MEMORANDUM FOR DEPARTMENT AND AGENCY HEADS FROM HORACE BUSBY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80B01676R000500010035-0
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 25
• Document Creation Date: December 12, 2016
• Document Release Date: June 20, 2002
• Sequence Number: 35
• Publication Date: February 12, 1965
• Content Type: MF

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ppa 71-5-4y t
REFERRAL TO NSC NOT REQUIRED
February 12, 1965
MEMORANDUM FOR DEPARTMENT AND AGENCY HEADS
On Thursday, February 11, at the Cabinet Meeting,
the President expressed the hope that all Department and
Agency Heads would read, discuss with their staffs, and
seek to contribute to the implementation of the Messages
to Congress on the Balance of Payments and Natural
Beauty. At the same time, the President also suggested
that Department and Agency Heads would find useful the
information on the economy provided to him by the Council
of Economic Advisers, presenting the first performance
profile of 1965 on the various indices of economic activity.
For your convenience, copies of these Messages and
the CEA Advisory are attached.
Horace Busby
Special Assistant to the President
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FOR RELEASE AT 12 NOON (EST) February 8, 1965
NOTICE: There should be no premature release of this Message to the
Congress, nor should its contents be paraphrased, alluded .to or hinted
at ir.. earlier stories. There is a total embargo on this message until
12:.00 noon February 8, 1965, which includes any and all references to
any material in this message.
George E. Reedy
Press Secretary to the President
THE WHITE HOUSE
MESSAGE ON NATURAL BEAUTY
TO THE CONGRESS OF THE UNITED STATES:
For centuries Americans have drawn strength and inspiration
from the beauty of our country. It would be a neglectful generation
indeed, indifferent alike to the judgment of history and the command
of principle, which failed to preserve and extend such a heritage for
its descendants.
Yet the storm of modern change is threatening to blight and diminish
in a few decades what has been cherished and protected for generations.
A growing population is swallowing up areas of natural beauty with
its demands for living space, and is placing increased demand on our
overburdened areas of recreation and pleasure.
The increasing tempo of urbanization and growth is already
depriving many Americans of the right to live in decent surroundings.
More of our people are crowding into cities and being cut off from
nature. Cities themselves reach out into the countryside, destroying
streams and trees and meadows as they go. A modern highway may
wipe out the equivalent of a fifty acre park with every mile. And
people move out from the city to get closer to nature only to find that
nature has moved farther from them.
The modern technology, which has added much to our lives can
also have a darker side. Its uncontrolled waste products are menacing
the world we live in, our enjoyment and our health. The air we breathe,
our water, our soil and wildlife, are being blighted by the poisons and
chemicals which are the by-products of technology and industry. The
skeletons of discarded cars litter the countryside. The same society
which receives the rewards of technology, must, as a cooperating
whole, take responsibility for control.
To deal with these new problems will require a new conservation.
We must not only protect the countryside and save it from destruction,
we must restore what has been destroyed and salvage the beauty and
charm of our cities. Our conservation must be not just the classic
conservation of protection and development, but a creative conservation
of restoration and. innovation. Its concern is not with nature alone, but
with the total relation between man and the world around him. Its object
is not just man's welfare but the dignity of man's spirit.
(OVER)
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%60* NOW
In this conservation the protection and enhancement of man's oppor-
tunity to be in contact with beauty must play a major role.
This means that beauty must not be just a holiday treat, but a part
of our daily life. It means not just easy physical access, but equal social
access for rich and poor, Negro and white, city dweller and farmer.
Beauty is not an easy thing to measure. It does not show up in the
gross national product, in a weekly pay check, or in profit and loss state-
ments. But these things are not ends in themselves. They are a road
to satisfaction and pleasure and the good life. Beauty makes its own
direct contribution to these final ends. Therefore it is one'of the most
important components of our true national income, not to be left out
simply because statisticians cannot calculate its worth.
And some things we do know. Association with beauty can enlarge
man's imagination and revive his spirit. Ugliness can demean the people
who live among it. What a citizen sees every day is his America. If
it is attractive it adds to the quality of his life. If it is ugly it can de-
grade his existence.
Beauty has other immediate values. It adds to safety whether re-
moving direct dangers to health or making highways less monotonous
and dangerous. We also know that those who live in blighted and squalid
conditions are more susceptible to anxieties and mental disease.
Ugliness is costly. It can be expensive to clean a soot smeared
building, or to build new areas of recreation when the old landscape
could have been preserved far more cheaply.
Certainly no one would hazard a national definition of beauty. But
we do know that nature is nearly always beautiful. We do, for the most
part, know what is ugly. And we can introduce, into all our planning,
our programs, our building and our growth, a conscious and active con-
cern for the values of beauty. If we do this then we can be successful
in preserving a beautiful America.
There is much the federal government can do, through a range of
specific programs, and as a force for public education. But a beauti-
ful America will require the effort of government at every level, of
business, and of private groups. Above all it will require the concern
and action of individual citizens, alert to danger, determined to improve
the quality of their surroundings, resisting blight, demanding and build-
ing beauty for themselves and their children.
I am hopeful that we can summon such a national effort. For we
have not chosen to have an ugly America. We have been careless, and
often neglectful. But now that the danger is clear and the hour is late
this people can place themselves in the path of a tide of blight which
is often irreversible and always destructive.
The Congress, and the Executive branch have each produced conser-
vation giants in the past. During the 88th Congress it was legislative
executive teamwork that brought progress. It is this same kind of part-
nership that will ensure our continued progress.
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In that spirit as a beginning and stimulus I make the following
proposals:
Thomas Jefferson wrote that communities "should be planned with an
eye to the effect made upon the human spirit by being continually surrounded
with a maximum of beauty, "
We have often sadly neglected this advice in the modern American city.
Yet this is where most of our people live. It is where the character of our
young is formed. It is where American civilization will be increasingly
concentrated in years to come.
Such a challenge will not be met with a few more parks or playgrounds.
It requires attention to the architecture of building, the structure of our
roads, preservation of historical buildings and monuments, careful
planning of new suburbs. A concern for the enhancement of beauty must
infuse every aspect of the growth and development of metropolitan areas.
It must be a principal responsibility of local government, supported by
active and concerned citizens.
