Show Babson's AUTHENTIC STATEMENT Rorer fluter W Babson Special to THE VERNAL EXPRESS INTERNATIONAL FINANCIAL PROBLEMS Babson Park Mass ary 9 Babson's Business and the greatest dangers in 1967 warned readers that some of the greatest dangers in 1967 1961 might develop in the foreign economIc field With Wilts the first month of oC the year only now gone It is possible to get a clearer glimpse of the likely trouble spots Foremost among these arc international financial difficulties Strangely enough the cause of these is to be found right here at home Living Beyond Our Means I A nation naLlon just like a person may fall into financial hot water The citizen who spends more than he earns may get by for a while by adding to his current income from Crom savings But when he has exhausted his h he must either borrow or cut back on his way of living And if he borrows while con can continuing his unbalanced budget it will not be long before beCore his credit becomes wo Then he has to toe the line or go goba ba bankrupt nkru pt Since a nation is far more complex than an individual it takes much longer before beCore a country living beyond its means reaches the end of its financial rope The US still lies has a lot of oC that rope left How ever we do live in a community of Free World nations who sub sub- subscribe scribe to the capitalistic rules of oC earnings statements and bal bal- balance ance sheets Hence our failure lance to live within our means as a body politic for 16 of the past 17 years is raising more and more suspicion among other na na- na nations Why Not Well you say if we have been getting away with such high living for such a long time why should we run Into big trouble in 1967 Why didn't we last year or why not next year perhaps The answer lies in a bunching this year of unfavorable financial trends and attitudes in our relations with other nations of our Free World community First and foremost is the Viet war With half a million men In Southeast Asia we are forced to spend a great deal more for foreign materials in Japan for instance Addition Addition- Additional al dc defense ln e outlays abroad for 1967 1961 will run half a billion dollars above 1966 With air airfares fares Cares abroad sharply cut and the attraction of EXPO 67 in Montreal Us tourists should add almost as much as as the war warto warto to 1967 1961 foreign spending We may make some seine net gains from Crom exports of goods but with im ports also tilting higher with foreign investments likely to torise i irise rise and with lower interest I rates I ates In the US U S rising doubt as asto asto to other countries keeping their accounts here our deficit In International In- In International payments for 1967 1961 may hit 3 billion or more ThIs would follow last years year's big bulge budge in our payments deficit of more than 1 t billion Drawing The LIne It is no wonder that our Free i World neighbors are moving ever closer to drawing n a line aro around md our international I ial activities This may be the year they will do It for the opportunity exists in two cases First England must repay a billion dollars to the International Monetary Fund in D Dec C- C Cember ember Since the US is in debt to the Fund Great Britain can can- cannot cannot not use dollars to meet her debt She will have to t use currencies or of countries not in debt to the Fund This will certainly em- em embarrass embarrass barrass the US It will give France and her friends on the Continent a chance to trade with Washington the Europe Europe- Europeans ans will surely demand more say In running the IMF Second Britain wants in on the Common Market Frances France's de is Is- Is making noises that sound Uk not want his neighbor admitted But while the General talks about not letting England join he is isI I probably drawing up conditions for Cor her admission Among these e emay may be a further revision of oC the International Monetary Funds Fund's regulations aimed I at cutting down on both Eng Eng Eng- England's I Iland's lands land's and the US power to toI I dictate the Funds Fund's policies lie Ill I figures Why should the US a debtor to the IMF have the biggest part in world money councils Of course any European moves to curb the US spending spree abroad will be greeted by howls of dismay ay in Wash ington The cry of ingrate will be hurled nt at France Italy Holland etc But in the long run our country may he be thank thank- thanking ing the Europeans for having saved the dollar from Cram eventual devaluation |