Banking Chairman Attacks Carter Plan To Save the Dollar: Dollar Rescue Plan Attacked
The chairman of the House Banking Committee yesterday called for a wholesale re-examination of the Carter AdministrationÛªs dollar-rescue program, charging that high interest rates being promoted by the Administration will actually weaken rather than strengthen the dollar next year.</br></br>And in terms of the depressive domestic impact of ÛÏbudget austerityÛ now at the heart of CarterÛªs announced economic policy. Rep. Henry S. Reuss (D-Wisc.) warned that it could lead to civil strife in financially stricken cities like Cleveland, Newark, and Detroit.</br></br>The Wisconsin Democrat will begin two days of hearings before a Joint Economic Committee subcommittee on these questions today, with Treasury Secretary W. Michael Blumen-thal and Charles L. Schultze chairman of the Council of Economic Advisers, as lead-off witnesses. Federal Reserve Chairman G. William Miller will testify on Friday. Academic and other witnesses will also be heard.</br></br>ReussÛª major policy prescription is not a new one. He suggested in a statement released yesterday that the U.S. should rely less on massive intervention, and more on a ÛÏsubstitution account" at the International Monetary Fund, through which dol-lar-holders could exchange unwanted money for ÛÏenlarged and re-christened special drawing rights.Û</br></br>The ÛÏsubstitution accountÛ idea has been popular among international monetary system reformers, going back to 1972. But it was put aside, when the IMF formally adopted floating exchange rates as the basis for the international monetary system.