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Nonetheless, the measures have begun to work. Last month Fowler announced "good and encouraging" results: U.S. payments ran a surplus of $132 million in this year's second quarter—its first black ink since 1957.
Though gold continues to drain off as foreigners cash in their accumulated dollars, the Government last week reported that the July loss of $80 million was the lowest all year. This interim success has deeply impressed skeptical European bankers, who doubt that their own businessmen would put patriotism over profits. Of course, the Government has such great powers over private business that it would take a brave businessman indeed not to "volunteer" to help. Though Fowler warns that the gains may be only temporary and that further tightening of discipline is necessary, he believes that the U.S. is on its way to solving its payments problem. Says he: "The U.S. economy and its agent, the dollar, are overwhelmingly strong at home and abroad."
Eloquent Reason. As a result of this, Fowler last week brought a new message to Europe: the dollar crisis is over. Since Fowler feels that it is only a matter of time before the U.S. permanently solves its balance-of-payments problem, he believes that the free world should get ready right now for the inevitable result of that solution: a drying up of the amount of dollars in the world and a consequent lessening of the amount of money available to finance trade. As Fowler sees it, this is the most eloquent reason for pressing for a revised money system. Said he last week: "The preparatory talks for a monetary conference are the same sort of contingency planning we have to make to defend the access roads to Berlin. If you wait to do this until these roads are cut off, it is too late."
While the U.S. is improving its position, the troubles of its closest monetary ally, Britain, are continuing. Though Britain's primary problem is that of living beyond its means, the British plight has been aggravated by the country's position as a reserve nation whose currency is subject to all sorts of alarums. Britain's reserves of gold and hard money have been dropping almost steadily for 31 years, are now down to $2.6 billion. In the clubs and pubs of London's City and other European money markets, talk persists despite all denials that Britain may be forced to devalue.
That drastic action, which would help Britain's trade deficit but do nothing to solve its gut problem of low productivity and high prices, is a constant source of worry to Lyndon Johnson and Joe Fowler. They fear that British devaluation would upset world money markets, force some other nations into devaluation to remain competitive, and price U.S. exporters out of markets where they compete head on against the British, notably in Latin America. For economic, political and sentimental reasons, the U.S. will do everything it can to bail out Britain.
Les Anglos. Just about all the world's money managers agree that the present monetary system has become outmoded, outdated and