Full text of Press Releases of the United States Department of the Treasury : Volume 150

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TREASURY DEP/\RTiv1 \~!T

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L'PR~RY

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50~n

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1972

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TREASLH ( DEPARTMENT

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.--

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.... \".; ............ 1,.;...;)

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5,003
29,521

II

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....•....

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19~c 2
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l'
52
1.... .r~'"
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•••••••••• .,. t

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l;"'"?~·:.'.':'~:S;:)
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400

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8 1r:'4
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13 , 123
15, 300
1,

--/'"-,.-- •••••••••••••••••••••• I!
-1-./

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85

11

.20
.29
.28

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1 C,l,j
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4,993
29,435
389

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-~~~e.....................

191.)·
""""1.- .... v . . . . . . . . . . . . . . . . . . . . . e
"1 oi, c:
-/~~ ••••••••••••••••••••••

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I () ), /"

_/~0......................

II'//
004

1.01

r:'

~,G

19l7......................

5,097

5, 258

1 ~
19 ~v......................

5, 17 0/
19/~O/······················ {
~ J •••••••••••••••••••••• I
4,522
3, 915
1
4, 099

1 0 1,0

\

0,.-'1
7)~......................

le,.-'?
~7)~......................

I

1953._....................

4,670

:::'1,
19 J_......................

'95~
~Q~

-

•••••••••••••••••••

4, 750

~,

Q •••••••••

I

1957 ••••••••••••••••••••••

1

Ie"/"
~/)b ••••••••••••

1958......................

,

1959 ••••••••••••••••••••• ~ I
1960 •••••••••••••••••••• ~.,
1961 •••••••••••• v • • • • • • • • • !
'9'0
~ u~ •••••••••••••••••••••• '
j'

1963......................

1964o ••••••••••••••••••• ~.!
t

/",-J

190:;; •••••••••••••••••••••• 1

-~.,..,
~ I..... u.
- sc--i
,,-,. c·d • . • • • • • • • • • • • • • • • • • •
v ...... ""'
""~~\"..o

!

4,.~
9'

4,721
4,437

4,298

4,022
4,011
4,029
3 877
,

4,299
4,200
6
1, 83

41r:'
:;;J

261
1,126
1,781
2,204
1,964
1,098
1,205
1,3h2
1,404
1,295
1,125
1,219
1,Sll
1,658
1,893
1,834
1,785
1,864
1,776
1,901
2,069
2,093

1,586
7,028
11,342
13,096
10,030
4,303
3,892
3,916
3,775
3,227
2,790
2,880
3,159
3,092
3,057
2,887

2,653
2,434
2,246
2,llO

1,900

1,784
1,7ll

1,406
246
480

14.13
13.81
13.57

ili.41

16.37
20.33
23.64

25.52

27.11
28.64
28.74

,29.7b.

32.36
34.91
38.25
38.85
40.23

43.37

44.16
47.39

51.35

53.99

2,588

60.20

2,794
1,437

66.52
85.38

-64

Total Series E••••••• •••••••••• 1·~1~38~,~2~5~0~~~9~7~,~09~1~~~~~~,~1~5~9~~~~~2~9.~7~7~~

(1952 - Jan. 1957) 2/ ... iI--------~~----------~~------------+-----------4,238
1,925
2,314
54.60
H (~eb. 1957 - 1965)......
6,312
891
5,421
85.88
Total Series E •••••••••••••••••
10,550
2,816
7,735
73a32

Se:::-ies n

~~d

?otal Se:::-ies E

S8~ics

J

H•••••••••••

!I----------;~----------+-------------+-----------148,800
99,907
48,894
32.86

!====~=======~~==~======

~~d

K

(1953 - 1957) ••••• \

,:o~~ ~~turec •.••••.

;.11 S8:::'2S< 70tal
i G~~~d

3,330

34)924
w.;"";1c.turec. •••••• ( 152,130
Tot~ •.•.•••••• i 187,054
w

1

0...:.:':'8:::' :'ec.8:7:1")tion valu.e.
P-t o"O~io::1 of Oi·;;:e:, boncis ~.ay '03 he Ie.. a.~ci
~:ill 8a:'Y: i:1-:.e:::-est fo:, ace.:.. tio::ci periods
~"~"'':l.~ 0""''';
"'O"ll 1."
~~t,..,.....;
""--\,,.r\,;;..
• ... 'YJ.0 ...
.......
..... T.y Q"'';'es
Incluces r.~.J.tu:-ed bones l:hich have not beon
~

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.-oresented for

~

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v

r8de~Dtion.

2,105

~

1,225

36.77

i==========~=======;==~==;:========~==========~

".,.. . . . . .

34,817
102,012
136,829

106
50,1l9
50,225

.30
32.9L.
26.85

BUREAU OF 'l'RE PU3UC DEBT

.

I Iss~cc.
::'·k?~J":~:~D
~no,;.
-:. ~,.~... €;
.....

935 -

r:~.:~\~1.;?2!)

29,521
400

1,847
1
1<:;42
,
8,154
19 1, ') ••••.•........••.....•
13,123
19)'h
.......•....•.••...•• 15,300
1945 •••••••••••••••••••••• !, 1l,994
19 10 ••
5,401
1947 ••••••••••••••••••••••
5,097
1945 •••••••••••••••••.••••
5,258
1949 •••••••••••• ~ •••••••••
5,179
1950 ••••••••••••••••••••••
4,522
1951.~ ••••••••••••••••••••
3,915
1952 ••••••••••••••••••••••
4,099
1953 ••••••••••••••••••••••
4,670
1951 ••••••••••••••••••••••
4,750
1955 ••••••••••••••••••••••
4,949
19~'_ ~o ••••••••••••••••••••••
4,721
1957 •••••••••••••••••••••• ! 4,,437
1958 ••••••••••••••••••••••
4,298
1959 •••••••••••••••••••••• ~
4,022
1960 •••••••••••••••••••• ~. ~
4,,011
1961 ••••••••••••••••••••••
4,029
"9"r)
3,877
~ 0' ••••••••••••••••••••••
1963 ••••••••••••••••••••••
4,299
1964 •••••••••••••••••••• ~. ,
4,200
1965 •••••••••••••••••••••• i
1,683

.......................

~~
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e' • • • • • • • • • • • • • • • • • • •

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~ncl<:ssified.,. • •• • • • • • • • • • • • • •• 1
m
.
.....
I
Iota1 S cr~cs
L • • • • • • • • • • • • • • • • • i 138,250

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4,993
29,435
389

Y\,J..

'--.

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~ ou-:~t~

of ;.:;:t. I

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.2(

10

85

.2~

11

.2E

261
1,126
1,781
2,204
1,964
1,098
1,205
1,342
1,404
1,295
1,125
1,219
1,5ll
1,658
1,893
1,834
1,785
1,864
1,776
1,901
2,0('9
2,093
2,588
2,794
1,437

14.13
13.81

j

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S~ries ~:

,. r-o,'1''"'\'':''
r_..
"-... L.I

l/ , ECC82::::: C.

5,003

D-19L~ •••••••••••
Sc:,::'e!:j F ~ C~1941 - 1952 •••••••••
Scties J ~~d K - 1952 ••••••••••••
:;; ..f..-. ..,.

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,

'

.~.ot..:.r.-;::'

1,586

7,028
11,342
13,096
10,030
4,303
3,892
3,916
3,175
3,227
2,190
2,880
3,159
3,092
3,057
2 887
2,653
2,434
2,246
2,llO
1,9CO
1,784
1,7ll
1,406
246
480

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13.57

14.41

I
I

16.37
20.33
23. 64
25.52
27.11
28.64
28.74
29.74
32.36
34.91
38.25
38.85

40.23

43.37
44.16
47.39
51.35
53.99
60.20

66.52

85.38

-

-64

,\

97,09~

41,159

29.77

\

1,925
891
2,816

2,314
5,421
7,735

54.00
85.88
73.32

99,907

48,894

32.86

3,330

2,105

W 1,225

36.77

)Tot~ matured .••••••• \ 34,924
All Seri~sl ?otal ur~~~tured •••.•• 152,130
1 Gr~d Total ••••••••••
187,054

34,817
102,012
136,829

106
50,119
.50,225

.30
32.94
26.85

Se~ies

n (1952 - Jan. 1957) 2/ ...
H (Feb. 1957 - 1965) ••••••

i

Total Series H•••••••••••••••••
Total Series E
Se~ies J and K

I

I

4,238
6,312
10,550

a.~d H••••••••••• ! 148,800

(1953 - 1957) •••••

I
I

I
i

I

I,

I

I

7.
1.

I~cludcs accrued Cisco~~t.
Cur~ent redcmntion value.

V At option
of ~~mer bonds may b3 hale ~d
earn interest for
periods
V

~dll
~ter

addition~

original maturity dates.
bandsuhich have not beon
pres~nted £or redemption.
Includ~~ ma~ureQ

BUREAU OF THE PUBUC DEBT

v:1i tee St.2...~es SaV:.J.flGs 3cnc..s 'Is ~ ..:.;:;d ~~c.. ;:ec.-:::c:-::ec 1":'.:-0\.:.:::;0 August 31, 196.5
(D,:,::":.:..r a::.. ::""''"1ts il"l rni.llion~ - r.J~;c..c;d 2.!"'.c. -,,-:'ll :,.o't r:ecess~ly add to tot.lls)

"9'"15
.)
- D- '9""
....
•••••••••••
Serios F & G-1941 - 1952 •••••••••
Scrie~ J and K - 1952 ••••••••••••
C:~~'-·L"'·s
.. ...:..~

.....,~

~~- .....

L~

5,003
29,521
400

4,993
29,437
390

10
83
10

1,847
8,157
13,127
15,307
11,998
5,404
5,100
5,262
5,184
4,526
3,919

1,588
7,038
11,357
13,116
10,052
4,311
3,901
3,926
3,786
3,231
2,799
2,890
3,173
3,108
3,081
2,898
2,664

259

.20
.28

2.50

Ui~'1ATURE:::J

Series i: Y
1941 .••••••••••••••..•••••
1942 ••••••••••••••••••••••

1943 ••••••••••••••••••••••
19~1 ••••••••••••••••••••••

t

1945 ••••••...•••••••••••••

1946 ••••••••••••••••••••••
1947 ••••••.••••••.••••••••
1948 ••••••••••••••••••••••
1949 ••••••.•••••••••••••••
1950 ••••••••••••••••••••••
1951 ••••••••.•••••••••••••
1952 ••••••••••••••••••••••
1953 ••••••••••••••••••••••

4,105
4,675

1954 ••••••..••••••••••••••
1955 ••••••••••••••••••••••
1956 ••••••••••••••••••••••

4,755
4,953
4,7 27
4,443
4,304
4,028
4,017
4,035
3,883
4,306
4,206
2,069
372

1957 ••••••••••••••••••••••
1958 ••••••.•••••••••••••••
1959 ••••••••••••••••••••••

1960 •••••••••••••••••••• ,.
1961 ••••••.••••••••••.••••

1962 ••••••••••••••••••••••
1963 ••••••••••••••••••••••
1964 •••••••••••••••••••• ~.
1965 ••••••••••••••••••••••
Unclassified.,••••••••••••••••••
Total Series E •••••••••••••••••

Series H (1952 - Jan. 1957) 2/ ...
H (Feb. 1957 - 1965) ••••••
Total Series H•••••••••••••••••

I

138,708
3,670
6,926
10,596

1,119
1,170
2,191
1,946
1,092
1,199
1,336
1,398
1,289
1,1l9
1,215

1,503

1,647
1,813
1,829
1,779
1,858
1,7 69
1,894

2,l.!h5

2,258
2,123
1,916
1,801
1,138
1,464
351
417

\

I

I
t

!,

2,059

2,082
2,568
2,741
1,719

U.02

13.12
13.48
14.31
16.22
20.21

23.51
25.39
26.97
28.48

28.55
29.00

32.'l5
34.64
37.82
38.69
40 04
43.17
43.92
47.15
51.03
53.62
0

59.64
65.17
83.08

-44

97,498
1,768
1,087

41,209

29.71

1,903

51.-a5

5,839

7,742

84.31
73.07

100,353

48,951

32.79

2,854

,

Total Series E and H•••••••••••

149,304

r

f

••

3,331

I

2,128

) Total matured ....... .
Total unm~tured ••••••
I Gra~d Total •••••••• ~.

34,923
152,635
187,559

!

34,820
102,480
137,300

1

Series J and K (1953 - 1957) ••
.
All

Ser~es~
t

11
~

11
~

Includes

8

1
)

IW

1,204

l<i
50,155
50,259

.30
32.86
26.80

~ccruea

Ciscount.
Ourr~nt redemption valuev
At option of owner bonds may be held and
't-r.i.ll earn in tere st for additional periods
cl'ter original maturity dates.
Incluoes matured bonds which have not been
presented for redemption.

BUREAU OF THE PUBLIC DEBT

United States SavinGs 3cncis I$~\!od a.'1G. ReC:e:c.":':l?c Ti::-o\.:~h August

(Doll.::..r anounts in million:; -

I
Issued. 1/
I

iUO.OW1t

----

Ar.:ount
Outstanding

J.:-.OU;1t

Lec.eer..ed 1/

K··.TU~~:',D

-SGF.i..es

L-1935 - D-191.a ...........
& G-1941 - 19$2 •••••••••

Scrie~ F
Scrie~ J

and K - 1952 ••••••••••••

31, 1965

a.'1c. ·,·;ill :-.ot r:ecess~ly add to total.~

rO\.:.."1clGd

5,003
29,521
400

4,993
29,437
390

1,847
8,157
13,127
15,307
11,998
5,404
5,100
5,262
5,184
4,526
3,919
4,105
4,615
4,755
4,953
4,727
4,443
4,.304
4,028
4,017
4,035
3,883
4,306
4,206
2,069
372

1,588
1,038
ll,357
13,1l6
10,052
4,311
3,901
3,926
3,786
3,237
2,799
2,890
3,173
3,108
3,081
2,898
2,664
2,lJ45
2,258
2,123
1,976
1,801
1,738

~ Out~t~

2/

o£ k-r.t.J

10

.2C

83

.28

10

2.50

259
1,119
1,770
2,191
1,946
1,092
1,199
1,336
1,398
1,289
1,119
1,215

14.02
13.72
13.48
14.31
16.22
20.21
23.51
25.39
26.97
28.48
28.55
29.60
32.1.5
34.64
37.82
38.69
• 40004

UNHATURED
Series B: '})

1941 ••••••••••••••••••••••

1942 ••••••••••••••••••••••
1943 ••••••••••••••••••••••
1944 ••••••••••••••••••••••

1945 ••••••••••••••••••••••

1946 ••••••••••••••••••••••
1947 ••••••.•••••••••••••••
1948 ••••••••••••••••••••••

1949 •••••••••.••••••••••••
1950 ••••••••••••••••••••••
1951 ••••••••••••••••••••••
1952 ••••••••••••••••••••••

1953 ••••••••••••••••••••••

1954 ••••••••••••••••••••••

1955 ••••••••••••••••••••••
1956 ••••••••••••••••••••••
1957 ••••••••••••••••••••••
1958 ••••••••••••••••••••••
1959 ••••••••••••••••••••••
1960 •••••••••••••••••••• ,.
1961 ••••••••••••••••••••••

1962 ••••••••••••••••••••••
1963 ••••••••••••••••••••••
1964 •••••••••••••••••••• ~.
1965 ••••••••••••••••••••••

Unc1::l.ssified.,••••••••••••••••••

I

1,4~

351
417
I

Total Series E •.•••••••••••••••

H (Feb. 1957 - 1965) ••••••
Total Series H•••••.•••••••••••

138,708
3,670
6,926
10,596

Total Series E and H•••••••••••

149,304

Series H (1952 - Jan. 19$7)

2/ ...

!

I

I
I,
,

Series J and K (1953 - 1957) •••••

3,331

I

2,128

) Total matured ••••••••
All sel~esJ Total unm~tured ••••••
Grand Total •••••••• e.

34~923

1

34,820
102,480
137,300

17

152,635
187,559

I

Includes accrued discount.
~ Current redemution value.
At option of ~wner bonds may be held and
will earn interest for additional. periods
after original maturity dates.
1:1 Inc1udes matured bonds which have not been
presented tor redemption.

-y

I

48,951
I

Iy

43.1.7

43.92
47.15
51.03
53.62
59.64
65.17
83.08

-

-44

41,209
1,903
5,839
7,742

97,498
1,708
1,087
2,B54

! 100,353
I

1,503

1,647
1,873
1,829
1,779
1,858
1,7 69
1,894
2,059
2,082
2,568
2,741.
1,719

1,204
~

50,155
50,259

29.n
51.tl5

I,

I
I

84.31
73.07
32.79
36.15
.30
32.86
26.80

BUREAU OF THE PUBLIC DEB'I

TREASURY DEPARTMENT
FOR RELEASE A.M. NEWSPAPERS,

Tuesday, August 3, 1965.

August 2,

RESULTS OF TREASURY I S WEEKLY BILL OFFERING

The Treasur.y Department announced last evening that the tenders for two series I
Treasury bills, one series to be an additional issue of the bills dated May 6, 1965,
the other series to be dated August 5, 1965, which were offered on July 28, were Opel
at the Federal Reserve Banks on August 2. Tenders were invited for $1,200,000,000, (
thereabouts, of 91-day bills and for $1,000,000,000, or thereabouts, of 182-day bil11
The details of the two series are as follows:

RANGE OF ACCEPTED
COMPETITIVE BIDS:
High
Low
Average

91-day Treasury bills
maturing November 4, 1965
Approx. EqUiv •
Price
Annual Rate
3.810%
99.037
99.028
3.845%
99.031
3.832 !I

l82-day Treasury bills
maturing Feb~ 3, 1966
Approx. Equj
Price
Annual Rate
98.028
3.901%
98.008
3.940%

98.015

3.921% Y

41% of the amount of 91-day bills bid for at the low price ~~ accepted
42% of the amount of 182-day bills bid for at the low price was accepted

TOTAL TENDERS APPLIED FOR AND ACCEPTED BY FEDERAL RESERVE DISTRICTS:
District
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
TOTALS

!I. Includes
Bf Includes

Y

87 2 780 l ooo

Accepted
$ 12,136,000
789,181,000
21,746,000
22,593,000
16,215,000
21,399,000
125,974,000
53,561,000
20,324,000
29,110,000
21,357,000
60.z855 l ooo

$2,030,427,000

$1,200,451,000

AEP1ied For
22,1)6,000
$
1,399,596,000
33,746,000
22,593,000
16,215,000
43,548,000
261,514,000
64,918,000

20,914,000
29,110,000
28,357,000

:

·:
·•
·•
!I

AEElied For
26,003,000
$
1,152,068,000
11,487,000
24,981,000
3,032,000
25,114,000
234,281,000
16,512,000
10,731,000
14,617,000
9,792,000
105,297,000
$1,633,915,000

Accepted
$
26,003,0
111 , ,348,0
3,487,0
24,981,0
3,032,01
12,214,Q
94, 281,~

1

12,512,~

10, 131, O(
14,617,0<
9,792,CX
77,777,0<
$1,000, 775,0(

$251,281,000 noncompetitive tenders accepted at the average price of 99.0~
$84,135,000 noncompetitive tenders accepted at the average price of 98.0J
On a coupon issue of' the same length and for the same amount invested, the return <
these bills woul.d provide yields of 3.92%, for the 91-dq bills, and 4.06%, for the
l82-~ bills.
Interest rates on bills are quoted in terms of bank discount with
the return related to the face amount 0 f the bills payable at maturity rather than
the amount invested and their length in actual number of days related to a 360-day
year. In contrast, yields on certificates, not,es, and bonds are computed in terms
of interest on the amount invested, and relate the number of days remaining in an
interest payment period to the actual number of dlys in the period, wi th semiannual
compounding if more than one coupon period is involved.
F-149

August

J, T96S

FOR PELF.ASE AT 12: 00 NOON, EDT
TUESDAY , A1Y'rUST 3, 1965

LESTER D. JOHNSON SWORN IN AS COMMISSIONER OF CUSTOMS

Secretary of the Treasury Henry H. Fowler today {Au~ttS41PiA~'
administered the oath of office to Lester D. Johnson as
U. S. Commissioner of Customs at a ceremony in the Department
of the Treasury.

Mr. Johnson was named to the office by Secretary

Fowler on July 20.
Commissioner Johnson has been acting commissioner since
October 1, 1964 when his predecessor Philip Nichols, Jro was
named judge in the U. S. Customs Court by President Johnson.
Mr. Johnson had been assistant commissioner since January, 1964.

TREASURY DEPARTMENT

August 3, 1965

FOR RELEASE AT 12:00 NOON, EDT

TUESDAY, AUGUST 3, 1965
LESTER D. JOHNSON SWORN IN AS
COMMISSIONER OF CUSTOMS

Secretary of the Treasury Henry H. Fowler today
administered the oath of office to Lester D. Johnson
as U. S. Commissioner of Customs at a ceremony in
the Department of the Treasury.

Mr. Johnson was

named to the office by Secretary Fowler on July 20.
Commissioner Johnson has been Acting Commissioner
since October 1, 1964 when his predecessor Philip
Nichols, Jr. was named judge in the U. S. Customs Court by
President Johnson.

Mr. Johnson had been Assistant

Commissioner since January, 1964.

000

F-150

7

.J

sale or other dJ .sF'S 11. 1011

~)f 'l'rcdsury :..; 11:t"

-

J'J':s not Ita ve lillY

such, under the Inten1al Revenue Code of 1954.

special treatment,

as

The bi 11s are subject to estate,

irmeritance, gift or other excise taxes, whether Federal or State, but are exempt from
all taxation now or hereafter imposed on the principal or interest thereof by any State,
or any of the possessions of the United States, or by any local taxing authority.

For

purposes of taxation the amount of discount at which Treasury bills are originally Bold
by the United States is considered to be interest.

Under Sections 454 (b) and 1221 (5)

of the Internal Revenue Code of 1954 the amount of discount at which bills issued hereunder are sold is not considered to accrue until such bills are sold, redeemed or otherwise disposed

or, and such bills are excluded from consideration as capital assets.

Accordingly, the owner of Treasury bills (other than life insurance companies) issued
hereunder need include in his income tax return only the difference between the price
paid for such bills, whether on original issue or on subsequent purchase, and the amount
actually received either upon sale or redemption at maturity during the taxable year
for which the return is made, as ordinary gain or

1088.

Treasury Department Circular No. 418 {current revision} and this notice, prescribe
the tenns of the Treasur'J bills and govern the conditions of their issue.
the circular may be obtained from any

!<~ederal

Reserve Bank or Branch.

Copies of

,)

-

printed

funnt> Bod fO:::V8.1ded

Reserve Banks or

Brflfl('ltr:8

1n

ttle

special

G

-

E!nvelopeB

which wl11 be supplied by Federal

on [llJpl1catloll therefor.

Banking t118tltutions generally may subnd t tenders for account of customers provided the names of the customers are set foIth in such tenders.

others than banking

institutions will not be permitted to sDbmit tenders except for their own account.
Tenders will be received without deposit from incorporated banks and trust companies
and from responsible and recognized dealers in investment securities.

Tenders from

others must be accompanied by payment of 2 percent of the face amount of Treasury billa
applied for, unless the tenders are accompanied by an express guaranty of payment by
an incorporated bank or trust company.
Immediately

a~ter

the closing hour, tenders will be opened at the Federal Reserve

Banks and Branches, following which public anouncement will be made by the Treasury
Department of the amount and price range of accepted bids.
will be advised of the acceptance or rejection thereof.
expressly

resel~es

Those submitting tenders

The Secretary of the Treasury

the right to accept or reject any or all tenders, in whole or in

part, and his action in any such respect shall be final.

Subject to these reaerva-

tions, noncompetitive tenders for each issue for $200,000 or less without stated
price from anyone bidder

~ill

be accepted

jn ~ll

at the average price (in three

decimals) of accepted cOli1petitive bids for the respective issues.

Settlement for

accepted tenders in accordance vith the bids'must be made or completed at the Federal
Reserve Bank on

"~'"'6USt

-~.~>.

-

12, 19C'=:
tID

~.-,~-.

, in cash or other immediately availe.ble funds

or in a like face amount of Treasury bills maturing
and exchange tenders will receive equal treatment.

August 12, 1905

--------~~lll~,~-----

•

Cash

Cash adjustments will be made for

dirferences between the par value of maturing billa accepted in exchange and the issue
price of the new bills.
The income derived from Treasury bills, whether interest or gain from the sale or
other disposition of the bills, does not have anJ' exemption, as such, and loss from till

Tn !':fl, '1 n\Y

L)EPAR'TI"u::NT

I.!:u;bington
FOR IJ.1MEDIA TE REU<)\:-; l'~,
:'~xxXXXXXXXXX}Ot~~Jt.~MJH€XXJ(

T?I;A:;'l'?Y':- ','31U"Y 3E,:!,_ OFFE?:::IIG

-

The Treasury Depn rtment, by thi G public notice, invites tenders for two series
of Treasury bills to the aggregl1tf~

of $ :2} 20~OO, 000, or thereabouts, for
~
cash and in exchange for Treasury bills maturing August ~ 1935 ,in the amount
~
of :$ 2 z 202) 0J ~0:J , as folloW's:
am')!HlL

:{A>pc
9L -day bills (to maturity date) to be issued __A_u~'b~~u_s_t~l_2~)~1_9_3_5_____ ,

W

W

in the amount of .$ 1,200):'00,000 , or thereabouts, represent~i1
ing an additional amount of bills dated ___I'_la~y__1_3~,~1~9_5_5_____ ,
and to mature

l\ovc:;-;cey 12, 1965

lil

, originally issued in the

#ij
amount of $ 1,000)857 )OO:::! , the additional and original bills
tTh~
to be freely interchangeable.
182 -day bills, for $ 1.,OOO,C;OO)OOO , or thereabouts, to be dated

iWX

{±2:}
_h_\~~lg~~_:s_t_ir~_2~~~1_9_6v_~___ ,

and to mature ___~_"e_b_:_ru_a_r~~Tr~1_~~l~1~9~6~6~___

The bills of both series will be issued on a discount basie under competitive
and noncompetitive bidding as hereinafter provided, and at maturity their face amount
will be payable without interest.

They will,be issued in bearer form only, and in

denominations of $1,000, $5,000, $10,000, $50,000, $100,000, $500,000 and $1,000,000
(maturity value).
Tenders will be received at Federal Reserve Banks and Branches up to the closing
Da;/~_ib,-t

3avi~:5

hour, one-thirty p.m., Eastern~ time, Londa], Au::;ust 9) 1965
• Tenders
t~~
will not be received at the Treasury Department, Washington. Each tender must be
for an even multiple of $1,000, and in the case of competitive tenders the price
offered must be expressed on the basis of 100, with not more than three decimals,
e. g., 99.925.

Fractions may not be used.

It is urged that tenders be made on the

TREASURY DEPARTMENT

August 4, 1965
FOR IMMEDIATE RELEASE
TREASURY'S WEEKLY BILL OFFERING
The Treasury Department, by this public notice, invites tenders
for two series of Treasury bills to the aggregate ambunt of
$2,200,000,000,or thereabouts, for cash and in exchange for
Treasury bills maturing August 12,1965,
in the amount of
$2,202,205,000, as follows:
9~day bills (to maturity date) to be issued
in the amount of $1,200,000,000, or thereabouts,
additional amount of bills dated May 13, 1965,
mature November 12,196~,originally issued in the
$1,000,857,000,the additional and original bills
interchangeable.

August 12, 1965,
representing an
and to
amount of
to be freely

182 -day bills, for $1,000,000,000, or thereabouts, to be dated
August 12,1965,
and to mature February Ie, 1966.
The bills of both series will be issued on a discount basis under
competitive and noncompetitive bidding as hereinafter provided, and at
maturity their face amount will be payable without interest. They
will be issued in bearer form only, and 1n denominations of $1,000,
$5,000, $10,000, $50,000, $100,000, $500,000 and $1,000,000
(maturity value).
Tenders will be received at Federal Reserve Banks and Branches
to the closing hour, one-thirty p.m., Eastern Daylight Saving
time,
Monday, August 9, 1965.
Tenders will not be
received at the Treasury De~artment, Washington. Each tender must
be for an even multiple of $1,000, and in the case of competitive
tenders the price offered must be expressed on the basis of 100,
with not more than three decimals, e. g., 99.925. Fr~ctions may not
be used. It is urged that tenders be made on the printed forms and
forwarded in the special envelopes which will be supplied by Federal
Reserve Banks or Branches on application therefor.
up

Banking institutions generally may submit tenders for account of
customers provided the names of the customers are set forth in such
tenders. Others than banking institutions will not be permitted to
submit tenders except for their own account. Tenders will be received
without deposit from incorporated banks and trust companies and from
responsible and recognized dealers in investment securities. Tenders
from others must be accompanied by payment of 2 percent of the face
amount of Treasury bills applied for, unless the tenders are
accompanied by an express guaranty of payment by an incorporated bank
or trust company.
F-151

- 2 -

be
at the
Immediately after t he c 1os i ng hour " tendersh' will
h
blieopened
announceFederal Reserve Banks and Branches, followlng W lC pu unt and rice
ment will be made by the Treasury D:pa:tmen~n~!r~h:i~~obe adviS~d
range of accepted. bids, Th~se submlttlng t
cretar of the Treasury
of the acceptance or rejectlon thereof. The ,Se
y
11 tenders
ht
t
ccept
or
reject
any
or
a
,
.
h
expressly reserves t e rlg
0 a
hall be
in whole or in part, and his action in any such respect sders for
final
Subject to these reservations, noncompetitive ten
for $200 000 or less without stated price from anyone
h :
eac
l
s
s
u accepted
e,
three
bidder will be
in full at the average p rice (in
..
decimals) of accepted competitiv: bids for thew~~~p~~:l~~d~S~~:~.be
Settlement for accepted tenders 1n accordance
t 12 1965 .
made or completed at the Federal Reserve Bank on Augus
,
,1n
or other immediately available funds or in a like face amount
bills maturing August 12,1965. Cash
will receive equal treatment. Cash adjust~ents,wl
e m ~ in
differences between the par value of matu~lng b111s accepte
exchange and the issue price of the new bl11s.

~~s~reasury

a~~le~cha~~e ~~~ders

The income derived from Treasury bills, whether interest or
gain from the sale or other disposition of the bills, does not have
any exemption, as such, and loss from the sale or other disposition
of Treasury bills does not have any speCial treatment, as such,
under the Internal Revenue Code of 1954. The bills are subject to
estate, inheritance, gift or other excise taxes, whether Federal or
State, but are exempt from all taxation now or hereafter imposed on
the principal or interest thereof by any state, or any of the
possessions of the United States, or by any local taxing authority.
For purposes of taxation the amount of discount at which Treasury
bills are originally sold by the United States is considered to be
interest. Under Sections 454 (b) and 1221 (5) of the Internal
Revenue Code of 1954 the amount of discount at wh1ch bills issued
hereunder are sold is not considered to accrue until such bills are
sold, redeemed or otherwise disposed of, and such b1lla are excluded
from conSideration as capital assets. Accordingly, the owner of
Treasury bills (other than life insurance companies) issued hereunder
need include in his income tax return only the difference between
the price paid for such b11ls, whether on original issue or on
subsequent purchase, and the amount actually received either upon
sale or redemption at maturity during the taxable year for which the
return is made, as ordinary gain or loss.
Treasury Department Circular No. 418 (current revision) and this
notice prescribe the terms of the Treasury bills and govern the
conditions of their issue. Copies of the circular may be obtained from
any Federal Reserve Bank or Branch.
000

TREASURY DEPARTMENT
Washington
Statement of
The Honorable Merlyn N. Trued
Assistant Secretary for International Affairs
Before the Subcommittee on Foreign Economic Policy
House Foreign Affairs Committee
August 4, 1965, 10:00 A.M.

Mr. Chairman and Members of the Committee:
The Committee has already received statements and
supporting materials covering the composition and present
uses of our foreign currency holdings.

I will, therefore,

confine my opening remarks to certain aspects of the role
of the Treasury Department which may be of interest to this
Committee.
The Treasury's primary responsibility in this area was
defined in Executive Order 10488 of September 23, 1953.

This

Executive Order provided that " • • • the purchase, custody,
transfer, or sales of foreign exchange (including credits and
currencies) by any executive department or agency of the
United States shall be administered under such regulations
as may be issued by the Secretary of the Treasury

It

Following the promulgation of this Executive Order the
Secretary of the Treasury, on October 19, 1953, issued
Treasury Department Circular No. 930.

F-152

This Circular, which

...

- 2 has since been amended several times, requires (1) that all
collections of foreign currencies by any department or
agency be deposited into the custody of the Treasury,
(2) that foreign currencies may be withdrawn from Treasury
custody only for sale for dollars, or for expenditure by
agencies without payment of dollars if specifically authorized
by law, and (3) that agencies must purchase foreign currencies
from the Treasury rather than in the market whenever Treasury
has the needec currencies available for sale.
Another Treasury responsibility in the management of
U.S.-owned foreign currencies is the determination of what
currencies are in excess of requirements for payment of U.S.
obligations abroad.

This responsibility was delegated to the

Secretary of the Treasury by Executive Order 10973 of
November 3, 1961.

I would like to go into this in a bit more

detail.
Excess Currency Determination:
For most of the 81 different currencies coming into
Treasury accounts, holdings are much smaller than estimated
requirements for U. S. Government payments in those currencies
for a reasonable period in the future.

But in the case of

- 4 but less than three years' estimated requirements, the
currency mayor may not be listed as "excess!'

depending on

such factors as estimated future accruals, possible depreciation of the currency, and the trend of agency requirements.
If more than three years' estimated requirements are on
hand, the currency would normally be considered in excess.
The determination obviously cannot be a mechanical one
since it depends in part on estimates of future developments.
It is considered reasonable to have two or three years'
estimated requirements on hand before declaring the currency
in excess.

Otherwise, contingencies could cause a shortfall

in availabilities for priority uses and the Treasury might be
forced to cover the requirements for such uses by purchases
with dollars in the foreign countries involved.
be undesirable for

u.s.

This would

balance-of-payments reasons.

Once it is compiled, the list of "excess" currency
countries for the following fiscal year is used by the Budget
Bureau as a basis for inviting agencies to propose projects
which would not be approved by Budget for regular dollar
appropriations.

The BOB considers that the projects proposed

should be of a quality justifiable for inclusion in the

- 5 -

agency's regular dollar budget, but that they may be of lower
priority than projects included in the dollar estimates.

When

such projects or programs are approved, appropriations are
requested from the Congress for dollars restricted to the
purchase of currencies declared "excess u by the Treasury
Departmen t.
The Treasury does not, however, have responsibility in
the approval of programs for the utilization of "excess"
currencies by agencies having statutory authority for such
programs.

This is a function of the Bureau of the Budget.

Of course, the Treasury, as a matter of international
financial policy, has a continuing interest in proposals for
the utilization of "excess" currencies, particularly where
these proposals bear on our balance of payments.
It has been possible to make certain arrangements for
further use of our excess holdings of local currency.

These

arrangements are summarized in a letter of May 27, 1965 to
Senator Byrd, which has been published in the Congressional
Record.

They include, for example, greater use of such

currencies for official travel in lieu of dollars, for

- 6 Government procurement for use olltside of the host country by
the United States or for third countries and sale to tourists
and other private U.S. citizens.

Other possibilities are

always examined, but because of the difficult economic
situation in the countries involved, these arrangements of
necessity have limited potential.
Program Coordination:
I should also mention that Treasury participates with
other agencies on the Interagency Staff Committee for Surplus
Agricultural Disposal, known as the ISC, which formulates U.S.
negotiating positions for prospective Title I sales agreements
with foreign countries.

The Treasury role on this Committee -

whose functions were discussed with you by the representative
of the Department of Agriculture - is to furnish information
and advice on the requirements of the U.S.
of the respective countries which bear

for the currencies

on the amount of

foreign currencies which should be eRrmarked for U.S. use
under the prospective P.L. 480 agreement.

Treasury also

assists in preparing Title IV sales agreements by furnishing
information and advice concerning appropriate rates of interest
and maturities, and other terms and conditions.

- 7 In summary, I should say that we at the Treasury have
certain specific functions in the handling of local
currencies which I have described and a related interest
in the use of such currencies as they bear on our balance of
payments.

In this latter connection, it may be of interest

to recall the fact that local currency uses in both excess
and non-excess currencies have directly saved the U. S.
balance of payments about $300 million annually.
Thank you, Mr. Chairman.

1~

.' l' -.:::~-

"V~

:;..... : ~l. j,

:

.J. P.ltCl!1 (>lc:.:~~lec, C-dcf * '~"ln:i~;CrriD!)t ,t\nnlysis Division
. . 1. \:~":;ar~y, 0C;.iUt.,.. Director of Pers0lm,,1
~~

:~~0u~ ;~

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D~rjuty Cosmissioner
As~i$tant [];Ji)uty Corur.;liS5io.ncr

Glc;"';n ::. Jid:crson .. k-:si$t=Wtt
F.t:..yt~ond ;~.

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EC.'C;-':L:.s:)
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~'::tt.~

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O..l:~tOt:"3 Study. the ccrtific~te~
l 1I~WC b CC·l1 :-)'re'P~lrcu1 'ror
your

~:..'aru

attached for your c;i~'l1ature is tilo i,;.xccptional S~T"ic;
[:;1' .Jt'.t.l"::C5 (j'~ StoV(ir. th~ r1rojoct LoJder.

-

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sta£ l ,(are as 10110\48:

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('UR'!
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i,lcon 'lt~enle(:::, Gnie~., pf;tna,e:,eru,-)})t An.alysis Divi.iOll
C;(:or,(' S. ~lall;Jray t Depli cy Llrector or Persolmel
gOl:.H::l't i... 5k t.uner, NJ.tllCt"emenL Analy st
f,(I\Jdrl", J .·:l.~;.li\dyt.~r, :;t-:nior budget Analyst
j.

j"':L\:t/~er SOH, ;~8SJ..iitant

Deputy COI1Illia..ioller
RaYfOClud N. Harr.c: ~ {, sai.stant Deputy Commissioller

(;lenu B..

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O},.'-\.,).,r: i... .•(.:J S I(h"l L

.I

STAi".F

v'" t.i.c€:
o.~ tlle .Sccretar~
______
. . __
- -. - I
Alvin \'. Norcross, ~ssistant to the Director of PerlO1UlII
~~r s. Jane 0. Sp€t.:4r, ",~nagement Andlyat
dureau
•

or

Customs

Albert J. frances, Jr., L1aison Ufficer
James E. Townsend, vpt:ra.tions Offi.cer

i'he Secretary poiated out that l'the result. of the
~)urv~y (;.roup' s \,'orli.. under James Stover I S

into efiect, will enable the

~reau

'joul'ance, when put

01 Customs to administer

the Customs laws more effectively with ail)niflcant annual
savint:2JI to the

taxp~er.·t

fhe lecretary also commended t.he members of tne Survey

Group, and ot tts Profes.1onal Staff, who received tbe Speeial
Act or Service Award -- a cash award -- Lrom the As.ietaat

Secretary tor Aomtniatration, A. E. Weatherbee.

wClS

made in du amounts of $50U to each. atember

GrOUD and of

~200

The Award

or

the Survey

to each member of the profe.51onal staff.

AUfJ'ust

5', 196 S

7CP ~vLr't\~F AT J·OO LV., ~T
Tnl1,~ ~-wY, hi TiO ! IS T ::,

1965

1)b"ftx-~

SECRETARY FO\:I'LER CQMFEaIIi EXCEPTIOlML
5ERVICl;. t\~}ARD UPON JAMES H. STOVER

Trcas\!ry ::;ecretary Henry H. Fowler, at a ceremon. in

tne Treasury Building, conferred an Exceptional Service
i\.\,;ar(j upon James H. Sto'V·er, Director of the Of.t:ice
~nagement

dir~ctin~

and Organization, lor lit

outstalldin,~

01

effort in

a two-year Btudy oi the CUstoms Bureau.

That sOtady -- conducted by a special Treasury Survey

Group under Hr. Stover's leadership -- reaultea in a
comprehensive report with 230 recommendations for a thorough
Customs

,~ernization

In his citation
"handlin~~

t

program.

Secretary Fowler praised Mr. Stover's

of tllis dif Cicult ano complex as.ignraent. t1

TREASURY DEPARTMENT

August 5, 1965
FOR RELEASE AT 3:00 P.M., EDT
THURSDAY, AUGUST 5, 1965
SECRETARY FOWLER CONFERS EXCEPTIONAL
SERVICE AWARD UPON JAMES H. STOVER
Treasury Secretary Henry H. Fowler, at a ceremony in
the Treasury Building, today conferred an Exceptional
Service Award upon James H. Stover, Director of the Office
of Management and Organization, for his outstanding effort
in directing a two-year study of the Customs Bureau.
That study -- conducted by a special Treasury Survey
Group under Mr. Stover's leadership -- resulted in a
comprehensive report with 230 recommendations for a thorough
Customs modernization program.
In his citation, Secretary Fowler praised Mr. Stover's
"handling of this difficult and complex assignment."
The Secretary pointed out that "the results of the
Survey Group's work under James Stover's guidance, when put
into effect, will enable the Bureau of Customs to administer
the Customs laws more effectively with significant annual
savings to the taxpayer."
The Secretary also commended the members of the Survey
Group, and of its Professional Staff, who received the
Special Act or Service Award -- a cash award -- from the
Assistant Secretary for Administration, A. E. Weatherbee.
The Award was made in the amounts of $500 to each member of
the Survey Group and of $200 to each member of the
professional staff.

F-153

- 2 Members of the Survey Group and staff are as follows:
MEMBERS OF SURVEY GROUP
Office of the Secretary
J. Elton Greenlee, Chief, Management Analysis Division.
George S. Maharay, Deputy Director of Personnel.
Robert L. Skinner, Management Analyst.
Edward J. Widmayer, Senior Budget Analyst.

Bureau of Customs
Glen R. Dickerson, Assistant Deputy Commissioner.
Raymond N. Marra, Assistant Deputy Commissioner.
PROFESSIONAL STAFF
Office of the Secretary
Alvin W. Norcross, Assistant to the Director of Personnel.
Mrs. Jane B. Spear, Management Analyst.
Bureau of Customs
Albert J. Frances, Jr., Liaison Officer.
James E. Townsend, Operations Officer.

000

TREASURY DEPARTMENT

August 6, 1965

FOR IMMEDIATE RELEASE
TREASURY

~~ET

TRANSACTIONS IN JULY

During July 1965, market transactions in
direct and guaranteed securities of the government
for Treasury Investment and other accounts resulted
in net purchases by the Treasury Department of
$145,870,000.00.

000

F-154

TREASURY DEPARTMENT

August 6, 1965

FOR IMMEDIATE RELEASE

TREASURY MARKET TRANSACTIONS IN JULY
During July 1965, market transactions in
direct and guaranteed securities of the government
for Treasury Investment and other accounts resulted
in net purchases by the Treasury Department of
$145,870,000.00.
000

F-154

TREASURY DEPARTMENT
4

FOR IMMEDIATE RELEASE

August 6, 1965

PRELIMINARY RESULTS OF TREASURY'S CURRElf.r EXCHANGE OFFERING

Preliminary figures show that about $7,032 million, or 96.8~, of the
$7,268 million Treasury notes maturing August 13 have been exchanged for
the two issues included in the current exchange offering.

Exchanges include

about $5,148 million for the new 4 percent notes maturing February 15, 1967,
and $1,884 mil.lion for the 4 percent bonds maturing February 15, 1969.
$236 million, or

About

3.2i, of the maturing notes remain for cash redemption.

Subscriptions reported above include $3,051 million by the Federal
Reserve Banks and Government accounts for the 4% notes and $1,076 million
for the

4i

bonds.

Of the maturing notes held outside such accounts $2,097

million were exchanged for the 4% notes and $808 million for the 4~ bonds,
leaving $236 million, or

7.5i,

unexchanged.

Details by Federal Reserve Districts as to subscriptions will be
announced after final reports are received from the Federal Reserve Banks.

000

F.. 155

"', I '

,

'/'"

TREASURY DEPARTMENT

R RELEASE A. M• NEWSPAPERS,

esday, August 10, 1965.

August 9, 1965

RESULTS OF TrtEASURY'S WEEKLY BILL OFFERING

The Treasury Department announced last evening that the tenders for two series of
easury bills, one ~eries to be an additional issue of the bills dated May 13 1965 and
.
'
,
e other ser~es
to be dated August 12, 196 5, which were offered on August 4, were
opened
the Federal Reserve Banks on August 9. Tenders were invited for $1,200,000,000, or
ereabouts, of 92-day bills and for $1,000,000,000, or thereabouts, of 182-day bills.
e details of the two series are as follows:
NGE OF ACCEPrED

MPETITIVE BIDS:

High

Low
Average

92-day Treasury bills
maturing November 12~.1965
Approx. Equi v •
Price
Annual Rate
99.021
3.831%
99.014
3.858%
99.017
3.846%

Y

··

·
·
···
·

IB2-day Treasury bills
maturing FebEUa!Y 10, 1966
Approx. Equiv.
Price
Annual Rate
98.010
3.936%
98.002
3.952%
98.004
3.948% 1/

89% of the amount of 92-day bills bid for at the low price was accepted
36% of the amount of l82-day bills bid for at the low price was accepted
TAL TENDERS APPLIED FOR At"lD ACCEPl'ED BY FEDERAL RESSRVE DISTRICTS:

Applied For
Accepted
Applied For
Accepted
$ 22,255,000
$
12,255,000
$
29,787,000
$
4,787,000
1,416,024,000
761,884,000
1,455,136,000
782,833,000
29,768,000
17,768,000
15,260,000
6,760,000
37,107,000
37,107,000
30,519,000
21,511,000
14,365,000
14,365,000
8,973,000
3,345,000
40,031,000
27,673,000
22,963,000
11,963,000
275,053,000
145,393,000
274,601,000
66,451,000
39,729,000
31,619,000
13,640,000
9,640,000
22,793,000
21,573,000
9,858,000
5,718,000
Kansas City
33,158,000
32,158,000:
19,588,000
14,813,000
Dallas
30,390,000
22,280,000
12,383,000
7,383,000
San Francisco
101,774,000
76,849,000
107,374,000
64,820,000
$2,062,447,000
$1,200,924,000!! $2,000,082,000
$1,000,024,000
Includes $256,652,000 noncompetitive tenders accepted at the average price of 99.017
Includes $91,072,000 noncompetitive tenders accepted at the average price of 98.004
On a coupon issue of the same length and for the same amount invested, the return on
these bills would provide yields of 3.94%, for the 92-da.y bills, and 4.08%, for the
182-day bills. Interest rates on bills are quoted in terms of bank discount with
the return related to the face amount of the bills payable at maturity rather than
the amount invested and their length in actual number of days related to a 360-day
year. In contrast, yields on certificates, notes, am bonds a.re computed in terms
ot interest on the amount invested, and relate the number of days remaining in an
interest payment period to the actual number of days in the period, with semiannual
compounding if more than one coupon period is involved.
'-156
District
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Loui!
Minneapolis

£1

':':'!iT::ASURY

D7~PARTI IErJT

1,Tashington

~DNESDAY,

AUGUST 11, 1965

F-151

The Bu.reau Df Customs has announced the following preliminary
figures showing the imports for consumption from January 1, 1965,
to July 31, 1965, inclusive, of co®nodities under quotas established
pursuant to t~e Philippine Trade Agreement Re~."ision Act of 1955:

Comrnodi ty
Buttons

· ......

........
Coconut oil ....
Cord20'e ·......
(~isars

-

'D

Tobacco • ••••••

-><Approximate1y

·•..• Established
Quantity

t~nnual

·

C"~uota

510,000

.
·,·

·

..

Unit of .
Quantity J.

Imports as of
July 31, 1965

Gross

257,933

120,000,000

Number

26B,800,000

Pound

6,000,000

Pound

4,44 0 ,889

3,900,000

Pound

3,275,818

4,968,lL!7
Quota

i'illed3~-

283,370,703 pounds entered through July 31, 1965.

TREASURY DEPARTI1ENT
T;! as hington

IMI"!EDIATE R2LFASE

WQDNESDAY, AUGUST 11, 1965

F-157

The ?urc-1.u Df Sllstoms has announced the following preliminary
figures shoulng the imports for consumption from Ja.nuary 1, 1965,
to July 31, 1965, inclusive, of commodities under quotas established
pursuant to thp. Philippine Trade Agreement Re·.. isinn /.ct of 1955:

Cormnodi ty

I\nnual · Unit of :
··!· Established
·!· Quantity ··•
("Nota Quantity

Imports as of
July 31, 1965

·......

510,000

••••••••

120,000,000

Number

Cocon'lt oil •••

268,800,000

Pound

':';uota :'i11ed-::-

Corct2.::~

·......

6,000,000

Pound

L,t~Lo,8e9

Tobacco

·......

3,9 00 ,000

Pound

3,275,818

Buttons
(~isars

Gross

257,933

L, 968,11.17

-l~Approxi.mately 283,370, 7L3 pounds entered through July 31, 196~;.

-"-

--'---- ..

~-,---

-------------- ,,-'-'--

Cor.rnodi t:,-

--- -----.---

-'-~

.

: Unit of

Period and Quantity

: (~uantity

--"

Rutt:;r 3ucstitut:::;s con-:ainin~ ov~r 45~ of butterfat,
and butter oil ••••••••.••

Calendar year

Fibers of ~otton processed
but ~ot spun •••••••••••••

1,200,000

Pound

12 mos. from
Sept. 11, 196h

1,000

Pound

12 mos. from
August 1, 196/-j.

1,709,000

Pound

1,709,000

Pound

.: Imports

.: July 31, as1965of

Quota filled

Peanuts, shelled or not
sh,=11a1, blanched, or
otherwise pre)ared or

pr8s8rved (excc~t peanut
butter) ••••••••••••••••••

12 mo s. from
i\U~,lst

11

Imports as of August 9, 1965.

F-158

1, 1965

QUo ta

filled

Tt!~/5Gl~Y

1)8' AiiTIi,~JT
-.i::3.shin;ton

F-158

WEDNESDAY, AUGUST 11,1965

The Eta"3au of Ct:stOffis announced today preliminary fi~es on imports for
('on5u.l:1ption 0::' tih:; foi.loldnt~ commodi tics fror.1 the begirming of the respective
quota Del'iod s through July ~31, 1965:

Conunodity

:
;

Period and Quantity

---------------------------._"----------

:Uni t of : Imports as of
: Quanti ty : July 31, 1965

----------------------------~--~

Tariff-Rate Quotas:
Crea.m, fresh or sour ••••••••

Calendar year

1,500,000

Gallon

641,028

Hill{, fresh or sour • • •

Calendar year

3,000,000

Gallon

42-

~Jhole

Cattle, 700 Ibs. or more each
(other than dairy COl-IS) • • •

July 1, 1965 Sept • 30, 1965

120,000

Head

14,14S

Cattle, less than?OO Ibs.
each • • • • • • • • • • • • • • • • • • • • • •

12 mos. from
April 1, 1965

200,000

Head

58,358

Fish, fresh or frozen, filleted, etc., cod, haddock,
hake, pollock, cusk, and
rose.fish ••••••••••••••••••

Calendar year?4,383,589

Pound

Tuna Fish •••••••••••••••••••

Calendar year

66,059,400

Pound

24,618,503

'Ihite or Irish potatoes:
Certified seed ••••••••••••
Other • • • • • • • • • • • • • • • • • • • • •

12 mos. from 114,000,000
Sept. 15, 1964 45,000,000

Pound
P01.ll1d

Quo ta filled
Quo ta filled

Nov. 1, 1964Oct. 31, 1965 69,000,000

Pieces

Quo ta filled

Quota fil1ed

Y

Knives, forks, and spoons
wi th stainl'2ss steel

handl'3s •••••••••••••••••••

ImD_. orts for' consu.rnption at th·s quota rate are l;.,.,;ted
durin; the first ? months of the calendar year.
J ..UL.l..

-1-",
'-""'

18 ')87 691 pounds
,~,

TREASURY DEP AR'IMENT

',,/a shington
nnWIATE RELEASE

F-158

WEDNESDAY, AUGUST 11,1965

The Bureau of Customs announced today preliminary figures on imports for
consUr.lPtion of the following conunoditL~s from the begirming of the respective
quota periods through July 31, 1965:

Corrunodity

···
·

Period and Quantity

:Unit of
: Quantity

··· Imports as of
· July 31, 1965

Tariff-Rate Quotas:
Cream, fresh or sour ••••••••

Calendar year

1,500,000

Gallon

641,,028

'w.fhole HiH:, fresh or sour •••

Calendar year

3,000,000

Gallon

42

Cattle, 700 Ibs. or more each July 1, 1965 (other than dairy cows) ••• Sept. 30, 1965

120,000

Head

14,148

Head

58,358

Cattle, less than 200 Ibs.
each ••••••••••••••••••••••

12 mos. from
April 1, 1965

200,000

Fish, fresh or frozen, filleted, etc., cod, haddock,
hake, pollock, cusk, and
rosefish ••••••••••••••••••

Calendar year

24,383,589

Pound

Fish •••••••••••••••••••

Calendar year

66,059,400

Pound

24,618,503

12 mos. from 114,000,000
Sept. 15, 1964 45,000,000

Pound
Pound

Quota filled
Quota filled

Nov. 1, 1964Oct. 31, 1965 69,000,000

Pieces

Quota filled

Tuna

or Irish potatoes:
Certified seed ••••••••••••
Other •••••••••••••••••••••

~"lhite

Quota fi11ed

Y

Knives, forks, and spoons

with stainless steel
handles •••••••••••••••••••

11

Imports for consumption at the quota rate are limited to 18,287,691 pounds
during the first 9 months of the calendar year.

Commodity

Unit of

.. Quantity

Period and Quantity

· Imports as of
····· July 31, 1965

Absolute Quotas:
Butt':!r substitutes containing OV0r 45~ of butterfat,
and butter oil •••••••••••
Fibers of cotton processed
but not spun •••••••..••••
Peanuts, shelled or not
shelled, blanched, or
otherwise prepared or
pr0served (excG~t p8anut
butter) ••••••••••••••••••

11

1,200,000

Pound

1,000

Pound

:.ugust 1, 1964

1,709,000

Pound

12 mos. from
i\Urplst 1, 1965

1,709,000

Pound

Calendar year

12 mos. from
Sept. 11, 1964

12 mos. from

Imports as of AUGUst 9, 1965.

F-158

Quota filled

Quo ta filled

494,J341/

TREASURY DEPARTMEN'l'

Waahington, D. C.

F-159

ThNEDlATE hELEAS[

WEDNESDAY, AUGUST 11

1965

or UNMANUFACTURED LEAD AND ZINC CHARGEABLE TO THE C:UOTAS ESTABLISHED
BY PRESID~NTIAL PROCLAMATION NO. 3257 OF SEPTEMBF.R 22, 1958, AS MOnUIED BY THE tARP'F SClIEDill;~S Cf THt
lJNIT1i;D STATr.S, WHICH BECAMI: EITf,cTIV!: A.UGUST 31, 1963.

-----~L-.....;:~...::....::-=-,p;;;.REL~:.,::ilrlmffi;:..+,...,..::;::,.;:;:r....::,...;DA:;..,TA ON IMPORT~ FOR CONSl.,'MPTI0N

OU.AR'l'i...:RLY OU~ PERIOD -

IMPORTS I'l'Dd 925.01.

Country

.t

:

Proeluction

s

July 1,

1?65 -

July 1, 1?65 lTDo{

S.pte/llber )0,

August

1965

9ZS.03-

Umrrought lead aM.
:lead 'Waste anel scrap

Le ....-beari~ ores
and material.

t.r

6, 1?65

••
a
I

:

as noted)

ITEM 925.02-

ITEM 925.04-

•
I

Z~earinl

orea

~

mater1al..

s u.rought z1n.o (exoept allery.

: .r
:
:

zinc and zinc cluat) aDd

zinc 'Wast. and. .era,

:
Iq>orta

(p0\Ui6)

(PoUiib)
11,220,000

.!.uatra11a

ll,220,000

22,540,000

('Pounds )

\ Pound. )

2,255,444

Bel.gi~

and
~ (total)

Bolin..
Canada

5,040,000

···823,971

13,4040,000

1)g440pOOO

15,920,000

5,912,120

66,480,000

66,480,000

Italy
Yexioo

16,160,000

Peru

·"10,484,,43

14,980,000

oountri~s (total)

6,560,000

···2,626,611

-S8. Part 2, Appendix to Tarif! Sonedules •

•• Republio of South Afrioa •
••• 1aports a. or Au~st 9, 1?6S.
PREP~

IN

~

F..JREAU

OF

CUSTc:t.&S

37,840,000

·")6,276,473

3,600,000

···1,102,,)00

15,086,)16

70,.480 ,000

26,no,)M

6,320,000

···.,191,L19

12,880,000

1,400£1041

35,120,000

7,3 20 ,771

3,760,000

1,)U8,3jO

5,.440,000

···3,251,8-44

6,090,000

6,080,OOb

14,880,000

yugoslarla
All other

...... ),L9 6.701

36,880,000

Repub1io of the ConlO
(ro~rly Belgian Congo)
-"Un. So. Urioa

7,520,000

15,760,000

···4,654,04,

6,080,000

···),782,377

17,&40,000

17,840,000

TRUSURY DEPARTMEN'l'
WUhingt01l, D. C.

F - 159

I*EDIJ. TE RELEASE

..;..;.WE=D..;;.NE~S;..:D:;.;;A..:;..Y.::..,....;A:.:;.::U.::;G.:::U..::S:.,;J::r,.R£L..;:I::.;latm:n+.II"I'I.;,9;"f~6UA.-;.,,5'fA

ON IWPORTS FOR CONSL'MPTI('.N OJ' tOO&A.NUrACTURJ:D LEAD AND ZINC CHARGEABLE '1'0 THE QUOTAS ESTABLISHED
BY PRESIDENTIAL PRCCLAMATIClf NO. 3257 or SEPTEMBF.R 22, 1958, AS MODU'IED BY THE TARIIT SCHEDULES Of 'rm;
uNITTi:D STAT1'S, WHICH BlC.UiI: EJ'l'J:CTIVl: AUGUST 31, 1963.

O\aR'l'uu.y QUOl'.1 PERIOD D4P~

ITDl 925.01.

eo:t

t17

Pronoticm

AutraUa

U,l2O,OOO

1,65

Sep\••ber )0,

925.03.

•

1
I
I

.e:ra,

lhIIrougbt lel4 aM
leacl wute ani

uul -.tel'iab

s
s

1,65 -

.hll7 1, 1965 • August 6, 1,65 'e..
nD{

LeM-bearUaC orel
I

-

.lu~ 1,

11,220,000

Z2,~,OOO

&8

ne\.d)

I

CeWe

5,040,000

·"823,,71

13 ,-4«> ,000

13,440,000

ltalJ
16,l6Q,OOO

*

..

2,255,«4

-..

oOUJltriel (total)

6,560,000

1"5.

-

66,480,000

..

•

7,520,000

··.,,196,701

-

.

37,640,000

···)6,276,41)

3,600,000

···1,102,300

26,770,)64

6,320,000

··*4,181,1"

···10,484,'"'3

12,880,000

1,400.041

35,120,000

7,)20,171

3,760,000

1,'O8,3~

..

5,.440,000

•••"251, M4

14,880,000

···2,626,611

-See Pe.rt 2, Appen41x 'to Tariff Sehedulea.
"Repub1io of South Atr1oa •
•• _!aport .... of AUF." "

66,480,000

-

70,480,000

Y1l«oll&T1a

111 other

5,,12,120

.f siDe u4 z1Dc tu.t) aU'
.1M wast. . . . . . . . .

15,086,)16

of the 00..,0
formerly Be141&11 congo)
lA ,'380,000

:

36,880,000

~uUO

- "UIl. So. .l.f1oioa

-

I
I

material.

•

Ylxieo

Pen

15,920,000

•l'-rroqllt z1DD (euept all"T.

ZiDe-beariq ore.....

Bolina

ITJ:M 925.04*

l'rDf 925.02.

-

-

.
•

15,760,000

···4,654,04.,

6,090,000

···),782,377

-

17,840,000

-.

17,840,000

6,090,000

6,080,000

-2COTTON WASTES
(In pounds)
COTTeN CARD STRIPS made from cotton havin~ a staple of less than 1-3/16 inches in length) COMBER

1-JASTE, LAP WASTE, SLIVER ~";A3TE, AND ROVING WASTE, WHEI'HER OR NOT MANUFACTURED OR OTHERWISE
ADVANCED IN Vl'.liJE: Provided, however, that not more than 33-1/3 percent of the quotas shall
be filled by cotton wastes other than comber wastes made from cottons of 1-3/16 inches or more
in staple lerlgth in the case of the fol1owin~ countries: United Kingdom, France, Netherlands,
Swi tzerland, Belgium, Germany, and Italy:

Country of Origin

:
:

Established
TarAL QUarA

:

United

Kin~dom ••••••••••••

Canada ••••••••••••••••••••
France •••..•••.••••.••••••

India and Pakistan ••••••••
Nether1ands ••••••••
Switzerland •••••••••••••••
Belgium •••• o • • • • • • • • • • • • • •
$

••••••

J apart •••••••••••••••••••••
Ch.ina •••••••••••••••••••••

4,323,4.57
239,690
227,420
69,627
68,24 0
44,388
38,559
341,535
17,322

8,135

Cu.ba ••••••••••••••••••••••
Gey-rn~ •••••••••••••••••••

6,544
76,329
21,263

Other,

inc1udin~

Total Imports
:
: Sept. 20, 19 , to
:

~t .•.•..••••...•••••.•.

Italy ..•••••••...••..•••..

:

;, -"5<:'

:J, 196;:

Ll,iL
,..., ,- -,

:

Established:
33-1/3% of :

!mports
Sept. 20, 19'

Total Quota

t o ' j ,c'

1,441,152

_~~I'_~/j

75,807
I

-:

r,,,1

. ; _" , ,: r:" :

22,141
11,196

12,853

...
? ~~ . ):' / --(;

25,443

, ,"

1,599,886

.""./

7,088

the U.S ••

5J u82,50 9

1/ Included in total imports, column 2.
Prepared in the Bureau of Customs.

,

I __

~)

/)_,_

1/
-

TREASURY DEPAR'1MENT

Washington, D. C.

IMMEDIATE RELEASE
WEDNESDAY, AUGUST 11, 1965

F-160

Prel.iminary data on imports f'or consumption of' cotton an:l cotton waste chargeab1e to the quotas established by
Presidential Proclamation No. 2351 of' September 5, 1939, as amemed, an::l as modified by the Tariff Schedules of the
United States which became effective August 31, 1963.
(The country designations in this press release are those specified in the appeIJiix to the Tarif'f Schedules of' the
United States. There is no political connotation in the use of' ou1Dx1ed names.)
COTTON (other than linters) (in pounds)
Cotton umer 1-1/8 inches other than rough or harsh unier
IIgports September 20. 19 (I - ' 1;=-~_15L L 1~)6c;

COlmt,r:r of Origln

Imports

Established Quota

Egypt and Sudan ••••••••••••
Peru •••••••••••••••••••••••
India and Pakistan •••••••••
Chilw. ••••••••••••••••••••••

Mexico •••••••••••••••••••••
Brasil •••••••••••••••••••••

783,816
247,952
2,003,483
l.,370,79l.
8,883,259
618,723

6:i

,

~~gent,~

5,203

Haiti ••••••••••••••••••••••
~or ••••••••••••••••••••

2'57

11
11

Par~

871

••••••••••••••••••••

l24

Col.ombia ••••••••••••••••••••
?

y
~I
SIt

9,3))

195
2,240

Iraq ••••••••••••••••••••••••
British East Africa•••••••••

~\

,7()1,)' (':';')

lF2rt.s

752

Honduras ••••••••••••••••••••

475,l24

•••••••••••••••••

Eatabli shed Quota

Countr;y of' Origin

riC
J
/ /

Union of Sonet

Socialiat Republics ••••••

3I4.ft

Indonesia aIXl Netherl.aDls
Hew ~linea ••••••••••••••••
British W. IndieS •••••••••••
.1ger.1a•••••••••••••••••••••
Brit.iah w. Atrica. ••••••••••
other, 1 nclJJd1 ng the U.s ....

71,)88
21,)21

5,m

1.6,00lt.

Ex.cept Barbados, Benuia, Jamaica, Tr1n1dad, aDl Tobago.
EEcept Nigeria

am

Ghana.
'c-t.,,1·,l'J_S .Icc.1
"e>

. ' j ) .....'l

I C . . . / __

~otton I-l/ e " or
y~~

l-:~/Rt' (Tan~uis)
l-l/3 11 or more Clnd under
1-J/~\1I

.

...J....-..;,~~r .Lt..!

~-.

:--;-("",1'18 Lenr,;th
'11ocati8D
1- ?/G!! or p:o'ce- 39,590, 77 0
.-J
at1o.
u(!\.,cr
1 - _r') jI"J<,-, 11 or morc. '

lc,

I'nDo~t,s
-:J. ..... -,

.,r")2....

- .. -- ...

,--,+~

-:0ldV'vd,

IP,P>
V(1(1"'d
- '-:"'_'-"'~-' . . .
-

-

e

--------

)_,),O_)\.),L,/::.v
r:' "r'/ ',,)('

Lhl~;'::;J
~__ .~)

-,J..

1))6 r-:
~

,~
o.

I

qy

...,~- C'

,~

II

:

.::-~~ .~Uc~ • .1:,'

1 ./,.)..-/
C/"·:~

+.r

. . -....1

-::;c; ~GO 'I77'~!.J
~./ , ././

'_I':., c (j I...l...17
'---/'//..,/,

1,[~OO,OOO

r:"
Co
'./' 7 ~}./

6,722

},~:~6S .. 6b2

2 .. 722 .. 73l

6~; .. ';);I?

') l~

.1-. -

1

_

,/,

L./

TREASURY DEPAR'lXF1IT
Washington, D. C.

IMMIDIATE RELEASE

j I.~

WEDNESDAY, AUGUST 11, 1965

F-160

Prelill.inary data on imports for consumption of cotton am cotton waste chargeable to the quotas establ j shed by
Presidential Proclamation No. 2.351 of September 5, 19.39, as amenled, ani as Dldified bY' the Tariff Schedules of the
United states which became effective August 31, 1963.

(The country designations in this press release are those specified in the apperrlix to the Tariff Schedules of th9
~Jl"'.ited States. There is no political cormotation in the use of ou"t..uk:led names.)
COTTON (other than linters) (in poUDis)
Cotton un1er 1-1/8 inches other than rough or harsh '¥Iie\~
S§p~EJ~

lJQ)rts

Country of Origin

Established Quota

783,816
247,952
2,003,483
1,370,791
8,883,259

Egypt and Sudan ••••••••••••

Peru •••••••••••••••••••••••
India and Pakistan •••••••••

China ••••••••••••••••••••••

Mexico •••••••••••••••••••••
Brasil •••••••••••••••••••••

Un:lDn

20. 19(): -

·u~-_lsL~. 196:'; __ _

country of Origin

Imports

68,899
?,761,983

618,72.3
~

of Sonet

Argent~ •••••••••••••••••

5,20.3

237
9.JJJ

Estahli abed Quota

Honduras ••••••••••••••••••••

752

Paraguar ••••••••••••••••••••
Colombia••••••••••••••••••••

l24

~I
g

195

British East Africa•••••••••
IDiones1a and RetberlaDls

2.240

New Guinea••••••••••••••••

71,388

.tser.La•••••••••••••••••••••

Brit1ab W. Africa. ••••••••••
other. 1m1 W1 1ng the U.s ....

±!porn

fJ71

Iraq ••••••••••••••••••••••••

British W. Indies •••••••••••

475,l24
Haiti ••••••••••••••••••••••
Ecuador ••••••••••••••••••••

JlJi!..

2l,J21

5,m

16,00It.

II Except Bal'badoa,

y

Benula, Jamaica, Tr1n1d.:i, aDi Tobago.
Ez.cept lIigeria and Ghana.
Cotton l-l/UII or more
45,6::;6,1.[20 lbs.

j~stablished Yearly- (,Juo:,a -

rllocation
Staple Length
1-3/8 11 or more
39,590,778
1-5/32" or more and 1.mder
1,SOO,000
l- 3/8t! (Tanguis)
1-1/8 11 or more and under
l- 3/8 11

!~,

565,642

Imports Y8RT endell July 31, 1965

Imports Aug. 1, 1965 to Augo 9, 19&2

39,590,778

25,993,017

83,759

6,722

2,72 2 ,731

65,942

-2COTTON WASTES

(In pounds)
CO'M'CN CARD STRIPS marle from cotton

havin~

a staple of less than 1-3/16 inches in length, OOMBER

WASTE, LAP WASTE, SLIVER 'tfASTE, AND ROVING WASTE, WHETHER OR NaT MANUFACTURED OR OTHERWISE
ADVANCEJJ IN VAllIE: Provided, however, that not more than )3-1/3 percent of the quotas shall

be filled by cotton wastes other than comber wastes made from cottons of 1-3/16 inches or more
in staple le~th in the case of the followin~ countries: United Kin~dom, France, Netherlands,
Switzerland, Belgium, Germany, and Italy:

Country of Origin
United

:

Established

.•

TaJ'AL QUOTA

Kin~dom ••••••••••••

CaIlada ••••••••••••••••••••

France ••••••••••••••••••••

India and Pakistan ••••••••
Netherlands •••••••••••••••
Switzerland •••••••••••••••
Belgium •••••••••••••••••••
J apart •••••••••••••••••••••
ChIDa •••••••••••••••••••••
E'.gy'pt •••••••••••••••••••••
Cuba ••••••••••••••••••••••

GennarJ;Y" •••••••••••••••••••

Italy •.••..•••..•••.••.••.

other,

inc1udin~

:

Total Imports
Sept. 20, 19(jI., to

: i.uGUst 9, 1965

4,32),457
239,690
227,420
69,627
68,240
44,388
38,559
341,535
17,322
8,135

:

11,713
239,393

:

Established I
))-1/3% of:
Total Quota:

1,441,152

75,807

L3,26LI

22,747
14,796
12,853

6,544

~

76,329
21,263

25,425

25,443
7,088

5,482,509

519,795

1,599,886

the U.S ••

1/ Included in total

imports, column 2.

Prepared in the Bureau of CUstoms.

Imports

..

-1/

Sept. 20, 196L
to '~ugust 9, 1965

TREASURY DEPARTMENT

August 11, 1965

FOR IMMEDIATE RELEASE
TREASURY'S WEEKLY BILL OFFERING
The Treasury Department, by this public notice, invites tenders
for two series of Treasury bills to the aggregate amount of
$2,200,000,000,or thereabouts, for cash and in exchange for
Treasury bills maturing August 19,1965,
in the amount of
$2,201,249,000, as follows:
9~day

bills (to maturity date) to be issued
1n the amount of $1,200,000,000, or thereabouts,
additional amount of bills dated May 20, 1965,
mature November 18,1965,originally issued in the
$1,001,778,000,the additional and original bills
interchangeable.

August 19, 1965,
representing an
and to
amount of
to be freely

182 -day billS, for $1,000,000,000, or thereabouts, to be dated
August 19,1965,
and to mature February 17, 1966.
The bills of both series will be issued on a discount basis under
competitive and noncompetitive bidding as hereinafter provided, and at
maturity their face amount will be payable without interest. They
will be issued in bearer form only, and in denominations of $1,000,
$5,000, $10,000, $50,000, $100,000, $500,000 and $1,000,000
(maturity value).
Tenders will be received at Federal Reserve Banks and Branches
to the clOSing hour, one-thirty p.m., Eastern Daylight Saving
time, Monday, August 16, 1965.
Tenders will not be
received at the Treasury De~artment, Washington. Each tender must
be for an even multiple of $1,000, and in the case of competitive
tenders the price offered must be expressed on the basis of 100,
with not more than three decimals, e. g., 99.925. Fractions may not
be used. It is urged that tenders be made on the printed forms and
forwarded in the special envelopes which will be supplied by Federal
Reserve Banks or Branches on application therefor.
up

Banking institutions generally may submit tenders for account of
customers provided the names of the customers are set forth in such
tenders. Others than banking institutions will not be permitted to
submit tenders except for their own account. Tenders will be received
Without deposit from incorporated banks and trust companies and from
responsible and recognized dealers in investment securities. Tenders
from others must be accompanied by payment of 2 percent of the face
amount of Treasury bills applied for, unless the tenders are
accompanied by an express guaranty of payment by an incorporated bank
or trust company.

F-161

-

2 -

Immediately after the closing hour, tenders will be opened at the
Federal Reserve Banks and Branches, following which public announcement will be made by the Treasury Department of the amount and price
range of accepted. bids. Those submitting tenders will be advised
of the acceptance or rejection thereof. The Secretary of the TreBsury
expressly reserves the right to accept or reject any or all tenders,
in whole or in part, and his action in any such respect shall be
final. Subject to these reservations, noncompetitive tenders for
each issue for $200,000 or less without stated price from Bny one
bidder will be accepted in full at the average price (in three
decimals) of accepted competitive bids for the respective issues.
Settlement for accepted tenders in accordance with the bids must be
made or completed at the Federal Reserve Bank on August 19, 1965,
cash or other irmnediately available funds or in a like face amount
of Treasury bills maturing August 19, 1965.Cash and exchange tenders
will receive equal treatment. Cash adjustments will be made for
differences between the par value of maturing bills accepted in
exchange and the issue price of the new bills.
The income derived from Treasury bills; whether interest or
gain from the sale or other disposition of the bills, does not have
any exemption, as such, and lOBS from the sale or other disposition
of Treasury bills does not have any special treatment, as such,
under the Internal Revenue Code of 1954. The bills are subject to
estate, inheritance, gift or other excise taxes, whether Federal or
State, but are exempt from all taxation now or hereafter imposed on
the principal or interest thereof by any state, or any of the
possessions of the United States, or by any local taxing authority.
For purposes of taxation the amount of discount at which Treasury
bills are originally sold by the United States is considered to be
interest. Under Sections 454 (b) and 1221 (5) of the Internal
Revenue Code of 1954 the amount of discount at which bills issued
hereunder are sold is not considered to accrue until such bills are
sold, redeemed or otherwise disposed of, and such bills are excluded
from consideration as capital assets. Accordingly, the owner of
Treasury bills (other than life insurance companies) issued hereunder
need include in his income tax return only the difference between
the price paid for such bills, whether on original issue or on
subsequent purchase, and the amount actually received either upon
sale or redemption at maturity during the taxable year for which the
return is made, as ordinary gain or loss.
Treasury Department Circular No. 418 (current revision) and this
notice prescribe the terms of the Treasury bills and govern the
conditions of their issue. Copies of the circular may be obtained from
any Federal Reserve Bank or Branch.
000

JQ
__

_1

TREASURY DEPARTMENT

FOR TIMMEDIATE RELEASE

STATEMENT BY TREASURY SECRETARY HENRY H. FOWLER
ON REORGANIZATION OF TREASURY LAW ENFORCEMENT,
AND APPOINTMENT OF DAVID C. ACHESON
In connection with the establishment in the Treasury of
the new office of Special Assistant to the Secretary (for
Enforcement), and the appointment of David C. Acheson to
fill the new post, announced today by the White House,
Treasury Secretary Henry H. Fowler said:
"I have
enforcement,
Treasury law
war on crime

reorganized the supervision of Treasury law
and named Mr. Acheson to direct or coordinate all
enforcement activities as part of the President's
in the United States.

"Full and active Treasury participation in the President's
program to abate crime at all levels is of particular importance
because the Treasury has the most extensive law enforcement
establishment in the Federal government.
"Like the President, I view the prevention and reduction of
crime as one of our most important national tasks. It is clear,
as the President has indicated, that this involves a throughgoing
attack on crime in all its aspects, including the coordination
of enforcement activities, study of the causes of crime as one
of the most important ways of preventing crime, study of ways
to rehabilitate those who have set their foot on the pathways
of crime, better understanding of how to punish crime, and
assistance by Federal agencies to state and local law enforcement.
"As the first occupant of the new office of Special
Assistant to the Secretary (for Enforcement), Mr. Acheson will
be charged with seeing to it that the Treasury does everything
within its powers to cooperate with the President's Commission
on Law Enforcement and the Administration of Justice, in the
discharge of its great tasks. It is likewise his task to
ensure that the Treasury does all that it can, within its own

F-l6~

- 2 means, to reduce and prevent crime, and to cooperate with
other law enforcement agencies, including state and local law
enforcement."
The Treasury Secretary gave the following list of the
principal duties of the new Office of Special Assistant to the
Secretary (for Enforcement):
The new Special Assistant to the Secretary shall have
direct supervision over the follo~ing:
United States Secret Service;
Bureau of Narcotics;
Office of Law Enforcement Coordination (including the
Treasury Enforcement School).
He will also:
Serve as principal advisor to the Secretary on all law
enforcement matters;
Inform the Secretary fully of all significant developments
relating to Presidential protection;
Coordinate all enforcement activities of the Treasury and
provide policy and technical guidance to the Bureau
of Customs, United States Coast Guard, and Internal
Revenue Service enforcement activities as required
to assure optimum benefits from joint and cooperative
utilization of law enforcement resources;
Appraise Treasury enforcement agencies with respect to
merit of programs and the overall efficiency,
effectiveness and integrity of personnel and activities;
Formulate basic law enforcement policy, program, organizational and procedural proposals to effectively and
efficiently carry out the Department's national and
international law enforcement responsibilities; and
Strengthen relationships with Federal, state, and local
enforcement agencies.
000

- 4reorgru~ization

Tne

of the structure of the Customs Bureau will be

ticcompanied by introduction over the next two years of automatic data
har.dlin s and other measures to gear customs services to the rapidly ex)~~ding

business of the Bureau brought about by the growth of travel and of

trade.

The Customs Bureau

-~-'. ~

/

\.\

ti~e

"

\his fiscal

year/~

ex~ebs-~

/

COllec}o:er $2 billion for the first

\,

The speed with which demands upon the Bureau are

/

increasing is indicated by the fact that customs collections first reached
$1 billion in 1957.
The Customs Bureau has 9,300 employees throughout the United States

,)

pri~arily

at border and seaport points.

- 3 i~ "rI,.i,~... l':""(,

t'/'''(4

. ..-._..._"' .... _ . ._"

,

The Treasury Progress Report describes st~p~taken to increase the

-efficiency, convenience

~~d econo~

of customs services, in line with

recommendations made by a Treasury Survey Group.
'-

on

I)

./. ')

" /. ,c'/
'\.

Action has been taken

•

,-

85 of some 7fJ recommendations. The new arrangements will expedite

the entry and clearance of vessels and of imported merchandise, simpl11)r
the clearance of persons and their effects, reduce backlogs and eliminate

delays.
Under the Reorganization Plan, the
by

53

Customs oftices

Presidential appointments are to be abolished.

former~

filled

Holders of fuese offices

will be afforded an opportunity for employment in the Customs Service for
which they can qualify under the Civil Service laws.

The regional organization of the Customs Bureau Will consolidate the
present

u2

25

rnajor collection districts, 22 smaller collection districts,

appraisement districts and 9 ~aboratory districts, all of which have

reported separ~tely to ~·:ashington.

This organization grew up piecemeal

over the span of the nation IS history, with services and districts added
2S

the nation and its intern8tional bUSiness grew.

?
....

::;c~tectiun

. nnouncerilent of tne

of

Z'.

of reeional headquarters sites was part

progress report issued today by the Treasury on lllOdernization of the

CustOlllli

':~ervice.

Ur(1anization of tile Customs Bureau into nine regions is
CJ

i:.;.le 111O::;t extensive chnne;e in the 176-year-old history of the Bureau.

It

folloH's up ~leorganization Plan No. 1 of 1965, l-mich became effective

The
i~ustoms

'l'he

han authorh;ed the

':jervice upon
reGion<:~l

President to place the fast growing

c,C!.reer basis.

,q

headquarters "Jill come into being at different times
The new structure will be initiated with the eetab.

over the next 12 roonths.

lishment ofiegion 1111 headquarters at San Francisco in lJovember.

, (. l - - . J u J I / k

asf!i~'!t: ;/..,0/ /

vII'tLos ''l'~:' 1 ,/U111 fo 110\01 , in January; Region IV~ at Hiami

· ,.~ V

"'

<:.;./

Region

and

Region VJ

..~,~{/

IJew Orleans in February 1966; itegion rx:'i.Ch1cagO,~.arch; Region nI,t,Baltlw

,

I t.J'
", ~,(
,(if/' \ N '"
more, April; 2ecion II, douston and Region Ii).13oston~ 11ay; and Region il,
~
f
I'
~
\. t...' I (f C'n'wr ,r ,,;7
lx.! 1
ri
i~ew York City" June, 1966.
I>

0 '

/

/

I

r

II

d

CHANGES IN THE CUSTOMS BUREAU
Assistant Secretary of the Treasury James A. Reed announced today
that Baltimore, Houston, and Los Angeles have been added to the cities
scheduled to become regional Customs headquarters.
It had previously been announced that new regional Customs
headquarters would be established in the near future at Boston, Chicago,
~uami,

Fla., New Orleans, New York and San Francisco.

liThe choice of headquarters sites has been made with painstaking care, It
Assistant Secretary Reed said.

"The sites were chosen with the objective of

providing the public with good service on an efficient basis.

We have been

guided in our choices by considerations of public convenience, economy and
efficiency.

II

TREASURY DEPARTMENT

August
ADVANCE FOR RELEASE AT 12 NOON, EDT.
THURSDAY, AUGUST 12, 1965
CHANGES IN THE CUSTOMS BUREAU
Assistant Secretary of the Treasury James A. Reed announced
tod~y that Baltimore, Houston, and Los Angeles have been added
to the cities scheduled to become regional Customs headquarters.
It had previously been announced that new regional Customs
headquarters would be established in the near future at Boston,
Chicago, Miami, Florida, New Orleans, New York and San Francisco.
"The choice of headquarters sites has been made with
painstaking care," Assistant Secretary Reed said. "The sites
were chosen with the objective of providing the public with
good service on an efficient basis. We have been guided in
our choices by considerations of public convenience, economy
and effic iency."
Announcement of the selection of regional headquarters
sites was part of a progress report issued today by the
Treasury on modernization of the Customs Service. Organization
of the Customs Bureau into nine regions is the most extensive
change in the l76-year-old history of the Bureau. It follows
up Reorganization Plan No. 1 of 1965, which became effective
May 25. The plan authorized the President to place the fast
growing Customs Service upon a career basis.
The regional headquarters will come into being at different
times over the next 12 months. The new structure will be
initiated with the establishment of Region VIII headquarters
at San Francisco in November. Region VII, at Los Angeles,
will follaw, in January; Region IV, will be established at
Miami and Region V at New Orleans in February 1966; Region IX,
at Chicago, in March; Region III, at Baltimore, in April;
Region VI, at Houston and Region I, at Boston, in May; and
Region II, at New York City, will come into being in June, 1966.

F-163

- 2 The Treasury Progress Report describes steps that have been
taken to increase the efficiency, convenience and economy of
customs services, in line with recommendations made by a Treasury
Survey Group. Action has been taken on 85 of some 230 recommendations,
The new arrangements will expedite the entry and clearance of
vessels and of imported merchandise, simplify the clearance of
persons and their effects, reduce backlogs and eliminate delays.
Under the Reorganization Plan, the 53 Customs offices formerly
tilled by Presidential appointments are to be abolished. Holders
of these offices will be afforded an opportunity for employment
in the Customs Service for which they can qualify under the Civil
Service laws.
The regional organization of the Customs Bureau will consolidate
the present 25 major collection districts, 22 smaller collection
districts, 42 appraisement districts and 9 laboratory districts,
all of which have reported separately to Washington. This organization grew up piecemeal over the span of the nation's history,
with services and districts added as the nation and its international business grew.
The reorganization of the structure of the Customs Bureau
\vill be accompanied by introduction over the next two years of
automatic data handling and other measures to gear customs services
to the rapidly expanding business of the Bureau brought about
by the growth of travel and of trade.
The Customs Bureau collected
over $2 billion for the first time in fiscal year 1965. The
speed with which demands upon the Bureau are increasing is indicated
by the fact that customs collections first reached $1 billion
in 1957.
The Customs Bureau has 9,300 employees throughout the United
States, primarily at border and seaport points.
000

Customs Regional and District Headquarters
LocRtions together with Ports of Entry Included Therein
Est~lished

by Treasury Department Order No. 165-17
dated August 10, 1965

egion and
eadquarters

I - Boston, Mass.

District and

Ports of Entry

Headqu~ters

Portland, Me.

Portland, Maine
Bangor, Maine
Bar Harbor, Maine
Bath, Maine
Belfast, Maine
Bridgewater, Maine
Calais, Maine
Eastport, Maine
Fort Fairfield, Maine
Fort Kent, Maine
Jackman, Maine
Houlton, Maine
Jonesport, Maine
Limestone, Maine
Madawaska, Maine
Fbrtsmouth, N. H.
Rockland, Maine
Van Buren, Maine
Vanceboro, Maine

St. Albans, Vt.

St. Albans, Vermont
Alburg, Vermont
Beecher Falls, Vermont
Burlington, Vermont
Derby Line, Vermont
Highgate Spring, Vermont
Island Pond, Vermont
Newport, Vermont
North Troy, Vermont
Richford, Vermont

Boston, Mass.

Boston, Massachusetts
Fall River, Massachusetts
Gloucester, MAssachusetts
Lawrence, Massachusetts
New Bedord, Massachusetts
Plymouth, Massachusetts
Salem, Massachusetts
Springfield, Massachusetts
Worcester, Massachusetts

Providence, R. I.

Providence, Rhode Island
Newport, Rhode lsI and

2

Region and
He adquarters

District and
Headquarters

Ports of Entry

Bridgeport, Conn.

Bridgeport, Connecticut
Hartford, Connecticut
New Haven, Connecticut
New London, Connecticut

Ogdensburg, N. Y.

Ogdensburg, New York
Alenandria Bay, New York
Cape Vincent, New York
Champlain, New York
Chateaugay, New York
Clayton, New York
Fort Covington, New York
Massena, New York
Mooers, New York
Morristown, New York
Rouses POint, New York
Trout River, New York
Waddington, New York

Buffalo, N. Y.

Buffalo, New York
Niagara Falls, New York
Rochester, New York
Oswego, New York
Sodus Point, New York
Syracuse, New York
Uticc:1, New York

II - New York City

New York City, N. Y.

New York, New York
Albany, New York
Perth Amboy, New Jersey

III - Baltimore,

Philadelphi~,

Fhiladelphia, Pennsylvania
Chester, Pennsylvania
Erie, Pennsylvania
Pittsburgh, Pennsylvpni8
Wilmington, Delaware

Maryland

Pa.

Baltimore, Md.

Baltimore, Maryland
Annapolis, Maryland
Cambridge, Maryland
Crisfield, ~ryland
Washington, D. C.

Norfolk, Va.

Norfolk and Newport News, Virginia
Alexandria, Virginia
Cape Charles City, Virgini~
Petersburg, Virgini~
Reedville, Virginia
Richmond, Virginia

3

gion and
adquart ers

District and
Headquarters

IV - Miami, Fla.

Wilmington, N. C.

Wilmington, North Carolina
Beaufort-Morehead City, North Carolina
Charlotte, North Carolina
Durham, North Carolina
Elizabeth City, North Carolina
Elkin, North Carolina
Reidsville, North Carolina.
Winston-Salem, North Carolina

Charleston, S. C.

Charleston, South Carolina
Georgetown, South Carolina

Savannah, Ga.

Savannah, Georgia
Atlant8., Georgia
Brunswick, Georgia

Tampa, Fla.

Tampa., Florida
Bocagrande, Florida
Fernandia Beach, Florida
Jacksonville, Florida
Port CanaverRl, Florida
St. Augustine, Florida
St. Petersburg, Florida

Miami, Fl a •

Miami, Florida

San Juan, P. R.

San Juan, Puerto Rico
Aguadilla, Puerto Rico
Faj ardo, Puerto Rico
Ouanica, Puerto Rico
Humacao, Puerto Rico
Jobos, Puerto Rico
M~aguez, Puerto Rico
Ponce, Puerto Rico

Ch~.rlotte

<l1arlotte Amalie
Cruz Bay
Coral Bay
Christiansted
Frederiksted

st.

Amalie,
Thomas, V. I.

Ports of Entry

Key West, Florida
Port Everglades, Florida
West Palm Beach, Florida

4

Region and
Headquarters

District and
Headquarters

v-

Mobile, Ala.

Mobile, Alabama
Apalachicola, Florida
Birmingham, Alabama
Carrabelle, Florida
Gulfport, Mississippi
Panama City, Florida
Pascagoula, Mississippi
Pensacola, Florida
Port St. Joe, Florida

New Orleans, La •

New Orleans, Louisiana
Baton Rouge, Louisiana
Chattanooga, Tennessee
Greenville, Mississippi

New Orleans, La.

Ports of Entry

Memphis,

TenneBs~e

Morgan City, Louis iana
Nashville, Tennessee

VI - Houston, Texas

Port Arthur, Texas

Port Arthur, Texas
Beaumont, Texas
Lake Charles, Louisiana
Orange, Texas
Sabine, Texas

Galveston, Texas

Galveston, Texas
Corpus Christi, Texas
Freeport, Texas
Port Lavaca, Texas

Houston, Texas

Houston, Texas
Iallas, Texas
Fort Worth, Texas

Laredo, Texas

laredo, Texas
Brownsville, Texas
Del Rio, Texas
Eagle Pas s, Texas
Hidalgo, Texas
Rio Grande City, Texas
Roma, Texas
San Antonio, Texas

El Pas 0 , Texas

El Paso, Texas
Columbus, Ne~ Mexico
Denver, Colorado
Fabens, Texas
Presidio, Texas

5

Lon Blld
1quarters

District and
Headquarters

II - IDs Angeles,
Calif.

Nogales, Arizona

Nogales, Arizona
Douglc?s, Arizona
Lukeville, Arizona
Naco, Arizona
San Luis, Arizona
Sasable, Arizona

San Diego, Calif.

San Diego, California
Andrade, California
Calexico, California
Tecate, California

ws

Los Angeles, California
Port San Luis, California.

III - San Francisco

Angeles, Calif.

San Francisco, Calif.

Ports of Entry

San Francisco-Oakland, California

Eureka, California

Calif.

Honolulu, Hawaii

Honolulu, Hroiaii
Hilo, Hawaii
Kahului, Hawaii
Nawiliaili-Port Allen, Hawaii

Portland, Oregon

Portland, Oregon
Astoria, Oregon
Coos BBY, Oregon
wngview, Washington
Newport, Oregon

Seattle, Washington

Se at tIe, Washington
Aberdeen, Washington
Anacortes , Washington
Bellingham, Washington
Blaine, Washington
Danville, Washington
Everett, Washington
Ferry, Washington
Friday H2rbor, Washington
Laurier, Washington
Lfnden, Washington
Met aline Falls, Washington
Neah Bay, Washington
Nighthawk, Washington
Northport, Washington
Olympia, Washington

6

Region end
He a.dquarters

District and

Headquarters

Ports of Entry

Oroville, Washington
Port Angeles, Washington
Port Townsend, Washington
South Bend-R~nd, Washington
Spokane, Washington
Sumas, Washington
Tacoma, Washington
Juneau, Alaska

Juneau, Alaska
Anchor2ge, AlaBka
Fairb cmks, Alaska
Ketchikan, Alaska
Kodiak, Alaska
Pelican, Alaska
Petersburg, Alask~
Sand Point, Alaska
Si tka, AIRska
Skagway, Alaska
Wrangell, Alaska

Great Falls, Montana

Great Falls, MOntana
Del BOnita, MDntana
Eastport, Idaho
Morgan, Montana.
0pleim, Montana
PiegAA, Montana
Porthill, Idaho
Raymond, Montana
Rooseville. Montana
Scobey, Montana
Sweetgrass. Montana

Turner, }t)ntana
\Vbitetail, Montana
Whi tlash. }kmtana
IX - Chicago,

Cbicago. Illinois

Chicago, Illinois
Ona.ha, Nebras ka.
Peoria, Illinois

Pembina, North Lakota

Pembina, North Dakota
North Dakota
Antler, North Dakota
Baudette. Minnesota
Carbury, North Dakota
DullSeith, North Dakota
Fortuna., North Dakota
HaJ.mah, North Dakota
Hansboro, North Dakota
Maida, North Dakota
Neche, North Dakota
Noonan, North Dakota
Northgat~, North Dakota

Illinois

~brose,

7

Region and
~eadquarters

District and
Headquarters

Ports of Entry
Noyes, Minnesota
Pinecreek, Minnesota
Portal, North Dakota
Roseau, Minnesota
Sarles, North Dakota
Sherwood, North Dakota
St. John, NOrth Dakota
Walhalla, North Dakota
Warroad, Minnesota
Westhope, North Dakota

Minneapolis, Minn.

Minneapolis, Minnesota
St. Paul, Minnesot8

Duluth, Minn.

Duluth, Minnesot8 and Superior, Wis.
Ashland, Wisconsin
Grand Portage, Minnesota
International Falls-Ranier, Minn.

Milwaukee, Wisconsin

Milwaukee, Wisconsin
Green Bay, Wisconsin
Manitowoc, Wisconsin
Marinette, Wisconsin
Racine, Wisconsin
Sheboygan, Wisconsin

Cleveland, Ohio

Cleveland, Ohio
Akron, Ohio
Asht abula, Ohio
Cincinnati, Ohio
Colunt>us, Ohio
Conneaut, Ohio
Dayton, Ohio
Evansville, Indiana
Indianapolis, Indiana
Lawrenceburg, Indiana
Icuisville, Kentucky
Sandusky, Ohio
Toledo, Qlio

8

Region and
Headquarters

District Blld
Headquarters

Ports of Entry

St. Louis, Missouri

St. wuis, Missouri
Kansas City, Missouri
St. Joseph, Missouri

Detroit, Michigan

Detroit, Michig;m
Muskegon, Michig an
Port Huron, Michigan
SaginRw-Bay City, Michigan
Sault Ste. Marie, Michigan
South Haven, Michigan

Status Report on Recommendations
Relating to
Management and Operations
o:f

Bureau

the

o:f

Customs

STATUS REPORT OF RECOMMENDATIONS

I.
II.
III.
IV.

Recor.unendations which have been implemented
Reconunendations which have been
implemented

parti<'~lly

Reconunendations which have been rejected
Recommendations under consideration

1
RECOMMENDATIONS WHICH HAVE BEEN IMPLEMENTED

1.

2.

3.

4.

Recommendation

Reorganize Bureau headquarters along functional
lines to provide better functional supervision of
all major field programs.

Action Taken:

Implementing memorandum forwarded to Secretary on August 26, 1964, and approved September
18. 1964.

Recommendation

Establish four major offices in the headquarters.
These are Offices of Assistant Commissioner for:
(1) Enforcement; (2) Administration; (3) Technical;
and. (4) Operations.

Action Taken:

Title of offices changed as follows: "Investigations"
instead of Enforcement; "Regulations and Rulings"
instead of Technical.

Recommendation

Redefine responsibilities of the Office of the
Chief Counsel to clarify certain divided responsibility on legislation, court decisions, and judicial
liaison.

Action Taken:

Implementation memorandum forwarded to Secretary on August 26, 1964. and approved September
21, 1964. Bureau instructions issued in Office
Memorandum MAN-6-cc. 9/21/64.

Recommendation

Assign to the Office of Assistant Commissioner
(Enforcement) functions now assigned to the
present Division of Investigations and Enforcement. except personnel security activities.

Action Taken:

Implementation memorandum forwarded to Secretary on August 26, 1964, and approved September
18, 1964. Name of office changed to "Investigations" and title of head retained a8 "Deputy" for
present.

Recom mendation

Assign to the Office of A6sistant Commissioner
(Admini6tration) functions now assigned to the present
Division of Management and Controls.

Action Taken:

Implementation memorandum forwarded to Secretary
on August 26, 1964, and approved September 18, 1964.
Title of head changed to "Deputy" for present.

Recommendation

Transfer operating functions to the proposed Office
of Assistant Commissioner (Operations). (Relates t.o
the traMfer of operating functions Crom the former
Division of Management and Controls to the new Office
of Operations).

Action Taken:

Implementation memorandum forwarded to Secretary
on August 26, 1964, and approved September 18, 1964.
Title of position changed to "Deputy" for present.

Recommendation

Rearrange functions of the Office of Assistant Commissioner (Administration) to provide four divisions.
These are: (1) Personnel Management; (2) Fiscal
Management~ (3) Management Analysis; and, (4)
Administrative Services.

Action Taken:

Implementation memorandum forwarded to Secretary
on August 26, 1964, and approved September 18,
1964. It provides for five sections, as follows:
Budget and Management Analysis; Fiscal Management; Admillitltrative ServIces; Personnel Management; and Audits.

Recommendation

Assign to the Office of Assistant Commissioner
(Technical) functions now assigned to the divisions
of (1) Classification and Drawbacks; (2) Entry,
Value, and Penaltiesj and, (3) Marine Administration.

Action Taken:

Implementation memorandum forwarded to Secretary
on August 26, 1964, and approved September 18,
1964.
Name of office changed to Regulations and
Rulings.

Recom mendation4

T ransier operatint; functions to the proposed Office
of Assistant Commissioner (Operations). (Relates
to the transfer of operating functions from the
divisions of Classification and Drawbacks; Entry t
Value and Penalties; and Marine Administration to
the DeW Office of OperaUou.)

3

Action Taken:

Implementation memorandum forwarded to Secretary on August 26, 1964, and approved September
18, 1964.

10.

u.

12.

Recommendation

•

Assign to the new Office of Assistant Commissioner (Operations) functional supervision of all
field operations and all operating functions now
performed in present divisions except investigations and Enforcement.

Action Taken:

Implementalion memorandum forwarded to Secretary on August 26, 1964, and approved September
18, 1964.
Title of position changed to "Deputy
Commissioner" for present.

Recommendation

Additional personnel should be assigned to the
audit staff 89 that it can adequately perform
the functions transferred from the Agency
Service.

Action Taken:

Implemented by letter to comptrollers. file
PEe 161.1 R, dated July 8, 1964.

Recommendation

Operational functions now performed in tile
Division of Management and Controls (such
as conducting field inspections and supervising
export control activities) should be transferred
to the proposed Office of Assistant Commissioner
(Operations) and a Management Analysis Division
should be established in the proposed Office of
Assistant Commissioner (Administration) to deal
with forms and reports management and to provide an effective management analysis program
for all Customs activities. including appraisers'
offices, laboratories, and the Customs Agency

Service.
Action Taken;

Implemented by recomznended transfers and by
establishing recOIIIIDeDd.ed divis1ons.

4
13.

14..

Recommendation

The Quota Unit should be in the proposed Office
of the Assistant Commissioner (Operations) as
proposed in Section IV.

Action Taken:

Implementing memorandum forwarded to Secretary on August 26, 1964, and approved September
18. 1964. Title of head of office changed to
"Deputy Commissioner" for present.

Recommendation

In order to reduce tile backlog of unappraised

entries, administrative instructions should be
issued to appraise all such entries made prior
to August 31, 1963. on the basis of best
available information, except entries withheld
pending court decision and entries withheld
under the provisions of the Antidumping Act.

Action Taken:

15.

Recommendation

Implemented September 14, 1964.

Public information efforts should be strengthened

as follows: a. Place greater emphasis on informing
the public of the entire program and the requirements of Customs. h. Create enthusiasm for
good public relations among the rank and file
employees through suoh techniques as a monthly publication, training programs, and employee confer-

ences.
Action Taken:

16. Recommendation

Action Taken:

Implemented by

~ollowing

tbe re-clJIIIDendations.

A jOint study should be made by the
Burea.us of Budget, Census, and Customs
to determine if statistical verification can be satisfactorily accomplished
by a system of selective sampling.
The study by the joint sub-committee has
been co~leted. It was found that while
statistical verification cannot be
effectively accomplished at this time
by a system of selective sampling there
are ~everal ways present procedures can
be improved. These changes are undervay
and v1l.l be 11IIplemented 'by J~ l, 196,.

...,
'

17. Recommendation

Action Taken:

lB. Recommendation
Action Taken:

19. Recommendation
Action Taken:

..

Assi~n

rC's;:>onsibility for direct supervision of
the CllS~()Il1S Information Exchange (New York City)
to the A~sist.ant Commissioner (Operations).

