[Congressional Record Volume 141, Number 41 (Monday, March 6, 1995)]
[Senate]
[Pages S3513-S3514]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                      THE DOLLAR-YEN RELATIONSHIP

  Mr. BENNETT. Mr. President, I have enjoyed this exchange. While I 
have the floor, I would like to talk briefly about the issue that I 
came to the floor to talk about before I became fascinated with the 
arguments by my friend from Arkansas.
  Mr. President, I happen to be chairman of the Senate prayer breakfast 
group. In that role, I attended the National Prayer Breakfast addressed 
by President Clinton and the Reverend Andrew Young. While we were 
there, we had Scripture readings, one from the New Testament and one 
from the Old Testament. Ruth Bader Ginsburg from the Supreme Court read 
the Scripture from the Old Testament. And I would like to repeat that 
which she read here on the floor of the Senate today because it covers 
beautifully the issue I want to address briefly.
  It is from Deuteronomy, chapter 25, and starts with verse 13.

       Do not have two differing weights in your bag, one heavy, 
     one light. Do not have two differing measures in your house, 
     one large, one small. You must have accurate and honest 
     weights and measures so that you may live long in the land 
     the Lord, your God, is giving you.

  Honest weights and measures--do not have one large and one small.
  The newspapers this morning are full of the story of the relationship 
between the dollar and the yen or the dollar and the deutsche mark. We 
recognize that the dollar for us is the unit of account that we use to 
measure the value of our work, measure the value of our products, and 
measure the value of our lands. All of these things are measured by the 
number of dollars that they can bring. In Japan the measure is the yen. 
Now, says the Bible, do not have two measures in your bag, one big and 
one small, one heavy and one light. Do not switch the measures.
  Yet, when it comes to the unit of account between national economies, 
we seem to have gotten into the idea that we can switch the measures. 
We have gone through that with the Mexicans. When we debated NAFTA on 
this floor, the unit of account was 3.5 pesos equals $1. Oh, it varied 
a little. It was in a band between 3.1 and 3.5. But we adopted NAFTA. 
We supported NAFTA on the firm assumption that the relationship between 
the dollar and the peso would be as stable as the weights and measures 
described in the Bible, that there would not be a breaking of the trust 
between those two countries.
  Then, in December there was, as our friends to the South said, 
``Well, we are no longer going to hold the rigidity of that weight and 
measure between those two currencies. We are going to say the dollar 
buys you 4.5 pesos. We are going to have a lighter weight in our bag 
than we had before.''
  I have spoken about the peso. I have perhaps spent too much time in 
the Senate talking about the peso. I tried to get the administration to 
work toward trying to get the weights and measures back to where they 
were. The administration does not seem to be interested in that. I will 
continue to bring it up from time to time. But today, I want to talk 
about the dollar and the yen because that is on the front pages. Mexico 
for some reason seems to have disappeared from the front pages even 
though the economic disaster in Mexico probably has more impact on our 
country long term than the relationship between the dollar and the yen.
  We are being told in this morning's papers that the dollar is falling 
against the yen, that the problem is in the free flight of the dollar, 
that we must do something to defend the dollar. There is an explicit 
assumption in that statement that I would like to challenge. What if--
just think about it--what if the dollar is the stable measure and it is 
the yen that is fluctuating in the wrong direction? What if, as you 
reach into your bag, you pull out the weight that the Bible talks about 
and it is the dollar that you find there? How are we going to know, if 
we have two fluctuating against each other, which one is the stable 
one? Or maybe neither is the stable one? But the unspoken assumption in 
this morning's paper that the yen is stable and it is the dollar that 
is falling is the assumption I want to challenge. How can you challenge 
it?
  Well, there is a third unit of measure that I would like to introduce 
into the equation. That is the measure that has been used for a unit of 
account of value since biblical times and probably before. There were 
no dollars, there were no yens when Moses wrote what I have read in 
Deuteronomy. But there was a measure for money, and it was called gold.
  How is the dollar valued currently with respect to that ancient 
metal? We have been talking about it--the Senator from Arkansas and I--
in terms of mining. Let us talk about it in terms of money for just a 
minute.
  The dollar is currently somewhere in the neighborhood where $380 buys 
you an ounce of gold; a little below that right now, down in the 
$370's. But the dollar has been fairly stable for months, maybe even 
going back to a year, around the $380 to $385 mark.
  You look at it today. The dollar is still stable in that area with 
respect to gold. The yen, on the other hand, has been falling with 
respect to gold. The price of gold in yen is $320 to the ounce. When we 
add this third element to the equation, it begins to change our 
perception just a little. Maybe it is the dollar that is stable and the 
yen that is fluctuating improperly instead of the other way around as 
this morning's papers indicate.
  What would happen if Alan Greenspan, who follows these things more 
carefully perhaps than any of us, got on the telephone and called his 
office number in Japan and said, Why don't you start printing extra 
yen? Do you know what would happen if they started printing extra yen? 
The value of the yen with respect to gold would begin to change. Of 
course, if we stayed stable with the price of gold, the value of the 
yen with respect to dollars would begin to change. And you would see 
the dollar-yen relationship begin to come together around the common 
point.
  For the sake of illustrating the point, let us say it was at $380 an 
ounce of gold and the yen would come to the point where you could buy 
gold at $380 an ounce with yen as well. So the yen and the dollar 
relationship would be solidified around their common relationship to 
gold.
  I think a number of very interesting things would happen in the world 
if that were to happen. I leave you with 
[[Page S3514]] this intriguing thought which Mr. Greenspan left with us 
when he testified before the Banking Committee. He said, ``If the 
United States were on a gold standard, the Mexican peso crisis would 
not have occurred,''
 because, you see, what he is really saying is, if we pegged our unit 
of account to a weight and a measure that did not change, to a weight 
and a measure that did not have a light version and a small version, to 
use the language of the Bible, but had only one, our currency would be 
the strongest in the world and the other nations would peg their 
currency to our currency, instead of having a situation where both 
currencies are constantly moving and producing the kind of uncertainty 
that this morning's headlines give us.

  Mr. President, I have no legislation to offer on this. I expect I 
probably will have as the Congress unfolds. But I take the occasion of 
this morning's headlines to once again raise the issue. I raised it 
last year in the last Congress when Mr. Greenspan first suggested in 
his testimony before the Banking Committee that pegging the dollar to 
gold might be a good idea. I have been watching it closely ever since 
Mr. Greenspan said that. I have been trying to become a student of this 
issue ever since Mr. Greenspan said that. I have talked about it on the 
floor of the Senate ever since Mr. Greenspan said that. So far, nobody 
has noticed. Perhaps nobody will notice it today.
  I find it very interesting that in this morning's paper, everybody is 
interested in the relationship between the dollar and the yen and the 
dollar and the deutsche marks, just as they were all interested in the 
relationship between the dollar and the peso. Nobody is addressing the 
fundamental question raised in the scriptural reference that Ruth Bader 
Ginsburg gave us at the National Prayer Breakfast when she told us, as 
the Bible has told us, that we must have stability and honesty in our 
weights and measures.
  I can think of no place where it is more vital to have that stability 
and honesty than in the weight and measure that we use to measure value 
throughout the world, which is our currency.
  I thank the Chair and yield the floor.
  Mrs. BOXER addressed the Chair.
  The PRESIDING OFFICER (Mr. Burns). The Senator from California [Mrs. 
Boxer], is recognized.
  Mrs. BOXER. I ask unanimous consent to speak as in morning business 
at this time.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator is recognized.

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