Federal assistance can be a valuable stimulus and help to such local
efforts.
I have recommended a community extension program which will bring
the resources of the university to focus on problems of the community just
as they have long been concerned with our rural areas. Among other things,
this program will help provide training and technical assistance to aid in
making our communities more attractive and vital. In addition, under the
Housing Act of 1964, grants will be made to States for training of local
governmental employees needed for community development. I am
recommending a 1965 supplemental appropriation to implement this program.
We now have two programs which can be of special help in creating
areas of recreation and beauty for our metropolitan area population: the
Open Space Land Program, and the Land and Water Conservation Fund.
I have already proposed full funding of the Land and Water Conservatidn
Fund, and directed the Secretary of the Interior to give priority attention
to serving the needs of our growing urban population.
The primary purpose of the Open Space Program has been to help
acquire and assure open spaces in urban areas. I propose a series of
new matching grants for improving the natural beauty of urban open
space,
The Open Space Program should be adequately financed, and
broadened by permitting grants to be made to help city governments
acquire and clear areas to create small parks, squares, pedestrian
malls and playgrounds.
(OVER)
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Lz addition I will request authority in this program for a matching
program to cities for landscaping, installation of outdoor lights and
benches, creating attractive cityscapes along roads and in business areas,
and for other beautification purposes.
Our, city parks have not, in many cases, realized their full potential
as sources of pleasure and play. I recommend on a matching basis a
series of federal demonstration projects in city parks to use the best
thoug:iit and action to show how the appearance of these parks can better
serve the people of our towns and metropolitan areas.
Jill of these programs should be operated on the same matching
formula to avoid unnecessary competition among programs and increase
the possibility of cooperative effort. I will propose such a standard
formuila..
In a future message on the cities I will recommend other changes in
our housing programs designed to strengthen the sense of community of
which natural beauty is an important component.
In almost every part of the country citizens are rallying to save
landmarks of beauty and history. The government must also do its share
to assist these local effort? which have an important national purpose.
We will encourage and support the National Trust for Historic
Preservation in the United States, chartered by Congrc4ss in 1949. I shall
propose legislation to authorize supplementary grants to help local
authorities acquire, develop and manage private properties for such
purposes.
The Registry of National Historic Landmarks is a fine federal
program with virtually no federal cost. I commend its work and the new
wave of interest it has evoked in historical preservation.
THE COUNTRYSIDE
Our present system o:: parks, seashores and recreation areas --
monuments to the dedication and labor of far-sighted men -- do not meet
the needs of a growing population.
The full funding of the Land and Water Conservation Fund will be an
important step in making this a Parks -fgr-America decade.
I propose to use this i:und to acquire lands needed to establish:
-- Assateague Island National Seashore, Maryland-Virginia
Tocks Island National Recreation Area, New Jersey-Pennsylvania
Cape Lookout National Seashore, North Carolina
Sleeping Bear Dunes National Lakeshore, Michigan
Indiana Dunes National Lakeshore, Indiana
Oregon Dunes National Seashore, Oregon
Great Basin National Park, Nevada
Guadalupe Mountains National Park, Texas
Spruce Knob, Seneca Rocks National Recreation Area, West Virginia
Bighorn Canyon National Recreation Area, Montana-Wyoming
Flaming Gorge National Recreation, Utah-Wyoming
'Vihiskeytown-Shasta-Trinity National Recreation Area, California
In addition, I have requested the Secretary of Interior, working with
interested groups, to conduct a study on the desirability of establishing
a Redwood National Park in California.
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I will also recommend that we add prime outdoor recreation areas
to our National Forest system, particularly in the populous East; and
proceed on schedule with studies required to define and enlarge the
Wilderness System established by the 88th Congress. We will also
continue progress on our refuge system for migratory waterfowl.
Faulty strip and surface mining practices have left ugly scars which
mar the beauty of the landscape in many of our States. I urge your
strong support of the nationwide st rip and surface mining study pro-
vided by the App,~lacliian Regional legislation, which will furnish the
factual basis for a fair and reasonable approach to the correction of
these past errors.
I am asking the Secretary of Agriculture to work with State and local
organizations in developing a cooperative program for improving the
beauty of the privately owned rural lands which comprise three-fourths
of the Nation's area. Much can be done within existing Department of
Agriculture programs without adding to cost.
The 28 million acres of land presently held and used by our Armed
Services is an important part of our public estate. Many thousands of
these acres will soon become surplus to military needs. Much of this
land has great potential for outdoor recreation, wildlife, and conserva-
tion uses consistent with military requirements. This potential must
be realized through the fullest application of multiple-use principles.
To this end I have directed the Secretaries of Defense and Interior to
conduct a "conservation inventory" of all surplus lands.
More than any country ours is an automobile society. For most
Americans the automobile is a principal instrument of transportation,
work, daily activity, recreation and pleasure. By making our roads
highways to the enjoyment of nature and beauty we can greatly enrich
the life of nearly all our people in city and countryside alike.
Our task is two-fold. First, to ensure that roads themselves are
not destructive of nature and natural beauty. Second, to make our roads
ways to recreation and pleasure.
I have asked the Secretary of Commerce to take a series of steps
designed to meet this objective. This includes requiring landscaping
on all federal interstate primary and urban highways, encouraging the
construction of rest and recreation areas along highways, and the
preservation of natural beauty adjacent to highway rights-of-way.
Our present highway law permits the use of up to 3% of all federal-
aid funds to be used without matching for the preservation of natural
beauty. This authority has not been used for the purpose intended by
Congress. I will take steps, including recommended legislation if
necessary, to make sure these funds are, in fact, used to enhance
beauty along our highway system. This will dedicate substantial re-
sources to this purpose.
I will also recommend that a portion of the funds now used for
secondary roads be set aside in order to provide access to areas of
rest and recreation and scenic beauty along our nation's roads, and
for rerouting or construction of highways for scenic or parkway
purposes.
(OVER)
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The Recreation Advisory Council is now completing a study of the
role which scenic roads and parkways should play in meeting our high-
way and recreation needs. After receiving the report, I will make
appropriate recommendations.