Implementation memorandum forwarded to Secretary on August 26 t 1964, and approved September
18, 1964.
Appointment of a coordinating committee for
implementation of recommendations;
Committee established by Commissioner on
July 24, 1964.
Deferment of filling vacancies of positions to be
affected by the reorganization;
Implemented by internal controls.

20.Recommendation

Qualification standards should be applied uniformly in both competitive and non-competitive
actions.

Action Taken:

Implemented by Bureau circular on March 26,
1964 t which removed the waiver of the Federal
Service Entrance Examination.

21.. Recommendation

Areas of competition for reassignment or promotion should encompass all employees in a
geographic area, such as the proposed regions,
or all employees in the Customs Service,
depending upon the grade and organizational
level of tile position involved.

Action Taken;

Reassignments and promotions to key positions
are now filled by servicewide recruitment.
This procedure has becn partially in effect
since 1960 but by Bureau circular of May 25,
1964, it was further changed by increasing the
number of positions oovered and by redefining
Bureau policy in lUUng such vacancies.

s
22.

..

Recommendation

The Bureau should make a comprehensive
inv('nto I)' of training needs to determine
priori!:: requirements, and develop specific
plans for meeting those requirements on a
time-phased basis.

Action Taken:

Was implemented as a prOVISlon of the charter

of the Training and Career Development Council
which was established by Bureau Memorandum
of November 30, 1964. Members of this
Council have been apPOinted and the recommended inventory of training needs is being
given priority attention.

23.

Recommendation

An advisory high-level Employee Development
Council should be established to assist the
Commissioner of Customs, his Personnel
Officer and the Employee Development Officer
in planning and carrying out a BureaU-Wide
career development program and executive
development program.

Action Taken:

Was implemented by Bureau memorandum of
November 30, 1964, which established a

Training and Career Development Council.

24.

25.

Recommendation

The Bureau should devote more attention to
the training implications of long and short
range plans affecting its organization, procedures, and staffing (including plans for the
application of ADP).

Action Taken:

Was implemented by incorporating in the charte~
of the Training and Career Development Council
the responsibility for advising on the best means
for determining and defining the total training
needs of the Customs Service.

Recommendation

Efforts should be continued to obtain additional
staffing for the mail divisions.

Action Taken:

Implemented in

l.966

budget.

,

,..
6.

'7~

Recommendation

As a part of tl1e total reorganization of the Customs
Service. action should be taken to: d. Streamline
and reorganize the headquarters Personnel Section
by: (3) Consolidating the total incentive awards program
under the Personnel Section;

Action Taken:

Implemented by memorandum from Deputy Commissioner, Division of Management and Controls to
Commissioner of Customs.

Recommendation

The Bureau should move faster with feasibility studies

and acquisition of automatic data processing equipment$
Action Taken:

8A. Recommendation

Action Take n:

9., Recommendation

Implemented.
Responsibility for development and installation of
automatic data processing should be placed under the
Fiscal Management Officer.
Implemented.
Computer systems analysts and staff should be employed to install automated systems and train employees
in the use of the systems. This would be a continuing

staff for mn.1ntenanoe and improvement of the a.utomatio
data processing system, including studies extending its
use to other activities to insure maximum benefits and
use from the installation.

l.

••

Action Taken:

Implemented.

Recommendation

Increase the present $20,000 limitation on the
Commissioner's authority to remit or mitigate
penalties to $100,000.

Action Taken:

Implemented, see T. D. 56276.

Recommendation

Require the Assistant Secretary or other official
designated by the Secretary of the Treasury to
sign cases which ~ontinue to be referred for
~"viAW to the

Office of the Secretary.

8

2.

13.

~.

Action Taken:

Implemented, see T. D. 56276.

Recommendation

Permit collectors of customs to deLegate to
deputy collectors of customs in charge of subports as much of tile authority as they now
h<\ve, or a lesser amount as they see fit, in
the case of fines, penalties, and forfeitures
as set forth in Section 23.25 of the Customs
Regulations.

Action Taken:

Implemented.

Recommendation

Autllorize collectors of customs to mitigate or
remit any liquidated damages that do not aggregate over $20.000 in anyone case. when the
collector is satisfied that such liquidated
damagcls occurred in circumstances justifying
mitigation or remission.

Action Taken:

Implemented, see T. D. 56202 and CR 23.25.

Recommendation

ApPOintment or a selection co~ttee to
recommend employees for key positions.

Action Taken:

Implemented by Bureau Circular PER-12-PER,
April 9, 1965, which established an Executive
Evaluation Board composed of Customs and
Treasury officials to be responsible for
evaluaticu v£ applicants for customs positions in grade GS-14 and higher and to make
recommendations for those considered best
qualified.

5. Recommendation
Action Taken:

6. Recommendation

Action Taken:

Recrui tment and training of management interns
for field administrative jobs.
Implemented by Bureau Circular PER-3-PED,
dated June 4, 1965
Propose that the Department of Commerce and/or
the United States Tariff Commission undertake
a study to determine the effect of drawback
on American businesses engaged in foreign trada,
vith a viev toward proposing new legislation
\lhich might be more effective and less costly'
to administer.
Implemented b~ Treasury action.

Q
v

~7.

Recommendation

In order to reduce the backlog of unliquidated

entries. all Wlliquidated entries for which there
is no change in the amount of duty due as a
result of the appraiser's and inspector's reports
should be considered liquidated "as entered"
without going through the full process of liquidation.

38.

Action Taken:

Was implemented by Bureau Circular LIQ-I-CO
of November 27. 1964. which directed that all
formal consumption entries which were ready
for tentative liquidation with no change in value,
classification, or quantity were to be liquidated
as ente red without formal processing except for
a random and judgment sampling totaling 5 percent of the backlog. As a result. it is anticipated
that the backlog will be eliminated during the
current quarter. In order to prevent a
reoccurrence, probably necessitating a similar drastic solution, a study of the whole
problem has been made by a select group of
Bureau and field officers with entry. appraisement. and liquidation backgrounds. The
rocommendations of this group will soon be
tested at several ports and if found to be as
practical as is now believed will enable
Customs to liquidate entries on a current basis
for the first time in approximately 10 years.

Recommendation

The Bureau of Customs should continue to work
closely with the Customs Section of the Office of
the Assistant Attorney General to provide for
vigorous prosecution and speedy disposition of
cabes peneling before tile Customs Court.

Action Taken:

Implemented by continuing such lia.ison.

39. Recommendation

Action Taken:

Reorganize the Division of Investigations and
Enforcement

Implemented.

,)
1 ..
40.

u.
U2.

Jul

Reco.e')dation

A polieT on participation in prolesaional societies
and attendance at proteaa1onal . .lings should be
formulated to encourage per :lonnel to keep abreast
of scientific dev.lo~.

Action Taken:

Impl_nted bT. Bureau lett.er of Janu8.17 26, 1965,
.t11a TS 180.71th V to each Chief Chemist.

Reco.-ndatlon

Datarm1nation ot legislative requirelr8nte, i f
for reorganization.

Action Taken I

IJapl.eDllnted by- eub!ld.ssion of Reorganisation Plan
No. 1 of 1965 to the Conereas.

Re~ndation

Eatabllab regional offices with beadquarters at
cities vtdch are convenient .from the standpoint. of
Cuato. adadn:1stration.

Action TakIm I

Tre8SUl7 Order prepared by Chief Counsel establlah1ng niDa J"elional offices with headquarters at Boston,
New York, Balt:1aore, New Orleans, San Franciaco,
Chicago, IDs Anples, Miami and Howrton.

ReCO'DPndation

SpecUle aaa1gmMnt of responsibility tor 1Japle_ntation to appropriate Bureau of'ticial.a atter reorganization o£ the Bureau headquarters.

Action Taken:

Co9d.s81onar

ot

~.

CustOJIIS Memoranduma and Custo.

Delegation Order No. 21, Septeai>er

25. 1964.

Breadth of experience shoul.d be eD4ilasized and be
Jade a pr1D8 consideration for entrance into ke7
positions in the field and in tbe headquarters.

16.

4, 1965.

Actlon Taken:

Bureau Circular PER-3-PED, dated June

ReCO'lMDdation

Action mould b. takan to clarl1'y and strengthen the
role ot the Elplo7M Development Officer, 1.8aue DID"
cODp"8bena1ve policy and guidance concerning train1n£ responsibilities, and provide adequate statfing
and budCetar.r support tor the tra1 n' 1\1 .t'uJ1ct1on.

Actlcm Taken:

Bureau HeIIiorandum, Novuber 30, 1964.

J,6.

'lhe req~ in section

11.3 ot

the Custoa
to 1n1tial

Manua] tor reporting shipments subsequent
01188 should be liberalized to the 'UXiI!llDl

ent.ent

pouj))le conadst.ent with the principle at un1foraity.

Action Taken:

Subst.ntially illplemented by Bureau MaJaoranduJll,
Sept ....r 17. 1964.

11
RF..COMMENDI\TIONS WHICH HAVE BEEN PARTIALLY IMPIEMENTED
1. ReeODlll8lldation

A

_ana or

overt.

IID1"8 c108817 cont.rollJ.ni compUance with
Bureau pol1q on
ahould be installed to
1n8ure I (1) all DOD-reiJlburaable tours ot duty that
are not vital are eli.Dated, (2) adequate toure ot

cbltyr are prov1~d 1D lJ.eu

ot reiDbursable &S!lignmenta where tb1a 18 justU1edJ and, (3) the extent
ot
worked b7 &IV' emplo78e does not 11IIpa.1r

overt_

clur1Dc the regular

tour ot cblty. This
can be done b7 ~.d reporting to the Bureau,
liv1.Dc ~ re8p-.1bUlt7 to field suditors I and
by us 1
tuaet10D&l supervision
inapect10Dal

h18 e.ttici8nq

""'ng

or

acUvit.1es to operations div1a1.ODB at regionAl ottieee.
Act.ion T.an 2

W... 1apa-nt.ed by Buruu Circular of October lS, 196h,
1IIb1ch cl.arlt1ed and rev1aed the Bureau' a pol1cl.ea and
objectlv.. in the -icmwnt or personnel to inapect·loau 8ct1ntia I includSng thon pertors.d while
in an onrtt. statu. 'lb1a circular also :.>rovided
1'1eld oU1.cere With added authority and re8p0D81b111t.y
tor edm1rdatratiOl1 of sudl Bureau poliC)".

2. Reco!!!ndat1on
Action I.alcen:

Eftect a major reorgam..atioQ of the Bureau headquarters amd field. HrVice.
ImplemelrtAd by' Secretary' 8 memorandum of SepteDber

18, 1964, aDd 1'reasur7 Order No. 165 - prepared by
the (hie!' Counsel.

3. Reon. ndation

Establ1ab two maJor divisions in the Office of
Operati0Jl81 (l) Dlv1a1oD8 ot Qltr;y and Appra.1seD8nt;
and, (2) llI.:r1ejQDII of Inspection and Control.
Partial hpl-m,at1on memorandum approved
bY' Secretary on Septallber 18,~. On an 1nt.erim
basis it eatabl.1ahee a 6~at ctltterent organizat1cmal. a' 1 p-nt from that vbtch vas reCOllWlded.
The procedure Wlder vb1cb iR1baequent s t . rill be
takan is UDd.. acU:va study. W:lat.aver Pl"Oced».re 18
put into ett.ct vil1 be &iTeA an 1.n1t1al field trial.

12

Recommendation

The BurC:-lL< hcadCiuarters should provide stronger
leadersh.p, direct.ion, coordination, and evaluation
of training programs in the field and inc reased staif
assistance to field officials in carrying out their basic
responsibilities for employee development.

Action Taken:

Was implemented in a number of ways. The authorities
and responsibilities of the Career Development
Officer have been enlarged. The Training and Career
Development COW1cil was established. There will be
a contir.uing effort to provide the recommended headquarters attention to field training programs. One of
the early programs will be a new chapter in the Customs
Personnel Manual to define training poliCies and responsibilities. This chapter bas been dra.tted and shoul.d 'be
~ .. qued in the next few months.

Recommendation

The laboratories should be placed under the
direction of th.a proposed Assistant Commissioner (Operations) and Assistant Regional
Commissioners (Operations) in order to make
this advisory service responsible to the
organization that it principally serves.

Action Taken:

Memorandum to Secretary on August 26, 1964,
contained implementing recommendation placing
Division of Laboratories under Office of Operations. Balance of recommendations dependent
upon administration decision. Memorandum
approved by Secretary September 18, 1964.

$ecommendation

Transfer the responsibility for
auditin6 customs brokers I records to the
proposed offices of the Assistant Regional
Commissioners (Audit).

Action Taken:

Implemented by T. D. 56201, dated June 25, 1964,
and Customs Manual Amendment X-785, dated

June 30, 1964.

13
Recommendation

Follow-up and evaluate to insure understanding.
acceptance, and carrying out of the ideas that
are communicated.

Action Taken:

Pa~ially

implemented. Remainder will be
accomplished in carrying out other recommendations.

Recommendation

Include and stress principles in Bureau headquarters issuances in order to: (a) get understanding and acceptance on the part of employees;
(b) enable employees to better exercise judgment
wht!'n judgment is called for; and (c) enable
employees to better eA-plain their actions and
activities to the public.

Action Taken:

Partially implemented. Remainder will be
accomplished in carrying out other recommendations.

Recom mendation

Designate as public information aid one qualified
and trained employee in each proposed re6ion and
district. with responsibility for assisting principal
officers in appropriately irJorming the public.

Action Taken:

Implemented by appropriate designations.

Recommendation

Emphasize use of the spoken word as a means of
communication. i. e., much more needs to be
done in the way of training and conferences.

Action Taken:

Partially implemented. Remainder will be
accoml'llished in carrying out other recommend~Li()ns.

Recommendation

Distribute information on the basis of known
needs of the field for such information, i. e. ,
there should be reasonable assurance on the
basis of experience or knowledge that a field
office needs. or will need, issuances before
those issuances are sent to that office.

Action Taken:

Partially implemented. Remainder will be
accomplished in carrying out other recommendations.

12.

13.

14.

15.

16.

17.

Recommendation

Continue efforts to obtain legislation permitting
the establishmer.t of a single form for all docum~ntation. the document to be renewed aIUlually.

Action Taken:

Implemented by continuing such efforts.

Rec om mendation

Continue efforts to obtain legislation which will
permit the establishment of fees for issuing
documents on a cost recovery basis.

Action Taken:

Implemented by continuing such efforts.

Recom me ndation

Continue to work through IMCO to bring about a
simplified system for determining tonnages for
passenger and cargo vessels in international trade.

Action Taken:

Implemented by continuing such et't'orts.

Recommendation

Continue efforts to obtain legislation permitting
the adoption of a. simple formula to determine ~e
size capacity of vessels not engaged in international
trade.

Action Taken:

Implemented by continuing such efforts.

Recommendation

The overall problem of expediting clearance of
cargo merits thorough jOint study' by Customs
and the transportation industries; Customs should
give increased impetus to such studies.

Action Taken:

Implemented in part by establishment of Air
Cargo Committee.

Recom menda tiOD

A joint project should be under..aken m con-

junction with the Post Office Department to
consolidate to the e>.."tent feasible the many
small mail divisions into larger ones.
Action Taken:

Implemented by establishing joint 6tUdy.

15
18.

Recommendation

All mail divisions should be placed under
the appraiser.

Action Taken:

Implemented on an individual consideration
basis. Philadelphia converted. Remainder
under study.

19. Recommendation

20.

21.

22.

23.

24.

The verification of liquidations by the
comptroller should be discontinued; such
verification to be replaced by a system of
internal control and post facto review by
the regional audit division.

Action Taken:

Will be accomplished by placement of audit
functions in Office of Regional Commissioner
where final liCluidation of "change" entries
will also be done as recommended elsewhere.

Recommendation

Establish a Regional Commissioner in each
region to direct all customs activities in
each region.

Action Taken:

Treasury Order No. 165- prepared by Chief
Counsel.

Recommendation

Abolish positions of comptrollers of customs
as vacancies occur.

Action Taken:

Will be accomplished under President's
Reorganization Plan No. 1 of 1965.

Recommendation

Abolish the comptroller's office in Philadelphia.

Action Taken:

Will be accomplished under President's
Reorganization Plan No. 1 of 1965.

Recommendation

Abolish positions of collectors of customs
as vacancies occur.

Action Taken:

Will be accomplished under President's
Reorganization Plan No. 1 of 1965.

Recommendation

Abolish small collection districts and
consolidate them with larger districts.

Action Taken:

Will be accomplished under President's
Reorganization Plan No. 1 of 1965.

JG
25.

Recommendation

Establish an office of District Director in
each of the remaining collection districts to
supervise all activities within the district
except investigations and enforcement.

Action Taken:

Will be accomplished under President's
Reorganization Plan No. 1 of 1965.

26. Recommendation

27.

28.

Abolish the remaining positions of collector,
appraiser, and surveyor as vacancies occur.

Action Taken:

Will be accomplished under President's
Reorganization Plan No. 1 of 1965.

Recommendation

Install the reorganization in two phases.
The first phase should include reorganization of Bureau headquarters and establishment
of regional offices. The second phase should
include abolition of small collection districts
and establishment of district director offices.

Action Taken:

Will be accomplished under President's
Reorganization Plan No. 1 of 1965 and Treasury
Order No. 165- prepared by Chief Counsel.

Recommendation

Develop a plan for implementation of the
proposed reorganization.

Action Taken:

Treasury Order No. 165- prepared by the Chief
Counsel.

29. Recommendation
Action Taken:

30. Recommendation

Installation of a single test

~egion.

Region VIII (San Francisco), September 1, 1965.
Installation of all additional regions after

6 months' operation of test region.
Action Taken:

31. Recommendation

Action Taken:

Additional regions will be established as
previously announced, the last being Regions I
and II on June 1, 1966.
Delineation of the responsibilities and
authorities of key officials at all levels
of the organization.
Accomplished for Bureau headquarters officials
and draft version prepared for field officers.

17
32 • Recommendation
Action Taken:

33. Recommendation

Action Taken:

34. Recommendation

Action Taken:

35. Recommendation

Action Taken:

Establishment of priorities and schedules
for implementing actions.
Has been established through effective
dates of last regions in June I, 1966.
Selection boards should be utilized in
making selections for key positions in
lower organizational levels; e.g., a headquarters selection board of top career
employees should screen and nominate
candidates for key positions in regions.
Executive Evaluation Board established by
Bureau Circular PER-12-PER of April 9, 1965
Immediately assign a team of top level
headquarters and field personnel to the
job of planning a system of communication
that Will meet Bureau needs at all organizational levels. Once planned, immediate
action should be taken, and resources drawn
from field and headquarters, to put the system
into effect.
Study completed. Recommendat ion made. Will
be accomplished early in next fiscal year when
funds penni t .
Retain at the district level under the proposed
organization the authority presently delegated
to collectors of customs, together with the
additional authority recommended above for
collectors, with authority to redelegate as
much as circumstances indicate is desirable
to subports within the district.
Will be accomplished by Commissioner of Customs
delegation order now in draft form.

18

RECOMHENMTIONS WHICH HAVE BED REJECTED
Delegate authoritY' above the $100,000 level J in
add!tlon to tbe 32 typu nov apec1f1ed in Treasury
Order No. 165, to the Ccwdaaioner in penalty case.
which do not pr_nt polley 1aeuea ot significance.

Act1Dn Taken:
2. Recol8DImdation

Not Adopted in cODSidering T. D. 56276.
Abandon the present policy of 100 percent examination ot passenger baggage and replace it with selective spot-dlE~ck examlDat1ons. 1b.e goal to be

sought is a pnerall.,y accepted program of voluntary
cOlIpl1ance by the travel.1ng public, supported by an
effective entorcellent program to discourage would-be
8lIRlgglers and to apprehend actual violatonl.

Action Taken:

J. RecoIaIndation

4.

Rejected by Secretary after consultation with
Secretary o£ Agriculture and MeDbers of Congress.
Abol1sb laboratories in lbUadelIilia, Savannah, and
los Arce1ee.

Action Taken.

Rejected by Secretar,y after consultation with Members
of Congresl3.

Recaa.ndat10n

The number
in two

or field laboratories
Pl u.. as follava.

should be reduced

Make the nine laboratoIj" ct1.striCtB contOl'1ll
to the proposed a:S.x-reg1on pa1ltern, nth a
laborator;y at each regional heacquarterll.
This would el:hd.nate the laborat.orie. in
3ElVannah, fb1ladelJ:il1a, and IDa Ancelea.

Action TalceIli

Reject.ed by Secretary atter consultation with MeJli>ers

ot

Congress.

1~
RECOMMENDATIONS UNDER CONSIDERATION BY
COORDINATION COMMITTEE

1.

Retitle the position of Assistant
Commissioner as Deputy Commissioner and
the position of Deputy Commissioner for
Policy Planning as Special Assistant to
the Commissioner

2.

Assign responsibility for direct
supervision of senior customs representatives (foreign) to the Assistant Commissioner (Enforcement).

3.

After reorganization, initiate a
detailed study of the office of operations
to determine appropriate internal organizational arrangements; and, relationships and
coordination required with other offices.

4.

Establish four major divisions in each
region: (1) Enforcement; (2) Audit; (3)
Administration; and, (4) Operations.

5.

Establish a position of Regional
Counsel in each region.

6.

Assign to the Assistant Regional Commissioner (Enforcement) functions now performed in the offices of the regional
supervising customs agents.

7.

Abolish positions of regional supervising customs agent.

8.

Discontinue regional office designations of Rome and Tokyo offices.

9.

Assign to the Assistant Regional Commissioner (Audit) functions now performed
by comptrollers of customs and functions
now performed by the Customs Agency Service
in connection with drawback claims and
examination of broker's records.

20
10.

Transfer from local principal field
officers and assign to the Assistant
Regional Commissioner (Administration)
responsibility for maintaining adequate
personnel, budget, fiscal, management
analysis, and facilities programs for the
entire regiou.

11.

Assign to the Assistant Regional Commissioner (Operations) responsibility for
functional supervision of all district
operations (except enforcement) throughout
the region.

12.

Establish two major sections to supervise regional operating functions and provide
functional supervision of district operations.
These are: (1) Classification and Value
Section; and, (2) Collection and Control
Section.

13.

Transfer to the Assistant Regional Commissioner (Operations) from local principal
field officers functions of: (1) liquidation
of "change" entries; (2) processing of drawback claims; (3) accounting for collections
and refunds and appropriation accounting;
and, (4) regional customs laboratories.

14.

Realign district activities into two
major divisions: (1) Classification and
Value Division; and (2) Collection and
Control Division.

15.

Establish an Enforcement Division in
each collection district under the direct
supervision of the Assistant Regional Commissioner (Enforcement) to supervise all investigative and enforcement activities throughout
the district.

16.

Abolish the positions of customs agents
in charge now located at the 25 proposed
district headquarters.

17.

Customs should make full use of its relatively favorably salary position by increasing
the competition for appointment and promotion,
to the technical positions, GS-5 and above.

21
18.

Qualification standards for technical
positions should be reevaluated in the light
of actual job requirements. In the event
the FSEE is not the most appropriate test
of essential skills and abilities for entry
into these occupations, other examinations
should be developed to obtain high quality
personnel.

19.

Nationwide examining should be conducted for initial appointment to technical
positions in the Customs Service.

20.

A review should be made of present
administrative policies to determine if
further reduction in reimbursable overtime
can be accomplished within the framework of
present legislation. Review should be made
to determine if additional tours of duty
can be justified to:
a. Provide additional tours of duty at
airports to service private aircraft arrivals
where the volume of contemplated arrivals
based on experience or valid projections will
generally occupy an employee's time;

21.

22.

b. Provide tours of duty at seaports
outside regular hours if a regular-recurring
need can be shown based on experience.

23.

The Treasury Department should request
the Bureau of Budget to seek legislation
which would:
a. Clearly set a uniform Governmentwide policy on reimbursements for inspectional services;

24.

b. Establish uniform charges for those
services for which charges are made;

25.

c. Establish Government-wide definitions of overtime for inspectional services;

26.

d. Set uniform rates for overtime and
holiday pay for inspectional services;

27.

e. Provide equitable treatment, with
appropriate savings provisions where necessary,
for employees concerned.

22
28.

The Bureau should establish nationwide
recruitment, ex~~ination, selection~
training, and initial assignment programs
for inspectors similar to those programs
in the U.S.D.A. Plant Quarantine Division,
the Immigration and Naturalization Service,
and the Public Health Service~ Foreign
Quarantine Division.

29.

b. Effective use should be made of the
peak workload season in the port of New York
to provide a combination of classroom
instruction and on-the-job training for new
appointees.

30.

Needed training manuals and guides should
be developed to insure the effectiveness of
on-the-job instruction and this method and
programmed correspondence courses should be
used to full advantage in meeting the training
requirements of the Service.

31.

The Service should accelerate its effort
to develop, in coordination with other
pertinent agencies, adequate training programs
for personnel involved in mutual activities
such as multiple-screening, or where Customs
acts for another agency in carrying out the
mission, and support these programs with
essential policy, guidance, and manpower
resources.

32.

As a part of the total reorganization
of the Customs Service, action should be taken
to:
a. Establish regional personnel offices
and eliminate personnel offices at lower
levels;

33.

b. Make the regional personnel office
equally responsible to, and responsive to, all
key field officials;

34.

c. Delegate authority to carry out
the personnel program in the field, retaining
only that degree of control deemed absolutely
necessary;

23
35.

d. Streamline and reorganize the
headquarters Personnel Section by:
(1) Making it basically a staff
organization;

36.

(2) Separating out the headquarters
operating work in a unit reporting to the
personnel officer;

37.

(4) Transferring the safety function to the organizational element responsible for facilities management and increase
emphasis on safety facilities and equipment.

38.

A budget analyst with adequate staff
should be assigned to each Assistant
Regional Commissioner (Administration) to
coordinate the development~ formulation~
and execution of regional budget estimates
and financial plans.

39.

It is recommended that:
a. The formal allotment of funds should
be held to the level of the regional
commissioners;

40.

b. Regional commissioners should make
suballotments but should pe~it field offices
to operate on allowances supported by
financial plans.

41.

To alleviate some of the financial problems, the Bureau should assign priorities to
implementation of key proposals.

42.

The accounting functions should be consolidated into nine regions under the direction of the Assistant Regional Commissioner
(Operations), and these accounting functions
should provide supporting information for
appropriation accounting and budgeting.

43.

The Director of Audits and the Assistant
Regional Commissioners (Audit) should continue to be apprised of, and participate
actively in, studies of ADP systems being
considered for adoption so that adequate provisions can be considered to assure that the
systems will lend themselves to an effective
and economic audit program.

44.

At the regional level it is recommended that the Assistant Regional Commissioner (Administration) be responsible
for a management analysis program and be
provided with a staff adequate for this
purpose.

45.

Each regional office should establish
a long-range plan for replacing equipment
and furnishings. These regional plans
should be consolidated into an overall plan
for the Bureau. Such a plan should establish
priorities which would be submitted for
departmental and Bureau of the Budget
approval. Annual adjustments would be made
for changing conditions and situations.

46.

Central direction for liaison with the
General Services Administration for longrange space planning, for construction of
joint Customs-Immigration border stations, and
for establishing minimum standards for inspection facilities should be provided by a
Facilities Management Section.

47.

The Bureau should seek clear legislative
authority to set standards for space for
customs inspection and clea~ance operations
at docks and airports. The legislation
should specify that such standards should be
adhered to at the expense of either local
authorities or the United States Government.

48.

A training program for entry officers
shoUld be initiated. The program should
include temporary detailing to the appraiser's
staff for training in classification and value.

49.

There should be a stricter enforcement of
entry requirements with less emphasis on minor
infractions and more emphasis on the major ones.

50.

There should be a continuing program to
educate brokers in the proper preparation of
entries.

51.

Appraisement personnel should be detailed
to the entry division for the purpose of
reviewing the more complex entries.

25
52.

The time limit for filing ~he Special
Customs Invoice required at the time of
entry should be reduced to 3 months.

53.

The time limit for filing other documents required for entry should be reduced
to 3 months, which time limit the collector,
at his discretion, may extend for further
periods of 3 months each, not to exceed a
total of 1 year.

54.

The function of processing entries in
bond for transportation, for transportation
and exportation, and for exportation should
be transferred from the entry division to
the outside division.

55.

Payment of duties should be deferred for
a specified period of time (20 to 30 days)
after entry has been made. Duties would then
be deposited on the basis of a tentative
return by the appraiser.

56.

The functions of the entry division
should be transferred to the Classification
and Value Division.

57.

Section 49a(a)(1) of the Tariff Act of
1930 should be amended to provide that the
value limitation for informal entries be
changed to $500, or preferably that the
Secretary of the Treasury be authorized to
establish in his discretion the value limitation from time to time as conditions warrant.

58.

Artistic antiquities, imported for personal use and not for sale, and valued at
$500 or less, should be cleared by informal
entry at all ports.

59.

Shipments of personal effects and noncommerical shipments of a value not in excess
of $500 should be cleared at the port of
arrival by a simple form of entry similar to
that used for clearance of mail packages on
customs Form 3419. Upon delivery of the merchandise the carrier would collect the duty
and taxes due and make remittance to the port
of first arrival.

26

60.

Processing at ports of arrival should
be handled in the same manner at all ports.
All mail entries should be completely processed at the first port of arrival and
placed with the postmaster for collection.
This would eliminate a second handling at
small interior ports and would free personnel
at those locations for more complete examination of mail received at those ports.

61.

Customs should be permitted to estimate
Internal Revenue taxes collected on mail
entries rather than making a separate
accounting of them.

62.

Section 321(a)(2)(c) of the Tariff Act
of 1930 should be amended to provide that
customs officers shall pass free of duty and
internal revenue tax any importation on
which the total duty and tax does not exceed
$1.

63.

The Bureau of Customs should initiate
efforts to persuade interested agencies to
withdraw quotas that are not serving a
useful purpose.

64.

Legislation should be introduced to
Congress to eliminate section 402a (old law)
as a basis of appraisement for imported
merchandise.

65.

Authority to ascertain and fix the rates
of duty applicable to imported merchandise
should be delegated to the appraiser.

66.

LegiSlation should be introduced to amend
the definitions of export value and foreign
value in section 402 and 402a of the tariff
act to provide that in all cases the value of
merchandise appraised under these definitions
would be the f.o.b. port of shipment value.

67.

A thorough study of section 402 should
be made for the purpose of further simplification to help speed up appraisement.

68.

The value requirement of $250 in section
14.3 of the Customs Manual for reporting
initial shipments to the C.r.E. should be
charged to at least $500.

27
69.

A thorough study should be made of
the procedures of the Customs Information
Exchange to determine the feasibility of
using automatic data processing equipment
to facilitate the dissemination of
information.

70.

Section 8.29(c) of the Customs Regulations should be amended to provide that if
a change in rate of duty, or value, or
quantity results in an increase of 5 percent
or more of the duty, but not less than $30, the
appraiser shall so notify the importer. In
any case, notice shall be given if the increase
in duty is more than $100.

71.

By attrition the merchandise samplers
should be replaced by trainee examiners to
be known as wharf examiners.

72.

In those cases where the appraiser is
able to complete his appraisement without the
Special Customs Invoice, he should be permitted
to waive production of such document. If time
and experience show that the Special Customs
Invoice is not needed for a particular commodity,
that commodity should be added to the list of
exceptions in section 8.15 of the Customs
Regulations.

73.

Where appraisement cannot be completed
without the Special Customs Invoice, and such
document is not produced within the specified
time limitation, the penalty for nonproduction
should not be mitigated to less than $100.

7~.

Authority should be delegated to the
appraiser to determine the marking requirements
of imported merchandise in accordance with
section 304 of the tariff act.

75.

When merchandise is found to be not legally
marked, an affidavit that it has been marked
should be accepted in lieu of actual customs
supervision of the marking, subject to production of a marked sample, or a spot-check
examination after the fact.

76.

Centralized ap~raisement should be extended
to the extent feasible within districts.

28
77.

A comprehensive study should be made
of the results of centralized appraisement
with the view toward extending it to the
maximum degree possible within regions
and within the Customs Service as a whole.
The study should also encompass the feasibility and potential benefits of using automatic data processing equipment for appraisement purposes.

78.

The system by which samples are selected
for analysis should be studied with a view
toward more concentration on high-duty or
problem areas and reducing the number of
repetitive samples.

79.

The function of advising on the design
and maintenance of small border stations
should be transferred to the proposed
Facilities Management Section of the Assistant
Commissioner (Administration).

80.

The possibility and feasibility of closer
collaboration with laboratories of the Alcohol
and Tobacco Tax Division of the Internal Revenue
Service should be studied.

81.

Responsibility for planning and coordinating
a research program should be fixed in one person,
who should devote full time to these efforts.

82.

The possibility of applying work measurement
techniques to laboratory work should be explored.

83.

Part of the liquidating staff' shoul.d be transferred to the appraiser's office to assist in the
appraisement function and to make the necessary
computations for the tentative liquidation of "no
change" entries.

84.

All entries for which there will be a change
in the amount of duty due as a result of the report
of the appraiser and/or the inspector, or for any
other reason, should be liquidated at the regional
headquarters.

29

85.

Section 321(a)(1) of the Tariff
Act of 1930 should be amended to change
from less than $3, to less than ~5, the
limit in the difference in duties or
taxes which the Secretary of the Treasury
is authorized to disregard.

86.

The appraiser should be
authorized by regulation to deSignate as
"no change" entires those entries which,
as a result of his appraisement report,
result in a difference of duties due less
than the statutory limit provided for in
section 321(a)(1) of the Tariff Act of
1930; such entries to be considered
liquidated "as entered. 11

87.

A copy of the entry with
appropriate notations as to the changes,
if any, made in liquidation should be
furnished the broker or importer as an
unofficial notice of liquidationj the
posted bulletin notice of liquidation
would be the official notice required by
law.

88.

All protests received within a
region should be reviewed by the Office
of the Assistant Regional Commissioner
(Operations) •

89.

Section 501 of the Tariff Act
of 1930 should be amended to authorize
the appriser, upon appeal by the importer of an adverse appraisement, to review
such appraisement and to modify it in
whole or in part 1 or to affirm it wi thin
90 d8\Ys of the appeal. Any change in
appraisement involving substantial amounts
of duty should be subject to approval by
the regional commissioner.

90.

Section 501 of the Tariff Act of
1930 should be amended to provide that
appeals to reappraisement be accompanied
by payment of additional duties due as a
result of appraisement.

91.

Sections 501 and 514 of the
Tariff Act of 1930 should be amended to
provide that a combined notice of appraisement and liquidation be given the importer, such notice to be final upon the
importer unless appealed and/or protested
within 90 days after the date of notice.

92.

Assign responsibility for the
administration of the drawback program
to the proposed Assistant COmmissioner
(Operations) •

93-

Strengthen the staff in the
drawback program by the addition of one
industrial economist and one industrial
cost accountant.

94.

Provide legal advice and
assistance in the drawback program by using
the legal staff of proposed Assistant
Commissioner (Technical).

95.

Assign responsibility for field
aspects of drawback to the proposed regional
commissioners.
Reduce costs of administration
and time elements involved by redesigning
procedures and revising requirements on
drawback.

97.

To the extent that the measures
taken in drawback fail to reduce the costs to
the amount now retained by the Government
increase the percentage retained.
Eliminate the initial investigations of applications for a drawback rate
conducted by the Agency Service.

99·

Make companies responsible for
preparing their own applications for drawback.

31
100.

Strengthen the review of drawback
entries by requiring increased emphasis on
audit of "first time" entries. Require
audit type investigations of selected
companies, on a sampling basis, in connection with requests for refunds.

101.

Eliminate requirement for return
to customs custody of me rchandise failing
to conform to specification.

102.

A sampling basis procedure
should be used in audit of drawback entries,
with special attention being given to full
coverage of first entries.

103.

Explore the feasibility of partial
prepayment of involved drawback claim, the
maximum amount of the prepayment to be
limited to those items regarding ~~lch
there are no questions as to the aJ:;.ount
of refWld due the claimant.

104.

Establish procedures ~ich
would require manufActurers to submit
certificates of manufacture and drawback
entries on a consolidated basis covering
quarterly periods.

105.

Make vessel builders and owners
responsibile for certifying for customs
and Coast Guard purposes the correct
tonnage of all privately-owned vessels.

106.

After a system of simplified
tonnage determination is established, give
Coast Guard the responsibility for such
verification and enforcement of the
admeasurement requirements as is necessar,y
to prevent abuses.

~07.

The entrance and clearance requirements and procedures for vessels need
to be thoroughly revised and simplified.
As examples of needed actions, the following
are suggested:
a. Simplify the requirements of
stores' lists and crew purchase lists
(curio lists);

32

form;

b.

Modernize the inward manifest

c. Revise permit to proceed in
order to eliminate other forms;
d. Revise outward manifest form
and clearance form;
e. Discontinue the lO-cent fees
for entering vessels on the "waters of
the northern frontiers."
loB.

A thorough review should be
made to determine the Federal Government's
responsibility to record mortgages and
liens on vessels for private parties. To
the extent such service is to be continued, it should be performed on a cost
recovery basis.

109.

Increase efforts to establish
unified direction for primary screening
at border ports where multiple screening
is carried out.

110.

Develop more adequate standards
for staffing inspection activities.

lll.

Encourage the establishment of
landing facilities for private aircraft
adjacent to border ports of entry.

112.

A thorough study should be made to
determine customs proper role in the control
of merchandise. The basic determination to
be made is whether Customs should attempt to
exercise complete physical control over
merchandise or should exercise primarily
documentary control.

113.

When at all possible in overtime
inspection situations, a single customs
official should be autborized to perform
all customs functions.

33
114.

Cease investigating initial applications for a drawback rate as soon as
revised procedures for processing drawback are established. Additionally, the
verification of selected drawback claims
should be transferred to the Assistant
Regional Commissioner (Audit).

115.

Assign coordination of liaison
with other agencies to the Commissioner's
office. (This function should be assigned
by the Commissioner to one of his staff
assistants. )

116.

Assign specific responsibility
to appropriate Bureau headquarters
offices of maintaining liaison with the
agencies with which Customs deals. The
establishment of an Operations Division
in the headquarters office will do much
to permit specific liaison responsibilities on operating matters.

117.

Insure adequate interest and
liaison on international matters.

118.

Initiate close liaison with other
agencies to insure that Customs had
adequate and clear expression of policy
and procedural instructions for guidance
of field offices.

119.

Critically analyze and question:
the propriety of the assignment to
Customs of the many other-agency assignments it now has or is asked to assume;
(2) the policies of these agencies and
the feasibility of their enforcementj
(3) the balance between performance of
work for other agencies as against
accomplishment of the basic customs
mission; and, (4) whether other agencies
are satisfied with the job Customs is
doing.

120.

Establish procedures to insure
that all instructions to field offices
are issued by the Bureau headquarters,
or if issued by the agency concerned,
are received and approved by the Bureau
headquarters.

(1)

34
121.

Initiate a joint study to determine feasibility and
possible advantages to be gained from consolidation of
of functions of the Alcohol and Tobacco Tax Division of
the Internal Revenue Service and the Bureau of Customs.

122.

Review policy relationships between Customs and
the Treasury offices of Foreign Assets Control and
Domestic Gold and Silver Operations with a view to
delegation of more authority for handling cases to
CUstoms.

123.

Develop a uniform system of providing information
to the field in a usable form. This entails: (a) central control and coordination of all issuances in the
Bureau headquarters, (b) preparation of material so that
it is easily understood; and, (c) consolidating and arranging the material so that it is readily usable (i.e.,
easily located when needed).

124.

Require that all issuances from other agencies be
coordinated with or approved by Bureau headquarters.
Issuances should either be incorporated into the Customs
issuance system or countersigned by the Commissioner or
his designee. Distribution of all. material should be
prescribed by Customs headquarters.

125.

Adopt a single consolidated bond for use in lieu of
separate bonds presently required and specify in Customs
Regulations the conditions and terms of the bond as applicable to various principals.

126.

Permit term bonds to be renewed periodically and
continue in effect until terminated by any party to the
contract ..

l27.

Broaden coverage of bonds filed by importers to
cover most frequently encountered situations which now
require separate bonds.

128.

Permit one-time, infrequent, and small quantity
importers who desire to prepare their own entries to
file bonds without surety wbere the value of the sbipment does not exceed $1,000 and the estimated duties
are collected at the time ot entry.

35

129·

Permit customs brokers to obtain General Ter.m
Bonds including all those conditions specified for
importers and also including conditions contained
in the Carrier I s Bond (cF 3587) and Customs Cartman
or Lighterman Bond (cF 3855) where applicable.

130.

Broaden coverage to principals in the capacity
of domestic carriers to include conditions and terms
now included in the Common Carrier Bond and Customs
Cartmen or Lighterman Bond and eliminate separate
bonding prOvisions for customs cartmen or lightermen.

131 •.

Eliminate the extra information required to be
filed by motor carriers with their applications relating to description of equipment, ownership, employers, list of routes, etc.

132.

Broaden coverage for all principals on bonds in
the capacity of international carriers to include the
responsibilities and obligations presently covered in
the Consolidated Aircraft Bond (cF 7605), and, in addition, the activities covered by (Term) Temporary Importation Bonds (cF 7563-A), the Landing Bond (cF 7593),
and the Bond for the Free Withdrawals of Distilled
Spirits (cF 7603).

133·

Specify for principals on customs bonds in the
capacity of warehouse proprietors the responsibility and
obligations in the Proprietor's Warehouse Bond (cF 3581} ,
Proprietor's Manufacturing Warehouse Bond (cF 3583) ( and
the Bond of Customs Cartmen and Lightermen (cF 3855) (if
otherwise qualified).

134.

Make proprietors of class 2 and 3 bonded warehouses
responsible for safekeeping and condition of imported
merchandise.

135.

Permit c].a.ss 2 and 3 bonded warehouses to operate
without customs supervision or the use of customs padlocks.

136.

Prescribe penal provisions calling for the payment
by proprietors of amounts equal to the duty on merchandise
destroyed or damaged due to negligence or stolen.

36
137.

the present legal restriction against tn. IQaIlUfacture in bond
of articles made in wole or in part o:f iDIported materials for doaestic
cODSUDlPtlonj consolidate class 6 and 8 bonded warehouses into a siDgle
Clas8 6; and e11m1nate clu8 8 as a separate class of warehOUH.

138.

Send informal notices of amounts due to the principals after 20 day5
and a formal demand tor pa~nt on cF 4619 at the end ot 45 days.

139.

Prepare a manual :ror the guidance of c:uetOlllB field officers in the
handling of penalty matters.

lLO.

IlIpose a standard penalty 111 a reasonable amount for failure to produce
a m1ssing document in lieu or 1 npos1ng a penalty equal to the value of the
merchandise.

J1l.

Delegate to saC'll of the regional. coJlJD:1ss1oners under the proposed new
organization all the authority preaerrt.ly delegated to the CoDIDd.Beioner of
Customs in subparagrarb (b) o:f Treaaur,y Order No. 165.

]12.

Develop a system tor exchange or penalty Wormation aIJ¥:)ng regional
colllItlssioners under the proposed reorganiaation.

143.

Propose legislat:1on to amend sect1.011 610 o£ the tarif£ act to give
the Secretary or the Trea.sury administrative authority to Bet the value ot
seized D8rchand1Be which DlBt be condemned or forfeited by court proceed:f.ngs.

144.

Review ex1st.!.ng penalty provisions and attempt to obtain legislation
for mere realistic penalties or which w1ll give the Secretar,y of the Treaau.ry
"1'8 adm1.n1strat1ve diBcret10n in 8B888Sing amounts of penalties.

1l6.

Following the 1nB1:.allation o~ an illproved system. for the selection of
samples, consider such .factors 88 workload ptrt,t.ern, posaible areas of additional spec1.a1ization, t.ransporta:tion costs, time lags J benerits ot axiern1zation and the like with a view to ac:hiev1.n& opti-m facilities £or laboratory service which would cover the enUre United States e.t'te~ivel3' and
economically •

ReDJV8

Cross reference between numbers in the attached list
of recormnenda tions ~nd recommen~t'! f'l:\!) of the survey
Group Report dated December, 1964 entitled "Customs-An Evaluation of NJ.ssion Organization Management." *

37

Recommendations' which have been implemented:
IV-2-a
IV-2-b
3. IV-3-b
4. IV-4-a
5. IV-5-a
6. IV-S-b
7. IV-S-c
8. IV-6-a
9. IV-6-b
10. IV-7-a
1l. V-27
12. V-29
13. VI-16
14. VI-29
15. XII-l
16. VI-2S
12.

17.
18.
19.
20.
2l.
22.
23.
24.
25.
26.
27.
2B.
29.
30.
3l.
32.

IV-7-c
IV-18-a
IV-1S-b
V-3

v-s

V-12
V-IS
V-17
VI-11-b
V-19-d(3)
V-24
V-25
V-26
XIII-12
XIII-14
XIII-16

33.

34.
35.
Jo.

37.
38.
39.
40.
4142.
43.
44.
45.
46.

XIII-17
IV-1S-d
IV-18-c
VII-6
VI-40
VI-48
X-l
VI-36
IV-18-f
IV-8-a
IV-lt.-e
V-7
V-14
VI-21-b

Recommendations which have been partially implemented:
V-8
2. IV-l
3. IV-7-b
4. V-IB
5. VI-31
6. X-2
7. XII-4
8. XII-5
9. XII-2
10. XII-3
11. XII-7
12. VIII-l
1.

13.
14.
15.
16.
17.
18.
19.
20.
2l.
22.
23.
24.

VIII-2
VIII-3
VIII-4
IX-6
VI-Il-a
VI-12
VI-43
IV-8-b
IV-I0-a
IV-IO-c
IV-13
IV-14

25.

26.
27.
2B.
29.
30.
31-

32.
33.
34.

35.

IV-15-a
IV-1S-c
IV-17
IV-IB
IV-1S-g
IV-lS-h
IV-1S-i
IV-1S-j
V-6
XII-9
XIII-20

RecammendationQ which have been rejected:
1.

2.

XIII-13
IX-l

3.

IV-12-d

4.

VI-32-a

.
.
nted actions have in some cases varied
Implemented or partl.ally JJ1lPleme
ort as is indicated in rough outf:om the recommendation of ~he surveY"Gr~~ ~~~ted "recommendations under ~o~sideraline in the text under nact~on taken.
R ort to the extent that prov~s~on
tion" differ from those in the Survey Gr01~p r:P ion establishment.
is made for- znine region rather than a sJ..X
g

~ote:

,) l ' i
("

._.

r:
Recommendations under consideration by Coordination Committee:
1-

2.
3.
4.

5.
5.
7.
8.
9.

10.
11-

12.
13.

14.
15.
16.
17.
18.
19.

20.
2122.
23.
24.
25.
26.
27.
28.
29.
30.
3l.
32.

33.
34.
35.
35.

37.
38.
39.

to.
11.
12.
13.
14.
15.
·6.

·7.

·e.

IV-3-a
IV-4-b
IV-6-c
IV-8-c
IV-8-d
IV-9-a
IV-9-b
IV-9-c
IV-10-b
IV-11
IV-12-a
IV-12-b
IV-12-c
IV-1S-b
IV-l6-a
IV-l6-b
V-1
V-2
V-4
V-9
V-9-a
V-9-b
V-10-a
V-I0-b
V-I0-c
V-I0-d
V-10-e
V-ll-a
V-11-b
V-13
V-16
V-19-a
V-19-b
V-19-c
V-19-c.(1)
V-19-d(2 )
V-l9-d(4)
V-20
V-21-a
V-21-b
V-22
V-23
V-28
V-30
V-31
V-32
V-33
VI-l

L;. 9.

50.
5l.
52.
53.
54.
55.
56.
57.
58.
59.
60.
6l.
62.

63.
6L;..

65.
66.
67.
68.
59.
70.
7l.
72.
73.
74.
75.
76.
77.
78.
79.
80.

81.
82.

83.
84.
85.
86,
87.
88.
89.
90.

9l.
92.

93.
94.
95.
96.
97.

V:-2-o..
VI-2-b
VI-3
VI-4-a
VI-4-b
VI-5
VI-6
VI-7
VI-8
VI-9
VI-10
VI-13
VI-14
VI-lS
VI-l7
VI-18
VI-19
VI-20-a
V:::-20-b
VI-21-a
VI-22
VI-23
VI-24
VI-25-a
VI-25-b
VI-25-a
VI-26-b
VI-27-a
VI-27-h
VI-30
VI-33
VI-34
VI-35
VI-37
VI-38
VI-39
VI-41-a
VI-41-b
VI-42·
VI-44
VI-4S
VI-46
VI-47
VII-l-a
VII-l-b
VII-l-c
VII-l-d
VII-2-a
VII-2-b

98.
99.
100.
10l.
102.
l03.

104.
105.
106.
107.
108.
109.
110.
11l.
112.
113.
114.
115.
116.
117.
118.
119.
120.
12l.
122.
123.
124.
125.
126.
127.
128.
129.
130.
13l.
132.
133.
134.
135.
'136.
137.
138.
139.
140.
14l.
142.
143.
144.

145.

VII-3-a
VII-3-b
VII-3-c
VII-4
VII-5-a
VII-5-b
VII-5-c
VIII-5
VIII-6
VIII-7
VIlI-ti
_ IX-2
IX-3
Ix-4
IX-5
IX-7
X-3
XI-l
X:L-2-a
XI-2-b
XI-3
XI-4
XI-5
XI-6
XI-7
XII-6
XII-B
XIII-I-a.
XIII-I-b
XIII-2
XIII-3
XIII-4
XIII-5
XIII-6
XIII-7
XIII-B
XIII-9-a
XIII-9-b
XIII-9-c
XIII-IO
XII:i:-ll
XIII-l5
XIII-lS
XIII-l9
XIII-21
XIII-22
XIII-23
VI-32-hi

3~

TREASURY DEPARTMENT
Washington
STATEMENT OF THE HONORABLE JOSEPH W. BARR
UNDER SECRETARY OF THE TREASURY
BEFORE THE HOUSE COMMrTTEE ON WAYS AND MEANS
IN SUPPORT OF THE EMPLOYMENT SECURrry AMENDMENTS OF 1965
AUGUST 11, 1965, 10 A.M. EDT

Mr. Chairman and Members of the Committee:
I am pleased to be able to appear before this Committee to express
the Treasury Department viewpoints on the bill H.R. 8282, which contains
the Administration's program to modernize the Federal-state unemployment
insurance system.
We support this legislation.

Many features of the legislation, of

course, deal with specific aspects of the operation of the unemployment
compensation system in Which we have no particular expertise.

These

matters have been dealt with in considerable detail in the testimony
of the Department of Labor and the Department of Commerce.

I would like

to discuss in broad terms the fiscal policy aspects of this bill.
A basic point that I would like to make is that future fiscal policy
decisions) in which the Treasury Department will be particularly concerned,
will be more manageable if we have an unemployment insurance system in this
country that operates effectively.
One important dimension of this unemployment insurance system is its
function in providing an automatic stabilizer to deal with problems of
recession.

Our ability to time changes precisely to meet the require-

ments of future variations in business activity is limited, and it is
important to supplement the role of discretionary actions) such as tax
reductions) with effective automatic stabilizers.

F-164

- 2 -

The potential of unemployment compensation as a stabilizer will be
considerably strengthened under this bill through the provisions for higher
benefit standards and for increased coverage, and as well by the provisions
for extended benefits and assistance to states with high compensation costs.
Another aspect of the concern with unemployment insurance from a fiscal
policy standpoint is that we recognize now that one appropriate method of
dealing with the recession problem is through the provision of tax reduction.
Tax reduction, of course, does not directly increase the take home pay of
those who are without a job, although it does greatly help in reducing the
unemployment.

In the first instance, however, under tax reduction the

increased purchasing power goes to those who have taxable income, and these,
by and large, are people who are still emPbyed.

The overall effectiveness

of efforts to deal with the problem of recession is considerably increased
if at the

sa~e

time we have an adeQuate

unemp~oyment

insurance system to

help directly with the needs of unemployed workers.
Unemployment insurance cannot deal with the entire problem of replacing
lost income since clearly workers should get higher incomes for being
employed than they get for being unemployed.

A general consensus seems

to have developed that an unemployment benefit structure which provides
unemployment benefits of something like 50 percent of the individual's
average wage for most workers does not impede the return to employment when
oPportunities are available.

The difficulty is that in recent years too

small a proportion of the workers have been able to get this kind of

- 3 unemployment benefits.

strengthening the unemployment compensation system

will, therefore, make our response to recession more equitable as well as
more automatic.
In addition to the general strengthening of the system, there are a
number of featules of the present bill that will serve to make the process
of re-employing workers more efficient and to this extent cut dawn on the
problems of fiscal policy.

One important step in this direction is the

strengthening of the employment services.
the extended benefits and retraining.

Another step is the tie-in between

Another is the requirement for treat-

ment of interstate claims that will make it easier for workers to go to
places where jObs can be found.
The aspect of the current bill which is particularly within the interest
of the Treasury Department is the provision for financing of the Federal
unemployment adjustment benefits and the matching grants to states
excess benefit costs.

for

As you know, -these provisions under the bill are to

be financed by a combination of an additional 0.15 percent tax on employers
subject to the FUTA and an equal amount to be appropriated from general
revenues. The new feature in this financing arrangement is the provision
for some contribution from general revenues.
The provisions involved are the extended benefits program and the
matChing grants program.

To summarize briefly, the extended benefits

program applies only to workers with a solid attachment to the labor force
measured Over the preceding three years.

Additional benefits up to 26 weeks

- 4 would be :paid to these workers out of a new special "Federal Adjustment
Account • "

Beneficiaries w::)uld be disqualified if they refuse to ta...~e or

continue training to which they may be referred.
The matching grant program would provide that in a state meeting the
Federal benefit standards, if the annual costs of benefits exceed 2.0 percent
of the total covered wages, then two-thirds of the excess would be paid from
the Federal Adjustment Account.

This will lessen the variation in tax rates

between states.
The extended benefits program and the matching grants
in effect continuously, although the

a~aunt

progra~

will be

of payments out of the Federal

Adjustment Account for these programs will vary with economic conditions.
Roughly, in a year like 1964 when the national rate of insured unemployment
was about

3.8 percent, it is estimated that the payments under the new

progra.'lls

would be slightly under $).5 billion.

The rate of insured unemployment

in the :past few months has been about 3.0 percent, which is aJ.ready considerably

below the 1964 rate.

For the foreseeable future it is reasonable to expect the payments under
these special accounts to remain well under $0.5 billion.

This is less than

the amount that would be provided by the employer tax of 0.15 percent and
a !llB.tching amount from general revenues.

As has been explained, when the

SUl1>lus in the Federal Adjustment Account builds up, the additional employer

tax is reduced and the potential Federal grant from general revenues is also
reduced.

- 5 It is significant that the items involved with general revenue financing
under H.R.

8282 are also somewhat separable from the basic unemployment

insurance coverage which at the present time is financed entirely by payroll
taxes.

Both the extended benefits provision and the provision for matching

grants to states with excess benefit costs involve costs which are much less
readily identified with the previous employer than is true for normal
unemployment b enef its.
In the extended benefits situation the data indicate that as workers

are unemployed for relatively long periods it becomes less likely that they
~ll

be re-employed by the previous employer.

Also, long periods of unemploy-

ment are particularly likely to be associated with a relative decline in a
particular industry, or with a high national rate of unemployment.
Similar observations are applicable to the appearance of excess benefit
costs in particular states.

These are characteri stically associated with

things like a general decline in the demand for the product of some key
industry in a state.
Up:)n

Forcing all of the unemployment benefit costs back

the business firms in that state simply makes it harder for the state

to make the necessary economic adjustments for this change in demand.
In these programs of extended benefits and matching grants this distinctive
character is recognized by the provision for general revenue participation
in the financing.

I sho'Jld say initially that this Committee has in the

present session made one provision for general revenue ;inancing in relation
to what is basically a social insurance program, namely, the voluntary
progra'Tl

for physician care in the recent Social Security Act.

The Congress

- 6 saw fit to distinguish that coverage as a separate program from the part
of social security benefits which were to be financed entirely by payroll
taxes.
We believe that from a long-run standpoint basic reliance on payroll
tax financing in social security is sound.

The importance of the payroll

taxes in maintaining unemployment benefits and also old age benefits as a
matter of right is important.
which involve a means test.

We do not want these programs to have benefits
Any changes in payroll tax financing must be

examined with the greatest care.
The provision in this bill is reasonable in that in the long run onehalf of the costs of these additional

progra~s

will be met through employer

contributions in the increase of 0.15 percent in the Federal unemployment
tax rate and one-half will be met from the general revenues.

This recognizes

the increasing interdependence of our economy in which the continuing success
of a business firm depends partly upon what that firm does and partly upon
general conditions elsewhere.
However, I want to express the opinion of the Treasury Department that
the general prinCiple of financing the cost of social insurance programs
from the general revenues of the United states constitutes an abrupt departure
from our national tradition.

While I will repeat that in this instance and

in the case of the voluntary program for physician care, it can be justified,
still we feel that the Congress should examine all such excursions into the
general revenues with great care.
000

TREASURY DEPARTMENT
Washington
statement on the U.S. - Thai Income Tax Convention
by
Stanley S. Surrey, Assistant Secretary of the Treasury
before the Subcommittee on Tax Conventions of the
Senate Committee on Foreign Relations, August 11, 1965

Mr. Chairman:
I welcome this opportunity to discuss the pending income tax convention with Thailand.

Since this is the first time this Subcommittee

is considering tax conventions, you may find it helpful if I were to
review the general objectives of our income tax treaty program and then
discuss the specific tax convention that is now before you.

Since there

are also pending treaties with two other less developed countries,
Israel and the Philippines, where appropriate I will refer to these
treaties since they, together with the Thailand treaty, indicate the
general procedure and standards being followed with respect to the
negotiation of tax treaties with less developed countries.
As in the case of other industrialized countries, the United States
has found it useful to enter into income tax treaties for the purpose
of eliminating some of the troublesome tax problems that arise out of
various types of international transactions.

These problems may arise,

for example, when sales take place between an enterprise in one country
and an enterprise in another country, or when individuals from one
country travel for business or cultural purposes to another country.
They may arise when income is generated in one country as a result of
investments made by individuals or corporations of another country, or
as a result of services rendered by residents of one country to persons
in another.

The resulting problems of double taxation exist for all

countries, and particularly industrialized countries.

F-16~

- 2 These transactions cause international tax problems since each of
the two - or more - countries involved in the transaction may lay claim
to an income tax on the income or profits produced by the transaction.
Conflict is thus inevitable.
Most of the industrialized countries have found it appropriate to
include unilateral measures in their tax laws to cope with these double
taxation problems.

In the United States, principal reliance in meeting

these problems is placed on the foreign tax credit mechanism.

Under

domestic law, the United States allows a credit to its taxpayers for the
taxes imposed by a foreign country on income derived from that country.
In a sense, we treat taxes paid to a foreign country as if they had been

paid to the United States and thus, as offsetting our income tax claim
against the taxpayer.

Some other countries, such as the United Kingdom,

also use this tax credit approach to deal with international double
taxation.

Other countries, however, exempt foreign income in varying

ways and degrees from their tax system.

But even though the industrial-

ized countrries thus employ various unilateral measures to cope with these
problems, virtually all industrialized countries have found it necessary
to supplement these measures by entering into a network of tax treaties
with their principal commercial partners and other countries with whom
their taxpayers are concerned in trade or investment.
There are a number of factors responsible for this, which I can
illustrate by reference to the experience of the United States.

There

are, to begin with, differences among countries concerning the scope of

- 3 their income taxes.

If the United States is to give a credit for taxes

imposed by a foreign country, surely it must be only for taxes imposed
on income which we consider has a source outside the United States.
But if our concept of source differs from the other country's, the credit
mechanism will not be adequate to the problem -- the other country will
tax the income, we will not allow the credit, and the income involved
will bear a tax considerably higher than either country alone would impose.
If, for example, a foreign country considers the earnings from the rendi-

tion of personal services by a United States individual to have its source
where the enterprise paying for the services is located, while the United
States considers the source to be where the services are rendered, then
our unilateral credit mechanism will not eliminate double taxation since
no credit will be allowed for the foreign tax.

Consider another example:

One country may regard the source of income from a sales transaction to
be the place where the order is accepted.

The United States considers it

to be the place where title to the property passes.

Again the tax credit

mechamism may not provide appropriate relief from double taxation.

Still

another example, more important, perhaps, than the others arises when two
countries utilize different methods for determining the amount of income
allocable to each country from transactions between related enterprises,
such as a parent corporation in one country and the subsidiary in the
other country.

The result may be that a segment of income is taxed in

both countries, with neither giving any recognition to the tax imposed
by the other.

Tax treaties deal with these problems by reaching mutually

acceptable rules regarding the source of income and allocations of income.

- 4 There are other tax issues which often are best solved through one
of the countries granting complete exemption from tax through tax treaties.
For example, a businessman from the United States who temporarily visits
another country for the purpose of exploring business opportunities or
to consult with associates and employees on the spot is often in a
difficult position from a tax standpoint.

It is not merely that he may

have to pay taxes in that country on his income during his stay in that
country, such as a pro rata part of his annual salary.

Often the filing

of a tax return may constitute a more serious irritant to the conduct of
business in that country than the payment of tax.

The individual involved

may be able to claim a credit against his U.S. tax for taxes paid in
that country but that would not eliminate the annoyance and inconvenience,
not to speak of the consequences of erroneous interpretations or inadvertent
errors, which compliance with the unfamiliar tax laws of a foreign country
may involve.

These problems are not limited to businessmen, but involve

many types of visitors such as teachers, students, entertainers, professional
persons and so on.

This type of problem is generally eliminated in tax

treaties by reciprocal exemption of residents of one country who visit
the other for limited periods of time.
Another tax difficulty facing international business which our
unilateral tax credit mechanism does not solve relates to various types
of fees and royalties.

It is common for a country to levy tax on out-

going payments, such as royalties, rents, or technical fees, on a gross
basis.

In the United States a tax of 30 percent is levied on the gross

- 5 -

amount of such payments.

A foreign tax at that rate on, say, a royalty

paid to a U.S. licensor of a patent may be considerably higher than our

48 percent corporate tax on the net amount earned by the licensor after
taking account of the costs incurred in earning that royalty.

It may

represent the equivalent of a 55 percent or 60 percent tax on the net
income from the royalty.

The excess foreign tax in such a case could

not be absorbed through our unilateral tax credit mechanism.

However,

a reduction in the foreign withholding tax rate, if sufficiently large,
could bring the effective tax rate on the net income down to a level
which would be absorbed by the U.S. tax.

Or the difficulty could be met

by having the foreign tax apply on a net income basis rather than on
gross income.

These are the approaches generally used in tax treaties.

A somewhat similar problem relates to the determination by a foreign
country of the amount of income earned therein by a branch of a U.S.
enterprise.

In some countries, the costs allowed as a deduction in arriv-

ing at the taxable income of a branch of a foreign-owned enterprise are
limited to those incurred within the foreign country itself.

Thus overhead

costs incurred in the United States which are allocable to the activities
of the branch may not be allowed as a deduction in computing taxable
profits.

The result is that the tax to that extent is on gross income

rather than net income.

Here tax treaties generally meet the problem by

obligating a country to allow costs incurred abroad but allooable to the
branch within its borders as a deduction for purposes of its t'ax.·
There are situations which may involve a combination of problems.
An American firm seeking to enter a market in another country may not only

- 6 be confronted with the difficulties of complying with unfamiliar tax
laws, but it may also be confronted with a foreign tax burden that is
unrelieved by the foreign tax credit provision in our law because of
differing tax concepts.

The so-called permanent establishment provisions

of our income tax conventions seek to cope with such cases.

They describe

certain types of activity which, when carried on in a foreign country by
an American firm, are regarded as not constituting a permanent establishment within that country, and therefore any profits earned through such
activity are not taxable in that country.

Thus a firm in one country

may send out salesmen to the other in an effort to penetrate a particular
market without becoming subject to the tax laws of the latter country.
Other types of activities, some involving the maintenance of a definite
place of business, may also be carried on without constituting a permanent
establishment for tax purposes.

These include such activities as a purchase

of goods or merchandise, the storage of merchandise, the conduct of advertising, and the use of commission agents.

This article may be of special

significance in treaties with less developed countries, where it is not
uncommon to assert tax on a nonresident company which sells goods to a
local firm even though it is not actually engaged in business

~

that

country.
Still another case where a unilateral provision such as our foreign
tax credit is inadequate to deal with international tax problems is
the relatively simple one where foreign tax rates are higher than our
tax on the same income, so that an unused tax credit is generated.

This

- 7 problem arises most frequently where direct foreign investment is involved.
Like the United States, many foreign countries impose not only a corporation tax on profits but in addition they also levy a withholding tax on
the dividends paid to the shareholders whether at home or abroad.

Ordi-

narily, no distinction is drawn between the types of dividend recipients
abroad.

One recipient may be a parent corporation owning all or a major

part of the company paying the dividends.

Another may be an individual

or corporation owning only a few shares in the company.
withholding tax on both is likely to be at the same rate.

The statutory
Under these

circumstances the total taxes payable with respect to the profits earned
through direct investment and transmitted to the United States in the
form of dividends may be considerably above the 48 percent rate imposed
by the United States.

Private investment abroad will thus be handicapped,

as compared with domestic investment.

To solve this difficulty, our tax

conventions seek to arrive at mutually acceptable adjustments in the withholding tax rates on dividends paid by the companies in each country to
shareholders in the other.

We have tried to secure reciprocal with-

holding tax rates on dividends which differentiated between a parent
corporation and other shareholders.

Most of our treaties provide for a

15 percent withholding rate on dividends generally and a 5 percent rate
on dividends received by a parent corporation, which are the rates
recommended in the OECD model convention.

In our conventions with less

developed countries, we have taken the view that withholding tax rates
on dividends paid to parent companies should be reduced only to the point

- 8 where the total taxes imposed on the profits earned in the foreign
country and remitted to the United States do not exceed the U.S. tax on
corporate income generally.

This objective is consistent with the policy

of eliminating tax obstacles to the flow of private capital into the less
developed countries.

Our tax conventions also seek to assure nondiscrimination in tax
treatment for American individuals and business ventures abroad.

It is

not uncommon for nationals of one country to find themselves subject to
heavier taxes in a foreign country in which they are residing than the
nationals of that country.

Through tax conventions we have been able to

secure commitments from other countries that U.S. citizens will get the
same tax treatment as nationals of the country in which they are living.
One of the important contributions of tax conventions to international
trade and investment is that they open the door to consultations between
the tax authorities of the signatory countries.

The creation of this

consultative machinery offers the enterprises of a country some assurance
that where appropriate there will be official discussions on a technical
level with the authorities of the other country to secure a reasonable
determination of taxable income. And perhaps even more important is the
tacit assurance that in appropriate cases there will be the same determination reached in each country as to the amount of the taxable income
present, so that tax would not be imposed by both countries on the same
items of income without each recognizing that a tax has been imposed by
the other.

Closely related to the consultation provisions are those con-

cerning exchanges of information between tax authorities, which

afford~'

- 9 them a means for improving enforcement of their tax laws.

This involves

primarily the routine transmission to one country of data on income received
by its taxpayers from the other country.

In selected cases more elaborate

information may also be transmitted.
These in general are the objectives of the 22 income tax conventions
now in existence between the United States and foreign countries.

They

are also the objectives of the 150 or 200 income tax treaties entered into
by the other countries of the world with each other.
of the Model Convention adopted by the OECD.

They are the objectives

Their general purpose, I

repeat, is to encourage international trade, investment and cultural
intercourse through the elimination of tax barriers and irritants that
can arise from the application of the tax laws of two or more countries
to the same transactions.

They represent the principal achievements in

the three tax conventions now pending before the Committee.

Of course,

as in our existing treaties, there are variations among the particular
provisions depending on the concerns that the other countries bring to
the negotiation of the conventions.

I shall develop some of the specific

clauses to demonstrate how these objectives are attained and to show
how we have moved forward in some respects from the treaties now in
effect.

But before doing so, I would like to stress that the three

pending treaties are with less developed countries, Thailand, Israel,
and the Philippines, and therefore in some instances involve different
problems and consequently require somewhat different solutions from our
treaties with industrialized countries.

- 10 -

The transactions which take place between the United States and less
developed countries ordinarily produce a flow of income from those
countries to the United States, but not the reverse.

Dividends flow

from investments in these countries to the United States, royalties come
from foreign licensees to the United States; American businessmen go
abroad to these countries; American manufactures are sold to these
countries.

In contrast, the movement of such goods and services from the

less developed countries to the United States is generally quite limited.
Under these circumstances, less developed countries are reluctant to
enter into the standard type of tax treaty even though the rules are
eminently reasonable and equitable, because those rules involve a revenue
loss to them without an adequate offset.

Their need for revenues is so

pressing that nearly always they seek a recognition of their problems that
goes beyond the usual tax treaty pattern and thus compensates for the
difficulties they face in entering into any agreement involving a revenue
loss for them, no matter how small.
Since their need for foreign capital is usually urgent, this search
by the less developed countries for a different pattern in their tax

treaties is generally centered on seeking an approach which will move
the industrialized countries

~n

the direction of incorporating a provision

which presents a reasonable likelihood of increased capital flows to the
less developed countries.
As a consequence, the other industrialized countries entering into
tax treaties with less developed countries - and there appear to be over

30 of these treaties - have found it necessary to incorporate a provision

- 11 -

which the less developed countries consider a stimulus to capital in-flows
in order to obtain a treaty with them.

One approach followed involves

exemption by the industrialized country of various forms of income received
by its taxpayers from activities in the less developed country.
approach is the so-called "tax sparing creditll.

Another

In treaties incorporating

such a provision, the capital exporting country agrees to allow a credit
against its tax, not only for the taxes actually paid to the less developed
country, but also for the taxes that would have been paid to the less
developed country if that country had not reduced its income taxes under
some special tax concessions scheme.

Thus, all of the treaties entered

into with industrialized countries by Israel, and this includes the
United Kingdom, France, Italy, Germany and Sweden, involve either an
exemption clause or a tax sparing credit granted by the industrialized
country.

This is also true of the two treaties which Thailand has with

Japan and Sweden.

There appear to be some twenty IItax sparing" treaties

in force between industrialized countries and the less developed countries.
In our view these approaches are undesirable.

Thus, tax exemption

of income derived from investment in less developed countries would be
viewed as a highly inequitable provision by American taxpayers engaged
in business in the United States and would have a highly erratic effect
on the relative tax burden of foreign producers as compared with those
engaged in domestic production.

It would be basically inconsistent with

the principle of the foreign tax credit which seeks to maintain uniformity
in tax burdens as between domestic and foreign economic activities.

- 12 -

A tax sparing credit would operate capriciously, providing the largest
tax benefits to investors in countries having the highest nominal tax rates
and without any necessary relationship to the fundamental economic needs
of a country or to such policies as the "Alliance for Progress".

More-

over, it would stimulate the rapid repatriation of profits from less
developed countries rather than the reinvestment of profits in those
countries.
When the Kennedy Administration came into office in 1961, there were
pending in the Senate three income tax conventions with less developed
countries -- India, Israel, and the United Arab Republic -- which contained "tax sparing" clauses.

The Administration was convinced for the

reasons I have stated, and others that could be added, that such tax
sparing

clauses were not in the best interests of the United States and

of economic development in less developed countries.

Moreover, it will

be recalled that this Committee had entered a reservation to the tax
sparing clause in the Pakistan treaty in 1958.

Those three treaties lay

dormant for several years and were withdrawn by the Administration from
consideration by the Senate in 1964.
The Administration was desirous, however, of negotiating tax treaties
with less developed countries for it regarded tax treaties as beneficial
to both the United States and the less developed countries.

Indeed, the

Congress expressly declared this policy in the Foreign Assistance Act of

1961 when it directed the President to "accelerate a program of negotiating
treaties for commerce and trade, including tax treaties, which shall

- 13 include provisions to encourage and facilitate the flow of private investment to, and its equitable treatment in, friendly countries and areas
participating in programs under this Act.1t

Moreover, the other industrial-

ized nations have been following such a course and extending their network
of treaties to include less developed countries.
The question presented was whether a suitable

a~proach

could be found

which would give recognition to the requirements of the less developed
countries for provisions looking to the encouragement of capital inflows
to those countries and at the same time did not run counter to settled
tax policies of the United States.

Fortunately, develOpments in our tax

law as a result of the Revenue Act of 1962 and later legislation pointed
the path to an appropriate answer.
As a result of the Revenue Act of 1962, our present tax law now
provides a credit - the investment tax credit - against U.S. income tax
of 7 percent of the amounts spent for machinery and equipment for use in
the United States.

Since this credit did not extend to investment abroad,

that Act established in effect a preference for domestic investment as
compared with foreign investment.

Such a policy is understandable with

respect to investment in other industrialized countries.

Looked at from

the standpoint of the less developed countries, however, this provision would
be regarded as presenting an impediment to investment in those countries.
Consequently, the extension of the 7 percent investment credit by treaty
to these countries offers itself as a fitting approach to the recognition
those countries seek with respect to the encouragement of capital inflows.

- 14 It would, so far as the United States is concerned, remove an impediment
to investment in less developed countries and thereby in this respect
establish a general parity of treatment between domestic investment and
investment in the less developed country.

In establishing this parity

and thus assisting investment in these countries, we would also be pursuing
a policy reflected in other tax legislation recently adopted by Congress.
ThUS, the Revenue Act of 1962, which was directed at IItax-haven ll or "basel!
companies abroad, contains a number of provisions favorable to investment
in less developed countries as compared with industrialized nations.

More-

over, under the Interest Equalization Tax, loans made to enterprises in
less developed countries and investments therein are treated in the same
way as domestic loans and investments and thus are exempt from the tax.
Extension to the less developed countries or

incentives

granted to

d.omestic investment is in keeping w·i th a policy recently favored in a
Report of the OECD Fiscal Committee on "Fiscal Incentives for Private
Investment in Developing Countries, 1965

11
:

"Inadequate recognition of foreign taxes is not the only
feature of the tax systems of industrialized countries which tends
to produce discrimination in favor of domestic investment compared
with investment in developing countries.

Many industrialized

countries grant tax benefits to their taxpayers in the form of
accelerated depreciation, initial allowances and investment allowances or credits, but grant them only with respect to domestic
investments and deny them for investment abroad even though they tax
income from foreign investment.

The result is, of course, a tax

- 15 advantage for domestic investment.

If capital exporting countries

using such allowances also granted them with respect to investment
in developing countries, they would be taking another important
step toward promoting increased investment in developing countries. 1f
Moreover, the investment credit approach is far more appropriately
suited to less developed countries than the tax sparing approach or the
exemption of income approach, from the standpoint of equity, efficiency and
administration.

Since the investment credit operates on the act of invest-

ment, it eases the risk of investment at the very outset.

Since the credit

does not turn on the receipt of income in the United States from the
foreign investment, as do tax sparing and tax exemption,it does not
encourage Quick repatriation of profits.

Since the credit does not turn

on foreign tax concessions, as does tax sparing, it does not have the
capriciousness of that device nor does it transfer from the United States
to a foreign country the decision as to whether a tax benefit is to be
conferred and if so, the extent of such benefit.

Since the extension of

the investment credit to less developed countries would but follow the
treatment accorded domestic investment, it does not involve the treaty
process in favoring the foreign investor as against the domestic investor
in a matter closely linked to the rates of tax, as did tax sparing.
With our basic tax laws thus providing an approach that could be
adapted to a less developed country in the negotiation of a tax treaty so
that the United States would not be at a disadvantage compared with the other
industrialized countries in this endeavor, we proceeded once more to enter

- 16 on a program of negotiation.

We felt obliged to renegotiate the agree-

ments with the three countries which had bean withdrawn, Israel, India
and the United Arab Republic.

Of the three, the treaty with Israel, the

first to respond, is before you, and negotiations with India are virtually
concluded.
The less developed countries with whom we have had discussions have
responded favorably to our suggestion that extension of the

7 percent

investment credit is a recognition of their desire for an encouragement
to capital inflows.

Thus the treaties with Thailand and Israel now

before you contain this extension of the investment credit.

Whether the

less developed countries will in their other treaties adopt this approach
instead of tax sparing, we cannot tell.

Yet it seems clear that they

find it at least a satisfactory alternative viewed from their side of
the negotiation, so that tax treaty discussions with the United States
can once more proceed.
It must be recognized that the United States in these negotiations
is quite clear on its view that extension of the investment credit is
appropriate only where the other country is receptive to U.S. investment
and where its tax system, taken as a whole, does not involve measures that
can be regarded as significantly working at cross purposes with such investment.

In many cases the existing tax systems of less developed countries

do not meet this standard.

But the treaty process itself permits the

foreign country to modify its system through the treaty and thus deal
with the contradictions and with provisions which act as disincentives

- 17 to investment from the United States.

For example, the existence of a

complex of corporate taxes and withholding taxes on dividends in a less
developed country, which brings the effective rate of tax on profits earned
~here

above the general level of the U. S. corporate tax, creates a tax

barrier to U.S. investment in such countries.

It would generally be

difficult to justify a tax credit for U.S. investment in such a country
unless that country is prepared to reduce its taxes to the level prevailing in the United states.

This can be done by a treaty but not otherwise,

since that country may not be prepared to reduce its taxes on its own
nationals or those of third countries.
The treaty process also permits complementary modifications where
appropriate in the tax laws of the other country which are conducive
to improved international trade.

Where the other country is not yet

ready to make certain modifications, or is more concerned with continuing
a somewhat restrictive approach to foreign investors, then the investment
credit need not be extended.

While it may well be that in most of these

cases a treaty may presently not be negotiable, this need not always be
the result, as the Philippine treaty before you indicates.

That treaty -

mliike the treaties with Thailand and Israel now before you and the treaty
with India which is nearing conclusion - does not contain an extension of
the investment credit.

Certainly the United States seeks no overre.aching

of any less developed country, and to the contrary is understanding of their
problems and their desires to conserve revenues.

The treaties before

you evidence the recognition of these attitudes and

the basic truth

- 18 that a tax treaty is a negotiation in the true sense of the term , and
one that will be satisfactory and worthy of the United States only if
each country genuinely believes its policies and problems have bean
fairly handled.
Turning now to the specific provisions of the convention with
Thailand, I should like to point out how some of the more important
provisions achieve the objectives that I previously discussed.

The

first of these is Article 3 dealing with the definition of a permanent
establishment.

It contains the rules in most of our other tax treaties

which permit a firm in one country to engage in certain activities in
t he other without thereby acquiring a permanent establishment.

I want

to take special note of a provision of Thai law which is altered by the
tax convention, because it deals with a problem that we find exists in
other less developed countries.

Under Thai law, an American firm which

sells its products to a Thai enterprise through a commission agent or
broker and without in any way engaging directly in business in Thailand
is nevertheless subject to tax in Thailand at the regular rates applicable to any Thai enterprise.

Because the Thais are unable to arrive at

the net income which the American enterprise may derive from such a sale,
they arbitrarily assess a 2-percent tax on the gross amount received by
the American firm from the transaction.

The tax is required to be paid

over by the commission agent, presumably by withholding that amount from
the price due the American firm.

This frequently creates difficulties

in trading activities, since the American seller may not be aware of this
liability and the amount of tax may be relatively high.

Under the

- 19 convention, the tax is eliminated in such cases where the commission
agent is an independent agent thus removing these difficulties.
"
" exc 1 USlve
" 1 y II or
ever, an agent ac t lng

"

How-

" I I for the
a 1most excluslvely

American firm is not treated in the convention as an independent agent.
The position of Thailanti is that a nominally independent broker operating in Thailand is not really independent if his business depends on a
single firm, and therefore, as where it acts through a dependent agent,
me firm should be considered to have a permanent establishment in Thailand.

A similar provision is to be found in the tax convention between Thailand
and Japan.
Article

4 of the Thai convention deals with the determination of

business profits and, in addition to its principal operative provision
that a company not be taxed on business profits unless it has a permanent
establishment in the country, it provides that in computing the industrial
or commercial profits of the permanent establishment there shall be
allowed all deductions reasonably connected with those profits.

This has

been a problem for companies operating in Thailand, because administrative
costs incurred in the United States by the home office on behalf of a Thai
branch have been disallowed by Thailand as a deduction in computing the
profits of the branch.

Under the convention, this will no longer occur.

I have already discussed the investment credit provisions which are
in Article 5 of the draft.

Additional details are contained in the technical

memorandum which has been transmitted to the Staff of the Joint Committee
on Internal .l.,evenue Taxation and which we shall submit for the record.
The revenue effect of this provision would be quite small, since the flow

- 2Q -

of U.S. investment to Thailand is limited.

Based on the average net capital

movement to Thailand in the last few years, and ignoring capital repatriation to the United States, the cost would have been less than $150,000
rumually.

I should like also to point out that this article may be

terminated by the United States after five years, without such termination
ending the entire treaty.
One of the special needs of less developed countries is the technical
knowledge and skill which have been developed in the industrialized
countries of the world.

Companies which have developed such skills may

sometimes be prepared to supply them to less developed countries in
exchange for stock in new enterprises provided such an exchange does not
require them to make cash contributions to the venture abroad as well.
Unfortunately such transfers of technical knowledge, knOW-how, and skills
in exchange for stock must frequently be accompanied by cash outlays in
the form of tax payments on the income resulting from the stock received
in the eXChange.

This is true under U.S. law and it is also true under

foreign tax laws.

Article 6 of the convention with Thailand seeks to

remedy this difficulty by deferring tax on such transfers until the stock
received by a transferor is disposed of.

This article in the convention

alters both U.S. and Thai law in this respect.

Under U.S. law, tax on

transfers may be deferred only if the United States company has an 80 percent interest or more in the foreign corporation to which it transfers the
mOW-how and if the know-how constitutes property.

may be appropriate in many cases.

These requirements

However, insofar as less developed

Countries are concerned there is great need for services as well as

- 21 property and for encouraging joint ventures where the American company
may not necessarily possess even a majority of the stock, let alone

80 percent.

Under Thai law, no deferral is granted irrespective of the

ingredients of the exchange or of how much stock in the acquiring corporation the donor company has.

The tax deferral provided by Article 6

cannot be effectively granted as a unilateral measure since deferral by
the United States would be of little use if tax is imposed by the foreign
country.

Accordingly, the tax convention is a uniquely appropriate method

for matching the tax laws of the two countries with respect to this
important problem.

The United States or Thailand may also terminate this

article after five years.

I should like to add that the treaty provision

is not intended to be a substitute for existing statutory provisions but
a supplement to them.
To turn to another provision, international transportation enterprises
face unusual tax burdens by virtue of the fact that their income may be
derived from many places and the tax laws of various countries which they
touch may vary significantly.

As a result it has become an objective

for most countries to seek reciprocal exemption of the profits, if any,
earned by their international transport enterprises.

Tax exemption also

assures that such enterprises will not be taxed by some countries if their
overall operations turn out to be unprofitable, as is freqnently the case.
Article

7 of the convention provides for complete exemption of aircraft

operations in international traffic. The Thais were not prepared to agree,
however, to full exemption of shipping, partly because of the lesser
likelihood that they would acquire international shipping lines going to
the United States to offset the loss derived from their exemption of

- 22 -

American shipping firms.

Nevertheless, the Thais did agree to reduce

the tax payable by shipping enterprises to one-half the amount that would
otherwise be payable.

While this provision does not relieve American

shipping companies of the necessity to comply with the Thai tax laws, it
does reduce the likelihood that they would pay taxes to Thailand which
could not be credited against their U.S. tax liability.
The dividend article in the Thai convention, Article 9, provides that
the maximum rate of tax that would be imposed on dividends paid by a corporation in one country to a parent corporation in the other would not exceed
20 percent.

The Thai tax on dividends is graduated from 15 to 25 percent,

ald ffi:)st dividends are subj ect to the 25 percent rate.

At that rate, the

Thai tax on profits derived in Thailand by an American parent through a
Thai subsidiary combined with the Thai tax on the dividends transmitted
by the Thai subsidiary exceeds the U.S. corporate tax on the same income.
~

reducing the withholding tax from 25 to 20 percent, the total combined

Thai tax is kept slightly below the level of U.S. tax on remitted profits,
so that no excess credit is generated in Thailand.

As a matter of reciprocity,

which the Thais desired, the U.S. tax on dividends leaving the United States
is also limited to 20 percent.
The tax on interest is not affected by the convention, except in
the case of interest received by the respective governments or their
instrumentalities, in which case exemption is granted at the source.
This provision, Article 10, eliminates the uncertainty which in some
cases has surrounded United States governmental lending programs in
Thailand.

- 23 Article 11 of the convention deals with royalties and provides that
the maximum withholding tax rate on royalties will be 15 percent compared
with the Thai statutory rate of 25 percent and the U.S. statutory rate of
30 percent.

The reduction in the rate of withholding on royalties is a

reflection of the view that a high rate of tax on the gross amount of
royalties will frequently result in a higher rate on the net earnings
and lead to an unused tax credit.

The reduced rate is thus a device to

compensate for the fact that costs have been incurred in developing and
administering patents, films, and other property rights which costs are
not given any recognition when gross royalties are the basis for the tax.
Article 13 of the convention deals with income from personal services
and makes it possible for American firms to send their employees to
Thailand for periods up to 6 months instead of 3 months without their
becoming subject to tax in Thailand.

The value of this provision is that

greater flexibility in assigning tecrmical personnel is attained by
firms which find it necessary to have such persons temporarily stationed
in Thailand. The article also provides exemption of entertainers.
However, in these cases the exemption applies only if the earnings do
not exceed $100 a day or an aggregate of $3,000 for the entire period
the entertainer is in Thailand.
As in the case of most of our other tax conventions, this one with
Thailand contains provisions designed to promote cultural exchanges.
Thus, under Article 14 teachers from one country may go to the other for
a period of two years and remain exempt from the tax of the latter country

- 24 during that period.

Similarly, under Article 15, students and trainees

may come from one country to the other and be tax-exempt in the latter
country for varying periods of time, depending on the circumstances
involved.
Article 18 of the convention deals with charitable contributions.
Under that article, American citizens and corporations may take a deduction in computing their U.S. income tax for contributions made to a Thai
organization provided it qualifies as a charitable organization under
our law.

Of course it also provides that the organization must be exempt

from tax under Thai law.

Similar provisions are included in the income

tax conventions with Honduras and with Canada, although in the latter
treaties the maximum deduction is based upon the amount of income derived
within the respective countries.

This article reflects the fact that

American citizens and companies in Thailand feel an obligation to participate in community affairs and that charitable contributions are an
important part of such participation.

The United States

~ay

also terminate

this article after five years.
Since the convention provides that Thailand will impose a tax on the
commercial and industrial profits of American firms only if they have a
permanent establishment in Thailand deriving income from sources within
Thailand, it becomes important to have rules relating to the source of
income.
Thai law.

Such source rules are found in U.S. law, but there are none under
In Article

19 of the convention, the Thai Government has agreed

to adopt rules which are embodied in U.S. law.

This will introduce a

- 25 degree of certainty in tax determination for American businessmen engaged

in business in Thailand which does not exist at present and to which they
attach a good deal of importance.

The principal departure from the U.S.

source rules relates to interest paid by a U.S. branch in Thailand.

Under

our law, an American firm paying interest on funds borrowed from a bank,
~r

example, is considered to be paying interest from U.S. sources and

therefore must withhold a 30-percent tax even though the borrowing was
done by its branch in Thailand and the interest is paid by the branch in
Thailand out of its fUnds.

The treaty establishes Thailand as the source

in such a case so that our tax would not apply.
Under existing Thai law, no provision is made for allowing taxpayers
a credit for taxes imposed on income they receive from sources outside
Thailand.

The result is that American citizens resident there or branches

in Thailand of American companies which derive income from sources outside
Thailand may be subject to tax both in Thailand and in the country from
which they derive income.

Under Article 22 of the convention, the double

taxation that now exists for these persons would be eliminated as a result
of the credit granted by Thailand for U.S. taxes on U.S. income.
In most of our conventions, the nondiscrimination article applies
with respect to individuals from one country who are resident in the
other.

Many conventions go beyond that and provide that nondiscrimination

shall apply in each country to a local branch of a foreign company.

Article 23

of this treaty goes even further and makes the nondiscrimination prinCiple
applicable to a local corporation of one country which is owned by nationals

- 26 or corporations of the other.

This comprehensive nondiscrimination article

represents a marked step forward in securing fair treatment for American
interests in foreign countries.
I hope, Mr. Chairman and members of the Committee, that this rather
lengthy presentation has served to clarify the nature and purpose of our
tax treaty program.

We believe this program can make a useful contribution

to international trade and investment in less developed countries by
eliminating a number of tax problems, introducing sounder tax practices
and establishing the basis for cooperation between our tax authorities
and those of the foreign countries.

This program will enable the

United States to develop a network of tax treaties with these countries
and thereby permit us to keep pace with the other industrialized countries,
who are extensively using tax treaties as a significant means of cementing
their economic relationships with the less developed countries of the
world.

- 6 The Treasury has always maintained close connection with
the International Bank, and is fortunate indeed to have

Mr. Merchant as the U. S. Executive Director of that Body.
Similarly, as Secretary of the Treasury I am most
fortunate because Mr. Merchant's parallel aS1J-ignme.nt is

that of a Special Assistant to the Secretary of the
Treasury.
Livy, I know everyone in this room joins me in

welcoming you into this new assignment, through which you

will continue your great service to our country and thus
further draw upon your great talents, judgment, and experience

000

2ioancial relationships.

His experience spans three

coutioents in ttmes of war,

--

cr.t recovery

and

'iJ..

peace.

As is so often the case wlth men of such outstanding
capacity his departure from Government service ••"ly
f1QVer takes place.

After his last tour 041 duty as our

Ambas sador to Canada, he agreed to serve as a Spec 1a 1

Assi.stant to the Secretary of State for the Multilateral
Nuclear Force.
His most recent contribution has been that of joining

with a dlsttng.uished Canadlan colleague in preparing a
Spec tal Re?ort for the President of the United Statel and
the Prime MiEister of Car.ada on the subject of U.S. - canadtan
Relations.

- 4 and in pr iva te liie which have

this present assignment.
ba;-,king he

join~d

80

well equip~d h1.ra (or

Arter sixteen years of Inv.atment

the Department of State to begin a moat

di.stingulshed career in the forei.gn service.

Af~er

holding

important positions dur1nr; world War II, he became Counaelor
for our Embassy in Nank.ing J China.

Later he vaa named

Deputy Assistant and subsequently Assl.tant Secretary of
S ta te for European AJ,- ta lr s •

Ambassador to Canada, and

l~s

He

was

tv tce

named . . our

served as Under Secretary of

State for Political Affairs.

He has represented the United States in

ma&~'

international meetings of the highest importance.

He

ur,derstand$ the problems or our toreigf1 policy» not only in
the i.r oalit teal context, but also in the lr economic and

- 3 . 'j

, r'

t:

action by governments for short range political consideration.

These thoughts were strongly in the President's mind when
he nominated Mr. Merchant
of the World Bank.

a£

the U. S. Executive Director

This country, and indeed the._1fhole

free world. is most fortunate because time and cireumstance
have made Livingston Merchant available to shoulder this
responsibility_

The growth of the Bank and the times we

live in call for an individual of significant stature in
this position, and in Mr. Merchant we have a man

~

superbly

equipped for the part he will play in representing the United
States in its share of the process of determining the coura.
of the Bank's future policy_
I am sure that most of this audience is aware of the
highlights of Livingston Merchant's background in

Gove~nt

- 2 s .Lc;nif Lcant

pl.U

cess taking place

ill

the .f.e'e world today.

Last year the Bank loaned over $1 billion to its members.
The World Bank and the IDA constitute the principal source for
multilateral assistance to those countrees of the world which
are making efforts to improve the lives of their peoples by
building stronger and more~fficient economies •
•

We must r.ememhsr, too; thet ~n addition to the loans

it makes, the World Bank takes the initiative in organizing

consortia and consultative groups for securing and organ1z1ns

economic aid for many countries in Asia, South America-, and
Africa which are developing plans for their long range eeona.ic

growth.

It is also taking leadership in divising arrangement.

under which outside private investment can plJy an increaling
role in this process at less risk from unfair and arbitrary

REllARKS BY THE HONORABLE HENRY H. FCNLER
SECRETARY OF THE TRFASURY
AT SWFARING-IN CEREMONIES OF LIVINGSTON T. MERCHANT
AS U. S. EXECUTIVE DIRECTOR OF THE INTERNATIONAL BANK

FOR RECONSTRUCTION AND DEVELOPMENT
WEDNESDAY, AUGUST 11, 1965
AT NOON

My friendship with

~iv1ngston

Merchant goes back many

years and my respect and admiration for his abilities and
his dlaracter increases with

thoae~rs.....

I think we ..all....&H aware of his great contributions
to American foreign policy and to the whole field of foreign

service.

It is a matter of great pride and satisfaction to

me to welcome htm to his new duties today.
The past years have seen a great expansion in the influenc.

of the International Bank for Reconstruction and Develo,..nt.
Together with its affiliates, the Internatianal Development
Association and the International Finance Corporation, the
World Bank has u.a.ly become a focal point in shaping world poU
for economic development -- and I know of no more univer.. l1y

TREASURY DEPARTMENT
Washington

REMARKS BY THE HONORABLE HENRY H. FOWLER
SECRETARY OF THE TREASURY
AT SWEARING-IN CEREMONIES OF LIVINGSTON T. MERCHANT
AS U. S. EXECUTIVE DIRECTOR OF THE INTERNATIONAL ~ANK
FOR RECONSTRUCTION AND DEVELOPMENT
WEDNESDAY, AUGUST 11, 1965
NOON
My friendship with Livingston Merchant goes back many years
and my respect and admiration for his abilities and his character
increases with experience.
I think you are all generally aware of his great contributions
to American foreign policy and to the whole field of foreign
service. It is a matter of great pride and satisfaction to me
to welcome him to his new duties today.
The past years have seen a great expansion in the influence
of the International Bank of Reconstruction and Development.
Together with its affiliates, the International Development
Association and the International Finance Corporation, the World
Bank has become a truly focal point in shaping world policy for
economic development -- and I know of no more universally significant
process taking place in the world today. Last year the Bank loaned
over $1 billion to its members. The World 8ank and the IDA
constitute the principal source for multilateral assistance
to those countries of the world which are making efforts to improve
fue lives of their peoples by building stronger and more efficient
economies.
In addition to the loans it makes, the World Bank takes the
initiative in organizing consortia and consultative groups for
securing and organizing economic aid for many countries in Asia,
South America and Africa which are devloping plans for their
long range economic growth. It is also taking leadership in
divising arrangements under which outside private investment can
play an increasingly important role in this process at less risk
from unfair and arbitrary action by governments for short range
political considerations.

- 2 -

These thoughts were strongly in the President's mind when he
nominated Mr. Merchant to be the U. S. Executive Director of the
World ~ank. This country, and indeed I think the Bank and its
constituents throughout the world, is most fortunate because time
and circumstance have made Livingston Merchant available to shoulder
this responsibility. The growth of the ~ank and the times we
live in call for an individual of significant stature in this
position, and in Mr. Merchant we have a man who is superbly
equipped for the part he will play in representing the United States
in its share of the process of determining the course of the ~ank's
future policy.
I am sure that most of this audience is aware of the
highlights of Livingston Merchant's background in Government and
in private life which have so well equipped him for this present
assignment. ~ut let me detail a few of these. After sixteen years
of investment banking he joined the Department of State to begin
a most distinguished career in the foreign service. After holding
important positions during World War II, he becamse Counselor for
our Embassy in Nanking, China. Later he was named Deputy Assistant
and subsequently Assistant Secretary of State for European Affairs.
He was twice named our Ambassador to Canada, and has served as
Under Secretary of State for Political Affairs.
He has represented the United States in international
meetings, many of the highest importance. He understands the
problems of our foreign policy, not only in their political context,
but also in their economic and financial relationships. His
experience spans three continents in times of war, recovery, and
peace.
As is so often the case with men of such outstanding capacity
his departure from Government and from public service never really
takes place. After his last tour of duty as our Ambassador to
Canada, he agreed to serve as a Special Assistant to the Secretary
of State for the Multilateral Nuclear Force.
His most recent contribution has been that of joining with a
distinguished Canadian colleague in preparing a Special Report for
the President of the United States and the Prime Minister of Canada
on the subject of U.S. - Canadian Relations.

- 3 The Treasury has always maintained very close connection with
the Bank, and is fortunate indeed to have Mr. Merchant as the
fulltime U. S. Executive Director of that Body.
as Secretary of the Treasury I feel particularly
fortunate to have him working in parallel as a Special Assistant
to the Secretary of the Treasury.
S~ilarly,

Livy, I know everyone in this room Jo~ns me in welcoming
you into this new assignment, through Which you will continue your
great service to our country and thus further draw upon your great
talents, judgment, and experience, and it is with very great pleasure
that I ask you to come forward and take the oath. Mr. Trued will
administer it.

000

-

('

"
.1

-

~

','LO(~;'.J,ct:.O-,;. 0

1l1~ new quc::::rters

I

cw, ?ni l:,(:eln(lia ~':i.nt.

;"081:,

0';,,:

e<l1:1 y

lXt

~"UHl

to

composite

FacilL.

~es

iJ'3

ior procucing clad metal strip at the

buill at Philadelphia come into being the

,~[lteri81s

lot'

The L,ew coins will be issued late thil

19 6(, according co the need for coins.

hlk~n~c;cilitles

nen',

\"ill begin this month at

for the new coins will be produced there.

production of clad strip are to be added in

the Denver lhnt.

Procurement of materials for the new coin.

will continut: outside the Mine until facilities for its
production be(;ome available.

000

- 2 silver-coppel:

Oll

~:oppcr-silver

lliloy for this coin.

They were:

-- A contract for approximately $8 million with Engelhard
Industries Inc., of Newark, New Jersey, for production at pl.tl

in

and in Plainville, Massachusetts.

Newar~(

-- A contract for approximately $3 million with Handy
and Harman, of New York City, for production in its plant at

Fairfield, Connecticut.

,,!:~ /
,tW/

A\. million contract for the supply of the cOIapO.ite
~

metal strip needed for the

n@~

quarter and dime baa been

signed with Composite Metal Products, Inc., of Eighty-four,

Pennsylvania.

The new 10 cent and 25 cent pieces

will hav.

iaces of the same 75 percent copper, 25 percent nickel alloy
from which the 5 cent piece is made, bonded to a core of pure

copper.

~l

July 27 the Treasury announced the signing of

three contracts :tor this material, amounting to approximately

L i? AFT
FOR ,-{ELLASr. AT _": ·)0 PU EDT
\,Tf:DtffiS.i\-\Y, AUGUST 11, }965

TREASURY ANNOUNCES ADDITIONAL
CONTRACTS FOR COINAGE MATERIALS
Tbt~ Tri;~asury

today annolmced signature of the first

contracts for procurernel1t of materials for the new silver half
collar, approved in the Coionge Act of 1965.
:~or

A further contract

procuremeI,t of materials for the nelt¥ quarter and dime hal

also been completed.

Productton of the new half dollar, which will be the
silver standard uearer of the new fractional coinage, will be
start;:!d llt

tn(~

Denver r.1int this fall.

will be a composite coin,

~ith

The new 50-cent piece

faces of 80 percent silver

aLe LJ perce;.1t copper, bonded to a core of 21 percent silver

and 79 percent copper.

