EPSON IN WASHINGTON . . .
Balance Of Payments
Is Confusing Subject
PAGE
HERALD AND NEWS, KItnuth Falls, Oregon
Wednesday, August 14, 1963
"It's Going to Be a Tight Squeeze!"
Who
These two businessmen were settling
the big issues of the day as they rode to work.
" "It's about time," said one, "that these
guys in Washington wake up to what's really
going on in this country and around the
world. Between the White House and Con
gress, we're getting nowhere fast. The coun
.try is really in a mess."
The other man nodded. "Things are
rough, all right," he said. "But I'd sure hate
to be the ones who have to try to straighten
them out."
So would we all. Most any one of us can
call the shots when we're sitting on the side
lines and no one is keeping score on us. But
how many of us would welcome the responsi
bility of having a voice of authority in ren
dering judgment and final decisions in such
problems as:
The railroads' management - labor
problem?
The racial unrest throughout the
country?
The continuous and insistent tug be
tween management and labor, erupting into
open breaks around the country from day to
day?
The relation of the nuclear test ban
(Cincinnati Enquirer)
Sometimes if you ignore it long enough,
a problem will go away. Sometimes, it can be
dispelled by stop-gap measures. But the prob
lem of the gold outflow is not in either cate
gory. Temporarily, at any rate, it is worse
than it was a year ago. For the first quarter
of 1963, the outflow of U.S. capital as a
whole was at the annual rate of $3.8 billion,
which is higher than the rate of 1962 al
though not quite as high as the rates for
1960 and 1961. And it rather looks as though
the same pattern will prevail when figures
for the first six months of the year are avail
able. Further heavy drains on our gold sup
ply have brought reserves down to $15.7 bil
lion, which is the lowest since April of 1939,
nearly a quarter century ago. One conse
quence is a new flurry of speculation in
European capitals about possible dollar de
valuation. The President can attempt to offset
this by another firm statement flatly ruling
out any such action. But while that may head
off another epidemic of raids on the dollar by
The
By HOLMES ALEXANDER
WASHINGTON, D.C.-Congress-man
Roman Pucinski, Democrat
from Illinois, has an idea which
could beam the glare o( public
enlightenment upon America's
grotesque unemployment problem.
Pucinski tells mo he intends
to ask Labor Secretary WirU to
add a third category to the re
ports under which Iho Bureau
of Labor Statistics now lists (a
employed and (b) unemployed fig
ures. The silvering but energetic
Congressman, once a reporter and
bomber pilot, wants the third
category to be those Americans
who are unemployable under the
mores of Uie times. He says this
third-class citizenry w ill compose
almost 90 per cent of persons out
of work. H Mould break down
as follows:
1. About 800.000 draft age
youths between the ages of 18
and 26. His studies show that
employers do not readily give
meaningful jobs to young men
classified as 1-A with their draft
boards because this would force
the employers to keep the job
open for two years while a draft
ed worker Is in the military serv
ice. 2. About two million Ameri
cans who arc "functionally illi
terate." One of the real contri
butions of the Kennedy Adminis
tration has been to bare the
shocking fact that hundreds of
thousands of Americans, under
our public and compulsory school
system, liavo managed to get
through grade school, high school
and even Into freshman year of
college without being able to
read.
Of course we were warned
long ago in books that were re
jected by major publishers and
scored by the uptown critics that
the "progressive" system of edu
cation was leading to Ignorance.
Finally a book by Rudolf Flesch
did break through to show "Why
Johnnie Can't Read." The Irre
pressible Admiral Rlckover made
himself heard. But tho damage .
upon th present generation was
Has The Answers?
treaty to a nonaggression pact? Who would
want to try to guess right on this?
The controversial federal aid to
schools issue?
Tax cuts and tax reforms?
The unemployment situation and the
national economy?
The farm problem?
The population explosion and birth
control?
And on and on and on.
We mention those headaches only a
few of the scores to plague the administra
tion and the lawmakers in Washington not
to excuse any errors of judgment or action
that may be made, but to emphasize the
scope and size of the tremendous task facing
our national leaders.
The freedom to second guess and to
serve as Monday morning quarterbacks is an
inalienable right of every American. But
there is also the obligation to help solve those
problems by individual effort, sober judg
ment, calm action, fair play and loyal citizen
ship. Contrary to what we may be told or what
we may think at times, the voice of the people
still prevails in America. Each of us is part
of that voice. Each of us is part of America.