The authority or the: existing program of outdoor advertising
control expires on June 3 0, 1965, and its provisions have not been
effective in achieving the desired goal. Accordingly, I will recom-
mend legislation to ensure effective control of billboards along our
dhways.
In addition, we need urgently to work towards the elimination ox
screening of unsightly, beauty-destroying junkyards and auto grave-
yards along our highways. To this end, I will also recommend neces-
sary legislation to achieve effective control, including Federal
assistance in appropriate cases where necessary.
I hope that, at all levels of government, our planners and builders
will. remember that highway beautification is more than a matter of
planting trees or setting aside scenic areas. The roads themselves
mui;t reflect, in location and design, increased respect for the natural
and social integrity and unity of the landscape and communities through
which they pass.
Those who first settled this continent found much to marvel at.
Not:h.ing was a greater source of wonder and amazement than the power
and majesty of American rivers. They occupy a central place in myth
and legend, folklore and literature.
They were our first highways, and some remain among the most
important. We have had to control their ravages, har:iess their power,
and use their water to help make whole regions prosper.
Yet even this seemingly indestructible natural resource is in
danger.
Through our pollution control programs we can do much to restore
our rivers. We will continue to conserve the water and power for
tomorrow's needs with well-planned reservoirs and power dams. But
the time has also come to identify and preserve free flowing stretches
of our great scenic riverf; before growth and development make the
beauty. of the unspoiled waterway a memory.
To this end I will shortly send to the Congress a Bill to establish
a National Wild Rivers System.
The river rich in hisi:ory and memory which flows by our nation's
capital should serve as a model of scenic and recreation values for
the entire country. To meet this objective I am asking the Secretary
of the Interior to review the Potomac River basin development plan
now under review by the Chief of Army Engineers, and to work with
the affected States and local governments, the District of Columbia
and interested federal agencies to prepare a program for my
consideration.
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A program must be devised which will:
a. Clean up the river and keep it clean, so it can be used for
boating, swimming and fishing.
b. Protect its natural beauties by the acquisition of scenic
easements, zoning or other measures.
c. Provide adequate recreational facilities, and
d. Complete the presently authorized George Washington
Memorial Parkway on both banks.
I hope action here will stimulate and inspire similar efforts by
States and local governments on other urban rivers and waterfronts,
such as the Hudson in New York. They are potentially the greatest
single source of pleasure for those who live in most of our metropolitan
areas.
The forgotten outdoorsmen of today are those who like to walk,
hike, ride horseback or bicycle. For them we must have trails as
well as highways. Nor should motor vehicles be permitted to
tyrannize the more leisurely human traffic.
Old and young alike can participate. Our doctors recommend and
encourage such activity for fitness and fun.
I am requesting, therefore, that the Secretary of the Interior work
with his colleagues in the federal government and with state and local
leaders and recommend to me a cooperative program to encourage a
national system of trails, building up the more than hundred thousand
miles of trails in our National Forests and Parks.
There are many new and exciting trail projects underway across
the land. In Arizona, a county has arranged for miles of irrigation
canal banks to be used by riders and hikers. In Illinois, an abandoned
railroad right of way is being developed as a "Prairie Path. " In
Mexico utility rights of way are used as public trails.
As with so much of our quest for beauty and quality, each community
has opportunities for action. We can and should have an abundance of
trails for walking, cycling and horseback riding, in and close to our
cities. In the back country we need to copy the great Appalachian Trail
in all parts of America, and to make full use of rights of way and other
public paths.
One aspect of the advance of civilization is the evolution of
responsibility for disposal of waste. Over many generations society
gradually developed techniques for this purpose. State and local
governments, landlords and private citizens have been held responsible
for ensuring that sewage and garbage did not menace health or contaminate
the environment.
(OVER)
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In the last few decades entire new categories of waste have come to
plague and menace the American scene. These are the technological
wastes -- the by-products of growth, industry, agriculture, and science.
-b a cannot wait for slow evolution over generations to deal with them.
Pollution is growing at a rapid rate. Some pollutants are known to
be harmful to health, while the effect of others is uncertain and unknown.
In some cases we can control pollution with a larger effort. For other
Formes of pollution we still do not have effective means of control.
Pollution destroys beauty and menacos health. It cuts down on
efficiency, reduces property values and raises taxes.
The longer we wait to act, the greater the dangers and the larger
the problem.
Large-scale pollution of air and waterways is no respecter of
political boundaries, and its effects extend far beyond those who cause it.
Air pollution is no longer confined to isolated places. This
generation has altered the composition of the atmosphere on a global
scale through radioactive materials and a steady increase in carbon
dioxide from the burning of fossil fuels. Entire regional airsheds,
crop plant environments, and river basins are heavy with noxious
mmate:dials. Motor vehicles and home heating plants, municipal dumps
and factories continually hurl pollutants into the air we breathe. Each
day almost 50, 000 tons of unpleasant, and sometimes poisonous, sulfur
dioxide are added to the atmosphere, and our automobiles produce
almost 300, 000 tons of other pollutants.
In Donora, Pennsylvania in 1948, and New York City in 1953
serious illness and some deaths were produced by sharp -increases in
air pollution. In New Orleans, epidemic outbreaks of asthmatic attacks
are associated with air pollutants. Three-fourths of the eight million
people in the Los Angeles area are annoyed by severe eye irritation
much of the year. And our health authorities are increasingly concerned
with ?:he damaging effects of the continual breathing of polluted air by all
our people in every city in the country.
In addition to its health effects, air pollution creates filth and
gloom and depreciates property values of entire neighborhoods. The
White House itself is being dirtied with soot from polluted air.
Every major river sye?tem is now polluted. Waterways that were
once sources of pleasure and beauty and recreation are forbidden to
human contact and objectionable to sight and smell. Furthermore,
this pollution is costly, requiring expensive treatment for drinking
Ovate:- and inhibiting the op-yration and growth of industry.
In spite of the efforts and many accomplishments of the past, water
pollution is spreading. And new kinds of problems are being added to
the old
-- Waterborne virunes, particularly hepatitis, are replacing
typhoid fever as a significant health hazard.
- Mass deaths of fish have occurred in rivers over-burdened
with wastes.
-- Some of our river s contain chemicals which, in concentrated
form, produce abnormalities in animals.
