r B: Net Import-Costof

Imported from Foreign Affiliates

All U.S. petroleum Ltrports, as well as most of our miqeral imports atrd
over 10 percent of our manufactured impofts, are purcbased from foreigd a.frliates of
U.S, companies. For these goods, the actual doUar paymed turned over to the
baoks .of the host countries is considerably less thdn their Domirial "transactionS"
valuatioo. This is because a large compotrent of the transfer price repiesents furlis
tctailed in the United States in the form of "costs" aud "earnings" qedited to U.S.
paxent comparfes. Io practice, the ody foreien exehange reoitted to the exportitrg
hort countries lor these commodities i8 that sum q€cessary to cover paymeits to the
dohe"stic labor ehployed by these afiliates, their expeoditures oo local goods and
services, and their tax or loyalty paymetrts to thei! government.
- This disparity between nominal inremational trade values as recorded on the
"cllstoms clealance" basls and the actual internatiotral fftrallcial payments r€mitted on
a "bank clearance" basis has called fo h a measure of "net bdiance of payments cost
of imports" on the palt of the iovestiDg countries (hereafter referred to simply as
"riet import co$t"). ihis measure finds its counterpa io the complementary statistic
for "Det expo proceeds" received by the hdst countries itr which U.s. overseas
ifvestmeots are located. For iust as the U.S. companies do not remit abrdad the entire
*ansactions value of their imports, so the p ftary-expotting coutrtdes do not rcceive
the full transactions value of these commodities. For many yoars the foreign exchange
statisticr of Chile, Iran, Iraq, altd other primary exporters have carefully distinguished
betwee! the tfansactions value of their exports arld the eetual foreigo exchange
receivedfor thesegoods.

Derh'arion ol "Net lmpofi-Cost"

Sizabl€ Cofponents of the import price of raw materials brought iflto the
Ijnited States ffom U.S. affiliates abroad repre-setrt fubds retained here by parelt
cotnDanies,These funds include (l) paretrt compades'ibcome orl theit affiliates'sa]e
ol their output (both to the United Statos and to other couotries): (2) cbarges for
capital goods aarl other supplies tian$ferred to these affillates; (3) depreciatio! flows;
(41 management fear and other service r€eeipts by the ltsretrt companies and other
U,S. companies; ald (5) that componoot of wage paymetrts by foreign affliates to
U.S. residiots workltg abroad which ttr€y elect to have credited to their home-offce
accounts, or to theif families.
The concept of qet import colt lvas widely voided in th6 eafly U.S. Depart'
m€[t of Commerc6 leports on the balanee of internatignal ]taymeDts. The 1926 report'
fof id8tance.observedthat:

A Fortion of our impdfts are in a special class because they were

produced by Ametican capital abroad. Sugar from American pladtatioft in
Mexico, Dew6pritrtpaper frod Catrada, petroteum from AmericaD oil com-
pades in M€xico, and copper from Americal mines in Chile illustrale fis
class of impeft, Matry item$ ia this class are on the free list; and thare beiDg
tro incetrtive to udd€rstategrent, it is probable that they are generally valued
at the mark€t price. Not all of this market pdce goos abroad, tlowevef. All
the profits on the sales, plus the admiaistration expeoses of the head offlces
in the Uaited States, plu! rcserves, reoaio here' In this surv€y it ivill be
assumed that the profits dn the sales are ineluded in the estimated income
from our foreigl fuivestmerits. The share uaaecounted for oarl be estimated
only arbitrarilyj but it is too imiortaflt to be igaored; we are inalined, from

93
 informatiol at hand, to estimate it at about $30,000,000during 1926. This
item can not appropriately be entered as an export, but is entered as per
contra in the import column.l