Persistent Gold Problem
private speculators in London and Amster
dam, it will not solve the basic problem.
Whatever its other effects, the drastic
slash in overseas aid for fiscal 1964 that is
indicated by the temper of Congress will help
to correct the imbalance. So will the ex
pected further increase of foreign visitors to
this country.
For the still longer term, there is anoth
er set of corrective forces at work. Chief of
these is the upward spiral of prices and wages
in Europe and also in Japan in contrast
to a leveling off of prices and wages here.
Another, unpredictable as to its scope, is a
prospective slowdown in the export of private
U.S. capital, particularly the movement
touched off by formation of the European
Common Market.
Until our balance of international pay
ments is really balanced, however, we shall
be operating under a considerable handicap,
both financial and political, since a weak gold
position is a poor hand to hold in internation
al politics.
HOLMES ALEXANDER .
Miserable
substantially done. As recently
as last year, a California slate
wide election went squarely to
the issue of returning to the basic
educational principles of the three
Its. Meanwhile, illiteracy of job
seekers who cannot read j o b
manuals and simple instructions
has become an albatross around
the national neck.
"I'm on two subcommittees,"
said Pucinski of tho House Kclu
cation and Labor Committee,
"which undertake to create jobs.
But until we teach people In
road and write, it won't do much
good to make jobs for them."
3. About two million workers
upward of 40 years old who have
been replaced in their jobs by
automation and relocation of
plunls. At this mature age-group,
workers might be thought to be
"You mtan u t'rt payM
btr bow to
BERRY'S WORLD
Ones
at their productive peak. But the
introduction of new machinery,
at the old sites or in new ones, in
stantly turns a skilled worker into
an unskilled worker.
Even before the federal and
stale governments began to ac
celerate retraining, as under the
Training Act of 1962, private in
dustry and many of the unions
wore attempting the same thing.
All these effurrs, however, are
made in the teeth of a population
explosion which necessitates more
and more jobs each year.
Pucinski is on the trail of a
useful idea. Merely to add Uie
dreary category of "uncmploy
ables" to our already-dreary cn
cyclocdia of statistical data will
not solve our employment prob
lemshut it will spotlight what
uur problems are.
that fiturv tchool to ltar
bo a TREE)"
' '
'vu1..i:'w'.lJV-i.,.,-iU,-iir;
NEWS COMMENTARY
Civil Aviation Changed
By ROBERT J. SERL1NG
UPI Aviation Editor
WASHINGTON UPH The
airlines, their pilots and the Fed
eral Aviation Agency (FAAi,
who do not always see eye to
eye. have one thing in common
these days.
Namely anger.
It is directed at i recent re
port by a House subcommittee
headed by Rep. Jack Brooks iD
Texas). Last fall the subcom
mittee heard testimony concern
ing shennanigans in airliner cock
pitspilots sleeping or reading
while on duty, donkeys running
around in cabins, and stewardess
es being allowed to take the con
trols on scheduled trips.
The subcommittee report re
pealed the testimony and included
pictures taken secretly by flight
engineers. What angered virtually
everyone in commercial aviation
was the implication it drew that
the cockpit discipline situation
still existed. II urged, for exam
ple, that the FAA start making un
announced flight inscction to de
termine whether "aircrew mem
bers are applying themselves to
their duties and responsibilities."
Demanded Najeeb Resign
A nalinnal magazine (The Sat
urday Evening Post used the
hearings as justification for de
manding the resignation of Fed
eral Aviation Administrator Na
jeeb E. Halaby, who wasn't in of
fice when most of '.he incidents
occurred. An editorial in the Aug.
3 issue declared:
By SYDNEY J. HARRIS
My old and dear friend. Mil
Ion Mayer, has filed suit in the
Federal Court in Washington,
DC, to force llie Stale Depart
ment to issue him a passport.
Milton Mayor, is. in my opinion,
llie most brilliant journalist in
our country and our time. He
would be an adornment in any
country and any time. He w riles
powerfully, thinks clearly, and
has the courage to live as he
writes and thinks.
He has been an anti-communist
during the 25 years I have known
him and for years before that.