1\,·0

cont:racts have been si[:ned for the purchase of the

TREASURY DEPARTMENT

August 11, 1965
FOR RELEASE AT 5: 00 P.M., EDT

WEDNESDAY, AUGUST 11, 1965
TREASURY ANNOUNCES ADDITIONAL
CONTRACTS FOR COINAGE MATERIAL
The Treasury today announced signature of the first
contracts for procurement of materials for the new silver half
dollar, approved in the Coinage Act of 1965. A further
contract for procurement of materials for the new quarter and
dime has also been completed.
Production of the new half dollar, which will be the
silver standard bearer of the new fractional coinage, will be
started at the Denver Mint this fall. The new 50-cent piece
will be a composite coin, with faces of 80 percent silver and
20 percent copper, bonded to a core of 21 percent silver and
79 percent copper.
Two contracts have been signed for the purchase of the
silver-copper on copper-silver alloy for this coin. They were:
-- A contract for approximately $8 million
with Engelhard Industries, Inc., of Newark,
New Jersey, for production at plants in Newark and
in Plainville, Massachusetts.
-- A contract for approximately $3 million with
Handy and Harman, of New York City, for production
in its plant at Fairfield, Connecticut.
A $3 million contract for the supply of the composite
metal strip needed for the new quarter and dime has been
Signed with Composite Metal Products, Inc., of Eighty-four,
Pennsylvania. The new 10 cent and 25 cent pieces will have
faces of the same 75 percent copper, 25 percent nickel alloy
from which the 5 cent piece is made, bonded to a core of pure
copper. On July 27 the Treasury announced the signing of
three contracts for this material, amounting to approximately
$42 million.
(OVER)

F-l66

- 2 -

Production of the new quarters will begin this month at
the Philadelphia Mint. The new coins will be issued late
this year, or early in 1966, according to the need for coins.
When facilities for producing clad metal strip at the
new Mint to be built at Philadelphia come into being the
composite materials for the new coins will be produced there.
Facilities for production of clad strip are to be added in
the Denver Mint. Procurement of materials for the new coins
will continue outside the Mint until facilities for its
production become available.

000

TREASURY DEPARTMENT

FOR IMMEDIATE RELEASE

AUGust 12, l'J{)S

SU3SCRIPTION FIGtffiZS FOR CUPFE.NT EXCHANGE OFFL'RIrJG

The results of the Treasury's current exchange offering of
4% notes dated August 13, 1965, maturing February 15) 192,7, and.
4% bonds of 1969 dated August 15, 1962, with interest from

August 13, 1965, maturing

Feo~Jary

15, 1969,

open to holders of $7,268 million of 3-7/8% Notes of Series D-196S maturing
August 13, 1965, are summarizea in the table below.

Total subscriptions

amount to $7,035 million, leavine $233 million, or 3.2%, of the maturing
notes for cash redemption.

About 7 .4~S of the public holdings '.{ere not

exchanged.
Federal Reserve
District
New York

Philadelphia
Cleveland

Atlanta
Chicago
St. Louis
l.unneapolis
Kans33 City
Dallas
San Francisco
Treasury

Total

4%

Bonds of 1968

93,342,000
211,428,000
'38,149,000
31,723,000
5:'),229,000
117,153,000
197,654,000
18,396,000
$5,150,432,000

:p1, 884 ,425,000

82,0"11,000

4,005,004,000
G1,116,000
156,274,000
51,9~3,000

Richmond

Exchanges for the

26,819, ooe
1,429,003,000
20,605,000
66,4:33,000
9,640,000
18,193,000
134,554,000
17,909,000
11,886,01)0
11,427,000
12,704,000
125,064,000
____ 68,000

:~

Boston

F-167

Exchanses for the
4c1I o Notes,_ C-l967

;,J

TREASURY DEPARTMENT

August 12, 1965

FOR D'lME:DIATE RELEASE

TREASURY DECISION ON HARDBOARD
UNDER THE ANTIDUMPllJG ACJr

The Treasury Department has determined that hardboard from
South Africa is not being, nor likely to be, sold at less than
fair value wi thin the meaning of the Antidumping Act.

A "Notice

of Tentative Determination," was published in the Federal Register on June 22, 1965.
No written submissions or requests for an

~portunity

to

present views in opposition to the tentative determination were
presented within 30 days of the publication of the above-mentioned notice in the Federal Register.
Imports of the involved merchandise received during the
period October 30, 1964, to date were worth approximate~
$151)000.

TREASURY DEPARTMENT

August 12, 1965

FOR IMMEDIATE RELEASE
TREASURY DECISION ON HARDBOARD
UNDER THE .ANTIDUMPING Ac:r

The Treasur,y Department has determined that hardboard from
South Africa is not being, nor likely to be, sold at less than
fair vaJ..ue within the meaning of the Antidumping Act.

A "Notice

of Tentative Determination," was published in the Federal Register on June 22, 1965.
No written submissions or requests for an opportunity to
present views in opposition to the tentative determination were
presented within 30

~s o~

the publication of the above-men-

tioned notice in the Federal Register.
Imports of the involved merChandise received during the
period October 30, 1964, to date were worth approximately

$151,000.

TREASURY DEPARTMENT

FOR IMMEDINrE RELEASE
TREASURY DECISION ON hEADBOARDS
UlIDER THE ANTIDUMPING ACT

THe Treasury Departmeat has determined that headboards, manufact~ed

of

~ood,

from Yugoslavia, are not being, nor likely to be,

sold at less tnan fair value within the meaning of the Antidumping
Act.

A "Notice of Tentative Determination,

Federal Register

O£l

I,

was published in the

June 22, 1965.

No written submissions or requests for an opportunity to present
vie~s

in opposition to the tentative determination were presented within

30 days of tne publication of tne above-mentioned notice in the Federal Register.
Imports of the involved merchandise received during the period
June 1, 1964, tHrough March 31, 1965, were ~orth approximately $110,000.

TREASURY DEPARTMENT

FOR IMMEDIATE RELEASE
TREASURY DECISION ON HEADBOARDS
UNDER THE ANTIDUMPING AC T

The Treasury Department has determined that headboards, manufactured of wood, from Yugoslavia, are not being, nor likely to be,
sold at less than fair value within the meaning of the Antidumping
Act.

A "Notice of Tentative Determination,

II

was published in the

Federal Register on June 22, 1965.
No written submissions or requests for an opportunity to present
vie~s

in opposition to the tentative determination

~ere

presented within

30 days of the publication of the above-mentioned notice in the FederaJ. Register.
Imports of the involved merchandise received during the period
June 1,

1964, through March 31, 1965, were worth approximately $110,000.

- /s(Iu If let Nm:

In Viet

~lL

Narr~,

r.Jrts 01_ the

i.J£

cai(.e up the arrow

tllsreLore,

~~-orld

\"-J@

0,(

war,

80

that th. 011,.

seek only what we .e.k 1D

-- a just and .i:ree

peace.

',fur supreme 1.lurpOSe -- tl1el'e, as elsewhere -- ia to furtIlI

-- the dream of a world ill

Ci.l<lt

xeatefSt (iream of all mankin

\lh• .i..\~tl

all uen an.. , nut :Lons can 1 ive to:setner in peace and

DrosperiLy, ".liel1 r..rec0om and

(!i~nity

and justice.

Ttllli: is the .-jream that President Johnson haa surpal.1Dgly

'''ortraYNl c1nc

:",'1;;;_ _

_

,_<::!

"...

steaj.~astl.y

!'~J.;
',',
...

l','~L'_ lL'.>

'.,:;n
.....

pursuea. in deed and in word, at

5

-1.--

0""'~...

__

.lor ourselves. and for othl1'l

And while thus we labor to build a Great Ioelety at

~.

we also bear the burden of learlership in purau1n6 peace aAd
dec.:endin:; ireedom abroad.

That ia why. today, til Ioutb...t Alii

we lend arms and men and supplies to belp the tiDy COUDtry of
South Viet Nam. 1n ita strugo.;le fOX' survival •• a free .ad

independent nation.
In Viet Nam, a. elsewhere, it 1. peace that w. . . . , DOt

war -- cooperation, not conflict.
Btat in Viet Ham, S18O, we

d~.tr.t.

that, wilile we

never seek to provoke, we ever rel.-ua. to appease.
In Viet Nam ,,:e demonstrate that, tvnl1e we yield to DO

nacion in the patient pursuit ot peace aDd tbta work. of p.....
we [lave ttle -:;.,i11 and the weapons to iiJht. if fi.4l t we ...t
to

r1e .. eod

our trecdom and ella freedom at our fellow Nll.

In a recoro u;c accomplishment unexampled 111 our

hl'~l'Jt

the i'resident has proposed and tile Congre •• hal paned a bo.t

oi measures that put us tar

alon~

the path toward

taat ...1 ~

no measures more ir'...tportant tilan thoae to make our eclucatioul
system, in the President's word., "equal to our towerlag

expectation. of the America that we love and the America that
.1&
to come.• -r t

~~re

truro any in our hi.tory, the edicational progr..

taat Presiden, Jotmson and tile Congre•• bave thu. fa:

fashioned will hasten that oay in our land when ability to lun

rather than ability to pay, will be the sole ataadard of
educational opport\Jnity -- when every child, in every

can -- as the Peesident has Jeacribed it .education,
demands

an~i

04

'~ve

re,t..

all of

tae

tne hi.;ilest quality, which hi. or her _itlca

nis or her Ltind can absorb. I,

- 31-

,',1ho leads our nation in the path.. of peace and proaperity.

0" order and ,justice and freedom, both at home and abroad.
At home" President John.on has guided ua into the

sr-t••!

period of peacetime prosperity in our history -- by helpt.&
Drinr: to;,;et.her all se;;ments of our eociety. all lector. of

our economy, into a dYn8mic partnership for progre •• who ••
constructive potential we have only be.sun to realize.
He has taken the nation to new heights -- raised d . 011

eyes

to the vision and our enersies to the talk of

an age-old American

drea~

fulll1l~

-- the dream of a Great Society ta

whose aoundant life every citizen can share to the full.at

measure of his capacity and his destre.
2

In

,.10 in.,;

so, he ha s given America a goal to ill.,i!'.

verv'reatness it demands.

m.

:;
!

to

helpin~~

builo1n~

{I

'.o1in their nearts Clnd minds to the challen&e of

the

New~.

n~ese ~ere

1 speak ot Robert E. Lee.

men who understood that the

i~tur.

beloaal

to those who seek., Duild, not to destroy -- who .eek to
bind, not to break _. who seek to heal, not to hurt.
These were men wno understood that the perpetuat10n of

hatred, and division, and violence could only prevent tbe
Souch

~rom becomin~

what all wbo lovea nerewanted her to be,

and knew she could be -- a region ot abounding plent.y where

men and ruen's dreams can live aDd thrive.
Today, it is a man like these -- a son of tbeSoutb . . . . .
of the spirit anc vision of Henry W. Grady and of Robert E. LN.
a man of wiSGom and understandins • of rea.on and moderatioD ••

I speak, first, of Henry }Gradp--- tne diatlngul8bed edlbW
01

the Atlanta Constitution .- who in tbe decad.. follow1Qg

tne war spoke so eloquently and effectively of • lIew Ioutk ••

a South united. not in bitteme •• and grief, but: in
and pOlitive purpose of creating an

LlN~Jf~lleled

~he

great

pro,peitty

:\.:or all her citizens.

I speak, also, of a maD from my own native .011 of
Virginia -- the man who led tile young men of tbe ScNth on

tal

battlefieLd. of war -- and who, onee the war wa. over, .......

toe presideney ot a aaall college in the Virginia ~itl • ..at~
kno\Jn then as \-Jaahington College. and known now •• V• •iDle.
and Lee.

'lbere. he devoted the remaining years of hi, life te

llelpin;; lead young men of the Sofath into tbe work. of p ......

would divert your energies and your .eeourcel a.ay
~reat o~portunity

ot divisiveness

f~,tbe

before you into the blind aDd bitter

pa~

and of hatred and of fear.

For the South, a. for the nation, the

elo.~g

decade.

at the Twentieth Century nold forth the prom! •• of progr•••
and prosperity in all

s~e.

of human endeavor of a kind

and scale to surpa58 all we bav. 8een and all we might nrtai ...
Hut if that promiae 1, to be fulfilled, tben the Soutll

l1al8t

enter the closing decade. of this century lneplred b7 tile

sa.e quality and kind of vi.ion unveiled before the South
I:WO

of ber great.tIt sona -- by

t1IJO

b7

of America'i gr. . .1t _ . . .

in the period following the War Between the State. vb_ the

region was torn asunder by war and raciAl turmoil.

TUe challenge ue10re you now is to build upon that ba ••••

and tllUS to Ioove far closer toward the ,5reat 8CODOIDie

accomplianmenta that lie will within your grasp. if you are
will in~~ to sstie them.

To meet that challenge will~t be ea.y.

It will require that

~

of respon81bility here in

the South -- the leaders in sovernMent, iabu.ine•• , in 10Cl1

and community a£.i:.ira -- carefully encourage'the growth of
that lame stron6 partnership ior prosperity between all

.~tf

or: your economy that has worked so well on tlle nat10DAl 1...1.
It will Jl!quire tnat men of responaiLlity here in tb. . .~

toe leaders in Lovernment, in businesa, in local aad co ••-tty

af£airs -- reiuie to relinquish the initiative to those wbo

in

La.hlnl~ton

and in the State Governments and 1n the local

coamunities -- that th.e Sout:1l has come

80

far in rec_t dead,••

and stand ••now on the threshold of an 9& of enormous eeoDIale

promise and potential.

The South has a strong nucleus of capital. plant,
technical and business know-how.

aDd

Ita po.sibiliti •• for

development are limited only by the depth of the desire &DCI

determination of its people to create the kind of coaditiou.
the kind of climate, the kind of atmosphere -- not 0811 18
which this nucleus of native resources can grow aDd pro.,•••
but which will draw new capital, new plant, Dew teehnology, ...

new brain-power to the South as

8

place where both meD aael

industry can flouriSh.
The

~outh has

succeeded thus far in laying a S)UDd .nd

stron:;, economic !lase.

~arned

them the hi;hest regard and respect of American. Mt

t'

only in this state and in this re 6 ion but throughout tb. . .

I have spoken of John Sparkman'. contribution. to aat'-i
Bnd international fiMneial affairs-.

But hi 8 concern. aDd

his ac.ecmpllshments go far beyond purely fiftMaCial eoaflMa.

i!.~.- the

fieldotif housing,

~ taa UdI F ".i~ iD tile fl.ld

of small business. in the field of edueation. in the £le1. of
rural electrification -- in ~J._~i theae fielda and ~ tIM
t

last several decades have seen scar.ely a national

'.

prog~

to

advance the welfare of our citizens which John SparlaMlI bat •
stron:;l." supported or which does not bear th.'wark of hi...111

anci effective leadership.

\it 1s lar3ely throu.;h leader_it> of hii kind and caliber

- 24 l'hl.&

less.:m~

this expe';;'-l.ence -- de[Uonatrated at tbe

nat L.lrlBl level unaer the inspired leadership of President

J":lhns('lO] --

has

a

special relevance t·,) the South.

Fer the South is a reg ton rich in natural and human
tesour·ces.
The

8S

f

a

eCH,\~l~:y ~f

ldlDle - -

::-11 i.ts

) [ that

In

this state -- the economy of the South

have shared, and shared abundantly, in the
,;f"'')~;''~nb

la:~:;;e LleaSl.ll-e

pai"t nership because ;;f

d: supe"b

an.~

partnership for prosperity that hal

J

you have shared

li&eil

80

fully in that

like John Spar1UUan -- men who•• carel

unselfish service to their state and their Datiol

- 23 •

Over the past four and a half yeara of uninterrupted
prosperity ~ business, labor. and government have demon.tI"ated
that. by pulling together, they can achieve far more than by

pulling apart.

They have demonstrated that, by working with each other
to create greater abundance for all, they ..rve their
individual self-interests far better than by working apinlt
each other to secure aom. app8X'ent marginal adv8Iltapa.
This, then, i8 the lesson to which our unparalleled
prosperity bears unimpeachable witness:

the 1ea80n

that,

in economic affairs as in all others, we are strong.at wheD
we work to broaden the areas of cooperation

when we seek to widen the areas of conflict.

- 22 -

non-inflationary collective bargaining and pricing proc••••••
In particular, both parties in the steel industry must cOIl.14K
whether they do not carry an added burden of responsibility

for avoiding an inflationary settlement which would not
only affect that crucial industry, but which eould set a

pattern for others.

- 21 specialized government services benefitting special group.
are furnished on a no cost or a highly subsid6zed basis.
These are some of the hard questions and difficult
decisions that President Johnson and his Administration are
wres tImg with today.

They are the counterpart of the

guestions -- equally hard and difficult -- that labor and

business must also ask themselves.
Labor, for example, in its wage decisions -- and industry
in its pricing decisions -- must ask themselves whether thi.

is a time,ri:i indeed there ever

lS~

when they can safely
/

i

exceed the quidepos.s that define the public interest in

- 20 ob jalJ t iJAlrS •
We are asking ourselves whether tilis is 8 time when
Congress -- and government workers, too -- should reconsider
the implications, in terms of the budget and as a precedent for

other groups, of a proposed increase in pay for civilian
,

government workers far in excess of ~O'tb' the Administration'.
request and- ttre- wage-pEice-qaldeposta M ,ta.

~P'C11

of

EQoemrti:e Advisers.

;In my own 8epartment, for example, we are retb.ialdJrIf"Plana)

anq paPt78'pec ts for tax reduc tlon in the

11gh~

new

of

I

prlorlt1t••\
"'--.J

We are also asking ourselves whether this i8 the time to cona~

enac tment of an omnibus user charge program that would include

the proposals made in the President's 1966 Budge,. and Ixciae
I

Tax Messages as well as a number of additional areas in which

- 19 higher budgetary deficit, and expect to finance such a deficit
easily without addi.ng excessively to the money supply.

We are asking ourselves whether

F=

with miH-t5aIFf-

----"-",.,...

.,.dit'!/

in this fiscal year rising appreciably above eartle' budget
~s~tee

-- this is a time when we should bry to

miD~ize

increases in the budget deficit by accelerating the elimination
or reduction of old,

OU~

and obsolete civilian programs

for the current budget -- a process, as I have said, that
President Johnson has well underway for future budgeta.
We are asking

~rselves

whether -- looking

ah~

fiscal 1967 -- this 1&·. time to stretch out or defer
the impac t on spending of ~. of the new and propo.ed
civili~

programs, without

legislation or otherwise

del~ing

tmpairin~

basic authorizing

high priority, but

l0D8.r·~.

1. $19 billions of reductions in income and eXC1S~ I.4A .......
reductions which have helped to keep going the longest peacetime economic expansion in history.

z.

Two major civil rights bills - - helping to assure the American
Negro his full rights as an American citizen.

3. A Medicare bill which provide"s far more in medical care for
the elderly than its original sponsors dared suggest.
4. An anti-poverty program which has already brought work and
education, and above all, hope to millions of the desperately poor.
5. An education bill which, for the first time, clearly breaks
through the barriers of tradition to assure more adequate support
for elementary and secondary education.
6. A rent supplement proposal which makes it possible to provide
decent housing for low-income families on a large scale and
in a dignified way.
I believe the reasons for unparalleled success are clear:
First, because we have been able to demonstrate that these are
sound, practical, and carefully developed programs which serve
the interests of all the people.
Second, and equally as important, because we have made the effort -a real and convincing effort -- to guarantee the people and the Congress
that they are getting full value for every dollar spent. ,fie have shown
that compassionate government does not mean imprudent government
that we are just as interested in rooting out old and inefficient
programs as in developing new ones.
Between fiscal 1964 and 1966 we will increase spending on the major Great
Society programs by $4-1/2 billion -- a rise of over 60%. But our total
budget will go up by only $2 billion. Over half of the new spending is being
financed from improved efficiency and reductions in less essential programs.

MORE

(OWER)

- 19 c'Vlew. The Budget Director has
.
_ . . ~~...,,, v1 tl~ese prograr.ns.
If, between now and January,
p:o[r::lm- requests a1 e reduced by as much as they were in the same period
last year, budget eXFenditures would still grow at a rate very substantially
in excess of the rate; of growth in our national economy.
__ r- ...

4

Now I intend to spend whatever is necessary
to p14vtect the security of the Nation

to honor our commi tlnents abroad, and
to achieve the goals of our Society in America.
But I d
not intend to spend a penny mere than this, and I am absolutely
ce rtain that a growth in budget expenditures at the rate indicated is neither
necessary nor inevitable.
At the last Cabinet i.T1 eeting I asked each of the Cabinet members and Ag en(
heads to appoint a tas~,- force to identify areas whe re savings c auld be
made to offset the increased spending frem new and expended programs.
I have asked tc r.n;;et -v7itn you, the members of these task forces, to impres
on each of you how L-.1portant I conceive your work to be.
There are a numbel' cf principles I think you ought to follow in your deliber
ations:
l { . • ~.

J

t;4w Ahold no program sacred.

No program - - no matter how long
established - - should be free of a cold and searching examination.
Let me worry about the political problems - - I'll make those decisioI
Some decisions :-;.-:.ay be unpopular for a time -- but sanity and sense ~
be far more pcpt.:lla r in the long run. 1/

3::.c_ond, real savings are going to come from reducing or eliminating
obsolete p:L'ogra::~-:s. \Vhile I do wa.nt you to find more efficient ways
of running existing programs, I don It -want you to concentrate so hea'
on that aspe ct, that you refrain from asking whethe r the program its
is worthwhile.

MORE

- 18 lirst shown the President what savings can be made in existing

programs •
., ,

,I
,.,.- ..... _ _ .

In short,

~

"

1

/'

i;.',.I/(1

,-

Pres"ent !will not even consider anyi

\

-.,'

requ8s ts lor new or higher spending until he has firs t ID&~

sure that he has saved every dollar possible on old programaJ
;Ke has mada aiwply, cl.eaf his unswerving detennination to save

everywhere he can in order to spend where he must.
Both within and beyond tile boundaries of these

con.iderat~

the President and his advisers are asking themselves some
hard questions -- questions that require hard answers.
We in the national government are asking ourselvea whetheT,
with demands for military manpower and material increasing,
this is a time whell we could reasonably~ountenance a sharply

Tr-t~ PT'C~ ~

re·nt h!3s minced no

wOY'ds

in makinp plain to all
.....

~ in? less

the

LN~r

has the President minced any words in

m~~g

plain to all members of his Administration that his
~-

campaign for Federal cost reduction

#-trre ludeS' ~V e-Pjt?

s iag!:@!"

i;J'IlQi;j"~Lzr--:.-L./
~rrg d~

e

exceptions whats~er, but must include every single

*

LJA)

Federa 1 program. Jr!' 1. '., I 1) , 'JJ ,. F .['• • & As he charge]) 1+' S
WWCabinet Task Force on Cost Reduction -- and I quoTE:

- 17 -

II

:.,l;:~ .L '.,U.1 o.~

Lase month, ~le ini.~ed his Cabinet Taak

:urc(' 0a Gost Reduction -- and I quote:

'l~c\)

r

intend to spend \.Jhatever is neces8ary

protect the security of the Nation.

•

;'.0

•

tv honor our commitments abroad, and

•

to achieve the

oa1s

01.

our Society in AIIerica,

gut I do not intent! to spen<i a penny more than tbl....

,/

}~.

Tle President has also directed the Director of the IudglC,

~h~rlcs

Schult7e:

-- noe to consider

pro~raru

increases Wltl1 be hal

snown what savings can be made in existing progr.
to help rinance them;

-- not :'::0 preBeIlt recOLmlendatioQa to the Pre.MeDt

,.or increaaes in spending until after he ba.

- 16 year -- earned by the continued cooperative efforts af
business, labor and government.

New needs develop -- and

new problems arise -- and they require that business and
labor and government continually sUBject their policie8 and

practices to serious and searching review.
Today, for example, we in the Administration are hard

at work considering with President Johnson plans and programl
for the fiscal 1967 budget, as well as possible measures for
more tmrnediate future -- measures and programs that will

enable this nation to meet both its domestic needs and goal.
and its international coumitments.
No previous Administration has ever had to meet such
stern and stringent standards as those President Johnaon hal
set

~or

his Adutinistration.

~.

- 1" -

cCIlLinuCI;i Deill

tile

.i~t:

l:Q

jisplay -- a balance abat bodes will for

turo.

"'e cannot, of course, blitnely assume that the bUline ••

cycle has Dean repea.led, or that there are not potential
trollblt~

spots that uear close watching.

We cannot, after all,

.i::orestall trouble unless we foresee it.

Dut --

~Iears

--

'ile

from our successes over the peat four and
have learned a

~;reat

we

\le have alao leamed a

deal from the tailures of prior years.

n~u8t

balf

.eal about how to .-uat.io

stron '. and steady economic .srowth.

~~re.at

ODe

I And

--

the ODe 1•••

oear foremost in [ailld today is that, if there 1.

ODe

thin; \Jhich prosperity cannot stand. it ia to be taken for
".r~nt\:(~.

It must be earned anew every day. every week,

flY..,

~he smaller,

iJut titill sizable, declines earlier

\.:cli

u:.;

~11~~

year -- ctle Berlin crisis in 1901 and the Cuban mi •• il.

Cl:1.sis in Lib3 - ... and large V'ariations in our budaetary defiCit,
,;i1ictl rose t:o a peak of $8.2 b111ion in fiscal 1964 before it
~ell

sharply to

~J.5

Dillion only a year later.

Tilde were test:s that might easily l18ve tripped up • 1•••

viable and Gurable expansion - ... but tbat

~~e

have met and . . .~.

avoidln-; recession on the one hand and inflation on the other,

as uusiness, labor and government nave worked together 10 •
climate of mutual cooperation and confidence.
Ibus. t.vhen we stand back and take a long and c10•• 101k

at our expansion -- at its paBt and present progre•• -- ...
can

~ly be

impressed

oy

t~e

hi6Q degree of

balance which it

- u away by higher prices, with the attendant

dang~8

of pre••ure.

on proiit margins and of an inflationary and speculative

psychology

ti~t

would distort and

~pede

an orderly growth

in real output.
We see the ample fruits of this balance and this restraint
in the relative stability of our industrial prices -- which, It
the wholesale levet) are only one percent higher than they

were six years ago.
We see them also in the demonstrated ability of our
expansion to adjust to potentially severe disturbances without
serious damage or distortion.
For our expansion has not only survived, but surmounted,
the sharpest break in stock prices in many years in 1962,

a.

- 1.2 L'vt!o more cl!'.lcial -- botb in terms of sustaining our

dOLU'3Stl_C

prosperity ano improvint;; our international cc:..petlt1••

position -- has ueen our excellent record of balance betw. .

"1/a.';;es tlnd prdductivity ;;iidna.

\I'e can nil point to blemisnes on that reeord -- tbey
have been widely

.tact

l.S

publicized, and rightly

80.

But tll. key

that, for ruanu1:acturin;;; aa a whole, wage iocr.....

since 1900 nave remained within
:,;rowth -- and, today, unit labor

~

tn.

bounds of productivity

CO.t8~i..1pdp.t~ar. actuall,

a bit lower than the, were four year. ago.
he nave

retused~

therefore. to fall prey to that _tiMI

al1urin~~ but always illu8~oD4ry proce •• by which ..e fon_

wa.;es up beyond the capacity of the eeoncay to abaorb
only to see the )apparent: gains in worker.' i.neoaae

cia.,

w._eet

11
in .lationary strains on capacity.

Jrut at the ....

tt..

tney have re.lrained Lrom buildinS far beyond i._.eMble

needs -- and thus inviting the inevitable contract1oA.
Similarly, while inventories nave been rising .teadl1y
in absolute terms. ousinea.en have by and large _inta1Ded

tnem at conservative levell in relation to the growiag yolu..
of sales -- thUs

tor~scall~

another potential pitfall 18

~

way oi continuing economic: advance.

A vast growth in

internally generated

aS8ure ample financing tor

~i.

fuDd'~ba' ~.lped

growtb in inv •• c.en~

ttle J:1nanclal cOOIDIU1lity baa wi,., demonatrated it.

but~

1ag.ut1

in c!raw in6 upon our enormoua pot81ltial for aavUta fft &.dl tt
meet the .l inanc iD~ need. .of our bua1ne..... our

and our state

~no

local

6over~ent8.

r

a-\..,.IIu,••

:"ur

ll<11t

th~ key

to our unaaampled

~conomic

achievement.

not I)een pu..:.l ic policy alone .- althou,;h it hal been

that noll-c:," that nas created the cl iruate ana offered the

encoura~;ement

t1l&~~i£icent

and furnished the incentive _. but 8180 the

reaponse to that policy of the private'

.ector

o £ our E·conOliIY.

Yt is

lar~)ely

response that

hCiS

the wise and measured character of that
k.ept our expansion relatively free fl'Oll til.

excesses and Lmbalances that too often in the pa.t have
undennined Ol.lr periods of prosperity.
Buslnes8luen~

for example, nave greatly enlarged their

?roductive facilities to keep pace with their expal'lcU.Dg . .rUt

potential, tnus avoidinG bottleaecks in productLon aDd

- 9 investment credit and depreciation reform have done • gr..t
deal to help rev! talize the textile industry a8 well ••
others essential to a healthy Southern economy.
the Treasury Department made more

lD fact,

liberal depreciation rata.

effective for the textile industry in the fall of 1961 ••
nine months before they became effective for other induatri...
1 would venture to say that, at no time in our history,
has our national government pursued with auch vigor or lOch

success public policies to promote private ecooom1c srowth
than over ehe last four and a half years.

Tho •• yeerl have . .

equally notable for the extraordinary degree of cooper.CloD,

understanding and mutual confidence between the ...,...1 MOtOr'

of our economy -- between busines8 and labor and goy• • mt.

- 8 The investment credit of 1962 it the depreciation nfen .f

1962 and 1965, the :Lncoaae tax cut of 1964 and the ucla. tu
cut enacted this year -- these measures, at next ,...'. levalI

of income, will .del up

CO •

net total of t18 bl1l10D woetb .f

annual tax reduction -- a ....iv. att.ulul indeed to the
privat. lector cf our econcxay.

portunlti•• for the private individual aDd private buliM•• to

a.&\De the d~c, conatructive role that baa cbar_C8d.c" ..

rate. that were iIIIpoaecl partly to reatra1D private
investment and CODsUlllptlon and allowed to peralat
long after that need had passed.

In particular, the

- 7 -

-- total personal income tlas :5rown by 23 percent,

c()[uparecl wittl

lj

p(:!rcenc for the nation all a whole;

-- per capicatlersonal income has ,:;rown by 16

percent, compared with 13 percent for thei . .tlon •• a

T:,~:i.8 Bt&~e, thereiore _. and this region -- htwe .....CI::J
and mared amply, 1n; tee awesome economic advance /i!.r nat10ll

has made over the past tour and a half

year~.Jr '~
......
"

1'11i8 advance, as you know. did not simply happen.

cne airect cesult or public policies
privBte

ei~ort

ce8io~ed

It 1.

to fo.tar gr..t .

and initiative -- of public polieles del1beratti,

lasnioned to enlarge and

ea~ance

the role of the free

enterprise system in the pursuit ot our

natio,,~

...1••

I

()

is the tac~ that -- de.pit. tbe ~ct of auta.attoa

--ka.

_number ot worker. in manufacturiag ro.. ~rp11 i.at 1-by 720,000 -- and boo.ted total lI&1luucturing ..,1.,

-j

'1't!J

a near record of more than 18 mil110D job.,
TAi. expansion, in short, baa beatow·ed i,~.
.

tliberally "'POll ~ll .eemeRt. of

~&tw~en

_y./ i Tl1i.

eft . . .

this state -- have abared :fully 1n

a•• 'iti,

---

'''' ..

re&ioa ••

the.e~ benaflt~

1961 and 1964, for exa.ple, in the .tat •• of

the Sixth Federal Re.erve Dlatrict:

-- tne total llUDIber of nonfarm worker .....

anr-

by 8.3 percent, compared with 5.2 percent for the . .t1ea

as a wnole;
- .. average weekly earnings of productioD worker. 1a

manufacturing have frown by 12.7 percent. compared with
11.~ perc~nt ~or

the nation as a whole;

the lowest

ii~ure

in nearly eight y . .rs.

\.hat is moat impre •• ive about tbi. decl1ae 1a th.
unemployment rate i . that it baa

labor force baa been

~rowiQg

occu~ed

.at a t1ae - _ our

at a pheDOmeDAl rate -- ••

~

young people born in the early po.tw" year. bava eDt_eel ..,
work. Loree io enormoU8 n..-bera.

In the p •• t year. frOll J\lly 1964 to July 1965. the

expansion na. created 2.3 ailliOll new DOilfara job..

Ia ethr

word•• in one twelve month spa the U.S. econo.,. bal prwi...
addit ional nonfal'll'1 j oha equal to the total ..,1OJed La . .

eiJhtb laJ:ge.t state

-o.

the .tate of- ,e'Jt. Jere., -- or 1a tIM

entire country of Denmark.
Impressive testimony, also. to tM power of dal. . . .

_f.

consecutive month of economic expansion

-~

aD expaaaloa

remarkable not only for its length, but for it, .trengta.
its soundness and its stability.
TIlat expansion has beeD broadly ba.ed, and ita b_fltl

haVE been broadly shared.

Theae benefit. include:

.- a 30 percent rise in our total national out,.CJ

-- a 28 percent rise in eon.umer .pending;
-- a 40 percent rise in busln... inveat.ent fa
plant and equipment;

-- 8 31 percent rise 1n llI8nuuctur1llg productioD;

•• a 88 percent rise 1n corporate profitt

'fter ~

.- a 28 percent rise in personal 1ncOlll8.

Durinz that expansion, •• well, the une.plo,..at race

~

fallen trom 0.9 percent in early 1961 to 4.5 percellt laat ...

Reserve District --

tn •• tat ••

-- between

in

,

of Al.b....

'lo~ida.

Georgla,

1929 and 1964, total per.onal inca..

these statal grew by

8Qma

8-3/4

t~••• -

1

t~. 1a

Alabama -- compared to • 5- 3/4 time. for the aatiOD ••
a

\mole;

-- during that ..... period, per capita per_l
income in tll••• Itatel grew by

5\ till•• _. aearly S%

times in Alabama -- coaapared to nearly 3-3/4 ebae. for

the nation as a whole.
OYer abe laat four and a llalf year •• aa you Imow. the

nation

8S •

wtuile

rival in our

naa

experienced an economic raaurg. .e wltM11

~tire peacet~e

history.

W. are

DOW

1a

our

~

-

;t -

and international financial affair. a8 leeoad ranking -jorlty
member of the Foreign Relations and Banking and CUrrency
Committees of the United States Senate.
It does not seem long 8g0-·- although IIlOre tUD • quarter
of a century haa pa •• ed -- since Pr •• ident J'rankllil D.

South as the nation'. ''number one eeOlMaic probl_."
Today the South 18

01\

the

lDOVe - -

steadily illprcwiAI

_til

its economic performance and it. position a8 a region rlcb
in economic promi.e.
lIIr

80

88

the national eeonocay baa grown over rec_t ....... ,

has the Southern eeoaomy ~\

.

",'

I

Look, for example, at the state. of the Sixth rederal

?C'E EfLFA: E ~. ~I. ~T'i~FAP::RS
6 ;..,5_ _
v, AT''''',UST 16, 1...:...9_

'!(":TV

REMARKS ~y 'fHE HONORABLE HEMRY H. FOWLD

SLCRETARY OF THE TUASUIlY
bifORE 'rHE KI~"ANIS CLtJa OF ALABAMA
AT THE nrrw ILER HOTEL, BlaMDIGHAM, ALAIAIfl,

MUNDAY, AUGUIT.lb, 1965, 12:30 P. M., CST.
I am indeeci pleased to be here today with thi. t.portat
~

;roup and in tiis fine state -- a state which I bave caa.
know so well throut;h a close and constant a ••ociat1on that
be;jan more than thirty years ago whea, as a YOU!l& lawyer,
/J.A/ ..:."
,...

-

.1

~.

/

~ i ".

C~'l'f i ,

~.

.-";Ift..

I boined the leJal staff o~(the Tenn••••• Valley Autborlty.

I am particularly

~.ppy

to be here on bis bome grouDda

with Senator Sparkman - .. and I am very grateful to hia for

his :;racious introduction.

I am not only fortunate

to know him as an ola and valued friend. but .a

eaouP'

Secret.~

the Treasury I know iirsthand of the constructive aDd

of

iDf.~d

concribution ne makes to le,islation concerning both D&t1oMl
?-

(L','

TREASURY DEPARTMENT
Washington

FOR RELEASE P.M. NEWSPAPERS
MONDAY, AUGUST 16 z 1965

REMARKS BY THE HONORABLE HENRY H. FOWLER
SECRETARY OF THE TREASURY
BEFORE THE KIWANIS CLUB OF ALABAMA
AT THE TUTWILER HOTEL, BIRMINGHAM, ALABAMA,
MONDAY, AUGUST 16, 1965, 12:30 P. M., CST.
I am indeed pleased to be here today with this important
group and in this fine state -- a state which I have come to
know so well through a close and constant association that began
more than thirty years ago when, as a young lawyer, I went to
work helping advance and defend the cause of the Tennessee Valley
Authority.
I am particularly happy to be here on his home grounds
with Senator Sparkman -- and I am very grateful to him for his
gracious introduction. I am not only fortunate enough to know
him asan old and valued friend, but as Secretary of the
Treasury I know firsthand of the constructive and informed
contribution he makes to legislation concerning both national
and international financial affairs as second ranking majority
member of the Foreign Relations and Banking and Currency
Committees of the United States Senate.
It does not seem long ago -- although more than a quarter
of a century has pass'ed -- since President Franklin D. Roosevelt
described the South as the nation 1 s "number one economic
problem. "
Today the South is on the move -- steadily improving both
its economic performance and its position as a region rich in
economic promise.

- 2 For as the national economy has grown over recent decades,
so has the Southern economy.
Look, for example, at the states of the Sixth Federal
Reserve District -- the states of Alabama, Florida, Georgia,
Louisiana, Mississippi, and Tennessee:
-- between 1929 and 1964, total personal
income in these states grew by some 8-3/4
times -- 7 times in Alabama -- compared to a
5-3/4 times for the nation as a whole;
-- during that same period, per capita
personal income in these states grew by
5-1/4 times -- nearly 5-1/2 times in Alabama
compared to nearly 3-3/4 times for the nation
as a whole.
Over the last four and a half years, as you know, the
nation as a whole has experienced an economic resurgence without
rival in our entire peacetime history. We are now in our 54th
consecutive month of economic expansion -- an expansion
remarkable not only for its length, but for its strength, its
soundness and its stability.
That expansion has been broadly based, and its benefits
have been broadly shared. These benefits include:
a 30 percent rise in our total national
output;
a 28 percent rise in consumer spending;
a 40 percent rise

in business investment

in plant and equipment;

--

a 38 percent rise in manufacturing
production;

--

a 88 percent rise in corporate profits
after taxes;

--

a 28 percent rise in personal income.

- 3 During that expansion, as well, the unemployment rate has
fallen from 6.9 percent in early 1961 to 4.5 percent last
month -- the lowest figure in nearly eight years.
What is most impressive about this decline in the
unemployment rate is that it has occured at a time when our
labor force has been growing at a phenomenal rate -- as the
young people born in the early postwar years have entered our
work force in enormous numbers.
In the past year, from July 1964 to July 1965, the expansion
has created 2.3 million new nonfarm jobs.
In other words, in
one twelve month span the U. S. economy has provided additional
nonfarm jobs equal to the total employed in our eighth largest
state -- the state of New Jersey -- or in the entire country
of Denmark.
Impressive testimony, also, to the power of this expansion
is the fact that -- despite the impact of automation -employment in manufacturing rose last month to a record high
of 18,133,000 on a seasonally adjusted basis
19,000 above
the previous peak reached in November, 1943, at the height of
World War II factory production.
This region -- this state -- have shared fully in these
abundant benefits of expansion.
Between 1961 and 1964, for example, in the states of the
Sixth Federal Reserve District:
-- the total number of nonfarm workers has
grown by 8.3 percent, compared with 5.2 percent
for the nation as a whole;
Average weekly earnings of production
workers in manufacturing have grown by 12.7
percent, compared with 11.5 percent for the
nation as a whole;
-- total personal income has grown by
23 percent, compared with 18 percent for the
nation as a whole;
-- per capita personal income has grown
by 16 percent, compared with 13 percent for
the nation as a whole.

- 4 This awesome economic advance
in which all have shared
so amply -- did not simply happen.
It is the direct result of
public policies designed to foster greater private effort and
initiative -- of public policies deliberately fashioned to
enlarge and enhance the role of the free enterprise system in
the pursuit of our national economic goals.
The investment credit of 1962, the depreciation reform of
1962 and 1965, the income tax cut of 1964 and the excise tax
cut enacted this year -- these measures, at next year's levels
of income, will add up to a net total of $18 billion worth of
annual tax reduction -- a massive stimulus indeed to the
private sector of our economy.
These measures also mean dramatic new incentives and
opportunities for the private individual and private business
to assume the dynamic, constructive role that has characterized
our American system since the days of the pioneers. They have
materially eased the burden of oppressive war-time tax rates
that were imposed partly to restrain private investment and
consumption and allowed to persist long after that need had
passed.
In particular, the investment credit and depreciation
reform have done a great deal to help revitalize the textile
industry as well as others essential to a healthy Southern
economy.
In fact, the Treasury Department made more liberal
depreciation rates effective for the textile industry in the
fall of 1961 -- nine months before they became effective for
other industries.
I would venture to say that, at no time in our history,
has our national government pursued with such vigor or such
success public policies to promote private economic growth
than over the last four and a half years. Those years have
been equally notable for the extraordinary degree of
Cooperation, understanding and mutual confidence between the
several sectors of our economy -- between business and labor and
government.
For the key to our unexampled economic achievements
has not been public policy alone -- although it has been that
policy that has created the climate and offered the encouragement
and furnished the incentive -- but also the magnificent response
to that policy of the private sector of our economy.

- 5 -

It is largely the wise and measured character of that
response that has kept our expansion relatively free from the
excesses and imbalances that too often in the past have
undermined our periods of prosperity.
Businessmen, for example, have greatly enlarged their
productive facilities to keep pace with their expanding market
potential, thus avoiding bottlenecks in production and
inflationary strains on capacity. But at the same time, they
have refrained from building far beyond foreseeable needs -and thus inviting the inevitable contraction.
Similarly,_ while inventories have been rising steadily
in absolute terms, businessmen have by and large maintained then
at conservative levels in relation to the growing volume of
sales -- thus forestalling another potential pitfall in the way
of continuing economic advance.
A vast growth in the internally generated funds of businesE
has helped assure ample financing for this growth in investment.
But, in addition, the financial community has demonstrated its
ingenuity in drawing upon our enormous potential for saving for
funds to meet the financing needs of our businesses, our homebuyers and our state and local governments.
Even more crucial -- both in terms of sustaining our
domestic prosperity and improving our international competitive
position -- has been our excellent record of balance between
wages and productivity gains.
We can all point to blemishes on that record -- they
have been widely publicized, and rightly so. But the key fact
is that, for manufacturing as a whole, wage increases since
1960 have remained within the bounds of productivity growth -and, today factory unit labor costs are actually a bit lower
than they were four years ago.
We have refused, therefore, to fall prey to that sometimes
alluring but always illusory process by which we force wages
up beyond the capacity of the economy to absorb them, on~y to
see the dollar gains in workers' income washed away by ~~gher
prices, with the attendant dangers of pressures on prof~t
margins and of an inflationary and speculative psychology that
would distort and impede an orderly growth in real output.

- 6 We see the ample fruits of this balance and this restraint
in the relative stability of our industrial prices -- which, at
the wholesale level, are only one percent higher than they were
six years ago.
We see them also in the demonstrated ability of our
expansion to adjust to potentially severe disturbances without
serious damage or distortion.
For our expansion has not only survived, but surmounted,
the sharpest break in stock prices in many years in 1962, as
well as the smaller, but still sizable, declines earlier this
year -- the Berlin crisis in 1961 and the Cuban missile
crisis in 1963 -- and large variations in our budgetary deficit,
which rose to a peak of $8.2hlllion in fiscal 1964 before it
fell sharply to $3.5 billion only a year later.
These were tests that might easily have tripped up a less
viable and durable expansion -- but that we have met and mastered,
avoiding recession on the one hand and inflation on the other,
as business, labor and government have worked together in a
climate of mutual cooperation and confidence.
Thus, when we stand back and take a long and close look
at our expansion -- at its past and present progress -- we
can only be impressed by the high degree of balance which it
continues still to display -- a balance that bodes well for
the future.
We cannot, of course, blithely assume that the business
cycle has been repealed, or that there are not potential
trouble spots that bear close watching. We cannot, after all,
forestall trouble unless we foresee it.
But -- from our successes over the past four and one half
years -- we have learned a great deal about how to sustain
strong and steady economic growth. We have also learned a
great deal from the failures of prior years.
And the one lesson we must bear foremost in mind today is
that, if there is one thing which prosperity cannot stand, it
is to be taken for granted.
It must be earned anew every day,
every week, every year -- earned by the continued cooperative
efforts of business, labor and government. New needs develop
and new problems arise -- and they require that business and
labor and government continually subject their policies and
practices to serious and searching review.

- 7 Today, for example, we in the Administration are hard at
work considering with President Johnson plans and programs
for the fiscal 1967 budget, as well as possible measures for the
more immediate future -- measures and programs that will
enable this nation to meet both its domestic needs and goals and
its international commitments.
No previous Administration has ever had to meet such stern
and stringent standards as those President Johnson has set for
his Administration.
On the 15th of last month, he informed his Cabinet Task
Force on Cost Reduction
and I quote:
"Now I
·
•
·

intend to spend whatever is necessary
to protect the security of the Nation,
to honor our commitments abroad, and
to achieve the goals of our Society in
America.
But I do not intend to spend a penny more than this ... "

Speaking of the heads of all departments and agencies,
the President has also directed the Director of the Budget,
Mr. Charles Schultze:
-- not to consider program increases until
he has shown what savings can be made in existing
programs to help finance them; .
-- not to present recommendations to the
President for increases in spending until after
he has first shown the President what savings
can be made in existing programs.
Nor has the President minced any words in making plain to
all members of his Administration that his campaign for Federal
cost reduction will admit of no exceptions whatsoever, but must
include every single Federal program. As he charged his
Cabinet Task Force on Cost Reduction -- and I quote:
"
hold no program sacred. No program
no matter how long established -- should be free
of a cold and searching examination. Let me worry
about the political problems -- I'll make those
decisions.
Some decisions may be unpopular for
a time -- but sanity and sense will be far more
popular in the long run."

- 8 No President has ever gone any farther or made any clearer
his unswerving determination to save everywhere he can in order
to spend where he mus t .
Both within and beyond the boundaries of these considerations,
the President and his advisers are asking themselves some hard
questions -- questions that require hard answers.
We are asking ourselves whether this is a time when we should
try to minimize increases in the budget deficit by accelerating
the elimination or reduction of old, outworn and obsolete civilian
programs for the current budget -- a process, as I have said, that
President Johnson has well underway for future budgets.
We are asking ourselves whether this is a time when
Congress -- and government workers, too -- should reconsider
the implications, in terms of the budget and as a precedent for
other groups, of a proposed increase in pay for civilian
goverment workers far in excess of the Administration's request.
We are also asking ourselves whether this is the time to
consider enactment of an omnibus user charge program that would
include the proposals made in the President's 1966 Budget and
Excise Tax Messages as well as a number of additional areas in
which specialized government services benefitting special groups
are furnished on a no cost or a highly subsidized basis.
These are some of the hard questions and difficult
decisions that President Johnson and his Administration are
wrestling with today. They are the counterpart of the questions
equally hard and difficult -- that labor and business must also
ask themse I ve s .
Labor, for example, in its wage decisions -- and industry
in its pricing decisions -- must ask themselves whether this
is a time when they can safely exceed the quideposts laid down by
the Council of Economic Advisers to define the public interest in
non-inflationary collective bargaining and pricing processes.
In particular, both parties in the steel industry must consider
whether they do not carry an added burden of responsibility for
avoiding an inflationary settlement which would not only affect
that crucial industry, but which could set a pattern for others.

- 9 Over the past four and a half years of uninterrupted
prosperity, business, labor, and government have demonstrated
that, by pulling together, they can achieve far more than by
pulling apart.
They have demonstrated that, by working with each other
to create greater abundance for all, they serve their individual
self-interests far better than by working against each other
to secure some apparent marginal advantage.
This, then, is the lesson to which our unparalleled
prosperity bears unimpeachable witness: the lesson that, in
economic affairs as in all others, we are strongest when we
work to broaden the areas of cooperation -- we are weakest
when we seek to widen the areas of conflict.
This lesson, this experience -- demonstrated at the national
level under the inspired leadership of President Johnson -- has
a spec ial re levance to the Sou th.
For the South is a region rich in natural and human
resources.
The economy of this state -- the economy of the South as
a whole -- have shared, and shared abundantly, in the fruits of
that growing partnership for prosperity that has proved so
potent a force in our national life.
In large measure, you have shared so fully in that
partnership because of men like John Sparkman -- men whose
careers of superb and unselfish service to their state and their
nation has earned them the highest regard and respect of
Americans not only in this state and in this region but throughout
the nation.
In the field of housing, in the field of small business, in
the field of education, in the field of rural electrification
in these fields and many more that go beyond his contribution to
foreign and financial affairs that I mentioned earlier,
the last several decades have seen scarcely a national program
to advance the welfare of our citizens which John Sparkman has
not strongly supported or which does not bear the mark of his
Wise and effective leadership.

- 10 -

The South has a strong nucleus of capital, plant, and
technical and business know-how. Its possibilities for
development are limited only by the depth of the desire and
determination of its people to create the kind of conditions,
the kind of climate, the kind of atmosphere -- not only in which
this nucleus of native resources can grow and prosper -- but
which will draw new capital, new plant, new technology, and
new brain-power to the South as a place where both men and
industry can flourish.
The South has succeeded thus far in laying a sound and
strong economic base.
The challenge before you now is to build upon that base
and thus to move far closer toward the great economic
accomplishments that lie well within your grasp, if you are
willing to seize them.
To meet that challenge will not be easy.
It will require that men of responsibility here in the
South -- the leaders in government, in business, in local
and community affairs -- carefully encourage the growth of
that same strong partnership for prosperity between all segments
of your economy that has worked so well on the national level.
It will require that men of responsibility here in the South
the leaders in government, in business, in local and community
affairs -- refuse to relinquish the initiative to those who
would divert your energies and your resources away from the
great opportunity before you into the blind and bitter path of
divisiveness and of hatred and of fear.
For the South, as for the nation, the closing decades
of the Twentieth Century hold forth the promise of progress
and prosperity in all spheres of human endeavor of a kind
and scale to surpass all we have seen and all we might surmise.
But if that promise is to be fulfilled, then the South
must enter the closing decades of this century inspired by the
same quality and kind of vision unveiled before the South by
two of her greatest sons -- by two of America's greatest sons
in the period following the War Between the States when the
region was torn asunder by war and racial turmoil.

- 11 -

I speak, first, of Henry W. Grady -- the distinguished editor
of the Atlanta Constitution -- who in the decades following
the war spoke so eloquently and effectively of a New South -a South united, not in bitterness and grief, but in the great
and positive purpose of creating an unparalleled prosperity
for all her citizens.
I speak, also, of a man from my own native soil of
Virginia -- the man who led the young men of the South on the
battlefields of war -- and who, once the war was over, assumed
the presidency of a small college in the Shenandoah Valley of
Virginia known then as Washington College, and known now as
Washington and Lee. There, he devoted the remaining years of
his life to helping lead young men of the South into the works
of peace -- to helping win their hearts and minds to the
challenge of building the New South. I speak of Robert E. Lee.
These were men who understood that the future belongs
to those who seek to build, not to destroy -- who seek to
bind, not to break -- who seek to heal, not to hurt.
These were men who understood that the perpetuation of
hatred, and division, and violence could only prevent the
South from becoming what all who loved her wanted her to be,
and knew she could be -- a region of abounding plenty where
men and men's dreams can live and thrive.
Today, it is a man like these -- a son of the South, a man
of the spirit and vision of Henry W. Grady and of Robert E. Lee,
a man of wisdom and understanding, of reason and moderation
who leads our nation in the paths of peace and prosperity,
of order and justice and freedom, both at home and abroad.
At home, President Johnson has glided us into the greatest
period of peacetime prosperity in our history -- by helping
bring together all segments of our society, all sectors of
our economy, into a dynamic partnership for progress whose
constructive potential we have only begun to realize.
He has taken the nation to new heights -- raised anew our
eyes to the vision and our energies to the task of fulfilling
an age-old American dream -- the dream of a Great Society in
Whose abundant life every citizen can share to the fullest
measure of his capacity and his desire.

- 12 In doing so, he has given America a goal to inspire the
very greatness it demands.
In a record of accomplishment unexampled in our history,
the President has proposed and the Congress has passed a host
of measures that put us far along the path toward that goal -no measures more important than those to make our educational
system, in the President's words, "equal to our towering
expectations of the America that we love and the America that
is to come."
More than any in our history, the educational program
that President Johnson and the Congress have thus far
fashioned will hasten that day in our land when ability to learn,
rather than ability to pay, will be the sale standard of
educational opportunity -- when every child, in every region,
can -- as the Pres ident has described it -- "have all of the
education, of the highest quality, which his or her ambition
demands and his or her mind can absorb."
And while thus we labor to build a Great Society at home,
we also bear the burden of leadership in pursuing peace and
defending freedom abroad. That is why, today, in Southeast Asia,
we lend arms and men and supplies to help the tiny county of
South Viet Nam in its struggle for survival as a free and
independent nation.
In Viet Nam, as elsewhere, it is peace that we seek, not
war -- cooperation, not conflict.
But in Viet Nam, also, we demonstrate that, while we
never seek to provoke, we ever refuse to appease.
In Viet Nam we demonstrate that, while we yield to no
nation in the patient pursuit of peace and the works of peace,
we have the will and the weapons to fight, if fight we must
to defend our freedom and the freedom of our fellow man.
In Viet Nam we take up the arrow of war, so that the olive
branch of peace may grow.
In Viet Nam, therefore, we seek only what we seek in all
parts of the world -- a just and free peace.

TREASURY DEPARTMENT

August 16, 1965

FOR IMMEDIATE RELEASE
ANTIDUMPING PROCEEDING ON
SHOES
On

J~

16, 1965, the Commissioner of Customs received informa-

tion in proper form pursuant to the provisions of section 14.6(a)
of the Customs Regulations indicating a possibility that shoes, leather
(other than men's and boys' of welt construction), imported from Rwoonia
are being, or likely to be, sold at less than fair value within the
meaning of the Antidumping Act, 1921, as amended.
In order to establish the validity of the information, the Bureau
of Customs is instituting an inquiry pursuant to the provisions of section l4.6(d)(1)(ii), (2) and (3) of the CustOIDE Regulations.
The 'information was received from sources within the Customs Servic:e.

An "Antidwrrping Proceeding Notice ll to this effect is being published

in the Federal Register pursuant to section 14.6(d)(1)(i) of the Customs
Regulations.
Imports of the involved merchandise received during the period
April 1, 1964, through Vlarch 31, 1965, were worth approximately $100,000.

TREASURY DEPARTMENT

August 16, 1965

FOR IMMEDIATE RELEASE
ANTIDUMPING PROCEEDING ON
SHOES
On July 16, 1965, the Commissioner of Customs received information in proper form pursuant to the provisions of section 14.6(a)
of the

Custo~

Regulations indicating a possibility that shoes, leather

(other than men's and boys' of welt construction), imported from Rumania
are being, or likely to be, sold at less than fair value within the
meaning of the Antidumping Act, 1921, as amended.
In order to establish the validity of the information,the Bureau
of Customs is instituting an inquiry pursuant to the prOVisions of section 14.6(d)(1)(ii), (2) and (3) of the Customs Regulations.
The information was received from sources wIthin the Customs Service.
An "Antidwrrping Proceeding Notice" to this effect is being published

in the Federal Register pursuant to section 14.6(d)(l)(i) of the Customs
Regulations.
Imports of the involved merchandise received during the period
April 1, 1964, through 1<larch 31, 1965, were worth approximately $100,000.

TREASURY DEPARTMENT

FoR aELEASE A.M. l~KwSPAPERS,

Lesday, August 17, 1965.

-

August 16, 1965

RESULTS OF TREASURY'S WBE1\.LY BILL OF?ERING

The Treasury Department announced last evenine that the tenders for two series of
Teasury bills, one series to be an additional issue of the bills dated May 20 1965
'ld the other series to be dated August 19, 1965, which were offered on August' il, w~re
oened at the Federal Reserve
Banks on August 16. Tenders were invited for .!Jl,
~l 200 , 000 , 000 ,
•
~thereabouts, of 91-day bLlls and for $1,000,000,000, or thereabouts, of 182-day bills.
1e details of the two series are as follows:
LNGE OF ACCEPTED

ll{PE'rITIVE BIDS:

High
Low

Average

91-day Treasury bi.l1s
maturing l~ovember 18, 1965
Approx. Equiv.
Price
Annual rlate

182-day Treasury bills
maturil!& February 17, 1966
Approx. Equiv.
Price
Annual ria t e
98.023
3.911%
98.012
3.932%
98.017
3.923% 11

99.041
ti.033
99.036

91 percent of the amount of ;II-day bills bid for at the low price was accepted
19 percent of the amount. of 182-day bUls bid for at the low price was accepted
lTAL TElWE.-tS APtJ1ISD FOR AND ACCEPl'SD BY FZDEri.AL H.ESEilVE DISTRICTS:
District
Acce;Eted
!EE!.ied For
AcceEted
..• AEElied For
Boston
,%
26,764,000
$
$
2:-1,201,000
19,001,000
26,76L,000
:tP
New York
1,]89,906,000
714,656,000
1,360,060,000
785,195,000
Philadelphi.a
5,161,000
13,161,000
30, :J80, 000
18,980,000 :
Cleveland
28,354,000
33,3)4,000
25,003,000
25,003,000
Richmond
4,367,000
4,772,000
16,291,000
16,291,000
Atlanta
12,217,000
22,217,000
33,616,000
43,796,000
Chicago
111,h97,OOO
271,997,000
144,L.66,oOO ••
275,h66,000
14,208,000
St. Louis
•
16,205,000
29,857,000
38,127,000
i1inneapolis
12,065,000
13,470,000
19,606,000
2O,776,000
Kanaas City
11,076,000
11,576,000
27,892,000
2C3 ,t92,000
Dallas
9,832,000
10,642,000
18,363,000
21,.)43,000
San Frl¥lcisco
50,t055 2 OOO
77 2 535 z000
52.zl03,t000
83,2733 02 °00
TOTALS
.$1,973,868,000
)1,200,L'53,OOO a/ $1,691,602,000
$1,000,252,000
Includes $254,Mn,00o noncorr.oetitive tenders accepted a 1 the average price of 99.036
Inch:des $99,350,000 noncompetitive tenders accepted at the ave!'age price of 98.017
~ a coupon issue of the same length and for the same amount invested, the return on
these bills would provide y:Lelds of 3.?Oi, for the 9l-day bills, and 4.06%, for the
182-day bills. Interest rates on bills are quoted in terms of bank discount with
the return re1:::!ted to the face amount of the bills payable at maturity rather than
the amount invested and their length in actual number of days related to a 360-day
year. In contrast yields on certif'~cates, notes, and bonds are COIrlputed in terms
?f interest on the' amount invested, and relate the number of days remainin~ in an
lnterest payment period to the act ual number of days in the period, with semiannual
compounding if IT,ore than one coupon period is involved.

·
·
·

··
··
·
·

F-169

p./

TREASURY DEPARTMENT
(

August 17, 1965

FOR IMMED IA TE RELEA SE

STATEMENT OF THE HONORABLE HENRY H. FOWLER
SECRETARY OF THE TREASURY
AT A NEWS CONFERENCE ON THE BALANCE OF PAYMENTS,
AUGUST 17, 1965

We are pleased
quarter of the year
account, seasonally
$756 million in the

that our balance of payments for the second
shows a surplus of $132 million on regular
adjusted.
This compares with a deficit of
first quarter.

We do not take it as a sign that we have turned the corner
from balance of payments deficits to balance of payments surpluses.
The period of surplus is too short for that, and there were
too many special factors affecting it.
What we do conclude from the second quarter performance
is that the President's program for correcting the deficit in
our transactions with the rest of the world is working, and
that we should press ahead with it in all respects, without
relaxing anywhere. We intend to press ahead, we do not intend
to relax our efforts at any point in the program, and we are
not going to be misled or waylaid by tentative and incomplete
resul ts .
This, I confidently believe, will make it possible for us
to bring our accounts with the rest of the world into an
equilibrium that can be sustained.
But the following special features relating to our second
quarter surplus indicate clearly that we can not yet take the
view that we have reached that path, even though we may be, as
I am convinced, approaching it.
First:
We are reporting a surplus for one quarter only.
This is far too short a time period to be taken as establishing
a new trend, especially since it is the first quarter since late
1957 when we have had a surplus.

F-170

- 2 Second:
The dock strike of January and February delayed
until the second quarter a large volume of exports that would
otherwise have been made in the first three months of the year.
Imports were of course also affected, but not as greatly as
exports. As may be seen in the figures made available today
by the Dep:1 rtment of Commerce, this improved the second quarter
balance by some $300 million or more. That is greater than the
entire surplus reported today.
Third:
There was an exceptionally large outflow of funds
from banks and other lenders in the first weeks of this year,
just prior to announcement of the President's balance of
payments program and his call upon the business community to
reduce their outlays of dollars abroad. Most of the subsequent
excellent response to the voluntary program carne in the second
quarter. The result was that a large ~flow of bank credit
in the first quarter was replaced by a large inflow in the
second quarter. This, again, tended to make for a fortuitously
good second quarter.
Fourth:
It must be remembered that some of the results
of the voluntary program are of a one-time character. That
is to say, we may already have reaped most of the balance of
payments benefits we can reasonably expect to get from the
reduction of bank credits flowing abroad, and from the
repatriation of liquid balances held abroad by business firms,
under the terms of the existing program.
Inflows of funds from
these sources contributed to the good second quarter results,
but we cannot expect to continue indefinitely to get like
favorable effects.
Fifth:
There are factors that will count against us in the
months ahead.
For one thing,more American tourists are abroad
this year than ever before.
Their spending will show up as a
balance of payments cost in accounts for the third quarter.
For another, the step-up in our participation in the defense
of South Vietnam will result in some costs that will be
reflected in our balance of payments, although there is no
indication that it will be so large as to throw us off our course.
Finally, our imports are tending to rise, while our exports,
partly due to the dock strike, have failed to keep pace during
the year.

- 3 -

Let me refer to one other factor that I regard as a strong
reminder that we must not relax our efforts to balance our
international payments. This is the fact that official foreign
holders of dollars still preferred in the second quarter to
cash in some 330 million of their reserve dollars for gold.
These were dollars that could otherwise have been used to
earn interest. The choice of gold instead showed clearly that
these foreign monetary authorities believe there are still more
dollars abroad than are needed.
The conversion of the $330 million, and of $811 million
in the first quarter reduced by $1.1 billion the liquidity
available for trade and development in the free world. This
is the process that must be arrested if existing liquidity is
to be rna in ta ined.
Let me just add that, as you know, we have been considering
within the Government the use of a second concept for measuring
the deficit known as the official settlements concept. It
differs from our present concept by excluding changes in our
dollar liabilities to private foreign holders from the
measurement of our deficit; in other words, the changes taken
hto account are with respect only to our liabilities to
foreign official monetary authorities. On this official settlements
basis, the first quarter deficit figure was $738 million and the
second quarter surplus was $229 mill ion.

000

-

,)

-

~D!aaC

Bale or other disposition of Treasury bills does not have any special treatment, as
such, under the Internal Revenue Code of 1954.

The bills are subject to estate,

inheritance, gift or other excise taxes, vhether Federal or State, but are exempt fnx
all taxation now or hereafter imposed on the principal or interest thereot by any Sta1
or any of the possessions of the United States, or

by

any local taxing authority.

purposes of taxation the amount of discount at which Treasury bills are originally
by the United states is considered to be interest.

~:
80

Under Sections 454 (b) and 1221 (

of the Internal Revenue Code of 1954 the amount of discount at which bills issued her
under are sold is not considered to accrue until such bills are sold, redeemed or otb
wise disposed of, and such bills are excluded from consideration as capital assets.
Accordingly, the ovner of Treasury bills (other than life insurance companies) issued
hereunder need include in his income tax return only the difference between the price
paid for such bills, whether on original issue or on subsequent purchase, and the moo
actually received either upon sale or redemption at maturity during the taxable year
for which the return is made, as ordinary gain or

10S8.

Treasury Department Circular No. 418 (current revision) and this notice, prescri
the terms of the Treasury bills and govern the conditions of their issue.
the c1rcular may be obtained from any Federal Reserve Bank or Branch.

Copies of

- 2 -

printed forms and forwarded in the special envelopes which will be supplied by Fede
Reserve Banks or Branches on application therefor.
Banking institutions generally may submit tenders for account of customers pro
vided the names of the customers are set forth in such tenders.

others thaD bank1n

institutions will not be permitted to submit tenders except for their own account.
Tenders vill be received vithout deposit from incorporated banks and trust compan1e
and from responsible and recognized dealers in investment securities.

Tenders

f~

others must be accompanied by payment of 2 percent of the face amount of Treasuryc
applied for, unless the tenders are accompanied by an express guaranty of payment t
an incorporated bank or trust company.
Immediately after the closing hour, tenders will be opened at the Federal ResE
Banks and Branches, following which public anouncement will be made by the
Department of the amount and price range of accepted bids.
will be advised of the acceptance or rejection thereof.

TreaBU~

Those submitting tendel

The Secretary of the TreaE

expressly reserves the right to accept or reject any or all tenders, in whole or u

part, and his action in any such respect shall be final.

Subject to these

re8e~'

tions, noncompetitive tenders for each issue for $200,000 or less without stated
price from anyone bidder will be accepted in full at the average price (in three
decimals) of accepted competitive bids for the respective issues.

Settlement for

accepted tenders in accorda.nce with the bids'must be made or completed at the Fedel
Reserve Bank on

I~'J.Gust

2:), 192'::

lUI

, in cash or other immediately available

or in a like face amount of Treasury bills maturing Aug-.lst 2G, 1955

•

~

Casl

.)
and exchange tenders will receive equal treatment.

Cash adjustments will be made

j

differences between the par value of maturing bills accepted in exchange and the 11
price of the new billet
The income derived from Treasury bllls, whether interest or gain from the sall
other disposition of the bills, does not have any exemption,

88

such, and

10S8 f~

TREASURY DEPARTMENT

Washington
FOR IMMEDIATE RELEASE,

AW:;-u.st IS, 1965

xx XXXXXX XXX K:arXXXUXXXXXXWK

TREASURY' S

~illEla.,y

BILL OFFERING

The Treasury Department, by this public notice, invites tenders for h,o series
of Treasury bills to the aggregate amount of $ 2.,200,000) 000 , or thereabouts, tor

~

cash and in exchange for Treasury bills maturing
of $ ~,20:), U!~ ,) ,UUC
~2

•

,

August 23, 19 G5

in the amount

as follows:

-day bills (to maturity date) to be issued

fi

J

(Ii)

in the amount of $

-

':;'YI "nt'

1

~JLV~,,-.'vV,

'000

,

AUGust ~ 1965

or thereabouts, represent-

ing an additional amount of bills dated
and to mature

Eove,nLer 2() } 18C5

----.._)r----

..

_!_'\1....:aJ:...T_2_7....:)~1:::J9t:""6_5_ _ _ ,

, originally issued in the

amount of $ 1,000,1':J5,OOC , the additional and original bills

iiii

to be freely interchangeable.
132.day bills, for $ 1,OCO,~10C,OOO , or thereabouts, to be dated

-...iiit.....--...--

..

i1. U

Cclst 26, 1965

, and to mature

February ~ 1966

.,

t.aX

The bills of both series will be iSBued on a discount basis under competitive
and noncompetitive bidding as hereinafter provided, and at maturity their face
will be payable without interest.

~u

They will, be issued in bearer form only, and in

denominations of $1,000, $5,000, $10,000, $50,000, $100,000, $500,000 and $1,000,00
(maturity value).
Tenders will be received at Federal Reserve Banks and Branches up to the clos1
.Ja~tlig~lt

Saving

hour, one-thirty p.m., Ea8tern/~ time, l·londay, August 23,1965

•

Tend

(M)
will not be received at the Treasury Department, Washington.

Each tender must be

for an even multiple of $1,000, and in the case of competitive tenders the price
offered must be expressed on the basis of 100, with not more than three decimals,
e. g., 99.925.

Fractions may not be used.

It is urged that tenders be made on the

TREASURY DEPARTMENT

August 18, 1965
FOR IMMEDIATE RELEASE

TREASURY'S WEEKLY BILL OFFERING
The Treasury Department, by this public notice, invites tenders
for two series of Treasury bills to the aggregate amount of
$2,200,000,000,or thereabouts, for cash and in exchange for
Treasury bills maturing Augus t 26,1965,
1n the amount of
$2,203,046,000, as follows:
9&day bills (to maturity date) to be issued
in the amount of $1 200 000 000, or thereabouts,
additional amount of bills dated May 27, 1965,
uture November 26,1965,originally issued in the
$1,OOO,785,000,the additional and original bills
interchangeable.

August 26, 1965,
representing an
and to
amount of
to be freely

182-day bills, for $1,000,000,000, or thereabouts, to be dated
August 26,1965,
and to mature
February 24, 1966.
The bills of both series will be issued on a discount basis under
competitive and noncompetitive bidding as hereinafter provided, and at
maturity their face amount will be payable without interest. They
will be issued in bearer form only, and in denominations of $1,000,
$5, 000, $10,000, $ 50 ,000, $ 100,000, $ 500,000 and $1,000,000
(maturi ty value).
Tenders will be received at Federal Reserve Banks and Branches
up to the closing hour, one-thirty p.m., Eastern Daylight Saving
time, Monday, August 23, 1965.
Tenders will not be
received at the Treasury De~artment, Washington. Each tender must
be for an even multiple of $1,000, and in the case of competitive
tenders the price offered must be expressed on the basis of 100,
with not more than three dec imals, e. g., 99.925. Fractions may not
be used. It is urged that tenders be made on the printed forms and
fONarded in the special envelopes which will be supplied by Federal
Reserve Banks or Branches on application therefor.
Banking institutions generally may submit tenders for account of
customers provided the names of the customers are set forth in such
tenders. Others than banking institutions will not be permitted to
submit tenders except for their own account. Tenders will be received
Without deposit from incorporated banks and trust companies and from
responsible and recognized dealers in investment securities. Tenders
from others must be accompanied by payment of 2 percent of the face
amount of Treasury bills applied for, unless the tenders are
accompanied by an express guaranty of payment by an incorporated bank
or trust company.
F-171

- 2 -

Immediately after the closing hour, tenders will be opened at the
Federal Reserve Banks and Branches, following which public announcement will be made by the Treasury Depar~rnent of the amount and price
range of accepted. bids. Those submitting tenders will be advised
of the acceptance or rejection thereof. The Secretary of the Treasury
expressly reserves the right to accept or reject any or all tenders,
in whole or in part, and his action in any such respect shall be
final. Subject to these reservations, noncompetitive tenders for
each issue for $200,000 or less without stated price from anyone
bidder will be accepted in full at the average price (in three
decimals) of accepted competitive bids for the respective issues.
Settlement for accepted tenders in accordance with the bids must be
made or completed at the Federal Reserve Bankson August 26,1965,
cash or other immediately available funds or in a like face amount
of Treasury bills maturing Al1:--.:;u:-;t 26,196S.Cash and exchange tenders
will receive equal treatment. Cash adju3Lments will he made for
differences between the par value of maturing bills accepted in
exchange and the issue price of the ue',,' bills.

The income derived from Tr9asury bills, Vlhether' Interest or
gain from the sale or other disposition of the billS, does not have
any exemption, as such. and loss from the sale or other disposition
of Treasury bills does not have any special treatment, as such,
under the Internal Revenue Code of 1954. The bills are subject to
estate, inheritance, gift or other excise taxes, whether Federal or
State, but are exempt from all taxation now or hereafter imposed on
the principal or interest thereof by any State, or any of the
possessions Jf the United States, or by any local taxing authority.
For pU.rposes of taxation the amount of discDunt at which Treasury
bills are originally sold by the United States is considered to be
interest. Under Sections 454 (b) and 1221 (5) of the InteNlal
Revenue Code of 1954 the amount of discount at which bills issued
hers>u:'1der are sold is not considered to accrue until such bills are
sold, redeemed or otherwise disposed of, and such bills are excluded
from c0~lslderation as capital assets. Accordingly: the owner of
Treasti.ry bllls (other than life i:"':surar.ce companies) issued hereunder
need inc LHle in his income tax return only the difference between
the price paid for such bills, whether on original issue or on
subseque~t purchase, and the amount actually received either upon
sale or redemption at maturity during the taxable year for which the
return is made, as ordinary gain or loss.
r:'i'easury J'?partment Circular No. l..t18 (current revi2;ion) and this
n:)tlce prescribe the terITl.s C',f trv? ':'l"ea::'L:r:;' "hills anc ~/,0vern trie
conditions of their issue, Copies of the ~trcular may be obtained from
any Pe1eral Reserve Bank or Branch.
:)00

-

0

-

n1,(, excmpt. j'rom aLL to...'Cnt,ion now or hcrcaf'ter impor:ed. on the principal or interes1

Lhcrcof by rlllY StaLe, or

DllY

loc~l,

li'or purpose::; 01' tnxaLi.on the amount of' discount at which

l. t,D.x.i.nr: :tuLhor1ty.

of the pODGcssions of the United States, or by any

,:ereUGU1'Y 'bills nrc originally Gold by 'the United States is considered to be in-

terest.

Under ScctlonG ·1:54: (b) and 1221 (5) of' the Internal Revenue Code of 1954

t.he amount o:f discount at lmich bills issued hereunder are sold is not considered
to aeClilC until such bills arc [;old, redeemed or otherwise disposed of, and such
bLlls arC'
oi'

c.):clUrit

d from confJi<iern:tion

nr;

cr-.pttal

n.j~~ctG.

Ii.ccordingly, the owner

'J,'rcllr.;ury b:i.LLG (other 1.JI~I.n ll'i'e insuru.ncc companies) issued hereunder need in..

clude in his income ta.."( return on l.v the dii'f'crence betvreen the price paid for sue
biJ_ls, l,hethcr on oric;innl

.lnr~u('

or on r;nbGcqucnt purchase, and the amount actual

rcccJvcd either upon .sale or redempt.ion at maturity durinG the taxable year for
uhich the return is wade, an ordrno-I';Y Guin or lose.

'l'l'cn.sury Department. Circular Ho. 4:18 (current revision) and this notice, pre
scribcLhe

'~erm[;

01'

the Treasury biJ_ls and govern the conditions of' their issue.

Copies of' the circular may be obta.ined from any Federal Reserve Bank or Branch.

- 2 -

-

dlf].U

bonking institutions w..tll not. be penn.l t;l-ed to subnrl t tenders except for their own

account.

Tenders 1vill be received vr.i_lhouL deposit from incor:porat~d banks and

trust companies and from responsible -ond l'ecognized dealers in investment securities.

Tenders from others must be accompanied by payment of 2 percent of the face emOlmt
of Treasury bills applied :for, unless the tenders are accompanied by an express
8Ullranty of payment by an

incorpor8.t~d

banlc or trust- company.

after the closing hour J tend,crs wIll be opened at the Federal TIe ..

Immediat~ly

serve Banlcs and Branches, follmvinc; "hlch 1mblic rumotmcement will be made by the
Treasury Department of' the Dmount and price range of accepted bIds..

'l'hose Gubmlt

ting tenders rrlll be advised of the acceptance or rejee l-ion thercoi'.

of'the rrreasury

e;~resDly

reserves the riGht to accept or

r~ject

The Secretary

any or all tenders,

in ,·,hole or in part, and his action in any auch respect shall be final.

to these reservations, noncompetitive tenders for :j; 200,000
~

Subject

or less without

stated price from any one bidder "rill be accepted in full at the average price (in

three decimals) of accepted compcti tive bidG.

Settlement for accepted lenders in

accordance '\-at.h the bids mUGt be made or completed at the Federal Reserve Bank on
AUguS~ 1965

, i n cash or other immediately available funds or in a like

face amount of Treasury bills maturinG
tenders loTill receive equal treatment.

August 31, 1965

•

Cash and exchange

tId

each adjustments 'Will be made for difi'er-

ences betloleen the par value of maturi~ bills accepted in exchange and the issue

pr:tce of the nCH bills.
The income derived from Treo.Gury bills, lomether inter~Gt or gain from the sale

or other disposition of the bill£, does not have any cxemptton, as such, and loss
frOl1l the sale

or

other disposition of Treasury- bills does not have

trentment, as such, under the Internal Revenue Code of 1954 ..

any'

special

The bills are subject

to estate, inheritance, gift or other cxcioc taxes, vThE;!ther Federal or state, but

