1961 - Commerce

Commerce

President Eisenhower warns in a January 17 farewell TV address against the "military-industrial-complex" that works to maintain high levels of spending for the defense establishment; he calls for a "balance between the clearly necessary and the comfortably desirable," "between cost and hoped-for advantage," and "between the actions of the moment and the national welfare of the future," but President-elect Kennedy has campaigned on a promise to close a phantom "missile gap" and will push through measures that increase military spending. By the end of the century the United States will have spent more than $5 trillion on the military despite the lack of any serious threat to national defense.

South Africa adopts the decimal system; the rand becomes legal tender February 14.

Britain's Chancellor of the Exchequer Selwyn B. Lloyd, 57, announces an austerity program July 17 to improve the nation's trade deficit. His emergency budget imposes a hold on wages and raises the bank rate from 5 percent to 7 percent.

An Alliance for Progress announced by President Kennedy in March will spur economic and social development of Latin-American countries that cooperate with the United States; the Latin American Free Trade Association (LAFTA) comes into force June 2 (see 1960); agrarian reform and tax reform are major objectives of the new Alianza, created at Punta del Este, Uruguay, in August by an agreement signed with 19 Latin-American countries that receive a promise of $10 billion in U.S. aid over a 10-year period.

U.S. Ambassador to the United Nations Adlai E. Stevenson urges that the developed countries of the world each contribute 1 percent of their Gross National Product to the development of the emerging nations.

Amendments to the Fair Labor Standards Act of 1938 signed into law by President Kennedy May 5 take effect September 3, raising the minimum wage 15ยข to $1.15 per hour and extending it to 3.6 million workers (see 1956). Included are not only employees engaged in interstate commerce or in producing goods for interstate commerce but also people employed in large retail and service enterprises, local transit, local construction, and gas stations (see 1963).

A Louis Harris poll shows that 23 percent of U.S. working women work to support themselves, 18 percent to support their families, 49 percent for extra money, 9 percent for "something interesting to do."

New York's First National City Bank offers negotiable fixed-term certificates of deposit (CD) paying a higher rate of interest than is permitted on savings accounts. Citibank's Connecticut-born executive vice-president Walter B. (Bigelow) Wriston, 41, has worked with another executive to develop the CD, which are initially offered to corporations in denominations of $100,000 and higher; other banks soon follow suit, and CDs will become available in denominations as low as $500 as depositors seek ways to keep inflation from eroding their savings.

The U.S. Gross National Product reaches $521 billion, up 60 percent since World War II as measured in constant dollars.

The U.S. Agency for International Development (USAID) created by President Kennedy in an executive order signed November 1 is an independent federal agency that will provide economic and humanitarian assistance to support U.S. foreign policy worldwide. It will grow by the end of the century to have nearly 7,000 employees in about 85 offices, some of them civil servants, some foreign service officers, some foreign nationals.

Wall Street's Dow Jones Industrial Average closes December 29 at 731.14, up from 615.89 at the end of 1960.