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563877913
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AHC General Correspondence June-August 1990 [5]
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563877913
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document
title
AHC General Correspondence June-August 1990 [5]
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04012-006e
collections
Records of the White House Office of the Chief of Staff to the President (George H. W. Bush Administration)
Andrew Card's Files
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1990-08-31
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1990
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1990-06-01
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1990
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Originally Processed With FOIA(s):
FOIA Number:
2025-0373-S
2025-0373-S
FOIA
MARKER
This is not a textual record. This is used as an
administrative marker by the George Bush Presidential
Library Staff.
Record Group/Collection:
George H.W. Bush Presidential Records
Collection/Office of Origin:
Chief of Staff, White House Office of
Series:
Card, Andrew, Files
Subseries:
OA/ID Number:
04012
Folder ID Number:
04012-006e
Folder Title:
AHC General Correspondence June-August 1990 [5]
Stack:
Row:
Section:
Shelf:
Position:
G
15
21
6
Withdrawal/Redaction Sheet
(George Bush Library)
Doc. No. / Type
Subject/Title
Date
Restriction
Classification
01. Resume
Re: Elizabeth Penniman Schmidt. (1 pp.)
n.d.
(b)(6)
02. Letter
Robert H. Marsh to Andrew Card, Re: Assistance with
08/02/90
(b)(6)
immigration visa issue. (1 pp.)
03. Letter
Robert H. Marsh to U.S. Representative Barney Frank, Re:
08/02/90
(b)(6)
Assistance with immigration visa issue. (1 pp.)
Page 1 of 1
Collection:
Record Group:
Bush Presidential Records
Office:
Chief of Staff, Office of the
Series:
Card, Andrew H., Jr., Files
Subseries:
WHORM Cat.:
File Location:
AHC General Correspondence June-August 1990 [5]
Pinksheet Number:
RML16122
OA/ID Number:
04012-006e
Date Closed:
3/14/2025
FOIA/Sys Case #:
2025-0373-S
Re-review Case #:
P-2/P-5 Review Case #:
Ambassador
C
HALLMARK CARDS, INC.
DEC 202 Q
Dear Mr. Card,
aug. 1990
Thank you somuch for helping arrange
the visit to the White House for the Miss
T.E.E.N. organization on august 7,1990,
we all had a wonderful time.
The group regrets not being able to
see you on that day and thank you personally.
However, due to your busy schedule, and
the crisis in the Gulf we knew yourtime
would be limited.
I was pleased to see you at Sen. Paul
cellucci's party on august 6, however.
we speak of you oftenin our household,
and weatten see you on television with the
President. It must be so exiciting to be
involved, and that clase to everything.
Thank you again Mr. Card.
Sincerely,
Victoria
P.S. My Dad sends his regards.
UNITED STATES SENATE
WASHINGTON, D. C.
JOHN McCAIN
ARIZONA
8/13/90
Dear Andy
As you KNOW, I've accepted The offer of The
Chairmonship of the Federal Maritime Commision
to meet with the and discuss the issue.
d simply want to Thank you for your willingness d
abilities and best efforts, and d intend President and
will undertake This new job with all off mydo
choice his staff appreciate that They made a good
everything d can to make the
professionalesm and your courtery.
The future, and your, sppreach your
I look forward to d working with you in
Sincerely.
Chris Koch
TOMN HOT BROOK 1634 MASS
Send
1/8/21
Holbrook Housing Authority
INCORPORATED 1872
One Holbrook Court
Holbrook, Massachusetts 02343
Kevin R. Donovan
Telephone: 767-0024
Executive Director
August 3, 1990
The Honorable Andrew H. Card Jr.
Deputy Chief of Staff to the President
The White House
Washington, D.C. 20500
Dear Andy:
The Holbrook Housing Authority has recently applied for fifty (50) Section
8 Certificates from the U. S. Department of Housing and Urban Development.
A copy of the application is enclosed.
The Authority has experienced a large influx of qualified applicants who are
truly in need of this type of assistance.
Any consideration in reviewing the application will be indeed greatly appre-
ciated. If you have any questions please feel free to contact us.
Very truly yours,
Holbrook Housing Authority
Board of Commissioners
will a Malls
by, William D. Marble
CHAIRMAN
Catherine Ennia
Catherine Ennis, President
TENANTS ASSOCIATION
KRD:prd
Encl.
TOMAN HOL BROOK 1634 MASS
Holbrook Housing Authority
E.N.HOLBROOK.
1872
One Holbrook Court
Holbrook, Massachusetts 02343
Kevin R. Donovan
Telephone: 767-0024
Executive Director
July 20, 1990
Ms. Jeanne McHallam
Director of Development
U.S. Department of HUD, Region 1
O'Neill Federal Building, 3rd F1., Rm. #321
10 Causeway Street
Boston, MA 02222-1092
Dear Ms. McHallam:
Enclosed please find a funding request for fifty (50) additional units
of Section 8 Existing Housing to be administered by the Holbrook Housing
Authority. In addition, I have enclosed the Section 213 letter from the
Board of Selectmen endorsing the proposed increase.
Please note that the Authority currently administers fifty-seven (57) units
of Section 8 Existing Housing and has an executed Annual Contributions Contract
to expire June 30. 1991.
Your assistance in reviewing the enclosed application for fifty (50) additional
units would truly be appreciated.
If you have any questions, please feel free to contact me.
Very truly yours,
Review ( Donovan
Kevin R. Donovan
EXECUTIVE DIRECTOR
Application for
U.S. Department of Housing
Existing Housing
and Urban Development
Office of Housing
Section 8 Housing Assistance Payments Program
Federal Housing Commissioner
Send original and two copies of this application form
and attachments to the local HUD Field Office
OMB Approval No. 2502-0123 (exp. 11/30/90
Public reporting burden for this collection of information is estimated to average 0.5 hours per response, including the time for reviewing instructions,
searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comments
regarding this burden estimate or any other aspect of this collection of information, Including suggestions for reducing this burden, to the Reports Manage-
ment Officer, Office of Information Policies and Systems, U.S. Department of Housing and Urban Development, Washington, D.C. 20410-3600 and
to the Office of Management and Budget, Paperwork Reduction Project (2502-0123). Washington, D.C. 20503.
Name of the Public Housing Agency (PHA) requesting housing assistance payments:
Application/Project No. (HUD use only)
HOLBROOK HOUSING AUTHORITY
MA06E072010
Mailing Address of the PHA
Requested housing assistance payments are for :
How many Certificates?
How many Vouchers?
One Holbrook Court
Holbrook, MA 02343
50
Have you submitted prior applications: No Yes
Signature X Review of PHA Officer P. authorized Donorron to sign this application
...
for Section 8 Certificates?
X
...
for Section 8 Housing Vouchers?
Title of PHA Officer authorized to sign this application
Phone Number
Date of Application
Kevin R. Donovan - Executive Director
617-767-0024
July 20, 1990
Legal Area of Operation (area in which the PHA determines that it may legally enter into Contracts)
Holbrook, Brockton, Randolph, Abington, Quincy, Boston
A. Primary Area(s) from which families to be assisted will be drawn.
Locality (City, Town, etc.)
County
Congresional
Units
District
Town of Holbrook
Norfolk
11th
City of Brockton
Plymouth
11th
Town of Randolph
Norfolk
11th
Town of Abington
Plymouth
11th
City of Quincy
Norfolk
11th
City of Boston
Suffolk
11th
B. Proposed Assisted Dwelling Units
Number of Durniting Units by Bedroom Count
Total
Housing Program
Elderly, Handicapped, Disabled
Non-Elderty
Dwelting
Efficiency
1-BR
2-BR
1-BR
2-BR
3-BR
4-BR
5-BR
6+BR
Units
Certificates
20
20
10
50
Housing Vouchers
C. Need for Housing Assistance. Demonstrate that the project requested in this application is consistent with the applicable Housing condition Assistance of the housing Plan Including stock in the the community goals for
the
needs
of
Lower-Income
Families
or,
in
the
absence
of
such
Illen,
that
the
procosed
project
is
responsive
to
the
meeting and the housing housing assistance needs of Lower-Income Femilies (including the elderly. andicapped and disabled, large families and those displaced or to be displaced) residing in or
expected in reside in the community. (If additional space is needed, add separate pages.)
SEE ATTACHED
1
D. Qualification an a Public Housing Agency. Demonstrate that the applied ant qualifies as a Public Housing Agency
Submitted with
Previously
and is legally qualified and authorized to carry out the project applied for In this application. (check the appropriate boxes)
this application
submitted
1. The relevant enabling legislation
2 Any n¹₉s and regulations adopted or to be adonted by the agency to govern its operations
3. A supporting opinion from the Public Housing Agency Counsel
form HUD-52515 (7:81
Retain this record for the term of the ACC.
page 1 of 2
ref. handbook 7420
Previous editions are obsolete
In the past four (4) years Total units allocated to Holbrook Housing Authority
was five (5) , five (5), and seven (7) - a Total of seventeen (17) units.
The Town of Randolph, who abuts Holbrook, does not have a Section 8 program.
Holbrook Housing Authority has been administering Section 8 Certificates to
those who choose to live in Randolph.
A large number of mentally disabled are on our 1 bedroom Waiting List as we
are in Brockton Multi Service neighborhood as well as South Shore Mental
Health. Our landlords in Holbrook and Randolph have been very agreeable
to leasing to the disabled who are presently housed in the worst conditions
possible. This office can place them in decent, safe neighborhoods that are
close to their workshops and support systems.
There are several shelters in our area that temporarily house homeless,
pregnan women that will need housing when the baby is born. Our Holbrook
shelter houses hundreds of single men that are unable to find affordable
housing because of low wages earned or large support payments to their
families.
Our waiting list is lengthy with housing available in Holbrook and Randolph
but no certificates available.
Because of the great need and our history of underfunding we are requesting
the maximum allowed which is only Fifty (50) Certificates.
CERTIFICATIONS IN CONNECTION WITH THE OPERATION
OF A SECTION 8 EXISTING HOUSING PROGRAM
Instructions: The applicant agency must provide assurances and certify to all of the following items.
The applicant agency hereby assures and certifies that:
(i) It will comply with Title VI of the Civil Rights Act of 1964 (P.L. 88-352) and regulations pursuant thereto
(Title 24 CFR Part 1) which states that no person in the United States shall, on the ground of race, color, (
national origin, be excluded from participation in, be denied the benefits of, or be otherwise subjected to
discrimination under any program or activity for which the applicant receives financial assistance; and will
immediately take any measures necessary to effectuate this agreement. With reference to the real property
and structure(s) thereon which are provided or improved with the aid of Federal financial assistance extend
to the applicant, this assurance shall obligate the applicant, or in the case of any transfer of property, the
transferee. for the period during which the real property and structure(s) are used for a purpose for which th
Federal financial assistance is extended or for another purpose involving the provision of similar services
or benefits.
(ii) It will comply with Title VIII of the Civil Rights Act of 1968 (P.L. 90-284) as amended, which prohibits
discrimination in housing on the basis of race, color, religion, sex or national origin, and administer its
programs and activities relating to housing in a manner to affirmatively further fair housing.
(iii) It will comply with Executive Order 11063 on Equal Opportunity in Housing which prohibits discrimination
because of race, color, creed, or national origin in housing and related facilities provided with Federal
financial assistance.
(iv) In establishing the criteria for the selection of tenants, the PHA or Owner will not utilize preferences or pri
orities which are based on (1) the identity or location of the housing which is occupied or proposed to be
occupied or (2) upon the length of time the applicant has resided in the jurisdiction. The PHA or Owner
shall treat non-resident applicants who are working, or have been notified that they are hired to work,
in the jurisdiction as residents of the jurisdiction.
(v) If the proposed project is to be located within the area of a local Housing Assistance Plan (HAP), the
applicant will take affirmative action to provide opportunities to participate in the program to persons
expected to reside in the community as a result of current or planned employment.
July (Date) 19,1990 (Titte) (Signature)
Replaces Forms HUD-912 and HUD-41901, which are obsolete
HUD-916 (4-76)
Certification for a
U.S. Department of Housing
and Urban Development
Drug-Free Workplace
Office of Public and Indian Housing
Public Housing Agency / Indian Housing Authority
OMB No. 2577-0044 (exp. 10/31/92)
Public Reporting Burden for this collection of information is estimated to average 0.25 hours per response, including the time for reviewing instructions,
searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comments
regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden, to the Reports Management
Officer, Office of Information Policies and Systems, U.S. Department of Housing and Urban Development, Washington, D.C. 20410-3600; and to the Office of
Management and Budget, Paperwork Reduction Project (2577-0044) Washington, D.C. 20503.
PHA/IHA Name:
If Development or CIAP,
enter the Federal Fiscal Year in which
Holbrook Housing Authority
the funds are expected to be reserved:
Program/Activity Receiving Federal Grant Funding: (mark one)
If Operating Subsidy or Section 23,
enter the PHA's/IHA's Fisca/Year Ending date
Development
CIAP
Operating Subsidy
Sec.23 Leased Housing
in which funds are expected to be obligated:
Acting on behalf of the above named PHA/IHA as its Authorized Official, I make the following certifications and agreements to the Department
of Housing and Urban Development (HUD) regarding the sites listed below:
1. I certify that the above named PHA/IHA will provide a drug-free workplace by:
a. Publishing a statement notifying employees that the unlawful
(1) Abide by the terms of the statement; and
manufacture, distribution, dispensing, possession, or use of a
(2) Notify the employer of any criminal drug statute conviction
controlled substance is prohibited in the PHA's/IHA's workplace
for a violation occurring in the workplace no later than five
and specifying the actions that will be taken against employees
days after such conviction;
for violation of such prohibition.
e. Notifying the HUD Field Office within ten days after receiving
b. Establishing a drug-free awareness program to inform employ-
notice under subparagraph d. (2) from an employee or otherwise
ees about the following:
receiving actual notice of such conviction;
(1) The dangers of drug abuse in the workplace;
f. Taking one of the following actions within 30 days of receiving
(2) The PHA's/IHA's policy of maintaining a drug-free workplace;
notice under subparagraph d. (2) with respect to any employee
(3) Any available drug counseling, rehabilitation, and employee
who is so convicted:
assistance programs; and
(1) Taking appropriate personnel action against such an em-
(4) The penalties that may be imposed upon employees for drug
ployee, up to and including termination; or
abuse violations occurring in the workplace.
(2) Requiring such employee to participate satisfactorily in a
c. Making it a requirement that each employee of the PHA/IHA be
drug abuse assistance or rehabilitation program approved for
given a copy of the statement required by paragraph a.;
such purposes by a Federal, State, or local health, law en-
forcement, or other appropriate agency;
d. Notifying the employee in the statement required by paragraph
a. that, as a condition of employment with the PHA/IHA, the
g. Making a good faith effort to continue to maintain a drug-free
employee will do the following:
workplace through implementation of paragraphs a. thru f.
WARNING: 18 U.S.C. 1001 provides, among other things, that whoever knowingly and willingly makes or uses a document or writing containing any false. fictitious,
or fraudulent statement or entry, in any matter within the jurisdiction of any department or agency of the United States, shall be fined not more than $10,000 or
imprisoned for not more than five years, or both.
2. Sites for Work Performance. The PHA/IHA shall list in the space provided below the site(s) for the performance of work done in connection
with the HUD funding of the program/activity shown above: Place of Performance shall include the street address, city, county, State, and
zip code. (If more space is needed, attach additional page(s) the same size as this form. Identify each sheet with the PHA/IHA name and address
and the program/activity receiving grant funding.)
Holbrook Housing Authority
One Holbrook Court
Holbrook, MA 02343
Signed by: (Name, Title & Signature of Authorized PHA/IHA Official)
Name & Tide
Kevin R. Donovan EXECUTIVE DIRECTOR
Signature X XX & Date
7-19-90
form HUD-50070 (12/89)
ref. Han books 7417.1. 7475.
Certification for Contracts, Grants, Loans
and Cooperative Agreements
The undersigned certifies, to the best of his or her
knowledge and belief that:
(1) No Federal appropriated funds have been paid or will be
paid, by or on behalf of the undersigned, to any person for
influencing or attempting to influence an officer or employee of
an agency, a Member of Congress, an officer or employee of
Congress, or an employee of a Member of Congress in connection
with the awarding of any Federal contract, the making of any
Federal grant, the making of any Federal loan, the entering into
of any cooperative agreement, and the extension, continuation,
renewal, amendment or modification of any Federal contract,
grant, loan, or cooperative agreement.
(2) If any funds other than Federal appropriated funds have
been paid or will be paid to any person for influencing or
attempting to influence an officer or employee of any agency, a
Member of Congress, an officer or employee of Congress, or an
employee of a Member of Congress in connection with this Federal
contract, grant, loan, or cooperative agreement, the undersigned
shall complete and submit Standard Form-LLL, "Disclosure Form to
Report Lobbying," in accordance with its instructions.
(3) The undersigned shall require that the language of this
certification be included in the award documents for all
subawards at all tiers (including subcontracts, subgrants, and
contracts under grants, loans, and cooperative agreements) and
that all subrecipients shall certify and disclose accordingly.
This certification is a material representation of fact upon
which reliance was placed when this transaction was made or
entered into. Submission of this certification is a prerequisite
for making or entering into this transaction imposed by section
1352, title 31, U.S. Code. Any person who fails to file the
required certification shall be subject to a civil penalty of not
less than $10,000 and not more than $100,000 for each such
failure.
19th
Executed this
date July of 1990.
By
(signature)
KEVIN R. DONOVAN
Exacutive (typed or printed Director name)
(title, if any)
Covered Action:
(type and identity of program, project or activity)
TOMN HOL BROOK 1634 MASS
Town of Holbrook
50 North Franklin Street, Holbrook, MA 02343
HOLBROOK.
1872
(617) 767-4312
-
BOARD OF SELECTMEN
Board of Public Works
July 20, 1990
Ms. Jeanne McHallam
Director of Development
U.S. Department of HUD, Region 1
O'Neill Federal Building, 3rd F1., Rm. #321
Boston, MA 02222-1092
Dear Ms. McHallam:
Please be advised that the Holbrook Board of Selectmen endorses the
application for fifty (50) additional units of Section 8 Existing
Housing as proposed by the Holbrook Housing Authority.
The application is submitted in accordance with Holbrook's Housing
Assistance Plan and this communication should be considered the final
comments from the Town of Holbrook and no additional comments will be
submitted by the Board of Selectmen.