Ir 1966 U.S. mining companiesimported copper from their Chilean affiliates

at an average Wice of 44.5( per pound (compared to an average London Metal
Exchange price of 59.51 per pound), Over one quarte! of this nominal transfer price
- some 1ld per pound - was retained in the United States: 6.9d representing U.S.
parent company earnings, 2.91 representingdepreciation charges, and l.2d covering
other productiotr costs retaided in the United States. Only 33.5g per pound, somi
74Vo of lhe reported transfer price, was remitted to Chile's central banli as ner oav-
menr for tbis copper.2
Unfortuoately, adequate statistics do not exist lrom which to compute the
net import-cost of all commodities brought into the United States from overseas
affliates of U.S. companies.To conslruct an economic model capable of imputing this
Det import cost is not diffcult, however. It requires statisticsfor (1) total sales of all *
U.S. foreign affliates, on an industry-by-industry basis; (2) total earnings and depre-
ciation flows of these affiliates on these sales; and (3) total io the Urrited
Statesby these afiliates. (These figures are reported annually in"*port.
siecial articles in the
Suruey ol Cufient Buslness covering manufacturing investments abroad, but ex-
clllding petroleum and mining affiliates). Earnings and depreciation may be com_
puted as a percentage of total amliate sales, and this mtio applied to the value of
these affiliates' exports to the United States,3yielding a figure which approximatesthat
portion of the import price retained in the United States by U.S. piient companies.
Ideally, additioDal figures would be colleced for (4) operating expensesof foreign
afrliates remitted to the United States for investment gooas ana other supplies, and
for service and wage payments to U.S. residents.These expenseswould then also be
computed as a percentage of total afrliate sales, and credited against U.S. imports
from these affiliates as "value retained in the United States.,,
Until such statisticsare more systematicallycollected and published covering
mining and petrcleum investments,this accounting conc€pt of..net import cost', must
remain.in abeyanceas an aggregatemeasure,although it may be computed for some
industries in some countries: Chile's central bank, lor instance. pubiishes excellent
statistics on foreign investment in its exrractive industries. dividingihe proceedsfrom
its copper exports into "value returned to Chile,' (labor and maieriali costs oard to

'."The.
Bdldn.e of Inrernarional Payments of rhe United Srdres in l|s26,. op .r., D. 4. see al,o
the lq2r repofl. p. 5:_rheto28 repo;r, p. 8: lo2a rcpo;i, pp. i& ir,i roj6,"p.,LIp. ro. tr **
u , ( r y r r . r f n o r r j p . r r ) t r d t e s r a b t r s h e dl h e p r a c l i , e o f r e c o r d i n"c- i !, u arh u.s. coars
p'a( rice , . 1 \ e r € ! o r d e d m e r cah, aan u,re, er u m r o
iand
, - ! ' , lrmpoft
l _ . I _ : " -sransr'cs
i-!i Tp3n\, a
l grnctude .fo owed unrir.rhe ro60.s: e^purl
several kinds of.nontrade. ftemsa that is, items which do nor srvE rrsc to
ori\ert'n8 cash .laims._. . . Sinc€ l026 a deduflion rra. ueen maai in irri annriil iooiiriLtrcn or rre
ro_r
:lliile - o l _ p : v mpj !r!ol c e e d sa . s peenci D r \rass or imponc-\r-ich representr\. p,oducr or Ai.ri(d,, .ap,,al
ch remain.in the unrted srales Lo cover adfini.lrarion erpensfr oj
ot
l9li 9-f!s: . . As orrerna y sussesred, rot aI of the marker price is transrerred abroad, and
T:":.ll T ! . r b e , r a k e n o r i t s o m e w h e r e .T h e o r e L i c a | y . r h i s a d j u s r m e n r s \ o u l d b e m z d e e n r i . e t y i n
g
lrlo: ,o. :\ l luTr1o,n! , r n e .r , ' n " rerun on American dire.r in\esrments abroad. tr F nor po(sibre in pracrice ro
n o m e , o m c € a s . a . s e p a r a t ee n t i l v : i t i l w e r e r h e s a m e a s a n y o r h e r t o r e i C n b u y e r , r e _
' n l h e . U n ' l € d S t a t e s c o u l d b e r r e a r e d t h e s r m e a s s a t e se t i e w h e - e i n a i r i v i n s a r n e r
operarns abroad do nor yeep lheir accounts in such a form that this distinciion can be made.
Jeparare a(count nuq. rneretore, be laten oI a subrtaruiat pafl of rt-er impons.
''Ihe
same sroups ot comDanies atso e\porl certain eoods wt ich a!e acrualty ot d nonuaoe
wrth- lhe. rds hateriats. !ohinE in. rhe soods sent oul a,e hachrnery, otren
mittance. Durins 1931 thjs ctass or exporrs was cornparativety uninpoitiiili*pi ti irril-i,ii ina"st.v...
: Sourc_e: Banco C--entral_
de Chite, Bolanza de pasos d. Chite: 1966, r^bres 1014. This fteasu.e ooes

