Evening star., 1962-06-08

District Bankers Association 8
Eliot Janeway, New York
Usher of the Janeway Service
remove a major obstacle to fl
nancing American exports ant
would provide a strong barriel
to a possible run on the dollar
THE United States LITERAL,
needs a second banking system
copied after and competitive
with facilities that have beer
available for a number of year.
all over Europe" Mr.. Janeway
declared.
Calls for Miracle
THE United States is on 9
collision course with q dollar
crisis which cannot be avoided
unless we pull off a United
States export equivalent of the
postwar German miracle" he
continued.
"Such an export miracle
would head off speculation
against the dollar and would
give American hard goods pro-
duction the lift 1t needs tc
work its way out Of the profits
squeeze. No source of new de-
mand other than exports and
no other source of hard cur
rency earnings is available fol
our economy.
I'm view of the financial
squeeze in which the treasury
is caught, Government spend
ing cannot be counted upon to
finance a new phase Of expan-
sion in time to save the dollar
Indeed, any move in the direc-
ton of new spending could very
well trigger the gold run on the
dollar that so many people
rightfully fear" he declared.
THE Government has lost its
fiscal freedom of action as the
earnings squeeze has choked
off tax collections, and new
Government programs - even
against unemployment-are out
for the duration of the earn
ings squeeze and the galloping
deficit.
THE other hoped-for source
Of lift for the economy has
been consumer spending, but
the break in the stock market
created a new atmosphere of
wait-and-see which soon may
put the brakes on consumer
buying as well as on corporate
commitments.
"The consumer sector will do
well to hold its own while the
United States avails itself of
the opportunity it still has to
save the dollar and to inject
new energy into the economy
by financing an American ex-
port miracle"
Capitol Hill Interested
Mr.. Janeway said his pro-
posal for the new export CEN
tral bank has attracted much
interest on Capitol Hill. Influ-
ential members of the Senate
Finance Committee and many
other members of Congress s
have corresponded with him
about the popoSal. he said.
1.-THE way to solve our prob
lem is to free private American
industrial exports to compete
in the European market as to
financing terms. Financin G
terms, not prices, offer the real
way to make our exports COM
petitive in the remaining hard
currency markets.
1--WE will not make progress
until we offer our potential
customers in Western Europe
terms of payment fully as long
as they are accustomed to Of
fer their own customers.
European export terms are
at least five years and where
competition has intensified
these have been extended to
eight and even 10 years. Not
even the biggest American ex-
porters will or should accept
eight-year paper for even tri-
plea European customers un-
less the discount window in the
United States banking system
is open for acceptance of such
paper.
THE United States CONNER
cial banking system is not
equipped to offer rediscount
privileges for long-term export
paper, nor should it be asked
to. The Federal Reserve System
should remain an apparatus
for discounting short-term do
mestic commercial paper.
Could Be Limited
"This second banking sys-
TEN should be deviced as a CEN
tra1 or bankers bank for the
sole purpose Of rediscounting
paper given to member banks
by their industrial customers
as a result of export sales. Such
rediScount privileges should be
limited to export sales made in
countries to which the United
States owes money.
This market is $22.5 billion
large. 1t is as big as the short
term debt which the United
States could be called upon to
pay in gold.
Every country to which we
owe part of this $22.5 billion
qualities automatically as a
good credit risk and should be
entitled to credit privileges as
customers of United States in
dustry. In fact, the one chance
the United States has of in
ducing its creditors not to start
a run on the dollar is to per-
suade them to accept payment
in American goods.
.NE1Irnnaan Salli,nn of IIoitnd