The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
August IS, 1955* Governor Eccles Lauchlin Currie Memorandum on requiring checking accounts to be reported on personal in~ co&e tax returns« The object of requiring checking accounts to be reported on personal income tax returns would be to throw some liuht upon the distribution of deposits on the d&te selected (presuaably December Slat)* and to throw s z e light upon the distribution of oa deposits according to different income groups* Together with the data on the cash holdings of corporations as of the same date* it 1 8 probable that a substantial part of the checking accounts of , the country would be accounted for* Annual information on the cash holdings by income groups v;ould beftvaluable aid in determining how far the sise of deposits is a function of income* It would also indicate the extent to which the deposits of different income groups fluctuated with business fluctuations* Thus, the information would aid in research in the problem of the deposit or monetary requirements of individualst There would be several weaknesses in such a series In the first place, it would probably be impracticable to secure the information for a date other than December 51st, This date, from the point of vi$w of deposit holdings of individuals, is probably the worst in the year* Secondly, the series would cover the deposits of only the comparatively few people who file income tax # returns* It is, of course, possible tha- this group holds the bulk of the deposits owned by individuals* Thirdly, the information would not be available for at least a year after the date to which it applies (Statistics of Income for 19S5 is not as yet published)* This would effectively debar the series from use for operating purposes* The Treasury would probably be reluctant to *£d this question to its schedules* It would, in the first place, be of no use to the Treasury, ana its tabulation would put it to soae extra expense* In the second place, such a question would cause wide com~ ment and surmise, and probably an official explanation would have to be offered* The Secretary might feel that to explain that it was inserted at the request of the Federal Reserve Board would offer a precedent for requests by other agencies for information* C i the i&ele* X should favor deferring this roqueat for the h time being. One of tho objects of the WPA project on which i e r have been working is to relate deposits to incosjea (as ascertained by regular credits) for a substantial group of personal accounts over a period of year a • If the project is approved and carried out* wo will b© in a bottsr position to dccicio whathor Information on the deposit holdings of the middle and up?or income groups is significant for operating purposest If v e decide that it ir.f m r will bo in a stronger position in approaching the Trs&frory* On the other hand, we may regard the information as of sufficient importance to inaugurate a monthly series obtained directly from member banks* Finally, I never like to ask for anything unless there is a protty good chance of getting itt and in this case I feel very dubious whether tho Treasury sill accede to our request on the case we can siake at present* If, however, you feel differently* I shall ba very pleased to rnko out aa strong & ease aa I can in a letter under your signature to Mr» Haas* One request I should like to mako in any cab© is to have tho flcaah* itm on the corporation balance sheet returns that are filed s?lth the Bureau of Interns 1 Revenue broken dow& into Currency* Demand Deposits9 and Time Deposits* Moreoverf I should like to have banks* bailee sheets reported separately from the finance group* From our point of viev* tho usefulness of the tabulations of tho S* Statistic© of Incoae will be greatly increased by these two changes* LCtea
