Presidential Statement No. 3 on Economic Issues: Strengthening Our Balance of Payments.

1. WE HAVE made much progress over the past 4 years in strengthening our balance of payments.

--Our surplus of merchandise exports over imports is 40 percent above 1960.

--Our balance of payments deficit (on regular transactions) has been cut by more than half--from an average level of $3.9 billion in 1958-60 to $1.7 billion during the last fiscal year.

--Confidence in the dollar has been restored.

--As a result, the gold outflow--which averaged an alarming $1.7 billion a year from 1958 through 1960--was cut in half in 1961 and 1962, and has ceased entirely over the past 12 months.

2. This progress has not come at the expense of our other vital responsibilities

--for maintaining and improving our defenses abroad,

--for providing needed assistance to developing nations, and

--for sustained and rapid growth at home.

3. Moreover, we have refused to seek "easy" and fast solutions to our balance of payments problem through damaging controls and restrictions that would have curbed economic freedom, hurt our domestic prosperity, or damaged other countries' trade.

4. Instead, we have chosen the slower but surer path of progress through a more competitive, efficient, and prosperous domestic economy--an economy fully equipped to maintain and expand its share of rapidly growing world markets.

5. To assist American business in tapping the great potential of these world markets, this administration has pursued a vigorous program of export promotion and expansion. Five permanent American trade centers have been established abroad since 1961; 19 commercial exhibits at foreign trade fairs have been sponsored by the Department of Commerce in the past 2 years. With the assistance of the export expansion program, about 4,000 U.S. firms have made export sales for the first time since 1960.

6. During the past year we have cut back hard on the U.S. Government flow of dollars abroad; we have passed the interest equalization tax and raised short-term interest rates at home to cut off an excessive flow of capital abroad. Moreover, our policies have helped to maintain the price stability that has advanced our trade and we have made investment at home more attractive by stimulating healthy economic growth.

7. The task of restoring balance in our external payments has not been completed. We will maintain our forward momentum and capitalize on the very real gains of the past 4 years through further efforts to expand our exports, create conditions that will attract more of our capital into domestic investment, and pursue responsible fiscal and monetary policies that will retain the world's confidence in the American economy and the American dollar.