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TABLE I.-The recognition lag, 1946-61 ure to make a sharp distinction between action by Congress, too little when limited

what they know for sure and what is simply to present legal possibilities, too risky if new Recognition Recogni their best judgment under circumstances of and adequate powers were to be conferred Date of cyclical turn 1 date tion lag, inadequate knowledge. This failure is the on the President without a sound criterion

(months) reason why the rather simple and obvious for determining when to exercise them. For

point I am trying to emphasize is so little mula flexibility is objectionable because noNovember 1948 (P)-- End March 1949.

412

appreciated. Here is one of the dependable body has been able to devise a satisfactory October 1949 (T). End March 1950

522

regularities of economic science-or, better, formula. Semiautomatic stabilizers are July 1953 (P)-Mid-November

here are two regularities: The finding, thor needed. They would come into play, not in 1953.

4 August 1954 (T).

accordance with a formula, since no formula End November

oughly documented by the National Bureau

313 1954.

and buttressed by a long-known theo for the business cyle has yet been devised, July 1957 (P)----- Mid-November

4 retical explanation, that the economy has a not at the whim or discretion of any person, 1957.

built-in mechanism that keeps it going in but on the occurrence of an objectively idenApril 1958 (T). End July 1958 312

tified circumstance. May 1960 (P) End October

the same direction once it has fairly started;

542 1960.

and the finding here, which is hardly new Discretionary fiscal policy: The CommisFebruary 1961 (T)... Mid-May 1961..

3 or startling, that turns can be identified with sion on Money and Credit has recommended

certainty 3 to 6 months after they occur. giving the President discretionary authority 1 Dates of peaks (P) and troughs (T) from the Na To be sure, these are dependable regularities, to vary the first (20-percent) bracket of the tional Bureau of Economic Research.

not scientific laws. One cannot feel the same income tax upward or downward by a maxiTable 1 suggests, not very surprisingly, a degree of confidence about them that one

mum of 5 percentage points for counterminimum lag of 3 months, a maximum of 6 feels for the speed of light. Nevertheless, the cyclical purposes. To exercise this power, months, with the average a shade over 4 degree of confidence is exceedingly high. the President would be required to issue a months. Cyclical contractions in the past

II. SEMIAUTOMATIC STABILIZERS

statement that "economic conditions are have never lasted less than 8 months; they

The great problem of anticyclical policy is

running significantly counter to the objecaveraged 21 months between 1854 and 1946; 8 to take action in time. The well-known lags, Congress would have 60 days in which to

tives set forth in the Employment Act," and since 1946, they have averaged 10 months.

of which the recognition lag is only one, Since it takes some considerable time after

veto the action.13 together with the difficulties of forecasting

The change in tax rates a trough before the economy returns to full employment, there is opportunity to take and the danger that a contraction will gather would continue in effect for only 6 months

unless renewed by the same procedure. momentum, create a cruel dilemma. If the action to combat a contraction without Government rushes in with vigorous meas

The Commission would leave it to the running too great a risk of contributing to

ures to forestall an anticipated contraction, President to decide what is meant by "ecoinstability. The risk of destabilizing polithe measures may be destabilizing, aggravat

nomic conditions * * * running significantly cies might be unduly great, however, if there ing inflation; but if it waits until the con

counter to the objectives set forth in the are false alarms. In fact, there was none in

traction gets bad, anything done will be too Employment Act.” This plainly would rethe period 1946–61. The nearest approaches

late. The proper time for action comes at the quire a criterion. Insofar as a temporary to false alarms occurred in 1949 and 1954 time that the Government's economic ex

cut in the tax rate is concerned, the criwhen some observers were premature in perts become agreed that a downturn has oc

terion should be the determination that a recognizing upturns upturns that actually occurred. Thus, President Kennedy, who

downturn has occurred. Similarly, the cricurred a little later. showed a greater disposition toward anti

terion for rescinding a cut (or for not reFortune, ever optimistic, in its issue of

recession action than President Eisenhower, newing it) should be determination that an September 1949, inquired whether the recescame into office too late. The time for action,

upturn has occurred. In view of the lag insion was over and concluded, “the answer, if at all, was in the week before the election.

volved between action by the President and as indicated by the business events of July By January 20 there was not much else to do

its maximum impact, any later action-or and August, was apparently yes." 9 U.S. News & World Report, Moody's Stock Sur

but what Kennedy actually did: Namely, later rescinding of action—would run undue

very little.12 vey, and the Guaranty Survey made similar,

As a Senator, Kennedy had

risk of being destabilizing, as would any earhedged statements in September, as did Prof.

been less sensible. Although he justifiably lier action in view of the hazards of predicvoted against an antirecession tax cut in

tion at other times.14 Lewis H. Haney in early October.10 Even March 1958, the month before the trough

Formula flexibility: In a sentence which, though the trough did not occur until Ocand several months after recognition of the

though lukewarm, was subject to dissents by tober, those who called the turn prematurely should not be blamed. Strikes in the coal

six members, the Commission on Money and preceding downturn, he reversed himself and voted for the cut in June 1958.