Sincerely,
Michael Huntington
Michael Huntington
Chairman
/mf
Park
Forestry
Water
Sewer
Highway
DEAR ANDREW
08
.8.7
PIECES DONT FIT THE PUZZLE. LET ME ELABORATE THE UNITED STATES NOW
HAS 100 PLUS NUGLEAR POWER PLANTS GENERATING 20% OF THE TOTAL ELECTRIC
DOMESTIC DEMAND, THE DEFENSE DEPARTMENT HAS ITS NUCLEAR PROGRAM, WHERE THE
HECK ARE ALL THE ENGINEERS, TECHNICIANS AND SCIENTISTS SPECIALIZED COMING
FROM?THAT S A PROBLEM. SECOND POINT AS YOU ARE WELL AWRRE THE BOSTON HARBOR
WOI
CLEAN UP IS A POLITICAL PORK BARREL, I.E. ALTHOUGH THERE IS OVERWHELMING
EVIDENCE OF THE NEED FOR A NEW SEWERAGE TREATMENT PLANT THE BEAURACACY
AND THE CONTRACT ENGINEERING WAS POLITICALY CHOSEN (MR DUKAKIS WILL BE
RUNNING AGAIN FOR PRESIDENT, THE PROBLEM IS THE POLLUTION MAY BE A HEALTH
80
PROBLEM IF NOT RECTIFIEID, PERSONAL EXPERIENCE OF SMELLING HUMAN EXCREMENT
ON VI тои PUBLIC BEACHES TITSYN AS NAHANT AND REVERE DOESNT PORTEND FOR THE HEALTHY
AMERICAN SOCIETY. (YOU MUST BE GETTING SOME IMPLICATION OF THE HIGH LEGAL
"HOTAV AND ILLEGAL IMMIGRATION LEVELS (THIS IS NOT BECAUSE THE STREETS ARE PAVED
WITH GOLD OR THERE ARE TREMENDOUS JOBS WAITING) THE REASON FOR THE GREAT. SSI
LABOR SHORTFALL IS IN THE WAY HEALTH CARE HAS BEEN PRACTICED AMERICAN MED-
BI
ICINE HAS BEEN RATIONED AND THE CONSEQUENCES OF THAT ARE LOW FERTILTY
DEATH
IN AMERICAN WOMEN AND A HIGH EXTEXRATE. LET ME IT CLEAR A HIGH DEATH RATE
MAY BE LESS OF THE CONSEQUENCES ИО OF DISEASE BUT OF THE POP CULTURE DRUG
ABUSE, THE CRIME, MOTOR VEHICLE AND INDUSTRIAL ACCIDENTS. HOWEVER I HAVE THE
DATA THAT SUBSTANTIATES MY CLAIM THE DEATH RATE HAS NOT BEEN LOWER THAN
TUB
THE RATE OF 1979 IRREGARDLESSOE THE EXPENDITURES IN HEALTH CARE.
WITH THE ABOVE FACTS I DONT WANT ANY MILITARY INTERVENTION OF AMREICAN
FORCES GOING INTO KUWAIT OR IRAQUE UNLESS DIRECTLY THREATENED. IF THE U.S.
CAB GET A SENI PERMANENT MILITARY BASE IN SAUDI ARABIA THEN DO IT.
FRANKLY YOU CANT AFFORD -TO LOSE AMERICAN YOUNG AT THIS TIME IN THE
CULTURE, AS ISAID EVERYTHING DOESNT FIT ON AN ENGINEERING DRAWING, GLUOW YOU 021. HAVE
OT
PAHT
PROBLEMS IN OUR DOMESTIC CULTURE THAT WILL BE EXACERBATED BY THE INCREASE
oh
IN LABOR SHORTATES. TO THOSE THAT ARE CLAIMING or THAT IMMIGRATION WILL BE
ABLE TO FILL THE GAP, OK. INCREASE THE QUOTAS FROM ALL WESTERN EUROPEUN
NATIONS AND LOWER THE QUOTAS FROM OTHER AREAS. WATCH THE RESPONSE FROM THE
LINBERAL SIDE. IMMIGRANTS ARE NOT BEING SCREENED FOR COMMUNICABLE DISEASES
INCLUDING T.B. DIPTHERIA HEPATITIS so THAT FURTHER PLACES A STRAIN ON
WOR
интата
THE
TIN
тиоа
AMERICANS.
ABSOLUTELY I CAN SUBSTANTIATE WITH GOVERNMENT DATA THAT THE AMERICAN
POPULATION IS RECEEDING AND IS BEING PROPPED UP BY IMMIGRATION.
DATMON
THE FOLLOWING ARTICEL DOESNT FOCUS ON MORTABITY RATES BUT DOES IDENTIFY
ЯОДЯАН
E
LOW FERTILITY AS PART OF THE PROBLEM..
31
81
FINALLY I WOULD LIKE TO ALSO STATE THAT IN 1982 A DEPARTMENT OF
THE PUBLIC HEALTH SERVICE DID /A REPORT ON THE NUMBER OF PROFESSIONAL
PHARMACIST IN PRACTICEIN AMERICA, AS YOU MAY REMEMBER I AM A DEGREED PHARMACIST
OR WAS FORMERLY LICENSED, THAT 1982 REPORT GAVE THE FOLLOWING FIGURES OUT OF
150,000 LICENSED PHARMACSS IN 1975,25,000 OF THEM LIKE MYSELF WHERE NOT IN
PRACTICE AND IN INKNOWN ACTIVITY, ANOTHER 15,000 WERR OUT OF WORK LOOKING FOR
PHRAMACY WORK. MY ESTIMATE IS THAT SOCIETY HAD LET 15-18,000B.S. DEGREES VAPOR-
12E. IN 1980.1 BELIEVE THAT WASA MISTAKE.
CHERT
-CHM
I AM NOT GOING TO DWELL QT THAT REPORT BUT ONLY CAN SAY THAT THERE
ИД
ROMAX
IS SOME SORT OF DELAYED REACTION FROM GOVERNMENT AGENCIES. A CRISIS HAS TO ENSUE
BEFORE THE RIGHT THING IS DONE.
LET.
ROTH
GUA
namow
WI
FOLLOWING ARE PUBLIC HEALTH SERVICE REPORTS ON VITAL STATISTICS WHICH I
GATHERED, ONE HEALTH STATISTIC IS THE DEATH RATE (MORTALITY). ASYOU SCAN THE
ANNUAL DATA YOU WILL NOTICE THAT 1979 WAS THE LOWEST RATE (NOT ABSOLUTE TERMS
BUT RELATIVE RATE PER 1000 POPULITION.
Bit Resprels
ENT
ИЛОТИЯМА 50 ИОГТИНИЯНТИТ GOOD LUCK тион BIDAY SHT HTDW
.8.0 SHT II. ФЕИЕРАКЯНТ YEMR JOHN V VERCELLONE ЯО TIAKUA OTHE OWLOS
.TI or ИНТ АЕНАЯА 62 MARLBORO STREET ТИНИАМЯНЯ IM33 THE EAD
SHT ИТ amil CIRT EA ОИО BELMONT, MASS 02178-3660 14 ТИАЭ JOY YINNAST
SIV AR JOY, MA no TIT тизнос GIASI 34. GRUTIUO
ALSO WOULD SUGGEST THAT PEASE A.F.B. BE CONVERTED TO DEFENSIVE, COMMERCIAL
МРАЗЯДИТ ART Ya Ed IIIA TANT EXUTIVO HUO PPI аминасяя
MILITARY RECONNAISANCE AND REFUELING, TO MUCH CONCENTRATION IN SOUTHERN N.
NEW HAMPSHIRE, MOVE S.A.C. TO ANOTHER LOCATION WITH LESS PROSPERITY.
исатония ИНИТ IV U&A MORT CATOUO SHT REAMHOVI .10.TAD THE INIT OT THA
THI МОЯТ неиочаня HOTAN: ЗАНЯА ЯЗНТО BATOUO BHD HEWOI СИА СИОТТАЙ
HEARBIC ОТИШИМОС яоз ФИИЗИНОВ эттая TO% 486
Staff writer of The Christian Scie
S
HOULD America keep agrees that we cannot take in un-> mated 1.7 million immigrants a
growing, or is 250 million limited numbers. Is it humane to year, nearly three times the cur-
bring in even more than we dor rent level, by 1991. In five years;
WASHINGTON:
people enough?
hat Congress question in coming weeks run because. hurts our envi- added to the US population un-
will try to answer don't think so not in the long 8.7 million migrants would be
RESIDENT Bush, in an Oval (
out lawmakers are beset with con- ronment, which supports all of der his proposal, CIS estimates.
P
with a small group of newspape
flicting advice.
us."
Supporters of liberalized im-
views on the receding threat to
Conservationists warn Con-
But Wattenberg counters:
migration make three major ar-
Pact and flatly denied reports that he
gress
that
rapid,
growth
is
"Beyond a strong dose:of the en
guments. First, it would bring
defense budget cuts.
destroying
America's
environ-
terprising spirit,immigrants typi-
about faster family unification for
The military threat to NATO from 1
migrants. Often, the male head of
return to its full cold-war level, he saio
ment, using up its natural re
cally bring something else'to the
sources like oil and water, and
country, and that is their youth.
a family arrives first, puts down*
His comments seemed to split the
threatening its economy and stan-
The United States is in the midst
roots, and eventually become a
tween members of his administration
dard of living.
US citizen. Then he can send for
versal in the East bloc. The debate is i
of becoming significantly grayer
Proponents of growth argue
nation.
Each payroll tax
his wife and children.
of United States defense spending.
that the United States needs more
paying immigrant adds thou-
"I'm convinced that, certainly for the
people to keep factories hum-
sands of dollars year to the so-
Splitting families inhumane
of the change we've seen taking plac
ming. A larger population also
cial security trust funds.
Many congressmen say that
turned by events," he said. "Poland i
makes the US stronger on the in-
The US currently is growing
separating families for years is in-
being a captive nation, if you will. Bu
ternational scene, they contend.
faster than any industrialized
humane. They want to unite fam-
not some pitfalls out there."
The issue is stirring Capitol
country in the world. The popu-
ily members swiftly, even before
Although Mr. Bush acknowledged
Hill because of five bills now be-
lation, now slightly over 250 mil-
the head of the household has
"never go back to Square 1 in terms C
ing considered by the House of
lion; climbs by 3. million a year. achieved US citizenship.
left open the possibility for reversals in
Representatives. The bills, all
Legal immigration in 1989 was
However, that argument trou-
least the Soviet Union.
highly controversial, deal with
612,110, including 90,694 refu-
bles Gene McNary, commissioner
"I can't vouch for what every coun
immigration. Each would have a
gees. There are also thousands of
of the US Immigration and Natu-
including the Soviet Union
It's ve
decisive impact on US population
illegal immigrants, whose num-
ralization Service.
uring intentions of individual par
trends during the next 100 years.
bers are unknown.
Mr. McNary contends that
[reports] so solid and so strong tha
Markup on a House immigra-
Sharon Camp, vice president
"the ability to bring relatives to
versed." Reform prospects in the S
tion bill begins today in the Judi-
of the Population Crisis Commit-
this country without regard to
sponding demilitarization are at the )
ciary Subcommittee on Immigra-
tee, estimates that without further
numerical restrictions is a special
Director of Central Intelligence
tion, Refugees, and International
net immigration, America's popu-
privilege. In a sense, it is on a par
William Webster and Defense
Law. Scholar Ben Wattenberg
lation would level off at 269 mil-
with the right to vote and hold
Secretary Richard Cheney.
lion in the year 2020. Fertility
political office, and should be lim-
The differences are matters of
't
says the immigration policy
adopted this year could be "the
rates in the US are presently 1.8
ited to United States citizens."
degree. Mr. Webster believes that
re
most important action taken by
that is, 1.8 children per woman,
The commissioner also notes
the less threatening military pos-
our government in this decade.
which is slightly below. the "re-
that many aliens hurry to become
ture of the Soviet Union is be-
tc
coming increasingly difficult to
U:
Experts say that virtually all
placement level' needed to en-
US citizens so that they can bring
US population growth in the next
sure a stable population. But an
relatives here. Without that in-
reverse. Mr. Cheney is more
century will come from immigra-
unusually large number of
centive, many aliens might not
skeptical,
tion. If migration slows signifi-
American women are currently in
bother to become citizens -
Bush praised Soviet President
cantly, population will stabilize.
their child-bearing years, and
thereby slowing their assimilation
Mikhail Gorbachev's managing
But if migrants pour into the
that is nudging population
into the American mainstream.
of peaceful change throughout East
country, population could sky-
higher, Dr. Camp explains.
Second, advocates say current
moved from the table the concept of
rocket to 400 million.
The Senate has already passed
law must be revised to bring in
The backdrop of the president's r
Urging slow growth, or no
an immigration bill, S358, spon-
more skilled workers, including
tion between Lithuanian leaders seel
more immigrants from Europe.
Gorbachev trying to slow their mon
growth, are conservationists, such
sored by Sen. Edward Kennedy
as Rose Hanes of Population-En-
(D) of Massachusetts and Sen.
There is general agreement on
ducted maneuvers in the region over
vironment Balance, and former
Alan Simpson (R) of Wyoming.
this provision, which has already
Lithuanians took as intimidation.
Colorado Gov. Richard Lamm,
The Center for Immigration
passed the Senate.
"One of the reasons I have not or
director of the Center for Public
Studies (CIS) estimates that the
The third argument for liber-
structuring] but also supported Gort
Policy and Contemporary Issues
Kennedy-Simpson bill would
alized immigration is the so-called
steadfastly adhering to the concept
at the University of Denver.
bring migrants to the US
impending "labor shortage."
very important."
At the other extreme are expo-
in 1991. Under current law, the
As America's population ages,
A news report last weekend that th
nents of "growth-is-good," such
number would rise to 780,000 in
some advocates say that the US
to cut over $7 billion more from the
1991, CIS calculates.
must open its doors to younger
Bush proposed in January "did not {
as Mr. Wattenberg of the Ameri-
The White House supports the
workers from other nations.
As for Soviet troops, Bush saw lit
can Enterprise Institute, econo-
mist Julian Simon, and the edito-
Kennedy-Simpson bill as a rea-
Without them, Wattenberg con-
East Germany, despite the calls of sor
rial writers of the Wall Street
sonable increase in immigration.
tends, the US will face a future of
viets to retain a presence as a hedge
But the administration opposes
"deteriorating service, and an in-
"I don't think the Soviets are want
Journal.
more-generous
legislation
crease in underqualified, rude,
heard what the Poles have said, but
Economic consequences
drafted by Rep. Bruce Morrison,
and weakly committed employ-
seconded by many Poles. And it is m
Every American has a stake in
(D) of Connecticut, chairman of
ees." Businesses will have to can-
that array of countries, I don't see an
the outcome of this debate. Levels
the immigration subcommittee.
cel expansion plans, and the na-
viet troops there."
of immigration and population
According to CIS, the Mor-
tion could suffer wage inflation.
Yet even in the East, Bush said.
can affect pay scales, jobs, the en-
rison bill would bring in
Rep. Lamar Smith (R) of Texas
keeping US troops in Germany. Of V
vironment, housing prices, busi-
1,060,000 immigrants in 1991
counters that the US has 14 mil-
US troops aren't wanted, US troops
ness prosperity, and even na-
That would rise until 1995, when
lion unemployed, including some
As for other instabilities and histc
tional security.
millions of more people would
people who have become discour-
again in Europe, Bush is optimistic:
Dr. Arnold Packer, senior re-
become eligible for US residence.
aged and stopped looking for
new democracies emerge. there will I
search fellow of the Hudson Insti-
In addition to Mr. Morrison,
jobs. Perhaps those unemployed
on the part of governments in Easter
tute, says the immigration policy
three other representatives have
Americans should be the nation's
and that in itself will help peaceful
adopted by this Congress could
drafted separate immigration leg-
top priority, he suggests.
FOCKN on 1979, 1980 RAYE
PAGE
852.2 AND 878.3
1
RESPE Jively 90 to DAGE 2
2
these AME
Table 9. Death rates for all causes, according to race, sex, and age: United States, selected
years 1950-82
(Data are based on the National Vital Statistics System)
Year
Race, sex, and age
1
1
1950
1960
1970
1975
1979
1980
1981
2
1982
3
Total
Number of deaths per 100,000 resident population
4
All ages, age adjusted
841.5
760.9
714.3
630.4
577.0
585.8
571.6
556.4
All ages, crude
963.8
954.7
945.3
878.5
852.2
878.3
866.4
857.6
Under 1 year
3,299.2
2,696.4
2,142.4
1,603.0
1,332.9
1,288.3
1,190.4
1,143.7
1-4 years
139.4
109.1
84.5
69.9
64.2
63.9
60.0
55.5
5-14 years
60.1
46.6
41.3
35.2
31.5
30.6
30.6
27.8
15-24 years
128.1
106.3
127.7
117.3
114.8
115.4
106.2
104.7
25-34 years
178.7
146.4
157.4
140.6
133.0
135.5
135.4
126.9
35-44 years
358.7
299.4
314.5
266.7
229.8
227.9
226.4
207.9
45-54 years
853.9
756.0
730.0
649.9
589.7
584.0
577.4
556.4
55-64 years
1,911.7
1,735.1
1,658.8
1,475.3
1,338.0
1,346.3
1,335.3
1,292.4
65-74 years
4,067.7
3,822.1
3,582.7
3,179.5
2,929.0
2,994.9
2,940.0
2,904.5
75-84 years
9,331.1
8,745.2
8,004.4
7,034.5
6,496.6
6,692.6
6,431.1
6,350.3
85 years and over
20,196.9
19,857.5
17,539.4
15,655.0
14,962.4
15,980.3
15,362.4
15,228.6
White male
4
All ages, age adjusted
963.1
917.7
893.4
804.3
738.4
745.3
730.8
709.7
All ages, crude
1,089.5
1,098.5
1,086.7
1,004.1
963.3
983.3
972.8
957.6
Under 1 year
3,400.5
2,694.1
2,113.2
1,551.9
1,276.0
1,230.3
1,193.9
1,129.2
1-4 years
135.5
104.9
83.6
70.1
64.2
66.1
62.4
55.5
5-14 years
67.2
52.7
48.0
40.9
36.6
35.0
37.9
32.1
15-24 years
152.4
143.7
170.8
163.6
167.0
167.0
152.4
148.2
25-34 years
185.3
163.2
176.6
166.4
166.7
171.3
172.0
156.7
35-44 years
380.9
332.6
343.5
295.1
257.5
257.4
260.7
237.7
45-54 years
984.5
932.2
882.9
791.0
711.3
698.9
698.9
671.0
55-64 years
2,304.4
2,225.2
2,202.6
1,940.9
1,734.5
1,728.5
1,695.1
1,648.6
65-74 years
4,864.9
4,848.4
4,810.1
4,343.0
3,991.5
4,035.7
3,953.1
3,893.2
75-84 years
10,526.3
10,299.6
10,098.8
9,274.7
8,624.0
8,829.8
8,603.7
8,506.5
85 years and over
22,116.3
21,750.0
20,392.6
18,562.2
17,924.0
19,097.3
18,563.7
18,333.3
White female
4
All ages, age adjusted
645.0
555.0
501.7
439.0
402.5
411.1
403.7
395.1
All ages, crude
803.3
800.9
812.6
775.1
771.8
806.1
802.0
802.3
Under 1 year
2,566.8
2,007.7
1,614.6
1,191.7
986.7
962.5
924.8
906.2
1-4 years
112.2
85.2
66.1
56.2
50.4
49.3
48.5
44.3
5-14 years
45.1
34.7
29.9
25.5
23.2
22.9
20.7
20.2
15-24 years
71.5
54.9
61.6
55.3
55.2
55.5
52.7
52.3
25-34 years
112.8
85.0
84.1
72.1
64.7
65.4
65.7
62.8
35-44 years
235.8
191.1
193.3
165.3
140.9
138.2
136.4
129.7
45-54 years
546.4
458.8
462.9
414.0
374.5
372.7
374.8
357.6
55-64 years
1,293.8
1,078.9
1,014.9
928.6
862.8
876.2
884.0
860.9
65-74 years
3,242.8
2,779.3
2,470.7
2,142.0
1,997.9
2,066.6
2,048.4
2,029.0
75-84 years
8,481.5
7,696.6
6,698.7
5,785.4
5,258.6
5,401.7
5,182.1
5,090.1
85 years and over
19,679.5
19,477.7
16,729.5
14,749.7
14,027.9
14,979.6
14,302.2
14,278.0
See footnotes at end of table.
