Business: NIXON'S NEW MAESTRO OF MONEY

THOUGH he is normally one of the more obscure figures in Washington, the Chairman of the Federal Reserve Board has greater influence over the daily lives of all U.S. citizens than almost anyone except the President who appoints him. By performing some of the more arcane maneuvers in the realm of finance—raising or lowering bank reserve requirements, buying or selling Government securities—the Federal Reserve controls the supply of credit and the level of interest rates. It thus largely determines how much interest the consumer must pay to borrow for a new house or car, how much the businessman must pay to borrow for a new hamburger stand or a steel mill—and whether many kinds of loans will be available at all. By influencing the rate of business expansion, the board also helps decide the worker's chances of finding a job or winning a raise and the corporate executive's chances of making a price increase stick.

For the past 18 years, the seven-member board has been headed by William McChesney Martin, 62, who has become almost as much a fixture in the capital as the Washington Monument. But his term in the $42,500-a-year job ends on Jan. 31, and by law he cannot be reappointed. Last week President Nixon announced his choice as successor to Democrat Martin. The new economic maestro is Arthur Frank Burns, 65, a self-described "moderate Republican," a longtime close aide of Nixon, and a stubborn anti-inflationist. For at least the next four years, the nation's money and credit policies will bear his stamp.

"We Will Not Budge." The change comes at a particularly sensitive time, when everyone is wondering when prices will stop going up and interest rates will start coming down. The Administration has given top economic priority to fighting inflation by sharply restricting Government spending at the same time that the Federal Reserve curbs the growth of credit. One purpose of Nixon's timing in announcing the Burns appointment last week was to underscore the Administration's determination to persevere with its policies of severely tight money, despite political pressures to relax. Burns has a reputation for doggedness in following just such anti-inflationary policies. Nixon himself, in a radio speech on inflation last week, said that the nation will have to accept some more "bitter medicine," and counseled consumers and businessmen to slow their spending.

Burns, speaking in his role as Counselor to the President and coordinator of Administration domestic policies—a Cabinet-level position created specifically for him—strongly seconded Nixon.

He warned that Nixon might veto bills —possibly even the tax-reform bill—that involved excessive spending or loss of revenue. Almost his last words before his appointment to the Federal Reserve were: "We will not budge."

Where He Stands. That comment was quintessential Arthur Burns. Around the White House, he has tirelessly preached the virtues of steadiness in Government policy. His favorite slogan for almost any situation is "Don't panic." He has written that "we need to learn to act, at a time when the economy is threatened by inflation, with something of the sense of urgency that we have so well developed in dealing with the threat of recession."