TREASURY DEPARTMEI'rr
Washington

August 13, 1965

FOR INlvIE:DIATE RELEASE,

}fX::exoccocmooc;{)OOOoooooootx
TR2ASURY ?,EFillQS ONE- YEfu~ BILLS

The Treasury Department, by this public notice, invites tenders for

;p

J. J 000 ,GCe ) 000

ill

, or thereabouts, of

365

~~~-

-dny Treasury bills, for cash and

in exchange for Treasury bills maturing _ _
A_uf.;;.iU_s_t---.3....,1""',_1_9_6_5_-__ , in the amount
of

$ 1 Z OC)O ,c13:) ,oeo

#1C

, to be issued on a discount basis under competitive and

~
noncompetitive bidding as hereinafter provided.
dated

AUG.Jst

31, 1935

1'he bills of this series will be

, and. will mature

#1X

the face amount will be payable without interest.

August 31, 1966

, when

**

They will be issued in bearer

form only, and in denominations of $1,000, $5,000, $10,000, $50,000, $100,000,
$500,000 and $1,000,000 (maturity value).
Tenders will be received at Federal Reserve. Banks and Branches up to the
Daylj_ght Saving

closing hour, one-thirty p.m.,
Tenders

~nll

Eastern/~

time, Tuesday, August 24, 1965 .

**

not be received at the Treasury Department, Washington.

Each tender

must be for an even nrultiple of $1,000, and in the case of competitive tenders thE
price offered nrust be eX}>ressed on the basis of 100, with not more than three dec·
1me.ls, e. g., 99.925.

Fractions may not be used.

these bills vill run for

305

"¥)C

(Notwithstanding the fact that

days, the discoWlt rate will be computed on a banl

d18CO\Ult basis of 360 days, as is currently the practice on all issues of Treasur,
bills.)

It is urged that tenders be made on the printed forms and forwarded in

the special envelopes which will be supplied by Federal Reserve Banks or Branches
on application therefor.
Banking institutions generally may submit tenders for a.ccount of customers
provided the names of the customers are set forth in such tenders.

Others than

TREASURY DEPARTMENT

FOR IMMEDIATE RELEASE

TREASURY REFUNDS ONE-YEAR BILLS
The Treasury Department, by this public notice, invites tenders
tor $1,000,000,000, or thereabouts, of 365-day Treasury bills, for
:ash and in exchange for Treasury bills maturing August 31,1965, in
~e amount of $1,000,439,000, to be issued on a discount basis under
:ompetitive and noncompetitive bidding as hereinafter provided. The
Jills of this series will be dated August 31, 1965, and will mature
\ugust 31, 1966, when the face amount will be payable without
lnterest. They will be issued in bearer form only, and in
jenominations of $1,000, $5,000, $10,000, $50,000, $100,000, $500,000
md $1,000,000 (maturity value).
Tenders will be received at Federal Reserve Banks and Branches up
~o the closing hour, one-thirty p.m., Eastern Daylight Saving time,
fuesday, Augus t 24, 1965. Tenders will not be rece ived at the
rreasury Department, Washington. Each tender mus t be for an even
mltiple of $1,000, and in the case of competitive tenders the price
)ffered mus t be expressed on the bas is of 100, wi th not more than three
iecimals, e. g., 99.925.
Fractions may not be used.
(Notwithstanding
:he fact that these bills will run for 365 days, the discount rate will
)e computed on a bank discount basis of 360 days, as is currently the
lractice on all issues of Treasury bills.)
It is urged that tenders
)e made on the printed forms and forwarded in the special envelopes
~hich will be supplied by Federal Reserve Banks or Branches on
lpplica tion there for.
Banking institutions generally may submit tenders for account of
ustomers provided the names of the customers are set forth in such
enders. Others than banking institutions will not be permitted to
ubmit tenders except for their own account. Tenders will be
eceived without deposit from incorporated banks and trust companies
nd from responsible and recognized dealers in investment securities.
enders from others mus t be accompanied by payment of 2 percent of the
ace amount of Treasury bills applied for, unless the tenders are
ccompanied by an express guaranty of payment by an incorporated bank
r tru8 t company.
Immediately after the closing hour, tenders will be opened at the
ederal Reserve Banks and Branches following which public announcement
ill be made by the Treasury Depar~ment of the amount and price range

-172

- 2 -

of accepted bids. Those submitting tenders will be advised of the
acceptance or rejection thereof. The Secretary of the Treasury
expressly reserves the right to accept or reject any or all tenders,
in whole or in part, and his action in any such respect shall be final.
Subject to these reservations, noncompetitive tenders for $200,000 or
less without stated price from anyone bidder will be accepted in full
at the average price (in three decimals) of accepted competitive bids.
Settlement for accepted tenders in accordance with the bids must be
made or completed at the Federal Reserve Bank on August 31, 1965, in
cash or other immediately available funds or in a like face amount of
Treasury bills maturing August 31, 1965. Cash and exchange tenders
will receive equal treatment. Cash adjustments will be made for
differences between the par value of maturing bills accepted in exchang
and the issue price of the new bills.
The income derived from Treasury bills, whether interest or gain
from the sale or other disposition of the bills, does not have any
exemption, as such, and loss from the sale or other disposition of
Treasury bills does not have any special treatment, as such, under
the Internal Code of 1954. The bills are subject to estate,
inheritance, gift or other excise taxes, whether Federal or State, but
are exempt from all taxation now or hereafter imposed on the principal
or interest thereof by any State, or any of the possessions of the
United States, or by any local taxing authority. For purposes of
taxation the amount of discount at which Treasury bills are originally
sold by the United States is considered to be interest. Under
Sections 454 (b) and 1221 (5) of the Internal Revenue Code of 1954
the amount of discount at which bills issued hereunder are sold is not
considered to accrue until such bills are sold, redeemed or otherwise
disposed of, and such bills are excluded from consideration as capital
assets. Accordingly, the owner of Treasury bills (other than life
insurance companies) issued hereunder need include in his income tax
return only the difference between the price paid for such bills,
whether on original issue or on subsequent purchase, and the amount
actually received either upon sale or redemption at maturity during
the taxable year for which the return is made, as ordinary gain or
loss.
Treasury Department Circular No. 418 (current revision) and this
notice, prescribe the terms of the Treasury bills and govern the
conditions of their issue. Copies of the circular may be obtained
from any Federal Reserve Bank or Branch.

000

TREASURY DEPARTMENT
Washington

STATEMENT BY THE HONORABLE HENRY H. FOWLER
SECRETARY OF THE TREASURY
ON THE UNITED STATES BALANCE OF PAYMENTS
BEFORE THE SUBCOMMITTEE ON INTERNATIONAL FINANCE
OF THE SENATE BANKING AND CURRENCY COMMITTEE
WEDNESDAY, AUGUST 18, 1965
10:00 A. M.
10

Introduction and

Summary
I appreciate the opportunity to consider with this
distinguished Committee the international financial position of
the United States.
Since the crisis affecting the British pound last fall,
the return to a very heavy rate of deficit in U. S. payments
in late 1964 and early 1965, and the inception of President
Johnson's balance of payments program last February, there has
been increased interest in, and discussion of, international
financial developments.

These hearings are a valuable part

of the national and international discussion of issues and
exchange of opinion now going on in the search for means to
improve the workings of the international monetary system.

F-173

- 2 -.

[he i_nternational financial positi_on ..)f tr,e UnLtec: :)t3te:
Th~

15 nnE of the impor[ant elements of this problem.

principal aim of my testimony to you today is to place that
element of the problem in perspective, because a lack of
!::,erspective has characterized much recent COITlil.1ent.
t~y

I shall

to do so by discussions of the following topics, arriving

at conclusions which I have summarized below the topic

headings:

The workings of the U. S. balance of
payments program, and what can prudently
be concluded about results thusfar.

The results are good, and encouraging.

We

achieved a small surplus in our payments
in the second quarter of this year.

But

the period of surplus is too short, and
too many special factors contributed to
it to justify more than the conclusion

that there

lS

every reason to think we

are on the right track, but that continued
efforts on all fronts will be essential
to yield sustained Success.

- 3 The relationship of the United States
balance of payments program to world
liquidity and to the economies of
other countries.

There is no evidence that the efforts of
the United States to bring about an
equilibrium in its transactions with
the rest of the world, after many years
of deficits, is having harmful effects
on world trade or liquidity; ££. the
contrary, any tendency of the economies
of our trading partners to slow down
is due to the conscious decision of
their own financial and monetary
authorities to avoid or diminish inflationary pressures by domestic

restraints~

and finally, by protecting the stability

of the dollar as the principal world
reserve currency, our balance of payments

program -- far from reducing liquidity --

- 4 is a principal element in preservLng
existing liquidity.

The benefits to

the United States, and to every other
national economy of maintaining
confidence in the dollar are so great
as to make confidence in the dollar the
goal of highest priority -- and equilibrium
in our balance of

pav~~nts

is essential to

that confidence.

The objectives of the United States in the
development of an improved and strengthened
world international finance system.

It is our objective to maintain the liquidity
in the Free World monetary system provided
by $27 billion in the official reserves and
private holdings of foreigners, supported
by the strength of the United States economy
and secured by healthy economic growth at
home and equilibrium in our payments abroad.

- 5 At the same time, we seek in cooperation
with other friendly nations to find the
means to ensure against any future
shortfall in the world's money supply,
hitherto provided by our deficits.

Let me add, before I proceed to these topics, two comments
that are indispensable, but often overlooked, background to
all other elements of our discussion.

These are, the great

underlying strength of the dollar, and, the scope and character
of the United States approach to the solution of its balance
of payments problem.

Basic Strength of the Dollar
Our balance of payments difficulties are a curable ailment
of a very sound economic body.

The United States economy

and its agent, the dollar, are overwhelmingly strong, at home
and abroad.

We have in this strength the means to cure the

ailment without harm to ourselves and others.

But since it is

so easy to lose sight of this basic strength in discussion of the
balance of payments problem, let me go over the principal facts.

- 6 Our productive output is enormous and growing, and our
~o~eign

trade surplus is far larger than that of any other

country.

Our international competitive position is benefitting

from sustained cost and price stability relative to other
countries.

This productive potential and price stability

make the dollar the strongest, and the most widely used,
currency in the world; it is the only currency freely convertible
i~to

gold by foreign governments and central banks.

The dollar

is backed by the world's largest reserves of gvld and is also
backed by a large and growing excess of our total assets and
claims abroad over our liabilities of all kinds to foreigners.
Our official and private holdings of investment assets and
other claims on foreigners totalled roughly

~lOO

billion at

the end of 1964, exceeding the total of foreign claims on us
by some $40 billion.

Our private international assets, which

exclude all U. So Government claims on foreigners, exceeded
foreign claims on the United States by almost $20 billion,
compared to $9 billion at the end of 1961.

The scope and character of the U. S. Program
The great fundamental strength of the dollar allows the
tlni~ed

States to approach its balance of payments problem in

a ITlanner that is at the same time measured and determined.

It

- 7 is measured, because we recognize the damage that could b2
done by hasty and ill-conceived action to shut off the flow
of capital and trade to the weaker countries, to straightjacket the dollar in tight controls, or to impair the growth
of our own economy.

It is determined because we

the strength of the dollar could be eroded away, and

wi~h

it

the underpinnings of the monetary system that has servea us so
well and upon which we must build in the future.
Our effort is consequently a broad one.

It involves many

interrelated programs which, in turn, require participatior.
and support by many departments and agencies of

Gcvernment~

and the understanding and cooperation of business, labor and
finance.
The role of Congress in this broad-ranging effort has
been and remains a significant one.
Legislation tightening the exemption from duty
returning residents has become law.

enjoye(~

b:i

The Bill providing an

exemption from the anti-trust laws to the bankers who have been
Cooperating so effectively with us in the voluntary program
has passed both Houses.

The proposal to extend the scope and

duration of the Interest Equalization Tax has been favorably
acted upon by the House of Representatives and Senate action

is pending.

Hearings have been held by the House Ways and

- 8 ~l~ans

Committee on the Bill designed to remove certain tax

obstacles to foreign protfolio investment in the United
States.
The voluntary programs that Secretary Connor and
Governor Robertson have described before this Committee and

the legislative action which you have been taking in this session
are important links in the chain of defenses we are building
for the dollar.

While I will not discuss them in detail today,

it is important to remember that there are other links as well.
In outlining the ten-point program on February 10, the President
emphasized that we must continue to minimize the foreign
exchange costs of our defense and aid programs; narrow our
tourist gap by encouraging our friends from abroad as well as
our citizens to see the U.S.A.; and to redouble our efforts
to promote exports and thus earn more trade dollars.
Within the Executive Branch, our balance of payments
program is fully coordinated at the Cabinet level.

Our

formal channel and organized forum for doing this is the
Cabinet Committee on Balance of Payments, under my chairmanship, which includes as regular members:

- 9 -

n.
:

,
\

Secretary of Defense McNamara
Secretary of Commerce Connor
Under Secretary of State Ball
Administrator of AID Bell
Special Representative for Trade
Negotiations Herter
Budget Director Schultze
Council of Economic Advisers
Chairman Ackley

Mr. Bundy, The White House

Both Chairman Martin of the Federal Reserve Board and
the Export Expansion Coordinator, Mr. Goldy, have participated
actively and frequently in the Committee's work.

The heads

of other departments and agencies concerned with particular
subjects which may come before the Committee are included,
as appropriate.

- 10 -

This Committee meets at frequent intervals, providing us
at the Cabinet level with an opportunity for full discussion
of what has been attempted and achieved, as well as an
opportunity to thrash out any differences we may have.

The

Committee reviews the program in over-all terms, and it
appraises the program from both the short and the longer-term
outlook.

It examines the problem and the program in the

light of world developments and needs as well as in the light
of our own objectives.

From time to time it reports to the

President on these matters.
The work of this Cabinet-level Committee is supported
and its coordinating role in carrying out our over-all
payments program is further extended and supplemented --

by

an Executive Committee of the same agencies, meeting at the
Assistant Secretary level.

II.

Assessment of the United States
Balance of Payments Program
As figures for the balance of our international payments

for both the first and the second quarter of this year have
appeared since my predeCEssor testified before this Committee
last March, I will review these developments very briefly.

'--

nr:
,_I

- 11 The First Half of 1965

In the first quarter of this year we had a deficit
on a regular transactions basis of $756 million, after adjustmentfor seasonal factors.

In part, this deficit resulted from a

sharp reduction in our earnings from trade due to a dock
workers strike extending from mid-January through late
February.

This work stoppage cut our exports much more than

our imports.

In part also, the first quarter result was

influenced by an exceptionally large outflow of funds from
banks and others in the early weeks of the year.

Large as

the deficit was in the first quarter of 1965, however) it was
sharply below the deficit in the final quarter of 1964.

As

the first quarter ended signs were beginning to appear that
the new program was taking hold.
In the second guarter, according to the preliminary figures
that have just become available, we had a surplus amounting to
some $132 million, on a regular transactions basis.
Among the scarce supporting data for the second quarter
are figures on the flow of bank credit abroad.

In the

first quarter there was an outflow of $438 million from banks.
In the second quarter there was a net inflow of dollars to the

- 12 -

U.

s. amounting to $368 million.

These numbers can be taken as

a good measure of the key role of changes in bank credits to
foreigners in our recent balance of payments results.
We do not yet have similar data on the flow of direct
investment funds, remittances of foreign investment income,
and the like, needed to assess the contribution of non-financial
business' firms participating in the President's program for
voluntary restraint of dollar flows abroad.

Such incomplete data

as we have, indicate, however, that in the second quarter
business firms have continued the repatriation of deposits and
of other short-term funds held abroad that began in February
and March.
New foreign-security issues were somewhat larger in the
second quarter than the first -- largely reflecting heavy
borrowing by Canada in our market -- bringing the first-half
total of such issues roughly in line with 1964 levels.
Transactions in outstanding foreign securities continued
in this quarter -- as they have ever since the announcement
of the Interest Equalization Tax in mid-1963 -- to shaw a
moderate capital reflow, through net liquidation of such
holdings by Americans.

- 13 -

We know too from data now available that the
resumption of exports following the end of the dock
strike in February also contributed to the improvement of
our balance of payments in the second quarter.
I would add that, in reviewing these second quarter
results, it is equally important to keep our
continued gold losses in mind.

While the outflow of

gold slowed somewhat, the plain fact is that official
foreign holders of dollars during the second quarter
preferred to cash in for gold some 300 million of those
dollars -- dollars that can be invested to earn 4 percent
or more.

The effect was to diminish both our reserves

and Free World liquidity in the same amount.

This flow

of gold to central banks does not include some $259
million of gold payments to the International Monetary Fund
to cover our increased quota in IMF.

- 14 -

Special Factors that Must be Taken Into Account

Scarcely one of these results for the first and the second
quarters of this year can be accepted at face value in assessing
c-h.. e results of our balance of payments program thusfar.

First of all, the time period is short:

we have reports

for only four full months -- March, April, May and June
affected by the President's balance of payments program announced
February 10.

This is simply too short a period on which to

rest much analytical weight.
Second, the surplus we can report, for the second quarter,
18

very thin -- only $132 million.

In a calculus involving

$80 billion in transactions in a single year, and in a situation
in which we have had deficits in everyone of the 28 quarters
of the past 7 years, averaging almost $900 million per quarter,
we could not take a surplus of this size, in one quarter only
even if its significance was not obscured by factors special
[0

the quarter -- as being more than an encouraging invitation

to press on with our efforts.
The facts, however, are that the second quarter success
is exceptionally qualified by obscuring special factors.

Some

- 15 are temporary influences.

These include the distorting effects

upon trade of the dock strike in the first quarter, which
shifted something like a net $300 million of exports that
otherwise would have been registered earlier
for the second three months of the year.

ip{~o

the accounts

Similarly, some part

of the outflow of long term bank loans and of corporate deposiLs
of liquid funds abroad immediately preceding the President's
program presumeably would otherwise have been made in the
second quarter.

This development thus made the first quarter

deficit larger while it fortuitously improved second quarter
performance.
It should also be borne in mind that a part of that
improvement in our payments situation which is attributable
to the cooperative effort of our banks and business firms has
been of a one-time, non-recurrent character.
Thus, the reflow in bank credit that I discussed earlier
is not likely to be repeated -- at least to the same extent,
for there is now room under the Federal Reserve Guidelines for
a modest increase in credit to foreigners.
Available evidence also indicates that the quickest and
largest effect so far of the guidelines suggested to business
firms by the Commerce Department has been the substantial

- 16 -

return to this country of liquid balances held in foreign banks
and money markets in excess of necessary operating requirements.
It S2ems only pn1dent to assume that the great bulk of the
balance of payments benefits to be expected from this particular
aspect of the voluntary cooperation program has also already
been achieved.

Taking account of these temporary distortions, it
might very well be more accurate, and mare prudent,
to measure the extent of our apparent progress so
far on the basis of our payments position during
the first half of this year as a whole.

We have

a first half deficit at an annual rate of

$1.2 billion.

While this is indeed a very consider-

able improvement, it nevertheless leaves us still
far to go before we can be confident that we are
approaching conditions in which we could look
ahead to sustained equilibrium in our international
payments.

- 17 -

Looking Ahead

This analysis of the factors at work in the first two
quarters of the year gives no assurance that we will not be in
deficit in the second half of the year.
Further, there are other influences that will count against
us in the rest of the year.

Record nQmbers of American tourists

are now spending large amounts of dollars abroad.
In the Government area, the step-up in our participation
in Vietnam will inevitably result in some balance of payments
cost, although that cost need not be so large as to throw us
off course.

And, our imports have been rising rapidly

w~ile

our

exports over the first half as a whole, have failed to keep pace.
Taking all of this together, it is patent that we could
not afford at this time to relax any feature of our program
for overcoming our balance of payments problem.
Let me note in concluding this review that the results are
not

significan~ly

changed whether they are viewed on the regular

transactions basis which I have used and will use in the
remainder of my remarks, or whether we view them on the official
settlements basis recommended by the Review Committee for
Balance of Payments Statistics led by Dr. Edward Bernstein.

- 18 On the official settlements basis the first quarter would
show a seasonally adjusted net deficit of approximately
$750 million.

In the second quarter there would continue

to be a small surplus, of about $230 million.

The spread is

not larger, contrasting to quite large differences in the past,
particularly in the second half of 1964, because private
dollar holdings abroad that normally account for the largest
difference between the two measures have in recent months
shown no change or a moderate decline, after seasonal adjustment.

III.

The United States Balance of Payments
Program and the Adequacy of World Liquidity
I address myself here to three widely divergent views

about the future of the dollar:
First, that the United States might fail to
solve its balance of payments problem,
continue to run large deficits, eventually
exhaust the world's confidence in the
dollar and create a confidence crisis that
would lead to a run on gold, deplete our
gold stock and dry up existing liquidity.

no

- 19 -

Second,

that even the tentative and partial
success the United States is having
in bringing its international
payments into equilibrium, and
similar further progress, is capable
of putting a restraining hand on
economic growth and of setting off
a world deflationary spiral.

Third,

that following upon sustained
United States success in righting
its payments position, the world
money supply will become inadequate
to the conduct of the world's business,
leading to retardation of economic
growth and world depression.

Clearly, all three of these views cannot be correct.
The truth is that the first two are extreme and overdrawn, and diametrically opposed.

The third may be

realistic with respect to some time in the future, and

- 20 -

I will discuss in the concluding section of this testimony
the steps we are taking to address our international monetary
policy to this possibility.
Let me examine a few of the basic facts bearing on these
issues.
The only

~2~~

or set of facts relevant to the first

speculation -- what would follow if the United States failed
to maintain confidence in the dollar by failing to bring
its international payments into equilibrium -- is that our
program for balancing our payments is one of the United
States government's most firmly held, extensive and active
policies, for which the President of the United States has
obtained the vigorous support of the nation's business and
financial community, and to the successful accomplishment of
which the entire relevant apparatus of the United States
government is directed.

As has been previously stated, we

have good news from this front, indicating that we are on the
right track.

We are not going to get off it, anymore than we

are going to be deluded by preliminary and tentative gains
into thinking the battle has been won.

And, finally, not

only are we determined to restore and sustain equilibrium, we
have the advantage of enormous underlying economic strength
to help us do so.

- 21 j

,
J

j

,

Let me turn to the facts bearing upon the second -- and
even, in most respects, the third

-P

of the above speculations.

First is the fact that the demand for liquidity takes
many forms satisfied in many different ways, according -- to
cite a few cases -- to whether official or private funds are
concerned, whether funds are needed to finance deficits in
international payments, or whether funds are needed to
transact international trade, or to finance domestic growth.
Omnibus statements that world liquidity will become inadequate
have little meaning in the face of this variety of needs and
the variety of ways in which they can be met.
Next corne the facts about what is currently happening to
the supply of funds in the world.

In the first six months

of this year official reserves declined very slightly:
some $300 million, or by about half of one percent.

by

What

needs to be emphasized here is the fact that this did not
result from the -United States balance of payments program.
It resulted, instead and quite on the contrary, from the
snuffing out of part of the world's money supply through
the exchange of monetary reserves -- chiefly dollars -for U. S. gold, by other countries.

- 22 The further fact about this small drop in world liquidity
lC

that it is the net of a process, again involving gold

[r~nsactions,

r0d~ced

through which United States liquidity was

by some $900 million while funds available to other

c8untries rose by $600 million.
S'l(~cess

Very clearly, the current

of the United States in dealing with its balance of

paYments problem is not causing world liquidity to decline.

And -- let

m2

give this strong emphasis -- what these

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b~

Uni.ted States to dry up its international deficits would
certain to lead to a serious drop in international

~lmost

Li~iditL'

because loss of confidence in the dollar would

accelerate conversions of dollars into gold at the expense
jnitially of our own reserves,
s~_every

b~t

subsequently at the expense

country with a stake in effective monetary arrangements.

He can, and I think we should, state this otherwise
and posi.tively:

the United States program for

bringing its international payments into equilibrium
is the best guarantee the world has of continued
adequate liquidity.
to

~rolect

Failure to take this course

the world's principal reserve currency

,.,1

- 23 -

.

.q

would be the quickest route to a depleted world
supply of funds, and to economic contraction.
Let us look briefly at an indicator of liquidity, the
supply of and demand for Euro-dollars, dollars that are in use
in foreign countries.

The interest rates that must be paid to

borrow Euro-dollars give us a reasonably good picture of the
relation of supply to demand.

On three occasions since

President Johnson's balance of payments program was announced
last February, the Euro-dollar rate has turned up.
were only passing flurries.

But these

Today, the Euro-dollar rates are

just slightly above the levels of last January and February.
Our program has no doubt resulted in the repatriation
of substantial amounts of dollars from the Euro-dollar pool
by United States firms.

But Canadian and U.K. banks have

apparently almost completely refilled the pool by withdrawals
of funds from United States banks.

The very small net effect

upon the United Kingdom and Canada appears to have been mostly
offset by some increased flow of dollars to them from the
continental European countries.
Finally, what, if anything, has been the impact in
international trade?

Here too we are dealing with an indicator .

- 24 -

A substantial drop in trade can be taken as an indication of
trouble In the international financial picture.

The evidence

to hand is skimpy, but what we have fits the rest of the
picture

a world with adequate funds to do its business.

Some Individual Country Considerations
Some concern has been expressed that our program generally
might adversely affect liquidity in the international payments
system, tend to impede the growth of economies abroad, and
restrain the desirable expansion of international trade.
Moreover, it is sometimes suggested that the program has
seriously aggravated more directly the economic positions of
some countries, particularly the U.K., Canada and Japan.

Such

concerns do not seem to me justified by the facts.
In most of the industrial countries -- more particularly
those in Western Europe -- economic expansion continues and
the pressure of internal demand remains strong

o

These

governments, relying on restrictive monetary policies to avoid
inflation, have welcomed our balance of payments measures for

- 25 the support given to domestic restraints abroad.

To illustrate

the scope of their efforts, I am making available to the
Committee a country-by-country survey of the restrictive
internal measures that have been taken by foreign governments
and central banks during the last 18-month period.

With

respect to these countries, -- broadly characterized by strong
reserve positions and brisk domestic economic activity amidst
varying degrees of inflationary pressure -- there is no basis
for any conclusion

except that the tools and resources are at

hand to strengthen domestic demand, when and if they consider
it appropriate to do so.
With respect to three countries which have, to greater
or lesser degree, been experiencing balance of payments problems,
some additional comments are perhaps appropriate.
of course, to Canada, Japan and the United Kingdom.

I refer,
We have

sought in our program -- and I believe successfully -- to
avoid aggravating the problem of those countries.

Canada
Canada's economic growth in the last few years has paralleled
ourso

It has been impressive.

levels of employment and output.

Canada is now operating at high

- 26 As I have noted earlier, our voluntary program has resulted
~n

a very substantial repatriation of U. S. corporate deposits

in Canadian banks, but these withdrawals of dollars from Canada
have been met in substantial part by withdrawals by the
Canadian banks of dollars invested in the New York money market
and in part by dollars obtained from third countries.

There

is no evidence that our program has hampered Canadian growth
by starving it for credit, nor have Canada's official reserves
been reduced, even in the face of rapid growtho

Indeed,

Canadian official reserves dropped only minimally the first
half of this year

a period of normal seasonal losses of

significant amount.

Canada has of course an exemption under

the Interest Equalization Tax for new security issues, and it has
used this exemption freely to maintain its reserves.

In the

first six months of this year new Canadian issues in the U. S.
have amounted to $325 million.
The recent large sale of Canadian wheat to the Russians
should have a substantial favorable impact on Canada's trade
balance, and thus mitigate its need to raise long-term capital
in the United States.

In any event, the promising outlook in

Canada does not appear in any way to be prejudiced by our
program ..

- 27 Japan
Industrial production in Japan tended to flatterl out about
the turn of the year, before the U. S. balance of payments
program was announced.

Even earlier, there was a downturn in

the Japanese stock market, and this preceded by some months the
announcement of the United States Interest Equalization Tax.
The fact is that Japan, over recent years, has had very rapid
rates of growth, running well over 10 percent annually.

Some

adjustments were inevitable in the process of tailoring the
economy to rates of growth more sustainable for the longer-run
future.

A major portion of this adjustment appears to have been

accomplished and economic activity at a faster pace may now well
be in the offing.

This is in part being facilitated by moves

toward a relatively easier monetary policy gradually adopted
over recent months, as the Japanese balance of payments showed
very substantial improvement as exports moved sharply highet.
For this year, a substantial surplus on goods and services transactions is expected.
When the Interest Equalization Tax was applied to bank
lending as a part of our program, a limited exemption from
it was granted for government or government-guaranteed

- 28 -

borrowings in our market.

This gave added assurance that

Japan's needs for external capital would be met.

The

subsequent record shows that Japan's reserves have not
deteriorated, and much of the tax-free borrowing authority
even now remains unused.

With Japan's internal economy seem-

ingly generating renewed strength and its external position
very promising, an improved situation exists unimpaired by
our balance of payments program.

The United Kingdom
The problem of correcting a serious balance of payments
deficit faced Britain long before the announcement of our
program.

A sharp increase in imports in 1964 in an economy

characterized by brisk employment and inflationary stresses
required the adoption of measures to stem the resulting
pressures on the pound sterling.

Very simply, Britain could

not sustain for long a balance of payments deficit of the
magnitude of over $2 billion incurred in 1964, nor could
it afford a continuation of the inflationary pressures adversely
affecting its competitive position.

· }

/,

- 29 -

Measures to correct the situation were introduced last
November prior to our program and have since been successively
reinforced by the British government, most recently on July 27.
The measures taken show clear promise of moving toward
achievement of the necessary correction.
The essential point is that these measures were necessary
before our program was announced; it is worth noting that the
severe pressures on sterling last November came at a time when
we were incurring a massive quarterly deficit.

So far as we

can determine, our program has not in any significant way
aggravated the basic adjustment problem facing the British
authorities

0

We were aware of the possibility of some adverse side
effects resulting from our program.

For this reason, in

administering our voluntary restraint program, we have called
attention to the balance of payments problem facing the U.K.
and we have urged that appropriate consideration be given.

We feel that this has been done, and will continue to be
done.

- 30 -

Summary
What emerges from this review is that the swing from the
very substantial U. S. deficits late in 1964 and in early 1965
to the modest surplus of the second quarter -- about as rapid
a transition from dollar outflow to dollar repatriation as we
are likely to have -- has not damaged the economies of the
advanced industrialized nations, or dimmed the prospect for
flourishing world trade.
One of the most reasonable appraisals of recent events
has come from the Bank for International Settlements.

The BIS

stated in its latest annual report, released in Basle on June 14:
For the western industrial countries the main
economic problems with which policy had to
contend during the past year were the curbing
of inflationary pressures in the continental
countries, the currency crisis in the United
Kingdom and the large lncrease of capital
exports in the United States.

In all these

respects the situation at present is better
than it was six months ago, though it is not
yet clear that the difficulties have been
fully overcome.

- 31 The Developing Countries

We, of course, have a strong interest in seeing that
conditions continue to exist in which the less developed
countries will be able to obtain the capital they need for their
continued expansion.

The policies the United States is

following at present contribute to that end.

I need not repeat

the facts cited by Secretary Conmr and Governor Robertson.
Under our balance of payments program, direct investment in
the less developed countries is in no way discouraged.

As for

other capital flows, clear priority is assigned to meeting
the needs of these countries, a priority second only to that
of providing financing for our exports.
been observed.

These guidelines have

For example, we know that bank

com~itments

on longer term loans to less developed countries during the
first half of 1965 were equal to those of the January-June
period of the previous year.

We have every confidence these

demands for needed capital will continue to be met.
More generally, and looking further ahead, I should
note that policies that contribute, as we intend that our
policies should, to the continued healthy growth of the more
industrialized nations, contribute thereby to the creation
of capital available for use in the less developed countries.

- 32 -

Contrarily, policies that failed to encourage sound growth of
the capital exporting nations would certainly be felt -- and
probably felt first and most strongly -- in the capital-needy
countries as capital available for export became increasingly
less abundant.

IV.

Our Longer Term
Objectives
Before concluding, I would like to speak very briefly of

our approach to the longer-term objective of international
financial policy.

As we take this somewhat longer look ahead,

let us not forget that the international monetary system
created at Bretton Woods over 20 years ago has been extraordinarily effective and resilient.

During the past 20 years,

the industrial nations have created powerful new economies.
A number of important currencies have become freely convertible.
International trade has flourished, increasing over one-third
in volume in the first four years of this decade alone.
Nevertheless, we must be alert to the possibility that
continued growth of the world's economy together with sustained
equilibrium in the United States payments position could combine

- 33 -

1 •

to create an eventual shortage of liquidity.
This is the single real danger of which I spoke earlier.
It is the danger that prompted the United States proposal -set forth in my Hot Springs address of July 10th -- that we
begin, together with other nations, the careful preparation
and consultation that is a necessary prelude to monetary reform.
I believe the nature of this problem is becoming widely
recognized.

Again, the Annual Report of the BIS provided an

interesting view of the issue.

That Report stated:

For the first time in some years there is some prospect
of a substantial reduction in the payments imbalance
between the United States and Europe.

If this occurs,

the potential problem of inadequate means for increasing reserve assets may come closer to reality.

From

the standpoint of aggregate reserves, it would be
likely to take considerable time before the system
as a whole were short of liquidity.

But from the

standpoint of the annual margin for increasing
reserves, various countries might feel themselves
adversely affected after a rather shorter time.
A situation of balance in the external position
of the reserve currencies would provide the

- 34 -

conditions for more fruitful discussion of
this problem.
Exactly when the shortage of liquidity will take place,
where it might first appear, what the extent might be, how it
will be distributed from country to country, how it will be
divided among the private and official monetary components -these are questions that we cannot now answer. Butwe do know
that we should be prepared to deal with these problems, when
and if they do arise, in an orderly fashion.
As you know, United States representatives are in almost
constant discussion with their counterparts in other countries
on international monetary problems.

We have participated

actively in the deliberations of the Group of Ten.

Meetings

of Working Party 3 and other committees of the Organization
for Economic Cooperation and Development are attended
regularly by people from the Treasury, the Federal Reserve
System, and the Council of Economic Advisers, and afford
opportunities for a frank exchange of views.

Free World

central bankers meet monthly in Switzerland.

We,of course,

pIa y

an important role in such international financial

organizations as the International Monetary Fund

- 35 and the International Bank for Reconstruction and Development.
Out of such consultations have corne a number of innovations
that have helped the international monetary system to cope
with recent problems.

And

these consultations have helped

lay a base for the further preparation and agreement essential
to reach the international consensus that must underlay monetary
reform.
Since announcing the U. S. initiative to intensify and
give urgency to the negotiation of new and improved
international monetary arrangements, I have been privileged
to consider this problem here in Washington separately with
Finance Minister Takeo Fukuda of Japan and Walter L. Gordon
of Canada.
I will be leaving for Europe shortly to consult with my
counterparts in a number of leading European nations on how
best to proceed in this effort, without delay, but on the
basis of careful and deliberate preparation.
to hearing the views of our friends abroad.

I look forward
I intend to present

them with a firsthand picture of the nature of our program
here, its results to date, and our attitude toward the
longer-range issues -- the subjects I have been discussing
with you here this morning.

000

- 8 \lhich pr ivate effort -- by labor and busines. -- can flouriah.

I have every confidence that you in labor, and the member. of
the business c'Jwmunity, will continue to take full advantage

of that cluuate for growth in ways that will assure strong and
stable economy in whose f-r'uits all Americans can fully ahare.

.' 1 0
~

- 7 -

a half years will, at next year's level. of incom.. add up to •
net total of $18 billion worth of annual tax reduction.
The response to these meaaures by the private .ector of
our economy -- by consumers and inveatora, by
has been magnificent.

b~1ne ••

aDd labor

And it ia that total effort -- the

effort of labor and buaines8 and government working together -that has

brou~ht

us all the great economic gain. of the

,..t

four years.

That same total effort -- of labor and bU81ne •• and

IO¥.~

went pulling t06ether to create a greater abundance and •
better life for all -- holds the key to continued econo.ic
advance in the months and years ahead.

I can

a~sure

you that. for its part. th.. Adminiatratloa

will continue to pursue policies designed to furniah the clt.atl

- 0 -

1>JLth 11.

j

percent for ttle nat:L..,n as a whole;

-- t:Jtal persona 1 income has grown by

2b

percent I

compared \o7ith 18 percent for the nation .8 whole;
~-

per capita pe rsonal income has grown by 18 percent.

compared with 13 percent for the nation as a whole.
'l'h~_s

unprecedeuted economic advance ... - in which Vifginiana,

like all Americans, have amply shared ... - did not simply happen.
It: is the d.i. ~(!ct .cesult of public.: pol Lcies desIgned to foster
~J-,"8ater

private effort and initiative -- to enlarge and enhance

t:he free enterprise system in the pursuit of our

the :cole

r,f

nati~nal

economic 88a19.

Th~

i;,>2 anr.

investment credit of 1962, the depreciation reform of
}.I'J5,

the incnme tax cut of 1964, and the exciae tax cut

enacte(1 this year -- all these tax hteaBurea of the I •• t four and

-- a Jc:

peL~cent

,-

rise in manufacturing production,

-- an be percent eise in corporate profits after taxe.;

--

0}1:;:::;

t

C\

23 percent rise in personal income.

.i.w.portant, that expans ion has he lped cut the unemploya

rate b:m.l 0.9 peL'cent lon ear ly 1901 to 4.5 percent last month .-

Lnc lowest fit,ure Ln nearly eight years.
in

YJU

beneii_LS.

V1.r~inia

have shared, and shared fully, in thee.

Between 1961 and 1964, for example, in the State of

the total numoer of nonfarm workers grew by 11.9
percent, compared with 5.2 percent for the
nation as a whole;
-- average t"eet<ly earnings of production workers in
WB.nuiactu.c.l.ug llave ~rown by 12.4 percent, compared

- If. -

for your country, for your state aoG for ,..r•• l~

~

reur

efforts on behalf of United .t.~e. 'lIYi. . . 10. . . .

The Savinas Banda pro&%,- -- whick ,.,,,

bay.

done

to .<iv.uce .- b.. helped ma~rial17 1D pre••&"'Iiaa

economic gaiDa over the

paJlt

.0

-..cb

O1I.C . . .If • •

four and a balf 78AD fc.a

inflation.

'.the nation 18

DOW

in ita 54th conaeOlltlve . . .~h of .....u

expansion -. the loqs8t peacet1ae expaDa10a in

OU%

lalace.,.

All ""'ricana have shared in ita abundant benefit. -- MDefit.
that include:

-- • 30 percent: ri•• ill our total Datioa.l out:pu.CI
-- • 18 pere.at rise in cOl18umer 8peud1n&;
-- a 40 percent ria. iD. Duallle•• iav. .~ac 1a

plant aDd equipment;

J

r' '" .
.l~.

AFL-,;ro

·,nves t

'~lil t

~n,:.,

.LS

•

')us and

,-;vel.'

-

t,~1e

:'..1,(

VoLrGi..nia State Labor

Ra :!~l road Bp)thechoods in the c;,reat

~.>O ~,li 11 ..')\.1

'

annually in ::iaal..nos Bonds throul:;h

I :(i.1m.: that, in the years to c ~jme, the Virblnia State

AFL-·CIO - - a LJili:., ","ith ,Etlan leaders and members throughout

-

L~he nat~_Jn

-- v:ill c':;ntinue t\': oive

T'~ y~~Ll,

(. han:~8

ClnJ

and to y'Ju.r

Ut1i0n

<.r'y c'.)n ..;lratu ta.t,'

:)i1S

stron;~

support to the

membe:.:-s, I \'Jant to express my
Ln' the great job you are doing

- 2 -

the leaders of American labor -- as well a. the American
\·;orlcLn:::.;ru8l1 --

Savin~s

llave recognized the crucial contribution the

Bonds pro5ram maKes to non-inflationary national

economic gr()wth as well as to the personal financial welfare

of all \'lho buy Saviu68 Bonds.

'fod·nt,

through the National Labot' Advisory Committee --

of which AFL-CIO President George Meany is an influential
member -- some 200 national unions take part in the Savings
Bonds

pro~ram.

Throut:;hout th.e country, thousands of men and

women in labor unions serve as volunteers in promoting the

Saviobs Bonds program among union members.
As a VirgLoian, I am particularly proud of the out.tanding
";OL~ :)f

the Virginia State AFL-CIO on behalf of Savings Bo~.

22£:
REMARKS BY. SECREIARY FOWLER
BEFORE THE ANNUAL CONVENTION OP THE VIRGIRIA STAD An.-CIO
AT THE SHERATON-PARK Hor&I.. VASHn.-l'OB, D.C.

RIMY, AUGUST 20, 19t15, lOl4S A.H. . . .
I am very happy to be bare thia aeK'Dia& w:l.da . . • •••
fellow Virginjan.a -- au. with an or. . . 1a.~i.o. Cbac MIl . . .

• 0

IDLlCb for the economy of Vira1aia aacl. ~b. . . fo~ cb8 .'IP) IJ

of the nation.

one

w.,.

in parC1cular :.La whicb til. Yuaiala State Al'J,.C" . . .

welfare of tlaeir . .sbera and of their cOUll&K7.

1 . ,••k o.

their excellent efforta oe bebalf of "ai.&•• aU&M

-.vi .........

The 8tron&. .t:eady .u.pport of orpoiaed labor baa be• •

enjoyed .iDee it _tart.d in 1941.

Fro. ~Ia. very

_."p

s1 8 ••

REMARKS BY. SECRETARY FOWLER
BEFORE THE ANNUAL CONVENTION OF THE VIRGINIA STATE AFL-CIO
AT THE SHERATON-PARI: llOTEL, WASHUCTON, D.C.

FRIDAY, AUGUST 20, 19u3, lO:4j A.M., EDT
1 alI'. very happy

t;)

be here this nlornillg

~ith

80 many

fello'W Virbini8ns -- and wtth an organtzation thaL haa tione
so much f,:,:,' the econorl1Y of Virc;illia.

and~

thus, for the economy

af the nat ion.
As Secretary ·:)f the Treasury, I am especially min0ful of
;)ne way in pa:rtlcul.ar in whicn the Vir61nia Stat:e AFL-CIO, as

\>Jell as unions throughout the land, have helped further the
~elfare

of their members and of their country.

1 speak af

their excellent efforts on behalf of United States .. aving& Bonds.
The strong, steady support of organized labor has been a
vital factor in the aucce88 the Savings Bonds program hss
enjoyed since it started in 1941.

From the very beginning,

- 2 -

the leaders of knerican labor -- aa well .8 the American
workin~n

-- have

Savings Bonds

recob~ized

pro~ram

the crucial contribution the

maKes to non-inflationary national

economic growth as well as to the personal financial welfare
of all who buy Savings Bonds.

Ted-nl, through the National Labor Advisory Committee
of whIch AFL-CIO President George Meany is an influential
member -- some 200 national unions take part in the Savings

Bonds program.

Throughout the country, thousands of men a.nd

women in labor unions serve

8S

volunteers in promoting the

Savings Bonds program among union members.

As a Virginian. I am particularly proud of the outstanding
work of the Virginia State AlL-CIO on behalf of Savings Bonds.

-

:3 -

Under the vel.·Y able and dedicated leadershJ.p :)[

Pres lcient.) HI'. Harold Boyd -- who 1s

'JU.c

yOU1..'

'~)\\,'ll

Virg.ln.i.a Srate Lab(»)

AFL-CIO uni;)us and the Ral.lroad Brotherhoods in tlw

;~reat

C(J!':\l,h)nt.'ealth ,.,f Virginia, along with other.' ",labe ear;'ners, are

LnvestLn o aver $:';0 mill:Lon annually in ::>alrl.o.::;s Bon::1s thrau,:,n

the

PaYL··~)ll

I

;(i.1O't.;>

3avi.nL;s Plan.

that, in the years to come, the Virb.Lnia Stc::,te

AFL-CIO -- along with union leaders and members throughout
•
the
nation -- will continue to 6ive strong support to the

SaVl.n;s Bends prog.ram.

To you, and to your unIon members, I want to express my
thanks and my con~ratu lt1tLons for the great job you are doing

- 4 for YCJur country t for your state and far yout'selves by your

efforts on behalf af United States Savings Bonds.
The Savings Bands program -- which lJou have done

SI)

much

to advance -- has helped li&Aterially in presel:ving our enormous

econOluic gains over the past four and a half yea.r.:'s from
inflation.

The nation is nov.' In its 54th consecutive month of econoruic
expansion -- the longest peacetime expans..lon in ouzo hIstory.

All A8ericans nave shared in

1tS

abundant benefits -- benefits

that inc lude :

-- a 30 percent rise in our total national output;
-- a 28 percent rise in consumer spending;
-- a 40 percent rIse in business inve.truant in
plant and equipment;

-,- ... a 38 percent rise in manufacturing production;
-- an b8 percent rise in corporate profits after taxes;
-- c1 28 perceltt t:'lse in personal income.
~1ost

iniportant, tllat expansion has helped cut the unemployutent

rate from 0.9 percent in early 1901 to 4.) percent last rnonth -the lowest figure in nearly eight years.

Y.:)u in Virt;inia have shared. and shared fully,
beneiits.

Bet'tt.Teen

..lll

tnese

1961 and 1964, for example, in the State of

Virginia:
-~

the total number of nonfarm workers

~rew

by

11.9

percent, compared with 5.2 percent for the
nation as a whole;
-- average weekly earnings of production workers in
manufacturing have grown by 12.4 percent, compared

- 6 Hith 11.5 percent for the nati."}n as a wh'~Jle;

-- total

per8o[~1

c0n~ared

Income has grown by

20

percent,

with 18 percent for the nation as whole;

-- per capita pers011al income has .;rown by 18 percent,
compared with 13 percent for the nation as a whole.

This unprecedented economic advance -- in which Vif6 inians,
like all AIDer leans, have amply shared - - did not

8

imply happen.

It is the direct result of public policies desIgned to foster

greater private effort and initiative -- to enlarge and enhance
the role of the free enterprise system in the pursuit of our
nati~nal

econumic goals.

The investment credit of 1962, the depreciation reform of

1962 and 1965, the income tax cut of 1904, and the excise tax cut
enacted this year -- all these tax measurea of the last four and

- 7 8

half years will, at next year's levels of income, add up to a

net total of $18 billion worth of annual tax reduction.
The l:esponse t'.) these measures by the private sectnr

(}f

our economy -- by consumers and investors, by business and labor -has been magnificent.

And it is that total effol't -- the

effort of labor and business and government worklnf; toc;ether -that has

brou~ht

us all the great economic Jains ol the past

four years.

That same total effort -- of labor and business and government pulling toc;ether to create a greater abundance and a

better life [or all -- holds the key to continued economic

advance in the montns and years ahead.
I can assure you that, for its part, thea Administration
"rill continue to pursue policies designed to furnish the climate in

- 8 which private effort -- by labol.' and business -- can flourish.
I have every c0nfidence that you in labor, and the uuambers of

the business c'JLOmunity, will continue to take full advantage

()f

that climate £'01: growth in Vlays that will assure

stl·on~;

and

stable economy in whose fl:·uits all Americans can fully share.

TREASURY DEPARTMENT

FOUlELEASE A.M. NEWSPAPERS,
esday, August 24, 1965

-

RESUL'l'S OF TREASUR.Y'S WEEKLY BILL OFFERING
The Treasury Departnent announced last evening that t he tenders for
easury bills, one series to be an additional issue of the bills dated
dtM other series to be dated August 26, 1965, which were offered on
ened at the Federel. Reserve Banks on August 23. Tenders were invited

thereabouts, of
e details of the
NGE OF ACCEPTED
MPFrITIVE BIDS:
High
Low
Average

90 percent of

47 percent of

two series of
May 27 1965
August'18, w~re
for $1,200,OOO.)JOOO,
92-day bills and for $1,000,000,000, or thereabouts, of l82-day bills.
two series are as follows z
92-day Treasury bills
:
l82-day Treasury bills
•
maturing i'iovember 26, L~65
maturing February 24, 1966
Approx. Equivo :
Approx. Equive
Price
Annual R.a. te
Price
Annual Rate
•
99.019
3.839%
98.012
3.9)2%
3.862%
3.962%
99.013
97.997
98.001
99.015
3.855% "t/
3.955% ~i
the amount of 92-day bills bid for at the low pri ce was accepted
the amount o:f 182-day bills bid for at the law pn ce was accepted

·

·

ITAL TENDERS APPLIED FOR AND ACCEPTED BY FEDERAL RESERVE DISTRICTS:
District
A.pplied For
Accepted
: Applied For
Boston
$
25,473,000
$
15,473,000: $
26,166,000

NnYork

789,674,000:
1,200,066,000
Philadelphia
17,645,000 :
11,813,000
Cleveland
27,558,000 :
20,880,000
Richmond
4 ,44
1.1.5 ,000
21~117,OOO
21, 06 7,000.•
ltlanta
35,297,000
30,647,000 :
16,979,000
Cmc~o
285,220,000
136,020,000 :
251,312,000
St. Louie
37,716,000
28,616,000 :
13,474,000
~inneapo111
17,428,000
15,218,000 :
12,284,000
Wlsas City
24,822,000
2),822,000 :
15,282,000
Dallas
23,741,000
1.5,641,000 :
10,971,000
San FranCisco
104,698.000
78,848,000 :
168,652,000
TOTAlS
82,174,339,000
$1,200,229,000!,/ $1, 752,324,000 :$1,OOO,281JOO~ ~I
Includes $235,166,000 noncompetitive tenders accepted at the average price of 99.01~
In~ude8 $86,522,000 noncompetitive tenders accepted at the average price of 98 Q 001
On a Coupon issue of the same length and for the same amount invested~ the return on
these bills would provide yields of 3.95%, :for the 92-day bills, and 4.09%, for the
l82-day bills. Interest rates on bills are quoted in terms of bank discount with
the return related to the face amount of the bills payable at maturity ra.ther than
the amoUllt invested and their length in actual number of days related to a )60-day
year. In contrast, yields on certificates, notes, and bonds are computed in telIDS
?t interest on tm amount invested, and relate the number of days rem~ining in an.
lllterest payment period to the actual. number of days in the period, Wl..th semianrrual
compoUllding i t more than one coupon period is involved.

F-174

1,541,624,000
29,645,000
27,558,000

Accepted
$
21,166,000
644,028,000
3,813,000
20,880,000
L
• 000
4, 44 ~,
11,919,000
123,662,000
6,974,000
11,519,000
14,782,000
7,Lilil,OOO
129,652,00.12

TREASURY DEPARTMENT

FOR L ~,1EDIATE RELEASE

WITHHOLDING OF APPRAISEMENT

ON SHOES
The Treasury Department is instructing customs field officers
to wIthhold appraisement of shoes, leather, men's and boys', welt
construction, from Poland, pending a determination as to whether
this merchandise is being sold at less than fair value within the
meaning of the Antidumping Act, 1921, as amended.

Notice

~o

this

effect is being published in the Federal Register.
Under the Antidumping Act, determination of sales in the United
States at less than fair value would require reference of the case
to the Tariff COmmission, which would consider whether American industry was being injured.
sho~

Both dumping price and injury must be

to justify a finding of dumping under the law.

The information alleging that the merchandise under consideration was being sold at less than fair value within the meaning of
the Antidumping Act was received in proper form on October 15, 1964.
The complaint was received from Truitt Brothers, Inc., Belfast,
Maine, through Senator Edmund S. Muskie.
The dollar value of imports received during the period April I,

1964, througb March 31, 1965, was apprOximately $80,000.

TREASURY DEPARTMENT

FOR E;iv1EDIATE RELEASE
WITHHOLDING OF APPRAISEMENT
ON SHOES

The Treasury Department is instructing customs field officers
to withhold appraisement of shoes, leather, men's and bOys', welt
construction, from Poland, pending a determination as to whether
this merchandise is being sold at less than fair value within the
meaning of the Antidumping Act, 1921, as amended.

Notice to this

effect is being published in the Federal Register.
Under the Antidumping Act, determination of sales in the United
states at less than fair value would require reference of the case
to the Tariff COmmiSSion, Which would consider whether American
dustry was being injured.

in~

Both dumping price and injury must be

show. to justify a finding of dumping under the law.
The information alleging that the merchandise under consideration was being sold at less than fair value within the meaning of
the Antidumping Act was received in proper form on October l5, 1964.
The complaint was received from Truitt Brothers, Inc., Belfast,
Maine, through Senator Edmund S. Muskie.
The dollar value of imports received during the period April l,

1964, through March 31, 1965, was approximately $80,000.

TREASURY DEPARTMENT

August 23, 1965
FOR TI-11v'iEDIATE RELEASE
WITHHOLDING OF APPRAISEMENT ON

SHOES
The Treasury Department is instructing customs field officers
to withhold appraisement of shoes, leather (other than men's and boys'
of welt construction), from Rumania pending a determination as to
whether this merchandise is being sold at less than fair value within
the meaning of the Antidumping Act, 1921, as amended.

Notice to this

effect is being published in the Federal Register.
Under the Antidumping Act, determination of sales in the United
States at less than fair value would require reference of the case to
the Tariff COmmission, which would consider whether American industry
was being injured.

Both dumping price and injury must be shown to

justify a finding of dumping under the law.
The information alleging that the merchandise under consideration
was being sold at less than fair value within the meaning of the Antidumping Act was received in proper form on July 16, 1965.

This informa-

tion was the subject of an TlAntidurnping Proceeding Noti ce l1 which was
published pursuant to section l4.6(d), Customs Regulations, in the
Federal Register of August 18, 1965, on page 10249 thereof.

TREASURY DEPARTMENT

August 23, 1965
FOR ThlMEDIATE RELEASE

WITHHOLDING OF APPRAISEMENT ON

SHOES
The Treasury Department is instructing customs field officers
to withhold appraisement of shoes, leather (other than men's and boys'
of welt construction), from Rumania pending a determination as to
whether this merchandise is being sold at less than fair value within
the meaning of the Antidumping Act, 1921, as amended.

Notice to this

effect is being published in the Federal Register.
Under the Antidumping Act, determination of sales in the United
States at less than fair value would require reference of the case to
the Tariff Commission, which would consider whether American industry

was being injured.

Both dumping price and injury must be shown to

justify a finding of dumping under the law.
The information alleging that the merchandise under consideration

was being sold at less than fair value within the meaning of the Antidumping Act was received in proper form on July 16, 1965.

This informa-

tion was the subject of an "Antidumping Proceeding Notice" which was
published pursuant to section l4.6(d), Customs Regulations, in the
Federal Register of August 18) 1965, on page 10249 thereof.

TREASURY DEPARTMENT

roR RELEASE A. M. NEWSPAPERS,

-

iednesday, August

25, 196.5.

24,

A.ugust

RESULTS OF REFUNDING OF $1 BILLION OF ONE-YEAR BILLS

The Treasury Department announced last evening that the tenders for $1,000,000,000,
or thereabouts, of 365-day Treasury bills to be dated August 31,1965, and to mature
lugust 31, 1966, which were of.fered on August 18, were opened at the Federal Reserve Banks
on August 24.
The details of this issue are as follows:
Total applied .for - $1,926,902,000
Total accepted
- 1,000,152,000

~e

(includes $34,059,000 entered on a
noncompetitive basis and accepted in
full at the average price shown below)

(Excepting one tender of $200,000)

of accepted competitive bids:

High

-

Average

-

Low

95.950 Equivalent rate of discount approx. 3.995% per annum
95.931"
II,.
,.
n
4.013% n
n
95.938
II
II..
•
II
4.006% rt
..
1/

(11% of the amount bid for at the low price was accepted)
Federal Reserve

Total

District

Applied for

Total
Accepted

Boston

$

$

New York

45,317,000

1,484,894,000
11,349,000
43,781,000

Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis

4,202,000

Minneapolis
Kansas City

Dallas
San Francisco

TOTAL

11,045,000
211,018,OOO
16,823,000
6,331,000
6,609,000
11,068,000
74,465,000
$1,926,902,000

Jj On a coupon issue of the same length

35,317,000
801,314,000
3,349,000
23,001,000
3,202,000
4,545,000

78,018,000
4,823,000
3,441,000

6,609,000
2,068,000
34,465,000
$1,000,152,000

and for the same amount invested, the return OD
these bills would provide a yield of 4.19%. Interest rates on bills are quoted in
terms of bank discoWlt with the return related to the face amount of the bills payable at mat uri ty rather than the amount invested and their length in actual number
of days related to a 360-day year. In contrast, yields on certificates, notes, and
bonds are computed in tenns of interest on the amount invested, and relate the number
of days remaining in an interest payment period to the actual number of days in the
period, with semiannual compoundi.ng i f more than one coupon period is involved.

F-175

- 3 ~~X::~

Bale or other disposition of Treasury bills does not have any special treatment,
such, under the Internal Revenue Code of 1954.

88

The bills are BubJect to estate,

inheritance, gift or other excise taxes, whether Federal or State, but are exempt fttD
all taxation now or hereafter 1mposed on the principal or interest thereof by any Stat
~r

or any of the possessions of the United states, or by any local taxing authority.

purposes of taxation the amount of discount at which Treasury bills are originally Bo1
by the United states is considered to be interest.

Under Sections 454 (b) and 1221 (5

ot the Internal Revenue Code of 1954 the amount of discount at which bills issued

he~

under are sold 1s not considered to accrue until such b1lls are sold, redeemed or othe
wise disposed of, and such bills are excluded from consideration

8S

capital assets.

Accordingly, the owner of Treasury bills (other than life insurance companies) issued
hereunder need include in his income tax return only the difference between the price
pa1d tor such bills, whether on original issue or on subsequent purchase, and the amou
actually received either upon sale or redemption at maturity during the taxable year
for which the return 1s made, as ordinary ga1n or 10s8.
Treasury Department Circular No. 418 (current reVision) and thia notice, prescrib
the terms of the Treasury bills and govern the conditions of their issue.
the circular may be obtained from any Federal Reserve Bank or Branch.

Copies of

- 2 -

printed forms and forwarded in the special envelopes which will be supplied by

Fede~

Reserve Banks or Branches on application therefor.
Banking institutions generally may submit tenders for account of customers provided the names of the customers are set forth 1n such tenders.

others than

banldI18

institutions will not be permitted to submit tenders except for their own account.
Tenders will be received without deposit from incorporated banks and trust companies
and from responsible and recognized dealers in investment securities.

Tenders fram

others must be accompanied by payment of 2 percent of the face amount of Treasury bil
applied for, unless the tenders are accompan1ed by an express guaranty of payment

by

an incorporated bank or trust compahy.
Immediately after the closing hour, tenders will be opened at the Federal Resen,
Banks and Branches, following which public anouncement will be made by the Treasury
Department of the amount and price range of accepted bids.
will be advised of the acceptance or rejection thereof.

Those submitting tenders

The Secretary of the Treasur

expressly reserves the right to accept or reject any or all tenders, in whole or in

part, and his action in any such respect shall be final.

Subject to these reserva-

tions, noncompetitive tenders for each issue for $200,000 or less without stated
price from anyone bidder will be accepted in full at the average price (in three
decimals) of accepted competitive bids for the respective issues.

Settlement for

accepted tenders in accordance with the bids'must be made or completed at the Fedenl
Reserve Bank on 3eoteInher

&mJ965

J

in cash or other immediately available fund

or in a like face amount of Treasury bills maturing
and exchange tenders will receive equal treatment.

September 2, 1965

Cash

xcmt

Cash adjustments will be made for

differences between the par value of maturing bills accepted in exchange and the

tS8U

price of the new bills.
The income derived from Treasury bills, whether interest or gain from the sale
other disposition of the bills, does not have any exemption, as such, and

0

1088 f~t

MIlORD

IflJWftmlIf
TREASURY DEPAR'Th1ENT

Washington
FOR IMMEDIATE RELEAS E,

Aucust 25, 1965

MXKX.XXXXX~tXXXXXXXXX:XXXXXXXX

TRZA.SURY'S \1E!i:KIJY BILL OPF'ERING

The Treasury Department, by this public notice, invites tenders for two series
of Treasury bills to the aggregate amount of $ 2,200,000,000 , or thereabouts, tor

00

cash and in exchange for Treasury bills maturing septembef.

y' 1965

X

of $ 2,202 J 651 f000 , as follows:

I

in the amount

(4

91 -day bills (to maturity date) to be issued September 2, 1965

(I)

I

(I)

in the amount of $ 1,200,000,000 , or thereabouts, represent-

(I)

June 3 , 1965
t
(I)
, originally issued in the

ing an additional amount of bills dated
and to mature

December 2, 1965

(I)

amount of $ 1,001,177,000 , the additional and original bills
(I~)

to be freely interchangeable.
182 -day bills, for $1,000(000,000

en)

September 2, 1965
(IX)

u)

,or thereabouts, to be dated

, and to mature Harch 3, 1966

(II)

The bills of both series will be issued on a discount basis under

competitl~

and noncompetitive bidding as hereinafter provided, and at maturity their face
will be payable without interest.

~~

They will·be issued in bearer rom only, and in

denominations of $1,000, $5,000, $10,000, $50,000, $100,000, $500,000 and

$l,OOO,~

(maturity value).
Tenders will be received at Federal Reserve Banks and Branches up to the closin(
Day1igh i::,

Savin~

hour, one-thirty p.m., EaBtern/~ time,

Honday, August 30, 1965
• Tendel
(U)
will not be received at the Treasury Department, Washington. Each tender must be
for an even multiple of $1,000, and in the case of competitive tenders the price
offered must be expressed on the basis of 100, with not more than three decimals,
e. g., 99.925.

Fractions may not be used.

It is urged that tenders be made on the

TREASURY DEPARTMENT

August 25, 1965

FOR IMMEDIATE RELEASE
TREASURY'S WEEKLY BILL OFFERING
The Treasury Department, by this public notice, invites tenders
for two series of Treasury bills to the aggregate amount of
$ 2,200,000,000,or thereabouts, for cash and in exchange for
Treasury bills maturing September 2,1965, in the amount of
$ 2,202,651,000, as follows:
91-day bills (to maturity date) to be issued
in the amount of $1,200,000,000, or thereabouts,
additional amount of bills dated June 3, 1965,
mature Decemb~r 2,1965, originally issued in the
$ 1,OOl,177,OOO,~he additional and original bills
interchangeable.

September 2, 1965,
representing an
and to
amount of
to be freely

l82-day bills, for $ 1,000,000,000, or thereabouts, to be dated
September 2,1965, and to mature March 3, 1966.
The bills of both series will be issued on a discount basis under
competitive and noncompetitive bidding as hereinafter provided, and at
maturity their face amount will be payable without interest. They
will be issued in bearer form only, and in denominations of $1,000,
$5,000, $10,000, $50,000, $100,000, $500,000 and $1,000,000
(maturity value).
Tenders will be received at Federal Reserve Banks and Branches
one-thirty p.m., Eastern Daylight Saving
time, Monday, August 30,1965.
Tenders will not be
received at the Treasury De~artment, Washington. Each tender must
be for an even multiple of $1,000, and in the case of competitive
tenders the price offered must be expressed on the basis of 100,
with not more than three decimals, e. g., 99.925. Fractions may not
be used. It is urged that tenders be made on the printed forms and
forwarded in the special envelopes which will be supplied by Federal
Reserve Banks or Branches on application therefor.
up to the clOSing hour,

Banking institutions generally may submit tenders for account of
customers provided the names of the customers are set forth in such
tenders. Others than banking institutions will not be permitted to
submit tenders except for their own account. Tenders will be received
without deposit from incorporated banks and trust companies and from
responsible and recognized dealers in investment securities. Tenders
from others Inust be accompanied by payment of 2 percent of the face
amount of Treasury bills applied for, unless the tenders are
accompanied by an express guaranty of payment by an incorporated bank
or trust company.
F-176

- 2 -

Immediat(ly afcer the closing hour, tenders \vill be opened at t
Federal Reserve Banks and Branches, following which public announcement will be made by the Treasury Department of the amount and price
range of accepted bids. Those submitting tenders will be advised
of the acceptance or rejection thereof. The Secretary of the Treasu
expressly reserves the right to accept or reject any or all tenders,
in whole or in part, and his action in any such respect shall be
final. Subject to these reservations, noncompetitive tenders for
each issue for $200,000 or less without stated price from anyone
bidder will be accepted in full at the average price (in three
decimals) of accepted competitive bids for the respective issues.
Settlement for accepted tenders in accordance with the bids must be
made or completed at the Federal Reserve Bank
September 2, 1965, i
cash or other immediately available funds or in a like face amount
of Treasury bills maturing September 2,1965.
Cash and exchange tem
will receive equal treatment. Cash adjustments will be made for
differences between the par value of maturing bills accepted in
exchange and the issue price of the new bills.
The income derived from Treasury bills, whether interest or
gain from the sale or other disposition of the bills, does not have
any exemption, as such, and loss from the sale or other disposition
of Treasury bills does not have any special treatment, as such,
under the Internal Revenue Code of 1954. The bills are subject to
estate, inheritance, gift or other excise taxes, whether Federal or
State, but are exempt from all taxation now or hereafter imposed on
the principal or interest thereof by any State, or any of the
possessions of the United States, or by any local taxing authority.
For purposes of taxation the amount of discount at which Treasury
bills are originally sold by the United States is considered to be
interest. Under Sections 454 (b) and 1221 (5) of the Internal
Revenue Code of 1954 the amount of discount at which bills issued
hereunder are sold is not considered to accrue until such bills are
sold, redeemed or otherwise disposed of, and such bills are exclude
from consideration as capital assets. Accordingly, the owner of
Treasury bills (other than life insurance companies) issued hereund
need include in his income tax return only the difference between
the price paid for such bills, whether on original issue or on
subsequent purchase, and the amount actually received either upon
sale or redemption at maturity during the taxable year for which tr.
return is made, as ordinary gain or loss.
Treasury Department Circular No. 418 (current revision) and tt
notice prescribe the terms of the Treasury bills and govern the
conditions of their issue. Copies of the circular may be obtained
any Federal Reserve Bank or Branch.
000

• s-

,

I

-.

"-,

Saturday and Sunday, September 4-5:
visit Stockholm,

.In [.

.~-

The Fowler party will

where they will meet with officials of

the Swedish government and the Riksbank.'Further details as to
travel plans, itinerary, and appointments are unavailable at this
.~

\

time, and will be supplied later.)
,I

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Secretar, rovler·. ltbwras:1. .... hi. appoilam_u (ia IMaI
tt.aa) .111 lrtclucle:

natioul Airport. (TWA Flight 302) at 10 •••• i ani. . Cr1,

:earla. at 9:55 p.m.

rleY.

- 2 -

DurlDg hi. ri.ait, Secret.ary Powl_ will ..... Is.e Yi_ ..til
Wutara EuI'opUIl _thorltl_ _

the .... to liIpl'Ova eM t.tew-

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ps'oce.1'M f_ facl1itadll

thla c _ _ Itati_ ..ct re8\11tiD& aeaot1atl•••

FOR n~!F.J)lhTE RELEASE

ITINERARY AND APPOINTMENTS FOR
SECRETARY FONLF.R '8 VISIT TO EUROPE

I/H/"

Treasury

See~etary Heary

H. 'owl... will luft tht ••••t ...

.~"' t u t/t.)
to consult with lover_eat ad 1IO•• tary off1c1ala of . . . . . .'11.

A
Europea CGUIltriea . . . tbe ~ ~. Cc

Fl'OIa Aqut

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Rome t

L Ie /..'i '.J L Il.( j
lraakfurt. Boaa, .......1•• tba ..... , ....~ . . . .
t·

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He w111 be accOIIP_ied ce aoet of

UDder .;)ec:Z'etary of Stat•• Ceorae

w.

u.

trip .". eM

"11.

'l'b. party will 1aclude the Und.er .iecl'etay . f tbe II ••

for MoGetaJ:y Affair.,

rr....lck

I.,

L. o-taai Fr_t.a II. . . . . . .,

the atafl of the Special Mal.tat to the

rr..l.dMt

f . , , '••'

Security Affaira; Dixoa lkeael1ey. Aui.talC to ~ , . . .

S.

Und.er ,secretary Ball; ad Ceorge II. Wl1l1., DepltJ to . . . . . . .

- 3 -

Saturday, September 4: 8:30 a.m., depart
Cologne-Bonn Airport. 12:15 p.m., arrive Stockholm
Airport. 3:30 p.m. ,appointments with Minister of Finance
G. E. Strang and Governor Per Asbrink of the Bank of
Sweden.
Sunday, September 5: 1:15 p.m., leave Stockholm
Airport. 4:30 p.m., arrive Brussels National Airport.
Monday, September 6: 11:00 a.m., Hubert Ansiaux,
Governor of the National Bank of Belgium. 4:00 p.m.,
Robert Marjolin, Vice President of the Commission of
the European Economic Community. 5:30 p.m., Gaston
Eyskens, Belgian Finance Minister.
Tuesday, September 7: 10:30 a.m., leave
Brussels National Airport (U. S. military aircraft).
11:00 a.m., arrive Ypenburg Airport, The Hague.
3:00 p.m., Anne Vondeling, Dutch Finance Minister, and
Emile van Lennep, Dutch Treasurer-General, Ministry of
Finance.
Wednesday, September 8: 8:45 a.m., leave The Hague
by car for Amsterdam. 11:00 a.m., Marius W. Holtrop,
President of the National Bank. 3:00 p.m., leave
Schipol Airport (U. S. military aircraft). 4:20 p.m.,
arrive London (Northolt).
Thursday, September 9: Secretary Fowler has
appointments with James Callaghan, Chancellor of the
Exchequer, Deputy Prime Minister George Brown, and
Lord Cromer, Governor of the Bank of England, at
times that have not yet been fixed.
Friday, September 10:

Appointments to be annouced.

Saturday, September 11: 1:00 p.m., leave Heathrow
Airport (TWA Flight 709). 4:10 p.m., arrive Dulles
Airport, Washington.

000

- 2 -

Secretary Fowler has already talked in Washington on
international arrangements with Canadian and Japanese officials.
He also plans to meet with officials of the International
Monetary Fund, which has headquarters here, prior to the annual
meeting of the World Bank and Fund in Washington this coming
September.
Secretary Fowler's itinerary, and his appointments (in local
times) will include:
Saturday, August 28: Leave Washington, National
Airport, (TWA Flight 702) at 8 a.m.; leave New York,
John F. Kennedy International Airport, (TWA Flight 802)
at 10 a.m.; arrive Orly Field, Paris, at 9:55 p.m.
Sunday, August 29:

In Paris.

Monday, August 30: 3 p.m., Valery Giscard d'Estaing,
French Minister of Finance and Economic Affairs.
Tuesday, August 31: 9:30 a.m., Jacques Brunet,
Governor of the Bank of France; 10:30 a.m., the
French Minister of Finance and Economic Affairs;
5:30 p.m., depart Orly Field (U. S. Military aircraft).
8:50 p.m., arrive Ciampino Airport, Rome.
Wednesday, September 1: 10:00 a.m., Treasury
Minister Emilio Colombo, as well as with Budget
Minister Giovanni Pieraccini and Guido Carli, Governor
of the Bank of Italy.
Thursday, September 2: 9:15 a.m., leave Ciampino
Airport (U. S. military aircraft). 12:20 p.m., arrive
Rhine-Main Airport, Frankfurt, Germany. 3:00 p.m.,
appointment with Karl Blessing, President of the
Deutsche Bundesban~, 5:00 p.m., leave Frankfurt by car.
7:30 p.m., arrive Ambassador George C. McGhee's
residence at Bonn.
Friday, September 3: 9:30 a.m., Rolf Dah1gruen,
German Minister of Finance. 3:30 p.m., Wolfram Langer,
German State Secretary, Ministry of Finance.

TREASURY DEPARTMENT

FOR IMMEDIATE RELEASE

August 25, 1965
(Revised: August 27, 1965)

ITINERARY AND APPOINTMENTS FOR
SECRETARY FOWLER'S VISIT TO EUROPE
Treasury Secretary Henry H. Fowler will leave this weekend
to consult with government and monetary officials of seven
Western European countries and the European Economic Community
on measures to improve international monetary arrangements.
From August 29 to September 10, Mr. Fowler will visit
Paris, Rome, Frankfurt, Bonn, Stockholm, Brussels, The Hague,
Amsterdam, and London. He will be accompanied on most of the
trip by the Under Secretary of State, George W. Ball.
The party will include the Under Secretary of the Treasury
for Monetary Affairs, Frederick L. Deming, Francis M. Bator, of
the staff of the Special Assistant to the President for National
Security Affairs; Dixon Donnel1ey, Assistant to Secretary Fowler
for Public Affairs; George S. Springsteen, Special Assistant to
Under Secretary Ball; and George H. Willis, Deputy to the
Assistant Secretary of the Treasury for International Monetary
Affairs.
During his visit, Secretary Fowler will exchange views with
Western European authorities on the need to improve the international monetary system and ways of doing so.
The trip follows a speech on July 10 in which Secretary
Fowler said that the United States stands ready to participate
in an international conference to consider what steps might be
taken to secure substantial improvements in international monetary
arrangements. The Secretary cautioned at that time that such a
meeting must be preceded by careful preparation and international
consultation.
Mr. Fowler hopes to elicit the views of the financial
authorities of the countries visited on procedures for
facilitating this consultation and resulting negotiations.
F-177

TREASURY DEPARTMENT
(

FOR IMMEDIATE RELEASE

August 25, 1965
(Revised: August 27, 1965)

ITINERARY AND APPOINTMENTS FOR
SECRETARY FOWLER'S VISIT TO EUROPE
Treasury Secretary Henry H. Fowler will leave this weekend
to consult with government and monetary officials of seven
Western European countries and the European Economic Community
on measures to improve international monetary arrangements.
From August 29 to September 10, Mr. Fowler will visit
Paris, Rome, Frankfurt, Bonn, Stockholm, Brussels, The Hague,
Amsterdam, and London. He will be accompanied on most of the
trip by the Under Secretary of State, George W. Ball.
The party will include the Under Secretary of the Treasury
for Monetary Affairs, Frederick L. Deming, Francis M. Bator, of
the staff of the Special Assistant to the President for National
Security Affairs; Dixon Donnelley, Assistant to Secretary Fm"ler
for Public Affairs; George S. Springsteen, Special Assistant to
Under Secretary Ball; and George H. Willis, Deputy to the
Assistant Secretary of the Treasury for International Monetary
Affairs.
During his visit, Secretary Fowler will exchange vic"vJS \v1t11
Western European authorities on the need to improve the international monetary system and ways of doing so.
The trip follows a speech on July 10 in which Secretary
F~ler said that the United States stands ready to participate
in an international conference to consider what steps might be
taken to secure substantial improvements in international monetary
arrangements. The Secretary cautioned at that time that such a
meeting must be preceded by careful preparation and international
consultat ion.
Mr. Fowler hopes to elicit the views of the financial
authorities of the countries visited on procedures for
facilitating this consultation and resulting negotiations.
F-ln

- 2 -

Secretary Fowler has already talked in Washington on
international arrangements with Canadian and Japanese officials.
He also plans to meet with officials of the International
Monetary Fund, which has headquarters here, prior to the annual
meeting of the World Bank and Fund in Washington this coming
September.
secretary Fowler's itinerary, and his appointments (in local
times) will include:
Saturday, August 28: Leave Washington, National
Airport, (TWA Flight 702) at 8 a.m.; leave New York,
John F. Kennedy International Airport, (TWA Flight 802)
at 10 a.m.; arrive Or1y Field, Paris, at 9:55 p.m.
Sunday, August 29:

In Paris.

Monday, August 30: 3 p.m., Valery Giscard d'Estaing,
French Minister of Finance and Economic Affairs.
Tuesday, August 31: 9:30 a.m., Jacques Brunet,
Governor of the Bank of France; 10:30 a.m., the
French Minister of Finance and Economic Affairs;
5:30 p.m., depart Orly Field (U. S. Military aircraft).
8:50 p.m., arrive Ciampino Airport, Rome.
Wednesday, September 1: 10:00 a.m., Treasury
Minister Emilio Colombo, as well as with Budget
Minister Giovanni Pieraccini and Guido Carli, Governor
of the Bank of Italy.
~d~, September 2:
9:15 a.m., leave Ciampino
Airport (U. S. military aircraft). 12:20 p.m., arrive
Rhine-Main Airport, Frankfurt, Germany. 3:00 p.m.,
appointment with Karl Blessing, President of the
Deutsche Bunde5bank, 5:00 p.m., leave Frankfurt by car.
7:30 p.m., arrive Ambassador George C. McGhee's
residence at Bonn.

Friday, September 3: 9:30 a.m., Rolf Dahlgruen,
German Minister of Finance. 3:30 p.m., Wolfram Langer,
German State Secretary, Ministry of Finance.

- 3 -

Saturday, September 4: 8:30 a.m., depart
Cologne-Bonn Airport. 12:15 p.m., arrive Stockholm
Airport. 3:30 p.m.,appointments with Minister of Finance
G. E. Strang and Governor Per Asbrink of the Bank of
Sweden.
Sunday~

Airport.

September 5: 1:15 p.m., leave Stockholm
4:30 p.m., arrive Brussels National Airport.

Monday, September 6: 11:00 a.m., Hubert Ansiaux,
Governor of the National Bank of Belgium. 4:00 p.m.,
Robert Marjolin, Vice President of the Commission of
the European Economic Community. 5:30 p.m., Gaston
Eyskens, Belgian Finance Minister.
Tuesday, September 7: 10:30 a.m., leave
Brussels National Airport (U. S. military aircraft).
11:00 a.m., arrive Ypenburg Airport, The Hague.
3:00 p.m., Anne Vondeling, Dutch Finance MinLster, and
Emile van Lennep, Dutch Treasurer-General, Mi.njstry of
Finance.
Wednesday, September 8: 8:45 a.m., leave The Hague
by car for Amsterdam. 11:00 a.m., Marius W. Holtrop,
President of the National Bank. 3:00 p.m. ~ leave
Schipol Airport (U. S. military aircraft), 4:20 p.m.,
arrive London (Northolt).
Thursday, September 9: Secretary FOT~ller has
appointments with James Callaghan, Chancpllor of the
Exchequer, Deputy Prime Minister George BrO""vIln, and
Lord Cromer, Governor of the Bank of England. at
times that have not yet been fixed.
Friday, September 10:

Appointments to be annouced.

Saturday, September 11: 1: 00 p.m., leave H~'atnro"l
Airport (TWA Flight 709). 4: 10 p.m., arrive Dulles
Airport, Washington.

000

- 3 -

This would be done under rules laid down in the
Convention.

The Center would maintain lists of qualified

persons from which arbitrators and conciliators could be
selected.

The Center would be located at World Bank headquarters

in Washington.
Recourse to the services of the Center would be voluntary
and would be based upon an agreement between the investors and
the government of a member nation.

An agreement to submit to

conciliation or arbitration before the Center would be binding.
Neither party to the agreement would have the right to withdraw
unilaterally.
600

- 2 Treasury Secretary Fowler noted in signing it that:
liThe new convention is intended to promote
an atmosphere of mutual confidence between private
countries which

foreign investors and

wish to attract a larger flow of private international
capital.
"It's ratification and adoption will be a
major step forward in international cooperation
I.
r:::::C
0

£ ()

I:.(,{

t' ''"'

6 A (;. ." {.t,J ~.•.' f..,\

"7 f,.'Y-. ~
.Ii -r ( c.u C It ~. 4... >- f A..
through private investment."

fA~

for @es_. . . ee18l~

1\
Under the agreement an International Center for
Settlement of Investment Disputes is to be established, to
provide procedures to conciliate or arbitrate disagreements
between private investors and governments of foreign
countries where they have invested.

DRAFT
FOR IMMEDIATE RELEASE

August 27, 1965

SECRETARY OF THE TREASURY HENRY H. FOWLER
SIGNS CONVENTION FOR THE SETTLEMENT OF
INTERNATIONAL INVESTMENT DISPUTES

Secretary of the Treasury Henry H. Fowler today signed

p I? 0

1:::' C C) f(. ( :'.- t.. G' /". ~_, ·A. i'/-f an international convention aimed at i)12'2Pr~jpg private
fU.. C;,'T 1/'..11::,

The agreement signed today is a Convention on the Settlement
of Investment disputes between States and Nationals of Other
States, sponsored by the World Bank.

It will be submitted by

the President to the Senate for ratification.
is the 10th nation to sign.

The United States

The Convention will come into

effect when it has been ratified by 20 member governments of
the World Bank(International Bank for Reconstruction and
Development) •

Previous signers were the Central African Republic:

Ivory Coast, Jamaica, Mauritania, Niger, Nigeria, Pakistan,
Tunisia and the United Kingdom.

TREASURY DEPARTMENT

August 27, 1965

FOR IMMEDIATE RELEASE
SECRETARY OF THE TREASURY HENRY H. FOWLER
SIGNS CONVENTION FOR THE SETTLEMENT OF
INTERNATIONAL INVESTMENT DISPUTES
Secretary of the Treasury Henry H. Fowler today signed an
international convention aimed at promoting economic growth
particularly in the developing countries -- through private
investment.
The agreement signed today is a Convention on the Settlement
of Investment disputes between States and Nationals of other
States, sponsored by the World Bank. It will be submitted by the
President to the Senate for ratification. The United States is
the 10th nation to sign. The Convention will come into effect when
it has been ratified by 20 member governments of the World Bank
(International Bank for Reconstruction and Development). Previous
signers were the Central African Republic, Ivory Coast, Jamaica,
Mauritania, Niger, Nigeria, Pakistan, Tunisia and the United
Kingdom.
Treasury Secretary Fowler noted in signing it that:
"The new convention is intended to promote an
atmosphere of mutual confidence between private
foreign investors and countries which wish to attract
a larger flow of private international capital.
"Its ratification and adoption will be a major
step forward in international cooperation for
economic growth -- particularly in the developing
countries -- through private investment."
Under the agreement, an International Center for Settlement
of Investment Disputes is to be established, to provide
procedures to conciliate or arbitrate disagreements between
private investors and governments of foreign countries where they
have inves ted.

F-178

- 2 This would be done under rules laid down in the Convention.
The Center would maintain lists of qualified persons from which
arbitrators and conciliators could be selected. The Center
would be located at World Bank headquarters in Washington.
Recourse to the services of the Center would be voluntary
and would be based upon an agreement between the investors and
the government of a member nation. An agreement to submit to
conciliation or arbitration before the Center would be binding.
Neither party to the agreement would have the right to withdraw
unilaterally.

000

TREASURY DEPARTMENT
,
FOR RELEASE A.M. NEWSPAPERS,
Tuesday, August 31, 1965
RESULTS OF TREASURY'S WEEKLY BILL OFFERING
The Treasury Department announced last evening that the tenders for two series of
Treasury bills, one series to be an additional issue ot the bUls dated June 3, 1965,
and the other series to be dated September 2, 1965, which vere offered on August 25, _
opened at the Federal Reserve Banks on August 30. Tenders were invited for $1,200,000,0.
or thereabouts, of 9l-day bills and for $1,000,000,000, or thereabouts, ot 182-day bUll
The details ot the two aeries are as follows I

RARlE OF ACCEPl'ED
o:JIPETITIVI BIDS.

9l-day Treasury bills
I
l82-day Treasury bills
maturiIfl December 2, 1965
t
maturing March 3, 1966
.Approx. EquiY.
Approx. Equiv. I
Price
Annual Rate
Price
Annual Rate
High
99.022 a/
3.869%
I
97.988 bl
3.980%
Low
99.015 3.897%
I
97.978 4.000%
Average
99.018
3.886% 11 I
97.983
3.991% l/
a/Excepting 1 tender of $2,000,000; b/ Excepting 1 tender of $150,000
1; percent of the amotmt of 91-day buls bid for at the low price vas accepted
74 percent of the amount of 182-day bills bid for at the low price was accepted

TOTAL TENDERS APPLIED FOR AND ACCEPrED BY FEDERAL RESERVE DISTRICTS.
District
Accepted
AE,E1ied For
.AcC8;eted
~lied For
13,180,600
Boston
23,180,000 ,
16,578,000
•
16,578,000
New York:
846,429,000
1,559,509,000
676,758,000
1,098,288,000
Philadelphia
26,992,000
14,992,000
5,948,000
13,948,qoO
Cleveland
24,677,000
24,477,000
26,833,000
26,833,000
Ricmon!
3,486,000
13,444,000
13,444,000
),486,000
Atlanta
36,282,000
12,870,060
27,354,000
18,159,000
131,233,000
Chicago
273,753,000
129,055,OPO
259,055,000
28,048,000
39,928,000
st. Louis
1l,627,obO
17,127,000
17,011,000
Minneapolis
19,911,000
9,425,000
9,925,000
Kansas City
28,058,000
27,058,000
l6,o50,O()O
16,550,000
Dallas
25,321,000
18,361,000
il,740,000
13,000,000
8
San Francisco
68 2367,2000
79,2989,2000
3 ,2755.zOO0
133,2384,2000
TGrllS
$2,139,482,000 $1,200,342,000 ~I $1,626,333,000 $1,000,359,000

•

cl Includes $239, 729jX1J noncompetitive tenders accepted at the average price of 99.018
Includes $95,403,000 noncompetitive tenders accepted at the average price of 97.983
11 On a coupon issue of the same length and for the same amount invested, the return OJ
these bills would provide yields of 3.98%, for the 91-day bills, and 4.13%, for the
182-day bills. Interest rates on bills are quoted in terms of bank discount with
the return related to the face amount of the bills payable at maturtt7 rather thaD
the amount invested and their length in actual number or days related to a )6O-da1
year. In contrast, yields OD certificates, notes, and bonds are computed in te1'lll
ot interest on the amount invested, and relate the DUJIlber ot day"s· rama i n1 ng in aD
interest PayMllt period to the actual number ot daY'l in the period, with .emennna.l.
compound:5 ng i t aor, thaD ODe coupon period 1s inTolved.

d/

TREASURY DEPARTMENT
RELEASE A.M. NEWSPAPERS,

WASHINGTON. D.C.

:sday, August 31, 1965

August 30, 1965
RESULTS OF TREASURytS WEEKLY BILL OFFERING
The Treasury Department announced last evening that the tenders for two series of
lasury bills, o~e series to be an additional issue of the bills dated June 3, 1965,
t~ other ser~es to be dated September 2, 1965, which were offered on August 25, were
iI1ed at the Federal Reser~e Banks on A~st 30. Tenders were invited for $1,200 ,000 ,000,
tMreabouts, of 91-day b~lls and for ~l,OOO,OOO,OOO, or thereabouts, of 182-day' bills e
details of the two series are as follows:

lE OF ACCEPl'ED

9l-day Treasury bills
182-day Treasury bills
PETITIVE BIDS:
maturing December 2, 1965
:
maturing March 3, 1966
Approx. Equi v 0
Approx. Equiv. :
Price
Annual Rate
Price
Arumal Rate
High
9ge022 al
3.869t
:
97.'188 bl
3.98oh
Low
99.015 3.897%
:
97.978 4.000i
Average
99.018
3.a86% ] / :
97.953
3.991;h 11
!/Excepting 1 tender of $2,000,000; ~I Excepting 1 tender of $750,000
4 percent of the amOlmt of 91-day bills bid for at the low price was accepted
74 percent of the amount of l82-day bills bid for at the low price was accepted

IAL TENDERS
listrict

~u>uLIED

Ioston
[nYork
'hilade1phia
:J.eveland
~c~ond

Ltlanta

:hicago
It, ~uis

u~polis

Wlsas City
lallas
Ian Francisco
TorUS

FOR AND ACCEPTED BY FEDERAL ~SERV~ D[STRIcrS:
~plied For
Acce;eted
: i;eP1i d For
Accepted
jji
23,180,000 ~p
1),1:80,000
1 ,578,000 $ 16,578,000
1,559,509,000
846,429,000:
1,098,288,000
676,758,000
26,992,000
14,992,000 :
13,948,000
5,948,000
24,677,000
24,477,000 :
26,833,000
26,833,000
13,444,000
13,444,000
3,486,000
3,486,000
36,282,000
27,354,000 :
18,159,000
12,))70,000
27),753,000
131,233,000 :
259,055,000
129,055,000
39,:128,000
28,045,000
17,127,000
11,627,000
19,971,000
17,011,000 :
9,925,000
9,425,000
28,058,000
27,058,000
16,550,000
16 ,050 ~ooo
25,)21,000
18,.361,000 :
13,000,000
il,740,000
68,367,000
38,755,000:
133,384,000
7j~'}b9,OoO

6

$2,139,482,000

$1,200,342,000:;1 $1,626,333,000

$1,O()0,359,OOO ~/

Includes $239,729,000 noncompetitive tenders accepted at the average price of 99.018
Includes ~95 ,)~03 ,GuU noncompetitive tenders accepted at the :3.verage price of n. ~83
On a COupon issue of the same length and for the same amount invested, the return on
these bills would provide yields of 3598%, for the 91-day bills, and 4.13~, for the
lR2~y bills. Interest rates on bills are quoted in terms of bank discoa~t with
the return related to the face amount of the bills payable at mat1.lI·i ty rather than
the amount invested and their length in actual number of days related to a )6o-day
~ar. In contrast, yields on certificates, notes, and bonds are computed in terms
~f interest on the amount invested, and relate the number of days remaining in an
lIlterest payment period to the actual number of days in the period, with semiannual
COlllpounding if more than one coupon period is involved"

·179

- 3 -

ltlDJCn1l'liJl f1 UK

sale or other disposition of Treasury bills does not have any special treatment, as
such, under the Internal Revenue Code of 1954.

The bills are subject to estate,

inheritance, gift or other excise taxes, whether Federal or State, but are exempt fn.
all taxation now or hereafter imposed on the principal or interest thereof' by any Sta'
or any ot the possessions ot the United States, or by any local taxing authority. Po:
purposes of taxation the amount ot discount at which Treasury bills are originally
by the United states is considered to be interest.

10

Under Sections 454 (b) and 1221 (

ot the Internal Revenue Code ot 1954 the amount ot discount at which bills issued

he~

under are sold is not considered to accrue until such bills are sold, redeemed or otb
wise disposed ot, and such bills are excluded from consideration as capital Bssets.
. Accordingly, the owner of Treasury bills (other than life insurance companies) bsued
hereunder need include in his income tax return only the difference between the price
paid tor such bills_ whether on original issue or on subsequent purchase, and the

~

actually received either upon sale or redemption at maturity during the taxable year
tor which the return i8 made, as ordinary gain or 10s8.
Treasury Department Circular No. 418 (current revision) and this notice, prescri
the tenDs of the Treasury bills and govern the conditions of their issue.
the circular may be obtained from any Federal Reserve Bank or Branch.

Copies ot

- 2 -

printed forms and forwarded in t.,!le special envelopes which will be supplied by Federal
Reserve Banks or Branches on application therefor.
Banking institutions generally may submit tenders for account of customers pro.

vided the names of the customers are set forth in such tenders.

bank~

others than

institutions will not be permitted to submit tenders except for their own account.
Tenders will be received without deposit from incorporated banks and trust companiel
and from responsible and recognized dealers in investment securities.

Tenders tna

others must be accompanied by payment of 2 percent of the face amount of Treasury bill
applied for, unless the tenders are accompanied by an express guaranty of payment by
an incorporated bank or trust company.
Immediately after the closing hour, tenders will be opened at the Federal Resem
Banks and Branches, following which public anouncement will be made by the Treasury
Department of the amount and price range of accepted bids.
will be advised of the acceptance or rejection thereof.

Those submitting tenders

The Secretary of the

Trea~

expressly reserves the right to accept or reject any or all tenders, in whole or in

part, and his action in any such respect shall be final.

Subject to these

rese~·

tions, noncompetitive tenders for each issue for $200,000 or less without stated
price from anyone bidder will be accepted in full at the average price (in three
decimals) of accepted competitive bids for the respective issues.

Settlement for

accepted tenders in accordance with the bids'must be made or completed at the FedenU
Reserve Bank on

September 9, 1965

(at

, in cash or other immediately available ~~

or in a like face amount of Treasury bills maturing

September 9, 1965

•

Cash

(If)
and exchange tenders will receive equal treatment.

Cash adjustments will be made tor

differences between the par value of maturing bills accepted in exchange and the issue
price of the new bills.
The income derived from Treasury bills, whether interest or gain from the sale
other disposition of the bills, does not have any exemption, as such, and

loSI trmI

or
tilt

TREASURY DEPAR'lMENT

Washington

FOR IMMEDIATE RELEASE,

August 30, 1965

XXXXXXXWXXXXfftxxxxxxxxxxxxxxxxx
I

TREASURY I S WEEKLY BILL OFFERING

The Treasury Department, by this public notice, invites tenders for two seriea
of Treasury bills to the aggregate amount of $ 2,200,000,000 , or thereabouts, tor

(I)

cash and in exchange for Treasury bills maturing

.

September 9, 1965 , in the amount

(X)

of $ 2,200,609,000 , as follows:

(I)

,

91-day bills (to maturity date) to be issued Septembe~;1 J 26,$
-rI(!Ift')ll) ,
in the amount of $1,200,000,000 ,or thereabouts, represent·

(I)
ing an additional amount of bills dated
and to mature

December 9, 1965

,

June 10, 196$

(IJ

,originally issued in the

(I)
amount of $ 1,000,294,000 , the additional and original bills

(D)

.

to be freely interchangeable.
182_day bills, for $ 1,OO0t200,OOO , or thereabouts, to be dated

( 13 )

....,(~B")t"""-

September 9, 1965, and to mature

(tt)

March 1°(&.1966
u)

•

The bills of both series will be issued on a discount basis under compet1tin
and noncompetitive bidding as hereinafter provided, and at maturity their face
will be payable without interest.

BIllOW

They will· be issued in bearer form only, and 11

denominations of $1,000, $5,000, $10,000,' $50,000, $100,000, $500,000 and $l,OOO,OOC
(maturity value).
Tenders will be received at Federal Reserve Banks and Branches up to the cloliJI
Daylight Saving
hour, one-thirty p.m., Eastern/~ time, Friday, September 3, 1965
• ~

(D)
will not be received at the Treasury Department, Washington.

Each tender !DUst be

for an even multiple of $1,000, and in the case of competitive tenders the price
offered must be expressed on the basis of 100, with not more than three decimal.,
e. g., 99.925.

Fractions may not be used.

It is urged that tenders be made OD tile

TREASURY DEPARTMENT

August 30, 1965

OR IMMEDIATE RELEASE
TREASURY'S WEEKLY BILL OFFERING

The Treasury Department, by this public notice, invites tenders
or two series of Treasury bills to the aggregate amount of
2,200,000,000, or thereabouts, for cash and in exchange for
reasury bills maturing September 9,1965, in the amount of
2,200,609,000, as follows:
9Gday bills (to maturity date) to be issued
n the amount of $1,200,000,000, or thereabouts,
dditional amount of bills dated June 10,1965,
ature December 9,1965, originally issued in the
1,000,294,000, the additional and original bills
nterchangeable.

September 9, 1965,
rep re sen t ing an
and to
amount of
to be freely

18~day bills, for $1,000,000,000, or thereabouts, to be dated
eptember 9,1965, and to mature March 10, 1966.

The bills of both series will be issued on a discount basis under
ompetitive and noncompetitive bidding as hereinafter provided, and at
.aturity their face amount will be payable without interest. They
ill be issued in bearer form. only, and in denominations of $1,000,
5,000, $10,000, $50,000, $100,000, $500,000 and $1,000,000
maturi ty value).
Tenders will be received at Federal Reserve Banks and Branches
p to the closing hour, one-thirty p.m., Eastern Daylight Saving
ime, Friday, September 3, 1965.
Tenders will not be
ecelved at the Treasury De~artment, Washington. Each tender must
e for an even multiple of $1,000, and in the case of competitive
enders the price offered must. be expressed on the baSis of 100,
·1th not more than three decimals, e. g., 99.925. Fractions may not
e used. It is urged that tenders be made on the printed forms and
ONarded in the special envelopes which will be supplied by Federal
eserve Banks or Branches on application therefor.
BankIng institutions generally may submit tenders for account of
ustomers provided the names of the customers are set forth in such
enders. Others than banking institutions will not be permitted to
ubmit tenders except for their own account. Tenders will be received
Ithout deposit from incorporated banks and trust companies and from
esponsible and recognized dealers in investment securities. Tenders
rom others must be accompanied by payment of 2 percent of the face
mount of Treasury bills applied for, unless the tenders are
ccompanied by an express guaranty of payment by an incorporated bank
r trust company.

F-180

- 2 Immediately after the closing hour, tenders will be opened at the
Federal Reserve Banks and Branches, following which public announcement will be made by the Treasury Department of the amount and price
range of accepted bids. Those submitting tenders will be advised
of the acceptance or rejection thereof. The Secretary of the Treasu~
expressly reserves the right to accept or reject any or all tenders,
in whole or in part, and his action in any such respect shall be
final. Subject to these reservations, noncompetitive tenders for
each issue for $200,000 or less without stated price from anyone
bidder will be accepted in full at the average price (in three
decimals) of accepted competitive bids for the respective issues.
Settlement for accepted tenders in accordance with the bids must be
made or completed at the Federal Reserve Bank on September 9, 1965,
cash or other immediately available funds or in a like face amount
of Treasury bills maturing September 9,1965. Cash and exchange tender
will receive equal treatment. Cash adjustments will be made for
differences between the par value of maturing bills accepted in
exchange and the issue price of the new bills.
The income derived from Treasury bills, whether interest or
gain from the sale or other disposition of the bills, does not have
any exemption, as such, and loss from the sale or other disposition
of Treasury bills does not have any special treatment, as such,
under the Internal Revenue Code of 1954. The bills are subject to
estate, inheritance, gift or other excise taxes, whether Federal or
State, but are exempt from all taxation now or hereafter imposed on
the principal or interest thereof by any State, or any of the
possessions of the United States, or by any local taxing authority.
For purposes of taxation the amount of discount at which Treasury
bills are originally sold by the United States is considered to be
interest. Under Sections 454 (b) and 1221 (5) of the Internal
Revenue Code of 1954 the amount of discount at which bills issued
hereunder are sold is not considered to accrue until such bills are
sold, redeemed or otherwise disposed of, and such bills are excluded
from consideration as capital assets. Accordingly, the owner of
Treasury bills (other than life insurance companies) issued hereunder
need include in his income tax return only the difference between
the price paid for such bills, whether on original issue or on
subsequent purchase, and the amount actually received either upon
sale or redemption at maturity during the taxable year for which the
return is made, as ordinary gain or loss.
Treasury Department Circular No. 418 (current revision) and this
notice prescribe the terms of the Treasury bills and govern the
conditions of their issue. Copies of the circular may be obtained froo
any Federal Reserve Bank or Branch.
000

TREASURY DEPARTMENT
t

August 30, 1965
FOR IMMEDIATE RElEASE
TREASURY DECISION ON DINITROSOPENTAMETHYLENETEl'RAMINE
UNDER THE ANTIDUMPING ACT

The Treasury Department has completed its investigation with
respect to the possible dumping of dinitrosopentamethylenetetramine
from Japan.

A notice of intent to close this case with a deter-

mination that this merchandise is not being, nor likely to be,
sold at less than fair val.ue will be published in an early issue
of the Federal Register.
Dinitrosopentamethylenetetramine is a chemical foaming agent
used in the production of foam rubber.
Promptly after the COImnencement of the antidumping investigation,
price revisions were made which eliminated the likelihood of sales
below fair value with respect to two exporters, while sales to the
United states were terminated with respect to the remaining exporter.
Assurances were received from the three exporters that shipments to the
United States would not be resumed at prices which could be likely to
be below fair value.

The complaint thereafter was withdrawn.

Appraisement of the above-described merchandise from Japan has
been withheld.
Imports of the involved merchandise received during the period
September 1, 1963, through July 31, 1965, were worth approximate17

$145,000.

TREASURY DEPARTMENT
(

August 30, 1965
FUR IMMEDIATE RElEASE

TREASURY DECISION ON DINITROSOPENTAMETHYLENETErRAMINE
UNDER THE ANTIDUMPING ACT

The Treasury Department has completed its investigation with
respect to the possible dumping of dinitrosopentamethylenetetramine
from Japan.

A notice of intent to close this case with a deter-

mination that this merchandise is not being, nor likely to be,
sold at less than fair value will be published in an early issue
of the Federal Register.
Dinitrosopentamethylenetetramine is a chemical foaming agent

used in th e production of foam rubb er.
Promptly after the commencement of the antidumping investigation,
price revisions were made which eliminated the likelihood of sales
below fair value with respect to two exporters, while sales to the
United states were terminated with respect to the remaining exporter.
Assurances were received from the three exporters that shipments to the
United States would not be resumed at prices which could be likely to
be below fair value.

'lhe complaint tberea1'ter was withdrawn.

Appraisement of the above-described merchandise from Japan has
been withheld.

Imports of the involved merchandise received during the period
SepteDi:>er 1, 1963, through July 31, 1965, were worth approximately

$145,000.

TREASURY DEPARTMENT

August 30, 1965

FOR IMMEDIATE RELEASE
TREASURY DECISION ON LIGHTERS
UNDER THE ANTIDUMPING ACT

The Treasury Department has completed tne investigation
with respect to the possible dumping of lighters, pocket, cigar
and cigarette, butane gas-fueled, from Japan.

A notice of a

tentative determination that this merchandise is not being,
nor lilcely to be, sold at less than fair v2.1ue will be published in c.n early issue of the Federal Register.
Apprcisement of the above-described merchandise from Japan
is not being withheld zt this time.
The dollar value of imports of the involved merchandise
received during the period June 1, 1964, to date is approximately

$73,000.

000

TREASURY DEPARTMENT

FOR D1MEDIATE REIEASE
TREASURY DECISION ON LIGHTERS
UNDER THE ANTIDUMPING ACT

The Treasury Department has completed tne investigation
with respect to the possible dumping of lighters, pocket, cigar
and cigarette, butane gas-fueled, from Japan.

A notice of a

tentative determination tnat this merchandise is not being,
nor likely to be, sold at less than fair value will be published in an early issue of the Federal Register.
Appraisement of the above-described merchandise from Japan
is not being withheld at this time.
The dollar value of imports of the involved merchandise
received during the period June 1, 1964, to date is approximately

$73,000.

000

TREASURY DEPARTMENT

August 30, 1965
FOR IMMEDIATE RELEASE
WITHHOIDING OF APPRAISEMENT ON
VINYL j\SBESTOS FLOOR TILE

The Treasury Department is instructing customs field officers
to

~ithhold

appraisement of vinyl asbestos floor tile from Canada,

manufactured by Building Products of Canada Limited, Montreal,
Canada, pending a determination as to whether this merchandise is
being sold at less than fair value
dumping Act, 1921, as amended.

~ithin

the meaning of the Anti-

Notice to this effect is being pub-

lished in the Federal Register.
Under the Antidumping Act, determination of sales in the United
States at less than fair value would require reference of the case
to the Tariff Commission, which would consider whether American industry was being injured.

Both dumping price and injury must be

shown to justify a finding of dumping under the law.
The information alleging that the merchandise under consideration
was being sold at less than fair value within the meaning of the Antidumping Act was received in proper form on May 17, 1965.

This in-

formation was the subject of an "Antidumping Proceeding Notice" which
was published pursuant to section 14.6(d), Customs Regulations, in the
Federal Register of June 11, 1965, on page 7614 thereof.

000

TREASURY DEPARTMENT
(

August 30, 1965
FOR IMMEDIATE RElEASE

WITHHOLDING OF APPRAISEMENT ON
VINYL ASBIi5T08 FlOOR TILE

The Treasury Department is instructing customs field officers
to vithhold appraisement of vinyl asbestos floor tile from Canada,
manufactured by Building Products of Canada Limited, M:;)ntreal,
Canada, pending a determination as to whether this merchandise is
being sold at less than fair value within the meaning of the Antidumping Act, 1921, as amended.

Notice to this effect is being pub-

lished in the Federal Register.
Under the Antidumping Act, determination of sales in the United
States at less than fair value would require reference of the case
to the Tariff Commission, which would consider whether American industry was being injured.

Both dumping price and injury must be

shown to justify a finding of dumping under the law.
The information alleging that the merchandise under consideration
was being sold at less than fair value within the meaning of the Antidumping Act was received in proper form on May 17, 1965·

This in-

formation was the subject of an "Antidumping Proceeding Notice" which
was published pursuant to section 14.6(d), Customs Regulations, in the
Federal Register of June ll, 1965, on page 7614 thereof.

000

TREASURY DEPARTMENT
WASHINGTON. D.C.

Monday, August 23,196

FOR RELEASE AT 10: 30 A. M. EDT
MONDAY, AUGUST 23, 1965
STATEMENT OF ROBERT A. HALLACE ,ASSISTANT SECRETARY OF THE TREASURY,
AT THE FIRST STRIKING OF COINS FROM THE NEW COINAGE MATERIAL
U.S. MINT, PHILADELPHIA, PA.
AUGUST 23, 1965 -- 10:30 A.M.
The start of coin production from new coinage materials
authorized by Congress this summer is a source of great satisfaction to the Treasury Department. It represents the result
of a two year effort to develop and obtain the authorization of
a satisfactory substitute for silver in the dime and quarter.
Had Congress not authorized the new material, Treasury
stocks of silver would have been exhausted in less than three
years. The elimination of silver in the dime and quarter, and
the reduction of the silver content of the half dollar will make
our silver supplies for coinage sufficient for the forseeable
future.
The new coins will have precisely the same purchasing
power as current coins. They will work in all existing coin
operated devices. From an esthetic point of view, the new
dimes and quarters will be just as attractive and durable as
the old.
The new half dollar, which will continue to contain silver,
will be nearly indistinguishable from existing coins of this
denomina t ion.
All new coins will bear the date 1965.
The first of the new coins minted will be the quarter. Aside
from the one-cent and five cent pieces, this is the key coin
for commerce. By the end cf December we expect to produce a
half billion of these ne'i-J q_'(',fcers, a year's supply. These will
be released through the baGk~0~ 3ys~em late this year or early
in 1966. Production of the ne~ dime and half dollar will begin
O-:CHE)

- 2 -

late this year.
mid 1966.

Both coins are expected to be released before

Despite the large production of new quarters we are actually
increasing the output of current quarters and dimes by 25 percent.
Mint and Federal Reserve Bank inventories of these coins are
nearly double the levels of a year ago. Nevertheless, the
Treasury is continuing to increase their production in order
to reduce any potential possibility of shortages in the future.
The Treasury is deeply grateful to the Congress for its
quick action in the program, to the Bureau of the Mint for its
help in the development of the new materials, especially to
Mint employees for production records beyond our most optimistic
expectations, and to our suppliers for their understanding of
our problem and ability to produce the new material quickly.

000

TREASURY DEPARTMENT

FOR RELEASE AT 10:30 A.M. EDT
MONDAY AUGUST 23, 1965
STATEMENT OF DIRECTOR OF THE MINT MISS EVA ADAMS
AT THE FIRST STRIKING OF COINS FROM THE NEW COINAGE MATERIAL
U.S. MINT, PHILADELPHIA, PA.
AUGUST 23, 1965 -- 10:30 A.M.
Production of the new quarter, authorized by the Coinage
Act of 1965, started today at the Philadelphia Mint.
The new quarter will have the face of the same copper-nickel
alloy used in the current five-cent piece and will be bonded to
a core of pure copper. It will be manufactured from strips
of three layers of metal, bonded together and rolled to the
required thickness.
Production of the new fifty-cent piece of silver copper
clad on silver copper is scheduled for sometime in November,
at the Denver Mint. It will continue to be made of silver and
copper, but will become a composite coin with the silver content
reduced from 90 percent to 40 percent.
The ten-cent piece will be the last of the new alloy
denominations to enter production. Having the same composition
as the new quarter, the dime is scheduled to be struck in
December. The new coins will all bear the 1965 date.
Reactivation of minting operations at the San Francisco
Assay Office has been set for September 1, 1965. The one-cent
piece to be struck there will constitute the first coins produced
at the Assay Office since 1955 when coining operations were
discontinued.
None of the new coins will be released to the public until
a sizeable supply is on have for distribution. Meantime, the
Mint is continuing production of the present coinage alloy, as
authorized by the Coinage Act of 1965.
000

TREASURY DEPARTMENT
(

FOR RELEASE AT 10: 00 A.M., PDT
WEDNESDAY, SEPTEMBER 1, 1965
STATEMENT BY DIRECTOR OF THE MINT MISS EVA ADAMS
AT CEREMONIES REACTIVATING MINTING OPERATIONS AT
THE SAN FRANCISCO ASSAY OFFICE
SEPTEMBER 1, 1965, 10:00 A.M., PDT
Reactivation of minting operations at the San Francisco
Assay Office, authorized by the Coinage Act of 1965, began today,
September 1, 1965. The one-cent pieces to be struck here will
constitute the first coins produced at the Assay Office since
1955, when coining operations were discontinued. Four new
stamping presses are to be in operation. Later, five-cent
pieces will also be struck at the San Francisco Office.
Production of the new quarter started August 23 at the
Philadelphia Mint. The new quarter has the face of the same
copper-nickel alloy used in the current five-cent piece and is
bonded to a core of pure copper. It is manufactured from
strips of three layers of metal, bonded together and rolled to
the required thickness.
Production of the new fifty-cent piece of silver copper clad
on silver copper is scheduled for later in the year, at the
Denver Mint. It will continue to be made of silver and copper,
but will become a composite coin with the silver content reduced
from 90 percent to 40 percen t.
The ten-cent piece will be the last of the new alloy
denominations to enter production. Having the same composition
as the new quarter, the dime is scheduled to be struck later
this year.
The new coins all bear the 1965 date. None of them will
be released to the public until a sizeable supply is on hand
for distribution. Meantime, the Mint is continuing production
of the present coinage alloy, as authorized by the Coinage Act
of 1965.
The newly minted pennies from San Francisco, however,
like those made in Denver and Philadelphia, will go immediately
into circulation.
The penny and the nickel are not changed in
composition by the new legislation.
000

TREASURY DEPARTMENT

September 1, 1965
FOR D1MEDIATE REIEASE
TREASURY DECISION ON F.ERROCHROMIUM

UNDER THE ANTIDUMPING ACT
The Treasury Department has determined that ferrochromium,
not containing over 3 percent by weight of carbon, fram Sweden
is not being, nor likely to be, sold at less than fair value
within the meaning of the Antidumping Act, 1921, as amended.
A "Notice of Tentative Determination," was published in the
Federal Register on July 17, 1965.
No written submissions or requests for an opportunity
to present views in opposition to the tentative determination
were presented within 30 days of the publication of the abovementioned notice in the Federal Register.
Imports of the involved merchandise received during the
period June 1964 through July 1965 were worth approximately
$430,000.

TREASURY DEPARTMENT

=

September 1, 1965
FOR ThlMEDIATE REIEASE

TREASURY DECISION ON FERROCHROMIUB
UNDER THE ANTIDUMPING ACT
The Treasury Department has determined that ferrochromium,
not containinG over 3 percent by weight of carbon, from &,eden
is not beinB, nor likely to be, sold at less than fair value
within the meaning of the Antidumping Act, 1921, as amended.
A "Notice of Tentative Determination," was published in the
Federal Register on July 17, 1965.
No YITitten submissions or requests for an opportunity
to present views in opposition to the tentative determination
were presented within 30 days of the publication of the abovementioned notice in the Federal Register.
Imports of the involved merchandise received during the
period June 1964 through July 1965 were worth

$43 0 ,000.

approximate~

TREASURY DEPARTMENT
WASHINGTON. D.C.

September 3, 1965

FOR "DNEDL\TE RELEASE

A..,\TIDU~fPIXG PROCEEDI~G

OK
B~LK, CRl~E, L~DRIED SOLAR SALT

-

... ,-.-- "'" ,

-,.

re~ei7ed

of
...

se~-

: : I ...... '.

--._\-;

-:::.::::: -_.-----:

---_................ ,
.....

~

··-r...... - -

sa:'..:

~­

~-- ........

., . . - ·-c-.
-,...

is

1-rex:..~o J

Sa:. J

_Co_ "" __ ..... '_

as az:.e =.de d. •

salt

-- ,....- ...._...-;;:;--.,....
...
..... -J •
the

..... -

..,,- -

.

-_

-'
,,(-)(-)(
-~.- ~
- -..-)) (2)
I

~~---~-

I

_

_

"'l

0:

...

t::J.e

':us~om.s

Washing-

-:on,

:,es:":'e

An. !1k::::.iu=p"'
7")= Pro~eedi' n.::- --0
"'"t>

p:.:.b::'sl:ed

iT"!'""lorts
~

,'.
" ."Co
":IO~:':!€

t-·
!Us

eff'e~t

is being

Fed.e::-a.l rteg:'s~e!" p;;.rs:.w.nt to se~tion 14.6(d)(1)(i)

of -;be i.n'Yol ved .uo..;_
r-:>,!""';"",,..,~",
~....... ~e
_

=
-""J

1

000

re~eived

during the

TREASURY DEPARTMENT

FOR IMMEDIATE RELEASE

September 3, 1965

ANTIDUMPING PROCEEDING ON
BULK, CRUDE, UNDRIED SOLAR SALT
On August 17, 1965, the COmmissioner of Customs received
informa~ion

in proper form pursuant to the provisions of sec-

tion l4.6(b) of the Customs Regulations indicating a possibility
that bulk, crude, undried solar salt imported from Mexico, manufactured by Cia Exportadora de Sal, Baja California, Mexico, is
being, or likely to be, sold at less than fair value within the
meaning of the AntidUIIlping Act, 1921, as amended.

T"ne salt under consideration is an industrial grade salt
used in

~he

chenical industry.

In order to establish the validity of the information, the

Bureau of Customs is instituting an inquiry pursuant to the provisions of section 14.6(d)(1)(ii), (2) and (3) of the Customs
Regulations.
T"ne inforoat;ion was suomi tted by 1o1oran and Crowley, rlashington, D. C., on behalf of Leslie Salt Company, San Francisco,
California, and Western Salt Company, San Diego, California.
An "Antidumping Proceeding Notice II to this effect is being

published in the Federal Register pursuant to section 14.6(d)(1)(i)
of the Customs Regulations.
Imports of the involved merchandise received during the
period February 15, 1965, through August 31, 1965, were worth
approximately $50,000.
000

TREASURY DEPARTMENT
tit

*

.! " e e

tt¥WA3 ;

'tH

FO.-\. IfiLEASZ A.;'~. N~tlSP."'.PS:\S,
Saturday, September 4, 1965
RESUL':'S OF TilEASUay'S r,.2Zi\LY BiLL

O?F~TIl~G

The Treasury Department announced last evening that the tenders for tHO series of
Treasury bills, one series to be an additional issue of the bills dated June 10, 1965,
and the other series to be dated September 9, 1965, lihich . . . . ere offered on AUc,71lst 30, wer
opened at the Federal Reserve Banks on September 3. Tenders Here invited for $1,200,000
or thereabouts, of 91-day bills and for ~l,OOOIOOO,OOO, or thereabouts J of 182-day bills
The details of the two series are as follows:
182-day TreasUl~ bills
RANJE OF ACCEPTED
91-day Treasill:j bills
:
maturin3 Harch 10, 1966
CQ~PETITIVE BIDS:
maturing December 9, 1965
:
Approx. Equ:'Lv.
Approx. Equi v. :
Price
An.."'1uaJ. nate
Annual" R.ate
Price
High
99.023
97.978
4.000%
3.865%
Low
99.011
97.961
3.913%
4 g 033X
Average
97.966
99.015
4.0247; ~/
3.898% 1./ ·

···
·

33 percent of the amount of
82 percent of the amount of

91~day

bills bid for at the lo~ price ~~s accepted
bills bid for at the low price was accepted

182-d~

TOTAL TENDERS APPLIED FOR AND ACCEPTED BY FZDERAL nESERVE DISTn.::CTS:
District
Accepted
Applied ?or
A:e:e1ied For
AcceEted
Boston
$ 24,702,000 $ 14,702,000
18,533,000 ~ 14,173,000
w
New York
1,576,377,000
699,822,000
661,486,000
1,644,786,000
Philadelphia
27,821,000
17,821,000 •
14,349,000
ll,349,OOO
Cleveland
26,492,000
26,492,000
29,525,000
34,525,000
Richmond
10,767,000
10,767,000
3,564,000
3,564,000
Atlanta
43,833,000
39,488,000
19,249,000
23,776,000
Chicago
183,158,000
142,138,000
86 ,377 ,000
146,377,000
St. Louis
43,403,000
35,733,000 :
18,610,000
16,110,000
Minneapolis
18,191,000
18,191,000 •
14,413,000
15,593,000
Kansas City
26,650,000
25,980,000
12,619,000
13,119,000
Dallas
27,191,000
19,851,000
1l,937,000
7,937,000
San Francisco
149 2 451 2°00 •
1951. 788 1.°00
159 2 404,000
123 ~404z000
TOTALS
$2,204,373,000
$1,200,436,000 ~/ $2,104,573,000 $1,000,206,000

··
··
·

(.

·
·
·
···
··

a/ Includes $247,443,000 noncompetitive tenders accepted at the average price of 99.015
0/ Includes J93,367,000 noncompetitive tenders accepted at the average price of 970966
rl On a coupon issue of the s~~e length and for the sa~e &~O~~t invested, tr2 return OD
- these bills would provide yields of 3.99iS, for- the 91-day bills, and 4016%, for the
182-day bills. Interest rates on bills are quoted in te~s of b~"'1k discount with
the return related to the face a~ount of the bills payable at maturity rather than
the a~ount invested and their length in actual number of days related to a 360-day
year. In contrast, yields on certificates, notes, and bonds are computed in terms
of interest on the amount invested, and relate the nu..-nber of days remaining in an
interest payment period to the actual mlmber of days in the period, with semiarmual
compounding if more than one coupon period is involved.
F-181

TREASURY DEPARTMENT
10~ rl.mJ\SE A.i~I. NEWSPAPE:RS,
WASHINGTON. D.C.
laturdal z September 4, 1965
September 3, 1965
RESULTS OF TREASURY'S WEEKLY BILL OFFERING
The Treasury Department announced last evening that the tenders for two series of
~reasurl bUls, one series to be an additional issue of the bills dated June 10, 1965,
UId the other series to be dated September 9, 1965, 'Which were offered on A.ugust 30, were
)pened at the Federal Reserve Banks on September 3. Tenders were invited for $1,2OO,00O,OCO,