PAGE 2
1983, 1984, 1985, 1986, 1987
862.8, 862,3, 873.9, 873.2, 872.4 respectively
Table 22 (page 1 of 2). Death rates for all causes, according to sex, race, and age: United States, selected
years 1950-87
(Data are based on the National Vital Statistics System
Sex, race, and age
1950¹
1960'
1970
1980
1983
1984
1985
1986
1987
All races
Deaths per 100,000 resident population
All ages, age adjusted
840.5
760.9
714.3
585.8
550.5
545.9
546.1
541.7
535.5
All ages, crude
963.8
954.7
945.3
878.3
862.8
862.3
873.9
873.2
872.4
Under 1 year
3,299.2
2,696.4
2,142.4
1,288.3
1,107.3
1,085.6
1,067.8
1,032.1
1,018.5
1-4 years
139.4
109.1
84.5
63.9
55.9
51.9
51.4
52.0
51.6
5-14 years
60.1
46.6
41.3
30.6
26.9
26.7
26.3
26.0
25.6
15-24 years
128.1
106.3
127.7
115.4
96.0
96.8
95.9
102.3
99.4
25-34 years
178.7
146.4
157.4
135.5
121.4
121.1
123.4
132.1
133.2
35-44 years
358.7
299.4
314.5
227.9
201.9
204.8
207.2
212.9
214.1
45-54 years
853.9
756.0
730.0
584.0
535.7
521.1
516.3
504.8
498.0
55-64 years
1,911.7
1,735.1
1,658.8
1,346.3
1,299.5
1,287.8
1,282.7
1,255.1
1,241.3
65-74 years
4,067.7
3,822.1
3,582.7
2,994.9
2,874.3
2,848.1
2,838.6
2,801.4
2,751.3
75-84 years
9,331.1
8,745.2
8,004.4
6,692.6
6,441.5
6,399.3
6,445.1
6,348.2
6,282.5
85 years and over
20,196.9
19,857.5
16,344.9
15,980.3
15,168.0
15,223.6
15,480.3
15,398.9
15,320.8
White male
All ages, age adjusted
963.1
917.7
893.4
745.3
698.4
689.9
688.7
679.8
668.2
All ages, crude
1,089.5
1,098.5
1,086.7
983.3
957.4
951.1
960.0
954.4
947.8
Under 1 year
3,400.5
2,694.1
2,113.2
1,230.3
1,052.9
1,038.4
1,033.9
976.6
942.1
1-4 years
135.5
104.9
83.6
66.1
57.3
51.8
52.4
52.2
52.0
5-14 years
67.2
52.7
48.0
35.0
31.1
30.5
29.9
29.9
30.0
15-24 years
152.4
143.7
170.8
167.0
137.0
138.8
136.3
145.9
137.3
25-34 years
185.3
163.2
176.6
171.3
154.8
154.3
157.1
168.8
167.8
35-44 years
380.9
332.6
343.5
257.4
232.9
235.1
241.4
248.4
249.6
45-54 years
984.5
932.2
882.9
698.9
636.5
617.9
608.8
592.2
582.8
55-64 years
2,304.4
2,225.2
2,202.6
1,728.5
1,642.9
1,625.5
1,614.3
1,573.1
1,552.8
65-74 years
4,864.9
4,848.4
4,810.1
4,035.7
3,816.1
3,745.3
3,716.8
3,634.8
3,548.4
75-84 years
10,526.3
10,299.6
10,098.8
8,829.8
8,556.9
8,459.1
8,500.4
8,341.7
8,212.2
85 years and over
22,116.3
21,750.0
18,551.7
19,097.3
18,443.3
18,552.7
18,788.9
18,576.1
18,434.9
Black male
All ages, age adjusted
1,373.1
1,246.1
1,318.6
1,112.8
1,019.6
1,011.7
1,024.0
1,026.9
1,023.2
All ages, crude
1,260.3
1,181.7
1,186.6
1,034.1
963.3
958.1
976.8
987.7
989.5
Under 1 year
5,306.8
4,298.9
2,586.7
2,243.4
2,136.6
2,134.8
2,181.7
2,211.4
1-4 years
208.5
150.5
110.5
96.8
85.2
89.0
90.9
90.5
5-14 years
95.1
75.1
67.1
47.4
40.9
42.4
41.3
42.0
42.5
15-24 years
289.7
212.0
320.6
209.1
165.0
163.9
174.1
190.5
203.9
25-34 years
503.5
402.5
559.5
407.3
335.8
335.6
374.4
385.6
389.8
35-44 years
878.1
762.0
956.6
689.8
586.5
616.0
641.8
675.9
701.5
45-54 years
1,905.0
1,624.8
1,777.5
1,479.9
1,287.3
1,273.5
1,283.3
1,266.5
1,263.6
55-64 years
3,773.2
3,316.4
3,256.9
2,873.0
2,713.1
2,658.3
2,623.1
2,545.5
2,464.7
65-74 years
5,310.3
5,798.7
5,803.2
5,131.1
4,949.3
4,874.5
4,888.7
4,789.9
4,737.6
75-84 years
8,605.1
9,454.9
9,231.6
9,100.0
9,023.1
9,298.4
9,290.8
9,240.7
85 years and over
14,844.8
12,222.3
16,098.8
14,155.6
14,642.9
15,046.2
15,488.1
15,226.1
White female
All ages, age adjusted
645.0
555.0
501.7
411.1
392.7
391.3
390.6
387.7
384.1
All ages, crude
803.3
800.9
812.6
806.1
815.3
822.3
837.1
840.7
845.5
Under 1 year.
2,566.8
2,007.7
1,614.6
962.5
837.6
818.5
786.9
759.1
742.9
1-4 years
112.2
85.2
66.1
49.3
43.9
41.6
39.7
40.7
40.5
5-14 years
45.1
34.7
29.9
22.9
19.7
20.0
19.4
18.6
17.9
15-24 years
71.5
54.9
61.6
55.5
48.3
49.6
48.4
50.4
49.1
25-34 years
112.8
85.0
84.1
65.4
60.1
59.5
58.9
60.4
62.6
35-44 years
235.8
191.1
193.3
138.2
123.4
123.9
121.2
121.3
119.3
45-54 years
546.4
458.8
462.9
372.7
351.0
341.9
339.5
330.3
325.7
55-64 years
1,293.8
1,078.9
1,014.9
876.2
867.8
864.9
864.1
853.3
848.5
65-74 years
3,242.8
2,779.3
2,470.7
2,066.6
2,024.7
2,032.5
2,028.3
2,031.8
2,001.8
75-84 years
8,481.5
7,696.6
6,698.7
5,401.7
5,162.2
5,140.0
5,171.4
5,108.7
5,075.2
85 years and over
19,679.5
19,477.7
15,980.2
14,979.6
14,278.3
14,319.6
14,579.4
14,502.9
14,486.9
See footnote at end of table.
Health Status and Determinants
119
PAGE
they
1989
1488
868.1
11
Monthly Vital Statistics Report
aths and death rates, by age, race, and sex, and age-adjusted death rates by race and sex: United States,
989 and sample of deaths. Rates on an annual basis per 100,000 of estimated the estimates population see Technical in specified notes) group. Due to rounding
cumulative figures 1988 and 1989
not nated add from to totals. a 10-percent For method of computation and information on standard errors
January-December
December
1988
1989
1988
1989
Rate
Number
Rate
Rate
Number
Rate
Number
Number
sex
sexes
883.1
2,155,000
2,171,000
883.9
868.1
933.2
185,000
198,000
2986.1
38,700
21,022.2
38,900
44.2
7,470
51.3
104.6
6,550
100.1
4,730
4,620
9,070
26.2
9,330
26.5
104.0
105.6
37,240
102.0
38,870
3,140
101.9
3,310
139.8
58,520
134.1
4,740
128.0
61,290
5,230
140.5
222.1
77,100
218.7
207.9
81,070
233.7
6,300
7,360
117,650
487.1
119,380
479.5
490.9
10,410
502.5
10,490
1,253.5
1,209.1
271,900
1,246.8
261,080
22,900
1,253.4
23,040
2,626.0
488,470
2,729.8
2,716.9
477,460
43,660
2,811.2
41,440
601,930
6,314.2
601,780
6,165.1
50,450
6,181.4
55,960
6,687.8
15,094.7
459,360
15,518.9
39,930
15,646.6
459,180
16,734.9
1,580
44,260
1,510
160
90
536.5
523.9
533.7
552.5
921.6
1,130,230
944.9
920.5
1,115,030
100,800
976.3
93,690
21,820
22,200
21,146.1
1,080.2
47.2
4,260
57.2
117.5
3,580
2,480
105.0
2,720
32.2
5,420
30.6
5,800
149.6
28,850
152.8
2,460
155.3
27,610
42,880
196.3
2,310
148.3
187.8
44,540
203.0
3,840
206.1
3,480
303.6
51,750
297.6
4,130
276.2
54,720
4,950
318.2
628.8
74,840
637.2
644.1
76,150
622.4
6,490
6,470
166,950
1,624.2
1,616.1
159,980
1,568.4
1,606.4
14,010
13,870
3,410.9
284,440
3,581.9
3,475.1
276,150
25,350
3,664.5
23,550
7,946.1
295,280
8,229.7
7,727.0
293,290
8,421.4
23,790
26,700
152,450
18,478.8
18,273.2
150,470
17,702.4
20,095.0
12,970
890
14,780
920
90
60
700.0
679.2
681.5
708.8
female
1,040,360
826.0
847.7
1,039,740
817.0
892.1
90,830
96,890
17,080
2886.8
16,470
2892.2
3,210
45.2
2,970
41.1
95.1
2,010
91.1
3,530
20.6
3,650
21.6
2,140
53.3
10,020
54.2
54.8
9,620
830
54.5
850
16,750
76.5
15,650
71.8
1,260
68.1
25,350
142.0
1,390
74.8
141.4
26,360
142.7
2,400
150.6
2,170
43,230
338.1
42,800
344.9
367.2
3,920
368.4
887.3
104,950
910.4
4,030
930.0
101,100
936.0
9,030
9,020
2,110.5
201,310
1,995.7
204,030
2,050.1
2,125.9
17,890
18,310
5,083.9
306,650
5,158.1
5,244.2
308,490
29,270
5,632.1
26,660
14,083.5
306,910
14,375.2
14,629.1
308,710
15,433.7
26,950
690
29,480
580
70
30
403.6
396.4
412.4
425.5
1,886,400
910.3
905.3
1,866,310
893.1
171,130
960.6
159,470
25,500
2834.7
25,860
2817.3
39.5
5,650
48.1
89.1
4,690
88.1
3,240
6,630
23.8
3.260
6,880
24.4
29,910
98.0
2,580
101.0
28,050
94.4
2,340
93.5
119.1
42,380
115.8
109.9
43,670
3.840
123.5
3,410
4,550
59,800
191.8
57,150
189.3
175.6
92,030
441.8
5,610
208.8
444.5
93,240
434.4
8,190
444.9
7,940
1,198.9
1,191.1
217,570
1,152.4
228,430
1,193.8
19,180
19,120
417,060
2,570.8
428,080
2.677.3
37,880
2,737.2
36,090
2,650.2
543,850
543,750
6,293.4
6,153.5
6,628.1
45,640
6,172.3
50.180
15,849.8
424,470
15,373.8
425,690
15,830.8
16,942.3
36,730
40.650
1,170
1,200
120
70
513.2
499.7
507.4
528.4
Characteristics of
Pharmacists
2 This Nd outline of prograph
By P. Hannah Davis, formerly with the Division of Health Care
Statistics, and G. Gloria Kapantais, Office of Vital and Health
Care Statistics
cAnE
SECTIN
the
for
Introduction
medical
WEASONS.
Between May 1977 and June 1979, the National Center
for Health Statistics conducted an inventory of all licensed
editing and processing the data were performed. In addition,
pharmacists in the United States. The data were collected
duplicate records of pharmacists holding licenses in more
through two separate but parallel mechanisms.
than one State were removed. This was necessary because
The first was the Cooperative Health Statistics System.
pharmacists were surveyed and counted in each State in
Those States with a Cooperative Health Statistics System
which they were licensed. The procedures for processing
and editing the data and for removing duplicate records are
manpower component contract collected data on pharmacists
discussed in appendix I.
and submitted to the National Center for Health Statistics
a specified set of data elements, using standardized processing
States have license renewal dates at varying times of
specifications. (For information on the Cooperative Health
the year. In addition, some States have biennial license renewal
Statistics System and the data set, see appendix I.) The
cycles. These caused up to a 2-year delay in beginning
National Center for Health Statistics had an individual contract
the questionnaire mailout in some States. The questionnaire
with each State in the Cooperative Health Statistics System.
mailout spanned 2 years in order to coordinate each State's
usually with the State health department. All contractors
mailout with its license renewal period because it was thought
within the System developed their own questionnaires for
that pharmacists would be more likely to complete and return
distribution in their States. The questionnaires were required
questionnaires enclosed in the same envelope with license
renewal forms.
to include all of the items specified by the Center and usually
had the wording and format suggested by the Center.
Because of contractual obligations with the Center, some
The second mechanism through which the data were
Cooperative Health Statistics System States submitted pharma-
collected used a single contractor, the American Association
cist data tapes for 2 consecutive years, each tape representing
of Colleges of Pharmacy, to collect the same items in those
an annual data collection in their States. In these cases the
States not collecting data through the Cooperative Health
later data tape was chosen for inclusion in the 1978-79 Survey
Statistics System. Identical questionnaires provided by the
of Licensed Pharmacists. The data collection period rep-
Center were mailed out in all of these States. A copy of
resented by this later tape was a date prior to June 1979,
this questionnaire appears in appendix II, with further defini-
except for Oregon. Later tapes were selected not only because
tion of terms provided in appendix III. The questionnaire,
they provided more recent, up-to-date information, but also
a prototype of the individual questionnaires developed in
because they were usually of a higher quality because of
the 23 Cooperative Health Statistics System States, was used
the experience gained by the State contractor in data collection
and in assembling at least one earlier tape for the Center.
to collect data in 27 States and the District of Columbia
by the American Association of Colleges of Pharmacy. Similar
It should be noted that although this report and the
data collection methodologies were used by both the Coopera-
Survey of Licensed Pharmacists are labeled 1978-79, not
tive Health Statistics System State contractors and the Ameri-
all States collected data for the national file during these
2 years. The large majority (80 percent of the States) collected
can Association of Colleges of Pharmacy to ensure uniformity
of data and to permit the statistics from both mechanisms
the data in 1978-79, while remaining data were collected
to be merged into a single national data file.
during 1977 or 1980. The appendix table shows the particular
year of each State's survey data.
To ensure accurate data a number of procedures for
NAMA, N/E/A
160,000 (-)/E.W
48,000 1978-79
In 1978-79 there were 160,664 licensed pharmacists in
the United States. The activity status of 27,417 of them
40
was unknown; for those of known status 112,335 or 84
percent were known to be active, and 20,912 or 16 percent
were known to be inactive (table 1).
As seen in table 2, the percent of active pharmacists
30
28.9
out of the total number of licensed pharmacists drops as
age increases. Ninety-five percent of pharmacists under 30
Percent of active pharmacists
21.2
years of age were active; whereas only 79 percent of pharma-
20.7
cists 60-64 years of age were active. The largest decline
20
17.1
occurred among female pharmacists, although at every age
a smaller percent of licensed female pharmacists than of
male pharmacists were active. Reasons for inactivity for both
10
sexes are discussed later in this report.
7.0
Pharmacists between 30 and 59 years of age are often
5.1
in their prime years of professional practice. Within these
ages, 9 out of 10 licensed male pharmacists were active
in the profession, compared with 8 out of 10 female pharma-
Under
30
30-39
40-49
50-59
60-64
65
and
over
cists. Their activity rate was about 11 percent lower than
that of males. A 1973-74 study of pharmacists showed that
Age in years
at that time approximately the same proportion of male phar-
Text figure. Percent distribution of active pharmacists by age: United
macists were active in their profession as in 1978-79, but
States, 1978-79
only 6 out of 10 female pharmacists were active in 1973-74.²
The 1978-79 data show that 21 percent of active pharma-
Thus, for every 8 pharmacists who were most likely to
cists were under 30 years of age, while 12 percent were
leave the profession within 5 years, 9 new pharmacists had
60 years and over (text figure). There seem to have been
recently entered the profession. The South had the largest
enough young pharmacists going into the profession to replace
ratio of young to old pharmacists-2.56 pharmacists under
the older pharmacists who would be most likely to leave.
30 years of age for every pharmacist 60 years and over.