Credit said, "A promising approach that and steel industry interrupted the improvement in business that had taken place in

Since any conclusions on policy depend merits detailed investigation is formula flexion the judgments of the commentator, I had

bility wherein changes in the first bracket the summer. Although the strikes had the effect of postponing the month of the

rate of the personal income tax would be better make my assumptions explicit: I betrough as determined by the National Bu

lieve that the American economy is depres- made automatically in response to changes sion-resistant but not necessarily depression in appropriate economic indicators.” 15

In reau of Economic Research (which has a policy of favoring the later date in case of

proof; that a major contraction of the length his dissent, J. Irwin Miller justly said, "it

and amplitude of 1907–8 and 1920–21 (let doubt), the expansion in one sense had

would be well nigh impossible to select a alone 1929–33) would be a catastrophe for single indicator or set of indicators to whose actually begun earlier. In the second quarter of 1954 some statis

the United States in the present world situ movements we could for any period of time tics showed rises, leading Gabriel Hauge, a

ation; that major contractions are most safely entrust the determination of tax rates. close adviser of President Eisenhower, to say,

readily checked before they gather momen The danger of destabilizing tax changes

tum; that it is not safe to follow a wait-and“The recession * * * is over.” 11 He was

would be so great that any formula could wrong; there was a relapse in July and Au

see policy when contractions begin; and
that, aside from the admittedly small danger

not be permitted to operate automatically gust. Although Hauge was not the only one to make this mistake, his view did not repreof a major depression, it is desirable to re

without Executive review.” 16 But he went sent a consensus. Moreover, one must disduce the amount of unemployment associ

on to say, "The increasing rapidity of changes tinguish between the public pronouncements of somewhat more inflation. My purpose in ated with cyclical troughs even at the risk

in the ebb and flow of our economy seems to of those working for the incumbent administration, which often err on the optimistic ments but to illustrate the uses of the conwhat follows is not to argue for these judg

13 “Money and Credit, Their Influence on side, and the conclusions on which the administration bases decisions, which are genclusions of the last section. Anyone with

Jobs, Prices, and Growth” (Englewood Cliffs,

N.J., 1961), 137. different judgments can readily alter the erally better founded.

(See also pp. 272–273.) conclusions accordingly.

Three members of the Commission dissented Hauge's premature calling of the turn

To the usual three categories of automatic

from this recommendation. illustrates a besetting sin of economists, failstabilizers, discretionary policies, and for

14 Within the limit of 5 percentage points, mula flexibility, we should add a fourth,

it seems to me appropriate to leave it to the 8 Bert G. Hickman, “Growth and Stability semiautomatic stabilizers. Automatic stabi

discretion of the President how deep the cut the Postwar Economy” (Washington, lizers are good but, it follows from my as

should be, since the right amount will vary 1960), 25. The so-called contraction of sumptions, not enough. Discretionary fiscal

with the percentage of unemployment at the 1918–19 was only 7 months, but I do not policies are too slow when dependent on

cyclical peak, the amount of unemployment regard this as a genuine exception to the

that is purely structural, etc. statement in the text.

15 Ibid., 130. In view of the staff at the dis9 Fortune, September 1949, 37.

12 Kennedy made a considerable show of posal of the Commission one may wonder why 10 U.S. News & World Report, Sept. 9, 1940, antirecession activity, but in many cases the Commission did not make the "detailed 13; Moody's Stock Survey, Sept. 19, 1949, 246; such as the minimum wage bill, he was in investigation” that this “promising approach Guaranty Survey, Sept. 30, 1949, 5; Lewis H. reality giving an antirecession guise to meas ** * merits.” No doubt the recommendation Haney, “Contrasts of Near-Term and Long- ures he would have wanted irrespective of is one of those silly compromises so essential Term Business Outlook," Commercial and the phase of the business cycle. To use to report-writing by a group with widely Financial Chronicle, Oct. 6, 1949, 1.

Samuelson's phrase, "he fought the recession divergent views. 11 Time, July 26, 1954, 68. by placebo."

16 Ibid., 131n.

call for the application of imaginative judg- able to all workers who have been employed

able to all workers who have been employed of the demand it creates won't be satisfied ment within prescribed limits,” 17 thus miss half the time in the preceding 3 years, ir due to a shortage of skilled workers. ing two points, that "imaginative judgment” respective of the phase of the business cycle, For the administration, Heller readily will lead to destabilizing actions unless there and cuts off benefits after 13 weeks for all agrees that the unskilled and unschooled is available a sound basis for exercising it workers irrespective of how bad business make up an outsized portion of the jobless. and that the recognition-of-a-turning-point conditions may be. A proper policy would But the key question, Heller says, is what has criterion opens up a possibility that is sub establish a maximum benefit period for times caused the increase in unemployment in reject to the limitations of neither formula of full employment; 6 months seems to me cent years. And here the statistical eviflexibility nor wholly discretionary authority; just right. During times of abnormal un dence indicates that unemployment is not namely, semiautomatic stabilizers.

employment, the benefit period should be ex rising more rapidly at the bottom of the The basic objection to formula flexibility tended, preferably without limit, for all eli skill ladder. can be illustrated with President Kennedy's gible workers, both

gible workers, both as a countercyclical Between 1957 and 1962, Heller observes, proposal for extending the period of unem measure and as a matter of social justice. the jobless rate for male college graduates ployment benefits during recessions and de The extension should go into effect as soon doubled; the rate for those with 8 or less pressions.18 (I shall not be concerned with after experts recognize a downturn has taken

years of school rose only by one-half or about that part of the proposal that would extend place as is administratively feasible. When the same as the rise in unemployment genthe period which a worker employed for at an upturn is recognized, action should be

erally. least 78 weeks in the last 3 years can draw taken to rescind the extension.21

