Mr. GREENSPAN. There is no specific ceiling, because what you have to do is analyze this matter much beyond the initial imports of crude oil. To oversimplify perhaps to an inordinate extent, the economic impact depends on whether or not the moneys we pay for the oil are respent in the United States either with respect to goods and services or reinvested in securities or ownership of American assets because then the moneys flow back in and what occurs is a change in who owns the particular goods and services we produce or assets that we have. I should say that there is no way in which one can find that the sharp increase in prices we must pay for imported oil can in anyway be viewed as a plus; it is not. It is negative no matter which way you look at it. But the degree of the problem is not clear. Mr. STEED. If we get in a situation where the flow back from investment doesn't work and the amount of oil we are bringing in is high to the extent that our balance of payments begins to get to a critical point, would you then have to think in terms of a ceiling on the amount of further expenditure we could stand? Mr. GREENSPAN. As you know, Mr. Chairman, we now have what are called floating exchange rates, floating currencies. So that a decline in the value of the dollar vis-a-vis other currencies would occur as you have this very heavy drain from the American economy and no reinvestment. This would make our imports more expensive in general. As a consequence, the sheer economics of higher prices would itself tend to curb the amount of imports excluding oil. And concurrently, because it would also lower the price of our exports, it would tend to increase our exports somewhat. In a certain sense, to oversimplify again because there are some complexities in this, this tends to be at least partially self-correcting and very substantially because of the market processes themselves. STATISTICAL DATA ON TRADE Mr. STEED. To keep your hand on what you are talking about requires of course a considerable amount of information about the inCome and expenditures. How much timelag is there in the availability of your statistical information? Mr. GREENSPAN. Our data on trade, that is, on imports and exports of goods, has, as I recall, approximately a 3-week lag before the cusoms receipts and analyses are completed. We do, however, have on a weekly basis considerable data on the flows of funds into and out of the United States which gives us a partial ew of what is happening so that we can form some fairly current judgments, almost on a day-by-day basis, of what is happening in the arketplaces. Mr. STEED. Then timelag is not a problem in this area? Mr. GREENSPAN. I would say no, sir. Mr. STEED. You would still have ample time to make whatever adjustment in policy these statistics would indicate to you that the trend was with no more timelag than 3 weeks wouldn't you? Mr. GREENSPAN. I would think so. ACCOMPLISHMENTS OF THE WOMEN'S ADVISORY COMMITTEE Mr. STEED. Could you give us a little summary of what the Advisory Committee on the Economic Role of Women was able to accomplish. Mr. GREENSPAN. Mr. Chairman, since that function ended before I became chairman on September 4, I would like to ask my colleague John Davis, who was special assistant to then Chairman Stein, to respond to your question on that. Mr. DAVIS. I think the major purpose that it accomplished was to focus attention and to bring together a number of people from outside of the Council, from the business community and the educational community, to look at different parts of the problem. Some analysis was conducted by the Council's staff. There were a number of meetings that were held. At one of them a number of papers were presented by experts in the field who had done some work on particular aspects of the problem. Another meeting was held involving representatives of other governments in terms of their policies and their assessments of the economic role of women in their countries. I think that the major thrust of the Council's efforts was, if you will, to focus some attention and the beginning of some analysis on parts of this problem. The Council is an analytical group. We are not advocates as such. As the committee began to approach the end of its second year, the decision was reached that we probably had done about as much in that regard as was sensible. Some of the activities that came out of this effort were I believe picked up by some of the other branches of government. Mr. STEED. Not so facetiously, with regard to the impact of women in politics, since they control over half of the vote, if they ever get organized men are going to be caddies for them. In economics I have heard that women own three-fourths of the wealth of the Nation and they do most of the spending. Was is this aspect of the economic role of women that you were looking at? Mr. DAVIS. I think the attention was less on the distribution of wealth and more on the way in which women participate as producing agents in society-more along the lines of investigating the growth in importance of women in the labor force and some of the problems associated with the increased importance of women in the labor force. DISTRIBUTION OF THE ECONOMIC REPORT Mr. MILLER. Thank you, Mr. Chairman. I notice in your Economic Report to the President you have about 50,000 copies that are issued each year. I am wondering who receives those copies? It would guide us as to what use they may receive. Mr. GREENSPAN. Do you have a breakdown of the subscribers, John? Mr. MILLER. In general. Mr. DAVIS. You are referring to Economic Indicators or the Economic Report? Mr. MILLER. The Economic Report of the President. Mrs. SKIDMORE. I think the 50,000 refers to the number sold by the Printing Office approximately. Then we get requests for copies. Mr. DAVIS. We only see one part of it at the Council and any comments I would make on that would be impressionistic. But the bulk of the direct requests that we receive and fill are directed to members of the economic profession both in the academic and business communities, to Members of Congress and to constituents of various Members of Congress who have requested the report and to students. FOREIGN AND DOMESTIC NATURAL RESOURCES Mr. MILLER. You have stated that you have a number of teams of people responsible for the areas encompassed in international trade. For example, energy and natural resources. You spoke of energy domestically and internationally as well as natural resources. I am wondering if your people are looking at our problem of strategic metals and the fact we consume about 35 percent of the world's natural resources in this country. We have information that we will be out of 11 of the 13 major strategic metals by the year 2000. I placed an amendment in the foreign assistance authorization in December 1974 that would allow the President to barter our foreign assistance with Lations around the world for the natural resources they have. My question is, are your people considering this as a means of keepng us in business in this country? We certainly are in trouble, not only with the energy problem, but projecting out beyond the current energy problem there is looming a natural resource problem. Mr. GREENSPAN. Yes, Mr. Miller. I would say that this is one of a number of collateral issues which has been uppermost in many economists