l1y 1il:lll: tl91 rmriares or u.s. compan,es. r \i,e companie< r,< eerira v ,bi; a; i;-rJ;i
t r o m IglStEr
r h e r r b r a n c h e sr ! . . D r o d u . e - q p r i c e s . s h i c h a r e o f r e n t o w < r r h a n t h e o p e n n a r L e r
rJrices eslablished
' o p e n . m a r k
ofl the London M€tal Exchanbe or on the New yorr
e r " commoaitv e;chanse, at
which b u y e r m u s r c o n d u c r r h e i r r . a n s a c r i o n < .H a d U . S . c o p D e r i o ; p ; n i e s nol in_
rhey woutd have entaited an ..opportlnity cosf. to tlre u.s. economy of some 36a per
o o u n d ' n . 1 o 6 6 . - T t e r c r u a l 1 3 . 5 . p e r p o u n d t a , u a l y p a i d r o C h i r e r e p r e s e n i sa i u r n ; ; " , . , , . c ro
l e 5 i l f a n h a l l o l i h d r t r h i c h w o u l d h a v e h a d r o b e p a i d a b r o a d r i . ? , , o n r h e L o n d o n M---- elal Fxchaigel
if chile's copp€r resources had been owned and bperatea nv'nori,u.s. ;o-.-l;;ni;s.
'g,l{-']) qodel,,is. rl-e^d$umption rh€r rhe ratio or earnines and deprecrdtion
on roreren
a n r r r e s iel e ( p ol la! r r o r h e u n i t e d s t a t e s a r e e q u a t r o l h e r a t i o o n s a l e s r o r e s i d e n t "o f a o r h e r c o u n r r G ,
r r n c r u o r n er h e r r h o s r c o u n r r y ) .

94
 le-
Chilean resitlens, plus tax payments to the Chileatr govemmetrt) atrd "value
plus goods
t"i""a uuio^a' (eamings aaa dipleciatiotr on these mw mate als exports,
;;-;"t"Gr imported from a6road connected with the productiod oJ tbese raw
;;";;1.).-1ii-ii; eata are published bv Irar and Iraq, ard mav be fouDd in the
IMF s anrual -Raranceol Pclments Yeatbook'

Theoreticol Implications ol the "Net Import'Cosl' Concept

pay-
While the purpose of this monograph is to analyze tbe U S',balaDceof
ot foreign countiies, the theoretical implications-of the "net
m"ot" r"tno in"o iftui par-
Lo& concept bave major bearings for the lheory of iDternatiotral-tmde'
* it DeriaiDsto lhe less developed.primary-exportiDg count es whose export
ti"if".f" "o"r"
t""t-r'"* ouin.a operated by foriign iompanies Tbe divergence of "oet pay-
l]Jrri:n ir oo "oa u""oont" ftom the transactioos value of these exports rcnde$
6iri-"ouot.i". eiceptions both to the "classical" and Keynesian theodes of inlerna-
""pott
tiotral trade.
-
The "classical" theory eDvisagedtrade balances itr thd "tEnsactions" sense
- as teing associated by internationai flows of gold aIId foreigl exchange, leadhg in
price
turtr to m;etary expaniion (or contractioo), increases(or declines) iD domestic
i""J". u"a increasiig (or decreasing) relative demand for imports The -Keynesian
view of balance_of-trade "adrustment," by way of contrast, envBages cnanges rn
results of exlorts- earniogs on
domestic income and employment as being the main
;d6;;;d p';dicted'by the "foreien r;de multiplier"). Noted Jonathatr v' Levin
i;
(The EJcportEconomi?r [Camb dge, 1960] ):

In the export economies characterized by loreigtr factors atrd luxury

importels, howev6r, the secondary effects envisaged in al'er view of the
adjustment process did not take place. The secondary - effects described by
the ol<ler (ri., "classical") view did not occur becausethe increasein export
ti""ii"a uv t reigtr factors did not bring an inflow of gold or foreign
"uiol"!.
exchao-ge expanding the domestic money supply and bidding up the domestic
orice livel. It brought instead an iqcrease in remittances to th€se factols'
iountries of origin, where, in fact, the secoodary effech were felt' ' Nor
did the more recently eavisagedprocessof multiple expansion or contraction
of income and employment, and-an atteDdantcorrection of import demand'
take place in sucll atr export economy' Because lhe foreigtr factor did oot
'prcpensrty to
speld'his increased income within the export economy his
c'onsume' dornestically was zero and his added export income geneiated tro
expansionof income and employment at all in-tbe rest o.f tbe-export economy'
withia rhe export economy the foreign trade mulliplier for.his increased
i;;;;rv; zJro; it was in the couotry to which he remitted these added
4
earniDgs tha't the foreigtr trad€ multiplier opelated

In other wofds, a model hacitrg the domestic ecoaomic impact of less

countties' p mary exports must employ expof-statistics computed on a
-;;'";";i.i;;
developed
; tisis s simitartv, because some portiotr oJ tbe- imPott-demand
;;;J;iJ;; e;-"Jc exparsion in the united states is rechanneled throush the
tH';;;;.-v l;ih" forri of retained earninss bv u S' parent co-mpaoies on these
i-tf"t., a similar net paymelts-flow measure of U S' foreigtr trade must
S expanslon
be employed iD order to gauge lhe "foreign excbatrgeleakage" otr u
"1'--oaiw

