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A s s is t a n t S e c r e t a r y



epartm ent


December 11, 1968
.MEMORANDUM TO Cabinet Committee on Balance of Payments
Secretary of Defense
Secretary of Commerce
Secretary of Transportation
Under Secretary of State Rostow
Under Secretary of Agriculture
Administrator of AID
Special Representative for Trade
Director, Bureau of the Budget
Chairman, Council of Economic Advisers
Mr. Edward Fried, White House

Agenda for Meeting of December 12, 1968, 4:00 p.m.,
Room 4426, Treasury Department

Attached is a Treasury staff proposed letter to the
President from Secretary Fowler, as Committee Chairman,
recommending and outlining the 1969 balance of payments
program. Basically, this is an expression of the policy
outline reviewed at the September meeting. In implementing
the policies contained in this letter, some’ details of the
handling of exports under the Federal Reserve guidelines
remain to be clarified.
Upon the concurrence of this Committee, it is intended
that the letter, following a brief acknowledgment from the
President approving the program, will be released to the
public next week.
The 1969 Balance of Payments Program and this letter
is the only agenda item for the Thursday meeting.


Governor Brimmer
The Honorable E. Goldstein



Dear Mr. President:
Near the end of each year beginning in 1965, your
Cabinet Committee on Balance of Payments has submitted a
recommended Program to guide and coordinate the many Federal
activities relevant to our international balance of payments.
This letter report will set forth the recommendations of the
Cabinet Committee on Balance of Payments for the 1969 Program.
Your approval of this Program should facilitate an effective
transition and orderly development of further policies in
this important area.
With my colleagues on the Cabinet Committee and the aid
of your staff, we have coordinated the execution of the Action
Program contained in your Balance of Payments Message to the
nation last New Year's Day. A 1968 Progress Report will be
separately submitted.
We have also considered together the nature and extent
of a program for 1969 if the nation is to build on the
progress made in 1968 and achieve a viable and durable
equilibrium in our international balance of payments.
It is
submitted below.
The Cabinet Committee on Balance of Payments has worked
with me in preparing the 1969 Program. The following
participants join with me in these recommendations:
Secretary of Defense
Secretary of Commerce
Secretary of Transportation
Under Secretary of Agriculture
Under Secretary of State for Political Affairs
Administrator, Agency for International Development
Special Representative for Trade Negotiations
Director, Bureau of the Budget
Chairman, Council of Economic Advisers
Chairman, Federal Reserve System
A few preliminary comments are in order concerning the
overall policy framework in which these recommendations are

- 2 -

Our determination to achieve equilibrium in our inter­
national accounts is as vital today as it was on January 1,
1968, the day you announced your Balance of Payments Action
Program. The removal of our international payments deficit
remains "a national and international responsibility of the
highest priority."
The execution to date of the broad and comprehensive
Action Program you announced on last New Year's Day has
substantially improved our balance of payments situation.
A huge deficit in 19 67 has been whittled down to near
equilibrium in the second and third quarters of this year
on the liquidity basis of measure. There is a substantial
surplus for the first three quarters on the official settle­
ments basis.
We are pleased that the nation is making substantial
progress toward achieving equilibrium in our international
balance of payments. But, we cannot be satisfied with the
relative composition of its components. Our progress is
spotty and some of it may be transitory.
It is spotty because
two big elements in our current account — trade and tourism —
are far from satisfactory, and a third — a reduction in net
deficit in government military expenditures in Southeast Asia —
has been difficult to effect up to date because of overriding
political and military considerations.
Therefore, we must continue ouc*resolve to keep intact
those elements of the balancA of payments program that are
being executed. Equally importan^, we must press ahead with
the implementation next year oil tine remainder of your Action
Program. Portions of that progVam have not yet been authorized
by the Congress or approved by/rtjr trading partners where
approval is necessary. Otheryparfcs have been rendered
unfeasible in 1968 by military developments outside the United
There is reasonable prospect of continuing improvement
next year. This assumes that there is no dismantling of the
ongoing elements of your Action Program. It also assumes
that the initiatives launched in that program to improve our
trade surplus and reduce the net deficits in military expendi­
tures abroad and private travel are vigorously pursued. Until
these elements of the program are effectively executed, we will
not have the durable surplus or the assurance of a long-term
equilibrium that will enable us to abandon some of the temporary
and less desirable measures we have been forced to employ.

