The Atlantic Report on the World Today: Washington

LONG before the campaigning began, the nation’s capital was quivering with election fever. Republican and Democratic headquarters were off to an early start in appraising the main issues before American voters at the November polls. With a GOP majority of only two in the House and of one in the Senate, the excruciatingly close balance heightens the suspense and is a measure of the importance of the coming midterm ballot. Focusing on the national scene and allowing for the unexpected in the campaign’s closing stage, the two major parties generally agree on the principal issues.

Democratic strategists are building their hope on what they claim is popular disappointment with the Republican Administration. They say this “vague disillusionment,”rather than revulsion against any one or two GOP policies, will turn the tide. The Democrats argue that dissatisfaction is felt more with the Republican Party than with the President. They are also feeding their optimism on last year’s eight Congressional elections which netted the Democrats two Republican seats.

GOP leaders dismiss this Democratic horoscope as wishful woolliness. They say the voter will judge the Republican Party by whether it has or has not kept its promises. Has the Administration cut taxes, moved towards a balaneed budget, run the government economically? Did it end the war in Korea? Is it exercising better control over the Communist situation?

The electorate’s response to this sort of concrete question, the Republican tacticians insist, will decide the outcome in November. They show confidence that the governing party can face such a test. Like the Democrats, some top Republicans are also indulging in generalities and claim they have improved the moral tone of administration. As one leading GOP Senator remarked with wry satire: “You no longer have to send your income tax return care of some Federal penitentiary.”

War and peace

Foreign policy is one of the two paramount factors that will determine the vote. Republicans think they have a winning card in charging their Democratic predecessors with having “lost” China — an unfortunate word, suggesting we once possessed China. Democratic chiefs profess doubt about their rivals’ chance of “squeezing another two or three years’ mileage out of Acheson.”

The Democrats are ready to counterattack if Asia is to become a football in the 1954 election campaign. A Republican accusatory shout of “China” nowadays promptly evokes the Democratic echo, “Indochina!” Vice President Nixon opened this tit for tat when he held former Secretary of State Dean Acheson responsible not only for the loss of China but also for the Korean war and the Indochinese misfortune. The Democrats have been putting the GOP on the defensive for having uttered dark threats of united action and then failing to halt disaster in Indochina.

As to the other pivot of world affairs —less dominant across the front pages but at least as critical for war and peace — Western Europe seems likely to remain outside the current campaign here. The two parties are agreed that the time has come to give the Bonn Republic its sovereignty and to create German units for the West’s military system even if France stands aside.

Thhere has been much justifiable anxiety about the estrangement between ourselves and some of our close allies. The Democrats have some truth on their side in charging that the Administration is more concerned to maintain its alliance with Knowland & Co. than with Britain and France, to say nothing of holding the good will of India, Burma, Indonesia, and Ceylon.

In the whole debate on this topic, though, one fact of historical import has been ignored. In the years immediately after World War II the nations of Western Europe were to an exceptional degree dependent on the United States for food and raw materials. This reliance was anchored first in American loans and later in the Marshall Plan. Then Western Europe’s dollar crisis vanished. British gold and dollar reserves have been climbing steadily and are now above the $3 billion mark. Britain and the others expanded their economies. They regained markets. They throttled their demand for dollar goods. Meanwhile the U.S. increased its purchases of foreign arms and other military equipment, assuring a continuing flow of dollars.

As they once more stood on their own feet economically, these befriended countries also struck out on more independent political paths. The British have shown this particularly in their China policy. The French have braved an American outcry against “appeasement ” in Indochina. But France must still plunge into an ordeal of austerity if it is to do without the billion dollars a year which the U.S. has pumped into the Indochina war and which has salvaged the French balance of payments.

The state of business

The business situation is the other factor that will exert the greatest influence on the voters. It will have a varying impact in different regions, depending on the state of farming or industry in specific areas. Republicans admit that with several ugly patches already evident, a further dip in the economy could inflict heavy reverses on them.

Since its June 30, 1953, summit, the rate of defense spending has fallen by an estimated $8.5 billion — from $53.5 billion to a projected $45 billion. The rush to amass inventories after the outbreak of the Korean war was continuing far into 1953. Lately that trend has been reversed, inventories dropping some $10.7 billion between the second quarter of 1953 and the corresponding period in 1954. These movements alone accounted for almost 80 per cent of the whole business reces-

sion since a year ago. The dip in industrial production and the increase in unemployment have been contributing to the uncertainty in Washington.

GOP economists are emphasizing that these and some other minus signs in the economy are in large part the price we paid for ending the Korean war. They go on to stress that since the Republicans were returned to power, income taxes have been cut 10 per cent; the excess profits tax has been abolished; and during this session of Congress an over-all $7 billion tax reduction has been set in motion. The GOP chiefs claim they have advanced in the direction of a balanced budget by pitching Federal expenditure some $11 billion below the level President Truman planned.

As to unemployment, say the Republicans, those who are out of work and who have exhausted their unemployment benefits are almost sure to vote Democratic. Anyway, they add, Republicans rely much less than do Democrats on the votes of the time-clock punchers. Further, they conclude, the picture is by no means all gray; for instance, disposable personal income has been maintained at a high level.

To all this, the Democrats are ready with answers. Rightly or wrongly, they say higher social security costs under the Republicans have just about erased the advantages of reduced taxation, and average take-home pay is roughly what it was. When Harry Truman left the White House, they point out, there were 1.6 million Americans out of work; today there are about 3.5 million, to say nothing of sharp curtailment of overtime. Since the GOP again began governing the country the gross national product, classic barometer of prosperity, fell from $371 billion in the second quarter of 1953 to $357 billion in the second quarter of 1954. In the same period, industrial production went down 9 per cent.

