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Calendar No. 3 3
74TH CONGRESS
1ST SESSION
H. R. 4304
[Report No. 32]
IN THE SENATE OF THE UNITED STATES
JANUARY
21 (calendar day, JANUARY 28), 1935
Read twice and referred to the Committee on Finance
JANUARY
21 (calendar day, JANUARY 29), 1935
Reported by Mr. HARRISON, without amendment
AN ACT
To amend the Second Liberty Bond Act, as amended, and for
other purposes.
1
Be it enacted by the Senate and House of Represents-
1> tives of the United States of America in Congress assembled,
3
That the Second Liberty Bond Act, as amended, is further
4
amended as follows:
5
6
The first paragraph of section 1 is amended to read
as follows:
7
" The Secretary of the Treasury, with the approval of
8
the President, is hereby authorized to borrow, from time to
9
time, on the credit of the United States for the purposes
10
of this Act, to provide for the purchase, redemption, or re-
IX
funding, at or before maturity, of any outstanding bonds,
2
1
notes, certificates of indebtedness, or Treasury bills of the
2
United States, and to meet expenditures authorized for the
3
national security and defense and other public purposes au-
4
thorized by law, such sum or sums as in his judgment may
5
be necessary, and to issue therefor bonds of the United
6
States: Provided, That the face amount of bonds issued
7
under this section and section 22 of this Act shall not exceed
8
in the aggregate $25,000,000,000 outstanding at any one
9
time."
10
SEC. 2. The first sentence of subsection (a) of section
11
5 is amended to read as follows: " In addition to the bonds
12
and notes authorized by sections 1, 18, and 22 of this Act,
13
as amended, the Secretary of the Treasury is authorized,
14
subject to the limitation imposed by section 21 of this Act,
15
to borrow from time to time, on the credit of the United
16
States, for the purposes of this Act, to provide for the pur-
17
chase, redemption, or refunding, at or before maturity, of
18
any outstanding bonds, notes, certificates of indebtedness or
19
Treasury bills of the United States, and to meet public
20
expenditures authorized by law, such sum or sums as in his
21
judgment may be necessary, and to issue therefor (1) cer-
22
tificates of indebtedness of the United States at not less than
23
par (except as provided in section 20 of this Act, as
24
amended) and at such rate or rates of interest, payable at
25
such time or times as he may prescribe; or, (2) Treasury
3
1
bills on a discount basis and payable at maturity without
2
interest."
3
SEC. 3. Section 5 is further amended by striking out
4
the final sentence of subsection (a) thereof, reading as
5
follows: " The sum of the par value of such certificates and
6
Treasury bills outstanding hereunder and under section 6
7
of the First Liberty Bond Act shall not at any one time
8
exceed in the aggregate $10,000,000,000/'
9
10
SEC. 4. Subsection (a) of section 18 is amended to
read as follows:
11
" In addition to the bonds and certificates of indebted-
12
ness and war-savings certificates authorized by this Act and
13
amendments thereto, the Secretary of the Treasury, with
14
the approval of the President, is authorized, subject to the
15 limitation imposed by section 21 of this Act, to borrow from
16
time to time on the credit of the United States for the pur-
17
poses of this Act, to provide for the purchase, redemption,
18
or refunding, at or before maturity, of any outstanding bonds,
19 notes, certificates of indebtedness, or Treasury bills of the
20
United States, and to meet public expenditures authorized
21
by law, such sum or sums as in his judgement may be neces-
22
sary and to issue therefor notes of the United States at
23
not less than par (except as provided in section 20 of this
24
Act, as amended) in such form or forms and denomination
25
or denominations, containing such terms and conditions, and
4
1
at such rate or rates of interest, as the Secretary of the
2
Treasury ma}7 prescribe, and each series of notes so issued
:>
shall be payable at such time not less than one year nor
4
more than five years from the date of its issue as he may
r>
prescribe, and may be redeemable before maturity (at the
(5
option of the United States) in whole or in part, upon not
7
more than one year's nor less than four months' notice, and
5
under such rules and regulations and during such period as
!)
he may prescribe."
K)
S E C . 5. The Second Liberty Bond Act, as amended.
I 1 is further amended by adding a new section, as follows:
12
" SEC. 2 1 . The face amount of certificates of indebted-
I;{
ness and Treasury bills authorized by section 5 of this Act,
14
certificates of indebtedness authorized by section 6 of the
15
First Liberty Bond Act, and notes authorized by section 18
10
of this Act shall not exceed in the aggregate $20,000,000,000
17
outstanding at any one time."
