Ask the Scholar
Document scope · 1 page
Scholar
Ask about this object, its catalog metadata, its source description, or the page inventory.
For page-specific OCR and visual context, open one of the page chats.
Source Description
This file contains material related to the Governor, Federal Reserve Board.
Scholar Source Context
Document identity
localId
241322071
label
Brimmer, Andrew, Oct. 1969 - April 1971 (3)
core
doc
dtoType
document
citationUrl
pageCount
1
Source metadata
id
241322071
contentType
document
title
Brimmer, Andrew, Oct. 1969 - April 1971 (3)
description
This file contains material related to the Governor, Federal Reserve Board.
citationUrl
collections
Arthur F. Burns Papers
Federal Reserve Board Staff Files
subjects
Africa
Federal Reserve System. (1913 - )
African Americans
Banks and banking
Finance
Developing countries
Monetary policy
Economics
Commerce
Interest rates
thumbnailUrl
largeImageUrl
imageCount
1
hasImages
yes
source
import
hasTranscription
no
Source extras
naId
241322071
coverageEndDate
logicalDate
1971-04-30
month
4
year
1971
coverageStartDate
day
1
logicalDate
1969-10-01
month
10
year
1969
levelOfDescription
fileUnit
recordType
description
ocrSource
nara-archive
Single page context
seq
1
pageIndex
0
type
document
mediaId
0b88c2dd4f1e275f
ocrText
The original documents are located in Box C2, folder "Brimmer, Andrew, Oct. 1969 - April
1971 (3)" of the Arthur F. Burns Papers at the Gerald R. Ford Presidential Library.
Copyright Notice
The copyright law of the United States (Title 17, United States Code) governs the making of
photocopies or other reproductions of copyrighted material. Arthur Burns donated to the
United States of America his copyrights in all of his unpublished writings in National Archives
collections. Works prepared by U.S. Government employees as part of their official duties are in
the public domain. The copyrights to materials written by other individuals or organizations are
presumed to remain with them. If you think any of the information displayed in the PDF is subject
to a valid copyright claim, please contact the Gerald R. Ford Presidential Library.
NATIONAL ARCHIVES AND RECORDS SERVICE
WITHDRAWAL SHEET (PRESIDENTIAL LIBRARIES)
FORM OF
DOCUMENT
CORRESPONDENTS OR TITLE
DATE
RESTRICTION
1. memo
Andrew F. Brimmer to Record Section re trends in the
6/29/70
C
commercial paper market
2. memo case, Brimmer to Board of Governors, 6/30/70
2a.memo
Economic Policy Committee Recommendation on Export
6/16/70
A
Credit (1 p.)
FILE LOCATION
Arthur Burns Papers
SRM
Federal Reserve Staff Files, Box C2
3/20/85
Brimmer, Andrew (3)
RESTRICTION CODES
(A) Closed by Executive Order 12356 governing access to national security information.
(B) Closed by statute or by the agency which originated the document.
(C) Closed in accordance with restrictions contained in the donor's deed of gift.
GENERAL SERVICES ADMINISTRATION
GSA FORM 7122 (REV. 5-82)
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
Office Correspondence
Date May 4, 1970.
To
Chairman Burns
Subject: Meeting on Trade Message and
From
Andrew F. Brimmer OAB
Trade Hearings, Wednesday, May 6.
An interagency meeting is being scheduled for Wednesday,
May 6, at 3 p.m. to consider a trade message that the President
might deliver and to review issues that Administration witnesses
will be expected to discuss at hearings to be held during the
next few weeks by the House Ways and Means Committee. You will
probably be receiving a notice of this meeting. (The meeting
will follow immediately another session called for 2 p.m. the
same day, to consider the future of the Foreign Direct Investment
program. The invitation list, I have been told, will be broader
for the trade discussion than for the FDIP review.)
For your background information, and as a preliminary
indication of the subjects to be covered at the trade meeting,
I attach a memorandum on a preparatory session conducted by
Hank Houthakker last Thursday and attended by Bernie Norwood
of our Division of International Finance. Another staff-level
meeting will be held late Tuesday, and a final paper for review
by principals attending the Wednesday meeting may not be available
much, if at all, in advance of that meeting.
The major issues of concern to the Board that are
being considered for treatment in a Presidential trade message
are proposals to expand Ex-Im's operations and to create a
tax deferral device to encourage exports. The trade hearings
will probably cover, of direct interest to the Board, proposals
(possibly all from outside the Executive branch) to create tax
incentives for exports.
Attachment
Memorandum on preparations for discussion of trade issues.
cc: R. Solomon
Holland
Cardon
BERALD FORD LIBRARY
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
Office Correspondence
Date May 1, 1970
To
Governor Brimmer
Subject: Houthakker Meeting on the
From
Bernard Norwood
Of
President Trade Message
CONFIDENTIAL (FR)
The following is an account of the meeting held by
Mr. Hendrik Houthakker (CEA) to discuss a message on trade to be
delivered by the President, as well as to consider matters to be
covered in trade hearings by the Ways and Means Committee.
Summary
The meetings considered points that might be included
in a Presidential trade message; did not do any drafting or re-
view language of proposed texts; elicited agency attitudes on
topics covered; and agreed to reconvene on Tuesday to prepare a
report that would be considered by principals on Wednesday. (In
addition to the Wednesday meeting of principals on trade matters,
there will be a meeting that day of high level officials on possi-
ble OFDI revision.) The meeting also noted preparation of Adminis-
tration material to be presented in the Ways and Means Committee
hearings.
On the principal issues, agencies were divided on a pro-
posal "to take Ex-Im out of the budget, " were agreeable to lesser
proposals to liberalize Ex-Im's operating limitations, and were
for the most part awaiting a further review of the DISC proposal
before developing positions.
Participants
CEA Houthakker, Wonnacott
Budget - Mann, Green, Bray
STR - Gilbert
NSC - Johnston
Ex-Im - Kearns, Bostwick
State - Weintraub, Duncan
Treasury - Schaffner, Pelikan
Commerce - Davis, Fox
Agriculture Bates
Federal Reserve - Norwood
GERALD
ARE
Determined to be an
Administrative Marking
By TMH
NARA, Date 4/18/22
To: Governor Brimmer
- 2 -
Documentation
Prior to the meeting, Davis had circulated an Ex-Im Bank
paper that proposed several ways of easing restraints on the Bank's
operations. At the opening of the session, the Chairman circulated
a CEA draft of a Presidential trade message (Attachment A); during
the discussion, Treasury circulated to those representatives who
had not previously received copies another draft Presidential mes-
sage (Attachment B). The latter two texts were referred to, but
not carefully reviewed, during the meeting.
Before the meeting opened, I gave Houthakker a copy of
the memorandum in which Reed Irvine and I had given to you our
views on the Ex-Im proposals and, incidentally, on the contemplated
DISC.
Proposed removal of Ex-Im from the budget
Houthakker solicited general reactions on the proposal to
take Ex-Im lending activities out of the Federal Budget (proposal
described in an Ex-Im memorandum circulated by Ken Davis on April 27).
Mann said that it had been agreed at the last NAC meeting to hold
this matter off until January. Kearns replied that Ken Davis at
some earlier meeting had asked Ex-Im to prepare a paper on the
subject. Davis said that the Secretary of Commerce, in a meeting
with the President, discussed tax incentives and export financing
and that the President asked for a further study of these matters.
Fox added that Wilbur Mills, Chairman of the Ways and Means Commit-
tee, had directed "us" to indicate how the President would achieve
his objective for U.S. trade performance.
Houthakker said that he had not been aware of the NAC
action but did recall that, when the issue was discussed last sum-
mer, there was an understanding that the budget constraint issue
would not be pushed. However, he recognized that the situation
had been altered by new events, namely, the Administration's deci-
sions to place certain Government activities of the Environ-
mental Finance Authority and of the Student Loan Program -- out-
side the Federal Budget. "Because a girl has lost her virginity
does not mean she has to become a whore,' Mann remarked.
Along the lines of our memorandum to you, I said we saw
value in budget discipline and believed now was not the time for
relaxation of budget restraints either in fact or in appearance.
GERALD LEGRARY FORD
To: Governor Brimmer
- 3 -
Bostwick objected to an inference in the meeting that
taking Ex-Im out of the Budget would remove it from all Governmental
controls. He noted particularly that the five Ex-Im directors were
appointed by the President and would be expected to carry out Admin-
istration policy. The Government Control Act provided the Budget
Bureau with adequate restraints over the Bank, Fox declared.
There was a sharp interchange between Mann and Kearns
over Mann's view that the proposal represented gimmickry and that
a proposal that would, in effect, remove Ex-Im from the Federal
Budget should be framed in a more clear-cut manner.
Returning ultimately to his initial request for agency
attitudes, Houthakker received the following indications.
Commerce - favored
Budget
opposed
Ex-Im
- favored
Federal Reserve - opposed
STR
- favored
Treasury
- no position,
State
- favored
but hopeful of estab-
lishing one during
the day.
In response to a direct query from Davis about the basis
of the Federal Reserve position, I said that the view had your con-
currence and that I expected that, in the light of previous expres-
sions of Board members on the broad issue involved, it would have
the support of other members. However, reminding Davis that he had
only gotten the Ex-Im paper to us the day before, the specific pro-
posal had not been presented to the Board.
