Evening star., 1961-01-30
Won't RevoIue Gold
Or Restrict Trade

Efficient expansion at home,
stimulating the new plant and
technology that can make our
goods more competitive. is also
the key to the international
balance of payments problem.
Laying aside all alarmist talk
and panicky solutions, let us
put that knotty problem in its
proper perspective.
1t is true that. since 1858.
the gap between the dollars we
spend or invest abroad and the
dollars returned to US has
substantially widened. This
overall deficit in our balance Of
payments increased by nearly
Sill billion in the last 3 years
and holders of dollars abroad
converted them to gold in such
quantity as to cause a total
outflow Of nearly IS billion Of
gold from our reserves. The 1859
deficit was caused in large part
by the failure Of our exports
to penetrate foreign markets
the result both Of restrictions
on our goods and our own un-
competitive prices. The 1860
deficit, on the other hand. was
more the result Of an increase
in private capital outflow seek
ing new opportunity, higher re-
turn or speculative advantage
abroad.
Meanwhile, this country has
continued to bear more than
its share Of the Vests military
and foreign aid obligations
Under existing policies. another
deficit Of 81 billion is predicted
for Iceland individuals in
those countries whose dollar
position once depended on these
fdeficits for improvement now
wonder aloud whether our gold
reserves will remain sufficient
to meet our own obligations.
All this is cause for concern
but it is not a cause for panic
For our monetary and finan-
cial position remains exceeding.
ly strong. Including our draw
ing rights in the Internationa,
Monetary Fund and the golc
reserve held as backing for oul
currency and Federal Reserve
deposits, we have some $22 bill
lion in total gold stocks ano
other international monetary
. reserves-and I now pledge that
their full strength stands be.
|; hind the value Of the dollar fol
use If needed.
Moreover, we hold large as
sets abroad-the total oWeC
this Nation far exceeds tht
claims upon our reserves-ant
our exports once again substan'
TALLY exceed our imports.
In short, we need not-anc
we shall not-take any actor
to increase the dollar price o
gold from $35 an ounce-to i'm
pose exchange controls-to re
duce our anti-recession effort
to fall back on RESTRICTIVE
! trade policies-or to weaker
our commitments around tn
: world.
This administration will no
! distort the value Of the dollal
in any fashion. And this is
) commitment.
Prudence and good sense d.
require, however, that new
steps be taken to ease the pay
B ments deficit and prevent an!
c gold crisis. Our success In worlt
. affairs has long depended IL
1 part upon foreign confidence
in our ability to pay. A series o
! executive orders, legislative re
r medies and cooperative effort
S with our allies will get unde
way immediately-aimed at at
= tracting foreign inveStmen
t and travel to this country -
= promoting American exports
g at stable prices and with NOR
c liberal governmental guaran
r tees and financing-curbin
= tax and customs loopholes tina
= encourage undue spending o
S private dollars abroad - an
d (through DECD. NATO an
4 otherwise) sharing with ou
e allies all efforts to provide 10
e the common defense Of tn
k free world and the hopes 70
o growth Of the less develope
= lands. While the current defici
10 lasts, ways will be found t
o ease our dollar outlays abroa
It without placing the full burde
on the families Of men whor
1t we have asked to serve ou
l. flag overseas.
le In short, whatver Is require
m will be done to back up all o,
st efforts abroad. and to NAL
:" certain that, in the future as
l. the past, the dollar is
ly Sound as a dollar"
We Domestic Problems
l. To Be Dealt With
I'd But more than our exchanl