107. Memorandum From Secretary of the Treasury Fowler to President Johnson1
Enclosed is my report of the Cabinet Committee on the Balance of Payments covering the first stage of the program we recommend for 1967.2 You will recall in my previous memorandum of November 8,3 I suggested that this program be announced in two stages. The first announcement would come in early December and it would pertain to the Federal Reserve and Commerce Department programs. We feel that it is necessary to get this announcement out in order that industry may incorporate the guidelines in their own forward planning, as well as to remove any apprehension about the nature of next year’s balance of payments program, apprehension which may cause speculative capital outflows in the final weeks of the year. The second stage of the 1967 program [Page 312] should be detailed at the time of your Economic Message. I suggested waiting until then because of the major influence the Government’s 1967 economic program has on our balance of payments picture. When we discussed this at the Ranch, you indicated that this timing made sense.
On the first phase of our 1967 program I had hoped to be able to forward a unanimous recommendation from your Cabinet Committee. However, after nearly three hours of discussion on Monday,4 involving the principals only, preceded by previous Cabinet Committee meetings and a number of contacts at the staff level we have been unable to reconcile one difference in judgment on the issue, described in the attached report, of the appropriate degree of tightness in the Commerce program. We must submit this issue to you for resolution.
If you can see your way clear to approve the proposed programs, and decide the unreconciled issue, we would hope to be able to announce these measures this Friday, at a joint press conference held by Secretary Connor, Chairman Martin (or Governor Robertson), and myself. I will be abroad in Athens next week, at the King’s Prayer Breakfast, and then at the NATO Ministerial Meetings. Therefore, if it is not possible to make the announcement by Friday, we would not hold a joint press conference but simply release the various documents to the press when you approve the Federal Reserve program and the proposals for the Commerce program or some modification thereof. Secretary Connor and Governor Robertson would deal with press inquiries as they consider appropriate.
Assuming you approve the continuation of the program, the material to be released to the public would include (1) a letter from you to me as Chairman of the Balance of Payments Committee giving your approval (Tab A);5 (2) the Department of Commerce release describing their program (Tab B);6 and (3) the Federal Reserve release describing their program (Tab C).7
- Source: Johnson Library, National Security File, Subject File, Balance of Payments, Vol. 3 [1 of 2] Box 2. Confidential.↩
- Not enclosed, but presumably a reference to Document 108.↩
- Document 105.↩
- December 5. See Document 106.↩
- The tabs were not attached. The approved version of the letter was released to the public on December 12 at a White House press conference; for text, see American Foreign Policy: Current Documents, 1966, pp. 981–982.↩
- The approved version of the press release was released to the public on December 13 at a Department of Commerce press conference; for text, see ibid., pp. 982–985.↩
- Regarding Secretary Fowler’s statement, December 13, announcing the 1967 Balance of Payments Program, see Document 110.↩
- Printed from a copy that bears this typed signature.↩