In 1978-79, the largest group of pharmacists were 30-39
For each of the four regions, there was more than one pharma-
years of age (29 percent). Fifty percent of the active pharma-
cist under 30 years of age for every pharmacist 60 years
cists responding in the survey were under 40 years of age.
of age and over.
Table A shows replacement ratios-the percent of phar-
The age composition of active pharmacists in each State
macists under 30 years of age divided by the percent 60
is presented in table 3.
years of age and over. This ratio indicates whether there
is a sufficient supply of pharmacists entering the profession
Table A. Percents of active pharmacists under 30 years of age and 60
years of age and over and replacement ratios, by geographic regions:
(as measured by those under 30 years of age) to replace
United States, 1978-79
those most likely to be leaving (as measured by those 60
Active pharmacists
years and over). A value of 1.0 indicates that there are
equal proportions of pharmacists under 30 years of age and
Under 30 years
60 years of. age
Replacement
60 years and over. A value of less than 1.0 means that
Geographic region
of age
and over
ratio
there is only that proportion of young pharmacists for every
Percent
pharmacist 60 years of age and over. Conversely, a value
Northeast
18.3
16.3
1.12
greater than 1.0 indicates that there are proportionately more
North Central
23.6
12.8
1.84
young pharmacists to replace those most likely to be leaving.
South
23.0
9.0
2.56
A ratio greater than 1.0 indicates growth in the profession.
West
17.3
11.5
1.50
In 1978-79, the Northeast had 1.12 pharmacists under 30
'The percent of pharmacists under 30 years of age divided by the percent 60 years of age
years of age for every pharmacist 60 years of age and over.
and over.
2
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Independents Chains
62 MARLBOR ST
BELMONT
MA 02178
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SUBLINGUAL NGUAL
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CONTROL
TOTAL
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of
GGIST
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QUESTRAN®
(Cholestyramine for Oral Suspension)
POWDER
NEWS
TETRACYCLINE-
ADMINISTERED
USED DURING
WHILE TAKING
OF THE POTENTIAL
DURING TOOTH
AND CHILD-
ANENT DISCOL-
This is more common
PHARMACIST BLAMED FOR FATAL MEDICATION ERROR
epeated short-term
TRACYCLINES,
GROUP UNLESS
OR ARE CON-
A PHARMACIST AND A
2 Deaths In Nebraska
complex in any bone-
treated for infection with
deaths were attributed to
observed in young
pharmacy technician were
In an unrelated incident in
antibiotics.
other causes. The isotonic
six hours. This
animal studies, tetracy-
fired from Albert Einstein
Nebraska, two patients
can have toxic effects
The eight patients
solution, which is com-
keletal development).
Medical Center, in Phil-
who had heart surgery at
were among 24 who were
pounded in the hospital
in pregnancy. The
in BUN. In patients
levels of tetracycline
adelphia, after three in-
Bryan Memorial Hospital
operated on between May
pharmacy, is used to mini-
In renal impairment,
fants in the neonatal inten-
toxicity. Under such
in Lincoln died after being
22 and June 1, when a
mize damage to cells
longed therapy, deter-
sive care unit died who
xaggerated sunburn
exposed to a contaminat-
batch of a cardioplegic so-
when the heart is inactive
tetracyclines. Photosen-
(light-headedness,
were given an IV solution
ed solution that was pre-
lution contaminated with
during surgery. The cause
during therapy, and usu-
patients who experi-
containing potassium that
pared in the hospital phar-
bacteria is known to have
of the contamination is un-
azardous machinery
was incorrectly prepared
macy. Six others were
been used. Two other
der investigation.
organisms, including
by the pharmacy depart-
appropriate therapy.
in adults and bulging
ment. The potassium
use. While these
is discontinued, the
caused a fatal drop in
INDEPENDENTS OFFER FRIENDLIER SERVICE
hould be performed in
heart rate in the three ba-
by an exaggerated sun-
bies, all born prematurely
A
REPORT
BY
D.P.
tetracyclines.
checkout,
while
only
6.5%
name tags, 90% of chain
light that this reaction
and weighing less than
Hamacher & Associates
of independent store
store clerks did. Chain
at the first evi-
rarely with use of
2-1/2 pounds.
Inc., comparing customer
checkout clerks did so.
clerks were also more
mptoms (see
or using hazardous
The IV solution, used
service in 30 independent
The most common
likely to wear a smock or
aceptives less effective
to flush out the IV tube af-
and 30 chain pharmacies,
employee attitude was
uniform (88% in chains VS.
syphilis is suspected,
ter medication is given,
finds that independent
'pleasant" (68% of indepen
41% in independents).
is started and the blood
should have contained
store clerks offer quicker
dents and 60% of chains).
Independent stores,
aluations of organ sys-
heparin, dextrose, and wa-
and friendlier service. On
However, 30% of chain
however, tended to be
shown to depress plasma
may require downward
ter, but instead contained
the other hand, chain store
store employees had a pas-
cleaner (96.5% VS. 82% for
ctericidal action of peni-
heparin and potassium
clerks are more likely to do
sive attitude, as did 17.5%
chains) and less cluttered
with penicillin.
containing aluminum, cal-
chloride.
additional selling and pre-
of independent employees
(36.5% of chains were clut-
has been reported to
Martin Goldsmith,
sent a professional image.
While only 33% of in-
tered compared to 25.5%
traceptives less effective.
president of Albert Ein-
The surveyors, who
dependent clerks wore
of independents).
of urinary catecholamine
test.
stein, said bottles of potas-
visited stores in southeast-
Dietary administra-
sium and dextrose are of
in rats resulted in evi-
ern Wisconsin, received
been found to produce
evidence of onco-
the same size and both
immediate attention in
RADICAL CHANGES/IN
ytetracycline (ie, adrenal
studies of minocycline
contain clear liquid and
51% of independent stores
RETAILING EXPECTED
ammalian cell assays (ie,
been reported for
have similar labels, but
but in only 30% of chain
tetracycline). Segment I
evidence that minocy
both are clearly marked.
stores. When asked the lo-
ONE-STOP SHOPPING
the decade because of an
D (see WARNINGS).
Michael Cohen, di-
cation of an item, 41% of
will become increasingly
oversupply of retail space,
and delivery is
rector of pharmacy at
independent clerks took
important, to the detri-
sameness among retail-
milk. Because of the
from the tetracyclines,
Quakertown Community
the "customer" to the
ment of drugstores, ac-
ers and overleveraged fi-
ursing or discontinue the
the mother (see WARN
Hospital, Philadelphia,
product, compared to
cording to a study, "Re-
nancing.
told The Philadelphia In-
16.5% of chain store em-
tailing 2000," conducted
Merchandising efforts
side effects to lower
quirer that there have
ployees, Directions were
by the Management Hori-
will focus on individual
he following adverse reac-
cyclines: Gl: Anorexia, nau
been at least 40 medical
zons Division of Price
colitis, inflammatory lesions
given by 79% of chain
customers at the store
increases in liver
and esophageal ulcer.
incidents nationally in the
store employees and 53%
Waterhouse. The report
level and on developing
ine-class capsules and
before going to bed (see
last ten years involving
of independent clerks.
indicates that drugstores
long-term relationships
apular and erythematous
multiforme and, rarely,
mixups with potassium
Over 85% of indepen-
will suffer as more super-
with customers to gain a
notosensitivity is discussed
mucous membranes
chloride. Last July, the
dent store checkout clerks
markets offer a wider as-
larger share of each cus-
se-related (see WARN-
ioneurotic edema, anaphy-
United States Pharma-
made eye contact and 79%
sortment of nonfood mer-
tomer's spending.
of systemic lupus ery-
sinophilia. Blood:
copeia proposed placing a
smiled, while 73.5% of
chandise and add service
Shopping frequency
eosinophilia. CNS: Bulging
(Pseudotumor cerebri
black seal on potassium la-
chain store checkout
departments.
will decline, but cus-
reported. Other: When
duce brown-black micro-
bels to alert pharmacists
clerks made eye contact
Other predictions:
tomer loyalty will in-
of thyroid function are
and in children less than
of the potential dangers,
and 60% smiled. However,
More than half of to-
crease among older
ported.
but the change has not yet
11% of chain store clerks
day's retailers will be out
(over 35), time-pressed
symptomatically, and
ADMINISTRATION for
been implemented.
did additional selling at
of business by the end of
consumers.
276
AMERICAN DRUGGIST AUGUST 1990 21
GROWTH HORMONE-
The bodies of 12 men 61 to 81 years old, who took shots of genetically
FOUNTAIN OF YOUTH?
engineered human growth hormone three times a week for six months,
were by many measures almost 20 years younger than before treat-
ment. The men averaged a 14.4% drop in fat tissue and an 8.8% gain
in lean tissue, including muscles and vital organs such as the heart and
kidneys. (N Engl J Med July 5, 1990)
PHARMACIST FOUND
A pharmacist was found 35% liable and a physician 65% liable after a
LIABLE
patient died from taking medication that was contraindicated. The pa-
tient, under treatment for chronic bronchitis with asthmatic reactions,
was prescribed pindolol for hypertension. Pindolol is contraindicated in
asthmatics because it narrows breathing passages and can provoke
asthma attacks. The court held that the pharmacist was not merely a dis-
penser of medication following doctor's orders, but a professional who
failed in his duty to a patient.
ASPIRIN WARNING
FDA will require aspirin products to carry warnings advising against
STRENGTHENED
use by women during the last three months of pregnancy unless direct-
ed by a physician. Manufacturers have one year to add the warning.
MAIL-ORDER error COSTS
Because Walgreen's mail-order subsidiary sent a wrong drug, a federal
WALGREEN $250,000
jury ruled the company should pay $250,000 to 68-year-old Marvin
McCormick of Columbia, TN. McCormick ordered the antiepileptic
drug Dilantin but received the diuretic Dyazide.
CLOSED PHARMACY
A study by the Wisconsin Pharmacists Association found professional
PROGRAMS DON'T SAVE
fees for third-party plans open to all pharmacists to be virtually identical
MONEY
to those for closed plans, at $2.97 for open-panel plans and $3.01 for
closed plans. Although fees for open panels start out higher (at $3.19
vs. $2.71 for closed), competition brings open-panel costs down, while
in the absence of competition costs for closed panels creep up.
PCS TESTING NEW PLANS
PCS will test a program in which community pharmacies dispense 90-
day and 120-day supplies of maintenance medications to counter third-
party belief that mail order is cheaper because it offers this option, says
Robert Johnson, PCS' president. The company will also test a program
in Massachusetts to determine how many patients will pay a slight pre-
mium to receive prescriptions from personal pharmacists. Further, PCS
and RxNet, NARD's pharmacy-services administrative organization, are
CARDIAC ARREST
considering a managed pharmaceutical care program for third parties.
dizziness
more prominent
in such individual
in the ambulato
SANDOZ RE-EVALUATING
Sandoz is considering amending its exclusive contract with Caremark.
CLOZARIL
The Veterans Affairs Department has offered to go beyond white-blood-
insomnia,
cell counts for agranulocytosis among users of Clozaril, to monitor for
fract spasm.
aintness, and
all adverse drug reactions.
and reduced libide
hemorrhagic
LIMITING MEDICATION
Harvard Medical School researchers report that when New Hampshire
-Ample intake of war
stool softener
HURTS THE ELDERLY
Medicaid limited patients to three prescriptions a month, nursing-home
ellective thes preventive
not occur for
admissions of elderly patients doubled and hospital admissions of se-
possible cause
niors increased, compared to Medicaid patients in New Jersey, where
be effective
respectively. However
no prescription cap existed. Nursing-home and hospital admission rates
antinauseant.
sedation can
tolerable pain or par
were nearly identical in both states before the New Hampshire prescrip-
without a
tion cap and after a less-restrictive policy replaced it.
(continued)
000
AMERICAN DRUGGIST (ISSN 0190-5279) is published monthly, except in October when it is published semi-monthly, by The Hearst Corporation, 959 Eighth Avenue, New York, N.Y. 10019, Frank A.
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AMERICAN DRUGGIST
AUGUST 1990 1
No.
(July),
pp.
9-10,
59.
C 1990 Health Physics Society
Pergamon Press plc
President's Message-1990
THE DANGER OF THE EMPTY PIPELINE:
A MAJOR PROBLEM IN OUR PROFESSION Raching
X
DR. GENEVIEVE S. ROESSLER
WHAT is the problem? I'm not referring to oil, but to
it. I realize you will accept the fact that there is currently
health physics graduates. We are not producing nearly
a severe shortage of health physicists and that the shortage
enough of them. And the pipeline, while not empty at the
is going to become more severe. Therefore, I do not feel
moment, could become low enough to put our profession
obligated to cite statistics supporting this assertion.
in danger.
How did the problem occur? Our profession is not
It is, of course, nice for graduates to have a plethora
unique. Articles in the prestigious journal Science have
of job offers and to be attracted by the high salaries. But
deplored trends in this country, showing that students are
what impact will this have on the quality of health phys-
turning away from and not performing well in the sciences.
icists? Too few people spread too thin suggests that the
President Bush recognizes the problem and, as the "Ed-
quality of work will decrease and critical jobs that need
ucation President," is proposing programs that will hope-
to be done now may not be achieved at the appropriate
fully put our country's students back in the top ranks in
level.
science and mathematics. Our scientific profession suffers
In this article, I want to emphasize that we do have
in a similar manner for the same reasons. We lack good
a problem, suggest reasons why it has occurred, propose
science teachers in our schools, and we have an environ-
ways to correct the situation, and, most importantly,
ment that does not encourage young people to major in
challenge you as health physicists to do something about
the sciences.
9
10
Health Physics
July 1990, Volume 59, Number 1
If that isn't enough of a problem, we have the added
should offer to judge science fairs. And why not occa-
stigma in health physics of being in a "nuclear" or radia-
sionally invite counselors and science teachers from local
tion field. Associations with the "bomb," leaks and bad
high schools, community colleges, and 4-y colleges to our
things happening to the environment, and even intangible
chapter meetings? How about sponsoring symposiums
ties to chemical spills haunt us.
about radiation for science teachers? These people are
It is with trepidation that I focus on another concern
eager to find viable job opportunities to present to their
in this article in a journal entitled Health Physics. Does
students. Students are impressed by being able to interact
our Journal's title convey what our science is really about
with a person with a "real" job. I have learned in my
to anyone other than health physicists? I'm not about to
chapter visits and at our Chapter Council meetings that
propose a solution to this difficulty at this point. It has
many chapters are doing the above. I hope that these
been of concern for some time by many in our profession.
chapters will summarize their efforts in the Health Physics
Some health physicists believe that for historic and other
Society Newsletter in an effort to encourage other chapters
reasons, we should not consider changing our title. I am
to do the same.
a traditionalist. Nevertheless, I can't help but believe that
We also need to establish communications with local
our professional name is not self-explanatory, which
media. In these and many other ways, we develop op-
doesn't help our situation. Of course, a question remains:
portunities to convey what we do as health physicists. We
What is a better title?
will get the message across that we like what we are doing
Another major reason we have a shortage of health
and that we are doing something meaningful to protect
physicists is because there are now more jobs than ever.
people and the environment. These are goals that appeal
The need by United States Department of Energy (DOE)
to young people of this generation.
facilities is currently placing a large demand on the job
The prerequisite to establishing this communication
market. Another question we have to ask is: "What will
link is to explain what health physics means. Everyone
be the impact of the new BEIR V report?" Will the findings
has their own way of doing this, and the approach will
place an even larger demand on the level and number of
vary depending on the group that is being addressed.
health physicists?
Our ultimate goal should be that one cannot retire
Another factor that affects us began in the early 80s
or leave the health physics field until three or four people
and is now making a significant impact: the retirement
may serve as replacements. In order to bring these people
of radiation scientists who entered the profession in the
to this level and fill other similar jobs that will be available
40s and 50s. These scientists entered the nuclear field when
at the same level, we need to start now. For example, if
reactors, weapons, medical uses of radionuclides, and
you are a Ph.D. at a university or laboratory, you will not
concerns for health were at the fore. Financial support
be able to vacate your position for 6-10 y. It will take 4
for education was also prevalent in those days. This cur-
or 5 y of graduate school for the person recruited with a
rent and continuing exodus of health physicists produces
B.S. in physics to get his/her basic education. Then, at
a need primarily for Ph.D.s, but also master's-level grad-
the minimum, this person needs 2-5 y to attain some
uates. The national laboratories are feeling the effect.
Ph.D.s are in short supply, and the major universities
experience to even begin to fill your position.
are affected. Health physicists who have administered and
We have a responsibility to society to see that our
championed programs across the country are retiring;
profession continues to exist and that it continues to per-
others are being promoted to higher level positions at uni-
form at the highest possible scientific level. There are many
versities or are leaving for higher paying positions in in-
other ways to assure this. Funding is one. The U.S. DOE
dustry, significant positions in government, and influential
is certainly responding to this need by establishing many
positions in scientific organizations. Who is replacing
health physics and health physics-related fellowship pro-
them? It takes a long time in the pipeline to produce a
grams. The Institute of Nuclear Power Operations (INPO)
Ph.D. When they are not replaced, what happens to a
has provided fellowship support for years. The Health
one- or two-person faculty at a formerly productive-
Physics Society provides funding assistance in a number
from a health physics point of view-university? It may
of ways. Chapters and individuals also encourage students
disappear.
by providing financial assistance.
What can we do about the problem? We have to stage
There are many other approaches to solve our prob-
a multi-faceted approach.
lem. I believe that once we all agree a problem does exist,
The first long-term approach with which I have been
solutions will be forthcoming at the grassroots level.
challenging chapters in my chapter visits is to establish a
Whatever individuals or chapters do will impact the total
"friendship" with 4-y colleges in their geographic area.
picture.
As health physicists, we must visit the science (especially
Let's use our best initiatives, work relentlessly, and
physics), math, and engineering departments and offer
be creative, aggressive, and positive to keep that pipeline
to present seminars on topics in the radiation field. We
full!
August 15, 1990
Phone: 833-3526
Hi Andy --
I'm enclosing FYI a copy of a letter I've written to Ron Kaufman,
expressing my disappointment that I wasn't considered for a
DAS position that soon will become vacant in the State
Department's Human Rights Bureau. I've appreciated very much
your encouragement and support during my long-standing efforts
to get back into a political position at State. If there is
anything you can do to get Presidential Personnel to take a
fresh look at this case, I would be very grateful.
Many thanks and best wishes.