Farm prices

The Democrats are for rigid price supports for America’s six basic crops while Republicans favor flexible supports. This issue directly affects an estimated 40 million citizens, including the nation’s 5.5 million farmers.

The Democrats contend that during the 1952 campaign the GOP pledged 100 per cent of parity and of late flouted that promise. President Eisenhower has repeatedly denied this. That failed to prevent Adlai Stevenson from alluding to this subject again and again in agrarian vernacular with the remark: “The most perishable commodity in our American life is a Republican campaign promise.”

Secretary of Agriculture Benson, whose stature in the mition is steadily growing, points out that the rigid support system has failed to prevent a decline in net farm income for five of the past six years. Yet the Democrats are mindful of Harry Truman’s big inroads into the farm vote in his triumphant 1948 race for the presidency.

GOP strategists are prepared to cope with what they describe as Democratic inflation of this issue. Republican leaders doubt that the price support controversy will appreciably sway the rural vote. In Minnesota, for example, the ratio of farm income derived from high rigid price supports is between 10 per cent and 13 per cent. That proportion is reported to hold for many other states and a number of Congressional districts.

President Eisenhower has made clear he attaches high significance to acceptance by Congress of the principle of flexible supports. In the opinion of the President and his advisers, incomparably more important is the country’s ability to absorb a maximum of farm produce. GOP headquarters is looking to the index of personal incomes and to spending, both of which are running high, for the answer to uncertainty regarding the rural as well as the urban vote.


The Democratic National Committee is as determined to make McCarthyism an issue in the autumn elections as the Republican leadership is to avoid this. Democrats are arguing that Senator McCarthy has impaired the GOP Administration’s effectiveness by actions which diverted the government from the conduct of the nation’s affairs.

Public opinion surveys indicate a decline in McCarthy’s influence since the beginning of the year. During this period the ratio of those who favored him fell from half to a third of those polled. Simultaneously, several Republican Senators running for office this fall have stated they will refrain from asking McCarthy to come to their states to take the stump for them. The Democrats firmly believe that McCarthy will lose more votes than he will gain for any candidates whom he backs. Democrats will attempt to discredit what they call the smile-and-smear campaign. By this they suggest President Eisenhower will take the gentlemanly high road while McCarthy takes the low road.

This is how a leading Democratic spokesman acidly expressed this divisive tactic against the Republicans: “We think President Eisenhower is at least as good an American as McCarthy and also that he has as good a war record. As for McCarthy’s constant howls about Reds in government — if the President hasn’t found more Communists in executive agencies, perhaps it’s because there just weren’t any there.”

The Republicans believe they have found a telling method of dealing with this problem. By establishing a set of rules to put the conduct of investigative committees in order, they say they will have gone far towards banishing McCarthyism as a campaign issue. They express conconfidence that such rules will immunize them against Democratic exploitation of the McCarthy issue.

An opinion poll on this topic revealed the public about evenly split as to whether Congress is abusing its power to investigate. But on the further question, the vote was 57 per cent to 35 per cent to remove from the hands of Congress the job of ferreting out Communists and to leave this entirely to the Department of Justice and the FBI.

Democratic leaders take the position that the code of good behavior proposed for investigative units will fail to assuage public discontent unless those rules are strictly observed. Will the rules be enough, they ask, unless the whole Congress acts to ban browbeating of witnesses, loaded questions, and slanted summations of testimony that insinuate proof of wrongdoing?

Public vs. private power

In the controversy over electric power the Democrats believe they have a lively and politically rewarding issue both in the Northwest and in the seven-state TVA area. The Eisenhower Administration has never set out to eliminate public power. But it has consistently held power development to be primarily the responsibility of private enterprise, with the government intervening only in large multipurpose projects which would be uneconomic for private business. This attitude was reflected in the Administration’s decision to open Hell’s Canyon in Idaho to private utility concerns instead of reserving it for a future ambitious Federal project.

The President aroused opponents of private power interests when he called the Tennessee Valley Authority “creeping socialism.”This summer he carried his attitude further by ordering the Atomic Energy Commission to negotiate a contract with a private syndicate to supply power to the TVA. Proponents of public power in the Tennessee Valley district denounced the plan as “an effort to sell this area back to the power trust.”In the House, Representative Chet llolilield, a California Democrat, saitl the higher cost of privately supplied electricity under t his scheme would cost taxpayers in the a fleeted area $3.6 to $5.5 million a year “overcharge.”Holifield alleged the AEC contract would enable the private power combine to launch a $107.3 plant on an initial $5.3 million investment.

From inside the Democrats’ own ranks Senator Fulbright, Arkansas Democrat, struck back at the foes of private power. He said he has long supported TVA but felt there is room for private and public power and that this was an opportunity for private firms to participate. He challenged the AFC’s estimates which showed the proposed private control would cost at least $3.6 million more yearly than if TVA provided the power. If TVA’s relief from taxation were taken into account, Fulbright contended, the difference came only to $282,000 annually.

Thus as the 1954 campaign approaches its climax, the old feud between public and private utilities has flared up again. Despite the rather lonely Fulbright defection in their camp, Democrats are convinced that popular feeling will be deeply stirred against what the Alabama Democrat Senator Lister Hill described as “giving private monopoly a chance to drive into the Tennessee Valley area and destroy the yardstick.”