At the time of his remarks, Dr. Walker suggested the following course of action to resolve the gold reserve problem: The gold reserve requirement does serve as a check on excessive monetary expansion and, as the volume of free gold declines, spurs actions to correct a balance-of-payments deficit. On the other hand, the requirement ties up gold that could, and at times should, be used to support the dollar internationally, and it can contribute to an artificial shortage of reserves that may deter domestic expansion by hampering normal and desirable growth in the money supply. Now below 28 percent, the actual ratio is approaching the danger point. And it should be noted that the recent sharp drop in the ratio has not resulted primarily from gold outflows, which have diminished in the past few years, but from growth in the currency and deposits required by a rapidly growing economy. How to solve the dilemma? The best course of action seems to me to be to relax, but not remove, the requirement. Retention of the discipline, even if at a lower level, would preserve many of its advantages. But any easing of the limit should be effected only if we can be certain that the monetary discipline which the requirement helps maintain continues to be assured. As late as February 1, 1968, Wilson E. Schmidt, professor and head of the Department of Economics, Virginia Polytechnic Institute, stated before the Senate Banking and Currency Committee: We must not defend the dollar to the last ounce of gold. Inevitably, we must bring equilibrium to the balance of payments. If we choose to do this under a fixed exchange rate we must retain some gold reserves to stabilize the rate we choose. The disturbing regression by Great Britain in recent months from a position of greatness is ample proof that no world power can indefinitely ignore the debilitating and inevitable results of unsound fiscal and monetary policies. It is likewise evidence that one of the greatest drains upon any nation's economy is the cost of maintaining sizable military commitments in all parts of the globe. This country must place the other nations of the free world on notice that we can no longer afford to carry alone the overwhelming bulk of the defense of the free world. Either we must withdraw great numbers of troops from Western Europe and maintain only token forces (as a show of our continuing commitments) or we must demand that the other nations of the free world pay a greater share of the cost of maintaining those troops abroad. Of course, the continuing struggle in Vietnam is resulting in an estimated $1 billion per year loss in the balance-of-payments picture of this country. This external drain, combined with the budgetary expense of roughly $26 billion per year, makes it all the more imperative that steps be taken to bring that conflict to a successful and early end. The testimony of Eugene Stewart, spokesman and counsel for the Trade Relations Council of the United States, has suggested an alternative approach to the solution of our problem. Figures prepared by the Trade Relations Council reflect that in some manufacturing industries, the United States has lost its competitive position in the world market. It is suggested that we decrease our imports in certain specified areas sufficiently to offset the present balance-of-payments deficit. I am taking the liberty of inserting a prepared comment from Mr. Stewart at this point: The committee's action in regard to the gold cover is clearly taken in the context of our Nation's continuing balance-of-payments crisis. The committee's action is taken in isolation from effective attention to other factors which relate in a fundamental way to the cause of our Nation's outflow of gold which bring to the forefront a consideration of the gold cover question. Foremost among these other factors is the rapid worsening of the U.S. balance of trade in the products of a large number of manufacturing industries, including food products; textiles; apparel; wood products; leather products; primary metals; metal manufactures; machinery; electronics; stone, clay, and glass products; and miscellaneous manufactures. Evidence and testimony were presented to the committee in public hearings by the Trade Relations Council of the United States, based upon a computer study, establishing that 122 U.S. manufacturing industries as defined at the four-digit level of the standard industrial classification experienced a net foreign trade deficit in 1966 of $7.5 billion. This was a worsening by 153 percent of the annual average deficit of $3 billion experienced in the foreign trade of these industries during the base period 1958-60. Imports of products like or competitive with the output of these industries increased from $6.2 to $11.4 billion during this period-an average annual increase of 13.6 percent in contrast to an increase in the exports of the products of these industries from $3.3 to $3.9 billion during the period, an average rise of 3.2 percent per year. In the light of these sharply differing and well-established import-export trends, it is predictable that the foreign trade deficit, and hence the drain on our balance of payments, in the product of these industries will continue. The committee was urged to consider as an alternative measure for the achievement of a constructive contribution to the solution of our balance-of-payments crisis the imposition of import quotas on the products of the 122 industries based upon 1965's import volume, and subject to an annual increase equivalent to the actual increase achieved in U.S. exports of the products of these industries. This would produce a saving of approximately $1.5 billion in our balance of payments, equivalent to the full effect announced by the administration as its objective through the curbs on direct investment and the travel of U.S. citizens abroad. Since the domestic sales of the products of the 122 industries account for about