Dave
-- David Matthews
730 24th Street, N.W., #418
Washington, D.C. 20037
August 14, 1990
Mr. Ronald C. Kaufman
Deputy Assistant to the President
The White House
Dear Ron:
As you suggested in our phone conservation today, I'm sending
you this note with a copy of my resume. I have appreciated
very much your encouraging words during the past year, when
I was in touch with you and Andy Card about obtaining a position
in the State Department. You'll recall that prior to the Bush
Presidential campaign, I was a career Foreign Service Officer
for a number of years, with assignments in international human
rights, political-military affairs, public affairs, etc.
In view of my background and interests, when I learned last
week that Paula Dobriansky, currently Deputy Assistant Secretary
in the State Department's Human Rights Bureau, was moving on
to a position at USIA, I naturally was very much interested
in the job she would be leaving. Back during the 1988 campaign,
I had met with her boss, Assistant Secretary Richard Schifter,
on human rights issues for use in George Bush's campaign
speeches, and I drafted numerous human rights issues papers
during the campaign for use in those speeches.
I immediately communicated my interest in the Human Rights job
to State's White House Liaison Office, which has been on the
lookout for a position for me for over a year. It promised
to send my resume to Ambassador Schifter. I also was able to
get in to see Ambassador Schifter earlier today, upon his return
from an overseas trip. Unfortunately, however, he had to inform
me that two weeks ago the White House already had decided upon
a replacement for Paula.
I'm sure, Ron, that you can understand my disappointment on
learning that news. I don't know who Paula's designated
successor will be, and I assume that he or she will be well
qualified. However, I can't help wondering how that individual's
background in human rights and foreign affairs compares with
my own 25 years of experience.
You indicated that the decision on the new DAS probably is a
"done deal". If it is not yet chiseled in stone, however, I
would very much appreciate it if the matter could be reopened,
SO that someone could take a look at my own qualifications.
The DAS position in State's Human Rights Bureau is one for which
I believe I would be extremely well qualified.
Thanks very much for your assistance, Ron. Best wishes.
Sincerely,
Daue
David Matthews
CC. Andy Card
8/25/90
andy -
+ wanted to enclose a copy of my
latest letter to Ron Koufman. I'm sure
Ron will continue his efforts to find a
position for me, and & appreciate very
much your support also.
Dest wishes.
1
-Dave
Document Originally
Attached to
Following Page
730 24th Street, N.W., #418
Washington, D.C. 20037
August 25, 1990
Mr. Ronald C. Kaufman
Deputy Assistant to the President
The White House
Dear Ron:
Thanks very much for your letter of August 22. Even though
it may not be possible to succeed in reopening the matter of
the DAS position in the State Department's Human Rights Bureau,
I do appreciate very much your extraordinary efforts to see
if something can be done.
After seeing that position filled as it was, bypassing the usual
White House procedures, before I was even aware of its
availability, I decided to check with some of my contacts in
the State Department, to see if they might be aware of anything
else opening up. I did hear about another vacancy, but on
checking that out with Catherine Keller, I learned that someone
else already is scheduled to move into that position also.
The position is in State's African Bureau, a DAS job which Kevin
Callwood previously filled, and for which Leonard Robinson is
the nominee.
You may recall from my resume that I previously was regional
coordinator for Africa in State's Human Rights Bureau, and in
addition, I have served in State's African Bureau as desk officer
for southern African affairs. I understand that Leonard
Robinson also has an extensive background in African affairs,
and has previously been a DAS in the African Bureau.
Consequently, I assume that his nomination will proceed without
a hitch. However, in the event that some problem does arise,
I would appreciate it if you would keep me in mind as an
alternative candidate.
Obviously, it will be great, Ron, if you can spring loose the
Human Rights DAS position. If that doesn't succeed, however,
I'm sure there will be other DAS-level positions coming along
at State, ACDA, or DOD. I would appreciate it very much if
you could put me on your priority list for filling such positions
when they do come open. I really would like to feel that at
last I am making a contribution to the foreign policy of the
Bush Administration.
Many thanks for your assistance, Ron, and best wishes.
Sincerely,
Done
David Matthews
CC. Andy Card
AUG-16-90 THU 6:39
P.01
BRYAN
United States Congress
August 15, 1990
The White House
Washington, D.C.
Att: Andy Card
Dear Andy,
As a Republican candidate for U.S. Congress from the 10th
District, carefully. I have studied the new oil spill bill very
I agree with the President that the unlimited liability
provisions of the bill are counterproductive and will lead to
the potential for ever more spills, as "fly by night" (or
"sail by night") operators begin to carry more oil while
large, reputable tanker companies leave the U.S. market.
Therefore, I urge you to ask the President to veto the
legislation and send it back to Congress. The bill would be
excellent if we limited to the liability to the requirements
of current international treaties.
Lastly, I hope that, when a bill is signed, the President
WILL NOT have a signing party, with great fanfare, that will
benefit my opponent Mr. Studds.
Thank you for your consideration.
MA-10 Jan
Jon Bryan
P.O. Box 88 - Osterville, MA 02655 508-428-8765
Paid for by Bryan for U.S. Congress
THE WHITE HOUSE
WASHINGTON
Ms. Barbara J. Sinnott
President
Better Business Bureau of Central
New England, Inc.
Post Office Box 379
Worcester, Massachusetts 01601
THE WHITE HOUSE
8/9/90
Barbara- Thank you for your letter.
I will pusl to All what
can be done about the
Oct. 14-17 event.
The photo is in - the Andy works!
BBB
BETTER BUSINESS BUREAU OF CENTRAL NEW ENGLAND, INC.
32 Franklin Street
508/755-2548
P. O. Box 379
Worcester, Massachusetts
01601
August 6, 1990
Mr. Andrew Card
Deputy to the Chief of Staff
The White House
1600 Pennsylvania Avenue
Washington, D.C. 20500
Dear Andy,
The Council of Better Business Bureaus Inc. will be again holding its Annual
Assembly in October 1990 in Dallas, Texas. I am presuming on our long
friendship to enlist your support in securing an appearance during the
Assembly by President Bush if that is at all possible.
You may recall my making a similar request last year when it was in Seattle,
WA. Scheduling didn't allow it then, but the telegram sent was so warmly
received that the words conveyed by President Bush were incorporated with
pride into the Annual Report.
I've enclosed a copy since you and I both enjoy having our efforts bear
positive fruits for our cause.
A letter of invitation has been sent to the President by Council president
James H. McIlhenny to see if sometime during October 14th -17th there is
any possibility of his greeting the national assembly in Dallas. It was sent
to the attention of Joseph W. Hagin, Deputy Assistant to the President for
Appointments and Scheduling. You should also receive a copy of the letter.
I hope you can be of assistance in this matter. Only a personal touch such
as yours can propel such a request to the point where an effort will truly
be made to incorporate this event into the official schedule.
11
By the way, my wall is still waiting for the hand signed photograph you were
going to send me of the President. As I told you, the other one I had of
him with me was lost in a fire SO a replacement is needed to join Presidents
Nixon, Ford and Reagan.
I know the picture can be handled easily, but I'll call you in a couple of
weeks to see if there is a chance of a stop by in Dallas in October.
Warmly,
Bastaro Delinnott
Barbara J. Sinnott
President
Enclosure
CC: James H. McIlhenny, CBBB president
BBB
COUNCIL OF BETTER BUSINESS BUREAUS, INC.
®
..
James H. McIlhenny
President
August 6, 1990
Mr. Joseph W. Hagin
Deputy Assistant to the President
for Appointments and Scheduling
The White House
1600 Pennsylvania Avenue, N.W.
Washington, D.C. 20501
Dear Mr. Hagin:
I enclose a letter to President Bush for your consideration. Of course we
can assure you that our schedules can be arranged for the convenience of
the President.
With all the current pressures of office on the Executive I realize that
there are many demands upon President Bush's time. We offer an opportunity
to him to speak to the only organization in the country totally supported
by businesses (large and small) which is dedicated to the protection of
consumers and the vitality of the free enterprise system.
It would be our honor to have the President as our most illustrious guest.
Regards,
James
JHM:avw
Encls
CC: Ms. Barbara Sinnott, President
BBB of Central New England, Inc.
Mr. Andrew Card
Deputy to the Chief of Staff
4200 Wilson Boulevard
Arlington, Virginia 22203-1804
(703) 276-0100
FAX (703) 525-8277
BBB
COUNCIL OF BETTER BUSINESS BUREAUS, INC.
®
James H. McIlhenny
President
August 6, 1990
President George Bush
The White House
Washington, D.C. 20500
Dear President Bush:
The Council of Better Business Bureaus will hold its Annual Assembly in
Dallas, Texas October 14th through October 16th. We were especially
delighted to have you recognize last year's Assembly in your letter and
quoted from it in our 1989 Annual Report.
Now I respectfully invite you to appear at the 1990 Assembly - of course
as our honored guest. You might want to join us at South Fork for a
Bar-B-Que on Monday evening October 15th or at the Fairmont Hotel any time
during the Assembly schedule.
As the preeminent business self-regulation system in America we know we
have your support. We would like to give you the opportunity to touch base
with Bureaus and the Council who collectively represent 250,000 businesses
across the country. We'd be proud to have you.
Sincerely,
4200 Wilson Boulevard
Arlington. Virginia 22203-1804
(703) 276-0100
FAX (703) 525-8277
Call arbogret
Andy -
I don't think this will fly through
the correspondence unit. There is
no reason/occasion/event to tie a
message in with.
katie
Document Originally
Attached to
Following Page
The Commonwealth of Massachusetts
PETTIT
AUDITOR OF THE COMMONWEALTH
ONE ASHBURTON PLACE, ROOM 1819
A. JOSEPH DENUCAC
HAS SEEN
BOSTON, MASSACHUSETTS 02108
TEL. (617) 727-6200
AUDITOR
July 27, 1990
Mr. Andrew H. Card, Jr.
Deputy to the Chief of Staff
The White House
Washington, D.C. 20500
Dear Andy,
Enclosed is a clipping from the Quincy Patriot Ledger about your friend
and mine, June Alfano. If at all possible, could you arrange to have the
President and/or Mrs. Bush drop her a note to commend her for all of her
tireless and beneficial volunteer work. June's husband, Domenic works for us,
and I would like to present this to them. Please send this to me at my office
at:
Office of the State Auditor
One Ashburton Place, Rm. 1819
Boston, MA 02108
ATTN: Cynthia Keane
Best personal regards.
Sincerely,
Bob Thanks!
Bob Powilatis
RAP/CAK
Enclosure
PS. Sorry I missed Ron at the Convention in
Springfield. It was interesting to say the
least. If you would like to chat about this
and other goings on here in Mass., give me a
call. I know how you are.
PSS. David will be attending Georgetown Univ.,
starting this fall, and I will be making
frequent visits to see him; maybe all of us
can get together.
2030 2AH OA
8
The Patriot Ledger, Mon., July 23, 1990
NEWSMAKER
Gary Higgins/The Patriot Ledger
June Alfano is the former president of the
State Federation of Women's Clubs.
Women's club leader
likes fighting for cause
By Peter Halesworth
The Patriot Ledger
G
etting to know June Alfano takes more than
one look.
First there's Alfano the fiery Canton
planning board member, mercilessly berating law-
yers and developers at meetings.
"Some of the ways I did speak I was afraid some
people would throw a rock through the window,"
Alfano said, recalling threats she received during
first year on the board. "I feel I'm an honest
representative of the people, not on the take, not
implying others are, but sometimes elected officials
lean towards those supportive of them."
Bush Library Photocopy
Then there's Alfano the recently-retired presi-
dent of the 16,000-member State Federation of
Women's Clubs, visiting nursing homes and sing-
ing at club meetings.
"I think that's in us, particularly in women,"
Alfano said of her work on behalf of others.
Alfano says her both her and tender sides are
part of her instinct to give to others.
"I'm the type of person that I hate to do things
for myself," she said.
That got in the way of her dream of being a
professional sing-
er. Alfano said she
June Alfano
knew she couldn't
battle for herself.
Age: 63
But these days she
Home: 12 Woodlock
battles for others,
Road
always volunteer-
Raised: Winthrop
ing to organize
Occupation:
people to improve
Volunteer organizer
their quality of life.
Family: Husband,
"I love to fight
Domenic, three grown
for a cause," Al-
children, Mario, Paul
fano said. "My fa-
and Carla
ther (Mario Di-
Education: Attended
Troia) was in law,
Boston University
and maybe that's
Hobbies: Singing,
where this fighting
reading
business comes in,
this sense of de-
mocracy."
Alfano's been
around for many town hall battles over land use
including those involving Codex, Towermarc and
Instron.
Leading townspeople against the positions of her
fellow officials is a role she is comfortable with,
despite the isolation she sometimes feels among her
town government colleagues.
When she first came on the planning board,
Alfano said a town official sent her a letter telling
her to "keep your mouth shut."
Alfano told her colleagues about the letter but
received no support for confronting the sender, she
said.
"It was uncomfortable at times," Alfano said. "I
just put it out of my mind when they didn't support
another member. But now the board has changed.
We work wonderfully together."
Running for her second five-year term on the
board in 1989, Alfano received a card that said
"Please lose."
Compared to town government, Alfano's two
years as president of the State Federation of
Women's Clubs was mellow.
She has visited 160 of the 226 women's clubs in
the state, sparking interest in the various programs
offered by the federation to enrich women's lives
and those of other people.
"It's all about self-enrichment, to educate our-
selves about what's going on, but also to provoke
and encourage citizens to improve their quality of
life."
Alfano joined her mother, Rose, in the Winthrop
women's club in 1958, and has been a part of a club
ever since for the camaraderie. Moving to Canton
23 years ago with her husband, Domenic, she
immediately joined the Canton Community Club.
By 1969 Alfano was serving on state federation
committees. By 1974 she was treasurer for four
years. In 1982 Alfano became second vice president
of the federation, and by 1988 she was president.
She started her climb up the federation ladder
with her customary splash, leading a floor fight to
change a bylaw to allow nominations from general
members on the floor at the convention. She won
Bush Library Photocopy
the fight and the bylaw was changed.
Meanwhile, she had been president of the
Women's Italian Club of Boston, first vice presi-
dent and treasurer of the Professional Women's
Club, and a member of the Lunenberg Woman's
Club
But Alfano prides herself in putting her family
above all her community activities.
"I never put them on the back burner," Alfano
said. "I neyer forgot the family. I always tried to get
home for dinner time."
Alfano is still involved in community affairs.
Now she is president of the local St. Catherine of
Siena club.
"This country would fall apart if there were no
volunteers," she said.
Bush Library Photocopy
THE WHITE HOUSE
WASHINGTON
August 10, 1990
Dear Elizabeth,
Thank you for your letter and resume.
After much deliberation, I have made a decision
with regard to the staffing of the available
position.
I appreciate, however, your interest.
With best wishes,
Sincerely,
Andrew Andy Card H. Card, Jr.
Assistant to the President and
Deputy to the Chief of Staff
Ms. Elizabeth P. Schmidt
603 Queen Street
Alexandria, Virginia 22314
the
AC HAS SEEN
August 3, 1990
Mr. Andy Card
Assistant to the President and Deputy Chief of Staff
The White House
Washington, D.C. 20500
Dear Andy,
I wanted to write a brief note to pass on my resume to you, and
to express my interest in the Staff Assistant position currently
available in your office.
As Director of Publications for the 1990 Economic Summit of
Industrialized Nations, my primary responsibility was to
communicate all background information to the media and
delegations attending the Summit through three different briefing
handbooks. I was responsible for the coordination of both the
media and delegation schedules, the Final Communique, and also
served as Executive Editor of "The Economic Summit - A Pictorial
History," a copy of which I have attached.
I believe that with this experience, coupled with my prior
experience in the White House, I would be an asset to your staff.
I realize that things are more than busy at this time for you,
but I would hope to meet with you at your earliest convenience.
I do appreciate your time and consideration.
With warm regards,
Schmidt
Elizabeth Penniman Schmidt
Withdrawal/Redaction Sheet
(George Bush Library)
Document No.
Subject/Title of Document
Date
Restriction
Class.
and Type
01. Resume
Re: Elizabeth Penniman Schmidt. (1 pp.)
n.d.
(b)(6)
Collection:
Record Group:
Bush Presidential Records
Office:
Chief of Staff, Office of the
Series:
Card, Andrew H., Jr., Files
Subseries:
WHORM Cat.:
File Location:
AHC General Correspondence June-August 1990 [5]
Date Closed:
3/14/2025
OA/ID Number:
04012-006e
FOIA/SYS Case #:
2025-0373-S
Appeal Case #:
Re-review Case #:
Appeal Disposition:
P-2/P-5 Review Case #:
Disposition Date:
AR Case #:
MR Case #:
AR Disposition:
MR Disposition:
AR Disposition Date:
MR Disposition Date:
RESTRICTION CODES
Freedom of Information Act (FOIA) [5 U.S.C. 552(b)]
Deed of Gift Restrictions
(b)(1) National security classified information
C(1) Closed by Executive Order 13526, governing access to national
(b)(2) Release would disclose internal personnel rules and practices of an
security information
agency
C(2) Closed by statute or by the agency which originated the information
(b)(3) Release would violate a Federal statute
C(3) Closed in accordance with restrictions contained in donor's deed of
(b)(4) Release would disclose trade secrets or confidential or financial
gift [formerly listed as only C]
information
PRM. Removed as a personal record misfile
(b)(6) Release would constitute a clearly unwarranted invasion
of personal privacy
(b)(7) Release would disclose information compiled for law enforcement
Presidential Records Act - [44 U.S.C. 2204(a)]
purposes
(b)(8) Release would disclose information concerning the regulation of
P-2 Relating to the appointment to Federal office [(a)(2) of the PRA]
financial institutions
P-5 Release would disclose confidential advice between the President and
(b)(9) Release would disclose geological or geophysical information
his advisors, or between such advisors [(a)(5) of the PRA]
concerning wells
THE WHITE HOUSE
WASHINGTON
August 10, 1990
chet
Dear Congressman Atkins,
Thank you for bringing the work of Fink and Company
to my attention as well as their desire to present
a Margarete Steiff dolls to Mrs. Bush.
While I try not to intervene in the scheduling of
the First Lady, I will be happy to pass the
information you have provided to Ann Brock, her
Scheduling Director.
With best wishes for a restful recess,
Sincerely,
Andrew Ludy H. Card, Jr.
Assistant to the President and
Deputy to the Chief of Staff
The Honorable Chester G. Atkins
U.S. House of Representatives
Washington, D.C. 20515
bee: Ann Brock
THE WHITE HOUSE
WASHINGTON
August 10, 1990
Dear Rich,
Thanks for your letter and the materials from John
Rau. I appreciate you sharing this with me.
