PAGE EIGHT

THE MICHIGAN DAILY

WEDNESDAY.'. JULY 29. 1965

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US. Economy-Solid Gold?

DAILY OFFICIAL BULLETIN
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By RICHARD L. GRAVES
Associated Press Business News Writer
NEW YORK-New confusion,
oompounded by seemingly contra-
dictory government pronounce-
ments, has grown up around the
United States balance of payments
anid gold problems.
The confusion may have hit a
high point a few weeks ago
when:
-Treasury Secretary Henry H.
Fowler indicated the voluntary
program to trim the U.S. bal-
ance of payments deficit is work-
ing so well he is worried about
overoptimism.
-The Federal Reserve announc-
ed the greatest weekly outflow of
gold in six years, $359 million.
On Again, Off Again
The statements were the latest
zig-zags in the government's on-
again, off-again enthusiasm about
its efforts to preserve its dwin-
dling gold stock.,
Here are some basic questions
and answers on the current U.S.
gold and balance of payments sit-
uations:
Q.: What is the status of the
U.S. gold stock now?
A.: The U.S. monetary gold
stock now is worth $13.93 billion.
It has declined $1.45 billion since
Jan. 1. The outflow in six months.
of 1965 is exceeded only by the
total yearly losses in 1958 and
1960. The present supply of gold
is now back to the level it was
in 1938 before the nation built up
its vast gold pile during World
War II.
Deficits
The United States has had a
balance of payments deficit every
year since 1949 (except 1957). A
deficit results when the nation
spends more overseas than for-
eign nations spend in the United
States. Since we have a deficit,
it figures that some other nations
will have a surplus. Some foreign
governments convert their surplus
dollars into gold. The United
States guarantees it will buy or
sell gold at the fixed price of $35
a troy ounce.
Q.: What is the so-called ,vol-
untary program and how does it
fit into the picture?
A.: The program was establish-
ed by the government in Febru-
ary via "guidelines" to banks and
manufacturers. One of the basic
features of the program calls on
organizations to limit their over-
seas investments to 105 per cent
of their 1964 Investment. For-
eign investment was one of the
biggest single items in the 1964
balance of payments deficit. That

vate sector seem to agree only
that there is a problem to be
taken care of. No program has
been worked out. Treasury Sec-
retary Fowler says the voluntary
program must hold tight for at
least a year.
Future
Q.: What happens next?
A.: Probably the United States
will lose more of its gold stock,
since foreign governments still
hold billions of dollars convertible
into gold. But some economists
feel the gold loss will taper of f
for three reasons: the voluntary
program has limited dollars go-
ing overseas; the United States
is still - the world's number one
department store and purchases
ire made with dollars, and many
governments prefer to keep their
dollar holdings in dollars or in-
terest-bearing U.S. dollar securi-
ties rather than in bullion.
Q.: Why is gold so important?
A.: Many economists say gold
is important only because so many
people think it is important. Ac-
tually, gold has little useful value.
Its value as money is mostly psy-
chological. The mystique sur-
rounding gold is rooted deep in
history. But whatever the psy-
chological or historical reasons,
gold is readily convertible into
currency, goods, or services in al-
most any part of the world.
U.S. Economy
Q.: What has that got to do
with the U.S. economy?
A.: Because of the psychologi-
cal importance of gold, many in-
dividuals and some nations re-
gard the level of gold backing cur-
rency as a barometer of the true
value of the currency. That view
prevails in many European coun-
tries, particularly France and Ger-

many, where disastrous inflations
in the past have wrecked the
economies of the countries. France
and Germany in recent years have
been the largest buyers of U.S.
gold.
Q.: Does the U.S. government
regard gold highly as a reserve?
A.: No. The United States posi-
tion is that a currency is only as
strong as the economy behind it.
The government contends that as
long as the U.S. economy is strong,
the dollar is strong.
Dollar
Q.: What is a sign of world re-
gard for the dollar and what does
it show?
A.: Possibly the clearest sign
of the world attitude is the price
of gold in dollars on the London
market where prices are bid up
or down each day. When confi-
dence in the dollar slips for some
reason, the price of gold goes up.
When confidence in the dollar is
strong, the price hovers near the
U.S. fixed price level (plus 84
cents an ounce service charge).
Currently, the London price of
gold has been ranging between
$35.09 and $35.11 a troy ounce.
A former chairman of the
President's Council of Economic
Advisors yesterday predicted that
the nation's economy-a prime
determinant of world respect for
the dollar-will stay healthy.
Some slowdown from the recent
pace of economic advance is in
the cards for the rest of 1965, Dr.
Walter Heller, former chief eco-
nomic adviser to President Ken-
nedy and Johnson, told the na-
tional governors' conference.
"But the strength of underlying
forces for expansion offers con-
siderable insurance against an
economic stall," he added.

