The Patient Patrician

FOR years, U.S. Presidents could imagine few worse political nightmares than having to ask Congress to devalue the dollar. Any such act was certain to stir up a chorus of accusations that the U.S. was acquiescing to a devastating loss of international power. Yet, when the Nixon Administration last week submitted to Congress the Par Value Modification bill, which will devalue the dollar 8.57% by raising the price of gold, its prospects for relatively swift passage were all but certain. The man most responsible for anesthetizing the issue in Congress--and thus allowing an unavoidable economic adjustment to take place--is a thoughtful, patrician Democratic Representative from Milwaukee named Henry Reuss. Testifying before the Joint Economic Committee last week. Federal Reserve Chairman Arthur Burns told a blushing Reuss: "If it weren't for you, I doubt that the Smithsonian agreement [devaluing the dollar and realigning currency-exchange rates] would have been concluded when it was."

There is little doubt that the normally inconspicuous, 59-year-old Reuss (pronounced Royce) played a major role in setting the stage for that agreement. Last Aug. 6, as chairman of a congressional subcommittee on international economics, he issued a report recommending the unhitching of the dollar from gold. Mistakenly viewed by European speculators as an official hint of policy change, the report led to panicky selling of dollars on money markets. Nine days later, Nixon was forced to halt the outflow of billions of dollars from the U.S. by floating the greenback against other currencies. Reuss has no regrets: "The markets were in turmoil already, and I simply stated that the emperor had no clothes." Then Reuss put his knowledge of economics to work and lined up congres sional backing for formal devaluation.

Although international finance is his recognized specialty, Reuss is also one of a handful of Congressmen who can knowingly assess the U.S. economy. In August 1970, he introduced the amendment giving President Nixon authority to impose wage and price controls. Nixon stubbornly refused to use the power for twelve months, until, in a stunning about-face, he declared a three-month freeze. At present, Reuss is striving to relieve the 5.9% unemployment rate by plugging a "Jobs Now" program that would create some 500,000 public-service positions. Nixon's plan to open 130,000 such jobs, Reuss says, is "a pitiful pooper of a program." He is also determined to close remaining loopholes in federal income tax regulations that allow a few wealthy people to get away with paying little or no tax every year.

Reuss himself might stand to lose from higher taxes on the rich. As the scion of a Milwaukee banking family, he owns $183,000 worth of stock in the city's Marshall & Ilsley Bank. He has never been active in banking, however; after graduating from Harvard Law School in 1936, he enlisted in the Army as a private, won a Bronze Star in the crossing of the Rhine and returned to Milwaukee to enter law and politics. In McCarthy-era Wisconsin, he lost his first three major races (for Milwaukee mayor, state attorney general and the U.S. Senate) before winning in 1954 the congressional seat that he still holds.

He also is interested in more emotional issues, notably the environment (he is an ardent camper and skier). It was Reuss who breathed life into the 1899 federal law regulating waste disposal in navigable rivers, and turned it into a modern-day antipollution measure. Still, Reuss is more at home discussing the fine points of currency-exchange rates with European bankers and statesmen or reading a book. When Nixon agreed in talks with French President Georges Pompidou to devalue the dollar, Reuss quoted the remark made by Henry IV after that cynical monarch converted to Catholicism in order to gain the French throne: "Paris is well worth a Mass." To that Reuss added: "Now Mr. Nixon has determined that Paris is worth a minor dollar devaluation."

That historical allusion, which would be lost on most voters, points up one of Reuss's weaknesses: he is considered a bit overgenteel for higher political office. Nonetheless, his seniority makes Reuss an odds-on favorite to succeed 78-year-old Wright Patman as chairman of the powerful Banking Committee. It would be a fitting reward for a patient Congressman who has consistently done his homework.

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