)rtooreabouts, of 91-day bills and for $1,000,000,000, or thereabouts, of 182-day bills.
~ details of the two series are as follows:
162-day Treasury bills
WOE OF ACCEPl'ED
91-day Treasury bills
a
::OOETITlVE BIDS:
maturing December 9, 1965
I
maturi93 Harch 10, 1966
Approx. Equiv. I
A.pprox. Equiv •
Price
Annual Rate
Price
Annual Rate
H!.gh
99.023
91.978
3.865%
4.000%
Low
99.011
30913%
:
97.961
4.033%
Average
99.0].5
3.898% 1,1 :
97.966
4.024% 1,1

33 percent of the amount of 91~day billa bid for at the low price was accepted
82 percent of the amount of 162-day bills bid for at the low price was accepted
raUL TENDERS APPLIED FOR AND ACCEPTED BY FEDERAL RESERVE DISTRICTS:

District
Boston
Nev York
Plliladelphia
Cleveland
RichmoIrl

Atlanta
Chicago
St. Louis
Kinneapolis
Kansas City
Iillas
San Francis co
TOTllS

AEElied For
$ 24,702,000
1,516,377,000
27,821,000
26,492,000
10,767,000
43,833,000
163,158,000
43,403,000
18,191,000
26,650,000
27,191,000
195,1788,1000
$2,204,373,000

AcceEted
$ 14,702,000
699,822,000
17,821,000
26,492,000
10,767,000

:

:
••

39,488,000 s
142,138,000 s
35,733,000
18,191,000
25,980,000
19,851,000

:
:
:
:

149,451,000 s
$1,200,436,000 !I

AcceEted
AEElied For
$ 16,533,000 $ 14,173,000
661,486 ,000
1,644,786,000
11,349,000
14,349,000
29,525,000
34,525,000
3,564,000
3,564,000
19,249,000
23,776,000
86,377,000
146,377 ,000
16,110,000
18,610,000
14,413,000
15,593,000
12,619,000
13,1l9,000
7,937,000
1l,937,000
123 2404 z000
159 1404 zOO0
$2,104,573,000 $1,000,206,000

bl

~In~Udes $247,443,000 noncompetitive tenders accepted at the average price of 99.015
~In~udes $93,367,000 noncompetitive tenders accepted at the average price of 97.966
1 On a Coupon issue of the same length aM for the same amount invested, the return on
these bU1s would provide yields of 3.99~, tor the 91-day bills, and 4.16%, for the
182-day bUls. Interest rates on bUls are quoted in terms ot bank discount with
the return related to the face amount of the bills payable at maturity rather than
the amount invested and' their length in actual number of days related to a 360..day
y~. In contrast, yields on certificates, notes, and bonds are computed in terms
~ interest on the amount invested, and relate tm number of days remaining in an
lllterest paymeut period to the actual number of daY!' in the period, with semiannual
cODIpounding i ! more than one coupon period is mvolveda
F..l81

TREASURY DEPARTMENT
(

September 3, 1965

FOR IMMEDIATE RELEASE
STATEMENT BY THE HONORABLE HENRY H. FOWLER
SECRETARY OF THE TREASURY OF THE UNITED STATES
AT A PRESS CONFERENCE IN BONN, GERMANY,
FRIDAY, SEPTEMBER 3, 1965,
6:00 P.M. BONN TIME (1:00 P.M. EDT)
Treasury Secretary Henry H. Fowler today issued the
following statement at a press conference in Bonn, Germany,
in response to press inquiries concerning the new British
wage-price program.
"I heartily welcome the new British program, which
strengthens my confidence in both the short and long term
outlook for the British economy.
liThe British Government's intention to seek parliamentary
action to strengthen and make more effective its wage-price
stabilization program clearly demonstrates the Government's
determination to arrest the current climb in costs and prices,
and to move the British economy into a stronger competitive
position in world markets.
"0ver the past several months, the United Kingdom has
taken a number of steps designed to bring its international
payments position into balance. These actions have led to
improvement in the United Kingdom's balance of payments and
give indications of producing equilibrium in Britain's external
accounts by the second half of 1966, as planned. The newly
announced program not only strengthens these indications,
but provides the basis for long run stability in costs and
prices which is a major factor in combining sound economic
growth with balance of payments equilibrium.
"We applaud the action of the British Government and we
share its hopes and expectations that a new basic trend of
cost and price stability will now be established.

F-182

- 2 "The British Government's new program underlines its
determination to achieve and to maintain balance in its
international payments and to preserve the value of the Pound
Sterling. I am confident that the United Kingdom has both
the will and the power to preserve that value."

000

TREASURY DEPARTMENT
WASHINGTON,

September 7, 1965

HITHHOL:JIliG OF APPRAISEr,lENT ON
STEEL JACKS
On nay

OJ

1965) a press release was issued concerning a I1Hith_

:lOlding of Appraisement" notice vnich ,ms published in the Federal

sard t8 steel jac:ks from Canada) manufactured by J. C. Hallman _r.fanufa2turing Co.} L-cd.} Haterloo) Ontario) Canada.
The Antidur.rpint; Regulations require that a

11

Wi thholding of Ap-

praisenent" noti-2C puolisn the appropriate basis of comparison with
forei8n market value or if that infortJation is not available at the
tine of puolication of the noti:::e that this information be published
'-.'hen it oe20ne::: available.

Because of tDe unavailability of the ap-

propriate information) the IIUi thholding of Appraisement II notice did
not state the basis of comparison.
It :nas

nCl\i

oeen found that purchase price is the appropriate

oasis of comparison and a supplemental noti:::e to this effect is being
publisned in tDe Fede:-al negister.

TREASURY DEPARTMENT
(

September 7, 1965

FOR TIvlMEDIATE RELEASE
WITHHOLDING OF APPRAISEMENT ON
STEEL JACKS
On May

6, 1965, a press release was issued concerning a "With-

holding of Appraisement" notice which was published in the Federal
Register, dated

May

8, 1965, volume 30, No. 89, page 6445, with re-

gard to steel jacks from Canada, manufactured by J. C. Hallman l-1anufacturing Co., Ltd., Waterloo, Ontario, Canada.
The Antidumping Regulations require that a IIWithholding of Appraisement" notice publish the appropriate basis of comparison with
foreign market value or if that information is not available at the
time of publication of the notice that this information be published

when it becomes available.

Because of the unavailability of the ap-

propriate information, the "Withholding of Appraisement" notice did
not state the basis of comparison.
It has now been found that purchase price is the appropriate
basis of comparison and a supplemental notice to this effect is being
published in the Federal Register.

UNITED STATES NET

rllX~~.l.'.';.•{Y

GJi.L'

'L~'i~2'

CTIONS

lHTH FOREIGN COUNTRIES AND INTERNATIONAL INSTITUTIONS
January 1, 1965 - June 30, 1965
(In millions of dollars at $35 per fine troy ounce)
Negative figures represent net sales by the
United States; positive figures, net purchases
Fiscal Year 1965
First
Second
July 1, 1964Quarter
Quarter
June 30, 1965
1965
1965
Austria
-62.5
-25.0
-37.5
-101.7
Belgium
-39.6
-22.1
+54.3
Brazil
+28.2
-1.
Ceylon
-4.3
-4.3
Chile
-1.0
-3.3

°

Colombia
Congo (Leopoldvil1e)
Costa Rica
Egypt
France
Germany
I.M.F,
Iraq
Ireland

*
-1.3
-1.

°

-482.5

-.4

Italy
Lebanon
Netherlands
Philippines

+30.0
-.1

-1.0
-147.5
-258.8**
-10.0
-1.0
- 80.0

- 832.5
-25.0
-258.8**
-10.0
-2.3

- .1

- 80.0
-10.5
-95.0
+9.7

-60.0
-7.6
-12.5

-2.7
-1.5
-180.0
-7.6
-101.0

-35.0
- .1

+40.0
+1.6
-1.9
-3.7

Panama
Salvador
Spain
Sudan
S~vi tzer1and

- 2.7
-1.5
-90.0

Syria
Turkey
U.K.
Yugoslavia

-.2
-15.7
-75.7
- .6

-.2
-2.5
+29.4
- .5

- .7
-30.7
+241.2
-2.3

All Other

- •3
-811.0

- •2
-558.2

-1.6
-1,472.8

-37.5

Total

Figures may not add to totals because of rounding. *Less than $50,1
**Pub1ic Law 89- 31, a~proved June 2, 1965, authorized an increase 0
$1,035 million in the quota of the US in the IMF. On June 30 t 1965
the US made the required payment of 25% of its quota increase in go
in the amount of $258,750,004.03.

TREASURY DEPARTMENT

September 8, 1965

FOR IMMEDIATE RELEASE

UNITED STATES FOREIGN GOLD TRANSACTIONS
FOR SECOND QUARTER OF 1965
During the second quarter of 1965, the net sale of
monetary gold by the United States amounted to $299.4 million;
in addition, the U.S. transferred to the IMF $258.8 million
gold, representing the 25 per cent gold payment of the U.S,
quota increase in the IMF.

These transactions brought to

$558.2 million the net decline in U.S, gold stock from monetary gold transactions with foreign governments, central banks
and international institutions in the second quarter.
The total decrease in U.S, gold stock in the second
quarter of 1965 was $590.0 million, including the net sale of
$32.0 million worth of gold for domestic industrial, professional
and artistic uses.
The Treasury's quarterly report, made public today,
summarizes U.S, net monetary gold transactions for the first
two quarters of Calendar Year 1965 and for the Fiscal Year
1965.

F-183

(Table on reverse side.)

(OVER)

TREASURY DEPARTMENT

September 8, 1965

FOR IMMEDIATE RELEASE

UNITED STATES FOREIGN GOLD TRANSACTIONS
FOR SECOND QUARTER OF 1965
During the second quarter of 1965, the net sale of
monetary gold by the United States amounted to $299.4 million;
in addition, the U.S. transferred to the IMF $258.8 million
gold, representing the 25 per cent gold payment of the U.S.
quota increase in the IMF.

These transactions brought to

$558.2 million the net decline in U.S. gold stock from monetary gold transactions with foreign governments, central banks
and international institutions in the second quarter.
The total decrease in U.S. gold stock in the second
quarter of 1965 was $590.0 million, including the net sale of
$32.0 million worth of gold for domestic industrial, professional,
and artistic uses.
The Treasury's quarterly report, made public today,
summarizes U.S. net monetary gold transactions for the first
two quarters of Calendar Year 1965 and for the Fiscal Yea.r
1965.

F-183

(Table on reverse side.)

(OVER)

UNITED STATES NET MONETAl{Y GOLD fRANSACTIONS
WITH FOREIGN COUNTRIES AND INTERNATIONAL INSTITUTIONS
January 1, 1965 - June 30, 1965
(In millions of dollars at $35 per fine troy ounce)
Negative figures represent net sales by the
United States~ positive figures. net purchases
First
Second
Fiscal Year 1965
Quarter
Quarter
July 1, 19641965
1965
June 30. 1965
Austria
-25.0
-37.5
-62.5
Belgium
-39.6
-22.1
-101. 7
Brazil
-1.0
+28.2
+54.3
Ceylon
-4.3
-4.3
Chile
-1.0
-3.3
Colombia
Congo (Leopo1dville)
Costa Rica
Egypt
France
Germany

*
-1.3
-1.0

-1.0

-482.5

-147 .5

I .M.F •

Iraq
Ireland

-.4

Italy
Lebanon
Netherlands
Philippines

+30.0
-.1

-258.8**
-10.0
-1.0
- 80.0

Panama
Salvador
Spain
Sudan
S1;vi tzer1and

-2.7
-1.5
-90.0
-37.5

Syria
Turkey
U.K.
Yugoslavia

-.1

-60.0
-7.6
-12.5

-2.7
-1.5
-180.0
-7.6
-101.0

-15.7
-75.7

-.2
-2.5
+29.4

- .6

- .5

- .2

.

All Other

- 3

Total

-811.0

- 832.5
-25.0
-258.8**
-10.0
- 2.3
-80.0
-10.5
-95.0
+9.7

-35.0
- .1

+40.0
+1.6
-1.9
-3.7

.

- 2
-558.2

- .7

-30.7
+241.2
-2.3
-1.6
-1,472.8

Figures may not add to totals because of rounding. *Less than $50,O(
**Public Law 89-31, a~proved June 2, 1965, authorized an increase of
$1,035 million in the quota of the US in the IMF
On June 30, 1965,
the US made the required payment of 25% of its q~ota increase in gole
in the amount of $258,750,004.03.

- 3 -

sale or other disposition of Treasury bills does not have any special treatment,
such, under the Internal Revenue Code of 1954.

8S

The bills are subject to estate,

inheritance, gift or other excise taxes, whether Federal or State, but are exempt

f~

all taxation now or hereafter imposed on the principal or interest thereof by

any

Sta

or any of the possessions of the United States, or by any local taxing authority.

~

purposes of taxation the amount of discount at which Treasury bills are originally

Be

by the United states is considered to be interest.

Under Sections 454 (b) and 1221 I

of the Internal Revenue Code of 1954 the amount of discount at which bills issued hel
under are sold is not considered to accrue until such bills are sold, redeemed or otl
wise disposed of, and such bills are excluded from consideration as capital assets.
Accordingly, the owner of Treasury bills (other than life insurance companies) issuee
hereunder need include in his income tax return only the difference between the price
paid for such bills, whether on original issue or on subsequent purchase, and the am
actually received either upon sale or redemption at maturity during the taxable year
for which the retunl is made, as ordinary gain or loss.
Treasury Department Circular No. 418 (current revision) and this notice, prescr
the terms of the Treasury bills and govern the conditions of their issue.
the circular may be obtained from any Federal Reserve Bank or Branch.

Copies of

- 2 -

printed fonns and forwarded in the special envelopes which will be supplied by FQde
Reserve Banks or BrHnrhes on application therefor.
Banking institutions generally may submit tenders for account of customers pro
vided the names of the customers are set forth in such tenders.

others than bankin

institutions will not be permitted to submit tenders except for their own account.
Tenders will be received without deposit from incorporated banks and trust companle
and from responsible and recognized dealers in investment securities.

Tenders froo

others must be accompanied by payment of 2 percent of the face amount of Treasuryc
applied for, unless the tenders are accompanied by an express guaranty of payment 1
an incorporated bank or trust company.
Immediately after the closing hour, tenders will be opened at the Federal ResE
Banks and Branches, following which public anouncement will be made by the
Department of the amount and price range of accepted bids.
will be advised of the acceptance or rejection thereof.

TreaBu~

Those submitting tendel

The Secretary of the Treal

expressly reserves the right to accept or reject any or all tenders, in whole or

part, and his action in any such respect shall be final.

Subject to these

~

rese~·

tions, noncompetitive tenders for each issue for $200,000 or less without stated
price from anyone bidder will be accepted in full at the average price (in three
decimals) of accepted competitive bids for the respective issues.

Settlement for

accepted tenders in accordance with the bids'must be made or completed at the
Reserve Bank on

September 16, 196:::'

--~--~(b~)------

Fe~:

, in cash or other innnediately avai19ble f1

or in a like face amount of Treasury bills maturing September 16 J 1965
• Casi
(n)
and exchange tenders will receive equal treatment. Cash adjustments will be made
differences between the par value of maturing bills accepted in exchange and the 1
price of the new bills.
The income derived from Treasury bills, whether interest or gain from the sa1
other disposition of the bills, does not have any exemption, as such, and

1088

fro

THl'J\: ',\ n{Y DEPAR'.I'MENT

Wa;;hington
FOR

September 8, 1965

IMMEDIATE RELt:M)i'~,
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

-.,---

TREASURY I S 'N'EE1a.,Y BILL OFFERING

The Treasury Depa rtment, by ttl is pllblic notice , invites tenders for two series
of Treasury bills to the aggregnte

of $ 2,200,000,000

amolltlt

, or thereabouts, for

(X)
cash and in exchange for Treasury bills maturingSeptember 16 1 1965
t~)

of $ 2,203,196} 000

,in the amount

, as follows:

(:4
91 -day bills (to maturity date) to be issuedSeptember 16, 1965

t~)

in the amount of $1,200,000,000
(:~

(li )
,or thereabouts, represent-

)

ing an additional amount of bills dated June 17, 1965
~}

and to mature

December 16, 1965

(j)

,

,originally issued in the

amount of $ 1,001,469,000 , the additional and original bills
(~)

to be freely interchangeable.
18~-day

bills, for $1,000,000,000

()tt )

--,,('lti~}

, or thereabouts, to be dated

September 16, 1965 , and to mature

W)

March

17.J. 1966

The bills of both series will be issued on a discount basis under competitive
and noncompetitive bidding as hereinafter provided, and at maturity their face
will be payable without interest.

They will be issued in bearer fonn only,

WOOL

and

in

denominations of $1,000, $5,000, $10,000, $50,000, $100,000, $500,000 and $l,OOO,~
(maturity value).
Tenders will be received at Federal Reserve Banks and Branches up to the doe
Day li gh t Sa ving
hour, one-thirty p.m., Eastern/~ time, Monday, September 13, 1965
• Tenl
(m:)
will not be received at the Treasury Department, Washington. Each tender must be
for an even multiple of $1,000, and in the case of competitive tenders the price
offered must be expressed on the basis of 100, with not more than three decual s ,
e. g., 99.925.

Fractions may not be used.

It is urged that tenders be made on tb

TREASURY DEPARTMENT

September 8, 1965

FOR IMMEDIATE RELEASE

TREASURY'S WEEKLY BILL OFFERING
The Treasury Department, by this public notice, invites tenders
for two series of Treasury bills to the aggregate amount of

$2,200,OOO,000,or thereabouts, for cash and in exchange for
Treasury bills maturing September 16,1965,in the amount of
$2,203,196,000, as follows:
91 -day bills (to maturity date) to be issued September 16, 1965,
in the amount of $1,200,000,000, or thereabouts, representing an
~dltional amount of bills dated June 17,1965,
and to
mature December 16,1965, originally issued in the amount of
$1,OOl,469,000,the additional and original bills to be freely
interchangeable.
182 -day bills, for $ 1,000, 000,000, or thereabouts, to be dated
September 16,1965 ,and to mature
March 17, 1966.
The bills of both series will be issued on a discount basiS under
competitive and noncompetitive bidding as hereinafter provided, and at
maturity their face amount will be payable without interest. They
will be issued in bearer form only, and in denominations of $1,000,
$5,000, $10,000, $50,000, $100,000, $500,000 and $1,000,000
(maturi ty value).
Tenders will be received at Federal Reserve Banks and Branches
one-thirty p.m., Eastern Daylight Saving
time, Monday, September 13, 1965.
Tenders will not be
received at the Treasury Del?artment, Washington. Each tender must
be for an even multiple of $1,000, and in the case of competitive
tenders the price offered must be expressed on the basis of 100,
with not more than three decimals, e. g., 99.925. Fractions may not
be used. It is urged that tenders be made on the printed forms and
fONarded in the special envelopes which will be supplied by Federal
~se~e Banks or Branches on application therefor.

up to the cloSing hour,

Banking institutions generally may submit tenders for account of
customers provided the names of the customers are set forth in such
tenders. Others than banking institutions will not be permitted to
submit tenders except for their own account. Tenders will be received
without deposit from incorporated banks and trust companies and from
~Sponsible and recognized dealers in investment securities. Tenders
from others must be accompanied by payment of 2 percent of the face
amount of Treasury bills applied for, unless the tenders are
accompanied by an express guaranty of payment by an incorporated bank
or trust company.

F-184

- 2 Immediatelv after the closinE, hour, tenders will be opened at tt
Federal Reserve Backs and Brallches, following which public announcement will be made by the Treasury Department of the amount and price
range of accepted bids.
Those submitting tenders will be advised
of the acceptance or rejection thereof.
The Secretary of the Treasul
expressly reserves the right to accept or reject any or all tenders,
in whole or in part, and his action in any such respect shall be
final.
Subject to these reservations, noncompetitive tenders for
each issue for 5200,000 or less without stated price from anyone
bidder will be accepted in full at the average price (in three
decimals) of accepted competitive bids for the respective issues.
Settlement for accepted tenders in accordance with the bids must be
made or completed at the Federal Reserve Bank on September 16, 1965
cash or other immediately available funds or in a like face amount
of Treasury bills maturing September 16,1965.Cash and exchange tendl
will receive equal treatment.
Cash adjustments will be made for
differences between the par value of maturing bills accepted in
exchange and the issue price of the new bills.
The income derived from Treasury bills, whether interest or
gain from the sale or other disposition of the bills, does not have
any exemption, as such, and loss from the sale or other disposition
of Treasury bills does not have any special treatment, as such,
under the Internal Revenue Code of 1954.
The bills are subject to
estate, inheritance, gift or other excise taxes, whether Federal or
State, but are exempt from all taxation now or hereafter imposed on
the principal or interest thereof by any State, or any of the
possessions of the United States, or by any local taxing authority.
For purposes of tax~tion the amount of discount at which Treasury
bills are originally sold by the United States is considered to be
interest.
Under Sections 454 (b) and 1221 (5) of the Internal
Revenue Code of 195~ the amount of discount at which bills issued
hereunder are sold is not considered to accrue until such bills are
sold, redeemed or otherwise disposed of, and such bi lIs are excluded
from considerction as capital assets.
Accordingly, the owner of
Treasury bills (other than life insurance companies) issued hereunde
need include in his income tax return only the difference between
the price paid for such bills, whether on original issue or on
subsequent purchase, and the amount actually received either upon
sale or redemption at maturity during the taxable year for which the
return is made, as ordinary gain or loss.
Treasury Department Circular No. 418 (current revision) and thi:
notice prescribe the terms of the Treasury bills and govern the
conditions of their issue.
Copies of the circular may be obtained f:
any Federal Reserve Bank or Branch.
000

Ff3CM. SERVi',:f

OFFICE OF
fiSCAL "SST. SECRETMrt

TREASURY DEPARTMENT

FOR IMMEDIATE RELEASE
TREASURY MARKET TRANSACTIONS IN AUGUST
During August 1965, market transactions in
direct and guaranteed securities of the government
for Treasury Investment and other accounts resulted
in net purchases by the Treasury Department of

$5 S,552,000.OO.
M

000

F-185

TREASURY DEPARTMENT

FOR IMMEDIATE RELEASE
TREASURY MARKET TRANSACTIONS IN AUGUST
During August 1965, market transactions in
direct and guaranteed securities of the government
for Treasury Investment and other accounts resulted
in net purchases by the Treasury Department of

$5ry8,552,000.00.

000

F-185

STAW.ffiNT BY THE RANK OF E;-.nLAND

September 10, 1965 at 9

A.~~.,

E. D. T.

There is increasing evidence that the measures taken by
Her Majesty's Government to restore the United Kingdom's
balance of payments are having their effect.

Sentiment toward

sterling in the exchange markets is improving.
trend, the Bank
Majesty's

at

To further this

England:; wi th the full authority of Her

Governmen~has

entered into new arrangements with the

central banks at: Austria, Belgium, Canada, Germany, Holland,
Italy, Japan, Sweden, Switzerland,

fo~

i _~~ternational

United States, and the Bank

Settlement& who cooperated in the support of

sterling last November.
These naw arrangements take various forms and will enable
appropriate action to be taken in the exchange markets with the
full cooperation of the central banks concerned.

000

- 2 -

Confidence in the U.K. position is growing.

The new

arrangements are designed, as the Bank of England has pointed
out, to further this trend.
2.

The new cooperative

arrangem~nts

take various forms.

Details concerning the form, amount, and timing of these
arrangements are not being made available.

A.l.:.ta hed is 0.11 iro.f"orr. c.tion COp! of ::1!.1Ifr tOd2.y1 s !:'h:.terent by the
Bank

0

f' Sr,c1and.

T R. r iiSu I( 8 R £ 5 P6N S of
(}OA.(CcRNlN~
:5~/£M&vr-

7l....

.::r.-ssu

.I"'¢Jui,fl6.t

!0

I~AN~ ~-F £nS~
£.b 91llY1. (£',D. 7j

Rilil 1E1710 fM!SS h4Q62ttIL5 eft
BtIRt· OF Fur. IlL dlUUOllt881Ili1Ui'

SePT£.'f1'. ~ /tJ1

196 r

The Treasury said that it could not elaborate on the new
arrangements announced today by the Bank of England, but pointed
out that:
1.

The present arrangements entered into by the Bank

of England with other central banks have been developed in
an economic and financial environment very different from that
of last November when the situation required emergency credit
assistance to the U.K.

Then, the United Kingdom was

experiencing a very large balance of payments deficit which
had not yet been brought under control, and confidence had
been sharply impaired.

~~L~
Now, the
. "··of measures taken by
A....-

"- 1'4

the United Kingdom over recent months

J

~bringing

improvement

,--fie U,!~

in~~lance of payments ,and giv0ndications of producing

equilibrium, as intended, by the second half of 1966.

TREASURY DEPARTMENT

FOR IMMEDIATE RELEASE
TREASURY RESPONSE TO INQUIRIES CONCERNING
THE BANK OF ENGLAND STATEMENT ISSUED 9 A.M. (E.D.T.)
SEPTEMBER 10, 1965
The Treasury said that it could not elaborate on the new
arrangements announced today by the Bank of England, but pointed
out that:
1. The present arrangements entered into by the Bank of
England with other central banks have been developed in an
economic and financial environment very different from that of last
November when the situation required emergency credit assistance
to the U.K. Then, the United Kingdon was experiencing a very large
balance of payments deficit which had not yet been brought under
control, and confidence had been sharply impaired. Now, the series
of measures taken by the United Kingdom over recent months is
bringing improvement in the U.K. balance of payments, and gives
indications of producing equilbriurn, as intended, by the second
half of 1966. Confidence in the U.K. position is growing. The
new arrangements are designed, as the Bank of England has pointed
out, to further this trend.
2. The new cooperative arrangements take various forms.
Details concerning the form, amount, and timing of these arrangements are not being made available.
Attached is an information copy of today's statement by the
Bank of England.

STATEMENT 'RY THE 'RANK OF E~LAND

September 10, 1965 at 9 A.M., E. D. T.

There is increasing evidence that the measures taken by
Her Majesty's Government to restore the United Kingdom's
balance of payments are having their effect.

Sentiment toward

sterling in the exchange markets is improving.
trend, the Bank

ot

Engl~ with

To further this

the full authority of Her

Majesty's Government, has entered into new arrangements with the
central banks of Austria, Belgium, Canada, Germany, Holland,
Italy, Japan, Sweden, Switzerland,

"lOr)

United States, and the Bank

·/International Settlement~ who cooperated in the support of
l __

~

sterling last November.
These new arrangements take various forms and will enable
appropriate action to be taken in the exchange markets with the
full cooperation of the central banks concerned.

000

ECONQ\HCS AND EQUAL OPPORTUNITY
Address of Robert A. Wallace, Assistant Secretary of Treasury
Humanitarian of the Year Award Dinner of the Abraham Lincoln Centre
Sherman House, Chicago, Illinois
September 13, 1965

IT WAS A GENUINE PLEASURE TO LEARN OF YOUR INVI TATIQ\J FOR ME TO BE
WITH YOU ON THE OCCASIQ\J OF YOUR

HU~ITARIAN

OF THE YEAR AWARD DINNER.

THE RECIPIENTS OF THIS AWARD HAVE BEEN TRULY ILLUSTRIOUS CITIZENS OF
TREMENDOUS TALENTS AND ACCOMPLISHMENTS IN THE FIELD OF

HU~

RIGHTS.

MEN

LIKE SENATOR DOUGLAS, MAYOR DALEY, GOVERNOR KERNER, CHARLES PERCY Af'..lD ARNOLD
t"AREMONT ARE WELL KNOWN THROUGHOUT THE LENGTH Af'..lD BREADTH OF THE

~I TED

STATES FOR THEIR ACCOMPLISHMENTS IN THIS FIELD.
NOW THEY ARE BEING JOINED BY A

~

WHO HAS SERVED THE CAUSE OF HUMAN

FREEDOM AS LARGE EtvPLOYER IN A FAMOUS CO'-1PAf'..lY.

HE HAS NOT ()\lLY FOUGHT BIAS

AND DISCRIMINATION, BUT ALSO ACHIEVED POSITIVE ACTIONS TO BRING NON-WHITE
CITIZENS INTO RESPONSIBLE EMPLOYMENT.
ROBERT UIHLEIN, JR. THE

~

WE ARE H()\lORING T()\lIGHT, IS PRESIDENT OF

THE 116 YEAR OLD JOS. SCHLITZ BREWING COMPANY W-UCH IS STILL <MNED AND
OPERATED BY THE DIRECT DESCENDANTS OF ITS FOl.J'JDER.

MR. UIHLEIN IS -- LET'S

FACE IT -- WEALTHY.

H~TING,

w-tICH

tWf(

HIS HOBBIES, POLO Af'..lD BIG GAME

OF US \>tQULD LIKE TO BECOt-1E ACCUSTOMED.

ARE THOSE TO

HIS SCHOOLS, PHILLIPS

ACADEMY, HARVARD AND THE UNIVERSITY OF WISCONSIN ARE THE VERY BEST.
MR. UIHLEIN'S ADVANTAGES DID NOT SEQUESTER HIM FROM SOCIETY.

BUT

LIKE OUR LATE

MARTYRED PRESIDENT KENNEDY, t-E IN-iERITED WEALTH, BUT HE DEVOTED HIS TALENTS

- 2 AND HIS ADVANTAGES TO PURSUITS IN HARMQ\lY WITH SOCIETY'S NEEDS.
ONE OF PRESIDENT KENNEDY'S FAVORITE STORIES CONCERNED THE TIME HE FIRST
RAN FOR CONGRESS IN A POOR DISTRICT OF BOSTON.

AT ONE MEETING WITH

SEVERAL OTHER CANDIDATES ON THE SAME TICKET, THE M.C. KEPT INTRODUCING

EACH CANDI DATE AS "A

~

WHO CAME UP THE HARD WAY."

WHEN IT CNvE TIME FOR

HIM TO INTRODUCE KENNEDY HE FUMBLED FOR WORDS, BUT KENNEDY HELPED HIM OUT.
HE SAID "1'M THE ONE THAT DID'J'T COf-1E UP THE HARD WAY."
BOB UIHLEIN DID NOT HAVE TO COVE THE HARD WAY IN ORDER TO SERVE THE
HLMANITARIAN PURPOSES FOR WHICH WE HONOR HIM TONIGHT.

AS PRESIDENT OF A

LARGE COMPANY HE HAS BEEN IN A POSITION TO PRACTICE THE PRINCIPLES OF
LNIVERSAL

HU~

DIGNITY MORE EFFECTIVELY THAN MOST PEOPLE.

HE DID NOT

ISOLATE HIMSELF WITH A FEW WELL CHOSEN FRIENDS, BUT, INSTEAD TREATED
LIFE AS A POSITIVE- ENTERPRISE TO HELP SOCIETY AS WELL AS HIS COMPANY AND
HIMSELF.

HE THUS REPRESENTS THE FINEST

TRADITIONS OF OUR CAPITALISTIC

SYSTEM AND HIS E><.Af.1PLE WILL DO MORE FOR AMERICA AND HU~ITY AS A RESULT.
THE BATTLE FOR HUMAN RIGHTS AND HUMAN DIGNITY MJST BE WAGED ON MANY
FRONTS.
.~

ALTHOUGH elVI L RIGHTS LANGUISHED FOR ALMOST 100 YEARS, CONGRESS

ENACTED NO LESS THAN FOUR CIVIL RIGHTS BILLS SINCE 1957.

RIGHTS BILL WAS THE LATEST.

THESE HAVE BEEN GREAT VICTORIES",

WINSTON CHURCHILL SAID OF ANOTHER VICTORY "IT IS NOT THE END.
TI-£ BEGINNING OF THE END.

THE VOTING
BUT AS;
IT IS NOT EVEN

BUT IT IS, PERHAPS, THE END OF THE BEGINNING."

AnJ, AS PRESIDENT JOI-f-.lSON SAID AT HOWARD UNIVERSITY ON JLNE 4:

- 3 -

"THAT BEGINNING IS FREEDG1j .AND THE BARRIERS T{) THAT FREEDOM ARE
TUMBLING DOWN. FREEDOM IS THE RIGHT TO SHARE, SHARE FULLY AND EQUALLY,
IN AMERICAN SOCIETY -- TO VOTE, TO HOLD A JOB, TO ENTER A PUBLIC PLACE,
TO GO TO SCHOOL. IT IS THE RIGHT TO BE TREATED IN EVERY PART OF OUR
NATIONAL LIFE AS A PERS<l'4 EQUAL IN DIGNITY .AND PRO'-1ISE TO ALL OTHERS.
"BUT FREEDOM IS NOT ENOUGH. YOU DO NOT WIPE AWAY THE SCARS OF
CENTURIES BY SAYING: NOW YOO ARE FREE TO GO WHERE YOU W.ANT, OR DO AS
YOU DESIRE, AND CHOOSE THE LEADERS YOU PLEASE.

"IT IS NOT Et-llUGH JUST TO OPEN THE GATES OF OPPORTUNITY.
CITIZENS MUST HAVE THE ABILITY TO WALK THROOGH THOSE GATES.
::

::

ALL OUR

::

"TO THIS END EQUAL OPPORTUNITY IS ESSENTIAL, BUT NOT ENOJGH, NOT
ENQlX;H. t-EN AND WOt-EN OF ALL RACES ARE BORN WITH THE S.AME R,ANGE OF
ABILITIES. BUT ABILITY IS NOT JUST THE PRODUCT OF BIRTH. ABILITY IS
STRefCHED OR STUNTED BY THE F.AMI LY YOU LIVE WITH, .AND THE NEIGHBORHOOD
YOU LIVE IN, BY THE SCHOOL YOU GO TO .AND THE POVERTY OR THE RICHNESS OF
YOUR SURROONDINGS. IT IS THE PRODUCT OF A HUNDRED UNSEEN FORCES PLAYING
UPON THE L1TILE INF.ANT, THE CHILD, AND FINALLY THE MIIN."
SO, IT IS NOT ENOOGH TO HAVE RIGHTS.

AS PRESIDENT JOHNS<l'4 HAS

SAID, OUR AIM t-UST BE "TO FULFILL THESE RIGHTS."

IT IS TO FULFILL THE FAIR EXPECTATI<l'4S OF

t-W-j."

"FOR WHAT IS JUSTICE?

- 4 -

JUSTICE IS A PROPER GOAL FOR OUR

NATIO~

IT MUST BE ACHIEVED IN THE

FIELD OF JOBS, EDUCATION, HOUSING, HEALTH, SPIRITUAL GROWTH AND ECONOMIC
WELL-BE I NG.
MUCH HAS BEEN ACCOM'LI SHED BY THE FEDERAL GOVERNMENT I N THE Ef'APLOYfv1ENT
AREA.

WHEN I FIRST CAME TO THE TREASURY DEPARTfv1ENT 4-1/2 YEARS AGO, I WAS

NAMED DEPARTMENTAL Ef'APLOYMENT POLICY OFFICER WITH RESPONSIBILITY FOR
ENFORCEMENT OF THE PRESIDENT'S EQUAL EMPLOYMENT OPPORTUNITY PROGRAM.

I WAS

SURPRISED TO FIND THAT NOT A SINGLE NEGRO HELD A PROFESSIONAL OR SECRETARIAL
POSITION IN THE OFFICE OF THE SECRETARY OF THE TREASURY, THE POLICY-DIRECTING
STAFF OF THE DEPARTMENT.

UNDER THE LEADERSHIP OF SECRETARY DILLON AND

SECRETARY FmJLER, SOME 34 PROFESSIONAL I'lND SECRETARIAL POSITIONS IN THAT
OFFICE HAVE NOW BEEN FILLED BY NEGROES.
IN JANUARY, 1961 THERE WAS NOT A SINGLE CUSTOMS COLLECTOR WHO WAS A
NEGRO.

PRESIDENT KENNEDY QUICKLY CHANGED THIS SITUATION BY APPOINTING A

NEGRO AS COLLECTOR FOR THE VIRGIN ISLANDS.

THE SAVINGS BONDS DIVISION

APPOINTED THE FIRST NEGRO EVER TO SERVE AS AN AREA BOND DIRECTOR,
MR. SYLVESTRE HATKINS OF CHICAGO.

THE COAST GUARD ACADEMY HAS APPOINTED ITS

FIRST NEGRO FACULTY MEMBERS,. AND ITS PREVIOUSLY ALL vJHITE STUDENT BODY HAS
BEEN JOINED BY SEVERAL NEGRO CADETS.
THE TREASURY GUARD FORCE APPOINTED ITS FIRST NEGRO LIEUTENANTS.

THE

WHITE HOUSE POLICE FORCE, WHICH COMES UNDER THE SECRET SERVICE IN THE
TREASURY DE PAR TtlfNT, APPOINTED ITS FIRST NEGROES.

THE BUREAU OF ENGRAVING

AND PRINTING JlPPOINTED ITS FIRST NEGRO f'lACHINISTS AND ITS FIRST NEGRO

ELECTRICIAN.

THREE LOCAL UNIONS REPRESENTING WORKERS IN THAT BUREAU HAVE

- 5 NOW FOR THE FIRST TIME ACCEPTED NEGROES AS MEMBERS.

.AND TODAY, ALSO FOR THE

FIRST TIME, THE INTERNAL REVENUE SERVICE HAS NEGROES SERVING IN THE HIGHEST
REGULAR CIVIL SERVICE GRADE.
OUR PROGRESS HAS NOT BEEN CONFINED TO THE NORTH.

INTERNAL REVENUE

SERVICE APPOINTMENTS AT THE PROFESSIONAL LEVEL, FOR THE FIRST TIME, HAVE
GONE TO NEGROES IN ATLANTA, LOUISVILLE, BIRMINGHAM, NEW ORLEANS, NASHVILLE,
LITTLE ROCK, JACKSON, MISSISSIPPI, COLUf-1BIA, SOUTH CAROLINA ,AND JACKSONVILLE,
FLORIDA.

IN ATL.ANTA, WHERE NO NEGRO HAD PREVIOUSLY SERVED THE INTERNAL

REVENUE SERVICE IN .ANY HHITE COLLAR POSITION, 68 TAX EXAMINERS AND KEY PUNCH
OPERATORS AND SUPERVISORS HAVE BEEN HIRED.
I r/PoNT TO EMPHASIZE THAT SUCH HIRING HAS BEEN ON THE BASIS OF f'lERIT AND
THAT EVERY CIVIL SERVICE RULE AND REGULATION HAS BEEN STRICTLY OBSERVED.
SIMPLY BY AFFORDING EQUAL OPPORTUNITY, PoND PRACTICING POSITIVE RECRUITf'lENT
PROGRAMS AMONG MINORITY GROUPS, WE HAVE, SINCE JANUARY 1961, MADE CONSIDERABLE
PROGRESS.
WE HAVE CONCENTRATED ON RECRUITMENT AND ADVANCEMENT OF NEGROES IN THE
MIDDLE AND UPPER PROFESSIONAL LEVELS -- THOSE THAT PAY OVER $5,000 A YEAR.
THESE ARE THE JOBS THAT HAVE BEEN TOUGH FOR NEGROES TO BREAK INTO.
MOST OF THE HIGHER TREASURY POSITIONS, THOSE PAYING OVER $10,000 A
YEAR REQUIRE TREASURY EXPERIENCE IN ORDER TO QUALIFY.

PLACING NEGROES IN THE

MIDDLE PROFESSIONAL LEVELS, THOSE PAYING $5,000 TO $10,000 A YEAR, IS THUS A
KEY TO THEIR LATER ADVANCEMENT.

SINCE 1961 TREASURY HAS HIRED AND PROMOTED

1,300 NEGROES IN THESE SALARY RANGES.

THIS HAP-PENS. TO BE A 90% INCREASE.

NEGROES FORMERLY ACCOUNTED FOR ONLY 3-1/2% OF ALL EMPLOYEES AT THESE LEVELS.
NOW THE PROPORTION IS 6-1/2% -- ALMOST DOUBLE.

- 6 -

ONE OUT OF EVERY THREE PERSONS HIRED OR PROMOTED BY TREASURY FOR THESE
KEY PROFESS IONL\L JOBS l-'oAS BEEN A NEGRO.
HAS THIS PAID OFF IN GETTING NEGROES INTO THE HIGHER JOBS?
IN 1961 ONLY 35 NEGROES HELD POSTS IN TREASURY PAYING OVER $10,000 A YEAR.
THERE ARE NOW, ALMOST SIX TIMES THIS NUMBER.
IN THE PAST YEAR ALONE, HALF OF ALL NB'J JOBS IN THE$5,000 TO $10,000
RANGE WENT TO NEGROES AND NEGROES GOT 11 PERCENT OF ALL NEW POSITIONS PAYING
OVER $10,000 A YEAR.
WE ARE CURRENTLY TRYING TO GET MORE NEGROES INTO THE VERY HIGHEST JOBS
AND ALSO TO GET MORE NEGROES ESTABLISHED IN TREASURY OFFICES SCATTERED ALL
OVER THE UNITED STATES, INCLUDING THE SOUTH.
I AM GLAD TO HAVE PLAYED A PART IN THE TREASURY DEPARTMENT'S HIRING
AND PROMOTION OF OVER 1,450 NEGROES IN THE MIDDLE AND HIGHER GRADES.

BUT

THE TOLL OF PAST DISCRIMlNATICN HAS PREVENTED WHAT MIGHT HAVE BEEN A MUCH
HIGHER NUMBER.

FOR THE ONLY WAY TO GET INTO THESE PROFESSIONAL POSITIONS

IS TO HAVE THE NECESSARY EDUCATION AND TRAINING, AN) THERE ARE SIMPLY NOT
ENOUGH NEGROES WITH THE NECESSARY EDUCATION AND TRAINING AVAILABLE TO US.
I HAVE WT SEEN THE GOVERNfvENT -HIDE FIGURES, BUT I KWW THAT lJ'.JDER THE
LEADERSHIP OF PRESIDENT JOHNSON AND VICE PRESIDENT HUMPHREY, MANY THOUSANDS
OF NEGROES HAVE BEEN BROUGHT I NTO THE GOVERNf'AENT IN THE BETTER JOBS.
MOREOVER, 310 LARGE CORPORATIONS EMPLOYING NEARLY 9 MILLION

PERSO~5

HAVE

SIGNED THE PRESIDENT'S PLANS FOR PROGRESS AGREEMENTS TO INITIATE PROGRAMS OF
AFFIRMATIVE ACTION OF RECRUITMENT AND TRAINING.

- 7 -

MEPNWHILE, UNDER FRANKLIN D. ROOSEVELT, JR., THE GOVERNfvENT HAS f'IOVED TO
ENFORCE TITLE VII OF THE COMPREHENSIVE CIVIL RIGHTS BILL TO PROVIDE EQUAL
EMPLOYMENT OPPORTUNITIES THROUGHOUT THE LAND.
BUT THE ACHIEVEMENT OF JUSTICE IS ONLY ONE PART OF THE CIVIL RIGHTS PICTURE.
ANOTHER IS OUR NATIONAL ECONOMIC NEEDS.

STILL ANOTHER IS OUR ABILITY TO

SURVIVE IN A \-JORLD THAT CONTAINS HOSTILE AS \,/ELL AS FRIENDLY COUNTRIES.
OUR CONTINUED ROLE AS A WORLD LEADER WILL

ULTI~ATELY

DEPEND ON OUR

PERFORMANCE AS A PEOPLE -- AND THIS PERFORMANCE WILL DETERMINE THE COURSE
TO BE

FOLLO~JED

BY OTHER f'IORE POPULOUS COUNTRI ES AND AREAS OF THE WORLD.

IF OUR ECONOMIC SYSTEM CAN PRODUCE ENOUGH AND DISTRIBUTE ITS PRODUCTION
FAIRLY, IT WILL BE EMULATED.

IF OUR POLITICAL SYSTEM YIELDS THIS PRODUCTION

WHILE YET PRESERVING THE LIBERTIES OF INDIVIDUALS, IT WILL ENDURE AS THE
STANDARD FOR OTHERS TO FOLLOW.

AND, IF OUR BEHAVIOR TOvJARD OUR FELLOW fv'AN

IS ON THE BASIS OF JUSTICE AND EQUALITY, IT WILL BE HONORED.
WHICH BRINGS ME TO THE THEME OF WHAT I WOULD LIKE TO DISCUSS VlITH YOU
TODAY:

THAT IN TODAY'S WORLD IT IS UTTERLY IMPERATIVE THAT THE UNITED STATES

ACHIEVE ECONOMIC STABILITY AND GROWTH AND ALSO TRUE RACIAL EQUALITY IN ALL
RESPECTS -- THAT THESE TWIN GOALS ARE COMPLETELY INTERDEPENDENT -- THAT
NEITHER CAN BE ACHIEVED WITHOUT THE OTHER -- THAT THE FAILURE OF EITHER
WILL BE THE FAILURE OF BOTH.
THE DEVELOPING NATIONS ABROAD, WHEREIN RESIDE THE VAST fv'AJORITY OF MANKIND,
WANT

~D

NEED

~ISING

LIVIf\l7 STANDARDS.

NEED DIGNITY AND SELF-RESPECT.

tIORE

TH~

THAT, THEIR PEOPLES vlmT AND

IF WE SHOW THE WORLD THAT OUR SYSTEM CAN

OUT-PRODUCE OTHERS AND STILL PROVIDE DIGNITY AND SELF-RESPECT FOR ALL PERSONS

- 8 -

THEN AND ONLY THEN WILL OUR SOCIETY PERSEVERE.
OTHER SIDE,:

BUT, WE MUST CONSIDER THE

IF WE FAIL TO (vEEr THESE NEEDS IN OUR COUNTRY -- IF OUR PECPLE

BEAT DOWN THE DIGNITY AND SELF-RESPECT OF MILLIONS OF OUR OWN CITIZENS, WHO
WILL FOLLOW OUR EXAMPLE?- OF COURSE, OUR MILITARY IS MIGHTY, BUT CAN

~/E

HOPE

TO HOLD OUT IF WE BECOME AN ISOLATED ISLAND FACED BY THE GROWING STRENGTH
OF OUR ENEMIES AND WITHOUT FRIENDS AMONG THE BILLIONS OF PEOPLE WHO INHABIT
THE OTHER AREAS OF THIS PLAf\ET?
THE JOHNSON ADMINISTRATION HAS FACED THIS

ISSU~

IT HAS MADE PROGRESS,

AND IS FORGING AHEAD IN THE FIGHT AGAINST DISCRIMINATION AND IN THE STRUGGLE
TO KEEP OUR NATIONAL ECONOMY STRONG AND HEALTHY.

BUT, IT IS A CONTINUING

BATTLE -- ONE WHICH BY_ ITS VERY NATURE MUST INTENSIFY.
ADVANCEMENT CN MANY FRONTS IN OUR STATES AND LOCALITIES.
BREAKIf\X; DOv-N, DISCRIMINATION HAS ABATED.

WE HAVE ALSO SEEN
SEGREGATION IS

HERE AGAIN THE WINNI f\G OF A FEW

SKIRMISHES, WHILE NOT VICTORY ITSELF, DOES AT LEAST GIVE US A RENEWED WILL TO
WORK HARDER THPN EVER.
THE no/IN GOALS OF A HEALTHY ECONOMY AND RESPECT FOR THE RIGHTS OF EVERY
CITIZ~

CAN'JOT BE SEPARATE AIMS.

FOR OUR FULL PRODUCTIVE POTENTIAL CANNOT BE

REACHED IF MEN ARE PREVENTED BY DISCRIMINATION FROM MAKING THEIR FULL CONTRIBUTION.

NOR CJIN A MAN HAVE DIGNITY AND RESPECT FOR HIS GOVERNMENT IF HE IS TOLD

THAT HE MUST WORK ONLY AT CERTAIN JOBS, ATTEND ONLY CERTAIN SCHOOLS, VOTE ONLY
IN SOME JURISDICTIONS OR LIVE ONLY IN SPECIFIED PLACES.
ON MARCH 25, 1965 THE PRESIDENT'S COUNCIL OF ECONOMIC ADVISERS ISSUED A
REPORT WHICH SPELLED OUT THE HIGH ECONOMIC COST TO OUR COUNTRY OF RACIAL
DISCRIMINATION IN EMPLOYt-ENT.

- \9, THE COUNCIL ESTIMATED THAT FULL UTILIZATION OF THE PRESENT CAPABILITIES
OF THE NON-WHITE POPULATION WOULD INCREASE THEIR PERSONAL INCOME BY $12.8
BILLION.

IN ADDITION, THE COUNCIL SAID THAT IF NON-WHITES HAD THE SAME

EDUCATIONAL ATTAINMENTS AS WHITE WORKERS AND EARNED THE SAME PAY AND
EXPERIENCED THE SAME UNEMPLOYMENT RATES AS WHITES, THEIR
WOULD BE $20.6 BILLION HIGHER.

PERSO~~L

INCOME

THESE BENEFITS VlOULD ACCRUE NOT a~LY TO

NEGROES BUT ALSO TO THE ENTIRE NATION IN THE FORM OF AN EXTRA $23 BILLION
IN THE TOTAL

a=

OUR NATIONAL OUTPUT OF GOODS AND SERVICES.

THESE ESTIMATES TELL US SOMETHING OF VITAL IMPORTANCE.

THEY TELL US

THAT EVEN IF WE COULD IGNORE THE HUrvw-l MISERY AND DEGRADATION THAT DISCRIMINATION CREATES, EVEN IF WE COULD ENDURE THE BURDEN OF DESPAIR WHICH IS IMPOSED
UPON OUR CITIZENS AS A RESULT, EVEN IF WE COULD ACCEPT INDEFINITELY AN
lNEtJPLOYt-ENT RATE Atv'Q\JG NEGROES nvlCE THAT AMJNG WHITES, THAT PREJUDICE ,AND
DISCRIMINATION WOULD -- SOLELY ON ECONOMIC GROUNDS -- BE IN DIRECT
WITH THE NATIONAL INTEREST OF THE UNITED STATES.

SINCE

~-1ORE

ca~FLICT

RAPID ECONOMIC

GROWTH IS THE t-1A.JOR ECa--JOMI C GOAL OF OUR NATION, NO ONE WITH ANY SERIOUS
C~CERN

FOR PUBLIC POLICY CAN AFfORD TO OVERLOOK THE POTENTIAL IN HUMAN AND

EC(NOMIC RESOURCES THAT VIE WASTE THROUGH PREJUDICE .AND DISCRIMINATION REGARDLESS OF WHETHER THE DISCRIMINATION IS DELIBERATE OR INADVERTENT.
BUT THE PRI CE OF PREJUDICE RUNS FAR HIGHER THAN EVB'-l THOSE FIGURES \,IfOULD
SUGGEST.

WE PRESENT A STRPNGE Ca--JTRADICTION WHEN WE SPB'-lD BILLIONS FOR FOREIGN

AID TO EXPAND HUfv\CN RIGHTS ABROAD AT THE SAME TIM:: THAT WE TOLERATE DISCRI~lINA-

TI ~ HERE AT HOtAi

EVEN tv'ORE I f'APORTANT, RAC I AL DISTURBANCES I N THE UN ITE D

STATES BOTH SHOCK AND MYSTIFY MANY FOREIGNERS, AND SOME OF THEM DRAW FROM
SUCH INCIDENTS A PROFOUND SKEPTICISM ABOUT FREEDOM IN AMERICA.

- 10 -

FROM JANUARY, 1961, UNTIL MID-1965, OUR NATIONAL ECONOMIC NEED WAS FOR
GREATER GROWTH, HIGHER EMPLOYtvENT AND fv'ORE INVESTtvlENT.
ACHIEVED.

THIS WE HAVE LARGELY

OUR TOTAL NATIONAL PRODUCTION HAS JUMPED $150 BILLION.

tvENT HAS DROPPED FROM 7% TO 4-1/2 c'o.

FROM 78% TO 90%.

OUR USE OF PlANT CAPACITY HAS RISEN

THERE IS STILL SOtvIE SLACK, OF COURSE, BUT NOW WE MAY WELL

BE FACING A SO"tvlEHHAT DIFFERENT PROBLEM:

PRODUCTION BOTTLENECKS -- AT LEAST

IN A FEW AREAS -- AND PERHAPS SOtvIE UPWARD PRESSURE ON PRICE LEVELS.
STEPPED-UP DEFENSE ACTIVITIES
PRODUCTICl'J.

UNEMPLOY-

OCCASIa~ED

FOR OUR

BY VIET NAM WILL NEED ADDITIONAL

WHILE THERE IS STILL GENERAL UNEMPLOYMENT, THERE MAY WELL BE

SOME SHORTAGES OF SKILLED WORKERS, TECHNICIANS, AND OTHER PERSONNEL WITH
EDUCATI~

AND TRAINING.

THUS DISCRIMINATION AGAINST NEGROES WOULD BE NOT ONLY

UNJUST, BUT FOOLHARDY IMPRACTICALITY.
THEY CAN QUALIFY FOR.

WE NEED NEGROES IN THE HIGHEST JOBS

WE NEED THEM EDUCATED AND TRAINED.

I HAVE HEARD CHARGES THAT WE CAN'T HAVE BOTH GUNS ,!\ND BUTTER -- THAT
WE OUGHT TO CUT BACK ON OUR POVERTY AND EDUCATION PROGRAMS.

WE MAY VERY

WELL HAVE TO FOREGO A GREAT DEAL OF BUTTER SUCH AS DESIRABLE BUT LESS ESSENTIAL
GOVERNMENT EXPENDITURES AND ALSO FURTHER TAX CUTS.

BUT THE POVERTY AND

EDUCATION PROGRAMS WILL PROVIDE THE ECONOMIC SINEWS NECESSARY TO NATIONAL
DEFENSE, FOR THESE ARE THE PROGRAMS WHICH WILL UPGRADE OUR NATIONAL WORK
FORCE.

MEANWHILE, EQUAL OPPORTUNITIES ARE NECESSARY TO GIVE EFFECT TO

THESE POLICIES.

- 11 -

I BELIEVE THE ADMINISTRATION'S TWIN JOB OF COf£ATING RACIAL DISCRIMI~~TION
AND PROVIDING GREATER ECONOMIC OPPORTUNITIES FOR ALL AMERICANS REPRESENTS THE
CRUCIAL SEGMENT OF THE PRESIDENT'S DOMESTIC PROGRAM.
THESE GOALS CAf\NOT BE ACHIEVED fvERELY WITH PIOUS HOPES OR BLAND
THAT "THINGS WILL WORK OUT IF YOU JUST GIVE THEM TIf'lE."

OPTIMISr~

THE CONTINUED

EXISTENCE OF POVERTY, IGNORANCE AND BIGOTRY A FULL CENTURY AFTER LINCOLN'S
EMANCIPATION PROCLAMATION GIVE IRREFUTABLE PROOF TO THE CONTRARY.
PASSIVE TOLERANCE AND GOOD INTENTIONS ARE NOT Ef\OUGH.

POSITIVE, AGGRESSIVE,

VI GQROUS ACTI ON BY THE GOVE RNtv'E NT , AND BY fv1EN AND WOMEN OF COURAGE AND TENAC I TY
IS VITAL.

ONLY IN THAT WAY, CAN WE ENHANCE THE DIGNITY OF THE INDIVIDUAL

CITIZEN, PROf"OTE THE Ml\XIMUM DEVELOPfv1ENT OF HIS CAPABILITIES, AND vlIDEN THE
~E

AND EFFECTIVENESS OF OPPORTUNITIES FOR INDIVIDUAL CHOICE.

WAY CAN WE BRING THE AM:RICAN DREAM CLOSER TO REALITY.
WE SURVIVE AS A FREE PEOPLE.
TH.ONK YOU VERY MUCH.

00

00

00

ONLY IN THAT

ONLY IN THAT WAY CAN

TREASURY DEPARTMENT

FOR ~ELEASE A.M. NEWSPAPERS,
Tuesday, September 14, 1965

RESULTS OF TREASURY'S WEEKLY BILL OFFERING
The Treasury Department announced last evening that the tenders for two series ot
Treasury bills, one series to be an additional issue of the bills dated June 17, 1965,
and the other series to be dated September 16, 1965, which were offered on September 8,
were opened at the Federal Reserve Banks on September 13. Tenders were invited for
$1,200,000,000, or thereabouts, of 91-day bills and for $1,000,000,000, or thereaooutS r
of l82-day bills. The details of the two series are as follows:
RANGE OF ACCEPTED
9l-day Treasury bills
:
182-day Treasury bi.11s
COl1PETITIVE BIDS:
maturing December 16, 1965
:
maturing March 17, 1966
Approx. Equiv. :
Approx. EqUiv.
Annual Rate
Price
Annual Rate
Price
High
3.877%
:
97.970
4.015%
99D020 a/
Low
3.893%
I
97.958
4.039%
99.016 Average
3.887%
97.962
4.031%
99.018

!I

:

Y

a/ Excepting 1 tender of $77,000
percent of the amount of 91-day bills bid for at the low price was accepted
19 percent of the amount of 182-day bills bid for at the 10\1 price was accepted

38

TOT.~

TENDERS APPLIED FOR AND ACCEPTED BY PEDERAL RESERVE DISTRICTS:

District
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis

Mj~neapolis

Kansas City
Dallas
San Francisco
TOTALS

Applied For

Accepted

$

4\

27,548,000

1,599,2)9,000
32,553,000
30,4 R2,OOO
18,562,000
46,986,000
346,092,000
59,587,000
23,341,000
34,~25,000

32,011,000
131,002,000
$2,)81,828,000

17,54B,OOO

:

Applied For

Accepted

: $ 19, ?23,000 $ 10,173,000
t
IjJ72,945iOOO 705,735,000

729,6ge,OOO
20,232,000:
29,510,000:
18,042,000:
30,126,000
189,420,000:
43,966,000:
16,889,000:
30,795,000:
18,)91,000:
56,470,000:
$1,201,087,000

18,799,000
91,133,000

10,718,000
65,983,000

27,018,000

21, 96L,ooO
82,672,000
12,165,000
11,760,000
17,676,000
9,2)6,000
45,519,000
$lttO, 365, 060 sI

7,Ge+,OOO

~~0,912,000

21,285,000
15,570,000
18,176,000
12,046,000
94,744,000

£I $1,938,615,006

6,764,000

~ Includes $30),826,000noncompetitive tenders accepted at the average price of 99.°618

oj

fI

Includes $116,136,(0) noncompetitive tenders accepted at the average price of 97.9 2
On a coupon issue of the same length and for the same amount invested, the return at
these bills would provide yields of 3.98%, for the 91-day bills, and &.17%, for the
l82-~ bills. Interest rates on bills are quoted in terms of bank discount with
the return related to the face amount of the bills payable at maturity rather than
the amount invested and their length in actual number of days related to a 360-day
year. In contrast, yields on certificates, notes, and bonds are computed in terms
of interest on the amount invested, and relate the number ot days remaining in an
interest p~ent period to the actual number ot days in the period, with semiannual
compounding i f more than one coupon period is involved.

TREASURY DEPARTMENT
(

WOR RELEASE A.M. NiWSPAPI<:RS,
Tuesday, September 14, 1965
-

RESULTS OF TREASTJRY I S WEEKLY BILL OFFERING

The Treasury Department announced last evening that the tenders for two series of
Treasury bills, one series to be an ac'lditional issue of the bills dated June 11, 1965,
md the other series to be dated September 16, 1965, which were of::ered on September 8,
~re opened at the Federal Reserve P.aru{S on September 13.
Tenders were invited for
U,200,OOO,000, or th'?reabouts, of 91-d.'3.J· 1~i11s and for :71,000,000,000, or tLereabouts,
of 182-day bills. TJ:.~ det'1ils of the two series core as follows:
RANGE JF M':CEPTED
91-day Treasury ~i.ll s
:
1R2-day Treasury bills
~m,pr.:'}TrD/E -gIDS:
maturing De"emher 16, 1965
maturing March 17, 1966
.'\pprox. Equi~T •
Approx. ~qui v •
Price
Annual Rate
Price
Annual Rate
:lieh
3.877~
97. Q7 0
4.015%
°9.020
1,0'11
99.01~ 3.893:%
:
97.958
4.039%
Average
3.8R7:·~
97.962
4.031%
99.011~

al

!I

!I

1/ ~xceptbg

1 t.ender of ~77, 000
re pl'rcent of the amount o~ 91-d'3.y ti113 tj.d for' at thl=' ~.o,..:r ,Prir::p. was acceptAd
l? ;.ercent of the amount of 182-day bills bid for at tlJe lou price was accepted
rO!PL TENDl!:...R.S APPLIED l'DR AT'ID ACC"S?TED 3Y ~DERAL RESERVE DISTRICTS:
Accepted
: Applied For Accepted
District
Applied For
Boston
$ 27,548,000 $ 17,548,000 : f. 19,72.1,000 $ 10,173,000
729,~9P,n00
1,J72,945,OOO 70),735,000
New York
1,599,239,000
20,
~3?,:)OO:
18,799,000
10,718,000
Philadelphia
32,553,000
8
30,4 2,000
Cleveland
29,510,000
91,133,000
65,983,000
Richmond
18,042,000:
7,Ge+,ooo
6,764,000
18,562,000
Atlanta
30,126,000
27,018,000
21, 96L, 000
46,986,000
Chicago
1B9,420,000:
240, 91?,000
82,672,000
346,092,000
St. Louis
43,966,000
21,285,000
12,165,000
59,587,000
Minneapolis
16,889,000:
15,570,000
11,760,000
23,.31.:.1,000
Kansas City
30,795,000:
18,176,000
17,676,000
34.,112) , 000
Dallas
18,391,000:
12,046,000
9,236,000
32,011,000
San Francisco
56,470,000:
94,744,000
45 1 519,000
131,002,000
$1,201,087,000 ~ $1,938,615,000 $1 toO, 365, 000 ~
'rOTALS
$2,381,828,000

VInclUdes $303,826,OOOnoncompetitive tenders accepted 3.t the average price of 99.018
~I Includes $116,136,om noncompetitive tenders accepted at tlle averaee price of 97.962
r.; On a coupon issue of the same length and for the same amount inYested, t.he return on
these bills would provide yieldS of 3.98;~, for the 91-day bills, and 4.17%, for the
Interest rates on bills are quoted in terms of bank discount with
the return related to the face amount of the bills payable at maturity rather than
the amount "invested and their length in actual number of days related to a 360-day
year. In contrast, yields on certificatec, notes, and bonds are computed in terms
?f interest on the amount invested, and relate the number of days remaining in an
lIlterest p~ent period to t!1e actual number of days in the period, with semiannual
cOMpounding if more than one coupon period is L~vo1ved.
182-~ bills.

F-l86

- 4 -

,~

-

7 ')

.'-

Secretpry Fowler told the group that 18,200 employee
~u~~e8tiolif'

alJaost twice
the s8vin.18

were
~s

~;ubmitted durin~

the n8st fiscal year --

many ElF the year before.

re~ultin~;

"Equally important,

from adopted suggestionE also almost

doubled," he sa.id.
He reminded the audience that President Johnson was
determined to find
new and expanding

~avings

pro~rams,

in existing programs to finance
and that all

agencie~

face a

"new challenge -- how to do more work with relatively fewer
employee£'. "

- 3 Treasury

official~

who were, during the year, the recipients

of the Alexl'nder Haailton Award.
former

Commis~ioner

'lhey were:

lIort1aer II. Cal'lia.

of Internal Revenue, Robert Y. 10088.

fanner Under Secretary far Monetary Affairs, and

~C)

Stataley I.

Surrey, Assistant Secretary for Tax Policy.

The emDloyee suggestions and services which were recolfti•••
by the Secretary tOd3Y cover a wide range of !lew lde•••

procedures and Ilctivities, which altogether accounted for
$4 million in savings to the lederal govet'DlllBftt.

SOIDt!

!bey

went, for example, to Treasury law enforcement agents who

broke

up

counterfeiting and illicLt narcotics

op.rat~8,

eoalt

Guard marine engineers who improved the operating capability
of £hips, and to lawyers, administrators and others for surweyl
~nd

in

£tudies which modernized administrative procedure. resu1tial
s~vings

of thousands of dollars.

- 2 -

Fourteen supervisors were recognized this year by the
Secretary for notable achievements in encouraging employee.
contributions to efficiency and ecOllOlll1.

'light of the ••

individuals were from various Treasury bur.au offic.. throulbeut
the country, the remainder from units in the Washington area.
Each year the Secretary presents two hOllorary awards to
bureaus for their outstanding

partic~tion

Department' s Incentive Awards Program.

and results ta the

The Office of the

Treasurer of the United States was cited for the us. of
incentive awards to recognize employees who significantly
exceeded normal job requirements, and the Bureau of Mcoat.

for the best average results in the suggestion phase of the
program, with 10.5

ad~d

suggestions per 100 eJlployees.

Although previously e.nnounced at the tiwae the ...rd. wen
conferred, the ceremony today listed three of the bilhe.C

FOR RELEASE PM NE{oJSPAPERS

'ruESDAY, SEPTEMBER 14, 1965
TREASURY EMPLOYEES HOHOIID
IN ANNUAL AWAlIDS CDDDn'

Treasury Secretary Henry H. Fowler this morning hODoted
U F/UN'~

IL~--

.(}O

,
l Treasury

employee~

in the

De~8rtment'!

second andual award.

ceremony, held in the Departmental Auditorium, WaAhington, I.C.
The employees received awards for outstanding service
and significant contributions to Treasury operations during

the fiscal year which helped to cut costs and increase

eff1al~

/( t-C' I "JILt "?"<:'(./ ~ 7
"6ee7;e;Ivo'd
The gecretary"pu& __ed hrt ifi cat8'" to~
~.

...,10,.".

during the year, had received either of the Treasury's

~o

top

awarrle -- for Excf!Ptionl!l Service or Meritorious Service.

3'

emDloyee~ received recognition for outstanding

lugae.tlORl

or rervice which effected ~i~ificant monetsry saving., iacnaaecl

efficiency, or distinct improvements in Government Service.
1j

other~ in the Washington areA received citation. fo~

more than 40 years of Federal service.

TREASURY DEPARTMENT

September 14, 1965
FOR RELEASE P. M. NEWSPAPERS

TUESDAY, SEPTEMBER 14, 1965
TREASURY EMPLOYEES HONORED IN
ANNUAL AWARDS CEREMONY
Treasury Secretary Henry H. Fowler this morning honored
approximately 100 Treasury employees in the Department's second
annual awards ceremony, held in the Departmental Auditorium
Washington, D. C.
'
The employees received awards for outstanding service and
significant contributions to Treasury operations during the
fiscal year which helped to cut costs and increase efficiency.
The Secretary recognized 37 employees who, during the year,
had received either of the Treasury's two top awards -- for
Exceptional Service or Meritorious Service. 36 employees
received recognition for outstanding suggestions or service
which effected significant monetary savings, increased
efficiency, or distinct improvements in Government Service.
23 others in the Washington area received citations for more than
40 years of Federal service.
Fourteen supervisors were recognized this year by the
Secretary for notable achievements in encouraging employees
contributions to efficiency and economy. Eight of these
individuals were from various Treasury bureau offices throughout
the country, the remainder from units in the Washington area.
Each year the Secretary presents two honorary awards to
bureaus for their outstanding participation and results in the
Department's Incentive Awards Program. The Office of the
Treasurer of the United States was cited for the use of
incentive awards to recognize employees who significantly
exceeded normal job requirements, and the Bureau of Accounts
for the best average results in the suggestion phase of the
program, with 10.5 adopted suggestions per 100 employees.

F-187

(OVER)

- 2 -

Although previously announced at the time the awards were
'_onferred, the ceremony today listed three of the highest
Treasury officials who were, during the year, the recipients
of the Alexander Hamilton Award. They were: Mortimer M. Caplin,
former Commissioner of Internal Revenue, Robert V. Roosa, former
Under Secretary for Monetary Affairs, and to Stanley S. Surrey,
Assistant Secretary for Tax Policy.
The employee suggestions and services which were recognized
by the Secretary today cover a wide range of new ideas,
procedures and activities, which altogether accounted for some
$4 million in savings to the Federal government. They went, for
example, to Treasury law enforcement agents who broke up
counterfeiting and illicit narcotics operations, Coast Guard
marine engineers who improved the operating capability of ships,
and to lawyers, administrators and others for surveys and
studies which modernized administrative procedures resulting in
savings of thousands of dollars.
Secretary Fowler told the group that 18,200 employees
suggestions were submitted during the past fiscal year -almost twice as many as the year before. "Equally important,
the savings resulting from adopted suggestions also almost
doubled," he said.
He reminded the audience that President Johnson was
determined to find savings in existing programs to finance new
and expanding programs, and that all agencies face a "new
challenge -- how to do more work with relatively fewer employees."
Attached is a listing of the employees recognized and their
citations.
000

EMPLOYEE SUGGESTIONS AND SERVICES
Recognition by the Secretary of outstanding suggestions or exemplary
services which served to effect significant monetilry savings, mcreased efficiency, or improvements in Government operations.
PAUL E. ANTHON'Y, Management Analyst, Office of the Director,
Planning Staff, North-Atlantic Service Center, Internal Revenue
Service, Lawrence, Mass.
For developing and testing a new system which eliminated the
need for two additional 7330 tape drives for the 1401 computer
system. Estimated savings-$26,127. Suggestion award-$1,310.
OHMER BRUCE BALDWIN, Criminal Investigator, Office of Supervisor
in Charge, Alcohol and Tobacco Tax Division, Internal Revenue
Service, Aiken, S.C.
For extraordinary initiative in obtaining public service contributions from 19 prominent individuals who informed the public
of the health hazards of moonshine whiskey and the millions of
tax dollars lost to the Government through this illegal industry. Special Service Award-$750.
FRANCIS W. BERNHARDT, Tax Law Specialist, Tax Rulings Division,
Office of the Assistant Commissioner (Technical), Internal Revenue Service.
For developing a check sheet for use in analyzing master or
prototype forms of plans under the Self-Employed Individuals
Retirement Act thereby saving time in drafting, typing and reviewing analysis memoranda, and assuring that all areas of the
requirements for qualifications are covered. Estimated savings$40,000. Suggestion award-$860.
AMI BURDETT E. BROWNELL, JR., Aviation Structural Mechanic, First
Class, Coast Guard Air Station, Brooklyn, N.Y.
For successfully developing a way to protect circuit breakers on
HH-52A helicopters, thus reducing maintenance costs and eliminating a major safety hazard. Estimated savings-$3,360. Suggestion award-$500.

5

CHARLES D. CASEY, Narcotic Agent, Bangkok, Thailand
For exceptional cooperation with international law enforcement
officials in the Far East and for outstanding work under hazardous conditions in initiating 21 cases involving 54 defendants and
the seizure of two illicit heroin conversion laboratories and a
significant quantity of narcotic drugs. Superior Work Performance Award-$500.
JOHN W. COGGINS, Supervisory General Attorney (Tax), Alcohol and
Tobacco Tax Legal Division, Office of Chief Counsel, Internal Revenue Service
For tireless effort, intelligence, and initiative in drafting and developing the Administration's legislative proposals with respect to
the traffic in firearms. Special Service Award-$500.
Lt. LEO J. DEGRAW, Electronics Engineering Division, Coast Guard
Headquarters, Washington, D.C.
For developing a dualized radiobeacon coder as a replacement
for the present K Y-76 series coders at sequenced radiobeacon
stations, thus reducing procurement and maintenance costs of
such equipment. Estimated savings-$50,OOO. Suggestion
award-$SOO.
HENRY E. DEWLlNG, Sheetmetal Worker, Coast Guard Yard, Curtis
Bay, Md.
For unique devotion to the Service. His voluntary assumption of
responsibility for planning, revising, and effectively teaching a
number of courses averted the closing of the Coast Guard Yard's
Apprentice School. Special Service Award-$500.
ETCP MARTIN P. DOOLAN, Chief Electronics Technician (Repairman), Coast Guard Supply Center, Brooklyn, N.Y.
For devising a modification to the handset cradle of the ANI
URC-7 series radio telephone, thereby increasing the life span
of the Type 1624 transmitting tubes. Estimated savings$14,168. Suggestion award-$600.
KENNETH W. FRANKS, Chief, Administration Division, St. Louis District, Internal Revenue Service
For initiative and effective leadership during the crucial stages
of merger operations between two large Missouri districts
involving realignment of program functions and services under
the newly established St. Louis District. Superior Work Performance Award-$500.

6

EDWARD GRIFFIN, Revenue Officer, Group Supervisor, Collection
Division, Internal Revenue Service, Montgomery, Ala.
For designing a kit enabling Revenue Officers to prepare reports
of daily actions, itinerary plans, and travel on an "as you perform basis," thus eliminating the daily trip to the office and reducing clerical work while providing better records. Estimated
savings-$19,440. Suggestion award-$740.
CHRELE WILBUR
Alexandria, Va.

J.

HALL, Washington Radio Station, Coast Guard,

For his significant role in solving the Loran oscillator failure
problem by using mercury thermostats in lieu of the bi-metallic
type. Estimated savings-$10,900. Suggestion award-$525.
YNCS DONALD R. HAYES, Senior Chief Yeoman, 7th Coast Guard
District, Miami, Fla.
,For suggesting the transfer of the Transient and Administrative Unit for non-rated personel in the 7th District from Base,
Miami Beach, to Base, Charleston, thereby saving travel expense
and man-days. Estimated annual savings-$10,000. Suggestion award-$500.
CLIFFORD S. HUBBARD, Working Foreman, Construction and Maintenance Division, Bureau of Engraving and Printing
For proposing the removal of electrically heated steam generators
from currency printing presses and the substitution of piped
steam from the building system. Estimated first-year savings$39,140. Special Service Award-$850.
ENl TosHIO MITSUNAGA, Engineman, First Class, Civil Engineering
Branch, 14th Coast Guard District, Honolulu, Hawaii
For successfully developing a "full flow" lubrication oil filter
system for PE-205 diesel engines, thus reducing maintenance
costs and increasing operating efficiency. Estimated savings$19,000. Suggestion award-$775.
ROBERT

J.

MOTTO, Special Agent, U.S. Secret Service, Chicago, Ill.

For decisive and courageous actions under conditions of great
danger in several recent counterfeiting cases, one of which involved his seizure of almost a million dollars in counterfeit
money. Special Service Award-$500.

7

CLARENCE H. RICE, Supervisory Marine Engineer, Naval Engineering
Branch, 8th Coast Guard District, New Orleans, La.
For outstanding contribution in preparing preliminary design,
drawings, and specifications for modernizing two Coast Guard
vessels, thus effecting greater operational capability and eliminating possible replacement cost. Estimated savings-S28,OOO.
Special Service Award-SI,OOO.
RICHARD C. SCHWARTZ, Supervisory General Attorney (Tax), Western
Regional Counsel, Internal Revenue Service, Seattle, Wash.
For the highly exemplary manner in which he effectively managed the legal affairs and directed the personnel of the Seattle
Branch Office. Superior Work Performance Award-$500.
ROBERT L. SPATZ, Supervisory General Attorney (Tax), Enforcement
Division, Office of the Chief Counsel, Internal Revenue Service
For exceptionally competent work in coordinating and preparing the responses of IRS to the Subcommittee on Administrative
Practice and Procedure, Senate Judiciary Committee. Special Act
Award-$500.
JAMES J. SULLIVAN, Customs Inspector, Collector's Office, Bureau of
Customs, New York, N.Y.
For outstanding alertness and dedication to duty in effecting the
seizure of the largest amount of cocaine ever made in this country. Special Act Award-$7S0.
HENRY WINTERS, Naval Architect Technician, Naval Engineering Division, Coast Guard Headquarters, Washington, D.C.
For authorizing the royalty-free use by the Coast Guard of a
patented method of plastic boat construction, thereby enabling
the service to procure a 17-foot utility boat. Special Service
Award-$SOO.
DAVID H. GARVER, Revenue Agent, Audit Division, Albuquerque District, Internal Revenue Service
CLARENCE PHILPOT, Revenue Agent, Group Supervisor, Audit Division, Little Rock District, Internal Revenue Service

8

)~/J
REX O. VOWELL, Revenue Agent, Audit Division, Little Rock District,
Internal Revenue Service
For demonstrating great ingenuity and initiative in the preparation of a chart which eliminated several computations on estimated tax penalties.
Estimated annual savings-$153,102.
Group Suggestion Award-$1,905.
MAYNARD J. PRO, Assistant Chief
HOWARD L. SCHLEISINGER, Chemist
National Office Laboratory, Alcohol and Tobacco Tax Division,
Internal Revenue Service
For imagination, initiative, and untiring effort in developing
methods of analyzing evidence submitted by Treasury Enforcement Officers in connection with traffic in illicit spirits and narcotics, tax fraud, and other criminal activities. Group Superior
Work Performance Award-$l,OOO.
GLENN R. DICKERSON, Assistant Deputy Commissioner, Bureau of
Customs
ALBERT J. FRANCIS, JR., Liaison Officer, Bureau of Customs
J. ELTON GREENLEE, Chief Management Analysis Division, Office of
the Secretary
GEORGE S. MAHARAY, Deputy Director of Personnel, Office of the
Secretary
RAYMOND N. MARRA, Assistant Deputy Commissioner, Bureau of
Customs
ALVIN W. NORCROSS, Assistant to the Director of Personnel, Office
of the Secretary
ROBERT L. SKINNER, Management Analyst, Office of Management and
Organization, Office of the Secretary
JANE B. SPEAR, Management Analyst, Office of Management and Organization, Office of the Secretary.
JAMES E. TOWNSEND, Operations Officer, Bureau of Customs
EDWARD J. WIDMAYER, Senior Budget Analyst, Office of Budget and
Finance, Office of the Secretary
For marked achievement in completing a 2-year study of the
Bureau of Customs resulting in a comprehensive report with
230 recommendations for a thorough modernization program and
more effective administration of Custom laws. Special Service Award-$3,800.
782-05(]··Gii-··

.,

9

AWARDS TO SUPERVISORS
Recognition by the Secretary of notable achievements by supervisors
in encouraging employee contributions to efficiency and economy.
These supervisors were selected from Bureau nominees after con·
sideration of such factors as the size of groups supervised, the value
of contributions, and the nature of action by the supervisor.
GLORIA ARCHAMBAULT, Supervisor, Check Preparation Section, Birmingham Regional Disbursing Office, Bureau of Accounts
For special attention in training a flexible, competent work group
in their various duties and using the Incentive Awards Program effectively to motivate all employees to improve operations.
WESLE'Y S. BOWERS, Personnel Officer, Wilmington District, Internal
Revenue Service
For personal devotion, leadership, and interest in effectively encouraging employee participation in the Incentive Awards Program to the extent that Wilmington District in fiscal year 1965
ranked first among 58 Internal Revenue Districts in suggestions
received per 100 employees.
b.STER CHUNG, Supervisor, Documenting, Signing, and Distribution
Section, Chicago Regional Disbursing Office, Bureau of Accounts
For exceptional ability in achieving increased productivity, general excellence and accuracy in operations through intense
performance appraisal, effective counseling, and recognition of
superior contributions.
WALTER W. CURTISS, Foreman, Construction and Maintenance Division, Bureau of Engraving and Printing
For outstanding leadership and motivation of employees to increase efficiency, resulting in improved operations and substantial
cost reductions.

10

SIDNEY B. FEIWELL, Head, Correspondence and Ruling Unit, Bureau
of the Public Debt, Chicago, Ill.
For conducting a vigorous and effective training program and
consistently stimulating the development of ideas for reducing
costs and improving productivity.
BENJAMIN L. FREDERICK, Foreman, Sheet Processing Section, Surface
Printing Division, Bureau of Engraving and Printing
For exceptionally effective leadership in encouraging and mo·
tivating his employees to be economy-minded and to work
at peak efficiency, thereby substantially increasing overall
production.
SUSIE KENAMOND, Chief, Accounts Branch, Office of the Treasurer,
U.S.
For demonstrated leadership and outstanding effectiveness In
stimulating employees to achieve a consistently high level of
production despite a substantial increase in workload.
ARTHUR H. KLOTZ, Director, Appellate Division. Internal Revenue
Service
For outstanding interest, leadership, and direction of the Suggestion Program in the Appellate Offices throughout the Service.
WILLIAM E. LEUBA, Head of Plastic Products Shop, U.S. Coast Guard
Yard, Curtis Bay, Md.
For proficient leadership in accomplishing the change-over from
wood to plastic boatbuilding including complete retooling of shop
and retraining employees, without loss in production quality or
employee morale.
CATHERINE E. MILLER, Chief, Daily Treasury Statement Branch, General Accounts Division, Office of the Treasurer, U.S.
For attaining a high level of employee performance in a complex accounting and reporting operation through outstanding supervisory skill in motivating employees and recognizing their
achievements with appropriate awards.

Il

RICHARD E. NORTON, Chief, Audit Division, Los Angeles District, Internal Revenue Service
For outstanding initiative and leadership which effectively increased the quantity and quality of employee participation in the
Incentive Awards Program of his Division.
BERNARD J. O'KANE, Chief, Payment Facilities Branch, Philadelphia
Regional Disbursing Office, Bureau of Accounts
For stimulating his employees to exceed established production
standards, to constantly improve operations by means of the suggestion program, to augment their skills through training, and to
support with enthusiasm the goals of the bureau.
ETHELYN P. SWANN, Forewoman, Sheet Section, Postage Stamp Division, Bureau of Engraving and Printing
For exceptional supervisory ability in maintaining excellent employee morale and optimum operating efficiency despite the continuous pressures of new deadlines.
CHARLES G. WARD, District Supervisor, Bureau of Narcotics, Chicago,

Ill.
For effective leadership in promoting the Incentive Awards Program, maintaining high employee morale, and increasing productivity and reducing costs in his District.

12

THE SECRETARY'S ANNUAL AWARDS
TREASURY INCENTIVE AWARDS
PROGRAM
The Secretary of the Treasury presents two honorary awards each
year to recognize bureaus for outstanding participation and results
in the Treasury Department's Incentive Awards Program. One is
given to the bureau showing the best average results in the suggestion phase of the program and the other to the bureau showing the
best average results in the performance phase of the program.

SECRETARY'S AWARD FOR PERFORMANCE
PHASE OF PROGRAM

Office of the Treasurer of the United States
For effective use of incentive awards to recognize employees who significantly exceeded normal job requirements.
In recognition of such performance, over 9 percent of all
personnel of the Office of the Treasurer, U.S. received cash
awards and 2.5 percent received within-grade pay increases for high-quality performance during fiscal year
1965.

SECRETARY'S AWARD FOR SUGGESTION
PHASE OF PROGRAM

Bureau of Accounts
For outstanding achievement in the Bureau's suggestion program during fiscal year 1965. Per 100 employees on its
rolls the Bureau had 10.5 adopted suggestions and estimated savings of $2,667.

CAREER SERVICE RECOGNITION
R~cognitjon

by th~ S~cr~tary of ~mployees in th~ Washington, D.C.,
ar~a who attain~d 50, 45, or 40 y~ars of F~deral servia during fiscal
year 1965.

50 Years of Federal Service
None

45 Years of Federal Service
Elizabeth B. Farr
Frank S. Goodyear
Earl C. McClure
Maude L. Morgan
Carl W. Staats
Roscoe D. Stevens

U.S. Coast Guard
Internal Revenue Service
Internal Revenue Service
Bureau of Engraving and Printing
Bureau of Engraving and Printing
Bureau of Engraving and Printing

40 Years of Federal Service
Lucy Lea Andes
Zella M. Bryner
Ernest L. Elsberry
Clair S. Furr
Ruby G. Henderson
William E. Higman
Ellis B. Klioze
Leighton L. Morgan
Anne M. Mosher
Herman F. Nolte
Orvetta E. O'Brien
Floyd S. Pomeroy
Marguerite Rawalt
Henry A. Remmers
Ernest J. Schlatter
Julia T. Smith
Orlando H. Smith

14

Internal Revenue Service
Internal Revenue Service
Internal Revenue Service
Bureau of the Public Debt
Office of the Secretary
Bureau of Customs
Internal Revenue Service
Internal Revenue Service
Internal Revenue Service
Internal Revenue Service
Internal Revenue Service
Bureau of Customs
Internal Revenue Service
U.S. Coast Guard
Internal Revenue Service
Bureau of Customs
Bureau of Accounts

(")
1'01'

MERITORIOUS SERVICE AWARD
The Meritorious Service Award is next to the highest award which may
be recommended for presentation by the Secretary. It is conferred on
employees who render meritorious service within or beyond their
required duties.
JAMES C. ABBOTT, Regional Disbursing Officer, Philadelphia Regional
Office, Bureau of Accounts
For outstanding performance and excellent management ability
in reducing costs and increasing employee productivity since 1961.
MONROE H. O. BERG (Retired), Formerly Director, Systems Division,
Office of the Assistant Commissioner (Data Processing), Internal
Revenue Service
For exemplary achievement in directing the development of highly
complex procedures, systems, and programs for one of the Nation's largest and most detailed computer processing operations.
MORRIS V. BOLEY, Assistant Technical Consultant to the Director of
the Mint
For outstanding work in the adaptation and installation of machinery for the production of coinage blanks at the San Francisco Assay Office, contributing immeasurably toward relieving
the Nation's critical coin shortage.
ALBERT W. BRISBIN, Assistant to the Deputy Commissioner, Internal
Revenue Service
For outstanding analytical and executive abilities in assisting the
Commissioner and the Deputy Commissioner of Internal Revenue
in policy formulation and direction of the Service.
MARTIN COHEN, Accounting Advisor to the Office of Tax Legislative
Counsel, Office of the Secretary
For marked ability and initiative contributing to the solution of
a wide variety of difficult problems of tax policy and the promotion of closer relationships between Treasury and the accounting
profession.

15

.,
•

SAl\! CEL COHt.!\;, Assistant Regional Counsel (Collection Litigation),
~fid-Atlantic Region, Internal Revenue Service
For exemplary performance of management duties and outstanding action leading to improved procedures in both Federal and
State agencies and changes in statutes of two states.
SIDNEY Cox, Deputy Commissioner for Deposits and Investments,
Bureau of Accounts
For sustained technical and managerial leadership in Governmentwide financial programs concerned with the depositary system,
designation of insurance companies to do surety business, international claims, and investments for trust funds.
DOROTHY DE BORCHGRA VE, Confidential Assistant to former Secretary
of the Treasury Douglas Dillon
For superior knowledge of Government methods and procedures
and intelligence and foresight in the efficient conduct of business in the Office of the Secretary.
FRANK F. DIETRICH (Retired), Formerly Assistant to the Fiscal
Assistant Secretary
For technical expertise and ability to develop and execute fiscal
requirements commensurate with monetary and economic policies
in the field of international finance.
NATHAN N. GORDON, Assistant Director, Office of Tax Analysis and
Director, Office of International Tax Affairs, Office of the
Secretary
For extraordinary professional competence in representing the
United States in international tax conferences. His skill, good
will, and tolerance for the views of other nations earned their
respect and contributed greatly to the success of tax negotiations.
ETHEL HODEL, Special Assistant to the Fiscal Assistant Secretary
For technical mastery, devotion to duty, and good judgment in
making forecasts of cash needs on which all Treasury Department borrowing plans are based.

16

DONALD I. LAMONT, Formerly Special Assistant to the Secretary and
Director, Executive Secretariat
For significant contributions to the travel and entertainment
regulations of the Revenue Act of 1962 and to the solution of
other important substantive issues confronting the Treasury
Department.
EILEEN B. LUSBY, Personnel Officer, Bureau of the Mint
For outstanding achievements in the personnel management,
recruitment and training facets of the Bureau of the Mint's
program of expansion.
ELIZABETH J. MATHENY, Liaison Officer, U.S. Savings Bonds Division
For great devotion to duty and valuable contributions to the
effectiveness of the U.S. Savings Bonds Program.
JOHN F. MORAN (Retired), Formerly Chairman, Treasury Department Destruction Committee, Bureau of the Public Debt
For superior leadership and technical proficiency in the formulation and implementation of destruction regulations and procedures for security items.
MAURICE PARSHALL (Retired), Formerly Chief, Procedure and Closing Agreement Branch, Appellate Division, Internal Revenue
Service
For excellent technical and legal judgment on matters affecting
final closing agreements and in the preparation and maintenance
of Part VIII of the Internal Revenue Manual.
ALBERT J. SCHAFFER, Director, Personnel Division, Internal Revenue
Service
For imaginative program innovations and sound leadership
which have placed the Internal Revenue Service in the forefront of
progressive personnel management.
EARL H. SHACKELFORD, Regional Director, U.S. Savings Bonds Division, Des Moines, Iowa
For dedication to the U.S. Savings Bonds Program and exemplary
performance in developing an active and productive volunteer organization for his Region.

17

CHARLES R. SIMPSON, Formerly Director, Legislation and Regulations
Division, Office of the Chief Counsel, Internal Revenue Service
For outstanding supervision and direction of his personnel and
extremely effective administration resulting in the formulation
and issuance of a record number of new regulations.
HOWARD D. TAYLOR (Retired), Formerly Regional Commissioner of
Internal Revenue, New York, N.Y.
For sound planning and unusually capable leadership in effectively
organizing, directing, coordinating, and controlling the functions
and activities of the New York Region.
JOSEPH S. ZUCKER (Retired), Formerly Principal Technical Advisor
to the Assistant Commissioner (Technical), Internal Revenue Service
For exceptional foresight and superb technical judgment in the
rcviclV of rulings and regulations and in the interpretation of tax
laws.

}8

'-:- ')?

EXCEPTIONAL SERVICE AWARD
This is the highest award which may be recommended fa)' presentation by the Secretary. The award is conferred on employees who
distinguish themselves by exceptional service within or beyond their
required duties.
G. D'ANDELOT BELIN, Formerly General Counsel, Office of the Secretary
For excellent judgment as a counselor to the Secretary of the
Treasury and other officers of the Department, and for highly
effective administration of Treasury Department laws and
regulations.
JOHN C. BULLlTT, Formerly Assistant Secretary for International
Affairs
For exemplary service and significant contributions to the Treasury Department's role in mainta1l11l1g America's position of
strength and leadership in international affairs.
ROBERT A. CARSWELL, Formerly Special Assistant to the Secretary
For valuable assistance to the Secretary, distinguished service in
the formulation of Treasury policy, and unstinting dedication to
duty under sustained and exhausting schedules.
DIXON DONNELLY, Assistant to the Secretary (Public Affairs)
For unique contribution to the Treasury Department and to
the Nation in bringing about better public understanding and
acceptance of fiscal policies.
HENRY J. DONNELLY, JR., (Retired), Formerly Director, Audit Division, Office of the Assistant Commissioner (Compliance), Internal
Revenue Service
For resourceful management and the many significant improvements he made while directing the activities of the largest
enforcement program of the Internal Revenue Service.

19

HAROLD R. GEARHART (Retired), Formerly Commissioner of Accounts
For dynamic leadership and sustained record of accomplishments
in reducing costs and increasing productivity in the Bureau of
Accounts
KENNETH A. MORROW, Special Agent, U.S. Secret Service
For outstanding courage and voluntary risk of personal safety
in saving the life of a colleague and apprehending an armed
fugitive sought for forgery.
RICHARD W. NELSON (Retired), Formerly Director, Research Division,
Office of the Assistant Commissioner (Planni ng and Research),
I nternal Revenue Service
For distinguished professional competence in developing information for legislative and administrative actions which increased
the efficiency of tax administration and reduced the burdens on
taxpayers.
FRED B. SMITH, Acting General Counsel. Office of the Secretary
F or dedication to publ ic service and high professional attainments contributing immeasurably to effective operations of the
Department.
JAMES H. STOVER, Director, Office of Management and Organization,
Office of the Secretary
For capable direction of a 2-year study of the Customs Bureau resulting in comprehensive recommendations for a thorough modernization program.
CHARLES A. SClL/VAN, Assistant to the Secretary (National Security
Affairs)
For successful efforts in substantially reducing the Nation's balance of payments by developing, coordinating and negotIating
purchases of United States military equipment by foreign
countries.
RONALD JAY SZEGO, Special Agent, U.S. Secret Service
For exemplary courage in the apprehension of a fugitive wanted
for forgery and armed robbery, during the course of which he was
struck by pistol fire.

20

DAVID R. TILLINGHAST, Formerly Special Assistant to Assistant Secretary Stanley S. Surrey
For excellent legal ability and substantial contributions to the
modernization of the Department's procedures and policies for
negotiating international tax treaties.
PAUL A. VOLCKER, Deputy Under Secretary for Monetary Affairs
For high technical competence in the analysis of economic problems and outstanding contributions to Treasury policies in domestic and international financial areas.
ROBERT A. WALLACE, Assistant Secretary of the Treasury
For conspicuous contributions in three important and diverse
fields-development of economic policy, resolvement of problems
in the nationwide coin shortage, and equal employment opportunity within the Department.
ARTEMUS E. WEATHERBEE, Assistant Secretary of the Treasury for
Administration
For exceptional ability and leadership in the formulation of policies, programs, and procedures for achieving effective use of the
Department's physical, human, and financial resources.

21

ALEXANDER HAMILTON AWARD
This award iJ- conferred by the Secretary, to persons designated by him
to be so honored. It is generally restricted to the highest officials of
the Department who have worked closely with the Secretary for a
substantial period of time and who hat'e demonstrated outstanding
leadership during that period.
MORTIMER M. CAPLIN, Formerly Commissioner of Internal Revenue
For dedication and notable achievements in strengthening taxpayer confidence in Federal tax administration and improving the
efficiency of the Internal Revenue Service
ROBERT V. ROOSA, Formerly Under Secretary of the Treasury for
Monetary Affairs
For extraordinary service to the Department and to the Nation
in effective management of the public debt, in providing a solid
financial base for the Nation's vigorous economic growth, and
in greatly strengthening the international monetary system.
STANLEY S. SURREY, Assistant Secretary of the Treasury for Tax Policy
For unparalleled accomplishments in the area of tax policy and
his crucial role leading to the enactment of the most comprehensive program of income tax reduction and reform in the Nation's
history.

Os

COUIINN,,,, fldHllNG OFFlCE.191$D'

- 8 the pound.

1 would emphasize that this action c...

of new measures taken by the British

IOVerDa8llt

upoD

the be.l.

to atreDlthea

Britain's long-term national program to stabilize coata aDd price.
so as to improve the eo.petitive position of Great IritalD in
international marketa.

The main effect of the

1'l8W arr8D8~t.

with respect to the pound will thus be to exploit and retnforce

Britain' s already encouraging movement toward equl1ibriu. 1D ita
international payaaalts.

- 7 Let me add that the re-ex.illaticm of the Free Werl.· I

into the workings of the tntemati. .l . . .tary ayat_ ......11, •

••peet..

In this respect. I founcl that there . _ a lhIbat.at1a1

intereat, which I abare. in aiviDg iIlerea.eel att_tlOD to the

prOflJl' way of aehlwf.1lI and . .iDtai1llag ba1aDc. lD iaterutioul
payment. in s_eral t by means that would improve the adjuac..t

process for surplus aDd deficit countries .11ke.
I was extremely plea.eel that during .,. vi.it 1n Burope -

were able to participate ill • joint action with DiDe otbel' uti. .

and the Bank for lnternatioaal Sett18Dellta to consolidate ....
further the trend of growing confidence in the future of the
British pound.

1 refer to the action announce4 laat f r i . by eM

Bank of England for new arrangeDellta to eab.,ce the I~ of

- 6 preparatory discus.ton ad negotiatioD, to Slve adequate opportunity for the participation of the

_.her

couatri. . of tba

Iuternatlonal Moaetary I'uDcl other tha tM Group ofT• •
Succes.ful completion of praparatioa8 alOD& the.. lta..
would, we are ccmvlDced. lay • fina basia for a --laafal

conference

OIl

international . . .tary UTIID8--U.

Tile appnprlate

foX'll and nature of such a conference abould beeOlls cl. . . . 8d _
move further iDto the preparatory pbaa. . I ban _t:iaaed.

AI for th, t1a!g of the initial sgae. of the••

1IOV81, it

was agreed that the t1lae of the ADDu.l Hettina of the Jat:eaattoaal

Monetary FUDCl, beginDing September 27 t will offer _ _ ll_c
opportunity to concert procedures, .iDee it will brlDa COSedler,
in Washington, policy'-iDa officials of the Croup of tt_ _ t1oaa.
who can DlMt to provide new inatructiou to their

o.pud.M.

- 5 -

and the Bank for International Settlements, as well as from the
Swiss National Bank.
Second:

Discussions must now be raised from the technical

level to the high policy level, and active negotiations initiated
at that level.

A new mandate for the resumption and completion

without delay of the unfinished work of the Deputy Finance
Ministers of the Group of Ten nations would be a practical and
speedy way of beginning the first stage of these negotiations -hopefully next month.
We found a good measure of support for a point that
the United States delegation made in all of the talks, that to
be sound and lasting, improvement of the Free World monetary
system must serve the interests of all the members of the
International Monetary Fund

including those of the developing

countries. We believe that arrangements should be made for a second
phase of

- 4 arrang-.ent ••
The work at the level of the Deputie. was d1.contlaued while
a study p-oup of technical adviaora to the Deputl•• COIlduct.l _
intensive exadnatl00 of "ay. ill which addltional reMrYe ....te

might be cr.ated wlth6r by • new procedure or by a furth.e¥ u. . . .
develop.eot of existing r . . .rve claw.

Fund.

OIl

the Iat. . . .tloDall«oMt.

'!'his study, known as Th. 0.8Ola Report, . . . . . . public ..

Auauat 10.
Th. ten Datlona in thl. group are the couatrle. 1Ibich an tI&I
principal holders of .anetary re.erve. and aoarcu of latamats..e1

lDODetary credits in the Free World.

The,. are Belli_, C. . . . .

Prance. GerlMDy, Italy, Japan. the Metberlancla, S..... , tile UaltM
Kingdom ad the United Stat...

'lbe Group of T_ baa

-J"'"

tba

Fund, the OrpnizatlOft for Icca.om.c Cooperatioa . . ~,

- 3 .... tWe we found that there i. complete accorcl with our vi.,
that i.t 1s equally or even 1IIOre iaportaDt that va _lDtala
equili.brl~

in our balance of pa,..t. , in order to pruerva . .

protect the po.ition of the exiat1ng and very

w.

~rtaDt

dollar

found alao a general conaenaua that active di.CU8810De

1.(.;' /. -;,;;?

/ ; , .) 1'1 ..

~

I ::;;

<.' .liouid beain 1n the near future, at: the level of policy....laa
I

,

officiale.
JlUch of our talks focuaec:l OIl the

IDOve forward toward the.. goals.

.eana by which we could belt

Here. too. 1 _

biIIIP7

to be

.11

to report aeveral ar_ of agrement:

Firat:

l'he work should bep.n by r ....i:na aacl COIIplet1a& •

unfinished taak of the Deputies of the HiIli.tere aad c.tral ...
Governor. of the nationa kDowo .a the Group of

r_.

wbo

-ial

the pa8t several years have beeD ......1aa the Fr. . WocU' •••••

Our alma were aoclest aacl pralllli.a8y. but all &be _

Datl00a abare our view that there i • • aeecI to .ove . . to ••c
in IDOtion high-level discus.lou 1ookiD&

~

illproriaa eM

matter of prudent cOQti.D&a\Cy plaD1a&. provlaloa f _ _ ......ee

future aupply of ___ tar)' reaervu; .ad. HCODd. to tI:7 to Mtlll
upon procedures to be followed in arriving at a cona.1WI _ ....C
should be done.
It La moat p"atlfyiDg that . . found there ,.

_._&1 ....

meot that preMllt clrcu.at_cea do 1Dcleeci call for __ u .... utiola

1D .aaetary reaervea will beco.e DeCeuary . . u.s. cIeftoit8-

1oo&er provide Dew reaervea to the r ..e of the world. At die

OfIlUG .DlMES IY lKCIlftay . . 111& DUIUU
HBDY H. POWLD
AT A NEWS COIiFDDIc.E, 'l'UBSMY. SUtiMID 14. 4: 00

011 USULTS

or au

BY. U . . . .

r •••

AUGUST 30 to SEPTIMIIl 10, 1965

Earlier today, Under Secretary of State CJeorp . .11 . . 1
reported to the Pre.idet in .... detail the YUJ aratifylJla r ...ltl
of our visit to Cont1neDtal Europe and. the UIlitecl

KlDs". 1_

glad of this opportunity to diacua. the result. vith the ,nal . .

__ :~ ~•.-lia.) ~By=-~.y=-:o~f;-:.r==--:--==~-:-:77-=-~"""'-

sUit. r

I

ll try

1 visited frace, ltal"

Ge%W8DY, Swede, "1&1_. the

Nether land., and the United Jt1ngclQa ill that order.

frlor to the

round of talks in Europe, I had confen"e4 in W.ahiDltca with

Canadian and Jap.e•• officiale.

I wu accorapaied

OIl

.at of tba

trip by Under Secretary Ball, and throqbout by the UDder . . . .tar1
of the Treasury for Hoaetary Affaira, Frederick

o..1D&.

TREASURY DEPARTMENT
Washington

OPENING REMARKS BY SECRETARY OF THE TREASURY
HENRY H. FOWLER
AT A NEWS CONFERENCE, TUESDAY, SEPTEMBER 14, 4:00 P.M.
ON RESULTS OF HIS TALKS IN EUROPE
AUGUST 30 TO SEPTEMBER 10, 1965
Earlier today, Under Secretary of State George Ball and
I reported to the President in some detail the very gratifying
results of our visit to Continental Europe and the United
Kingdom. I am glad of this opportunity to discuss the results
with the press and other news media.
I visited France, Italy, Germany, Sweden, Belgium, the
Netherlands, and the United Kingdom in that order. Prior to
the round of talks in Europe, I had conferred in Washington
with Canadian and Japanese officials. I was accompanied on
most of the trip by Under Secretary Ball, and throughout by
the Under Secretary of the Treasury for Monetary Affairs,
Frederick Deming.
Our aims were modest and preliminary, but all the same
vitally important: first, to determine whether these other
nations share our view that there is a need to move now to
set in motion high-level discussions looking toward improving
the workings of the international monetary system, including, as
a matter of prudent contingency planning, provision for an
adequate future supply of monetary reserves; and, second, to
try to settle upon procedures to be followed in arriving at
a consensus on what should be done.
It is most gratifying that we found there is general
agreement that present circumstances do indeed call for
re-examination of the Free World's monetary arrangements,
and that we should plan now for the time ahead when new ways
of providing for the growth in monetary reserves will become
necessary as U. S. deficits no longer provide new reserves to
the rest of the world. At the same time we found that there
is complete accord with our view that it is equally or even
more important that we maintain equilibrium in our balance of
payments, in order to preserve and protect the position of
the existing and very important dollar component of world
reserves.

F-188

- 2 -

We found also a general consensus that active
discussions and negotiations should begin in the near future,
at the level of policy-making officials.
Much of our talks focused on the means by which we
could best move forward toward these goals. Here, too, I am
happy to be able to report several areas of agreement:
First: The work should begin by resuming and
completing the unfinished task of the Deputies of the
Ministers and Central Bank Governors of the nations known as
the Group of Ten, who during the past several years have been
assessing the Free World's monetary arrangements.
The work at the level of the Deputies was discontinued
while a study group of technical advisors to the Deputies
conducted an intensive examination of ways in which additional
reserve assets might be created either by a new procedure or
by a further use and development of existing reserve claims
on the International Monetary Fund. This study, known as
The Ossola Report, was made public on August 10.
The ten nations in this group are the countries which
are the principal holders of monetary reserves and sources
of international monetary credits in the Free World. They
are Belgium, Canada, France, Germany, Italy, Japan,
the Netherlands, Sweden, the United Kingdom and the
United States. The Group of Ten has enjoyed the assistance
in its work of experts from the International Monetary Fund,
the Organization for Economic Cooperation and Development,
and the Bank for International Settlements, as well as
from the Swiss National Bank.

- 3 -

Second: Discussions must now be raised from the technical
level to the high policy level, and active negotiations initiated
at that level. A new mandate for the resumption and completion
without delay of the unfinished work of the Deputy Finance
Ministers of the Group of Ten nations would be a practical and
speedy way of beginning the first stage of these negotiations -hopefully next month.
We found a good measure of support for a point that the
United States delegation made in all of the talks, that to
be sound and lasting, improvement of the Free World monetary
system must serve the interests of all the members of the
International Monetary Fund -- including those of the developing
countries. We believe that arrangements should be made for
a second phase of preparatory discussion and negotiation, to
give adequate opportunity for the participation of the member
countries of the International Monetary Fund other than the
Group of Ten.
Successful completion of preparations along these lines
would, we are convinced, lay a firm basis for a meaningful
conference on international monetary arrangements. The appropriate form and nature of such a conference should become
clearer as we move further into the preparatory phases I have
mentioned.
As for the timing of the initial stages of these moves, it
was agreed that the time of the Annual Meeting of the International
Monetary Fund, beginning September 27, will offer an excellent
opportunity to concert procedures, since it will bring together,
in Washington, policy making officials of the Group of Ten
nations, who can meet to provide new instructions to their
Deputies.
Let me add that the re-examination of the Free World's
monetary arrangements to be undertaken must, of course, enter
into the workings of the international monetary system generally,
and the talks I have just had touched upon some of these broader
~spects.
In this respect, I found that there was a.substantial
interest, which I share, in giving increased attention to the
proper way of achieving and maintaining balance in international
payments in general, by means that would improve the adjustment
process for surplus and deficit countries alike.

- 4 I was extremely pleased that during my visit in Europe we
were able to participate in a joint action with nine other nations
and the Bank for International Settlements to consolidate and
further the trend of growing confidence in the future of the
British pound. I refer to the action announced last Friday by
the Bank of England for new arrangements to enhance the strength
of the pound. I would emphasize that this action came upon the
heels of new measures taken by the British government to
strengthen Britain's long-term national program to stabilize
costs and prices so as to improve the competitive position of
Great Britain in international markets. The main effect of the
new arrangements with respect to the pound will thus be to
exploit and reinforce Britain's already encouraging movement
toward equilibrium in its international payments.

000

- 3 -

sale or other dispcJsitlon of 'l'lcClour'y Lill,; dops not
such, under the Internal Revenue Code of 1954.

have

Clny special treatment, as

The bills are subject to estate,
f~

inheritance, gift or other excise taxes, whether Federal or State, but are exempt

all taxation now or hereafter imposed on the principal or interest thereof by any Sta'
or any of the possessions of the United States, or by any local taxing authority. Fo
purposes of taxAtion the amount of discount at which Treasury bills are originally
by the United states is considered to be interest.

80

Under Sections 454 (b) and 1221 (:

of the Internal Revenue Code of 1954 the amount of discount at which bills issued herl
under are sold is not considered to accrue until such bills are sold, redeemed or othl
wise disposed of, and such bills are excluded from consideration as capital assets.
Accordingly, the owner of Treasury bills (other than life insurance companies) issued
hereunder need include in his income tax return only the difference between the price
paid for such bills, whether on original issue or on subsequent purchase, and the

&00'

actually received either upon sale or redemption at maturity during the taxable year
for which the return is made, as ordinar7 gain or loss.
Treasury Department Circular No. 418 (current revision) and this notice, prescril
the terms of the Treasury bills and govern the conditioDs of their issue.
the circular may be obtained from any Federal Reserve Bank or Branch.

Copies of

- 2 -

printed fonns and forwarded in the special envelopes which will be supplied by Fede
Reserve Banks or Branches on application therefor.
p~

Banking institutions generally may submit tenders for account of customers
vided the names of the customers are set forth in such tenders.

others than bank1J:

institutions will not be pennitted to submit tenders except for their own account.
Tenders will be received without deposit from incorporated banks and trust compan1E
and from responsible and recognized dealers in investment securities.

Tenders

f~

others must be accompanied by payment of 2 percent of the face amount of Treasury 1
applied for, unless the tenders are accompanied by an express guaranty of payment l
an incorporated bank or trust company.
Immediately af'ter the closing hour, tenders will be opened at the Federal ResE
Banks and Branches, following which public anouncement will be made by the
Department of the amount and price range of accepted bids.
will be advised of the acceptance or rejection thereof.

Treasu~

Those submitting tendel

The Secretary of the TreaE

expressly reserves the right to accept or reject any or all tenders, in whole or II
part, and his action in any such respect shall be final.

Subject to these

rese~'

tions, noncompetitive tenders for each issue for $200,000 or less without stated
price from anyone bidder vill be accepted in full at the average price (in three
decimals) of accepted competitive bids for the respective issues.

Settlement for

accepted tenders in accordance with the bids'must be made or completed at the
Reserve Bank on September

kta

1965

Fe~l

, in cash or other immediately avsilBble 1\

or in a like face amount of Treasury bills maturing

September 23 ~ 1965

•

cast

(U
and exchange tenders will receive equal treatment.

Cash adjustments will be made 1

differences between the par value of maturing bills accepted in exchange and the if
price of the nev bills.
The income derived from Treasury bills 1 whether interest or gain from the sale
other disJX)sition of the bills, does not have any exemption, as such, and loss frcJ1

TREASURY DEPARTMENT
Washington

September 15, 1965

FOR IMMEDIATE RELEASE,
XXXXXX~XXXXXXXXXXXK

TREASURY'S HEEKLY BILL OFFERING
The Treasury Department, by this public notice, invites tenders for two series

of Treasury bills to the aggregate amount of $ 2,200,000,000 , or thereabouts, for

(1i)

cash and in exchange for Treasury bills maturing September 23, 1965 , in the amount
~
of $2,205, 7~ 000 , as follows:
)
91 -day bills (to maturity date) to be issued September 23, 1965 ,
(I)
~
in the amount of $ 1,200,000,000 , or thereabouts, represent-

(X)
ing an additional amount of bills dated June 24, 1965

(iiQ

and to mature December 23, 1965

(I)

,originally issued in the

amount of $ 1,001,519,000 , the additional and original bills
(~)

to be freely interchangeable.
182 -day bills, for

(ll)

$ 1,000,000,000 , or thereabouts, to be dated

(Ia)
September 23, 1965 , and to mature March 24, 1966

63i)

QB)

The bills of both series will be issued on a discount basis under competitive
and noncompetitive bidding as hereinafter provided, and at maturity their face
will be payable without interest.

~w

They will be issued in bearer form only, and in

denominations of $1,000, $5,000, $10,000, $50,000, $100,000, $500,000 and

$l,OOO,~

(maturity value).
Tenders will be received at Federal Reserve Banks and Branches up to the clos1J
Daylight Saving
hour, one-thirty p.m., Eastern/~ time, Monday, September 20, 1965
• Tendl
(n)
will not be received at the Treasury Department, Washington. Each tender must be
for an even multiple of $1,000, and in the case of competitive tenders the price
offered must be expressed on the basis of 100, with not more than three decimals,
e. g., 99.925.

Fractions may not be used.

It is urged that tenders be made on the

TREASURY DEPARTMENT

FOR IMMED IA TE RELEASE

TREASURY'S WEEKLY BILL OFFERING
The Treasury Department, by this public notice, invites tenders
for two series of Treasury bills to the aggregate amount of
~,200,000,000, or thereabouts, for cash and in exchange for
Treasury bills maturing September 23,1965, in the amount of
$ 2,205,738,000, as follows:
91-day bills (t:) maturity date) to be issued September 23, 1965,
in the amount of $ 1,200,000,000, or thereabouts, representing an
additional amount of bills dated June 24,1965,
and to
mature December 23,1965, originally issued in the amount of
$1,001,519,000, the additional and original bills to be freely
interchangeable.
182-day bills, for $ 1,000,000,000, or thereabouts, to be dated
September 23,1965, and to mature
March 24,1966.
The bills of both series will be issued on a discount basis under
competitive and noncompetitive bidding as hereinafter provided, and at
maturity their face amount will be payable without interest. They
will be issued in bearer form only, and in denominations of $1,000,
$5,000, $10,000, $50,000, $100,000, $500,000 and $1,000,000
(maturity value).
Tenders will be received at Federal Reserve Banks and Branches
up to the closing hour, one-thirty p.m., Eastern Daylight Saving
time, Monday, September 20, 1965.
Tenders will not be
received at the Treasury De~artment, Washington. Each tender must
be for an even multiple of $1,000, and in the case of competitive
tenders the price offered must be expressed on the basis of 100,
with not more than three deCimals, e. g., 99.925. Fractions may not
be used. It is urge::i that tenders be made on the printed forms and
forwarded in the spp.cial envelopes which will be supplied by Federal
Reserve Banks or Br'3.nches on application therefor.
Banking institJtions generally may submit tenders for account of
customers provided the names of the customers are set forth in such
tenders. Others than banking institutions will not be permitted to
submit tenders except for their own account. Tenders will be received
without deposit from incorporated banks and trust companies and from
responsible and recognized dealers in investment securities. Tenders
from others must be accompanied by payment of 2 percent of the face
amount of Treasury bills applied for, unless the tenders are
aCcompanied by an express guaranty of payment by an incorporated bank
or trust company.
F-189

- 2 -

Immediately after the closing hour, tenders will be opened at the
Federal Reserve Banks and Branches, following which public announcement will be made by the Treasury Department of the amount and price
range of accepted bids. Those submitting tenders will be advised
of the acceptance or rejection thereof. The Secretary of the Treasur
expressly reserves the right to accept or reject any or all tenders,
in whole or in part, and his action in any such respect shall be
final. Subject to these reservations, noncompetitive tenders for
each issue for $200,000 or less without stated price from anyone
bidder will be accepted in full at the average price (in three
decimals) of accepted competitive bids for the respective issues.
Settlement for accepted tenders in accordance with the bids must be
made or completed at the Federal Reserve Bank on September 23,1965, i'
cash or other immediately available funds or in a like face amount
of Treasury bills maturing September 23,1965.Cash and exchange tende
will receive equal treatment. Cash adjustments will be made for
differences between the par value of maturing bills accepted in
exchange and the issue price of the new bills.
The income derived from Treasury bills, whether interest or
gain from the sale or other disposition of the bills, does not have
any exemption, as such, and loss from the sale or other disposition
of Treasury bills does not have any special treatment, as such,
under the Internal Revenue Code of 1954. The bills are subject to
estate, inheritance, gift or other excise taxes, whether Federal or
State, but are exempt from all taxation now or hereafter imposed on
the principal or interest thereof by any State, or any of the
possessions of the United States, or by any local taxing authority.
For purposes of taxation the amount of discount at which Treasury
bills are originally sold by the United States is considered to be
interest. Under Sections 454 (b) and 1221 (5) of the Internal
Revenue Code of 1954 the amount of discount at which bills issued
hereunder are sold is not considered to accrue until such bills are
sold, redeemed or otherwise disposed of, and such bills are excluded
from consideration as capital assets. Accordingly, the owner of
Treasu ry bi lls (other than life insurance companies) issued hereunder
need include in his income tax return only the difference between
the price paid for such bills, whether on original issue or on
subsequent purchase, and the amount actually received either upon
sale or redemption at maturity during the taxable year for which the
return is made, as ordinary gain or loss.
Treasury Department Circular No. 418 (current revision) and this
notice prescribe the terms of the Treasury bills and govern the
conditions of their issue. Copies of the circular may be obtained fr
any Federal Reserve Bank or Branch.
000

1865

I
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-2-

Commodity

.~_b301ute

Unit of
Quanti t-y

Period and Quantity

. Imports as of
Sept. 11, 1965

0uotas:

Butter substitutes containing over 45% of butterfat,
and butter oil •••••••••.••

Calendar year

Fibers of cotton processed
but not SP'.ID ••••••••••••••

Peanuts, shelled or not
shelled, blanched, or
othert-Jise prepared or
preserved (except peanut
butter)

••••••••••••••••• 0

1,200,000

Pound

12 mos. from
Sept. 11, 1964

1,000

Pound

12 mos. from
Sept. ll, 1965

1,000

Pound

12 mos. from
August 1, 1965

l/

Status as of September 13, 1965.

~/

Imports as of September 10, 1965.

F-190

Quota fUled

,

1,7 09,000

Pound

594,84f

I

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1865
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TREASURY DEPARTHmT
1:Jashington

DflJ-IEDIA TE RELEASE

THURSDAY, SEPTEMBER 16, 1965

F-190

The Bureau of Customs announced today preliminary figures on imports for
consumption of the following commodities from the beginning of the respective
quota periods through September 4, 1965:
Commorlity

.i

Period and Quantity

:Uni t of : Imports as of
!Quantity i Sept. 4, 1965

Tariff-Rate Quotas:
Cream, fresh or sour ••••••••

Calendar year

1,500,000 Gallon

804,042

1"hole I1ilk, fresh or sour •••

Calendar year

3,000,000 Gallon

53

Cattle, 700 Ibs. or more each July 1, 1965 (other than dairy cows) ••• Sept. 30, 1965
Cattle, less than 200 Ibs.

120,000 Head

35,422

200,000 Head

61,746

each ••••••••••••••••••••••

12 mos. from
April 1, 1965

Fish, fresh or frozen, filleted, etc., cod, haddock,
hake, pollock, cusk, and
rosefish ••••••••••••••••••

Calendar year

24,383,589 Pound

Tuna Fish •••••••••••••••••••

Calendar year

66,059,400 Pound

31,396,725

12 mos. from 114,000,000 Pound
Sept. 15, 1964 45,000,000 Pound

Quota filled
Quota ~lled

Nov. 1, 1964 Oct. 31, 1965

Quota filled

1:ihite or Irish potatoes:
Certified seed ••••••••••••
Other •••••••••••••••••••••

Knives, forks, and spoons
~dth stainless steel
handles •••••

1/

0

•••••••••••••

69,000,000 Pieces

Quota

filled-~/

Imports for consumption at the quota rate are lL~ted to 18,287,691 pounds
during the first 9 months of the calendar year.

TREASURY D8PAIlTHENT
Hashington
n~rnIATE REL~:ASE

THURSDAY, SEPTEMBER 16, 1965

F-190

'The Bureau of CustOMS announced toda;", preliminary figures on imports for
consumption of the following commodities from the beginning of the respective
quota periods through September 4, 1965:

·•••

Commorlity

T.~ri ff'-Rate

Period and Quantity

:Unit of ~ Imports as of
!Quantity t Sept. 11, 1965

'1uotas:

Cream, fresh or sour ••••••••

Crtlendar year

1,500,000 Gallon

80u,0!(?

l'!ilk, fresh or sou.r •••

Calenriar year

3,000,000 Gallon

53

':~lOle

e;)t tle, 7DO Ibs. or more each July 1, 1965 Sept. 30, 1965

120,000 Head

3S,422

••••••••••••••

12 mos. from
\pril 1, 1965

200,000 Head

61,746

Fish, .fresh or frozen, filleted, etc., cod, haddo ck,
hake, pollock, cusk, :md
rose fish .••.•...•.••••••.•

Calendar year

211,383,589 Pound

Tuna ?ish •••••••••••••••••••

Calendar year

66,059,400 Pound

31,396,72)

"nitr or Irish potatoes:
Certified seed ••••••••••••
Other .••.•••••••••••••••••

12 mos. from 114,000,000 Pound
Sept. 15, 1961J 45,000,000 Pound

Quota filled
Quota filled

fnives, forks, and spoons
~Qth stainless steel
handles •••••••••••••••••••

Nov. 1, 1964 Oct. 31, 1965

Quota filled

(other than ciairy

COlvS)

•••

Gattle, less than 200 Ibs.
eR C!l

!/

•••••••

0

!

69,000,000 Pieces

Quota

fillecr~;i

Imports for consumption at the quota rate are limi ten to 18,287,691 pounds
'luri.ne the first 9 months of the calendar year.

-2-

Cormnodity

Butter suhstitutes containing over 45% of butterfat,
and butter oil ••••••••••••
of cotton processed
but not spun ••••••••••••••

~ibers

Pe.:muts, shelled or not
shellp.0, , blanched, or
othen·rise prepared or
preserver] (except peanut
bu tter) ••••••••••.•••••••

1,200,000

Pound

12 mos. from
Sept. 11, 1964

1,000

Pound

12 mos. from
Sept. 11, 1965

1,000

Pound

I? mos. from
August 1, 1965

1,709,000

Pound

Calendar year

];/Status as of Septem:'1er 13, 1965.

?/

Imports as of September 10, 1965.

F-190

Unit of
Quantity

Period and Quantity

)

:
: Imports as of
Sep·~.

ii, 1965

Quota filled

.'y,

1866

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TREASU~Y

DEPARTHENT

1:1 ashington

HllIEDIATE :-1.ELEASZ

THURSDAY, SEPTEMBER 16, 1965

The Bureau
figures shm,ring
to September 1~,
lished pursucmt

F-191

of Customs has announced the following preliminary
the imports for consumption from January 1, 1965,
1965, inclusive, of commodities under quotas estabto the Philippine Trade Agreement Revision Act of

1955:

Cor.rrr..odity

: Established ."'nnual
Quota Quantity

Unit of : Imports as of
Quantity
Sept. 4, 1965

·......
........

120,000,000

Number

Coconut oil •••

268,800,000

Pound

Quota filled

6,000,000

Pound

4,635,9 09

3,900 ,000

Pound

3,hoo,812

Buttons
Cigars

Cordage
To~Clcco

·......
·......

510,000

Gross

290,557
6,425,396

TREASURY DEPARTI1ENT
IIJashington

IMHEDIATE RELEASE

THURSDAY, SEPTEMBER 16, 1965

The Bureau
figure s showine
to September )),
lishe~ pu.rsuant

F-191

of Customs has announced the following preliminary
the imports for consumpti on from J anua!"J 1, 196:;,
1965, inclusive, of commodities under quota.s estabto the Philippine Trade ft~reem~nt Reviston ~.ct of

1955:

Cor1r'.orii t:,r

3uttons
Cigars

·......

........

...
Cordage ·......
ToQ[1.cco ·......
Coconut oil

~st"lhlished
(~uot!1

~nnual

Qlln.ntity

510,000

Unit or'
~~uC:.nti ty
Gross

Imports ao o r·~
Sept. I ~ , 1965

290,557
6 ,1,2 5, 396

1?0,000,000

Number

268, ,300,000

Pound

Quota filled

6,000,000

Pound

)~,635,909

3,900,000

Pound

3,)~00,0l2

'l'RJ'.1SURY DEP.1R'rlmft'
WUh1agtOll, D. C.
.JlIiQ:DI.l'B RELI:.1.SJ:

THURSDAY, SEPTEMBER 16

F-192

1965

--......:....~~L-...:=~~9PPJRijlt:t,:liiMri~bil~RYnnAmDrCli :JlII»ORTS ,CIt CONSUWP'l'IOR or u.awrAC1'URED LEAD AliD ZINC CHARGEABLE 'to THE OUOT.iS
BY" PRESIDI:N'rIAL PRcx::LlMlT'ICif NO. 3257 or SEP'i'D'BER 22, 1958, .AS MODIFIED BY 'IRE TiRDT SCH£Im,ES

ESTABLISHED
OJ' THE

URl.TED SDftS, 1fHICIl BIXaME EJTIX:TIVJ: AUGUS'1' 31, 1963.

ClUiRTERLY QUOD. PIlUOD - July 1, 1965 - September 30, 1965
IWPOR'l'S - July 1, 1965 - September 10, 1965 (or as noted)
IT'QI

c...a'bT

L.M-bear1D4l or..
... matd'iala

.~

Pl'M1IIri1_

.u.tral1a

925,01e

n'IM 9!!Se03-

••

~1"''''
lead
waate aDI . . . .,

I

•

:I

I

•
11,220.000.

11,220,000

22,540,000

l'1'Df 925.02-

lTD(

925.04'

ZiM-beariDC ore. aM
materiala

9,210,590

'a....(total)

Bel.f1~

1M.

Bollrla
r~.

5,040,000

··'824,218

13,440,000

13,44°,,°00

15,920,000

···1),955,0°5

66,480,000

7,520,000

7,520,000

37,840,000

37,840,000

3,eoo,000

···1,102,)00

56,780,7°7

6,320,000

·"6,219,9~

18,694,714

3,760,000

••• 2,907,6"

5.,440,000

'··5,4)8,a.r

66,480,000

ltaq

Marl..
P....

16,leQ,OOO

16,160,000

36,880,000

30,037,060

70,480,000

12,880,000

11,411,612

35,120,000

t.be eo.,.
r ___17rBelC1aa
C.,.)

~ll• •

'4Ua. So. A1'J'1_

14,880,000

14,880,000

TWC_laria
.All .tber
oountrle. (total)

6,560,000

-s••

•• '6,050,586

Part 2, A,peD4h to Tariff Seheclul.e ••
"bpub11.o of South Atrloa.
···lapert, ae .r Sept,.b,. 1), 1,65.
PREPARED :Ill '1'RlI: BURJ:&.U 01' ClJSTCIIE

15,760,000

'··10,658,914

6,080,000

···4,)74,4611

.
•

17,-.0.000

17,840,000

6,080,000

6,080,OOt

TRU.SURY DJ:P~
Wuh1Dgton, D. C.
~un

RELI:.lSJ:

THURSDAY, SEPTEMBER 16

F-192

1965

--'-"':";:";="=':'=-=-.l.-::::"::'::'="'-:::"=:!:.!.!:ip~Ritt:[;,~iiirj~lIi1ltRYnDAmn£ CIf

m»ORrS

rem

CClfSUMPTIOR 01' tMaIIUJ'AC'!'URED LUD Alm ZINC CHJ.RGEABLJ: i'O THE OUO'US ESTABLISHED

BY PRESIDJ:N'fIAL PRcx:LAIA'fI(JI' NO. 3257 or SEP!"DmER 22, 1958, AS t.«>DD'nD BY 'IlIJ: TiRDT SCBEOOLI:S 01' TIlE
UNn'ED S'UDS, 1fHICII BJXaME tl'n~1V1! AUGUST 31, 1963.

QUARTERLY

PERIOD - July 1, 1?65 - Septelllber 30, 1965

QlJorA

IWP~

I'l"Al 925.01 e

c...'b7
et

LeM-bearu.; ore.
aDd.

PrMueU..

-.terlal.

11,220.000.

.u.tral.1a

11,220,000

- July 1, 1965 - September 10, 1965 (or as noted)
IftM 925.03-

~1"''''
lead,....te
.......

22,540,000

••
I

lTDf 925.04-

I'1'Dl 925.02I

Z1...-b.ariDC oree aM
-.teriala

...
(total)

Bolln..
('--.ta

5,040,000

···824,218

13 ,""-40 ,000

13,440,000

15,920,000

···13,?55,005

66,480,000

7,520,000

7,520,000

37,840,000

37,840,000

3,600,000

···1,102,3°0

56,780,7°7

6,320,000

···6,21?,?5?

18,694,714

3,760,000

···2,9°7,693

5.,440.000

···5,4)8,847

6,080,000

6,080,000

66,480,000

ltal,.

Min..

36,880,000
16,UIQ,OOO

Pen

16,160,000

12,880,000

30,037,060

70,480,000

1I,411,612

35,lZO,000

~l.1• •f tbe ~
t . . . .17 Be141aD
.)

."Ua.

So. J.1'ri_

lA,880,OOO

14,880,000

Twc_larla
~

other
ooantri.. (t.t&1)

6,560,000

••• 6,05°,,586

-S •• Part 2, AppeD4u to Tariff Sehedul•••
eeIWpubl.10 of South Afrloa.
···t.perta ae et Sept •• b.r 1), 1,650
PJtEP.ARED

:or

'l'HJ!l BURD.U 01' COSTcae

s . f sbe .....Uo Gat) ...
.1M,....te ........

9,210,590

J.. 'III'

BelC1~

• u.rroqllt sbe (nMpt all.,..

:I

15,760,000

···10,658,914

6,080,000

···4,374,4611

17,840,000

17,840,000

1868

-2COTTON WASTE:)

(In pounds)
COTT~

CARD STRIPS made from cotton havin~ a staple of less than 1-3/16 inches in length, OOMBER
WASTE, LAP WASTE, SLIVER WASTE, AND ROVING WASTE, WHEI'HER OR NOT MANUFACTURED OR OTHERWISE
ADVANCED IN VAI1JE: Provided, however, that not more than 33-1/3 percent of the quotas shall
be filled by cotton wastes other than comber wastes made from cottons of 1-3/16 inches or more
in staple length in the case of the followin~ countries: United Kin~dom, France, Netherlands,
Switzerland, Belgium, Germany, and Italy:
- - - --Country of Origin

:
:
:

United Kin~dom ••••••••••••
Canada....................
France....................
India and Pakistan........
Netherlands...............
Switzerland...............
Belgium...................
Japan.....................
China.....................

Egypt.....................
Cuba......................
Germany...................

Italy.....................
Other, includin~ the U.S ••

11 Included

Establis1iea--:
Total Imports - : Established:
TarAL QUOTA
: Sept. 20, 1964, to:
33-1/3% of :
: Sept. 13, 1965
: Total Quota :

4,323,457
239,690
221,420
69,621
68,240
44,388
38,559
341,535
11,322
8,135

11,713
239,393

1,441,152
15,801

):3,26Lj
22,141
14,196
12,853

6,544

..

16,329
21,263

25,L25

25,443
1,088

5,482,509

319,795

1,599,886

in total imports, colunm 2.

Prepared in the Bureau or Customs.

Imports 1/
Sept. 20, 19GJ-+ to Sept. 13. 1965

1868

I
I

I
I

TREASURY DEPAR'llmIT
Washington, D. C.

IMMF.D lATE RELEASE

THURSDAY,SEPTEMBER 16, 1965

F-193

Preliminary data on imports for consumption of cotton am cotton waste chargeable to the quotas established by
Presidential Proclamation No. 2351 of September 5, 1939, as amemed, arxi as modified by the Tariff Schedules of the
United states which became effective August 31, 1963.
(The country designations in this press release are those specified in the appemix to the Tariff Schedules of the
United States. There is no political connotation in the use of outDXled names.)
n

-

Country of Origin

Egypt and Sudan••••••••••••
Peru •••••••••••••••••••••••
India am Pakistan •••••••••
Chilla ••••••••••••••••••••••

Mexico •••••••••••••••••••••
Brasil •••••••••••••••••••••
Union ot Sorlet
Socialist Republics ••••••
Argent~ •••••••••••••••••

"

HAiti ••••••••••••••••••••••
~or

J/
21

••••••••••••••••••••

Established Qgota

783,816
247,952
2,003,483
1,370,791
8,883,259
618,723

/

'~,

("

-

,

1::"

1~)6.S

Country ot Origin

Imports

Established Quota

752

Honduras ••••••••••••••••••••
Par~

"-

871

••••••••••••••••••••

Colombia ••••••••••••••••••••

l24

Iraq ••••••••••••••••••••••••
'1
I'

,

~(7("

_! "

'-)'1:;
L ~

11

475,l24

5,203

~I
g

2Y/

9,333

Except Barbados, Benmia- Jamaica- Trinid.t,
Except Nigeria and Ghana.

Se~")t8r~loer

am

195
2.240

British East Africa •••••••••
Indonesia and Netherlands
New Guinea••••••••••••••••
British W. Indies •••••••••••
B1ger.1a •••••••••••••••••••••
Brit1ah V. Africa. ••••••••••
other. 1 nc'ud1 ng the U.s ....

7l.J88
21.321

5,m

16.004.

Tobago.

Cotton l-l./Stt or more
Established Yearly Quota - 45.656.420 Ibs.
Imports Auggt 1. 1% c; - SeDtepber 10, J 965

St.ap1e Length
1.-3/8n or more
1.-5/32" or IIIDre am UDler

1.-3/8" (Tangu:1s)
1.-1./an or a>re and
1-'1/an

UDier

A.llqcat.1on

T!!T9rts

.39;590.718

26~C~~ ~(j:::<?

1.500.000
L._"i6'5.642

--' l~;J_
I "(

t

~, ~(

l!!l!2rts

TREASURY DEPAR'OO!2IT
Washington, D. C.

IMMEDIATE REI..EASE

THURSDAY,SEPTEMBER 16, 1965

F-193

Prel.illl1.na.ty data on imports for consumption of cotton am cotton lf88te chargeable to the quotas established by
Presidential Proclamation No. 2351 of September 5, 1939, as amerried, am as DXlified. by the Tariff Sched.ul.es of the
United States which became effective August 31, 1963.
(The country designations in this press release are those specified in the apperriix to the Tariff Schedules of the
United States. There is no political. connotation in the use of ou'f:m)ded names.)
n

Country of Origin

Egypt and Sudan••••••••••••
Peru •••••••••••••••••••••••
India and Pakistan •••••••••
China ••••••••••••••••••••••
Mexico •••••••••••••••••••••
Brasil •••••••••••••••••••••

783,81.6
247,952
2,003,483
1,370,791
8,883,259
618,723

2,770,015

!I

Argant~

•••••••••••••••••

Haiti ••••••••••••••••••••••
~r ••••••••••••••••••••

11
21

475,l24
5,203
237
9,333

Eltabl 1 shed Quota

Honduras ••••••••••••••••••••
Par~ ••••••••••••••••••••
Colombia••••••••••••••••••••
Iraq ••••••••••••••••••••••••

68,1399

Union of Sorlet

Socialiat Republics ••••••

Country of Origin

Imports

Established Quota

~J
g

British East Africa •••••••••
Indonesia and Hetherlanis
Hew ~Iinea••••••••••••••••
British W. Indies •••••••••••
.1ger.ia •••••••••••••••••••••
Brit.iah W. A.trica. ••••••••••
other.
the U.s ....

1m'''''ng

Imcept Barbmos, Betwlda. J8IIIaica. Tr1n1dm, an:l Toba&o.
Eltcept Rigeria and Ghana.
.

Established
J~rts

Cotton l-l/Stt or .ore
Quota - 45.656,420 lbs.

Y'arll

Auggat 1.

12S~

-

~eptember

stap1.. Length
1.-318ft or JllDre
1.-5/32" or DlDre and under

1-;J/sn

1-1/sn or
1.-3/8n

(Tangu1.s)
DlDre ard under

10. 1965

A"oat.1ou

!emrt.

39. S90. Tl8

26,058,092

1.500. 000

31,851

4.56,.642

156~667

752

tm.

l24
195
2.240

71.388
21,)21

5,m

1.6.004

I'P9rta

COTTON 'WASTES

(In

COTI'CN CARD STRIPS made from cotton

ha~

pounds)

a staple of less than 1-3/16 inches in

1en~h,

OOMBER

\oJASTE, LAP WASTE, SLIVER WASTE, AND ROVING WASTE, WHETHER OR Nor MANUFACTURED OR OTHERWISE
ADVANCED IN VAlliE: Provided, however, that not more than 33-1/3 percent of the quotas shall

be filled by cotton wastes other than comber wastes made from cottons of 1-3/16 inches or more
in staple le~th in the case of the foll~ countries: Uni ted Kin~dom, France, Netherlands,
Switzerland, Belgium, Germany, and Italy:
:
Country of Origin

:

Established
TarAL QUCYl'A

:
United Kin~dom ••••••••••••
Canada....................
France....................
India and Pakistan........
Netherlands...............
Switzerland...............
Belgium...................
Japan.....................
China.....................

Egypt.....................
Cu.ba. • • • • • • • • • • • • • • • • • • • • •
Germany...................
Italy.....................
other ,

!/

includin~

4,323,457
239,690
221,420
69,627
68,240
44,388
38,559
341,535
17,322
8,135

1l,713
239,393
113,264

Established , - ---rmports
i./
33-1/3% of: Sept. 20, 1964 Total Quota I to Sept. 13. 19_6~

1,441,152
75,807
22,747
14,796
12,853

...

6, 5L.4

76,329
21,263

25,425

25,443
7,088

5J 482,509

319,795

1,599,886

the U. S ••

Included in total imports, column 2.

Prepared in the Bureau of CUstoms.

F-l'13

:
Total Imports
:
: Sept. 20, 1964, to:
: Sept. 13, 1965
:

- 3 -

No mere orosecutor, be has found the

t~

and inepiration to

give thou.-;htful attention to the caUM. of crime, ad to how
i.t ca.n be prevented and bow it can most effectively be d••lt

>;,;'ith.

In this job he ha!= Rupervised a large staff llaadliDS

the range of cri_inal prosecution and civil litiaatioa, ad
ha~

been responsible for the preparation of new lest.1attoo

for the District of Columbia in the field of law enforceaenc.
P-S

well as for the

h8ndlin~

of trials, appeals, add deol.iOD.

in prosecutions and indictments.
We are happy indeed to we leawe David Camp ion Ache.on

today into the TreaEury.
Dave, would you please come forward now and be svora iDT

- 2 It will be

hi~

task to eee to

everything within its »ower

tt

t~

that the Treasury

cooperate with

~8

President'.

t~

CommiE ~ ion on Law Enforc.-ut art.d the AdainietfttioD of

Justice.

However, this reorganization of Treasury 1_ aforc.-nt
re~1)onsibilltleB

bas the funda.eneal aia of .sur1q that the

Treasury doef: all that it can do, .ithia it.

0WIl

"'.tmtial

means, to reduce and to -prnent en... t nd to cooperate with
other 1. . enforeement agenci.s,
~nd

ineludtn~

those of the states

of localities, to the s _ eftd!.
Dave Acbeson 1s well fitted to bear the •• respOilsibillt1•••

He ha s had both e1q)erience in ~overn.ent nd private practl ••

of the law.

Durin~ the last four years. siac. he Mcam8 United

State~ Attorney for the District of

Columbia, be . . . dealt day

by day with the entire range of law breaking, and

t . _fORS.·t.

TRFASURY DEPARTMENT

Washington

A~

REMARKS OF THE I«>NORABLE HDltY H. POWLU.
SECRETARY OF THE TRlASURY
AT THE SWEAlURG IN 011 DlVlD CAMPIOI AC8IOII
SPECIAL ASSISTANT TO THE SECRlTAltY (FOR DI'OICDIIitt)

ON SEPTEMBER 16, 1965 AT 10:30 A. M.
1M

R90M

4121, HAIR TlBASDY IU1LD1.

Our action today
cre~ted po~t

insta11in~

Dave Acheson 1n bi. aew1,

como1etes the reorganization of Treasury t.w

enforcement Fupervision. as part of tile President'. war

OIl

crime in the United States.
It is nartieularly fitting and fortunate that we lboulj

have in this new j OD a man of Dave Ache. on ' I 1)roved aellDa!.tr~tive

.-\[0.

talent, and insight in" current law enforc..-at

the fir~t oceu~ant of the new office of 8,..1&1 "11IaII

to the Secretary (for Enforcement) Mr. Acheson wl11 be ~
with directing or coordinating all Treasury 1_

eaton.

I

.C.

TREASURY DEPARTMENT
Washington
REMARKS OF THE HONORABLE HENRY H. FOWLER
SECRETARY OF THE TREASURY
AT THE SWEARING IN OF DAVID CAMPION ACHESON
AS SPECIAL ASSISTANT TO THE SECRETARY (FOR ENFORCEMENT)
ON SEPTEMBER 16, 1965 AT 10:30 A. M.
IN ROOM 4121, MAIN TREASURY BUILDING
Our action today installing Dave Acheson in his newly created
post completes the reorganization of Treasury law enforcement
supervision, as part of the President's war on crime in the United
States.
It is particularly fitting and fortunate that we should have in
this new job a man of Dave Acheson's proved administrative talent,
and insight into current law enforcement problems.
As the first occupant of the new office of Special Assistant to
the Secretary (for Enforcement) Mr. Acheson will be charged with
directing or coordinating all Treasury law enforcement. It will be
his task to see to it that the Treasury does everything within its power
to cooperate with the President's Commission on Law Enforcement and
the Administration of Justice.
However, this reorganization of Treasury law enforcement
responsibilities has the fundamental aim of ensuring that the Treasury
does all that it can do, within its own substantial means, to reduce
and to prevent crime, and to cooperate with other law enforcement
agencies, including those of the states and of localities, to the same
ends.
Dave Acheson is well fitted to bear these responsibilities. He
has had both experience in government and private practice of the
~w. During the last four years, since he became United States
Attorney for the District of Columbia, he has dealt day byday with
the entire range of law breaking, and law enforcement. No mere
prosecutor, he has found the time and inspiration to give thoughtful
attention to the causes of crime, and to how it can be prevented and
how it can most effectively be dealt with. In this job he has
supervised a large staff handling the range of criminal prosecution
and civil litigation, and has been responsible for the preparation
of new legislation for the District of Columbia in the field of law
enforcement, as we 11 as for the hand ling of trials, appeals, and
decisions in prosecutions and indictments.
We are happy indeed to welcome David Campion Acheson today into
the Treasury.
000
F-194

~

()

I~

'1

,~
U'

~ 17.6
A

\-'

.

~

million

-2-

/fJII{;tI,«((II'(~

checks~tal~ $885
/\

-~

/V

million began to

move in the mails today • Delivery can be expected over the following
several days.

The checks represent retroactive payments of

Social Security benefits in response to the 7 percent increase for
the period January 1 to August 31, 1965, stemming from the Social
Security Act amendments of 1965.

