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ANNUAL REPORT OF THE

Secretary of the Treasury
ON

THE STATE OF THE
FINANCES




FOR THE FISCAL YEAR
ENDED JUNE 30

1919

With Appendices

WASHINCrON
GOVERNMENT PRINTING OFHCE
1920




T R E A S U R Y DEPARTMENT,

Document No. 2842.
Secretary.

CONTENTS,
R E P O R T OP THE SECRETARY OF THE T R E A S U R Y :

Page.

- Financial cond:i.tions and the Treasury's program
1
The international financial situation
11
Currency and credit expansion..•.
17
Economy
22
Taxation
23
Cost of the war
25
Public debt
........
30
Fourth Liberty loan
1
31
Victory Libert^,^ loan
32
Treasury certificates of indebtedness
54
War-savings cejctificates.—
:
60
Loans to foreigja Governments
64
War Loan Organization.
68
War loan publicity
71
National Wom{i,n's Liberty Loan Committee
72
Liberty bonds and Victory notes outstanding
72
Conversion of l i b e r t y bonds.
77
Interconversio]! of Victory notes
81
Exchange and transfer of Liberty bonds and Victory notes
81
Purchases of Liberty bonds by the Treasury.
82
Cumulative sinking fund
\
84
Victory Liberty loan subscriptions by persons in the inilitary and naval
forces
'.
86
Acceptance of Liberty bonds as security
86
Acceptance of Liberty bonds and Victory notes in payment of estate or
inheritance taxes
87
Loans secured by obligations of the United States
...
88
Liberty loan subscriptions in default
89
Coupon Liberty bonds in permanent form
°...
90
Official titles oit Liberty bonds and Victoi*y Liberty notes
91
Authorizations for issues of Liberty bonds and Victory notes
91
Illegitimate traffic in Government obligations
93
Issues of fraudiilent and worthless securities
'.
95
Tax exemptioits of Liberty bonds and Victory notes
96
Bond and note designs
100
Currency designs
100
Federal Reser^re System
101
War Finance Clorporation
:
•
103
Capital Issues Committee
107
Gold
108
Silver
110
Public moneys and special depositaries
112
United States depositaries in foreign countries,
113
Payment of Sjianish-American war bonds
113
Bond-secured ciirculation of the national banks
114
Funds for Army payments in Europe
115
Audit of accounts abroad
•
115
A budget systeim
1.16
Revolving funds and reimbursements of appropriations
. 126
Incorporated C-rovernment agencies
129
Checking accounts of Government corporations and the Railroad Administration candied by the Treasurer
. 132
Salaries of Gox-^ernment officers and employees
134
Retirement of civil-service employees
135
Federal Farm Loan System
136




III

IV

CONTENTS.

REPORT OF THE SECRETARY OF THE TREASURY—Continued.

Page.

Seed-grain loans to farmers
'.
139
Bureau of Internal Revenue
144
Synthetic glycerin formula
:
149
War risk insurance
1
149
Organization
151
Marine and.seamen's insurance
'.
]52
Military and naval allotments and family allowances
153
Military and naval compensation
154
Military and naval insurance
;......
156
United States Government life insurance
158
Amendments159
Enemy or ally of enemy insurance companies and other foreign insurance
companies
160
Soldiers' and sailors' civil relief act and bonds issued thereunder
'
160
Customs
161 Public Health
163
After-the-war program
164
Influenza.
3.66
' Public buildings
166
Contractors' relief act
:
167
National archives building
168
Coast Guard
'
,
168
Anchorage control
169
Bureau of Engraving and Printing.
170
Contracting and purchasing
170
General Supply Committee
:
174
International High Commission
.,
:
176
Surety bonds for Government officers
• 179
Representation of Treasury on War Trade Board
].80
Panama Canal
181
Contingent fund
181
Finances
,
181
Receipts and disbursements,,, fiscal year 1919
181
General fund
•
181
Summary of general-fund transactions
184
Postal Service
185
. United States notes (greenbacks)
185
Gold reserve fund.. -•
185
Trust funds
185
Sinking f u n d . . . - - . .
.'
186
Condition of the Treasury June 30, 1919
186
Cash in the Treasuiy June 30, 1919.
-. 187
Comparison of receipts, fiscal years 1919 and 1918.
188
Comparison of disbursements, fiscal years 1919 and 1918.
190
Estimates of receipts and expenditures for the fiscal years 1920 and 1 9 2 1 . .
198
Estimates of appropriations, fiscal year 1921,' as submitted b y the executive
departments
206
Postal Service, estimated revenues and expenditures, 1921
206
Estimates for 1921 and appropriations for 1920
. 208
Statement of estimates of appropriations for 1921 compared with appropriations for 1920
.•
208
Exhibits accompanying the report on the finances.
E x h i b i t 1: Preliminary financial statement of the United States Government from April 6, 1917, to June 30, 1919.'
E x h i b i t 2: Proclamation revoking proclamations, orders, etc.i prohibiting
t h e exports of coin, bullion, and currency, etc
E x h i b i t 3: Cash expenditures of the Government, fiscal years 1917, 1918,.
and 1919, as published in daily Treasury stateraents
' E x h i b i t 4: Financial statement of t h e United States Government June 30,
1919
.:
Exhibit 5: Results of fourth Liberty loan, compiled by War Loan Organization on basis of subscriptions originally reported
E x h i b i t 6: Draft of fifth Liberty bond bill proposed by the Treasury
Department
Exhibit 7: Victory Liberty loan act of March 3, 1919.
.
"




213
217
219
220
225
231
235

CONTENTS.

V

REPORT OF THE SECRETARY OF THE TREASURY—Continued.

Exhibit 8: Formal offering of Victory Liberty loan, under Department
Circular No. 138
Exhibit 9: Forni of application for notes of the Victory Liberty loan
Exhibit 10: Form of application by an incorporated bank "or trust company
for coupon no1;es of the .Victory Liberty loan for advance delivery
Exhibit 11:. Results of Victory Liberty loan subscriptions, compiled by
War Loan Organization
Exhibit 12: Issues of certificates of indebtedness from April 6, 1917, to
October 31, 1919
Exhibit 13: Treasury certificates of indebtedness, series V A, 4^ per cent,
dated December 5, 1918, due May 6, 1919
Exhibit 14: Tre;;isurv certificates of indebtedness, series V B, 4^^ per cent,
dated Decemtber 19, 1918, due May 20, 1919..:
:
Exhibit 15: Tre;;isury certificates of indebtedness, series V C, 4^ per cent,
• dated January 2, 1919, due June 3, 1919
Exhibit 16: Tre;;isury certificates of indebtedness, series V D, 4^ per cent,
dated January 16, 1919, due June 17,1919
Exhibit 17: Treasury certificates of indebtedness, series V E, Ah per cent,
dated January 30, 1919, due July 1, 1919
:
\
Exhibit 18: Treasury certificates of indebtedness, series V F, 4^ per cent,
dated February 13, 1919,.due July 15, 1919
Exhibit 19: Treasury certificates of indebtedness, series V G, 4^ per cent,
dated February 27, 1919, due July 29, 1919
:
Exhibit 20: Treasury certificates of indebtedness, series y H, 4^ per cent,
dated March 3.3, 1919, due August 12, 1919
Exhibit 21: Treasury certificates of indebtedness, series V J, 4^ per cent,
dated April 10, 1919, due September 9, 1919
E x h i b i t 22: Treasury certificates of indebtedness, series V K, 4^ per cent,
dated May 1, 1919, due October 7, 1919
;
Exhibit 23: Fo\:ir and one-half per cent Treasury certificates of indebtedness, series A 1920, dated August 1, 1919, due January 2, 1920.
Exhibit 24: Four and one-half per cent Treasury certificates of indebtedness, series B 1920, dated August 15, 1919, due January 15, 1920
Exhibit 25: Four and one-half per cent Treasury certificates of indebtedness, series C 1920, dated Septeniber 2, 1919, due February 2,. 1920
Exhibit 26: Four and one-half per cent Treasury certificates of indebtedness, series T 2, dated January 16, 1919, due June 17, 1919
Exhibit 27: De])artment Circular No. 136, 4 | per cent Treasury certificates
of indebtedness, series T 3, dated March 15, 1919, due June 16, 1919
Exhibit 28: Dejpartment Circular No. 146, 4^ per cent Treasury certificates
of indebtedness, dated June 3, 1919, series T 4, due Septeniber 15, 1919;
series T 5, due December 15, 1919
E x h i b i t 29: De]:)artment Circular No. 152, 4^ per cent Treasury certificates
of indebtedness, dated July 1, 1919, series T 6, due September 15, 1919;
series T 7, du<;) December 15, 1919
Exhibit 30: De]:)art'ment Circular No. 155, 4^ per cent Treasury certificates
of indebtedness, series T 8, dated July 15, 1919, due March 15, 1920
Exhibit 31: Dej^arfment Circular No, 162, Treasury certificates of indebtedness, dated September 15, 1919, series T 9, 4^ per cent, due March 15,
1920; series T 10, 4^ per cent, due September 15, 1920
Exhibit 32: Call for redemption before maturity of Treasury certificates
of indebtedness, series IV D
Exhibit 33: Call for redemption before maturity of Treasury certificates
of indebtedness, series IV E
Exhibit 34: Offer to redeem before maturity, at holder's option. Treasury
certificates of indebtedness, seriesV A
Exhibit 35:' Offer to redeem before maturity, at holder's option, TreavSury
certificates of :i.ndebtedness of all series matuxing on or before July 1,1919..
Exhibit 36: Call for redemption before m a t m i t y of certificates of indebtedness, series V G
Exhibit 37: Offer to redeem at holder's option Treasury certificates of indebtedness of series V G prior to the date on which such certificates had
been called for redemption
Exhibit 38: Offer to redeem before maturity at holder's option Treasury
certificates of indebtedness, series V F
Exhibit 39: Offer to redeem before maturity at holder's option Treasury
certificates of indebtedness, series V J . . : . . . :




Page.

241
250
251
253
258
266
267
268
269
270
271
272.
273
274
275
i
276
278
, 279
280
r
281
283
284
285
'

286
288
288
288
289
289
289
290

• 290

VI

CONTENTS.

R E P O R T OP THE SECRETARY OP THE TREASURY—Continued.

E x h i b i t 40: Call, for redemption, before maturity, of Treasury certificates
• of indebtedness, series V K
Exhibit 41: Offer to redeem before maturity, at holder's option, Treasury
certificates of indebtedness, series maturing September 15, 1919, and
also series V K, prior to date on which called for redemption
E x h i b i t 42: Department Circular No. 128, war-savings certificates, series
of 1919
E x h i b i t 43: Department Circular No. 143, Treasury savings certificates...
E x h i b i t 44 Depart:ment Circular No. 149, Treasury savings certificates...
E x h i b i t 45: Department Circular No. 126, surrender of war-savings certificate stainps, series of 1918, held b y agents of the first class.
Exhibit 46: Department Circular No. 130, distribution and sale of warsavings certificates and stamps, series of 1918
E x h i b i t 47: Department Circular No. 131, surrender of war-savings certificate stamps, series of 1918, held by agents of the second class
Exhibit 48: Statement showing dates and amounts of credits established in
favor of foreign governments, etc
:
Exhibit 49: Statement showing dates and amounts of cash advances to
foreign governments, etc
Exhibit 50: Statement of denominational exchanges b y Federal reserve
districts of $50, $100, $500, $1,000, $5,000, and $10,000 coupon Liberty
bonds and Victory notes, as of September 30, 1919
Exhibit 51: Recapitulation of transactions in Liberty bonds and Victory
notes, etc
Exhibit 52: Liberty loans (Form L and C 265), interest coupons.
Exhibit 53: Department Circular No. 137, extension of conversion privilege.
Exhibit 54: Supplement to Department Circular No. 137, supplemental
regulations governing extension of conversion privilege
Exhibit 55: Second supplement to Department Circular No. 137, Liberty
loans; supplemental regulations governing extension of conversion privilege
Exhibit 56: Department Circular No. 158, exchange and conversion of 4
per cent coupon Liberty bonds
Exhibit 57: Department Circular No. 139, Victory Liberty loan; rules and
regulations governing exercise of the conversion privilege
Exhibit 58: Supplement to Department Circular No. 139, Victory Liberty
loan; supplemental rules and regulations governing exercise of the conversion privilege
•.
Exhibit 59: Letter of Secretary of the Treasury to banks and trust companies regarding regulations governing transactions in Liberty bonds
and Victory notes.
Exhibit 60: Department Circular No. 141, rules and regulations concerning
transactions in Liberty bonds and Victory notes
Exhibit 61: Information with respect to registration of Liberty bonds and
Victory notes (Form L and C 222)
Exhibit 62: Regulations defining special arrangements for subscriptions to
4f per cent notes. Victory Liberty loan, from persons in the military forces
of the United States
Exhibit 63: Regulations defining special arrangements for subscriptions to
4f per cent notes. Victory Liberty loan, from persons in the naval forces
of the United States
Exhibit 64: Department Circular No. 154, acceptance of United States
bonds as security in lieu of surety or sureties on penal bonds
Exhibit 65: Department Circular No. 132, receipt of Liberty bonds for
estate or inheritance taxes
•
.'
Exhibit 66: Department Circular No. 151, receipt of 4 | per cent Victory
notes for estate or inheritance taxes
Exhibit 67: Department Circular No. 135, first Liberty loan subscriptions
in default
."
Exhibit 68: Department Circular No. 156, second Liberty loan subscriptions in default
Exhibit 69: Letter from Secretary of Treasury to House Ways and Means
Committee and Senate Finance Committee, and draft of bill to.protect
the public against issues of fraud ulent and worthless securities
Exhibit 70: Letter from Secretary of Treasury to Delegate from Alaska
regarding gold production
•'.




Page.

290
290
291
295
302
308
309
311
312
316
324
338
344
348
352
354
358
362
369
373
375
394
397
399
402
412
421
424
425
426
431

CONTENTS.
R E P O R T OP THE SECRETARY OP THE TREASURY—Continued.

Exhibit 71: Department Circular No. 92 amended and supplemented;
special deposit of public moneys under act of September 24, 1917, as
amended and supplemented
Exhibit 72: Department Circular No. 144, instructions in connection with
collection" aiid deposit of checks received in payment of internal-revenue
taxes. ,
E x h i b i t 73: Treasury Department telegram; seed-grain loans
Exhibit 74 Guaranty fund agreement; second seed-grain loans for fall planting in 1918
Exhibit 75: Joint Circular No. 2 (Departments of Treasury and Agriculture), reguliitions relative to farmers' seed-grain loans for spring-wheat
planting in 1919 in drouth-stricken areas
Exhibit 76: Joint Circular No. 3 (Departments of Treasury and Agriculture) , regulations relative to farmers' seed-grain loans in drouth-stricken
areas in the ] natter of determining crop failure for the purpose of replanting.
Exhibit 77: Joint Circular No. 4 (Departments of Treasury and Agriculture), supplemental regulations relative to farmers' seed-grain loans in
drouth-stricken areas covering the matter of insurance of crops
Exhibit 78: S(?ed-grain loan instructions
Exhibit 79: Premium rates for United States Government life insurance. .
Exhibit 80: Act of February 25, 1919, amending act establishing Bureau of
War Risk Insurance
Exhibit 81: Act of July 11, 1919, amending vocational rehabilitation act of
•Tune 27, 1918
.'
Exhibit 82: ./kCt of August 6, 1919, amending act establishing Bureau of
War Risk Insurance
Exhibit 83: Act of March 8. 1918, soldiers'and sailors'civil relief act
Exhibit 84: Department Circular No.. 115, regulations governing United
States bonds issued under authority of soldiers' and sailors' civil relief
act approved March 8, 1918
Exhibit 85: International gold clearance fund convention; safeguarding
the inviolability of gold deposits for clearance operations.
Exhibit 86: Convention concerning commercial travelers

VII
Page.

432
438
443
444
447
455
457
459
460
463
464
466
467
473
475
477

Abstracts of reports of bureaus and divisions.
Treasurer of tlie United States
481
District of Columbia
484
Comptroller oii the. Currency
485
Number of national banks and amount of capital stock, etc., June 30,
1919.
487
Number of national banks organized, insolvent, in voluntary liquidation, an.d in operation, etc
490
Mint service.
491
- Operations of the mints and assay offices
491
Stock of coin and bullion in the United States.
493
Production of gold and silver
493
Industrial arts.
493
Export of gold coin
493
Appropriations, expenses, and income
493
Deposits, income, expenses, and employees, by institutions, fiscal
year 1919
496
Bureau of Internal Revenue
496
Revenue .Act of 1918
,.
497
Cost of ad ministration
497
Income and profits taxes
498
Estate taxes
499
Capital-stock taxes.
499
Child-lab<:)r tax law
,
499
Taxes on sales, special and miscellaneous commodities, occupations,
and adraissions and dues
•.
" 500
Distilled iL^pirits
, 500
Denatured alcohol
501
Industrial distilleries
501
Distilleries
501
Fermented liquors
502
Wines and cordials
502
Prohibition enforcement
502




. VIIT

CONTENTS.

REPORT OF THE SECRETARY OF THE TREASURY—Continued.

Bureau of War Risk Insurance
M.arine and seamen's insurance
Military and naval allotments and family allowances
.'
Military and. naval.compensation.
Military and naval insurance
Bureau of Engraving and Printing
:
Customs
Tea inspection
,
Office of the Supervising Architect
Buildings
'... .^
.,
Statement of appropriations
Summary of acts carrying appropriations for the fiscal year 1920
Public Plealth Service.
Division of Scientific Research
Division of Interstate Quairantine
^
•
Division of Foreign and Insular Quarantine and Immigration
Division of Sanitary Rej^orts and Statistics.
:
Division of Marine Hospitals and Relief
'
Division of Personnel and Accounts
Division of Venereal Diseases
•
Public health education
Recommendations
Coast Guard
Award of life-saving medals
Loans and Currency
Interest-bearing debt of the United States; changes duriho; the fiscal •
year 1 9 1 9 . . . !
.".
Interest on registered bonds and registered certificates of indebtedness.
Insular and District of Columbia loans; changes during the year
Circulation
,.
:
Paper custody.
:
Custody of Federal reserve notes, series of 1914 and 1918
Audit and destruction of retired currency, thrift cards, and war-savings
stamps
Liberty bonds and Victory, notes
Consolidated report, war-loan registered issues, and interest pajrments.
Coupons issued upon exchanges; Treasury cases
Claims on account of lost, stolen, or destroyed interest-bearing securities
^
r
War-loan securities audit account, April 6, 1917, to June 30, 1919
Division of Public Moneys
:
Division of Bookkeeping and Warrants
General fund
State bonds and stocks owned b y the United States
Secret Service Division
Division of Printing and Stationery
Printing and b i n d i n g . . . :
Stationery
:
'.......
Postage, materials for bookbinder, and department advertising
Office of the disbursing clerk
General Supply Committee

Page.

503
503
506
507
510
514
515
520
522
522
523
524
526
526
530
535
538
539
540
542
542
543
545
545
551
551
552
552
553
554
554
554
555
556
557
557
558
559
561
562
562
563
564
564
566
568
568
570

Tables accompanying the report on the finances.
Table A.—Statement of the outstanding principal of the public debt of
the United States, June 30, 1919
Table B.—Statement of the outstanding principalof the public debt of
the United States on the 1st of July of each year from 1856
to 1919, inclusive
Table C.—Analysis of the principal of the interest-bearing public debt of
the United States from July 1, 1856, to July 1, 1919
Table D.—Statement of the issue and redemption of loans and Treasury
notes and of deposits and redemptions in bank-note account
for the fiscal year ended J u n e 30,1919
Table E.—Sinking-fund account for fiscal year 1919 to March 3, 1919




581
610
612
614
.615

CONTENTS.
R E P O R T OF THE SECRETARY OF THE TREASURY—Continued.

IX
i^age

Table F,—Pop>ulation, ordinary receipts, and disbursements of the Government from 1840 to 1919, exclusive of postal, and per capita on receipts and per capita on disbursements
616
Table G,—Sta1;ement showing the ordinary receipts and disbursements of
tlie Government by months; net gold and available cash in
tlie Treasury at the end of each month; and the imports and
eiicports of gold from July, 1896, to June, 1919, i n c l u s i v e . . .
618
Table H.—Statement of the balance in the general fund of the Treasury, including the gold reserve, b y calendar years from 1791
to 1842, and by fiscal years from 1843 to 1919
626
Table I.—Receipts and disbursements of the United States
627
Table J.—Internal and customs receipts and expenses of collecting from
1858 to 1919
640
Table K,—Statement of United States bonds and other obligations, re- •
C(;!ived and issued b y the Office of the Secretary of the
Treasury from July 1, 1918, to June 30, 1919, a.nd with respect to war issues from^ April 7, 1917, to June 30, 1919
642
Table L.—Statement of the coin and paper circulation of the United
- States from 1860 to 1919, inclusive, with amount of circulation per capitta
645
Table M.—Cpllections, expenses, and average number of persons employed in the Internal Revenue Service, fiscal year ended
June 30, 1 9 1 9 . . . . . . . .
646
Table N.—Statement of business of the customs districts and ports for the
. fiscal year ended June 30, 1919
647
Table 0.—Statement, by districts and ports, showing total entries of merchandise, receipts, and expenses for the fiscal year ended
June 30, 1919
699
R E P O R T OF THE T E E A S U R E R :

Receipts and disbursements for 1918 and 1919
709
Panama Canal
,
710
Extraordinary disbursements
710
Receipts and disbursements on account of the Post Office D e p a r t m e n t . . . . . . .
711
Transactions in the public debt
,
, 711
Currency issued and redeemed
:
712
Public debt 1.918 and 1919
712
. Payment of intc^rest on registered bonds of the United States
713
Reserve fund
'.
:.
713
State of the Treasury, general fund—cash in the vaults
714
Net available cash balance, 1910 to 1919
716
Gold i n T r e a s u r y from 1910
.'..
716
Bonds held as si3curity for national-bank circulation and deposits
717
Bonds held as security for postal savings funds
718
Postal savings bonds and inA'estments therein
721
Withdrawal of bonds to secure circulation
721
Depositaries of i^he United States.
722
Public moneys ;i.n depositary banks
722
General account of Treasurer of the United States
723
Gold settlement fund
•
:
723
Monetary stock, 1918 and 1919
724
Ratio of gold to total stock of money
'.
725
Money in circulation
725
Circulation and population.
725
Paper currency issued directly by the Government
i
726
United States notes
726
Treasury notes of 1890
:...:
727
Gold certificates
728
Silver certificat<;;s
'
728
Changes in denominations during fiscal year 1919
729
Pieces of United States paper currency outstanding
730
Cost of paper currency
730
Average life of })aper currency
.
731
Paper( currency prepared for issue and amount issued
731
Papers currency held in the reserve vault
,
732
Paper currency redeemed
:
733
Standard silver dollars
•.
734
Subsidiary silver coin
735




X

CONTENTS.