Passing reference was made to a subsidiary element of the
proposal, namely, that Ex-Im be authorized to extend its discount
facilities to short-term export paper. Without objecting to the
proposal as a whole, I remarked that we would be concerned that a
failure to incorporate some restraints could well lead to an unde-
sirable surge in the expansion of the total volume of U.S. commer-
cial bank loans.
Increase in Ex-Im obligational authority
There was a generally favorable attitude toward Ex-Im's
request that its obligational authority be increased (point 2a in
Ex-Im's paper).
FORD
GERALD
To: Governor Brimmer
- 4 -
However, there was much debate over whether steps toward
this end should be taken now or should even be indicated publicly
at this time. Bostwick declared that Ex-Im would not need addi-
tional money now but would need it in FY72 and FY73. It would
need expanded obligational authority as of July 1971.
It remained unclear how the group's sentiment would be
reflected in the proposed trade message.
Debt obligations beyond Ex-Im's statutory life
There was no objection to the proposal that Ex-Im be
granted authority to issue debt obligations that extended beyond
its statutory life.
DISC
Green reported on the interagency meeting that had taken
place early in the week to formulate a position on the proposal to
establish as a tax deferral device to aid exports, a category of
domestic corporation to be known as a Domestic International Sales
Corporation (DISC). Hopefully, he said, papers to round out the
present proposal and to furnish needed analysis would be available
by next Tuesday. Gilbert said that he and Deputy Assistant Secre-
tary of the Treasury Nolan were to talk to Representative Byrnes
of the Ways and Means Committee concerning the proposal. Gilbert
had not yet done SO. It was not known whether Nolan or others had
brought the matter up with Byrnes.
Schaffner urged against possible insistence for a weigh-
ing of cost (revenue loss) against benefits (export earnings).
Agency reactions were as follows: Treasury, State, Agri-
culture, and Federal Reserve preferred to await a further proposal
before taking positions. Commerce definitely favored the idea of
the DISC. The Special Representative for Trade Negotiations was
sympathetic. Budget did not yet have a firm position. However,
DISC, as well as any other proposal involving a relinquishment of
revenue, would have to promise benefits that offset revenue loss
to warrant Administration endorsement. The NSC representative
said he had started out disposed favorably toward the proposal
but had become concerned about the holes in the proposal.
GERALD
To: Governor Brimmer
- 5 -
Houthakker thought that, pending a further review of the
proposal, reference of some sort to it should be retained in the
trade message.
VFCR
In answer to a question from Houthakker, I said I would
not recommend including in the trade message a reference to the
December 1969 modification of the VFCR guidelines.
OFDI
Some participants referred to the relationship between,
on the one hand, various proposals that would come up in the Ways
and Means Committee hearing and in the President's trade message
and, on the other hand, the possible liberalization of the Foreign
Direct Investment regulations, to be considered at a high level
meeting next week. Schaffner pointed out, for example, that trade
liberalization steps would to some extent determine how far Govern-
ment might go in liberalizing controls on capital outflow.
There was no attempt to get into the substance of the
OFDI issue at the meeting.
Other trade issues
Trade adjustment assistance. Gilbert had recommended to
the President the creation of the Trade Adjustment Assistance Ad-
visory Board that had been envisaged in the Trade Expansion Act of
1962 but that had never been established. There was brief discus-
sion of increased appropriations contemplated for adjustment assist
ance because of the expansion of the facility called for by the
President's trade bill.
Tariff Commission industry study. Gilbert also had recom-
mended to the President that the latter request the Tariff Commission
to do a comprehensive study of industries in the United States.
Houthakker thought that this point, as well as the adjustment assist-
ance matter, should go into a draft trade message if the President
accepted the recommendations.
Border tax adjustments. The Chairman of the Ways and
Means Committee might include border tax adjustments (BTA's) in
the hearings. However, in order to avoid inhibiting a possible
GERALD
LISRATA
To: Governor Brimmer
- 6 -
United States negotiating position, he would probably confine dis-
cussion of the topic to executive sessions of the Committee. Be-
lieving that the subject should be treated more fully, Fox said
that a decision had been taken at Cabinet level that the border
tax adjustment issue was important.
Houthakker and Gilbert agreed that no reference to the
subject should be made in the trade message.
Trade documentation. Gilbert expressed reservations
about an allusion in Treasury's draft of a Presidential trade
message to simplification of export documentation. (This was
virtually the only specific reference to the Treasury draft at
the meeting.)
Date of Mills hearings. Despite rumors, no firm date
had been set for the Mills Committee hearings. They were expected
in May. Cabinet officers and other senior officials were already
on notice that they would be scheduled.
Further action
Houthakker said the present group would meet again at
staff level Tuesday, May 5, at 4:30 p.m. Participants at the
present meeting were asked to submit to Wonnacott their comments
on the CEA draft Presidential trade message not later than noon,
Monday, May 4.
On Wednesday, May 6, at 2 p.m., a meeting would be held
under the Chairmanship of Paul McCracken to consider the possible
relaxation of the Foreign Direct Investment program. The meeting
would be confined to "principals only" (except for the inclusion
of Dick Urfer).
On Wednesday, May 6, at 3 p.m., another high level meet-
ing would be held to consider matters that would be coming up in
the Mills Committee hearings and to review a draft Presidential
trade message. The agency representation at this meeting would
be broader than at the 2 o'clock meeting.
cc: Messrs. R. Solomon
Hersey
Irvine
Pizer
Cardon
Attachments 2.
GERALD
Trade M sage - Preliminary Draft
April 29/PW/CEA
CONFIDENTIAL
Dat mind to be Administrative Marking
Date 8/19/85 By DAO
Last November, I sent to the Congress a message on
our foreign trade policies, and, included in that message,
my proposals for a Trade Act. If our trade policy is to
have the flexibility required by the changing world of
the nineteen seventees, these proposals are essential,
and I therefore urge their speedy enactment. While the
proposals are modest in scope, they provide flexibility for
U.S. trade policy in a number of significant ways.
Specifically:
---- They restore the authority needed by the
President to make limited tariff reductions.
----- They recognize the very real plight of
particular industries, companies and workers
faced with import competition, and provide for
readier relief in these special cases.
--- They provide for the legislative completion
GERALD FORD LIBRARY
of the Kennedy Round of trade negotiations,
and remove a major obstacle impeding progress
on the reduction of non-tariff barriers.
--- They strengthen the hand of the President in his
efforts to ensure fair treatment for U.S. exports.
CONFIDENTIAL
-2-
--- They strengthen the General Agreement on
Tariffs and Trade by regularizing the
funding of United States participation.
LIMITED AUTHORITY TO REDUCE TARIFFS
The President has now been without authority to make
since 1967;
modest reductions in U.S. tariffs / the proposed act would
provide such limited authority. As was explained in the
message of last November, this authority is not intended
for major tariff negotiations, but rather to make possible
minor adjustments that specific circumstances might from
time to time require. In the event of the use of an
escape clause action, for example, it is normally necessary
to provide compensatory reductions to our trading partners;
otherwise they are justified in taking retaliatory measures,
with the resulting danger of a drift toward restrictionism.
Thus, the limited tariff reducing authority is an inseparable
companion of the provision of a more liberal escape clause.
AID FOR AFFECTED INDUSTRIES
In the trade bill presented last November, I recommended
significant improvements in the means by which U.S.
industry, firms, and workers can receive adjustment
assistance from the government to meet injury caused by
QERALD FORD LIBRARY
CONF IDENTIAL
-3-
imports. I also recommended liberalization of the escape clause,
providing a simple and clear test: relief should be
available whenever increased imports are the primary
cause of actual or potential serious injury. The increase
in imports should not -- as it is now -- have to be
related to a previous reduction in tariffs.
I reiterate my recommendation for these two changes,
which will ease the impact of import competition on
American industry and labor. I should also like to
note a number of actions which have been taken in the
past few months to help some industries and workers in
adjusting to import competition. The Tariff Commission
has now approved four applications for adjustment assistance
for workers and, based on the recommendations by the Tariff
Commission, I have granted moderate tariff relief to the
piano industry and have made its firms and workers eligible
for adjustment assistance. I have also provided adjustment
assistance for the firms and workers in the sheet glass
industry and have extended the escape clause rates
applicable to window glass for several years, after which
a phase-out of the escape clause has been scheduled. I
have extended the escape clause protection to the Wilton
and velvet carpet industry and have also freed certain
carpets and rugs from escape clause protection. Because
FORD i GERALD LIBRARY
CONFIDENTIAL
-4-
of the complexity of this industry and its production
and prices, I have asked the Tariff Commission for
additional information as to competitive conditions
in this industry.
ACTION ON THE AMERICAN SELLING PRICE
During the most recent round of trade negotiations,
all major participants made concessions in the chemical
sector. Many concessions were agreed on unconditionally,
while certain other concessions were conditional on U.S.
elimination of the American Selling Price method of
evaluation for duty purposes. Specifically, as part of
the ASP package, the European Community undertook to reduce
its chemical tariffs by an additional amount, so as to
achieve a combined Kennedy Round-ASP package reduction
of 46 percent on $460 million of chemical imports from the
United States. As a result, virtually all EEC chemical
tariffs would be at rates of 12-1/2% or below. The
United Kingdom would also reduce most of its chemical
tariffs as part of the ASP package. In addition, a
number of non-chemical provisions were included in the
ASP package. Belgium, France, and Italy would modify
road-use taxes so as to eliminate discrimination against
American types of automobiles; the United Kingdom would
reduce its margin of preference on tobacco imports; and
Switzerland would eliminate restrictions on certain
LIBRARY GERALD FORD
canned fruits.
