This Day In 1970's History: Monday August 16, 1971
- In response to President Nixon's new economic policy, the New York Stock Exchange average price per share was up a record $1.37 today, and the American Stock Exchange was up an average of 54 cents per share. [CBS]
- At least 15 nations suspended currency trading following President Nixon's announcement of moves to stabilize the U.S. dollar. Treasury Secretary John Connally said that the freeze announced by the President applies to wages, prices and rents for 90 days. The "Economic Stabilization Act" provides penalties for violations of the freeze; the Justice Department will prosecute violators. Connally noted that the freeze doesn't affect profits.
President Nixon's economic policy change has co-opted the positions of Democrat presidential contenders, but Senator George McGovern complained that the new policy appears to be a handout to big business. The chances of John Connally replacing Spiro Agnew as President Nixon's running mate are improved by the new policy. The Commerce Department reported that the balance of payments deficit increased to $5.75 billion for the second quarter of the year. [CBS]
- House Ways and Means Committee chairman Wilbur Mills praised President Nixon's new economic policy, but AFL-CIO president George Meany claims that the new policies discriminate against labor.
Ford Motor Company president Lee Iacocca said that selling 1972 cars at 1971 prices will cause problems in absorbing the increasing cost of production. The new economic policy is a problem for foreign car dealers too; the 10% surcharge and 7% excise tax reduction will improve the competitive position of American cars against imports. The 10% import surcharge surprised Japan; the Japanese stock market dropped following Nixon's announcement and the U.S. dollar fell sharply on the Japanese money market. [CBS]
- U.S. tourists are getting less for their dollars since President Nixon's economic policy announcement. In London, England, the U.S. dollar is likely to fluctuate broadly until new currency parities are worked out, but tourists are getting 5%-20% less for their dollar than they were last week. The effect of the new policy is to allow other countries to devalue the American dollar; the currency situation is likely to remain uncertain for some time to come. [CBS]
- A federal judge ruled that Alabama Governor George Wallace has no power to alter a court order requiring school desegregation. [CBS]
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