The Daily Official Bulletin is an
official publication of the Univer-
sity of Michigan, for ,which The
Michigan Daily assumes no editor-
ial responsibility. Notices should be
sent in TYPEWRITTEN form to
Room 3564 Administration Bldg. be-
fore 2 p.m ,of the day preceding
publication, and by 2 p.m. Friday
for Saturday and Sunday. General
Notices may be published a maxi-
mum of two times on request; Day
Calendar itemsmappear once only.
Student organization notices are not
accepted for publication.
WEDNESDAY, JULY 28
Day Calendar
Art Conference-Registration, Rack-I
ham Lobby, 8 a.m.
Conference on Aging-"Aging and
MentaleHealth": Rackham Lecture Hall,
9 a.m.
Audio-Visual Education Center Film
Preview--"Day of the Painter, Calder's
Circus" and "Interview": Multipurpose
Room, Undergraduate Library, 1:30 p.m.
School of Music Concert-Th Stanley
Quartet: Rackhamn Lecture Hall, 8:30
p.m.
Lecture: Dean Alien weller, College
of Fine and Applied Art, University

of Illinois, will speak on "Contemporary Student 1.D. Cards: Any new summer POSITION OPENINGS:
American Painting and Sculpture," 2 term students who plan to continue in National Homes Corp., Lafay,,tte, Ind
p.m., Wed., July 28, Architecture And. the fall term and did not receive a stu- -1. Supv. prod. planning, BSIE or In-
He will be showing slides from the Illi.- dent I.D. card should make applica- dust. Mgmt. 3-5 yrs. exper. Age 25-35.
nois Biennial Show. tion for a card at Window A of the 2. Plant Engr. BSEE or equiv. Recent
_ Registrar's Office. Any students who grad or 2-3 yrs. exper. Age 22-30.
lost their cards or need a new one be- Eator -gyrs., x ed .
(genera L ] otice cause of name change should also make E ucaon Mfge.CoegCevelndOrs.io-.
(General Notices a;n ga"j? DO
application at Window A. It is stronglyp aringeagewnt.Dgreenpus6y. gc3-
Master's Degree Candidates: A break- recommended all cards be secured prior per, In metal working industry Age 32-
fast honoring candidates for the mas- to the end of the summer term. A stu--D2 Purchasing value analyst dept
ter's degree will be held in the Michi- dent I.D. card Is required of all reg- cttring industry.
gan Union Ballroom Sun., Aug. 8, at 9 istrants for the regular term.,utn nuty
ayticketsRobert E. Eastman & Co., Flint, Mich.
a.m. Candidates may pick uptikt alsRpe.orado&Tsain.
in Room 3510 Administration Bldg. be- Bkgdfinor ra i aes r elp.
tween hours 8-12 and 1-5, Monday I ace ' e ful. Assignment to major city after ei-
through Friday, and 8-12 Sat., July 31. tial trngc
Tickets should be picked up noulater Wayne County, Mlch.-Child Guidance
than 5 p.m., Fri., Aug. 6. If you are PLACEMENT INTERVIEWS: Bureau Counselor, MA in guidance & counsel-
a candidate for the, master's degree of Appointments-Seniors & grad stu ing, soc. work, spec. educ., psych.; or
but did not receive an Invitation, you dents, please call 764-7460 for appoint- BA plus 2 yrs. exper. Grad study may
are still entitled to attend. ments with the following: substitute for 1 yr. exper.
Seniors: College of L.S. & A., and WED., AUG.4 PrgammeCorp. eacedonbN. . - Sir
Schools of Education, Music, Public .Dge nbs di.o
Heath, ad EBusin Adminstra Aetna Casualty & Surety Co., Hart- math pref. 2 yrs. exper. Will consider
Tentative lists of seniors for August ford, Conn.-Seeking degrees in Gen. non-degree applicants with superior
Lib. Arts, Econ., Educ. Law, Lib. Sci., ability.
rroA~ ti n in'. ao "ctA n 11

0

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graduation have been posted on the
bulletin board in the first floor lobby,
Administration Bldg. Any changes
therefrom should be requested of the
Recorder at Office of Registration and
Records, window Number A, 1513 Ad-
ministration Bldg.
Regents 'Meeting: Sept. 24. Communi-
cations for consideration at this meet-
ing must be in the President's hands
no later than Sept. 10.

Math, Public Health, etc. Positions in
insurance including home office,
claims, sales, acctg., surety bonds ,etc.
Locations throughout U.S.

For further information, please call
764-7460, General Div., Bureau of Ap-
pointments, 3200 SAB.

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HENRY H. FOWLER

Ai '

deficit provided the vast pool of
dollars which some foreign gov-
ernments are converting into gold
this year.
Payment Status
Q.: What is .the U.S. balance ofj
payments position now
A.: Despite optimism about the
voluntary program, the United
States deficit in the first three
months of the year was $733mil-
lion. The program did not really
begin to tell until the second three
months. Though statistics present-
ly are not available for the sec-
ond quarter of 1965, it is believed
the balance is showing a surplus.
Some economists project the net
deficit for 1965 at about $1 bil-
lion, or one-third the total defi-
cit for 1964.
Q.: Is that good or bad?
A.: A little of both. It is good
because it shows the voluntary
program is working. It is bad be-
cause there is still a deficit.
Tourniquet
The voluntary program is like a
first-aid tourniquet-a temporary
device that preserves the patient
until there can be surgery to re-
pair the injury.
At this stage, the voluntary
tourniquet chafes. But the bankers
and industrialists who complain
about it are unlikely to loosen it
until doctor government gives the
word.
Q.: What kind of permanent
treatment has been proposed? f
A.: That's one of the problems.
So far, government and the pri-

A'


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