CONFIDENTIAL
-5-
Although the ASP system applies to only a few
American products -- mainly benzenoid chemicals -- it has
taken on great symbolic significance in the eyes of our
trading partners. Thus, it has become a major obstacle
to negotiations on non-tariff barriers. If progress is
to be made in the important area of non-tariff barriers,
it is important that the United States undertake the
elimination of the American Selling Price.
Reducing or eliminating other non-tariff barriers
will require a great deal of hard bargaining. I would
welcome a clear statement of Congressional intent with
regard to non-tariff barriers to assist in our efforts
to obtain reciprocal lowering of such barriers. It is not
my intention to use such a declaration as a "blank check.' "
Rather, I pledge to maintain close consultation with the
Congress during the course of any such negotiations, and,
of course, to submit to Congress any agreements which
would require new legislation. The purpose of seeking a
declaration of Congressional intent is to strengthen our
ability to negotiate on non-tariff barriers.
FAIR TREATMENT OF U.S. EXPORTS
The reduction in trade barriers which has taken place
in the past four decades has contributed to the vigor and
prosperity of the United States economy. It is important
FORD
GERALD
CONFIDENTIAL
-6-
to recognize that the United States can gain from both
sides of the trade equation. Imports provide a wider
choice of goods to the American consuming public, and
reduce inflationary pressures in the economy. At the
same time, it is no less important to recognize the need
for vigorous efforts to assure fair conditions for U.S.
exports competing in world markets. These efforts will
be strengthened if we have more effective means of
response when confronted with illegal or unjust restrictions
on American exports. In the trade bill submitted last fall,
I recommended that authority to respond to such restrictions
be expanded in two ways, namely, by extending the existing
authority to cover unfair actions against all U.S. products,
rather than just agricultural products, and by providing
new authority to take action against subsidized competition
in third country markets.
FOR THE FUTURE
The trade bill presented by the Administration
represents a step towards developing the flexible trade
policies needed for the world of the nineteen seventies.
It is, however, important to reexamine our entire trade
policy. In order to assist in this reexamination, I have
recently announced the members of the Commission on World
Trade. The Commission is charged with the task of
GERALD
CONFIDENTIAL
-7-
examining the entire range of trade and related policies,
and of preparing recommendations as to future policies.
Certain aspects of our trading relations have been
of particular concern in recent years. The decline in
our trade surplus, from about $6.8 billion in 1964 to
only $0.6 billion in 1968, has been the reflection of
deep seated problems in our economy. In particular,
it has been an external consequence of the inflationary
forces which have dominated our economy. As I mentioned
in my balance of payments message of April 1969, it is
appropriate to deal with fundamental problems by the use
of fundamental remedies. In this case, a fundamental
remedy has been the reduction of inflationary pressures.
With the steps we have taken to gain control of inflation,
there has been some evidence of improvement of our trading
position. As our anti-inflationary policies continue, we
may hope for a further improvement in the trading position.
Anti-inflationary policies alone are not enough, however;
it is also important to take vigorous steps to protect
the interest of our exporters.
One of the most disquieting developments in trade has
the
been in/field of agricultural trade. Although there has
been a general reduction in trade barriers in recent decades,
GERALD R. FORD
CONFIDENTIAL
-8-
there have been evidences of contrary trends in agricultural
trade. In particular, the use of high domestic prices and
high trade barriers in a number of countries have created
difficulties for our agricultural exports. We have
protested against these measures as each new barrier was
raised and have on occasion been reluctantly forced to
threaten or to actually take retaliatory measures.
Examples of these are the chicken war and subsidies on
exports of poultry and lard into selected markets.
During the past decade, there has been a major
integration of the fragmented economy of Western Europe.
We see ahead the prospect of an enlargement of this
community. In my Foreign Policy Report, I welcomed this
movement toward enlargement:
Intra-European institutions are in a
flux. We favor a definition by Western
Europe of a distinct identity, for the sake
of its own continued vitality and independence
of spirit. Our support for the strengthening
and broadening of the European Community has
not diminished. We recognize that our interests
will necessarily be affected by Europe's
evolution, and we may have to make sacrifices
in the common interest. We consider that the
possible economic price of a truly unified
FORDO is GERALD LIBRARY
Europe is outweighed by the gain in the
political vitality of the West as a whole.
This attitude, I believe, is the only wise and forward-
looking attitude for the United States to take. Nevertheless,
CONFIDENTIAL
-9-
I believe that we are entitled to expect that, in the
process of enlargement of the EC and the contemplated
expansions of its commercial spheres of influence, our
friends in Europe will give due regard to the rights
and interests of the United States and third countries.
We wish our friends in Europe well in their efforts toward
economic and political unity and will watch their steps
toward this end with sympathetic interest -- remaining
alert, however, to the need for respect for our commercial
interests.
IMPROVED EXPORT PERFORMANCE
For a number of reasons it is possible that American
industry has been less export-minded than that of other
major competing industrialized countries. Attractive
alternatives to export sales development -- in the very
dynamic domestic market for example, and in the alternative
of direct foreign investment abroad for manufacture of
products in locations closer to the foreign markets being
served -- have existed for American industries to a greater
degree than available for foreign companies. Private
foreign investment has helped the economies of our friends,
and this we do not regret, but when such investment is
further stimulated by unintended consequences of our own
FORD is 033470 LIBRARY
CONFIDENTIAL
-10-
tax laws, this requires rectification. I will be sub-
mitting a legislative proposal shortly to accomplish
this purpose.
United States exports have increasingly shown a
concentration in capital goods and other technologically
advanced products. It is customary in domestic as well
as international trade in such items for the seller to
provide credit on comparable conditions with those provided
by his competitors. Important steps have been taken by the
Export-Import Bank in the past year to make U.S. Government
export credit and guarantee programs as flexible and useful
to U. S. industry as possible. However, the funds of the
Bank have been limited at times to provide the needed export
credit. I am recommending a simplification of the budget
procedures as they relate to the Export-Import Bank, and
I have directed the Treasury Department and the Eximbank to
simplify the terms and conditions under which the Export-
Import Bank obtains funds through private commercial
banking channels. The purpose of these changes, of course,
is to provide comparable export credit facilities for U.S.
exporters to those enjoyed by their foreign competitors.
An equally important purpose is to rely as fully as possible
on private banking channels to avoid government financing
where private financing is available, and to avoid an
FORD & 936670 LIBRARY
CONFIDENTIAL
-11-
undisciplined international credit race respecting export
credit. In this last regard, I have asked the Treasury
and the Eximbank to undertake consultations with the
Treasury and the banking officials of other countries
to reach international understandings to obviate the
possibility of such an international credit race taking
place.
FORD is LIBRARY GERALD
April 20, 1970
Draft Presidential Statement
on Trade Expansion
In my balance-of-payments statement of April 4, 1969,
virtual
I called attention to the/disappearance of our once sizeable
trade surplus and the need to restore it as an essential
component of a viable U.S. balance-of-payments position.
The year that has elapsed since that statement has seen
only a very modest improvement in our trade balance.
I therefore must reemphasize the significance of achieving
our objective. The significance lies in the need for
financing major national policies involving expenditures
abroad.
We have large and enduring responsibilities for
contributing to the defense of the free world. We recog-
nize the desirability of continuing to provide development
aid to the less developed nations of the world. We respect
the continuing contribution that our business firms can make
to world economic growth through their technology, their
managerial skills, and their investment abroad. We intend
to continue a liberal commercial policy regarding merchandise
imports associated with the operation of a high employment
non-inflationary domestic economy.
LIBRARY GERALD ? FORD
- 2 -
All of these major national purposes involve
large-scale expenditures abroad--expenditures which must
be financed in viable ways if the dollar is to remain
strong. Prolonged deficits in the U.S. balance of payments
can jeopardize the achievement of these purposes and
endanger our international financial position to a point
of concern about the strength of the dollar.
During most of last year, the tightness of credit
in the U.S. induced short-term capital inflows which
offset the adverse effect on the dollar, and on our
reserve position, of an unsatisfactory trade balance.
The credit situation can no longer be expected to play
this role to the same degree. We have no satisfactory alter-
native to the rebuilding and maintaining of a substantial
surplus on our goods and services account.
But we have a persistent deficit in certain service
transactions such as tourism and military expenditures.
We also make a sizeable volume of government and private
unilateral transfers abroad. Traditionally we have a
large net outflow of medium- and long-term capital. All
of these net payment categories must be substantially
covered by our net investment income and our trade surplus.
GERALD LIBRARY P FORD
- 3 -
Our net investment income grew a little more than
$2 billion during the last ten years, approximately
doubling the 1960 level. Such growth, however, cannot
compensate for a more than $4 billion decline in our trade
balance to only one seventh of the 1960 level. The
necessary course of action is clear.
A lesson from the past years of sharp deterioration
in our trade position is that another period of strong domestic
price inflation would probably throw our trade balance
into substantial deficit. We cannot afford to ignore this
warning. We must do more than avoid domestic inflation,
however, in order to achieve an adequate trade surplus.
Both Government and business must be as actively concerned
with the maintenance of a substantial trade surplus as our
chief competitor countries not from any mercantilistic
motives but from our interest in making a real contribution
to a safe, prosperous world in which our country can flourish,
and in preserving the role of the dollar as the currency
which knits the business transactions of many countries
into a healthy international network.