Unfortunately, I can no longer keep Linda out of
trouble. She has gone to the Department of
Commerce as Confidential Assistant to the Assistant
Secretary for Trade Development. Good for her -
bad for me.
Talk with you soon.
Sincerely,
Andrew tudy H. Card, Jr.
Assistant to the President and
Deputy to the Chief of Staff
Mr. Richard S. Williamson
Mayer, Brown and Platt
190 South LaSalle Street
Chicago, Illinois 60603-3441
MAYER, BROWN & PLATT
WASHINGTON
190 SOUTH LA SALLE STREET
312-782-0600
LONDON
TELEX 190404
NEW YORK
FACSIMILE:
CHICAGO, ILLINOIS 60603-3441
HOUSTON
312-701-7711
LOS ANGELES
TOKYO
RICHARD S. WILLIAMSON
312-701-7119
August 6, 1990
The Honorable Andrew H. Card, Jr.
Assistant to the President and
Deputy to the Chief of Staff
The White House
Washington, DC 20500
Dear Andy,
I enjoyed visiting with you. Once again, congratulations on
the Souter appointment. It's terrific for the Court, the country
and the President.
Enclosed are the materials, prepared by John Rau, which I
mentioned to you over the phone on the S&L problem. I have
enormous respect for John and think he provides some practical
insights that might be helpful to you and your colleagues in
trying to get a handle on this.
As I mentioned to you and have written previously, I do
worry about the S&L problem continuing to spin out of control and
cause real damage to the financial institutions and to the
President politically.
Once again, congratulations on Judge Souter. Please give my
best to Linda and keep her out of trouble.
Cordially
Richard S. Williamson
RSW/sk
Enclosures
LaSalle Banks
Address Correspondence to:
ABN
LASALLE
Salle National Bank
The Exchange National Bank of Chicago
,35 South LaSalle Street
120 South LaSalle Street
Chicago, Illinois 60603
Chicago, Illinois 60603
(312) 781-8500
John Rau
President
Chief Executive Officer
July 20, 1990
Mr. Richard S. Williamson, Esquire
Mayer, Brown & Platt
190 South LaSalle Street
31st Floor
Chicago, IL 60603
Dear Rich:
I am following up our conversation on what can
be done to minimize the damage from the S & L bailout
and the related need to restructure our financial
services sector from being a blight on the
administration and the economy.
As you suggested, I've jotted a few thoughts
down in summary form. As you'll see, I describe two
scenarios first to illustrate the sense I know you
share which is that there is nothing inevitable at
all about how this plays out. In fact, the range of
consequence between good policy decisions and bad
decisions or drift is amazingly wide.
The second section lists a few things that can
be done to help us reach the "good news" scenario.
While some of this may be novel thought, some are
obviously things that may have been suggested
elsewhere. Clearly, I believe one can not only
identify options that have more preferable
consequences than others but also be able to look at
and predict the impact of various overall
combinations of policy, regulation and practice. But
my sense is there is much less proactive thinking
going on and more reaction to the tug and pull of
vested interest and the battle to engage public
perception.
LaSalle National Bank
ABN
LASALLE
Speaking of public perception, a major factor in
managing through the crisis will be the ability to
give the American people an understandable credible
sense of how this all happened. In this context,
I'll add one frivolous sidelight. At least in terms
of the structure of the financial system, I may be
one of the few people in America who gets requests
for advice letters from Ann Landers. Her note to me
is attached; the background is that Ann (Eppie
Lederer) is a good customer and I am her "banker."
But she tells me that one of the most common question
she gets is "How did we get into the S & L mess?" My
response, which I've also attached, focuses on the
Congressional responsibility. The fact that she gets
this question a lot and that her editor is concerned
about her "taking sides" speaks a volume about the
need to address this. In any event, I hope these
musings are useful.
Best regards,
John
JR/jr
Attach.
Outline of Notes on
"The S & L Bailout--Nothing's Inevitable"
When dealing with commitments as large as the S & L bailout will
entail, it may be too easy to assume that events of this
magnitude will have their own inertia. We analogize to "the
bigger the battleship, the harder it is to turn."
But in thinking about the consequences of the S & L bailout and
the related restructuring of our financial system to keep it
strong and competitive on a world scale, there is nothing
inevitable about the consequences at this point in time. In
contrast to the "turning the battleship" comparison, the image I
think is much more apt is the "teetering boulder." Picture a
gigantic rock at the cliff-side edge of a broad plateau and
someone (the harried policy maker) leaning against it with his
back to the bolder and facing over the precipice. It will take
roughly the same amount of effort to push it over the cliff as to
roll it back across the plateau. But off the cliff will entail a
large uncontrolled explosion and immeasurable damage below (and
it may well sweep the policy maker over the edge with it). The
same boulder, pushed back onto the plateau will roll slowly,
disintegrate gradually and much less loudly. The issue is can we
see behind the rock to find this option rather than accept the
temptation to "get it off our backs" and let it head over the
cliff.
Scenario I - July 1995. Five years of steady economic growth
after the "pause of 1990" has eliminated the federal deficit and
led to a record low level of unemployment. The chroniclers of
economic history have pondered the reasons that the net costs and
effect of the S & L bailout were smaller and less disruptive than
anyone predicted.
U.S. banks and other financial institutions, having evolved into
an astonishing variety of specialties encouraged by flexible risk
based capital rules and disciplined by private co-insurance on
guaranteed federal deposits, have financed the major expansion of
U.S. firms into the new markets opened up in Europe and the
Pacific rim that a strong U.S. trade policy made possible.
Credit is readily available and inflation and interest rates are
low; U.S. investment has risen for 5 years. Not coincidentally,
the majority of failed thrifts were acquired by healthy banks,
thrifts and other financial institutions in "whole institution"
purchases that created strong incentives to collect troubled
loans and kept the amount of assets "put" to the RTC declining
every year.
Scenario II - July 1995. Financial markets are still waiting for
the end of the real estate recession of 1991. The RTC is now one
of the 10 largest financial institutions in the world. The
overhang of the properties it retains has prevented any
meaningful new real estate development or lending for five years.
Higher capital requirements mandated by the Fed and FDIC as
banks' real estate portfolios deteriorated prevented any
meaningful acquisitions of thrifts. The secondary real estate
markets have been virtually shut down. Foreign investors have
purchased huge amounts of land and commercial properties at
prices unmatched anywhere in the developed world.
Thrifts sold and recapitalized in 1989-91 are failing again in
record numbers. Inexperienced private operators, encouraged by
rules relaxed to attract bidders and the continued availability
of 100% deposit insurance, made new loans to build profitability
in the mistaken belief that had "called the bottom" of the real
estate markets. The head of OTS has revised upwards his estimate
of inherent losses four times in the last 15 months to over $450
billion.
The second Bush administration, which many believe won the
election only because the Democrats insisted that Louis Farrakhan
be slated as shadow Vice President, is paralyzed by huge deficits
and an economic system being purchased wholesale by foreign
interests.
Clearly, no one disagrees with what the goal of policy should be.
The disagreement, of course, is over what elements of policy will
achieve the desired ends and, equally importantly, what kinds of
changes can be negotiated in a world with complex political and
economic vested interests. If one had to identify a few key
changes that collectively would have the most beneficial impact
on achieving the kind of state described in Scenario I above,
they would, in my judgement, include:
1. Cut back government exposure on insured deposits both in
aggregate and in a way that puts market discipline into risk
taking activities. Of all the approaches to this dimension
of the problem that have been discussed, I am convinced that
the cleanest and most efficacious would be to institute a
haircut or co-insurance feature above the levels needed to
provide comfort to the "small depositor." The attached
essay (Tab 1) that appeared in the Wall Street Journal on
November 15, 1985 outlines this view. The basic notion is
that if above say $20,000 or $25,000 all deposits had a 5%
deductible, banks would need to respond by offering co-
insurance from the private markets in a way that would both
price and discipline risk taking. The conventional belief
is that this cannot be sold to the small independent banks.
I do not believe this "It's right but won't fly" attitude is
correct. If combined with modifications to risk adjusted
capital (see 2 below) that let the deposit taking local
banks have a capital advantage, as well as the elimination
of the "too big to fail" practice, I believe the small bank
part of the industry could be brought to accept this overall
approach.
2.
Insure that the risk based capital formulas become the sole
determinant of capital requirements for all banks. Current
stances by the Fed and FDIC have resulted in aggregate
leverage still being the dominant factor in determining
required capital levels. This has the perverse effect of
encouraging maximum risk taking at all levels of bank size.
This will not allow the small banks to specialize as they
must to survive. It will also hinder the evolution of large
banks into the specialty forms they will need to compete
successfully on a world basis. Achieving this end will
require strong leadership from the Administration since it
will require the natural tendencies of the regulatory and
insurance agencies to minimize their risk be overruled. But
as part of a broader fabric, the regulators' current policy
will result in the elimination of many of the small banks
that provide both the diversity and stability, as well as
the broader political base of our current banking system.
Current policy will give unnatural advantage to foreign
competitors whose regulators, at least, de facto, recognize
these kind of distinctions and have allowed their banks to
evolve in these directions. Again, I have attached (Tab 2)
a relevant article I wrote that appeared in the
August/September issue of Leaders Magazine that discusses
this point as part of the broader need to insure the
competitiveness of our financial institutions on a world
class basis.
The two items above will go a long way to insuring that there is
no repetition in the 90's of the thrift crisis of the 80's in
terms of unbridled risk taking and massive default costs
ultimately absorbed by the tax payer. The next two deal with the
more immediate issue of reducing the imbedded costs of the
current cleanup and also spreading it in a way that does not
engender political and economic ripple effect crises over the
next 2-4 years.
3. Resume the use of yield maintenance agreements as the
principal inducement for purchase and absorption of failed
institutions. By this I mean that rather than the
government paying the gross cost of purchasing defaulted
assets, our agreements with acquirors should focus on the
carrying cost of holding and liquidating problem loans. And
we should make the spread subsidy variable with the level of
interest rates since this is the real economic cost incurred
by someone who acquires a portfolio of problem loans. The
other positive effect beyond having the government outlay be
limited to the net cost is that in sluggish economic times,
with low interest rates which would tend to be periods of
higher natural federal deficits, the yield maintenance costs
would decline.
4.
Encourage healthy institutions to purchase "complete" failed
thrifts by tying asset "puts" to deferral of capital ratio
targets. Right now no healthy bank or thrift is willing to
buy a problem thrift in toto (or is able to rationally
outbid a non-institutional buyer of thrift deposits) because
they face the extreme cost of immediately complying with
increased capital minimums. The fallacy in this approach is
the belief that it is the current existence of capital that
protects the insurance fund. In fact, as long as there is
wherewithal and obligation to bolster capital as needed, the
pool runs little risk. A more graphic example of this is
the financing of Lloyds of London insurance syndicates.
While the call on syndicate members capital is unlimited,
they put up no cash to join.
The government should want healthy institutions to buy
failed or failing thrifts in toto for three reasons:
-
Institutional buyers can factor in synergies in bidding
premiums.
-
Whole institution purchases put problem assets in hands
with every incentive to hold and collect only as
maximum value can be achieved.
-
Institutions with strategic goals will be more likely
to invest in new products and maintenance of market
share than purchasers focused on "milking" franchises
for short term profit and resale.
We should combine the concept of net yield maintenance
(treating purchased problem assets as pools on which there
will be no earnings for say 5 years and subsidizing only the
difference) and a policy telling institutional purchasers of
"whole" institutions that their obligation to add the equity
needed to support the purchased assets and deposits will
need to be funded only after 5 years or when assets that
can't be collected are "put" to the insurer, whichever comes
first. While capital will still be added as needed, the
government's outlays are deferred without increasing risk to
the insurance fund.
An example of yield maintenance with capital linked "puts"
shows the differences compared to current practice.
Assumptions: $1.0 billion dollar institution fails with
$100 million negative net worth, i.e. $500
million in performing loans and $500 million
in non-accrual loans worth $400 million and
deposit obligations are $1.0 billion.
Loans are collected over 5 years, 20% per
year, 10% interest factor used for ease of
calculation.
Case 1:
RTC seizes institution and handles asset sales
itself.
Year 1
2
3
4
5
RTC Outlay
$1 Bil.
Interest on Funds
100
80
60
40
20
RTC Inflows
180
180
180
180
180
Interest Income
50
40
30
20
10
Net Outflow
(870)
Inflows
140
150
160
170
5 Year Net Outlay: $250
Case 2:
RTC pays full institution purchaser carrying costs
on non-performing assets and pays net losses after
5 years collection efforts
Year 1
2
3
4
5
RTC Outlay
- Yield Maintenance
(50)
(40)
(30)
(20)
(10)
- Final Put
(100)
Net Outlay
(50)
(40)
(30)
(20)
(110)
5 Year Net Outlay: $250
In this very simplified example, the 5 year net outlays are the
same, i.e. $250 million. But the pattern is quite different.
Equally significant is that to the extent the private sector pays
more for full franchises, gives a value to changing the timing of
meeting capital calls and/or is more effective in getting higher
and more accelerated loan collections, then net costs become less
as well.
As with most complex systems, the 80-20 rule applies. There are
obviously many other factors involved and a meaningful range of
trade-offs that can improve the situation that exists today. But
application of these four general thrusts will be 80% of the
battle in insuring that, by the mid 1990's, the S & L crisis will
be a history lesson and not headline news.
TAB 1
_reprinted NOT PERMITTED
from THE WALL STREET JOURNAL.
ISSUE OF NOVEMBER 15, 1985
Putting the Squeeze on Small Banks
By JOHN RAU
emphasis, etc.) in which smaller institu-
tries extended by the larger institutions.
The only good bank is a big bank.
tions have traditionally been stronger.
Treasury Secretary James Baker has an-
That's not what politicians and policy
This was a price, however, that many
nounced a plan, endorsed by Mr. Volcker
makers are saying, but it seems to be what
small banks were willing to pay for the op-
at the ABA convention, to keep these Third
they believe if you look at the impact of
portunity to compete more effectively on
World loans current by encouraging banks
their actions on small banks. Federal Re-
their own terms. But they made the mis-
to advance additional funds to pay the in-
serve Chairman Paul Volcker's pronounce-
take of assuming that deregulation meant
terest that is due. By pressuring the big-
ments at last month's American Bankers
just that, less regulation, not more.
gest lenders to increase their total lending
Association convention in New Orleans
They also assumed that the regulations
to the Third World by more than $20 bil-
have simply strengthened my conviction
remaining in force would be administered
lion, regulators will then make it impossi-
that this partiality exists.
evenhandedly. But deregulation, as it has
ble to apply the same credit-rating stan-
Since the days of Thomas Jefferson, the
evolved over the past few years in bank-
dards that they impose on smaller
political consensus in this country has been
ing, has meant disproportionately higher
banks.
that individual banks should be kept small
costs of doing business for small banks.
Like deregulation in the securities in-
to avoid concentrating credit-granting
Probably the most obvious example of
dustry and, more recently, with the
power, especially in the hands of the gov-
favoritism toward large banks has been in
breakup of the American Telephone &
ernment. It is only in the past five years
Telegraph Corp., banking consumers are
that the cumulative effect of public policy
finding that it was the smaller consumer
has shifted to a clear and substantial fa-
Current regulations, in
who had been getting a subsidy from
voritism toward big banks-a favoritism
larger customers. The principal effect of
that is especially lethal at a time when
favoring large banks, are
deregulation has been an increase in retail
small banks are under severe competitive
pushing the system toward
prices as the subsidy to small depositors
pressures from geographic and pricing de-
has been withdrawn. If this were the only
regulation.
centralized control of the
effect, it would have been a good one, re-
I believe this favoritism, in conjunction
flecting the true costs of services. But the
with deregulation's other pressures, will
flow of credit, a condition
implicit and explicit regulatory favoritism
lead first to the consolidation of the indus-
that hurts big and small
toward big banks, on top of the normal
try, and then, inevitably, to substantially
pressures of more competitive markets,
greater control over credit allocation by
banks alike.
will drive banks to consolidate, and many
the government. The obvious irony of all
small banks will fail.
this is that while big banks benefit from
deposit insurance. While theoretically only
What complicates the picture in bank-
this favoritism in the short run, they too
deposits up to $100,000 are insured, in prac-
ing is that the government has implicitly
stand to lose substantial control over their
tice, depositors in those banks deemed
assumed the responsibility not just for pro-
destinies should the balance shift toward
"too big to fail" have found their unin-
tecting small depositors, but for keeping
government credit allocation. I believe pol-
sured deposits effectively free of risk. De-
the banking system itself stable. In years
iticians fully understand where this is all
positors in those small banks allowed to
past, this task was a very limited one be-
headed and that, as long as no one resists,
fail have enjoyed no such security.
cause the existing regulatory framework
they are perfectly willing to be thrown into
Another set of recent policies whose ef-
guaranteed the system's stability. As this
the "briar patch" of greater government
fect has been to discriminate against
scaffolding has been taken down, it puts
involvement in the credit markets.
smaller institutions is the push for higher
regulators in a bind. Regulators are trying
Whether the politicians are acting un-
wittingly or not, one must ask whether this
capital ratios, billed as a shift toward a
to prevent failures in a system that politi-
more consistent set of capital ratios. In
cians have legislated into a form guaran-
is what the consumers and the banks
practice, this means that large institutions
teeing an increasing number of failures.
(whether large or small) thought they
that can borrow in the public market will
Now the script is predictable. Politi-
were buying when they supported deregu-
be able to meet the new capital levels with-
cians blame the regulators for not having
lation. I, for one, don't think there's any
out slowing their growth, whereas the
done well to stem the tide of bank failures.
question about the answer to that.
smaller institutions, whose only realistic
This is no more rational than an architect
Willing to Pay Price
source of capital is retained earnings, will
blaming a maintenance crew for water on
The effect of public policy since the late
find that they will have to stop growing to
the floor when he's designed a building
1970s has been to clearly favor large finan-
catch up to the new minimums and give up
with holes in the roof. Of more concern is
cial institutions over small. The shift really
market share to larger firms.
when the politicians decide that they need
began with the first pieces of "deregula-
Along with the push for higher capital
to exert much more influence over the aft
tion" legislation. I use quote marks be-
has come an even more insidious set of
fairs of the fewer remaining institutions
cause a system in which government de-
practices that penalize small banks. When
since "they can't all be allowed to fail" or
posit insurance plays a meaningful part
banks that lend to consumers, farmers and
"the flow of credit needs to be monitored
will never be truly deregulated. Nonethe-
small businesses have credit problems, the
by more than a few private bankers." This
less, the effect of "deregulation" has been
regulators require that the potential losses
risk alone ought to be enough to make big
to move the basis of competition onto those
be charged off against earnings, which fur-
banks wary of the "Trojan Horse" of regu-
parts of the playing field (economies of
ther reduces the bank's capital. Banks
latory favoritism.
scale, price, technological product develop-
must either replace these charge-offs with
An instrument to disguise this perni-
ment) in which the larger institutions ex-
new capital or shrink the level of credit
cious trend is already being discussed un-
cel, and away from those aspects (per-
they can provide. The exception' to this
der the innocuous designation of "risk-
sonal service, convenience, community
practice is made for loans to foreign coun-
based" capital ratios. At last month's ABA
DOW JONES REPRINT SERVICE
P.O. BOX 300
PRINCETON, NEW JERSEY 08540
Reprinted from The Wall Street Journal.