R E P O R T OP THE TREASURER—Continued.

Minor coin
United States currency
:
,
Transfers for deposit in New York—money for moving the crops, etc
Telegraphic transfers for foreign coin
.^
. Deposits of gold bullion at mints and assay offices, 1917,1918, and 1919
Shipments of currencv from Washington, 1918 a,nd 1919
l...
Recoinage, 1918 and 1919
Redemption of Federal reserve and national curren03^
Special trust funds and changes therein during the fiscal year
District of Columbia sinking fund
Tables accompanying the report of the Treasurer

Page.

736
736
738
739
741
741
741
742
743
744
746

R E P O R T or THE DIRECTOR OF THE M I N T :

. Operations of the mints and assay offices
813
Coin demand
813
Silver dollars converted' to bullion
813
New assay office at New York
813
Platinum
814
Refineries
:
814
Minor coinage metal fund increased
814
Institutions of the Mint Service
814
Deposits of gold and silver
815
Minpr assay offices
815
Gold operations
815
Silver operations.
1.1
815
Coinage
816
Stock of coin and bullion in the United States
816
Production of gold and silver
816
Industrial arts consumption
816
Export of gold coin
816
Estimates for the fiscal year 1921
816
Appropriations,' expenses and income
817
Philippine Mint equipment
817
Philadelphia. Mint improvements.
817
Denver Mint iihprovements
820
New York assay office improvements
820
Income and expenses of the fiscal year 1919
•.
820
Deposits, income, expenses, and employees, by institutions, fiscal year 1919
821
Coinage, details of, executed during fiscal year. 1919
..."..
822
Deposits of foreign gold bullion and coin
•.
823
Deposits of foreign silver bullion and coin
• 823
Issue of fine gold bars for gold coin and gold bullion
824
Balances, receipts, and disbursements of gold bullion
825
Purchase of minor coinage metal for use in domestic coinage
826
Purchase of minor coinage blanks prepared for coinage
826
Sale of minor coinage metals
826
Distribution of ininor coins...
. . . .^
827
Minor coins outstanding . . ,
827
Operations of the assay departments.
828
Proof bullion (1,000
fine)
:
828
Operations of the melting and refining and of the coining departments,
fiscal year 1919
829
Refining operations
:
830
Bj^'-products of Government refineries
1 831
Ingot melts made
832
Fineness of melts for gold and silver ingo1;s
833
Commercial and certificate bars manufactured
.,
833
Melts for fine gold and fine silver
834
Ingots operated upon by coining departments and percentage of coin
produced
'
....
834
Percentage of good coin produced to pieces struck..:
835
Sweep cellar operations
>...
835
Bullion gains and losses
I...
836
Wastage and loss on sale of sweeps
I...
836
Engraving department
...:...
837
Dies manufactured
-.!
837
Medals sold
J'
838
The progress of the numismatic collection
(
839




CONTENTS.

XI

R E P O R T OP THE DIIIIECTOR OP THE MINT—Continued,

Employees
, Visitors
Work of the mirior assay offices
Ore assays...
:.
Gold receipts at Seattle
Laboratory of the Bureau of the Mint
Proceedings of the Assay Commission, 1919
Tables, Report Director of t h e Mint

Page.

,
:

'...

:

839
839
840
840
841
841
842
846

R E P O R T OF THE COMPTROLLER OF THE CURRENCY:

Submission of report
•
,
National banks in t h e reconstruction period
.,...
Economic pr.obl ems needing settlement
Heayy^ shrinkage in production of essentials
Diminished production with price inflation does not enrich a country
Our colossal foreign trade
,.
'
•Foreign balances collectible in goods, not in gold
Prosperity to endure must b e based on sound principles
Bankers' influence may help correct evils and avert perils.
Meaning of t h e liihrinkage in value of foreign exchange
No responsibility on us to maintain parity of gold and paper money of
other countries
Subordinate Geiimany 's internal debt to obligations due allied nations
The banking power of t h e United States
Enormous foreign trade of t h e United States
Merchandise imports and exports from 1914 to 1919
Gold and silver imports and exports from 1914 to 1919
Gold, silver, ami paper money in t h e world..
Nearly 22^ billions of assets in national banks.
Growth of national banks b y five-year periods.
Vast growth of national banks in 20 years.
Chart showing "Enormous growth in resources, deposits, and capital of national b a n k s "
.
^
•.
Close observance of laws and regulations b y national banks
. National banks gratifying imniunity from failure
°.
State bank failures in 1919
Chart showing " Increased stability and safety of national banks "
Comparative figures of national and State banks
'.
Growth of national and State banks for six-year period
Many national banks increasing their capital
,
Large number ol' State banks nationalizing
Earnings and dividends of national banks
Chart showing " Unprecedented prosperity of national banks "
Wider diffusion of t h e country's wealth and credit
Big growth of Middle West.
Huge increase in t h e Southern States
Western Sts^tes gain 500 per cent.
Pacific States b a n k s ' assets advance 1,340 per cent
Growth of 1,000 per cent or more i n each of 16 States
Largest actual increases.
Some strikrag comparisons
-....:
Number of depositors in oirr national b a n k s . . . . :
Healthy distribmtion to investors of Liberty bonds and Victory notes
Location of t h e country's largest national banks
120 banks w i t h over 25 million asset's now; 19 such banks in 1899
..
Big banks m 39 cities in every p a r t of t h e country
T h e West had three big banks i n 1899 and 48 in 1919
Productivity of loans and bond investments of national banks
Condition of thei national banks i n each State
National and F<5deral reserve currency issued and redeemed
Federal Reserve) System
,
Condition of national banks at date of each call during t h e report year
Resources of national banks—
Loans and discounts
Bills receiv:;ible eligible for rediscount with Federal reserve banks
Amount and classification of loans b y national ba,nks in.central reserve
cities




893
893
894
895
896
896
897
898
898
899
900,
901
901
. 902.
903
903
903
906
907
907
908
909
909
909
910
910
910
911
911
911
911
912
913
913
913
913
914
914
914
915
919
919
919
920
920
921
921
924
925
926.
928
929
936

XII

CONTENTS.

R E P O R T OF THE COMPTROLLER OF THE CURRENCY—Continued.

Resources of national banks—Continued,
.
Three-year comparative statement of loans by national banks in
reserve cities and country banks....'.
"
.'
Direct and indirect liability of officers and directors of national banks,
June 30, 1919
---.
Classification of loans by national banks in New York in June, 1915 to
1919
• - - -.. - :
-. -.
Overdrafts
United States Government securities owned,
Other bonds, securities, etc
:.....
Stocks.
.-.....:
•.
•.
Investment securities of national banks classified
'
Domestic and foreign securities held by national banks
Liberty bonds and United States certificates owned, etc., on December
31, 1918, and March 4, 1919
-.-.-•
Subscriptions b y national banks for Victory notes, June 30, 1919..
United States war securities owned and held as collateral by
national banks, September 12, 1919
•--•..
Classification of Foreign Government bonds owned by national banks,June 30. .•-...
Bank premises and other real estate owned
Due from banks
1
National-bank deposits with Federal reserve banks
Specie, gold and silver certificates
Exchanges for clearing house
Liabilities—:
Capital stock, surplus, and undivided profits
,
• Circulation outstanding.. .^
Due to banks
Individual deposits
.
„
Bonds and money borrowed.
Bank acceptances
. Changes by geographical divisions in principal items in reports of condition of national banks..'..
,
• Relation of capital to deposits, etc., of national banks
Percentage of principal ite;ns of assets and liabilities of national banks....
Reserve
Reserve required and held by national banks in Federal reserve cities,
etc
-. - -:
Classification of loans (including paper bought) as shown b y reports made
b y 600 banks located in cities of more than 50,000 population
Growth of national banks since 1913
Foreign branches of national banks
Organization of national banks—
National-bank charters applied for, granted, and refused
Increases and reductions of capital stock
Liquidation of national banks
,.
Consolidation of national banks
Steady growth in number of national b a n k s . . . . . . :
,
National banks organized since 1900
State banks converted into national banks since 1900
Organization and liquidation of national banks, 1863 to 1919
National banks chartered year ended October 31, 1919
Number of national banks chartered in each month from March 14, 1900, to
October 31, 1919
Conversion of State banks and primary organizations as national banks
since 1900
State banks converted into national banks 1863 to 1919
Classified capitalization of banks by States
,..
Expirations and extensions of charters of national banks
Reextension of charters
{
Increases and reductions in capital stock of national banks by States. . •...
Changes in title of national banks
".:
Increasing immunity from failure
National banks organized, failed, and liquidated, by States, year ended
October 31, 1919




Page.
936
• 937
939
939
939
940
940
940
941
.
945
948
952
956
956
956
957
957
958
958
958
959
959
959
959
960
961
961
961
962
963
976
979
982
982
982
983
985
985
985
985
989
.994
995
995
995
997
99-8
998
999
1000
1001

CONTENTS.

.

R E P O R T OF THE COMPTROLLER OF THE CuRRENCY-^Continued.

Xlir
Page.

Causes of failure, etc
1004
Banks' investments in United States bonds
1005
Bonds availabi GI as security for national-bank circulation
1005
Increase, etc., in national-bank circulation
1007
Monthly issues of national-bank circulation
1007
Denominations of. national-bank circulation
1008
Vault account of national-bank circulation
1008
Profit on national-bank circulation.
10.09
Redemption of national-bank circulation.
1009
Taxes on national-bank circulation
1011
Monthly statement relating to bonds on deposit to secure circulation and
circulation secured thereby
1011
Interest-bearing d ebt of t h e United States
1012
Prices and investment value of United States bonds
1012
Federal reserve notes
1012
Federal reserve bank notes
1018
Legislation enacted r.elating to national banks
1021
Consolidation of national banks.
, 1021
Denominations of and signatures on national-bank currency
'. 1022
Earnings of Federal reserve banks—Discounts for mem.ber banks
1023 >
Investments b y national banks in stock of corporations engaged in
foreign financial operations
1024
Loan limit by national banks
1024
Liability limit of national banks
1026
Gold certificates legal tender
:
1026
. Banking coi'porations authorized to do foreign business
1026
Comptroller's recommendations for new legislation.
1031
Digest of court (decisions on national bank cases
1039
Liability of directors of national banks
1039
Retention of pai't of loan as deposit is usurious
1041
National bank examinations
,
\
1041
National bank examiners
1042
National bank officers convicted of criminal violationsof law
1043
Banks other than national
1044
State banks, savings banks, private banks, and loan and trust companies
1044
State banks
1047
Mutual savings b a n k s . :
1048
Stock saving^s banks
1051
Mutual and stock savings banks
1053
Loan and trust companies
1054
Private banks
.
^
1055
Abstracts b y Sta,tes of reports of condition'of State and private banks
1057
Comparative. statement of condition of all reporting national and State
banks in the United States.
1061
Comparison of principal items of resources and liabilities of national and
• State banks for years 1918-19.
•
1062
Summary of combined returns from all banks in the United States and
island possessions
:
• 1065
Comparative statement of resources and liabilities of all national, State,
and private banks, 1914-1919
1066
Growth of all reporting banks, 1863 to 1919, inclusive.
1072
Individual deposits of all reporting banks
-.
1074
Cash in all reporting banks
,
1074
Money in the United States
1075
Rates for money in New York. .'
1077
Discount rates oi: the Federal reserve banks
1078
Sterling exchange
1079
Transactions of clearing house associations. :
1080
Transactions of ITew York Clearing House
1081
" United StatesTostal Savings System
1081^
Federal Farm Lc>an S5^stem
'.
1084
Condition of Federal loan banks
1085
Farm loan bonds
:
1087
Farm loan associations
1087
Joint stock land banks
- . . -.
1089
Loans b y joint stock land banks, closed; etc
1090



XIV

CONTENTS.

R E P O R T OP THE COMPTROLLER OP THE CURRENCY—Continued.

Building and loan associations i n t h e United States
All financial institutions in t h e District of Columbia.:
Savings banks i n t h e principal countries of t h e world
A century of banking i n t h e United States
Conclusion

Page.

1091
10*93
1094
1097
1097

R E P O R T OF THE COMMISSIONER OF INTERNAL R E V E N U E :

Collections
Revenue act of 1918
Advisory t a x board
Regulations
:
Forms
."
Treasury Decisions
Administrative rulings
Tax adjustments
Solicitor of internal revenue
...
Field service
'
Observance and enforcement
Analysis of experience
Cost of administration
Bureau organization
Personnel
'.
'.
:.
Housing
:
Stamps
-,
Chemical analvses
Glycerin. .^.
Incomes and profits
Training program
Information service
Statistics
Claims.
Special activities
Divisional organization
Capital stock
Estates
:....
Child labor
Sales—Special and miscellaneous commodities—Occupations and privileges
Alcohol...:.-.
Distilled spirits and alcoholic beverages
Denatured alcohol
Industrial distilleries
Fermented liquors
Wines and cordials
Tobacco
1
Floor taxes
'
Oleomargarine
Adulterated butter
'
Renovated b u t t e r . . ."
Mixed
flour
Narcotic drugs
Prohibition enforcement
:
Statistical tables
Digest of court decisions




1101
1102
1104
1106
1107
1108
1108
1110
llll
1114
1118
1121
1122
1123
1124
1125
1126
1127
1128
1128
1130
1130
1131
1131
1131
1132
1133
1135
1139
1141
1142
1144
1145
1145
1146
1147
1147
1149
1150
1151
1152
1152
1152
1154
1156
1162

ANNUAL REPORT ON THE FINANCES.
TREASURY DEPARTMENT,

Washington, Novemher 20, 1919.
SIR: I have th.e honor to make the following report:
F I N A N C I A L CONDITIONS AND THE TREASURY'S PROGRAM.

In this period of readjustment from war to peace, of reconstruction
of regions swept bare by the havoc of the greatest war of all time, of
political and economic change, and of world-wide unrest and anxiety,
America stands strong economically, financially, and politically
among the nations of the earth. She has emerged from the colossal
struggle with strength tested and unimpaired. The impious hand of
the enemy has not touched any part of her fair land, and there are
no waste places here to restore. A large share of the cost of the
war already has been paid for by taxes and the public debt is but
a fraction of our national wealth, our credit and financial structure
is sound and secure, our gold reserves are the greatest in the world,
prosperity flourishes in every branch of industry and in every part
of the Nation, and the people of the country are fully employed.
On the other hand, there are serious and grave problems that challenge our statesnitanship and our patriotism. I n the train of the great
physical and spiiitual effort the Nation put forth in the supreme task
of winning the war, it is not surprising, in the light of the experience of
mankind followi]ig wars of every age, that there should appear a certain spirit of reac^tion that finds its concomitant in discontent and dissatisfaction. The continuation of prosperity and the financing of our
domestic and foreign trade, the full and peaceful employment of labor
and capital, credit expansion, speculation and the cost of living are
great social and €iconomic problems, but they are susceptible of American solution. To entertain the thought of failure in finding an effective remedy for every phase of discord and dissatisfaction in America
is to shatter the hopes of mankind. The answ'er to these great questions, which are far less grave in the United States than elsewhere in
the world, is to be found in the courage and ability and spirit of
Americans and tlieir love of the United States. These are attributes
which have stood the test of time from the birth of thirteen struggling
colonies to the iiaaturity of a great nation. The men who went to
Europe to fight for the freedom of the world, and their compatriots
who mobilized to support them to the utmost at home, will not be
140325—PI 1919




1

1

2

REPORT ON T H E FINANCES.

found wanting in these critical times and can be relied upon to grapple, with these questions in the same indomitable and loyal spirit
that won the war and with the traditional appreciation and respect
of Americans for the rights of their fellowmen,. in full confidence of
the vindication of right and justice in every element of our life as
a nation.
This spirit of optimism and hopefulness is born of the Nation's
performances of the past and has its immediate revival in the great
achievements of the people during the war and in the index afforded
by the Treasury's favorable outlook for the future, if dur course is
directed along intelligent lines of efficiency and rigorous economy in
public and private finance. During the 19 months of ^ active
warfare, the people of the country cheerfully contributed taxes for
the support of the Government in greater measure than ever before
in our history, and generously subscribed to four great popular
Liberty loans. The success of these stupendous operations was made
possible only by the devoted patriotism of the American people. In
the highest and truest sense, the people of the country financed the
war, and they deserve the credit for the great achievement. The
loyal and efficient work of the organization in the Treasury, the
Federal reserve banks and the Liberty loan committees, great and
effective as it was, would have amounted to naught had it not sounded
the note of patriotic appeal.
Since the signing of the armistice, taxes have been paid with equal
willingness in even larger amounts than during the period of hostilities, although not so great as would have been necessary if the war
had continued. During the year that has elapsed since the previous
report of the Secretary of the Treasury,, i t has been necessary to issue
only one popular loan—short-term Victory Liberty notes—as compared with four issues of long-term bonds in the previous 19 months.
In the face of many gloomy forecasts that the Victory issue must be
sold on a strictly commercial basis and that it would" be impossible
again to appeal to the patriotism of the American people, the loan,
launched without the impulse of the enthusiasm of war, was another
overwhelming success that again reflected the financial and economic
strength of America and the solidarity and patriotism of the people
of the country.
Tax receipts, payments of Victory loan subscriptions and the diminishing expenditures of the Government have permitted the issue of
Treasury certificates of indebtedness on a decreasing scale for the
purposes of temporary financing. This has been particularly true
since the close of the fiscal year 1919. On October 31, 1919, the total
amount of outstanding Treiasury certificates, which on April 30 aggregated $6,250,000,000, had been reduced to $3,736,352,300, of which
only $1,634,671,000 were loan certificates. There are no maturities




SECRETARY OF T H E TREASURYo

6

of certificates to provide for prior to 1920, as the certificates maturing
December 15, 1919, are more than covered by the income and profits
tax installment due on that date.
In these circumstances, it is believed that the time will soon be in
sight when the expenditures of the Government, including interest
and sinking fund charges on the public debt, may be met by current
receipts, without incurring new floating debt except Treasury certificates of indebtedness issued in anticipation of income and profits
taxes. I confidently expect that by the time the cumulative sinking
fund begins to operate on July 1, 1920, temporary financing will be
substantially o^'er and the certificates will have disappeared from
the market except to the extent that financing may be done and
certificates issueid in anticipation of income and profits taxes. That
is the goal toward which the Treasury is aiming, but its realization is
dependent upon, the continuation of taxes at the present aggregate
level and the vigorous enforcement of economy.
The Treasury's financial program can best be expounded in detail
through various public letters setting forth the facts as they developed in gradual stages during the 'early months of the current fiscal
year. The condition of the Treasury and the state of the public debt
on June 30, 1919, was analyzed in a letter sent to the Chairmen of
the Senate Committee on Finance and the House Committee on Ways
and Means early in July. That statement revealed that the Treasury was on the t/hreshold of a more favorable period and enabled the
department to confirm the announcement which had been made on
April 14, 1919, to the effect that the issue of Victory notes would be
the last Liberty loan and further to point out that while the ultimate
amount of expenditures for the fiscal year 1920 was uncertain, it was
confidently exp(3cted that the Goyernment would be able, not only
to meet its furtlier temporary requirements for the decreasing scale
pf expenditure by the sale of Treasury certificates of indebtedness
bearing interest at the rate of 4^ per cent or less, but also to fund as
many of these as may be desirable by the issue of short-term- notes,
in moderate amounts, at convenient intervals, w;hen market conditions were favoi-able and upon terms advantageous to the Government. The foll(.)wing is a copy of the letter mentioned:
WASHINGTON, July 9, 1919.

. M Y D E A R CONGRESSMAN : I take pleasure in handing you herew ith, for your information and t h a t of the Committee on Ways and Means, the followirg statements:^
A. Preliminary fi]iancial statement of t h e United States Government for the period
from April 6, 1917, to June 30, 1919 (Exhibit 1, page 213).
B . Preliminary statement of the pubUc debt on June 30,1919 (Exhibit 1, page 214).
C. Statement showing classified receipts, exclusive of the principal of the public
debt, b y months, from April 6, 1917, to June 30, 1919, as published in daily Treasury
statements (Exhibit 1, page 215).




4

. REPORT ON THE FINANCES.