RATE WAS SAME benefits for 13 weeks beyond the normal 26 The three-stage tax cut proposed by Presweek benefit period, even in times of high ident Kennedy in January 1963 represents a

Moreover, take a look at 1954 and 1962, 2 employment, although I believe that it im lost opportunity. Since it aims primarily at

years in which unemployment was the same plies a wrong principle.) As reported in the stimulating a chronically sluggish economy,

5.6 percent, Heller says. If the unskilled have

been losing out, the unemployment rate for press, Kennedy's proposal provides for an the initial cut may go into effect at once, iradditional 13 weeks of unemployment bene respective of the stage of the business cycle;

the most skilled should have declined. But fits when the President and the Secretary but for Congress and the President to decide

it didn't. In both years, the jobless rate for of Labor have determined "that a recesin 1963 that further cuts of an amount spec

the highly trained professional and technical ified in advance shall go into effect on

workers was the same, 1.7 percent. sion exists.” 19 Actually the proposal is for formula flexibility; for an "extended dura specific dates in 1964 and 1965 regardless of

On a homelier level, Heller might have tion period” to begin, the formula requires intervening changes in economic conditions

intervening changes in economic conditions pointed to Detorit. Unemployment in the that 1 percent of covered workers must have is to miss the chance to time them when they motor city's labor market was a whopping exhausted their benefits during the preced will do the most good and to run the risk 11.1 percent in 1961; so far this year, it has ing 3-month period and that insured un that one or the other will aggravate a boom

average only 5.4 percent. The difference apemployment, seasonally adjusted, must have instead of countering a contraction. Instead

pears to be 2 strong auto years in a row. been at least 5 percent of covered employ of advocating that part of the future cut be

In other words, increased demand-not a ment during each of the 3 preceding months. reserved to take place at the time the next

change in the skills of Detroit's labor forceThe extra 13 weeks of benefits (for workers downturn has been recognized, President shrank the jobless rolls rapidly. employed less than half the time during the Kennedy has urged adoption of his proposal

Yesterday, however, Killingsworth preceding 3 years) ceases to be available on grounds that it may head off recession. As

turned to the attack in a speech at Michigan that is, the "extended duration period" the failure of the tax reduction of 1948 to State. Heller's figures, he suggested, conceal ends—when a 3-month period occurs in prevent the recession of 1949 illustrates, more than they reveal. Between 1957 and which less than 1 percent of covered work heading off recession requires a delicacy of

1962, the number of workers counted in the ers exhaust their regular benefits. timing and an accuracy in forecasting turn

labor force with 8 or less years of schooling Even on first examination, the formula ap ing points that are quite impossible. Το fell sharply and their average age increased; pears to be inferior. In 1960 it would have repeat the obvious but neglected principle, those with college degrees rose rapidly and gone into effect later than the recognition only at the time a turning point has just their average age decreased. It is logical, date.20 It provides two criteria for begin taken place is it possible to predict business Killingsworth argued, to expect that unemning an extended duration period, abnormal conditions well enough to base policy deci- ployment for a younger, growing sector of unemployment (that is, the onset of reces sions on the prediction.

the labor force would rise faster than the sion) and abnormal exhaustions of benefits

rate for an aging, shrinking group. (that is, proof that the extension is needed). [From the Washington Post, Oct. 27, 1963] As for Heller's professional and technical It provides only one criterion for ending CUT IN TAXES HELD NO HELP TO BULK OF U.S.

groups, nearly a quarter have had no colan extended duration period, which amounts

UNEMPLOYED

lege training at all. So, the average jobless to a showing that the extra benefits are no

rate for this sector may have held constant longer needed because the proportion of cov

(By Bernard D. Nossiter)

because the less educated found it harder ered workers exhausting benefits has re Is the Nation's army of unemployed to get jobs while the better educated found turned to normal. But the formula is open doomed to continued joblessness until their it easier. to MILLER'S objection. There is never any dif schooling and skills are increased?

INVISIBLE JOBLESS ficulty in devising a formula that would have Will a tax cut merely open up jobs for the

Having disposed of Heller's statistics to worked pretty well in the past. Such a well-educated who are now in short supply?

his own satisfaction, Killingsworth came formula presumably would continue to work These questions have been raised with spe- up with some of his own. He makes elabfor some time into the future. But the his- cial force by Charles C. Killingsworth, a labor

orate calculations for the invisible unemtory of economics is strewn with formulas market specialist at Michigan State Univer

ployed. These are the workers who don't that gave a beautiful fit to past data, yet sity. His thesis has drawn so much atten

show up in the official statistics because sooner or later broke down. This is par tion in the administration that Chairman

they are neither at work or looking for work. ticularly true where the formula depends Walter Heller of President Kennedy's Coun However, if jobs were open, they would be critically on quantitative values, such as 5 cil of Economic Advisers has himself replied seeking employment. percent unemployed and 1 percent exhaus to it.