Dow Jones & Co., Inc. 1985
DO NOT MARK REPRINTS
convention, Mr. Volcker revealed that he
tem than higher capital ratios and
would soon support a program of this kind,
wouldn't be biased in favor of big banks.
and that the Comptroller of the Currency
And a limit on the aggregate dollars of in-
was working on a similar plan. Such pro-
sured deposits in any one bank would not
posals would adjust a bank's capital ratio
only deal with the concentration issue but
based on the regulators' evaluation of risk.
would help avoid creating banks in which
While pitched as a means to discourage
the government's stake was too large to let
banks from engaging in high-risk activi-
a failure occur.
ties, this kind of scheme will inevitably be-
I've made the case that our current reg-
come a point system for substituting politi-
ulatory framework, in favoring large
cal judgments of credit-worthiness for
banks, is accelerating the consolidation
those made by the market. For example,
process and pushing the system toward
can anyone imagine that the Fed chairman
centralized control of the flow of credit, a
would argue for higher insurance pre-
condition that hurts big and small banks
miums on student loans than on loans to fi-
alike. Politicians may have seen this com-
nance corporate mergers, regardless of
ing, but I don't think many consumers or
how one might rank them in terms of rela-
bankers imagined this was where deregu-
tive risk?
lation would lead. My fundamental con-
cern is with the political implications of
Cut Back Government Role
such an outcome. But I also think that the
Is there a way to derail the drive to-
U.S. would be better served by a diverse
ward this greater political control? Al-
financial system composed of institutions
though modern technology precludes a re-
of varying size, ensuring that all con-
turn to the old system of geographic and
sumers of financial services would have
functional decentralization, we can take
choices commensurate with their needs.
the first step forward by eliminating the
And, unfettered, I think the market would
rationale for political involvement.
probably support this diversity. Instead,
Specifically, I would propose a substan-
the market's natural forces are being
tial cutback in the government's role in
thwarted in a way that will continue to
implicit as well as explicit deposit insur-
take the leverage over the credit-granting
ance. A variety of approaches designed to
system farther away from the general pub-
remove the government's incentive for
lic and closer to the "banks" of the Poto-
meddling with the system is being dis-
mac. This can't be good for the U.S.
cussed. My own formulation would be to
institute a 5% "deductible" on insured de-
Mr. Rau is president of the Exchange
posits between $20,000 and $100,000. This
National Bank of Chicago, a $1.3 billion in-
would add a lot more discipline to the sys-
stitution.
TAB 2
F
CUS
GLOBAL BANKING SURVIVAL TIPS
Global Banks:
tance is now a barrier to the delivery
Ultimately, though, it will not be
of most kinds of financial services. Na-
raw size or global reach but product
tional boundaries will become invisi-
quality in each business segment that
Surviving In A
ble in the next 10 years, much as
dictates the winners and losers. The
county and state boundaries have been
new international risk-based capital
superseded by both law and technolo-
rules not only help level the playing
Tough New
gy in the last 10 years.
field but provide the framework to al-
The other major trend, which I
low the restructuring to happen.
believe entails an equal risk of being
Specifically, in many countries
Neighborhood
self-deceptive, is that of larger banks
current capital rules require banks to
evolving into financial department
hold the same amount of capital for a
stores. They argue that shrinking mar-
given asset base, regardless of the
gins can be offset by selling more
composition or riskiness of the asset
By John Rau, President and CEO,
products to the customer base with
portfolio. This creates an enormous in-
LaSalle National Bank, Chicago
whom they have a relationship. The
centive for banks not only to take on
risk is, of course, that for each product
higher levels of risk in their asset port-
A POINT OF PRIDE AMONG MANY
on their shelves there are global finan-
folios but also to fully utilize both
successful, self-made businesspeople
cial institutions offering lower costs,
sides of the balance sheet, taking in
is that they grew up in tough neigh-
more experience and/or more refined
deposits and lending funds, even if
borhoods. As globalization increasing-
the bank is not equally adept at both.
ly creates a single world market for fi-
As an example, a bank particularly
nancial services, many of the world's
well-suited to gathering low-cost de-
banks-even those that define them-
posits can make a nice profit by resell-
selves as neighborhood, regional or
ing or investing those deposits in in-
"one-country" banks-will find that
terbank funds, securities or even cor-
their "neighborhoods" are in fact get-
Regardless of size,
porate bonds. But whatever profit it
ting a lot tougher and that surviving
the next decade will be a well-earned
all banks need
makes from its deposit-raising activity
can be enhanced if the bank also be-
distinction.
to think in terms
comes a direct generator of loans,
Conventional wisdom has it that
since it has to maintain the regulatory
the globalization of economic flows is
of restructuring
capital base anyway. The short-term
of primary concern only to those man-
economics are compelling in that the
ufacturing companies with internation-
by business segment.
"second" use of this capital is free.
al operations or competitors. By impli-
But, over the long term, current capi-
cation, somehow, the service sector is
tal requirements tempt all banks to try
presumed exempt from global compe-
to be all things to all people and ne-
tition. What is now becoming clear,
glect the particular lines of business
however, is that globalization trends
each bank finds most profitable. The
will have comparable impact on such
result is a flaccid banking industry in-
service-sector institutions as banks, in-
sulated by national borders and ill-
cluding those that describe themselves
advanced systems. So, whether exist-
prepared for the pressures of global
as "regional" or "community" banks.
ing relationships will entice consum-
competition.
In fact, large banks that have failed to
ers to accept inferior product when
On the other hand, successful
profit by global or even national ex-
specialty shopping gets easier and eas-
banks in the global neighborhood will
pansion now proudly describe them-
ier remains to be seen. Clearly, the
restrict their operations to activities
selves as super-regional or "mega"
risk is the same as that faced by tradi-
that are cost-competitive and offer cus-
regional, as if that changed descrip-
tional department stores who lost their
tomers added value. Rather than focus-
tion exempts them from the forces
electronics/housewares business to
ing on the geographic expansion and
that pushed back their original
the discounters and their apparel busi-
contraction that characterized the
ambitions.
ness to the chains and boutiques.
banking strategies of the '60s, '70s and
Within the next tier of banks, the
And these phenomena are at work
'80s, successful banks in the 90s will
same form of self-deception also oper-
all over the globe. Western European
do more to build areas of expertise,
ates. Small banks invoke "neighbor-
banks are merging to serve a United
buy and sell lines of business and
hood ties," "community involvement"
Europe and cut costs to face larger
strip away unprofitable activities.
and "local market expertise," as if
competitors. U.S. banks are merging to
The key question is what these
this will serve to immunize them from
cover even larger regions. And interna-
new banks will look like and how they
the powerful global winds blowing
tional acquisitions are becoming in-
will differ from today's national, re-
through their neighborhoods. The re-
creasingly common as banks try to
gional and community banks. Given
ality is that neither geography nor dis-
serve clients across several continents.
the opportunity, at least five bank
LEADERS 81
Global Banks: Surviving In A
Tough New Neighborhood
John Rau
"success profiles" will emerge, which
the business unit level. The world will
pertise. And both reasons make it
might be called asset originators, asset
be too ruthless to support the shared
more likely that many of these banks
servicers, financial product factories,
costs and unallocated overhead that
will become either wards of the
deposit gatherers and portfolio
can "hide" marginal profitability on
F.D.I.C. or terminal cases at the tax-
managers.
some lines of business. Business unit
payers' expense.
Asset originators will be those
managers will be given direct authori-
U.S. legislators and regulators
banks most skilled at maintaining rela-
ty over all parts of their activities. Cen-
must therefore beware of throwing ob-
tionships with a class of customers
tralized support units will be broken
stacles in the path of an evolution in
(whether business or consumer) that
up. And control will replace scale effi-
banking that is vital to the industry's
tend to be regular borrowers. Asset-
ciency as the principal goal of organi-
future strength. The rest of the world
originator banks would create a steady
zational structure.
has already come to understand that
stream of loans, either to hold or
How easily this evolution happens
national regulators can't continue to
resell.
will depend on the shape the final
provide incentives for banks to plug
Asset servicers, whose expertise
capital rules ultimately take. The nice
away at unprofitable businesses. The
lies in handling the ongoing relation-
thing about the risk-based capital pro-
only viable approach is to allow spe-
ship between the borrower and who-
posal is that it specifies lower capital
cialization to flourish and not expect
ever decides to hold legal title and
to support lower risk assets. Deposit
the banks of tomorrow to look like
fund the earning asset, will make their
gatherer banks could invest their li-
the banks of today.
profit based on economies of scale
quidity and earn profits on lower risk
The largest banks in the world are
and the expertise gained by process-
all Japanese. The European banks are
ing high volumes.
large by U.S. standards and will get
Information processors (or fi-
even larger as they consolidate into
nancial product factories) will fill the
the form needed to serve a United Eu-
recurring external data needs of busi-
rope. And these competitors have long
nesses or other banks or will special-
years of experience running checkless
ize in developing and "wholesaling"
Ultimately, it will
payment systems, participating in se-
financial products to banks that have a
curities underwriting and distribution
need to fill out their product offerings.
Deposit gatherers (or funds gen-
be product quality
and managing insurance risk-taking
and sales. Regardless of size, however,
erators), in regular contact with net
that dictates the
all banks need to think in terms of re-
providers of funds, will pull back from
winners and losers.
structuring by business segment to
direct asset generation in the future
play successfully in the global
and resell the funds raised to either
neighborhood.
asset originators or to the capital
From the perspective of the U.S.
markets.
banking industry, which is the most
Portfolio managing banks will
fractionated and most narrow in the
profit by offering their expertise in
world, it is fortunate that the attention
investment, safekeeping and record
of its European and Asian competitors
management to companies and in-
is fixed on changes in Eastern Europe
stitutions requiring investment
assets than loans and not be penalized
and that the immediate interest in the
management.
with the same capital required of asset
U.S. is somewhat low. But they will
Since form follows function, these
originator banks. In Europe and the
certainly be back. U.S. bankers have
profiles will in turn be matched by
Far East, banks and regulators seem to
only a few years in the meantime to
shifts in organizational structure. The
be working together to enable this
fix up our neighborhood so that when
highly autonomous, vertically inte-
evolution to occur smoothly.
they do return we're not all run out of
grated banks of today will need to
But in the United States there is
town.
"unbundle" services, buying or con-
a countervailing push for a return to
tracting out for those services they
the "old" minimum floor of capital-to-
John Rau
cannot provide profitably. For exam-
total assets. While understandable
beaded Exchange Na-
ple, a deposit gatherer bank will prob-
from the insurance fund perspective, if
tional Bank until Jan-
ably need to have a strong relationship
capital-to-asset ratios become the ef-
uary, 1990, wben Ex-
with an information processing bank,
fective capital constraint, the second-
change was acquired
which will sell it the deposit product
ary effect will be to prevent many
by Algemene Bank
systems needed to service its accounts.
banks from evolving into the forms
Nederland N.V., the
Internally, too, banks will need to
that will make them viable, profitable
parent of LaSalle. Mr.
Rau was tben named
restructure to ensure that there are no
businesses. It will also have the per-
bead of the combined
weak organizational links. Ironically,
verse consequence of encouraging
LaSalle/Exchange
this internal shift will be toward more
banks to take more risk, even in areas
Bank.
autonomy and more integration, but at
where they do not have dominant ex-
82 LEADERS
]
TAB 3
Ann Landers
Chicago Tribune
435 North Michigan Avenue
Chicago, Illinois 60611
July 9, 1990
Mr. John Rau
President
LaSalle National Bank
135 South LaSalle Street
Chicago, Illinois 60603
Dear John:
Thank you for the wonderfully illuminating information
on the S&L mess. You really laid it out beautifully in
both the article and the letter to me.
I am running into a bit of flack from my editor on this
issue. He feels that it is highly political. I do not
agree but I may decide it's not worth the battle.
In any event, I do want to thank you for responding so
effectively to my call for help.
All best,
ppice
EPL/km
The S & L "mess" started in the early 1980's when the S & L
industry lobbied Congress to give it more freedom to invest in
assets other than traditional mortgage loans. The S & L's argued
they needed to make more money to offset the rising rates they
had to pay to attract deposits.
The problem arose because the government guarantees (up to
$100,000) all the money put in, but many of the investments the S
& L's made with their new powers were real estate developments
that didn't make economic sense. In more than a few cases, the
problem was more than just bad judgement and inexperience but
extended to fraud and misappropriation by the managers.
But because Congress had granted these new powers and let the
investments be funded with insured deposits, as the projects are
sold or liquidated for less than was invested in them, the
difference will get paid by the taxpayers. In short, Congress
let the S & L's borrow money, with the taxpayers as "cosigners"
to speculate in real estate and when the prices fell, the
taxpayers had to make good on the guarantee they probably didn't
know they had made.
John Rau
President and CEO
LaSalle National Bank
F
CUS
GLOBAL BANKING SURVIVAL TIPS
Global Banks:
tance is now a barrier to the delivery
Ultimately, though, it will not be
of most kinds of financial services. Na-
raw size or global reach but product
tional boundaries will become invisi-
quality in each business segment that
Surviving In A
ble in the next 10 years, much as
dictates the winners and losers. The
county and state boundaries have been
new international risk-based capital
superseded by both law and technolo-
rules not only help level the playing
Tough New
gy in the last 10 years.
field but provide the framework to al-
The other major trend, which I
low the restructuring to happen.
believe entails an equal risk of being
Specifically, in many countries
Neighborhood
self-deceptive, is that of larger banks
current capital rules require banks to
evolving into financial department
hold the same amount of capital for a
stores. They argue that shrinking mar-
given asset base, regardless of the
gins can be offset by selling more
composition or riskiness of the asset
By John Rau, President and CEO,
products to the customer base with
portfolio. This creates an enormous in-
LaSalle National Bank, Chicago
whom they have a relationship. The
centive for banks not only to take on
risk is, of course, that for each product
higher levels of risk in their asset port-
A POINT OF PRIDE AMONG MANY
on their shelves there are global finan-
folios but also to fully utilize both
successful, self-made businesspeople
cial institutions offering lower costs,
sides of the balance sheet, taking in
is that they grew up in tough neigh-
more experience and/or more refined
deposits and lending funds, even if
borhoods. As globalization increasing-
the bank is not equally adept at both.
ly creates a single world market for fi-
As an example, a bank particularly
nancial services, many of the world's
well-suited to gathering low-cost de-
banks-even those that define them-
posits can make a nice profit by resell-
selves as neighborhood, regional or
ing or investing those deposits in in-
"one-country" banks-will find that
terbank funds, securities or even cor-
their "neighborhoods" are in fact get-
Regardless of size,
porate bonds. But whatever profit it
ting a lot tougher and that surviving
the next decade will be a well-earned
all banks need
makes from its deposit-raising activity
can be enhanced if the bank also be-
distinction.
to think in terms
comes a direct generator of loans,
Conventional wisdom has it that
since it has to maintain the regulatory
the globalization of economic flows is
of restructuring
capital base anyway. The short-term
of primary concern only to those man-
economics are compelling in that the
ufacturing companies with internation-
by business segment.
"second" use of this capital is free.
al operations or competitors. By impli-
But, over the long term, current capi-
cation, somehow, the service sector is
tal requirements tempt all banks to try
presumed exempt from global compe-
to be all things to all people and ne-
tition. What is now becoming clear,
glect the particular lines of business
however, is that globalization trends
each bank finds most profitable. The
will have comparable impact on such
result is a flaccid banking industry in-
service-sector institutions as banks, in-
sulated by national borders and ill.
cluding those that describe themselves
advanced systems. So, whether exist-
prepared for the pressures of global
as "regional" or "community" banks.
ing relationships will entice consum-
competition.
In fact, large banks that have failed to
ers to accept inferior product when
On the other hand, successful
profit by global or even national ex-
specialty shopping gets easier and eas-
banks in the global neighborhood will
pansion now proudly describe them-
ier remains to be seen. Clearly, the
restrict their operations to activities
selves as super-regional or "mega"
risk is the same as that faced by tradi-
that are cost-competitive and offer cus-
regional, as if that changed descrip-
tional department stores who lost their
tomers added value. Rather than focus-
tion exempts them from the forces
electronics/housewares business to
ing on the geographic expansion and
that pushed back their original
the discounters and their apparel busi-
contraction that characterized the
ambitions.
ness to the chains and boutiques.
banking strategies of the '60s, '70s and
Within the next tier of banks, the
And these phenomena are at work
'80s, successful banks in the '90s will
same form of self-deception also oper-
all over the globe. Western European
do more to build areas of expertise,
ates. Small banks invoke "neighbor-
banks are merging to serve a United
buy and sell lines of business and
hood ties," "community involvement"
Europe and cut costs to face larger
strip away unprofitable activities.
and "local market expertise," as if
competitors. U.S. banks are merging to
The key question is what these
this will serve to immunize them from
cover even larger regions. And interna-
new banks will look like and how they
the powerful global winds blowing
tional acquisitions are becoming in-
will differ from today's national, re-
through their neighborhoods. The re-
creasingly common as banks try to
gional and community banks. Given
is neither geography nor dis-
serve clients across several continents
the opportunity. at least five bank
"success profiles" will emerge, which
the business unit level. The world will
pertise. And both reasons make it
might be called asset originators, asset
be too ruthless to support the shared
more likely that many of these banks
servicers, financial product factories,
costs and unallocated overhead that
will become either wards of the
deposit gatherers and portfolio
can "hide" marginal profitability on
F.D.I.C. or terminal cases at the tax-
managers.
some lines of business. Business unit
payers' expense.
