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I ' r:.v_ Ill ~ r::::,...__z::_,..._~J L-Ll ~~~ - \S '"ro#J/;~ I Opening s nt of Vice President Hump y r .. ~ #1- I I Breakfast Conference of lnaurance Investor Bxacutivea ~ c.;i ~ Metropolitan Club 1 n. v---

8:30 a.m. Friday, April 23, 1965

1 think 1 should mention at the outaet tha the probl

of our foreign and domestic ecOOOJilie object:l: • u diff rent

today than tluty w during tbe rurti • . t that tt bur

~obl was unemployment. The J'ull to,.nt Act of 1946 with

its goals of ~ .. loyment, production and tturcheae power

introduced new econoad.C era. orld·witie shon&g of dollars

during tt. il:iloec:late postwar y ra -...-t tl'l.U balance of ymen

was no con~~ r int and . buil Euro •'• wu-torn ind ~ and provide for ita politi 1 •tabil1ty. Today, we recognize t t for full emploYD*lt we 111U8t have rapid ee nomic growt but thia t be aecQD~pani d by pr.:Lce •tab111ty. Thf.a

baa added a complexity to our domestic ecoa.oad.c goal• and we

now have a major ac:ldition41 foretgn goal, which ls to achie a

sustained balance of payi~enU equillbl:'1um. o courn, beyond

this our foreign, economic goala include the need to rovtde for

long·run growth in in ernational tra~ ad paymmta and t.o work

with other for a aore productive international ecol'lODZY.

We have come a long way toward achieving our domes tie

ecOnol:nie goals. Our Gross National Product 1 a moat comprehenaiva

9 1.

• 2 -

It '~ ona u ut,. A $120 bill sinc41

11£ Ji31J,.e., • 1 !nd · c"

t:be ' t 1: ll

t year.

1 11 lo

t is rc tin

.7 c t'C •

8

11.

field o 81:4 i.lity .. • uu~ in lral't,..,1Jh""l7 of l 1 1 1 ••

01.2. ·na(lUCti 11 ~.II.QCI

1 c ti

1 b

l1 r1. haa

t • the domestic econoau.c front

itlo •

.. 3

f.ndic t by o

1 t ,-ear. There

~llltiiSIIIIIIM~aa.--~ 18 tw taotgotoo /

· 1a outlays · ~Jttl 1-J 6 4 zJ'

futu&'e irte ll

z-ru •)] ~to

. of

vtU,~ou of • ca.

~~LOD to ittc:rea

au llalt outllow

3 .. 6 bill and if it .... 'ftO~ f.« our prtYate

4 tlO~ ba: a

outflow of u •• · ri.vate

ttal, loug and

in 1 . .... touriSt I ficit ... . --·

dia . bl1a8 ,·e.E:t.c

J'OIIuen baa

1 o $6. blUioa

bill!~ ' !bus.

..

ceiv

th it

b ' ..

t. t

1 i

-4-

you ~~--. ita s enc U.inl:

111

4UI'II"- and banking coalllrlity. Prel ......... ~~~~

t.

'l'reuury,

t

ineaa an aca

tbat

el d rtly. f ed,

t •

1c t ch ~ atr~l!,.....t:ly than any other

(as £tci :Lteme) ly any ut of pl

• private

tion, bu. al•o

ine!:~aae ln • U ut

of ic 1. 1'hi

efully in the

lett. *@~llfi

- s-it too

to

'ld

f,. art

trattoa•a r o

tfmd..Ution iO IIIli tab mal eott'V8rtibi tt1 of

1 into ld at: 3S lt i t prtc. t t ancbo

t intemaU.ODal f, .................. ,.

Laat • ~ Minlat

He cU.acul y the nMd to re 1 Ua.1

balanc of fie it. 1.'ba probl• 1a SnitlllJ'

i . we ~· ~. by tbe ~

frank rec ltion tbat et. t be ao1

JAtnati of • m budatttary _ ea Ukeo y

hU country. bucia-t waa 11 rec•ive<l by the ~t.s ber

• t'Oa4 _ te]J:oa baa, in fact • ab:eqtta.Jad. ir

try bu jutt &one • at I wblch it .....

to pqahla. fid., waa penlble OG11 throUgh the ... aiva

.. 6 ..

The PrU. Minister also noted the need to wo~Jt toward

ilaprovemallt in the international 11101'letary field •o that -.n

eapanciil\g vol of world tracte vould not be baJipctred by

any tnactequaciu in lntern.atioo.al liquidi.t.y. n. UtU. ted tatea,

of cour•e. agree• w1th thia general poa1t1on and is participating

in • •Jor atudy notJ und r way on this wbject by repreaenu• tivea cf the jor lndustrla1 .and trad.il\g nat:ione of the 110rld. While no po8it1on baa been taken u yet. .. to the precue meant

to acb18'91 tbie objective, 1 hope that continutng cH.at:uaeiona

will lead to ..,.ittv. re8\llta. Early this atWaaer. aa you •1

haVe seen in the preaa • the Chane llor of ~ lxchequjr •

Mr. Callaghn. 1• caa1q over to tbe U4tted tatea to exchange

Y1 on thl• subject vitll the s.cretary of the 'rreasul')' Fowler. I ~t there will be other converaatiOne with financial

offtciala of other Pa~ on tbU 8ubjHt alM.

Specif1c41ly on tbe topic of your ••tinga tD ubJ.J\gton1

I believe the-re 18 no fundeaental conflict between our dolleati

and fontsn conmd.c objectives,; both cJepa4 for their aehteW­

ment upon • aoun dollar backed by a rapidly expandin.g, productive ,ec:OllOIIIY. In thia connection • the following oba•rvattinUt

- 7 ..

•• The of fueal 11cy t apur t

deallim8trat by 1964 • • to reduction

to lncent.i • it. hU offer d.

-· n. axci.ee tax rec!ucticm 1\Cl close control of ~diture i 1 cany oal of a lanced

budget 1a a b•Uneecl economy.

-· Monetary policy h8s ept c:redit available end key

lc -terua intere ~ ratea .• tmportaat for bua •• lmtea

stable.

u encouraged, CQIO\dlting. on the avarage, to 1•1/2 ;;;1 ~ 0 ll (__...-

ent e ~ roeeaaicm lava of four years ago. Thia hO kept our money uaarket rate• 1n the r aonable lignauent with r to in for•ign mty markets that is required in a world of convertible

eurrenci.ea •

• the full burden of acbteving a4justment 1li our ba1~e of yment& could not re listie lly be plat: d n mcmee«.ry policy. We haw, hoWever. throll&h the more aeti u. of f:tacal policy left 1a0netary pollcy fr

- 8-

to move quickly if the need ebotild uta • AS

Preaident Johnson pointed out in h1a ~c !u2rt

earlier thia year, monetary policy t be prepared

to quickly if e:aceaaive demand ahould threaten

inflAtion • o~ if an outflow of liquid fund• 1hou.ld

une_,ectedly wor•en our balance of paymente.

In cloetng, 1- say the MaSniacr.tion pledges the

contlnuatiOll of sound monetery and f18cal policies, deaigned.

to preserve t value of th• dOllar at ~ and abroad. Working

within that at ble fr...work ancl calling ~ the i.nitiati'le

of all our citiaena, our econany will go on to even grMter

productive accompliabment •

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