Newspapers / The Chowan Herald (Edenton, … / March 1, 1962, edition 1 / Page 2
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PAGE TWO The National Outlook What Is Ahead For Interest Rates? By Ralph Robey One of the efforts of this ad ministration has been to make certain that the business up swing will not be halted too early by rising interest rates. Back of this is a belief that the recovery from the 1952 re cession was needlessly checked by the Federal Reserve Board tightening credit too early and too strongly. This is an issue that sincere students can argue about by the day and never come to a conclusion as to which side is most nearly correct. But in any event the behavior of the interest rate structure has been materially changed in this uptrend from that of earlier re covery periods. The most volatile interest rate is that for 3-month Treasury bills. These are bid for by banks and other interested in- 1 vestors, and since the volume outstanding is enormous and con stantly turning over, it is sel dom that two consecutive issues will be sold at the same price. During 1954 as a whole the rate of this type of government pa per was below one per cent. From this it roee fairly constant ly to over 3% per cent in 1957. Then in 1958 the rate again dropped to below one per cent, and from this rose rapidly to a; little above 2% per cent, and ultimately to above 4 per cent at the end of 1959. During the first half of 1960 this rate plummeted to below per cent and for month after month remained around that fig ure. Recently, there has been a slight increase, but the rate is still below 3 per cent. No other interest rate has gone through such wide gyrations, but almost all the others have shown increased firmness in the last few weeks. It is time, there fore, to make a guess as to the future. Before predicting, however, there are three basis facts that must be mentioned. First, the Federal Reserve Sys tem has deliberately kept from driving this short term rate too low. The reason for this has been that it did not want funds moving out of the nation to foreign money centers because of a difference of interest rates. In its open market operations, therefore, the Federal Reserve did not limit itself to buying bids, but rather also bought gov ernment securities of longer ma turity. This tended to keep the rate on longer issues lower than it otherwise would have been, but there is no way to measure this effect. Second, the Federal Reserve, authorities harve been cooperat ing with the administration in keeping interest rates from needlessly rising. This does not mean that the Federal Reserve has given up its independence. It means merely that up to this point there has not been enough evidence of inflation, or of mis use of bank credit, to justify putting on the brakes. Even before the 1960 downturn of business the Federal Reserve started to ease credit conditions and it has continued a policy of relative ease ever since. Spe cifically, the Federal Reserve has kept the net free reserves of commercial member banks at about SSOO million. This is the which determines the po tential lending power of the commercial banks without fur ther borrowing from the Federal Reserve. Third, the demand for credit has been growing. Total loans and investments of commercial banks has increased by over sls billion within the past year, and the money supply—which means Precision printing is where we shine! You don’t need a magnifying glass to see the difference in our printing. The result of our careful craftsman y ship is immediately apparent .. . and highly gratifying to our customers. You’ll like it, too! Wj • w # m W r!B/ Let us prove the quality W of our work with sam- I pies, and the modesty a of our prices with a rVPHLj] quotation on your job. I atV 38^.1 L ' ■ I U \ TltA niimiiMt Uatalil iik uiow2R iteraa I V®Jw Phone 2221 currency outside banks and de mand deposits—has risen sharp ly in the past few months. Now the prediction: , There is no reason to assume that the Federal Reserve will make a sudden shift in its policy of credit ease. But there also is no reason to assume that it will continue this policy indefi nitely. On balance, the likelihood would appear to be that, before long we shall see a firming of interest rates in all categories of lending. j Health For All j TB EPIDEMIC Almost five per cent of the I school children in a small mid ■ western town infected with TB germs within four months- The first warning came in De cember, 1959, when the music leacher found he had TB. Im mediately the other teachers and the school children were tuber culin skin tested in a coopera tive project of the school sys tem, the health department and the TB association. Ten chil dren and six of the school staff ' were found to be infected with TB germs, but X-rays showed no active TB. Three months later, the high school basketball coach noticed that one of the boys on his team tired easily. He tried to get the boy to see a doctor but the boy refused. Finally an or der was given: get a checkup or leave school! The checkup showed far-advanced active TB. Another tuberculin testing pro gram already had been planned, and now it was put into high gear. Sixty-four students, it re vealed, had been infected with TB germs since the previous test. Three of them needed to go to the hospital. It appeared from the available evidence that it had been the tuberculosis of the basketball player that had spread through the school. The 1,700 children attending school were given further follow up tests. The fifth, in May 1961, shpwed that the epidemic was under control. But, in all, sev en children had been hospitaliz ed with TB. So had the music teacher and the five-year-old brother of one of the sick school children. Ninety-eight other children had been infected and were potential TB cases. Today, except for the athlete with far-advanced TB who will be sick for some time, all those who went to the hospital are back at school. Yet it is certain that the people in this town, many of whom had thought that tuberculosis was well under con trol, wilt not soon -relax their vigilance against this smoldering menace. A Lot Os Trust “Why is it” asked a visitor to 'the United States Mint, “that they stamp ‘ln God We Trust’ on the pennies?” “That,” explained the guide, “is for the benefit of the people who use them for fuses.” About Average An inquisitive visitor in a small village began questioning a native. He wanted to know everythng