Last summer 2, 600 square miles of Lake Erie -- over a quarter
of the entire Lake -- were 1e almost without oxygen and Yunable to
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from cities an arms.
more
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In many older cities storm drains and sanitary sewers are
interconnected. As a result, mixtures of storm water and sanitary waste
overflow during rains and discharge directly into streams, bypassing
treatment works and causing heavy pollution.
In addition to our air and water we must, each and.-every day, dispose
of a half billion pounds of solid-waste, These wastes -- from discarded
cans to discarded automobiles -- litter our country, harbor vermin, and
menace our health. Inefficient and improper methods of disposal increase
pollution of our air and streams.
Almost all these wastes and pollutions are the result of activities
carried on for the benefit of man. A prime national goal must be an
environment that is pleasing to the senses and healthy to live in.
Our Government is already doing much in this field. We have made
significant progress. But more must be done.,
Federal Government Activity
I am directing the heads of all agencies to improve measures to abate
pollution caused by direct agency operation, contracts and cooperative
agreements. Federal procurement practices must make sure tra t the
Government equipment uses the most effective techniques for controlling
pollution. The Administrator of General Services has already taken steps
to assure that motor vehicles purchased by the Federal Government meet
minimum standards of exhaust quality.
Clean Water
Enforcement authority must be strengthened to provide positive controls
over the discharge of pollutants into our interstate or navigable waters.
I recommend enactment of legislation to:
Provide, through the setting of effective water quality standards,
combined with a swift and effective enforcement procedure, a
national program to prevent water pollution at its source rather
than attempting to cure pollution after it occurs.
Increase -project grant ceilings and provide additional incentives
for multi-municipal projects under the waste treatment facilities
construction program.
Increase the ceilings for grants to State water pollution control
programs.
Provide a new research, and demonstration construction program
leading to the solution of problems caused by the mixing of storm
water runoff and sanitary wastes.
The Secretary of Health. Education, and Welfare will undertake an
intensive program to clean up the-Nation's most polluted rivers. With the
cooperation of States and cities -- using the tools of regulation, grant
and incentives ?- we can bring the most serious problem of river pollution
under control. We cannot afford to do less.
We will work with Canada to develop a pollution control program for the
Great Lakes and other border waters.
(OVER)
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Through an expanded program carried on by the Department of Health,
Education, and Welfare and Interior, we will continue to seek effective
and economical methods i:or controlling pollution from acid mine drainage.
To improve the quality of our waters will require the fullest
cooperation of our State and local government. Working together, we can
and will preserve and increase one of our most valuable national resources --
clea.n water.
Clean Air
The enactment of the Clean Air Act in December of 1963 represented a
long step forward in our ability to understand and control the difficult
problem of air pollution. The 1966 Budget request of Z4 million dollars
is Elrnost double the amount spent on air pollution programs in the year
prior to its enactment.
In addition, the Clear Air Act should be improved to permit the
Secretary of Health, Education, and Welfare to investigate potential air
poll.ution problems before pollution happens, rather than having to wait until
the damage occurs. as is now the case, and to make recommendations
leading to the prevention of such pollution.
One of the principal unchecked sources of air pollution is the
automobile. I intend to lastitute discussions with industry officials and other
interested groups leading to an effective elimination or substantial reduction
of pollution from liquid fueled motor vehicles.
Sol-.'.d Wastes
Continuing technological progress and improvement in methods of
manufacture, packaging and marketing of consumer products has resulted in
an over -mounting increase of discarded material. We need to seek better
solutions to the disposal of these wastes. I recommend legislation to:
Assist the States in developing comprehensive programs for some
forms of solid waste disposal.
Provide for research and demonstration projects leading to more
effective method,; for disposing of or salvaging solid wastes.
Launch a concentrated attack on the accumulation of junk cars
by increasing research in the Department of the Interior leading
to use of rretal f:com scrap cars where promising leads already
exist.
Pesticides may affect living organisms wherever they occur.
In order that we may better understand the effects of these compounds,
I have included increased funds in the budget for use by the Secretaries
of Agriculture, Interior, and Health, Education, and Welfare to increase
their research efforts or. pesticides so they can give special attention to
the flow of pesticides through the environment; study the means by which
pesticides break down and disappear in nature; and to keep a constant
check on the level of pesticides in our water, air, soil and food supply.
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I am recommending additional funds for the Secretary of Agriculture
to reduce contamination frorn.t.Qxic chemicals through intensified research,
regulatory control, and educatianal programs.
The Secretary of Agriculture will soon submit legislation to tighten
control over the manufacture and use of agricultural chemicals, in-
cluding licensing and factory inspection of manufacturers, clearly plac-
ing the burden of proof of safety on the proponent of the chemical rather
than on the Government.
Research Resources
Our needs for new knowledge and increasing application of existing
knowledge demand a greater supply of trained manpower and research
resources.
A National Center for Environmental Health Sciences is being planned
as a focal point for health research in this field. In addition, the 1966
budget includes funds for the establishment of university institutes to
conduct research and training in environmental pollution problems.
Legislation recommended in my message on health has been intro-
duced to increase Federal support for specialized research facilities of
a national or regional character. This proposal, aimed at health re-
search needs generally, would assist in the solution of environmental
health problems and I urge its passage.
We need legislation to provide to the Departments of Agriculture and
the Interior authority for grants for research in environmental pollution
control in their areas of responsibility. I have asked the Secretary of
Interior to submit legislation to eliminate the ceiling on pesticide
research.
Other Efforts
In addition to these needed actions, other proposals are undergoing
active study.
I have directed the Chairman of the Council of Economic Advisers,
with the appropriate departments, to study the use of economic incentives
as a technique to stimulate pollution prevention and abatement, and to
recommend actions or legislation, if needed.
I have instructed the Director of the Bureau of the Budget and the
Director of the Office of Science and Technology to explore the adequacy
of the present organization of pollution control and research activities.
I have also asked the Director of the Office of Science and .Technology
and the Director of the Bureau of the Budget to recommend the best way
in which the Federal government may direct efforts toward advancing
our scientific understanding of natural plant and animal communities
and their interaction with man and his activities.
