EXPLANATION OF ANNEXED BUDGETS Part IV presents detailed schedules and explanatory statements on seven self-supporting Government agencies and programs which are outside the normal budget process. Like the budgets for the Legislative branch and The Judiciary, the annexed budgets have not been reviewed by the President but are presented in the amounts submitted by the agencies. 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 than for all of their activities, and the information was 1294 | obtained informally. obtained informally. The presentation 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 announcement of class and uniform blend prices, associated butterfat differentials and with examination of handlers records and facilities to verify their reports and payments to producers and in checking weights and tests of producer milk. 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 and adjustments below these rates are made from time to time upon recommendations by the market administrator and approval of the Consumer and Marketing Service 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, as the case may be. Milk sold by regulated handlers supplied about 104 million persons-60% of the total nonfarm populationduring calendar year 1965. The following table gives an indication of the growing role of Federal orders on the marketing of milk over the past few years. Administrative fund totals are comprised of 73 separate independent order accounts, plus in fiscal year 1966, 2 additional orders which were in effect for a portion of the fiscal year. The Marketing Service fund totals are comprised of 63 separate independent order accounts, plus in fiscal year 1966, 2 additional orders which were in effect for a portion of the fiscal year. The Secretary of Agriculture is authorized by the Agricultural Marketing Agreement Act of 1937, as amended-under certain conditions-to issue Federal milk marketing orders establishing minimum prices which handlers are required to pay for milk purchased from producers. Market administrators are responsible for carrying out locally the terms of specific marketing orders. Their operating expenses, partly financed by assessments on regulated handlers, and partly by deductions from producers, are reported in these schedules. These funds are collected 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. His staff is employed directly by the market administrator. The activities conducted in the local office are concerned primarily with monthly computations and public 110 The Office of the Comptroller of the Currency, the administrator of national banks, was established by the National Currency Act of 1863 (12 U.S.C. 1 et seq., 12 Stat. 665). That act provided for the chartering and supervision of a banking system by this Federal agency. The administrator of national banks is empowered by law to issue charters to new banking institutions which choose to operate under Federal law. Each approval or disapproval issues only upon a comprehensive field investigation which is subsequently subjected to thorough analysis by an expert staff of attorneys, economists, and experienced national bank examiners. The operations of existing national banks are subject to the supervision of the Comptroller. A staff of over 1,200 national bank examiners conducts a detailed examination of the approximately 5,000 operating national banks on a regular basis. The end-product of these examinations is a determination of the financial condition of national banks, the soundness of their operations, and their compliance with applicable laws and regulations. In addition, the Comptroller must pass on all applications for mergers in which the resulting bank will be a national bank. He must also pass on applications by national banks for new branch offices. In accordance with statute, the Comptroller of the Currency promulgates regulations and rulings for the guidance of national banks. All laws, regulations and rulings relating to national banks are published in the "Comptrollers Manual for National Banks" and the "Comptrollers Manual for Representatives in Trusts," both available in the 22,554 Comptroller's Office. In addition, the Office's Depart ment of Banking and Economic Research edits and publishes the quarterly "National Banking Review," a journal of banking and economic policy and practices. 260 22,814 Cash transactions: 93 Gross expenditures.. 94 126,956 -513,452 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 APPENDIX TO THE BUDGET FOR FISCAL YEAR 1968 TREASURY DEPARTMENT-Continued EXCHANGE STABILIZATION FUND-Continued it began operations has been $254.6 million and its expenses $46.9 million, resulting in a net income as of June 30, 1966, of $207.8 million. It is not practicable to forecast the transactions of the fund in gold, foreign currencies, foreign investments, and the like. The budget schedules, therefore, are incomplete for all items other than operating expenses for 1967 and 1968. Administrative expenses will be more than covered by interest on investments in U.S. securities. Liabilities of the fund include $583 million borrowed by the Secretary from the International Monetary Fund. Revenue, Expense, and Retained Earnings (in thousands of dollars) 1966 actual 1967 est. 1968 est. |