- 3 -

These temporary measures have served us well. They have
brought the necessary immediate improvement in our balance
of payments and have given renewed confidence in the strength
of tha United States dollar. These temporary measures,
appropriately modified, a e needed for some additional period.
As the longer term measures instituted las t year and in some
of the preceding years yield increasingly larger benefits,
the restraint achieved by the temporary measures may be
phased out.
To complete our task a continued and sustained effort
must be pushed forward. This is the quickest and surest
route to the strong and viable payments position which will
permit us to eliminate those aspects of our program that are
not wholly compatible with the free flow of trade and
capital movements.
These are the underlying principles on which your
Cabinet Committee on Balance of Payments has formulated the
1969 version of the program.

A Stable Economy and the Restoration of a
Healthy United States Trade Surplus Should
be the Primary Objective for 1969.

The keystone of a sound international financial position
of the United States and of the dollar is a trade surplus.
Without it, the United States cannot do what is natural and
desirable for its role in tha Free World — to export capital,
to provide its share of the common defense, to give foreign
aid, and to have large numbers of its citizens traveling

Hence, the first order of business in your last New
Year's Day Message was for Congress to enact an anti-inflation
tax, which, coupled with expenditure controls and appropriate
monetary policy, could help stem the inflationary pressures
which threatened our economic prosperity, stability and our
trade surplus. You also urged labor and management restraints
in wage-price decisions and instructed your principal officers
in the economic area to work with leaders in business and labor
to make effective a voluntary program of wage-price restraint*
A similar instruction on preventing our exports from being
reduced and our imports increased by crippling work stoppages
was- prescribed.

~ 4 -

Unfortunately, delays in attending to this first order
of business in 1968 contributed to a continued instability
in the economy and a very substantial decline in our trade
surplus. However, the progress that has been made in
recent months has laid the foundation for a much better national
performance in the area in 1969 and years ahead, jLf the nation
carries through with the program n x in progress.
The Revenue and Expenditure Control Act, finally enacted
in late June, has locked Federal finances into the appropriate
posture through June 30\ 1969.
The Congress and the President must decide in the months
ahead on fiscal policy for the period beginning July 1, 1969.
This policy will require decisions on expend!tures and taxes
necessary to provide that degree of fiscal restraint which
is a fundamental element in an adequate follow-through in the
on-going process of disinflation, restoration of our competitive
edge, and provision of a healthy trade surplus. This fiscal
policy, coupled with appropriate monetary policy by the
Federal Reserve Board, will make possible the avoidance of
excessive growth with its excess of demand that has contributed
to the decline in our trade surplus. It will also restois our
competitive edge by arresting inflation and enabling the
economy to move back toward reasonable price stability, given
accompanying voluntary restraint in wage-price decisions.
The Cabinet Committee on Price Stability, after extended
study and consultation with business and labor leaders
including, particularly, the President's Labor-Management
Advisory Committee, is submitting recommendations with respect
to a more lasting and effective effort on the wage-price front.
Although 1968 \?itnessed the settlement of the work
stoppage in copper and- the avoidance of a work stoppage in
steel, there is an impending threat of a work stoppage on the
docks that is pointed at the very throat of our international
trade. This work stoppage has been held off since October 1
only by an injunction. It focuses renewed attention on the I
need for a better method of assuring compatibility between
free collective bargaining and the protection of our national !
interest in maintaining the strength of the dollar.





Negotiations Initiated and Pursued in 19 68
to Assure Fairness to U.S. Trade in World
Markets Should Culminate in 196 9 in
Cooperative Action Among Our Trading
Partners and Appropriate Legislative and
Administrative Action.

