Evening star. [volume], December 06, 1960, Page A-13, Image 13

About Evening star. [volume] (Washington, D.C.) 1854-1972

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DAVID LAWRENCE
Economic Power Blocs in U. S.
Unbalancing of Nation's Business
Called Paramount Issue of Era
Not a speech was made
about it in the campaign by
either presidential candidate.
Nor was it discussed in the
“great debate” on television.
Yet it was and is the para
mount issue of the current
era.
The question is: Shall the
economic power of private
blocs continue to unbalance
the whole business situation
and cause widespread unem
ployment as well as the loss
of billions of dollars to the
American people?
For that’s what happened
as a consequence of the
threat of a steel strike and
subsequently as a result of
the work stoppage itself that
lasted more than three
months in 1959. A downturn
in the business situation
during 1961 has already been
forecast. This is a direct ef
fect of the steel strike of
1959. Unemployment because
of the disruption of the
economy is growing.
Long before the strike
actually began, buyers of
steel feverishly bought all
the metal they could get here
and abroad. Steel mills op
erated at record capacity.
After the long strike, the
mills caught up somewhat
with the demand, but opera
tions thereafter steadily were
curtailed as business sought
to readjust itself to the body
blow it had received.
Foreign producers of steel
made some long-term con
tracts with American buyers,
thus cutting off future busi
ness for American mills after
the strike ended. Some
manufacturers of articles
which had been made of steel
turned to substitute metals
and have kept on using them.
Some construction all over
the United States was de
layed, and the indirect ef
fects were felt throughout
the entire economy.
Oddly enough, there hasn't
been a comprehensive post
mortem on the steel strike.
The politicians shy away
from it.
This correspondent asked
a disinterested economist to
DORIS FLEESON
New Style Kennedy Press Parleys
Innovations and Variety Expected
In Next President's Conferences
The major innovation in
White House press gelations
in the Kennedy administra
tion is the proposal to stage
an occasional presidential
press conference on live tele
vision at prime viewing time
such as the early evening.
Presumably the time and
place would vary so that
residents in the different time
zones would get a break.
Such use of the new me
dium is only to be expected.
It represents also an effort
to get away from the same
ness of the televised Eisen
hower conferences which were
put on tape and then released
in selected bits and pieces.
Some showmanship is neces
sarily involved; reporters who
will perforce be the support
ing actors—at no extra pay
will hope not too much.
This and other decisions
were discussed by the Ken
nedy press secretary, Pierre
Salinger, at a luncheon at the
Women’s National Press Club.
Generally approved were
Salinger suggestions that re
porters would not need to
identify themselves before
asking questions, this to dis
courage show-offs, and a re
turn to the Roosevelt-Tru
man system of conferences
timed to favor equally and
RALPH McGILL
Bare-Bones Budget Proposal
Boomerang Against Republican Party
Forecast If Plan Is Pursued
The text for this essay
might be the story of the
Texas Democrat who won so
much money betting on Sena
tor Kennedy that he turned
Republican.
There must be a certain
morbid fascination for pro
gressive Republicans in
watching the Ooldwater-
Dirksen faction at work pre
paring* a so-called "bare
bones” balanced budget for
the next fiscal year, which
begins in July. It is a shabby
piece of political business to
begin with. It frankly is ad
mitted to be aimed at embar
rassing and "restricting” the
Kennedy administration.
It is so plainly political
that it will, if pursued, boom
erang against the Republican
Party. It will once again de
pict the party as interested
not in the troubles of the un
employed, the aged, and of
education, but as one dedi
cated to. first of all, business
and special interests. The
story from Texas is a jest.
But the fact it was invented
and told with so much glee is
not without meaning to those
of the G.O.P. who are willing
to think. Gov. Rockefeller
will understand it. Senator
Dirksen won’t.
The President is reported
deeply piqued by his party’s
defeat. Even so, it is difficult
to understand giving an ear
to those who would express
their resentment in a "bare
bones” budget which ignores
the next administration’s ap
proach to 6 million persons
out of jobs and at least 3
l<
describe the effects of the
steel strike on the national
economy in 1959 and 1960.,
Here is his memorandum:
"Spurts in Inventory build
ing by American business and
especially by users of steel,
both ahead of and following
the well-advertiaed steel
strike which started in mid-
1959, were the most pro
nounced for any peacetime
periods of record. Oscilla
tions in inventory building
are disturbing to the econ
omy.
