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CO^-T^EI. TO TILT ?;y ~iiugoi: r.cp;.^ ic An Advisory Committee to the President on Eeonomie Policy should be est&DlIs&ed to coordinate the policies of the vmriow monetary and fiscal agencies of the Government and to work out plans for dealing with monetary, fiscal and. price problems relating to the defense program and to the ultinate transition to a peaee-tir-ie basis* This committee, under the chairmanship of the Tie® President, sight be composed of the Secretary of the Treasury, the federal Loan Administrator, the Chairman of the Board of Governors of the 5®&eral Re serve System, and the meaber of the Defense Commission in charge of prices. One of the Adainistratine Assistants to the President could act as the committee1s secretary. The Director of the Bo&get could, if it were thought desirable, sit in ft! an observer. Reasons for H !•• The Broad Beed for L,.^Committee* Unie progress has been made i» coordinating-; the "physical side of the defease nrQgrua, Ko progress, boverer, has been aa<le in coordinatia-; its financial ooiaterp&rt. Consequently, tlierc firs M M a nunbGr of different departments and agencies all concerned with one or more aspects of wbfct is in essence a single large problem* As the defense program trains m there is t—T—Blag dan.;er and livelihood of eonflictin,: or policies being adopted. There are almost botind to arise individual disagreements as to whether or to w\ at ertent recourse should be had to the use of monetary controls, fiscal controls, direct credit or rationing controls. Some differences, of source, will always exist. Many others, however, could be resolved round a table. As a means of relieving pressure on the President and in the interests of developing consistent and comprehensiTG proftTfiUM, there is urgent need of an aduiinistrstiYe device to insure that conflictinr, or Aaplloati&g policies be avoided, that the areas of controversy that irmst be settled by the President be reduced and that alternative courses of action, to be pieced before th© President be el©trly and sharply defined. A frequent cause of diei. -reeseats on policy natters is traceable to differences in the factual and analytical studies on which policies are bused. The su,nested aoi^aittee would facilitate an interchange of viei?s and • narrowing of differencea at the technical level* Finally, the t*lgge*te4 coKiittee, under the chairmanship of the Vice President, «O«ld afford • I M M of coordinating policies of the Executive and Legislative Branches of the QoverMMftt and of lessening mistinderstanding between, those branches. In 30 dai&g, it would enhance the influence and usefulness of the offlee of Vice President. 2« Terms of Refer once and Mature of Problems. The terms of reference of the propo—j cossnittee mt^y be indicated by the nature of the problems that arc imminent or prospective. These include questions of direct or in-.iirect methods of preventing price distortions; precautions agalaat oossibilities of future credit inflation; bttdgat&ry requirements of defense and [mat rtafraai activities and their financing; related questions of inter st ritM snd tha type and timing of taxation inte^r.sted with the aaaio objective of sustained production and employment; aal&ta&a&ea of aoo&oadc balance, particularly as it affects »£Xiculture and consumers. Ihaaa and many other related matters require analysis &ne coordination thrown a representative? committee that can act in Hi advisory capacity under the President's direction. 3« Composition of Committee. (a) The Vice President: Various advantages ^/ould flow from the designation of the Vice President as Cnalraan of the Coar Ittse. It would provide the ssost satisfactory way of keeping him in touch v.'ith the policies of the Adftlnlatr&tloa and the ran;-;e of considerations that entered into their making. Being comparatively free from administrative duties and harlag the interests that he has, it is to be expected that he ^ould take an active part in the wozfc of the committee, (b) The boeret&ry pfrtiie Treasury; Because of his direct responsibilities in the field of taxation end Government financing emd the Treasury13 BQ&et&rr and ba^ikini?* powers. (c) The Federal Loan Ad:ninistr£tor should probably be a meaber bccoufie of the magnitude of the domestic ejid foreign locins made by his agimel— and the influence on interest ratal he can nc«rt« (d) The Ch&irssan of the Board of Governors: Becauar of the responsibilities of the Federal Heterve Srst«H in the monetary and general credit field. (e) The CogiBissioner on Prices iof the Defense Conailssion: It is obvioualy desirable that a liaison be established betveen the Finance Qoamlttae aad the Defense (TWilmtflli The responsibilitiee of the Co^'iiasioner on Prices relate aomt closely to the v^ork of the proposed coraaittee and it so happema that he is also a aeab«T of the Priorities Board* As it appears to be established as a general principle that no member of the President's staff should serve on a policy-forcing committee reporting to the President through someone else, the Director of the Budget is mot Mf§Mt«4 as & memoer* On matters pertaining to the budget, however, he could sit in as an observer, if it m i thought desirable. It is most desirable that the coosiittee have a s©exYet&r/ to keep records, prepare &n agenda and reports, and insure that the technical studios required by the committee are forthcoming. The selection of a secretary from any one of the agencies represented raises obvious difficulties. It is recommended, therefore, that the Administrative Assistant to the President in the general field of fiscal and monetary matters be made secretary. ;
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