Asset originators will be those
managers will be given direct authori-
U.S. legislators and regulators
banks most skilled at maintaining rela-
ty over all parts of their activities. Cen-
must therefore beware of throwing ob-
tionships with a class of customers
tralized support units will be broken
stacles in the path of an evolution in
(whether business or consumer) that
up. And control will replace scale effi-
banking that is vital to the industry's
tend to be regular borrowers. Asset-
ciency as the principal goal of organi-
future strength. The rest of the world
originator banks would create a steady
zational structure.
has already come to understand that
stream of loans, either to hold or
How easily this evolution happens
national regulators can't continue to
resell.
will depend on the shape the final
provide incentives for banks to plug
Asset servicers, whose expertise
capital rules ultimately take. The nice
away at unprofitable businesses. The
lies in handling the ongoing relation-
thing about the risk-based capital pro-
only viable approach is to allow spe-
ship between the borrower and who-
posal is that it specifies lower capital
cialization to flourish and not expect
ever decides to hold legal title and
to support lower risk assets. Deposit
the banks of tomorrow to look like
fund the earning asset, will make their
gatherer banks could invest their li-
the banks of today.
profit based on economies of scale
quidity and earn profits on lower risk
The largest banks in the world are
and the expertise gained by process-
all Japanese. The European banks are
ing high volumes.
large by U.S. standards and will get
Information processors (or fi-
even larger as they consolidate into
nancial product factories) will fill the
the form needed to serve a United Eu-
recurring external data needs of busi-
rope. And these competitors have long
nesses or other banks or will special-
years of experience running checkless
ize in developing and "wholesaling"
Ultimately, it will
payment systems, participating in se-
financial products to banks that have a
curities underwriting and distribution
need to fill out their product offerings.
be product quality
and managing insurance risk-taking
Deposit gatherers (or funds gen-
and sales. Regardless of size, however,
erators), in regular contact with net
that dictates the
all banks need to think in terms of re-
providers of funds, will pull back from
structuring by business segment to
direct asset generation in the future
winners and losers.
play successfully in the global
and resell the funds raised to either
neighborhood.
asset originators or to the capital
From the perspective of the U.S.
markets.
banking industry, which is the most
Portfolio managing banks will
fractionated and most narrow in the
profit by offering their expertise in
world, it is fortunate that the attention
investment, safekeeping and record
of its European and Asian competitors
management to companies and in-
is fixed on changes in Eastern Europe
stitutions requiring investment
assets than loans and not be penalized
and that the immediate interest in the
management.
with the same capital required of asset
U.S. is somewhat low. But they will
Since form follows function, these
originator banks. In Europe and the
certainly be back. U.S. bankers have
profiles will in turn be matched by
Far East, banks and regulators seem to
only a few years in the meantime to
shifts in organizational structure. The
be working together to enable this
fix up our neighborhood so that when
highly autonomous, vertically inte-
evolution to occur smoothly.
they do return we're not all run out of
grated banks of today will need to
But in the United States there is
town.
"unbundle" services, buying or con-
a countervailing push for a return to
tracting out for those services they
the "old" minimum floor of capital-to-
John Rau
cannot provide profitably. For exam-
total assets. While understandable
beaded Exchange Na-
ple, a deposit gatherer bank will prob-
from the insurance fund perspective, if
tional Bank until Jan-
ably need to have a strong relationship
capital-to-asset ratios become the ef-
uary, 1990, wben Ex-
with an information processing bank,
fective capital constraint, the second-
change was acquired
which will sell it the deposit product
ary effect will be to prevent many
by Algemene Bank
systems needed to service its accounts.
banks from evolving into the forms
Nederland N.V., the
Internally, too, banks will need to
parent of LaSalle. Mr.
that will make them viable, profitable
Rau was then named
restructure to ensure that there are no
businesses. It will also have the per-
bead of the combined
weak organizational links. Ironically,
verse consequence of encouraging
LaSalle/Exchange
this internal shift will be toward more
banks to take more risk, even in areas
Bank.
autonomy and more integration, but at
where they do not have dominant ex-
82 LEADERS
_reprinted from THE WALL STREET JOURNAL
NOT PERMITTED
ISSUE OF NOVEMBER 15, 1985
Putting the Squeeze on Small Banks
By JOHN RAU
emphasis, etc.) in which smaller institu-
tries extended by the larger institutions.
The only good bank is a big bank.
tions have traditionally been stronger.
Treasury Secretary James Baker has an-
That's not what politicians and policy
This was a price, however, that many
nounced a plan, endorsed by Mr. Volcker
makers are saying, but it seems to be what
small banks were willing to pay for the op-
at the ABA convention, to keep these Third
they believe if you look at the impact of
portunity to compete more effectively on
World loans current by encouraging banks
their actions on small banks. Federal Re-
their own terms. But they made the mis-
to advance additional funds to pay the in-
serve Chairman Paul Volcker's pronounce-
take of assuming that deregulation meant
terest that is due. By pressuring the big-
ments at last month's American Bankers
just that, less regulation, not more.
gest lenders to increase their total lending
Association convention in New Orleans
They also assumed that the regulations
to the Third World by more than $20 bil-
have simply strengthened my conviction
remaining in force would be administered
lion, regulators will then make it impossi-
that this partiality exists.
evenhandedly. But deregulation, as it has
ble to apply the same credit-rating stan-
Since the days of Thomas Jefferson, the
evolved over the past few years in bank-
dards that they impose on smaller
political consensus in this country has been
ing, has meant disproportionately higher
banks.
that individual banks should be kept small
costs of doing business for small banks.
Like deregulation in the securities in-
to avoid concentrating credit-granting
Probably the most obvious example of
dustry and, more recently, with the
power, especially in the hands of the gov-
favoritism toward large banks has been in
breakup of the American Telephone &
ernment. It is only in the past five years
Telegraph Corp., banking consumers are
that the cumulative effect of public policy
finding that it was the smaller consumer
has shifted to a clear and substantial fa-
Current regulations, in
who had been getting a subsidy from
voritism toward big banks-a favoritism
favoring large banks, are
larger customers. The principal effect of
that is especially lethal at a time when
deregulation has been an increase in retail
small banks are under severe competitive
pushing the system toward
prices as the subsidy to small depositors
pressures from geographic and pricing de-
has been withdrawn. If this were the only
regulation.
centralized control of the
effect, it would have been a good one, re-
I believe this favoritism, in conjunction
with deregulation's other pressures, will
flow of credit, a condition
flecting the true costs of services. But the
implicit and explicit regulatory favoritism
lead first to the consolidation of the indus-
that hurts big and small
toward big banks, on top of the normal
try, and then, inevitably, to substantially
pressures of more competitive markets,
greater control over credit allocation by
banks alike.
will drive banks to consolidate, and many
the government. The obvious irony of all
small banks will fail.
this is that while big banks benefit from
this favoritism in the short run, they too
deposit insurance. While theoretically only
What complicates the picture in bank-
stand to lose substantial control over their
deposits up to $100,000 are insured, in prac-
ing is that the government has implicitly
tice, depositors in those banks deemed
assumed the responsibility not just for pro-
destinies should the balance shift toward
government credit allocation. I believe pol-
"too big to fail" have found their unin-
tecting small depositors, but for keeping
sured deposits effectively free of risk. De-
the banking system itself stable. In years
iticians fully understand where this is all
headed and that, as long as no one resists,
positors in those small banks allowed to
past, this task was a very limited one be-
fail have enjoyed no such security.
cause the existing regulatory framework
they are perfectly willing to be thrown into
the "briar patch" of greater government
Another set of recent policies whose ef-
guaranteed the system's stability. As this
involvement in the credit markets.
fect has been to discriminate against
scaffolding has been taken down, it puts
Whether the politicians are acting un-
smaller institutions is the push for higher
regulators in a bind. Regulators are trying
capital ratios, billed as a shift toward a
to prevent failures in a system that politi-
wittingly or not, one must ask whether this
more consistent set of capital ratios. In
cians have legislated into a form guaran-
is what the consumers and the banks
practice, this means that large institutions
teeing an increasing number of failures.
(whether large or small) thought they
were buying when they supported deregu-
that can borrow in the public market will
Now the script is predictable. Politi-
be able to meet the new capital levels with-
lation. I, for one, don't think there's any
cians blame the regulators for not having
question about the answer to that.
out slowing their growth, whereas the
done well to stem the tide of bank failures.
smaller institutions, whose only realistic
This is no more rational than an architect
Willing to Pay Price
source of capital is retained earnings, will
blaming a maintenance crew for water on
The effect of public policy since the late
find that they will have to stop growing to
the floor when he's designed a building
1970s has been to clearly favor large finan-
catch up to the new minimums and give up
with holes in the roof. Of more concern is
cial institutions over small. The shift really
market share to larger firms.
when the politicians decide that they need
began with the first pieces of "deregula-
Along with the push for higher capital
to exert much more influence over the aft
tion" legislation. I use quote marks be-
has come an even more insidious set of
fairs of the fewer remaining institutions
cause a system in which government de-
practices that penalize small banks. When
since "they can't all be allowed to fail" or
posit insurance plays a meaningful part
banks that lend to consumers, farmers and
"the flow of credit needs to be monitored
will never be truly deregulated. Nonethe-
small businesses have credit problems, the
by more than a few private bankers." This
less, the effect of "deregulation" has been
regulators require that the potential losses
risk alone ought to be enough to make big
to move the basis of competition onto those
be charged off against earnings, which fur-
banks wary of the "Trojan Horse" of regu-
parts of the playing field (economies of
ther reduces the bank's capital. Banks
latory favoritism.
scale, price, technological product develop-
must either replace these charge-offs with
An instrument to disguise this perni-
ment) in which the larger institutions ex-
new capital or shrink the level of credit
cious trend is already being discussed un-
cel, and away from those aspects (per-
they can provide. The exception' to this
der the innocuous designation of "risk-
sonal service, convenience, community
practice is made for loans to foreign coun-
based" capital ratios. At last month's ABA
DOW JONES REPRINT SERVICE
P.O. BOX 300
PRINCETON, NEW JERSEY 08540
Reprinted from The Wall Street Journal.
Dow Jones & Co., Inc. 1985
DO NOT MARK REPRINTS
convention, Mr. Volcker revealed that he
tem than higher capital ratios and
would soon support a program of this kind,
wouldn't be biased in favor of big banks.
and that the Comptroller of the Currency
And a limit on the aggregate dollars of in-
was working on a similar plan. Such pro-
sured deposits in any one bank would not
posals would adjust a bank's capital ratio
only deal with the concentration issue but
based on the regulators' evaluation of risk.
would help avoid creating banks in which
While pitched as a means to discourage
the government's stake was too large to let
banks from engaging in high-risk activi-
a failure occur.
ties, this kind of scheme will inevitably be-
I've made the case that our current reg-
come a point system for substituting politi-
ulatory framework, in favoring large
cal judgments of credit-worthiness for
banks, is accelerating the consolidation
those made by the market. For example,
process and pushing the system toward
can anyone imagine that the Fed chairman
centralized control of the flow of credit, a
would argue for higher insurance pre-
condition that hurts big and small banks
miums on student loans than on loans to fi-
alike. Politicians may have seen this com-
nance corporate mergers, regardless of
ing, but I don't think many consumers or
how one might rank them in terms of rela-
bankers imagined this was where deregu-
tive risk?
lation would lead. My fundamental con-
cern is with the political implications of
Cut Back Government Role
such an outcome. But I also think that the
Is there a way to derail the drive to-
U.S. would be better served by a diverse
ward this greater political control? Al-
financial system composed of institutions
though modern technology precludes a re-
of varying size, ensuring that all con-
turn to the old system of geographic and
sumers of financial services would have
functional decentralization, we can take
choices commensurate with their needs.
the first step forward by eliminating the
And, unfettered, I think the market would
rationale for political involvement.
probably support this diversity. Instead,
Specifically, I would propose a substan-
the market's natural forces are being
tial cutback in the government's role in
thwarted in a way that will continue to
implicit as well as explicit deposit insur-
take the leverage over the credit-granting
ance. A variety of approaches designed to
system farther away from the general pub-
remove the government's incentive for
lic and closer to the "banks" of the Poto-
meddling with the system is being dis-
mac. This can't be good for the U.S.
cussed. My own formulation would be to
institute a 5% "deductible" on insured de-
Mr. Rau is president of the Exchange
posits between $20,000 and $100,000. This
National Bank of Chicago, a $1.3 billion in-
would add a lot more discipline to the sys-
stitution.
THE WHITE HOUSE
WASHINGTON
August 28, 1990
Dear Representative Marsh,
Andy Card is abroad, but before departing,
he asked me to acknowledge your letter of
August 2 and let you know that your request
for assistance on behalf of Mr. John Haycock
has been forwarded to the appropriate staff
at the Department of Labor for review and
response. You should hear from them soon.
Andy asked me to pass along his best wishes.
Sincerely,
Linda Linda Casey Casey
Assistant to Andy Card
Honorable Robert H. Marsh
State Representative
The Commonwealth of Massachusetts
167 Oakland Street
Wellesley, Massachusetts 02181
THE WHITE HOUSE
WASHINGTON
DATE: September 4, 1990
TO:
Sally Kelley
FROM:
ANDY CARD
Please pass this along to the Department
of Labor for direct response. Thanks.
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immigration visa issue. (1 pp.)
Collection:
Record Group:
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Office:
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Series:
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Subseries:
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File Location:
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Date Closed:
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Robert H. Marsh to U.S. Representative Barney Frank, Re:
08/02/90
(b)(6)
Assistance with immigration visa issue. (1 pp.)
Collection:
Record Group:
Bush Presidential Records
Office:
Chief of Staff, Office of the
Series:
Card, Andrew H., Jr., Files
Subseries:
WHORM Cat.:
File Location:
AHC General Correspondence June-August 1990 [5]
Date Closed:
3/14/2025
OA/ID Number:
04012-006e
FOIA/SYS Case #:
2025-0373-S
Appeal Case #:
Re-review Case #:
Appeal Disposition:
P-2/P-5 Review Case #:
Disposition Date:
AR Case #:
MR Case #:
AR Disposition:
MR Disposition:
AR Disposition Date:
MR Disposition Date:
RESTRICTION CODES
Freedom of Information Act (FOIA) - [5 U.S.C. 552(b)]
Deed of Gift Restrictions
(b)(1) National security classified information
C(1) Closed by Executive Order 13526, governing access to national
(b)(2) Release would disclose internal personnel rules and practices of an
security information
agency
C(2) Closed by statute or by the agency which originated the information
(b)(3) Release would violate a Federal statute
C(3) Closed in accordance with restrictions contained in donor's deed of
(b)(4) Release would disclose trade secrets or confidential or financial
gift [formerly listed as only C]
information
PRM. Removed as a personal record misfile
(b)(6) Release would constitute a clearly unwarranted invasion
of personal privacy
(b)(7) Release would disclose information compiled for law enforcement
Presidential Records Act - [44 U.S.C. 2204(a)]
purposes
(b)(8) Release would disclose information concerning the regulation of
P-2 Relating to the appointment to Federal office [(a)(2) of the PRA]
financial institutions
P-5 Release would disclose confidential advice between the President and
(b)(9) Release would disclose geological or geophysical information
his advisors, or between such advisors [(a)(5) of the PRA]
concerning wells
THE WHITE HOUSE
WASHINGTON
August 28, 1990
Dear Mr. Tyler,
Andy Card is abroad, so I am taking the
liberty of responding to your letter to him
dated August 19 inviting him to attend the
fundraiser for Mr. Malone on September 4.
Unfortunately, Andy will not be able to
attend. He will appreciate your thinking
of him, and when he returns to Washington,
I will make sure he sees your letter.
Thank you for writing.
Sincerely,
Linka (ssey
Linda Casey
Assistant to Andy Card
Mr. Quint Tyler
Reynolds Bros. Inc.
776 Washington Street
Canton, Massachusetts 02021
Andy
I'll do note nagret
assume no
Document Originally
Attached to
Following Page
REYNOLDS BROS.
R
REYNOLDS BROS. INC.
CANTON, MASS.
ENGINEERS . CONTRACTORS
776 WASHINGTON STREET . CANTON, MASSACHUSETTS 02021 . (617) 828-8580
8/19/90
Dear Andy,
a note to inform you that
I am sponsoring a fend ruised
for for malone, Candidate for
Treasurer on Tuesday Sptenben
4,1990 5-7 P.M. at the Ridge
Cerena, West Street Brantree, mass.
Basic attendees will be Road Contactors.
I'm letting you know because
I would be honored if you
could attend.
Very Truly your
355 DOVER RD
WESTWOOD, MASS
JumBingle
02090
over
Quite obviously your are busy
but I.would hate to have you
home here for whatever reason
and not know that This
is happening.
THE WHITE HOUSE
WASHINGTON
August 28, 1990
Dear Mr. Bathgate,
Andy Card is abroad, so I am taking the
liberty of responding to your letter to him
dated August 21 inviting him to be a featured
speaker at the National Meeting of The Presi-
dent's Club on September 25.
Unfortunately, Andy cannot accommodate your
request. He will appreciate your thinking
of him, and when he returns to Washington,
I will make sure he sees your letter.
Thank you for writing.
Sincerely,
Linda Linda Casey Casey
Assistant to Andy Card
Mr. Lawrence E. Bathgate, II
Chairman
Republican National Finance Committee
310 First Street, S.E.
Washington, D.C. 20003
REPUBLICAN NATIONAL FINANCE COMMITTEE
310 FIRST STREET. SOUTHEAST WASHINGTON, D.C. 20003 202-863-8720
Portuguese PM in
LAWRENCE E. BATHGATE, II
CHAIRMAN
town that day
T-Y
August 21, 1990
The Honorable Andrew Card
White House Deputy Chief of Staff
The White House
Washington, DC 20500
Dear Andy:
The I would President's like to invite Club being you to held be a in featured Washington, speaker D.C. at the on National Tuesday, Meeting September of 25, 1990. 11
As you may know, The President's Club membership is made up of individuals who
contribute at least $1,000 annually, and is a key component of the Republican National
Committee. Many of our members are part of the "old team" of 1988 Bush contributors.
Today, their financial support of The President Club helps fund political appearances and
activities of President Bush and Vice President Quayle on behalf of Republican
candidates at all levels.
The legislative briefing is scheduled to take place at the Ritz-Carlton, Pentagon City from
10:45 a.m. to 11:45 a.m. We are asking our speakers to give ten minutes of remarks
and then a ten minute questions-and-answers session.
We are trying to make this day very special for our old and important donors. Your
participation will help us make it special. Please have a member of your staff contact
Julie Gregg at 863-8643 to advise if you will be able to be with us.
Thanks very much. I sincerely hope you can join us.
Sincerely,
Cos
Lawrence E. Bathgate, II
LEB:jg
PAID FOR BY THE REPUBLICAN NATIONAL COMMITTEE