Killingsworth estimates that there tions. To be so certain that the formula In brief, Killingsworth argues that autowill keep on working that one is willing to mation and the growing outlays for services shadow class. He lumps them in with the

nearly 1 million male workers in this base an act of Congress on it, it must be like insurance or education have transformed officially counted unemployed to calculate founded on dependable scientific regulari the demand for labor. These irreversible the changes in real unemployment. And he ties. No such formula has yet been devised. trends, he says, increase job openings for the The Kennedy proposal not only runs an skilled and the schooled; job opportunities

compares the situation in 1950 with 1962.

Here is what he finds: undue risk of performing erratically but also for the uneducated and unskilled are shrinkpromises to be effective for neither economic ing.

PERCENTAGE CHANGE IN REAL UNEMPLOYMENT

QUALITY A FACTOR stabilization nor social justice. The proposal

RATES, 1950–62, FOR MALES makes the extra 13 weeks of benefits avail

A tax cut, Killingsworth contends, in

Years of school completed:

Percent creases demand generally but doesn't affect

0 to 4.-

100 17 Ibid. the quality of workers. The extra demand

5 to 7---

47 18 H.R. 7640, 87th Cong., 1st sess., introgenerated by a tax cut will be spent primarily

8_

53 duced by Mr. KING of California in the on the products and services that employ the

9 to 11--

26 House of Representatives on June 14, 1961. skilled. So, the professor concludes, the ad

12------An identical bill was introduced in the Senministration program will make only a small

13 to 15_-

-2 ate, S. 2084. dent in unemployment.

16 or more..

36 19 The Wall Street Journal, June 14, 1961,

Even worse, some of the tax cut's force will 2.

be dissipated, he says. This is because some As Killingsworth sees it during the 1950-62 20 According to our calculations, it would

period, unemployment generally rose fastest have gone into effect in January 1961 (as 11 I would favor giving the President dis- among the least educated and actually desoon as the data for December became avail cretionary authority to continue benefits clined among the best educated. able), about 2 months after the recognition for up to 6 months longer and to ensure that This puts the ball back in Heller's court. date and 1 month before the cyclical all workers who had exhausted regular bene- With the tax bill at stake, he can be expected trough.

fits would not be cut off at the same time. to smash it back promptly.

43

TRIBUTE TO FORMER PRESIDENT was blessed by my mother and father and should be used as a political weapon. This HOOVER

my grandparents. They prayed for him. is a dangerously volatile assumption, prone

Why are you confused? How many Herbert to backfire. A food surplus is a moral fact Mr. CHURCH. Mr. President, the Hoovers do you have in America?”

even before it is an economic fact or a poSaturday Review, under the enlightened

I said it was now clear we were talking litical fact. Herbert Hoover was correct in editorship of Norman Cousins, is one of about the same man but I was eager to know recognizing that we should make food availthe foremost magazines of political, so why my host should offer a toast to Mr. able, not because it is the strategic thing to cial and cultural opinion in the United Hoover and why his parents and grandpar do, but because it is the right thing to do. States today. Mr. Cousin's usually ents blessed him and prayed for him.

The attitude that sees food in strategic terms The farmer looked at me severely.

leads to a vital shrinkage in our own conwrites the editorials for this magazine

"You don't know why we like Mr. Hoover? ception of what this Nation is all about and and they are always worth reading. I

I Very well, I will tell you why we like most certainly to a shrinkage in the idea found his editorial “A Toast to Presi

Mr. Herbert Hoover. Years ago, just after of America held by the rest of the world. It dent Hoover” which appeared in the our revolution, we were without food. It transforms us into moral midgets, clinging November 9 issue especially worthwhile. was a terrible time. We wondered what to useless merchandise and losing those In this editorial, Mr. Cousins remarks would happen to us. Herbert Hoover came things out of which a sensible future can about the reservoir of good will of the

to us with food and saved our lives. We will be built.-N.C.

never forget it. My parents blessed him and people of the Soviet Union toward the

prayed for him even when he became a big United States, despite the barrage of capitalist and a Republican President. He hostile propaganda to which they have liked us and helped us as human beings ADDRESS BY FORMER SENATOR been exposed by their Government. Mr. even if he didn't like our Government. A WILLIAM BENTON BEFORE Cousins attributes part of this good will very great man, We will drink a bottoms-up UNESCO EXECUTIVE BOARD to the work of Herbert Hoover in his toast.” capacity of distributing food to starving

The farmer rose to his feet and held his Mr. CHURCH. Mr. President, former

Senator William Benton has sent me a Russians under the auspices of the glass high.

“To Mr. Herbert Hoover,” he said, “a very American Relief Administration.

copy of his address to the UNESCO great human being."