“Inventory building among
nonfarm industries rose to a
$ll billion annual rate in the
June quarter of 1959, fell to
a figure of minus $0.5 billion
in the following quarter, and
then in the first quarter of
1960, after steel mills re
opened. zoomed back up to
a $ll billion rate. By the third
quarter of 1960, the rate of
accumulation had slipped
back to only $0.3 billion.
"Such oscillations in in
ventory demand as these can
induce relapses in the econ
omy despite a rising trend
of final demand. In fact,
except for them, the gross
national product would not
have slipped in the third
quarter of either last year
or this. The flow of goods
to final users continued to
rise in both periods. Thus,
the economic setback in the
third quarter 1960, as meas
ured by the gross national
product, appears to be pri
marily an aftermath of the
steel strike.
"What happened in steel
prior to, during and following
the strike sheds considerable
light on the disrupting effects
of the strike. Steel ingot out
put rose tq a second-quarter
1959 annual rate of 135 mil
lion tons, then fell to an 18-
million-ton rate during the
strike, rebounded to a 139-
million ton rate in the first
full quarter after the end of
the strike, and then receded
to a last-half 1960 rate of
around 78 million tons.
“Output just before and for
a time after the end of the
strike was far above the 117-
altemately the morning and
evening press.
For himseff. Mr. Salinger
proved fully capable of han
dling a rapid fire of questions
and eager to answer them.
This surprised none of the
reporters who started on the
Kennedy campaign trail with
him 14 months ago. The
durable quality of his wit,
courtesy, brevity and sim
plicity is well established.
Still in the future, of
course, are the hazards any
new administration must
face. When the troubles pile
up, Mr. Salinger will be in
the eye of the hurricane.
The best description of
what he will then be up
against was given by a re
flective statesman who had
just watched the massed press
dealing with a well-meaning
but ineffective press agent for
a popular candidate for
President. “Individually, you
reporters are charming,” pro
nounced this observer, “but
collectively you are a pain
in the neck.”
President Eisenhower has
enjoyed a virtual immunity
from press and public rriti
cism for many reasons, in
cluding his health and leg
endary status as a popular
million on a short-week basis,
the gold crisis, shortage of
schoolrooms, and the needs
of the aged.
The business of both the
Republicans and the Demo
crats is the people of this
coufitry and their security.
If there is human hurt, it is
the responsibility of the Gov
ernment to be concerned.
The truth is, as the failure
of the Eisenhower financial
mission to our European al
lies revealed, that this ad
ministration has demon
strated no great genius in
the matter of national fi
nance or budgets.
If we go back to 1952 when
there was a great deal of
talk about balancing the na
tional budget, reducing the
number of Federal employes,
cutting the debt, and lower
ing taxes, and look-at the
present figures, we can all
learn a lesson.
In the eight Eisenhower
years we have:
1. Raised the Federal pay
roll to an all-time high.
2. Incurred the highest
peacetime budget in the
Nation's history.
3. Created a budget deficit
for the period of more than
$lB billion.
4. Raised the national debt
limit five times.
5. Watched our gold re
serves drop to the critical
low of less than $lB billion.
Now it would be unreason
able to "blame” the Presi
dent for all this. A great
many persons, however, in
sist, with reason, that the ad
ministration has lacked bold-
million-ton annual record of
1955, when more steel than
ever before or since was
shipped to the number-one
steel-using auto industry,
when the construction and
container industries—next in
order of importance were
taking about as much steel as
now. and when each of the
other major users were taking
more. ‘Obviously, then, these
pre and post strike output
rates were abnormal. They
could not be sustained. Such
abnormalities in an impor
tant industry tend to bring
widespread imbalance in the
economy.
"Coal.mining, for example,
is directly affected, and so
is transportation. Less dis
cernible but important are
the effects in metal-working
industries, in construction,
and throughout the economy.
Construction expenditures fell
6.2 per cent between June
and November, 1959, and in
October, 1960, at $55 billion,
were still 5 per cent below
the pre-strike rate of $57.9
billion.
“A look at estimated costs
of the steel strike gives fur
ther evidence of steel's im
portance in the economy.
,‘‘By the end of the steel
strike; more than a million
workers had lost their jobs
because of the strike, com
pared with 500.000 in steel
alone.
“The steel strike cost cor
porations generally about $3
billion in earnings before
taxes. Out of this sum, the
steel companies’ cost was
about $2 billion. In addition,
workers lost $1.75 billion in
wages they will never regain.
Os this sum. the steel em
ployes lost $1 billion.”