But he refuses to sign llie non
communist oath which became a
part of I'.S. passport applications
last year. For this reason, the
Stale Department is rclusing to
reissue bis passport, which ex
pired last spring.
He will not take an nath under
duress. "My views on commu
nism are widely known," he has
said, "but 1 express them ho
cause I wish lo. I will not do o
under duress."
It would be simple for lum In
lake the oath, as must of us
would. He is contractually obli
gated to three publishers and two
church orc.iui7.il ions for assign
ments in Europe tins year. But as
a matter of principle, he refuses
to deny a crime with which he
has not been charged.
Such a lest oath, he believes,
"is the historic instrument of ty
rannies for the reduction of free
men lo servility. It is unworthy
of my country and my govern
I BSFB
"The House government acti
vities subcommittee report is fur
ther proof . . . that Mr. Halaby
should either apply himself more
fervently to the cause of greater
air safety or else he should re
sign." The aviation community said it
would like to get a few points
across on the subject of cockpit
cut-ups:
No responsible airline pilots'
union or government official con
dones the events of the past. But
the word "past" should be capi
talized. All airlines and their
crews have been warned that re
currences will not be tolerated.
There have been no further inci
dents reported. And in all the
furor generated by the hearings
and the subsequent report, it was
easy to forget that the cockpit
discipline incidents cited all oc
curred between 1957 and 1961.
The subcommittee and the maga
zine, as far as responsible civil
aviation leaders are concerned,
arc beating a dead horse.
Corrective Action Taken
The report went inlo great de
tails on the testimony from va
rious w itnesses, but went into no
detail on the fact that FAA and
the airlines, even before the hear
ings were held, already had taken
corrective action.
Aviation officials believe that
in citing the cockpit incidents in
such great length, the report cre
ated a distorted picture of wide
spread, frequent and even current
laxity which could well prompt
STRICTLY
PERSONAL
ment, and I must make my pro
test against it."
I know scores of upstanding,
high-principled conservatives, who
inveigh daily against government
authority and restrictions but
only when these directly alfect
their earning capacity, their
schedule, and their business pro
cedures. Most of them would be
heartily in favor of Ihe non-com-miinisl
oath for passports.
Likewise, most of Ihe liberals
I know concentrate only on one
nsicct of "freedom" that part
which coincides with their politi
cal and economic beliefs. They
aie not unduly concerned about
-government infringement of the
business area, even it it is un
just. But "freedom." if il means
anything, is indivisible. We can
not le (or it in one sector, and
iiuiifteient lo its abuse in an
other sector. We cannof ask the
government to move in when il
serves our interest, Mid to slay
out when our interest is threat
ened. But this is exactly what
most of us want.
Milton Mayer stands to gain
nothing personally, and to lose
a lot. by refusing to take the
passport oath. He is fichting our
battle more than his. For, as he
says, "Liberty goes down the
drain, little by little, while no
body is looking."
He was opxsing the commu
nists long before most of us knew
what was going on. Now he is
opposing llie government. In both
lights, lie is right, and the rest
of us are put to shame.
A
fearful citizens to stay away from
air travel. The magazine also
gave the impression that the FAA
and the airlines still are indiffer
ent to the necessily for cockpit
discipline.
The report's recommendation
for unannounced flight inspection
warrants some comment. This is
why the FAA doesn't think much
of it:
FAA inspectors want to watch
the entire operation of a flight,
not just what goes on in the cock
pit. This involves observation of
flight plan and dispatch duties,
pre-flight mechanical inspections,
etc.
The FAA is gettinpl ready lo
issue a proposed regulation re
quiring all cockpit doors be lock
ed as a precaution against sabo
lage or hijacking. Cockpit secu
rity appears to be a far greater
air safety problem than cockpit
discipline.
FAA officials already perform
a certain amount of unannounced
inspections. They ride incognito in
airliner cabins to observe the per
formance of cabin attendants and
the frequency with which pilots
leave the flight deck.
One fact stands out which was
not mentioned either in the sub
committee report of the maga
zine: Civil aviation has changed
since the cockpit incidents oc
curred. Any layman privileged to
observe the flight deck of today's
jels or any other airliner would
be surprised as well as reas
sured. There is noticeable ten
sion, total alertness and an at
mosphere of no-nonsense.