minds in recent years. I think realistical projections of the future equire us to confront the types of potential shortages and the possiities of developing alternative materials or sources of supply. Clearly, to just go through a physical projection exercise without being ware that we may not have reliable future supplies of a number of Laterials, of course the major one being crude petroleum, is not a atisfactory approach to our problems. So this is a rather long answer o a short question. Yes, we have tried to focus on that although we don't at the moment ave an immediate ongoing program. But it is an issue of which we fully aware and it is a necessary part of our longer term ojections. Mr. MILLER. I think it is something that should be worked on. The statistics pretty well show us where our shortages are, what tations we are now aiding, and where the natural resources are located. Would it be your responsibility to advise the President to put into eration that barter program? Mr. GREENSPAN. No, sir. We are strictly advisory. That issue, however, has emerged and will continue to emerge in many of the discuss of the Economic Policy Board of which I am one member. However, because the Economic Policy Board is an interagency teration, that issue cuts across a number of areas, and I would sug24 that it is a function of the Economic Policy Board to raise such ~es and advise the President on a question of that nature. Mr. MILLER. I bring it up because I worked about 2 years on the Vendment in order to get it into the foreign assistance bill. Now it is there, I would like to see it implemented. I am wondering who is going to have the responsibility for advising the President this is the road to go. Mr. GREENSPAN. Mr. Miller, I shall see personally that that issue is raised at the next meeting of the Economic Policy Board to be certain it is being covered in a manner adequate to the requirements. Mr. MILLER. I appreciate that very much. TROIKA Would you distinguish the difference between the Department of Treasury, OMB and the Council of Economic Advisers with respect to analyzing economic developments and recommending economic policy? They all seem to do this, but certainly I would assume they have certain areas of responsibility. Mr. GREENSPAN. Yes. There are certain areas of individual responsibility, but there are also general areas of overlapping responsibility. We have in effect a joint operation under the name "troika" in which working groups function at various different staff levels of consisting of representatives of the Department of the Treasury, the Office of Management and Budget, and the Council of Economic Advisers. Such groups meet periodically to construct. for example, economic forecasts or evaluate the economic impact of specific administration programs. As a consequence of that there are collateral organizations in many areas which would tend to work together as a group and come up with analysis or economic forecasts. There are a number of areas which individual agencies have prime responsibility for. Clearly the Department of the Treasury is the most knowledgeable in certain broad financial areas, the Office of Management and Budget has the detailed data on Federal spending programs. The Council of Economic Advisers by its nature tends to view a number of the issues which broadly affect some of the larger elements of economic policy, but we tend to coordinate our work through the troika operation and in a broader sense through the Executive Committee of the Economic Policy Board. Mr. MILLER. Mr. Chairman, I have used my 5 minutes. Thank you, Mr. Greenspan. Mr. STEED. Mr. Patten. Mr. PATTEN. It is good to see you, Mr. Greenspan. As far as your budget goes, I think we will approve your request without much trouble. But once we get the opportunity to see you we can't resist talking to you. This is off the record. [Discussion off the record.] Mr. PATTEN. Thank you. Mr. Greenspan. INDUSTRY REQUIREMENTS FOR NATURAL RESOURCES Mr. McEwEN. Mr. Greenspan, I would just like to echo what Mr. Miller said on this matter of resources. I think this is something we really should be looking at very hard. And the approach that Mr. Miller took in the amendment he had adopted is, I think, realistic. I think if we are going to aid the development of these countries we had better see if we can't get some concessions on the materials we need to keep us strong so we can aid them. I know we had a meeting with Secretary Morton, and he is very much concerned about it. He talked about our petroleum problem, but he did say looking down the road we are going to have some even more critical ones on basic materials for our industries. My own district has aluminum manufacturing; we don't have any bauxite. Most of it comes from outside the country now. That is just one of the many areas where we are dependent on other parts of the world. I was delighted when you assured Mr. Miller this is something that is being given consideration. I have no questions on your budget request. Obviously all of us welcome the opportunity, however, of picking your brain a little on the economic situation as you see it. INTEREST RATES I have a feeling-and I would like your comments on this-that while it would be an oversimplification of a complex problem to single out any one factor contributing to our economic problems at the moment, I have had the strong feeling that high interest rates were a very definite contributing factor to our problem. I have been pleased to see over recent months the short-term rate coming down. The prime has dropped, and what may be even more significant, the Treasury bill rate, which I believe is under 512 percent. The long-term rate was coming down some, but I believe turned back up again a little bit. How do you view this and what importance do you put on it? I hope we can all make the assumption that the recession is going to bottom out and there will be demands from the private sector for money, what is going to be available and what will be the cost of it? I think I saw an economic model that said the 3d and 4th quarter of this year it was going to bottom out. What about the availability of money to finance that recovery? Mr. GREENSPAN. First, Congressman, let me just echo your concern with respect to interest rates because there is no doubt that highinterest rates do inhibit economic growth and are not something which policy is focused on sustaining. However, what we must realize is that the key element involved in gh-interest rates, especially in the long-term market, is inflation, because when you have a continuous deterioration in the purchasing power of the dollar lenders invariably attempt to compensate for that. Lenders become unwilling to lend at low-interest rates and we get what economists call an inflation premium built into the interest rate #ructure. Mr. McEwEN. This would be more true in the long-term money, would it not? Mr. GREENSPAN. That is correct. There are technical reasons why t doesn't show up very clearly in short-term interest rates, but in many respects it is the long-term interest rates which are critical to the ques⚫on of economic growth, A- a consequence, when our objective is to bring interest rates down must look at the underlying cause of high-interest rates and essenay it is inflation, and the expectation of future inflation more spe |