APO AE 09213-1315
October 24, 1995
Russell Munk
Assistant General Counsel
Department of the Treasury
Washington, D.C. 20220
Dear Russell:
By golly, was I surprised to receive your nice letter of October 10. Yes, I'd all but decided my latest -- I've sent the same letter to the last four Secretaries of the Treasury -- had been lost in the bowels of the bureaucracy. I've recognize that I've been persistent in pushing the German WW I war debt issue. But I had the job of keeping track of it some years ago when I was senior economist in the Office of International Monetary Affairs in the State Department. And since we had to submit an annual report to Congress -- indicating the Congress hadn't written it off, and since the current Congress has been pinching every penny (including old folks' benefits) in the attempt to close the budget gap, I've become convinced that there'll never be a better time to approach the Germans to put closure to this seventy-five year old item in our bilateral relationship. I am pleased to learn that you are thinking of revisiting the issue early next year. I have no startling new thoughts on the matter: Just that Germany is now reunited and prosperous, the former East Zone is now apparently solidly on the way to parity with the rest of the Bundesrepublik, and if Germany is finding money to help the Third World (as it is), it can afford to cycle these payments through the U.S. a) to resolve its long-standing WW I debt issue, and b) let us take credit for what would in other circumstances be US foreign aid (i.e. substituting for some current US aid, which could -- money being fungible -- go towards debt reduction).
Regarding the new dollar, while you say inflation is not a current issue, that is precisely why now is the time to upvalue. Indeed, the Conference Board has just announced its take that we can expect a new inflationary spiral to break out about six months from now. Metals prices have already moved -- and this will be reflected in the PPI, and later the CPI, down the road. But the main reason for my suggestion is the declining prestige of the dollar vs. the DM and the Yen (not to mention the Swiss Franc and the pending Euro-currency) as international units of account. There's lots of finance and other invisibles earnings associated with being the world's leading currency unit. I do thank you for the information you sent along about the new hundred dollar bill. Just wish we were seizing the opportunity to revalue on the occasion of its introduction. Again, I don't know when there'd be a better conjunction of events (including the coming new century) in which to give the dollar the important boost of revaluing it to its more or less historic level. (The Friedmann University of Chicago study shows it to have just about exactly a tenth of its pre-Great Depression value. When again can we get by with just knocking one zero off the end of each bill?)
As for my Japan paper (which, I understand, will be appearing in the next issue of Encyclia ), Robert Kuttner has recently taken up the same issue, i.e. of Second Best being better than stubborn adherence to an idealistic Free Trade (which is, in fact, a non-free trade) norm. And it seems to me that the most recent negotiations show that the message is getting across. I'm a free trader, too. But we haven't had free trade with Japan since V.J. Day. I surely wouldn't go as far as Pat Buchanon or Ross Perot's denunciation of NAFTA and apparent adoption of outright protectionism (I don't think Second Best is protectionist -- indeed, as I see it, it's a step on the road to really free trade). But it remains to be seen whether Mr. Reich's rather ambiguous arrangements with Muriyaki will bear fruit. For sure, the expansion of regional preferential trade areas around the globe suggests that some form of more nuanced US notion of what free trade is, and isn't, will be taking form over the next few years.
We were both interested in hearing about Dianne and David their adoptees. Dianne was a good friend in Guatemala and we remember her with affection. Lola was sorry to hear about Terry Rich. I don't think I knew him, but he was her bishop at one time and she thought highly of him.
Lola and I have found our tour in Bucharest interesting. Not quite as fascinating as Beijing. But I may say, my languages, background, and experience were all in Western Europe and I never expected postings to either China or the Iron Curtain. So our last two tours have rounded out my experience (albeit post-retirement) wonderfully. I've kept busy here as Counselor in the Romanian Mission Presidency, where we've also had some fascinating experiences. Church first came here over a hundred years ago with branches in the three principle cities -- Bucharest, Ploesti, and Brasov. But with WWI, the Great Depression, WWII, and fifty years of Communism, LDS activities were pretty well abandoned. Starting with the baptism of three exceptional individuals three and a half years ago (two of 'em were gifted poets, who have translated some fifty LDS hymns and one became our first local BP and is now one of our two first DPs), we now have nearly a thousand members, with seventeen branches again located in all three of the main cities. Formed our first two Districts six months ago and just held our first highly successful District Conferences under local leadership over the past two weekends.
We're leaving here on December 12 -- for Geneva (back to the real world) and Probably Lola's last posting before retirement. Will be in SLC (except for some travel to Washington state, California, and Arizona) until February 12 when Lola starts some short-term training in Washington. Looks like we'll again be able to rent the little town house up the street from the Kennedy Center which we've used during previous Washington stops. It's wonderfully convenient to the GWU metro stop and handy for Kennedy Center events. We will get in touch when we arrive. It will be good to see you and your wife again.
With best wishes,
David Timmins
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