Chart 18 COMPARATIVE TRENDS IN GNP, PRICES, AND NON-FEDERALLY HELD MONEY SUPPLY, 1955-1968 1955- 1955- 1956- 1957- 1958- 1959- 1960- 1961- 1962- 1963- 1964- 1965- 1966- 1967- 1956 1961 1962 7.0 6.0 5.0 4.0 AVERAGE INTEREST RATES ON TOTAL Calendar Years COMPUTED AVERAGE INTEREST RATE Percent 3.0 1952 54 56 58 60 '61 '62 '63 '64 '65 '66 '67 TOTAL PUBLIC AND PRIVATE COST Chart 19 15 1 T 1952 54 56 58 60 61 62 63 64 65 66 67 1952 54 56 58 60 61 62 63 64 65 66 67 Data: U.S. Treasury and Office of Business Economics, Department of Commerce. CUNA INTERNATIONAL, INC. By J. ORRIN SHIPE, MANAGING DIRECTOR This statement is submitted on behalf of CUNA International representing credit unions in every State of the Union, District of Columbia, and Puerto Rico. Over 20 million Americans belong to credit unions at the beginning of 1969. CUNA International appreciates the opportunity to express its views concerning certain aspects of the Economic Report of the President transmitted to Congress, January 1969. GENERAL ECONOMIC POSITION Nineteen hundred and sixty-eight turned out to be a much better year than expected. The economic boom in business continued through the entire year; the policy of the Government to moderate inflationary forces through the imposition of a surcharge was approved by the Congress; peace talks had started on the war in Vietnam; inflation, however, continued to undermine the value of savings in credit unions and other financial institutions. As President Johnson has stated in this report, "The immediate task in 1969 is to make a decisive step toward price stability." THE CREDIT UNION MEMBER More than a million persons voluntarily joined credit unions in 1968. This credit union family generally has stable employment; a mortgage on their home; makes an average of over $7,500 a year; has very little in readily available liquid assets. Two-thirds of the credit union families are forced to borrow for consumer installment needs. The average savings of these credit union families are low. Most of these members have steady employment. Therefore, they have the problems of maintaining a rising standard of living while paying increasingly heavier local, State, and Federal taxes; at the same time paying off the mortgage on their homes, their installment debt, and, saving funds to educate their children and for future needs. The continued rise of prices in 1967 and 1968 provided them with a serious challenge. They saw the value of their savings in the credit union and in other financial institutions being reduced by an inflationary trend. The heart of the credit union is the member. The credit union is created to serve the needs of the member. Anything that harms the member is of interest to the credit union. An inflationary trend that eats away the value of the savings of credit union members and other Americans can only harm these individuals. As President Johnson has stated, "The first line of defense of the dollar is the strength of the American economy." The need for some price stability with economic 24-833-69-pt. 4-7 growth is primordial to our comments. The distortions that inflation brings about in the structure of the economy and the pressures it generates in financial markets, inevitably results in economic dislocation to those on fixed incomes. The reduction of income in the hands of the public together with a sound Government budgetary program may bring price stability in 1969. The estimated surplus of $3.4 billion should reduce the inflationary trend. An institution as a credit union that only accepts savings that can be withdrawn on a moment's notice, would have difficulty protecting the works that it undertakes if a constant inflationary trend reduces the value of the savings that our members have placed with us. If it is necessary to maintain the surcharge on income taxes as suggested by President Johnson in order to produce greater price stability, we believe that this should be viewed along with other measures of tax reform in order to lessen some of the burdens of taxes on the lower and middle income families. While credit unions are interested in price stability, we recognize that the bulk of our members live in the large urban complexes. Therefore, many of the nonmilitary Government programs that will aid the living conditions in urban centers are in the best interest of the credit union families and the Nation. CUNA believes that there should not be a reduction in Government programs that aid the poor, the aged, and those that live in urban centers. Programs for additional training, education, and health should be supported. BALANCE OF PAYMENTS PROBLEM As credit unions continue to expand overseas, CUNA International becomes more and more involved with the problems of the balance of payments. The 1968 U.S. foreign trade surplus dropped to the lowest level in 30 years. A surplus on merchandise trade of only $725 million was a distinct change from the high level surpluses of preceding years. We recognize the necessity of need for freer trade between nations. The United States will be unable to change its current balance-of-payments problems if prices continue to rise domestically. All of the schemes to increase international liquidity will fail if we cannot sell U.S. goods abroad at a competitive price. SUMMARY The credit union movement through CUNA is intensely interested in programs that will increase the strength of our Nation and our members. We recognize that our members are facing problems of increased inflation in 1967 and 1968. Unchecked inflation can only drive up the prices of all commodities including money. We urge positive programs to protect the Nation and our members from the hardships of inflation. We urge that domestic programs to aid those living in urban centers be continued and strengthened. FEDERAL STATISTICS USERS' CONFERENCE This statement is submitted on behalf of the Federal Statistics Users' Conference whose membership is composed of organizations from all sectors of the economy. Our members have a common interest in the development of adequate, reliable, and timely statistics from Federal sources. The Conference appreciates the opportunity to express its views regarding certain statistical materials which provide much of the information upon which the President's Economic Report and the Report of his Council of Economic Advisers is based. This vast storehouse of information is used by private as well as public planners and policymakers in making important decisions that affect the course of the economy. It is important for all of us that our actions and policy decisions are based upon the best measures of the economy that it is possible to obtain. We consider these two documents and the Federal Budget of such importance to our members, and others, that for 3 consecutive years we have sponsored 1-day conferences at which these documents were discussed by the chairman, or a member, of the Council of Economic Advisers, and by the Director, or Assistant Director, of the Bureau of the Budget. We plan to hold a fourth annual conference in April or May of this year. Our purpose is to help raise the level of understanding of the public policy issues involved in these documents and to assist users of them in making more effective use of the information they contain. This year, neither the President's Budget Message nor his Economic Report gave even passing mention to the need for improved economic statistics. This is in contrast to last year when President Johnson, in his Budget Message, identified five "long-standing goals" one of which was: "Providing improved statistics to aid business, labor and government in sustaining economic growth." In his Economic Report last year the President said: "Accurate, comprehensive and timely statistics are essential to the development of sound economic policies by government, business and labor. Our economic statistics are the best and most comprehensive in the world, but they can be and need to be further improved. The costs will be exceedingly small relative to the benefits." The passing of 1 year has not diminished the accuracy of that statement, nor the necessity for continued emphasis upon improvement of our economic statistics. We urge that the Joint Economic Committee, in its 1969 Report, not overlook stressing these needs. Last year's Report of the Council of Economic Advisers directed specific attention to improvement in economic statistics and outlined a program for improvements in such statistics. That report carefully spelled out the need as follows: "That need is accentuated by the current state of the economy and the current aims of policy. Sustaining expansion close to the |