"For the Ultimate Good"

In a week of dramatic political developments, George M. Humphrey's first major speech as Secretary of the Treasury got only the No. 2 headlines. But the words he spoke at the Associated Press's annual luncheon in New York this week were the clearest expression to date of the Administration's economic policy.

Humphrey began with a blunt opening sentence: "There is no reason to fear peace." Some U.S. citizens, he said, have been talking as if the curtailing of war production would mean economic disaster. Said he: "There is no reason for a depression unless we fail ourselves to do the things we ought to do, and lack the courage and foresight to do them . . . We cannot preserve our way of life through another long, deep depression, and we must never permit it to occur."

Then George Humphrey outlined some of the things "we ought to do." Items: P: Cut defense spending. "More defense for less money is perfectly practical ... It is in the cards and on the way. . . Carefully planned objectives, with price tags attached . . . will provide a posture of defense against outside aggression that can and will be maintained over whatever period may be required . . . Truce in Korea . . . will not have an early important influence on the rate of military spending." P: Cut taxes (but not until spending is cut). When the people pay less taxes, they have more money to spend for what they want; this new consumer demand will replace Government spending. "In addition, there must be a radical revision of our tax system to better provide the incentives for the creation of more jobs for more people, and for the making of more, better and cheaper goods for all the people." P: Promote a free-market economy. "This Administration believes . . . that a most powerful influence over the years has been the accumulated effect of the industry and efforts of so many of our people to advance their own interests independently and in their own ways. This way of life has withstood wars and political manipulations and experiments of all kinds." P: Demonstrate more ingenuity in production, sales and distribution. Full production will create tough competition, but Americans have never feared competition. P: Manage that enormous legacy, the federal debt, with wisdom. The total debt is more than $267 billion, with $32 billion maturing every 90 days. If debt policy increases the money supply unduly and overextends credit, there will be more inflation; if it drains the savings of the people too rapidly and credit is unduly restricted, the result may be depression. There must be good balance, precise timing, careful refinancing.

All these steps, Humphrey believes, will contribute to the overall goal, a stable currency.

In conclusion he reminded the U.S. that economic freedom, too, has its limiting standards. "The golden rule still is fundamental in human relations. It is the responsibility of every citizen of this country ... in accepting . . . freedom to accept the responsibility that goes with it. If the American people really want stability they must all contribute to it, in the prices they charge, in the wages they demand, and in everything that they do. They must exercise self-restraint from making quick turns to the detriment of others, and promote in every way possible the long-term thinking and planning that is for the ultimate good of all the people."

This file is automatically generated by a robot program, so reader's discretion is required.