The Atlantic Report on the World Today: Washington

DESPITE President Eisenhower’s support of Secretary Benson in his Kansas City speech, the clamor for the resignation of the Secretary of Agriculture has not abated. Republican politicians, since the by-election returns from Wisconsin, are especially sensitive about Benson. The soft-spoken Utahan is regarded as a distinct political liability.

Actually, Benson is in part a victim of circumstances. The decline in farm prices started long before President Truman and Secretary Brannan left office. Causes lay in the end of the abnormal wartime demand — which shot prices to all-time highs — plus the recovery of foreign production and the inability of other countries to spend dollars on American farm exports. The decline has leveled off during Benson’s tenure, with the parity index remaining at about 92.

In fact, Benson has taken many steps to stabilize prices. He voluntarily continued dairy supports at 90 per cent of parity for another year, He intervened to halt the beef decline by purchasing cattle in drought areas. He indicated willingness to continue 85 per cent supports on small grains — in addition to the 90 per cent supports on basic crops provided by law through 1954. That is, the Department of Agriculture stands ready to buy or make loans on crops at 85 to 90 per cent of parity.

All this is evidence that the Administration has no intention of allowing the bottom to drop out of the market. But it has not satisfied the critics. Benson’s sincerity is evident in his attempt to solve the price-surplus dilemma; but his tactless and inept remarks have left the impression that he regards price supports as insurance against disaster and nothing more. His proposal to reorganize the Soil Conservation Service along state instead of regional lines was popular with no one, and it stirred active opposition among those who look upon conservation as a sort of religion. Benson angered other critics by remarking that most of the complaints came from the politicians instead of the farmers.

After extensive hearings through the country, the House Agriculture Committee reported almost no sentiment for inauguration of the “sliding scale” of price supports. This is the system provided in the Anderson Law whereby governmental supports on basic crops would vary from 90 down to 75 per cent of parity, depending on supply. The theory is that lower supports when crops were large would discourage overproduction. Congress, however, has consistently postponed application of the Anderson Law and has left basic supports pegged at 90 per cent through 1954.

What the findings of the House committee amount to is a revolt of the traditional rugged individualist. Apparently many farmers would rather have guaranteed support levels, even with acreage allotments and marketing quotas, than take their chances in the market.

This philosophy conflicts with the repeated inveighing by President Eisenhower, during the campaign, against regimented agriculture. It also reflects a certain political fickleness. Farmers and farm politicians now calling for governmental help, particularly on drought relief, were among the first to object to controls and demand a free market when prices were high.

The cost-price squeeze

President Eisenhower has promised that a new agricultural program will be presented to Congress in 1954 after consultation with agricultural advisory groups. Benson’s problem is to come up with a formula that not only will cope with surpluses and export difficulties but also will serve as a psychological reassurance to farmers caught in a cost-price squeeze. There is much speculation that he will be forced to adopt — under a different name — the essentials of the Brannan Plan on perishable commodities.

Under this scheme, crops would be sold on the free market, but the government would make up in direct production payments to the farmer the difference between the market price and what was adjudged a fair income standard. One cartoonist, at the time the Brannan Plan was first broached, depicted it as a cow giving milk at both ends; but now there is increasing acknowledgment that the production payments system makes sense.

The Democrats are enjoying Benson’s discomfiture immensely. Meanwhile, Republicans in Congress remain acutely aware that the farm vote helped swing the 1948 election to Truman. Many state flatly that Benson is now anathema to farmers and that, irrespective of the economic merit of what he may recommend, he will have to be sacrificed as a scapegoat.

Nixon looks and listens

The Administration is eagerly awaiting the report of Vice President Nixon on his 38,000-mile air tour of the Far East. The youthful Nixon and his wife are good-will ambassadors of President Eisenhower on their eighteen-nation trip. More important, Nixon is serving as the eyes and ears of the President to help formulate a more consistent American policy toward the Far East.

Unlike Senator Knowland on an earlier tour, Nixon has avoided public pronouncements. His purpose has been to learn and discuss. To encourage frankness, he has talked privately with foreign officials. His views have broadened since the time of his election, when he was inclined to regard the Far East in terms of absolutes. He tended then to agree with Knowland that the United States should enlist every possible country in an anti-Communist crusade.

