JANUARY 12, 1949
WASHINGTON, Tuesday—One of the leading newspapers points out that among President Truman's economic advisers there seems to be less concern about the financial return to those who have capital to invest and who live on the income derived from that investment than there is consideration of the proper level of farm prices and the proper return to labor. This always has been one of the most delicate balances that anyone guiding the financial interests of the country has had to make.
It is essential to a high level of employment that it be profitable for capital to be invested not just in safe enterprises but in new and untried enterprises.
There must be incentive for this, particularly in times of peace. In times of war, when many men are risking their lives at the battlefronts, many others are willing to risk their money to do whatever is necessary for the well-being of the country. However, in times of peace there is not the same patriotic motive with which to prod capital into productive enterprise and, therefore, incentives must be found.
Some of our biggest investors—such as trust companies, banks, and insurance companies—are limited by law in their investments in order to safeguard those whose money they are using. Therefore, if we expect to develop new enterprises, to employ more people, and to have more buying power, there must always be available capital from the individual investors. This is getting harder and harder to find today.
It is of vital interest, of course, to the farmer and the wage earner that the things they have to buy keep on increasing in cost, because even though wages go up and farm prices go up, they never seem quite to cover the increased cost of living brought about by inflation and the passing on to the public of whatever costs have been imposed on the manufacturer.
Therefore, it is going to be necessary, it seems to me, to examine everything not only with an eye to what we would like to do, but with the constant thought before us of what the essentials are that must be done.
The preservation of the credit of our government is of vital importance to us and to the world as a whole, and while I believe that there are many things in our program, as outlined by the President, that are essential and will help to bring us prosperity, I think even the best of them should be weighed with the viewpoint of their essentiality in attaining the objectives that we have before us. These objectives are rehabilitation in the world at large and stability and strength in our own economic system at home.
These ends should never be forgotten and their importance should be explained to the people as each step is taken in this carefully balanced program which alone will see us through the difficulties of the next few years.