Senator MCCARTHY. If I were the Secretary of the Treasury I would be concerned, at least I would try to explain a statement such as Mr. Martin said:

But while the spirit is willing, the flesh, in the form of concrete policies, has remained weak. With the best intentions, some experts seem resolved to ignore the lessons of the past.

What was he talking about?

Secretary FOWLER. I don't know. You will have to ask him these questions.

Senator MCCARTHY. I would ask him. He is not talking about me, I don't think, because I am not an expert but he might be talking about you.

Secretary FOWLER. He is not talking about me, I can assure you that. He doesn't think my flesh is weak in any particular.

Senator MCCARTHY. He says:

of

The potentialities of monetary and fiscal policies are, we hope, better under

stood

What is the source of his doubts?

Secretary FOWLER. Well, you can't get me up here on a couch and ask me to psychoanalyze Chairman Martin.

Senator MCCARTHY. I think a fellow gives a speech like that, gives a bad speech, he raises a lot of questions and doesn't answer them. Look at this over here. I wouldn't mind this kind of speech on the floor of the Senate. I would hate to have a committee member of the Finance Committee, but just an ordinary run of the mill nonFinance Committee Senator might say this was a good speech.

On the question of the question of gold what he had to say about the fashionable theory about raising the price of gold at the present time. Well, these aren't fashionable theories. The only man I know he is talking about is Rueff.

Secretary FOWLER. He might have some company over there.

Senator MCCARTHY. He might have, but I don't think they are very fashionable. I don't know of anybody else excepting that limited school. Yet the Chairman of the Board, the Federal Reserve, presents this as though it was being seriously considered. And goes on here:

In 1931 and 1933, an increase in the price of gold was recommended in order to raise commodity prices. Today, a gold price increase is recommended as a means to provide the monetary support for world price stability.

Well, one man is making this proposal so far as I know, the great body of economists and fiscal experts are not proposing it. Yet he sets up these contrasts between 1931 as though it ought to be taken seriously by people who ought to be concerned, by experts in the-in fiscal policy.

Senator DOUGLAS. Will the Senator yield?

Senator LONG. He hasn't got the floor to yield.

Senator HARTKE. Let me say my dear friends from Illinois and Minnesota are pretty much in agreement with this.

Senator WILLIAMS. Mr. Chairman, I suggest to satisfy all of them we ought to get Chairman Martin up here and hear his views on this debt increase and all.

Senator LONG. It seems to me we are spending enough time here to examining the Secretary of the Treasury about the Chairman of the Federal Reserve Board. I hope that we haven't got to get the Chair

man of the Federal Reserve Board and have to examine him about the Secretary of the Treasury, because

Senator DOUGLAS. Mr. Chairman, this is the only way we haveSenator LONG. Because the Federal Reserve Board doesn't control the national debt or the debt ceiling, just like the Secretary of the Treasury does not control the policies of the Federal Reserve Board. Senator DOUGLAS. Mr. Chairman, this is the only way we have of getting at the Chairman of the Federal Reserve Board indirectly. Mr. Fowler is a very amiable gentleman. He is drawing into his body all of the arrows which we shoot and we hate to hurt him but this is our only way of talking to Martin who lives down on Pennsylvania Avenue in a very handsome marble palace.

Senator BENNETT. Isn't the Senator a member of the Joint Economic Committee?

Senator DOUGLAS. Yes.

Senator BENNETT. Can't you get at Mr. Martin?

Senator DOUGLAS. Once in a while.

Senator LONG. We can get him. Why on this bill?

Senator HARTKE. I will say why. First let me ask you this, I am trying to set the stage for this situation. The truth of it is that Mr. Martin's speech did not cause the stock market to go down any more than Mr. Fowler's speech or the President's speech caused it toit is still going down, I guess. [Laughter.]

Anyway, it didn't stop it from going down, I can say that; isn't that true?

Secretary FOWLER. Martin will speak for himself.
Senator HARTKE. Let me come on back to this Mr. Martin.

