Foreign Relations of the United States, 1964–1968, Volume VIII, International Monetary and Trade Policy

269. Letter From Secretary of Commerce Hodges to President Johnson¹

Washington, December 18, 1964.

Dear Mr. President:

As Secretary Dillon indicated in his December 9 memorandum to you on the balance of payments,² time did not permit a review of the final draft by the Cabinet Committee on Balance of Payments.³ I would like to call your attention to certain supplementary points which I think are important.

First, as the memorandum states, our export performance in 1964 was very good indeed. For the full year 1964, merchandise exports are expected to be about $2.8 billion above 1963, and the merchandise trade surplus (exports minus imports) will be in the neighborhood of $6.2 billion, up $2.2 billion over 1963.

This good export performance is in large part a result of our export expansion program, I feel certain, and consequently we should continue to press ahead with a variety of measures which can make the export expansion effort even more effective.

(1) For example, although we have made some progress toward making our credit terms competitive with those of other countries, in many ways the policies of the Export-Import Bank still leave our exporters at a distinct disadvantage in world markets.

(2) We should give serious consideration to an export tax rebate system comparable to that used by European countries.

(3) We should consider the establishment of an export executives corps, which would enlist the skills of the private business community as a very useful adjunct to our commercial officers overseas.

Secretary Dillon’s memorandum contains the forecast of a drop in our trade surplus next year based on a decline in the rate of increase in our exports and a more rapid increase in our imports. I believe that much can be done to offset the unfavorable impact that such possible results would have on our balance of payments problem by aggressively pursuing the opportunities that lie in the export expansion area. It is for this reason that I have written this letter to call your attention to certain of the measures which I think we should seriously explore in our efforts to keep our exports growing as rapidly as possible.

I am sending a copy of this letter to Secretary Dillon.

Respectfully yours,

Luther H. Hodges ⁴

1. Source: Washington National Records Center, RG 40, Secretary of Commerce Files: FRC 69 A 6828, Chronological Copies, September–December. No classification marking. Drafted by R. H. Holton on December 17 and rewritten by Hodges.
2. Not found.
3. Document 20.
4. Printed from a copy that indicates Hodges signed the original.