The actions and proposals recGmmended in this message will take us
a long way toward immediate reversal of the increase of pollutants in
our environment. They will also give us time until new basic knowledge
and trained manpower provide opportunities for more dramatic gains in
the future .
(OVER)
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WHITE HOUSE CONFERENCE
I intend to call a White House Conference on Natural Beauty to meet
in mid-May of this year. Its chairman will be Mr. Laurance Rockefeller.
It is my hope that this Conference -will produce new ideas and
approaches for enhancing the beauty of America. Its scope will not be
restricted to federal action. It will look for ways to help and encourage
state and local government, institutions and private citizens, in their
own efforts. It c4n serve as a focal point for the large campaign of
public education which is needed to alert Americans to the danger to
their natural heritage and to the need for action.
In addition to other subjects which this Conference will consider,
I recommend the following subjects for discussion in depth:
Automobile junkyards. I am convinced that analysis of the
technology and economics can help produce a creative solution
to this vexing problem. The :3ur eau of Mines of the Interior
Department can contribute technical advice to the conference,
as can the scrap industry and the steel industry.
Underground installation of utility transmission lines. Further
research is badly needed to enable us to cope with this problem.
The greatest single force that shapes the American landscape
is private economic development. Our taxation policies should
not penalize or discourage conservation and the preservation
of beauty.
Ways in which the Federal Government can, through information
and technical assistance, help communities and states in their
own programs of natural beauty.
-- The possibilities of a nation... tree planting program. carried
on by government at every level, and private groups and
citizens.
CONCLUSION
Ir my thirty-three years of public: life I have seen the American
systern move to conserve the natural and human resources of our land.
TVA transformed an entire region that was "depressed. " The
rural electrification cooperatives brosght electricity to lighten the
burde-ss of rural America. We have teen the forests replanted by the
CCC,'f., and watched Gifford Pinchot's sustained yield concept take hold
on forestlands.
It is true that we have often been careless with our natural bounty.
At times we have paid a heavy price for this neglect. But once our
people were aroused to the danger, we have acted to preserve our
resources for the enrichment of our country and the enjoyment of
future: generations.
The beauty of our land is a natural resource. Its preservation is
linked to the inner prosperity of the human spirit.
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The tradition of our past is equal to today's threat to that beauty.
Our land will be attractive tomorrow only if we o ?ganize for action
and rebuild and reclaim the beauty we inherited. Our stewardship
will be judged by the foresight with which we carry out these program
We roust rescue our cities and countryside from blight with the same
'purpose and vigor with which, in other areas, we moved to save the
forests and the soil.
,,YNDON B. JOHNSON
TIRE WHITE HCUSE,
Fehr a.ry 8, 1965.
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o.of
ants. noon., ebruary tenth,
to any material in this message
FOR IiEL 'ASE':.t 17. NOON (EST) rebrua.r~,10; 1965
QTlCE There should be nnow premature release of this Message to
the Congress, nor should its contents be paraphrased, alluded to or
hinted at in earlier stories. There is a trt.l embargo on this message
i G
George E. Reedy '
Press Secretary to the President
THE WHITE HOUSE
TO THE CONG ESS'O.F THE UNITED STATES:
After ,a full review of our international balance of, zraents and
c,ua! s~I l ca stica? , I can report to the Congress, thato
The state of the dollar in the world today is strong far
,stronger tha.xi three or four years ago.
To assure its continued and growing strength.. however, we
r red to- take new steps to speed our progress toward balance
in our external payments.
The strength. a.f our dollar is backed by
--the world's most productive anc efficient economy,
moving'each year to new heights of output, employment,
and .income without inflation;
the world's largest supply of gold, fully pledged to
honor this count:ry's dollar obligations,
mercial trade surplus to $3. 6 billion.
the government) to $22. 2 billion and our com-
Clea.r1y, those who fear for the dollar are needlessly afraid. Those
The .dollar is and ,will remain, as mood ae gold, freer convertible
at $35 an ounce. .~. ,w..
$88 billion of public and private claims against
foreigners, $37 billion greater than their claims
against us,,, counting our private asoets,only, the
margin is about $15 billion, and'steadily growing,
the world's most favorable trade position, 'based
on a rise in our exports by more than one-fourth
in four years a. rise which has brought our
the ,.larld"s strongest creditor position, based on
commercial exports `(ekcluding exports financed
.... aau}rs. s,.~ ten vraccsn si rats, in vain:
A country which exports far more than it imports and whose net
asset position abroad is great and growing is not "living beyond
its means.
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That pledge is backedlmour firm determination to brin an end
to our balance of payments deficit. __._
Last year, our flows of dollars abroad -- to pay for our imports
and foreign travel, to finance our loans and investments abroad, and
to meet our defense and aid obligations -- still exceeded our dollar
credits from foreigners by $3 billion. This represents steady improve-
anent over the $3. 6 billion deficit in 1962 and the $3. 3 billion deficit in
1963. But our progress is too slow.
The world willingly uses our dollars as a safe and convenient
medium of international exchange. The world's growing supply of
dollars has played a vital role in the postwar growth of the free world's
commerce and finance. But we cannot -- and do not assume that the
world's willingness to hold dollars is uuimited.
On the basis of searching study of the major causes of our continued
imbalance of payments, I therefore rp opose the folly program:
First, to maintain and strengthen our checkrein on foreign
use of United States capital markets, I ask the Congress
to extend the Interest Equalization Tax for two years
beyond December 31, 1965;
to broaden its coverage to non-bank credit of one-to-three
year maturity;
Second, to stem and reverse the swelling tide of U. S. bank
loans abroad, I have used the authority available to me under
the Gore Amendment to the Act to ap y the Interest Equaliza-
tion Tax to bank loans of one year or more.
Third, to stop any excessive flow of funds to Canada under its
special exemption from the Equalization Tax, I have sought and
received firm assurance that the policies of the Canadian Gov-
ernment are and will be dir. ected towards limiting such rautflcws
to the maintenance of a stable level of Canada's foreign exchange
reserves.
Fourth, to limit further the Outflow of bank loans, I am asking
the Chairman of the Board of Governors of the Federal Reserve
System in cooperation with the Secretary of the Treasury to
enroll the banking community in a major effort to limit their
lending abroad.