• D. Statement showing classified disbursements, exclusive of the principal of the
public debt, by months, from April 6, 1917, to June 30, 1919, as published in daily
Treasury statements (Exhibit L page 216).
Expenditures in the month of June just ended amounted in round figures to
$809,000,000, or less than for any month since September, 1917.
Expenditures for the fiscal year just ended amounted to $18,514,000,000.
• Expenditures for the war period amounted to $32,427,000,000, and of these more than
$9,384,000,000, or about 29 per cent, were met out of tax receipts and other revenues
than borrowed money, although paynient of nearly half of the income and profits taxes
for the fiscal year 1919 has not yet been made, such payinent being deferred until the
fiscal year 1920. In this calculation no deduction is made of expenditures for loans to
the Allies, which on June 30 amounted to $9,102,000,000, or for other investments,
such as ships, stock of the War Finance Corporation, bonds of the Federal land banks,
etc.
If we assume that the expenditures of the Government on a peace basis would have
been at the rate of $1,000,000,000 a year, or for the period under discussion of nearly
27 months would have equaled $2,250,000,000, then we may estimate the gross cost of
the war to June 30, 1919, at $30,177,000,000.
The gross public debt (without any deductioa for loans to the Allies or other investments) amounted on June 30,1919, to $25,484,000,000. Of this sum only $3,634,000,000
was in the form of Treasury certificates, or floating debt.. Of such certificates more than
$608,000,000 matured or were redeemed on July 1, 1919, and were paid out of the net
balance in the general fund on June 30, 1919, which amounted to $1,251,000,000.
Deducting the certificates last referred to, the floating debt on June 30, 1919, was little
more than $3,000,000,000, which is roughly the estimated amount of the deferred
installments of the income and profits taxes for the fiscal year 1919 and of the deferred
installments of the Victory loan subscriptions.
In the announcement given to the press on April 14,1919, of the terms of the Victory
Liberty loan, I made the following statement with reference to financing the future
requirements of the Government:
''This will be the last Liberty loan. Although as the remaining war bills are presented further borrowing must be done, I anticipate that the requirements of the
Government in excess of the amount of taxes and other income can, in view of the
decreasing scale of expenditure, be readily financed by the issue of Treasury certificates from time to time as heretofore, which may be ultimately refunded by the issue
of notes or bonds without the aid of another great popular campaign such as has characterized the Liberty loans."
I confirm the statement above quoted. The decision then taken has been fully
sustained by the experience of the past three months. The successful flotation of the
Victory loan and the adjustment of the amount and terms of the issue have resulted,
as I hoped they would, in a strong market at about par for these notes, without the
necessity of Government support, and in an improving market for the bonds of the
second, third, and fourth Liberty loans, evidenced not only by the firm market quotations but by strong undercurrents of investment buying, which give reason for the
hope that with the continuance of favorable general conditions, there will be consistent
appreciation in the market prices of these bonds.
I do not now think it will be wise to make any further issues of long-term bonds
before the maturity or redemption of the Victory notes, when there will have been
such an interval in Government offerings of all kinds as must inevitably result inmarked improvement of the market prices of the existing issues, with corresponding
decreases in the interest bases at which they are selling, and consequent assurance
that the Government will be able to finance itself for a longer period upon better terms.
It is not possible at this time, when appropriations for the coming year are under
consideration by the Congress, when contract claims by and against the United




SECRETARY OF THE TREASURY.

5

States are still ih process of settlement, when demobilization is still incomplete,
when the extent of the liability oh the wheat guaranty is unascertained, and when
the business upon which the income and profits tax receipts in the first half of the calendar year 1920 are to be based is still only half transacted, to make a formal estimate
of the receipts and expenditures of the United States during the fiscal year 1920.
B u t so large a part of the war expenditures has been paid or provided for out of taxes
and the issue of bonds or notes already sold and so small a part is unfunded that I
confidently expect that the Government will be able not only to meet its further
temporary requirements for the decreasing scale of expenditure b y the sale of Treasury
certificates of indebtedness bearing interest at the rate of 4^ per cent or less, b u t also
to fund as many of these as it may be desirable to fund, by the issue of short-term
notes, in moderate amounts, at convenient intervals, when market conditions are
favorable, and upon terms advantageous to the Government. I t will not be desirable to fund all the certificates of indebtedness, for the issue of certificates of indebtedness in anticipation of income and profits tax installments not only furnishes '
a means of financing the requirements of the Government temporarily upon easy
terms, b u t constitutes an almost necessaiy financial expedient, to enable .the taxpayer to save and to prepare gradually for the great tax payments, and to relieve
the banking machinery of the country of the great strain which would be imposed
upon it if these tax installments had to be paid on a single day without such preparation.
I need scarcely say to you that the realization of these sanguine expectations is
contingent upon the practice of the most rigid economy by the Government and the
continuance of ample revenues from taxation. Such a course, accompanied by the
practice of sober economy and wise investment by our people and strict avoidance
of waste and speculation, will make it possible for the American people to respond to
the demands to be made upon them privately for capital and credit by the nations
and peoples of Europe—demands which are reinforced by the strongest and most
vital ties of sympathy for the Allies, who fought and won the war with us, as well as
by the most obvious dictates of self-interest.
I am writing a similar letter to the Hon. Boies Penrose, chairman of the Committee
on Finance.
I t has seemed to me only proper at the end of the last fiscal year of the war period
to lay these facts and opinions before the Committee on Ways and Means, and the
Finance Committee, which bear so large a measure of responsibility for the war-loan,
legislation; and to.make them public also, since they vitally concern the millions
of Americans whose purchases of Government securities, and tax payments, made
this record of war finance possible.
Very truly, yours.
CARTER GLASS, Secretary.
Hon.

JOSEPH W . FORDNEY,

Chairman Committee on Ways and Means,
House of Representatives.

The above announcement was the most encouraging news from
the viewpoint of Government finance that the country had received
since the cessation of hostilities. I t was closely followed on Jtily
25, 1919, with a statement that, allowing for all the elements of uncertainty, the Treasury had no reason to believe, that the expenditures
of the Government during the fiscal year 1920. would exceed the
amount of revenue to be received under existing law and from the
remaining installments of the Victory Liberty loan. This would
mean a deficit for the year of only $1,032,000,000 and a net increase




6

REPORT ON T H E FINANCES.

in the gross public debt at the end of the year by that figure, which
was the amount of the deferred installments of the Victory Liberty
loan. This estimate was contained in an open letter to the banking
institutions of'the country apprising them of the financial program
for the ensuing five months, including the period of heaviest expenditure during the fiscal year 1920. The plan contemplated the
resumption of the issue of loan certificates after an interval of three
months, during which it had been possible to suspend the issue of
such certificates by reason of the rapid decrease in the current expenditures of the Government, the very large early payments on the
Victory loan, and the ready sale of tax certificates. The policy is
elaborated in the letter, a copy of which follows:
WASHINGTON, July 25, 1919.

D E A R SIR: I am writing the banking institutions of the coun,try, in pursuance of
the plan followed by my predecessor during the past year and a half, to inform them
of the financial plans for the remainder of the calendar, year and the probable requirements of the Treasury during that period, and indeed during the^ fiscal year ending
June 30, 1920," in so far as they may now be foretold. I have only recently had occasion to lay before the appropriate committees of Congress a report of the financing of
t h e war to t h e end of the fiscal year June 30, 1919. A copy of this report may be had
upon application to any Federal reserve bank or to the Treasury Department.
I t is not possible at this time, when appropriations for the coming year are under
consideration by the Congress, when contract claims by and against the United States
are still in process of settlement, when demobilization is still incomplete, when the
extent of the liability on the wheat guaranty is unascertained, and when the business
Upon which the income and profits tax receipts in the first half of the calendar year
1920 are to be based is still only half transacted, to make a formal estimate of the
receipts and expenditures of t h e United States during the fiscal year 1920 (ending
June 30, 1920). I do not hesita,te to say, however, that I anticipate that the Government will be in receipt of revenues under existing law and from the Victory Liberty
loan d u u n g the fiscal year 1920 to the amount of^at least $6,500,000,000, divided
somewhat as follows:
Internal revenue
Customs
.Sale of public lands
Miscellaneous..
Total ordinary receipts
Victory Liberty loan installments
Total

1.. $4, 940, 000, 000
260, 000, 000
,
3, 000, 000
300, 000,000
5, 503, 000, 000
1, 032, 000, 000
6, 535, 000, 000

I n the absence of a budget system or of any Treasury control of governmental
expenditure, i t is even more difficult to foretell the expenditures than the receipts
of the Government. Current expenditures, which reached the maximum of $2,060,000,000 in December, 1918, fell in June to $809,000,000, and, after deducting the
amount of the certificates of indebtedness of the Director General of Railroads paid
during the present month of July, should shovW a still further decrease in this month.
Allowing for all the elements of uncertainty above referred to, I have no present
reason to believe that the expenditures of t h e Government during the fiscal year




SECRETARY OF THE TREASURY.

7

1920 will exceed the amount of its receipts as above indicated, excluding transactions
in the principal of the public debt other than the Viqtory loan. If these expectations
prove to be correct, the gross public debt of the United States, which on June 30,
1919, amounted to...
$25, 484, 506,160. 05
should be increased during the fiscal year 1920 by not more than
the amount of the deferred installments of the Victory Liberty
loan payable in the fiscal year 1920.
1, 032, 000, 000. 00
making a total public debt on June 30, 1920, when presumably
the whole cost of the war will have been financed, of, say
26, 516, 506,160. 05
The realization of these sanguine expectations is contingent upon the practice of
most rigid economy by the Government and the continuance of ample revenues from
taxation.
The heaviest period of expenditure during the current fiscal year will probably fall
in the summer months of July, August, and September, because of the heavy disbursements of the ]ilailroad Administration heretofore held back for lack of an appropriation, the heav^y^ payments in settlement of Army contracts and on account of
demobilization, and the maturities of-certificates issued in anticipation of the "Victory
loan. The amount of certificates outstanding in anticipation of the Victory Liberty
loan at any one tirae (excluding certificates redeemed, tax certificates, etc.), which
on May 5 had reached the peak at
$5, 797, 296, 500
had up to July 22 been reduced by
4, 402, 519, 000
Leaving outstanding

1, 394, 777, 500

During the next few months, therefore, the actual cash requirements of the Treasury can not be expected to show ai heavy further decrease, and, on the other hand,
the proceeds of the deferred installments of the income and profits taxes for the year
1919, and the deferred installments on Victory loan subscriptions will not have been
fully received until nearly the end of the calendar year 1919.
Three months have passed since the last offering of Treasury certificates other than
those issued in anticipation of taxes. This interval has been made possible by the
rapid decrease in the current expenditures of the Government, the very large early
payments on the Victory loan, and the ready sale of tax certificates. Beginning
early in June, these have been issued up • to July 22 to the aggregate amount of
$1,875,437,500, but in amouuts less than the income and profits tax receipts due at
their respective maturities. Having borrowed as much as it is, in the Treasury's
judgment, proper to borrow in anticipation of the income and profits tax installments
payable September 15 and December 15, and having already sold up to July 22 Treasury certificates maturing March 15, 1920, to the amount of about $275,000,000, so that
the limit of that issue also would soon be reached, the time has come when the issue
of loan certificates ishould be resumed.
The Treasury has, accordingly, determined to issue loan certificates, of five months' ,
maturity, and, with a view to aiding the banking institutions of the country in the
distribution of these certificates, will issue the certificates on the 1st and 15th of each
month, beginning August 1, 1919, thus making the issue semimonthly^ instead of
biweekly as heretofore, and setting fixed dates in each month on which the issues will
open. Treasury certificates, which, at the beginning of our participation in the war,
had little or no market outside of the banking institutions of the country, have come
to be appreciated by a great and steadily increasing class of investors. Banking
institutions, on the other hand, which at the outset were loath to sell certificates to
their customers,, fearing loss of deposits, have come increasingly to realize the wisdom
and advantage of buying and distributing the certificates. Those incorporated banks
and trust companies (numbering some 9,500) which have availed themselves of the




8

/ . REPORT ON T H E FINANCES.

privilege j open to all, of becoming depositaries of the proceeds of the certificates
purchased, have found ample compensation in the resulting deposits.
The minimum amount of each semimonthly issue o f t h e certificates should not in
any casie exceed say $500,000,000, and, after September and during the balance of the
calendar year, should not on t h e average exceed half of t h a t amount, for then all the
Victory loan certificates will have been piaid or provided for, and such progress should
have been made in Army settlements and in demobilization as greatly to reduce the
requirements of the current program. That would mean the issue, during the remaining five months of the calendar year, of certificates to the amount of, say $3, 500, 000, 000
During the same period there will mature and b e paid loan and tax
certificates to the aggregate amount of
2, 997, 540, 500
Net increase
:
502,. 459, 500
The figures which the Treasury is now able to present seem fully to justify the
announcement made in April that the Victory loan would be the last Liberty loan •
and the statement, made in the report to the committees of Congress above referred to,
that t h e Treasury expects to be able to meet its further temporary requii-ements b y the
sale of Treasury certificates of indebtedness, bearing interest at the rate of 4^ per cent
or less, and also to fund as many of these as it may be desnable to fund b y the issue of
short-term notes, in moderate amounts, at convenient intervals, when market conditions are favorable, and upon terms advantageous to the Government.
The Federal reserve banks will advise all national and State banks and trust
companies in their respective districts of the minimum amounts of certificates they
are expected to take from time to time in pursuance of this program, which should
be not less than 1.6 per cent of the gross resources of each bank and trust company
for each semimonthly issue during August and September, and may fall as low as,
say, 0.8 per cent toward the end of the calendar year.
The program may be varied at opportune times by the substitution of an issue of
tax certificates or b y an alternative offering of such certificates, to which no quota
will be applicable.
I t is with confidence that I lay before the banking institutions of America, who
did so much to make our successful record of war finance possible, the present program
of the Government's current requirements for the balance of the calendar year, and
ask each of them not only to subscribe its quota for each semimonthly issue of Treasury
certificates, b u t to use its best efforts to distribute these certificates as widely as may
be among investors.
Cordially, yours.

CARTER GLASS.

To the P R E S I D E N T OP THE B A N K OR T R U S T COMPANY A D D R E S S E D .

The progress of the certificate program and the success of the first
two issues pf certificates in pursuance of the plan were such as to
permit the following announcement on August 25, 1919, in which
the banking institutions of the country were informed that the third
semimonthly issue, dated September 2, would be offered without
asking them to subscribe for any specified quota:
The second semimonthly issue of Treasury certificates of indebtedness (Series B,
1920) in pursuance of t h e program for financing t h e current necessities of t h e Government set forth i n Secretary Glass's letter of July 25, 1919, to all banks and trust companies, was oversubscribed.
The splendid response of t h e banking institutions of the country to t h e Treasury's
plan for financing t h e current needs of t h e Government as set out in t h e Secretary's
circular letter of July 25, gives assurance that t h e Treasury may count upon unquali-




SECRETARY OF THE TREASURY.

U

fied and ample support whenever needed. The success of the first two issues, which
realized a total of $1,065,953,500, has placed the Treasury in a very satisfactory cash
position. This makes it possible to make the following anouncements as to the
program for the next few weeks:
1. There will be no fixed minimum amount for the issue of loan certificates dated
September 2 and miaturing February 2 (Series C, 1920). The issue will not remain
open for any stated period, but will be closed without nd'tice. Federal reserve banks
will not assign quota in respect to this issue to the banking institutions of their
districts.
.
2. There will be no issue of loan certificates upon September 15. An issue or issues
of tax certificates of longer maturity may be substituted.
3. The Secretary of the Treasury has authorized the Federal reserve banks on and
after Tuesday, September 2, to redeem in cash before maturity at the holder's option,
at par and accrued interest to the date of such optional redemption. Treasury certificates of indebtedness of Series V J, dated April 10, 1919, and maturing September 9,
1919.

This offering of certificates without suggesting to the banks the
amount that should be subscribed was a very great success and further
reflected the splendid condition of the Government's credit, the investment value of these securities and the increased marketability
of the certificates through redistribution by the banks to investors.
The large subscription of the three issues of certificates dated August 1, August 15, and September 2, the fortunate cash position qf the
Treasury, and the increasing investment demand enabled the department to advance another important step forward in the gradually
developing program that was taking the Treasury out of the securities
market to the greatest extent possible and revealing the continuing
improvement in the situation. On September 8, the plan, as had
been customary from the beginning, was varied by suspending the
sale of loan certificates for the time being and offering two series of tax
certificates, both dated September 15, 1919, one series maturing in
six months and bearing interest at the rate of 4J per cent, and the
other maturing in one year and bearing interest a t the rate of 4J
per cent. This was the first time in over a year that certificates
had been offered at less than 4 i per cent. In addition, it was announced that all certificate maturities prior to 1920 were provided for
from tax receipts or cash in bank, which was further evidence of
progress in the policy of financing the balance of the war debt so as to
avoid great refunding operations by spreading maturities and meeting
them, so far as may be, from tax receipts. The situation and the
offering were described in detail in the subjoined letter to the banks
and trust companies of the country:
WASHINGTON, September 8, 1919.

DEAR SIR: The third semimonthly issue of Treasury certificates of indebtedness,
Series C 1920, in pursuance of the program outlined in my letter of July 25, 1919, was,
in accordance with the announceinent made on August 25,1919, offered without asking
the banking institutions of the country to subscribe for any specified quota. The




10

REPORT ON THE FINANCES.

Treasury felt confident that these certificates could be sold in amounts more than
sufficient to meet the reduced needs of the Government without assigning the usual
quota to individual banking institutions. This confidence was amply justified by
the event. The certificates of Series C ] 920 were dated September 2 and subscriptions closed on September 3, the following day. The aggregate amount of certificates
of this series subscribed for and allotted was $573,841,500, a sum greater by about
$40,000,000 than the amounf subscribed for either of the two preceding issues, each
of which had definite quota assignments and remained open a week after the date of
issue.. This aggregate was in excess of the immediate requirements of the Treasury
but allotment was nevertheless made in full upon all subscriptions made on the date
of issue and the day following, in order not to disappoint those subscribers who had
presented their subscriptions with reasonable promptness; and the opportunity was
taken to redeem on September 15 the certificates of Series V K maturing October 7,
1919 (the last of the certificates issued in anticipation of the Victory Loan). The
redemption of these certificates should have a beneficial effect in coimection with the
large payments of income and profits taxes due on September 15.
The aggregate amount of Treasury certificates of indebtedness still outstanding on
August 30 of the several series maturing or called for redemption on September 9 and .
15, 1919, was $1,799,041,500. This entire sum (which has since been reduced by
exchanges and cash redemptions) is provided for from cash in bank and income and
profits taxes due September 15, leaving an ample balance in the general fund.
There remain no maturities of certificates to provide for prior to 1920, as the certificates maturing December 15 are more than covered by the income and profits tax
installment due on that date.
In the month of August just past ordinary and special disbursements exceeded
ordinary receipts by less than $500,000,000. In September, because of the income
and profits tax installment payment; ordinary receipts should exceed ordinary and
special disbursements by approximately $500,000,000.
The success of recent issues of Treasury certificates, the fortunate cash position of
the Treasury at the moment and the reinvestment demand which will result from
the payment of so large an amount of certificates on or before September 15 create a
situation which should be availed of to make an important step forward in financing
the debt growing out of the war. In my letter of July 25, above referred to, I indicated that the Treasury certificate program might be varied at opportune times by
the substitution of issues of tax certificates. This obviously is an opportune time,
and accordingly the Treasury is offering two series of so-called tax certificates, both
dated September 15, 1919, Series T 9 maturing March 15, 1920, and bearing interest
at the rate of 4^ per cent, and Series T 10 maturing September 15, 1920, and bearing
interest at the rate of 4^ per cent, payable semiannually. It is not possible to say
definitely when semimonthly issues of loan certificates will be resumed nor upon what
terms they will be issued; but such issues will certainly not be resumed before October
15, and the minimum amount offered should not exceed $250,000,000. In view of the
important fact that now for the first time in over a year certificates (of Series T 9,
maturing March 15) are offered at a lower rate than 4J per cent, I deem it proper to
say that, if hereafter certificates maturing on or before March 15,1920, should be issued
bearing interest at a higher rate "than 4J per cent, certificates of Series T 9 will be
accepted at par with an adjustment of accrued interest in payment for certificates of
such series which may be subscribed for and allotted.
I hope that each and every banking institution in the United States will not only
subscribe liberally for one or both issues of the certificates now offered but also will
use its best endeavors to procure the widest possible redistribution of such certificates
among investors. The certificates, although acceptable in payment of income and
profits taxes payable at maturity, are, as you know, payable in cash when they mature,




SECRETARY OF THE TREASURY.

11

and should make a ^nde appeal to investors generally because of their valuable exemptions from taxation and attractive maturities. The success of these issues will be an
important advance in the process of financing the war debt in such a way as to avoid the
necessity for great refunding operations, by spreading maturities and meeting them,
So far as may be, out of tax receipts. Incorporated banks and trust companies which
are not qualified depositaries are urged to become such in order that they, like others,
may participate in the temporary deposits growing out of these issues.
The patriotic, loyal, and enlightened support which the banking institutions of
the country gave tc> the Treasury during the darkest days of the war and continued
through the perhaps more difficult period after the cessation of hostilities, when war
expenditures were at their peak, justifies the Treasury in addressing to them this
confident appeal now that the turn of the tide has come.
Cordially, yours.

CARTER GLASS.

To the PRESIDENT OP THE BANK OR TRUST COMPANY ADDRESSED.

The response to these two offerings of tax certificates was so great
that it was found desirable to close the issue in three days after
September 15. The total subscriptions aggregated $758,600,500, of
which $101,131,500 represented the 4i per cent six-month series and
$657,469,000 the 4J per cent one-year series. In view of the success
of the issues it vt^as possible to suspend for another period the offering
of further loan certificates.
The international financial situation.
The international financial situation is one of great importance and
in which we are seriously interested. The present position relative
to foreign financing and the general policy of the Treasury concerning
this vital problem should be fully stated.
Smce the armistice the United States has advanced to the Governments of the Allies, as of the close of business October 31, 1919, the
sum of $2,329,257,138.55, and there remained on that date an
unexpended balance.of $593,628,111.45, from the total loans of
$10,000,000,000 authorized under the Liberty loan acts.
The Treasury asked and obtained power for the War Finance Corporation to make advances up to the amount of $1,000,000,000 for
nonwar purposes and the Wa;r Finance Corporation is prepared to
make such advances.
By the act approved September 17, 1919, the Federal Reserve
Board is authorized to permit, until January 1, 1921, national banks
to invest to a limited extent in the stock of American corporations
principally engaged in such phases of international or foreign financial operations as may be necessary to facilitate exports.
The Secretary of War is authorized to sell surplus Army stores on
credit.
The United States wheat director is authorized to sell wheat to
Europe on credit.




12

REPORT ON T H E FINANCES.

