The New Problems

Businessmen greeted the Republican victory with sober optimism. They all expected the G.O.P. to bring a more favorable political climate for individual initiative, and for business in general.

Nobody expected the Republicans to change the stormy Fair Deal climate overnight; for many reasons, they could not. Under the Democrats, great areas of Government--particularly those having to do with business--were moved into the controlling hands of boards and commissions whose members were appointed for specific terms. Hence, barring mass resignations, many of these boards will remain in Democratic control for some time to come. The Federal Trade Commission will not pass into Republican hands until next September. CAB will be controlled by Democrats until December 1953, the Interstate Commerce Commission until 1954. But businessmen hoped that the agencies would note the election returns. In short, businessmen looked forward to an entirely more flexible, more sympathetic approach to their many problems:

Taxes. The excess profits tax will probably be allowed to die in June. Excise taxes, long under attack by liquor and other industries, may be lowered where hardship can be proved. The 12% boost in personal income taxes, approved a year ago, may be allowed to expire in December 1953. But businessmen were well aware that the U.S., now running a $10 billion deficit, can only hope for real tax relief if the Republicans find a way to cut waste in military and civilian spending.

Farm Prices. Commodities, which have been edging lower for months, slipped some more at the election news, though Republicans are on record as favoring present price supports, which still have two years to run, and other farm programs.

Foreign Trade & Aid. After seven years of aid, many European nations have realized that the time has come to stop aid and permit them to stand on their own feet and trade with the U.S. The only way Europeans could do so was by a drastic revision of U.S. foreign trade and tariff policies. Many Republican businessmen were among the loudest plumpers for lower tariffs (see below).

Controls. Wage and price controls, already withering, may virtually end even before the Republicans take office, although the Controls Act does not expire until April. The Controlled Materials Plan (for steel, copper and other materials), scheduled to die in June, may end sooner. However, some form of materials allocation for military production may be necessary. Republicans have said that they will rely more on indirect (e.g., fiscal and credit) controls to fight inflation, if that threatens again, in which case Congress would have to restore to the Federal Reserve Board its powers over consumer credit, which were wiped out last session.

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