[NTERVIEW OF SEN. \\ VLLACE FOSTER BENNETT (R) OF UTAH . . .
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• Americans arc watching closely for inflationary
trends in the national economy growing oul of zooming expansion of public anil private credit. Jusl
recently, tin- Federal Reserve Hoard, reflecting government concern over expanding credit, raised the
interest rates on money il loans lo banks.
• Senator Bennett, of Utah, member of the Senate
linking anil Currency Committee and Ihe Senate
Finance Committee, answered questions regarding
the economic outlook for lhe United Slales on a
recent Facts Forum REPORTERS' ROUNDUP. Be
was interviewed by L. Edgar Prina of the Washington
Cvcning Star and Glen Bayless, Washington bureau
editor of Business Week Magazine and McGraw-Hill
Publications. Robert F. Iliicloi-ili served as moderator.
PRIM \: Senator Bennett, there appears to l>r a tendency
on the part of sonic American industries to granl labor's
il. in..ml- without inn. li of a (mill, and then to pass on
in the form of higher price- these higher costs. Now,
does this tendency and other factor- indicate that the
American people may he in for another wage-price
well, to look back to the beginning of the Eisenhower ad-
'iiini-tralion. we look back over two and a half years during
which tin-re has heen no price spiral al the consumers level.
The consumer price index figure in Angus! '52, which was
''"■ Truman high, weis .'17.5 on the '47-49 average, and in
-uly of '55 it's 87.6 so close thai the difference is infinitesimal. Now. I agree thai there is always presenl the
r'sk and the threat ..I inflation when we go into ei period of
'er) high employment and very high business activity. Thus
'ar. the managers of the administration's fiscal and mein.
'-'rv policies bene heen able to keep it under control.
PRINA 1 Senator Bennett, these Steps, to jour opinion,
do thev represent a return to the so-called "hard money"
polic, thai was announced informally hack in 1953?
m. I think thev represent a currenl phase of the monetary
Policy—-an attempt to keep an adequate supply of money
'" serve the expanding economy, bul neither to depress nor
'"Hale the economy.
PRINAi ^oii don't believe that thc«- steps thai have
heen taken will cause einv sorl of a dip in our presenl
rising economy ?
No, I think ihey are intended and will be successful in
'ACTS FORI M NEWS, Vovember, 1955
more or less leveling mil the rale al which we continue to
rise. I Ihink we arc going to continue to rise Presidenl
Eisenhower in his 1955 State of the Union message predicted that in ten years we'd he up to five hundred million
grnss national product. Now. if we gel there we've got to
have aboul fourteen million a year increase over the next
ten years, and we've been lining a little heller than that, bul
PRINAi I see; well, some observers believe lhat the pattern should he a steadily rising prosperity, with em
occasional dip rather than a sky-rocketing one that
might (-nd in a bust.
1 ihink lhe administration feels lhal wav. hut there is another
phase nf the pattern thai you didn'l mention and thai i- an
occasional plateau- -an occasional leveling off where there
i- nol necessarily a dip. hut a pause.
BAYLESSi I wonder, with money being a little tighter
in the hank, whether 1 can fro down to the hank and
f-et that 36-month loan for a new car now. that I could
last year, and will that hurt things any?
Hen- an- smiie- basic figures thai arc very interesting. Tbe
disposable, personal income, which is lhe actual money we
hem tn spend, has increased al lhe rale nf 17 billion
dollars since the firsl of the year. Sn. theit mean- we don'l
hee\e' lei depend upon our borrowing capacity tn lake up the
additional production thai we can expeel it- coming oul of
our earning capacity.
BAYLESS: Well now. take housing as a bit: boom segment of thi- prosperity we're having. People are going
In have to pay more monev now for down-payments and
their mortgages are going to be shorter and therefore
the monthly payments are going to Im- up. something
like. oh. SI.7.V lo S5.00 ei month. I- this going to put ;i
crimp in this great housing boom we're Inning?
I don't think so. Take tbe average factory worker et- an
example his actual spendable income in terms of stable
dollars is up nearly li per cent since the Eisenhower administration came in, so tbat be can stand ei little more
responsibility in buying ;i house. And, main | pi.-, when
they think aboul llii- change in lhe down-paymenl program,
think that this is something new llml's never happened in
iln- past. Il's actually a return tn a mine- conservative basis
that existed before the la-i heni-imj eat wei- passed in 1954.
We're jn-t minim: hack In what weis considered prett) liberal more than a year ago.
BAYLESSi Have you had een, correspondence from .our
people out ill the western part of the country so leer.
either from hanker- or from borrowers, that thing- were
tougher because of the new governmenl action?
No. 1 haven'l had a word. (If course, the Federal Reserve
has stiffened things up. it men li>,,k as though il'- tougher,
hut when ihe Eisenhower administration came in. the Fed-