923
Wednesday, November 20, 1968
THE UNIVERSITY DAILY KANSAN
5
Europe's money crisis may affect U.S.
WASHINGTON (UPI)—The price of those little German automobiles may go up. The price of French perfume may go down. Maybe both. Maybe neither.
That's thoroughly indefinite, but it was as far as government economists here would go as they watched the currency crisis developing over the sickly French franc and the robust West German mark.
One reason for the vagueness was that many key U.S. policy makers were in Europe trying to head off a repeat of last year's world monetary crisis.
Treasury Secretary Henry H. Fowler and key aides were ending a week-long tour of European capitals with a series of meetings in Bonn with West German officials.
Arthur M. Okun, chairman of the President's Council of Economic Advisers, left Sunday night for a Paris meeting with French economists and other European trading partners.
Treasury and Commerce De
partment monetary analysts agreed changes in either the france or mark could bring important changes in the prices of goods those two nations sell Americans, as well as the price of American exports to France and West Germany.
Prices change slowly
However, like the British pound devaluation a year ago, prices may not change immediately or even by the full amount of any currency change.
But this is assuming the Germans revalue their mark and the French devalue their franc.
Why do either?
The argument for revaluation of the mark is that Germany is doing too well, capturing too large a share of other nation's currencies, especially the franc.
For the French, the story is just the opposite. Spring and summer strikes, paralyzing student uprisings and the hangover from last winter's gold crisis all have weakened the French economy and the franc.
The West German mark is worth 25 American cents. The German economy has been booming to the point where currency speculators are buying large quantities of marks as a hedge against world monetary uncertainty.
U. S. observers predicted if the Germans did increase the value of the mark, it would fall in the range of a 5 to 10 per cent boost.
The franc is exchanged at 4.93 per dollar. The French don't want to, but they may have to stop the strain on the franc by devaluing-by offering more francs per dollar.
This would mean a German would demand 5 to 10 per cent more dollars for this mark - perhaps exchanging 3.75 marks for a dollar, instead of four.
One of the problems facing the French government is that Frenchmen and other speculators are taking francs at 4.93 per dollar and trading them for marks at four per dollar.
Speculators hope the franc will fall in value and the mark
France will tighten its money belt
PARIS (UPI)—President Charles de Gaulle's government yesterday tightened its budget belt to save the French franc from devaluation.
Premier Maurice Couve de Murville was expected to outline spending cuts in a speech in parliament later today. Cuts in subsidies to nationalized industries were expected.
De Gaulle's chief lieutenant pledged in a nationwide broadcast Monday night France would put its own financial house in order. He stressed however the United States and the other rich nations of the non-Communist world were ready to help if needed.
"All the help France needs or will need in the future will be given to her without reserve," Couve de Murville said.
He did not mention devaluation. Speculators on the world money markets were waiting to see if France's actions now could successfully avoid eventual devaluation of the once-strong franc.
The draining away of at least a third of France's $6 billion gold reserves had led to a loss of confidence in the franc last week, resulting in mass selling of the franc and a lunge for stronger currencies on the money markets, especially the West German mark.
Couve de Murville was expected to move toward ending
West Germany will raise taxes
BONN (UPI) - West Germany yesterday announced a series of "immediate tax measures" to prevent revaluation of the German mark and increase its value during Europe's monetary crisis.
The new taxes would increase imports and curb the country's export surplus.
the government's spending more than it takes in.
In the current year, sparked by almost unprecedented student-labor unrest, De Gaulle's government had pushed ahead in major programs for education, housing and other social fields. Some of the military programs De Gaulle had designed to enhance his rebuilding of French "grandeur" already had been snipped.
The Premier's emphasis on French self-help reinforced reports from Basel, Switzerland, site of world banker meetings, that France rejected an offered $500 million short term loan from West Germany.
THE UNIVERSITY OF KANSAS THEATRE
presents
"SONG OF A GOAT"
by
J. P. Clark
A New Tragedy from Black Africa
Experimental Theatre
November 18 - 23
Tickets available at Murphy Box Office UN 4-3982
8:20 p.m.
Tickets are $1.50 or 75c with KU ID
gold has drained even more strength from the French monetary position.
increase, thus bringing a windfall profit. Additional attacks, by speculators trading frances for
DON'S STEAK HOUSE
FINE FOOD AT REASONABLE PRICES
Open Monday-Saturday 11:00 a.m. - 11:00 p.m.
Sundays 4:00 p.m. - 11:00 p.m.
1 Mi. South of Holiday Inn
CLINT EASTWOOD gives New York 24 hours...to get out of town!
Suggestion for Nature Advances IN COLOR · A UNIVERSAL PICTURE
Sat. & Sun.
Mat. 2:30
Evening
7:15-9:15