The ipower which at present exists in the Government or governmental agencies to assist in meeting Europe's financial needs is,
therefore, considerable. This power must, of course, be exercised
with extreme caution and with the most careful regard for the
urgent needs of our own people for an ample supply of foodstuffs and
other necessities of life at reasonable prices.
The Treasury is considering with representatives of the Governments of the Allies the funding of the demand obligations which the
United States holds into.long-time obligations, and at the same time
the funding during the reconstruction period, or say for a period of two
or three years, of the interest on the obligations of foreign Governments acquired by the United States under the Liberty loan acts.
The Treasury believes t h a t the need of Europe for financial assistance, very great.and very real though it is, has been much exaggerated both here and abroad. Our hearts have been so touched b y ,
the suffering which the war left in its train, and our experience is so
recent of the financial conditions which existed during the war (when
men were devoting themselves to the business of destruction) that
we are prone to overlook the vast recuperative power inherent in any
country which, though devastated, has not been depopulated, and the
people of which are not starved afterwards. We must all feel deep
sympathy for the suffering in Europe to-day, b u t we must not allow
our sympathy to warp our judgment and, by exaggerating Europe's
financial needs, make it more difficult to fiU them.
Men must go back to work in Europe, must contribute to increase
production. The industries of Europe, of course, can not be set to
work without raw materials, machinery, etc., and, to the extent that
these are to be secured from the United States, the problem of
financing the restoration of Europe belongs primarily to our exporters.
Governmental financial assistance in the past and talk of plans for
future Government or banking aid to finance exports have apparently
led our industrial concerns to the erroneous expectation that their
war profits, based so largely on exports, will continue indefinitely
without effort or risk on their part. To them will fall the profits of
the exports and upon them will fall the consequences of failure to
make the exports. So soon as domestic stocks, which were very low
at the time of the armistice, have been replenished, those industries
which have been developed to meet a demand for great exports, paid
for out of Government war loans, wiU be forced to close plants and
forego dividends unless they maintain and develop an outlet abroad.
The industries of the country must be brought to a realization of the
gravity of this problem, must go out and seek markets abroad, must
reduce prices at home and abroad to a reasonable level, and create
or cooperate in creating the means of financing export business.




SECRETARY OF THE TREASURY.

13

There is no reason for high commodity prices in the specter of
European demand nor for high interest rates in the specter of
European credits. Our fear must be that the cessation of war exports
will result in closed plants, passed dividends, and general depression.
The way to avoid those evils is to stimulate production and encourage
industrial and commercial activity and not to burden them with
high interest rates which are a deterrent to these things, b u t unfortunately are not a deterrent, except temporarily, in such times as
these to speculation.
Since armistice day, the consistent policy of the Treasury has been,
so far as possible, to restore private initiative and remove governmental controls and interferences. I t has been the view of the
Treasury that only thus can the prompt restoration of healthy
economic life be gained. The embargoes on gold and silver and
control of foreign exchange have been removed, as well as the voluntary and informal control of call money and the stock exchange loan
account. The control exercised by the Capital Issues Committee
over capital issues has been discontinued. Thus the financial markets
of the United States have been opened to the whole world and all
restrictions removed that might have hindered America's capital and
credit resources, as well as its great gold reserve, from being available
in aid of the world's commerce and Europe's need.
There are those who believe that the dollar should be kept at par—
no more, no less—in the market of foreign exchange. If effective
action were taken to carry out such a policy, it could only be done by
drawing gold out of the United States when the dollar would otherwise be at a discount and by inflating credit when the dollar would
otherwise be at a premium.
The dollar is now at a premium almost everywhere m the world.
Its artificial reduction and maintenance at the gold par of exchange
in all currencies is quite unthinkable unless we propose to level all
differences in the relative credit of nations and for our gold reserve
substitute a reserve consisting of the promises to pay of any
nation that chooses to become our debtor. Inequalities of exchange
reflect not only the trade and financial balance between two countries, but, particularly after a great war such as that we have been
through, the inequalities of domestic finance. The United States has
met a greater proportion of the cost of the war from taxes and bond
issues than any other country. Largely as a consequence of this
policy, the buying power of the dollar at home has been better sustained than has the buying power at home of the currency of any
European belligerent. For the United States to determine by governmental action to depress the dollar as measured in terms of foreign
exchange and to improve the position of other currencies as measured




14

REPORT ON THE FINANCES..

in terms of dollars would be to shift to the American people the tax
and loan burdens of foreign countries. This shifted burden would
be measured by the taxes to be imposed and the further loans to be
absorbed by our people as a consequence, and by increased domestic
prices.
United States Government action at this time to prevent in respect
to foreign exchange the ordinary operation of the law of supply and
demand, which automatically sets in action corrective causes, and
to prevent the dollar from going to a premium when its natural
tendency is to do so, would artificially stimulate our exports, and,
through the competition of export demand with domestic demand,
maintain or increase domestic prices.
The view of the Governments of the. Allies, I take it, is that had
they (after the war control of their imports had been relaxed) attempted to continue to ' ' p e g " their exchanges here at an artificial
level by Government borrowing, the effect would have been to stimulate their imports and discourage their exports, thus aggravating
their already unfavorable international balances.
I t is not, of course, to be expected that the breach left by the withdrawal of governmental support of exchange can be filled by private
initiative until the ratification of the treaty of peace has given
reasonable assurance against the political risk which, rather than
any commercial or credit risk, now deters private lenders. Some
progress has already been made in placing here through private
channels the loans of allied and neutral European countries and
municipalities. The Treasury favors the making, in our markets,
of such loans, which contribute to relieve the exchanges. I am sure
t h a t when peace is consummated, and the political risk" measurably
removed, American exporters and European importers will lay the
basis of credit in sound business transactions, and I know t h a t
American bankers will not fail then to devise means of financing
the needs of the situation nor American investors to respond to
Europe's demand for capital on a sound investment basis.
Meanwhile it is well to remember the invisible factors, which are
always at work toward a solution of the problem. Immigrants' remittances to Europe are, and will continue to be, a very large item
in rectifying the exchanges. As soon as peace is concluded foreign
travel will be a further item. Another very important factor is the
purchase of European securities and properties and repurchase of
foreign-held American securities by American investors. But the
principal factor in Europe's favor is the inevitable curtailment of her
imports and expansion of her exports. These processes, of course,
are stimulated by the very position of the exchanges which they tend
to correct.




SECRETARY OF THE TREASURY.

15

The exchange situation as it exists to-day and the steps which
were taken for the removal of all war restrictions as ra])idly as conditions would warrant may be summarized as follows:
On May 6, 1919, the Federal Reserve Board announced that thereafter licenses for the export of silver bullion or silver coin of foreign
mintage would be granted freely and without condition. This was followed on June 9, 1919, by the announcement that after consultation
with the Secretary of the Treasury, and with his approval, the Federal
Reserve Board had recommended to the President, and the President
had approved the recommendation, that the control theretofore exercised over transactions in foreign exchange and over the exportation of coin, bullion, and currency be terminated except as to the
importation or exportation of ruble notes or exchange transactions
with that part of Russia under the control of the so-called Bolshevik
government, and except as to exchange transactions with territories
in respect of which such transactions were at that time permitted
only through the Ainerican Relief Administration. At the same
time it was announced that until formal action was taken by the
President applications for the export of gold would, like applications
for the export of silver, be freely granted irrespective of amount or
destination except as above stated, and that during that interim
licenses required to consummate specific transactions in foreign exchange would be freely granted, except as set forth above.
On June 26, 1919, the President issued a proclamation, which is
attached hereto as Exhibit 2, page 217, giving effect to the above
recommendations. This was followed by the removal h j the Federal
Reserve Board, on June 30, of the restrictions on remittances to
countries to which remittahces had theretofore been permitted only
through the American Relief Administration, leaving in force and
^effect only the prohibition against the shipment of ''coin, bullion,
and currency to that part of Russia now under the control of the socalled Bolshevik government, and any and all dealings or exchange
transactions in Russian rubles or transfer of credit or exchange transactions with that part of Russia now under the control of the socalled Bolshevik government." On August 12, the Federal Reserve Board announced the issuance of a general license permitting
the exportation from the United States of Russian rubles, provided
that notice of such exportations be given to the Customs Division of
the Treasury and to the Division of Foreign Exchange of the Federal
Reserve Board. With the exceptions above noted, therefore, there
is now no control over foreign exchange or the export of coin, bullion, or currency.
The improvement of our exchanges with neutral countries and
the decline to normal, and in many cases to a very considerable dis-




16

REPORT QN THE FINANCES.

count, of the currencies of those countries which had been ruling at
considerable premium in the United States, is illustrated by the
following table showing (1) the highest premiums reached by certain
foreign currencies between April, 1917, and July 31, 1918; (2) the
highest premiums during the month of July, 1918; (3) the premiums
on November 15,1918; and (4) the premiums or discounts of each currency as of November 1, 1919:
Table showing highest premium's reached by certain foreign currencies in New York between
April, 1917, and July 31, 1918; premiums on Nov. 15, 1918, and premiums or discounts as of Nov. 1, 1919.
[Based on quotations for demand bills.]
' Highest premium between
April, 1917, and July 31,1918.
Carrency of—
Per cent.

Sweden
Norway
Denmark
,.
Holland
Switzerland
Spain
India
Japan
Argentina
.•
Chile
Peru (cable r a t e s ) . . .
Bolivia (cable rates).

69.78
44.59
44.59
29.35
35.28
54.15
23.30
7.82
12.25
78.24
20.83
10.25

Month in which
reached.

November, 1917.
do
do
July, 1918.......
May, 1918
April, 1918......
September, 1917.
July, 1918....:..
December, 1917..
June, 1918
July, 1918
December, 1917..

Highest
premium,
July,
1918.

Premium,
Nov. 15,
1918.

Discount,
Nov. 1,
1919.

Per cent. Per cent. Per cent.
3.55
33.58
11.00
1.68
17.91
16.42
16.79
.75
21.08
29.35
3.86
5.94
31.50
7.50
3.21
42.75
3.63
.10
10.14
10.14
1 29.47
7.82
9.33
11.81
5.61
5.04
.24
75.48
31.54
14.39
20.83
3.10
2.19
1.54
13.00

1 Premium..
NOTE.—Quotations for Chile are for inconvertible paper cuiiency and premiums are calculated upon the
average value of 18,8 cents per paper peso during the nrst 6 months of 1914 as a base. There is, therefore,
no premium or discount properly so-called.

I t will be observed that of these currencies the only ones now
-ruling at a premium are those of Japan, Bolivia, and India. In the
case of Japan and Bolivia the premium roughly measures, the cost,
including loss of interest, of the export of gold from the United States
to those countries, and may, therefore, be regarded as a normal quotation. With a free gold market in the United States, as we now have
it, the currency of no gold-standard country should rise above such
moderate premium as measures the cost of transportation of gold
from this country to the country in question. That is the normal
maximum. The normal minimum with any gold-standard country
enjoying a free gold market would be a discount equal to the transportation cost from that country to the United States.
As the above table indicates, exchange on India is selling at a very
considerable premium. The situation is anomalous. The currency
of India at the present time, while nominally on a gold basis, is practically on a silver basis. This is due to the fact that the circulating
medium of India is the silver rupee, designed to be and formerly




SECRETARY OF T H E TREASURY.

17

actually a token coin, the present market value of whose silver content, however, is far above its rated gold value as Indian currency.
That rated value is 32.44 cents per rupee, and when silver is selling
at 94.37 cents per ounce of fine silver the rated value of the rupee at
par, viz, 32.44 cents per rupee, is equal to the market value of its
silver content. The present quotation of the Indian rupee roughly
measures the present market value of the silver content of the rupee.
Owing to the propensity of the natives to hoard the precious metals,
the Indian Government is unwilling to permit the importation into
India of unlimited amounts of gold, which would thus to all intents
and purposes be lost to the world, but very considerable amounts of
gold have been sent to India and placed by the Government in the
reserve against rupee currency notes. The exchange rate on India,
therefore, in the present circumstances, is disconnected from the value
of gold and responds roughly to the value of silver in the same manner
as rates of exchange on China and Hongkong. A British commission was appointed early in 1919 to investigate the entire
subject of the Indian currency.
CURRENCY AND CREDIT EXPANSION.

The progressive rise in commodity prices and wages has led to
considerable public discussion as to whether there existed an inflation
of the currency, and whether such inflation, if it existed, was a cause
contributing to high prices. The discussion led to the introduction
in the Congress of a resolution requesting an inquiry into the advisability of legislation providing for the gradual reduction of the currency
in circulation. The chairman of the Senate Committee on Banking
and Currency requested the views of the Federal Reserve Board on
the subject, and I fully concur in the answer of the board, as embodied
in Gov. Harding's letter to Senator McLean, under date of August
8, 1919.
There is no escape from the conclusion that under our system currency can be issued only in response to a demand therefor as circulating medium and that such currency is automatically retired
when it is no longer required as circulating medium. Currency expansion, therefore, is an effect and not a cause of advancing prices.
The remedy for high prices, as stated in Gov. Harding's letter, is " t o
work and to save; to work regularly and efficiently in order to produce and distribute the largest possible volume of commodities; and
to exercise reasonable economies in order that money, goods, and
services may be devoted primarily to the liquidation of debt and to
the satisfaction of the demand for necessities, rather than to indulgence in extravagances or the gratification of a desire for luxuries."
140325—FI 1 9 1 9 — 2




1.8

REPORT ON THE FINANCES.

Credit expansion must be carefully distinguished from currency
expansion. The primary cause of high prices was the demand for
coinmodities.by the European belligerents before our entry into the
war and by the United States and the European belligerents combined after our entry into the war. So far as the United States
Government was concerned, payment by the Government for war
commodities rendered inevitable a certain measure of credit expansion, as it was impossible to bring about at once a restriction of private consumption by our people commensurate with the growing needs
of the Government. This credit expansion, therefore, was the effect
of the war demand for commodities by the United States Government and a necessary concomitant of t h a t demand. The primary
cause of high prices was war demand for commodities; credit expansion was a necessary concomitant thereof, and currency expansion
an effect of the rise of prices.
The following is a copy of Gov. Harding's letter to the chairman
of the Senate Committee on Banking and Currency:
WASHINGTON, August 8, 1919.

DEAR SIR: The Federal Reserve Board acknowledges receipt of your letter of the
5th instant asking for an expression of its views as to the advisability of legislation
providing for the gi'adual reduction of the currency in circulation as proposed by
Senate Resolution 142.
• The Board would suggest that in determining whether or hot legislation is necessary or desirable to regulate the volume of currency in circulation, consideration be
given to the various forms of money which make up the sum total of our volume of
currency. A distinction should also be drawn between the stock of money in the
country and the amount actually in circulation.
With respect to gold coin, gold certificates, standard silver dollars, silver certificates, subsidiary silver and Treasury notes of 1890, the Board assumes that it is recognized that no legislation is necessary.
The United States notes, or legal tenders, which have remained at the fixed amount
of $346,681,016 since March 31, 1878, have not been a disturbing factor since the
passage of the act of March 14. 1900. An adequate gold reserve of more than 45% is
now held against these notes, most of which are in the form of small bills of $1, $2,
and | 5 denominations. Notes of these denominatons are needed in the daily transactions of the public, and were the United States notes to be retired, the issue of
an equal volume of small bills in some other form of currency would be necessary.
To efiect the retirement of the United States notes, funds would have to be withdrawn from the Treasury to be supplied either by taxation or by the sale of interestbearing obligations. The Board does, not believe that any legislation with respect
to United States notes is necessary or desirable at this time.
The national bank notes outstanding on August 1,1919, amounted to 1658,118,555.00,
a reduction of nearly $60,000,000 since July 1, 1914. The greater part of these notes
is secured by United States 2% bonds, and provision has already been made in Section
18 of the Federal Reserve Act for their gradual retirement.
Federal reserve bank notes, which are secured by United States obligations and
are taxed just as national bank notes are, have been issued only to replace in part
national bank notes retired, and standard silver dollars melted or broken up and sold
as bullion under authority of the act of April 28, 1918, known as the Pittman Act.




SECRETARY OF THE TREASURY.

19

The issue of these notes has, therefore, brought about no increase in the circulating
medium.
The amount of Federal reserve notes outstanding has increased from $357,239,000
on April 1, 1917, to $2,504,753,000 on August 1, 1919. It appears therefore that those
who see in the larger volume of circulation in the United States the prime cause of
increased costs of living and who>seek a remedy by a forced contraction of the currency
must have in mind the Federal reserve note and Section 16 of the Federal Reserve
Act as amended June 21, 1917, which provides for its issue and redemption.
lucanalyzing our present monetary situation, and in considering the causes which
have led to the expansion of credits and note issues during the war, we should not lose
sight of some of the.4evelopments-of the pre-war period and of their effect upon credits
and prices. Very heavy'purchases of supplies of all kinds were made in this country
by European belligerents during the years 1915 and 1916, payment for which involved
the shipment to us of large amounts of gold. The stock of gold in.the United States
on July 1, 1914, was $1,890,678,304. This amount increased steadily until April, 1917,
the date of our own entry into the war, when it reached $3,088,904,808, an increase of
about $1,200,000,000. Bank deposits likewise show a large increase, the net deposits
of national banks having risen from $7,495,149,000 on June 30, 1914, to $10,489,217,000
on March 5, 1917, while the net deposits of all banks in the United States increased
from $17,966,150,000 in June, 1914, to $24,891,218,000 in June, 1917. Net deposits of
national banks had further increased up tp May 12, 1919, to $11,718,095,000, and those
of all banks in June, 1918, (the latest date for which figures are available) to $26,769,. 546,000. Shortly after April 6, 1917, when the Congress declared war, the Treasury
began to sell bonds, notes and certificates in large amounts resulting in. a net increase
in the public debt to August 1, 1919, of $24,518,064,840.
On July 1, 1914, the total stock of nioney in the United States, exclusive of that
held by the United States Treasury, was $3,419,168,368. ,0n April 1, 1917, the stock
of money, estimated on the same basis, was $4,702,130,941, an increase of $1,282,962,573 of which increase $883,481,028 was in gold.
On July 1, 1914, there were no Federal reserve notes in existence, while on April 1,
1917, there were outstanding $357,239,000.
The amendment to the Federal Reserve Act approved June 21, 1917, changed
substantially the original reserve requirements for member banks and provided that
their entire lawful reserve should be carried with the Federal reserve banks. The
same amendment authorized the Federal reserve banks to exchange I'ederal reserve
notes for gold. The result of these two changes in the law was to transfer immediately
large sums of gold from the vaults of the member and nonmember banks and from
general circulation to the Federal reserve banks, and this caused a change in the
methods of accounting for gold by the Federal reserve banks and Federal reserve
agents.
In order to avoid confusion in determining the volume of money in actual circulation, it is necessary to distinguish between tables showing the total stock of money
in the country, and tables showing the circulation outside of the Treasuiy and Federal
reserve agents' vaults, and to limit our view to amounts helcj by member and nonmember banks and the public, which are exclusive of amounts on hand at Federal
reserve banks, held by Federal reserve agents, and held in. the Treasury.
The reserve money held by or for the Federal reserve banks serves, of course, as a
basis for credit, but it forms no part of the currency in circulation. Upon, this basis,
the amount of money in circulation on July 1, 1914 (there being no Federal reserve
banks in operation at that time), was $3,419,168,368, made up as follows: Gold coin
and certificates $1,649,775,803; silver dollars and silver certificates, including Treasury
notes of 1890, $552,203,610; all other currency $1,217,188,955, being circulation per
capita $34.53.
"




20

REPORT :0N THE FINANCES.

The corresponding amounts of money in circulation on April 1, 1917, December ] ,
1918, and August 1, 1919, are shown in the following table:
Amount of money outside the Treasury and Federal reserve banks.
Aug. 1, 1919.

Apr. 1,1917.

Dec. 1,1918.

Gold coin and certificates
Silver dollars and silver certificates (including
Treasury notes of 1890)
Federal Reserve notes
Federal Reserve barik notes
All other currency

$1,989,152,000.00

$861,245,000.00

S728,046,000.00

532,700,000.00
357,239,000.00
3,170,000.00
1,218,715,000.00

372,489,000.00
2,607,445,000.00
87,737,000.00
1,201,069,^000.00

241,505) 000.00
2,504,753,000.00
166,289,000.00
1,156,297,000.00

Total
:
Amount per capita outside the Treasury and the
Federal Reserve banks
1

4,100,976,000.00

5,129,985,000.00

4,796,890,000.00

39.54

48.13

45.16

Assuming that the date December 1, 1918, marks the beginning of the post-war
period, the table shows changes during this period up to August 1, 1919. as follows
Gold coin and certificates in circulation decreased $133,199,000; silver dollars and
silver certificates, including Treasury notes of 1890, decreased $130,984,000; Federal
reserve notes decreased $102,692,000; Federal reserve bank notes increased
$78,552,000; all other currency decreased $44,772,000, being a net decrease in circulation for the post-war period of $333,095,000, or $2.97 per capita.
In considering the question of currency in circulation, there should be taken into
account the various factors which have entered into the demand for currency, among
which are: The gradual enlargement of pay rolls, both as to the number of workers
and amount paid to each; the effect of higher wages upon deposits in banks and upon
the amounts of money carried by shopkeepers in their tills and by individuals in their
pockets; the amounts of nioney locked up or carried on their persons by workmen
who have been receiving high wages and who, especially in the case of ignorant
foreigners, are unwilling to deposit their savings in banks or to invest in Government
bonds; the amount of money carried away by workmen returning to their homes
in foreign countries; and the fact that the circulating media of the Philippine Islands,
Hawaii, Cuba, Porto Rico, Santo Domingo, Efaiti, Honduras, Panama, and ih part,
Mexico, includes United States paper currency and subsidiary silver. The amount
required in these countries, most of which are very prosperous, have greatly increased
in the last few years.
The total foreign cu'culation of United States currency can not be stated accurately,
but is estimated to be at least one hundred and fifty million dollars.
The difficulty, indeed the impossibility, of keeping in circulation an excessive
volume of Federal reserve notes should be understood. The issue of these notes has
been carefully safeguarded by the Federal Reserve Act, and ample provision has been
made for their redemption. Federal reserve no'tes are redeemable in gold; they can not
be forced into circulation in payment of the expenses of the Government, or for any
other purpose, as they can be issued only in exchange for gold or against a deposit of
negotiable paper growing out of a legitimate commercial transaction, plus the required
gold reserve of not less than 40 per centum. Upon payment of commercial paper
which has been deposited to secure Federal reserve notes, there results either an
immediate return of an equal amount of notes to the bank, or an automatic increase
ih the percentage of gold reserve available for their redemption. Federal reserve
notes are not legal tender, nor do they count as reserve money for member banks.
They are issued only as a need for them develops, and as they become redundant in
any locality they are returned to the Treasury at Washington, or to a Federal reserve
bank for redemption. Thus there can not at any time be more Federal reserve notes




SECRETARY OF T H E TREASURY.