~~~.JSE

,9'15
r ,J~

FOR IMMEDIATE RELEASE..wKJ;)tt.SSBA¥, SEPmRR 15 t la65

SECRET SERVICE WARNS AGAINST CHECK THIEVES

The United States Secret Service today issued a warning against
check thieves to the more than 17 million people who will soon
be receiving retroactive Social Security payment checks.
The Secret Service -- which is part of the Treasury Department -eu~~I-/

urged recipients of these checks to make

~

effort to remove them

from household mail boxes as soon as possible after delivery. r~:~""S.7"~8

The Secret Service also urged that)I' lb.

I'••::.'

Fi II !Jrt~ banks

and stores cashing such checks require identification from the bearer.

Pt: S PI7t

7Mt;' ~ f l't)IJ"( (,Of T~t:'

Stt.,/l ~ 7

Each year, thousands of government checks fail to reach the

1\
people entitled to them because the checks are stolen, endorsements

... forged, and the checks .... cashed by thieves posing as rightful
owners.

I

--+----

~.~. r ..

!

....

~

.....

JIl; ..? ·. . . . . .,

~mt~!~!'II
. . . . .8S_~·_'''!'' 'V1f.::t
-

c/ t'/
~,

TREASURY DEPARTMENT
(

September 15, 1965
FOR IMMEDIATE RELEASE
SECRET SERVICE WARNS AGAINST CHECK THIEVES
The United States Secret Service today issued a warning
against check thieves to the more than 17 million people who
will soon be receiving retroactive Social Security payment
checks.
The Secret Service -- which is part of the Treasury
Department -- urged recipients of these checks to make every
effort to remove them from household mail boxes as soon as
possible after delivery.
The Secret Service also urged that banks and stores cashing
such checks require identification from the bearer.
Each year, despite the efforts of the Secret Service
and other enforcement agencies, thousands of government checks
fail to reach the people entitled to them because the checks
are stolen, endorsements forged, and the checks cashed by
thieves posing as rightful owners.
A total of 17.6 million checks amounting to $885 million
began to move in the mails today. Delivery can be expected
over the following several days. The checks represent
retroactive payments of Social Security benefits in response
to the 7 percent increase for the period January 1 to
August 31, 1965, stemming from the Social Security Act
amendments of 1965.

000

F-195

- 2 ,-------~~
........~
providE tnrci~£enI~ evidence that conditions are being created

----~--~.-- '.'-'.~

equilibrium.

000

S.L4 tu&..
~

iL ~.~t.J ~1/.4'N b.{~ "MIf t... ~

&z KtJ;;. ~ ;;;;::;,t(,i
(~J. ~'-4 VL (h 4.. to.. AI'
f
?G4M ~ Lt. vL ~ ~ 14-) It.J./i,,·a_J.. ~
tXt

FC:, 1!L ~tul.
'.!

/

0 0

~.

.'

I

September 1', 1965
,...

,...-}

SUGGESTED.I ~PPNSE BY /~~REASU~ TO INQUIRIES
REGARDlNG fREASUWi' RE TION.)fOl T~--:BRITISH
pn\TIO~L EydNOMY ~DL-PUB:r/rC ..
,/
T~Y, SEPtE
R 16, 196L/I

'

Sir Eric Roll
of the British National

prior
my Plan to inform him

its contents.

Bfft11:5l~

~~
~

'\ The National Economy Plan ioS

~

flu.- ~~~

O!eep ~#&'$

Q.t..

f

British government toward increasing productivity and

~ r;;:t~:2 ('/ tv9E'n. SCc)I- l:S

stabilizing costs and prices.

It is a~e te f~r~Q~r

the announced determination of the British Government to
achieve equilibrium in the United Kingdom's international
payments.

\( ~~t,.

" \~ vi ~) ~l ~ \~.L, ~ f'~p~ ~~tJ

,fhe Treasurykwelcomes the reiteration of ~~tiOD
in the National Economy Plan and welcomes the program
~

i~~

as a longer range addition to measures thus far taken which

FOR IMMEDIATE RELEASE
THURSDAY, SEPTEMBER 16, 1965

TREASURY COMMENT ON BRITISH NATIONAL
ECONOMY PLAN
In response to press inquiries, the Treasury today issued
the following comment on the British National Economy Plan.

TREASURY DEPARTMENT

FOR IMMEDIATE RELEASE
THURSDAY, SEPTEMBER 16, 1965
TREASURY COMMENT ON BRITISH NATIONAL
ECONOMY PLAN
In response to press inquiries, the Treasury today issued
the following comment on the British National Economy Plan.
"The British National Economy Plan emphasizes the importance
of increasing productivity and stabilizing costs and prices.
It also underscores the announced determination of the British
Government to achieve equilibrium in the United Kingdom's
international payments.
"While the Treasury has not had time to study the program
in detail, it welcomes the reiteration of that determination
in the National Economy Plan, and welcomes the program itself
as a longer range addition to measures thus far taken which
should strengthen the position of the British economy both
at horne and abroad."

000

F-196

- 16 -

;.:' ')

\.1 __

of the redevelooment of Independence Mall, where all the
fathers of our country tread time and again, and where Benjamin
Franklin was a daily

fi~ure durin~

so much of his life.

This is a partnership in city improvement that is part
and parcel of the Great Society to which President Johnson hal

nut his hand.

And this new Mint is the kind of lower cost,

hi'sher efficiency governmetm service facility that, in step

with

~

similar advances in the private sector, is making the

Great Society

;:1

practical

thin~:

it raises the standards of

Fervice and abundance to the higher levels that must be typical
of a Great Society). ~while it makes the savings that permit
the building of the Great Society on a sound financial structure.

000

- 15 -

the building of a great new 1G¥.rnment
facility that will serve the nation 'at high efficiency ..4
low cost,to produce ona of the basie needs of • vigorou. and
~~1ing

nation such as ours:

an abundant

ooina~e.

This

••
~ ~ 'H/"

'\--

8tan~ as Asymbol~

and heavy

partiei~ation

of your governmant t I int.nlt

in the rebuilding and beautification
~-

of this fine old city.

been

desi~ed

'flail building ~ that will house the new

carefully to fit in with the artistic

8piri~

eehet..,d

EfblH

~his

" .......::::::~.~.~_~.1J:I::~:I~d

~ th,~"'i . t96itJ;.>'M't!"..J;-_.---«more

than J us

t~fY~
~

expenditures for building costs, acquisition of computers and
payroll expenses.
UI4U.4

Jia~l!!lI!!t::t) ~lIiIii).,l!:r~Q~, ~ the s y stem be e OHte 8
l!!i

~ q:P</Jr~/ ~-r
j

all, e"@'f'QIi:·}"it: ....

relieve! Internal Revenue's district offices from

~r~~ v

It nul/I~S

1'8r'er p81!llfizu~ bur de

,..,.,

"-

~.

'* fit"

and permits them to concentrate more

effectively on taxpayer services and informational activities.

(
(J/

I

RtJ~(,e
. e.,",-~"". -~twi'"'Hlf!'.....u.s of the
i {
r .. a 1....

J'

~""'~~.:.~it.~~~/-'

abo a =-cI&:ttl§ au 22 C4il4;..r .....llIbi:g:;IlKttktng

t'e~u,...~

that the honest citizen has to pay the government no more than
cI reier, ,&

his own fair share of the tax

Roosevelt
in the

This installation, one of seven of its kind

countr~

is playing a vital role in strengthening federal

tax administration.
toe ualil

; @s the

9Al~ et

_!$__

."~'i • • ...QaQ.",-a,.,.s.i.w.i14~.~!ealld­

b¥@abi~1 ee~l!'ITI~that"'~~'g''''wtlict1~ at
_ .• a

co-gt"'~of" --$~'nfrlttmi ;+P;t

peak employment during the height of

thl

income tax filing period, the center employes as many as 2500

Pennsylvania, Delaware, New Jersey, Maryland, Virginia, and the

returns represent
$16 billion in federal taxes.

At the service center information

from the returns is transcribed into punched cards, converted to
magnetic tape, and forwarded to the

n~~iona\l

cOf9pu}e,r center

~;yclvd.eef l~y--'""

in Martinsburg, West Virginia where it is

..,....8.e.

te--B master

I"

file of all taxpayers throughout the country.

Resulting tapes sel

from Martinsburg to Philadelphia are the source of the refund

~

((0 ~.Ij

- 14 In North

Phl1adel~hla

the Internal Revenue Service

ye (1()~t t{ (fu't, rt6.~)

.1:~ ••• J

A..

b ....~-Operation an Automatic Data Processing Center,
"-"-...

for the better and lower cost handling of tax return_, built

cV

(Iu IrS 1<1il)

,y

- 13 the

~t~te,

the city and private capital.

'\

ty of the

latest Annual Report
City of

cost of

Philadel~hia,

completed,
the Federa

ove~nt

\

is providing $292 milli
i

This does not irtplude what the
\

Federal~

ernment 11

I

spendin-s upon its own plant and equipment' in
I

ilade1fahia.

/'

I have mentioned that the ''tt!nt for wnlch we

• breaking grouad

/

\
\
today will cost $37 million.\

new Mint will rise another la

JU8

acre.s th

Mall fr_ the

e Federal at

cture to taka it.

place as an attractive

a n..

Federal Office Build!
outlays of some $

8

On

will involve

then, in .Mitle

/

to its

$

Redevelo~ment

million.

grants. the Feder

Government 1,

.,.a'~

and coins to and from the Philadelphia and Denver Mints and
the San Francisco Assay Office.
A good deal more could be said, for the new Hint will be

a treasure house of advanced production and handling technique.,
and Nill have a lJood many other features besides:

for instance,

all of its operations will be visible from the visitors' ga11e17.
,..--

"

But 1 want, in closing, to mention

activit~

8~~ther

I f'( ~s; tc.NJ

Fe •• ~.l

g."~Dt

.",

in Philalelphia.

"\

tro~g practical~OUragement

I am happy tO'fote

your

/

/

./
/

~overnment

is giving to

r

\
throu~h

its Urban

/

~ Agency.
/

,

/

imagiJ{a

/

of

the~ity.

th~
.(';~tB
o{~enewal.
//
t

I
much a city gets dep".

/

P~ladelphia·s leaders and people

upon how much it

spend to re iVif!

91. this city and other.,

improv-at

/

energy and willingna.a to
ral grants pay for two ~

with the other thir. shared _ ...

- 11 -

plant cames into production.

The new Philadelphia Mint will

be capable of making coins of all deDOlllinations, from the

_lt~

casting, and rolling of coinage alloy to production of the
fini~hed

coin.

At the new Mint, ingots that are 17 feet long and that
weigh 5,400~ pounds will be cast, compared to the pre.ent
capability for casting ingots five feet long, weighinl 400

po~

The new Mint's strip making machines will roll the.e ingot. to
finished coin thickness five times as fast as at pre.ent.

It

will be fully mechanized for the handling and storage of . .t.r~
The coins produced by the new Mint will be weighed autOlllltically.
and automatically insDected.

The new Mint's capacity will be

such that it can serve the coin needs of the whole country
east of the Mississippi, making a considerablen.ning ill the
,-

costs now incurred in movin~~'.~' coin materials, coin hl ..k.

- 10 type of penny coin presses cannot be brougbt iDto u ••
imnediately.

This is merely one eUDlpl. of MIlY new f ••tUZ'ea ef the
Mint that 1s now to be built in this city.
of doublin~ the

It will be capabll

~\~ r~Jf (~- 6'~j~ j?. ifv(041----

e8l'acftY--ot-th8-jr. • .nt-H1DtJ'V~ v111

at 15 to 20 per cent les8 cost per unit of output.

produci

It vill

allow an unimpeded production flow, tbroup a fir.t floow
,fl'duction space SO feet high and 600 feet 14klg. v1th alao.t
as RIch additional

~ac.

on other floors for

die making, coin storage and other

8Ul)~ort1ng

0('
lab,.e.to~ie..

officI.

activities.

The new Hint will be able to produca the thne layer

_aal

strip needed for our new dimes t 'lUArtera and balf dollar., as
well a8 the bronze alloy strip _tal uecled fOE' .....1•• and
the cupronickel .tr~ needed for five ceat l'ieee..

Th. _terla1

for our new coins DUst be bought outaid. the lliat _til cJaU

- 9 '-]e

in.~enuity

a.re using

to try to make the Mint.,.,when it

enters operations, the last "lord in coin production.

To do

thLf, Secretary Wallace and Mint Director Adams, who are
responsible for planning the new Mint, have approved ordera
for the

buildin~

of an entirely new type of coin presl,

c.p.b~

if it works as it is expected to work -- of turning out the
fantastic number of 10,000 Dennies a minute:

not an hour, or

That compares with production of 300 •

a day, but a minute.

minute, the best existing machines can do.

No one knows yet, for sure, whether these presses will
,

f>-'
irrmediately

r" ,- '-

'18!'k.
,

up to expectations, or whether they will requ1J

t',

a development period.

contingency basis.

But we are

plannin~

for them on •

At the same tUne, Mr. Wallace and Mia. Ada.