In our efforts we must not follow the self-defeating
course of promiscuously erecting barriers to imports.
Such a course invites foreign retaliation, fosters inefficiency
at home and retards the growth of real income. We can, however,
QERALD FORD TERARY
- 4 -
without these adverse effects, eliminate government or
business regulations and practices
which favor imports over domestic products
or exports;
which favor U.S. manufacturing investment abroad,
with subsequent sale of the product either back
to the U.S. or abroad in competition with our
exports;
which stifle initiative in adapting to shifts
in U.S. consumer tastes--shifts that will be
satisfied by imported products if competitive
domestic alternatives are not available.
Our major efforts to strengthen our trade balance, however,
must center on export expansion. Last year we tentatively
set an export goal of $50 billion to be achieved by 1973.
Our exports rose last year by about $3 billion, excluding
the rise in automotive shipments to Canada which has been
more than balanced by imports from Canada under the U.S.-
Canadian Automotive Agreement. An annual increase of this
size would barely enable us to achieve the 1973 goal.
Furthermore, the goal itself now appears inadequate in view
of the prospective burden of foreign expenditures associated
LIBRARY GERALD FORD
- 5 -
with the major national purposes noted at the beginning
of this message. We must exceed $50 billion of exports
by 1973 and take new, substantive steps to bring this
about. These are the steps the Government proposes to
take:
[Commerce Department insert]
[STR insert]
Philip P. Schaffner
U.S. Treasury Department
GLRALD FORD LIBRARY
BOARD OF GOVERNORS OF T
FEDERAL reserve SYSTEM
DATE
5/13 [1970]
TO
Chairman Burns
FROM ROBERT SOLOMON
The attached letter from Governor
Brimmer provides further background
on the proposal for a discount facility
for export paper at the Federal Reserve.
Governor Brimmer is quite familiar
with the NEEC and would be glad to
brief you further if you wish.
RS
Attachment.
FORD & GERALD LIBRARY
APR 2 7 1970
Mr. Bruce N. Lynn, President,
National Cotton Council of America,
Ring Building, Room 610,
1200 18th Street, N.W.,
Washington, D. C. 20036
Dear Mr. Lynn:
Thank you for sending me 8 copy of your letter to
Chairman Burns, deted March 25, concerning the estsblishment
of e special rediscount system for export paper. You noted
that the National Export Expension Council (NEEC) had recom-
mended the crestion of a facility to rediscount short-term
and long-term export paper, and you recommended that the Board
of Governors favorably consider the establishment of such a
facility.
I assume that in making this recommendation, you
share the view of the NEEC committee that proposed lest
February that such a facility be established, preferably
within the Federal Reserve System, or, failing that, that
it be tied into the present Export-Import Bank facility or
into the operation of the contemplated Private Export
Financing Corporation (PEFCO). More important elements
than the question of location, the committee believed, would
be size and automaticity and access by the facility to funds
at lower than market rates (or the provision to the facility
of an operating subsidy).
Before commenting on the merits of the proposal,
it might be well for me to point out a distinction that
exists between the present and proposed Federal Reserve
discount facility and that appears to have been overlooked
in the NEEC position. The NEEC document states that the
present Federal Reserve discount "window could be opened
wider to accept export paper" (page 23 of the November 1969 FORD
Report of the NEEC Action Committee on Export Financing),
GERA
LISBARY
Mr. Bruce N. Lynn
-2-
But export paper is, and has long been, eligible for dis-
counting at Federal Reserve Banks. What would change are
the purpose and method of operation of the Federal Reserve
discount window. Presently, it is a selective, limited
mechanism to esse short-run liquidity pressures of individual
banks; the proposed facility would be an automatic mechanism,
accepting any volume of paper put to it, to ensure on overall
growth in credit for a perticular use,
With regard to the possible merits of the issue,
I believe that verious proposals for an export discount
facility that would operate with funds acquired at less
than market rates have tended to touch too lightly on, or
even to ignore, the potentially adverse effects of the use
of the Federal Reserve's powers over credit for purposes
other than influencing over-ell monetary conditions.
Such a system, today, would contribute to inflationary
pressures. There are already competing demands from other
sectors of the U.S. economy for similar treatment. For
exemple, legislation has been proposed for sid of this
type for middle-income housing and for rehabilitation of
urban and rural poverty pockets. Increasing the supply of
credit through the Federal Reserve System for export
financing, housing, hospitals, schools, and other high-
priority, worthy purposes would tend to weeken the market
for Treasury securities, as the System made offsetting
sales of these securities, and to contribute to inflation,
as it became more difficult or impossible to offset the
consequent expansion of credit. It would thereby frustrate
the objectives of monetary policy. Therefore, the Board
has opposed providing Federal Reserve credit for special
purpose lending.
Where a particular sector of the economy is to be
favored by low-cost credit, the method used, it seems to me,
should svoid conflicting with Government anti-infletionary
policy and should provide any element of subsidy through the
budget, where it can be measured and furnished after 8 weighing
of priorities for all Government expenditures.
Sincerely yours,
GERALO FORD VIBRARY
Andrew F. Brimmer
BN;bbs
be: R. Solomon
BOARD OF GOVERNORS OF THE
FEDERAL RESERVE SYSTEM
DATE 5/6/70
Chairman Burns
TO
FROM Andrew F. Brimmer
The attached
LIORABA GERALD ? FORD
memo may he of some
help re the meeting
with Paul mc Gacken at
3p.m. today relating to the
trade policy hearings
scheduled for week of
may 11.
affs.
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
Office Correspondence
Date May 6, 1970.
To
Governor Brimmer
Subject: Trade Meeting, Wednesday,
From
Bernard Norwood
Bu
May 5.
CONF IDENT LAL (FR)
Meeting at 3 p.m. A senior level meeting will be held
today, May 6, at 3 p.m. probably under the chairmanship of
Paul McCracken to consider issues to come up in the trade
hearings to be opened next Monday by the Ways and Means
Committee and to review a draft message by the President on
trade policy. I participated in a second interagency meeting
yesterday intended to prepare for today's meeting, and this
memorandum reports on the issues which are anticipated for
today's agenda.
Preparatory meeting-general. Yesterday's preparatory
meeting indicated: a substantial shortfall in proposals and
uncertainty, if not disagreement, on important issues.
The preparatory session, which was under the chair-
manship of Houthakker and which ran from 4:30 to 7:00 p.m.,
identified agency or staff attitudes on key issues, and gave
instructions to the CEA staff for at least one paper to be
drafted for review by principals for possible Presidential
signature.
In attendance were representatives of: the CEA,
Bureau of the Budget, NSC, Ex-Im, Agriculture, Commerce,
Labor, State, Treasury, and Federal Reserve Board, plus the
Special Representative for Trade Negotiations.
Attention was given to a new CEA draft Presidential
message (attached). It might be a Presidential "message" to
the Congress or a Presidential letter to Chairman Wilbur Mills.
Its purpose, in either case, is to reaffirm the President's
request for adoption of the Administration's trade bill and
to express the President's interest in increasing exports.
Ex-Im. Henry Kearns, objecting to language at the
end of the draft, said, unless something were done to take
Ex-Im out of the Federal Budget, it would be meaningless to
ask for the minor actions of increasing its obligational
authority and its authority to issue debt certificates beyond the
Bank's statutory life. However, explaining the position later,
Determined to be an
Administrative Marking
GERAL
LIBRARY
By
TMH
NARA, Date 4/18/22
To: Governor Brimmer
-2-
May 6, 1970.
Kearns said the big issue was not whether Ex-Im would be in, or
out of, the budget; it was assuring the Bank more money.
Treasury had no firm position. Under pressure for some
indications, however, Petty said his department would probably not
support the main Ex-Im request. He was skeptical that Treasury
would support the request to extend the Ex-Im discount facility to
short-term paper. "We'll have to get off the dime by 3 o'clock
tomorrow, he recognized.
Budget (Green) enumerated the benefits already given to
Ex-Im in terms of authority and money, reminded Kearns that Mayo
had said the Bank should come forward with additional requests if
those measures were not enough. Now, Green said, Ex-Im comes for-
ward in an interagency review with a proposal about 90-day paper.
In response to a demand from Commerce (Fox), Budget said
it would try to prepare a paper on the cost involved in changing
the present budget concept under which disbursements are expendi-
tures but borrowings are not offsets. Such a paper would cover
Ex-Im and other agencies.
DISC. The group debated the DISC at length. Petty
described the analytical technique of measuring cost and benefits
and warned that estimates among officials varied widely and that
all estimates were acknowledged to be uncertain. The task, as he
saw it, was to estimate the probable effect of DISC on the present
foreign tax credits arrangements. Under some assumptions about
current tax practices, the DISC would cause little revenue loss
but, commensurately, would lead to little export incentive.
Another element of uncertainty in making estimates concerned with-
holding tax arrangements although this aspect was not discussed.
There was a jurisdictional limit to the tax analysis
that should be made of DISC--Petty noted that an agreement had
been reached some time ago that there would be no interference
with the Alexander task force on taxation.
The difficulty of deciding an acceptable cost-benefit
ratio, measured in revenue loss and in foreign exchange gains,
was very great, Green stressed. All that could be said so far
was that the revenue loss might be on the order of a half bil-
lion dollars a year for the initial few years. He recalled a
Commerce Department problem a few years ago in selling the Budget
Bureau on a proposal involving an expenditure-export ratio of
about 15 to 1.