.Lvia at this pobt quotes E4ch Schiff, :Pitect Invc*mert, Terms-of-TJade' snd Balatce ot Pav-
meorJ,:' Qua . ! rounat ot E@@n4s' - (F;i,;'t ita2)' 309--10 'nvhat we aJ€ disc-ussinPhere
is a case or specrardep€rdglce g€twee! Lu.iui;a ii;; i' i6-e balue of pavp€Ptt' arcose stmilar
in some respectsto lrrat ot 1t€o '".*.-." ;;-i;;l-diat tne aajr'rstgr*t-cirlea for -bv e sudden
i0clease r! exports rates' ano-
iiielrdr- nictrioisrr of pric€ chasgcs' splcie flows; alteratiors- l! ..forelel'-€xchanee
iiri"iiiftti ::iii-Ti.n"i&ity or sErvice-imports' need 'ot, and wiu trot intnvene "
6kvin adds lhat, "Be.ause the lururv importer sPent little if anv of his added expon- ibcode was for
proaucea wittir *b exporiiioliorv. tii propeirstv o cgftume,goinerJicarv
roi.''- wri"t he is slcg€4rqc here is ecsentdllv.th;t ; eonioD
"6iiriiaii?rviii!
Eiiii"Eii of lsos€ Y:s-: iTpgll P1{:
il'Jnii i-rriii i'e iir tact uamfeft-ed abro.d are in nn rehanneled to the u s eEo'omv bv, qe qa$
6i:{uiiiii i-pott"o" tesldent abroad who rccelve Pavmeds from U S' am[at€s locat'd n tner

95
 occurrlng on import account. This measure .ather than the ,.t"unsactioni,valuation
foreign trade is the relevant one for tracitrg-.'adjustment pr*"rr"a;-u-oig of
---- - nu,rona,
wbeLheraccordidgto classicalor Keynesianiheoril.at
"oo-"J.;n

Appendix C: The Balance-of-palrnents

payback
Periodon Direct Investment

A fundamental distinction exists between corpomte profit-and_lossaccoutrtlng

and balance-of-paymenls accounting.The U.S. pareni comp"ny i, rnainty cooc.rnea
oI earning! and depreciationon ils loral cost of invisrmenr,re_
:,1:,T" "j"n,l1q*
garoressor wnether tbts total cost was originally expended
in the United States or
ab.oad. From the balance-of-paymentssta;dpoint, how"ue., the
initi"i- tutanc"_of-
payments cost of a foreign inve5lmqnl is likely to be less than
the overall cost of this
rnvesrmentto the parent company, while the U.S. balance_of_paymeDts
effects of the
g1q.I9 ::l:,Cr operarron are.tikely to exceedthe net financial return to the company.
l,or exampte, some of lhe initial cost of investment may be made in
(a, an etport of capilal equipmenr),lhus making the United States
rle ;niti"f Uut"n.._of.ouu_.n,rao,,
rower lnan lhe tolat company expenditure.Once the foreign
operarionisistablished,
additional -
-feedbackJ mainly in future periods_will u.i!", .i,"f, u. ifr" pur"fru." of
materials from U.S. supplierc and from other U.S. foreign umiiut".,"'urfr-
royalty payments to Amedcan coopanies, as well as *ug" puy,,'"nt, t"". una
to american
residentsworking abroad \rhich are remitted to the United S;t;.l
This monograph,snet payments-flowformat provides the basis for
a more relevant measure of the ..payback period,, on U.S. airect compullng
in-u",t_"lnt uu.ouO
.nu. 11o.t1o. Deen employed. Chapter VII has already contrasted the inveslment
il"l rn
cost national balance-of-paymentsteims frcm the idv;stment
cost io the pnvate
investor, as illustrated in the following hypothetical examDle:
Cost ol investhent to the parent compuny ----_
$ 100 million
Of which spent in the United States
40
Spent abroad 60
Balance-of-paymentscost of this investment:
$60
Cash llow
$ 20 million
Income
15 '
Depreciation
Cash flow as ratio ro invesledcapiral: 2odo
L asn now as a ratio to the balance_of_paymetrts
cosl ot tnvestment: 33?o

