Evening star., 1960-12-08
ECONOMIC
Continued From First Page

so it will continue to threaten
the dollar.
Fear of large-scale conver-
sions Of dollar claims into gold.
Mr.. Triffin warned, will restrict
freedom of action by the
United States in carrying out
foreign and domestic policies.
He said the Government al
ready has hesitated to combat
the business slump by lowering
interest rates, because reduce
ton Of rates would increase
the flow Of dollars and gold
abroad.
"Panicky' actions by the
Eisenhower administration to
reduce overseas spending. and,
other "makeshifts" will not
solve the basic problem, Mr..
Trlffin said. He blamed the
dollars troubles on "the fun
damental absurdity of the in.
ternational monetary system
ITSELF" with its dependence on
inadequate production Of gold.
The first step in overhaul
ing the international monetary
system, he said. should be
action to allow the Interna-
tional Monetary Fund to accept
reserve deposits from central
banks of member governments.
He said this change would pre-
sent foreign central banks with
an attractive alternative to
cashing their dollar balances
into United States gold.
Mr.. Triffin said about half
Of the United States short-term
1debt would be transferred from
present foreign owners to the
International Monetary Fund.
and so would cease to be q
constant threat" This relief,
lhe continued, would give US
time to explore and negotiate"
for even more fundamental
reforms. :
He noted that the Inter-
national Monetary Fund has
assailed his proposals, but he
called on the new Kennedy
administration to deal boldly
and imaginatively with the
issues"
Peter Henle Of the AFL-CIO
said unemployment now Is run
lining at recession rates" and
warned that the, trend is point
ing toward unemployment
totaling So million-at q rate
of 7 per cent-in February. Un-
employment totaled 3.6 million
at last count, in October. when
the rate was Ga per cent.
THE Nations economic health
is ailing. and action is needed
to alleviate the distress caused
by unemployment and to create
more jobs throughout the econ
omy,". he said. The AFL-CIO
proposes an increase in the
minimum wage. Federal aid for
school construction. Govern
ment assistance for housing
and other actions to step up
economic activity,
Douglas Greenwald Of the
McGraw-Hill Publishing Co..
Inc, predicted in his prepared
testimony that private invest
ment will decline next year to
$67.2 billion, 9 per cent less
than the $73.5 billion total
anticipated for 1860.
"Contraction" Seen
He said investment in plant
and equipment will drop from
$36.1 billion to $3.50 billion,
business inventories will decline
by 81 billion instead of rising
by 81 billion, housing will in
, crease from $21.1 billion to
! $21.7 billion and other private
investment will increase from
, S12.3 billion to $l2.6 billion.
, Summarizing, he said 1851
! will be a year of contraction
! in private investment. but
clearly not a year of consider
able decline" The decline will
be much more moderate than
in earlier postwar recessions, he
. said. adding that this prospect
; makes "the outlook for general
business Gin 1861 brighter
!. than many business forecasters
would have thought"
E William w. Tongue, an econ.
: omist for the Jewel Tea CO..
: Inc, made this optimistic fore
] cast on the basis of evidence
l that consumer spending is or
S the rise:
"Once again the consumer
= appears to be preparing to ster
. into the role Of hero in help
l ing to stem the tide of reces.
sion and to turn the economy
: upward again. This time, how.
! ever in the particular circum.
t stances of this recession, thu
: step-up in consumer expendi-
i lures may be relatively les.
' vigorous than at comparable
:, stages Of previous postwar re-
: coveries, notably for durable
goods"