He is a great prophet of gloom and doom, he is the man who made the statement to the Society of American Business Writers, this was some time before it, and he said here is his philosophy, and I think this is remarkable, "Don't let's think we can always have growing prosperity." Would the Secretary agree with that statement?

Secretary FOWLER. I would say we should constantly strive for it. Senator HARTKE. Now, the truth of it is, and this much is so, that if we are going to have a depression, and I know that the Secretary says that he wanted to ignore the first five pages of that speech, but the stock market people and the bank people and the country haven't ignored it, they have been writing, every business publication and every other magazine, every newspaper I have seen, has talked about it, if it is true they are going to go into a recession or one which is similar to the one which he created in 1957; don't you think you ought to ask for a $10 billion increase in the debt limit?

Secretary FOWLER. I am perfectly willing to stand behind the request we have here.

Senator HARTKE. I just wondered whether it is big enough.

Mr. Secretary, Mr. Carlson asked a question and I think somebody in the Treasury ought to be able to answer this: Isn't it true there is going to be a loss of revenue by these stock losses? You said it is hard to compute, but isn't there going to be a loss of revenue?

a

Secretary FOWLER. Not based on the paper profits that are reflection of these losses in values. There will be losses if people sell and realize the losses and match some of them off against gains.

Senator HARTKE. People are selling. How many sold yesterday, 2 million?

Secretary FOWLER. But these estimates, Senator-what I am trying to say is that these estimates about the loss in values are estimates of the loss in paper profits, not realized losses.

Senator HARTKE. I understand. But I will try to hurry up, about two more questions here, I will try to hurry up.

Are you in position where you have to borrow money now?
Secretary FOWLER. We will have to borrow money.

Senator HARTKE. When?

Secretary FowLER. During the fall.

Senator HARTKE. When?

Secretary FoWLER. We haven't picked the exact spot.
Senator HARTKE. Mr. Deming, you are the monetary expert.

Mr. DEMING. We will be borrowing in the first half of this fiscal year, Senator. The precise dates

Senator HARTKE. You do not need a temporary increase in the debt limit at all now, do you?

Mr. DEMING. We will need an increase in the temporary debt limit to get through fiscal 1966.

Senator HARTKE. I am talking about now. All you need now is to keep it at the present level, is that not right?

Secretary FOWLER. We will need it early in the fiscal year, Senator Hartke. We will need it because our receipts in the first 6 months of the fiscal year, July 1 until January 1, are only a percentage, 45 percent of it, roughly.

Senator HARTKE. Could we come back here really to decide that issue maybe in September to see where we are a little better? We can just extend the present temporary ceiling and not discommode the Treasury whatsoever, is that not true?

Secretary FowLER. You would discommode the Treasury. We want to be in position to take advantage of the situations as they develop, and we want to be in a position to take care of our financing requirements.

Senator HARTKE. But you are not pressed for cash now. You already testified to that.

Secretary FoWLER. We are not.

Senator HARTKE. You are not pressed to borrow money now.

Secretary FoWLER. It moves out awfully fast, Senator Hartke. The amount that moves out of the cashbox each month is a very appreciable amount, and the revenues that come in can fall far short of that particularly in these early 6 months.

Senator HARTKE. Let me say to you, Mr. Secretary, I am going to vote with you, but I am very thoroughly convinced that you do not need it. But I do not think the debt limit has much effect upon the overall condition of the country anyway, and I kind of agree with Senator McCarthy we ought to have a temporary ceiling.

How big was it?

Senator MCCARTHY. I do not care, $350 billion.

Senator HARTKE. I am going to accede to my chairman's wishes and cease and desist.

Senator BENNETT. Mr. Chairman, I was called out of the room when my turn came, and I am not going to keep the Secretary very long, but in his questioning Senator Douglas got some figures out of a House report that showed the total assets of the Federal Government at something like $324 billion, and a current debt of about $310 billion. Senator DOUGLAS. That was as of June 30 last year.

