June 11,44 "DO-NOTHING' POLICY HIT BY KEYSERLING Truman Aide, at ILGWU Parley, Asks Action Now to Halt Softening Economic Trend By JOSEPH C. INGRAHAM Special to THE NEW YORK TIMES. FOREST PARK, Pa., June 10- An end to the present "do-nothing" policy that is endangering the eco- nomic future of this country was called for today by Leon H. Key- serling, vice chairman of the Presi- dent's Council of Economic Ad- visers. In a talk to 550 delegates to the Northeast Department Conference of the International Ladies Gar- ment Workers Union, AFL, Mr. Keyserling warned that unless business and the Government take immediate and vigorous action to halt the softening economic trend we were headed for another major depression. Mr. Keyserling was the principal speaker at the opening session of the meeting. Its theme president two-day by David ILGWU Gingold, and direc- vice was set a of the tor of its northeast department, as "seeking answers to the problems of what's happening to jobs, wages and profits." Business should take the initia- tive in putting the United States stabilizing perity, back on the prices road Keyserling and national increasing said, by to pros- Mr. wages. high profits that enjoyed might by cut busi- into While the ness in 1948, it would rebound to their benefit in the long run, he asserted. Prices had not come down far enough for labor to forego demands for a further wage rise, Mr. Key- serling declared, and he urged unions to hold firmly when they meet with management in collec- tive-bargaining negotiations. Mr. Keyserling said that "now is and most prudent the time" dynamic cheapest for business program of embark expanding the slack to on a distribution to take up in veloping our economy steadily recent had should been months. de- that in The Government, too, be encouraged to stimulate economic growth, which could be achieved by its program of bolstering our educational system, social security, health services, public housing and public power, Mr. Keyserling added. He termed it "upside-down" economy to cut Government spend- ing now and predicted that such a policy would result in a further spiraling of the present mild down trend. Insisting that decisions on na- tional policy were not made by the Government but by private enter- prise, Mr. Keyserling predicted that "if we are to have a boom or a bust" would be settled soon by which of two competing philoso- phies would prevail. One school of thought rigidly after high employ- ment believed trend was that high production and levels must down be of and a normal production and investment cut, he asserted. There was no reason why we must have seven lean years after seven fat years, the economist said, and called it "the worst policy that could be followed." The other philosophy, adoption liberal national economic of ment policy, a now taking still the Mr. was adjust- Key- not would minimize place, serling said, and it too late to take the affirmative step and put us back on the road to national growth, he noted. Mr. Keyserling urged that in the transition period the burden should not be shifted to the wage-earner because "if wages go down, buying 1 power will drop and create a vi- I cious circle in which our whole e economy will recede." E