144. Letter From the President of General Electric Company (Borch) to Secretary of Commerce Trowbridge1
Dear Sandy:
To put it mildly, I was quite discouraged by the trend of events at the Balance of Payments Advisory Committee meeting last week,2 to the point of asking myself whether it is any longer meaningful for such a group of businessmen to attempt to meaningfully advise the Administration on this very important subject.
There seem to be some in the Administration who profess to believe that if business would stop exporting dollars into direct foreign investments the balance-of-payments problem would be solved. This attitude reflects itself in a constant hammering to reduce this relatively minor element of the balance-of-payments deficit. It further overlooks what all the businessmen on the Advisory Committee keep repeating; namely, that [Page 415] direct investments are a very significant element in maintaining or improving the US trade balance.
The voluntary program has served a major useful purpose; namely, in educating businessmen generally to the importance of the US balance-of-payments position to the health of our economy, and this has been reflected in results that some in the Administration said could not possibly happen. The record will show that the voluntary program has done an outstanding job by any measurement, and in my opinion this is because it was initially properly focused on the overall contribution that a business could make. This originally was the prime target, and properly so. In the last two years, emphasis has turned from the overall contribution to the matter of direct investments—in other words, from the “dog to the tail,” as someone expressed it.
Now the year 1967 shows still further progress, both in terms of trade balance and direct investments to the program countries. The fact that direct investments to lesser developed countries has increased should surprise no one, since such investment has been encouraged by the Administration. Now to attempt to further reduce the target on program countries to offset the increase to lesser developed countries strikes me simply as game playing.
To the point that some companies are not cooperating, the fact that the program is voluntary would make this inevitable. This does not mean that the Administration cannot use person-to-person persuasion on this score, which has heretofore been lacking.
However, the main point is that business under the voluntary program has done an outstanding job, in the opinion of many of us, in serving the country in both its short-and long-term interests. The Administration, on the other hand, still seems to be unwilling to face up to the admittedly difficult political problems associated with the other more critical aspects of the balance-of-payments problem, among which foreign travel is often cited as an example, although many aspects of the import situation are much more important.
Overall, Sandy, it appears to me that businessmen have evidenced by their actions their understanding of the seriousness of this problem, both short-and long-term, and some of us are extremely discouraged that the efforts being made by business are not being matched in results by the public sector, which is where the deficit is created.
Thanks for taking the time to read this—it’s more helpful to me to get it off my chest than it can possibly be to you!
Sincerely,
- Source: Washington National Records Center, RG 40, Executive Secretariat Files: FRC 74 A 30, Balance of Payments Background Material. No classification marking.↩
- See Document 143.↩