The Quiet Banker

Others--such as Dean Rusk and Arthur Goldberg--may have captured the headlines. But many Washingtonians are beginning to realize that the top performance by a Kennedy Cabinet officer to date has been turned in by Treasury Secretary C. (for Clarence) Douglas Dillon, 51, the Cabinet's lone Republican and the quiet man of the New Frontier.

Last week Doug Dillon, the Harvard-accented scion of Chateau Haut-Brion,* gave a typical performance before the Senate Appropriations Subcommittee. At issue was the restoration of a $16.9 million appropriation to hire 2,500 additional tax collectors that the House had cut from Treasury's budget. Because the Internal Revenue Service is understaffed, argued Dillon, more than $24 billion in personal income went unreported and untaxed in 1959; the Government's share of that hidden wealth would be more than enough to balance the budget. As usual, Dillon appeared without a retinue of aides or a suitcase crammed with documents. But his meticulous, detailed answers--the product of countless hours of cramming--left the Senators awed, and apparently willing to give Dillon at least half of his request. Dillon, explains a friend, delights "in being the smartest boy in the class."

Internal Verities. Dillon had more background for his job than most of his Cabinet associates had for theirs. A capable Ambassador to Paris (1953-57) and investment banker (Dillon, Read & Co. Inc.), he was Dwight Eisenhower's Under Secretary of State for Economic Affairs, and had little trouble getting the feel of his new desk in the Treasury Building. "My own internal thinking has not changed," he says. "I have not had to change my views." As an unmistakable G.O.P. voice in a Democratic Administration, Dillon has consciously tried to keep out of the limelight, worked diligently to transform his conservative fiscal views into action.

Carefully avoiding the risk of a fight with Congress, Dillon got a Justice Department ruling that has enabled him to nudge down long-term interest rates without affecting short-term levels--a trick his predecessors thought impossible without new laws. The ruling: bonds could be sold at less than their face value, thereby automatically hiking the interest rate. Beyond that, by establishing friendly, first-name relations with William McChesney Martin Jr., cautious boss of the Federal Reserve Board, Dillon smoothed the path for the Reserve's new policy of buying long-term Treasury notes and bonds rather than just short-term bills. At Dillon's direction, Under Secretary Robert Roosa has begun discussions with Europe's central banks on ways to prevent multibillion-dollar swings in the Western world's balances of payments; last quarter's $300 million U.S. deficit was the lowest in three years. Dillon helped plan the Administration's expanded Latin American aid program; he also worked closely with George Ball, Under Secretary of State for Economic Affairs, in U.S. efforts to persuade well-heeled allies to start their own foreign aid programs.

The Thought's the Same. Nothing Doug Dillon has done at Treasury has stirred up more emotions than his tax reform proposals (TIME, May 12). Attacked by both labor and management, the Administration's tax bill would crack down hard on expense accounts, provide corporate tax relief to spur investment in new plant and equipment. Dillon last week sailed imperturbably through three hard days of House committee questioning, calmly expects to see "the great bulk" of his package enacted--a view that few Congressmen share. "The chances are pretty strong that something will go through this time," Dillon insists, "although I know enough about Congress to know that it won't be in the same form in which we submit it." Win or lose, Dillon next year will suggest to Congress even more sweeping changes, aimed at broadening the tax base while lowering rates.

Compared with most of his fellow Cabinet members, Banker Dillon gets his job done in something close to bankers' hours. "Most of my clients," he notes happily, "work a five-day week." At the office by 8:45, he tries to leave by 7:30 at night (half an hour earlier if he is summoned to a white-tie dinner), seldom takes home heavy reading. His briefing papers he saves for weekends; he usually shows up in his office Monday morning with dozens of questions for his staff to handle. Demanding of talent, impatient with stupidity, Dillon has brought a sense of urgency to Treasury, and he clearly intends to keep the tempo upbeat. "When I took this job," says Republican Douglas Dillon, "it was with the thought that there was a national emergency." Then, with characteristic understatement, he adds: "Nothing has happened since this Administration took office to change that thought."

*A historic estate on the southern outskirts of Bordeaux that Dillon's father bought during the Depression as a sound oenological investment: its red Graves is one of five immortal wines of Medoc.

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