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c Scwwsfcer 27, 19&L Deer Mr. President: The Tre&swy torn, as y«a requested, beea etw!ying far eon* t&ee the usee of silver la our monetary aysteeu Informal croiif*re»3«a h o w *lacbeen held with otber depertaeBta is your Adalaiatratiett, with the federal E m m , and with lee&lqg iwpreeestetivee of both ailwr pra&jcieg aad congualn^ interest*. It bgm eeens appropriate to reciwwend aeveral ehessea ia our *il¥*r procedure*, largely bee**a* of the eteg» that hue talaeit place in the vcrld poeitlcsi of silver. The indwtrlel usee of »llrer have bees expending greatly and the i*tdoatrial couaaBptloo of silver ia steadily to&reaofs'gf it tam tam * t© be ased extessively in the ertaj it la seeded JLn our coinage. Ail together, the industrial, artistic end eotBage twett of t l i w are asrresfcly « e n m l % •are then ISO silliest ouaee* of silver per year in the Onitod State*. the total werld-vlde eoasuepttsa Is eetiaeted et acre then 300 itUlae. Produc tion, b c w m r f falls far short of these totals. wsrld-vid* i t It oiurvuiljr eetlasted et g*? «»»*« signally, of ehieti only rtW j l r t l t l a a ia produced in the Bolted statee. The laiieeted gs? bet»*M*S'world" pro&uetioa and world comuoptio©, «pertTro« cheagea la inventories, ia tho* sen r«taiin£ et about 65 miilixn ouacea. ffci* gap* aai it ie a gcwiM oat, bee for eons U m tew filled by sale* froat the stock* of ''free a t W * held by the Waited State* ?rea*ury. Theee etoeke were scemulated in earlier jeer* vhos total fletutf. we* crash lower and purchaees by the United state* Treasury, a* the mininaa price eetabllabed by the Coa^ra** for aeaetary purpceee, absorbed virtually all new dearstie production. The T-m^ur^a supply <af ft*« i l l w reached it# peak la April, 1959* at 229 atiHoo ounces. Sine* that tia», porchaeew have steedily decreased ani ealea taws laereaaed ead the Tvwwwry** *teefe of fiw t U w r he* declined. $jr the esd cf 1959 it wee 17% will&Mi owweei by the tol tf 19^0 it bed fallen to 123 ■ ll H on mmoeej o* of today, follow ing wraewally rapid ulai ia recent iwen, it hae f t & a to fine «ant. It ia eleer that under foremast procedure* title steak «mld mc» be entirely «xheueted aad tlwt the Treamvy wcNild thmemttmr tame i» fwrther •ilnr errailahle for public eal*. St aleo n e w elaar on the taalt of thee* teveXopweste that thnw la m reoeiaiag ae«A for Sowmwmt mvfort of the eiltwr price at SK>*5 oesta^ a* provided wader curremt l*arlaleti«i» la the ab**oo* of fwrther Ckawmerot ealea of free ailwur^ the private ■arfcet 1* ^uite obriouely pcrepered to aheorb all doaagtie prodaetioa aft or tten the prioe or 90«5 eeeta* oowmewmt etill 1mm, bomnwr, neacrly y-f fcnn«« «ub^« in a frallioQ rwsarvw held aeaiaet the iaawime of * pert of our paper w n m e y . H- -2 - Soaghly aaa quarter of tte toted is helA sgnlnat 4<Mrafl $10 silver aacfcifiettM, although existing legislation also permits i a n n n of $5 and $10 •etat fegr tte federal a m m y mA these latter notes represent veil oik 90 percent of tit* outstanding cwrreacy of thtn Amaiartlm* Tte otter "tferee qasrtara of the silver bullion m « m la used to support il sad ta_ •ilwr «vtifiatM| under «Usliag only aliver etrUfloitM are §*• tborlsed for currency af tteae denominations. la view of tte large rad growing aggregate deannfl far sllwr* It does sot c m to at to te either via* or ftMlblt to eoatlaae to lapnttnd a «*stentisl holding of silver bullion la tteea ewreoey n M n w » Z propew tfaet aa ao« tegln aa sctnsl, tteagfe ga&aal, nitbdraml of alivasr bullion frtm the currency reserves, paralttlng atftatitatiea of Federal gaaarvt aotee for tiit sllvar certificates vitMravn, mod wing tte bullion thereby rilttMd t4> MN& W ly fMHflyy ?#<g0CLMM2St6e At tte O K tlae, aafiar tte authority of existing laa, I propose to mg&aAJCm&Mr. aalaa of allaer to the aertot. X farther w o i r t that appropriate leg* UUtioa W prt^ptly to rutnre tte t n w w ry froat aa active role la 1 te aarteta for tte pareteaa and a*le of siltar, eod to parait trading la t U a r aa a porlatry eoaoodlty. KtaaaJilla, tli t n a m r ,» Ttasinlnc stocks of free silver ahoeld te aoeaarwd far peaalbla aaa la aaatrlfciitlfig to artirly eo^itksii ^nUany annrtiarnt tf tht zmsmttarr • If yoa ateald daslre to Uflawent tills general foU^r, tte first eta? vould la a Presidential directive to tia fieetatary tf tte Tr— wry to y staspaad fartter aalaa fro* the iwatetni stock of frm eilatr. Owe of thlA M ttlfilaf itoek tea? gdbiliim r eolttutt bt t m d M i i i . to ■ail &m As I twaM wisiKmi tii litiiv frq» draditkB t tXaaowk af for ttla purpoaa* tS»««a rotlrsd eartlficafcM wall te sa^loead fegrM i n i FmUtliag tMs aotlaa It sould tedzakla to taeoawmA to Coagntaa* \/ wt»a it recoevenes, tte laeediste rapaal erf* the SllTsgJBBrrhBSO >ftt of 193^j. ta iie11 sa tba Acts ralatlag to sllYiar <ar ^ai/ 5* 2329* aad JuJgr 51# lg^;« Siam tte axlatlag tax aa tna»f«ra of laiaraat la ilUiw bwllion ia aeoas* any aaly to aapport laslalactiaBf it fffiflitf »i«»« te dMlnbla to {miom alntltaaaawljr to Cs^prafla tfaat tte lalavaak part of tbt latarasl s u m i Cote bi M n M l B d mi u to allmr* to M X i l t ihs t e w l M n n c t erf s f!cwi ftitwii agyi»t Y i&illis Z fiiffrtit ttal iou co m liif rMonatalltta: td rniicnraiiii tbi \ ant af lagialatlea axtberlxiag tte Fadaral E a t w ^yataa to Issue radarsl ia <waifarttai af laaa ttea $5* ttea pravjUUas sa orderly, far replacing or wpjlaaanl fat tte aafply of silver certlfleataa saft ttereajr fndag tte iaplte af tilwr ttet will te aeaJsd to eovar fatara oolnsge xafdnaau* hitbMtr yotm, (signed) Douglas Tte fxaalteat The White House OS: RVRoosa;maf 11-27-61 Dfluelss mum Dillon