Congressional Record Excerpt, with Attachments

12246 CONGRESSIONAL RECORD SENATE July 18 Mr. HUMPHREY. I yield. ture unrelated to the second half of the although I find the Senator from Min- Mr. MORSE. I wish to thank the 20th century. nesota is discussing a very tempting Senator. In a few words he has pre- I do not believe that the United States subject. I rise only to commend the sented much more eloquently than I the should find itself in a position in which Senator. I remember very well his posi- major thesis of my speech. I should like it can be, in a very real sense, intimi- tion on this subject. I am not at all to ask his permission right now to have dated or harassed by a group of central surprised that his position is being re- his remarks made a part of the reprint banks in foreign countries, which can stated under this administration. It of the discussion of this subject which work their will because of a shortage of does not make any difference to the will be made. gold bullion related to the needs of the Senator from Minnesota or to the Sena- Mr. HUMPHREY. I will be very marketplace. tor from Oregon whether it is a Repub- honored. It is ludicrous to talk about a nation lican or Democratic administration, with a $600 billion gross national prod- when we think a course is wrong. ADMINISTRATION'S PROGRAM FOR uct, a high standard of living, and stable It does not really pain me to find my- IMPROVING OUR BALANCE-OF- value of the dollar being in trouble fi- self in disagreement with the President PAYMENTS POSITION nancially in the world because of a on this subject, because I agree with him balance-of-payments problem. on most of his positions. Mr. HUMPHREY. Mr. President, the The whole subject needs new thinking. As I said earlier this afternoon, we President of the United States has pre- It needs what was once termed a "new can best serve our President, in my judg- sented a balanced and meaningful pro- look." I am hopeful that such a study ment, when we disagree, by saying so, as gram for improving our balance-of-pay- will be made. The proposals which we serve when we fight to put his pro- ments position while at the same time have been advanced to review the long- gram_across. outlining a policy that will safeguard our term future of the world monetary sys- I point out also that in our Demo- domestic expansion. I note also that tem should be given the most serious cratic platform, we took a position in earlier today the distinguished Senator consideration. this regard. I know of no reason why from New York [Mr. JAVITS] commented I also urge, that we in the Congress we should change that position. If the on the President's message relating to support the efforts which have been out- Democratic Party were meeting in con- the balance of payments. He noted for lined by the President in his message, vention assembled next week, I would the attention of the Senate and the and do our part of the job by enacting support the same plank in the platform. Nation that it was important that the the proposed "interest equalization tax" Nevertheless I say-and I am sure the Department of the Treasury and the on foreign borrowings and foreign secu- Senator from Minnesota shares my Secretary of the Treasury give assur- rity issues in our markets. view-although I may disagree with the ances that the program that has been I wish to comment on another area of President in this regard as to details, outlined does not in any way-and I Congressional responsibility, as a watch- I pledge the President anew my support quote now from the Senator from New dog over interest rates. I understand once a policy is established, of trying to York [Mr. JAVITS]-"violate our long- that my good friend, the able, and bril- effectuate it with the soundest possible standing tradition of not opposing direct liant Senator from Oregon [Mr. MORSE] legislative controls and checks that are controls on our international financial had something to say about this subject needed. transactions." earlier today. I am sure many other Much of the harm which might result I join the Senator in that expression. Senators will have more to say about it. from this program could be prevented, I am hopeful that the assurances that I do not believe any of us can be very to permit us to get into a position to are required will be readily given. I am happy about an increase in interest rates, lower the interest rates, if we were to confident that they will. even though successfully limited to short- carry out certain suggestions that some I would also add that the suggestion term borrowings. of us have been making as to how to made of a world monetary conference is This Senator stood on this floor when stop the flight of capital out of the United most meritorious. We live at a time the previous administration was in States. There are many ways to do so. when the requirements for capital are power and criticized the then Secretary My position on the foreign aid bill is great. No other country is rich enough of the Treasury, George Humphrey, for the major step to take, although there today to be the world's banker. There- his high-interest-rate policy. I do not are other things we could do as well. I fore it is imperative that we look upon think that high-interest-rate policy discussed this.question earlier this after- the subject of capitalization as an inter- worked for the good of our country. I noon, and the record will speak for it- national responsibility rather than a na- do not believe it worked for the good self. tional responsibility. I claim no expert of the farmer, the independent busi- I am pleased that the Senator from knowledge in the area of international nessman, or the entrepreneur who Minnesota has again has demonstrated finance, but I do believe that a degree sought to expand his business and im- the same objectivity and courage which of commonsense is required and is prove his position in the marketplace. have characterized his many years of necessary if we are to have any under- I know that one of the reasons why service in the Senate. standing at all of what is transpiring in we have such a large Federal budget Mr. HUMPHREY. I thank the Sen- the international money markets and the today is that we literally doubled the ator from Oregon for his observations. capital markets. cost of financing the public debt. I am very much concerned about the The world is engaged in a great trade I remind my colleagues and the ad- so-called monetary and fiscal policy of program, an expanded trade program. ministration that when the interest rate this Government or of any other govern- The world is witnessing an increase in rise took place we were told that this ment, because ultimately this will deter- the gross national product in every coun- would permit long-term borrowing at mine what happens in an economy. try, with few exceptions. There is an more reasonable interest rates. Every- I recognize that President Kennedy increase in production, which in turn body knows that did not happen. made a strong case for stemming the means an increase in the volume of goods The Senator from Minnesota, in his outflow of short-term funds by raising and services available for the public; and capacity as a U.S. Senator and as a the rediscount rate and, along with it, it means an increase in the volume of friend of this administration, wants to short-term rates on Government bills credits and dollars, or whatever units of serve notice now. I shall be watching and the like. This Senator cannot bring currency may prevail at the moment in very carefully the end results-even the himself to believe that 1-year notes any one country, to handle the increased day-by-day results and effects of any ought to sell at more than 3 percent in- traffic or the increased commerce. rise in interest rates, as has been sug- terest. I cannot bring myself to believe What is the situation? We are at- gested and as worked out and announced that 91-day notes ought to bear interest tempting to do a giant-sized business in recently by the Federal Reserve Board at 2 percent or more than 2 percent. the world with a pygmy-sized monetary and the Treasury Department. This is like printing money and charg- system. We are attempting to conduct Mr. MORSE. Mr. President, will the ing interest on it. Therefore, the Sen- world commerce-the development of Senator yield? ator from Minnesota again must restate the industrialized nations and the capi- Mr. HUMPHREY. yield. his deep concern over these matters. talization of the so-called underde- Mr. MORSE. this time of the night The President has assured us that an veloped nations-with a monetary struc- I do not wish to delay the Senate long, increase in short-term rates-at a time Copy