GERALD
LIBRARY
To: Governor Brimmer
-3-
May 6, 1970.
USDA did not get a clear answer as to the extent farm
products would be covered. Banks were not intended to be covered
(but might be under the descriptive language of the proposal) but
PEFCO was.
No comments had been received, as requested, on a
draft circulated among DISC task force.
"We may have to come up with something that cannot be
justified in cold blood, " Houthakker declared. Treasury noted,
among points to be considered in developing an Administration
position: a certain interest in the Congress that related the
DISC to the border tax issue (a counterweight, presumably), the
need to "steal the thunder of the protectionists, a need to
defer entry into force (until about January 1, 1971) in order
to minimize the loss of revenue, and a willingness to see some
1ag in exports this year as U.S. firms awaited acquisition of
the tax deferral device.
Agency round-up:
Treasury and Commerce - For.
Ex-Im - Favorably disposed.
Labor - Unfavorably disposed (staff) - noting, to
Treasury's perplexity and discomfort, that the
AFL-CIO is opposed.
USDA - Staff might recommend it to the Secretary
if farm products are in.
State - On both sides--in principle for, but
identifying many serious qualifications. Believed
message should not refer to any proposal but
should say "we are studying."
Budget - On both sides--might favor, but revenue loss
might be too great.
Federal Reserve - Open--want to see more specific
proposal and analysis.
As to a possible reference in the message to a "proposal,"
some comment was made that it was bad to promise a proposal if one
were not already worked out. Petty forecasted that Treasury would
have a proposal-meaning a statutory draft-by the time Volcker testified
(some 10 days hence).
GERALD FORD LIBRARY
To: Governor Brimmer
-4-
May 6, 1970.
Other issues. Reports were made about progress on
studies to be completed as part of the Administration briefing
for the hearings.
Views were expressed about the nature of the study
on industries that the President, according to the draft, would
make of the Tariff Commission. Apprehensions were evidenced
about a return to trade agreement "peril-pointing." Gilbert
said he was sick and tired of wild assertions from the public
and Congress about import injury and wanted some good studies.
On adjustment assistant, Labor asked many questions
and expressed skepticism that any good could come from the
formulation in the draft.
Should the President mention PEFCO--favorably?
I told what I knew about its status (it then being 7 p.m. and
Kearns having left) and suggested checking on the completion
of such things as Justice's position. (Treasury or Ex-Im will
be queried.) I reported that the Fed would itself take no firm
position before receiving formal applications from the participating
banks concerning some institutional matters. (I did not mention,
but I do wonder, whether SEC has approved the prospectus and
whether the President should endorse PEFCO if SEC has not yet
completed the review of the prospectus.)
Gilbert threw up his hands at a long border tax
adjustments "issues" paper that Treasury passed around as the
meeting was about to close. (Not attached.) The paper was
to have been worked out between Treasury and STR. It might
have been, Gilbert acknowledged, but he was not satisfied with
its content nor the idea of putting it into the message. He
would have enough during the hearings fending off barbs about
border taxes without inviting further prodding.
Conclusions. Preparations will probably be inadequate
for discussions today. Issues have not been tidied up. Proposals
have not reached the stage of legislative drafts--and in some
cases, not even good descriptive papers. Some principals will not
have had adequate time to absorb, or even to receive, briefing.
But the hearings have just been announced by Mills and
will open Monday, May 11. Decisions will have to be taken.
GERALD
Advant
To: Governor Brimmer
-5-
May 6, 1970.
One of the main issues is giving Ex-Im more money by
one device or another. Some devices--relaxing budget restraint--
would be troublesome to us, in part because Ex-Im would free
itself of policy guidance.
Another important issue is the DISC. A decision will
turn on "political" factors more than on cost-benefit estimates
in dollar terms. The Administration is badgered about the
inequity of continuing tax benefits for U.S. foreign investors
and thereby moving U.S. production facilities overseas. Our
position is open on this issue.
A fresh draft Presidential "message" may not appear until
the meeting starts.
Attachment.
cc: R. Solomon
Hersey
Irvine
Pizer
Cardon
BERALD FORD LIBRARY
CONFIDENTIAL
Trade Message - Preliminary Draft II
Determined to be Administrative Marking
May 5, 1970
Date 3/20/85 By DAD
Dear Mr. Chairman:
I am extremely pleased that you are today beginning
hearings on trade legislation. The Administration
welcomes the chance to testify on behalf of the trade
bill which I submitted last November, passage of which
we believe to be necessary to provide a start in
adjusting U.S. trade policy to meet the problems of the
1970's. These hearings will also be useful in giving all
interested citizens a chance to explain their views on a
subject which is of great economic and foreign policy
significance for this country.
I urge speedy enactment of the proposals which I
have sent to the Congress. The proposals are modest in
scope, but they provide needed flexibility for U.S. trade
policy in a number of significant ways:
-- They would restore the authority needed by
the President to make limited tariff
reductions. This authority is not intended
for major negotiations, but rather to permit
minor adjustments, such as would be required
to extend compensation to other countries
FORD & LIBRARY 918839
CONF IDENTIAL
-2-
hurt by U.S. escape clause actions -- thereby
avoiding retaliation against U.S. exports.
-- They would recognize the very real plight
of particular industries, companies and
workers faced with import competition, by
providing for readier escape clause and
adjustment assistance relief where justified.
-- They would eliminate the American Selling
Price system of customs valuation, a major
obstacle impeding progress toward the
reduction of non-tariff barriers.
-- They would strengthen the hand of the President
in his efforts to ensure fair treatment for U.S.
exports.
-- They would strengthen the General Agreement on
Tariffs and Trade by regularizing the funding
of United States participation.
Since I submitted this legislation to the Congress in
November, there have been a number of developments which
add to its urgency. I cite only the important decisions
taken by the European Communities on the future evolution
of that great trading area, and the consideration by the
Congress of new U.S. farm legislation, which would further
GERALD FORD VIBRARY
CONF IDENTIAL
-3-
increase the importance of our access to foreign markets.
At a time of rapid movement in international trade relations
and patterns, the U.S. will find itself at a disadvantage
unless we have the added flexibility which I have requested.
Progress toward freer trade should continue. We must
encourage it. Without the strong support of the United States,
the world's largest trader, this progress could falter.
Passage of the legislation I have submitted will keep us
headed in the right direction.
FOR THE FUTURE
The legislation proposed by the Administration
represents an interim step toward developing the flexible
trade policies needed for the world of the 1970's. For
the long range, however, it is important to reexamine
our entire approach. Changes in production, trade and
investment patterns, and the rapid progress in communications,
transportation and technology impel us toward a basic
reassessment of our trade policy. I have recently
announced the appointment of the chairman of my Commission
on International Trade and Investment Policy, which will
assist in this reexamination, and I will shortly announce
its full membership. The Commission is charged with
examining the entire range of our trade and related
policies, and of preparing recommendations for the next
decade.
BERALD FORD
CONFIDENTIAL
-4-
In addition, a number of years have passed since
the Tariff Commission has made a detailed review of the com-
petitive relationship between imports and particular U.S.
industries and workers. Consequently, I am requesting
that the Tariff Commission make a broad survey of these
relationships. I am asking that public hearings be held
to obtain the views of all interested parties. I believe
that such a broad study, which the Tariff Commission is
best suited to conduct, will be of great assistance to us
in our future policies and trade actions and in the work
of my Trade Commission, and will help us identify trouble
spots in advance.
I intend also to marshal the forces of the executive
branch to expedite efficient adjustment to economic
changes brought about by increased imports. Now that
the Tariff Commission has begun to make findings that
U.S. industry, firms, and workers have been injured by
imports, or that such injury is threatened, I intend to
activate the Trade Adjustment Assistance Advisory Board
called for in the Trade Expansion Act of 1962 to lead a
broad coordinated executive effort to make adjustment
assistance even more effective in opening opportunities
for workers and firms.
BERALD FORD LIBRARY
CONFIDENTIAL
-5-
Certain aspects of our trading relations have been
of particular concern in recent years. The decline in
our trade surplus, from about $7.1 billion in 1964. to
only $0.8 billion in 1968, and $1.3 billion in 1969, has
been the reflection of deep seated problems in our economy --
particularly inflationary forces. As I mentioned in my
balance of payments message of April 1969, it is
appropriate to deal with fundamental problems by the use
of fundamental remedies. In this case, a fundamental
remedy has been the reduction of inflationary pressures.
With the steps we have taken to gain control of inflation,
there has been some modest evidence of improvement of our
trading position. As our anti-inflationary policies
continue, we hope for a further improvement in the trading
position. Anti-inflationary policies alone are not enough,
however; it is also important to take vigorous steps to
improve our exports.
One of the most disquieting trade developments has
been in the field of agricultural trade. Although there
has been a general reduction in trade barriers in recent
decades, there have been contrary trends in agricultural
trade. In particular, high trade barriers in a number
of countries, used to protect high domestic prices, have
created difficulties for our agricultural exports. We have
GERALD FORD
-6-
protested against these measures as each new barrier was
raised and have on occasion been reluctantly forced to
threaten or to actually take retaliatory measures, and
to meet foreign competition in our export markets.
During the past decade, there has been a major
integration of the economies of Western Europe. We
see ahead the prospect of an enlargement of this
community. We wish our friends in Europe well in their
efforts toward economic and political unity and will
watch their steps toward this end with sympathetic
interest - remaining alert, however, to the need for
respect for our commercial interests. I believe that we
are entitled to expect that, in the process of enlargement
of the EC and the contemplated expansions of its commercial
spheres of influence, our friends in Europe will give due
regard to the rights and interests of the United States
and third countries.
