ABSTRACT
In 1965 balance of payments message to Congress, President Lyndon B. Johnson issued a series of "voluntary" capital control guidelines for US transnational banks and the largest US transnational corporations. The impact of capital outflow deficits was partially offset by a small reduction in the government account deficit and, more importantly, by a near-record surplus in the trade account. In general, those who pessimistically felt that the underlying causes of the deficit were structural and permanent tended to want a more fundamental corrective than temporary restraints on capital exports and reform of Bretton Woods. Behind the logic of restricting direct investment was the relation of corporate overseas earnings to investment in the advanced capitalist countries as compared with the less developed countries. The US Council of the International Chamber of Commerce issued a statement calling on the government to reconsider the voluntary program.
