THE U.S. PROSPERITY TODAY

In a San Francisco speech last week, Treasury Secretary George Humphrey outlined, in clear and simple terms, how the Administration regards the U.S. economy today. Excerpts:

"WITHIN the last half century, this nation has gone through an economic evolution that makes pale any other in the long history of man's efforts to achieve a better life. We in this Administration have hitched our wagon to this rising star of a "have" nation. But on coming into office, we found that this great day-to-day American evolution from the bottom up was in danger. We found the economy's growth hobbled by successive layers of regulations, controls, subsidies and taxes imposed in past emergencies. We found defense spending being used partly to buy defense, partly as a crutch to support an unsound economy, thereby endangering both. We found an economy out of step with the nation it had to serve.

The Solid Base. Let's look at what millions of Americans have been actually making of our economy:

Total national production of goods and services now approaches $400 billion -20 times our national output in 1900. When you make allowance for price rises, national production is still seven times what it was in 1900. Our population has more than doubled, but our national output per capita is three times what it was then.

Here is the important thing: the lower-and middle-income groups have received the greatest share. Early in the century, only one out of every ten American families earned as much as $4,000 a year in terms of today's prices. Now, almost half our families earn more than $4,000 a year.

Let's see just how widespread this flow of purchasing power to the broad base of our economy has been: P: At the turn of the century, people had taken out 14 million life-insurance policies. Today the number has increased to about 250 million. P: Small investors' holdings in U.S. Savings Bonds total the huge amount of $50 billion.

P: Nearly 10% of all American families today own stock in American corporations.

P: In 1900, individuals had liquid savings of all types amounting to less than $10 billion. Now such savings total more than $235 billion. P: About 55% of our families now live in homes of their own.

P: More than 15 million Americans have more than $30 billion invested in pensions and retirement trust funds, which were unknown in 1900.

The Puhlic Enemy. The basic interests of the man in overalls are today the same as the basic interests of the man in the business suit. To the extent that inflation develops, both are robbed.

If you had $1,000 saved up in 1939, which you did not draw out to use until 1953, you really took a beating. Inflation had sneaked into your savings in those years and made off with $478. Inflationary price rises during that time cut the purchasing power of the dollars you were saving, every minute of every day.

We in the Eisenhower Administration have made halting inflation one of our principal goals. In the last 2 3/4 years, the value of the dollar has changed only one-half of one cent. We have kept inflation's hand out of your savings almost entirely.

We regard inflation as a public enemy of the worst type. But we have not hesitated, either, to ease or restrict the basis of credit when need was indicated. The full force of monetary policy has been made effective more promptly than ever before to better respond to natural demands. This has been done by the timely use of monetary policy and credit; by the return to the public of purchasing power through the biggest tax cut in the history of the nation; by cutting unjustified Government spending; by timely encouragement to construction, home building and needed improvements.

The Fertile Field. We hope for continued prosperity, based not on war scares or artificial Government stimulants but on steady spending by consumers and investment by business.

The best that Government can do to strengthen our economy is to provide a fertile field in which millions of Americans can work. The continued success of our economy depends not upon Government, but upon the efforts of all the people trying to do a little more for themselves and their loved ones. It is the sum total of all these individual efforts that makes our system superior to anything known in this world before.

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