Action in 1969 to further reduce non-tariff barriers
and to achieve appropriate changes in the GATT rules on
border tax adjustments must be achieved. International
trading rules and practices are established through multi­
lateral consent and negotiated in the multilateral forum of
the General Agreements on Tariff and Trade. In early 1968
U.S. representatives inaugurated a determined effort to
eliminate non-tariff barriers, negotiate improvements in
the trading rules and minimize the disadvantages to our
trade which arise from differences in the application of
national tax systems to exports and imports.
In the GATT Working Party on Non-Tariff Barriers a
catalogue of restrictions has been developed and the Working
Party is now turning to the task of removing these restrictions
We must be realistic in our objectives and recognize that they
will not all disappear overnight. On the other hand we cannot
be satisfied without real progress early next year — progress
which would begin to do away in a substantial manner with
these non-tariff barriers. In these negotiations we must bear
in mind Section 252 of the Trade Expansion Act of 1962 which
points out that the U.S. cannot compensate with trade
concessions the removal by others of illegal non-tariff
The GATT Working Party on Border Taxes has two tasks, both
of which must be achieved in the early part of 1969. We have
clearly seen the structural disadvantage to the U.S., and to
other predominantly direct tax countries, which arises from
the border tax adjustment system as presently permitted under
the GATT rules. The lack of an overall limitation on border
tax adjustments, the proliferation of the practice, and the
unequal treatment prejudicial against one tax system as
opposed to another are features of the GATT rules which must
be improved.

-6 -

The U.S. has also raised at the GATT Working Party the
issue of the provisions in the GATT rules which pertain to the
process by which international payments imbalances are ad­
justed. Under Article XII of the GATT, countries suffering
temporary balance of payments difficulties may introduce such
short-term trade restricting practices as quotas.
We have seen in the month of November two countries employ
other measures which also facilitate the adjustment of their
balance of payments position. Through the manipulation of
border tax adjustments both France and Germany are endeavoring
to influence thei^ trade account in a manner conducive to better
overall payments equilibrium. This course of action was
chosen as an alternative to a change in parity — an action
which would have a permanent effect on trade. This experience
should be examined to consider its lasting implications on the
process by which a nation's international payments are brought
into balance.

The Department of Commerce and AID should Continue
On An Intensified Basis the Effort to Expand
Commercial Exports in Conjunction With Foreign
Assistance to Assure Additionality and Minimize

Our efforts to minimize the balance of payments cost of
bilateral economic assistance have been successful in keeping
these costs to a minimum. The principles by which this is
done are established.
The implementation of these principles
has now been under way for some time; and the regular, vigilant
administration of these methods is what is required and is
what we are receiving.
One of the most important byproducts of economic assistance,
is the trading benefits arising from the development and growth
of viable economies abroad. We trade and- prosper together.
Our tied bilateral economic assistance has the effect of
facilitating the introduction of American goods and services
to these foreign markets.
In areas far distant from here,
where individuals purchase capital goods, sometime once in a
lifetime, whether it is a motor or a pump or a drilling gear,
through concentrating on the transfer of real resources we
automatically introduce the product names of our factories to
foreign buyers.

- 7 -

In 1969 and the. years that follow, we must concentrate
further upon having industry follow, up these delivered, and
working "calling cards." Salesmen must search out additional
or follow-on sales, sales of accessories, sales of replacements,
sales of the next stage of a company's family of products.
Led by industry — but assisted, if need be, by government -we must expand upon the export opportunity created by our
economic assistance. This should be the subject of a sustained
positive program helpful to the U.S. as it will be to those
who receive our aid.
The Commerce Department has cooperated closely with AID
in seeking ways to maximize U.S. commercial exports through
the foreign assistance program. In the area of publicity,
Commerce provides information on AID business opportunities
through a variety of m-dia such as International Commerce and
Quarterly Summary of Future Construction Abroad.
In addition to information available through these public
cations, Commerce provides information on AID export
opportunities and guidance on the procedures for selling under
the AID programs directly to American businessmen through
personal contacts. The Commerce Department also puts together
annual U.S. trade and investment programs for approximately
60 countries of main commercial interest in the world.
Specific informational, promotional, and policy activities to
be carried out in support of the program objectives are
delineated. For countries with AID missions, the AID operations
generally constitute an important factor in achieving progress
toward the investment program objectives. Additionally, the
Department of Commerce through its trade programs, commercial
exhibits, and trade missions actively assists the U.S. exporter.
All of these efforts have been helpful to date, and they
will have to be reinforced. The recent recommendations of
the National Export Expansion Committee provide suggestions of
reinforcements. These will have to be considered.

- 8 -


Consistent with our Security Commitments,
the Nation in 1969 Should Continue to Minimize
its Net Military Deficit by Neutralizing these
Expenditures through Cooperative Action by our
Allies and Reducing Them Whenever Conditions Permit.