Executive Board, which had its 66th sesIn the proposed current wheat sale,

“To Mr. Herbert Hoover,” we responded, “a

sion in Paris last September. the situation is quite different than it very great human being." was in the time of the Hoover food mis For the next 15 minutes, the farmer spoke

Those of my colleagues who recall the sion from 1921 to 1923. The Soviets are of his family's ordeal during those early

controversies early this year over certain

UNESCO publications, and also over a not starving; they will not starve. They years. He spoke, too, of the vision he had of are asking not for gifts of wheat but for America as the result of the Hoover mercy proposed UNESCO agricultural project

in Cuba, will find Bill Benton's speech sales, offering us hard dollars which will expedition. He spoke of letters he had re

ceived from distant relatives who had mihelp us redress our adverse balance of grated to the United States. As a result, he

especially interesting. I ask that porpayments. We should be willing to sell

tions of it may be printed at this point in had a high opinion of the American people. the RECORD, as a part of my remarks. wheat to the Soviets not only as good Then he launched into a series of new toasts, businessmen but also to give a graphic at least 15 in number, in which he made

There being no objection, the excerpts demonstration to the world that Com known his gratitude and good feelings.

were ordered to be printed in the RECORD munist agricultural theories are not

This experience was unusual and memora as follows: working out in practice. In addition,

ble but it was not unique. Few facts about STATEMENT BY FORMER SENATOR WILLIAM

the Soviet people today are more significant there is a moral dimension to this prob

BENTON AT 66TH SESSION OF THE UNESCC than their warm feelings toward the Amerilem which Norman Cousins cogently

EXECUTIVE BOARD, PARIS, SEPTEMBER 30, 1963 can people. Indeed, what seems most to imargues. I wish to call special attention press visiting Americans about the Soviet to the conclusion of this editorial: Union is the friendliness of the Russian peo

At the 12th Conference and in our comHerbert Hoover was correct in recognizing

ments in June to the Director General on ple, notwithstanding years of hostile propathat we should make food available, not beganda. The extent to which the Hoover food

the 1965–66 program and budget, the United cause it is the strategic thing to do, but

States made a number of recommendations supply mission is responsible for these feelings is difficult to say. But it is significant concerning (a)

concerning (a) the presentation because it is the right thing to do. The at

of the titude that sees food in strategic terms leads that so many Russians refer to it when they

budget, (b) conferences and meetings, (c) to a vital shrinkage in our own conception discuss their attitudes about America.

the nature of UNESCO's support of nonof what this Nation is all about and most

The existence of a human community be

governmental organizations, (d) training certainly to a shrinkage in the idea of Ameryond national boundary lines is a prime fact

and research centers and institutes, and (e) ica held by the rest of the world.

UNESCO publications.
It

of life today. Some governments, especially
transforms us into moral midgets, clinging
those of monolithic political character, like

Now, the many devoted men and women to useless merchandise and losing those to resist identifications higher than or be

who work on UNESCO in the State Departthings out of which a sensible future can yond national sovereignty. But the sense of

ment and in the U.S. National Commission be built. membership in the human family is natural

(and I report to this Board that there are to man and needs only the slightest exercise

hundreds of people in the United States I ask unanimous consent to have this to become manifest. American foreign pol

interested in UNESCO who, without pay or excellent editorial inserted at this point icy has been most effective not when it has compensation, give large parts of their time in the RECORD. operated on the hard level of formal di

to it, wholly apart from the professionals There being no objection, the editorial plomacy but when it has acted on the broad

in our Government) many will be gratified level where needs and hopes interact.

that some of the U.S. recommendations have was ordered to be printed in the RECORD,

A case in point exists today. The United as follows:

been followed or partially followed. Perhaps States has a surplus of food. The American

I should say "mildly gratified," looking at A TOAST TO PRESIDENT HOOVER

people are paying more than $1 million a day the program as a whole. For example, they Three years ago, in a village deep in the just to store crops, even as they rot. The

will be pleased by these five points: interior of Soviet Georgia, I lifted my wine Russians have a food shortage. Some claim

1. The integrated presentation of the proglass in response to a toast to the health of this is the result of natural causes. Others posed program and budget which shows Herbert Hoover. The man who proposed claim it is the result of fallacious Marxist UNESCO's program as a unit, regardless of the toast was not a Republican; in fact, he theories applied to agricultural production.

the source of the funds; this does indeed was not even a Democrat. He was a Geor It is possible that both factors are responsi

contribute to understanding. gian farmer and, so far as I knew, an au ble in varying proportions. No matter. The 2. The subventions have been held generalthentic Communist.

relevant fact is that the American people ly at existing levels. Let us hope, I may say Since the dinner conversation was being have a surplus and the Russian people have in passing, that alternative financing can be routed through a double set of interpreters a shortage. The Russians are not asking us found as soon as possible. UNESCO should Georgian into Russian into English and back to give them wheat. Nor has the American seek to put an end to much of this financing, again—I wanted to be sure there had been Government proposed to give them wheat. it seems to us, as soon as possible, no error in transmission,

They are asking to buy and we are offering 3. The Director General has established "Would you please ask our host whether to sell.

terminal dates for financial support to some he means Herbert Hoover, former President But all sorts of objections are being raised. centers and institutes, and further has beof the United States and the outstanding It is said we should not be giving aid to a gun reducing the support to certain other Republican of his generation?" I asked. Communist government. It is said that we centers. Very good. UNESCO should indeed

My question went through the double fil ought to use the food as leverage to gain aim at what we call a "phasing out” or a tration process and produced an instant political ends. It is said we ought to exploit "putting them on their own,” of most such reply. the opportunity to attach conditions.

centers and institutes. "But of course," the farmer said. “Who The trouble with these questions is that 4. The Director General has indicated the else? Mr. Herbert Hoover, the man who they flow out of the assumption that food revised budget will reflect a reduction in

*

meetings and conferences. We welcome this failings, studies of race relations would be trend; indeed, we applaud it.