one-third of total U.S. sales of manufactured products, quantitative limitations on this portion of U.S. imports of manufactured products would leave undisturbed the access of foreign producers to two-thirds of the U.S. market. Furthermore, the degree of limitation suggested for Under article XII of the General Agreement on Tariffs The modification or removal of the gold cover for our currency is a drastic step which should not be considered until all other reasonable measures for a correction of our balanceof-payments situation have been explored. The proposed import quotas are less drastic in their impact on the individual freedoms of American citizens than either the curbs on direct investment or the proposed tax on the foreign travel of U.S. citizens. Alone of all of these measures the United States has explicit consent to adopt import controls, as indicated in article XII of GATT. The failure of the committee to pursue the suggestion offered in regard to such action as an emergency measure is inexplicable. While I am a firm believer in free trade, yet, in times of national crisis, we must sometimes endure one evil so that a greater evil shall not be suffered. In my opinion, to impose the import quotas as a means of temporary relief, as suggested by Mr. Stewart, is a lesser evil then surrendering all of our gold to be absorbed in the international money markets. I repeat my earlier position: The culprit is Government spending abroad, combined with the inflationary effect created by fallacious monetary and fiscal policies at home. Under the circumstances, I cannot support this administration's proposals. I respectfully urge the administration to stop offering the American people an aspirin. in an effort to cure a cancer. 90TH CONGRESS 2d Session } HOUSE OF REPRESENTATIVES {No. 1096 REPORT AMENDING SECTIONS 281 AND 344 OF THE IMMIGRATION AND NATIONALITY ACT TO ELIMINATE THE STATUTORY PRESCRIPTION FEES, AND FOR OTHER PURPOSES FEBRUARY 12, 1968.-Committed to the Committee of the Whole House on the State of the Union and ordered to be printed Mr. RODINO, from the Committee on the Judiciary, submitted the following REPORT [To accompany H.R. 2792] The Committee on the Judiciary, to whom was referred the bill (H.R. 2792) to amend sections 281 and 344 of the Immigration and Nationality Act to eliminate the statutory prescription of fees, and and for other purposes, having considered the same, report favorably thereon without amendment and recommend that the bill do pass. PURPOSE OF THE BILL The purpose of the bill is to eliminate all statutory references to the fees to be charged for services rendered pursuant to sections 281 and 344 of the Immigration and Nationality Act, and thus permit such fees to be set by the Attorney General and the Secretary of State on a fair and equitable basis commensurate with the services rendered. GENERAL INFORMATION The Immigration and Nationality Act of 1952, as amended, set forth in sections 281 and 344 fixed statutory fees for specified immigration and nationality benefits, and services rendered, including those pertaining to nonimmigrant and immigrant visas, adjustment of status to permanent residence, and naturalization. These sections of law have remained unchanged as to fee amounts since December 24, 1952, or for more than 15 years. During the intervening period the cost of many of these benefits and services has risen considerably. In five examples cited by the Department of Justice, the annual costs exceeded the existing fee revenues by over $1,804,700. Since these fees are prescribed by statute they cannot be altered. administratively to reflect changes in corresponding costs or to reduce the resulting losses. H.R. 2792 would provide the solution to this problem. This bill eliminates all prescribed statutory fees to be charged for services rendered pursuant to sections 281 and 344 and permits such fees to be set by executive agencies pursuant to title V of the Independent Offices Appropriation Act of 1952. This thereby permits the Attorney General and the Secretary of State to set such fees on a fair and equitable basis, commensurate with the services rendered, and in the direction of fuller implementation of the user charge principle advocated by this and prior administrations. This financing of special benefits to users by adequate charges will aid in reducing the present losses incurred. This bill also eliminates the requirement that fees for nonimmigrant services be strictly on a reciprocal basis by substituting the words "in amounts corresponding as nearly as practicable" with the words "if practical, in amounts corresponding." This will give the Secretary of State greater flexibility to attract foreign tourists. User fees for State Department services in connection with immigrant visas would be governed in accordance with the provisions of title V of the Independent Offices Appropriation Act of 1952. Officials of the Department of State and Department of Justice appeared before the committee in support of H.R. 2792. On January 10, 1967, the then Acting Attorney General submitted an executive communication to the Speaker of the House of Representatives. This bill was introduced in pursuant thereto. The executive communication reads as follows: The SPEAKER, House of Representatives, Washington, D.C. OFFICE OF THE ATTORNEY GENERAL, DEAR MR. SPEAKER: I am enclosing for your consideration and appropriate reference a legislative proposal to amend sections 281 and 344 of the Immigration and Nationality Act to eliminate the statutory prescription of fees, and for other purposes. Pursuant to title V of the Independent Offices Appropriation Act of 1952 (65 Stat. 290) the Attorney General is authorized to set the fees to be charged for certain services rendered by the Immigration and Naturalization Service. This authority cannot be exercised where the fees are set forth in a statute such as is the case in sections 281 and 344 H.R. 1096 |