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Fifth. to ensure the effective cooperation of the banking
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Seventh, h, to minimize the forke gn exchange costs of our defense and
aid programs, I am directing the Secretary of Defense, the Admin-
istrator of AID, and other officials immediately to step up their
efforts to cut overseas dollar costs to the bone.
Eighth, to narrow our tourist gap, I encourage our friends from
abroad, as well` as our own citizens, to "See the U.S.A. ;" and I
request legislation further to limit the duty-free exemptions of
American tourists returning to the United States.
Ninth, to earn more trade dollars, I am calling for a redoubling of
our efforts to promote exports.
Finally, to draw more. investment from, abroad, I am requesting
new tax legislation to increase the incentives for foreigners to
invest in U. S. corporate securities.
These measures will deal with our payments deficit and protect
the dollar in ways fully consistent with our obligations
-- to sustain prosperity at home;
-- to maintain our defenses abroad;
-> to supply private and public funds to less developed countries
to build both their strength and their freedom;
-- to avoid "beggar thy neighbor" restrictions on trade and work
for a successful conclusion of the Kennedy Round trade
negotiations;
-- to work with our trading partners toward a more flexible world
monetary system.
These actions should achieve a substantial reduction in our inter-
national deficit during 1965, and secure still further improvement in
1966.
Where We Stand Today
Our deficit in 1964 was t?o. large. And over half of it occurred in
the final quarter of the year. ,- partly because of special and temporary
factors.
Yet this. disturbing reversal of our progress should not blind us to
the solid and significant advances we have made in the past four years.
The broad-based attack: we launched four years ago -- and intensi-
fied 18 months ago -- has in considerable part hit its mark;.
(OVER)
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Tax cuts and other measures to increase output, stimulate
cost-cutting investment, and hold prices steady have made
U. S. products far more competitive in world markets.
Combined with special export promotion efforts, these
policies have
-- boosted our commercial exports by $4. 7 billion, or
27%;
-- pushed our commercial trade surplus to a new record
of $3. 6 billion -- $800 million more than in 1960, and
a gain of $1. 3 billion over 1963.
Unrelenting efforts to cut the dollar drain of defense and
foreign aid expenditures' have, since 1960,
-- reduced overseas dollar spending for aid by more than
$400 million;
reduced overseas military spending by more than
$200 million (despite rising prices in the countries
where our forces are stationed);
increased military offset sales to foreign countries
through the Department of Defense-by $450 million, and
expanded sales of military equipment to foreign governments
from commercial sources.
Successful policies for expansion both here and overseas
have brought a rise by nearly $2 billion in profits and
interest on our past foreign investments.
But these impressive gains totalling well over $3. 5 billion did not
correspondingly narrow our balance-of-payments deficit. They were
largely offset by a $2. 5 billion rise in the level of private capital outflow
since 1960 -- and $2 billion of this rise occurred from 1963 to 1964:
The Interest Equalization Tax succe s sfu llydimini shed American
purchases of fore'gn securities from the peak rate of 1963. But
new issues exempt from the tax -- especially by Canada -- kept
these purchases nearly $500 million above the 1960 level.
Meanwhile, our banks met foreign demands for capital by adding
almost $1 billion to their long-term leans abroad in 1964 --
$800 million above 1960 and $400 million above 1963.
Short-term capital outflows in the form of bank credits and
corporate funds rose to an estimated $2 billion, well above
the 1960 and 1963 outflows even though our money-market
rates were kept generally in line with those abroad.
Direct investment abroad by U.S. companies -- very
largely in Canada and Europe - rose by more than $400 million
above 1960 levels, and $200 million above 1963.
Moreover, travel and tourist spending abroad rose $600 million
from 1960 to 1964, while foreign travel outlays in the United States rose
only $200 million.
The net impact of all these changes was to reduce tour over-all
deficit by only $900 million -- from $3. 9 billion in 1960 to $3. 0 billion
last year.
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To be sure, we have made more progress than these raw figures
suggest. More than half of our l964:deficit was financed by increased
lrldi s of dollars by foreign citizens, and by foreign private banks
and businesses. Less than half of it had to be :financed by the sale
of gold or of dollars to foreign governments and central banks. It is
only this "official" part that othea.' countries count as the measure of
their deficits.
If we measured our deficit their way, it would show
-- in. 1962, a deficit of $3. 3 billion;
- - in 1963, a deficit of $2. 3 billion; and
- - in 1964, a deficit of only $1. 3 billion.
This way of measuring our deficit does not reduce our need
for further action. But it gives anther, and in many ways a better
measure of our progress. It gives another and perhaps more realistic
measure of how far we still have to go to attain balance. And it reflects
the firm confidence of private individuals the world over in the dollar.
This confidence rests on.the full convertibility of our dollars into
gold -- at the fixed price of $35 an ounce. Our gold reserve of $15 billion
represents 35% of the free world's official gold reserves. To eliminate
any. possible doubts about its full availability I have asked the Congress
to remove the outmoded gold cover requirement against Federal Reserve
deposits. I am glad that the Congress is acting promptly on this
recommendation.
As we move ahead to further measures to cope with our balance of
payments problem, it is clear that we lead from strength. But to safe-
guard that strength, we must reinforce our programs to bring our
external payments into balance and maintain full confidence in the dollar.
Measures to Reinforce Our Programs
Capital
I propose to take further steps to restrain our outflow of capital
to the advanced industrial world. I do so reluctantly. The contribution
of American capital to the world's growth and prosperity has been
immense. But our balance of payments deficit leaves me. no choice.
The Interest Equalization Tax has effectively reduced the purchases
of foreign securities by Americans since legislation was submitted. to
Congress in July 1963. At the same time, it has encouraged the broad-
ening and deepening of capital markets in Europe -- markets which can
make a lasting contribution to the economic growth of the Free World.
The tax is now -scheduled to expire at the end of this year. But
circumstances require that it remain in effect.
Therefore, I request the Congress to extend for two Years the
Interest Equalization Tax on purchases by Americans of foreign securities.
(OVER)
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'BaWloat#s` abroad- with matklrities ~bV r 1`y ear `riot"now covered
y the talc increased by mover "if 'a .e-third, 'fir nea-rly $1 billion, ,in
1964.',The bulk c f"'thi?s rnonie*~:wdnt t+o,dthe'r industrialized coiiritries. : Of
this: bhly4-5%-sserVed to fiance U. S: 'exports.