IMPROVED EXPORT PERFORMANCE
For a number of reasons it is possible that American
industry has been less export-minded than that of other
major competing industrialized countries. Attractive
alternatives to export sales development -- in the very
dynamic domestic market for example, and in the alternative
:
FORD
GERALD
CONFIDENTIAL
-7-
of direct foreign investment abroad for manufacture of
products in locations closer to the foreign markets
being served -- have existed for American industries
to a greater degree than available for foreign companies.
Private foreign investment has helped the economies of
our friends, but change is necessary when such investment
is further stimulated by unintended consequences of our
own tax laws. I will shortly submit a legislative proposal
to accomplish this purpose.
United States exports have increasingly shown a
concentration in capital goods and other technologically
advanced products. It is customary in domestic as well
as international trade in such items for the seller to
provide credit on comparable conditions with those provided
by his competitors. Important steps have been taken by the
Export-Import Bank in the past year to make U.S. Government
export credit and guarantee programs as flexible and useful
to U.S. industry as possible. For example,
GERALD
CONFIDENTIAL
-8-
However, the funds of the Bank have been limited at
times. In order to avoid such a problem in the future,
I will be asking for an increase in the budgetary
authority of the Bank [at an appropriate time?] [in the
coming months?] At that time, I will also be asking for
a technical clarification to remove any question which
might have been associated with the authority of the Bank
to issue debt obligations with maturities beyond the
statutory life of the Bank.
FORD is 9ERALD LIBRARY
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
Office Correspondence
Date May 27, 1970.
To
Chairman Burns
Subject: Replenishment of the Resources
From Governor Brimmer asB
of the Inter-American Develop-
ment Bank.
As Chairman of the National Advisory Council on International
Monetary and Financial policies, Secretary Kennedy is today sending to
the President, to the Speaker of the House and to the President of the
Senate a report of the NAC on the proposed U. S. participation in a
replenishment of the resources of the Inter-American Development Bank.
His transmittal note will state that the report has been approved
unanimously by the members of the council.
In your absence this morning, I concurred in this action.
Our staff has reviewed the proposal, which was negotiated with the
other members of the Bank at its recent annual meeting, and has rec-
ommended our concurrence. The proposal calls for the United States to
provide $150 million in paid-in ordinary capital (in three annual in-
stallments in the form of letters of credit which will not be encashed
until disbursement requirements on the Bank's loans arise), $673,520,000
in callable capital to serve as backing for Bank borrowings in world
markets (this entails no foreseeable expenditure), and $1 billion in
subscription to the Bank's soft loan window, the Fund for Special
Operations, payable in three installments ($100 million by June 30, 1971,
$450 million one year later and $450 million two years later). The
other member countries are also increasing their contributions, bringing
the total of the new resources from this replenishment to $3.5 billion.
FORDO is GERALD LIBRARY
June 8, 1970
Governor Brimmer
Comments on letter from
Arthur F. Burns
Henry Kearns
May I have your comments on the attached?
Attachment - Letter dated May $3, 1970 from Henry Kearns
LIBRARY GERALD R. OHOMA
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
DATE June 9, 1970
Chairman Burns
TO
FROM ANDREW F. BRIMMER
I thought you might like to see
the rough English translation of newspaper
coverage of my visit to the West German
Central Bank on June 3 and 4.
GERALD R. FORE
June 4, 1970 / lh
SUBJECT: Meeting of German Federal Reserve Advisory Council
in the Presence of a Guest from the United States
Under this heading, SUEDDEUTSCHE ZEITUNG (Munich) of to-day
reports as follows (unofficial translation):
Frankfurt/os (report of our own)
It would have been to the great surprise of the banks and
on the stock exchange, if the German Federal Advisory
Council of the Federal Reserve Bank had passed on Wednesday
any resolutions in regard to credit policy. In fact, no
such activity took place. The board dealt more than
ordinarily with problems of international currency policy
as well as with the situation on the international financial
markets, with broad coverage given the release of the Canadian
exchange rate and the cyclical developments in the United
States. The reason for this was the attendance of the meeting
by Mr. Brimmer, one of the Governors of the Federal Reserve
Board. Well-informed observers are cautioning against over-
rating Mr. Brimmer's visit to the Federal Reserve Bank. How-
ever, it cannot be denied that most recent rumors about a
possibly gradual revaluation of the German mark plaid a role
in the discussions of Mr. Brimmer with the German Federal
Reserve Agents.
In its afternoon session, the Council dealt with the German
economic trend as well as with the situation on the capital
market. Unless available information were misleading, sub-
stantial scruples were raised against renewing excessive
demands on the bond market.
GERALD
FORD
LIBRARY
From Stuttgarter Zeitung of June 5, 1970:
"Brimmer: No hope for a quick lowering of interest rates in the USA
Andrew F. Brimmer a member of the Federal Reserve Board of the
USA -- which is an equivalent of the directorium of the German Bundes-
bank - dampened in an interview with the Stuttgarter Zeitung hope regarding
a quick reduction in interest rates in the US. Brimmer declared that the
American central bank system has had some success in reducing the excess
demand. The development of prices however remained unsatisfactory. A
loosening of restrictions could only be considered when economic activity
had been reduced enough so that for sometime sufficiently large unused
capacities would cause a reduction in the rate of increase in prices.
Brimmer continued that this policy of the central bank system would now
have to be supported in other spheres and pointed out that the Chairman
of the Federal Reserve Board, Arthur F. Burns, recently had advocated
activity by the Government in the sphere of incomes policy. By itself
the American money and capital markets currently would not be able to
come to a substantial reduction in interest rates in view of the pressure
of demands on them. Brimmer stressed in this connection that the elections
which are taking place in the US in the late fall do not constitute a
date for the Federal Reserve Board by which something would necessarily
have to happen in the sphere of interest rates."
GERALD
BRAKE
From Suddeutsche Zeitung of June 5, 1970
"
As one hears the Bundesbank was already on Wednesday forced
to take in $120-125 million. On the one hand this has technical
reasons, but on the other it also is related to the freeing of the
exchange rate in Canada. The international monetary speculators
thought that they saw some reasons to believe that
the
Federal Republic might copy this step. One did not in this
connection think of a revaluation in the normal sense, rather--
following the Canadian example--about a temporary freeing of
the exchange rate without any simultaneous announcement that
one later wanted to fix a different parity.
in
The quick reacting actors / the foreign exchange markets bec ame
suspicious not least because of the visit of Mr. Brimmer to
the Central Bank Council. Brimmer is one of the governors of
the Federal Reserve Board. With some reason one asks oneself
why Brimmer, who is one the way to attend the Annual Meeting
of the Bank for International Settlements in Basel, happened
to visit the Bundesbank just on the day of the meeting of the
Central Bank Council and not a day earlier or a day later. + "
GERALD R. FORD FIREAMA
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
Office Correspondence
Date June 15, 1970.
To
Chairman Burns
Subject: GAO Audit of Some NAC
From
Governor Brimmer am
Activities.
The attached memorandum indicates that a GAO audit of the
U. S. Government's supervision of its participation in the interna-
tional banks is to be undertaken soon, with Treasury cooperation.
This raises some important issues and I have asked the staff to
prepare a memorandum setting forth the pros and the cons of our
participation in this audit.
FORD is LIBRARY
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
Office Correspondence
Date June 12, 1970.
Governor Brimmer
To
Subject:
GAO Audit of Some NAC
Yves Maroni
From
ak
Activities.
NAC Use Only
At the NAC staff committee meeting of June 9, 1970,
Mr. Hirschtritt (Treasury) reported that the GAO had expressed
a desire to audit the U. S. Government's supervision over U.S.
participation in the international banks (IBRD, IDB, ADB). He
said that Treasury had decided to comply with the GAO request
and the other NAC agencies could expect to be approached by the
GAO as well.
He said that this was not to be an audit of all NAC
activities, nor would it affect the activities relating to the
IMF. Moreover, he thought that GAO would conduct a selective
audit rather than reviewing all of the loans made by IBRD, IDB,
or ADB.
He said that, as long argued by the NAC secretariat,
the loan documents originating in the international banks have
a privileged character since they contain material involving the
banker-client relationship. The borrowers made information avail-
able to the banks on the understanding that it would not be pub-
lished and the banks occasionally inserted in the loan documents
analyses and policy advice that was not for public disclosure.
If the GAO were to have free access to the loan documents and
quote from them in its report (or otherwise divulge their contents),
the risk existed that future loan documents would become far less
informative and avoid critical analysis and policy advice, as a
protection against any repetition.
But Mr. Hirschtritt recognized that GAO had to have
access to some of the loan documents and he said that Treasury
planned to let them see some of them. He asked that Treasury be
the only agency to show loan documents to the GAO and that the
other agencies refrain from doing so.
He said that the GAO would not be shown the minutes of the
meetings of the boards of the IBRD, IDB or ADB. These are confi-
dential under the by-laws of the banks. He said that we don't want
to hide anything, but that we must protect our sources of information
so that the flow of information will continue.
NAC Use Only
FORD & GERALD LIBRARY
TO: Governor Brimmer
NAC Use Only
-2-
He said that GAO would want to learn from the other
agencies how they analyzed the loan documents and how they
reached a decision on specific loans. GAO would want to see
the files of the other agencies and find out who saw the loan
documents.