Senator BENNETT. No matter what the date was.

There are two things I think we ought to get into the record. Did these include the contingent debt of the United States?

Secretary FOWLER. I am not familiar with the report, Senator Bennett. Senator Douglas had it, and therefore I cannot answer questions concerning it.

Senator BENNETT. Does the $310 billion debt include the contingent debt of the United States?

Secretary FoWLER. No, it does not.

Senator BENNETT. When the Federal Government-and Senator Douglas made it clear he considered this an asset value that he quoted as being very conservative-does the Federal Government charge off any depreciation or obsolescence on any of its assets? Secretary FowLER. No, sir.

Senator BENNETT. It does not.

He made the point that with the $14 billion surplus, if this were a private business, it would be a flourishing operation. Do you know of any private business that does not charge off depreciation and obsolescence?

Secretary FOWLER. Our experience in the Treasury indicates they are all rather avid to charge off.

Senator BENNETT. I would think so.

I made the record that I wanted to make.

Senator DOUGLAS. Since the Senator from Utah has raised this,. I ask unanimous consent that salient pages of the House committee document, pages 1 and 11, be included in the record, and a note which gives the accounting practices followed in making the appraisals.

Senator LONG. Without objection so ordered. (The documents referred to follow:)

FEDERAL REAL AND PERSONAL PROPERTY INVENTORY REPORT (CIVILIAN AND MILITARY) OF THE U.S. GOVERNMENT, COVERING ITS PROPERTIES LOCATED IN THE UNITED STATES, IN THE TERRITORIES, AND OVERSEAS, AS OF JUNE 30, 1964

PART I

INTRODUCTION

This Federal property inventory report represents a compilation of assigned values of real and personal property owned or controlled by the Federal Government, located throughout the world, as of June 30, 1964. This comprehensive recording of assets of the Government is the 10th such report issued by the House Committee on Government Operations. Since 1955, the committee has issued, on an annual basis, inventory reports of federally owned real and personal properties on a fiscal year basis.

The committee staff assigned to this project, aided by the experience of Government department and agency representatives, has explored inventory accounting systems employed by the Federal Government in an effort to include all assets of a department and to bring records covering such assets under accounting control. A comparison of our previous inventory reports, as listed below, shows clearly the great progress which has been made in improving accounting methods and recordkeeping operations employed in recording the amounts of real and personal property owned or controlled by the Federal Government. Constant attention is being focused on accurate and complete accounting of these assets. The utilization of up-to-date accounting systems, motivated by stimulated interest in property inventories, has strengthened the efforts of Government departments and agencies in bringing inventories under accounting control. This progress, which is being observed by the public, Members of the Congress, and especially by the membership of this committee, has been encouraging.

GRAND RECAPITULATION OF THE PERSONALTY AND REALTY ASSETS OF THE U.S. GOVERNMENT AGENCIES, OFFICES, AND ESTABLISHMENTS OF THE GovERNMENT, INCLUDING THE DEPARTMENT OF DEFENSE, AS OF JUNE 30, 1964, 1963, AND 1962 [In millions of dollars]

NOTE.-All properties reported are shown in gross amounts without deductions for allowances for losses and depreciation. Only wholly Government-owned corporation assets and other wholly owned assets are included. Assets held under trust arrangements and interagency assets, including public debt securities owned, are excluded. The properties have been valued at acquisition cost or estimated cost when the actual costs were not known. Public domain, donated property and properties under supervision of the Architect of the Capitol are shown at estimated present-day values. Properties acquired as gifts or without cost to the Government are shown at estimated present-day values.

Senator LONG. The committee had an executive session planned, so I will now declare this hearing closed. I would like to ask the Secretary of the Treasury to stick around a moment or two because there is a matter we wanted to ask him about which is not relevant to this particular bill.

(Whereupon, at 12:05 p.m., the committee proceeded into executive session.)