6 Some w.iters have suggesred

that lor€ieD ej

llqi*iH',nudl#.;*ti'Stfii:tfi'';:'?ir,$i1l,*rirlliti"r$t"r.ji'$j,',!,.:{
i_ li i!:,:li-*!.*fl;,:"J"JFt#1?i1.5itF!";',::riJ"i:r,",r,,X".::l*ti,*#rru:i.-;;
(onomi... ,Hanssi,i!?i..:rrr,l.iiiiiiriiiiiri.
aie not an rntesrarpart-orrhe uDderdeveroped
--".
Lil::::^{Ii'ii'ili{,".ji-it%S:iT:rT;di?{f'r,t,f:*it,:"f:1,"*:i":Iii,#,ix;i""."s:
sra\es to tne ceographe.s?courd h nor be ltar in. many caseslne producrire
iiitiiiiii
".
ro. expon
ill,i:llit{liii.r"i".::$*f..,,1tiit.tTj
purery ceographjcat and physicat sense? iff"*'",",1i.14i*ffi**ii.l,",r*ll.::!l*:.#i:
Ecor

.".t#lH3lJ*.?.""'ff:.ijf!l'hlt:idlTu,yjlr
nigh"""riilir:1i+il$*i:n::F.1tl
i.ld:IlTiilii,r,i!i*i.b"i,.:'f",|,."ffrsr"*:'Jtil",#,:;?'":'it""firHf1j',,:,_,.,T[::il!,j{
l['J.',ff"il"'??:lg
nSi.",:il:$.3*'i'.'$":,1,*L'::;ru:Xle
i*gltktkg:t"h[6t":r{:
;Pi,',*:",,1e5?,';"")!,.:,-,i5.it""I&:tr';;"f"n'J"'Jl:iiiiih."€"#*ng,"^i?fi
l!",,3:'**
96
Atditional operating costs ol lorcign afriliate which involve
\\ N\\Wq$-NNN\\$\N\ \\\\\\
Purchase of U.S. exports lor futher manufacture, etc. -..--.....-.
Payment to U,S. shippe$ oq these expoits (net) -.------------..."-..,..
ManagemeBt fees a'j'd royalties paid to pareit compady -----.------
Servicespurchased from other U.S. residents-,-.-.....-.....---...--.-.-..
Wage payments to U.S. residents tmnsfered to their
U,S. bank accounts
Total alrual cash flow aod selected operatiog
$ 35 million
As percent o, initial ilvestment costs
spent abroaal 58Vo
Payback period in balance-oI-Payme ts tetms I year,g months
(assuming entire cash flow is repatriated)

GiveD antrual eamiags of $15 millioD atrd depreciatiotr of $5 milliotr; the

corl,oratio!'s cash flow rate of retum o! its invested capital will be 2O/o (15% + 5%)'
Thi nation, however, ftor/tr ^ balonceal-payments point of l9iew is concirned with the
rccei1t of all inlernational rcceipts associated with its foreign inYestlrell, r6latiYe oDIy
to the intorrational paymetrts co6ts of this investment. If we assume that all cash flow is
repatriated, the paymetrts ilflows computed relative to the $60 dillion payrients cost in
thE denomitrator (rather than rhe $100 million rotal cost) yields a rate of 3370' Further-
more, to this annual inflow of earnings and depreciation are added the associated in-
v$hetrt-linked flows of U.S. e4rorts, qranagerial and other seNice f€es; patetrt and
licenring fees, aod U.S. baDk deposits both by these afrliates themselves and by
Amedcao residents employed by them. Most of these latter payments i!flows are
oeenses to the foreign a6liate, atrd are thercfore Irot part of iis retu on invesGd
capital. To the parent coDpany's natior, howevel, they are part of the balance-of-
payments payback on irs $60 million iovestment cost, Assuning the-se flows to be
constant through time, that they start immediately, ard that do exports are displaced
due to the foreign production, the U.S, economy in this hypothetical example would
recover the balance-of-paymeDts costs of this iNestment in only one year and nine
months, while the U.S. paretrt company would take five years to recover (through
earnitrgs and depreciation flows), irr overall investmeot costs. The cotrclusioDs for
policy-makidg are in such a case clear: if the United States elects to prohibit such
investmetrt, there will be a net balatrce-of-palmeots "saviq" duritrg lhe idtial stages
(the first twenty-one months), but there will be a net b4latrce-of-paymetrts opportudty
co$t of Joregoing this investmert over the longer run.
A trumber of studies have attemptod to estiEate the balatrcc-of-payments
payback pedod of U.S. direct irlv6stment, For marufacturing investment, the raDge of
estimates is roughly 5 to 10 year6.2 The author has estimated a much shorter payback
period (3 to 4 years) on petroleum aod mlDing iovestmeds,s

t Sec. Ior examDl€ P.W. Eoll. '?fiate Caoltsl Moyemed! ard the U.S. BalElcc of Pavm€nts," in
Farto4 Afl.cttne th. U.S. balance ot Povmettts (Joint Bconomic Corn-mittco oI the U.S, Colrgrcss,
1t162),wilter s. saranr, ?r aJ., The U.s. Batarce ol Payments,z 1968 (Washin8lor, D. c., 1963),
and Hdbaucr ard Adlcr, op. clr.
tBal6 4e oJ Paym.nts ol th. Petoleum lndusto, and Appendix to Balan e o, Palments ol the
Penoleum Inilusny (Chas€Manbattan Batrk, 1966).