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We should stand by the principles which we enunciated
in the January 1 program:
"We cannot forego our essential commitments abroad,
on which"America's security and survival depend.
"Nevertheless, we must take every step to reduce
-their impact on our balance of payments without
endangering our security.1
As we look at our over-all balance of payments position and
prospects, it remains a key concept that the foreign exchange
drain from U.S. defense expenditures outside our borders for
mutual security is an extraordinary item in the balance of
payments. It should be met by special governmental action-it does not result from normal economic developments; nor is
it subject to normal economic management through fiscal,
monetary and incomes policies.
We need to maintain existing programs and constantly
seek new ways to reduce our defense expenditures abroad.
The types of actions by the Defense Department to reduce
net foreign exchange costs from 1961-1967, as described in
Tab B of the Treasury Department Report, January 1963, and
in the separate Progress Report for 1968, must be constantly -y
pursued. Thoge- r some probability of aohicvjtgr^bsLaiiLlal: *i


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Jfog-Baofc dur-ng the-eog&ng yoay
We welcome the extensive cooperation from friendly
countries in NATO and in other parts of the world during
1968 to minimize our military foreign exchange costs through:

-- purchase in the U.S. of their defense needs, and
-- investments in long-term U.S. securities.




In 1969 we will want to continue this cooperation and
conclude new arrangements, with particular emphasis on NATO
Europe. In the coming year, wa will want to build on past
experience in ways which:
-- proceed from the NATO recognition of the principle
that the solidarity of the Alliance can be
strengthened by cooperation between members
to alleviate burdens arising from balance of
payments deficits resulting specifically from
military expenditures for the collective defense.
-- increase the emphasis on purchases in the U.S.
to meet country needs for the improvements NATO
has recently called for in country forces, and
-- reduce reliance on investments in long-term U.S.
securities as a means for dealing with our foreign
exchange costs resulting from defense expenditures
outside our borders.
In other parts of the world, V e should give particular
attention to the Far East. Military expenditures related
to Viet Nam and the prospective longer-term security situation
in the region may be expected to continue a heavy drain on
U. S. foreign exchange. We will be looking to countries in
the region to continue and expand their cooperation with us
to deal with this problem on a continuing basis. Active
negotiations to this end of both a bilateral and multilateral
character should be a continuing responsibility of the
Secretaries of State, Treasury and Defense.
Of course, the principal opportunity to achieve actual
reductions in our gross defense expenditures abroad, without
damage to our long-term mutual security interests, are most
likely to occur in connection with progress in the negotiations
looking to a peaceful settlement of the conflict in Southeast
Even before our substantial involvement in military
operations in Viet Nam in 1965, U.S. military expenditures
in-the Far East were substantial. The direct foreign exchange

- 10 -

costs of these expenditures averaged about $700 million per
year before 1965. They have been running approximately
$1.5 billion higher in the l s ; year or two.
This heavy direct loss of dollars to and through
East Asia must be regarded as unacceptable when the
fighting stops.
Therefore, a high priority must be given to the
problem of neutralizing to the maximum extent the balance
of payments cost'of our security forces in East Asia while
the fighting continues, and reducing the gross cost when
the fighting diminishes or ceases.


The Mandatory and Temporary Forcir^i p . c c
Investment Program, as Announced in Modified
Form by the Secretary of Commerce on November 15,
Should Be Maintained.

.The mandatory direct investment control program for
1968 has not interrupted the high, j.ndeed, unprecedented,
level of total American investment abroad. It has had the
intended effect of reducing capital outflows from this country
by increasing the use of funds borrowed overseas for direct
investment by U.S. affiliated enterprises.
Our base for future earnings continues to increase and
the present balance of payments costs are maintained within
tolerable limits. The private sector has for tha most part
understood this. The best way to keep the program temporary
is to press ahead vigorously on all features of the balance
of payments front.
There is little disagreement that this program should
be temporary and terminated as soon as possible. It is the
viev7 of your Cabinet Committee that it is not possible to
terminate the program in 1969 without running a grave risk
that our progress toward balance of payments equilibrium would
be reversed and a heavy deficit become a li.kely prospect.
As earlier stated in the principles governing tho formulation
of the 1969 program, until the nation has a durable surplus
or the assurance of long-term equilibrium, it would be unwise
to abandon some of the temporary and less desirable measures
that it has been forced to employ.
This has a special relevance to the Foreign Pirect
Investment Program as the following observations underscore:
First, overseas investments by American business (excluding
Canada which is exempt from the direct investment program)
are projected to increase again in 1969, with plant and equipment
expenditures reaching close to $8 billion — up from an estimated
$7.5 billion this year, and up from $4.6 billion in 1964, the
last year before the introduction of the voluntary program.