21

in circulation than the needs of the country at the present level of prices require, and
as the need abates the volume of notes outstanding will be correspondingly reduced
through redemption. The increased volume of Federal reserve notesi in circulation
during the past three years, in so far as it is not the result of direct exchanges for gold
and gold certificates which have been withdrawn from circulation, is the effect of
advancing wages and prices, and not their cause.
There has undoubtedly taken place during the last two years a cei'tain amount of
credit expansion which, under the circumstances connected with our war financing, was
inevitable, b u t this will be corrected as the securities.issued by the United States
Government for war purposes are gradually absorbed by investors. This credit
expansion is equal to the difference between the total of the war, exp<3nditures of the
Government on the one hand, and on the other, the total amounts raised, by the Government through taxation and by the sale of its obligations so far as paid for out of savings..
No reliable estimate can be made of this difference, which must be gradually absorbed!
through future savings for the reason that banks are lending and will always lend!
freely on Government bonds as collateral.
The principal cause of the advance of prices before and during the war was the
urgent need of the governments of the allied world for goods of all Ikinds for quick
delivery in large volume, and the competition of this buying by governments with
purchases by private individuals who failed to contract their expenditure's at a rate
commensurate with the growing expenditures of these governments. I n the post-war
period, through which we are now passing, the country has experienc:ed rising prices
owing, in part, to a general relaxation of the war-iime regime.of personal economy,
resulting in an increased demand for commodities by individuals who restricted their
purchases during the war b u t who are now buying in competition with export demand.
I n addition, accrued incomes and increased wages have led to heavy demands for
commodities not of prime necessity, which have resulted in diverting labor and
material from essentials to nonessentials.
The Federal Reserve Board believes that any currency legislation at this t i m e
is unnecessary and undesirable, and would suggest that whether -Ndewed from an
economic or financial standpoint, the remedy for the present situation is the same,
namely,, to work and to save; to work regularly and efficiently in order to produce and
distribute the largest possible volume of commodities; and to exercise reasonable
economies in order that money, goods, and services may be devoted ]orimarily to the
liquidation of debt and to the satisfaction of the demand for necessities, rather than toindulgence in extravagances or the gratification of a desire for luxuries. The war isover—in a military sense—and while the bills have been settled by loans to the Government, these obligations, so far as they are carried by the banks, must be absorbed
before the war chapter of the financial history of the country can be closed.
Very truly, yours,
W. P. G. H A R D I N G ,

Governor..
Hon.

GEO. P. MCLEAN,

Chairman Committee on Banking and Currency, United States Senate,
Washington, D . C^




22

REPORT ON T H E FINANCES.
ECONOMY.

Accepting a warning from the innumerable requests that are constantly being pressed upon the Congress for grants from the general
fund, it becomes the clear duty pf this department to point out that
there appears to be grave danger that the extraordinary success of
the Treasury in financing the stupendous war expenditures may
le.ad to a riot of public expenditure after the war, the consequences
of which could only be disastrous. It can not be too often repeated
or too strongly urged that the optimistic outlook of the future of the
'Government's finances, as presented in the beginning of this report,
ts based upon the practice of the most rigid economy and the continuance of ample revenues from taxation. Any other policy means
£i calamitous upsetting of the entire program.
Government expenditure is, I need scarcely say, the most vital,
fundamental factor in increasing the cost of living. Its evil effect in
that respect is mitigated, but can not be wholly eliminated, by the
wisdom and practical success of the financial measures adopted by
the Government to meet its expenditures. Roughly speaking, the
worst of these methods (which has been adopted in greater or less
degree in the countries of Europe and not at all in the United States)
is currency inflation. Far less harmful as a means of financing Government expenditures is the issue of bonds, notes, and other obligations of the Government, which, to the extent that they find lodgment in the hands of investors who pay for them from savings, are
a means of meeting expenditures without expansion. The least
harmful of all means of meeting Government expenditures is taxation,
because this enforces a considerable measure of saving on the part
of the taxpayer, who is not, as in the case of loans, furnished with a
new basis of credit in exchange for the buying power he transfers to the
Government. Of taxes the least harmful is the personal-income tax,
graduated in accordance with the means of the taxpayer, since this
is a direct tax and is only with great difficulty and to a limited extent
shifted to the consumer. Indirect taxes, such as protective tariffs,
consumption taxes, and the excess-profits tax, though less harmful
than currency inflation or loans, and having a less direct effect in
increasing the cost of living, nevertheless have an appreciable influence in that direction.
Inevitably, then. Government expenditure increases the cost of
living. The function of the Treasury, once the expenditure has been
determined upon, is to devise means of meeting it with the least injurious results. What increases the general cost of living imposes
an indirect tax on the whole people of the United States which, in
the nature of things, bears more heavily upon the poor than upon the
rich, and upon the needy than upon the poor, because expenditures for




SECRETARY OF THE TREASURY.

23

the necessities of life absorb practically the whole income of the
poor and needy and a negligible portion of the income of the rich.
Measures for governmental expenditures for the benefit of a portion bf the community at the expense of the whole by adding to the
cost of living, and to the burden it imposes upon the community as a
whole, will only aggravate evils which the.sentimental supporters of.
those measures think to mitigate, and the burdens thus imposed invariably fall most heavily upon those least able to bear them.
I have ventured thus to recall to mind the general f>rinciples of
economics and finance which underlie the present situation and which
so frequently are ignored by the advocates of specific policies and measures that are subversive of sound principles. I discussed the matter
somewhat in detail before the House Select Committee on the Budget
on October 4, and my statement to that committee is quoted elsewhere
in this report under the heading ^'A Budget System."
It is earnestly urged that the- Congress deny every proposal for
expenditures in new fields or the continuance or expansion of old unless
they represent imperative and unquestioned need. This policy is
particularly important in this period, when the solution of the problem
of the cost of living is to be found in such large measure in the most
rigid economy in public expenditure and in the firm determination to
meet that expenditure from current taxes.
TAXATION.

Though any appreciable reduction in the amount of the revenues
from taxation is not to be thought of during a fiscal year when the
Government's current disbursements wiU exceed its current receipts,
when its unfunded debt amounts to upward of $3,736,000,000 (October 31, 1919, on the basis of daily Treasury statements), and when
the Congress is considering various measures carrying vast additional appropriations, it is, I believe, the duty of the Congress to
give its closest attention. to the study of the incidence of taxation
with a view to the revision of the revenue act on lines which will
produce the necessary revenue with the minimum of inconvenience
and injustice. The Treasury's objections to the excess-profits tax
even as a war expedient (in contradistinction to a war-profits tax)
have been repeatedly voiced before the committees of the Congress. Still more objectionable is the operation of the excessprofits tax in peace times. It encourages wasteful expenditure, puts
a premium on overcapitalization and a penalty on brains, energy,
and enterprise, discourages new ventures, and confirms old ventures
in their monopolies. In many instances it acts as a consumption tax,
is added to the cost of production upon which profits axe figured in




24

. REPORT ON THE FINANCES.

determining prices, and has been, and will, so long as it is maintained
upon the statute books, continue to be, a material factor in the increased cost of living.
The revenue sacrificed by elimination or reduction of this tax must
be sought in an increase of the normal income tax (from which the
income on Liberty bonds is exempt) and of the lower brackets of the
surtax. The upmost brackets of the surtax have already passed the
point of productivity, and the only consequence of any further increase would be to drive possessors of these great incomes more and
more to place their wealth in the billions of dollars of wholly exempt
securities heretofore issued and still being issued by States and municipalities, as well as those heretofore issued by the United States.
This process not only destroys a source of revenue to the Federal
Government, but tends to withdraw the capital of very rich men
from the development of new enterprises and place it at the disposal
of State and municipal governments upon terms so easy to them
(the cost of exemptions from taxation falling more heavily upon the
Federal Government) as to stimulate wasteful and nonproductive
expenditure by State and municipal governments.
In that connection I call attention to the urgent necessity of
revision of the revenue law so as to require that, for the purpose of
ascertaining the amount of surtax payable by a taxpayer, his income
from State and municipal bonds shall be reported and included in
his total income, and the portion of his income which is subject to
taxation taxed at the rates specified in the act in respect to a total
income of such amount. The Treasury's recommendations in this
respect have been transmitted to the appropriate committees of Congress in connection with the Eevenue Act of 1918, and again in the
present calendar year. Under the present law a person having an
income of, say, $1,000,000,from taxable securities would, upon the
sale of half his property and the investment of the proceeds of that
half in State or municipal bonds, not only obtain exemption for the
income derived from such investment in State and municipal bonds,
but greatly reduce the surtaxes payable in respect to his other
income. It is intolerable that taxpayers should be aUowed, by purchase of exempt securities, not only to obtain exemption with respect
to the income derived therefrom, but to reduce the supertaxes upon
their other income, and to have the supertaxes upon their other
income determined upon the assumption, contrary to fact, that the>
are not in possession of income derived from State and municipal
bonds.
It is impossible to determine the actual gain in revenue to the
Government which would result from such an amendment of the
law. That it would be very material I have no doubt. A still more




SECRETARY OF T H E TREASURY.

25

important result of the amendment of the law in this respect, however, would be the reflex beneflt to Liberty bonds which carry exemption from normal income tax, but as to the great bulk not from surtaxes. The very great advantage the States and municipalities now
have in conferring upon holders of their bonds larger exemptions
from Federal taxation than the Federal Government itself confers
upon holders of Liberty bonds should be reduced, so far as it may be
reduced, by the adoption of appropriate administrative provisions
in the Federal revenue law.
A question has been raised concerning the right of the Federal
Government under the Constitution to tax the incomes from State
and municipal bonds, but there can be no doubt of the constitutionality of such an administrative provision. The proposal is not
to tax the income derived from State and municipal securities, but
to prevent evasion of the tax in respect to other income. The
principles involved are abundantly established in the decisions of
the Supreme Court sustaining taxes upon corporations, bank stock,
etc., computed after taking into account income derived from Government, State, and municipal bonds.
I am calling attention to these matters because it is of the utmost
importance that the Congress should follow the wise precedent
adopted by the last Congress in determining in advance of the year's
business the basis upon which taxes are to be imposed. Uncertainty
in respect to taxation during any given business period results in
each taxpayer's setting aside for taxes an ample margin to cover
variations in the tax law which may affect him onerously and calculating his costs and prices on that basis. Even a bad law is better
than a retroactive law. I t is, therefore, of the utmost importance,
in my judgment, that the Congress should give consideration in the
calendar year 1920 to the question of revision of the tax law with a
view to making such revision effective well in advance in respect to
the incomes and proflts of the calendar year 1921.
The administration of the RevenueAct of 1918 is discussed later
under the heading ^ Bureau of Internal Revenue."
^
THE COST OF THE WAR.

The total expenditures of the Government, exclusive of the principal of the public debt and postal disbursements from postal revenues, for the war period from April 6, 1917, to October 31, 1919,
amounted to $35,413,000,000, according to statistics compiled on the
basis of the daily Treasury statements. Of that great total covering
the disbursements for two years and seven months, $11.,280,000,000,
or nearly 32 per cent,'was met out of tax receipts and other revenues
than borrowed money, although the amount of taxes does not include




26

REPORT ON T H E FINANCES.

the December 15, 1919, installment of income and proflts taxes for the
flscal year 1919, nor any part of such taxes for the flscal year 1920.
The above calculation includes capital outlays as well as expenditures that have been permanently absorbed. No deduction is made
for loans to the Allies, or for other investments, such as ships, stock
of the War Finance Corporation, bonds of the Federalland banks,
etc.. Foreign loans on October 31, 191&, aggregated $9,406,000,000,
and if that amount is deducted from the total expenditures, the disbursements for the purposes of the American Government during the
war period under consideration were $26,007,000,000. And on that
basis, the proportion met out of tax receipts and revenues other than
borrowed money was over 43 per cent.
If it is assumed that the expenses of the Government on a peace
basis would have been at the rate of $1,000,000,000 a year, or
$2,583,000,000 for the two years and seven months mentioned, the
estimate of the gross cost of the war to October 31, 1919, would be
$32,830,000,000, inclusive of loans to foreign Governments, or
$23,424,000,000 exclusive of such loans.
The following tables, based on the daily Treasury statements,
show the classifled disbursements and receipts, exclusive of the
principal of the public debt, by months, from April 6, 1917, to October
31, 1919, and the total disbursements and receipts for that period:
Classified disbursements, exclusive of the principal of the public debt, by months, from
Apr. 6, 1917, to Oct. 31, 1919, as published in the daily Treasury statements.
Ordinary.

July, 1917
August, 1917
September, 1917
October, 1917
November, 1917
December, 1917
January, 1918
February, 1918.
March, 1918
April, 1918
May, 1918
June, 1918
Total for flscal year 1918..
July, 1918
August, 1918
September, 1918
October, 1918
November, 1918
December, 1918
January, 1919
February, 1919
March, 1919
April, 1919
May, 1919
Jime, 1919....
•..,

:

Total for fiscal year 1919..




$200,000,000.00
407.500,000.00
277,500,000.00

$7,885,770.50
4,962,746.28
919,445.78

$279,213,777.20
526,565.555.96
410,107,295.39

317,118,665.99

885,000,000.00

13,767,962.56

1,215,886,628.55

208,299,031.05
277,438, 000.64
349,013, 305.34
462,045, 359.94
512,952, 035.17
611,297, 425.62
715,302, 039.83
675,209, 068.43
819,955, 367.26
910,756,758.95
1,068,203,026.82
1.263,914, 905.86

Total Apr. 6 to June 30,
1917
•..

Other special

871,328.006.70
114,102,809.68
131,687,849.61

Apr. 6 to 30, 1917
May, 1917
June, 1917 (revised)

Foreign loans.

452,500,000.00
478,000,000.00
396,000,000.00
480,700,000.00
471,929,750.00
492,000,000.00
370,200,000.00
325,000,000.00
317,500,ooo:00
287,500,000.00
424,000,000.00
242,700,000.00

1,511,814.92
2,019,363.50
1,364,980.35
1,623,392.58
1,200,022.36
1,914,433.70
4,854,005.86
12,477,917.31
18,338,4.41.98
17,031,020.28
15,992, 206.83
5,958, 796.56

662, 310,845.97
757 457,364.14
746,378,285.69
944, 368,752.52
986, 081.807.53
1,105, 211,859.32
1,090, 356,045.69
1,012, 686,985.74
1,155, 793,809.24
1,215;287,779.23
1,508,195,233.65
1,512, 573,702.42

7,874,386,324.91 4,738,029,750.00

84,286,396.23

12,696,702,471.14

1,259,782, 599.23
1,524,901, 777.74
1,274,505, 845.05
1,174,622, 406.40
1,655,051, 004.19
1,670,890. 396.88
1,059,580; 520.24
1,035,130; 805.19
1,042,182, 523.55
1,003,862, 122.73
907,492, 923.94
727,845, 814.48

343,485,000.00
279,250,000.00
282,150,000.00
489,100,000.00
278,949,697.70
389,052,000.00
290,250,800.00
145,397,302.30
322,350,000.00
409,008,608.27
194,911,857.29
54,750,000.00

5,015,055.21
1,361,445.28
608,440.22
1,139,854.59
1,248,607.04
1,033,458.60
12,519,629.59
9,385,796.13
15,279.261.96
15,457,575.38
9,932,690.50
26,794,135.35

1,608, 282,654.44
1,805, 513,223.02
1,557; 264,285.27
1,664, 862,260.99
1,935 249,308.93
2,060; 975,855.48
1,962, 350,949.83
1,189, 913,903.62
1,379, 811,785.51
1,428, 928,306.38
1,112, 337,471.73
809, 389,949.83

14,935,848,739.62

3,479,255,265.56

99,775,949.85

18,514,879,955.03

Total.

27

SECEETARY OF THE TKEASUEY.

Classified disbursements, exclusive of the principal of the public debt, by months, from
Apr. 6, 1917, to Oct. 31, 1919, as published in the daily Treasury statements—Gon.
Ordinary.
July, 1919
August, 1919
September, 1919.
October, 1919
TotalJulyltoOct.31,1919

Foreign loans.

Other special.

Total.

$878,411,103.11
709,827,320.86
565,618,231.14
524,724,964.06

$97,650,000.00
54,275,945.99
102,006,000.00
50,154,927.00

$212,467.23
1,694,477.53
1402,600.90
1,469,314.52

$976,273,570.34
765,797,744.38
667,221,630.24
576,349,205.68

2,678,581,619.17

304,086,872.99

2,973,658.38

2,985,642,150.54

885,000,000.00
317,118,665.99
7,874,386,324.91 4,738,029,750.00
14,935,848,739.62 3,479,255,265.56
2,678,581,619.17
304,086,872.99

13,767,962.56
84,286,396.23
99,775,949.85
2,973,658.38

1,215,886,628.55
12,696,702,471.14
18,514,879,955.03
2,985,642,150.54

9,406,371,888.55

200,803,967.02

35,413,111,205.26

RECAPITULATION.

Apr. 6 to June 30,1917
Fiscal year 1918
Fiscal year 1919
July 1 to Oct. 31, 1919
Grand total




25,805,935,349.69

» Excess of credits.

Classified receipts, exclusive ofthe principal ofthe public debi, by months, from Apr. 6,1917, to Oct. 31,1919, as published in the daily Treasury statements.

to
00

Customs.

Miscellaneous
internal revenue.

Miscellaneous
revenue.

P a n a m a Canal..

Total.

$17,863,547.22
28,660,148.60
18,686,805.14

Apr. 6 to 30,1917
May, 1917
J u n e , 1917 (revised)
T o t a l A p r . 6,1917, to J u n e 30,1917
J u l y , 1917.
A u g u s t , 1917
S e p t e m b e r , 1917.
October, 1917
N o v e m b e r , 1917
D e c e m b e r , 1917
. J a n u a r y , 1918
F e b r u a r y , 1918
March, 1918
A p r i l , 1918
M:ay, 1918
J u n e , 1918

Income and
profits t a x .

'.

;
:

T o t a l for fiscal y e a r 1918
July,1918
A u g u s t , 1918
S e p t e m b e r , 1918
October, 1918
N o v e m b e r , 1918
D e c e m b e r , 1918
J a n u a r y , 1919
F e b r u a r y , 1919
March, 1919
A p r i l , 1919
M a y , 1919
J u n e , 1919
T o t a l for fiscal year 1919
July,1919
A u g u s t , 1919
S e p t e m b e r , 1919
October, 1919
T o t a l J u l y 1,1919, to Oct. 31,1919.




$24,075,386.24
107,601,090.34
195,230,281.19

$35,387,512.86
50,009,778.45
56,993,915.16

$5,804,920.33
11,361,950.32
14,120,100.17

$314,793.31
634,421.46
694,056.30

$83,446,159.96
198,267,389.17
285,725,157.96

65,210,500.96

326,906,757.77

142,391,206.47

31,286,970.82

1,643,271.07

567,438,707.09

15,805, 129.91
15,902; 255.99
15,201,388.70
13,647, 946.24
11,935, 389.41
11,247,214.10
12,163, 216.06
12,019, 441.74
18,106,373.13
16,445,531.99
19,925 706.94
17,598, 789.28

9,478,880.98
4,248,091.69
6,026,475.01
5,987,904.91
6,720,898.26
13,725,534.51
11,428,560.88
13,200,936.38
31,424,027.09
83,012,299.95
342,104,796.75
1,786,647,885.43

50,895, 959.22
43,922, 598.77
41,265, 393.95
50,318, 414.27
81,536, 702.42
61,425,075.62
61,665, 347.96
59, l i s ; 478.32
89,635, 237.66
93,113, 711.68
135,081,929.01
104,052,171.39

7,575,979.09
9,839,107.31
12,967,317.09
20,226,866.64
39,175,579.26
18,034,677.89
17,796,189.59
14,177,234.29
16,536,309.47
16,111,894.79
97,254,972.78
22,817,686.62

171,687.08
584,477.10
648,787.75
277,158.50
122,208.09
626,568.30
302,895.38
585,348.96
1,047,330.70
635,705.85
378,705.51
655,481.06

83,927,636.28
74,496,530.86
76,109,362.50
90,458,290.56
139,490,777.44
105,059,070.42
103,356,209.87
99,098,439.69
156,749,278.05
209,319.144.26
594,746,110.99
1,931,772,013.78

179,998,383.49

2,314,006,291.84

872,028,020.27

292,513,814.82

6,036,354.28

15,837, 889.72
14,175, 802.76
12,719, 024.43
11,453, 096.69
12,583, 861.29
9,681, 907. 59
12,732, 514.54
14,979, 078.02
17,876, 270.46
20,141, 486.97
20,896, 644.65
21,3S0, 290.27

497,496 376.62
30,795; 666.13
36,308, 166.21
30,136, 620.58
28,820, 184.49
61,916,648.37
43,141,373.49
30,341,342.50
1,129,821,269.04
107,696, 034.35
50,614, 139. 20
971,695,866.31

105,948, 066.11
83,736, 123.50
89,005, 937.44
93,327, 251.94
99,743,394.83
117,658,483.35
112,287, 675.18
94,310, 163.04
118,240, 897. 00
135,059, 064.46
115,265, 091.71
131,919, 143.11

21,974 810.55
22,645 000.23
.13,757;134.67
16,058,975.73
169,112,403.43
14,213,636.93
27,054, 788.82
22,361, 050.46
31,555, 382.12
159,228! 529.45
92,026! 548.47
56,151',439.19

619,994.14
899,439.10
94,391.05
604,815.02
734,419.15
431,587; 99
626,489.31
767,529.81
355,127.60
427,185.33
459,786.65
353,824.88

3,664,582,864.70
641 877,137.14
' 152,
252,031.72
151 884,653.80
151,580,759.96
310, 994,263.19
203, 902,264.23
195, 842,841.34
162, 759,163.83
1,297,848,946.22
422, 552,300.56
279, 262,210.68
1,181, 500,563.76

184,457,867.39

3,018,783,687.29

1,296,501,291.67

6,374,590.03

5,152,257,136.43

20,498,245.83
21,053,662.06
24,724,214.48
24,276,476.04

44,043,414.30
28,615,312.08
944,897,366.34
34,903,495.13

110,038,601.29
113,817,095.93
140,757,151.39
139,333,735.95

52,821,655.11
104,727,062.34
31,852,288.83
58,201,459.39

90,552,598.41

1,052,459,587.85

503,946,584.56

247,602,465.67

646,139,700. 05

379,786.49
325,698. 55
324,424.13
394,588.72
1,424,497.1

O
H
O
•H
M

227,781,703.02
268,538,830. 96
1,142,555,445.17
257,109,755.23
1,895,985,734.38

^

o

RECAPITULATION.

