policy - The Black Vault

THE BDM CORPORATION
military efforts, to tie US aid to purchases of US goods, and to
encourage the US government to "buy American." The Kennedy Administration,
besides the policies already mentioned, encouraged foreign
investment and tourism in the US, lowered the du~y-free exemptions
enjoyed by American travellers returning to the US, and cried to
manipulate interest rates to discourage the export of capital. See,
for example:
Sorenson, Kennedy, supra note 9, pp. 405-412.
The Banker, December 1960, pp. 779-784.
John F. Kennedy "Message on Balance of Payments and Gold," reprinted
in Harris, ed., The Dollar in Crisis (1961), pp. 295-307.
30. As was the case in the discussion of Kennedy's efforts to handle
balance-of-payments problems, this description of Johnson's efforts to
help the dollar is very much a summary. For further information about
the Johnson program see:
Block, supra note 21.
Levitt, Silent Surrender (1970), p. 10., for a discussion of the 1965
tightening of coitrols.
The Banker, February 1967, pp. 97-98, for a discussion of the 1966
tightening of controls.
p. 100, for a discussion of the 1968 tighten-
The Banker, February 1968,
ing of controls.
Stevens, supra note 7, p. 214, explains also that "The Johnson Administration
had been forced to impose the first-ever mandatory controls on
the outflow of US private capital on January 1, 1968, when it also
asked Congress to impose a penalty tax on foreign travel by Americans.
At the time, the 1968 crisis was called a loss oc confidence in the
gold value of all currencies, but since all were tied to gold via the
gold convertibility of the dollar, it was fundamentally a dollar
crisis."
The 1968 Tet offensive by the DRV figures importantly in the economic
equation. The British had been forced to devalue the pound in November
1967, and pressure began to build on the dollar as individuals and
institutions around the world began to cash in a small part of the
vast sums of dollars that had been collecting overseas while the US
financed its expansive foreign policy under the terms of the Bretton
Woods Agreements. The Tet offensive and the inability of the Johnson
administration to obtain taxes to pay for the war reduced international
confidence in the US government's ability to conduct its affairs.
N• • • I4-39
•-N