J8
19
S E C . 6. The Second Liberty Bond Act, as amended,
is further amended, by adding a new section, as follows :
20
" S E C . 22. (a) The Secretary of the Treasury, with
21
the approval of the President, is authorized to issue, from
22
time to time, through the Postal Service or otherwise, bonds
23
of the United States to be known as " United States Savings
24
Bonds."
25
able to meet any public expenditures authorized by law and
The proceeds of the Savings Bonds shall be avail-
5
1
to retire any outstanding obligations of the United States
2
bearing interest or issued on a discount basis.
3
issues and series of the Savings Bonds shall be in such forms,
4
shall be offered in such amounts within the limits of section
5
1 of this Act, as amended, and shall be issued in such man-
The various
G ner and subject to such terms and conditions consistent with
7
subsections (b) and (c) hereof, and including any restric-
ts
tion on their transfer, as the Secretary of the Treasury may
9
from time to time prescribe.
10
" (b) Each Savings Bond shall be issued on a discount
11
basis to mature not less thaa Jen nor more than twentv
12
years from the date as 6i S^hich the bond is issued, and
13
provision may be made for redemption before maturity upon
14
such terms and conditions as the Secretary of the Treasury
15
may prescribe: Provided, That the issue price of Savings
16
Bonds and the terms upon which they may be redeemed
IT
prior to maturity shall be such as to afford an investment
18
yield not in excess of three per centum per annum, com-
19
pounded semiannually. The denominations of Savings Bonds
20
shall be in terms of their maturity value and shall not be
21
less than $25. It shall not be lawful for any one person
22
at any one time to hold Savings Bonds issued during any one
23
calendar year in an aggregate amount exceeding $,10,000
24
(maturity value).
6
1
" (c) The provisions of section 7 of this Act, as
2
amended (relating to the exemptions from taxation both
3
as to principal and as to interest of bonds issued under
4
authority of section 1 of this Act, as amended), shall
5
a
6
determining taxes and tax exemptions, the increment in
7
value represented by the difference between the price paid
>8
and the redemption value received (whether at or before
9
maturity) shall be considered as interest. The Savings Bonds
10
Pply a s well to the Savings Bonds; and, for the purposes of
shall not bear the circtdation privilege.
It
" (d) The appropriation for expenses provided by
12
section 10 of this Act and extended by the Act of June 16,
13
1921 (IT. S. C., title 31, sees'. 760 and 761), shall be
14
available for all necessary expenses under this section; and
15
the Secretary of the Treasury is authorized to advance, from
16
time to time, to the Postmaster General from such appro-
17
priation such sums as are shown to be required for the
18
expenses of the Post Office Department, in connection with
19
the handling of the bonds issued under this section.
20
"(e) The board of trustees of the Postal Savings
21
System is authorized to permit, subject to such regulations
22
as it may from time to time prescribe, the withdrawal of
23
deposits on less than sixty days' notice for the purpose of
24
acquiring Savings Bonds which may be offered by the Secre-
7
1
tary of the Treasury; and in such cases to make payment of
2
interest to the date of withdrawal whether or not a regular
3
interest payment date. No further original issue of bonds
4
authorized by section 10 of the Act approved June 25, 1910
5
(U. S. 0., title 39, sec. 760), shall be made after July 1,
6
1935.
7
" (f) At the request of the Secretary of the Treasury
8
the Postmaster General, under such regulations as he may
9
prescribe, shall require the employees of the Post Office
10 Department and of the Postal Service to perform, without
11
extra compensation, such fiscal agency services as may be
12
desirable and practicable in connection with the issue, de-
13
livery, safe-keeping, redemption, and payment of the Savings
14
Bonds."
15
SEC. 7. Section 1126 of the Revenue Act of 1926 is
16
amended by adding at the end thereof the following: " I n
17
order to avoid the frequent substitution of securities such
18 rules and regulations may limit the effect of this section, in
19
appropriate classes of cases, to bonds and notes of the
20
United States maturing more than a year after the date of
21
deposit of such bonds as security.
22
notes of the United States' shall be deemed, for the pur-
23
poses of this section, to mean any public-debt obligations of
24
the United States and any bonds, notes, or other obligations
The phrase 'bonds or
8
which are unconditionally guaranteed as to both interest and
principal by the United States."
Passed the House of Eepresentatives January 25, 1935.
Attest:
SOUTH TRIMBLE,
Clerk.
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