When he left, Nixon acknowledged that there might be merit in other points of view. He expected to ask questions. Just what is the enemy in the Far East — Soviet imperialism, world Communist conspiracy, or Chinese expansionism? Should we attempt to split China from Russia, or should we view the Chinese Communist regime, in the fashion of Admiral Radford, as something that must be fought unceasingly? Would an attempt to isolate China throw it deeper into the arms of the Soviet Union?

Several Far Eastern nations have been smoldering over the American tendency to equate anticolonialism and new-found nationalism with Communism, and ambassadors in Washington regard Nixon’s questioning approach as a godsend. Senator Knowland created bitterness by lecturing officials in Southeast Asia on just what the policies of their countries should be. Southeast Asian nations especially have resented the “sign on the dotted line" technique.

The rift with India

Whether Nixon can bridge the gap is another matter. The rift with India is deep. Tension over Indian handling of anti-Communist prisoners of war in Korea emphasized the American suspicion of Indian motives toward China. Other Western members of the Neutral Nations Repatriation Commission protested, incidentally, that the aspersions on the Indian performance were highly unfair.

Indian diplomats complain that there is little understanding in the United States that India can be intellectually anti-Communist and proWestern and still be unwilling to embark on a program of military suppression. India’s neutralism, they maintain, befits a new nation and is not unlike the policy of the United States during its first 150 years. They also assert that as China’s immediate neighbors they are better able than others to evaluate what is going on — though outsiders protest with some validity that Indian policy is too ready to gloss over the brutal repressions and liquidations which Indian representatives themselves have reported from China.

No one expects Vice President Nixon to end the recriminations between India and this country or to formulate a new policy toward Asia all by himself. At the most, he is expected to bring back information and impressions that will be helpful in evolving a more precise American policy.

American foreign policy toward Europe, despite occasional aberrations, is generally clear enough in its objectives and has achieved a considerable measure of bipartisan acceptance. It is fair to say, by contrast, that there has been no such thing as an agreed-upon set of American objectives in Asia. During the Eisenhower Administration as during the Truman regime, a right-wing claque has established loyalty to Chiang Kai-shek as the test of policy. But another influential segment, composed of Democrats as well as some liberal Republicans, has regarded as disastrous the tying of this country’s efforts to Chiang’s dim hopes for restoration on the mainland. The first step in removing our Far East policy from the realm of narrow partisanship is to define the American objectives.

Nixon and the NSC

The evolution of Nixon’s openmindedness on the Far East is symbolic of his growth. He has submerged himself in the interests of the Eisenhower regime; he talks and acts as the understudy of the President. He is perhaps the hardest-working Vice President in a half-century. Not only does he serve as a counselor and liaison man with Congressional leaders; he also participates actively in the making of Administration decisions. He makes few speeches, but he often relieves the President of the burden of dining out. He and Mrs. Nixon set something of a record by attending eighteen official dinners in eighteen consecutive nights.

Nowhere is the Vice President’s role more significant than in his acceptance of responsibilities in the National Security Council. The NSC has become the President’s war cabinet — or, more accurately, the executive committee of the Cabinet. The concept of the National Security Council, as developed under President Truman, was that of an agency to ensure that American commitments would be reconciled with American power. In practice, however, it sometimes was little more than a loose coördinating committee. During the campaign, President Eisenhower criticized the failure to carry out the policies made by the NSC, and he promised a “revitalized and reconstructed” Council.

In its new version the National Security Council has superseded in importance both the Cabinet and the Legislative Conference. At frequent meetings it considers all essential policies involving defense and foreign affairs, including the American position in the United Nations, the defense budget, the strategic recommendations of the Joint Chiefs of Staff, and changes in Far East objectives.

Dulles takes hold

The barometer of Secretary Dulles’s reputation has begun to rise. Beginning with his powerful mid-September speech to the United Nations, Dulles has enhanced his stature with foreigners as well as with American observers. He seems to act with more deftness and confidence.

There is still criticism that Dulles lacks backbone and that he indulges in inconsistencies in order to please different audiences. But this is counterbalanced by the acknowledgment that his long-range strategy often has been right even when the tactics have been objectionable. The State Department also has sought behind the scenes to counter the impression of inflexibility invited by Ambassador Lodge’s stands in the UN, especially those involving India.