It might be said that this happy
situation is due in part lo the
revelations of the Brooks subcom
mittee. There undoubtedly are a
handful of pilots who might mis
behave if they were not afraid
someone like a flight engineer
would report them. But the main
deterrent for cockpit laxity is a
jet age fact of life there no
longer is time for culling up.
LETTERS
TO THE
EDITOR
Inhumane
I have always enjoyed my fre
quent trips through Moore Park,
but only recently have I visited a
part which I consider a disgrace
lo this beautiful park as well as
our whole community.
I refer lo the zoo. or rather
an imitation of one.
Here I observed wild life con
fined to "two by four" pens, pac
ing ceaselessly back and forth in
view of their natural environ
ment but with 110 hope of ever
gaining their freedom.
Do unto others as you would
have them do unto you.
Have you good citizens of this
city ever considered this to apply
as well to our friends. Ihe ani
mals'" If you will put yourselves
in their place and have a spark
of companion in your hearts,
you will agree with me that it
is high time to put an end to
this form of petty cruelty.
Truly man's inhumanity to man
can only he comparable to man's
inhumanity to these dumb and
helpless creatures.
Alice B. Wilson,
Lakeshore Drive.
By PETER EDSON
Washington Correspondent
Newspaper Enterprise Assn.
WASHINGTON (NEA1-A1I the
pieces in the papers about the
delicit in the U.S. balance of pay
ments and the declining U.S.
stocks of gold have a bad psycho
logical ellect on most American
citizens, even though many of
Ihem haven't much notion what
it's all about.
This is a pretty sophisticated
subject.
A short time ago it was said
that the only man in the world
who really understood interna
tional payments was Per Jacob
sen of Sweden, managing director
of International Monetary Fund.
He died in May.
Bankers, economists, govern
ment fiscal experts and some con
gressmen discuss balance of pay
ments very emotionally. Even
so, their language is almost com
pletely unintelligible lo laymen.
Back one of these authorities
into a cornor and ask him for a
simple explanation. You'll get
something like this:
"Tiie balance of payments is an
international accounting in sum
mary form for all U.S. interna
tional financial transactions.
"It includes exports and im
ports of goods and services, for
eign loans and investments, for
eign aid, the cost of keeping Amer
ican military forces overseas,
their spending and tourist spend
ing abroad, dividend, interest and
loan repayments and the move
ments of gold to balance inter
national accounts."
An average citizen may then
ask, "What has all this got to do
with me?"
One solid answer is that it af
fects U.S. jobs and taxes, due
lo Us influence on the value and
purchasing power of the dollar.
It can influence your mort
gage interest rates or time pay
ments on a new car.
This last is an intricate daisy
chain, but it can be followed.
On the day President (v'ennedy
sent his long message to Cong
ress with recommendations to
improve the U.S. balance of pay
ments position, the Federal Re
serve Board raised the interest
By FULTON LEWIS JR.
The departure from Washington
of Elizabeth Rudel Smith, a pert
California divorcee, has killed ,
one of the most bizarre schemes
under high-level consideration in
recent years.
An ardent Kennedy-for-Presi-dent
Democrat, Mrs. Smith was
named Treasurer of the United
Slates during the first days of
the new Administration.
In that position, she plugged
hard for multi-color currency, for
dollar bills tinted ochre, for five
spots colored pink, for lavender
tens and scarlet twenties.
The experts could not convince
Mrs. Smith the plan was wild
ly impractical. They told her that
mulli-color currency would con
fuse the public.
There are more than five tril
lion pieces of currency with a
lolal value of $31 billion cur
rently in circulation. To introduce
a new type of currency inlo the
economy. Mrs. Smith was told,
would lie a great hazard in that
if would encourage counterfeiting
and could deceive the public.
Mrs. Smith stepped down from
her post last year and was suc
ceeded by Kathryn Granahan,
a Philadelphia Congresswoman
who had lost her seat through
redisricting.
Mrs. Granahan huddled with
Treasury olficials including H. J.
Hollzclaw. Director of the Bu
reau of Printing and Engraving,
and asked about the feasibility
of multicolor currency. After a
personal investigation Mrs.
Granahan turned thumbs down on
her predecessor's scheme.
In a recent report to Treasu
ry Secretary Douglas Dillon, the
Chief of the United States Secret
Service reviewed his war on Ihe
nation's counterfeiters.
