Evening star. [volume] (Washington, D.C.) 1854-1972, 1960-10-23

AsOA spur nOaE0AmB
Other important and related
factors also contribute to the
flow Of gold out Of the United
States. World tensions always
cause some people to hoard
gold. Nervousness about infia-
ton - aggravated by uncer-
tainty about policies of the new
Kennedy or Nixon administra-
tion-has q similar effect.
These factors cause traders to
bid up the price Of gold on free
markets which causes central
banks to buy gold from the
United States.
In addition. interest rates are
lower here than abroad, en-
couraging foreigners and Amer
leans to deposit and invest their
dollars overseas. This shift of
funds makes dollars available
for purchase of gold.
/ Exports and imports are the
main componentS Of the bal
ance Of payments. Exports at
tanned q record high Of $19.5
billion in 1857. largely because
Of the Suez crisis. They
dropped to 1854 billion in 1853
and $16.3 billion in 1859. Ex-
ports in the f1rst eight months
Of this year totaled $129 bill.
lion, up from sos billion in
the same period Of 1859.
Exports Take Rise
Imports have made bigger
gains than exports during the
past few years. They totaIed
$lS billion in 1857, slipped to
$l2.s billion in 1855 and shot
up to a record $15.2 billion in
1853. Imports totaled $40 bill
lion in the i1rst eight months
OF this year, slightly ahead of
the $50 billion for January
August, 1859.
The all-importart yardstick
Is the excess Of exports over inn
ports. The margin was $6.6 bill
lion in 1857, dropped to $3.5
billion in 1858 and skidded
again to ST. billion last year.
Exports this year are expected
to exceed imports by "a billion
to IS billion.
Even this improvement is not
nearly enough to eliminate the
deficit in the balance Of pay
ments. Foreign aid, overseas
military spending and other
OUTLAWS exceed the export-im-
port surplus. Shifts Of American
and foreign holdings of dollars
from the United States to- other
countries viii onset the Inn
provement in exports.
This now of dollars overseas
Tor deposit and investment is
just another in a series of I'M
favorable developments. A Gov
eminent ofiicial remarked. OBJ
serving that the economy must
expect setbacks. -.
Other Nations Advanced
The Netherlands, Germany
and other countries also have
suffered Setbacks in the postwar
period, he recalled, but they
pulled themselves out Of their
difficulties. He continued:
But we have not made the
necessary adjustments. The
question is whether our econ
omy has the will and the VII.
tally to overcome. these OBJ
stacles."
Experts estimate that over
the long run United States ex-
ports must exceed imports by
IS billion to So billion . year,
in order to offset foreign aid
and other non-trade items In
the balance Of payments. That
means the United States must
achieve export-import surpluses
Of perhaps 81 billion in favor
able years to Offset years when
the surplus drops to So billion
or less.
This is a favorable year for
American foreign trade because
Of prosperity abroad and the
mild slackening of business
here. But the export import
surplus is expected to total less
than IS billion.
Many Reasons Cited
Analysts suggest various rea.
sons why the United States does
not do as well as it must in
building exports relative to i'm
ports. All the reasons boil down
to sluggish competition.
Costs and prices in some in
dustries are too high to COM
pete with foreign. producers.
In some cases, costs are high
because wages and salaries