| Show il 11 Page 6 1973 Merrill Lecture Series ‘Bretton Woods’ dead says economist by Douglas Anderson editor A leading' international economist declared Monday that the system which governed international trade for 26 years since World War 11 is “dead” but that he is “cautiously optimistic” about reform proposals which "would remedy the crisis in international balance of payments Speaking before 150 students and faculty on the Utah State David campus University and whose only solution was high on the world market lead to their countries of liberalization unemployment declining value Under the ar- exchange rates ticles of agreement of the IMF it payments restrictions” Walker or inflation member Walker a senior economist at the Internation Monetary Fund said the “Bretton Woods Agreement is dead at least in form” Walker was referring to the agreement signed by 44 countries in 1944 at Bretton Woods New Hampshire which set up the IMF “That system was built on 3 pillars: stability of exchange rates discipline on behalf of The second pillar of the now defunct Bretton Woods system Walker said was that par- noted Walker said the drafters of the IMF agreement sought to achieve stable rates of exchange between currencies to avoid the countries ticipating were responsible for maintaining the value of their own currencies about the established par This meant that countries were obligated to enter the in- ternational money markets and “buy up” their currency to support its value if as a result of the laws of supply and demand it was weakened of problems competitive depreciations countries had encountered during the 1930s and which had run havoc with international trade In 1944 when the IMF was set up currencies were “pegged” (in the terminology of economists) at certain defined values called “par” value In the case of the USA for example which ran deficits in its balance of trade for the first time in 1971 since 1894 the country imported more than it exported This meant that dollars were leaving the country to pay for the excess of import goods The overabundance of dollars Countries were allowed to adjust the value of their currencies relative to other countries only when they suffered from fundamental problems of disequilibrium in international payments or in other words when they suffered chronic balance of payments deficits was the responsibility of the USA to enter the world money markets and buy up those extra dollars and keep the value of the dollar from sagging below the par value which defined an ounce of gold at $35 an ounce In order to pay for the excess dollars the USA had to use reserves of foreign currencies it had built up in years of balance of payments surpluses or gold This was the doctrine of “free y” The final pillar of the Bretton Woods Agreement was that countries would avoid restrictions on payments for trade exchange controls Such controls outlawed by the IMF were instituted first by Germany in the 1930s Under such a so-call- ed set governments system restrictions on foreign currencies available to traders usually by establishing exchange values well below the world price Exchange controls generally succeeded in giving government greater control over the foreign sector of the economy but were criticized because of inef- ficiencies associated with them Walker said the Bretton Woods plan collapsed in Oct 1971 not so much because of weaknesses in the system but because of changes in the international environment Western Europe he said made more rapid economic recovery than had been expected which caused competitive pressures in tthe late 50s Persistent US capital outflows domestic price inflation and military expenditures expecially for the Korean and Vietnam wars joined to cause the US to have balance of payments deficits throughout the 50s and 60s although the US did not start running trade deficits until 1971 Faced with the persistent deficits the USA suspended “free convertability” in 1971 and it cannot hope to be reinstated until the USA begins running surpluses again Walker said “That cannot be done unless the rest of the world is willing to run deficits-someth- ing they do not want to do” said the IMF spokesman Walker said that a new system is now in the making Although the problem of building up the USA’s reserve of currencies is a great one a new system could work if an effective source of world liquidity which would not be attached to a national currency could be created to replace the dollar Walker spoke on the Utah State University campus as the lead-of- f speaker in the Merrill Visiting Scholar Lecture Series on European-America- n relations The series is coordinated by Wolfram Dr visiting science Hanrieder of professor a political from University of California Santa Barbara who is the first occupant of the endowed Merrill Milton R Political Chair of Science Cultural candidates A 4 I ' s r Away from home For the first time or the fiftieth time You can always use a friend express viewpoints Continued from page Five If you're from one of 94 cities in the Intermountain Area chances are First Security is your hometown bank person-to-perso- V Come in and see us advisor concert First Security Bank of Utah NA V Member Federal Deposit Insurance Corporation 1"1 h A W H A AM initiated reviewing “in-dept- A A- K W w w A r K ' of and his position of in- stitutions He also said that his exposure to people all over the world qualified him for the job Minott said he would like to see the establishment of a minority studies department at USU He said this was necessary because most white students were ignorant of the backgrounds and needs of minorities on campus alio He the advocated of a minority students’ center where they could meet together establishment Minott said he felt stpdents should have the choice of who speaks on campus during the year Join the Payroll Savings Plan h and because at different parliamentarian at those in- terviewing” in Student Life and met many of the people who are concerned with booking many of the top groups He also said he felt that his experience on Student Life had made him aware of student needs in cultural areas Willis said that next year he would like in initiate “block booking” and cut down on travel expenses paid to groups and speakers He also said he would like to improve the handling of the sound control in the FAC and Spectrum and have qualified ' persons doing it Minott a sophomore in Political Science said he felt he You have a long way to go Ne want to help along the way m stitutions for rock concert and FAC activities Lefens said that he felt his three years experience as a radio announcer two with KUSU qualified him for the office He said that at KUSU he was on the music staff in charge of screening and purchasing all music played by the station j Lefens said his main intent was to bring quality music to Utah State He said “The best music is not the most popular music” and would get the groups that had not sold out to promotion Willis said he felt he was qualified for the office because of his past experience with the Cultural Office ' He said that under George Daines he served as concert When you come to school in a strange town as far as we're concerned we're still your hometown bank Just as friendly just as anxious and willing to help you as the bank you grew up with We call it n banking But it means we just want to be friends rw was qualified attendance Build a nest egg " f iff i( h a- ii X |
