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in the nation's capital. Senator George Smathers of Florida is being interviewed by to Washington correspondents. Now let's join the interview for one of the questions Senator Smathers. Do you think that the steel increases that have already been announced by some of the smaller steel companies are any sign that there's going to be a general across the board increase coming up?

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I would hope not. I think the president made it very clear that he would permit the increases of selective items of all the steel companies, but he called on them for the highest. Industrial statesmanship cannot raise their overall prices because to do so, it obviously started terrible cycle of inflation throughout the entire nation.

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What effect will this price increase have on the general economy of our country? Well, it's going to raise the price of everything if we do have an overall price increase. Obviously, the labor union is steel workers union. They're going to want their share of this increase, and when we have the increase in the cost and then the increase in cost of wages, it's bound to set off.

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As I said, a cycle of inflation which will affect every person in these United States. Well, what can be done to stop this inflationary trend? I don't know that anything can actually be done. I don't believe we yet want to get to the point in our government where we regulate to prices and wages.

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But I do think that we must impress upon these leaders of steel that there's being the basic fundamental product in all of the commodities which we have in the nation, that they must exercise the highest degree of restraint and statesmanship so that we don't start inflation, which will finally find itself all the way down in the breadbasket of the housewife.

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Speaking of the tax bill, what are the prospects of getting this legislation through Congress this year? Well, I think we're going to have a tax bill. I'm satisfied it's going to be a very good tax bills. We will not get it, however, until late in the fall, and I think it will become effective January 1st 1964.

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If this tax bill goes through, there will be some sort of a tax cut, I presume. But how much value is it going to be? Well, I would hope that it would be of great value. That's the whole purpose of it is to try to stimulate the economy.

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While our country is growing fairly rapidly, it is not growing sufficiently rapidly to make jobs for the millions of new young people who come into the labor force every year. And we have to stimulate the economy so that we will grow more rapidly. I have a big concern is I know you have as to whether or not there really is going to be any beneficial results of the tax cut.

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If we find that first, we have inflation resulting from the increase in the cost of steel whereby the consumer finally gets a little tax cut. But because everything else has been raised, why they finally end up about where they started, there may be even worse than they started if we have inflation, the other aspect of it is which is quite dangerous, is that whether or not the state governments are going to continue to raise the cost of their government to the point where it would negate the beneficial effects of having a tax cut to what extent of the states already already shown that tendency well, there are too many of them doing that in the last five years that the numbers of employees of the federal government has risen by about 5% but the numbers of the A percentage of the state employees has arisen by 26%.

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And on the other hand, we find that the actually the indebtedness of the federal government in the last five years has increased by only 14%. But the indebtedness of local government has increased 55%. So if we continue to have this local and the state government raised the cost of their doing business, where then of course there's no not much better than having really a tax cut.

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So I'm hopeful that there will be a great deal of restraint exercise not only on the part of steel companies. At the same time, there will be considerable restraint exercise on the part of the state government. Senator has been a great deal of comment with respect to the clay committee report on foreign aid expenditures.

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As a member of the Foreign Relations Committee, what is your opinion of the findings of this report? Well, I think the recommendation to clay committee or accident that he recommended a tightening up with this program. He recommended a reduction of about 50 millions of dollars, and certainly I'm in favor of that.

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I think we've too long had a program that would get, uh, had in it too much waste and duplication. You've been listening to an informed discussion between Senator George Smathers of Florida and to Washington correspondents. I return you now to your station announcer that my name?

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What in the world? Well, Everland give that deep good. Uh huh. Halloween ready? Uh, we're ready now when the light comes on that star check. All right. Quiet, Senator. In light of the Claire report, how much do you think Congress may cut the president's foreign aid appropriations request for this year for the president recommended.

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490 million. Ah, the cut from this original recommendation. Clay has recommended to 450 additional. I think that we're going to see the whole thing cut close to a billion dollars. I don't believe that the Congress will just stand fast on the clay report even though they highly approve of the clay report.

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The general feeling of most members of Congress, as I gauge it, is that they feel the time has long since passed, when we should begin to direct more of our attention, more of our money's home and less to these countries around the globe who have long been the beneficiaries of our largesse.

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And some of them have not done very much towards helping themselves. I hope that we do not go too far and cutting the program with respect to Latin America, because there is an area where we do need to continue rather size. That will help where the countries themselves will follow a program of improving their own economy and bringing about political stability.

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Senator, a member of the president's advisory committee on the Alliance for Progress, recently stated that the private investment claims in Latin America is worse now than it has ever been. Do you agree with this statement? And if so, what are the reasons for this reluctance to invest private capital in Latin America?

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Well, there's no question about that. You have reference to Peter Grace, who's the president of the Gray Steamship Company and president of the Niagara, or part of the Niagara Airlines. Now what's happened is there used to be close to two billions of dollars in private capital which went into Latin America every year.

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There is not enough money, gentlemen, in the treasury of the United States for us to take on the whole program of rehabilitating or huh billet ating and building up the economy of any of these countries of Central and South America. What we need in addition to government funds or private investors who will go down there as I said it used to be.

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About $2 billion went down a year. However, this money has quit going down because the private investors are logically quite frightened about first inflation. They have seen a curve, for example, in Brazil and Chile and some of the other Latin American countries. Then, of course, Uhh that which capped the climax, so to speak, was when Fidel Castro took over and appropriated all these for himself.

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All these privately owned operations by American investors, and nobody wants to put their money into Central or South America, where this is a possibility. And so long as Fidel Castro stays as a threat, and certainly he is a great threat to the economic stability of Central and South America.

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You're not going to find much investment going down there. And I think the Department of Commerce figures show that this a private investment has dropped in Latin America from, as I said, an average of about $2 billion a year back in early 19 hundreds in the early 19 fifties.

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It's now dropped in less than about $100 million a year, and I think it's finally going to stop completely. As a matter of fact, there is a reverse trend going. There's a flight of capital private capital from these countries, and it stems from the fear what's going to happen to that money that has been invested and so long as Fidel Castro is a threat.

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And so long as these governments, local governments, will walk in and misappropriate these properties and these funds while you're going to see this flight continues, Senator, one quick local question. I understand that you were supposed to have addressed the Florida Legislature this week, and we're unable to do so.

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Perhaps they'd be interested in knowing what the commitment was that kept you from it. Well, frankly, I was please honored to receive an invitation from the Legislature. I only got the invitation on Monday morning and they asked me to come on Wednesday along with Senator Holland and make the speech.

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However, I was unable to change my calendar around because I had some long standing commitments to make here in Washington. And I was unable to change my calendar around so that I could go to Legislature. However, Senator Holland is going to speak. He was able to adjust his calendar and he will speak, of course, for both of us.

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Uh, I'm hopeful that the Legislature later on, as they begin to end their session will invite me and that I will be able to at that time appeared. Gentlemen, I see our time is up. Thank you very much for asking the questions. Thank you very much, ladies and gentlemen, for listening in.

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I hope you'll listen in again at the same time next week.