greatly welcomed by the United States. 5. In general we favor the goal of stabili Nothing on the record indicates that zation evident in the proposed budget in UNESCO can do this. areas other than science and education. We The first consideration, of course, must be must hope that the goal becomes even more whether conditions can be created that will clearly defined in practice.

enable UNESCO to employ scholarly and Mr. Chairman, the United States has scientific standards in publications which hoped and expected to see a substantial re deal with race relations, not merely in Africa duction in the number of publications. Un and the United States, but in the U.S.S.R., fortunately the funds for publications under and in all areas of the world. The problem the proposed budget are being increased of race relations is not confined merely to considerably. May we not hope that the the United States and Africa. Our scholars Secretariat will profit by the excellent sug in the United States are striving to establish gestions made by Mr. Avidor on Friday? He such standards in their studies of this probmust have been seeking the same goal. He lem. And as all of us know, it's not easy. suggested cutting back on the number of the

But until such standards can prevail, any Director General's personal reports to the major or full-scale attack on this subject Board-a suggestion that, it would not sur

by UNESCO should be postponed. And here prise me, fell on welcome ears. But don't we

again, the subject is so loaded with political want also a cutback on our overall publica

and propaganda overtones that a diversion tion program. The last General Conference

of any significant part of UNESCO's program passed a resolution asking the Director Gen

into it seems to me at this time to be a eral to reduce as much as possible the length mistake. However-and I must end up with of our documents and the number of copies.

this emphatic statement—the chance to take

leadership in the scientific and scholarly Let me now shift for a moment to the

study of race relations is surely one of Special Fund projects for which UNESCO is

UNESCO's important goals over the years the executing agent. Our Executive Board

ahead, and must be kept in mind and we

The

must attempt to work toward it. does not, it seems to me, spend enough time

Director General and I come together on discussing these and achieving understanding of them. Perhaps, if our agenda permits,

this point. Further, the work of UNESCO before we adjourn there may be time for a

in the field of racial relations should tie in more complete discussion. The United

closely with the great effort to destroy racial States as most of you know, puts 40 percent

discrimination, which is a major goal of the of the money into the total budget of the

United Nations itself. Special Fund. Further, this money is not assessed against the United States by any vote at a General Conference under which

The Director General seemed somewhat inthe United States may find it is called upon

credulous when I was chatting with him to make a contribution beyond the one

privately the other day, at my suggestion which it thinks warranted. The money giv

that the fact that certain countries do not en to the Special Fund by the United States

pay their moneys into the U.N., the funds is a voluntary contribution, wholly within

which the U.N. and the United States feel the hands of the United States. Voluntarily

are legally expected, that such failures by given, it could be voluntarily withdrawn if

certain countries could affect the attitude of the United States felt the projects were un

the United States toward UNESCO. But satisfactorily handled. This is an important

why shouldn't such failures affect the atti

tude of the United States toward all the
point, and I want this Board to understand
it.

U.N. agencies? UNESCO is a part of the U.N.
If the U.N. fails, UNESCO will fail. Make no

mistake about it. Let us not kid ourselves. The Director General has proposed new

Thus when the United States is forced to emphasis on two problems of human rights: underwrite a bond issue to keep the U.N. (1) race relations, and (2) disarmament, alive, this does indeed bring under review He has asked the Board whether there is U.S. policy not merely toward the U.N. but anything useful UNESCO can do in these toward ali affiliated agencies and the overall areas within its field of competence. He pattern of activity by these agencies—includasked whether he was wrong in bringing ing, in the case of UNESCO, the Special them up. He solicited our guidance. And Fund. I do indeed congratulate him on this approach to the Board, and I shall address myself to these two points.

In conclusion, Mr. Chairman and Mr. Di

rector General, we of the United States find First, the United States recognizes that

reason for some satisfaction in the progress UNESCO has a legitimate interest in both

evident in UNESCO's program, progress more areas. Mr. Pompei conceded merely the legitimate interest in race relations; I am

manifest than many of my associates in the

United States anticipated a year and 2 years willing to admit, over the years which lie ahead, the legitimate interest in both. But

ago. There's much in it on which the Direc

tor General warrants commendation. But only if we stick to our basic charter, as

the United States does not wish at this time, quite properly emphasized by the Director General himself when he presented these

with so much to do and so much unfinished, two points to us.

to risk stretching ourselves beyond the lim

its of our capacity. Let me first seek to qualify a bit more UNESCO's suitable role on race relations.

I wonder whether this Board—and notably, the scholars on this Board, those who come ADDRESS BY LYNN A. TOWNSEND, out of a background of scholarship can't

PRESIDENT OF CHRYSLER CORP. agree that UNESCO will not contribute either to peace or to collaboration among Mr. DIRKSEN. Mr. President, I ask nations—by sponsoring studies that contain unanimous consent to have printed in propaganda, or by promoting the one-sided

the RECORD an address delivered by views of any member state, or by publishing Lynn A. Townsend, president of the studies which fall short of high standards Chrysler Corp. at the annual banquet of scientific and scholarly objectivity. UNESCO has been guilty of such failings, session of the 45th annual meeting of and this has gravely damaged the prestige the Illinois State Chamber of Commerce of UNESCO. If UNESCO can avoid such in Chicago on November 1.