- 12 -

Second, in order to hold the balance of payments impact
of such investment in 1968 to the $2.6 billion targeted by
the President last January, it may be necessary for American
business to utilise between $2 and $2.5 billion of the
proceeds of foreign borrowing in addition to foreign borrowing
for day-to-day working capital requirements. To meet the
new target for foreign direct investment of $2.9 billion in
1969, - e project it may be necessary for business to utilize
another $2 to $2.5 billion in foreign borrowing next year.
Third, growing restraint upon capital flows from the
United States since the start of the voluntary program in
February 1965 has resulted in a substantial, and to some
extent abnormal level of foreign debt, as compared to what
it might otherwise have been. We don't have any precise way
to measure its size, but it surely will exceed $5 billion by
the end of this year, perhaps by a considerable amount.
Fourth, during the past four years, in cooperation with
the capital programs, many U.S. companies have decreased their
overseas liquidities through the reduction of intercompany
accounts and the repatriation of earnings, and, as a result,
are more active, albeit reluctant, borrowers for working
capital purposes.
All of this suggests that termination of capital controls
in 1969 could result in a sharp increase in direct investment
outflow -- it is difficult to estimate the precise amount,
but it could be as much as $3.0 - $4.0 billion. The situation
and outlook for 1969 does not permit a risk of that much
additional exposure to progress on our balance of payments.
Basically, the 1969 Foreign Direct Investment Program
will follow closely the format of this year’ program.
However, some additional leeway is needed (a) to provide
additional flexibility for companies with limited or no
overseas investment experience; (b) to make the Regulations
more responsive to those companies whose investment quotas
are unrealistically low in relation to the return flow of
earnings from their direct investments; (c) to assure that

- 13 -

the program doss n t unnecessarily inhibit the growth' of
intercompany exports of American goods and services to
foreign affiliates; and (d) to enable the Office of Foreign
Direct Investments to be more responsive to special industry
problems and soma of the inequities in the Regulations which
have become apparent during 1968.
We recognise that just to maintain their existing
overseas operations on a sound basis, companies must have
the capability fo retain abroad a certain percentage of
their foreign earnings. Furthermore, retention of a portion
of foreign earnings will be necessary to insure an orderly
retirement of the growing debt being contracted abroad. We
therefore recommended that the target level of direct i v s - .
ment be increased to insure that every company has in 1969 |
an investment quota of at least 20% of its 1968 earnings
from foreign direct investment,
Soma 'adjustment in the target was also necessary to
assure that as much direct investment as possible takes the
form of exports of goods and services by U.S. companies to
their foreign affiliates rather than cash transfers to
foreign affiliates.
Further adjustments in the target were needed to make
the Program more responsive to hardships arising from the
application of the Regulations to special industries such
as the international construction and transportation industries,
Whose operations and accounting procedures do not dovetail
with the Regulations;, to provide relief for companies whose
ability to meet the repatriation requirements of the Regulations
is restricted by law or lack of control, and to provide
companies with no or limited prior overseas investment
experience with a somewhat higher level of permitted direct
Finally, to enable companies to plan ahead and to insure
that investment projects with important future balance of
payments potential are not discouraged, the Office of Foreign
Direct Investments evolved its incremental earnings formula
under which additional direct investment in future years is
authorized based upon future incremental earnings.


The Federal' Reserve Voluntary Foreign Credit
Restraint program Should Be Maintained, but
Modified to Further Encourage the Promotion
and Financing of Exports by the Commercial
Banking System.

