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Guest Editorial

Background. Devaluation of the dollar, and agreement on a new pattern of foreign exchange rates by the United States and nine other major trading nations in December 1971 has resulted in optimism in U.S. business circles, particularly exporters. The U.S. Congress is being asked by the President to reduce the gold value of the dollar by 8.6%, and in addition the President dropped the 10% import surcharge tax. Common Market Countries and Japan agreed to begin negotiations on changes in their import regulations, leading hopefully to improved access for American products in those markets. Furthermore, most of our main trading partners agreed to increases, or at least maintain the gold value of their currencies.

Those optimistic about the agreements believe the way has been cleared for more domestic jobs by restoring the country's ability to export more than it imports. However, others point out that while trade concessions have been promised by the Common Market countries and Japan, they still have to be negotiated. Nevertheless, the dollar is losing buying power relative to other currencies.