Will anything be done
about all this? Will the pres
ent system of economic
anarchy be continued? Gov
ernment control isn’t the an
swer. But a new sense of
responsibility among private
economic groups is clearly
necessary. This can be awak
ened if there is full
publicity. A postmortem on
the steel strike by the Gov
ernment would be a helpful
first step.
(Copyright. IU6OI
hero. President-elect Ken
nedy will not be thus pam
pered. For example, by rea
son of age alone he will be
considered by many to be on
trial.
Thus Mr. Salinger’s lot will
be harder than that of White
House Press Secretary Hag
erty, a master of communica
tions and a major policy
spokesman of the Eisenhower
administration. Mr. Hagerty,
of course, had to adapt him
self to the role it seemed de
sirable that he should play.
Mr. Salinger begins with a
President known personally
to most reporters—he once
was one—and one eager to
pick their brains of any little
nuggets which might he help
ful to him. At the same time
Senator Kennedy was out
giving and candid in his com
ments on his own problems.
This mutual helpfulness is
the real basis of the rapport
between the new President
and the press which the New
York Daily News loudly com
plains about. Any real meet
ing of minds, helpful to both
parties, includes a relaxed
atmosphere.
Mr. Salinger contributed to
it by never coming between
candidate and press. He acted
always as a conduit for news,
never preferred as news his
account of what Senator
Kennedy supposedly was
thinking.
ness and innovation. It has
tended to wait until the fat
was in the fire before trying
to prevent its being placed
there. Again, the hurried
mission of Secretary Ander
son is an example. Bankers
and financial houses know
something should have been
attempted at least three years
ago.
The Eisenhower adminis
tration certainly revealed no
wizardry in meeting and an
ticipating problems. For it
now to present an austere,
“balanced” budget for a fiscal
year, which does not begin
until seven months after
President-elect Kennedy is
inaugurated, is so palpably
dishonest in fact and intent
as to be unworthy of an adn
ministration which has many
excellent achievements to its
credit.
Innovation will be required.
Bankers in convention have
heard that a system of larger
write-offs in depreciation
may evolve. There is hope of
saving money in the farm
administration which, at
present, is also more expen
sive than ever before in his
tory.
None knows what the eco
nomic and human situations
estimate what emergencies
estimate what emergecies
may arise in international
affairs requiring spending.
In view of this, it is dis
couraging to see admittedly
punitive planning in the
preparation of the fiscal bud
get. The people are in need
of understanding, not decep
tion.
And the G. O. P. needs to
cease making the Texas joke
look good.
I
SENATOR CAUCUS -»r Hu Wym.
J ///fSADAM |\\
0 Z V
eowe '•ociH-LetATimss eowe. tm.woulb wiohtw »«vn,
“You are going to meet a tall, shapely, blond
who will then button-hole you for patronage!”
POTOAMC FFVFR
Sy FLETCHER KNEBEL
President-elect Kennedy is urged to abolish 20 top jobs
at the Pentagon. Jack is having so much trouble filling his
cabinet, he may adopt the idea—and take the easy way out.
*• « •
The Supreme Court forbids discrimination in bus-stop
restaurants. It’s a new legal doctrine: Everyone has an equal
right to risk ptomaine poisoning.
*• • *
The United States adopts a new kind of passport. The
cover will be blue—matching the mood of all the Republican
officials who soon will have plenty of time to travel.
•* * *
Louisiana legislators want to deny Kennedy their State's
electoral votes. They don't mind his beating Nixon, but his
failure to repeal that man Lincoln is inexcusable.
•* * •
Baby Jack Kennedy, jr„ isn't as lucky as you might
think. By the time he's ready for college, his dad will have
been out of work for at least 10 years.
»» * *
College glossary* Dean’s list—When the dean tacks
slightly to port after a large evening.
Negro Judge Heads
San Francisco Court
SAN FRANCISCO, Dec. 8
(AP). The new presiding
judge of San Francisco’s Mu
nicipal Court is John Wesley
Buatey, first Negro elevated to
the bench in this city.
Judge Bussey, a 58-year-old
California and Harvard gradu
ate. was elected unanimously
yesterday by the other muni
cipal judges. He joined them
in 1958 by appointment of the
Governor.