There being no objection, the address
was ordered to be printed in the RECORD,
as follows:
REMARKS BY LYNN A. TOWNSEND, PRESIDENT,

CHRYSLER CORP., AT THE ANNUAL BANQUET
SESSION OF THE 45TH ANNUAL MEETING OF
THE ILLINOIS STATE CHAMBER OF COMMERCE,
CHICAGO, ILL., PALMER HOUSE, NOVEMBER 1

I am very pleased and highly honored to be here with you tonight to participate in your annual meeting in this great city. We Detroiters like Chicago very much indeed. We think of it as a wonderful place to do business and a wonderful place to come to enjoy life in general. Yet I can't remember any time in all the years I've lived in the Detroit area when we thought as well of Chicago or said as many nice things about it and its people as we did on a certain Sunday afternoon back in mid-Septemberbecause on that particular day the Chicago Bears outplayed and outclassed a football team that is our common problem—the Green Bay Packers. On that particular afternoon the Bears' win made the future look pretty bright for our Lions.

Two weeks later, however, when we sat down to our Sunday dinner, we found ourselves in a somewhat different mood. As I remember it, after that impressive-and, to us, depressing-performance by Billy Wade and his teammates, we just didn't have very much to say at all. And things haven't been quite the same since then with our Lions. But after all, another important Sunday afternoon is coming along soon here at Wrigley Field—and who knows what may happen then? As George Halas says, the National Football League wouldn't be much of a league unless any team could be beaten by any other team any Sunday afternoonor words to that effect.

Athletic competition between the professional teams of Chicago and Detroit, and between the great universities of Illinois and Michigan, has been putting an extra kick into life for all of us in this part of the country for a good many years.

It is characteristic of the Midwesterner to like hard, all-out competition, whether he finds it on the playing field or in his day-today work. And if there are any cities in this country—or for that matter in any other part of the world-where business competition is more intense than it is in Chicago and Detroit, I don't know where they could be. I can speak for all of us in Detroit when I say we believe there is only one way to compete—and that is the way they compete down at Indianapolis on Memorial Day-fiatout, with no quarter asked and none given.

And if you want to get the real lowdown on the way it feels to be involved in the kind of competition we are accustomed to in Detroit, you just can't do much better than to ask a Chrysler man about it. We at Chrysler have been right in the center of the battle of Detroit for a number of years now, and we've had our share of wins and losses. But business has been looking very good for us for some time and promises to continue good, not only for us but for the automobile industry as a whole—so I warn you that my remarks this evening are going to have a distinctly optimistic flavor.

As I'm sure you know, the automobile business is finishing out an excellent year, one in which we expect to sell a total of well over 7 million cars at retail. For those of you who don't spend your lives in the automobile business, let me explain that 7 million is something of a magic number to an automobile man. Up until 1962 there was only 1 year—1955—when we enjoyed retail sales at that level. And it had come to be established as something resembling a superstition in our business that if you had a big

year you were bound to pay for it in lower simple three-decker classification of low- this same bill so he can sign it into law. sales in the year following. It just wasn't price, medium-price, and luxury cars as What is more important still, Republicans in the cards to have 2 good years back to we knew it 10 years ago—the way we have and Democrats seem to be joining in the back, to say nothing of two 7-million-car improved quality and reliability to the point belief that the best way to keep the country years. But now the automobile industry is where we can offer the public greatly ex moving ahead is to give the private sector completing its second successive 7-million- tended warranties and the way we have of the economy a good sound incentive for car year—and there seems to be a real pos been able, with all the improvements and in working, saving, and investing. sibility that we may have three 7-million creased diversity of products, to hold the No one of us can afford to underestimate car years in a row. Although I am not going price line against a variety of cost pressures the importance for American business-and to make a flat prediction that the year ahead for 6 years in a row.

the importance for the strength and proswill be that good, I will say it would not sur It might be nice for someone to suggest perity of our country-of this startling deprise me or anyone else in our business to see that all these accomplishments are due to velopment. What it means to me is that a another 7-million-car year in 1964.

the fact that we in the automobile busi profound change has taken place in the Our industry has moved up onto a new ness are such bright and hardworking peo minds of the American people with regard level. Where we averaged approximately 6 plembut you and I know that isn't the rea to the importance of financial incentives million retail sales a year over the past 10 son at all. They are due to the fact that in the national scheme of things. If this years—1953 through 1962—we are now con every company in our business is being were not so, the tax bill would never have fidently expecting to sell at least 7.5 million pushed relentlessly by the demands of a very gone as far as it has. cars, on the average, over the next 10 years. Choosy and value-conscious buying public.

It seems to have become clear to increasing The industry has moved up onto this new We-like businessmen in every other field numbers of people that the profit system as level for the most natural reason in the are caught up in a general upgrading of taste we know it is this country's secret weapon. world-because the country itself has moved and a universal insistence on a maximum And men in positions of political leadershipup onto a new level. When you compare 1963 variety of choice and the highest possible on both sides of the political fence-knowwith 1953 you find that in 10 years the quality-at reasonable prices. The pressure ing that this new trend has set in--are talkdimensions of the market for automobiles is on the manufacturer and on the mer ing far less, if at all, about Government have been increased substantially in every chandiser to furnish what the increasingly pump priming through public works and far way that we can measure. For example: fastidious consumer wants in the way of more about stimulating expenditures by con

In 1953 the population of the United States both product and service of the product- sumers and businessmen. was 160 million and there were 46 million and it is only those companies that are

