23. Memorandum From Secretary of the Treasury Dillon to President Johnson 1

By letter dated April 29, 1964,2 you directed me to follow up on the Governmental action required to implement the Report of the Task Force on Promoting Increased Foreign Investment and Increased Foreign Financing, headed by the then Under Secretary of the Treasury, Henry H. Fowler, which was delivered to you on April 27, 1964.3

This follow-up has now been completed, and the attached report is being submitted in compliance with your directive.4 By far the most important recommendations deal with changes in our tax laws to [Page 67] improve the climate for foreign portfolio investment in the United States. The Treasury, after consultation on technical detail with the staff of the Joint Committee on Internal Revenue Taxation, is in general accord with the recommendations of the Task Force in this area, as more fully described in the attached report.

In view of the importance of this subject to the business community and to our balance of payments, I recommend an early White House Press Release or a statement by you at your next press conference along the lines of the attached draft.5

A fuller description of the details of our tax recommendations could be included in the balance of payments message which we are recommending that you send to the Congress in February or March, depending on how the international payments situation evolves during the coming weeks.6

Douglas Dillon 7
  1. Source: Johnson Library, National Security File, Subject File, Balance of Payments, Vol. 2 [2 of 2], Box 2. No classification marking.
  2. Not found.
  3. For excerpts of this report, see American Foreign Policy: Current Documents, 1964, pp. 1182–1190.
  4. See Document 24.
  5. Not printed.
  6. President Johnson delivered a special message to Congress proposing measures to correct the balance-of-payments deficit on February 10, 1965. See Public Papers of the Presidents of the United States: Lyndon B. Johnson, 1965, Book I, pp. 170–177.
  7. Printed from a copy that indicates that Dillon signed the original.