James J. Rowley revealed that
his agents last year picked up
almost $3 4 million in counterfeit
currency. Of this more than $2 R
million was seized before it was
put in circulation. The other half
million was turned in by banks
and individuals who had been
stuck.
In June of this year, agents
of Chief Rowley's Secret Serv
ice seized more than a million
dollars in phony twenties from five
North Carolina residents. Run olf
the presses of a legitimate print
shop by an unscrupulous busi
nessman, the bills were less than
48 hours old when Secret Service
agents swooped down. Tliey were
tipped ofl by an undercover agent
who had two days earlier pur
chased HO.OOO of the phony bills.
In June, 19H2, a counterleit $30
showed up in Fort Lauderdale,
rate on its loans to banks from
3 to 3.5 per cent.
It also authorized U.S. banks
to raise to 4 per cent the in
terest rales they charged on short
term loans from 90 days to a
year.
The aims were to attract for
eign money to the United States
and to encourage U.S. corpora
tions and others with surplus
funds for investment to keep this
money in this country.
Tins action was not intended
to affect long-term interest rates
on mortgages or corporate and
municipal bonds. There is no
agreement among all government
or private industry economists,
however, that long-term interest
rates will not be pushed up by
Ihe authorized increases in short
term rales.
One overriding concern is that
if a federal tax cut doesn't come
soon to release new funds for
saving and investment, a tight
money supply might develop.
Higher interest rates would re
sult and might slow up new busi-1
ness investment.
This would hold back economic
growth and employment a
prime Kennedy objective.
We come to the interest which
consumers must pay on their
homes and autos.
The rates now average between
6 and 7 per cent. In a tight
money market though, when in
terest rates are going up, the
terms may be changed to make
up the difference.
Down payment requirements
could be increased.
Auto loans could be cut from
36 to 30 or even 24 months. Mort
gages might be granted for only
25 years instead of 30. The re
sult is larger monthly payments,
which hit consumers hard.
The alternative to the compli
cated balance of payments ad
justments could be even worse.
Say the United States doesn't
raise its short-term interest rates.
Then foreign depositors could de
mand payment in , gold
which U.S. depositors can't
do and the drain on U.S. gold
stocks could continue. Then con
fidence in the dollar at home and
abroad may be further impaired.
WASHINGTON REPORT . . . '.
Counterfeiting One ,
Of Principal Rackets j
Fla. During the next fortnight;
identical bills were passed in Mir
ami. Investigation disclosed the
identity of the passer as an em
ploye of a Fort Lauderdale printing
firm.
On July 5, 19t2 he was ar
rcsled and $99,000 in Counterfeit
bills were seized along wilh the
plates and negatives used in their
manufacture.
The passer, who had manufac
tured the bills without the knowl
edge, of his boss, is now serving
a five-year sentence in Federal
prison.
One year ago fake tens and
twenties began to appear in the
Chicago area. Crudely - etched,
they were thought lo be the work
of rank amateurs.
Within a short time, new bills
appeared. Similar to the first
issues, they were, however, much
improved. Il was obvious the
counterfeiters wore making pro
gress. By January. 1963, more
than $17,000 in twelve different
issues had been passed inside
Chicago. Each bill wes shown lo
be the work of the same group.
Secret Service men determined
that tiie notes were distributed
by a small group of Cook Coun.
ly crooks. Simultaneous raid
were conducted in April, 1963 on
a restaurant and residence, re
sulting in the arrest of the five
manufacturers, and the seizure
of the press, plates, negatives and
several thousand dollars in uncut
counterfeit bills
Al
manac
By I niled Press International
Today is Wednesday. Aug. 14,
the 226lh day of 1963 with 139 to
follow. ,
The moon is approaching its
new phase.
The morning stars are Jupiter
and Saturn. .
The evening stars are Mars,
and Saturn.
On this day in history:
In Ihoo. 2,000 U. S. Marines
helped in the capture of Peking.
China, which ended the Boxer
Rebellion.
In 1929, Uie dirigible Graf
Zeppelin left Germanv with 20
passengers on a round-the-world
trip.
In 1943, President Harry Tru'
man announced that Japan had
unconditionally surrendered.
A thought for the day Amer
kan essayist Henry Thoreau
'!: "The mass of men lead
lives of quiet desperation."