Byrd Warns Unbalanced Budget Means No 1958 Tax Reductions; Japan to Increase China Trade

WASHINGTON, April 21--Sen. Byrd (D-Va.) said today that unless President Eisenhower cuts government spending sharply, an unbalanced budget may rule out any 1957 tax cuts.

Byrd, chairman of the Senate Finance Committee, said in an interview that if the rate of spending Eisenhower has proposed for the year beginning July 1 isn't lowered "it is probable the budget won't be balanced."

"The $71,800,000,000 budget the President has submitted is geared to continuing prosperity at a rate six percent higher in this calendar year than in 1956," Byrd said. "His budget also takes into account a proposed 600-million-dollar increase in revenues through a boost in postal rates, which Congress might not approve.

"Deficit spending, of course, would make it impossible for Congress to cut taxes."

Japanese Trade

TOKYO, April 21--Strong economic pressure lies behind Japan's drive to ease restrictions on trade with Red China imposed by agreement between Japan, the United States and other Western powers.

This drive achieved an initial and partial success yesterday. The United States, bowing to Japanese and British pressure, announced it was proposing to other countries which restrict export of strategic goods to Communist countries a partial relaxation of the limitations on trade with Peiping, combined with a certain tightening of restrictions on trade with the Soviet bloc in Europe.

There have been two main motivating forces behind Japanese desires for relaxation of the restrictions on trade with Communist China:

1. The prospect of gradually losing at least part of approximately 500 million dollars in annual income from U.S. troops.

2. A steel shortage exerting heavy inflationary influence throughout Japan's always precarious economy.

Cost of Living

WASHINGTON, April 21--New cost-of-living figures due to be announced by the government this week are expected to mean a pay raise for about 1,200,000 workers. The total increase will approximate 75 million dollars a year.

Nearly one million railroad workers will be affected, as well as a couple of hundred thousand workers in the aircraft and electrical manufacturing industries. Their wage rates are geared partly by labor contracts to the government's index of living costs. The index has hit a new high for each of the last six months.

Russian Submarines

WASHINGTON, April 21--Some members of Congress particularly concerned with defense matters believe Russia recently stepped up her efforts to produce an atomic submarine.

Whatever the new evidence of Russian efforts may be, it is not likely to have much immediate effect on U.S. defense planning.

Russia is now estimated to have 450 submarines and to be building close to 100 a year.