...._.

Grand total

65,210,500.96
179,998,383.49
184,457,867.39
90,552,598.41

326,906,757.77
2,314,006,291.84
3,018,783,687.29
1,052,459,587.85

142,391,206.47
872,028,020. 27
1,296,501,291.67
503,946,584.56

31,286,970.82
292,513,814.82
646,139,700.05
247,602,465.67

1,643,271.07
6,036,354.28
6,374,590.03
1,424,497.89

567,438,707.09
3,664,582,864.-70
5,152,257,136.43
1,895,985,734.38

520,219,350.25

A p r . 6, 1917 to J u n e 30,1917
Fiscal year 1918
Fiscal year 1919
J u l y 1, 1919 t o Oct. 31,1919

6,712,156,324.75

2,814,867,102.97

1,217,542,951.36

15,478,713.27

11,280,264,442.60

Total receipts and disbursements from Apr. 6, 1917, to Oct. 31, 1919, as published in the daily Treasury statements.
RECEIPTS.

DISBURSEMENTS.

Net balance in the general fund Apr. 5, 1917
$92, 317, 710. 27
Receipts, exclusive of principal of public debt, Apr.
6, 1917, to Oct. 31, 1919
11,280,264,442.60
Public debt receipts, Apr. 6, 1917 to Oct. 31, 1919. 55, 234, 272, 754. 36

Disbursements, exclusive of principal of public
debt, Apr. 6, 1917, to Oct. 31, 1919
$35, 413, 111, 205. 26
Public debt disbursements, Apr. 6,1917 to Oct. 31,
1919
30,305,711,180.75
Net balance in the general fund Oct. 31, 1919
888,032,521. 22




.66,606,854,907.23

66, 606, 854, 907. 23

o

>
O

^^
H
H

to
CO

30

EEPOKT ON T H E FINANCES.

There is attached hereto as Exhibit 3, page 219, a table showing
the cash expenditures of the Government for the fiscal years 1917,
1918, and 1919, as published in the daily Treasury statements and
classifled according to departments.
THE PUBLIC DEBT.

The gross public debt, on the basis of the daily Treasury statements,
amounted to $26,210,530,000 on October 31, 1919, without any
deduction for loans to the Allies or other investments. Of this sum,
only $3,736,352,000 was in the form of Treasury certiflcates or floating debt. The total figures mentioned represented a gross debt
increase since April 6, 1917, of $24,928,561,000. Deductmg the net
increase in the general fund balance from the gross debt increase
results in a net debt increase for the war period from April 6, 1917,
to October 31, 1919, of $24,132,846,000. ^
The following statement shows the debt classified by issues and
the gross and net increase for the war period:
Public debt Oct. 31, 1919, on the basis of the daily Treasury statements.
Bonds:
Consols of 1930
Loan of 1925
Panama's of 1916-1936
Panama's of 1918-1938
Panama's of 1961
Conversion bonds
Postal savings bonds

$599, 724, 050. 00
118, 489, 900. 00
48, 954,180. 00
25, 947, 400. 00
50,000,000. 00
i.
28, 894, 500! 00
11, 453,100. 00
—••
$883,463,130.00
1, 984, 783, 330. 00
3, 526, 377, 747. 60
3, 904, 313,017. 50
6, 613, 907,148. 00
16, 029, 381, 243.10

First Liberty loan
Second Liberty loan
Third Liberty loan
Fourth Liberty loan
Total bonds
Notes:" Victory Liberty loan
Treasury certificates:
Loan and tax
Pittman Act
Special issues

16, 912, 844,' 373.10
4, 413, 933,116. 53
3, 465,136,000. 00
255,475,000.00
..
15, 741, 300. 37

War-savings certificates (net cash receipts)
Old debt on which interest has ceased
Total interest-bearing debt
Noninterest-bearing debt
Total gross d e b t .




....«

3, 736, 352, 300. 37
910, 684,987. 44
2,144,970. 26
25, 975, 959, 747. 70
234,570, 522.19
26,210,530,269.89

31

SECBETAEY OF THE TREASUKY.

Gross and net increase of the public debt for the war period, Apr. 6, 1917, to Oct. 31, 1919,
on the basis of the daily Treasury staternents.
Total disbursements for war
period, exclusive of principal
of public debt.
$35,413, 111, 205.26
Total receipts for war period,
exclusive of principal of public
debt
-.
'.
11,280,264,442.60

Excess of disbursements
over receipts for war
period
24,132,846,762.66

Total gross debt Oct. 31,1919... $26,210,530,269.89
Total gross debt Apr. 5,1917.... 1,281,968,696.28
Gross debt increase foi"
war period
24,928,561,573.61
Net balance in
the g e n e r a l
fund Oct. 31,
1919
S888,032,521.2:2
Net balance in
the g e n e r a l
fund Apr. 5,
1917
92,317,710.27
Net increase in balahce in
general fund

795,714,810. 95

Net debt increase for war
peri od
24,132,846,762. 66

There is attached hereto as Exhibit 4, page 220, the financial statement of the United States Government as of June 30, 1919, which
shows the state of the Treasury and of the public debt on that date.
THE FOURTH LIBERTY LOAN.

The annual report of the Secretary of the Treasury for the fiscal
year 1918 reported the approximate final results with respect to subscriptions to the fourth Liberty loan. I t was necessary subsequently
to make several adjustments in the compilation. The figures, corrected to September 30, 1919, show that the total amount of subscriptions allotted was $6,992,927,100. The amount of bonds issued and
deliverable as a result of these subscriptions was $6,964,524,650.
This was the largest of the Liberty loans and was the greatest issue
of bonds in history. I t is estimated that the vast amount allotted
was subscribed by 22,777,680 persons. Eighty-four per cent of that
number subscribed in amounts of $50 and $100, while more than 99
per cent subscribed in amounts ranging from $50 to $10,000. The
following table shows the subscriptions allotted, payments received,
and original deliveries of coupon and registered bonds as of September 30, 1919:
The fourth Liberty loan^-Statement of subscriptions allotted, payments received, and
original delivery of coupon and registered bonds as of Sept. 30, 1919.
Boston.

New York.

Philadelphia.

Cleveland.

Richmond.

Subscriptions allotted
S632,101,250 $2,044,901,750 S598,763,650 S701,!;i09,800 $352,685,200
Payments received by Treasurer of
United States
:
632,101,250 2,044,901,750 598,763,650 '701,S>09,800 352,685,200
Less part payments
632,101,250

2,044,901,750

598,763,650

701,^109,800

352,685,200

Original delivery—Coupon bonds
574,977,4'50
Original delivery—Registered bonds. 57,123,800
Original delivery—Total
632,101,250

1,889,516,600
155,385,150

577,866,400
20,897,250

636,847,700
65,062.100

316,264,000
36,421,200

2,044,901,750

598,763,650

701,909,800

352,685,200

Full-paid subscriptions

Deliverable against full-paid subscriptions




32

REPORT ON THE FINANCES.

The fourth Liberty loan—Statement of subscriptions allotted, payments received, and
original delivery of coupon and registered bonds as of Sept. 30, 1919—Continued.
Atlanta.

Chicago.

St. Louis.

Minneapolis.

Subscriptions allotted
S217,885,200 $969,209,000 $295,340,250 $242,046,050
Paynjents received by Treasurer of United States... 217,816,808 969,209,000 295,340,250 242,046,050
12,308
Less part payments
Full-paid subscriptions

217,804,500

Original delivery—Total.

969,209,000

295,340,250

242,046,050

195,244,050 840,150,950
22,508,450 129,058,050

Original delivery—Coupon bonds
Original delivery—Registered bonds

253,415,200
41,925,050

209,367,350
32,678,700

217,752; 500 969,209;000' 295,340,250- 242,046,050

Deliverable against full-paid subscriptions

52,000

Kansas
City.

Dallas.

San Francisco.

Special.

Total.

Subscriptions allotted
:
$295,951,450 $145,997,950 $462,250,000 $33,885,550 $6,992,927,100
Payments received by Treasurer of
the United States
295,949,750 145,978,405 462,242,190 5,596,950 6,964,541,053
16,403
Less part payments
2,905
990
200
145,97.5,500

462,241,200

5,5S6,950

6,964,524,650

Original delivery—Coupon bonds
219,445,750 132,719,800
13,255,700
Original delivery—Registered bonds.. 76,475,100
Original delivery—Total.
295,920,850. 145,975,500

436,417,400
25,823,750

5,594,750
2,200

6,287,827,400
676,616,500

462.241,150

5,596,950

6,964,443,900

Full-paid subscriptions

Deliverable against full-paid
scriptions
'

295,949,550

sub-

28,700

50

80,750

The statistical information with respect to results of the fourth
Liberty loan, attached hereto as Exhibit 5, page 225, was compiled
by the War Loan Organization and is based upon the subscriptions
as originally reported. Since that time there have been various
adjustments in the figures, particularly with respect to Army subscriptions, which, under the special plan, were subject to cancellation in certain circumstances. The final allotment and issue, corrected to September 30, 1919, is in accordance with the above table.
THE VICTORY LIBERTY LOAN.

Early in the calendar year 1919 it became clear that it would be
necessary, as predicted in November, to issue another loan in the
spring to fund the floating debt, which was rapidly accumulating as
the result of mounting expenditures in the months immediately
succeeding the signing of the armistice. The situation was one of
very great and very grave difiiculty with respect to the successful
continuation of the Government's program of war flnance. The
country was passing tlirough the period of readjustment from the
most colossal organization for war in our history to the normal
processes of peace. This transition naturally was to be accomplished
through gradual stages and inevitably was to be marked by uncertainties and perplexities that affected the whole structure of industry,




SECRETARY OF THE TREASURY.

- 33

business, and finance. I n addition, the cessation of hostilities,
with the knowledge that the terms of the armistice made it impossible for Germany to resume flghtingj caused many people hastily
to assume that the large flnancial requirements of the Government
were at an end. There could be no greater error, or even calamity
if the impression were not quickly eradicated. The patriotism of
war had made memorable successes of four great Liberty loans, but
all of the war bills had not been paid. The flfth loan, to be floated
without the accompaniment of the enthusiasm and delirium of war
and the presence of imminent danger in the face of a national enemy,
was to test the quality of the patriotism of peace of the people of
America.
In the face oJ- these unfavorable conditions, the Treasury was told
by men of steady judgment that we must approach the problem of
the flfth loan in a distinctly cold-blooded mood; that things had
assumed a different aspect; that our attitude of mind and heart was
altered; that we must.consider the matter strictly from an investment point of ^dew and put the loan on a commercial basis. Some
students of the situation believed it would be impossible again to
appeal to the patriotism of the American people. The Treasury
held no such vi(3W. Furthermore, it was impossible to float the loan
strictly on a commercial basis. After floating billions of dollars of
Liberty bonds, it was unthinkable to expect the assimilation, purely
for investment purposes, of a loan of the proportions required. This
department recognized that an appeal.must be made to the patriotism
of Americans, and its unfaltering faith in the result of that appeal
was never shaken. The honor of the Government was involved in
the payment of the war bills; and the Government's honor is the
people's honor. To have lost confldence in the loyalty of the fathers
and mothers, brothers and sisters, and compatriots of the flne men who
went to France to save the freedom of the world would have brought
despair into the Treasury, and despair in the Treasury, of all places,
would have meant the failure of the loan.
I t was the desire of the department to postpone the offeririg of
the issue, which it was decided to name the Victory Liberty loan in
honor of the heroic achievements of our gallant Army and Navy
and the successful conclusion of the war, until the latest possible
date in order to give the country time to recover from the tremendous
transactions involved in the fourth Liberty loan, to permit the
progress of readjustment to the utmost limit, and to afford the
largest measure of preparation for the issue to be floated under such
unusual and untried conditions. In the circumstances, it was out
of the question to determine in detail all the terms and conditions-of
the loan before the third session of the Sixty-flfth Congress expii-ed
140325—FI 1919




3

.

34

,

REPORT ON T H E FINANCES.

by' iconstitutibaal limitation on March 4, 1919, and, consequently,
it was necessary to ask the Congress for larger discretion- than had
hitherto been granted, if the Government was to obtain, all the
advantages accruing from the ability to fix the rate of interest and
other terms, of the loan at an opportune and appropriate time in
order to meet conditions as they might exist when the offering was
made to the public. The subject accordingly was presented to the
House Committee on-Ways and Means on February 10, 1919, in
the following letter to the chairman of the committee, a copy of
which also was sent to the chairman of^ the Senate Committee on
Finance:
WASHINGTON, D . C , February 10, 1919.

D E A R M R . KITCHIN: Now t h a t the reveriue bill has passed t h e House, I desire,
i n accordance with t h e intimation contained in my letter of January 15 to you and
my talk with you and Mr. Fordney, to ask the attention of t h e Ways arid Means Committee to t h e necessity of t h e immediate enactment of legislation amending t h e
Liberty bond acts so as to make possible the funding by a Victory Liberty loan in the
spring of t h e floating debt which has been incurred and will be incurred up to that
time.. T h e Victory Liberty loan could not be issued successfully now t h a t hostilities have ceased, within t h e limitations imposed by existing laws.
After most careful consideration of the matter and after receiving and considering
t h e views of bankers. Liberty-loan workers, and others whose views are most entitled to consideration, very reluctantly I am constrained to say that I can not wisely
determine now in February the terms of t h e bonds or other obligations which i t would
be wise to offer for subscription in April when t h e Liberty-loan campaign should probably begin. At the moment we are in a period of readjustment. To t h e slackening
of industrial and commercial activity incident to the termination of active warfare
has been added the usual dullness of the winter season. The necessary and desirable
contraction of our credit structure has begun and will be greatly facilitated by t h e
enactment, of appropriate legislation to permit the liquidation of claims arising under
informal Army contracts. Steps have been taken to break the deadlock which has
arisen growing out of the maintenance, nominally at least, of war prices in certain
basic industries. Upon the enactment of appropriate legislation to enable the Food
Administration to protect t h e guarantiies given by t h e United States, I am hopeful
t h a t i t will prove possible to restore the operation of the law of supply arid demand
with respect to foodstuffs with, as I believe, a consequent reduction in the cost of
living. A period of rising prices and of intense industrial activity such as we have
experienced during t h e past four years is always a period of great apparent prosperity,
and a period of falling prices and of t h e contraction of credits is always a period of
depression. The retardation of t h e process of readjustment by artificial means can
only increase the evils inherent in t h e situation. Buying will not begin and activity
will riot set in until the community at large is satisfied t h a t prices have reached bedrock. I am very hopeful t h a t measures now under, discussion may result in t h e
rapid acceleration of t h e readjustment, and I am firmly convinced t h a t if that b e
done America has before her a new period of great and growing prosperity. I am
even sanguine enough to believe t h a t it is within the range of t h e possible that sa
much may have been accomplished on t h e lines above indicated before the expiration of two months from now t h a t t h e whole situation will have been changed and that
we may look forward to t h e successful issue of the Victory Liberty loan on terms
which to-day would seem quite impossible.




SECRETARY OF T H E TREAStJRY.

35

Furthermore, merely as a matter of the technique of bond selling, it would be-a
fatal mistake to fix t h e terms of t h e loan so long in advance of t h e offering. T h e
issue would become stale and its attractions would have been cliscounted long
before t h e loan campaign begins. I t will be remembered t h a t the second Libertybond act was approved as late as September 24 and the bonds were offered on
"October 1, 1917; t h a t the third Liberty-bond act was approved April 4 and t h e bonds
offered on April 6, 1918; and t h a t the supplement to t h e fourth Liberty-bond act was
approved September 24 and the bonds offered on September 28,-1918.
Therefore, and in view of the early expiration of the life of the present Congress
and the apparent impossibility of convening and organizing the new Congress in
time to enact further bond legislation before the Victory Liberty loan campaign
begins, I reluctantly ask greater latitude in the exercise of a sound discretion as to
the terms of the Victory Liberty loan than has been conferred by the Congress in
respect to previous loans. I should be only too glad to have the Congress share with
me the responsibility of -this extraordinarily difficult determination, but, believing
that it would be a grave mistake to reach a final determination at this time, 1 must
ask authority to deal with the matter as the situation may develop.
Holding these views, I have ventured to have prepared, and I submit to you herewith, a draft of a bill to amend the Liberty-bond acts and for other purposes (Exhibit 6, page 231). This bill would (1) increase the authorized issue of bonds from
$20,000,000,000 to $25,000,000,000; (2) remove the limitation as to interest rate so
far as regards bonds maturing not more than 10 years from the date of issue; (3) authorize the issue of not to exceed $10,000,000,000 of interest-bearing, non circulating notes
having maturities from one to five years; (4) authorize the issue of bonds and notes
payable at a premium; (5) exempt Avar-savings certificates from income surtaxes;
(6) confer authority upon, the Secretary of the Treasury to determine the exemptions
frorn taxation in respect to future issues of bonds and notes and to enlarge the exemptions of existing Liberty bonds in the hands of subscribers for new bonds and notes;
(7) exempt from income surtaxes and profits taxes all issues of Liberty bonds and
bo'nds of the War Finance Corporation held abroad; (8) extend the period for conversion of the 4 per cent Liberty bonds on the lines suggested in my lett<ir of January 15
to you; (9) create a 2^ per cent cumulative sinking fund for the retirement of the war
' d e b t ; (10) continue the existing authority for the purchase of obligations of foreigri
governments after the termination of the war in. accordance with the views expressed
by Secretary McAdoo,. by letter and in his testimony before the Ways and Means
Committee; and (11) extend the authority of the.War Finance Corporation so as to
permit it to make loans in aid' of our^ commerce, thus supplementing the aid which
may be giA^en by the Treasury on direct loans to foreign governments and in a measure
relieving the Treasury of demands for such loans.
I am sure that your committee will wish to discuss all of these matters fully with
me, and I shall not burden you at this time with a fuller statement of my views concerning them.
I am sending a copy of this letter to Senator Simmons..
Very truly, yours,
CARTER GLASS.
Hon.

CLAUDE KITCHIN,

House of Representatives.

The situation was explained in further detail three days later—
Februaiy 13, 1919—in the following statement before the Committee
on Ways and Means:
On the date the armistice was signed the United States was in the fortunate position
of having outstanding no short-time indebtedness, excluding war-savings certificates,
t h a t was not covered and raore than covered by the deferred installments on subscrip-




36

REPORT ON THE FINANCES.

tions for the bonds of the fourth Liberty loan. But expenditures in November, December, and January, according to the daily Treasury statement, exclusive of transactions in the principal of the public debt, amounted to $5,958,576,114.24, or at the
rate of nearly $2,000,000,000 a month, and the amount of Treasury certificates of indebtedness outstanding on January 31 was $4,798,064,800, of which $3,225,099,500
were issued in anticipation of the Victory Liberty loan. Expenditures for the first
seven months of the fiscal year ending June 30, 1919, exclusive of the principal of the
public debt, amounted to $12,594,498,537.96. It is apparent that unless there should
be a very radicahreduction in expenditures during the last five months of the current
fiscal year Secretary McAdoo's hope that the expenditures for the whole fiscal year
would be in the neighborhood of only $18,000,000,000 must be disappointed. I have
not as yet been able to obtain revised estimates from the War Department and other
departments of the Government of their probable expenditures. The cash disbursements during the first 10 days of the current month of February have shown a gratifying decrease, but the knowledge that heavy payments on the settlement of informal
Army contracts are being held in abeyance awaiting the enactment of appropriate
legislation, and that protracted discussion concerning the terms of peace will necessitate the continuance of large military expenditures abroad, the continuance of large
expenditures by the Shipping Board, the Navy program, and the guaranties and
commitments of the Food Administration prevent me from looking forward to any
great reduction in cash disbursements in the early future.
With these things before us and with a floating.debt of nearly $5,000,000,000,
increasing at the rate of, say, $1,400,000,000 a month, you will, I know, not be surprised by mj'" recommendation of an increase in the authorized a;mount of bonds.
The amount of bonds authorized and unissued under existing Liberty bond acts
is slightly in excess of $5,000,000,000; the authorization under the first bond act
haying been $2,000,000,000, and under the second, third, and fourth acts
$20,000,000,000, and approximately $17,000,000,000 of bonds having been issued
under the four acts. It is needless to say that the Treasury does not contemplate
the issue in connection with the Victory Liberty loan of any such amount of bonds
as $10,000,000,000. . It has, however, been the practice of the Treasury since the
second Liberty loan to allot the entire amount of bonds subscribed for. In order to be
in a position to do this in connection with the Victory Liberty loan, if it should then
be thought wise to follow that policy, it is necessary to authorize some increase in the
amount of bonds authorized to be issued. In making the change it seemed wise to
suggest an increase to a figui'e which, so far as at present information is available,
would seem to represent the maximum possible amount of the bonded debt growing
out of the war.
Not in addition to but as an alternative of the issue of such bonds, I have suggested
the authorization of an issue of notes limited to $10,000,000,000, and I should like to
suggest also an increase, in the maximum amount of Treasury certificates from
$8,000,000,000 to $10,000,000,000. It can not be too plainly stated that these three
items of $10,000,000,000 each are not cumulative.
I should like to draw the attention of the committee especially to that, as an editorial
in one of the New York papers several days ago seemed to think they are to be
cumulative.
'
It is contemplated merely that authority should be given to the Treasury to finance
the existing and expected indebtedness, either by the issue of Treasury certificates
or by the issue of notes or by the issue of bonds. It may be desirable to adopt all
of these methods in succession. It may be desirable to issue Treasury certificates
in the first instance and bonds to refund them, as has been done in.the past. It may
be desirable to refund the Tresisury certificates into notes and the latter ultimately
into bonds. Conditions may be such that the issue of a series of notes of a shorter
matmity than is indicated in section 4 of the second Liberty bond act as appropriate




SECRETARY OF THE TREASURY.

