Henry Fowler; Former U.S. Treasury Secretary
Henry H. Fowler, who as U.S. Treasury secretary from 1965 to 1968 was the nation’s point man on President Lyndon B. Johnson’s “guns and butter” economic policy, died of pneumonia Monday in Falls Church, Va. He was 91.
“Guns and butter” was a term describing the administration’s insistence that a tax wasn’t needed to pay for the escalating war in Vietnam and the domestic programs of the Great Society.
But behind the scenes, Fowler lobbied within the administration for a 10% tax increase as inflationary pressure began to build from Vietnam War-related activities. Johnson opposed a tax increase but eventually signed off on a surcharge that passed in 1968, the last year of a federal budget surplus until 1998.
“Secretary Fowler was at all times committed to the highest ideals of public service,” current Treasury Secretary Lawrence H. Summers said in a statement in Washington. “United States and world economic and financial stability were greatly enhanced because of his dedication.”
Fowler’s elevation from Treasury undersecretary to the top post came as a surprise to political observers who viewed his tenure in the No. 2 job as a counterbalance to then-Secretary C. Douglas Dillon, an investment banker and Republican who had also served in the Dwight D. Eisenhower administration.
Like Johnson, Fowler was a Southern Democrat with a reputation for being conservative but open to liberal policies. Fowler also had gained favor in the business and financial communities for shepherding the 1964 tax reduction bill through Congress.
The passage of the bill was no small feat given foes who feared that a tax cut would do little to improve the economy and only add to the deficit. A courtly figure, Fowler shunned the public spotlight, preferring to meet with lawmakers behind closed doors. He argued that a massive cut in taxes would lead to increasing consumer purchasing, providing a boon to an economy suffering from unemployment and slow growth.
In 1969, he joined Goldman Sachs, working in New York as chairman of Goldman Sachs International for 12 years.
In that capacity, he was instrumental in establishing the firm’s business in Europe and Asia. He also started the firm’s U.S. Treasury and agency securities trading operations in the early 1970s, leading to the creation of Goldman Sachs’ highly successful Fixed Income, Currency and Commodities Division.
Fowler was born in Roanoke, Va., and graduated from Roanoke College. He joined what is now the Washington law firm of Covington & Burling after receiving a law degree from Yale University in 1933.
A year later, he was one of many young lawyers recruited to work for President Franklin D. Roosevelt’s New Deal social and economic measures. At a time when New Deal programs were being challenged as unconstitutional, he earned his spurs doing legal work for the Reconstruction Finance Corp., Tennessee Valley Authority, the Federal Power Commission and the War Production Board. In the latter capacity, he was sent to Britain and Germany in 1944 and 1945. He served as chief counsel of a Senate subcommittee on education and labor before spending about five years in private law practice representing blue-chip companies in government matters.
Given his experience with the War Production Board, he was asked to return to Civil Service during the Korean War, eventually becoming director of the office of defense mobilization. He practiced law from 1953 to 1961, before returning to the government as Treasury undersecretary shortly after President John F. Kennedy took office.