Mr. Harley explained that the NAC secretariat would
make the NAC minutes available, and that Treasury internal memos
describing and evaluating the loan proposals and making recommenda-
tions as to how the Treasury vote should be cast on each one would
also be provided.
The GAO audit will begin very soon and it is important
to plan in advance what role the Federal Reserve should play in it.
GERALD R. FORD LIBRARY
OF
BOARD
BOARD OF GOVERNORS
OF THE
OF
FEDERAL RESERVE SYSTEM
THE
SYSTEM
WASHINGTON, O.C. 20551
RESERVE
ANDREW F. BRIMMER
MEMBER OF THE BOARD
June 26, 1970.
TO:
The Honorable Henry Kissinger
FROM: Andrew F. Brimmer
SUBJECT: Proposed Exemption of Schedule A
from OFDI Regulations.
The Federal Reserve Board has learned of the proposal to
liberalize the constraints on capital outflow administered by the
Department of Commerce. In the Board's judgment, this is a par-
ticularly inappropriate time to announce a relaxation of any of the
restrictions on capital outflows from the United States. Specifically,
the Board of Governors would object most strongly to the liberalization
of direct investments in Schedule A countries. Chairman Burns has
explicitly expressed the view that such a relaxation would be unwise.
The attached paper sets forth some of the reasons why this
proposal should not be accepted. I would like to emphasize that there
is already a growing concern abroad about the stability of the dollar.
Our balance of payments is in such bad shape at this stage that to
initiate a relaxation of restrictions on U.S. capital outflows could
only be regarded as extremely imprudent--and indeed rash and provocative
-- by those foreign monetary authorities whose cooperation will be badly
needed in the months ahead as their dollar holdings increase. As you
may know, we will have to announce very soon that our balance of payments
in the second quarter has registered a deepening deficit.
Furthermore, announcement now of a relaxation of our restric-
tions would very likely lessen the chances for a successful outcome to
the exchange rate flexibility exercise in which the United States is
engaged in the International Monetary Fund and the Group of Ten.
Consequently, the Federal Reserve Board urges that the proposed
modification in the direct investment restraints be dropped,
Attachment
(Sgd.) Andrew F. Brimmer
FORD & LIBRARY
June 25, 1970.
Exemption of Schedule A from OFDI Regulations
The exemption of investments in Schedule A (less developed)
countries from the OFDI regulations at this time would create some
very serious problems, while yielding very limited benefits. In
fact, the disparity between costs and benefits is so large as to
make the proposal untenable.
Among the costs are the following:
(1) The outright increase in the use of U.S. funds for
investment in the exempted countries could (according to Mr. Katz's
memo of 6/24) amount to $400-$500 per year to cover current require-
ments, even if it were possible to avoid leakages through the repayment
of already-outstanding debt of $1.6 billion.
(2) There could be a sizable indirect cost, since the
affiliates that would be exempted could serve as pass-throughs to
affiliates in Schedules B or C. When Canada was exempted it was
possible to erect certain safeguards against such pass-throughs.
Even if some form of reporting is still required for Schedule A
affiliates, it would be very difficult to detect evasions.
(3) Taking the further step of consolidating Schedules B and
C would cost an additional $200-$250 million per year. This step would
not help avoid the pass-through problem just mentioned, and would
primarily benefit a small number of companies operating in both B
and C countries.
FORD
GERALD
LIBRARY
-2-
(4) As noted by Mr. Katz, there would be an attempt to
mitigate the cost of the exemption by changes in the regulations
that would tend to induce companies not to take the opportunity
to repay existing offshore debt and that would alter present rules
on the allocation of the use of offshore borrowing. These changes
would further complicate the regulations. Taking account also of the
reporting requirements necessary to guard against pass-throughs, one
can hardly regard this change as a simplification.
(5) Most importantly, such an action taken at this time --
when we know we will be having great difficulties in our balance of
payments in the period ahead -- will strain the credibility of the
U.S. policy position not only with foreign governments but also with
the U.S. business community. We already encounter mounting criticism
abroad about our failure so far significantly to reduce the flow of
dollars to foreign central banks. Any action on our part that
deliberately worsened this situation would surely bring the strongest
sort of adverse reaction, and at the worst possible time.
Nor should it be forgot that the direct investors and financial
institutions we are concerned with are sophisticated observers who
would perceive immediately that there was a substantial liberalization
involved, and that the potential for evasion of the regulations was
being widened, even though there has been no great pressure from them
for this particular action. This would surely raise doubts as to
whether the Administration is really seriously concerned by the balance
of payments problem.
FORD is LIBRARY GERALD
-3-
In contrast with these quite obvious costs, the benefits
of exempting Schedula A are relatively trivial. There is almost
no evidence that the Program has had an inhibiting effect on direct
investment in the less developed countries, except perhaps in a few
isolated cases. The generous historical allowables in Schedule A,
with the establishment of a $5 million minimum allowable there, and the
provisions for the downstreaming of excess Schedule B and C allowables
to Schedule A have together ensured that the Program's effect would be
minimal in the less developed countries. In the relatively rare
instance where hardship was experienced by companies investing in
Schedule A, OFDI has maintained a very liberal attitude toward the
granting of specific authorization relief. In fact, Schedule A
investment has grown from $1.1 billion in 1967 to $1.4 billion in
1968 and $1.5 billion in 1969. OFDI has estimated that such invest-
ment may amount to almost $2.0 billion in 1970. Moreover, substantial
amounts of Schedule A allowables have not even been needed by companies
investing in the LDC's so that huge carryforwards of unused allowables
have been generated.
It is an illusion to believe that this action would spark
a larger flow of real investment to Schedule A countries -- it would
merely allow the use of U.S.-source rather than foreign financing.
Whatever benefit there was in terms of goodwill in less developed
countries would soon be dissipated when the action turned out to
have little real effect.
FORD
GERALD
LIBRARY
-4-
From the point of view of the business community, relaxation
in Schedule A would be regarded as a poor substitute for relaxation
elsewhere. In fact, if business felt that this relaxation would
delay relaxation in Schedules B and C they would not welcome it --
except for the relatively few whose interests are centered in the
Schedule A countries.
FORD & GERALD LIBRARY
GERALD R. FORD LIBRARY
This form marks the file location of item number
as listed on the pink form (GSA Form 7122, Withdrawal Sheet)
at the front of the folder.
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
Office Correspondence
Date June 30, 1970.
To
Board of Governors
Subject: Restraints on Export Credits--
From
Andrew F. Brimmer
APR
Further OECD Discussions.
Attached for your consideration are the documents that
I mentioned at today's Board meeting concerning discussions in the
OECD Economic Policy Committee and in the OECD Group on Export
Credits and Credit Guarantees on limiting competition in the
extension of export credits by developed countries.
Further intergovernmental talks are to take place at a
meeting of the OECD Export Credits Group on July 22, and an NAC
Alternates meeting is expected to be held over the next few days
in preparation for those talks.
I should appreciate any comments you might care to give
me on this matter.
Attachments:
1. Memorandum from Mr. Norwood, June 29.
2. Memorandum from Mr. Maroni, June 29.
QERALD FORD CIBRARY
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
Office Correspondence
Date June 29, 1970.
To
Governor Brimmer
Subject: OECD Export Credits Group--
From
Bernard Norwood
Possible NAC Alternates Meeting.
CONFIDENTIAL (FR)
An accompanying memorandum, prepared by Yves Maroni on
an interagency working group discussion in which he and I participated
last week, describes several export credit issues that the NAC
Alternates may be asked to consider very soon. There should be
another interagency meeting this week (probably Wednesday, July 1)
to indicate at least tentative agency positions and possibly an
NAC Alternates meeting quickly thereafter. The latter meeting
would be directed to formulating a U.S. Government position for
a meeting of the OECD Group on Export Credits and Credit Guarantees,
scheduled for July 22.
I should like here, as a supplement to Yves' careful
analysis and commentary, to indicate my own attitude on the
position the U.S. Government should take.
The issues to be reviewed are, in brief:
(1) The enlargement of a contemplated exchange of
information agreement among developed countries
on officially supported credits of 5 years maturity
or more on exports to any country, so that the
agreement includes financing terms;
(2) consideration of the feasibility and advisability
of an agreement under which OECD developed countries
would limit competition in the terms of officially
supported export credit on transactions among
themselves;
(3) agreement by members of the Export Credits Group
not to grant export credit with maturity of over
10 years without prior consultation among them all.
A procedural issue additional to these is the advisability
of consulting in the immediate future with business groups, Justice,
and possibly Congressional Committees on the contemplated exchange
of information agreement.
Determined to be an
GERALD
Administrative Marking
By That
NARA, Date 4/18/22
To: Governor Brimmer
-2-
June 29, 1970.
In general, I believe the U.S. Government should not
undertake any commitments, whether on the procedures of advance
exchange of information or on limiting official support to export
credit, that places it at a disadvantage to other major developed
countries.
With respect to the formulation of an exchange of
information agreement, I believe the United States should go along
with, but not press for, an agreement if the accord elicits from
all participants substantially all elements of cost of credit
(interest rates, together with other fees and cost requirements).
If the agreement cannot effectively cover information on all
financing charges, the U.S. Government should oppose the incomplete
coverage of that element of credit on grounds that the information
would be deceptive. It should, however, be agreeable, but should
not urge, adoption of the agreement as heretofore discussed, that
is, without any coverage of information of financing costs.