37

for a bond issue, but of a longer maturity than that permitted for Treasury certificates
bf indebtedriess, would be desirable.
', Conditions in April might be such that it would be easy and wise to issue a shorttime note bearing a relatively high rate of interest and carrying with it the privilege
of conversion, into bonds bearing interest at a lower rate and having a longer maturity.
This would make necessary authority for the issue of both the notes and the bonds
to the full amount to be raised, but, of course, would not necessitate the existence
of both as outstanding indebtedness at any one time. On the other hand, it might
be desirable to make an alternative offer of bonds and notes, leaving the subscriber a
choice between the two. This also would necessitate double authorization, but only
one debt.
In respect to the notes and also in respectto bonds of a maturity of 10 years or less
I, have asked authority to determine the interest rate as the situation may develop. .
I am by no means convinced that conditions will be such in April a,s to necessitate
an. increase in the interest rate over that provided in existing law to an important
extent, if at all, yet if I were obliged to determine now what is the lowest rate at which
T could undertake with certainty to finance the requirements of the Goverhment when
the issue is offered in April I should be obliged to name a maximum rate much higher
than that which, if developments are as favorable as I expect they Mill be in the
interval, will, I hope, be sufficient to float thie loan.
There is not, I venture to say, a solvent banking house in America which would
enter into a firm obligation to-day to purchase in April any important amount of
securities of any character at any price whatever—certainly not at a price which failed
to make such an allowance for contingencies in the interval as would be regarded
as prohibitive by the borrower. Yet that is exactly what the Congress would require
the Secretary of the Treasury to do if it were to fix the interest ra^te to-day. I can not
undertake the responsibility of skj^ing now at what rate the bonds or notes may be sold
in April; and if you were to-day to fix a maximum rate such as to be sufficient in any
possible contingenc)'- you would bj^ that very act tend to force the adoptjion of that
maximum rate when the loan is offered. No Liberty loan has ever been sold at lower
rate than the maximum fixed by the act under which it was issued. On the other
hand, in the second Liberty bond act, which was approved nearly a year and a half
ago, you conferred upon Secretary McAdoo authority to issue Treasury certificates of
indebtedness without limit as to the rate of interest, and he and I have been able to
piaintain- the rate of 4^ per cent for such certificates during a full year, including the
period when our war prospects were at their darkest and the recent period when the
cessation of hostilities has made the problem of selling Government securities most
.difficult. The floating debt, represented by Treasury certificates now outstanding
and to be issued in the interval before the Victory Liberty loan is offered, must be
refunded, and bonds or notes must be sold to an amount sufficient to accomplish this,
purpose. To withhold from the Secretary of the Treasury the power to issue bonds
or notes bearing such rate of interest as may be necessary to make this refunding
possible might result in a catastrophe. To specify in the act the maxiriium amount
of interest at a figure sufficient to cover all contingencies would be costly, because the
maximum would surely be taken by the public as the minimum.I have'suggested that authority be conferred upon the Treasury to issue bonds or
notes payable at a premium at maturity, believing that it might be found desirable
to issue bonds following the lines of the British national war bonds, which have been
issued so successfully during the past year and a half. Payment of a sUght premium
at maturity would have a number of advantages over an increase in the nominal interest rate: (1) It would carry with it an inducement to saving and to the retention of
the bonds; (2) it would tend to limit depreciation in the niarket; (3) it would probably
have a somewhat Jess injurious effect upon the market value of existing, issues of
Liberty bonds and other securities than a flat increase in the interest rate; and (4) it




38

..REPORT ON T H E FINANCES.

would make possible more exact computation of the effective interest rate to be borne
by the,bonds or notes than is possible where bonds are issued and paid at par. A
fractional semiannual interest payment involves infinite annoyance to bondholders,
banks, and the Government itself, which would be to a great extent avoided by payment of a small premium, only once—at maturity. I do not undertake to say that it
will be found v^ise to issue bonds or notes payable at a premium,.but I do say that the
Treasury should be equipped with authority to do so if that be found expedient.
. I have asked for authority to determine the exemptions from taxation to be carried
by the bonds, notes, and Treasury certificates. Such exemptions could not be grieater
than that conferred by the Congress in the first Liberty bond act. I t would not be lass
than exemption from State and local taxes. Within these limits I believe it is expedient that the Treasury should have authority to determine the exemptions. As a matter
. of principle, I agree entirely with Secretary McAdoo that exemptions from taxation,
even in respect to the Government's own bonds, are undesirable. He, however, found
it necessary, as a practical matter to modify those views to meet the exigencies of the
situation in connection with the fourth Liberty loan. The bonds of the second
l i b e r t y loan carried a higher rate of, interest than those of the first, the bonds of the
third carried a higher rate of interest than those of the second, and the bonds of the
fourth carried greater exemptions from taxation than those of the third. That something must be done to make the bonds or notes of the Victory Liberty loan more attractive than their predecessors is apparent. Whether the needed attraction should be
found in increased interest rate or in additional exemptions from taxation, or by a
combination of both, would be unwise to determine.now. In the discussion of the
pending revenue bill and of the supplement to the fourth Liberty bond act Secretary
McAdoo called attention to the relation between income taxes and the. rate of interest
on the bonds. In his letter of J u n e 5, 1918, to Mr. Kitchin concerning the reveriue
bill Secretary McAdoo wrote.as follows:
This brings me to another consideration pf great moment in the Government's
financial plans. I hope that it will not be necessary further to increase the interest
rate on. Government bonds. The number of subscribers to the three Liberty loans aggregated 30,000,000. The people who subscribed are impatient of those who have not.
Various plans have been urged upon me for forcing the people to buy Liberty bonds.
The man of small means who buys a SlOO bond wants his neighbor to do so, too. There
is a popular demand also for high taxes upon war profits. There is also a popular
demand that all the people should contribute to financing the war. There should,
theiefoie, be a substantial increase in the normal income-tax rate and a higher tax
should be levied upon so-called unearned than on earned incomes. Income derived
from Liberty bonds would be exempt from this taxation, and the relation between
income from Liberty bonds and.income from other secmities would be readjusted
without increasing the rate of interest on Liberty bonds. I t would not tax the patriotic purchasers of l i b e r t y bonds on their holdings, but it would weigh heavily
. upon the shirkers who have not bought them. I t would make the return fi-om Liberty
.bonds compare favorably with the return from other securities. It would give the
Government's bonds an essential and necessary advantage over those of corporate
borrowers, and would very greatly decrease the relative advantage which State and
municipal bonds now enjoy through the total exemption which they cany. It would
produce a gradual readjustment of the situation in the investment markets instead"
of an abrupt one, as would be the case if the interest rate on Liberty bonds should be
increased.
.
•A normal tax falls upori all alike. Therefore, as I pointed out in m y statement
before the Ways and Means Committee last summer, there is not'the same objection
to the exemption from normal income taxes as there is to the exemption from surtaxes. A substantial increase iri the normal income tax is the soundest and surest
way of stabilizing the price of Government bonds. If we have to increase the interest
rate on Government bonds, the increased rate may continue for 10 to 30 years, and
some of the bonds which we have issued will go to great premiums not lon^: after the
war is over. If we make the bonds at the present rate more attractive b y increasing,
t h e normal tax, then the decrease in taxation which will ..follow the close of the war
will automatically adjust the situation. I believe that to stabilize the p u c e of Government bonds by first increasing and subsequently reducing the normal income




SECRETARY OF THE TREASURY.

39

' taxes j' from which the holders of these'bonds are exempt, is sound finance and sound
economics.
'
There is another feature deserving of consideration.' We are askhig the.people to
finance this war and we are offering them an investment paying 4^ per.cent interest.
The people, have responded wonderfully to this appeal. I n the last Liberty loan
campaign 17,000,000, approximately, subscribed. T h e r e i s a widesp:pead feeling that
many people who are able to do so, especially those who are making vast profits out
of the war, are not doing their part either in the puichaseof Liberty bonds or in the payment of taxes; that they are investing in corporate stocks and bonds producing high
returns instead of in the bonds of their own Government, producing reasonable returns,
when the first duty of patriotism, and self-pro tec tion demands that they.shall buy
Government bonds for the protection of the Nation in its hour of peril.
. There is a natural feeling among the masses of t h e people that taxation, upon incomes
and upon war profits should be high enough to bring the return fi'om coiporate investments more nearly on a parity with the return from Government bonds; that the Government should not be forced to compete for credit with war industries, which are
profiting abnormally and which, unless restrained by the exercise of sound and just
taxation, will constantly add to the difficulties of the people of the United States in
their effort to supply the Government at reasonable interest rates with the ciedit i t
needs to fight successfully this war for liberty.
And on September 5, 1918, Secretary McAdoo wrote to Mr. K i t c h i n . concerning
the supplement to the fourth Liberty bond bill as follows:
The delay in the enactment of the tax bill, the fact that the rates of income surtaxes,
to which the interest on Liberty bonds, except the first Liberty loan, is subject, will
be higher, and the rate of normal income tax on unearned income will be lower,
than-1 had contemplated, materiall}^ affect the prospects of the fourth Liberty loan.
^

-x-

^

^

-x-

*

-st

The market price of Liberty bonds, which responded faA^orably to the suggestion
of an increased normal tax, from which the bonds will be exempt by their terms, was
depressed by the newspaper reports of a greatly increased surtax, to which the interest
on the bonds will be subject.
^

-X-

-X-

^

¥r

^

^

Last year I had t h e privilege of explairiing to you and your colleagues on the Ways
and Means Committee very fully the reasons why I advocated maldng the income
from Liberty bonds subject to income surtaxes, t still believe that that course was
wise and that the arguments advanced in favor of it were sound. I t m i l not do, however, to press any theory, however sound, to an extremity, and it is (Dbvious that as a
practical matter we can not keep t h e interest rate on Government bonds stationary
or substantially so, and continue indefinitely to increase the siirta>:es to which t h e
income from those bonds is subject without at the same time limiting the market for
Liberty bonds to those who have little or no surtaxes to pay.
I n order to give the numerous small holders of Liberty bonds th<3 advantage of a
market upon which they may sell their bonds in case of necessity, and also to attract
subscriptions from the great number of investors of ample means, b u t not of great
wealth, it will be necessary immediately either to increase the interest rate or to
neutralizerthe increased surtaxes by freeing the bonds to a limited extent from such
taxes.
•X-

¥r

^

-je-

*

-x-

*

I am influenced in this determination by the fact that it continues necessary to sell
Liberty bonds in competition with billions of dollars of bonds of the United States,
the various States and municipalities, which are wholly exempt from surtaxes, as
well as from all forms of taxation, so that the person whose income is subject to surtaxes
is apt to make a comparison of the income return from the Liberty bonds which he is
asked to subscribe for, not with the income return from corporation and other securities such as carry no exemption from taxation, b u t with the income return from wholly
exempt bonds of the United States and the various States and municipalities. Under
the existing state of the Constitution and laws, such a comparison can not be avoided.
I n these circumstances we must find a middle ground between the sound view which
would refuse all exemptions from surtaxes and the practical necessity of taking into
account the fact that such exemptions will in any event be gained, as surtaxes are
steadily increased, by shifting funds into governmental. State, and municipal bonds, .
the income from which is exempt from surtaxes as well as from normal taxes.
I n granting such exemption, I think appropriate provision should! be made to the
end that those who subscribe for bonds bf the fourth Liberty loan may, to the extent




40

REPORT ON THE FINANCES.

of a specified portion of their holdings, participate in the exemption in respect to
bonds of the first Liberty loan converted, the second Liberty loan converted and
unconverted, and the third Liberty loan.
The considerations which led Secretary McAdoo to recommend increased exemptions from taxation in September are more potent now. The Capital Issues Committee, which had exercised a restraining influence upon the issue of State and municipal securities, has ceased to function and such securities are now being issued without
restriction. The Treasury itself has found it necessary to resume the sale of bonds
of the Federal land banks, and these must continue to be issued in increasing amounts
carrying as they do exemption from all taxatibn. Those who are subject to higher
rates of surtaxes will escape taxation at those rates to a very considerable degree by
investment in the $8,000,000,000 or $10,000,000,000 of existing securities carrying
exemption therefrom and the mew securities of the same character continually being
offered. They will seek also for investment more speculative securities carrying a
very high nominal income rate. Low-rate taxable bonds have no attraction for them.
The cessation of hostilities, the discontinuance of war work, and war wages have
greatly decreased the investment power of the millions of patriotic Americans of
small means who subscribed so liberally to the second, third, and fourth Liberty
loans. They will, I know, subscribe, and subscribe largely, to the Victory Liberty
loan. But whether it be in their power to subscribe as largely as they have subscribed
for bonds of other loans I do not know. In any event it is essentially in their interest
that an obligation be devised which will not only be attractive to them in the first
instance, but which will have such characteristics as will tend to insure the main-'
tenance of its market price after the drive is over. I can not now determine what
those characteristics should be, but I regard it as essential that I should be free to
enlarge the exemptions from taxation if, when the time comes to determine the terms
of the new issue, that should seem desirable.
I believe it essential that in connection with the issue of the Victory Liberty loan
a plan should be devised which will fully protect the interests of the holders of the
existing Liberty loan bonds. As a matter of public policy it would not be wise nor
right to make a gift to the holders of those bonds, but I believe it will be wise and
proper to confer upon those holders of the old bonds who subscribe to the new loan
additional exemptions from taxation under terms and conditions and within limitations to be determined. Such a course would not only be a great aid to the sale of the
obligations of the new loan, but should be effective to improve the market price of
existing issues, which has suffered, from heavy liquidation, due, I believe, in large
measure, to the changed conditions following the cessation of hostilities.,
I have recommended that the holders of war-savings certificates be exempt from
taxation to the same extent as the holders of bonds of the first Liberty loan. These
certificates are of short maturity. The maximum amount which may be held by
anyorie is limited to $1,000. The interest is not payable until maturity or earlier
redemption, and holders who await the date of maturity before collecting their certificates will in any event escape war taxation. The effort has been and is being
made to get the widest possible distribution of these certificates among the people of
the United States. I believe the loss in revenue from this exemption will be negligible
and that-the conferring of the exemption will make the certificates what they ought
to be, clearly the most deshable security issued by the Government, for I feel entirely
confident that the Government will not under any conditions which can now be
foreseen ever have to issue any security more attractive than an obligation bearing
interest at the rate of 4 per cent per annum compounded quarterly and exempt from
all taxation.
I have suggested that Liberty bonds and War Finance Corporation bonds held
abroad should be exempt from all taxation. This is an enlargement of a provision
already adopted by the Congress in relation to such bbnds payable in foreign moneys.




SECRETARY OF T H E TREASURY.

41

The early cessation of hostilities p u t an end to efforts to sell obligations payable in
foreign moneys before any important amount had been sold. I belies ve substantial
amounts would be invested in t h e United States Government bonds of t h e various
Liberty loans by persons in neutral countries with which t h e exchanges are now
adverse to t h e United States if such investors could be assured of exempty)n from
taxatiori in the United States. This would supply a number of desirable markets
for t h e secondary distribution of Liberty bonds and would have a beneficial effect
upon those exchanges which are now adverse.
As tb the extension of t h e privilege of converting t h e 4 per cent Liberty loan bonds,
into 4 i per cent bonds, I expressed myself fully in m y letter of January 15. to Mr.
Kitchin, as follows:
WASHINGTON, January 15, 1919.

D E A R M R . KITCHIN: The total amount issued of 4 per cent bonds of t h e first Liberty
loan coriverted was $568,318,450, of which there remain outstanding as of December
31, 1918, in t h e hands of t h e public, unconverted, after deducting bonds purchased
and retired b y means of t h e bond purchase fund and.bonds held b y the War Finance
Corporation, $200,680,900; the total amount issued of 4 per cent bonds of t h e second
Liberty loan was $3,807,862,350, of which there remain outstanding as of December
31, 1918, in t h e hands of t h e public, unconverted, after deducting bonds purchased
by means of t h e bond purchase fund and bonds held b y t h e War Finance .Corporation,
$866,999,900; total 4 per cent Liberty bonds outstanding as of Dece]nber 31, 1918,
$1,067,680,800.
Under t h e terms of t h e contract with t h e holders of these bonds t h e conversion
privilege expired on November 9, 1918, six months after i t arose. E^/ery effort was
made b y Secretary McAdoo to give publicity to t h e fact of t h e conversion privilege
and its approaching expiration, and t h a t privilege remained open for six months.
My belief is t h a t those who did not avail themselves of t h e conveirsion privilege
within t h e period fixed b y the terms of t h e contract which t h e Government made
with t h e m fall among t h e class of small holders who are unaccustomed to bond investments and who, on account of t h e very wide distribution of Libei'ty loan bonds,
were not reached by general publicity, and could not, except in the cage of registered
bonds, be reached by department circular. Insistence upon t h e letter of t h e contract
will result in loss to a group of patriotic bondholders toward whom a special d u t y
of consideration exists. The United States has suffered nothing b y ' t h e i r failure to
act promptly i n t h e exercise of t h e conversion right, and it is m y judgment t h a t t h e
conversion privilege should be extended. I propose to submit to your committee
in connection with t h e bond bill which it will be necessary for me to present at an
early date for your consideration, a provision intended to extend 1ihe conversion
privilege so t h a t t h e higher rate of 4i'per cent shall be effective from t h e semiannual
interest payment date next succeeding t h e date of presentation for conversion.
I, am writing this letter to you now and giving it to t h e press in order t h a t the
holders of these bonds may be informed of m y views concerning t h e matter.
I am sending a copy of this letter to Senator Simmons.
Very truly, yours.
CARTER GLABS.
Hon.

CLAUDE KITCHIN,

Chairman Committee on Ways and Means,
House of Representatives.
I believe t h a t immediate steps should be taken to set u p a sinking fund for t h e
retirement of t h e vrar debt. I have suggested t h e creation of 2^ per cent cumulative
sinking fund calculated to retire the whole debt, so far as I can now esthrnate it, within
a period of some 25 years. A cumulative sinking fund has t h e advantage of making
t h e amount to be set aside for t h e service of the debt both on account of interest and
sinking fund substantially a permanent item at a fixed figure until t h e debt is retired.
The maturities and redemption dates for existing Liberty loan bonds have been
arranged with great wisdom and thoughtfulness b y Secretary McAdoc, t h e bonds of
t h e second loan being redeemable during t h e period between 1927 and 1942, those
of t h e third loan being payable in 1928, those of t h e forth loan beiag redeemable
during the period between 1933 and 1938, and those of t h e first loan being redeemable
duririg t h e period between 1932 and 1947. Secretary McAdoo announced before he
retired, and I have confirmed the announcement, t h a t t h e Victory Liberty loan will




42

. R E P O R T ON T H E :F.INANCES. .

be of short maturities. Assuming t h a t these maturities will cover t h e period between
one year after t h e termination of the war and the year 1927 it will always be in t h e
power, of t h e Government to use the sinking fund effectively for t h e redemption of
bonds of t h e Liberty loans.
.
,
r I,should accompany the,bill with a recommendation for the repeal of the existing
paper sinking funds had not this recommendatiori been repeatedly made in the annual
reports of the Secretary of the Treasury without action..
I have with me and would like to make a part.of my statement the following:
(1) Statements showing classified receipts and disbursements, exclusive of the
principal of the public debt, by months from March 1, 1917, to January 31, 1919,
as published in daily Treasury statements.
(2). Memorandum concerning the existing authorizations for issues of Liberty
bonds showing the balance of authority under existing law.
(3) Statement showing the interest-bearing debt,of the United Staites as of January
31, including the issue of Treasury certificates which opened on January 30,- thi
final figures for which were not received until a week or 10 days later.
(4) Statement of the bonds purchased by the Treasury for the bond-purchase
fund to January 31, 1919.
(5) Statement showing the final allotment of subscriptions to the fourth Liberty
loan corrected to February 1.
(6) Copy of the British war-loan act of July 30, 1918.
This latter, I think, will interest you as bearing upon the extent of the discretion
which I have asked the Congress to repose in me under the unusual circumstances
now confronting the Treasury. Following is the authority conferred upon the British
treasury by the Parliament:
.1. (1) Any money required for the raising of any supply granted to His Majesty
for the ser\ice of the year ending the thirty-first day of March, nineteen hundred and
nineteen, and, in addition, of a sum not exceeding two hundred and fifty milliori
pounds, or for the raising of any sum required for cancelling securities or treasury
bills under the powers of this act, may be raised in such manner as the treasury
think fit, and for t h a t purpose they may create and issue any securities by means
of which any public loan has been raised or may be raised, or such other securities
bearing such rate of interest and subject to such conditions as to repayment, redemption,' or otherwise, as they think fit.
The bill contains two provisions designed to meet a situation which is of vital
importance both to the United'States and the European allies. The first of these
provisions authorizes loans to the allied Governments to provide for purchases in the
United States for export therefrom, for expenditures in the United States in connection with such purchases, and for the payment of interest to the United States, subject
to two limitations—one t h a t the credits shall cease one year after the termination of
the war and the other t h a t the total amount advanced shall be limited to the amount
remaining unexpended of the sum authorized by previous legislation to be loaned
to foreign governments for war purposes.
The second provision authorizes the War Finance Corporation to make advances
under proper restrictions to promote exports not to exceed at any one time the sum
of $1,000,000,000.
These proposals are designed to meet partially the situation growing out of the
temporary exhaustion of the European allies as regards foreign commerce and finance
and out of the transition of the United States from a debtor to a creditor nation which
has been brought about by the war.
Destruction of property by the eriemy, demands bn the man power and manufacturing facilities of the nations, and the limitations imposed by shipping requirements upon the supplies of raw materials have combined to reduce the commercial
production of the European allied countries available for export to small proportions,




SECRETARY-OF THE TREASURY.

