29. Letter From the Chairman of the Board of Governors of the Federal Reserve System (Martin) to Secretary of the Treasury Kennedy 1
I regret that I shall have to miss tomorrow’s meeting on the 1970 balance of payments measures.2
Enclosed with this letter is a statement on the balance of payments problem, which provides strong reasons for minimizing any relaxation in the programs and for pressing toward equilibrium in the U.S. balance of payments.
I am sending copies of this letter and the enclosed statement to the other participants in tomorrow’s meeting.
- Source: Washington National Records Center, Department of the Treasury, Office of the Assistant Secretary for International Affairs: FRC 56 76 108, BOP Improvement Measures, Volume 4, 66-69. No classification marking. A handwritten notation on the letter reads: “Copy for Mr. Volcker 10/21 6:45 pm copies to Messrs. Petty and Schaffner.”↩
- The meeting has not been identified, but on October 29 Paul H. Boeker sent a memorandum to Assistant Secretary of State for Economic Affairs Trezise informing him that “interested USG agencies are having second thoughts about the Fed’s proposed revisions in the VFCR Program announced at last week’s meeting of the Cabinet Committee on Economic Policy.” Boeker explained that the Fed had consistently opposed increased export credit extension because of its adverse short-term balance-of-payments impact but that “all member agencies of the Cabinet Committee on Export Expansion except the Fed expressed support for the exemption of all export credit from VFCR guidelines.” Boeker recommended Trezise contact Governor Brimmer to support further interagency study of the practical consequences of the proposed revision of the VFCR program (before any announcement of new guidelines was made). Trezise’s handwritten note on Boeker’s memorandum reads: “Call to Brimmer not necessary now. PHT.” (National Archives, RG 59, Central Files 1967-69, FN 6 XMB)↩