THE ECONOMY: First Foe: Inflation

"As 1959 opens, there is reason for confidence," said Dwight Eisenhower this week in his sixth annual Economic Report to the Congress. "The improvement in business activity which began in the second quarter of last year will be extended in the months ahead." Happily ticking off the indicators of a recession-recovered economy, he felt free to concentrate on the foe—inflation—which he has consistently named as the chief threat to long-term U.S. economic health.

Summarizing the vastly improved strength of the economy, the President said: "Factors that influence decisions on business capital outlays have become more favorable, and an upturn may...

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