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University Daily Kansan Monday, Sept. 17, 1962
Monetary Fund Director Opposes Devaluation of Dollar
By Edward Cowan United Press International
WASHINGTON - Per Jacobsson, managing director of the International Monetary Fund, said today that "formidable lines of defense" protect the dollar and remove any possible need for an increase in the price of gold.
Jacobsson, a highly regarded Swedish economist, lined up solidly behind the U.S. view that gold guarantees for foreign dollar holders have "no merit" and that the official U.S. gold price should remain at $35 an ounce.
IT HAS BEEN suggested, mostly abroad, that the price of gold should be doubled to increase the world's financial resources. Raising the gold price would be tantamount to devaluing the dollar, the major reserve currency held by other nations.
President Kennedy has said the United States will not devalue. He undoubtedly will reaffirm this stand in a speech Thursday to free world finance ministers gathered here for the annual conference of the Monetary Fund and World Bank.
Jacobsson told the conference's opening session that the international currency situation was stronger and more stable than at any time since World War II. As
Official Bulletin
TUESDAY (SEPT. 18)
AIEE-ISE Student Branch: organization
7:30 p.m. Forum Room.
Student Union.
Freshmen and new students in electrical engineering are invited to come and meet the EE faculty and upperclass students. Coffee and doughnuts will be served.
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NEW YORK — (UPI) — One of five guests in a hotel leaves something by mistake in a room when checking out, according to a survey by the Hotel Edison.
this becomes better understood, ne said, confidence in the dollar and British pound "will be reinforced."
FEARS OF A RACE among governments to acquire gold and convertible currencies — a "scramble for reserves" — have been "exaggerated out of all proportion to reality," Jacobsson declared.
He said the flow of dollars and gold out of the United States in recent years had led to a redistribution of financial assets and "one country after the other is beginning to think" its reserves are adequate.
Proof that there is no shortage of credit lies in the 6½ per cent rise this year in world trade, Jacobsson said.
Jacobsson said ample reserves in many countries, currency swap arrangements and access to the fund's $15 billion of resources "provide formidable lines of defense against any pressures" on the dollar or other
"hard" currencies which may arise Stable exchange rates can be sustained without changing the price of gold, he declared.
JACOBSSON suggested that issuance by the United States of gold guarantees would only "detract from the efforts to solve real problems" and generate an unwarranted distrust of the dollar.
Predicting that confidence in the present system would increase, Jacobsson said it would lead to "less eagerness on the part of private individuals to hoard gold." More gold then would flow into the treasuries of governments, strengthening still further their credit policies, he said.
From 1950 through 1961, according to the fund's annual report, some $7.3 billion in gold was used in the arts and industries or disappeared into private hoards." That was more than half the gold coming into the market, either from mining or sales by the Soviet bloc.
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Senate Begins Debate On Kennedy Trade Bill
WASHINGTON — (UPI) — The Senate swung into debate today on President Kennedy's vital trade bill with administration leaders hopeful of fending off any seriously crippling amendments.
The legislation, passed earlier this session by the House, won a qualified endorsement from Chairman Harry F. Byrd of the finance committee.
The influential Virginia Democrat said it was of "utmost importance" that congress enact a new trade program this year. But he said he had some "very strong reservations"
about some features of the bill as it emerged from his committee.
He served notice he would oppose the President's controversial proposal for a job adjustment assistance program, providing federal aid to workers and industries injured by import competition.
The measure would give the President broad powers to cut tariffs in exchange for similar concessions from other countries. Kennedy has called it "vital legislation" that would arm U.S. negotiators with the needed powers to meet competition from the burgeoning European common market.
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