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EXPLANATION OF ANNEXED BUDGETS

Part IV, presenting detailed schedules and explanatory | statements on seven self-supporting Government agencies and programs which are outside the normal budget process is included for the second consecutive year. Like the budgets for the legislative branch and the judiciary, the annexed budgets have not been reviewed by the President but are included in the amounts submitted by the agencies (except for one case where Bureau of the Budget estimates are used because no agency estimates were submitted). Three agencies (Banks for Cooperatives, Federal Intermediate Credit Banks, and the Federal Deposit Insurance Corporation) have been included in the Governmentsponsored enterprise group in the computation of consolidated cash totals for some years, and the net totals for each have been displayed. However, data were reported only for certain debt and investment transactions, rather

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than for all of their activities, and the information was obtained informally. The inclusion of more complete annexed budgets does not change their handling in the totals.

The other four agencies and programs (Milk Marketing Administration, Comptroller of the Currency, Exchange Stabilization Fund, and the Board of Governors of the Federal Reserve System) are also not included in the administrative budget, and are included only in part in the deposit fund group within the trust fund totals. In part they are outside all traditional figures on Federal finances.

The material in this part is presented in the general format of similar material for public enterprise funds in part I. No appropriation language appears in part IV because action by the Congress is not required.

ANNEXED BUDGETS

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locally, deposited in local banks and disbursed directly by the market administrator.

Each milk order is administered locally by a market administrator who is appointed by the Secretary. There were 39 milk market administrators serving the 82 milk market orders as of July 1, 1964.

Each month each local office computes and announces class and uniform blend prices, and associated butterfat differentials. Handlers' records and facilities are examined to verify their reports and payments to producers, and weights and tests of producers milk are verified.

The expenses of each local office are met from an administrative fund and a marketing service fund which are prescribed in each order. The administrative fund is derived from prorated handler assessments. The marketing service fund of the individual order provides for the expense of disseminating market information to producers who are not members of a qualified cooperative. It also provides for the verification of the weights, sampling and testing of milk from these producers. The cost of these services is borne by such producers. The maximum rates for administrative assessment and for marketing services are set forth in each order. Adjustments below these rates are made from time to time upon recommendations by the market administrator and approval of the Agricultural Marketing Service. Rates are maintained at a level sufficient to provide reserves at about a 6-month operating level. Upon termination of any order the statute provides for distributing the proceeds from net assets pro rata to contributing handlers or producers.

Milk sold by regulated handlers supplied about 100 million persons-60% of the total nonfarm populationduring calendar year 1963.

The following table gives an indication of the growing role of Federal orders on the marketing of milk over the past few years.

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Calendar year

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Number of handlers.

2,259

Number of producers.

189,816

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2,153

176,683

Population of market areas (mil

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(billion pounds)..

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The Secretary of Agriculture is authorized by the Agricultural Marketing Agreement Act of 1937, as amendedunder certain conditions-to issue Federal milk marketing orders establishing minimum prices which handlers are required to pay for milk purchased from producers.

Producer deliveries used in Class I

The Agricultural Marketing Service has been delegated the responsibility for program development, technical assistance and overall program direction of the operations. Market administrators are responsible for carrying out Its costs of carrying out these responsibilities are financed, as authorized by 7 U.S.C. 1392b, from the funds approlocally the terms of specific marketing orders. Their operating expenses, partly financed by assessments on regu-priated by section 32 of the act of August 24, 1935 (7 lated handlers and partly by fees collected from producers, U.S.C. 612c), and are reflected in part I of the appendix are reported in these schedules. These funds are collected

but not shown here.

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The most important functions of the Comptroller of the Currency relate to the organization, examination, and liquidation of national banks. His approval is required by law in connection with the organization of new national banks, the conversion of State-chartered banks into national banks, and consolidations or mergers of national banks with national banks or of State banks with national banks where the continuing institution is a national bank. The establishment of branches by national banks also requires approval by the Comptroller.

The Office exercises general supervision over the operations of national banks. Each national bank is required to publish and file reports of condition not less than four times a year. National bank examiners examine each bank at least three times each 2 years for the purpose of determining the financial condition of national banks, the soundness of their operations, and their compliance with the requirements of the National Bank Act and other applicable statutes.

The estimates for calendar years 1964 and 1965 for costs and personnel have been prepared by the Bureau of the Budget.

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Total Government equity...

1963 1964 actual actual

154.524 67,964

192,930 287,262

347.454 355,226

Applicable receipts...

For the purpose of stabilizing the exchange value of the dollar, the Secretary of the Treasury is authorized to enter into stabilization agreements, and to deal in gold and foreign exchange and other instruments of credit and securities. An exchange stabilization fund, with a capital of $200 million (derived from the increment resulting from the reduction in the weight of the gold dollar which took place in 1934) is authorized by law for this purpose (31 U.S.C. 822a). All earnings and interest accruing are paid into this fund and are available for the purposes thereof, including expenses.

The principal sources of the Fund's income have been the handling charge imposed on purchases and sales of gold for the account of the Fund, profits on foreign exchange transactions, and interest on investments held by the Fund. The income of the Fund has consistently exceeded its expenses; the cumulative income of the Fund from the time it began operations has been $192.6 million and its expenses $37.3 million, resulting in a net income through June 30, 1964, of $155.2 million.

Liabilities of the Fund include a $250 million borrowing by the Secretary from the International Monetary Fund.

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