In my judgment this outflow has reflected substitution -ftYr7.Ae*
security issues in an amount sufficient materially to impair the
effectiveness of the Interest ,Eglization Tax.
Acting, therefore, hder the authority ranted me_~Y-
the Interest Equalization Tax Act, I have today imposed the
Tax on bank oans abrbad''with rnaturrtie.s.+t f one year or
-
more, with appropriate exemption for borrowers in develo12
ing countries.
If the Tax did no't apply to -foreign credits made by non-bank lenders,
it would discriminate against -banks -and invite. an outflow of untaxed funds
through non-banking channels. .
Therefore, Irequ-est the Congress to amend the'Interest
Equalization Tax to impose it on extensions of non-bank credit
of one year or more maturity, effective as of today.
' Finally, and, as: soon as proper authorizations are prepared, I intend
to' exempt from the Interest Equalization Tax, purchases by United States
residents of new securities issued or guaranteed by the Government of
Japan, up to an aggregate amount of $100 million each year. Until now,
an exemption for Japan under the Interest Equalization Tax has not
proved necessary. However, the application of the Tax to bank loans
of over one year will; in my 'judgment, create a sufficient threat to the
international monetary system to justify a limited exemption.
These measures are designed to serve our balance-of-payments
objectives without imposing direct controls on American business abroad.
We seek to preserve the freedom of the market place. But we cannot
succeed without the full cooperation of the business and financial
community
I hereby call on American businessmen and bankers to enter a
constructive partnership with their government to. protect and-strengthen
the position of the dollar in the world today. In doing so, they will per-
form a major service to their Nation. And they will help?as'stire a setting
of economic prosperity at home and economic stability abroad in which-
to conduct their own business, and financial operations.
Let me make clear that.the government does not wish to?impede
the financing of exports, or the day-to-day operation of American
business abroad. But loans- and investments' which are'not essential
must be severely curtailed.
Specifically, I .ask: the bankers'and, businessmen of America to
exercise voluntary restraint ip lending money ar making s investments> ? -.
abroad in the developed countries. This request applies with special
force to short-term loans and direct investments, that is, the capital
outflows not covered by the Interest Equalization Tax.
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' In connection with bank loans, I am asking the Chairman of the
Board of Governors of the ede al Reserve Systern-to work closely
with the Secretary of the Treasury and the Nation'.s banks to develop
a program that will sharply limit the flow of bank loans abroad. I
have directed the Comptroller of the Currency, and the Chairman of
the Federal Deposit Insurance Corpo'ration to cooperate with the Federal
Reserve and the Treasury in this undertaking.
To initiate this program, I am inviting a group of our leading
bankers to meet with me, the Secretary of the Treasury and the
Chairman of the Federal Reserve Board in the near future.
Cooperation among competing banking interests could raise problems
under the antitrust laws, and, if extended beyond measures essential to
our balance of payments objectives, would damage our competitive system.
competition.
Pending enactment of this legislation, the Secretary of the Treasury
and the Federal Reserve will guide this program of voluntary restraint
along lines which raise no antitrust problems.
In connection with short-term corporate lending and direct investment
in advanced countries abroad, I am asking a group of our leading business-
men to meet with me and the Secretary of Commerce for a full discussion
of the voluntary methods by which we can achieve the necessary results.
The Secretary of Commerce will remain in close contact with the responsi-
ble corporate officials. He will request periodic reports as the basis for
appraising their contribution to our balance-of-payments targets.
I have no doubt that American bankers and businessmen will respond
to the Nation's need. With their cooperation, we can block the leakage of
funds abroad, without blocking the vital flow of credit to American
business.
I am confident that the Federal Reserve, in carrying out its
responsibilities for monetary policy, will continue its efforts to maintain
short-term rates of return in the American money market. The Treasury
will fully cooperate. At the same time -- and in view of the heavy flow of
private savings into our capital markets -- I expect the continuation of
essential stability in interest rates.
Government Expenditures Abroad
Since 1960, we have steadily reduced the dollar drain of our foreign
aid program. We have steadily raised the percentage of AID dollars spent
for U. S. goods and services -- 85 percent of new AID commitments are
now spent within our borders. Until we master our balance--of-payments
problem, AID officials will send no aid dollar abroad that can be sent
instead in the form of U. S. goods and services.
(OVER)
Therefore, I request the Congress to rant a statutory
exemption from the antitrust laws to nuke pos.43~ the cooperation
of American banks in support of our balance of payments objectives.
I re uest, also, that the legislation require that this exemption be
administered in ways which will not violate the principles of free
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The same rule will apply to our defense dollars. We have already
made major progress in cutting the outflow of dollars for our defenses
abroad -- without impairing our strength or our defense commitment
to the Free World. I have directed the Secretary of Defense to intensify
his program
-- to shift defense buying from sources abroad to
sources in the United States;
-- to reduce the staffs in overseas headquarters;
-- to streamline overseas support operations;
-- to work with our defense partners to increase their
offset purchases of military equipment in the United States.
The Department of Defense has already conserved hundreds of
millions of dollars of foreign exchange by such actions. But the
Secretary assures me he can do more, while fully protecting our
security interests and discharging our responsibilities.
Foreign Travel
The growing interest of our citizens in foreign lands, and the steady
rise in their incomes, have greatly increased American vacation travel
abroad. Foreign travel should be encouraged when we can afford it, but
not while our payments position remains urgent. Today, our encourage -
ment must be directed to travel in the United States, both by our own
citizens and by our friends from abroad.
I ask the tourist industry to strengthen and broaden the appeal of
American vacations to foreign and domestic travelers, and I will
support its efforts through the "See the U.S.A." program.
In order to cut the dollar outflows associated with foreign travel,
I recommend that the Congress
-- pass legislation to reduce the duty exemption on foreign
purchases by United States citizens returning from
abroad to $50, based on the price actually paid;
-- limit the exemption to goods which accompany the
returning travelers.