97
 TABLE21. U.S.I nternationalTransactior
(millio'

Lin. (Cr€diti +; debit! _l

I Expor8 of goodsand soavices
Excludingtransfe'3under military granrs
adiusted,excludingmilitary t
fulerchandise,
4 Transfe.sunder military salescontracts
Transfersunder military grants,net
Transportation
7 Travel
I Feesand royaltiesfrom direct investments
Other privateservices
10 Other U.S. GovernmentseNices
Incomeon U.S. investmentsabroad:
11 Direct investments'
12 Other Drivate assets
13 U.S. Govemmentassets
14 I mpo.ts ot goodi and 5.wics6
15 Me.chandise, sdjust€d,excludingmiliraryI
16 Military expenditurss
11 TransDortation
18 Travel
t9 Privatepaymentslor other seNices
20 U.S,Governmentpaymgntstor other servrces
Incomeon foreign in^vestments in the United States:
21 Privatepaym€nts"
U,S.Gov€rnmentpayments
Balanceon loods.nd sowic$ (lin€sI and 14)
24 Excludingtransfersundo. mititary grant (line32 and l4l
25 Unilateraltransfers,net; transfersto foroighers(-)
Exchding |nilitary grants
Privateremittances
2a Irrilitarygrantsof goodsand seryicos
29 Other U.S, Governmentgrants'
30 U.S, Govornmentpensionsand other traNters
31 Balanceon goods.sorvices,
and unilateraltransfe.s(tin€s23 and 25, or 24 and 26)3

N.3.s, Not shown 3€p€ratatv.

:_ Lsis than $soo,ooo (+).
Dotaff3 for tino6 3 €nd 15 ars giv6n in iabt6 4; lor tines29, 42, 43.,5,6,and 87, in t6bt€ S;
lin€s 37 rhrough 40, in tabt6 6; and tor tin€s Sa and 59, in tabt€ 7.
2fof
; Exclud€s undisrrlbuted protiG ol subsidiarie3.
;Numoricslly €qual to net forstgn invssrrnont in U.S, nsitonat incoms and product accounrs.
R€ll€cts 9259 mittion paym6nt ot gotd portion of increa3€ctU.S. sub3cripiion to ths tMF
i n t h s s e c o n dq u s r t e r o t 1 9 6 8 .
Sourc€: Ospartmsnt ot Comm.rcq Sutvey of Currcnt Business.Juns r969.

98
of Business
Economics
Tabl€1

1960 1961 1962 196:l 196|1 1965 1966 1967 19G8 Line
p,253 n,235 ?2,U5 U,169- 8,611 41p27 44,ffi2 47,@3 5.t,432 I
27,M 8,770 0,506 32.601 37,271 39399 43,360 /16,188 50,594 2
19,650 fr,107 m,779 22,252 25474 A47 zg,geg :D,68r 33,598
335 402 656 657 747 830 429 1,240 1,427 4
1.765 1,465 1,539 1,562 1,340 1,624 1,@2 905 {X}8
1,782 1,803 1,955 2,103 2,317 2A14 2,608 2,775 2,924
919 947 957 1.015 1,207 1,380 1,590 1,646 1,770
403 463 580 660 756 924 t,G|o 1,136 , 1,279 8
898 941 9& r,029 1,114 1,227 1,fi7 1,N2 1,546 I
153 1& 195 26 265 285 326 3:r5 352 1 0

2,355 2,768 3,U4 3,129 3,674 3,963 4,045 4,517 4.985 t l

646 793 904 |,o22 1,256 1,421 1,614 1,717 1,949 1 2
348 381 471 498 456 509 593 638 765
-23355 -23,14a -25,357 -26,617 -2A,691 -32,278 -38,@t -41.Otl --4A,07S 1 4
-14,744 -14,519 -16,218 -17,01'l -19,U7 -21,4AA -25,463 -2$,e21 -32,972 t 5
-3,087 -2,S8 -3,105 -2,96r -2,8O -2852 -3,764 --4,378 -4,s30 1 6
-1,915 -1,943 -2,128 -2,316 -2,462 -2,675 -2,922 -zWO -j,24A
-1,7W -1Ja5 -1.939 -2,114 -1,211 -2.48 -2,6'i7 -3,195 -3,r,22 1 8
482 -49O -.460 -445 -500 --439 -491 -579 -425
-313 -406 -398 -447 -535 -550 -&2 -€87 _749 20