Dulles’s willingness to consider a nonaggression reassurance to Russia on Germany, at the same time that he parried Sir Winston Churchill’s demand for a top-level conference, was a sign of the new versatility. Although his verbal intervention in the German election brought a great outcry at the time, after-the-fact appraisals are more charitable in light of the outcome. His single-minded advocacy of European unity has begun to look like statesmanship because of the improved prospects. On one point Dulles has been consistent despite the confusion: any successful American foreign policy must have a solid base of political support.

Buttresting the economy

Fears of a serious downturn in business activity are still discounted in Washington because of the many selective economic stimuli available to the government. The Federal Reserve Board, which manages the money supply, is working in close conjunction with the Treasury. Thus, when the Treasury’s action in raising interest rates appeared to tighten credit too severely, the “Fed,”as it is called, moved to ease the situation by purchasing government bonds and by lowering reserve requirements for member banks.

In another area the end of the excess profits tax and the cut in individual income taxes scheduled to take effect January 1 are expected to pump more money into the economy and thus to help counter any recession that might develop. The Administration has been vigorously criticized for continuing to indorse tax cuts when the budget is badly unbalanced — though political pressures might have forced the tax cuts in any case.

Unquestionably the Administration is in something of a dilemma as it seeks new sources of revenue for those abandoned. What is generally overlooked, however, is that the tax cuts do serve a purpose in buttressing the economy against excessive deflation and are part of a premeditated plan.

The Eisenhower Administration is committed to use the mechanisms of government — credit controls, tax policy, and the like — to try to keep the economy functioning properly. This is the legacy of the Roosevelt experience, and any Administration would have to move in similar fashion. For example, if home construction should take an alarming slump, the Administration, in addition to easing general credit, might act specifically to lower requirements for mortgages or home improvement loans.

In the judgment of economists it is quite possible that, for a time, the country may undergo both deflation and the symptoms of inflation simultaneously. The economy is still making delayed readjustments to the end of price and rent controls, and some prices may continue to rise gradually even if there should be slight increases in unemployment.

Although the cost of living index is highly regarded as a statistical guide, it is figured on the basis of average retail prices and does not fully reflect such phenomena, as discount purchases and increased trade-in allowances which have resulted from more intensive competition. The erratic behavior of the stock market, in part because of too stringent margin requirements, is viewed with some concern, but is no longer regarded as an accurate key to the functioning of the economy at large.

The now economic advisers

The primary job of coördinating governmental policies affecting the national economy belongs to the President’s Council of Economic Advisers. Chairman of the Council is Arthur F. Burns, a Columbia University professor who has specialized in economic theory and the business cycle, and in addition has served as research director of the National Bureau of Economic Research. Serving with him is Neil H. Jacoby, the taciturn former dean of the school of business administration at the University of California in Los Angeles, who also has participated in the work of the Committee for Economic Development.

Three principal duties have been outlined for the new Council of Economic Advisers: 1) current assessments of economic conditions for the benefit of the President; 2) recommendation of immediate measures necessary to stabilize the national economy; 3) recommendation of longrange measures and drafting of legislation to carry them out.

Burns views his job as that of a confidential adviser to the President, and it is unlikely that he will make as many public appearances as his immediate predecessor in the Truman Administration, Leon Keyserling. There is a danger, however, that the over-all coördination of economic policy will be misunderstood — by bankers as well as by the public — unless it is explained. Thus the Administration may be forced to publicize some recommendations of the Economic Advisers, if only as a matter of reassurance.

Mood of the Capital

The Administration’s fortunes in the new session of Congress will be largely wrapped up in Senator Knowland. In the House there is the political skill of Speaker Martin to help; but Knowland’s ability to push a legislative program through the Senate in an election year remains to be demonstrated. Although the Democrats have not threatened open opposition, it is only natural to expect that their approach to individual measures will become more partisan and critical.

The immediate threat to Knowland’s leadership comes from a rightwing group led by Senator Capehart. It has been plugging for an ostensible “reform” of the Republican Policy Committee to include the chairmen of all fifteen Senate committees. The gimmick is that the committee chairmen, who have advanced to their posts through sheer seniority, are for the most part extremely conservative men. Once ensconced on the Policy Committee, they would be in a position to overrule the more moderate group now selected by the Republican Conference.

If Knowland wins this battle, his control will depend upon the help of Senator Millikin — a high tariff advocate-plus more active support by Vice President Nixon and probably by President Eisenhower.