about the community, its elevation above sea level, politics, religious tendencies, the bank clearances and so on. Fin ally he asked “What is the death rate in this town?” To which the somewhat bored na tive replied: “About one to a THE CHOWAN HERALD. EDENTON, NORTH CAROLINA, THURSDAY, MARCH 1, 1982. ■ t HP "Hfe ...v f| f PIIf $$ ■ wmm iIN- Jr *•;- it* illii ¥ Lyg|| - ■■■■Hi BH THROUGH THE LOOKING GLASS—Jimmy Pitts, 5, of Atlanta, Ga., didn’t quite make it to Wonderland as Alice did, but he did see a construction project through one of the six sidewalk superintendent-type portholes. I No Comment] By JAMES W. DOUTHAT Amliubl Vice Preni«lt*nt, <»oveminent Relations Division of the Natioual Association of Manufacturer* NO COMMENT is a report of Incidents on the national scale, and does not necessarily reflect NAM policy or position. Washington The opportune time for seeking tQ restrain as tronomic government spending is now. Members of the Congressional Economy Bloc are convinced that President Kennedy’s $92,- 500,000,000 record peacetime spending program for the 1963 fiscal year can be trimmed sub stantially without impairing Na tional Defense or any essential government service. Economy advocates -were pro vided with valuable ammunition contained in an analysis of Mr. Kennedy’s budget by the Na tional Association of Manufac turers which recommended a mmm . cut of $5,684,500,000. The government’s fiscal situ ation makes it. imperative, econ omy advocates maintain, that Members of Congress be urged in every way possible to vote against all unessential spending. Holding down government spending as much as possible is essential, it is contended, in or der to protect the nation’s fis cal solvency, to fight inflation,! to facilitate tax rate reform legislation, to protect the pres ent value of the dollar, to lower the national debt, and to restore an international balanec of pay ments. Many members of Congress are becoming increasingly alarm ed over the present high spend ing and over the future outlook. Among the causes for concern I are these: 1. The $92,500,000,000 spend ing program for 1963, in addi tion to being the biggest in, peacetime history, has soared by $11,000,000,000 above the total for the 1961 fispal year (which ended last June 30). 2. The Kennedy Administra tion already is on record as ex pecting government spending to! pass the $100,000,000,000 markj “sometime during the next few years.” This forecast came from Budget Director Bell. 3. Higher expenditures in the future were clearly indicated by Mr. Kennedy’s request to Con gress in the 1963 budget for new authority to spend $99,300,000,- 000 in that fiscal year and later. Since the new obligational au thority sought is higher by $6,- 800,000,000 than the actual spend ing proposed for 1963, this por tends climbing expenditures la ter. 4. The programs proposed in the 1963 budget involve more federal control over the- nation’s economy than any other peace time budget in history. It is based on the pnilosophy that the people are incapable of'dealing with local problems— and, therefore, the bureaucrats in Washington must broaden their domain to include such ac tivities as school construction and teachers’ salaries, urban af fairs, mass transportation, juv enile delinquency, sewage dis posal, parks, and playgrounds and a host of other things. 5. The Budget is being used as a fiscal tool to manipulate the economy—with official sanc tion for deliberately-incurred deficits in a time of business recession. Such a policy is re garded as. extremely dangerous by those who believe that a HERE’S TV’S STRONGEST RELIABILITY GUARANTEE "■ """■ l 11 ‘ u Here’s How Much Confidence We Have In Hk The Reliability of New Motorola TV FREE TV SET If the Power Transformer fails or falters in- / '>■ A s A side a year, well <*ive you a brand new com parable Motorola TV absolutely free! There’s no catch to this offer. It be- This is Motorola reliability. It’S in gins the day you drop in and buy your every model . . from the lowest priced 1962 Motorola TV . . . and lasts a full - right up to the big, beautiful Multi- y Car Speaker Consoles. v' *P|H COME IN...SEE TIE COMPLETE UK OF MOTOROLA TV’s! : i' i' 1 tißMSmmm i|£ESßlflßßriNL I J / Model 19T208 | JW j| V * 'yt' . PRICED FROM As " 1 IfllP .. . * _ z>. balanced budget, whenever pos sible, is essential for A sound economy. • v 6. The rapidly increasing fed eral expenditures—and the ac companying confiscatory tax rates—seriously Omit the avail ability of capital required to fi nance essential business expan sion and modernization., 7. Mast df the increased fed eral spending is for non-defense purposes rather than for de fense. 8. The Administration has made no effort to curb non defense spending'in order to de fray the cost of highel - defense expenditures. 9. Whenever the Administra tion forecasts a reduction in cer tain expenditures, it uses this as the basis for recommending other spending programs to use up the potential savings. In this way, the taxpayer gets no break. ‘ . . , 10. The legal debt limit has been elevated eight times in the last eight yearsr-and Mr. Ken nedy now wants it raised to an unprecedented $308,006*008,000. Chairman Byrd (D.-Va ), of the | Senate Finance Committee, is I among those demanding that the Administration prove its case. 11. The number of govern ment employees is increasing rapidly under the Kennedy Ad ministration—which means more expenditures not only for sal aries but also for broadened fed eral activities. Government em ployees traditionally seek to build their own bureaucratic or specialVitrterekt empires. } Fedtinl civilian employment iff! expected to jump to 2,538,390 sor 1 the 19(U fiscal year—an increase of 131,*00 over 1961. It is W>t enough to do good;, one must do it the right why ’ \ —John Morley. ! . . ; * ' : j . •-.* You’re more sure of the [jIOSEfiRI crop when npnoin you’re sure yflllH of the seed. [ | mark of Piontof Hi-Bred Corn Co, PIONEER'Corn SEE or CALL YOUR LOCAL PIONEER®DEALER ❖ Leary Bros. Storage Co. Phone 2141 Edenton, N. C. r BIRTH ANNOUNCEMENT.^^ 1- ! Mr. and >M*s. Billy Boyce •an nounce the birth of an 8-poutfe, 112-ounce sen, Bdvvard Blake* ! Thursday, February , , 22, infUftowan Hospital. Iflfe 'Bbyce is the former,. Miss Fran ! ces Necajsg. of Gulfport, Miss.
The Chowan Herald (Edenton, N.C.)
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March 1, 1962, edition 1
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