Now that both political parties are in households. In 1963 the population of the tuned to this new kind of consumer pres basic agreement in wanting to give the country is 190 million-and there are 55 mil sure that are going to be consistently profit economy some good tangible incentives that lion households. able.

will make it grow, we can expect to hear In 1953 there were 46 million cars in use in Now I would like to say a few words about a brandnew kind of political debate. And the United States. In 1963 there are ap an entirely different variety of competition this debate is going to be a distinct pleasure proximately 68 million cars in use. And but competition of a kind that may be just for the business community to listen to. where cars and trucks together amounted to as important in the long run as the kind I Over the course of the next year it is en56 million in 1953, the combined total today have been discussing. A year from next tirely likely that Republicans and Democrats is 82 million.

Tuesday the people of the United States will be competing vigorously with ideas, proIn 1953 there were 70 million licensed after listening to a solid 12 months of politi- posed legislation, and party-platform planks, drivers of motor vehicles. In 1963 the esti- cal speeches and debates—are going to decide all aimed at convincing both the general mated number of licensed drivers is 94 on the kind of political leadership they want public and the business community that they million.

for our country during the ensuing 4 years. have the key to stimulating the private In 1953 approximately 4 million households Those next 12 months are going to be far economy and giving it adequate encourageowned 2 or more cars. In 1963, we estimate from easy on any of us. The air will be full ment. And what could be sweeter music to that close to 12 million households own 2 of verbal flak and the newspapers will be the businessmen of this country than just or more cars.

loaded with charges and countercharges. In that kind of debate? And finally, in 1953 the national program view of all the political talk we have ahead What I am suggesting here tonight is that, of highway building initiated in 1956 had not of us, I am not going to burden you with a in the year of political decision that lies even been started. Since 1956, over 15,000 political speech tonight. But I would like ahead, the businessmen of America would miles of freeways in the Interstate System- before the battle begins in earnest—to ex do well to understand that there is now less including nearly 700 miles in this State as a press a few thoughts as a businessman about need to pound on the old familiar themes whole and the spectacular Dan Ryan Ex one of the key issues of the coming political and fight the same old fights. At least part pressway here in Chicago—have been opened year. And I can only hope that these of the battle has been won-maybe more to traffic and have provided a basic reason thoughts will seem worthy of consideration as the result of the performance of free enfor making car ownership and use more at by you as businessmen and as American citi terprise than as the result of its wordstractive.

zens, regardless of the nature of your own but won nevertheless. Now I am not talking about the promising personal political convictions.

A new tide has begun to move in the outlook for the automobile business just to There is one aspect of the present political affairs and in the opinions of men-and it is make myself feel confident and happy about climate-as it affects the businessman-that the businessman's great opportunity to move the future. Every man and woman in this is completely and refreshingly different from with this tide and speak positively and conroom—and, for that matter, every man and anything you and I have known in our entire structively about the unlimited potential of woman in America-has a stake in the pros- lifetime. Think back for a moment to all the the country once the disincentives of excesperity of the automobile business.

years that the American businessman has sive taxation have been removed. I say let As you know, the U.S. automotive industry, been on the defensive in supporting the cause others, if they wish, talk fearfully and negatogether with all of its related activities, is of free enterprise. Think of the uphill pull tively—and let the businessman start buildprobably the largest single economic com he has had in arguing for more reliance upon ing himself a reputation for being the proplex in the entire world. It generates more the investment of private funds in private ponent and apostle of economic growth and economic activity than the national defense undertakings and less reliance upon the the moves that will unleash the dynamics of and space establishments combined. It in- spending of public funds for public works. growth. volves one in every seven jobs and one in Think of all the speeches businessmen have To illustrate what I mean, let me suggest every six businesses. And when the auto given on the need to encourage saving and three positive approaches that a businessmobile industry can sell cars at a 7-million- capital formation by revising the excessive man might take in the current discussion per-year clip, it helps the whole country to and inequitable Federal income tax sched of the tax bill that is now under discussion prosper.

ules. Think of the patient and seemingly in the Senate. Just as an illustration of what this means hopeless arguments we have made year after First, I suggest that there be far less talk to you people here in Illinois, it might be of year for encouraging capital investment about the desirability of the tax bill as a some interest that during the past year through more flexible governmental policies means of avoiding a recession, and far more Chrysler Corp. bought approximately $29 regarding depreciation allowances.

emphasis on the real, basic purpose of the million worth of automotive components in And now-against that background-in the bill—that is, to encourage more vigorous Cook County alone.

perspective of years of struggle in which the growth of the national economy over the I have spoken of the size of the present Nation seemed like a house divided against long pull. automobile market and given some reasons itself-with great numbers of the American It would seem highly inadvisable to argue why that market will continue to be big people feeling that financial incentives were for a step as big and as important as enand will continue to grow bigger. But there closely related to sin-consider the fact that acting the current tax bill into law on the are many other interesting developments in the House of Representatives has passed an basis that it is needed to avert a hypothetical our business—such, for example, as the way income tax reduction bill by a vote of 271 recession that may not happen in the near we have extended the range and diversity to 155. And also consider the fact that the term at all. We in Detroit see no signs of of the products we build far beyond the President has been urging Senate action on lagging demand for our products, no backing

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