Foreign Investment in U. S. Securities
A truly worldwide market for capital among industrialized nations
requires a two-way flow of investments. In order to stimulate a
greater inflow of capital from advanced industrial countries, the
Secretary of the Treasury will shortly request legislation, generally
along the lines recommended by a Presidential Task Force, to remove
tax deterrents to foreign investment in U. S. corporate securities.
This action will encourage -- and will be reinforced by -- the efforts
of American business and finance to market U. S. stocks and bonds to
foreign investors.
Exports and Competition
Finally, and most important for the long pull, American business,
labor, agriculture, and government must work together to maintain stable
costs and prices and. strengthen_our trade- position in the world.
more
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Essential to a strong competitive position is an expanding economy
operating at or near capacity, yet holding costs and prices in check.
Sharp reductions in income taxes -- with more ,liberal depreciation
allowances and special incentives for cost-cutting investment - have
played a key role in creating such strength. Rising volume, rising
productivity, and falling tax rates have enabled U. S. industry to hold
the, line on costs. and prices while earning record profits and paying
record wages.
As a result, U. S. prices and wage costs have remained more stable
in recent years than those of any of our major competitors. The 27%
rise in commercial exports since 1960 -- and especially the 15% rise
in the past year -- bear witness to our growing ability to compete in
foreign markets. And the moderate rise in our imports demonstrates
our growing ability to meet and beat foreign competition in our home
markets.
But we must not take that ability for granted. Unwarranted price
and wage. increases 11 could destroy it all too quickly. Unless American
business and labor hew to the Government's price-wage guideposts, we
will run grave risks of losing our competitive advantage.
Wage increases which exceed economy-wide productivity gains and
price decisions which ignore falling unit costs -- and there have been
recent instances of both -- do us all a disservice.
I call on all Americans to do their share in maintaining our generally
excellent record of wage and price moderation. They will thereby
strengthen their country both at home and abroad.
On a foundation of stable costs and prices, we will build an increas-
ingly vigorous program of export expansion:
-- I urge the Congress to approve the $13 million budget
request for our export expansion program in the next
fiscal year.
We will step-u.p our efforts to assure American industry
sound and fully competitive export financing.
We will strive to eliminate such artificial barriers to
U. S. exports as discriminatory freight rates on ocean
traffic.
Policies for an expanding economy coupled with responsible price
and wage decisions and special measures to convert our competitive
advantage into greater exports -- this is the combination that holds the
key to a lasting solution of our balance-of-payments problem.
Evolution of the International Payments System
The measures I have proposed in this Message will hasten our progress
toward international balance without damage to our security abroad or our
prosperity at home. But our international monetary responsibilities will
not end with our deficit. Healthy growth of the Free World economy
requires orderly but continuing expansion of the world's monetary reserves.
(OVER)
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During the past decade, our deficits have helped meet that need. The
flow of deficit dollars into foreign Central Barak8 has made up about half
of the fncrease in Free World reserves. As we eliminate that flow, a
shortage of reserves could emerge. We need to continue our work on the
development of supplementary sources of reserves to head off that threat.
And we need to perfect our mechanisms for making international credit
available to countries suffering from balance of payments difficulties --
on terms that will assure orderly correction of imbalances without forcing
deflation on deficit countries or inflation on surplus countries.
To go back to a system based on gold alone -- to the system which
brought us all to disaster in the early 1930s -- is not an answer the world
will, or should, accept. Rather we must build an the system we now have,
a system which has served the world well during the past twenty years.
We have already made an excellent start. Our short-term defenses
against speculative crises have proved their strength and flexibility. The
proposed increase in IMF quotas is a constructive forward step. Further,
for some time we have been jointly exploring with our major trading part-
ners how best to create new reserve assets that will be available if needed
to supplement gold and dollars.
We must press forward with our studies and beyond, to action --
evolving arrangements which will continue to meet the needs of a fast
growing world economy. Unless we make timely progress, international
monetary difficulties will exercise a stubborn and increasingly frustrating
drag on our policies for prosperity and progress at home and throughout
thc' world.
Let no one doubt it --
We will eliminate our international deficit.
We will maintain the dollar at full value.
Our instruments and our actions must be as strong as our resolve.
That is why I have taken the additional steps, anti am asking the Congress
for the new legislation. These measures will focus our great economic
strength more sharply on our payments problem.
This is a problem that involves us all -- as workers, as businessmen,
as bankers, and as Government officials.
I know that the Congress-and the American public will respond in full
measure to the challenge.
LYNDON-B. JOHNSON
THE WHITE HOUSE,
February"iO;-? 1965.
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NW
FEBRUARY 11, 1965
Office of the White House Press Secretary
THE WHITE HOUSE
First reports on the performance of the economy at the start of 1965 are
now coming in, and they provide encouraging evidence of the continued
strength of our extended period of prosperity.
1. Sales of new American autos ran at a rapid pace of nearly
695, 000 for the month of January, representing
-- an annual rate of 9-1/2 million cars (seasonally adjusted), and
-- a gain of 21% above January 1964.
2. Total retail sales in January were up 6 -1 / 2% from last January
though they did not quite match December's record-shattering
pace.
3. Most encouraging was the January drop in the unemployment
rate (seasonally adjusted) to 4.8% -- the lowest level in 87
months. Compared with a year ago, we have 1-3/4 million
more jobs and about half a million fewer unemployed.
4. Exports soared to a. new monthly record in December while
imports declined. Our export surplus in December was the
highest for any month since March 1957. It brought our 1964
merchandise trade surplus to $6. 9 billion, or 31% above 1963.
This fine export record provides a solid foundation for our
efforts to correct our balance of payments problem. Pay-
ments for these big December exports will get our 1965
balance of payments off to a good start.
Any interpretation of these developments must recognize some qualifications.
Auto sales are being spurred currently by the backlogs still
left from last fall's strikes.
Our December foreign trade figures probably reflect some rush
of shipments to beat the dock strike.
Extra accumulation of steel inventories is temporarily contributing
to our production and employment.
Even with the qualifications, the picture is bright. According to my advisers,
this quarter's increase in GNP is expected to exceed the large quarterly
grains of last year. It is likely to be the largest advance in more than 3
years, and may even be the biggest gain of the current expansion. We look
forward -- with optimism and with determination -- to continued advances
throughout 1965.
# # #
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