I would resist any agreement in which developed countries
would undertake not to compete in easing export credit conditions
on trade among themselves and, without prior consultation among
them all, would refrain from offering maturities of over 10 years.
We already are restraining U.S. -source private (and, it might be
said, governmental) credit and are participating in a limited
advance exchange of information (Berne Union) program. We should
not be overly generous in ensuring further equality in all elements
of export competition.
Concerning the procedural aspect of the first of these
three issues, it would be highly desirable for someone (Treasury
would suit me) to consult with, or at least inform, business
groups, including the BAFT, on the exchange of information
agreement. It should be essential that Justice be consulted,
too. Although the agreement would be intergovernmental, and
although it would be confined to officially supported credit,
the transactions and credit would be largely private and the
governmental information program largely an adjunct to private
trade. Accordingly, it would have implications for essentially
private actions that might restrain competition and would warrant
Justice review.
It would be useful if Yves and I could get your reactions
to these issues and attitudes before further interagency discussion
preparatory to a possible NAC Alternates meeting.
cc: Mr. R. Solomon
Mr. Maroni
GERALD
BRAAT
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
Office Correspondence
Date June 29, 1970.
To
Governor Brimmer
Subject: Preparation for Next Meeting of
From
Yves Maroni
YO
OECD Exports Credits Group.
NAC Use Only
The OECD Export Credits Group will meet in Paris on
July 22 to consider further the pending exchange of information
agreement and it is likely that an NAC Alternates meeting will be
scheduled soon to formulate a U.S. position on three new suggestions
related to this agreement, which were introduced at the last Export
Credits Group meeting, June 15-16. In preparation for an NAC Alter-
nates meeting, we have been asked to develop tentative agency posi-
tions in time for a Working Group meeting on July 1.
The first two suggestions are from the OECD Economic
Policy Committee (see attached copy of resolution adopted June 16).
The first is that the Export Credits Group consider whether to en-
large the proposed exchange of information agreement so as to in-
clude financing terms. The second is that the Group consider the
possible content of an agreement on the terms on which officially
supported export credit is granted on transactions between the
developed member countries of OECD, as well as the advantages and
disadvantages of such an agreement.
The third suggestion made to the Export Credits Group at
its last meeting is an EEC proposal that members of the Group should
agree that no export credit with maturity beyond 10 years should be
granted without prior consultation among all the participants. A
notification that such a credit was contemplated would be required,
with a waiting period (either seven or fourteen days) to receive the
reactions of the other participants before finalizing the credit.
A working group meeting was held at Treasury on June 25
to begin exploring the issues which these proposals raise. In the
course of the discussion, there developed a view that the NAC Alter-
nates might focus on a fourth problem as well, namely the matter of
disclosing the contemplated exchange of information agreement to
interested business groups and banks, and consulting with Congres-
sional Committees and the Department of Justice.
NAC Use Only
LIBRARY GERALD FORD
To: Governor Brimmer
NAC Use Only
- 2 -
A. Exchange of Information on Financing Terms
As regards the first problem (inclusion of information
on financing terms in the exchange of information agreement), it
appeared, at the working group meeting of June 25, that an exchange
of information limited to interest rates charged would give the
United States comparatively little difficulty, but that the other
countries might have trouble complying, at least in some cases, be-
cause of the nature of the system under which they give official
support to export credits.
The working group also recognized that interest rates
were not the only cost of obtaining export credits and that an
information system covering the overall cost of money to the bor-
rower (which would be far more useful) might be impossible to de-
velop and administer. Such add-ons as commitment fees, guarantee
fees, insurance premia, and bank commissions might be ascertaina-
ble, though not in all cases, but it would be difficult to take
account of the effect on cost of money borrowed of such things as
compensating balances, or the Exim Bank practice of allowing a
commercial bank to take the early maturities (at one interest rate)
while taking the later ones for itself (at a lower rate). Foreign
countries supporting export transactions through a preferential
rediscount rate might also be hard put to calculate the impact on
the cost of money to the borrowers. All countries would find it
impossible to separate from the prices quoted for exports the ele-
ment that was added to compensate the supplier for having to ex-
tend credit. The complexities would be those of a truth in lending
program on an international scale and without the enforcement
clauses attendant to a national truth in lending program.
The working group also wondered whether an exchange of
information on interest rates, with or without the additional in-
formation needed to determine the cost of money to the borrower,
might not be the first step toward an agreement to fix interest
rates on export credits. Mr. Rowntree (Exim Bank) and Mr. Katz
(Commerce) were especially anxious to avoid taking any step that
would deprive the United States of what they felt were its only
advantage in international competition, namely more attractive
financing terms.
Mr. Rowntree noted that it often took a considerable
amount of time for the credit insuring agencies in foreign countries
to respond to inquiries from Exim on the terms on which they would
support given transactions. This was because they were required to
is
FORD
GERALD
LIBRARY
To: Governor Brimmer
NAC Use Only
-3-
refer many transactions (in some cases all of them) to a govern-
mental body for approval. He felt that the inclusion of financing
terms in the exchange of information would further slow down the
process.
Mr. Harley (Treasury) wondered whether the Economic
Policy Committee had not based its suggestion on a misunder-
standing of the basic purpose of the exchange of information
agreement. The EPC had been dealing with statistics on export
credits and might be hoping to get improved statistics from the
exchange of information agreement. In fact, the agreement had
quite a different purpose (to prevent escalation of competition
on credit terms). The requirement to exchange information was
not to apply to all transactions, and exchanges might well be
sporadic and limited.
B. Harder Terms for Transactions Among Developed Countries.
As regards the second problem on which the NAC Alternates
are expected to be asked to take a position (the possibility of an
agreement on credit terms for transactions among the developed
countries), the working group which met June 25 appeared rather
strongly opposed. The idea behind the proposal seems to be that
transactions among developed countries should not be as heavily
subsidized (or on as easy terms) as exports to the less developed
countries. But how to classify countries that are neither clearly
"developed," nor clearly "underdeveloped" (e.g. Greece, Turkey,
Portugal, Ireland, Iceland)? There is also an enforcement
problem since it would be tempting for importers in developed
countries to set up subsidiaries in a clearly "underdeveloped"
country to become eligible for the easier terms, and to divert
the goods to their developed country destination after they
left the exporting countries.
The working group feared that, by agreeing to harder
terms on exports to other developed countries, the United States
would deprive itself of the principal means it has available to
offset the disadvantage which results from its inability to
compete in export trade on the basis of price for a rather broad
range of goods. Mr. Duncan (State) thought that the proposal
was aimed primarily at the United Kingdom and Japan.
A contrary argument, which neither Mr. Norwood nor I
expressed at the working group meeting because it seemed to be
well in the minds of those present, is that importers in developed
countries in strong balance of payments positions are well able
GERAUD FORD LIBRARY
To: Governor Brimmer
NAC Use Only
-4-
to borrow in private markets on commercial terms and should not
have access to easy credit from official institutions in another
developed country which is in balance of payments difficulties.
This is essentially why the Federal Reserve has opposed a number
of Exim Bank loans to developed countries in recent years. Pushed
to its logical conclusion, this argument might lead us to favor
some sort of hardening of terms for transactions among developed
countries, unless we found the arguments advanced by the majority
of the members of the working group to be overriding.
C. Prior Notification and Waiting Period for Credits of More Than
10 Years.
The working group which met on June 25, gave little con-
sideration to this problem. Mr. Harley reported that the EEC
countries, which made the proposal, strongly favored it, especially
France. The Scandinavians and British also appeared to favor this.
Mr. Rowntree saw this proposal as another aspect of an
overall attempt to hamstring the United States in its efforts to
promote exports. He felt that this country had to retain its
freedom to grant easier terms to secure business for U.S. suppliers.
The other side is the general desirability to limit the
competitive escalation of credit terms which benefits only the
individual borrowers, and may not even benefit them if it leads them
as a group to borrow more than their country can afford to service
and the resulting balance of payments difficulties cause the
authorities to take steps to curtail their activities.
From the point of view of alleviating the debt service
burden of the developing countries, a limitation on credits of
more than 10 years may be undesirable. The developing countries
which have run into difficulties and which have accumulated
excessive amounts of short- and medium-term debts, have been trying
to lengthen the maturity of their debts. In some cases the Fund
has required, as a condition for granting a stand-by agreement
to such countries, that the authorities not permit any increase
in external indebtedness of less than eight years. This has often
severely restricted external borrowings, because of the relatively
greater difficulty of borrowing at longer terms. In view of this,
one may expect AID and possibly State to line up with Exim Bank in
opposing the proposed limitation.
NAC Use Only
GERALD
BRARY
To: Governor Brimmer
NAC Use Only
-5-
D. Disclosure and Clearance Problems.
Exim Bank and Commerce have business advisory committees
which may be interested to hear about the proposed agreement before
it is finally signed. Treasury is thinking about the possibility
of informing the Bankers Association for Foreign Trade.
Congressional Committees might also be informed, and the
problem arises whether the views of the Department of Justice
should be solicited because of implications of private restraints
on trade.
It would seem as though we might let the other agencies
take the lead on this range of issues.
Attachment - EPC Resolution of June 16, 1970
GERALDO FORD LIBRARY
GERALD R. FORD LIBRARY
This form marks the file location of item number 2
as listed on the pink form (GSA Form 7122, Withdrawal Sheet)
at the front of the folder.