How Fed Can Fight A Two-Front War
ILLIAM McChesney Martin Jr., has a stocky physique and a calm temperament. They suit a worriful job. If Martin doesnÛªt have inflation to worry about, itÛªs deflation. And if it isnÛªt deflation or inflation, itÛªs just plain flationÛÓ</br></br>A year ago. when production was still at a high level (145 in the Reserve Board index) and unemployment was comparatively lo\y (under 3 million), Martin, as Federal Reserve Board chairman, worried about rising pricesÛÓinflation. So, he and his six confreres kept a halter on credit.</br></br>They were going to stretch out prosperity and prevent speculation from bursting into a boom followed by a bust.	,</br></br>Reserve Board were not and are not ready to subscribe to .inflation as a permanent way of life in America, as the new 2 per cent-a-year era.</br></br>Then came the recession. The Reserve Board fought it with easy money. And the Federal Government fought the recession with accelerated spendingÛÓpublic works, better mortgage terms. Then, in April, the business decline came to a brusque halt. Overnight MartinÛªs worry changed. He mustnÛªt let credit flow too freely.