The Federal Reserve program has required a great deal
of U. S. financial institutions and they have responded
well. Since 1964, U. S. commercial banks have not increased
the volume of U. S. credits to foreign borrowers, even
though all other aspects of the foreign banking business
have grown substantially. In their international operation,
U. S. banks have had to meet the demands of clients for
foreign loans within their voluntary ceilings and through
the extensive use of resources in foreign branches.
The prospects for 1969 do not permit any basic change
in the hee<j for continued restraint on foreign lending
of banks and other financial institutions. Nevertheless, as
in the case of the foreign direct investment program, it is
important that we make adjustments which contribute more to
the long-run positive factors in our balance of payments. Fo
the commercial bank program, therefore, we propose adjustment
to encourage further the financing of exports.
Since 1964, annual exports from the U. S. have increased
by about 32 percent. Financing to support the growth in
exports has become available as banks have changed the com­
position of their portfolios of foreign credits in response
to the voluntary program and to a lesser extent, by the use
of funds in foreign branches and the expansion of the Eximbank's direct lending.
In their efforts to encourage manufacturers to stimulate
their exports, banks should not be pressed to their guideline
limits, less they be inhibited from actively soliciting export
credits. The banking industry has, over time, helped many
U. S. manufacturers to find new markets for their goods abroad.
We must not lose this constructive effort with all its long-nin
benefits to the balance of payments. With continued balanceof-payments restraints in 1969, we should accentuate those i|
elements which fortify our long-range balance-of-payments
position. There is no doubt that export financing is an
important part of export promotion, and it is in this area
that we are recommending adjustments in the 1969 program.



1 5


The Interest Equalization Tax which expires
July 31.1969 should be extended with the
existing~authority to vary the rate from
1-1/2 percent down to zero depending on

The size and efficiency of the American capital market
necessitated the Interest Equalization Tax in 1963. This
tax has served greatly to facilitate the expansion of the
European capital market and to develop additional techniques
for employing savings around the world in productive investments.
Through preserving an .exemption for lesser developed countries,
the access necessary for development assistance is preserved.
In 1967, Congress granted the President certain discretionary
authority in order that the purpose of the legislation— which
is to limit but not prevent access to the capital market from
developed countries--is best served.

In 1969, this legislation will need to be extended.
order that we have available a method for phasing out this
tax, the existing authority to vary the rate of the tax from
zero to 1-1/2 percent per annum should be retained.

A Five-Year Program for Narrowing the Travel
Deficit through Promotion of Foreign Travel in
the United States by Both Public and Private
Action Should be Recommended for Action by Congress
in 19 69.

As has been pointed out repeatedly to the public and
to the appropriate.
committees of Congress, the trend of thg
contribution of travel to and from the United States to our
balance of payments deficit is such that the United States
can not continue to ignore the problem.
It was for this reason that in your New Year's Day
Message last January you sought to reduce the 1967 travel
deficit in excess of $2 billion by voluntary action. If the
Nation is to avoid that tourist deficit from continuing to
mount at a pace that would exceed $4 billion by 1975 O s
United States disposable income and the portion of it spent
on foreign travel increases, and the new airplanes with
larger capacities and greater speeds bring lower fares), the
Nation must begin to implement now a comprehensive long-term
program to rapidly increase foreign travel to this country.


1 6


Your special Travel Task Force, formed in 1967, has
provided excellent blue prints not only for the immediate
measures already taken in 1968 but for the longer term future.
Congress has had before it specific legislation to pro­
vide a special fund by which these blue prints can be turned
into a viable program. It is important that early in the
coming year, the new Congress address itself to a disposition
of this proposal.
Under this proposal, the President would be authorized
to utilize up to $30 million a year for five years to promote
increased foreign travel to the United States.
Although final figures are not yet available, we must
anticipate a continued large travel deficit in 1968. It would
have been larger but for the many excellent remedial measures
recommended by your Special Task Force and carried out
voluntarily by the private sector.
The best way to provide regular and adequate financing for
the Task Force program is by early congressional action to
eliminate the exemption of international flights from the long
existing 5% tax on airline tickets and dedicate a proportion of
the proceeds to a Special Fund to be used and expended during
the fiscal years 1970-74, inclusive, in such amount and under
such rules and regulations as the President may prescribe in
encouraging foreign travel to and within the United States.
We must no\£ allow an increased tourist deficit to
jeopardize progress in other areas of the balance of payments
and necessitate the maintenance of temporary restrictive
measures on capital flows or handicap the United States in
discharging its national security commitments outside the
United States.
The Cabinet Committee on Balance of Payments has
reviewed these programs and policies which are so vital to
maintain the strength of the United States dollar. We


o q



1 7


recommend their adoption to continue the very real gains
achieved from the Action Program you announced on New
Year's Day.
In the year ahead, these policies will help
to preserve these gains and their contribution to a strong
free world economy.
Faithfully yours,

Henry H. Fowler
The President
The White House

Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102