Or z anized
H ® REMEMBER THE NAME ! #
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Between Perry and Quincy Street* .nJMhmw er/
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Seventh and N Streets N.W. *1
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InW Allen H. Sydnir, Branch Manage* Federal Reserve System wjy
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In** a ? ew Minutes I ■
from Downtown D. C. ffl
“A memorable I
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&I1 wS wLW or Reservations—Tino »
«,JEk* Himself or Mr. Leon will see I
«•” ’• •I’* l Tour psrty ■ will be »
jj the party of the Evening l{
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Holiday Luncheon or Dinner Parties Table d Note 91
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M Va, ' Call TE. 6-3340
CONSTANTINE BROWN
Kennedy's Complex Problems
Domestic and Foreign Situation Found
Far More Critical Than Roosevelt's
When President-elect Ken
nedy takes the oath of office
six weeks hence he will face
a situation far more critical
than when President Roose
velt was inaugurated 28 years
ago in the midst of one of
the gravest depressions we
lAve encountered.
But in 1933 the only major
problem Mr. Roosevelt had to
face was economic. By adopt
ing stringent measures, such
as forcing American citizens
to hand over their gold to the
Government and a number of
welfare plans, he was able to
bring the ship of state back
on an even keel.
The international situation
was good, at least on the sur
face, in 1933. In the conduct
of our foreign affairs, which
hinged particularly on
whether or not our World
War I associates would repay
several billions advanced on
promissory notes, the new
administration faced only
small headaches. Mr. Roose
velt mistakenly rushed to
recognize the USSR as a pal
liative for our sagging in
dustry.
When Senator Kennedy
takes over, he will be con
fronted not only with major
domestic difficulties but also
an unprecedentedly complex
international situation. The
entire Western civilization
is being challenged by inter
national communism under
the leadership of Russia and
China. The Roosevelt gold
stored at Fort Knox is
rapidly evaporating. Foreign
countries have an immediate
claim on it. For the first
time in our history Ameri
cans, fearing the stability of
the currency, are sending
their dollars abroad.
But even this difficult situ
ation which can be remedied
z THE EVENING STAR
Wwliwigton, D. C., Tuts Jay, Dtetmber 6, IM®
by a competent administra
tion is rather minor com
pared to the international
picture. The billions of the
Marshall Plan have produced
results beyond all expecta
tion. But in the Far East,
Important segments of the
Middle East and in Latin
America we have definitely
lost ground to the benefit of
international communism.
The outgoing Republican
administration came in like
a lion and is leaving like a
lamb. Despite the world-wide,
popularity ot President Ei
senhower, it is during the
eight years of this adminis
tration that the present con
dition emerged. Since the
death of Secretary of State
John Foster Dulles our world
position has deteriorated.
During the last two years,
the State Department has be
come paralyzed and there
was apparently no move on
the part of the Chief Execu
tive to put $ burr under the
saddles of the lethargic top
policy makers in the State
Department. It is in these
last years that things began
to go badly for us in Latin
America. The support given
Fidel Castro by our foreign
policy makers resulted in in
ternational communism es
tablishing a beachhead in
the Western hemisphere.
This irreparable blunder has
affected not only the whole
hemisphere but has caused
the leaders in other parts of
the globe to wonder about
our competence td lead the
free world.
Similarly, the reluctant
rr, =7]
n Let GEORGE and CO.
j ) help you with your GIFTS
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■ I SWEATERS, SLACKS, JACKETS, ’
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rau PABKING • «M XYC ST. N.W.
i|——■—■
agreement by President Ei
senhower to attend, against
his better judgment, the 1955
summit meeting in Geneva
played into the hands of in
ternational communism. Even
worse, there was a definite
revulsion on the part of our
allies' in continental Europe
when Mr. Eisenhower invited
Njkita Khrushchev to visit
• America as the Nation’s hon
ored guest. The idea that
such an invitation would lead
to easing of international
tensions was as ridiculous as
the summit meeting in Paris.
' in May this year. Both served
only to enhance the Red
prestige at our expense. We
also rushed to embrace two
. African dictators. Ghana’s
Nkrumah and Guinea’s Toure
who the State Department
well knew were Soviet pup
pets long before they ascend
ed their African thrones.
Similarly, we forced the
aged president of South Ko
rea, Syngman Rhee, out of
office when the students re
belled. Secretary of State
Herter issued at the psycho
logical moment an official
statement .giving Rhee an
unprecedented spanking and
embracing the cause of sev
eral thousand students. To
day it is not the democratic
government of Prime Minis
ter Chang which is conduct
ing the affairs of Korea but
a body of restless and dis
satisfied teen-agers who are
forcing laws on a weak-kneed
National Assembly.
These and many other
similar factors will plague
the new administration when
it takes over. It will take a
superman to bring conditions
to near normal at home and
abroad.
A-13