have developed parallel nlans for the installation of other
facilities to yield the required coin production, if the ...

~~~

The new Mint that will go up on this sit~I'7 t, ~

~
production by mid-1967.

It is going to cost $37 million dollar••

It 10dll be the world's foremost Mint:
~

,

- ...... --, '-,

-'-and
---....-the

the world'. biU.lt

world's most productive.

fl\-~'~)

The new Philadelphia Mint is a prime example of

Johnson is demanding throughout the government:
and better

is a

bi~

~ervice

.nat Pre.u.

more •• rvic.,

to a growing country, at lower cost.

order -- most of President Johnson'a order. are

the big side.

But the new Mint will demonstrate, as 18

That
OD

COD.taD~

being demonstrated, that the President's insistence upDD the ••
hard accomplishments
impossible.

~ets

tasks that are difficult, but DOt

We are achieving more and better servic., . .tina

the growing demands of a growing population and of a growin&
economy, at lower costs, and this Mint will be an out.taDdiDI
example.

- 3 -

.2!::~~.ll-l;t;.aJ;~~~~~~~~~"fIIIii,;"ih e' T~~""'?-J.9P.g~b,e.f.o~i~J
.1L~~~~.uit~~~~~~rtr'I!JMhat'dep~ha~

in September

J

1901.

- 2 -

.' e was inst

-W~h-

w

m n armed with a short
of a watchdo

- - Nero

bullion deposited was required to b
~~""~'I'<"p"l"h ..lI!!'k,,1t~~~"""~'.

'1.o--oIirs7~~~ O~"viOU$~Jh.,:aS.h
... -'
.. ,..

~

...

.

~

,~ ...u-;f .... ,;.,;r'":''' .",

.-

...~.,-

: " ~"~'

coined in strict order with the priority
~li~~:~.~':",,';Ci.;O .'~' «,._~ ';---t, .• .,.~

€e'TI"'S"aici;'! th;;~int, though its purpose was

... ," ..... - ~ ."

&~~~men'ey;··w~s not at this ime a money-maldn'ig~u::,:>taking and re"

peated efforts were made t9.
.~

.

J;~,m.ain..•a~~·:,-ib..

.

•• __ .... (.'t.,.$fIl.:~~

When the Capital 8iil.Qved

,,~

f:~~r~~hi,~".~p._~aS' "
:mId

__

olish it as too costly.

'"'"(::::,~~tion-W~1'g=-.h~..{;ft~

;,,";'rn·;;:,::r~~"~O.t.l,-tC~o~~~grYr:-::e;cs;-;s~v;;:o~t~e~dr:rit:;:-:s;-;c~o::-;n~ti1i';;n~u;-';a~n~c~e~_T16I"\"I"'c-;t~w""&-1'l~~~AAit{Q;l;!·>t~2~'i.rs:longer and so on until
'.

ue 4V. . . .

:W1Bs.;22.a8..,jail,;1u.ltt.lb;lJQQ.r~jt~..,,..~t~e""1~g"e;5~rJ~j!~f''W'ise··rn'~''tJ,.~.

t

After forty years at the original

lo~ation,

the Mint came uptown to a

newly erected building at the northwest corner of Chestnut and Juniper. The
cornerstone for this was laid July 4, 1829, but it was not finished and occupied until 1833.

Gf ecaatHal WhlCEi

,,'ii' ) ] 4

desiljillid'

Q

au th or i ty of th e fed e r al g ove r n menID \i~vr8:i!t":!:!-:i:ilil:&:iiii_.2LIa.i"l2iil11ififiilQlllr.trfftil'E8~UHnll"ii!ioiQoQ"~Sitt.aat.et.es

Mint ip Ph18:881phta, !'efifiSjiVdiilc!T
The site for the first United States Mint.),;:r-~t Seventh Street near

lvl (/

Arch -- on~~ hundred feet from where we are .t.."~i"!1 hOI. tn""i'>l'Q

.'.,

~.~,

break groun

or

(- - lh1a.RIIR

e fourth mint structure in

~ k~«"4,(

llij+:,

Philadelp~ On JUly::..rJ,

m2,

began"p;;-~d diStil~ ~uiJ,di')l< which was then located on the
~ +vv ~ ~t . (ttd:e.(;t(!)1t M'~l

destructi,?/,

~ SiteA-Some of the junk of the old distillery was soict Yor one dolla:, whipt
the Mint Director, David Rittenhouse, directed should be laid out for punch
for the bricklayers and other workmen.
Otbex adjacent lots

of

~

one turrnm

"""'

.

lil

.

~~"'-'~+'-----"-"-.-

January of that JJ

-

I--thiak-tit_bLiil?Wiit.....
Viilsllllu...........
i:.Ll1.a.. ••

7,

I

-

f S"ICI Oil

16

sy I_Zil, .Vl. . . .

Let me add just one more, and very well deserved, vorl
,

-I' ~...,'
"'."*'''

of thankfl.

Thil!l is to the/;Ph11adel'Phia Devel()t)lDent Cor,Gntt-.

hesded by Mr. William Day, which is developing the Mall.

Much

that we are doin~ today had it~ roots in the efforts of tIr. Day

~)/)
and of the

~ladel1)hia

not want this role to be

Develo,ment Corporation, and I vouU
for~otten.

-

0 -

va a884

·e-·iI·l'~I'. &f ~ • • • •
I\...

"I.I.'I.' I' ••..,.

Another hard worker in this vineyard has been Iepreaeatat1"
Byme, in whose district we stand.

I served with hi. in the

Congress, as I did with Congressmen Barret, Nix and Toll, .1.0

:r~;/

of the Philadelphia delegation,

(f~~~(}/.'e

c'J

/1/()

T-

'JiIe,eel".., ••• _

tl
.ac; cl ".

4

~ ~ ~~~ ~

....,. ft'." •••a...·_·••••11.d.a.,..'. ,hr' I .f ••
,.-jC2-f U;/(S

RCf{eSR",W/u-< a~...('e«..

g

IS

I

r

juT d ~ ~.'~

1&. et.' in ••••••ilgt' •• ~ .p.W.et1lEI . . .t ...... an I

~ ~-!'~~ ~

£K~cvi-;'U-e g~~ '%JL,

W
or·encI-· nep.I'8T *," In"] '" I . . . . . . . II _ •••••
~"sT 'I /l ,PI, t,.,tyt;7i d4~.;..,. ..:. tfZ. /I.ush

2U;4.k

17~

11

I

81_.

by the cap.o1 fiJi 'I. harfl 10Zb 1It".~. , ftUIMlalphl •••1e••

5~
._.-

~ f- -f(v
. .71'4.
. .kfJ-rel
..-.•.

tc..17J;
- if:.
~
-:and the zeal with which they look out for this city'. 18_.....
..

"

c-#!.c

.

~, ~-

..

- 5 !

/

to- be-- mt11t. f/
: ./

It waf for these reasons that the Philadelphia Redev.lo,.nf
Authority re-drew

th~

boundaries of the Independence Mall

Urban Renewal Area late in 1963 to move this site on which we
stand today to

(I; / ~ I.li r~~ /-Ie-I ,;.~\

~'I'AJf •• "- I

S 7'f;j;~ QJ

I j 6th wai ,~.aps;'D3,-t!ewe. . . .he •• '1on

This involved relocation of some 70 businessee, which
Mayor Tate

mana'~ed

with

~kill

and energy to get relocated

10

that this bite could be cleared, as it was, by the middle of
August this year.

'f.l:lis i . ai......,~, -8.' ilil end IE I

•

-o(Jera~i_';'ay:;=-/-""i_ e.J • d ~a.J ..d _ t
louJ:herity ••

cu/__.ef""IR!'"I!IT~'
/

ehe'-Redeveltm~·lftcttw:i~.

T
,.Qf

"/-t:hst. .......,.,....

ftet!IM!W

_ ••

7.'

_,...a.

,,,rug el@k

..,1111011" • •

'1- ...... w ....

f!6 _tel

'·IIeu:~ar.

~tien and thann ~" , _ ta_ --tadi91 BIf'IY~2I!~t

- 4 -

to

kee~

our growing and changing economy going smoothly at

the retail level.

In

~

fl.e I ; sa I • J ?? . . . . .~

tk:1 A 'PI ' ;

But

derpite thes. ingenious aud _ •• 1... _ • ..,11s~t.

~
t~ existing coil'l . .king C1IPaci~y
.Jh.......

OOV

a

~g.t the Si '

1'.uob.

'II' p •••

='

_~lIp....
_....IM6a
.....
,

tD!I~..
~~·i·~'-iIII. .ifta'"""I:W......a-t.......-

was getting no younger, and

t

b

faa. lbnt Philadelphia wante.

ilr:f~

8~t".

to get on with its renewal program.

M
a

,'J?

'

I f(..i / Ih

1t

~

,wej •••••44"11

f' (!tIfJ~~ ~
hOEC_,1 ~'I" to

/'

Q'atlonal need.

5 up.-vt rl t~J~

SecretaJ7 Wallace. Mint Director Adams and the 8.,1 ••' ••••
of the Philadelphia and the Denver Mints -- Mr. Sura,
C-

i

,_)Cj~"

,l

/

r rU(Ct"{

/

S11I1f\Wi ear of the Philadelphia Mint is here with

"'to, and, with the Mint's fine staff in

U8 _. ~

Wa8hin&~~~'

f"Ar~I(:/ HI./",;, I~I ,~t}1i r'(KH;1 (i:~!3, 11r,'I1~,~{f~
and De.vei'Ahave done what can only be descrl.bed as a Mrolo

'- /!~

1.1,

~.

_,

_',

/. , / ,

jO\..a,(PUShing e~d.stlngKint production capacl~ beymacl .11

.

~__

preVl.OUE estA.l.ll4tes

i,:muft-k,s
J$_&~ ~. .....
n ""'rsmiR«' w.ue mount........ ~• •I¥
A.

- 2 -

\

,'lIIJQ.Ufft.Q,...d.Q...!<.IIO/

rJ/'

.r-

~caU8e
new Mint is

8

getting started on the building of thi.

matter of such importance to the City of Phi1a4.lfIII

wrtJ

and to the nation·'1at large, I _ _ _

"'-..

'."8

to draw

;;lit attaatl.

to some, at least, of the people present here toctay who haw

_de
I will begin with Mayor James Tate, because he 1•• _ ..

this: MtHt::a

--,

..... ---.. -.

gathered here. I very IIlUCh hope that you viii believe th.t I

do much more than express a well worn convention wheD I tell
you that I am delighted to be here to share with you •

propitious event.

-

The facts are that this 1s • delightful

and propitious occasion, and that 1 take a very real p1••• ure
in being-¥ith you to share in it.

)
I

TREASURY DEPARTMENT
Washington
FOR RELEASE AT 11:30 A.M., EDT
FRIDAY, SEPTEMBER 17, 1965

REMARKS OF THE HONORABLE JOSEPH W. BARR
THE UNDER SECRETARY OF THE TREASURY
AT GROUND BREAKING FOR A NEW MINT AT
PHILADELPHIA, 11:30 A.M. ON FRIDAY,
SEPTEMBER 17, 1965
Mr. Chairman, Mayor Tate, Members of the Congress,
Commissioner Cohen, Miss Adams, Mr. Sura and other friends
gathered here, I very much hope that you will believe that I
do much more than express a well worn convention when I tell you
that I am delighted to be here to share with you a propitious
event. The facts are that this is a delightful and propitious
occasion, and that I take a very real pleasure in being with you
to share in it.
Because getting started on the building of this new
Mint is a matter of such importance to the City of Philadelphia,
and to the nation at large, I want to draw attention to some,
at least, of the people present here today who have made it
possible for us to get started at this early date.
I will begin with Mayor James Tate, because without his
work on its behalf, we could not be here today to break ground
for the new Mint. At the time in 1963 when Mayor Tate set
aside this site for a new Mint, as part of the redevelopment
of downtown Philadelphia, the urgency that has since increasingly
overtaken it, in the form of a coin shortage, was only beginning
to be felt. However, the existing 64-year-old Mint was getting
no younger, and Philadelphia wanted to get on with its renewal
program. After 1963, as the coin shortage worsened, increased
Mint capacity became a pressing national need.
Secretary Wallace, Mint Director Adams and the
Superintendents of the Philadelphia and the Denver Mints
Mr. Sura, Superintendent of the Philadelphia Mint is here with
us -- turned to, and, with the Mint's fine staff in Washington,

- 2 in the Philadelphia and Denver Mints, and in the San Francisco
Assay Office have done what can only be described as a heroic
job. They succeeded in pushing existing Mint production
capacity beyond all previous estimates in meeting, as they have,
the mounting demand for coins to keep our growing and changing
economy going smoothly at the retail level.
But despite these ingenious and massive accomplishments,
our existing coin making capacity is definitely not adequate
to satisfy the demand for coins on an efficient and economical
basis.
It was for these reasons that the Philadelphia Redevelopment
Authority re-drew the boundaries of the Independence Mall
Urban Renewal Area late in 1963 to move this site on which we
stand today to the immediate action stage.
This involved relocation of some 70 businesses, which
Mayor Tate managed with skill and energy to get relocated so
that this site could be cleared, as it was, by the middle of
August this year.
Another hard worker in this vineyard has been
Representative Byrne, in whose district we stand. I served
with him in the Congress, as I did with Congressmen Barret,
Nix and Toll, also of the Philadelphia delegation. I did not have
the pleasure of serving in the Congress with Representative
Green, but I know from my experience in the Executive Branch
that he and the rest of the Philadelphia delegation in the
House, stand out for the hard work and the zeal with which
they look out for this city's interests.
Let me add just one more, and very well deserved, word
of thanks. This is to the Old Philadelphia Development
Corporation, headed by Mr. William Day, which is developing the
Mall. Much that we are doing today had its roots in the
efforts of Mr. Day and of the Old Philadelphia Development
Corporation, and I would not want this role to be forgotten.
The new Mint that will go up on this site is scheduled
for coin production by mid-1967. It is going to cost 37
million dollars. It will be the world's foremost Mint: the
world's biggest and the world's most productive.

- 3 -

The new Philadelphia Mint will be the fourth Mint in this
city, which was the site of the Nation's first Mint.
The first Philadelphia Mint, in turn, was the first building
erected in the United States for public use, under authority of
the federal government.
The site for the first United States Mint, at Seventh
Street near Arch -- only a few hundred feet from where we will
break ground today for the fourth mint structure in Philadelphia
also had to be cleared, but under somewhat different conditions.
On July 19, 1792, destruction began on an old distillery
building which was then located on the site chosen for the
first Philadelphia Mint. Some of the junk of the old distillery
was sold for one dollar, which the Mint Director, David
Rittenhouse, directed should be laid out for punch for the
bricklayers and other workmen.
After forty years at the original location, the Mint came
uptown to a newly erected building at the northwest corner of
Chestnut and Juniper. The cornerstone for this was laid
July 4, 1829, but it was not finished and occupied until 1833.
By the end of the 19th Century the Nation again needed a
bigger Mint at Philadelphia. So the Philadelphia Mint now to
be replaced was begun in 1898 and completed in September,
1901.
The new Philadelphia Mint is a prime example of what
President Johnson is demanding throughout the government: more
service, and better service to a growing country, at lower
cost. That is a big order -- most of President Johnson's orders
are on the big side. But the new Mint will demonstrate, as is
constantly being demonstrated, that the President's insistence
upon these hard accomplishments sets tasks that are difficult,
but not impossible. We are achieving more and better service,
meeting the growing demands of a growing population and of a
growing economy, at lower costs, and this Mint will be an
outstanding example.
We are using ingenuity to try to make the Mint, when it
enters operations, the last word in coin production. To do
this, Secretary Wallace and Mint Director Adams, who are
responsible for planning the new Mint, have approved orders
for the building of an entirely new type of coin press,
capable -- if it works as it is expected to work -- of turning
out the fantastic number of 10,000 pennies a minute: not an

- 4 hour, or a day, but a minute. That compares with produc'tion of
300 a minute, the best existing machines can do.
No one knows yet, for sure, whether these presses will
immediately perform up to expectations, or whether they will
require a development period. But we are planning for them on
a contingency basis. At the same time, Mr. Wallace and
Miss Adams have developed parallel plans for the installation
of other facilities to yield the required coin production, if
the new type of penny coin presses cannot be brought into use
immediate ly.
This is merely one example of many new features of the
Mint that is now to be built in this city. It will be capable
of doubling the capacity of the present Mint, without a bigger
payroll. It will produce at 15 to 20 per cent less cost per
unit of output. It will allow an unimpeded production flow,
through a first floor production space 50 feet high and 600
feet long, with almost as much additional space on other floors
for laboratories, offices, die making, coin storage and other
supporting activities.
The new Mint will be able to produce the three layer metal
strip needed for our new dimes, quarters and half dollars, as
well as the bronze alloy strip metal needed for pennies and
the cupronickel strip needed for five cent pieces. The material
for our new coins must be bought outside the Mint until this
plant comes into production. The new Philadelphia Mint will
be capable of making coins of all denominations, from the
melting, casting, and rolling of coinage alloy to production
of the finished coin.
At the new Mint, ingots that are 17 feet long and that
weigh 5,400 pounds will be cast, compared to the present
capability for casting ingots five feet long, weighing 400
pounds. The new Mint's strip making machines will roll these
ingots to finished coin thickness five times as fast as at
present. It will be fully mechanized for the handling and storage
of materials. The coins produced by the new Mint will be
weighed automatically, and automatically inspected. The new
Mint's capacity will be such tta t it can serve the coin needs
of the whole country east of the Mississippi, making a
considerable saving in the costs now incurred in moving
coin materials, coin blanks and coins to and from the Philadelphia
and Denver Mints and the San Franc isco Assay Office.

- 5 A good deal more could be said, for the new Mint will be
a treasure house of advanced production and handling techniques,
and will have a good many other features besides: for
instance, all of its operations will be visible from the
visitors' gallery. But I want, in closing, to mention another
Treasury activity in Philadelphia.
In North Philadelphia the Internal Revenue Service recently
put into operation an Automatic Data Processing Center, for
the better and lower cost handling of tax returns, built at
a cost of 3 million dollars.
Among other things, this ADP center serves the purpose
of insuring that the honest citizen has to pay the government
no more than his own fair share of the tax burden. This
installation, one of seven of its kind in the country, is
playing a vital role in strengthening federal tax administration.
At peak employment during the height of the income tax
filing period, the center employes as many as 2500 people.
At the Philadelphia ADP Center the returns of 15 million
taxpayers in a region including Pennsylvania, Delaware,
New Jersey, Maryland, Virginia, and the District of Columbia
are processed. These returns represent $16 billion in federal
taxes. At the service center information from the returns is
transcribed into punched cards, converted to magnetic tape,
and forwarded to the national computer center in Martinsburg,
West Virginia where it is included in a master file of all
taxpayers throughout the country. Resulting tapes sent from
Martinsburg to Philadelphia are the source of the refund
checks or bills which taxpayers receive.
This system will not be fully installed until 1967, but
results of it even as it now stands more than justify the
expenditures for building costs, acquisition of computers and
payroll expenses.
As the system comes into operation, it relieves Internal
Revenue's district offices from paper handling burdens and
permits them to concentrate more effectively on taxpayer
services and informational activities.

- 6 -

The breaking of ground for this new Mint starts the
building of a great new government facility that will serve
the nation at high efficiency and low cost, to produce one of
the basic needs of a vigorous and growing nation such as
ours: an abundant coinage.
This new Mint stands as a symbol of your government's
interest and heavy participation in the rebuilding and
beautification of this fine old city. The building that
will house the new Mint has been designed carefully to fit in
with the artistic spirit of the redevelopment of Independence
Mall, where all the fathers of our country tread time and again,
and where Benjamin Franklin was a daily figure during so much
of his life.
This is a partnership in city improvement that is part
and parcel of the Great Society to which President Johnson has
put his hand. And this new Mint is the kind of lower cost,
higher efficiency government service facility that, in step
with similar advances in the private sector, is making the
Great Society a practical thing: it raises the standards of
service and abundance to the higher levels that must be
typical of a Great Society, while it makes the savings that
permit the building of the Great Society on a sound financial
structure.

000

- .)

JIIIIIIII

(tn'

exempt; from all tr!.Xation now or hcreafLer

Jmpo~ed

on the principal or interest

Lhcreof hy rllly stal.e, or :my of thc pm1sessions of the Un.ited States, or by
.1 oC~l.1

to.xJnr: authorIty.

POI'

purTo~e::.:

Wly

oJ' tnxaL:i.ul1 t.he amount. of diocount nt which

'l'rem:ury lJills nrc orIgInally sold by the United states is considered to be interest.

Under Sections -1,54 (b) and 1221 (5) of the Internal Revenue Code of 1954

the amount of discount at l1hich bills j.ssued hereunder are sold is not considered
to accrue until such bil18 are sold, redeemed or otherwise disposed of, and such
bills

0.1'('

e;:c lUfled from conGinerat -jon af; cql t tal a.wets.

r~ccordingJ~,

the owner

o.\.· 'l'l'eo'GIUJ' bLLls (other l.lnn II 'i'(~ .insurunce companieG) issued hereunder need include in h:i.G income tax return on l..y the difference betvTCcn the price paiel for such
bills" "Thether on oriGinal l.:;r;uc or on r;nhncquent purchase, and the BJl10unt

actual~

rcceJ.vcd either upon so.le or rcdem})tJon at maturity durinG thc taxable year for
Hhieh the return is made, as ordinary Uti.n or los:::;.
'l'l'c(J.sury Dcpartment Circular No. ~18 (current revision) and this notice, prescribe Lhe terms of the rrreasury biJ.ls and govern the conditions of their issue.
Copies of the circular may be obta.ined. from any Federal ReGerve Bank or Branch.

---

- 2 -

banking insti tutionD vrlll not be pennI tL<::d to submit tenders except for their own
nCCOlll1t.

Tenders "rill be received

Vi

LllouL dcposi t from Ineorporated banks and

tI11st companies and from responsible und l'eco[;nized dealers in investment securities.
Tenders from oLhers must be nccompantcd by payment of 2 percent of the face amotUlt

of Treasury bills applied for, unless the tenders are accompanied by an express
euaranty of payment by an incorporated banh: or trust company.
Immediately after the clo::dng

hou~,

tenders will be opened at the Federal Re-

serve Donlcs and Branches! follm-linl3 "l1ichpub] ic announcement will be made by the

l'rcasury Dcpai'tment of the· Dmountand price ranc;e of accepted bIds.
tinr, tenders vrill be advised of the acceptance or rejec Lion therooi'.

of the 'l'reasury

e;~ressly

~'hose

submit ....

The, SecretaI:Y

reserves the riGht to accept or reject any or all tenders,

in "Thole or in part, and his nction in any such renpect shall be final.

to these reservations, noncompetitive tenders for :j; 200,000
t(IIG8IJ

Subject

or le s.s wi thaut

stated price from any one bidder vrIll be accepted' in full at the average price (in
three decimalG) of accepted competi tlve bidG.

..

Settlement for accepted tenders in

accordance 1-rith the bids must be made or completed at the Federal Reserve Barlie on
September 30, 1965

, in cach or other tmmediately available funds or in a like

face amount of Treasury bill'S maturinc;
tenders vrill receive equal treatment.

September 30, 1965 •

Cash and exchange

iii

Cash adjustments will be made for differ-

ences betvTeen the par valUe of maturil1[; bills accepted in exchange and the issue
prIce of the ncVT bills.

The income derived from Treasury bills, ",hether intere;Jt or gain from the sale
or other disposition of the bills, does not have any exemption, as such, and loss
from the sale or other disposition of Treasury bills does not have any special
treutment, as such, under the Internal Revenue Code of 1954.

The bills are subject

to estate, inheritance, gift or other cxcioe taxes, "Thether Federal or State, but

IISbtIIIIDIA

TREASURY DEPARTMENT
Washington
September 16, 1965

FOR IHMIIDIATE RELEASE *
XXXXXXX~?QQQQQQQQQCXX

TREASURY REFUNDS ONE-YEAR BILLS

The Treasury Department, by this public notice, invites tenders for

*1,000,£20z000
~

in exchange for Treasury bills maturing
of $ 3 ,202.999,000

•

...

..

, or thereabouts, of __
3..
65....._-d~ Treasury bills, for cash and
_.::;S.=e,l;;;p..:;.te.;:;:m=b:;.;e::;,:;r~3~O;..;l'a....::l:.:9.;;6.;;5___ ,

in the amount

, to be issued on a discount basis under competitive and

noncompetitive bidding as hereinafter provided.

-

..

The bills of this series will be

dated _..;;S..;;e....
p~te_m;;b;.;:e:Lr~3....
0-.
• . ,:;1;,;: 9;.; ;6.; 5_ _ _ , and will mature

September 30. 1966 , when

the face amount will be payable without interest.

They will be issued in bearer

form only, and in denominations of $1,000, $5,000, $10,000, $50,000, $100,000,
$500,000 and $1,000,000 (maturity value).
Tenders will be received at Federal Reserve. Banks and Branches up to the
Daylight Saving
closing hour, one-thirty p.m., Eastern/~ time, Friday,S.mber 24,1965 •
Tenders "rill not be received at the Treasury Department, Washington.

Each tender

must be for an even multiple of $1,000, and in the case of competitive tenders the
price offered must be expressed on the basis of 100, with not more than three declme.ls, e. g., 99.925.

..

Fractions may not be used.

these bills will run for

365

(Notwi thstanding the fact that

days, the discount rate will be computed on a bank

discount basis of 360 days, as is currently the practice on all issues of TreasW7
bills.)

It is urged that tenders be made on the printed forms and forwarded in

the special envelopes which ,,'lill be supplied by Federal Reserve Banks or Branches
on application therefor.
Banking institutions generally may submit tenders for account of customers
provided the names of the customers are set forth in such tenders.

Others than

TREASURY DEPARTMENT
(

FOR IMMEDIATE RELEASE

TREASURY REFUNDS ONE-YEAR BILLS
The Treasury Department, by this public notice, invites tenders
for $1,000,000,000, or thereabouts, of 365-day Treasury bills, for
cash and in exchange for Treasury bills maturing September 30, 1965,
in the amount of $3,202,999,000, to be issued on a discount basis
under competitive and noncompetitive bidding as hereinafter provided.
The bills of this series will be dated September 30, 1965, and will
mature September 30, 1966, when the face amount will be payable without
~~rest.
They will be issued in bearer form only, and in
denominations of $1,000, $5,000, $10,000, $50,000, $100,000, $500,000
and $1,000,000 (maturity value).
Tenders will be received at Federal Reserve Banks and Branches up
to the closing hour, one-thirty p.m., Eastern Daylight Saving time,
Friday, September 24, 1965. Tenders will not be received at the
Treasury Department, Washington. Each tender must be for an even
multiple of $1,000, and in the case of competitive tenders the p~ice
offered must be expressed on the basis of 100, with not more than
three dec imals, e. g., 99.925. Frac t ions may not be used.
(No~ithstanding the fact that these bills will run for 365-day, the
discount rate will be computed on a bank discount basis of 360 days,
as is currently the practice on all issues of Treasury bills.) It is
urged that tenders be made on the printed forms and forwarded in the
special envelopes which will be supplied by Federal Reserve Banks or
Branches on application therefor.
Banking institutions generally may submit tenders for account of
customers provided the names of the customers are set forth in such
tenders. Others than banking institutions will not be permitted to
submit tenders except for their own account. Tenders will be
received without deposit from incorporated banks and trust companies
and from responsible and recognized dealers in investment securities.
Tenders from others must be accompanied by payment of 2 percent of the
face amount of Treasury bills applied for, unless the tenders are
accompanied by an express guaranty of payment by an incorporated bank
or trus t company.
Immediately after the closing hour, tenders will be opened at the
Federal Reserve Banks and Branches, following which public announcement
will be made by the Treasury Department of the amount and price range

F-197

- 2 of accepted bids. Those sUbmitting tenders will be advised of the
acceptance or rejection thereof. The Secretary of the Treasury exp~s
reserves the right to accept or reject any or all tenders, in whole ~
in part, and his action in any such respect shall be final. Subject t
these reservations, noncompetitive tenders for $200,000 or less withoo
stated price from anyone bidder will be accepted in full at the
average price (in three decimals) of accepted competitive bids. Settl
ment for accepted tenders in accordance with the bids must be made or
completed at the Federal Reserve Bank on September 30, 1965, in cash c
other immediately available funds or in a like face amount of Treasu~
bills maturing September 30, 1965. Cash and exchange tenders will
receive equal treatment. Cash adjustments will be made for differen~
between the par value of maturing bills accepted in exchange and the
issue price of the new bills.
The income derived from Treasury bills, whether interest or ga~
from the sale or other disposition of the bills, does not have any
exemption, as such, and loss from the sale or other disposition of
Treasury bills does not have any special treatment, as such, under thE
Internal Revenue Code of 1954. The bills are subject to estate,
inheritance, gift or other excise taxes, whether Federal or State, but
are exempt from all taxa tion now or hereafter imposed on the principal
or interest thereof by any State, or any of the possessions of the
United States, or by any local taxing authority. For purposes of
taxation the amount of discount at which Treasury bills are original~
sold by the United States is considered to be interest. Under
Sections 454 (b) and 1221 (5) of the Internal Revenue Code of 1954 the
amount of discount at which bills issued hereunder are sold is not
cons idered to accrue until such bills are sold, redeemed or otherwise
disposed of, and such bills are excluded from consideration as capital
assets. Accordingly, the owner of Treasury bills (other than life
insurance companies) issued hereunder need include in his income tax
return only the difference between the price paid for such bills,
whether on original issue or on subsequent purchase, and the amount
actually received either upon sale or redemption at maturity during
the taxable year for which the return is made, as ordinary gain or
loss.
Treasury Department Circular No. 418 (current revision) and this
notice, prescribe the terms of the Treasury bills and govern the
conditions of their issue. Copies of the circular may be obtained
from any federal Reserve Bank or Branch.

000

- 3 -

police system.
In addition to his law enforcement career he has had a long
background in journalism.

He served on the editorial staffs of the

Cleveland Press, Life Magazine, the Sunday New York Times, and as
assistant publisher of the Northern Virginia Sun.

He also wrote and

produced TV news and special events programs.
Mr. Sagalyn was born in Springfield, Massachusetts, in 1918,
and graduated from Oberlin College and the Graduate Institute of
International Studies in Geneva, Switzerland.

He served in World War I

as an enlisted man and later as a Captain in the infantry, and was
awarded four battle stars for service in the European Theatre of
Operations.
Mr. Sagalyn was recently named Vice Chairman of the Intemati
Association of Chiefs of Police Committee on Research .•
000

- 2 -

Enforcement).
Mr. Saga1yn has directed the activities of the Office of Law
Enforcement Coordination since April 1961.

He has served as United Stat

representative for the International Criminal Police Organization
(Interpol).

From 1962 until June of this year, he was senior vice

president of the International Criminal Police Organization.
Mr. Sagalyn first became active in law enforcement in 1939'
when he was appointed Assistant to the Director of Public Safety,
Cleveland, Ohio, where he participated in many criminal investigations
and in the reorganization of the city's police department.

He later

joined the Office of Defense, Health and Welfare Service working with
local and State police forces in a national program to suppress
prostitution.

At the close of World War II he was assigned to Berlin

as a military officer on the staff of the Chief of the Public Safety
Division of the Office ·on Military Government in Germany, and helped
direct the Denazification program and the reorganization of the Ge~

/ip 17

FOR RELEASE A.M. NEWSPAPERS
MONDAY, SEPTEMBER 20, 1965

SAGALYN DESIGNATED LIAISON TO
PRESIDENT'S CRIME COMMISSION
Secretary of the Treasury

Henry H. Fowler today announced that

Arnold Sagalyn, Director of the Treasury's Office of Law Enforcement
Coordination, will serve as Treasury's liaison with the President's
Commission on Law Enforcement and Administration of Justice.
Mr. Sagalyn will report to David C.

~son,

who was sworn in

Thursday, September 16, as Special Assistant to the Secretary (for
Enforcement).
This assignment will be Mr. Sagalyn's primary responsibility,

/.
in keeping with the high priority attached to the work of the/ommiSsi01
which has been charged by the President with studying crime in the
United States and recommending ways to reduce and prevent it.

Mr.

Sagalyn will continue as Director of the Office of Law Enforcement
Coord ina tion, which is now in the Office of the Special Assistant (for

TREASURY DEPARTMENT
(

September 17, 1965
FOR RELEASE A.M. NEWSPAPERS
MONDAY, SEPTEMBER 20, 1965
SAGALYN DESIGNATED LIAISON TO
PRESIDENT'S CRIME COMMISSION
Secretary of the Treasury Henry H. Fowler today announced
that Arnold Sagalyn, Director of the Treasury's Office of Law
Enforcement Coordination, will serve as Treasury's liaison with
the President's Commission on Law Enforcement and Administration
of Jus tice.
Mr. Sagalyn will report to David C. Acheson, who was sworn
in Thursday, September 16, as Spec ial Ass is tant to the Secretary
(for Enforcement).
This assignment will be Mr. Sagalyn's primary responsibility,
in keeping with the high priority attached to the work of the
Commission, which has been charged by the President with studying
crime in the United States and recommending ways to reduce and
prevent it. Mr. Sagalyn will continue as Director of the
Office of Law Enforcement Coordination, which is now in the
Office of the Special Assistant (for Enforcement).
Mr. Sagalyn has directed the activities of the Office of
Law Enforcement Coordination since April 1961. He has served as
United States representative for the International Criminal
Police Organization (Interpol).
From 1962 until June of this
year, he was senior vice president of the International Criminal
Police Organization.
Mr. Sagalyn first became active in law enforcement in 1939
when he was appointed Assistant to the Director of Public Safety,
Cleveland, Ohio, where he participated in many criminal
investigations and in the reorganization of the city's police
department. He later joined the Office of Defense, Health and
Welfare Service working with local and State police forces in a
national program to suppress prostitution. At the close of
F-198

- 2 -

World War II he was assigned to Berlin as a military
the staff of the Chief of the Public Safety Division
Office of Military Government in Germany, and helped
denazification program and the reorganization of the
police system.

officer on
of the
direct the
German

In addition to his law enforcement career he has had a long
background in journalism. He served on the editorial staffs of
the Cleveland Press, Life Magazine, the Sunday New York Times, and
as assistant publisher of the Northern Virginia Sun. He also
wrote and produced TV news and special events programs.
Mr. Sagalyn was born in Springfield, Massachusetts, in 1918,
and graduated from Oberlin College and the Graduate Institute of
International Studies in Geneva, Switzerland. He served in
World War II as an enlisted man and later as a Captain in the
infantry, and was awarded four battle stars for service in the
European Theatre of Operations.

000

D R AFT

SEPTEMBER 16, 1965

~.Lre.lea.sa-,-

sept-17)

Gltt U

'/I'~f< ~~-

'(/

t1

N~f J"A /~t ~ (?II (AJ~ Ip{"t

Ground will be broken today (Friday, September 17, 11:30
a.m. E.D.T.) in Philadelphia for the world's biggest and most
modern Mint, by Joseph W. Barr, the Under Secretary of the
Treasury.

Others participating will include James H. J. Tate,

Mayor of Philadelphia, Robert A. Wallace, Assistant Secretary
of the Treasury, Miss Eva B. Adams, Director of the Mint and
Michael H. Sura, Superintendent of the Philadelphia Mint.
The new $37 million plant will take the place of the
present Philadelphia Mint, now 64 years old.
,

fourth

IIpj taciw8bStSS

'-tlte .,

/

It "ill .. tlif

i~P8"'HUfiiQQwWia'a. . . t .. e£

TREASURY DEPARTMENT

September 16, 1965

FOR RELEASE A.M. NEWSPAPERS
FRIDAY, SEPTEMBER 17, 1965

GROUND BREAKING FOR A NEW
MINT AT PHILADELPHIA
Ground will be broken today (Friday, September 17,
11:30 a.m. E.D.T.) in Philadelphia for the world's
biggest and most modern Mint, by Joseph W. Barr, the
Under Secretary of the Treasury.

Others participating

will include James H. J. Tate, Mayor of Philadelphia,
Robert A. Wallace, Assistant Secretary of the
Treasury, Miss Eva B. Adams, Director of the Mint and
Michael H. Sura, Superintendent of the Philadelphia
Mint.
The new $37 million plant will take the place of
the present Philadelphia Mint, now 64 years old.

000

F-199

Director 0f the World Bank -- in the Lmportant work of th. lamk
lo the vital field of development finance.

In this work, I

8m

confident his contribution will reflect

credit upon himself, the Treasury, and the Bank.

Last year, he served a. a member of the United Itatea'
delegation to the United Nations Sonferenee on Trade aad
Development, and as Chairman of the United State.' daleption
concerned with developmentaasiatance in connection with the

Conference.

Hia contribution at the Conference wa. tmpre•• lv.

and he helped to achieve agreement among the divers. vi... of
the participants.
More recently, he has served effectively in the

.1iDlfl~

post of director of the Office of Developing Nations of the
Treasury and has played an important ro 1e in brin&iDa to the
present
Bank.

His experience has given

h~

execellent qualiflcatlOD1 to

assist Livingston T. Merchant -- the United States Executive

TP.FASURY DF.PAmrMENT
l"ashington

.tU:NAhKS lW THE HONORABLE HENRY H.
SECRETARY OF THE TREASURY

F~LER

AT THE SWEARING IN OF
BERNARD ZAGORIN

AS

ALTEtU~TE

UNITED STATES EXECUTIVE DIRECTOR

OF 'IHE WOlUJ) BANK
IN ROOH 4121, J.1AlN TREASURY BUILDING
:r-ri..:.IUAY, SEP'l'Et1BER 17, 1965, AT 12 NOON, i.D.T.

It:

t

S

'1:"

ne'l;' dut_Les.

Jth oreat pleasure that I we lcome Mr. &agorin to nit

de Ls a man of outstanding ability -- a fact that

the 1'1-eaSUrj rec;Jsnized as far back as 1951 ".:Then we hired him

away t:::.)m the Economic Coopet:ation AdministL-ation in London,

to

\.\1CJl.·K

as ':-Jur Ass istant Treaaury Attache there.

He set"Ved so \-Jell a.here that he was soon brought back to
\';ashin.~-)t.)n and after sever'al

pas t

~)f

years was given the intportant financial

Treasury r-epresentat ive in India.

Once again he served

with distinctL.::m, achievin::; t.he i.-espect and trust not only of
Department
~1:i.5 T:-easur-y an<i State/ cd.1lla6ues J but also of the Indian govern-

.Heet: an') ·)thers.

TREASURY DEPARTMENT
Was.hington
REMARKS BY THE HONORABLE HENRY H. FOWLER
SECRETARY OF THE TREASURY
AT THE SWEARING IN OF
BERNARD ZAGORIN
AS ALTERNATE UNITED STATES EXECUTIVE DIRECTOR
OF THE WORLD BANK
IN ROOM 4121, MAIN TREASURY BUILDING
FRIDAY, SEPTEMBER 17, 1965, AT 12 NOON, E.D.T.
It is with great pleasure that I welcome Mr. Zagorin to his new
luties. He is a man of outstanding ability -- a fact that the
rreasury recognized as far back as 1951 when we hired him away from
:he Economic Cooperation Administration in London, to work as our
~ssistant Treasury Attache there.
He served so well there that he was soon brought back to
~shington and after several years was given the important financial
lost of Treasury representative in India. Once again he served
vith distinction, achieving the respect and trust not only of his
rreasury and State Department colleagues, but also of the Indian
~overnment and others.
Last year, he served as a member of the United States' delegation
:0 the United Nations Conference on Trade and Development, and as
~hairman of the United States' delegation concerned with development
~ssistance in connection with the Conference.
His contribution at
:he Conference was impressive and he helped to achieve agreement among
:he diverse views of the participants.
More recently, he has served effectively in the significant
lost of Director of the Office of Developing Nations of the
~easury and has played an important role in bringing
to the
)resent stage discussions on the formation of the Asian Development
~ank.

His experience hasgiven him excellent qualifications to assist
~ivingston T. Merchant -- the United States Executive Director of the
Jorld Bank -- in the important work of the Bank in the vital field
)f development finance.
In this work, I am confident his contribution will reflect credit
Ipon himself, the Treasury, and the Bank.

000

- 3 -

the ranch, and a number of weapons were confiscated in the
raid.
,"-

. -_ _

--'~-.-".~

••.

--~--' '·~'-'·';~'--~~'-",~- •••·o .• _ ' . ,

,/

..-.\

~\7)

authorized by the

\jJ/ /

\\

'-_.-

of

,

(

Pr~dent

the~ted

t

(

I

to express

~

States to the Mexican

.,,/
.... .,,"4..

,.~./

h~e

our two nations

J

~

/'

authorities for this out anding achievement.
,~/
,,'"

J

........."

//

~r./J ,/ appreciation
\J rJ
~ ~

1~:7

Secretary Hem) Ihi'

~.

j

_ _••">'............ , . (

r'"

achieved a

_.i/'

Once again

igh degree of international

0"-

l\

".

.,f'"

.

7.

cooperat~on,..'''w~t

h t he

the traffic in illicit

...I'"
..-I

I

.I'

l

drugs ~ich represents such a threat to t e health and future
,1'/

.~
\

\

\

i..

,r

1

'\, .,¢'" so many innocent victims, particularly amo g our youth."
;: ~

,l'.

\ ..,

.....
'-'-."".,..

~--.. ----.-

.. --,..

~-.. -.--- -"'--'''-~-'''''-'''''''''~~''-'~-'''~ ..... " ........ -"

- 2 -

He said he lce@i:vliui .k8

The raid was made

j8118"li:"~ aeeslIIl1i I

~~"""3'

in a rural area near the

town of San Francisco Laguni11a, in the State of Guerrero,
about 120 miles from Acapulco.
The seizure was carried out

~

by agents of the

Mexican Federal Judicial Police, working under the direction

£1 (trlJ)l&1-1 a ~
of the Attorney General of Mexico, alent; with agents of the
t

A
u.S. Federal Bureau of Narcotics.
The Mexican agents -- who were accompanied by about 20
soldiers from the Mexican Army and one U.S. agent -- had to
walk about six miles to reach the ranch where the raid was
made.

The marijuana was believed grown on the ranch, and

destined for United States' markets.

Two men were arrested at

U~W~f!I7;~ilfA~~:~ ~
~._ _ . . : . .

luT}.,

."
{j C
. DRAFT TREASURY REI&ASE

9/17/65 ~"

"'

GJ

FOR IMMEI?I,A.TKRELEASE
"

.'

,

.:

......

''t'.''

MARIJuANA~; IZURE

"

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,"

..."

.....

"

..............~~\

_,,, ~...

1 .. ',-'"

IN MEXICO _.. -

l"te.fl4Stll< if s c:- c 1«' T A!.L.r 1-1 e IV,e yMexican authO'FitieS."_~6~-eing :in cooperation with
/\
.~"

age;;ts

'"

0

f the U. S • Treasury' s Bureau

carried out

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0

f Narc" tics

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t"

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-;r; -,11ft

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f•

the' largest seizures of marijuana on

record.

than 6,000
pounds of the drug

1If

~

If 7111 7 - - roughly equal to the total

of all seizures of this

~rug :':l.ong

the border

~__ ,,:.,,\1..1 ~.~~ _, .? e- It. e:-O

".1 I~' (

be~een th~0

~t

A ~ t, \D

United States and Mexico during all' of 196i\ He estimated

that the value of the seizure could be over a million dollars,
at the retail price to users in the United States of about
$150 a pound.

,/c~
~.

..)

9/17/65

MARIJUANA SEIZURE IN MEXICO

(

Tre~ury

Secretary Henry H. Fowler today expressed the appreciatia
~/)

of the United Statesl'r the action of Mexican authorities Who:>....9c.~

L CI.S &::'-

working in cooperation with agents of the U. S. Treasury's
1\

Bureau of Narcotics
)

~s

week carried out one of the largest

seizures of marijuana on record.

, 5,~:; ~~ ::;tJ ,4tI t.<v\

s~

(J ;

"I have been authorized by the President to express
appreciation on the part of the United States to the Mexican
authoiities for this outstanding achievement.

Once

again~

our two nations have achieved a high degree of international
cooperation, with the effect of reducing the traffic in illicit
drugs which represents such a threat to the health and future
of so many innocent victims, particularly among our youth."

~.
~.. r

_.

S. Narcotics Commissioner Henry L. Giordano said
tal trl._~.!I·.~.at:e«·"7n.i!JI~1IIiiP1"ll"

-~~!--J~-.

TREASURY DEPARTMENT
(

FOR IMMEDIATE RELEASE
MARIJUANA SEIZURE IN MEXICO
Treasury Secretary Henry H. Fowler today expressed the
appreciation of the United States for the action of Mexican
authorities who, working in close cooperation with agents of
the U. S. Treasury's Bureau of Narcotics, this week carried
out one of the largest seizures of marijuana on record.
Secretary Fowler said:
"I have been authorized by the President to
express appreciation on the part of the United
States to the Mexican authorities for this
outstanding achievement. Once again, our two
nations have achieved a high degree of international
cooperation, with the effect of reducing the traffic
in illicit drugs which represents such a threat to
the health and future of so many innocent victims,
particularly among our youth."
U. S. Narcotics Commissioner Henry L. Giordano said more
than 6,000 pounds of the drug -- roughly equal to the total of
all seizures of this drug along the border between the United
States and Mexico during all of 1964 -- was seized in a raid
Tuesday night. He estimated that the value of the seizure
could be over a million dollars, at the retail price to users
in the United States of about $150 a pound.
The raid was made in a rural area near the town of
San Francisco Laguni11a, in the State of Guerrero, about 120
miles from Acapulco.
The seizure was carried out by agents of the Mexican
Federal Judicial Police, working under· the direction of the
Attorney General of Mexico, in cooperation with agents of the
U. S. Federal Bureau of Narcotics.
The Mexican agents -- who were accompanied by about 20
soldiers from the Mexican Army and one U. S. agent -- had to
walk about six miles to reach the ranch where the raid was
made. The marijuana was believed grown on the ranch, and
destined for United States' markets. Two men were arrested
at the ranch, and a number of weapons were confiscated in the raid.
F-200
000

TREASURY DEPARTMENT
FOR :1ELEASE A.M. NEI'lSPAPERS,
WASHINGTON. D.C.
Tuesday, September 21, 1965.
September 20, 1965
RESULTS OF TREASURY'S WEEKLY BILL OFFERING
The Treasury Department announced last evening that the tenders for tliO series of
Treasury bills, one series to be an additional issue of the bills dated June 24" 1965,
ann the other series to be dated September 23" 1965, which were offered on September
15, .Jere opened at the Federal Reserve Banks on September 20. Tenders were invited- to
$1,,200,,000,000, or thereabouts, of 91-day bills and for $1,000,000,000, or therea~_
of 182-day bills. The details of the two series are as follows:
RUJG3: OF ACCEPTED
91-day Treasury bills
:
182-day Treasury bills
COHPETITIVE BIDS:
maturing December 23, 1965
:
maturing March 24: 1966
.
Approx. EqUIy
Approx. Equiv. :
Price
Annual. Rate
:
Price
Annual Rate
3.889%
:
97.949
4.057%
99.017
Low
3.916%
:
97.940
4.075%
99'11010
Average
99 0 013
3.905%
97.943
4.069%

y:

Y

5 percent of the amount of 91-day bills bid for at the low price was accepted
32 percent of the amount of 182-day bills bid for at the low price was accepted
T

'L TENDERS APPLIED FUR AND ACCEPTED BY FEDERAL RESERVE DISTRICTS:

District
Boston
~e\-1 York
Philene1phia
Cleveland
Ricr.mond
Atlanta
Chicago
Sto Louis
Hin11eapolis
K:...nsas City
San Francisco

For
30,414,000
1,1~ 72,520,000
29,452,000
31,613,,000
15,506,000
40,577,000
297,351,000
4),519,000
20,034,000
36,543,000
26,375,000
73,727,000

Taras

$2,119,631,000

D.:U.las

2/
'S/

tJ

A~lied

$

Acce]2ted
$ 20,414,000
780,145,000
17,452,000
31,613,000
15,056,000
25,177,000
150,901,000
33,574,000
16,084,000
33,643,000
19,425,000
56,737,000
$1,200,221,000

••
••
•
:

A]2]21ied For
28,998,000
$
1,272,950,000
13,000,000
50,820,000
13,186,000
•
:
27,785,000
278,186,000
•
20,071,000
•
15,192,000
21,933,000
12,583,000
•
104,108,000
$1,858,812,000

·
·
·
,

·
··
·
·
!I

AcceEted
$ 13, 318,Q(
684,570,0('
5, OOQ,OC
40, 820,OC
9,486,OC
12, 249,Q(
134, 786,¢.
12,071,00
12,192,OC
17,049,OC
7,903,OC
51, 568,oC
$1,OOl,012,OC

Includes $267,662,000 noncompetitive tenders accepted at the average price of 99.(
Includes $112,089,000 noncompetitive tenders accepted at the average price of 97.~
On a coupon issue of the same length and for the same amount invested, the retum (
these bills ,lould provide yields of 4.00;t, for the 91-day bills, and 4.21%, far ~
l82-day bills. Interest rates on hills are quoted in terms of bank discount with
the return related to the face amount of the bills payable at maturity rather thaD
the aJnount invested and their length in actual number of days related to a ,36O-da1
year. In contrast, yields on certificates, notes, and bonds are computed in tel'lll8
of interest on the amount invested, and relate the number of days remaining in an
~~terest payment period to the actual number of days in the period, with semi~
compounding if more than one coupon/is. involved.
per10d
F-201

TREASURY DEPARTMENT
roR RELEASE A.M. NEWSPAPERS,
~sday,

September 21, 1965.

WASHINGTON. D.C.
September 20, 1965

:?SSULTS OF TREASURY'S WEEKLY BILL OFFERING

The Treasury Department announced last evening that the tenders for two series of
rreasury bills, one series to be an additional issue of the bills dated June 24, 196.5,
;gnd the other series to be dated September 23, 196.5, which were offered on September
LS, were opened at the Federal Reserve Banks on September 20. Tenders were invited for
n,200,OOO,OOO, or thereabouts, of 91-day bills and for $1,000,000,000, or thereabouts,
If 182-day bills. The details of the two series are as follows:
RANGE OF AGCEPTED
91-day Treasury bills
:
182-day Treasury bills
OOMPETITIVE BIDS:
maturing December 23, lQ65
:
maturing March 24, 1966
Approx. Equiv. :
Approx. Equiv.
Price
Annual Rate
Price
Annual Rate
:1:iSh
99.017
3.889%
:
97.949
4.057%
Low
3.916%
:
97.940
4.07.5%
99.010
Average
99.013
3.905%!f
97.9~3
4.069% !I

.5 ~rcent of the arr'ount of 91-da~) bills bid for at the low price was accepted
32 percer;t of the amount of let:-da:.- bills hid for at the low price was accepted
Wl'AL TENDERS APPLIED FDR AND ACCEPTED BY FEDERAL RESERVE DISTRICTS:

District
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
TorALS

AEElied For
$ 30,h14,OOO
1,tl72,520,OOO
29,452,000
31,613,000
15,506,000
40,577,000
297,351,000
1+5,519,000
20,034,000
36,543,000
26,375,000
73,727,000
$2,119,631,000

·
·
·
·

•
Acce,eted
20,414,000
$
780,145,000
17,452,000 :
31,613,000
15,056,000
2.5,177,000
150,901,000
33,574,000
16,084,000 :
33,643,000
19,425,000
56,737 ,000
$1,200,221,000 !I

·

A,e,elied For
S 28,998,000
1,272,950,000
13,000,000
50,820,000
13,186,000
27,785,000
278,186,000
20,071,000
15,192,000
21,933,000
12,583,000
104,108,000
$1,858,812,000

Acce,eted
¢
13,318,000
'+684,570,000
.5,000,000
40,820,000
9,486,000
12,249,000
134,786,000
12,071,000
12,192,000
17,049,000
7,903,000
51,568,000
$1,001,012,000

,

~I Includes $267,662,000

noncompetitive tenders accepted at the average price of 99.013

j/ Includes $112,089,000 noncompetitive tenders accepted at the average price or 97.943

tj

On a coupon issue of the same length and for the same amount invested, the return on
these bills would provide yields of 4.OQ't, for the 9l-day bills, and 4.21%, for the
lB2-day bUls. Interest rates on hills are quoted in terms of bank discount with
the return related to the face amount of the bills payable at maturity rather than
the BJIlount invested and their length in actual number of days related to a 360-day
year. In contrast, yields on certificates, notes, and bonds are computed in terms
of interest on the amount invested, and relate the number of days remaining in an
interest p~ent period to the actual number of days in the period, with semiannual
compounding if more than one coupon/is, involved.
per10d
F-20l

bl

TREASURY DEPARTMENT
Washington

STATEMENT OF THE HONORABLE MERLYN N. TRUED
ASSISTANT SECRETARY FOR INTERNATIONAL
AFFAIRS, U.S. TREASURY, BEFORE THE
FINANCE COMMITTEE OF THE U.S. SENATE
10 A.M., September 20, 1965
Mr. Chairman and Members of the Committee:
I appreciate the opportunity to appear before you to
comment on the ba1ance-of-payments implications

of the

proposed legislation to implement the United States-Canadian
Automotive Products Agreement.
As this Committee knows, the U.S. has had a substantial
overall surplus on trade account with Canada, over the years.
Our automotive trade with Canada has contributed substantially
to that surplus.
With the Automotive Products Agreement in force, Secretary
Connor testified before the Committee that
" It is reasonable to project a continuing growth in
the Canadian automotive market sufficient to absorb
the projected increase in Canadian production without
reducing our net favorable balance of trade with Canada."

The Treasury supports this conclusion.

F-202

- 2 -

Let me begin by reviewing with you the basic figures
supporting this conclusion.
Model Year
1964 ~/
1968
$ millions
$ millions
Total sales in Canada (and out of
Canada to third countries) of
automotive products made in U.S.
and Canada

1,543.5

2,090

Canadian value-added of automotive
products made in Canada
(including replacement parts)

962.4

1,510

u.S. net surplus in automotive
products trade with Canada

581.1

580

~/

Based on official statistics of the U.S. Department of
Commerce and the Canadian Dominion Bureau of Statistics,
supplemented by industry information.
The first line in the table shows for model year 1964, on

an actual basis, and for 1968, on a prospective basis, the sales in
Canada (and out of Canada to third countries) of automotive
products produced in both the U.S. and Canada.

The second line

shows the Canadian value-added of automotive products produced
in Canada whether for sale in Canada, export to the U.S. or
export to third countries.

The difference between these lines

shows net U.S. exports to Canada.

This trade surplus of $581

million in model year 1964 will, on the basis of our estimates,

- 3 -

be approximately the same in model year 1968.

The figure of almost $2.1 billion at the top of the second
column represents the expected size of the Canadian automotive
market for automotive products produced in the U.S. and in
Canada in 1968. (It also includes about $72 million of exports
from Canada to third countries.)

It assumes a rate of growth

of 8% per year in the number of automotive units that will be
absorbed by the Canadian market between 1964 and 1968.

This

8% growth estimate is a projection of the growth that has
characterized the Canadian market in recent years.
Official Canadian statistics show that for the five year
period, 1960 through 1964, the annual rate of growth in number
of units sold averaged 8.5% a year.

In the two years 1963 and

1964, it averaged 12% a year.
In value terms, the growth was even greater -- averaging
10.6% a year for the period 1960 through 1964; and over 14%
a year for the last two years.
The estimate of an 8% increase per year in number of units
sold is on the conservative side, as these figures suggest.

- 4 The Canadian economy shows every prospect for a strong
rate of economic growth over the period through 1968, and with
this growth the demand for automobiles can be expected to continue strong.

This is so even if automobile prices in Canada

remain the same.

If they decline as the industry gets on a more

efficient basis, the estimate of an 8% increase per year in the
number of units sold may be even more on the conservative side.
The second figure in the righthand column derives from
the 1964 figure of Canadian value-added and the two undertakings
of the Canadian companies with the Canadian Government.

These

undertakings provide that, of the total growth of sales in Canada
of North American produced cars and trucks, 58 % (60% in the case
of cars and 50% in the case of trucks) will represent Canadian
value-added.

Over and above this growth factor, the automobile

companies have undertaken to produce an additional $241 million
of value-added in Canada by 1968.

The sum of these figures,

plus Canadian value-added in 1964, gives the $1.5 billion of
Canadian value-added in 1968.

By subtracting this figure from

the estimated market in Canada for North American produced cars
in 1968 we obtain the estimated net value of automotive products
that will be supplied to the Canadian market by the U. S. in 1968.

- 5 -

What the table shows, in short, is that the increase in
Canadian value-added in the automotive industry between 1964
and 1968 will absorb all of a conservatively estimated increase
in the Canadian market for North American produced cars.

If the

growth of the market should be greater than 8%, the U. S. automotive trade surplus with Canada in 1968 should exceed the 1964
surplus.

After 1968, when the companies no longer have an

undertaking with respect to a special $241 million of value-added
in Canada, the prospects for an increase in the U. S. automotive
trade surplus with Canada will be better.

I might note, Mr.

Chairman, that our surplus in the first half of this year was
about $45 million above that in the first half of 1964.
From a ba1ance-of-payments viewpoint then, the automotive
agreement simply means this.

Under it we stand to maintain our

present sizable surplus with Canada in automotive trade.

Without

the Agreement, we stand to lose a part of our present surplus.
There is no doubt in the Administration's mind of this outcome,
and I believe other Government witnesses have indicated their
firm judgment that, in the absence of the Agreement, Canada would
undertake measures to limit imports from the U. S.
There is another balance of payments consideration that I
would like to mention briefly in this context.

It relates to

- 6 investment in Canada.

The means of financing investments in

the automotive industry in Canada in recent years have been
reinvestment of local earnings and borrowing in the Canadian
market.

As Secretary Connor has stated, this pattern will

probably continue.

That probability is heightened by the

fact that under the Agreement the companies will have substantial
savings from the waiver of Canadian duties they would otherwise
have had to pay.

This means that any additional investment result-

ing from the companies' undertakings should involve little, if
any, cash transfers from the United States.

For this reason

we do not anticipate an adverse effect on our balance of payments
from increased automotive investment in Canada.
The tightening of Canadian restrictions on imports of U.S.
automotive products, in the absence of the Agreement, would have
probably induced companies to accelerate their investment in
Canadian facilities to a degree that may well have required some
cash flow from the U. S. with a consequent adverse effect on our
balance of payments.
The above considerations are those which have led me to
express Treasury Department concurrence in Secretary Connor's
position on the balance-of-payments effects of the automotive
agreement.

- 15 -

not halt -- these practices, so that confidence in the dollar
will be sustained, lab

•

If confidence in the dollar is sustained, if the international monetary system evolves in a sensible way, we will
have created the best possible environment for the American
economy -- American businessmen -- to demonstrate their
formidable competitive strength, in the world at large, in the
year's ahead.

- 14 The annual meeting of the International Monetary Fund
beginning next week offers a logical opportunity to start putting
the negotiating machinery in motion.
In both the case of the problem of the United States balance
of payments and that of international monetary reform, therefore,
there are signs of progress.
on a note of caution.

I would rather close, however,

A basic change in the world's monetary

system will not come about quickly or easily.

To reach agreement

among all the nations involved on anything so basic will require
time and enormous effort.
A lasting improvement in our balance of payments -- lasting
enough to be meaningful in the context I have described -- will
also require time and effort.
The President's program is broad-gauged, requiring some
sacrifice of many elements of the population but no unreasonable
sacrifice, in our judgment, of anyone element.

Of course,

more tourists would like to bring back more goods duty-free from
abroad; of course, banks and other lenders would like to lend
as freely as possible abroad; of course, businessmen would like
to take advantage of every attractive overseas investment
opportunity.

Essentially, we are asking these groups to adjust --

- 13 other major countries in comprehensive studies of the international monetary system, its recent evolution, its present
effectiveness and its future.

On June 1 of this year, this

multilateral study group issued a report which exhaustively
examines the possible ways to strengthen the system.

In July,

Secretary Fowler announced that the U.S. stood prepared to
participate in an international monetary conference that would
consider what steps we might jointly take to secure substantial
improvements in international monetary arrangements.
On September 10, Secretary Fowler returned from a 10-day
trip to Europe during which he exchanged views with officials
of seven countries on how we might move ahead to improve the
workings of the international monetary system.

Secretary Fowler

had earlier conferred in Washington with Canadian and Japanese
officials.
He found agreement that present circumstances call for
a reexamination of the free world's monetary arrangements; that
we should begin contingency planning

for~~sible

time ahead

when new ways of providing for growth in monetary reserves will
become necessary; and that active discussions on negotiations
should begin in the near future at the level of policy-making
officials.

- 12 The key to success in this program, both in the shortrun and in the long-run, is the business community.

For the

short-run, we must have the effective cooperation of the business
community to give us the time for our longer-run measures to
take effect.

And in the long run, the competitive position of

American business in relation to the other major trading
countries will be critical.
First of all, we must maintain our good record of relative
price stability.

Secondly, American business must become more

energetic and effective in finding and exploiting foreign markets
for American exports.
Shortly after President Johnson announced his new balance
of payments program on February 10, there was an encouraging
swing to a surplus in our balance of payments. It is far too
early, however, to conclude that this represents a permanent
trend toward equilibrium.

Some of the gains were due to special

factors, some were one time gains.

We are by no means out of

But we do feel that we have a program which is

S~

and can bring us to equilibrium if all of us follow through on

~

the woods yet.

vJhile the subject of world liquidity has only recently

c~

into public prominence, the U.S., several years ago, joined wiW

- 11 -

We are seeking the long-run, basic solution to our balance
of payments deficit through measures which are consistent with
our domestic objectives and our foreign policy objectives, and
consistent with a growing volume of world trade and capital
movements.
1.

In brief, our long-run approach is to:

Continue to minimize the balance of payments impact of
Government expenditures abroad.

2.

Strive to increase our exports and receipts from foreip
tourists.

3.

Encourage other developed nations to take on more
international financing to relieve us of a disproportionate share.

4.

Take measures to encourage more foreign investment
here.

To gain the necessary time for these longer run measures,
we have undertaken shorter-run

measures which President Johnson

outlined in his message last February 10.

These consist of

efforts to reduce foreign travel expenditures by

u.s.

citizens;

the extension and broadening of the Interest Equalization Tax;
and, most importantly, the request that banks and corporations
curtail or adjust their activities to lessen the balance of
payments impact of capital outflows.

- 10 -

on the particular circumstances at the particular time.
But while we may not be able to define in precise numerical
terms what equilibrium is, we can say that it does not exist
when the United States is continually losing gold.

Perhaps,

then, the best indication of what equilibrium in the U. S.
balance of payments is, is what the rest of the world thinks
it is.

The extent to which they cash in their dollars for

gold is, in short, a very useful indicator.

- 9 But these dollars did not become new additions to total world
reserves.

Rather, they came right back to the U. S. Treasury

Department to be exchanged, along with dollars accumulated in
past periods, for some $800 million worth of gold.

A continuance

of the dollar outflow would lead to more of the same, a transfer
of gold from the U. S. to the European surplus countries with
little or no gain for world liquidity as a whole but with
continual decreases in our liquidity.
The Administration's Approach.
The Administration's approach to these twin problems is
to move quickly and certainly to balance of payments equilibrium
and at the same time to move forward in discussions on improving
the world's monetary system.
I have pointed out why it is imperative for us to restore
equilibrium in our balance of payments.
do we mean by equilibrium?

But what, it is asked,

Is it an exact balance or does it

allow for some deficit, say $500 million, $1 billion, or even morl
Our feeling in the Treasury is that equilibrium cannot be
defined solely in terms of a figure; it is importantly a matter
of confidence.

Whether a given figure for the over-all balance

of our international transactions represents equilibrium depends

- 8 -

In noting these strengths of the present international
payments system, I am not arguing that nothing further needs
to be done.

I note them only because in recent months some

people have unjustifiably jumped to the conclusion that an
ending of the U. S. balance of payments deficits will immediately
bring about a shortage of world liquidity and a crisis.
In addition to overlooking the very real strength of the
current system, those who make the over-simplified argument
that we should continue our balance of payments deficit to
maintain world liquidity, overlook two other basic points.

First

the dollar cannot continue to be a reserve currency if we continul
a balance of payments deficit of the magnitudes that have prevailed in the past.

Sooner or later our liabilities will become

so large in relation to our gold reserves that foreign central
bankers will no longer believe that the dollar is, in fact, as
good as gold and they will not be willing to hold it.
Secondly, a deficit in our balance of payments does not
necessarily and automatically increase world liquidity if the
count:tj~e,..s _wI;\~.ch

are recei1ng the,. dOfllars cash them in ,f9r gold.

~Uv A.A.~,. l'.((\. ~.ll\

I~~

~~

Their reserves go up but ours' go downY"'\ To illustrate the point,
in the first quarter of this year the deficit in our over-all
balance of payments, seasonally unadjusted, was $180 million.

- 7 -

of our deficit may not create a world liquidity problem for
sometime to come.
Over the past four years, while we have not changed the
basic structure of the international payments mechanism, we
have substantially fortified it.

Just this year, the members

of the International Monetary Fund agreed to support a general
increase in IMF quotas of 25 percent or about $5 billion.

In

1961, the ten major industrial nations,known as the Group of Ten,
negotiated with the International Monetary Fund a so-called
General Arrangements to borrow ,whereby the ten nations agreed to
lend to the IMF up to $6 billion should this be necessary "to
forestall or cope with an impairment of the international
monetary system."
Added to this multilateral source of funds are the various
bilateral arrangements whereby the major countries stand ready
to swap their currencies with one or more of the other countries
in time of need.

The substantial support which the IMF

and the leading countries have extended to the pound sterling
in recent months is testimony to the strength of the present
system.

--

'2'
•

oJ

You will remember that I have earlier indicated that
net outflows of dollars have not always been turned back
to the U. S.

Some of these dollars have been retained

by foreigners to increase working balances to finance
an expanding level of trade and finance and some of these
additional dollars have been held to build up official
reserves.

On its face, it appears that we are faced with a dilemma.
Actually, careful analysis leads us to believe that the ending

- 6 -

of 1964 amounted to over $15 billion and our Government claims
on foreign countries which amounted to over $23 billion.

Our

over-all position, therefore, is obvlIously immensely strong.

[ju-

.

In'the process of building up these tremendous foreign
assets, most of which are long-term assets, we have incurred large
short-term liquid liabilities, which, while much smaller than
our long-term assets, bave been large in relation to

~

gold

reserves.
At the beginning of 1958 our holdings of gold came to almost
$23 billion.

They now stand at less than $14 billion.

Over

the same period our dollar liabilities to foreign official
institutions rose from less than $9 billion to over $14 billion.
It is obvious that this process of lending long and borrowing
short cannot go on indefinitely, and I think that most responsible
observers are agreed that our balance of payments must be brought
into equilibrium to bring it to an end.

But at this point the

second of our twin problems comes into focus.

If the dollar

outflow from the U.S. is ended, how will the world's needs for
a key currency and a reserve currency be met?

__ ~

~

-

-'

(;'t4-:"/' J.~e
. " L.'t'!" ~'* at eat thftan\!!@ "1' paYiii@!LiE§ !trst.

In essence, the balance-of-payments problem is one of
United States liquidity.

Our over-all financial position is

good and improving but our international liquidity has been
deteriorating.

To illustrate, at the end of 1964 our private

foreign investments alone exceeded themtal of all foreign
claims on us -- official and private -- by over $18 billion.
The comparable figure in 1958, when our balance of payments first
became a serious problem, was less than $7 billion.

This is

without taking any account of our gold stock which at the end

iBse~t

A

f'"

Page ,

(page 5 of this 1 neert)

define liquidity as the relation between these assets and
our short-term liabilities.

For the world as a whole,

you would probably define liquidity as the amounts,of
acceptable international resources (gold, convertible
currencies and automatic credit at the IMF) available for
trade, finance and reserves.

-Insert A

Page

£01'

5

(page 4 of this insert)

currencies and the credit available
basis in the IMF.

t1~..--uj'\). ,. ~.
~

~,tQ a

rather automatic

The relation of these assets to

\'.A ..'\.. /".

liabilities is usually meaningless to most countries
because their currencies are not used as a vehicle in
commercial transactions or held as reserves.
However, in the U. S. the corporate definition of
liquidity that relates liquid asaets to near-term liabil/V'A- ~.J-- (?
ities is «.~eia~.

I)
'"' "
d . (;rf~:~t-~~~

It is crt~al because as I have pOinted
~

out $11 billion are held by private foreigners for trade
and finance and $14 billion by official foreigners as
reserves.
Thus, the proper definition of liquidity would probably

~\.~-\.~- \..

be in

~parts.

For most nations it could be defined as

their holdings of convertible foreign currencies, gold and
their IMF position.

For the U. S. it is more precise to

his-el t=A:::::fm.

Page 5 (page 3

-at ]JiLPEis~

When the outgoing iteEexceed the incoming, we say
that we have a deficit; when the reverse is true we say
that we have a surplus.
Now some one at this juncture will say, "It is nonsense to keep accounts like these.

You have current items

such as funds spent on imports or money spent by tourists
lumped together with capital items such as long term loans
and investments!"
This is very true indeed and that is where the question
of liquidity enters the picutre.
liquidity?

Just what do we mean by

The corporate explanation of liquidity is the

relation between short term liabilities and short term
assets.

It seems to me that the international economists

are much less precise in their definition.

When they speak

of liquidity, they usually refer to the official (government and central bankt> holdings of gold and convertible

Iftsert
7.

A

for Page 5 (page 9 of this

Money sent abroad as payment of interest and
princiPa~

8.

~sert)

MOneY~Rt

S. borrowers.

aSP9aQ as dividend payments to

foreign holders of U. S. securities, u---"\ (AA

~ ,"~,' _ ~.-·d-';- '" U)

,

J

j')r-

\

\j

What Funds Coae In

•• j .

,.>.~ fc-(

Y

V'

Q.u/' ()

~

A

.."

..

&

1.

Money spent by foreigners to buy our exports.

2.

Money spent by foreign tourists in the U. S.

3.

Money loaned by foreign banks and governments
to U. S. borrowers.

4.

Money invested by foreigners in U. S. industries.

5.

Remittances of interest and principal payments
on debts foreigners owe to U. S. lenders.

6.

Remittance of dividend income and income of
U. S. overseas branches to U. S. investors and
corporations.

I have warned you that this is highly oversimplified
accounting, but it does include the major items

~h

~
_ accounting. _

~

~~

the

,

What Funds Go Out
1.

Money spent to buy imports (including shipping
costs to foreign lines).

2.

Money spent by tourists.

3.

Money spent by the U. S. in maintaining troops
overseas.

4.

Money loaned by banks and the Government to
foreign borrowers.

5.

Money invested in industries in foreign nations.

6.

Money given as untied grants under our foreign
aid program.

- 5 -

One final note on our dollar liabilities.

While the

large amounts of dollars which foreigners now hold represent
liquid liabilities and potential claims on our gold reserves,
the fact that the world is willing to hold such large amounts
of dollars is testimony to their confidence in the dollar.
The program to which I refer next is designed to

make sure

that the integrity of -- and international confidence in -- the
dollar are maintained.
The Twin Problems of Balance of Payments and World Liquidity.
Most of the current discussions of international finance
concerns twin problems:

our balance-of-payments deficit and

world liquidity

I do not mean to insult your knowledge, but let's
make certain of our definitions.
define the balance of payments.

First of all let's
It is not as easy as it

might seem because it is an accounting of our private and
government transactions with the rest of the world.

In

dangerously simplified terms the major transaction would
be like this:

(Insert F which becomes --

page -4-C --)

To illustrate, the amount of dollars (or any other
vehicle currency) held by banks and businesses for trade
and finance will probably grow as world X trade grows
and develops.

The dollars held for reserves can vary with

the judgment of central banks and governments on (a) what
amount of reserves they need and (b) their judgment as to
the potential value and usefulness of the dollar.

Those who hold the dollar as a reserve currency, centra]
banks and treasuries, do so in the knowledge that these dollars
are freely convertible into gold at the fixed price of $35 an
ounce.

The fact that we have not varied from this policy and

t~

fixed price for over thirty years plus the fact that we are the
only country which stands ready to exchange gold for holdings
of its currency has made the dollar second only to gold as an
international reserve asset.
Foreign monetary authorities hold about $14 billion in thei1
reserves.
payments

These dollars are used to finance their balance-of·
defici~

and surpluses and as a cushion for the future.

While these two international roles of the dollar are
interdependent -- dollars flow back and forth between official

Vf

and private hands

changes in the world's holdings of its

1-11
~

currency dollars can have quite different implications than c~
in the world's holdings of its reserve currency dollars. ~~

UfSERT

~:

,t

By a reserve currency we mean that dollars are held
by governments and central banks as a highly liquid and
dependable asset that they can use along with gold to
carry them over times of temporary imbalance -- precisely
the way you, as businessmen, keep reserves for contingencies.

But there is an important distinction between the

-

role of the dollar as a vehicle currency and its role as
a reserve currency.

I have mentioned that probably the

S
vehicle
principal factor in the dollar role as i7currency is
convenience.

I believe that the principal factor in the

dollar's role as a reserve currency is confidence -confidence in the ability to use it quickly and at an
assured price.

These are approximately the criteria most

businessmen use in acquiring and holding assets as co*tingent
reserves.

- 4 -

To summarize, the dollar is available, it is safe,
and it is enormously convenient to have one or (or if
one includes the British pound and French franc) two or
three currencies that many countries can use, in an
infinite variety of bilateral trade transactions, as a
kind of common denominator.
The dollar's third role -- that of a reserve
currency -- has developed for many of the same reasons
that have made it

~.<-L~

a~y

currency.

-.-----

)
'

}

! ",.,,

.

.

11

.

"j
.....

_-._---------------

-3-C i\

Like its role as domestic or national currency, the need
'\

for dollars as a vehicle currency

increas~as

and financial transactions increase.

"fa."

,$ ,

i' Pi "§' 5N

-'

world trade

- 3-8 -

-- and lastly a purely technical reason.
102 members of the IMF.

There are

If financial transactions were

denominated in the currencies of every nation, a little
simple arithmetic will show that you would raise the

cr~· (, f~-v'; I'.~

102 currencies to the second power

/

af '" '" *f:.--

~ i9.i'~

to arrive at

I
the different methods in which a transaction could be
accounted for.

To avoid this chaotic

situatio~when

a

businessman in Country A sells to a customer in Country B
~I

the

L l ..

transactio~ ~~ ususuall~work

like this:

The

customer in Country 8 buys dollars; with the dollars he
buys the national currency of Country A and uses these
funds to pay the seller.
This is why we sometimes refer to the role of the
dollar as a vehicle currency.

It is a crucial role and it

acquired this role for the reasons I have listed above.

- 3A because of the importance of the United States in world trade
was itself very large, as seen from most other countries;
because there were ample and versatile credit facilities
available from which supplemental supplies of dollars could
be obtained at short term;
because accumulations held for transactions purposes could
be readily invested in liquid form at reasonable rates of
return;
because foreign transactions form so small a part of the
vast U.S. markets that foreign holders have little reason to
fear that their operations would become

consp~cuous

or

subject to interference; and
because the dollar had an established tradition -- honored
through various periods of stress -- of maintaining open
markets free of the dictation and the intrusions characteristic
of exchange control.

There is not such a clear understanding, however, of the
second and third roles, and discussions of our balance of payment.
and world liquidity sometimes confuse the two.
V~rf J e.J. E
When we speak of the dollar as a ~currency, we refer
to its use in financing international trade and payments.

The

dollar in this capacity is held by private banks, businesses

and individuals throughout the world as a medium of exchange
for their international transactions; they use it just as they
use their own currencies for their domestic transactions.
Dollars held for this purpose -- what we call private
foreign dollar holdings -- amount to over $11 billion.
How did it come about that the dollar should serve this
role more than any other currency?
succinctly in his new book:

Robert Roosa puts it

J--h

:rL. c:;:;
~ ~ .(ib~
I'ao'

~_

The first role, as a national currency, is I think
obvious to everyone.

The dollar in this historic role

is our domestic medium of exchange, designed to meet the
needs of our domestic financial transactions.

Also, I

think most people understand that our domestic money
supply must grow over the years as our economy grows.
There is some limit on how many times a year you can use
a dollar for different transactions and as the economy
grows and transactions increase there is an obvious need
for more dollars to keep things moving.

Specifically, I will discuss the
role of the dollar in the world today, the problem of our
balance of payments, its relationship to world liquidity, the
Administration's approach to these matters and where we stand
today.
As this address is designed more for information than
for policy, I shall be delighted to answer any questions
that may occur to you at the conclusion of my formal
remarks.

The Rote of the Dollar
When we discuss the American dollar, I think it is t.portant
to bear in mind that the dollar serves three roles:

as a

nati~l

currency, as a key (sometLmes referred to as a vehicle) curreDCY
and as a reserve currency.

-.......
~ ')
finance.

I would suggest to you that these subject. are

Dot academic curiosities.

They are on the contrary issues

that have an intensely practical application to your
businesses and to the role this nation will play in the
world.
Therefore, my address today can be considered more as
a paper on fundamentalSrather thaD a statement of policy.

--'

c:

t,
1

-

This is fair enough -- six years in American politics has
convinced me that criticism and debate can be especially
helpful in formulating our national financial policies.
But I am concerned that this debate sometimes gets off
the rails because the subject matter is novel and complex.

"I

~

I would suppose that nearly every man and woman in this
room has had some academic background in economics.

I

would suppose that most of us can carryon a good reasonable
argument on monetary policy and on fiscal policy.

But I

wonder how many are fully grounded in the concepts of
the international financial mechanism that has largely
developed since World War II?

I

~ould

venture that

most of us could discourse reasonably on the old gold
standard that we were taught in college.

But how many

understand the workings of the IMF, the concepts of
liquidity and the role of the dollar in international

DRAFT:

9/17/65

Remarks by Under Secretary Joseph W. Barr
before the National Association of Manufacturers
on Tuesday, September 21, 1965, at Hot Springs, Va.
I

Time was when international finance was a subject confined
for the most part to the officials of the larger banks, central
banks and the Treasury.

Not many people outside this small

group understood or cared much about it.
one of the hottest topics going.

Not so today.

It is

It seems as though every

has something to say at one time or another about our balance
of payments, gold losses, and international liquidity.
This is a mixed blessing to us in the Treasury.

On the

one hand, a wide-spread interest among the public in this
important national problem is an encouraging sign of an alert
citizenry and ultimately it will be those outside the Government who will be responsible for the solution to our balance
of payments problem.
On the other hand, the Treasury Department, having
the primary responsibility for this area, is the focusing
point for this intense public spotlight and we are frequently
taken to task and called upon to account for our actions or
inactions--as the case may be.

But this is fairenoagh-and

OFFICE OF THE SECRETARY OF THE TREASURY
WASHINGTON, D.C.

20220

FOR RELEASE ON DELIVERY
REMARKS BY THE HONL JOSEPH W. BARR
UNDER SEC. OF THE TREASURY BEFORE THE NATIONAL
ASSOCIATION OF MANFUACTUERS,AT THE HOMESTEAD,
HOT SPRINGS, VIRGINIA, TUESDAY, SEPT. 21, 1965,
10: 30 A.M. , /

TREASURY DEPARTMENT
Washington
FOR RELEASE ON DELIVERY
REMARKS BY THE HONORABLE JOSEPH W. BARR
UNDER SECRETARY OF THE TREASURY
BEFORE THE NATIONAL ASSOCIATION OF MANUFACTURERS ,
AT THE HOMESTEAD, HOT SPRINGS, VIRGINIA,
TUESDAY, SEPTEMBER 21, 1965, 10:30 A.M., E.S.T.
Time was when international finance was a subject confined
for the most part to the officials of of the larger banks,
central banks and the Treasury. Not many people outside this
small group unders tood or cared much about it. Not so today. It
is one of the hottest topics going. It seems as though every
publication has something to say at one time or another about our
balance of pay~ents, gold losses, and international liquidity.
This is a mixed blessing to us in the Treasury. On the
one hand, a wide-spread interest among the public in this
important national problem is an encouraging sign of an alert
citizenry and ultimately it will be those outside the Government
who will be responsible for the solution to our balance of
payments problem.
On the other hand, the Treasury Department, having the
primary responsibility for this area, is the focusing point
for this intense public spotlight and we are frequently taken
to task and called upon to account for our actions or
inactions
as the case may be.
This is fair enough -- six years in American politics has
convinced me that criticism and debate can be especially
helpful in formulating our national financial policies. But
I am concernred that this debate sometimes gets off the rails
because the subject matter is novel and complex.
I would suppose that nearly every man and woman in this
room has had some academic background in economics.
I would
suppose that most of us can carryon a good reasonable argument
on monetary policy and on fiscal policy. But I wonder how
many are fully grounded in the concepts of the international
financial mechanism that has largely developed since World War II?
F-203

- 2 -

I would venture that most of us could discourse reasonably on the
old gold standard that we were taught in college. But how many
understand the workings of the International Monetary Fund,
the concepts of liquidity and the role of the dollar in
international finance. I would suggest to you that these subjects
are not academic curiosities. They are on the contrary issues
that have an intensely practical application to your businesses
and to the role this nation will play in the world.
Therefore, my address today can be considered more as
a paper on fundamentals rather than a statement of policy.
Specifically, I will discuss the role of the dollar in the
world today, the problem of our balance of payments, its relationship to world liquidity, the Administration's approach to these
matters and where we stand today.
As this address is designed more for information than for
policy, I shall be delighted to answer any questions that may
occur to you at the conclusion of my formal remarks.
The Role of the Dollar
When we discuss the American dollar, I think it is important
to bear in mind that the dollar serves three roles: as a national
currency, as a key (sometimes referred to as a vehicle) currency
and as a reserve currency.
The Dollar as a National Currency
The first role, as a national currency, is I think obvious
to everyone. The dollar in this historic role is our domestic
medium of exchange, designed to meet the needs of our domestic
financial transactions. Also, I think most people understand
that our domestic money supply must grow over the years as our
economy grows. There is some limit on how many times a year
you can use a dollar for different transactions, and as the
economy grows and transactions increase there is an obvious
need for more dollars to keep things moving.
There is not such a clear understanding, however, of the
second and third roles, and discussions of our balance of
payments and world liquidity sometimes confuse the two.

- 3 -

I he Dollar as a Vehicle Currency
We we speak of the dollar as a vehicle currency, we refer
to its use in financing international trade and payments. The
dollar in this capacity is held by private banks businesses
and individuals throughout the world as a medium'of exchange for
their international transactions; they use it just as they use
their own currencies for their domestic transactions.
Dollars held for this purpose -- what we call private
foreign dollar holdings -- amount to over $11 billion.
How did it come about that the dollar should serve this
role more than any other currency? Robert Roosa puts it
succinctly in his new book:
because of the importance of the United States in
world trade was itself very large, as seen from
most other countries;
because there were ample and versatile credit facilities
available from which supplemental supplies of dollars
could be obtained at short term;
because accumulations held for transactions purposes
could be readily invested in liquid form at reasonable
rates of return;
because foreign transactions form so small a part of
the vast U. S. markets that foreign holders have
little reason to fear that their operations would
become conspicuous or subject to interference; and
because the dollar had an established tradition -honored through various periods of stress -- of
maintaining open markets free of the dictation and
the intrusions characteristic of exchange control.
and lastly a purely technical reason. There are 102
members of the IMF. If financial transactions were
denominated in the currencies of every nation, a
little simple arithmetic will show that you would
raise the 102 currencies to the second power or a
figure of 10,404 to arrive at the different methods
in which a transaction could be accounted for. To
avoid this chaotic situation, when a businessman in
Country A sells to a customer in Country B the
transaction usually will work like this: The customer
in Country B buys dollars; with the dollars he buys the
national currency of Country A and uses these funds

to pay the seller.

- 4 This is why we sometimes refer to the role of the dollar
as a vehicle currency. It is a crucial role and it acquired
this role for the reasons I have listed above. Like its role
as a domestic or national currency, the need for dollars as
a vehicle currency increases as world trade and financial
transactions increase.
ffl"'?1

To su~arize, the dollar is available, it is safe and
-'
it is enormously convenient to have one or (or if one
includes the British pound and French franc) two or three
currencies that many countries can use, in an infinite variety
of bilateral trade transactions, as a kind of common denominator.
The Dollar as a Reserve Currency
The dollar's third role -- that of a reserve currency -has developed for many of the same reasons that have made it a
vehicle currency.
By a reserve currency we mean that dollars are held by
governments and central banks as a highly liquid and
dependable asset that they can use along with gold to carry
them over times of temporary imbalance -- precisely the way
you, as businessmen, keep reserves for contingencies. But
there is an important distinction between the role of the
dollar as a vehicle currency and its role as a reserve currency.
I have mentioned that probably the principal factor in the
dollars role as a vehicle currency is convenience. I believe
that the principal factor in the dollar's role as a reserve
currency is confidence -- confidence in the ability to use it
quickly and at an assured price. These are approximately the
criteria most businessmen use in acquiring and 'holding assets
as contingent reserves.
Those who hold the dollar as a reserve currency, central
banks and treasuries, do so in the knowledge that these
dollars are freely convertible into gold at the fixed price of
$35 an ounce. The fact that we have not varied from this
policy and this fixed price for over thirty years plus the
fact that we are the only country which stands ready to exchange
gold for holdings of its currency has made the dollar second only
to gold as an international reserve asset.

- 5 -

Foreign monetary authorities hold about $14 billion in their
reserves. These dollars are used to finance their balance-ofpayments deficits and surpluses and as a cushion for the future.
While these two international roles of the dollars are
interdependent -- dollars flow back and forth between official
and private hands -- changes in the world's holdings of its
vehicle currency dollars can have quite different implications
than changes in the world's holdings of its reserve currency
dollars.
To illustrate, the amount of dollars (or any other vehicle
currency) held by banks and businesses for trade and finance
will probably grow as world trade grows and developes. The
dollars held for reserves can vary with the judgment of central
banks and governments on (a) what amount of reserves they need
and (b) their judgment as to the potential value and usefulness
of the dollar.
One final note on our dollar liabilities. While the
large amounts of dollars which foreigners now hold represent
liquid liabilities and potential claims on our gold reserves,
the fact that the world is willing to hold such large amounts
of dollars is testimony to their confidence in the dollar.
The program to which I refer next is designed to make sure
that the integrity of -- and international confidence in -- the
dollar are maintained.
The Twin Problems of Balance of Payments and World Liquidity
Most of the current discussions of international finance
concerns twin problems: our balance-of-payments deficit and
world liquidity.
I do not mean to insult your knowledge, but let's make
certain of our definitions. First of all let's define the
balance of payments. It is not as easy as it might seem
because it is an accounting of our private and government
transactions with the rest of the world. In dangerously
simplified terms the major transaction would be like this:
What Funds Go Out
1.

Money spent to buy imports (including shipping
costs to foreign lines).

2.

Money spent by tourists.

- 6 3.

Money spent by the U. S. in maintaining troops
overseas.

4.

Money loaned by banks and the Government to
foreign borrowers.

5.

Money invested in industries in foreign nations.

6.

Money given as untied grants under our foreign
aid program.

7.

Money sent abroad as payment of interest and
principal due by U. S. borrowers.

8.

Money remitted as dividend payments to foreign
holders of U. S. securities, or as branch
income of foreign corporations.

What Funds Come In
1.

Money spent by foreigners to buy our exports.

2.

Money spent by foreign tourists in the U. S.

3.

Money loaned by foreign banks and governments
to U. S. borrowers.

4.

Money invested by foreigners in U. S. industries.

5.

Remittances of interest and principal payments
on debts foreigners owe to U. S. lenders.

6.

Remittance of dividend income and income of
U. S. overseas branches to U. S. investors and
corporations.

I have warned you that this is highly oversimplified
accounting, but it does inclue the major items.
When the outgoing items exceed theincoming, we say that
we have a deficit; when the reverse is true we say that we have
a surplus.

- 7 Now some one at this juncture will say, "It is nonsense to
keep accounts like these. You have current items such as funds
spent on imports or money spent by tourists lumped together
with capital items such as long term loans and investments~"
This is very true indeed and that is where the question
of liquidity enters the picture. Just what do we mean by
liquidity? The corporate explanation of liquidity is the
relation between short term liabilities and short term assets.
It seems to me that the international economists are much less
precise in their definition. When they speak of liquidity, they
usually refer to the official (government and central bank)
holdings of gold and convertible currencies and the credit
available on a rather automatic basis in the IMF.
The relation
of these assets to short-term liabilities is usually meaningless
to most countries because their currencies are not used as a
vehicle in commercial transactions or held as reserves.
However, in the U. S. the corporate definition of
liquidity that relates liquid assets to near-term liabilities
is more appropriate. It is in fact crucial because as I have
pointed out $11 billion are held by private foreigners for
trade and finance and $14 billion by official foreigners as
reserves.
Thus, the proper definition of liquidity would probably
be in three parts. For most nations it could be defined as
their holdings of convertible foreign currencies, gold and
their IMF position. For the U. S. it is more precise to
define liquidity as the relation between these assets and
our short-term liabilities. For the world as a whole, you
would probably define liquidity as the amounts of acceptable
international resources (gold, convertible currencies and
automatic credit at the IMF) available for trade, finance and
reserves.
Now let's look at our balance of payments. In essence,
the balance-of-payments problem is one of United States liquidity.
Our over-all financial position is good and improving but our
international liquidity has been deteriorating. To illustrate,
at the end of 1964 our private foreign investments alone
exceeded the total of all foreign claims on us -- official and
private -- by over $18 billion. The comparable figure in
1958, when our balance of payments first became a serious
problem, was less than $7 billion. This is without taking any
account of our gold stock which at the end of 1964 amounted

- 8 -

to over $15 billion and our Government claims on foreign countries
which amounted to over $23 billion. Our over-all position,
therefore, is obviously immensely strong.
But in the process of building up these tremendous foreign
assets, most of which are long-term assets, we have incurred
large short-term liquid liabilities, which, while much smaller
than our long-term assets, have been large in relation to ~
gold reserves.
At the beginning of 1958 our holdings of gold came to
almost $23 billion. They now stand at less than $14 billion.
Over the same period our dollar liabilities to foreign official
institutions rose from less than $9 billion to over $14 billion.
It is obvious that this process of lending long and borrowing
short cannot go on indefinitely, and I think that most responsible
observers are agreed that our balance of payments must be brought
into equilibrium to bring it to an end. But at this point the
second of our twin problems comes into focus. If the dollar
outflow from the U. S. is ended, how will be world's needs for
a key currency and a reserve currency be met?
You will remember that I have earlier indicated that net
outflows of dollars have not always been turned back to the
U. S. Some of these dollars have been retained by foreigners
to increase working balances to finance an expanding level of
trade and finance and some of these additional dollars have
been held to build up official reserves.
On its face, it appears that we are faced with a dilemma.
Actually, careful analysis leads us to believe that the ending
of our deficit may not create a world liquidity problem for
Some time to come.
Over the past four years, while we have not changed the
basic structure of the international payments mechanism, we
have substantially fortified it. Just this year, the members
of the International Monetary Fund agreed to support a general
increase in IMF quotas of 25 percent or about $5 billion. In
1961, the ten major industrial nations, known as the Group of
Ten, negotiated with the International Monetary Fund a so-called
General Arrangements to borrow, whereby the ten nations agreed
to lend to the IMF up to $6 billion should this be necessary
"to forestall or cope with an impairment of the international
monetary sys tem."

- 9 -

Added to this multilateral source of funds are the various
bilateral arrangements whereby the major countries stand ready
to swap the ir currenc ies wi th one or more of the other countries
in time of need. The substantial support which the IMF and
the leading countries have extended to the pound sterling in
recent months is testimony to the strength of the present system.
In noting these strengths of the present international
payments system, I am not arguing that nothing further needs
to be done. I note them only because in recent months some
people have unjustifiably jumped to the conclusion that an
ending of the U. S. balance of payments deficits will immediately
bring about a shortage of world liquidity and a crisis.
In addition to overlooking the very real strength of the
current system, those who make the over-simplified argument
that we should continue our balance of payments deficit to
maintain world liquidity, overlook two other basic points. First,
the dollar cannot continue to be a reserve currency if we continue
a balance of payments deficit of the magnitudes that have
prevailed in the past. Sooner or later our liabilities will
become so large in relation to our gold reserves that foreign
central bankers will no longer believe that the dollar is, in
fact, as good as gold and they will not be willing to hold it.
Secondly, a deficit in our balance of payments does not
necessarily and automatically increase world liquidity if the
countries which are receiving the dollars cash them in for gold.
Their reserves go up but ours go down, and the world total
remains the same. To illustrate the point, in the first
quarter of this year the deficit in our over-all balance of
payments, seasonally unadjusted, was $180 million. But these
dollars did not become new additions to total world reserves.
Rather, they came right back to the U. S. Treasury Department
to be exchanged, a long wi th dollars accumulated in pas t
periods, for some $800 million worth of gold. A continuance
of the dollar outflow would lead to more of the same, a
transfer of gold from the U. S. to the European surplus countries
with little or no gain for world liquidity as a whole but with
continual decreases in our liquidity.

- 10 The Administration's Approach
The Adminis tration' s approach to these. twin problems is
to move quickly and certainly to balance of payments equilibrium
and at the same time to move forward in discussions on improving
the world's monetary system.
I have pointed out why it is imperative for us to restore
equilibrium in our balance of payments. But what, it is asked,
do we mean by equilibirum? Is it an exact balance or does it
allow for some deficit, say $500 million, $1 billion, or even
more?
Our feeling in the Treasury is that equilibrium cannot be
defined solely in terms of a figure; it is importantly a matter
of confidence. Whether a given figure for the over-all balance
of our international transactions represents equilibrium depends
on the particular circumstances at the particular time.
But while we may not be able to define in precise numerical
terms what equilibrium is, we can say that it does not exist
when the United States is continually losing gold. Perhaps,
then, the best indication of what equilibrium in the U. S.
balance of payments is, is what the rest of the world thinks
it is. The extent to which they cash in their dollars for gold
is, in short, a very useful indicator.
We are seeking the long-run, basic solution to our balance
of payments deficit through measures which are consistent with
our domestic objectives and our foreign policy objectives, and
consistent with a growing volume of world trade and capital
movements. In brief, our long-run approach is to:
1.

Continue to minimize the balance of payments
impact of Government expenditures abroad.

2.

Strive to increase our exports and receipts from
foreign tourists.

3.

Encourage other developed nations to take on more
international financing to relieve us of a
disproportionate share.

4.

Take measures to encourage more foreign investment
here.

- 11 To gain the necessary time for these longer run measures,
we have undertaken shorter-run measures which President Johnson
outlined in his message last February 10. These consist of
efforts to reduce foreign travel expenditures by U. S. citizens;
the extension and broadening of the Interest Equalization Tax'
and, most importantly, the request that banks and corporation~
curtail or adjust their activities to lessen the balance of
payments impact of capital outflows.
The key to success in this program, both in the shortrun and in the long-run, is the business community. For the
short-run, we must have the effective cooperation of the business
community to give us the time for our longer-run measures to
take effect. And in the long run, the competitive position of
American business in relation to the other major trading
countries will be critical.
First of all, we must maintain our good record of relative
price stability. Secondly, American business must become more
energetic and effective in finding and exploiting foreign markets
for American exports.
Shortly after President Johnson announced his new balance
of payments program on February 10, there was an encouraging
swing to a surplus in our balance of payments. It is far too
early, however, to conclude that this represents a permanent
trend toward equilibrium. Some of the gains were due to special
factors, some were one time gains. We are by no means out of
the woods yet. But we do feel that have a program which is
sound and can bring us to equilibrium if all of ~ follow through
.2!l it.
While the subject of world liquidity has only recently come
into public prominence, the U. S., several years ago, joined with
other major countries in comprehensive studies of the international monetary system, its recent evolution, its present
effectiveness and its future. On June 1 of this year, this
multilateral sturly group issued a report which exhaustively
examines the possible ways to strengthen the system. In July,
Secretary Fowler announced that the U. S. stood prepared to
participate in an international monetary conference that would
consider what steps we might jointly take to secure substantial
improvements in international monetary arrangements.

- 12 On September 10, Secretary Fowler returned from a 10-day
trip to Europe during which he exchanged views with officials
of seven countries on how we might move ahead to improve the
workings of the international monetary system. Secretary Fowler
had earlier conferred in Washington with Canadian and Japanese
offic ials .
He found agreement that present circumstances call for
a reexamination of the free world's monetary arrangements; that
we should begin contingency planning for the possible time ahead
when new ways of providing for growth in monetary reserves will
become necessary; and that active discussions on negotiations
should begin in the near future at the level of policy-making
offic ials .
The annual meeting of the International Monetary Fund
beginning next week offers a logical opportunity to start
putting the negotiating machinery in motion.
In both the case of the problem of the United States balance
of payments and that of international monetary reform, therefore,
there are signs of progress. I would rather close, however,
on a note of caution. A basic change in the world's monetary
system will not come about quickly or easily. To reach agreement
among all the nations involved on anything so basic will require
time and enormous effort.
A lasting improvement in our balance of payments -- lasting
enough to be meaningful in the context I have described -- will
also require time and e.ffort.
The President's program is broad-ga~ged, requ~r~ng some
sacrifice of many elements of the population but no unreasonable
sacrifice, in our judgment, of anyone element. Of course,
more tourists would like to bring back more goods duty-free from
abroad; of course, banks and other lenders would like to lend
as freely as possible abroad; of course, businessmen would like
to take advantage of every attractive overseas investment
opportunity. Essentially, we are asking these groups to adjust
not halt -- these practices, so that confidence in the dollar
will be sustained.
If confidence in the dollar is sustained, if the international monetary system evolves in a sensible way, we will
have created the best possible environment for the American
economy -- American businessmen
to demonstrate their
formidable competitive strength in the world at large, in the
year's ahead.
000

TREASURY DEPARTMENT

-

(

FOR IMMEDIATE RELEASE

TEXT OF TAX PROTOCOL ANNOUNCED
The Treasury today published the attached text of
the proposed protocol (amendment) to the Tax Convention
(treaty) between the United States and Germany.
Signing of the protocol was announced Friday by the
State Department.

Note:

Copies of the State Department release and the
text of the protoco 1 a:r:e attached.

ill) if: fi))~ ~ 1f ~ lE ~ 11' (ID!f ~ 1]'A\ 1f IE
SEPl'EMBER 1'1,

SIGNING OF

l:)b')

INCO~lli-TAX

[f®~ 1l'1H]~ [F~ra~~

NO. 224

PROTOCOL WITH FEDERAL REPUBLIC OF GERMANY

On September 17, 1965, the American Ambassador at Bonn and the
Mwister of Foreign Affairs of the Federal Republic of Germany signed a
protocol between the United States of America and the Federal Republic
of Germany modifying the convention of July 22, 1954 for the avoidance
of double taxation with respect to taxes on income.
Modification of the 1954 convention in certain respects has been
advisable by reason of experience in the application of the convention since its entry into force and by relevant changes in the Federal
Republic's tax system.

~de

A major feature of the revision effected by the protocol is a change
taxation of dividends. Under the provisions as amended by the
protocol, dividends passing from one country to the other will be subject
to a reduced withholding tax of 15 percent. An exception to this rule is
provided in res pec t of dividends paid by a Federal Republic company to a
United States company having an interest of 10 percent or more in the
Federal Republic company paying the dividends. The Federal Republic tax
on dividends in such case will be withheld at the full rate of 25 percent,
whenever the dividends are reinvested in the Federal Republic company.
In this connection, reinvestment in any calendar year totalling less than
7.5 percent of the dividends received will be disregarded. On the other
rumd, any reinvestment made by the United States company in the year
prior to or following the year in which the dividends are paid will be
taken into account for purposes of imposing Federal Republic withholding
t~ at the full 25 percent rate.

m the

Another important change effected by the protocol in the convention
relates to mow-how payments. Such payments will be treated as royalties
~ as such will be exempt from tax in the country of source as from
January 1, 1963.
The definition of the term "permanent establishment" and the rule
governing indus trial and commercial profits are brought into line with
the definition in other recent income-tax conventions concluded by the
Umted States. Other changes effected by the protocol relate to the taxation of interest and capital gains. Double taxation of dividends from
~rtfoll0 investments in the United States will be avoided by crediting
United States tax against Federal Republic tax. The convention would be
utended to include the Federal Republic trade tax and capital tax. The
protocol provides for a broadening of the exemption with respect to personal service income and the provisions dealing with governmental
salaries, wages, and pensions. American nonprofit institutions would be
accorded exemption from Federal Republic tax comparable with that accorded
Federal Republic nonprofit institutions under Un1 ted States law.
Except as otherwise indicated in the protocol, the convent1on as
amended is to apply as of January 1 of the year in which the exchange of
~atruments of ratification takes place. The article regarding taxation
of diVidends would have effect with respect to dividends paid on or after
January 1, 1965.
The protocol w:Ul be transmitted to the Senate for advice and consent of the Senatero ratlf1cation.

* * ..

Protocol

modifying the Convention of July 22, 1954,

be~een

the

Federal Republic of Germany and the United States of
America for the Avoidance of Double Taxation with respect
to Taxes on Income
The Federal Republic of Germany
and the
United States of America
DESIRING to modify the Convention between the Federal
Republic of Germany and the United States of America for
the Avoidance of Double Taxation with respect to Taxes
on Income, signed on July 22, 1954, and to extend it to
certain other taxes, the Convention bearing the title
"Convention between the Federal Republic of Germany and the
United States of America for the Avoidance of Double
Taxation with respect to Taxes on Income and to certain other
Taxes"
have agreed as follows:

-2,-. : .: i

c'.~

1

Article I of the Convention shall be

C:~leted

and replaced

by the following:
"Article I
(1)

The taxes referred to in this Convention are:
(a)

In the case of the United States of America:
The Federal income taxes, including surtaxes
(hereinafter referred to as "United States tax");

(b)

In the case of the Federal Republic of Germany:
The Einkommensteuer (income tax),
the Korperschaftsteuer (corporation tax),
the Gewerbesteuer (trade tax), and
the Vermogensteuer (capital tax)
(hereinafter referred to as "Federal Republic tax").

(2)

The present Convention shall also apply to any

other tax of a substantially similar character which may
be imposed by one of the contracting States after the date
of signature of the present Convention.
(3)

The provisions of the present Convention in respect

to the taxation of profits shall likewise apply to the Federal
Republic trade tax (Gewerbesteuer) computed on a basis other
than profits or capital."

-3Article 2
Article II (1) (c) of the' Convention shall be deleted and
replaced by:
n(c) (aa) The term "permanent establishment" means a fixed
place of business in which the business of an
enterprise of one of the contracting States is
wholly or partly carried on.
(bb) A permanent establishment shall include especially:
a place of management;
a branch;
an office;
a store or other sales outlet;
a factory;
a workshop;
a mine, quarry or other place of extraction of
natural resources;
a building site or construction or assembly project
which exists for more than twelve months.
(cc) Notwithstanding subparagraph (c) (aa.) of this paragraph a permanent establishment shall be deemed
not to include one or more of the following

-4activities:
the use of facilities for the purpose of storage,
disphyor delivery of goods or merchandise belonging to the enterprise;
the maintenance of a stock of goods or merchandise
belonging to the enterprise· for the purpose of storage, display or delivery;
the maintenance of a stock of goods or merchandise
belonging to the enterprise for the purpose of processing by another enterprise;
the maintenance of a fixed place of business for the
purpose of purchasing goods or merchandise, or for
collecting information, for·the enterprise;
the maintenance of a fixed place of business for the
purpose of advertising, for the supply of information, for scientific research or for similar
activities, if they have a preparatory or
auxiliary character, for the enterprise.
d) Even if an enterprise of one of the contracting States

does not have a permanent establishment in the other
State under sUQparagraph (c) (aa) to (cc) of this
paragraph, nevertheless it shall be deemed to have
a permanent establishment in the latter State if it is
gaged in trade or business in that State through an
agent who has an authority to conclude contracts in the

-5name of

th~

enterprise and regulcrly exercises

that authority in that State, unless the exercise of
authority is limited to the purchase of goods or
merchandise for the account of the enterprise.
(ee)An enterprise of one of the contracting States shall
not be deemed to have a permanent establishment
in the other State merely because it is engaged in
trade or business in that other State through a
broker, general commission agent or any other agent
of an independent status, where such person is acting
in the ordinary course of business.
(ff)The fact that a resident or a corporation of one
of the contracting States controls, is controlled by,
or is under common control with, (i) a corporation
of the other State or (ii) a corporation which
engages in trade or business in that other State
(whether through a permanent establishment or otherwise) shall not be taken into account in determining
whether such resident or corporation-has a permanent
establishment in that other State."

-6-

A~ticle
repi~ced

III of the Convention shall be deleted and
by the following:
"ATticle III

Indu3tri~1

(1)

or commercial profits oE an enterprise

of one of the contracting States shall be exempt from tax
by

the other State unless the enterprise is engaged in

trade or busir.ess in such other S";:.:::..tc:: "through a
establishment situated

t~e~ein.

if

engaged, tax may be imposed by such
dustrial or

cO~T.ercial

pe4r~:.::ment

s~c~ e~terprise

ott~~ S~ate

profits of the

ente~prise

is so

on the inbut only

on so much of them as" are attributable to the permanent
establishment or are derived from sources within such other
State from sales of goods or merchandise of the same kind
as those sold, or from other business transactions of the
same kind as those effected, through the permanent establishment.
(2)

wtlere an enterprise of one of the contracting States

is engaged in trade or business in the other State through a

-7permanent establishment situated therein, there shall be
attributed to such permanent establishment the industrial
or commercial profits which it might be expected to
derive if it were an independent enterprise engaged in the
same or similar activities under the same or similar
conditions and dealing at armis length with the enterprise
of which it is a permanent establishment.

Where the

enterprise, in addition to the profits derived through the
permanent establishment, derives other profits of the kind
referred to in paragraph (1), such

oth~r

profits shall be

treated as if they were derived through the permanent establishment.
(3)

In determining the industrial or commercial profits

of an enterprise of one of the contracting States which are
taxable in the other State in accordance with paragraphs (1)
and (2), there shall be allowed as deductions all expenses,
where_ver incurred, which are reasonably connected with the
profits so taxable, including executive and general administrative expenses.

-8(4)

No profits shall be deemed to be derived from

sources within one of the contracting States by an
enterprise of the other State merely by reason of the
purchase of goods or merchandise by a permanent establishment of the enterprise, or by the enterprise itself, for
the account of the enterprise.
(5)

The term "industrial or commercial profits" means

income derived by an enterprise from the active conduct of a
trade or business, including income derived by an enterprise from the furnishing of services of employees or other
personnel, but does not include income dealt with in
Article VI paragraphs (1) to (6) (dividends), Article VII
paragraphs (1) and (2) (interest), Article VIII paragraphs
(1) to (3) (royalties), Article IX (income from real
property and natural resources), Article IX A paragraphs (1),
(2) and (4) (capital gains) and Article X (labor and personal
services)."

-9Article 4
Article VI of the Convention shall be deleted and replaced
by the following:
"Article VI
(1)

Except as otherwise provided in this Article,

United States tax on dividends received by a natural person
resident in the Federal Republic or by a German company
from a United States corporation shall not exceed 15 percent of the gross amount of the dividends.
(2)

Except as otherwise provided in this Article,

Federal Republic tax on dividends received by a resident
or corporation or other entity of the United States from
a German company shall not exceed 15 percent of the gross
amount of the dividends.
(3)

Notwithstanding paragraph (2) of this Article,

Federal Republic tax on dividends received by a United
States corporation or other entity from a German company
at least 10 percent of the voting shares of which are
owned directly by the former corporation or entity may
exceed 15 percent but shall not exceed 25 percent of that
portion of any dividend which, under paragraph (5) of this
Article, is deemed reinvested.

The foregoing provision

shall ~pp1y only if at the time the dividend is distributed

-10-

the Federal Republic imposes a corporation tax on the
distributed profits of the German company at a rate at
least 20 percentage points lower than the corporation tax
imposed upon its undistributed profits.
(4)

The provisions of paragraph (3) of this Article

shall apply, mutatis mutandis, to United States tax
imposed on dividends received by a German company from
a United States corporation.
(5)

For purposes of paragraph (3) of this Article, if th

United States corporation transfers money or other property,
directly or indirectly, to the German company as a.loan or
as an increase in the equity capital of the German company,
or as any other form of investment in such company, and if
the amount so transferred exceeds 7.5 percent of the dividends
received by the United States corporation from the German
company in the calendar year in which such transfer is made,
then the entire amount transferred shall be deemed to be a
reinvestment of dividends received from the German company
(a)

in the calendar year preceding the year in which
the amount is transferred,

(b)

in the calendar year in
transferred, and

whic~

the amount is

-11-

(c) in the following calendar year,
in that order and to the extent of such dividends.

With

respect to dividends paid in any year there shall first be
taken into account the amounts transferred in the preceding
year to the extent that such amounts were deemed to be
reinvestments and did not result in the imposition of tax
under paragraph (3) of this Article on any prior dividend.
(6)

Any reduction in withholding or refund of tax

withheld on dividends to which paragraph (3) or paragraph
(4) is applicable is subject to recapture if tax becomes due
by reason of transfers that are deemed reinvestments under
paragraph (5), the corporation receiving and that paying the
dividend being jointly and severally liable for such recapture.
(7)

The foregoing provisions shall not apply, if the

recipient of the dividends has a permanent establishment in
the United States, for the purposes of paragr~phs (1) and (4),
or in the Federal Republic, for the purposes of p~ragraphs (2)
and (3), and the holding giving rise to the dividends is
effectively connected with such permanent establishment.

-12-

(8)

The term "dividends" shall include in the case

of the Federal Republic, in addition to distributions by
an "Aktiengesellschaft" (stock corporation), distributions
with respect to shares in a "Gesellschaft mit beschrHnkter
Haftung" (private limited company), in a "Kapitalanlagegesellschaft" (investment trust) or in a "Konnnanditgesellschaft auf Aktien" (partnership limited by shares) and
income derived from "Kuxe" (mining shares), from "Genussscheine" (profit participation certificates), or by a
"stiller Gesellschafter" (sleeping partner) from his
participation as such. 1I

-13Article 5
Article VII of the Convention shall be deleted and replaced
by the following:

"Article VII
(1)

Interest on bonds, notes, debentures, securities or

on any other form of indebtedness (including debts secured by
mortgages or other encumbrances on real property) derived by
a natural person resident in the Federal Republic or by a
German company shall be exempt from
(2)

ta~

by the United States.

Interest on bonds, notes, debentures, securities or

on any other form of indebtedness (including debts secured by
mortgages or other encumbrances on real property) derived by
a resident or corporation or other enti t~· of the United States
shall be exempt from tax by the Federal Republic·.
(3)

Paragraph (1) or paragraph (2) of this Article shall

not apply if the recipient of the interest has a permanent
establishment in the United States, for purposes of paragraph
(1), or in the Federal Republic, for purposes of paragraph (2),
and the debt-claim giving rise to the interest is effectively
connected with such permanent establishment.

-14(4)

Where, owing to a special relationship between the

payor and the recipient or between both of them and some other

person, the amount of the interest paid, having regard to the
debt claim for which it is paid, exceeds the amount which
would have been agreed upon by the payer and the recipient in
the absence of such relationship, the provisions of this Article
shall apply only to the last-mentioned amount.

In that case,

the excess part of the payments shall remain taxable according
to the law of each contracting State, due regard being had to
the other provisions of this Convention."

-15Article 6
Article VIII of the Convention shall be deleted and replaced
by the following:
"Article VIII
(1)

Royalties derived by a natural person resident in

the Federal Republic or by a German company shall be exempt
from tax by the United States.
(2)

Royalties derived by a resident or corporation or

other entity of the United States shall be exempt from tax
by the Federal Republic.
(3)

The term "royalties", as used in this Article,
(a)

means any royalties, rentals or other amounts paid
as consideration for the use of, or the right to
use, copyrights, artistic or scientific works
(including motion picture films, or films or
tapes for radio or television broadcasting),
patents, designs, plans, secret processes or
formulae, trade-marks, or other like property or
rights, or for industrial, commercial or scientific
equipment, or for knowledge, experience or skill
(know-how) and

-16(b)

shall include gains derived from the
alienation of any right or property giving
rise to such royalties.

(4)

Paragraph (1) or paragraph (2) of this

Article shall not apply if the recipient of the
royalties has a permanent estabJishment in the
United States, for purposes of paragraph (1), or in
the Federal Republic, for purposes of paragraph (2),
and the right or property giving rise to the' royalties
is effectively connected with ·such permanent
establishment.
(5)

Where, owing tb a special relationship

between the payer and the recipient or between both
of them and some other person, the amount of the
royalties paid, having regard to the use, right or
information for which they are paid, exceeds the
amount which would have been agreed upon by the payer
and the recipient in the absence of such relationship,
the provisions of this Article shall apply only to
the last-mentioned amount.

In that case, the excess

part of the payments shall remain taxable according to
the law of each contracting State, due regard being
had to the other provisions of this Convention."

-17Article 7
Article IX of the Convention shall be deleted and replaced
by the following:
"Article IX
(1)

Income from real prvperty situated in one of the

contracting States and royalties in respect of the operation of mines, quarries or other natural resources located within that State, including gains derived from the
alienation of items of the aforementioned property, may be
taxed by that State.
(2)

A natural person resident in the Federal Republic

or a German company subject to tax in the United

S~ates,

or a resident or corporation or other entity of the United
States subject to tax in the Federal Republic, on any income
mentioned in paragraph (1) of this Article may elect for any
taxable year to compute tax on such income on a net basis
at the tax rates that would apply to a resident or company
of the contracting State in which the property is situated.

-18Article 8
The following new Article shall be inserted immediately
after Article IX of the Convention:
"Article IX A
(1)

Gain derived by a natural person resident in the

Federal Republic or by a German company from the alienation
of a capital asset (other than gain from the alienation
of property referred to in Article IX of this Convention)

.

shall be exempt from tax by the United States.
(2)

Gain derived by a resident or corporation or other

entity of the United States from the alienation of a capital
asset (other than gain from the alienation of property
referred to in Article IX of this Convention) shall be exempt
from tax by the Federal Republic.
(3)

Paragraph (1) or paragraph (2) of this Article shall

not apply if the person deriving the gain has a permanent
establishment in the United States, for purposes of paragraph (1), or in the Federal Republic, for purposes of paragraph (2), and the gain is derived from the alienation of a

-19capital asset which is effectively connected with such
permanent establishment.
Paragraph (1) of this Article shall not apply if:

(4)

(a)

the person deriving the gaj

is a natural person

resident in the Federal Republic who is present in
the United States for a period equal to or exceeding an aggregate of 183 days during the taxable year, and
(b)

the asset alienated was held by such person for
six months or less."

-20-

Article 9
Article X of the Convention shall be deleted and replaced
by

th~

following:
"Article X

(1)

Compensation for labor or personal services (in-

cluding compensation derivzd from the practice of a liberal
profession and the rendition of services as a director)
performed outside the United States by a natural person
resident in the Federal Republic shall be exempt from tax
by the United States.
(2)

Compensation for labor or personal services (in-

cluding compensation derived from the practice of a liberal
profession and the rendition of services as a director) performed in the United States by a natural person resident in
the Federal Republic shall be exempt from tax by the United
States if -(a)

he is present in the United States for a period or
periods not exceeding a total of 183 days during
a taxable year,

-21-

(b)

such labor or personal services are performed as
an employee of, or under contract with, a
natural person resident in the Federal Republic
or a German company, and such compensation is
borne by such resident or company, and

(c)

such compensation is not borne by a permanent
establishment which such resident or company has
in the United States.
Compensation for labor or"personal services (in-

(3)

cluding compensation derived from the practice of a liberal
profession ardthe rendition of services as a director) performed outside the Federal Republic by a resident of the
United States shall be exempt from tax by the Federal Republic.
Compensation for labor or personal services (in-

(4)

cluding compensation derived from the practice of a liberal
profession and the rendition of services as a director) performed in the Federal Republic by a resident of the United
States shall be exempt from tax by the Federal Republic
if -(a)

he is present in the Federal Republic for a period

-22-

or periods not exceeding a total of 183
days during a taxable year,
(b)

such labor or personal services are performed as an
employee of, or under contract with, a resident or
corporation or other entity of the United States
and such compensation is borne by such resident
or corporation or other entity, and

(c)

such compensation is not borne by a permanent
establishment which such resident or corporation
or other entity has in the Federal Republic. ft

-23Article 10
Article XI of the Convention shall be deleted and replaced
by the following:

(1)

(a)

Wages,

pensions paid by :he

s~laries

and similar cOillpensation and

Uni~ed S~ates

or by its states, terri-

tories or political subdivisions, to a

natur~l

person, other

than a Germ&n citizen, shall be exempt frow cax by the
Federal Republic.
(b)

Wages, salaries and similar compensation and

pensions paid by the Federal Re?ublic or by its Laender
or by municipalities, or by a public pension fund thereof,
to a natural person, other than a citizen of the United
States and other than an individual who has been admitted
to the United States

for permanent residence therein, shall

De exempt from tax by the United States.

-24(c)

Pensions, annuities and other amounts paid by

one of the contracting States or by a juridical person organized under the public laws of that State as compensation
for an injury or damage sustained as a result of hostilities
or political persecution shall be exempt from tax by the other
State.
(d)

For the purposes of this paragraph the term

"pensions" shall be deemed to include annuities paid to a
retired civilian government employee.
(2)

Private pensions and private life annuities which

are derived from sources within one of the contracting
States and are paid to a natural person resident in the
other State shall be exempt from taxation by the former State.
(3)

The term "pensions", as used in this Article, means

periodic payments made in consideration for services rendered
or by way of compensation for injuries received.
(4)

The term "life annuities", as used in this Article,

means a stated sum payable periodically at stated times during
life, or during a specified number of years, under an obligation to make the payments in return for
sideration in money or money's worth."

~dequate

and full con-

-25Article 11
The following new Article shall be inserted immediately
after Article XIV of the Convention:
TlArticle"XIV A
Witn respect to taxes on capital, the following

p~o­

visions shall apply:
(1)

Capital represented by property mentioned in Article IX
may be taxed in the contracting. State in which such
property is situated.

(2)

Subject to the prOVisions of paragraph (3) below,
capitsl represented by assets, other than property referred
to in paragraph (1), which are effectively connected
with a permanent establishment of an enterprise of one
of the contracting States may be taxed in the State
in which the permanent establishment is situated.

-26(3)

Ships and aircraft of an enterprise of one of the
contracting States and assets, other than property
referred to in paragrapn (1), pertaining to the
operation of such ships or aircraft shall be exempc
from tax by the other State.

(4)

(a)

All other elements of capital of a natural perSI
resident in the Federal Republic or of a German
company shall be exempt from tax by the United
States.

(b)

All other elements of capital of a resident or
corporation or other entity of the United

State~

shall be exempt from tax by the Federal Republic

-27Article 12
Article XV (1) of the Convention shall be deleted and replaced by the following:
"(1)

It is agreed that double taxation shall be avoided

in the following manner:
(a)

The United States, in determining United States
tax in the case of its citizens, residents or
corporations, may, regardless of any other provision
of this Convention, include in the basis upon which
such tax is imposed all items of income taxable
under the revenue laws of the United States as if
this Convention had not come into effect.

The

United States shall, however, allow to a citizen,
resident or corporation of t:.e United States as a
credit against United States tax the appropriate
amount of Federal Republic tax paid, other than
the Verm3gensteuer

(capital tax) and that portion

of the Gewerbesteuer (trade tax) computed on a basis
other than profits.

Such appropriate amount shall

be based upon the amount of Federal Republic tax
paid but shall not exceed that portion of the United
States tax which net income from sources within the

-28Federal Republic bears to the entire net income.
It is agreed that, by virtue of the provisions of
this Article, the Federal Republic satisfies the
similar credit requirement of the Internal RevenUE
Code with respect to Federal Republic tax.
(b)

1.

Federal Republic tax shall be determined in tl

case of a natural person resident in the Federal
Republic or of a German company as follows:
(aa) Unless the provisions of subparagraph (bb) b.
apply, there shall be excluded from the basi:
upon which Federal Republic tax is imposed, c
item of income from sources within the Unitec
States or any item of capital situated withil
the United States which, according to this
Convention, is not exempt from tax by the Un:
States.

The Federal Republic, however, retaj

the right to take into account in the de term:
tion of its rate of tax the items of income (
capital so excluded.

The first sentence sha)

in the case of income from dividends, apply
only to such dividends subject to tax under {
States law as are paid to a German company 11
by shares (Kapitalgesellschaft) by a United

~

corporation, at least 25 percent of the voti:

shares of which are owned directly by the
first-mentioned company.

There shall also be

excluded from the basis upon which Federal
Republic tax is imposed any participation
the dividends on which are excluded, or if paid
would be excluded, from the tax basis according
to the foregoing sentence.
(bb) United States tax payable under the laws of the
United States and in accordance

wit~

this Con-

vention on the following items of income shall be
allowed as a credit against such Federal Republic
on income
tax/as is payable in respect of the following
items of income:
(i)

dividends not dealt with in subparagraph (aa)
above;

(ii) wages, salaries, pensions and similar
compensation paid by the United States or by
its states, territories or political subdivisions, not being exempt from Federal
Republic tax under Article XI, paragraph- (1),
subparagraph (a) of this Convention.
Such credit shall not exceed that portion of the
Federal Republic tax which such items of income
bear to the total amount of all items of income.

-302.

Where a natural person subject to unlimited

tax liability in the Federal Republic is also
a resident of the United States for purposes of
United States tax or a citizen of the United
States, subparagraph 1 (aa) shall apply to those
items of income from sources within the United
States and those items of capital situated within
the United States which, according to that subparagraph, are exempt from Federal

R~public

tax

when received or owned by a natural person who
is not a resident of the United States for the
purposes of United States tax nor a citizen of the
United States.

All other items of income and

capital shall be included in the basis upon which
Federal Republic tax is imposed as if this Convention had not come into force.

There shall,

however, subject to paragraph 34 c of the German
Income Tax Act, as amended, be allowed as a credit,
against Federal Republic income tax the United
States tax on such other income from sources with
the United States."

-31Article 13
The following new Article shall be inserted immediately
after Article XV of the Convention:
"Article XV A
(1)

A German company or organization operated exclusively

for religious, charitable, scientific, educational or public
purposes shall be exempt from tax by the United States, if
and to
(a)

the extent that -such company or organization is exempt from tax
in the Federal Republic, and

(b)

such company or organization would be exempt from
tax in the United States if it were organized, and
carried on all its activities, in the United States·.

(2)

A United States corporation or organization operated

exclusively for religious, charitable, scientific, educational
Or public purposes shall be exempt from tax by the Federal
Republic, if and to the extent that -(a)

such corporation or organization is 'exempt from tax
in the United States, and

-32(b)

such corporation or organization would be
exempt from tax in the Federal Republic if it
were a German company or

orf~nization

and

carried on all its activities in the Federal
Republic. n

-33Article 14
Article XVI paragraph (1) of the Convention shall be
deleted and replaced by:
"(1)

The competent authorities of the contracting States

shall exchange such information (being information

availab~e

under the respective taxation laws of the contracting States)
as is necessary for carrying out the provisions of the present
Convention or for the prevention of fraud or the like in
relationto the taxes which are the subject of the present
Convention.

Any information so exchanged shall be treated

a·s secret but may be disclosed to persons (including a court
Or administrative body) concerned with assessment, collection,
enforcement or prosecution in respect of taxes which are the
subject of the present Convention.

No information shall be

exchanged which would disclose any trade, business, industrial or
professional secret or any trade process."

-34Article 15
Article XVII of the Convention shall be deleted and replaced
by the following:
"Article XVII
(1)

Where a taxpayer shows proof that the action of th

tax authorities of the contracting States has resulted or wi
result in double taxation contrary to the provisions of the
present Convention, he shall be entitled to present his case
to the State of which he is a citizen or a resident, or, if
the taxpayer is a company or a corporation of one of the
contracting States, to that State.

Should the taxpayer's cl

be deemed worthy of consideration, the competent authority

0

the State to which the claim is made shall endeavor to come
to an agreement with the competent authority of the other St
with a view to avoidance of double taxation.
(2)

The competent authorities of the contracting State

may communicate with each other directly to implement the
provisions of the present Convention.

Should any difficulty

or doubt arise as to the interpretation or application of th
present Convention, or its relationship to conventions betwe
one of the contracting States and any other state, the compe

-35authorities shall endeavor to settle the question as quickly
as possible by mutual agreement.
(3)

In particular, the competent authorities of the

contracting States may consult together to endeavor to agree
(a)

to the same attribution of industrial or commercial
profits to an enterprise of one of the contracting
States and to its permanent establishment situated
in the other State,

(b)

to the same allocation of profits between related
enterprises as provided for in Article IV, or

(c)

to

the same determination of the source of particular

items of income.
In the event that the competent authorities reach such an
agreement taxes shall be imposed on such income, and refund
or credit of taxes shall be allowed, by the contracting States
in accordance with such agreement."

-36Article 16
This Protocol shall also apply to Land Berlin J provided
that the Government of the Federal Republic of Germany
has not delivered a contrary declaration to the Government
of the United States of America within three months from
the date of entry into force of this Protocol.

- 9 -

The effect of the O'Brien bridge has been to assure
that every member has the chance to hear not only the
Department's position, but the President's views on legislation he is sponsoring.

The distinction may sound tenuous,

but think back to my original point that the Congress
usually tends to jump to a conclusion that departmental
positions are narrow-minded and parochial.
take that attitude with Presidents.

They do not

Even if they disagree

with a position, as politicians they are acutely aware that
a President stands for election before all the people.
It would be difficult to exaggerate the importance of

'
\
'
eft "(
this development involving only a hand(fuiJ of people in
,e~~

the White House and 30 or 40 in the rest of the government.
While maintaining the absolute independence of the individual

- 10 member of Congress, the O'Brien bridge has in effect
opened a parliamentary dialogue in a Congressional system.
I mean by this that the po1itidans-- the Members and the
President are now engaged in a ra •• ar direct dialogue as
they would in a Parliament.

~

I believe that the legislative record will support
my thesis that a dialogue between the politicians develops

more understanding than the more traditional dialogue
between the Congress and the departments.
III. Specialization
I have already referred to the fact that the variety
of issues confronting the Congress makes it a practical
necessity to rely on the judgment of Members who specialize
in the particular area.

As a Member I had a vague ; idea

- 11 -

that the Congress was a body of generalists fragmented
into areas of specialization.

I was forming a dim idea

that access to committee staffs and to the staffs of the

ONe

Departments over which~ had oversight opened up extraordinary avenues for research in depth in particular areas.
However, the extent and the quality of the Congressional
system of specialization never became fully apparent until
I was on the outside looking in.

- 12 My experience on the outside has had mainly to do with
taxes and finance and has involved the Ways and Means
Committee and Banking and Currency Committee of the House
plus the Senate Finance, Banking and Currency, and Foreign
Relations Committees.

I cannot speak with a background of

experience on the other Committees of the Congress but I
can state emphatically that an Administration witness before
any of the Committees I have named is always pressed-- and
pressed hard -- to make a case.

The Members of these Committees

have had years of experience; they are backed up by excellent
staffs; and their accumulated knowledge on almost anyone of
the problems that confront the Treasury is usually awe-inspiting.
There is nothing that irritates me more than a somewhat
recurring theme that I encounter periodically to the effect
that the Congress is a rubber stamp.

To the people who make

- 13 -

~ speeches

and write these articles, I have always wanted to

extend an invitation to testify on a highly technical

'f-

controversial subject before the Ways and Means Committee.

~e give you an example.

About a month ago I testified

before Ways and Means on Unemployment

~mpensation

legislation.

This subject is always controversial and it is admittedly
complex.

However, for my own information I kept a log of

the hours I

~

spent in preparing for the testimony.

I

logged a total of 34 hours -- usually late at night or early
in the morning -session.

pBX

preparing myself for a three-hour

4This may seem like super-caution, but too often

I have seen intelligent experienced witnesses demolished

)

before these Committees because they had not taken the trouble
to do their homework.

Just this week one of our Assistant

Secretaries went before the Senate Finance Committee to
t.~ify

for a total ~f twenty minutes on the Canadian~uto

- 14 -

~rts

legislation.

,

This man told me that he had spent

2'

hours in preparation.

I hope these illustrations will illystrate why I become
A.~,A/\t
cl,'{"',\-'I:
~,~

(l .. _

'.

~n

so irritated at the "rubber stamp" charge that is
1\

.L1'-Vr " .. t U

lev1ed at the Congress.

Any reasonable man with any experience

in the affairs of this Government knows better.

He knows

that when he takes the Administration's case to the Congress -no matter what the majority his party may have -- he is
confronted with an independent panel of specialized experts
who usually possess vastly more experience than he.

Unless

he is to disgrace himself, his Department, and the Administration, he has no alternative but to spend bone-crushing hours