-731 -729 -771 -924 -1,00i| -1 ,241 -r,593 -1,764 -2,231 21

--332 -279 -339 -4ot -453 -48s -t49 -698 -7o2 22
5,898 7,097 6,68a 7,96 9,920 A,749 6.A1 6.082 3.354 Z!
4,t3:t 5,622 5,149 5,984 8,5m 7,121 5,279 5,177 2,516 24
-.4,02s -3851 4,152 4,277 4,037 43A6 --3,8i|5 -3,903 J,703
-42ffi -2,4A6 -2,613 -2,715 -2,@1 -2,75A -2,833 -2,998 -2,865
-Baz -397 -.450 -536 -530 -581 -556 . -755 -753 27
-1,765 -t,465 -1,530 -1;562 -1,W -16,?a -1,@2 -905 -838 2a
-1,S4 -1,853 -1919 -l B1't -1 ,88A -1,€OA -1,910 -1,AO2 -l JO6 29
-214 -235 -245 -262 -279 -369 -367 -441 -4{16 3)
1,873 3,136 2,6fi 3,269 5.88i| 4,W 2,46 2,179 -349 31
Contlnu€d on following pag€

99
s2 tEnstctions in U;S. private asteb, nEt; ihcr6as6in a3se6 (-l
,3 Diiect investments-
94 Fo€ign sEcuritiosnewly issuedin the United States
Rddemotion!
Oiher transastionsin foreign securities
Cllims reportadby U.S.banks:t
a'1 Longtterm
3a Short-term
Cfaimsreportedby U.6. rosidentsother th6n banks:r
39 Long-teih
40 Shon term
41 TraDsgllgna |li p.t. GovtJnfiedt ass€,]s,lxcluding ofiicial lele.ve assets,net;
incaoasoin sraeb (-l
42 Losnsand other long-termasset5l -
43 Foreigncqfienci€3and othsr assets'
Repgymeritson credits:
44 Scheduted
45 NdBeheduled{includings.losol toreign obligationsto foreigners}
46 TralE.rctions irl U.s. ofthial.o$erv€ a.sets, n€t; increaseIn asreti {-l
47 Gold4
4A Convertiblscurroncies
49 Gold lranche position in lMFr
50 TraniietiofE in foreign arsatsin tho United Stat.s, net; increas€in toreign ass€t3
{U,S.liabilltiesl+).
51 Direct invostments2
52 U.S, socuriiierother than Treasuryissues
Long.terr liabilitiesroportedby U.S. bank
Other liabititiesrdportedby U.S, p.ivate residentsother than banks;
* LongFterm
Short term
Nonmarkelableliabilitiesaf U.S,Governmsnt,includingmeCium-tormsecurities
payableprior to maturlty only under specialconditions?r
56 Associatedwith lpecif ic ttanBactions
Other medium-te.msecuritig!
56 U.S.Treasurymarketabloor convertiblebondsond notesr .
Depolib 6nd mon€y market paperhgld in the United States'
€o E ro$ and o iaSlons.nat

100
 1961 1962 1963 1964 1965 1966 lgq 1968
r96{t
--6,575 -3,m4 -4310 -5.655 -'5'15t g2
-3,878 -4,1S0 -3326 -4,459
-1,674 -1,5sa :1,654 -1876 -2,s28 -2A6a -?,9P r'025 33
-a;i -szs -r'.rr,e -t,zso -r,oss ;1,N6 -1,219 J'191
-t.619 -1'669 34
frg 195 192 222 406 469 495 35
zor i+e -102
-309 -ifjl -€6 -50 r94 225 323 -116 36

-153 -136 -126 -755 -941 -232 337 255 359 37

-995 -1,125 -324 -7a1 -1,524 325 -44 -7fl) -a9 38

-485 -€8 -112 -?81 -174 g

-40 -127 -132 162
-222 --623 428 J31 479 -960 ',lo
-354 431 4
41
-1 ,lu -€26 -1 .094 -1 ,661 -1 ,676 -1 ,598 -1 .534 -2,421 -2;240
-1,213 -rB3O -2,129 --2,2f.1 -2375
-:ia -2'4fE -2,n! 4,6^y --3,713 4-2',
:; -mr -246 -447 -ie -265 2@ 72 43

