The Week

Quoth Adlai Stevenson: “We’ve made some progress with respect to the problem of the Secretary General.” Unavailable for comment at press time: the Secretary General.

In the week ending October 4, the gold supply of the United States faded by $101 million. Many factors not under the control of the Federal Government, such as foreign interest rates and the flow of private investment capital, contributed to this move. But the most important long-term factors remain, as always, susceptible to governmental influence and, as almost always in the last thirty years, have been either ignored or aggravated. Are foreign interest rates too high? The same day the gold flow was announced, the Federal Reserve announced it had made the largest weekly purchase of government securities in ten years—in effect, stuffing the commercial banks with reserves on which they in turn can lend out about six times as much, with resultant decreases in domestic interest rates, increases in the floating supply of purchasing media, therefore inflation, therefore further incentive for shifting capital to foreign countries with sane money policies. United States exports, being high-priced, are finding fewer and fewer buyers. Foreign production, being lower-priced, noses into our harbors in growing tonnages. Our trade balance is collapsing. Our costs are too high? Raise taxes, load business with more paperwork for Washington, smile on unions striking for wages they haven’t earned, refuse to modify depreciation rules to attract investment in new equipment, make DuPont sell its GM stock, make GM dilapidate into bitsy pieces, whiplash every business between the contradictions of the anti-trust laws. So, who’s minding the store?

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Quoth Adlai Stevenson: “We’ve made some progress with respect to the problem of the Secretary General.” Unavailable for comment at press time: the Secretary General.

In the week ending October 4, the gold supply of the United States faded by $101 million. Many factors not under the control of the Federal Government, such as foreign interest rates and the flow of private investment capital, contributed to this move. But the most important long-term factors remain, as always, susceptible to governmental influence and, as almost always in the last thirty years, have been either ignored or aggravated. Are foreign interest rates too high? The same day the gold flow was announced, the Federal Reserve announced it had made the largest weekly purchase of government securities in ten years—in effect, stuffing the commercial banks with reserves on which they in turn can lend out about six times as much, with resultant decreases in domestic interest rates, increases in the floating supply of purchasing media, therefore inflation, therefore further incentive for shifting capital to foreign countries with sane money policies. United States exports, being high-priced, are finding fewer and fewer buyers. Foreign production, being lower-priced, noses into our harbors in growing tonnages. Our trade balance is collapsing. Our costs are too high? Raise taxes, load business with more paperwork for Washington, smile on unions striking for wages they haven’t earned, refuse to modify depreciation rules to attract investment in new equipment, make DuPont sell its GM stock, make GM dilapidate into bitsy pieces, whiplash every business between the contradictions of the anti-trust laws. So, who’s minding the store?