of preparatory homework.
It is from this particular angle that the Congress
looks most different from the outside than from the inside.

'\

~

- 15 -

+-

I have often wondered whether it was not this degree of

specialization that has developed in the United States
Congress that has made it the tough, effective legislative
body that it is today.

We live in a world of specialists

in every phase of our lives.

While the Congressional system

with its high degree of specialization may appear fragmented
and disorderly

to those who admire the symmetry of the

Parliamentary system, I would submit that the Congressional
system is peculiarly adapted to the world in which we live
today.
It seems to me that this is especially true in the area
of taxation.

In a Parliamentary system a major overhaul of

a nation's tax system can usually be accomplished in a
month or two months.

In the United States, I know from

experience that it usually takes at least a year and in that

- 16 period of a y.ar Ithe legislation is debated in the Committees
of the llous. and Senate, on the floor, in the press, at most

f

bU8iness and labor gatherings, and eventually becomes the

I

~topic of almost general conversation in the nation.

I,

'while

\,

~

"
'"
"-

thi8 can be an excruciating and harassing experienee for the

,t
'f'.

i8 solid and _11 stand the scrutiny of the Congress. the ~

r6NTRov~·''<'';.111 (

't"

I f your case

Treasury, it does have one enormous advantage.

- -/'14 ht A7·7~/I..... /tOW

IJ

17 /VI/+'i

¥

.~

pre.a, and the senera1 public \ you will usually end up with
/~

a cODaenaua ranging from two-thirds to three-fourths of the
Dation in aupport of the proposal.

leatalatlon ia

fl~lly

enacted, the

Yital

~.a:'

-

support. what has been done.

. . ,y. 01/4 r-r;, <...

tooure.t1~!l"'lfar.

he.., eonseneua i. erucial.

r

I3J rlf~tion ~. .~s....
tA; uA(,'

~#l.S rANIH ,A N l> S
....11.

As a result t when the

-,

In any area so

.
aa taxatit I think this

- 17 -

congress of the United States who does not admire and feel a
deep affec.tion for the institution.

At

th~"particular
,{

moment in our kistory, when we are approaching the end of
/

one of the most remarkable sessions in the history of the
United States Congress, it is a distinct pleasure for me to

"

X r"t~

..'.........",. __

18

~'th' . . .,.;;::r

I;Q.,.t£eJz.~lId._,ride

I ean only eonelude from my vantage point

t

-,.~".r

first on the inside and then on the outside, the American
Congress ... as it exists today is a highly effective
instrument reflecting the will of all the American people.

- 18 ADd~n

I look further at the cooperation and understanding

that haa been established between the politicians at both
,. ~
, p /':. ,~) ,-: ,~j: ~ i' j;
ends of Pennsylvania Avenue, I (canl\ feel ~reasonable degree
( 01"'1 r- t J.? "'"" r- { (/~ ;' I'V .. ""'/
"~taintY .!~ the ability of this Nation to face up to
I

ita problems.

.1

of the nation in support of the proposal. As a result,
when the legislation is finally enacted, the nation usually
both understands and supports what has been done. In any
area so vital to our domestic welfare as taxation, I think
this heavy consensus is crucial.
CONCLUSION
I can only conclude from my v~nta$e point first on
the inside and then on the outside!Xthe American Congress
as it exists today is a highly effective instrument reflecting the will of~ the American people. And when I look
further at the cooperation and understanding that has been
established between the politicians at both ends of
Pennsylvania Avenue, I feel a profound confidence in the
ability of this Nation to face up to its problems.

000

- 2 All bidders are required to agree not to purchase or to sell, or to
make any agreements with respect to the purchase or sale or other
disposition of any bills of this issue at a specific rate or price,
~til after one-thirty p.m., Eastern Daylight Saving time, Tuesday,
October 5, 1965.
Immediately after the closing hour, tenders will be opened at the
Federal Reserve Banks and Branches, following which public announcement
will be made by the Treasury Department of the amount and price range of
accepted bids. Those submi tting tenders will be advised of the
acceptance or rejection thereof. The Secretary of the Treasury expressly
reserves the right to accept or reject any or all tenders, in whole or
~ part, and his action in any such respect shall be final.
Subject
to these reservations,non-competitive tenders for $200,000 or less
without stated price from anyone bidder will be accepted in full at
the average price (in three decimals) of accepted competitive bids.
Payment of accepted tenders at the prices offered must be made or
completed at the Federal Reserve Bank in cash or other immediately
available funds on October 11, 1965, provided, however, any qualified
depositary will be permitted to make payment by credit in its
~easury tax and loan account for Treasury bills allotted to it for
itself and its customers up to any amount for which it shall be
qualified in excess of existing deposits when so notified by the Federal
Reserve Bank of its District.
The income derived from Treasury bills, whether interest or gain
from the sale or other disposition of the bills, does not have any
exemption, as such, and loss from the sale or other disposition of
Treasury bills does not have any spec ial trea tment, as such, under the
Internal Revenue Code of 1954. The bills are subject to estate,
~~ritance, gift or other excise taxes, whether Federal or State, but
are exempt from all taxation now or hereafter imposed on the principal
~ interest thereof by any State, or any of the possessions of the
~ited States, or by any local taxing authority.
For purposes of
taxation the amount of discount at which Treasury bills are originally
sold by the United States i.s considered to be interest. Under
Sections 454 (b) and 1221 (5) of the Internal Revenue Code of 1954 the
amount of discount at which bills issued hereunder are sold is not
considered to accrue until such bills are sold, redeemed or otherwise
disposed of, and such bills are excluded from consideration as capital
~ssets.
Accordingly, the owner of Treasury bills (other than life
lnsurance companies) issued hereunder need include in his income tax
return only the difference between the price paid for such bills,
Whether on original issue or on subsequent purchase, and the amount
ac~ally received either upon sale or redemption at maturity during the
taxable year for which the return is made, as ordinary gain or loss.
Treasury Department Circular No. 418 (current revision) and this
notice, prescribe the terms of the Treasury bills and govern the
conditions of their issue. Copies of the circular may be obtained from
any Federal Reserve Bank or Branch.
F-207
000

TREASURY DEPARTMENT

FOR IMMEDIATE RELEASE
TREASURY OFFERS $1 BILLION IN JUNE TAX BILLS
The Treasury Department, by this public notice, invites tenders f
$1,000,000,000, or thereabouts, of 254-day Treasury bills, to be issue
on a discount basis under competitive and noncompetitive bidding as
hereinafter provided. The bills of this series bill be designated Tax
Anticipation Series, they will be dated October 11, 1965, and they wil
mature June 22, 1966. They will be accepted at face value in payment
of income taxes due on June 15, 1966, and to the extent they are not
presented for this purpose the face amount of these bills will be
payable without interest at maturity. Taxpayers desiring to apply
these bills in payment of June 15, 1966, income taxes have the
privilege of surrendering them to any Federal Reserve Bank or Branch
or to the Office of the Treasurer of the United States, Washington, no
more than fifteen days before June 15, 1966, and receiving receipts
therefor showing the face amount of the bills so surrendered. These
receipts may be submitted in lieu of the bills on or before June 15,
1966, to the District Director of Internal Revenue for the District in:
which such taxes are payable. The bills will be issued in bearer form
only, and in denominations of $1,000, $5,000, $10,000, $50,000, $100,0
$500,000 and $1,000,000 (maturity value).
Tenders will be received at Federal Reserve Banks and Branches up
to the closing hour, one-thirty p.m., Eastern Daylight Saving time,
Tuesday, October 5, 1965. Tenders will not be received at the
Treasury Department, Washington. Each tender must be for an even
multiple of $1,000, and in the case of competitive tenders the price
offered must be expressed on the basis of 100, with not more than
three decimals, e. g., 99.925. Fractions may not be used. It is
urged that tenders be made on the printed forms and forwarded in the
special envelopes which will be supplied by Federal Reserve Banks or
Branches on application therefor.
Banking institutions generally may submit tenders for account of
customers provided the names of the customers are set forth in such
tenders. Others than banking institutions will not be permitted to
submit tenders except for their own account. Tenders will be
received without deposit from incorporated banks and trust companies
and from responsible and recognized dealers in investment securities.
Tenders from others must be accompanied by payment of 2 percent of
the face amount of Treasury bills applied for, unless the tenders are
accompanied by an express guaranty of payment by an incorporated bank
trust company.
F-207

TREASURY DEPARTMENT
Washington

September 22, 1965

roR IMMEDIATE RELEASE,
;axxxxxxxxxXXXXXXXXXXXXXXXXXXXXXXXXXX

(¥1TREASURY OFFERS $1 BILLION IN

JUNE TAX BILLS

The Treasury Department, by this public notice, invites tenders for $1,000,000,000 ,

(I)
or thereabouts, of

254

-day Treasury bills, to be issued on a discount basis under

~)

competitive and noncompetitive bidding as hereinafter provided.

The bills of this series

will be designated Tax Anticipation Series, they will be dated _0_c_t_ob_e_r_l_l~,~19_6:..-5_ _ _ ,

and they will mature _J_un_e_2....
2~,",",1_9_6_6_ _

(l)

They will be accepted at face value in payment

(I)
of income taxes due on _ _J_un_e---.,15...,_1_9_6_6__ , and to the extent they are not presented

(#)
fur this purpose the face amount of these bills will be payable without interest at
maturity.

Taxpayers desiring to apply these bills in payment of

June 15, 1966

,

( 1:)
income taxes have the privilege of surrendering them to any Federal Reserve Bank or
Branch or to the Office of the Treasurer of the United States, Washington, not more than
fifteen days before June 15, 1966
, and receiving receipts therefor showing the
(~n
face amount of the bills so surrendered. These receipts may be submitted in lieu of
the bills on or before

June 15, 1966

, to the District Director of Internal Re'l-

(:§ )
enue for the District in which such taxes are payable.

The bills will be issued in

bearer form only, and in denominations of $1,000, $5,000, $10,000, $50,000, $100,000,
$500,000 and $1,000,000 (maturity value).

Tenders will be received at Federal Reserve Banks and Branches up to the closing
Daylight Saving
hour, one-thirty p.m., Easterrl~ time, Tuesday, October 5, 1965
Tenders

(m)

will not be received at the Treasury Department, Washington.

Each tender must be for

an even multiple of $1,000, and in the case of competitive tenders the price offered
mUBtbe expressed on the basis of 100, with not more than three decimals, e. g., 99.925.
Fractions may not be used.

It is urged that tenders be made on the printed forms and

forwarded in the special en'lelopes which will be supplied by Federal Reserve Banks or
Branches on application therefor.

- 2 -

Banking institutions generally may submit tenders for account of customers provided the names of the customers are set forth in such tenders.

others than banking

institutions will not be permitted to submit tenders except for their own account.
Tenders will be received without deposit from incorporated banks and trust companies
and from responsible and

recogni~ed

dealers in investment securities.

Tenders from

others must be accompanied by payment of 2 percent of the face amount of Treasury bills
applied for, unless the tenders are accompanied by an express guaranty of payment by an
incorporated bank or trust company.
ill bidders are required to agree not to purchase or to sell, or to make any agree-

lents with respect to the purchase or sale or other disposition of any bills of this
Daylight Saving
issue at a specific rate or price, until af'ter one-thirty p.m., Eastern/~ time,
Tuesday, October 5, 1965

(M)
mmediately af'ter the closing hour, tenders will be opened at the Federal Reserve
&~s

and Branches, following which public announcement will be made by the Treasury

~~rtment

of the amount and price range of accepted bids.

00 advised of the acceptance or rejection thereof.

Those submitting tenders will

The Secretary of the Treasury ex-

pressly reserves the right to accept or reject any or all tenders, in whole or in part,
and his action in any such respect shall be final.
~~t1tive

tenders for $ 200,000

Subject to these reservations, non-

or less without stated price from any one bidder will

(2)
be accepted in full at the average price (in three decimals) of accepted competitive bids.
Payment of accepted tenders at the prices offered must be made or completed at the Federal
Reserve Bank in cash or other immediately available funds on _O_c_t_ob_e_r_1"""l1r-:,::--:1_9_6_5_ _ __
(E)
ProVided, however, any qualified depositary will be pennitted to make payment by credit
In its Treasury tax and loan account for Treasury bills allotted to it for itself and
lts customers up to any amount for which it shall be qualified in excess of existing
lePoBlts When so notified by the Federal Reserve Bank of its District.
~e income derived from Treasury bills, whether interest or gain from the sale

tr other disposition of the bills, does not have any exemption, as such, and loss from

the sl\le or other dlspor:Jtion of Treasury bills does not have any special treatment, as
~uch, tltuler the Internal Revenue Code of 1954.

'l'he bills are subject to estate, inher-

itoncc, gift or other excise taxes, whether Federal or State, but are exempt from all
to.."{o.Uon now or hereafter imposed on the principal or interest thereof by any State, or

any of the possessions of the Un! ted States, or by any local taxing authority.

For

pll.!'poocs of to.xation the amount of d:l.ocount at which Treasury bills are originally Gold
by the United StateG is considered to be interest.

Under Sections 454 (b) and 1221 (5)

ofilic Internal Revenue Code of 1954 the amount of discount at which bills issued here-

lUIdcr nre sold .ts not considered to accrue until such bIlla are sold, redeemed or othermse disposed of, and such bills are excluded from consideration as capital assets.

Accordinc;ly, the mmer of Treasury bills (other than life insurance companies) issued
hCl'CWlder need inclUde in his income tax return only the difference between the price
paid for such bills; wether on original issue or on subsequent pruchase, and the amount

adunll¥ received either upon sale or redemption at maturity during the taxable year
for which the return is ma.de, as ordinary gain or loss.
Treasury Department Circular No. 410 (current revision) and this notice, prescribe
the terms of the Treasury bills and govern the conditions of their issue.
the Circular may be obtained from any Federal Reserve Bank or Branch.

Copies of

- 2 All bidders are required to agree not to purchase or to sell, or
to make any agreements with respect to the purchase or sale or other
dis~osition of any.bills of this issue at a specific rate or price,
~tll after one-thLrty p.m., Eastern Daylight Saving time, Tuesday,
october 5, 1965.
Immediately after the closing hour, tenders will be opened at the
Federal Reserve Banks and Branches, following which public announcement
will be made by the Treasury Department of the amount and price range
of accepted bids. Those submitting tenders will be advised of the
acceptance or rejection thereof. The Secretary of the Treasury
expressly reserves the right to accept or reject any or all tenders, in
whole or in part, and his action in any such respect shall be final.
Subject to these reservations, non-competitive tenders for $400,000 or
less without stated price from anyone bidder will be accepted in full
at the average price (in three decimals) of accepted competitive bids.
Payment of accepted tenders at the prices offered must be made or
completed at the Federal Reserve Bank in cash or other immediately
available funds on October 11, 1965, provided, however, ary qualified
depositary will be permitted to make payment by credit in its Treasury
~x and loan account for Treasury bills allotted to it for itself and
its castomers up to any amount for which it shall be qualified in
excess of existing deposits when so notified by the Federal Reserve
Bank of its District.
The income derived from Treasury bills, whether interest or gain
from the sale or other disposition of the bills, does not have any
exemption, as such, and loss from the sale or other disposition of
Treasury bills does not have any special treatment, as such, under
the Internal Revenue Code of 1954. The bills are subject to estate,
inheritance, gift or other excise taxes, whether Federal or State, but
are exempt from all taxation now or hereafter imposed on the princ ipal
or interest thereof by any State, or any of the possessions of the
~ited States, or by any local taxing authority.
For purposes of
~xation the amount of discount at which Treasury bills are originally
sold by the United States is considered to be interest. Under
Sections 454 (b) and 1221 (5) of the Internal Revenue Code of 1954 the
amount of discount at which bills issued hereunder are sold is not
considered to accrue until such bills are sold, redeemed or otherwise
disposed of and such bills are excluded from consideration as capital
assets. Ac~ordingly, the owner of Treasury bills (other than life
~surance companies) issued hereunder need include in his income tax
return only the difference between the price paid for such bills,
Whether on original issue or on subsequent purchase, and the amount
actually received either upon sale or redemption at maturi ty during
t~ taxable year for which the return is made, as ordinary gain or loss.
Treasury Department Circular No. 418 (current revision) and this
notice, prescribe the terms of the Treasury bills and govern t~e
c~ditions of their issue. Copies of the circular may be obtaLned
from any Federal Reserve Bank or Branch.
P-206
000

TREASURY DEPARTMENT

September 22, 1965
FOR IMMEDIATE RELEASE
TREASURY OFFERS $3 BILLION IN MARCH TAX BILLS
The Treasury Department, by this public notice, invites tenders
for $3,000,000,000, or thereabouts, of l62-day Treasury bills, to be
issued on a discount basis under competitive and noncompetitive biddin
as hereinafter provided. The bills of this series will be designated
Tax Anticipation Series, they will be dated October 11, 1965, and they
will mature March 22, 1966. They will be accepted at face value in
payment of income taxes due on March 15, 1966, and to the extent they
are not presented for this purpose the face amount of these bills will
be payable without interest at maturity. Taxpayers desiring to apply
these bills in payment of March 15, 1966, income taxes have the
privilege of surrendering them to any Federal Reserve Bank or Branch
or to the Office of the Treasurer of the United States, Washington, no
more than fifteen days before March 15, 1966, and receiving receipts
therefor showing the face amount of the bills so surrendered. These
receipts may be submitted in lieu of the bills on or before March 15,
1966, to the District Director of Internal Revenue for the District in
which such taxes are payable. The bills will be issued in bearer form
only, and in denominations of $1,000, $5,000, $10,000, $50,000, $100,0
$500,000 and $1,000,000 (maturity value).
Tenders will be received at Federal Reserve Banks and Branches up
to the closing hour, one-thirty p.m., Eastern Daylight Saving time,
Tuesday, October 5, 1965. Tenders will not be received at the
Treasury Department, Washington. Each tender must be for an even
multiple of $1,000. and in the case of competitive tenders the price
offered must be expressed on the basis of 100, with not more than
three decimals, e. g., 99.925. Fractions may not be used. It is urge
that tenders be made on the printed forms and forwarded in the special
envelopes which will be supplied by Federal Reserve Banks or Branches
on application therefor.
Banking institutions generally may submit tenders for account of
customers provided the names of the customers are set forth in such
tenders. Others than banking institutions \vill not be permitted to
submit tenders except for their own account. Tenders will be received
without deposit from incorporated banks and trust companies and from
responsible and recognized dealers in investment securities. Tenders
from others must be 3cccmpanied by payment of 2 percent of the face
amount of Treasury bills applied for, unless the tenders are
accompanied by an express guaranty of payment by an incorporated bank
or trust company.
F-206

TREASURY DEPARTMENT
Washington

September 22, 1965
TREASURY OFFERS $3 BILLION IN MARCH TAX BILlS
The Treasury Department, by this public notice, invites tenders for
or thereabouts, of
co~titive

and they will mature

MarChxiW966

of income taxes due on

maturity.

The bills of this series

•

March lXhJX66

1l~5

,

They will be accepted at face value in payment
, and to the extent they are not presented

purpose the face amount of these bills will be payable without interest at
Taxpayers desiring to apply these bills in payment of

March

i~966

,

income taxes have the privilege of surrendering them to any Federal Reserve Bank or
Bmnch or to the Office of the Treasurer of the United States, Washington, not more than
fifteen days before

March 15, 1966

, and receiving rece ipts therefor showing the

XbJIX

face amount of the bills so surrendered.
the bills on or before

March 15, 1966

XffiX

These receipts may be submitted in lieu of
, to the District Director of Internal Rev-

enue for the District in which such taxes are payable.

The bills will be issued in

bearer form only, and in denominations of $1,000, $5,000, $10,000, $50,000, $100,000,

$500,000 and $1,000,000 (maturity value).
Tenders will be received at Federal Reserve Banks and Branches up to the closing
Daylight Saving
hour, one-thirty p.m., Eastern/SXICJ!IiBrri: time,
Tuesday, October 5, 1965
Tenders

~

will not be received at the Treasury Department, Washington.

Each tender must be for

an even multiple of $1,000, and in the case of competitive tenders the price offered
must be expressed on the basis of 100, with not more than three decimals, e. g., 99.925.
Fractions may not be used.
I

It is urged that tenders be made on the printed forms and

forwarded in the special envelopes which will be supplied by Federal Reserve Banks or

~es on application therefor.
~-- '

,

162 -day Treasury bills, to be issued on a discount basis under

xmx
and noncompetitive bidding as hereinafter provided.

rill be designated Tax Anticipation Series, they will be dated October

~rthis

$3,OO~,OOO

- 2 -

~

-

Banking institutions generally may submit tenders for account of customers pro-

vided the names of the customers are set forth in such tenders.

others than banking

institutions will not be pennitted to submit tenders except for their own account.
Tenders will be received without deposit from incorporated banks and trust companies
and from responsible and recognized dealers in investment securities.

Tenders from

others must be accompanied by payment of 2 percent of the face amount of Treasury bills
applied for, unless the tenders are accompanied by an express guaranty of payment by an
incorporated bank or trust company.
All bidders are required to agree not to purchase or to sell, or to make any agreements with respect to the purchase or sale or other disposition of any bills of this
Daylight Saving
issue at a specific rate or price, until ai'ter one-thirty p.m., Eastern/stJrlltilCR; time,
Tuesday, October 5, 1965

~

llimediate1y after the closing hour, tenders will be opened at the Federal Reserve
&MS and Branches, following which public announcement will be made by the Treasury
~~rtment

of the amount and price range of accepted bids.

be advised of the acceptance or rejection thereof.

Those submitting tenders will

The Secretary of the Treasury ex-

pressly reserves the right to accept or reject any or all tenders, in whole or in part,

and his action in any such respect shall be final.
:ompetitive tenders for $ 400,000

Subject to these reservations, non-

or less without stated price from any one bidder will

Xkffi

be accepted in full at the average price (in three decimals) of accepted competitive bids.
Payment of accepted tenders at the prices offered must be made or completed at the Federal

~eserve Bank in cash or other immediately available funds on

October ~965

,

~rovided, however, any qualified depositary will be pennitted to make payment by credit

In its Treasury tax and loan account for Treasury bills allotted to it for itself and
lts customers up to any amount for which it shall be qualified in excess of existing
leposits when so notified by the Federal Reserve Bank of its District.
I

~e income derived from Treasury bills, whether interest or gain from the sale

r other disposition of the bills, does not have any exemption, as such, and loss from

- 3-

~
the sale or other dlspooition of Treasury bills does not have any special treB:tment, as
~uch, under the Internnl Revenue Code of 1954.

The bills are subject to estate, inher-

ltoncc, gift or other excise taxes, whether Federal or State, but are exempt from all
to.;{o.tion now or hereafter imposed on the principal or interest thereof by any State, or
8lrI of the possessions of the Un! ted States, or by any local taxing authority.

For

of taxation the amount of d:1. scount at which Treasury bills are originally sold

pUI1l0r;lCS

by thc United StateG is considered to be interest.

Under Sections 454 (b) and 1221 (5)

of thc Internal Revenue Code of 1954 the amount of discount at which billa issued here-

wldcr Ilre sold :l.s not considered to accrue until such billa are sold, redeemed or othermae disposed of, and such bills are excluded from consideration as capital assets.

AceordiIl61y" the mmer of Treasury bills (other than life insurance companies) issued
h(!rc~der

need include in his income tax return only the difference between the price

paid for such billa, wether on original issue or on subsequent pruchase" and the amount
~tually

received either upon sale or redemption at maturity during the taxable year

for which the return is made" as ordinary gain or loss.

Treasury Department Circular No. 410 (current revision) and this notice, prescribe
the tenns of the Treasury bills and govern the conditions of their issue.

the Circular may be obtained from any Federal Reserve Bank or Branch.

Copies of

- 2 -

Immediately after the closing hour, tenders will be opened at the
Federal Reserve Banks and Branches, following which public announce~nt will be made by the Treasury Department of the amount and price
unge of accepted bids. Those submitting tenders will be advised
of the acceptance or rej ec t ion thereof. The Secre tary of the Treasury
expressly reserves the right to accept or reject any or all tenders,
in whole or in part, and his action in any such respect shall be
final. Subject to these reservations, noncompetitive tenders for
each issue for $200,000 or less without stated price from anyone
bidder will be accepted in full at the average price (in three
decimals) of accepted competitive bids for the respective issues.
Settlement for accepted tenders in accordance with the bids must be
~de or completed at the Federal Reserve Bank on September 30,1965, in
cash or other immediately available funds or in a like face amount
of Treasury bills maturing September 30,1965. Cash and exchange tenders
will receive equal treatment. Cash adjustments will be made for
differences between the par value of maturing bills accepted in
9change and the issue price of the new bills.
The income derived from Treasury bills, whether interest or
from the sale or other disposition of the bills, does not have
my exemption, as such, and loss from the sale or other disposition
of Treasury bills does not have any special treatment, as such,
~der the Internal Revenue Code of 1954.
The bills are subject to
estate, inheritance, gift or other excise taxes, whether Federal or
State, but are exempt from all taxation now or hereafter imposed on
ilie principal or interest thereof by any State, or any of the
possessions of the United States, or by any local taxing authority.
fur purposes of taxation the amount of discount at which Treasury
bills are originally sold by the United States is considered to be
~terest.
Under Sections 454 (b) and 1221 (5) of the Internal
~~nue Code of 1954 the amount of discount at which bills issued
hereunder are sold is not considered to accrue until such bills are
sold, redeemed or otherwise disposed of, end such bi lIs are excluded
from consideration as capital assets. Accordingly, the owner of
Treasury bills (other than life insurance companies) issued hereunder
need include in his income tax return only the difference between
the price paid for such bills, whether on original issue or on
subsequent purchase, and the amount actually received either upon
sale or redemption at maturity during the taxable year for which the
return is made, as ord inary ga in or loss.
~~

Treasury Department Circular No. 418 (current revision) and this
notice prescribe the terms of the Treasury bills and govern the
conditions of the ir issue. Copies of the circular may be obtained from
any Federal Reserve Bank or Branch.
000

TREASURY DEPARTMENT
September 22, 1965
FOR IMMEDIATE RELEASE
TREASURY'S WEEKLY BILL OFFERING
The Treasury Department, by this public notice, invites tenders
for two series of Treasury bills to the aggregate amount of
$2,200,000,000,or thereabouts, for cash and in exchange for
Treasury bills maturing September 30,1965, in the amount of
$3,202,999,000, as follows:
9~day bills (to maturity date) to be issued September 30, 1965,
in the amount of $1,200,000,000, or thereabouts, representing an
additional amount of ~i11s dated July 1, 1965,
and to
mature December 30,1965,origina1ly issued in the amount of
$ 1,000,158,000,the additional and original bills to be freely
interchangeable.

l82-day bills (to maturity date) to be issued September 30, 1965
in the amount of $1,000,000,000, or thereabouts, representing an
additional amount of bills dated March 31, 1965, and to mature March:
1966, originally issued in the amount of $1,000,304,000, the addition,
and original bills to be freely interchangeable.
The bills of both series will be issued on a discount basis under
competitive and noncompetitive bidding as hereinafter provided, and at
maturity their face amount will be payable without interest. They
will be issued in bearer form only, and in denominations of $1,000,
$5,000, $10,000, $50,000, $100,000, $500,000 and $1,000,000
(maturity value).
Tenders will be received at Federal Reserve Banks and Branches
up to the clOSing hour, one-thirty p.m., Eastern Daylight Saving
time, Monday, September 27,1965.
Tenders will not be
received at the Treasury De?artment, Washington. Each tender must
be for an even multiple of $1,000, and in the case of competitive
tenders the price offered must be expressed on the basis of 100,
with not more than three decimals, e. g., 99.925. Fractions may not
be used. It is urged that tenders be made 0n the printed forms and
forwarded in the special envelopes which will be supplied by Federal
Reserve Banks or Branches on application therefor.
Banking institutions generally may submit tenders for account of
customers provided the names of the customers are set forth in such
tenders. Others than banking institutions will not be permitted to
submit tenders except for their own account. Tenders will be received
without deposit from incorporated banks and trust companies and from
responsible and recognized dealers in investment securities. Tenders
from others rnust be accompanied by payment of 2 percent of the face
amount of Treasury bills applied for, unless the tenders are
accompanied by an express guaranty of payment by an incorporated bank
or trust company.
F-205

~,.

:'

~:- ~. :"'~,-:' A, ~\,

..........."....V.""........

TREASURY DEPARTMENT

Washington

September 22, 1965

FOR IMMEDIATE RELEASE,
TREASURY'S WEEKLY BILL OFFERING

Tbe Treasury Department, by this public notice, invites tenders for two seriee
of~asury

bills to the aggregate amount of $ 2,200,000,000 , or thereabouts, for

(J{)
cash and in exchange for Treasury bills maturing September 30, 1965 , in the amount
(;1)
of $ 3,202,999,000 , as follows:
(~)

91 -day bills (to maturity date) to be issued September 30, 1965

<m

TI)

,

in the amount of $ 1,200,000,000 , or thereabouts, represent(ji)
ing an additional amount of bills dated
July 1, 1965
,
---'--~Ci:=""')r-----

and to mature December 30, 1965
, originally issued in the
(ii)
amount of $ 1,000,158,000 , the additional and original bills

(D)

to be freely interchangeable.

~:,~$

Cii ) . ,

.

~'reabouts,
""'''- t~ ) ,.
1,000,000,000 , or

. _~~~lllb~,_.~~"-,- and to mature

to' be dated_____ ..

March3ttJ966

•

The bills of both series will be issued on a discount basis under competitive
and noncompetitive bidding as hereinafter provided, and at maturity their face amount

will be payable without interest.
~1nations

They will,be issued in bearer form only, and in

of $1,000, $5,000, $10,000, $50,000, $100,000, $500,000 and $1,000,000

(maturity value).
Tenders will be received at Federal Reserve Banks and Branches up to the closing
Daylight Saving
hour, one-thirty p.m., Eastern/XIXDDI time, Monday, September 27, 1965
• Tenders
(lri)
will not be received at the Treasury Department, Washington. Each tender must be
tor an even multiple of $1,000, and in the case of competitive tenders the price
ottered must be expressed on the basis of 100, with not more than three decimals,
e.

g_,

99.925.

Fractions may not be used.

O-:J- {- £~

It is urged that tenders be made on the

ruBLtC DEB'l' 1966

Selltcmber 22" 1965

To :frea1dent s, Federal Reserve Banks I

Boston

Cleveland

New York

Richmond

Philadelphia

Atlanta.

11 ftrat

~

Chicago
St. louis

Minneapolis

Kansas City
Dallas
San Francisco

delete enUre clause for descrlbtng 182-day 'bills and in lieu
"

....., aubstltute:

----1, --...,
,

1
\'

I
,--

IIJIIIB 182__ bills (to
~ of

m&turI.ty

--------------------------------.

date> to be 1 _ September 50,

1965, in t.be

'~

$l.,000,ooo,000" or tb.ereabouts, representing an addltional

I

I

IIIIOU1l't of billa d&ted March 31, 1965" and to mature March 31, 1966,

orlgtnaUy issued in the amount of

*1,000 "304,000,,

t..lw add1 tional and

ortg1naJ bills to be treel.y intercll&ngeable.
Accordingly, delete till in In.formation items ll, 12" 13 and 14 in

previous wire when sending confirmation and in lieu t.bereof confirm
above quoted ebaDse.

CARLOCK

)
/

/

,/

·. 2 -

printed forms and forwarded in the special envelopes which will be supplied by Federal
Reserve Banks or Branches on application therefor.
Banking institutions generally may submit tenders for account of customers provided the names of the customers are set forth in such tenders.

others than banking

institutions will not be permitted to submit tenders except for their own account.
~nders
~d

will be received without deposit from incorporated banks and trust companies

from responsible and recognized dealers in investment securities.

Tenders fram

others must be accompanied by payment of 2 percent of the face amount of Treasury bills
applied for, unless the tenders are accompanied by an express guaranty of payment by
~

incorporated bank or trust company.
Dnmediately after the closing hour, tenders will be opened at the Federal Reserve

Banks and Branches, following which public anouncement will be made by the Treasury
~partment

of the amount and price range of accepted bids.

Those submitting tenders

nil be advised of the acceptance or rejection thereof. The Secretary of the Treasury
expressly reserves the right to accept or reject any or all tenders, in whole or in
part, and his action in any such respect shall be final.

Subject to these reserva-

tiona, noncompetitive tenders for each issue for $200,000 or less without stated
price from anyone bidder will be accepted in full at the average price (in three
~caals)

of accepted competitive bids for the respective issues.

Settlement for

accepted tenders in accordance with the bids'must be made or completed at the Federal
Reserve Bank on September 30, 1965

, in cash or other immediately available funds

lU)
or 1n a like face amount of Treasury bills maturing September 30, 1965
• Cash
Q&i)
and exchange tenders will receive equal treatment. Cash adjustments will be made for
differences between the par value of maturing bills accepted in exchange and the issue
Price of the new bills.
The income derived from Treasury bills, whether interest or gain from the sale or
other dispoSition of the bills, does not have any exemption, as such, and loss from the

- 3 -

~

-

sale or other disposition of Treasury bills does not have any special treatment, as

such, under the Internal Revenue Code of 1954.

The bills are subject to estate,

iMeritance, gift or other excise taxes, whether Federal or State, but are exempt from
all taxation now or hereafter imposed on the principal or interest thereof by any State,

oraDY of the possessions of the United States, or by any local taxing authority.

Fbr

purposes of taxation the amount of discount at which Treasury bills are originally sold
~th~

United states is considered to be interest.

Under Sections 454 (b) and 1221 (5)

otthe Internal Revenue Code of 1954 the amount of discount at which.bills issued hereunder are sold is not considered to accrue until such bills are sold, redeemed or othernse disposed of, and such bills are excluded from consideration as capital assets.

Accordingly, the owner of Treasury bills (other than life insurance companies) issued
hereunder need include in his income tax return only the difference between the price
}aid tor such bills, whether on original issue or on subsequent purchase, and the amount
actually received either upon sale or redemption at maturity during the taxable year

tor which the return is made, as ordinary gain or 10s8.
Treasury Department Circular No. 418 (current revision) and this notice, prescribe

too terms of the Treasury bills and govern the conditions of their issue.
the circular may be obtained from any Federal Reserve Bank or Branch.

Copies of

TREASURY DEPARTMENT

September 22, 1965
FOR IMMEDIATE REIEASE

WITHHOIDING OF APFRAISEMENT ON
STEEL WEWED WIRE MESH

The Treasury Department is instructing customs field officers
to Withhold appraisement of steel welded Wire mesh for concrete
reinforcement from Italy pending a determination as to whether this
merchandise is being sold at less than fair value Within the meaning
of the Antidumping Act, 1921, as amended.

Notice to this effect is

being published in the Federal Register.
Under the Antidumping Act, determination of sales in the United
states at less than fair value would require reference of the case to
the Tariff Commission, which would consider whether American industry
was being injured.

Both dumping price and injury must be shown to

justify a finding of dumping under the law.
The information alleging that the merchandise under consideration
was being sold at less than fair value Within the meaning of the Antidumping Act was received in proper form on March 3, 1965.

This in-

formation was the subject of an "Antidumping Proceeding Notice" which
was published pursuant to section 14.6(d), Customs Regulations, in
the Federal Register of March 26, 1965, on page 3992 thereof.

TREASURY DEPARTMENT

September 22, 1965
FOR IMMEDIATE REIEASE

WITHHOLDING OF APPRAISEMENT ON
STEEL WELDED WIRE MESH

The Treasury Department is instructing customs field officers
to withhold appraisement of steel welded wire mesh for concrete
reinforcement from Italy pending a determination as to whether this
merchandise is being sold at less than fair value within the meaning
of the Antidumping Act, 1921, as amended.

Notice to this effect is

being published in the Federal Register.
Under the Antidumping Act, determination of sales in the United
States at less than fair value would require reference of the case to
the Tariff COmmission, which would consider whether American industry
was being injured.

Both dumping price and injury must be shown to

justify a finding of dumping under the law.
The information alleging that the merchandise under consideration
was being sold at less than fair value within the meaning of the Antidumping Act was received in proper form on March 3, 1965.

This in-

formation was the subject of an "Antidumping Proceeding Notice" which
was published pursuant to section 14.6(d), Customs Regulations, in
the Federal Register of March 26, 1965, on page 3992 thereof.

TREASURY DEPARTMENT

September 22, 1965
FOR IMMEDIATE RELEASE
TREASURY ANNOUNCES NEW .TOUR SYSTEM
AT BUREAU OF ENGRAVING AND PRINTING
Treasury Secretary Henry H. Fowler will inaugurate a new
special tour system at the Bureau of Engraving and Printing
at 10:00 A.M. Thursday, September 23, 1965.
The new "self-service" tour system will allow visitors, who
total more than 600,000 a year, to view the manufacturing
operations of the Bureau -- where the nation's paper money is
printed -- in a more efficient manner than was permitted by the
previous "guided-tour" system.
Under the old system, guides conducted parties of twenty-five
visitors through the Bureau. During peak visitor periods, the
four-man guide staff frequently had to be augmented by as many
as two dozen production employees.
Despite these efforts, visitors frequently were obliged to
wait for as long as two hours before they could be accommodated,
and waiting lines outside the building occasionally numbered
several thousand. The new system is designed to eliminate such
waiting by allowing a continuous flow of visitors to enter the
Bureau, witness operations from glass-enclosed galleries, and
depart. The tour will take about twenty-five minutes.
The new system will also allow visitors to watch the
printing of multi-colored postage stamps, an operation which
was not previously open to the general public. Equipment now
includes escalators as well as an audio system which will
broadcast recorded messages explaining the currency and stamp
manufacturing operations as they are viewed during the course
of the tour.
Under the new system, tours will operate continuously from
8:00 A.M. to 2:30 P.M., an hour and a half longer than before.

000

F-204

DRAFT TREASURY PRESS RELEASE
FOR IMMEDIATE RELEASE

9/22/65

TREASURY ANNOUNCES NEW TOUR SYSTEM
AT BUREAU OF ENGRAVING AND PRINTING
Treasury Secretary Henry H. Fowler will inaugurate a
~)

new special tour system at the Bureau of Engraving and

0~

f

Printing at 10 A.M. Thursday, September 23, 1965.

,~

{)J

ftOTOrA

L

lV{O I(k- T({t+f\(

The new "self-service" tour system will allow

r;, c5t>(~

viSito~.. I\

to view the manufacturing operations of the Bureau -- where
the nation's paper money is printed -- in a more efficient

Pelf r1 (TYC:"
manner than was 1!llI!AtM-.1d by the previous "guided-tour" system.
/\

Under the old system, guides conducted parties of
twenty-five visitors through the Bureau.

During peak visitor

periods, the four-man guide staff frequently had to be
augmented by as many as ~"O dozen production employees ....

J,

( -ri-\~
",----". c ' - '

2

\
-!

Despite these efforts, visitors frequently were obliged
to wait for as long as two hours before they could be
accomodated, and waiting lines outside the building
occasionally numbemdseveral thousand.
The new system is designed to eliminate such waiting by
allowing a continuous flow of visitors to enter the Bureau,
£pidg eA8lB8Ciocs ""t+rr9tl§b. glass-enclosed galleries and depart.
~

",O'R8U 8jSL€iii

)

".tl'!~ escalators as well as an audio system

~/

/

I

which will broadcast recorded messages explaining the currency

f

and stamp manufacturing operations as they are viewed during

I

the course of the tour.
new system will also allow visitors to watch the
printing of multi-colored postage stamps, an operation which was
not previously open to the general public.

Ii:. (1 w( i~lf"'1 "

fe"" '"

r-,
t'·' ".,

- 3 ~--\~

Whil~"<~,he old system, during 'peaK'perlocrs'-~"'altowe'd''''''''''~''''
""<",

....

visitors to see

dhly two currency operations and no postage
''"""'.

'.~"'.~'".\.
'~~

.",.

stamp production at all, di~new system permits the viewing
14.\-...J~"

'·l~."

" .
currency .printing arid"'~rocessing
·.ft,~/~,.

"

of the complete

ltli~,

operation --

"":'"':'Q,'' ' ' B:"",<",

beginning with the blank paper going to press

arl1:\>,~nding
--:o,("!-

with the packaging of completed notes.

~~tC-"'J:T..="""';7;~~i<,~'M;.::f-nr.;;'ffj':~~..,.~:; ....~

old one, about 25

minute'g'~"""·',,,·

.

Under the old sysfem, tottrs"hadbeenavailablaon,.".

6

Pt"jIIA'(~

system tours will

,)

/"

.

_r~
,

/

\.

"'/'
~

,

.

f

~

,\

J...-f""p
{'Pr/tl P '

i:io:f,J ~,_,
f

'.

-42f)()r,~;~
J.anr~illl{~,)s,

day of

:tt Bonn in dup1i cat ':l , in the

~elif)h

,md Gennan

each te:(t having equal authenticity, thi$ _ _ _ _ __
,

1965.

Fen THE FEm"!: ,\.:, RERJl)LIC OF GEill4ANY:

-41?ropc~ty

(a) held by such permanent establishment or (b) held

specifically to promote its business activities.
4.

Both delegations agree that the amendment effected by

Article 6 of the Protocol shall not influence the
inter?retation to be given to Article VIII of the Convention
prio~

5.

to the amendment.

The exemption of capital gains provided by Article IX A

of the Convention is understood to apply to the sale,
liquidation or other alienation of a "wesentliche Beteiligung
(substantial participation) in a company.
6.

In the event that either the United States income tax or

Federal Republic tax, as it applies to

corp~·ations,

is

substantially changed, or if experience in individual cases
indicates that the application of Article VI leads to

effect~

that are not in accordance with the basic principles underlyl
that Article, the competent authorities of the contracting
States shall consult together for the purpose of ascertaininf
whether it is necessary to amend Article VIo

-40of the corporation paying the dividend, as for example
trade credit extended in accordance with the general
credit practices followed in the trade or business
concerned, shall not be deemed to constitute reinvestments.
The renewal or conversion into equity capital of loans
outstanding as of December 31, 1964, other than those
mentioned in the foregoing sentence, shall not be deemed
to constitute a reinvestment.
3.

The term "effectively connected" as used in Articles VI,

VII and VIII of the Convention shall be so construed that
items of income referred to in the respective articles
will be considered to be effectively connected with a
permanent establishment if such items of income accrue
to the recipient by virtue of assets (a) held by the
permanent establishment or (b) held by the recipient
specifically to promote the business activities of the
permanent establishment, or if the activities of the
permanent establishment are a material factor in realizing
such items of income.

As used in Article IX A of the

Convention, the term "effectively connected" shall be
so construed that gain to which the article applies will
be considered to be effectively connected with a permanent
establishment if the gain is derived from the alienation of

-39:'i2i':0NU"l)LJ1-'~ OF

UNDERSTANDING BETWEEN TAX DELEGATIONS OF

GER~A~-Y

:-.ND THE U;:;JITED STATES CONCERNING THE PROTOCOL SIGNED
SEPrEMBER 17
1965
.........
..' .........
,

TO MODIFY THE INCOME TAX

CONVE~lION

OF JULY 22, 1954

The representataves of

~he Ger~an

of the United States Treasury

Ministry of Finance and

Department~.ereby

agree that

the Protocol modifying the Income Tax Convention of July 22,
1954, between Germany and the United States of America shall

be applied in accordance with the following principles:
1.

In the application of Article II of the Convention

a hotel room or similar place temporarily occupied by
officials of an enterprise exercising management functions
shall not be interpreted to constitute "a place of management"
2.

For purposes of determining whether a corporation that

has received a dividend has made a reinvestment in the
corporation paying the dividend so that paragraph (3) of
Article VI of the Convention applies to the dividend
deemed to have been reinvested, paragraph (5) of that
Article shall be interpreted so that loans which do not
constitute more than a temporary addition to the capital

-38Article 18
(1)

This Protocol shall form an integral part of the

Convention of July 22, 1954, and shall continue in force
as long as that Convention remains effective.
(2)

The competent authorities of the contracting States

are authorized to publish the text of the Convention, as
modified by this Protocol, after this Protocol comes into
force.

DONE at .•••••..•... in duplicate in the German
and English languages, both texts being equally authentic.

For the Federal Republic of Germany:

For the United States of America:

- 8 Two

presidents. John F. Kennedy and Lyndon B. Johnson,

with the help of one man, Larry O'Brien, changed all this.
In this particular Congress there are
I know that everyone of them

)...<\.$

_7L

new members.

t J 11~.
{ '1 ~" .. ,

a close relationship with

Larry and his staff and at least some relationship with the
(

President.

While

'72

, Gr $' / -f.J .I J I..~

)

.,., .s' .t.: IV P ";'k

of these new member~ are members

of the President's party, I know from persch.1 observation
that the new members of the opposite party are given the
opportunity to establish a similar relation.
From the outside at least, it seems that this rather
simple device of consciously building a bridge across the
Constitutional Gulf has helped to combine the advantages
of a Congressional and a Parliamentary system.

- 7 II. Separation of Powers

~. . . . k·"\...J-, ,

During my two years in the Congress I felt that there
/\
was an unbridgeable abyss between the Congress and the
Executive.

I could and did

~
thrOt17 gyt· bridges

to the

Departments with which I was most involved because of
Committee assignments -- Treasury, State, Defense, and to
an independent agency, the Federal Reserve Board.

But

cJ~~·,_Q
there was no access to the White House for a freshman
Congressman.

I must admit that I was not disturbed by

this situation.

I merely assumed this was the way it had

always worked, and my colleagues with much longer tenure
had never seemed to have had more than a very tenuous
relationship with the White House.

- 6 -

it to be gratifying to be able to pursue the issues with
which we are associated in greater depth than I ever found
possible in the Congress.

But now I am frequently con-

cerned that I do not completely understand how all the
issues fit together in a national perspective.

The

Congressman, by the very allocation of his working time
has a better opportunity to obtain a more accurate perspective.
One bit of advice suggests itself here.

~

presentation to the Congress,
the case

0'" should
I'"'

~

~~f~~resent~must not

~APl'H&In ~.IE

keep in mind that

only stand on its

own merits but must also make sense when it is lined up
with all the other issues that are confronting the nation.
Failure to recognize this relationship gives rise to the

~ th~ th~oV7;:/ ~
of narrow-minded ;~d ~aroChial ex~.e
r-,
~~'-'<-~ .--....-"-_.
~'. \ \
~ II

- 5 -

to help me through an issue that confused me.

I suppose

that I asked too many questions because finally Mr. Sam
in exasperation said to me, "Joe, I am worried about you.

--

You seem to have an orderly mindl\and this is a disorderly
body'

"

"

In the final analysis you must usually take the word
of someone you trust who is expert in the area under debate
and vote with him.

While it would seem that this procedure

can eliminate the necessity for doing any studying on the
issues, still I believe that the average Congressman has

V ~/'

Q " Ii

a betltler perspective of the totality of issues th •• ,.&a .•_

\
My

views on this particular point have not changed

after four years on the outside.

Personally I have found

- 4 paralleled only in the White House.

(My reference here

is to Presidential assistants with whom I have worked

-.I,.

during the past four years -- not to the President, who
Df

Jl..r:.rPC'V..:..,

.

t:..1t...1

is clearly in a position that cannot be compared with
1\
anything.)

Finance, foreign policy, farm programs,

commerce, conservation, roads, defense, human rights -all these facets of American policy pour through the
Congress.

i3

For anyone who enjoys the broad sweep of affairs

0'"/ H

it is anl\exhi1arating and

~ 0~
he.~

E ,). f

,.. r(
experience.

But it also has its draw-backs.

If you have an

inquiring and analytical mind, the attempt to understand
all the issues presented for a vote can be maddening.

I

am not certain that I qualify as an analytical mind, but
I do remember on one occasion trying to get Speaker Rayburn

... 3 ...

f t, L

( (.) (,) ~ P

were !8uamented, by three years of close work with the
/

Congress in discharging my legislative responsibilities
with the Treasury. / 1 ... _ _ ••• IIz,-dIoeZ. . . . . . ' 7 . -

'-'-

reapoaaibilit:t..8to the 1Mlted ,£Utes u:•. anded.. from

pre.entatl,on.

But

at this 1IIGIIIene--.,."OWR f . .ling

·t.,~

I am at liberty to give 'YOU abaa!' Sttperu.lI>e "ef t_fJ'toIY.

! The

Inside-Outside Approach from
Various Points of Vi~_(

1. Involvement in the Nation's affairs
,;e!: (O/'/,I/.(;~:

First of all, to a Member there is a sense of total
involvement in the affairs of the United States that is

- 2 -

Its quality of uniqueness derives from the constitutional
separation of executive and legislative powers -- a division
which has puzzled, exasperated, and often outraged genera-

tions of SCholars.teu: Congressional system of government
lacks the symmetry and simplicity which is associated with
a Parliamentary government and this probably accounts for
its rather low standing in scholarly circles and, possibly,
for the fact that our system is not copied by the newly

emerging

na~~n:J

Perhaps

my

"inside .•• outside" attempt

today will contribute some understanding and if not understanding, at least, hopefully, sympathetic admiration.
I have

r

f) '"

aM

IJ}

£reservationf'

H/'- (: ~

/ on~two years in the
'-

Ii IVf

to offer.

PZ

d, 1 served

{\

~_ ( U 1 fLY )~ f~J 41( r- 1 ~

congre~n~this

(u......

is hardly enough

'\

0

time to form critical judgments) ~wever,jt~se two years

-

"} f

I'"

A\,"

" t~ (, "~~ ''''.: ''f l1, \~,

The ~merican \Congress -- A \Vi~ ,',from the
rnside and Outside; .

INTRODucnON
1 will confe.. to an unabashed Ed unre..rve~ admiration

/~

for the Congress and for the Congressional system.

\

'---

opportunity to adjress myself to this topic today is designed
to be a small but personal tribute to the Congress as it
f

completes the first session of this 8'th Congress.' The
constructive, thoughtful, and vigorous record it has establhhed this ya.:r surely calls for

~ admiration.

suc!fre.8iOnii0'li!~h'l411

Mine is offered her_ith.

The Congress, as it exists and functions today, is a

peculiarly American institution.

There is no legislative

body in any major nation today which resembles it very
closely -- and for that matter there has been nothing quite
like it in recorded history.

TREASURY DEPARTMENT
Washington
FOR RELEASE AT 12:30 P.M., EDT
WEDNESDAY, SEPTEMBER 22, 1'65
REMARKS OF THE HONORABLE JOSEPH W. BARR
THE UNDER SECRETARY OF THE TREASURY
BEFORE THE AMERICAN SOCIETY FOR PUBLIC ADMINISTRATION,
WASHINGTON, D. C., ON HEDNESDAY,
SEPTEMBER 22, 1965

THE UNITED STATES CONGRESS -- A PERSONAL VIEW
INTRODUCTION
I will confess to an unabashed admiration for the
Congress and for the Congressional system. The constructive,
thoughtful, and vigorous record it has established this year
surely calls for such expressions of admiration. Mine is
offered herewith.
The Congress, as it exists and functions today, is a
peculiarly American institution. nlere is no legislative
body in any major nation today which resembles it very
closely
and for that matter there has been nothing quite
like it in recorded history.
Its quality of uniqueness derives from the constitutional
separation cf executive and legislative powers -- a division
which has pu7.z1ed, exasperated, and ~ften outraged generations of scholars. Perhaps my "insi.de ... outside" attempt
today will ctJntribute some understsHding and if not understanding, at least, hopefully, sympathetic admiration.
I have one reservation to offer. I served two years
in the Congress. While I am acutely aware that this
-

F-208

- 2 -

is hardly enough time to form critical judgments, those
two years were followed by three years of close work with
the Congress in discharging my legislative responsibilities
with the Treasury.
I. Involvement in the Nation's affairs
First of all, to a Member of Congress there is a sense
of total involvement in the affairs of the United States
that is paralleled only in the White House. (My reference
here is to Presidential assistants with whom I have worked
during the past four years -- not to the PreSident, who is
clearly in a position of responsibility that cannot be compared with anything.) Finance, foreign policy, farm programs,
commerce, conservation, roads, defense, human rights -- all
these facets of American policy pour through the Congress.
For anyone who enjoys the broad sweep of affairs it is both
an exhilarating and sobering experience.
But it also has its draw-backs. If you have an inquiring and analytical mind, the attempt to understand all the
issues presented for a vote can be maddening. I am not
certain that I qualify as an analytical mind, but I do
remember on one occasion trying to get Speaker Rayburn to
help me through an issue that confused me. I suppose that
I asked too many questions because finally Mr. Sam in exasperation said to me, "Joe, I am worried about you. You seem to
have an orderly mind -- and this is a disorderly body."
In the final analysis you must usually take the word
of someone you trust who is expert in the area under debate
and vote with him. While it would seem that this procedure
can eliminate the necessity for doing any studying on the
issues, still I believe that the average Congressman has a
unique perspective of the totality of issues.
My views
four years on
gratifying to
associated in

on this particular point have not changed after
the outside. Personally I have found it to be
be able to pursue the issues with which we are
greater depth than I ever found possible in

- 3 -

the Congress. But now I am frequently concerned that I do
not completely understand how all the issues fit together
in a national perspective. The Congressman, by the very
allocation of his working time, has a better opportunity
to obtain a more accurate perspective.
One bit of advice suggests itself here. In making
presentations to the Congress, one should keep in mind that
the case being presented must not only stand on its own
merits but must also make sense when it is lined up with
all the other issues that are confronting the nation.
Failure to recognize this relationship gives rise to the
feeling in the Congress that the government is composed of
narrow-minded and parochial experts who suffer from that
dread bureaucratic disease -- "tunnel vision."
II. Separation of Powers
During my two years in the Congress I sometimes felt
that there was an unbridgeable abyss between the Congress
and the Executive. I could and did build bridges to the
Departments with which I was most involved because of
Committee assignments -- Treasury, State, Defense, and to
an independent agency, the Federal Reserve Board. But at
that time there was no access to the White House for a
freshman Congressman. I must admit that I was not disturbed
by this situation. I merely assumed this was the way it had
always worked, and my colleagues with much longer tenure had
never seemed to have had more than a very tenuous relationship with the White House.
Two presidents, John F. Kennedy and Lyndon B. Johnson,
with the help of one man, Larry O'Brien, changed all this.
In this particular Congress there are '2 new members, 83
of whom are in the House and' in the Senate. I know that
everyone of them has a close relationship with Larry and
his staff and at least some relationship with the President.
While 72 of these new members, 65 in the House and 7 in the
Senate, are members of the President's party, I know from
personal observation that the new members of the opposite
party are given the opportunity to establish a similar relation.

- 4 From the outside at least, it seems that this rather
simple device of consciously building a bridge across the
Constitutional Gulf has helped to combine the advantages
of a Congressional and a Parliamentary system.
The effect of the O'Brien bridge has been to assure
that every member has the chance to hear not only the
Department's position, but the President's views on legislation he is sponsoring. The distinction may sound tenuous,
but think back to my original point that the Congress usually
tends to jump to a conclusion that departmental positions
are narrow-minded and parochial. They do not take that
attitude with Presidents. Even if they disagree with a
position, as politicians they are acutely aware that a
President stands for election before all the people.
It would be difficult to exaggerate the importance of
this development involving only a handful of people in the
White House and 30 or 40 in the rest of the government.
While maintaining the absolute independence of the individual Member of Congress, the O'Brien bridge has in effect
opened a parliamentary dialogue in a Congressional system.
I mean by this that the politicians -- the Members and the
President -- are now engaged in a direct dialogue as they
would in a Parliament.
I believe that the recent legislative record will support
my thesis that a dialogue between the politicians develops
more understanding than the more traditional dialogue between
the Congress and the Departments.
III. Specialization
I have already referred to the fact that the variety of
issues confronting the Congress makes it a practical necessity to rely on the judgment of Members who specialize in
the particular area. As a Member I had a vague idea that
the Congress was a body of generalists fragmented into areas
of specialization. I was forming a dim idea that access to
committee staffs and to the staffs of the Departments over
which one had oversight opened up extraordinary avenues for

- 5 -

research in depth in particular areas. However, the extent
and the quality of the Congressional system of specialization never became fully apparent until I was on the outside
looking in.
My experience on the outside has had mainly to do with
taxes and finance and has involved the Ways and Means
Committee and Banking and Currency Committee of the House
plus the Senate Finance, Banking and Currency, and Foreign
Relations Committees. I cannot speak with a background of
experience on the other Committees of the Congress but I
can state emphatically that an Administration witness before
any of the Committees I have named is always pressed -- and
pressed hard -- to make a case. The Members of these
Committees have had years of experience; they are backed up
by excellent staffs; and their accumulated knowledge on
almost anyone of the problems that confront the Treasury
is usually awe-inspiring.

There is nothing that irritates me more than a somewhat
recurring theme that I encounter periodically to the effect
that the Congress is a rubber stamp. To the people who
make these speeches and write these articles, I have always
wanted to extend an invitation to testify on a highly technical and controversial subject before the Ways and Means
Committee.
Let me give you an example. About a month ago I testified before Ways and Means on Unemployment Compensation
legislation. This subject is always controversial and it
is admittedly complex. However, for my own information I
kept a log of the hours I spent in preparing for the testimony.
I logged a total of 34 hours -- usually late at night or early
in the morning -- preparing myself for a three-hour session.
This may seem like super-caution, but too often I have
seen intelligent, experienced witnesses demolished before
these Committees because they had not taken the trouble to
do their homework. Just this week one of our Assistant
Secretaries went before the Senate Finance Committee to
testify for a total of twenty minutes on the Canadian Auto
Parts legislation. This man told me that he had spent 29
hours in preparation!

- 6 -

I hope these illustrations will help to show why I
become so irritated at the "rubber stamp" charge that is
sometimes levelled at the Congress. Any reasonable man
with any experience in the affairs of this government
knows better. He knows that when he takes the Administration's case to the Congress -- no matter what the majority
his party may have -- he is confronted with an independent
panel of specialized experts who uBually possess vastly more
experience than he. Unless he is to disgrace himself, his
Department, and the Administration, he has no alternative
but to spend bone-crushing hours of preparatory homework.
It is from this particular angle that the Congress looks
most different from the outside than from the inside.
I have often wondered whether it was not this degree
of specialization that has developed in the United States
Congress that has made it the tough, effective legislative
body that it is today. We live in a world of specialists
in every phase of our lives. While the Congressional system
with its high degree of specialization may appear fragmented
and disorderly to those who admire the symmetry of the
Parliamentary system, I would submit that the Congressional
system is peculiarly adapted to the world in which we live
today.
It seems to me that this is especially true in the area
of taxation. In a Parliamentary system a major overhaul of
a nation's tax system can usually be accomplished in a month
or two months. In the United States, I know from experience
that it usually takes at least a year and in that period of
a year the legislation is debated in the Committees of the
House and Senate, on the floor, in t~e press, at most business and labor gatherings, and eve~tually becomes the topic
of almost general conversation in the nation.
While this can be an excruciating and harassing experience
for the Treasury, it does have one enormous advantage. If
your case is solid and will stand the scrutiny of the Congress,
the press, and the general public -~ no matter how controversial it may appear at first -- you will usually end up
with a consensus ranging from two-thirds to three-fourths

- 7 of the nation in support of the proposal. As a result,
when the legislation is finally enacted, the nation usually
both understands and supports what has been done. In any
area so vital to our domestic welfare as taxation, I think
this heavy consensus is crucial.
CONCLUSION
I can only conclude from my vantage point first on
the inside and then on the outside, that the American
Congress as it exists today is a highly effective instrument
reflecting the will of the American people. And when I look
further at the cooperation and understanding that has been
established between the politicians at both ends of
Pennsylvania Avenue, I feel a profound confidence in the
ability of this Nation to face up to its problems.

000

TREASURY DEPARTMENT

September 22, 1965
FOR IMMEDIATE RELEASE
TREASURY OFFERING OF TAX ANTICIPATION BILLS

The Treasury clarified its Autumn borrowing plans today with the
announcement that the bulk of this financing would be provided by a
$4 billion tax anticipation bill package that includes $3 billion of
March bills and $1 billion of June bills.

These bills will be sold by

competitive bidding on October 5 for payment October ll.

Banks will be

permitted to pay for their accepted tenders by 100 percent tax and loan
account credit.
The addition of some June tax bills at this time will permit the
Treasury to meet prospective cash requirements over this seasonally slack
revenue period until late in November.
The Treasury also noted that additional June tax bills would be issued
to meet the major portion of its remaining cash needs before the receipt
of heavy tax payments in the Spring.

F-209

- 14 -

present.

But I would submit that we are in as strong -- and in

some important respects stronger -- position to deal with any
contingencies that the future may bring than for some time past.
I would also suggest that, in assessing the outlook for financial
markets and in full recognition of the role that expectations can
play, that it would be a mistake to be beguiled by speculation in
the press or elsewhere concerning what conceivably might happen
at the expense of hard analysis of present trends and policies.

- 13 In the corporate area,where investment planning and financing
involves longer lead times, there would appear to be a sizable
potential for further savings, supplementing the more immediate
benefits from the repatriation of liquid funds.

There is also

a clear potential for increased exports -- improving on the performance of the first half when the slower growth of some important
foreign markets was one factor holding the total close to year
ago levels.

And, the process of reviewing Government expenditures

abroad to seek out savings wherever possible without sacrificing
other vital national objectives is continuing -- even though it
must be recognized that the easy and obvious areas for saving
have long since been fully exploited.
I am not about to try to strike a balance among these influences and try to forecast our balance of payments for this year
or next.

I would draw the conclusion that there is no cause for

relaxation.

But I would also feel grounds for confidence that, with

this kind of effort, we are on the right track, and that we are
building a foundation upon which discussions of international monetar:
reform can proceed to a fruitful conclusion in an atmosphere

free

from concern about the dollar itself.
The fact that uncertainties exist in the international area
as well as in the domestic economy is undeniable -- they are always

- 12

~

under no illusion that the job can be accomplished without effort,
or that we can escape entirely from a deficit in the second half
of the year
One highly encouraging, and essential, ingredient for
success over the period ahead is the clear evidence that the
banks and other financial institutions are extending their full
and continuing cooperation in the President's program.

I suspect,

too, that many of these institutions have, at the least, been
finding growing opportunities for usefully employing within the
domestic economy funds they have diverted from foreign lending.
Moreover, with the great majority of the banks now comfortably
within the guideline targets, I hope that the concern expressed
in some quarters earlier that export financing might inadvertently
be impeded has by now been fully dissipated.

Incidentally, the

inability of the Federal Reserve to find any hard evidence that
exports were hampered by shortages of bank credit even during the
period that many banks were aggressively pruning their foreign loans
to bring them within the guidelines is a remarkable testimony to
the efforts of the banks to respect the essential priorities within
the program.

- 11 -

President's call to reduce and repatriate surplus liquid funds
abroad, and the concerted efforts of the banks to bring their
foreign credits within the Federal Reserve guidelines were reflected in a return flow during the second quarter alone of
some $700 million.

In contrast, the average quarterly outflow

last year was $ 850 million.

At the same time, exports, which

had been hit hard by the dock strike in the first quarter, rebounded
sharply, adding perhaps $450 million to the export volume that
might otherwise have developed during the second quarter.
In part, these factors simply reflected a reversal of comparable adverse influences in the first quarter.

For that reason,

the point has been made that the deficit for the first half as a
whole of $1.3 billion, at an annual rate, may be a fairer approximation of the progress that has been achieved.

At any rate, it is

clear that the second quarter results did include some favorable
elements of a "once and for all" nature.

Moreover, there is ample

evidence that tourists have been traveling abroad in record volume
this year -- placing a particular burden on the third quarter results
and imports are respondin6 to the growth in our economy.
The arithmetic is inescapable that to achieve and maintain
a reasonable equilibrium, offsetting gains will be required in
other sectors of our accounts.

The potential is there, but I am

- 10 -

markets.

As a consequence, the crisis atmosphere that seemed to

be developing during the summer has been dissipated.
Meanwhile, our own balance of payments, as you know, has
improved dramatically since President Johnson's program was
announced on February 10.

It would be quite wrong to bask in the

glow of the early response to that program, and interpret the
small surplus of $lOG+·million in the second quarter as signifying
that our goal of full and sustained equilibrium has been achieved,
or is assured.

Experience shows that our balance of payments

outturn in any brief period can be sharply influenced, in one
direction or another, by a variety of essentially transient
influences, and we know that a number of the factors contributing
to the surplus during the second quarter cannot be counted on to
last.
Under the circumstances, nothing less than full scale
implementation of the balance of payments program in the period
ahead can be justified.

I can assure you there is no inclination

on the part of the Administration to relax in any way at the expense
of risking a relapse into the kind of persistent deficit that would
undermine the strength of the dollar in world markets.
The nature of the task ahead is implicit in recent developments.

The quick and willing response of businessmen to the

- 9 -

last to discount the importance of expectations as a market
influence.

But at the same time, I think we can all recognize

that expectations can be highly volatile -- and that the basis
for these expectations needs to be critically re-examined as
new facts appear.
We have in recent weeks, for instance, had what I think
must be termed a satisfactory and responsible settlement of the
wage dispute in steel -- a settlement that the Government and
private experts unaffiliated with the parties immediately at
interest seem to agree is very close to

the'~uidepost"

criteria.

Instead of a potentially disruptive strike or the kind of signal
of an inflationary trend in costs that had been feared, the
actual outcome would seem to support the central objective of
maintaining average wage increases in line with industry-wide
growth in productivity -- a basic prerequisite for price stability.
To turn to the international area, the increasingly visible signs
that the British program to restore equilibrium to its balance
of payments is beginning to take hold -- and the encouraging
further step that has been taken to promote essential cost and
price stability in the U.K. over the longer-term future

have

been reflected in the recent performance of sterling in the exchange

- 8 -

as expansion programs of a number of companies have reached the
point of requiring more external financing, has made those
demands more clearly visible in the bond markets.

But it is

less frequently realized that the growth in mortgage credit -which is far and away the largest single sector of the capital
market -- has measurably slowed, in effect releasing more of
the steadily growing volume of savings for placement in corporate
or state and local government securities.
Even during the first half of the year, total private
uses of longer-term investment funds were, as we add them up,
almost precisely the same as a year earlier.

The same thing was truE

the aggregate flow of funds through non-bank savings institutions.
Meanwhile, commercial banks have successfully captured a larger
share of the total savings flow, providing in that way most of
the funds required to meet the exceptionally heavy loan demands.
And, the balance of forces in the market seemed to be reasonably
mirrored by the flat trend in interest rates.
This is perhaps the long way around to make the unexceptional
point that expectational factors, more than any current change in
the underlying flows of savings and investment, have seemed to
account for the change in market climate and the tendency for
yields in the sensitive bond markets to move higher.

I would be the

- 7 concern over a possible steel strike or an unsatisfactory wage
settlement, it is hardly surprising that some potential buyers of
fixed-interest securities reacted almost instinctively by retreating to the sidelines to await developments.
Nevertheless, in studying the available data on credit flows
over this period, one is forced to conclude, I believe, that the
very strong demands for credit that characterized much of the first
half of the year were, with due allowance for the traditional summer
lull, giving way to a pattern somewhat more closely in line with that
of other recent years.

While the continuing flow of corporate bond

offerings has remained very sizable, the spring bulge which reached c
peak in June has subsided.

And, the trend of bank loans, which re-

flected more fully the direct and indirect effects of business

hedg~

against a steel strike, appears to have dropped appreciably in July
and August from the extraordinary increase at an annual rate of 18\%
during the first six months of the year -- and that was, of course,
well before the stockpiling of steel could begin to be unwound.
Abstracting from the special influence of steel inventories ,
aggregate credit demands are, of course, still large when assessed in
a longer perspective.

Moreover, I suspect that the tendency over

the past year for businesses to enter the market in larger volume,

- 6 the bill area to be rolled over in 1965 would remain well below
the average of the past five years.

Moreover, from the standpoint

of general economic policy, I am not aware of any compelling case
for aggressive sales of longer-dated securities.

The data we

have on homebuilding, plant and equipment outlays, and other
sectors of the economy dependent upon long-term credit simply do
not suggest the kind of excesses that, according to traditional
counter-cyclical theories, might call for dampening down by means
of more aggressive Treasury competition for long-term funds.
I do not mean to suggest that Treasury safely can -- or
will

pass up every favorable opportunity for medium or longer-

term financing indefinitely, for the debt structure could again
become compressed and distorted.

But neither do we feel any

compulsion to take advantage of any and all opportunities for
extension as soon as they might develop.

In the prospective of the

months ahead, I think this adds up to the fact that there need be
no concern, in your own appraisals of prospective credit market
conditions, that Treasury financing will impede the continued
orderly flow of investment funds to other uses.
Our present cash offering is, of course, coming close on
the heels of a period of considerable market uneasiness.

Faced

with the uncertainties of the Viet Nam situation, a renewed bout
of speculation against sterling in July and early August, and

- 5 -

Obviously, in the absence of the Viet Nam imperatives,
the President's tight control on expenditures and the higher
revenues generated by a vigorous economy would have been reflected
in an easier cash position over the rest of the fiscal year than
can now be foreseen -- or for that matter easier than in any
recent year.
But, in my judgment, it would be a mistake to jump to a
conclusion that the new defense requirements place dimensions on
our prospective cash needs for fiscal 1966 out of keeping with the
general pattern of most recent years, or even decisively different
from the prospect last spring before the current strength in our
revenue picture had become fully apparent.
In reviewing our financing plans, I should also mention a
rather obvious point that has been made on several occasions
already.

The successful efforts over the past four or five years

to extend the debt and achieve a better balanced maturity structure
have, over the time span

encompassed by our immediate cash re-

quirements, removed any sense of urgency from achieving still more
extension.

Indeed, if all our forthcoming financing were to be

concentrated in strictly money market paper, the average maturity
of the debt at the end of the year would still be about five years
the same as at the end of 1964 -- and the volume of debt outside

- 4 say these are the kinds of uncertainties with which markets have
had to grow accustomed.

But, I can refer you to the informed

appraisal of defense spending trends made by the Chairman of the
Council of Economic Advisers recently in discussing the business
outlook.
As he indicated, the figures that have been loosely suggested
by some of defense outlays rising by a rate of $10 billion and
beyond, with the implication of a comparably heavy drain on cash
balances as we approach the middle of next year, "can at this
point only be pure figments of someone's imagination".

Those

figures are not reflected in our own cash planning for the very
good reason that we have found no basis for numbers even approaching that magnitude.

Granting all the uncertainties inherent in the

situation, whatever further appropriations
already requested $2.4 billion

over and above the

may prove necessary, their major

impact on spending and borrowing requirements would be mainly felt
in fiscal 1967, beyond the time horizon encompassed in the planning
I have reviewed today.

Full account will, of course, be taken of any

requirements of that nature in shaping the blend of budgetary and
fiscal planning that will be presented to the Congress in January.

- 3 -

Thereafter, the Treasury should be in a position to retire very
sizable amounts of marketable debt over the rest of the fiscal year.
At this stage in the budgetary and Congressional process,
it is simply not possible to pinpoint the amount of that debt
retirement.

But it does seem clear, in terms of what we know of

the general contour of anticipated revenues and expenditures after
the turn of the year,that a large share of the cash needs that will
remain after the current $4 billion financing can and should also
properly take the form of tax anticipation bills.

As you know,

those bills provide a particularly convenient investment outlet
for corporations accumulating tax revenues, help to smooth our
cash flows after tax dates, and typically can be placed in sizable
volume with a minimum impact on the market generally.
My reason for emphasizing that rather conventional prospect is
precisely to make clear that, in its general pattern and dimensions,
our cash financing requirements over this fiscal year as a whole
are rather closely comparable to those of last year, or most recent
years, even after allowing for the increased defense outlays
required by the Viet Nam situation.

I will not attempt to pose

as a foreign affairs expert, and try to balance for you the possibilil
of new emergencies adding to the present Viet Nam requirements
against the chances of a relaxation in tensions -- other than to

- 2 -

entry into the market to meet the recurring seasonal deficit during
the first six or eight months of a fiscal year -- a welcome dividend from the much improved budgetary position and unexpectedly
high cash balance that materialized in fiscal 1965.
The timing of this financing is "on target" in terms of our
earlier planning.

Moreover, I am glad to report that the total

amount of cash financing we now anticipate over the first six
months of the fiscal year -- aggregating perhaps $7 billion -remains very comfortably within the estimates we provided the
market as long ago as last May -- well before decisions were
reached as to the increased commitment of troops to Viet Nam.

By

raising over half of this $7 billion or so immediately -- at a time
when entry into the market in some amount could not be long delayed
in any event -- we are able to cover prospective cash requirements
until sometime late in November.

The current financing will also

lay a basis, in terms of adequate cash balances, for approaching
the small November refunding with flexibility to consider the full
range of refinancing techniques.
In addition to the further amounts of new cash which will be required before the December tax payments, and looking ahead into early
1966, we will, as usual, need to return again to the market in Januar)

FOR RELEASE ON DELIVERY

REMARKS OF PAUL A. VOLCKER
DEPUTY UNDER SECRETARY FOR MONETARY AFFAIRS
DEPARTMENT OF THE TREASURY
AT THE
450TH MEETING OF THE
NATIONAL INDUSTRIAL CONFERENCE BOARD
THE WALDORF - ASTORIA HOTEL, NEW YORK, N. Y.
SEPTEMBER 23, 1965, 2:30 P.M.
I fully recognize that no Treasury official participating in
a panel on the Financial Outlook at this particular juncture will
be permitted to escape without some observations on the internationa
side of the equation.

I shall attempt to discharge that obligation

today -- without, I hope, contributing to further confusion in a
complex area -- by a brief status report on our balance of payments
progress and problems.

But before turning to that subject, I would

like to make a more mundane contribution to the session by outlining
as clearly and concretely as I can the financing plans of the
world's largest single borrower -- the U. S. Government.
The Treasury announced yesterday afternoon that it will enter
the market early in October to borrow new cash in an amount of
$4 billion.

This borrowing, which will take the form of tax antici-

pation bills maturing during the periods of flush revenues in March
and June of next year, is essentially designed to help cover seasonal
needs.

This

in fact

the Treasury has been

is the
able

to

first time
defer

since 1952

beyond

the

that

Summer

FOR RELEASE ON DELIVERY

TREASURY DEPARTMENT
Washington

REMARKS OF PAUL A. VOLCKER
DEPUTY UNDER SECRETARY FOR MONETARY AFFAIRS
DEPARTMENT OF THE TREASURY
AT THE
450TH MEETING OF THE
NATIONAL INDUSTRIAL CONFERENCE BOARD
THE WALDORF-ASTORIA HOTEL, NEW YORK, N. Y.
SEPTEMBER 23, 1965, 2:30 P.M.
I fully recognize that no Treasury official participating in
a panel on the Financial Outlook at this particular juncture will
be permitted to escape without some observations on the international
side of the equation.

I shall attempt to discharge that obligation

today -- without, I hope, contributing to further confusion in a
complex area -- by a brief status report on our balance of payments
progress and problems.

But before turning to that subject, I would

like to make a more mundane contribution to the session by outlining
as clearly and concretely as I can the financing plans of the
world's largest single borrower -- the U. S. Government.
The Treasury announced yesterday afternoon that it will enter
the market early in October to borrow new cash in an amount of
$4 billion.

This borrowing, which will take the form of tax antici-

pation bills maturing during the periods of flush revenues in March
and June of next year, is essentially designed to help cover seasonal
needs.

This

in fact

the Treasury has been

F-2l0

is the
able

to

first time
defer

since 1952

beyond

the

that

summer

- 2 entry into the market to meet the recurring seasonal deficit during
the first six or eight months of a fiscal year -- a welcome dividend from the much improved budgetary position and unexpectedly
high cash balance that materialized in fiscal 1965.
The timing of this financing is "on target" in terms of our
earlier planning.

Moreover, I am glad to report that the total

amount of cash financing we now anticipate over the first six
months of the fiscal year -- aggregating perhaps $7 billion -remains very comfortably within the estimates we provided the
market as long ago as last May -- well before decisions were
reached as to the increased commitment of troops to Viet Nam.

By

raising over half of this $7 billion or so immediately -- at a time
when entry into the market in some amount could not be long delayed
in any event -- we are able to cover prospective cash requirements
until sometime late in November.

The current financing will also

lay a basis, in terms of adequate cash balances, for approaching
the small November refunding with flexibility to consider the full
range of refinancing techniques.
In addition to the further amounts of new cash which will be required before the December tax payments, and looking ahead into early
1966, we will, as usual, need to return again to the market in January.

- 3 -

Thereafter, the Treasury should be in a position to retire very
sizable amounts of marketable debt over the rest of the fiscal year.
At this stage in the budgetary and Congressional process,
it is simply not possible to pinpoint the amount of that debt
retirement.

But it does seem clear, in terms of what we know of

the general contour of anticipated revenues and expenditures after
the turn of the year,that a large share of the cash needs that will
remain after the current $4 billion financing can and should also
properly take the form of tax anticipation bills.

As you know,

those bills provide a particularly convenient investment outlet
for corporations accumulating tax revenues, help to smooth our
cash flows after tax dates, and typically can be placed in sizable
volume with a minimum impact on, the market generally.
My reason for emphasizing that rather conventional prospect is
precisely to make clear that, in its general pattern and dimensions,
our cash financing requirements over this fiscal year as a whole
are rather closely comparable to those of last year, or most recent
years, even after allowing for the increased defense outlays
required by the Viet Nam situation.

I will not attempt to pose

as a foreign affairs expert, and try to balance for you the possibility
of new emergencies adding to the present Viet Nam requirements
against the chances of a relaxation in tensions -- other than to

- 4 -

say these are the kinds of uncertainties with which markets have
had to grow accustomed.

But, I can refer you to the informed

appraisal of defense spending trends made by the Chairman of the
Council of Economic Advisers recently in discussing the business
outlook.
As he indicated, the figures that have been loosely suggested
by some of defense outlays rising by a rate of $10 billion and
beyond, with the implication of a comparably heavy drain on cash
balances as we approach the middle of next year, "can at this
point only be pure figments of someone's imagination".

Those

figures are not reflected in our own cash planning for the very
good reason that we have found no basis for numbers even approaching that magnitude.

Granting all the uncertainties inherent in the

situation, whatever further appropriations
already requested $2.4 billion

over and above the

may prove necessary, their major

impact on spending and borrowing requirements would be mainly felt
in fiscal 1967, beyond the time horizon encompassed in the planning
I have reviewed today.

Full account will, of course, be taken of any

requirements of that nature in shaping the blend of budgetary and
fiscal planning that will be presented to the Congress in January.

- 5 -

Obviously, in the absence of the Viet Nam imperatives,
the President's tight control on expenditures and the higher
revenues generated by a vigorous economy would have been reflected
in an easier cash position over the rest of the fiscal year than
can now be foreseen -- or for that matter easier than in any
recent year.
But, in my judgment, it would be a mistake to jump to a
conclusion that the new defense requirements place dimensions on
our prospective cash needs for fiscal 1966 out of keeping with the
general pattern of most recent years, or even decisively different
from the prospect last spring before the current strength in our
revenue picture had become fully apparent.
In reviewing our financing plans, I should also mention a
rather obvious point that has been made on several occasions
already.

The successful efforts over the past four or five years

to extend the debt and achieve a better balanced maturity structure
have, over the time span

encompassed by our immediate cash re-

quirements, removed any sense of urgency from achieving still more
extension.

Indeed, if all our forthcoming financing were to be

concentrated in strictly money market paper, the average maturity
of the debt at the end of the year would still be about five years
the same as at the end of 1964 -- and the volume of debt outside

- 6 -

the bill area to be rolled over in 1965 would remain well below
the average of the past five years.

Moreover, from the standpoint

of general economic policy, I am not aware of any compelling case
for aggressive sales of longer-dated securities.

The data we

have on homebuilding, plant and equipment outlays, and other
sectors of the economy dependent upon long-term credit simply do
not suggest the kind of excesses that, according to traditional
counter-cyclical theories, might call for dampening down by means
of more aggressive Treasury competition for long-term funds.
I do not mean to suggest that Treasury safely can -- or
will

pass up every favorable opportunity for medium or longer-

term financing indefinitely, for the debt structure could again
become compressed and distorted.

But neither do we feel any

compulsion to take advantage of any and all opportunities for
extension as soon as they might develop.

In the prospective of the

months ahead, I think this adds up to the fact that there need be
no concern, in your own appraisals of prospective credit market
conditions, that Treasury financing will impede the continued
orderly flow of investment funds to other uses.
Our present cash offering is, of course, coming close on
the heels of a period of considerable market uneasiness.

Faced

with the uncertainties of the Viet Nam situation, a renewed bout
of speculation against sterling in July and early August, and

- 7 concern over a possible steel strike or an unsatisfactory wage
settlement, it is hardly surprising that some potential buyers of
fixed-interest securities reacted almost instinctively by retreating to the sidelines to await developments o
Nevertheless, in studying the available data on credit flows
over this period, one is forced to conclude, I believe, that the
very strong demands for credit that characterized much of the first
half of the year were, with due allowance for the traditional summer
lull, giving way to a pattern somewhat more closely in line with that
of other recent years.

While the continuing flow of corporate bond

offerings has remained very sizable, the spring bulge which reached a
peak in June has subsided.

And, the trend of bank loans, which re-

flected more fully the direct and indirect effects of business hedging
against a steel strike, appears to have dropped appreciably in July
and August from the extraordinary increase at an annual rate of

l8~%

during the first six months of the year -- and that was, of course,
well before the stockpiling of steel could begin to be unwound.
Abstracting from the special influence of steel inventories,
aggregate credit demands are, of course, still large when assessed in
a longer perspective.

Moreover, I suspect that the tendency over

the past year for businesses to enter the market in larger volume,

- 8 -

as expansion programs of a number of companies have reached the
point of requiring more external financing, has made those
demands more clearly visible in the bond markets.

But it is

less frequently realized that the growth in mortgage credit -which is far and away the largest single sector of the capital
market -- has measurably slowed, in effect releasing more of
the steadily growing volume of savings for placement in corporate
or state and local government securities.
Even during the first half of the year, total private
uses of longer-term investment funds were, as we add them up,
almost precisely the same as a year earlier.

The same thing was true of

the aggregate flow of funds through non-bank savings institutions.
Meanwhile, commercial banks have successfully captured a larger
share of the total savings flow, providing in that way most of
the funds required to meet the exceptionally heavy loan demands.
And, the balance of forces in the market seemed to be reasonably
mirrored by the flat trend jn interest rates.
This is perhaps the long way around to make the unexceptional
point that expectational factors, more than any current change in
the underlying flows of savings and investment, have seemed to
account for the change in market climate and the tendency for
yields in the sensitive bond markets to move higher.

I would be the

- 9 last to discount the importance of expectations as a market
influence.

But at the same time, I think we can all recognize

that expectations can be highly volatile -- and that the basis
for these expectations needs to be critically re-examined as
new facts appear.
We have in recent weeks, for instance, had what I think
must be termed a satisfactory and responsible settlement of the
wage dispute in steel -- a settlement that the Government and
private experts unaffiliated with the parties immediately at
interest seem to agree is very close to the"guidepost" criteria.
Instead of a potentially disruptive strike or the kind of signal
of an inflationary trend in costs that had been feared, the
actual outcome would seem to support the central objective of
maintaining average wage increases in line with industry-wide
growth in productivity -- a basic prerequisite for price stability.
To turn to the international area, the increasingly visible signs
that the British program to restore equilibrium to its balance
of payments is beginning to take hold -- and the encouraging
further step that has been taken to promote essential cost and
price stability in the U.K. over the longer-term future

have

been reflected in the recent performance of sterling in the exchange

- 10 markets.

As a consequence, the crisis atmosphere that seemed to

be developing during the summer has been dissipated.
Meanwhile, our own balance of payments, as you know, has
improved dramatically since President Johnson's program was
announced on February 10 0

It would be quite wrong to bask in the

glow of the early response to that program, and interpret the
small surplus of $10 Of· million in the second quarter as signifying
that our goal of full and sustained equilibrium has been achieved,
or is assured.

Experience shows that our balance of payments

outturn in any brief period can be sharply influenced, in one
direction or another, by a variety of essentially transient
influences, and we know that a number of the factors contributing
to the surplus during the second quarter cannot be counted on to
last.
Under the circumstances, nothing less than full scale
implementation of the balance of payments program in the period
ahead can be justified.

I can assure you there is no inclination

on the part of the Administration to relax in any way at the expense
of risking a relapse into the kind of persistent deficit that would
undermine the strength of the dollar in world markets.
The nature of the task ahead is implicit in recent developments.

The quick and willing response of businessmen to the

- 11 president's call to reduce and repatriate surplus liquid funds
abroad, and the concerted efforts of the banks to bring their
foreign credits within the Federal Reserve guidelines were reflected in a return flow during the second quarter alone of
some $700 million.

In contrast, the average quarterly outflow

last year was $850 million.

At the same time, exports, which

had been hit hard by the dock strike in the first quarter, rebounded
sharply, adding perhaps $450 million to the export volume that
might otherwise have developed during the second quarter.
In part, these factors simply reflected a reversal of comparable adverse influences in the first quarter.

For that reason,

the point has been made that the deficit for the first half as a
whole of $1.3 billion, at an annual rate, may be a fairer approximation of the progress that has been achieved.

At any rate, it is

clear that the second quarter results did include some favorable
elements of a "once and for all" nature.

Moreover, there is ample

evidence that tourists have been traveling abroad in record volume
this year -- placing a particular burden on the third quarter results
and imports are

respondin~

to the growth in our economy.

The arithmetic is inescapable that to achieve and maintain
a reasonable equilibrium, offsetting gains will be required in
other sectors of our accounts.

The potential is there, but I am

- 12 -

under no illusion that the job can be accomplished without effort,
or that we can escape entirely from a deficit in the second half
of the year.
One highly encouraging, and essential, ingredient for
success over the period ahead is the clear evidence that the
banks and other financial institutions are extending their full
and continuing cooperation in the President's program.

I suspect,

too, that many of these institutions have, at the least, been
finding growing opportunities for usefully employing within the
domestic economy funds they have diverted from foreign lending.
Moreover, with the great majority of the banks now comfortably
within the guideline targets, I hope that the concern expressed
in some quarters earlier that export financing might inadvertently
be impeded has by now been fully dissipated.

Incidentally, the

inability of the Federal Reserve to find any hard evidence that
exports were hampered by shortages of bank credit even during the
period that many banks were aggressively pruning their foreign loans
to bring them within the guidelines is a remarkable testimony

~o

the efforts of the banks to respect the essential priorities within
the program.

- 13 In the corporate area,where investment planning and financing
involves longer lead times, there would appear to be a sizable
potential for further savings, supplementing the more immediate
benefits from the repatriation of liquid funds.

There is also

a clear potential for increased exports -- improving on the performance of the first half when the slower growth of some important
foreign markets was one factor holding the total close to year
ago levels.

And, the process of reviewing Government expenditures

abroad to seek out savings wherever possible without sacrificing
other vital national objectives is continuing -- even though it
must be recognized that the easy and obvious areas for saving
have long since been fully exploited.
I am not about to try to strike a balance among these influences and try to forecast our balance of payments for this year
or next.

I would draw the conclusion that there is no cause for

relaxation.

But I would also feel grounds for confidence that, with

this kind of effort, we are on the right track, and that we are
building a foundation upon which discussions of international monetary
reform can proceed to a fruitful conclusion in an atmosphere

free

from concern about the dollar itself.
The fact that uncertainties exist in the international area
as well as in the domestic economy is undeniable -- they are always

- 14 -

present.

But I would submit that we are in as strong -- and in

some important respects stronger -- position to deal with any
contingencies that the future may bring than for some time past.
I would also suggest that, in assessing the outlook for financial

markets and in full recognition of the role that expectations can
play, that it would be a mistake to be beguiled by speculation in
the press or elsewhere concerning what conceivably might happen
at the expense of hard analysis of present trends and policies.

2129

TREASURY DEPARTMENT

September

FOR Il-1l>JEDIATE RELEASE

ANTIDUHPING PROCEEDING ON
CEI'1ENT

On August 27, 1965, the Commissioner of Customs received information in proper form pursuant to the provisions of section 14.6(b) of
the Customs Regulations indicating a possibility that cement, white
portland, imported from Japan, manufactured by Onoda Cement Company,
Tokyo, Japan, is being, or likely to be, sold at less than fair value
within the meaning of the Antidumping Act, 1921, as amended.
White cement is used instead of gray cement where the purity of
color is a paramount consideration.
In order to establish the validity of the information, the Bureau
of Customs is instituting an inquiry pursuant to the provisions of section 14.6(d)(1)(ii), (2) and (3) of the Customs Regulations.
The information vms submitted by Covington & Burling, Washington,
D. C., on behalf of Riverside Division of American Cement Corporation,
Los Angeles, California.
An "Antidumping Proceeding Notice" to this effect is being published in the Federal Register pursuant to section 14.6(d)(1)(i) of
the Customs Regulations.
Imports of the involved merchandise received during the period
January 1, 1965, through August 31, 1965, amounted to approximately
$175,000.

TREASURY DEPARTMENT

September

FOR IMMEDIATE RELEASE

ANTIDUMPING PROCEEDING ON
CEMENT

On August 27, 1965, the Commissioner of Customs received information in proper form pursuant to the provisions of section 14.6(b) of
the Customs Regulations indicating a possibility that cement, white
portland, imported from Japan, manufactured by Onoda Cement Company,
Tokyo, Japan, is being, or likely to be, sold at less than fair value
within the meaning of the Antidumping Act, 1921, as amended.
White cement is used instead of gray cement where the purity of
color is a paramount consideration.
In ord.er to establish the validity of the information, the Bureau
of Customs is instituting an inquiry pursuant to the provisions of section 14.6(d)(l)(ii), (2) and (3) of the Customs Regulations.
The information was submitted by Covington

&

Burling, Washington,

D. C., on behalf of Riverside Division of American Cement Corporation,
Los Angeles, California.
An "Antidumping Proceeding Notice" to this effect is being published in the Federal Register pursuant to section 14.6(d)(l)(i) of
the Customs Regulations.
Imports of the involved merchandise received during the period
January 1, 1965, through August 31, 1965, amounted to approximately
$175,000.

TREASURY DEPARTMENT
(

FOR RELEASE A.M. NEWSPAPERS,
Tuesday, September 28, 1965.
RESULTS OF TREASURY'S WEEKLY BILL OFFERING

The Treasury Department announced last evening that tenders for the additional is~
on September 30 of two series of Treasury bills, one series dated July 1, 1965 (91 days
to maturity) and the other series dated March 31, 1965 (182 days to maturity), which we]
offered on September 22, were opened at the Federal Reserve Banks on September 27. Ten«
were invited for $1,200,000,000, or thereabouts, of 91-d~ bills and for $1,000,000,000
or thereabouts, of 182-ciay bills. The details of the two series are as followsl
182-day Treasur,y billa
91-day Treasury bills
s
maturin~ March .21,! 1966
OOMPETITIVE BIL6s
I
maturi~ December 30,! 1965
Approx. Equiv.
Approxo Equi T. I
Annual Rate
Price
Price
Annual Rate
a
High
s
98.998 ~/
3.964%
4.120%
97.917 EI
Low
I
98.984
4.019%
97.903
4.148%
Average
s
98.993
3.983% "};/
97.911
4.133%
a/ Excepting 1 tender of $1,225,000
34 percent of the amount of 91-day bills bid for at the low price was accepted
68 percent of the amount of 182-day bills bid for at the low price was accepted

RANGE OF ACCEPTED

Y

TOTAL TENDERS APPLIED FeR AND ACCEPl'ED BY FEDERAL RESERVE DISTRI CIS a
District
ApE11ed For
AcceEted
a Applied For
Boston
20,040,00ti $ 10,040,000 I $ 19,523,000New York
1,132,821,000
708,221,000 I
1,046,781,000
Philadelphia
27,979,000
15,979,000 I
ll,282,000
Cleveland
30,906,000
30,906,000 I
43,082,000
Richmond
19,412,000
19,412,000 I
5,884,000
Atlanta
46,443,000
39,983,000 I
24,854,000
289,808,000
Chicago
165,348;000 I
264,519,000
45,563,000
41,563,000 I
St. Louia
33,069,000
19,394,000
19,394,000 I
Minneapolis
12,233,000
32,259,000
32,259,000 I
Kansas City
15,72£ ,000
27,277,000
23,817,000 I
Dallas
12,073,000
103,087,000
93,2087 2 000 I
San Francisco
59,1765,1000
$1,794,989,000 $1,200,009,000 E/ $1,548,793,000
TOTALS

r

AcceEted
$ 19,523,001
682,381,001
3,282,0()
43,082,00
5,589,00
14,854,0()
126,519,001
23,569,001
11, 313,0{)(
15,728,00
n,073,ool
43,!105,!0()
$1,000,018,00
1

1

1

E/ Includes $263,867,000 noncompetitive tenders accepted at the average price of 98.99.
~/ Includes $122,334,000

noncompetitive tenders accepted at the average price of 97.~
On a coupon issue of the same length and for the same amount invested, the return on
these bills would provide yields of 4.08,%, for the 9l-day bills, and 4.28%, for the
182-day bills. Interest rates on bills are quoted in terms of bank discount with
the return related to the face amount of the bills payable at maturit.y rather than
the amount invested and their length in actual number of days related to a 36Q-day
year 0 In contrast, yields on certificates, notes, and bonds are computed in terms
of interest on the amount invested, and relate the number of days remainjng in an
interest payment period to the actual number of days in tm period, with semiannual
compounding if more than one coupon period is involved.
F-212

y

TREASURY DEPARTMENT
FOR RELEASE A. M. NEWSPAPERS,

Saturday, September 25, 1965.
RESULTS OF

~~DING

September 24,
OF $1 BILLION OF ONE-YEAR BILLS

The Treasury Department announced last evening that the tenders for $1,000,000,000,
or thereabouts, of 365-day Treasury bUls to be dated September 30, 1965, and to mature
~ptember 30, 1966, which were offered on September 16, were opened at the Federal Reserve Banks on September 24.

The details of this issue are as follows:
Total applied for - $2,969,748,000
Total accepted
- 1,000,359,000 (includes $56,988,000 entered on
a noncompetitive basis and accepted in
full at the average price shown below)
Range of accepted competitive bids:
High

- 95.722 Equivalent rate of discount approx. 4.219% per annum
- 95.698
"
""
"
It
4.243%"
"
- 95.705
"
""
"
"
4.236%"
" ];/

Low

Average

(40% of the amount bid for at the low price was accepted)
Federal Reserve
District

Total
Applied for

Total
Accepted

Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Hinneapolis
Kansas City
Dallas
San Francisco

82,730,000
2,261,017,000
13,038,000
51,672,000
4,732,000
33,866,000
303,828,000
25,758,000
9,647,000
l6,511,000
32,877,000
134,072,000
$2,969,748,000

$

$

TOTAL

!/ On

55,730,000
769,503,000
2,938,000
5,092,000
2,732,000
6,231,000
95,098,000
15,058,000
1,647,000
8,911,000
2,372,000
35,047,000
$1,000,359,000

a coupon issue of the same length and for the same amount invested, the return on
these bills would provide a yield of 4.44%. Interest rates on bills are quoted in
terms of bank discount with the return related to the face amount of the bills payable at maturity rather than the amount invested and their length in actual number
of days related to a 360-day year. In contrast, yields on certificates, notes, and
bonds are computed in terms of interest on the amount invested, and relate the number
of days remaining in an interest payment period to the actual number of days in the
period, with semiannual compounding if ~ore than one coupon period is involved.
F-211

TREASURY DEPARTMENT
roR RELEASE A.M. NEWSPAPERS,
TuesdaY, September 28, 196.5.
RESULTS OF TREASURY'S WEEKLY BILL OFFERING

-

The Treasury Department announced last evening that tenders for the additional issue
on September 30 of two series of Treasury bills, one series dated July 1, 196.5 (91 days
to maturity) and the other series dated March 31, 196.5 (182 days to maturity), which were
offered on September 22, were opened at the Federal Reserve Banks on September 27. Tenders
were invited for $1,200,000,000, or thereabouts, of 9l-rlq bills and for $1,000,000,000,
lr thereabouts, of 182-day bills.
The details of the two series are a.s follows I
182-day Treasury bill.
91-day Treasury bills
maturing Marc!! ,31, 1966
maturine December 30 , 196.5
:
Approx. Equi v.
Approxo Equi v. I
Price
Annual Rate
Annual Rate
Price
I
High
98.998 a/
3.964%
4.120%
97.917 ~
Low
98.984 4.019:;
97.903
4.148%
A.verage
98.993
3.983~.!/
97.911
4.)33% Y
a/ Excepting 1 tender of $1,225,000
~4 percent of the amount of ~l-day bills bid for at the low price was accepted
68 percent of the amount of 182-day bills bid for at the low price was accepted

/ANGE OF ACCEPTED
roMPETITIVE BIlE:

IOTAL TENDERS APPLIED FCR AND ACCEPTED BY FEDERAL RESERVE DISTRI crS:

District
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louia
Minneapolis
Kansas City
Dallas
San Francisco
TOTALS

AEElied For
2J,oLio,oot
:$
1,132,821,000
27,979,000
30,906,000
19,412,00e l
46,U43,uOu
28'1,806,000
45,563,000
19,394,000
32,253,000
27,277 ,000
103 z087 z000
~1, 794,989,000

AcceEted
~
10,OLLO,ooo
708,221,000
15,979,000
30,906,000
19,4.12,000
39,783,000
165,34tj,ooo
41,563,000
19,394,000
32,259,000
23,817,000
93 z087 zOOO

~1,200,009,000

·•

AEElied For
$ 19,523,660
1,046,781,000
11,282,000
43,082,000
s
5,884,000
:
24,854,000
264,519,000
33,069,000
•
I
12,233,000
:
15,728 ,000
:
12,073,000
:
59.z765.z000

I
I

·
·
·
£/

~1,548,793,OOO

AcceEted
<$
19,523,000
682,381,000
3,282,000
43,082,000
5,589,000
14,854,000
126,519,000
23,569,000
11,313,000
15,728,000
1l,073,OO6
43.z105 1OOO
$1,000,018,000 ~/

£//InCIUdeS $263,867,000 noncompetitive tenders accepted at the average price ot 98.993
~ Includes 1122,334,000 noncompetitive tenders accepted at the average price of 97.911
VOn a coupon issue of the same length and for the same amount invested, the return on
these bills would provide yields of 4.08~, for the 9l-day bills, and 4.28%, for the
182~ billa. Interest rates on bills are quoted in terms of bank discount with
the return related to the face amount of the bills payable at maturit,y rather than
the anount invested and their length in actual. number of days related to a 36o-day
year. In contrast, yields on certificates, notes, and bonds are computed in terms
of interest on the amount inVested, and relate the number of days remaining in an
interest payment period to the actual number of clays in tm period, with semiannual
compounding if more than one coupon period is involved.
F-212

101' SeptAmber

as,

196'

TREASURY ANNOUNCES U.S. DRAWING ON IMF
Secretary of the TreUUl'y Henry H. lowler today CJDOUDCed

a drawing by the tkl1ted Staw. on 'the In"-maUonal ....'ta'y
Fund in the 8Dk>unt of

too

Dd.1Uoo.

The draw1Dg was Jaie in

Canadian dollars.
This dl'aring is 'the
been termed

1964.

_~'\h

in a Ml'1•• of what haw

"technioal" dn1r.lnca and which began in r.m-u.ry

The ourreno1.a drawn by the thr1t.d Staws are expec'\ed

to be sold tor 4Ioll.ara to other I'tmd -.beN for their use
in making repayments 1;0 the lund

OWl'

tlw next. several ramtbe.

The last such drawing wu in JIuoch ot thi8 year but, ..
previously announced, a drawiDa .... made this July to pa-ol
vide t0l'81gn exchange to the U. S. to cU.rectly finance its
intema'Uonal p-.ymen~

·fIniUcr1ed)

Approve:

Dia-wrove:

OASIA:TPNelson:dlt:9/22/65

nH or

...... _ 1

TREASURY DEPARTMENT

September 28, 1965
FOR IMMEDIATE RELEASE
TREASURY ANNOUNCES U. S. DRAWING ON IMF

Secretary of the Treasury Henry H. Fowler today
announced a drawing by the United States on the
International Monetary Fund in the amount of $60
million.

The drawing was made in Canadian dollars.

This drawing is the seventh in a series of what
have been termed "technical" drawings and which began
in February 1964.

The currencies drawn by the

United States are expected to be sold for dollars to
other Fund members for their use in making repayments
to the Fund over the next several months.
The last such drawing was in March of this year
but, as previously announced, a drawing was made this
July to provide foreign exchange to the U. S. to
directly finance its international payment.

000

F-2l3

TREASURY DEPARTMENT
Washington
FOR RELEASE UPON DELIVERY
!APPROXIMATELY 11:00 A.M., EDT)
REMARKS OF THE HONORABLE HENRY H. FOWLER
SECRETARY OF THE TREASURY OF THE UNITED STATES
AND
UNITED STATES GOVERNOR OF THE INTERNATIONAL MONETARY FUND
BEFORE THE
ANNUAL MEETING OF THE INTERNATIONAL MONETARY FUND,
SHERATON PARK HOTEL, WASHINGTON, D. C.
SEPTEMBER 29, 1965
Fellow Governors of the International Monetary Fund,
ladies and gentlemen. We are complimented by the presence in
our capital city of so many distinguished people, from so
many nations throughout the world. With the addition of
Zambia last week and of Malawi in July -- to whom I extend my
own and my country's hearty welcome -- the Fund now numbers
103 countries.
Each of the annual meetings of the great organizations for
international financial cooperation that we take part in
leaves the world a little changed, and changed for the better.
What we say each year rests upon what we have accomplished,
and what we have learned, in another year of world-wide
cooperation and constructive endeavor in the management of our
financial and economic problems.
This year -- my first as a Governor of the Fund -- we can
look back with special pride. During the year just past our
processes of consultation and cooperation passed stern tests
of their practical effectiveness. We are implementing a
significant increase in IMF quotas. The general arrangements
to borrow were twice called into operation and the participating
countries have indicated that they are prepared to continue the
arrangements if the Fund so requests.
I consequently look forward with confidence to continued
progress in seeking a consensus on matters of very far reaching
importance for all our countries, and for a long time ahead.
F-2l4

- 2 -

I hope that when we meet next year we will find ourselves
near the final stages of policy agreement in the field of
improved international monetary arrangements.
The United States regards the Fund as an essential part
of international financial arrangements. Since the inception
of the Fund large sums in dollars have been used by the
Fund to accommo~ate drawings by other countries. Over the
years, these dollars have been repaid to the Fund. In the
last two years, my country has also drawn on the Fund. Our
drawings have been, in large part, technical arrangements
making possible the continued use of dollars in the settlement
of the obligations of other countries with the Fund.
However, at the end of last July, the United States made
a regular drawing of $300 million through which it acquired
foreign currencies for its own use in financing international
payments.
All of these events provide evidence that the availability
of Fund resources is increasingly important for all of the
Fund members, large or small, industrial or developing.
The economic health of the United States affects world
economic health in many ways, but in no way more fundamentally
than in the reflection of United States economic conditions
in the strength of the dollar.
During the past year the value of the dollar -- and
therefore the value of that large part of the world's monetary
reserves kept in dollars -- was reinforced in two ways:
continued vigorous and sound economic growth in the United
States, and progress toward eliminating our balance of payments
deficit.
In the fiscal year ending last June, national output
increased by about $41 billion, equivalent to almost 5 percent
in real terms, continuing the longest peacetime economic
expansion we have known. Prospects for maintaining our forward
momentum are favorable. Despite its record length of 55
months, the current expansion has remained remarkably we11balanced and free from inflationary distortions.

- 3 -

In our manufacturing sector, increases in productivity
and in wages received have been sufficiently in harmony so
that labor costs per unit of output over the past year have
again been stable. Since 1960, our unit labor costs have
declined by 3.3 percent. We calculate that the recent key
settlement in the steel industry, provides increased wages
and benefits over a 39-month period equivalent to a little
over 3 percent per year. We are hopeful that this will help
sustain a pattern of balance between wages and productivity
in industry generally, and will be accompanied by a continuation
of stable prices.
Under the stimulus of improved incentives and prospects
for expanding markets, capital spending by private industry
continues to move ahead vigorously, as it has over the past
three years, providing assurance against strains on capacity.
In the light of this continued expansion in the domestic
economy of the United States, it is particularly encouraging
that I am also able to report a significant improvement in the
U. S. balance of payments position since the announcement of
President Johnson's program on February 10. In the second
quarter of this year, we experienced a surplus of $119 million,
seasonally adjusted, compared with deficits of $780 million
in the first quarter and $1,551 million in the fourth quarter
of 1964.
We do not by any means conclude from three months' data
that our balance of payments problem has been solved. Over
any short-term period, balance of payments accounts exaggerate
the effects of particular transactions, whether these be
favorable or unfavorable. On balance, we believe that our
second quarter figures were distorted in a favorable direction.
I regard it as more prudent for us to look at the combined
results of the first and second quarters of the calendar
year. During the first half of 1965, our balance of payments
position was much improved, although there was still a deficit.
This amounted to $661 million in the six-month period and
represents an annual rate of about $1.3 billion.

- 4 The figures I have used are in terms of the "regular"
deficit concept which has been used generally in recent years
in our balance of payments accounting. This concept has been
criticised in that it includes in our deficit additions to
private balances of dollars which represent working balances
and investments by private parties. As many of the Governors
know we intend to report our balance of payments data on the
official settlements basis as well as the usual form in order
to make our figures more comparable with those of other countries.
On the official settlements basis our deficit in the first half
of the year, seasonally adjusted, was about $400 million, or an
annual rate of $800 million.
This improvement gives us confidence that our efforts
over several years, supplemented by a vigorous new attack
on the problem proposed by President Johnson last February,
are moving the United States toward the equilibrium we are
determined to attain and sustain. Our programswi.11 be
vigorously pursued until we are certain that the conditions
have been created in which equilibrium in our international
accounts can be sustained. In this, it is clear that we have
the support of the Congress and the U. S. public at large.
This brings us to the heart of the matter: will the
Free World continue in the years ahead to be able to increase
the reserves in our international monetary system sufficiently
and in season to be certain that the sound employment of
the world's economic resources for growth and improvement is
not crippled by inadequate financial means?
This question must be asked because in the future the world's
reserve needs will no longer be met by United States deficits,
and because in recent years additions to reserves have depended
so heavily upon dollar outflows. The record is as follows:
The United States has supplied about three-quarters of
the new reserves accumulated by the rest of the world since
the end of 1958. Only about one-quarter of this increase came
from new supplies of monetary gold and from the credit operations
of the International Monetary Fund. We estimate that as of the
end of 1964 more than a quarter of the official reserves of
the rest of the world were held in the form of dollars.

- 5 -

Reserves deriving
in two forms -- dollar
acquired and converted
of course, resulted in

from the United States deficit grew
balances held as such, and dollars
into gold. The latter development,
a decline in United States reserves.

Thus, we have before us a problem of conflicting objectives.
Resolution of this problem is of central importance to the
United States and to the rest of the world:
(a)

On the one hand there is the need to
achieve and sustain equilibrium in the
U. S. balance of payments, in order to
preserve the integrity of the dollar
at home and abroad, to the end that the
dollar can continue to function as an
essential part of the world's monetary
system, and in order to arrest further
drains on United States reserves, and

(b)

On the other hand, there is the need
to continue to supply additions to
reserves for continued economic
expansion and betterment in all our countries.

All our countries are fully committed to a policy of
dynamic growth in a dynamic world economy. This means growing
international trade, growing domestic supplies of money,
growing national outputs, and growing real incomes and profits.
If this expansion is to occur it is reasonable to expect
that the Free World, including the United States, will, in the
course of time, face growing needs for monetary reserves.
We can hardly expect that either the industrial nations
that have experienced such reserve growth or the rest of
the world can be satisfied very long to limit future growth
in reserves to the very modest level of new monetary gold
supplies and such limited increases as come from normal IMF
drawings.
These are the principal considerations that led my
Government to take the initiative in suggesting that it is now
time to negotiate new monetary arrangements which will enable
the nations of the world to deal with future demands upon the
international monetary system.

- 6 -

It is not my intention in these remarks to comment on the
substantive proposals and the issues that have already been
set forth for us in the work of the Deputies of the Group of
Ten, the Ossola Group, and the Reports of the International
Monetary Fund. The process of attaining a general consensus
on the best ways of providing additional reserve assets will
take time and great effort.
I do, however, wish to draw your attention to some
important objectives to keep in mind as we go forward with the
work of improving the international monetary system.
1. As I have stated, we should not expect to
rely upon the dollar to continue to supply the major
part of the growth in world reserves. The responsibility
for providing reserves should be shared. This means
that other ways of creating reserve assets will be
needed to provide assurance that their total will grow
at a rate that will encourage a continuation of the
impressive growth in world economic production and
trade.
2. The adjustment of imbalance should be brought
about firmly but smoothly, in order to avoid disrupting
effects on other countries and on the system as a
whole. And here I want to stress that it is of key
importance for surplus countries to adjust their
positions as well as for deficit countries to do so.
The adjustment burden not only should not -- realistically,
it cannot -- rest solely on deficit countries. In the
field of medium-term credit, in which the Fund has a
pre-eminent place, we should assure that there are
adequate amounts of such credit available to enable the
adjustment process to function in ways consistent with
the economic and political realities of modern society.
3. We should, at the same time, perfect the
defenses of the international monetary system against
its vulnerability to massive destabilizing movements
of funds. In this area, international monetary
cooperation in general, and especially short-term credit
facilities among major countries, are important.

I_~,'
,,~,

("

~!

\'_,.1

_

- 7 As I have said before, in pursuing these objectives the
U~ited Sta~es is ~edded to no specific plan. We are impressed
w~th the w~de var~ety of technical possibilities which have
been developed in the writings of distinguished economists
here and abroad. And we have, in addition to these plans, the
extremely valuable exploration of basic issues that has been
developed by the Study Group on the Creation of Reserve Assets,
under the Chairmanship of Mr. Rinaldo Ossola, of Italy. This
report not only provides a useful guide to current concepts,
but has brought out clearly that the obstacles to progress are
not questions of technical ability to create reserve assets,
but policy issues concerning how, when and where to create and
distribute them. The problem is to reconcile the objectives of
governmental policies so as to find ways of making progress that
will find broad support.
It is therefore appropriate and gratifying that the Ministers
of the Group of Ten have decided on Monday of this week to move
from preliminary and technical consideration of improvements in
the international monetary system to a level of active negotiation
among responsible policy officials.
This is the first phase of preparation for new and improved
international monetary arrangements. I urge that these
negotiations to identify a broad measure of underlying agreement
go forward with concentration, vigor and dispatch.
It is commendable that the Ministers of the Ten have
requested the active participation in this first phase of
preparation of the representatives of the Managing Director of
the International Monetary Fund and of the O.E.C.D. and the
Bank for International Settlements in these deliberations.
With respect to the Fund itself, it is the hope of the
United States that in this first phase of preparation the
management of the Fund will keep the Executive Directors fully
appraised of work going on in the Group of Ten, and that the
Fund will keep the Group of Ten informed of results of
discussions and considerations by the Executive Board of the
International Monetary Fund.
Beyond this, there lies a second phase of preparation o~ t~e
utmost importance, on which the United States has been both ~ns~stent
and persistent in its pursuit of appropriate preparation for an
international monetary conference. This second phase should
be designed primarily to assure that the basic interests of all

- 8 members of the Fund in new arrangements for the future of the
world monetary system will be adequately and appropriately
considered and represented before significant intergovernmental
agreements for formal structural improvements of the monetary
system are concluded. Within the Fund membership there are
variations in the extent to which individual countries are
able to, or choose to, accumulate and hold large reserve
balances. All, however, have a vital interest in the evolution
of the world's monetary arrangements.
Twenty-one years ago, the Coordinating Committee of the
Bretton Woods Conference submitted to the full Conference its
report recommending that the IMF and IBRD be favorably
considered by governments. The section of the report dealing with
the IMF began with these words:
"Since foreign trade affects the standards
of life of every people, all countries have a
vital interest in the system of exchange of
national currencies and the regulations and
conditions which govern its working."
I believe that thought is as true and as important today
as it was in 1944.
It is true that only a limited number of countries hold the
bulk of the official reserves of the world. No doubt these
countries, including my own, have deep interests and
responsibilities of a unique kind in the system by which
reserves are generated and regulated. But other countries,
which are not large reserve holders, also have legitimate and
vital interests in these matters. This is why all the countries
of the free world have a fair and reasonable claim that their
views must be heard and considered at an appropriate stage in
the process of international monetary improvement.
I welcome the action of the Group of Ten Ministers and
Governors in recognizing this essential requirement for our
continued efforts toward improvement of the free world's
international monetary system. The United States views with
hearty approval the Managing Director's suggestions to make
suitable arrangements so that the efforts of the Executive
Directors of the IMF and those of the Deputies of the Group
of Ten can be directed toward a consensus as to desirable lines
of action and the agreement of the Ministers of the Group of Ten
on this point. We are looking forward to bringing together
these two groups, which together can contribute so much

- 9 -

.h

experience and knowledge to the solution of the world's
monetary problems, into full fledged preparatory discussions.
This combination provides an adequate and appropriate
preparatory committee for a significant international monetary
conference provided, of course, that a meaningful basis for substantive
agreement can be reached in advance.
Let me close with a plea that formidable and complex as
is the task of extending and improving the workings of our
international monetary system, we lift our eyes from it long
enough to see what it is, in reality, that we are about.
Let me say -- and President Johnson's policies in this
respect as in many others are predicated upon this -- that
what we are engaged upon is the task of creating in the
Free World an international monetary structure strong enough,
flexible enough, and with adequate elements of growth, to
provide the financial framework for the building of a greater
society of nations.
These international arrangements we debate, the improved
international monetary system that we grope toward, are the
extension of the great international task of economic
development to which so many of us have dedicated so much of our
resources.
I say this not to magnify our undertakings, but to give
them the inspiration of their true perspective setting.
Let us build patiently, and strong, for much of our fondest
hopes rest upon what we are undertaking in our monetary as in
our development tasks. But there is too much to be done to
permit us the luxury of delay. So let us go forward, with
confidence that the institutions and processes of international
consultation and collaboration we have brought into being are
adequate to keep our problems from mastering us, and that they
will permit, instead, that we shall master our problems, in peace
and increasing plenty.

000

- 3 ~c~x:~~l!:fX

sale or other disposition of Treasury bills does not have any special treatment, as
such, under the Internal Revenue Code of 1954.

The bills are subject to estate,

inheritance, gift or other excise taxes, whether Federal or State, but are exempt from
all taxation now or hereafter imposed on the principal or interest thereof by any State,
or any of the possessions of the United States, or by any local taxing authority.

Fbr

purposes of taxation the amount of discount at which Treasury bills are originally sold
by the United states is considered to be interest.

Under Sections 454 (b) and 1221 (5)

of the Internal Revenue Code of 1954 the amount of discount at which bills issued hereunder are sold is not considered to accrue until such bills are sold, redeemed or otherwise disposed of, and such bills are excluded from consideration as capital assets.
Aecordingly, the owner of Treasury bills (other than life insurance companies) issued
hereunder need include in his income tax return only the difference between the price
paid for sueh bills, whether on original issue or on subsequent purchase, and the amount
actually received either upon sale or redemption at maturity during the taxable year
for which the return is made, as ordinary gain or loss.
Treasury Department Circular No. 418 (current revision) and this notice, prescribe
the terms of the Treasury bills and govern the conditions of their issue.
the circular may be obtained from any Federal Reserve Bank or Branch.

Copies of

- 2 -

printed forms and forwarded in the special envelopes which will be supplied by Federa
Reserve Banks or Branches on application therefor.
Banking institutions generally may submit tenders for account of customers provided the names of the customers are set forth in such tenders.

others than banking

institutions will not be permitted to submit tenders except for their own account.
Tenders will be received without deposit from incorporated banks and trust companies
and from responsible and recognized dealers in investment securities.

Tenders from

others must be accompanied by payment of 2 percent of the face amount of Treasury

bil~

applied for, unless the tenders are accompanied by an express guaranty of payment by
an incorporated bank or trust company.
Immediately after the closing hour, tenders will be opened at the Federal ReservE
Banks and Branches, following which public anouncement will be made by the Treasury
Department of the amount and price range of accepted bids.
will be advised of the acceptance or rejection thereof.

Those submitting tenders

The Secretary of the

Treasu~

expressly reserves the right to accept or reject any or all tenders, in whole or in
part, and his action in any such respect shall be final.

Subject to these reserva-

tione, noncompetitive tenders for each issue for $200,000 or less without stated
price from anyone bidder will be accepted in full at the average price (in three
decimals) of accepted competitive bids for the respective issues.

Settlement for

accepted tenders in accordance with the bids'must be made or completed at the Federal
Reserve Bank on ____o_c_t_o___
be __
r7~,_1~9-6-5---------, in cash or other immediately available funds
(#)
or in a like face amount of Treasury bills maturing
October 7, 1965
• Cash
--------~~n-----------

and exchange tenders will receive equal treatment.

Cash adjustments will be made for

differences between the par value of maturing bills accepted in exchange and the issue
price of the new bills.
The income derived from Treasury bills, whether interest or gain from the sale or
other disposition of the bills, does not have any exemption, as such, and 10s8 from th

TREASURY DEPARTMENT
Washington

September 29, 1965

FOR IMMEDIATE RELEASE,

TREASURY'S WEEKLY BILL OFFERING
The Treasury Department, by this public notice, invites tenders for two series
of Treasury bills to the aggregate amount of $ 2, 200ci5000 I 000 , or thereabouts, for
cash and in exchange for Treasury bills maturing October 7, 1965

, in the amount

(ii6
of

~,202,664,000

~)

,as follows:

91 -day bills (to maturity date) to be issued October 7, 1965

0&3

(ti

,

in the amount of $ 1,200,000,000 , or thereabouts, represent-

M

ing an additional amount of bills dated July 8, 1965
and to mature

January 6, 1966

(ti9
amount of $

11000~4tOOO

ceo

,

, originally issued in the

, the additional and original bills

to be freely interchangeable.
182 -day bills, for $ 1,000,000,000 , or thereabouts, to be dated
em
. cmo
October 7 1965
, and to mature
April 7, 1966

~

QiliQ

The bills of both series will be issued on a discount basis under competitive
and noncompetitive bidding as hereinafter provided, and at maturity their face amount
will be payable vithout interest.

They will·be issued in bearer form only, and in

denominations of $1,000, $5,000, $10,000,· $50,000, $100,000, $500,000 and $1,000,000
(maturity value).
Tenders will be received at Federal Reserve Banks and Branches up to the closing
Daylight Saving

hour, one-thirty p.m., Eastenl~ time, ___M~o~n~da~Y~J~0_c_tr.0r.b~er~4~,~1;9~6~5____ • Tenders
Cti)
will not be received at the Treasury Department, Washington. Each tender must be
for an even multiple Of $1,000, and in the case of competitive tenders the price
offered must be expressed on the basis of 100, with not more than three decimals,
e. g., 99.925.

Fractions may not be used.

It 1s urged that tenders be made on the

TREASURY DEPARTMENT

FOR TIMMEDIATE RELEASE

TREASURY'S WEEKLY BILL OFFERING
The Treasury Department, by this public notice, invites tenders
for two series of Treasury bills to the aggregate amount of
p,200,000,000, or the~abouts, for cash and in exchange for
Treasury bills maturing October 7, 1965,
in the amount of
$2,202,664,000, as follows:
91-day bills (to maturity date) to be issued
in the amount of $ 1,200,000,000, or thereabouts,
additional amount of bills dated July 8, 1965,
mature January 6, 1966, originally issued in the
$1,000,904,000, the additional and original bills
interchangeable.

October 7, ~965,
representing an
and to
amount of
to be freely

182-day bills, for $ 1,000,000,000, or thereabouts, to be dated
October 7, 1965,
and to mature April 7, 1966.
The bills of both series will be issued on a discount basis under
competitive and noncompetitive bidding as hereinafter provided, and at
maturity their face amount will be payable without interest. They
will be issued in bearer form only, and in denominations of $1,000,
$5,000, $10,000, $50,000, $100,000, $500,000 and $1,000,000
(maturi ty value).
Tenders will be received at Federal Reserve Banks and Branches
to the closing hour, one-thirty p.m., Eastern Daylight Saving
time, Monday, October 4, 1965.
Tenders will not be
received at the Treasury De~artment, Washington. Each tender must
be for an even multiple of $1,000, and in the case of competitive
tenders the price offered must be expressed on the basis of 100,
with not more than three decimals, e. g., 99.925. Fractions may not
be used. It is urged that tenders be made on the printed forms and
forwarded in the special envelopes which will be supplied by Federal
Reserve Banks or Branches on application therefor.
up

Banking institutions generally may submit tenders for account of
customers provided the names of the customers are set forth in such
tenders. Others than banking institutions will not be permitted to
submit tenders except for their own account. Tenders will be received
Without deposit from incorporated banks and trust companies and from
responsible and recognized dealers in investment securities. Tenders
from others must be accompanied by payment of 2 percent of the face
amount of Treasury bills applied for, unless the tenders are
accompanied by an express guaranty of payment by an incorporated bank
or trust company.
F-215

- 2 -

Immediately after the closing hour, tenders will be opened at the
Federal Reserve Banks and Branches, following which public announcement will be made by the Treasury Department of the amount and price
range of accepted bids. Those submitting tenders will be advised
of the acceptance or rejection thereof. The Secretary of the Treasury
expressly reserves the right to accept or reject any or all tenders,
in whole or in part, and his action in any such respect shall be
final. Subject to these reservations, noncompetitive tenders for
each issue for $200,000 or less without stated price from anyone
bidder will be accepted in full at the average price (in three
decimals) of accepted competitive bids for the respective issues.
Settlement for accepted tenders in accordance with the bids must be
made or completed at the Federal Reserve Bank on October 7, 1965,
cash or other immediately available funds or in a like face amount
of Treasury bills maturing October 7, 1965. Cash and exchange tenders
will receive equal treatment. Cash adjustments will be made for
differences between the par value of maturing bills accepted in
exchange and the issue price of the new bills.
The income derived from Treasury bills, whether interest or
gain from the sale or other disposition of the bills, does not have
any exemption, as such, and loss from the sale or other disposition
of Treasury bills does not have any special treatment, as such,
under the Internal Revenue Code of 1954. The bills are subject to
estate, inheritance, gift or other excise taxes, whether Federal or
State, but are exempt from all taxation now or hereafter imposed on
the principal or interest thereof by any State, or any of the
possessions of the United States, or by any local taxing authority.
For purposes of taxation the amount of discount at which Treasury
bills are originally sold by the United States is considered to be
interest. Under Sections 454 (b) and 1221 (5) of the Internal
Revenue Code of 1954 the amount of discount at which bills issued
hereunder are sold is not considered to accrue until such bills are
sold, redeemed or otherwise disposed of, and such bills are excluded
from consideration as capital assets. Accordingly, the owner of
Treasury bills (other than life insurance companies) issued hereunder
need include in his income tax return only the difference between
the price paid for such bills, whether on original issue or on
subsequent purchase, and the amount actually received either upon
sale or redemption at maturity during the taxable year for which the
return is made, as ordinary gain or loss.
Treasury Department Circular No. 418 (current revision) and this
notice prescribe the terms of the Treasury bills and govern the
conditions of their issue. Copies of the circular may be obtained from
any Federal Reserve Bank or Branch.
000

2268

TREASURY DEPARTMENT

September 29, 1965

FOR IMMEDIATE RELEASE
TREASURY DECISION ON OFFICE MACHINE SruOLS
UNDER THE ANTIDUMPING ACT

The Treasury Department has completed its investigation with
respect to the possible dumping of office machine spools from West
Germany, manufactured by Regentrop & Bernard, Wuppertal, Germany.
A notice of a tentative determination that this merchandise is not
being, nor likely to be, sold at less than fair value will be published in an early issue of the Federal Register.
Appraisement of the above-described merchandise from West
Germany, manufactured by Regentrop & Bernard, Wuppertal, Germany,
has not been withheld.
Imports of the involved merchandise received during the period
October 1, 1964, through June 30, 1965, were worth apprOximately
$22,500.

TREASURY DEPARTMENT
(

September 29, 1965

FOR IMMEDIATE RElEASE

TREASURY DECISION ON OFFICE MACHINE SPOOlS
UNDER THE ANTIDUMPING ACT

The Treasury Department has completed its investigation with
respect to the possible dumping of office machine spools from West
Germany, manufactured by Regentrop& Bernard, Wuppertal, Germany.
A notice of a tentative determination that this merchandise is not
being, nor likely to be, sold at less than fair value will be published in an early issue of the Federal Register.

'

Appraisement of the above-described merchandise from West
Germany, manufactured by Regentrop & Bernard, Wuppertal, Germany,

has not been withheld.
Imports of the involved merchandise received during the period
October 1, 1964, through June 30, 1965, were worth apprOximately
$22,500.

U S TREASURY LIBRARY

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