583 579 599 661 594 651 8ff1 w7 1,123 44

54 695 680 126 123 22',1 429 6 269 45
606 1,53:t 377 171 1,222 568 sz -s8o 46
2,145
1.703 857 890 461 125 1'665 571 1,170 1,173 47
-116 17 -113 -220 -349 -5/;o -1.024 -1,183 48
-135 29 266 -94 537 -€4 -s70 'r9
42 626
50
2,120 2467 r,697 2,98i| 3,318 3a3 3,320 6852 9,352
141 7g 132 -5 -5 57 86 258 319 51
242 3;24 1U 252 -U -357 909 1,016 4,360 52
62 237 203 981 1,q52 5S0 53

-13 -38 29 180 85 673 54

1 50
-€1 -112 -23 113 149 296 490 750 55
176

443 489 197 129 -19 -138

85 614
: - 251 -56 -.2g -7 49 45S 2'010
-728 1,314 39 46 -1,561 412 -5d)
1 ' 5't2
1,630 1,253 .1,$9 919 2.590 6? 2,39 3,080 1'287
-1.103 -1.246 -5G) -1,148 -576 --489 -r,007 -717 fl)
-1,156

101
BUTLETINS
The following is a list of the available rccent BULLETTNSof the Institute. Singlc
numbeN are $1.00; double lumbe$ $2.00, and triple numbers $3.00.

30. Time Deposits and Debetrtures: The New Sources of Bank Funds-P. S-
Nadler
31. New Tools for Credit Control-M. Nadler
32-33. French Money and Capital Markets and Monetaly Management-H. L.
Engberg
34-35. A Critique of the Fluctuating-Exchange-Rate Policy in Canada-A. N.
Mcleod
36, A Critical Su ey of Plans for Intertrational Monetary Reform-R. G.
Hawkins and S. E. Rolfe
37-38. Compendium of Plans for lDternational Monetary.Reform-R. G. Hawkins,
ed.
39. Eurodollars: Ar Emerging Intemational Money Market-E. Bloch
40. International Commodity AgrcemeDts atrd Compensatory Financing Plans
-R. G. Hawkins, I. Epstein and J. Conzales
41-43. Barfti[g Structure and Petformance-J, M. Guttentag and E. S. Herman
44. The Central American Comrnon Marketi A Case Study on Economic
Integration in Developing Regions-I. Walter and H. C. Vitzthum
45. The Effectivenessof Debt Limits on State and Local Government Borrow-
ing-w' E. Mitchell
46-47. Cyclical and Growth Problems Facing the Savings and Loan Industry-
Policy Implications and SuggestedReforms-A. W. Sametz,ed.
48-49. Foreign Investmett, Capital Controls, and the Balance of Payments-N. K.
Bruck and F. A. Lees
50-51. The Stability of Flexible Exchange Rates-The Canadian Experietrce-
G. H. Mellish and R. G. Hawkins
52. The Flow of Funds Accounts: A Framewoik for Financial Analysis-
L. S. Ritter
53-54. Negotiable Certificates of Deposit: The Development of a Money Market
Inslrument-A. G. Heebnet
55-56. Understanding Merger Activity-Assessitrg the Slructural Effects of Acqui-
sitions-B. A. Kemp
5?. CuEent Issues in Monetary Economics and Policy: A Review-G, G.
Kaufman
58-60. The B tish Power Transfotmer Industry and Its Excursions into the United
States Market: A Case Study in Ioternational Price Discrimination-H. I.
De Podwin and B, Epstein
61-63. A Financial Payments-Flow Analysis of U.S. Itrternational Ttansactrons:
1960-1968-M. Hudson

A number of BULLETTNS
issuedbetweetr 1928 atrd 1964 are still in print.
A list of the available earlier BULLETTNS
will be mailed uDon teouest.

Subscriptions:
4 to 6 numbers issuedper academicyear 95.00
(Special rate to teachers$1.00 per year)

The followirg out-of-p nt BULLETTNSare available from

University Microfilrns
Library Services
300 North Zeeb Road
Antr Arbor, Michigan 48106

r02
BTJLLETIN NO.
l . The Problerd of InflatioD
2. The Intemationa.l Dollar Ptoblem
Fiscal and Mooetary Polici€s and Employment
Statistical Analysis of Publicly Offered Forcien Dollar Bolds
5. The Morcy Market aDd the Positiotr of the Tre.sury
8 . The ChaDged Status of the Do ar
12. The Commercial Banks and Economic Growth
1 3 . The Gold Problem
14- Interest Rates and the Iotemational Flow of Funds
The Key Curencies
18. Balk Mergers
20. Ilter€st Rates ald Individual Savings
22. Workable Competition in Banking
New Forces in the Money a[d Capital Markeb
2+25. The Balk Holding ComPatrY Act
The Commercial Banks in a Changing World
28. Basic Forces Affecting Equities
SwitzerlaDd-An Idtemational Finatrcial Center

103