43

-and at the same time the needs of the war have compelled them to make imports
*on a scale far transcending anything known before the war.
During' the years 1917 and 1918 our foreign trade showed a net balance of
:$6,40P,000,000 (or.$3,200,000,000 a year), and our trade with Great Britain, France,
:and Italy alone accounted. for $6,235,000,000 of this balance. In the ye ar iinmediately
preceding the opening of the European war, i. e., the year ending June 30, 1914,
our total balance of trade was $471,000,000 and our balance with the three countries
named $337,000,000. The trade figures for Great Britain for 1918 (up to November)
show that its exports for the year were in money value smaller and in quantity far
;smaller than iri the preceding year, and her total trade for the 11 months ending
November showed an excess of imports of practically $3,500,000,000,.
The necessity of foreign purchases before we entered the war has greatly impaired
t h e resources of the European allies available to meet an adverse balance of trade,
:so t h a t to-day they can not import goods they need without financial assistance.
The Treasury has insisted that, as far as possible, this finance should be secured through
" private channels; but the United States, before the war, was an importer/of capital
Tather than an exporter, and it is not to be expected that our pecple will adjust
themselves to the changed situation so.rapidly as to make it possible for all or even
t h e greater part of the needs of these countries to be met privately. Investment in
foreign securities was practically unknown in the United States hefore the commenceriient of the European war, and the habit is one which can not be widely extended
i n a short period of time. Some measure of governmental aid during the transition
period is therefore necessary if we are to be able to export the food supplies and other
commodities which European allies desire to secure and which it is to our interest
to sell them.
In asking the extension of the powers of the War Finance Corporation, it has been
my thought to avail of methods approximating, as nearly as possible, to commercial
practice and to enable the funds to be secured without resort to the Treasury or the
issue of Liberty bonds. The War Finance Corporation will, of course, if the legislation is enacted, secure funds b y . t h e issues of its bonds to the public which it is
already authorized to make.
I do not feel, however, that this action alone will meet the situation. Our exporters
will, of course, be liable to the War Finance Corporation for all advances made by it,
and must limit their.commitments, however well secured they may be. Moreover, in
rsome cases- our Government will either directly, or in effect, be the yondor. The
machinery of the War Finance Corporation is not applicable to su<:h pases. It is
anticipated that substantial sales of property of the United States Government, now
i n Europe, to foreign Governments can be effected to the mutual advantage of the
Governments concerned. The materials referred to include railroad materials and
equipment, j)ort and dock equipment, and other property of the American Expeditionary Forces. Again, the Government as guarantor of the price of wheat has a
direct interest in the foreign sales of wheat.
The interest payments.due frorn the several Governments on their obligations held
by the United States now aggregate over $200,000,000 each half year, and it is probable
that few of the Governments at the present time can meet these payments m t h o u t
assistance. The requirements for the reconstruction of Belgium and northern France
can not yet be fully determined, but it is probable that some of them will be such aa
can not be met without Government loans.
For these reasons I urgently ask the authority to broaden the purposes for which
the loahs to foreign Governments may be made. I do not ask an increased appropriation and it would not be my purpose to avail of the authority where commercial loans
or the powers of the War Finance Corporation could, in my judgment, be used to meet
the requirements. I do, however, feel very strongly that before the Congress adjourn?
powers should be given sufficiently broad to enable the situation to be dealt with.




44

REPORT ON T H E FINANCES.

We are creditors of the European allies to the extent of over $8,000,000,000 and we have
a very real interest in the early restoration of their economic life and their ability to
enter upon foreign trade. These allies include the countries to which for many years
the greatest voliune of our exports has flowed, and if our foreign trade is to continue
and to grow our trade ^vith these countries m.ust continue to be a large part of the total.
Business in the United States is now. hesitant and unemployment is gro\\ing. Upon
the maintenari^e of our exports depends in a large measure whether this situation shall
become aggravated or relieved.
I am con^inced that exports must be greatly curtailed unless the Government for
the present emergency (and only during that emergency) lends financial aid along
the lines I have indicated. I \ i e w with the greatest concern the task of raising the
funds needed by the Government during this year; but I am, neA-eitheless, willing
somewhat to increase thbse needs for this purpose, being satisfied that the resultant
effects Mn\] be such that the task as a whole v*ill thereby be lightened.
What I have said, gentlemen, is a general explanation and elaboration of the letter
which I sent to the committee.

While the Congress did not grant in full the authority requested
by the Treasury, it responded, through the Victory Liberty loanact, approved March 3, 1919 (Exhibit 7, page 235), with a law t h a t
entrusted sufficient power and discretion to the Secretary of the
Treasury with respect to the fifth loan to enable him to deal with
the situation as it might develop. The new statute authorized the
issue of notes of the United States to the extent of not over
$7,000,000,000 upon such terms and conditions and at such rate .or
rates of interest as the Secretary might prescribe. I t was provided
that the maturities should be iiot less than one year nor more than
five years from the date of issue. The act included certain alternative proposals with respect to exemptions from taxation and the
Secretary was given discretion to choose from among four classes of
exemptions. The right to fix the rate of interest and the latitude
given with regard to exemptions from taxation permitted the Treasury to wait until the very eve of the loan campaign, if necessary,
before naming the terms and conditions of the issue. For the purpose of stabilizing the market for the 4 per cent and 4 J per cent
Liberty bonds, the law provided additional exemptions from taxation for the outstanding issues.
During the war. Secretary McAdoo. had very wisely issued longterm bonds with maturities and redemption dates spread over the
period from 1927 to 1947, leaving the field for short-term securities
, free, with the exception of war-savings certificates and the temporary
certificates of indebtedness, for use in meeting the situation that
followed the period of active fighting. After a careful survey of
financial conditions in all parts of the country, it was decided to
take advantage of the favorable field for short-term securities and
exercise the authority conferred by the Victory Liberty loan act for
the issue of short-term notes rather than long-term bonds, which latter,
under the law, were limited as to rate of interest to 4 J per cent per




SECRETARY OF THE TREASURY.

>

45

annum and were subject, with an unimportant exception, to supertaxes and profits taxes. As soon as this conclusion was;, definitely
reached the people of the country were promptly advised;- The first
public announcement was made on March 12, 1919, when it-was stated
that the notes would be sold as a popular issue by means of another
great^intensive campaign which would open on Monday, April 21, and
close on Saturday, May 10. I t was not possible, that far in advance of the opening of the campaign, to determine the rate of
interest or the exemptions from taxation which the notes would
enjoy because those questions must be based on conditions existing
immediately prior to the public offering. The public statement of
March 12, 1919, was as follows:
The Victory Liberty loan campaign will open on Monday, April 21, and will close
on Saturday, May 10. Under the act of Congress approved September 24, 1917, and
amendments thereto, the Secretary of the Treasury still has the authority to issue bonds
similar to those of the second, third, and fourth Liberty loans to the extent of not
over $5,022,518,000, but any issue of bonds under authority of this act is limited as to
rate of interest to a maximum of 4J per cent per annum and would be subject to supertaxes and profits taxes except for the right to participate in the exemption of $5,000
principal amount with other outstanding issues of Liberty bonds and certificates.
The Congress has now passed the Victory Liberty loan act which was approved
March 3, 1919, under which the Secretary of the Treasury is authorized to issue notes
of the United States to the extent of not-over $7,000,000,000 upon such terms and
conditions and at such rate or rates of interest as he may prescribe. I t is provided in
this act that these notes shall be payable at such time or times, not less than one year
or more than five years from the date bf issue, as m a y b e prescribed b y t h e Secretary.
After studying financial conditions in all parts of the country, I have determined
that the interests of the United States will best be served at this time by the issuance
of short-term notes rather than of longer term bonds which would have to bear t h e
limited rate of interest of 4J per cent.
The Victory Liberty loan will therefore take the form of notes of the United States
maturing in not overfiA^eyears from the date of issue. These notes will be, as were
the Liberty loan bonds, the direct promise to pay of the United States, will be issued
both in registered and coupon form, and the coupon notes will be in final form and wil I
have attached the interest coupons covering the entire life of the notes. I am hopef ii 1
that the notes in final engraved form will be ready for delivery by the opening of th e
campaign on'April 21.
I am led to adopt the plan of issuing short-term notes rather than long-term bonds
largely because of the fact that I believe that a short-term issue will maintain a price
at about par after the campaign is concluded far more readily than would a longer
term issue.
I have not yet reached a conclusion as to the rate of interest and exemptions from
taxation which these notes will bear because this decision must be based on existing conditions immediately prior to the opening of the campaign.
I take this opportunity to repeat what I have already stated, that it is the intention of the Treasury Department to carry on the same kind of intensive campaign
for distribution as heretofore. I t would be a most unfortunate occurrence if the
people of the United States failed tb take these notes, thus placing the burden of
subscriptions on the banks. The business of the country looks to the banldng sys
tem for credit wherewith to carry on its operations, and if this credit is absorbed to
at large extent by the purchase of Government securities, there will be many liinita-




46

REPORT'ON

THE

FINANCES.

tions placed upon t h e supply of credit for business purposes. Our merchants and
manufacturers need ample credit for setting t h e wheels of industry in motion for
peace-time production and.distribution, and the wage earner is d h e c t l y interested
in seeing that these wheels are kept moving at a normal rate in order that full employment at good wages may continue, and where readjustment conditions have necessitated a slowing down of industry, it is ^dtally important that activity be resumed
and labor reemployed at the earliest possible moment.
I, therefore, ask t h e American people once again to give their support to their
Government i n order that this great loan may be made an overwhelming success b y
the widest possible distribution.

During the weeks immediately preceding the campaign there still
remained a small minority among the people, including men of
influence in public life, who looked pessimistically upon the outlook for the success of the loan. Senator Calder aptly expressed
this feeling in' a letter which he wi^ote to the Secretary on March
27, 1919, drawing the department's attention to the decline in the
market prices of Liberty bonds and urging the calling of an extra
session of the Congress to pass remedial legislation to prevent t h e
failure of the Victory loan. The Treasury did not in any sense share
such gloomy forebodings and set forth its viewpoint in detail in the
following reply to the Senator from New York:
WASHINGTON, March 31, 1919.

MY D E A R SENATOR : I received your letter of March 27. I do not share your present,
fear for t h e Victory Liberty loan nor do I understand what unfavorable developments have taken place since you addressed the Senate upon the 1st of March apparently in support of (certainly not in opposition to) t h e Victory Liberty loan bill tolead you to the \ i e w you now express. On March 1 in your speech in t h e Senate
you said, among other things:
Mr. President, I do not share the hopelessness expressed b y some Senators. Wehave had deposited in the banks and other financial institutions of the United States
during t h e past four years sums totaling over $5,000,000,000 more than those institutions contained previous to that time. Then, too; Mr. Presiderit, t h e wealth of
this country totals in t h e neighborhood of $235,000,000,000. • So I see no reason why
we should not feel certain of the future,' provided Congress legislates intelligently
and does everything in its power to keep|down t h e costs of Government.
I do not share the hopelessness now expressed b y you nor your present desire toincrease the costs to t h e Government by increasing its interest charges. The VictoryLiberty loan bill became law after very full and adequate consideration b y t h e Congress. You, yourself, advocated one amendment to t h e bill, b u t only one, t h a t
requhing that a vignette of Col. Roosevelt should be printed on all t h e notes (which,
if it had been adopted, would have so delayed t h e work of t h e Bureau of Engravingand Printing as to have made impossible the delivery of t h e notes during or at t h e
close of t h e campaign). The printed hearings before the Ways arid Means Committee of t h e Hoiise occupy 99 printed pages. The printed .hearings before theFinance Committee of t h e Senate occupy 54 printed pages. Thirty-six large pages^
in double columns and fine type of t h e Congressional Record are devoted to the^
debates and addresses in t h e House and 40 pages to those in t h e Senate concerning
the bill. The bill was reported b y a unanimous vote by the Ways and Means Cbmr
mittee of t h e House and passed t h e House with a practically unanimous vote, threeCongressmen only being recorded in the negative. This is to the lasting honor of themembers of that committee and of t h e House who, without distinction of party,.




SECRETARY OF THE TREASURY.

47

joined in writing and passing this bill which was so necessary to the welfare of t h e
people and to the preservation of the credit and financial strength of our great country. I t is true that political issues had arisen before the bill was reported by t h e
Finance Committee or passed the Senate which prevented like unaniimity in those
bodies. B u t although a few Senators expressed criticism of one or another provision of t h e bill, there was, be it said to the credit of the Senate, no concerted opposition to t h e bill or to any important feature of it and t h e bill passed the Senate without a record vote two days and a half before t h e Senate adjourned.
The enactment of the bill was received with relief and giatification by the country
at large and by the members of the gi-eat Liberty loan organization. They evinced
rio lack of confidence in the Treasury's ability to solve the problems entrusted to it by
the Congress; nor have I any fear of the Treasury's ability to solve those problems
given, as I am assured,it will hav^e,'the patriotic support of the'great Liberty loan
organization and of a united and victorious people.
To act in accordance with 3''our suggestion and ask the President to call the Congress
in special session tp enact iminediately additional legislation in aid of the Victory
Liberty loan would imply a distrust which I do not feel of the action already taken by
the Congress and approved b^^ the President, for there have been no ad vei'se developments since that action was taken.
With a view to determining the terms of the Victory Liberty loan i t has been m^^
duty to inform myself npt only concerning the surface conditions, which should be
obvious to you and to every well-informed American, but also concerning the undercurrents affecting our financial and industrial welfare and which bear directly and
indirectl}^ upon the Victory Liberty loan. I have been engaged, with the aid of t h e
best minds at my disposal—and they include the members of the great war loan
organization both at the Treasur}^ in AVashington and throughout the c o u n t r y which
has so successfully and brilliantl y supported the Treasury of the United States throughout the period of active warfare—in the study of those conditions, and I a,m glad indeed
to be able to tell you that as a result of that study I take a very optimistic view of t h e
prowspect for the Victory Libert}^ loan and of the future of this country.
I t is perhaps not unnatural that we Americans, like all the other peoples of t h e
world, should ha,ve had to go through a period of depression and discontent, even of
bitternesSj after the winning of the gi'eat war. But this was only the natural reaction
from the intense physical and spiritual effort which the war called lorth from t h e
overstimulation of all our energies and actiyities. The cessation of hostilities followed
hard upon a bitter political fight, and came just before the approach of winter, a time
when the resumption of normal peace actiAities was most difficult. I'he winter has
passed and we have every expectation of the early conclusion of peace. Already
commerce and industry begin to show signs of the renewed life which must follow t h e
removal of the restraints and interferences which war made.necessary. The problems
which arose from the failure of the Congress to enact legislation for relief of the rail-,
roads and other important legislation presented a very serious situation and one of
great embarrassment to the Government, but means will be found to carry them along
until the time when the Congress shall be called in special session.
The war is won. Our present national debt of less than $25,000,000,000 and our
ultimate national debt, after all war bills are paid, which ought not in any event to
exceed $30,000,000,000, against which we shall hold some $10,000,000,000 of obligations of foreign governments, is the barest fraction of our national resources. The
relation of our debt to our population and resources is small indeed corapared to that
of any of the great countries of Europe.
The discontinuance of governmental interference with the foreign exchanges,
made possible by the cessation of hostilities, has demonstrated the true position of
dollar exchange, which not only is at a premium in relation to the currencies of all of




48

,

REPORT ON THE FINANCES.

the European countries which were engaged ih the war, but has now approached par
or actually reached a premium with respect to the cunencies of European neutralb.
Our reserve, the greatest in amount in the world, the greatest in relation to circulation and deposit in any of the cbuntries which were engaged in the war, was on
March 28, 1919, 51.9 per cent of the combined Federal reserve note and deposit liabilities of the Federal reserve banks. This compares most favorably with a combined reserve of 49.8 per cent on November 8, 1919, just before the armistice, particulariy in view bf the fact that since that date the Government's expenditures, for
the most part growing out of the war, have approximated $8,000,000,000, the greater
part of which has necessarily been provided by the sale of Treasury certificates of
indebtedness tb the banking institutions of the country.
There is to-day no insufficiency of credit for the needs of any useful enterprise nor
insufficiency of gold to support our credit structure. The payment of the. Government's bills, the settlement of its contracts, and the liquidation of its liabilities should
go forward with all possible speed. There never has been and never will be lack of
cash in the Treasury to make the payments.' Now that the war is over and the in' dustry of the country is no longer subjected to the forcing process which was necessary to stimulate the maximum of production of war supplies, the needs of industry
and commerce for credit will automatically be greatly reduced. The Government's
expenditures, which shortly after the armistice reached a maximum in excess of
$2,000,000,000 in a month, should, after the war bills have been paid, shrink quickly
back to, say, $2,000,000,000 a year in addition to, the interest and sinkirig fund charges
on the public debt. This debt is widely distributed among perhaps 20,000,000 of
our people, and involves merely a payment by the taxpayers to the taxpayers—for
we are fortunate above all the great countries of the world in haAing practically no
foreign debt.
. I know of no one who does not believe that the Liberty bond.s of the outstanding
issues will sell well above par long before their maturity. The Congress has provided in the Victory Liberty loan act a sinking fund which is calculated to retire all
the bond^ and notes of the Liberty loans in less than 25 years. The liquidation which
has taken place in Liberty bonds since the armistice is, in my judgment, and, I believe, in that of most thoughtful financiers, traceable to other causes than the interest
rate aind terms of the bonds. Foremost of these causes is the fact that many patriotic
Americans, individuals and companies, subscribe for bonds in a spirit of patriotic
fervor induced by the war, in excess of their ability to hold. The "oversold" condition of the market for Liberty bonds thus created was accentuated' by the reaction
following the armistice, which made many feel they were released from the duty of
holding their bonds in aid of the Government's credit; by the desire to realize losses
before the end of the year and thus reduce taxes; by the changed financial position
of many bondholders growing out of the termination of hostilities; and, worst of all,
• by the wicked devices of bond sharps and swindlers who took advantage of the inexperience of many small investors in Liberty bonds whom the Treasury was, failing
the necessary legislation, powerless to protect. Ariother element in depreciating the
market value of Liberty bonds has, no' doubt, been the pessimistic utterances of many
people who, like yourself, have seen only the dark side of the page and who have
exaggerated both publicly and privately the difficulty of floating the Victory Liberty
loan. This pessimism has, I think, already been more than discounted in the market
price of existing issues. I have not allowed myself to be disconcerted by these pessimistic utterances because I know that similar opinions were expressed to Secretary
McAdoo before each of the four Liberty loans offered duiing the period of active
warfare, although during that period those who held such views were for the most
part considerate enough to express them to the Treasury privately and avoid public
utterances, which would have added to its burdens.




SECRETARY OF THE TREASURY.

i 49

• I believe t h a t all these adverse influences have spent their force; I, am sanguirie, to
believe that the market for Liberty bonds has seen its worst and that the market
position of the bonds will improve as true understanding of the immense strength of
the financiial position of the United States becomes disseminated and as the Victory
Liberty loan campaign proceeds.
' I.am encouraged to take these hopeful views not only because of the general considerations to which I haA'e called your attention, but also because of the special success
which the Government's financial operations have met since the a^'mistice. Since
the armistice the banking institutions of the country have responded to the request
bf the Treasur}^ to' meet the current requirements of the Government by purchases of
Treasury certificates without any diminution of their patriotic enthusiasm. The
sale of Treasury certificates of indebtedness at the rate of 4^ per cent established over
a year ago has continued with undiminished success. Indeed, such sales have recently
proceeded so successfully and in such large.amounts as to make necessary the omission
just now of one of the regular biweekly offerings.
This success was contemporaneous with another financial operation of the Treasury
no less gratifying. Approximately $1,000,000,000 of income and profits taxes were
paid into the Treasury during the period of two or three weeks before and after March
15, without financial disturbance, thanks to the provision which had been made in
advance by the sale of Treasury certificates of indebtedness maturing March 15 and
to the effective cooperation of the Federal reserve banks, and this notwithstanding
that the activities of the subcomrriittee on money of the Liberty, loan committee had
come to.an end about two months before.
I n writing you thus fully in answer to your letter I have proceeded upon the assumption that it was written with the intention of aiding in solving the financial problems
before us. I have made this assumption notwithstanding that the suggestion, thus
made by you but little.more than three weeks before the opening of the campaign,
was given to the press before it reached me, that you made no such suggestion when
the bill was before the.Senate, and that-you have sought no opportunity to confer
with me concerning it in the weeks that have intervened. I now aek that you give
to the Treasury of the United States, upon which, subject to the approval of the
President and to the limitations imposed by the acts of Congress, rests the responsibility for determining the terms of the Victory Liberty loan, that patriotic support
and confidence without which no financial program of such magnitude can be successful. The welfare of all our people is at stake. The great Liberty loan organizatibn is truly representative of all the people. I t has pledged its patriotic support
to the Victory Liberty loan, the sarrie patriotic support which it gave to four previous
loans, and I ask you to join with me and them to make t h ^ Victory Liberty loan,
this last great popular loan, the success it can and should b e , riot for the honor and
glory of the Secretary of the Treasury or of this adininistration, b u t for the welfare
and greater good of the' whole American people, and as a lasting monument of our
appreciation of those heroic men who went out from among us to suffer and, some
of them, to die, for all of us in France.
Sincerely, yours,
CARTER G L A S S .
Hon.

WILLIAM M .

CALDER,

. 1648 Eleventh Avenue, Brooklyn, N . Y.

The above exposition of the situation was heartily indorsed by
the members of the War Loan Organization, whose views coincided
with those of the Treasury and were guided by an abiding faith in
the patriotism of the American people and their willingness and14032.5—FI 1919




A

50

REPORT ON THE FINANCES.

ability to do whatever was necessary in the circumstances to pay
the bills of the war.
With all plans completed for the campaign, it was found possible
to decide the terms and conditions of the loan on April 14, 1919,
when the information was immediately given to the country. The
formal offering of the issue was made in Department Circular
No. 138, dated April 21, 1919, attached hereto as Exhibit 8, page
241. The form of application for the notes by subscribers generally,
and the form of application by incorporated banks or trust companies for coupon notes for advance delivery, are attached hereto
as Exhibits 9 and 10, pages 250 and 251, respectively. The public
announcement of April 14, summarizing the terms and conditions
of the loan, was as follows:
. The Victory Liberty loan, which will be offered for popular subscription on April
21, will take the form of 4 | per cent three/four year convertible gold notes of the
United States, exempt from State and local taxes, except estate and inheritance
taxes, and from normal Federal income taxes. The notes will be convertible, at
the option of the holder, throughout their life into 3 | per cent three/four year convertible gold notes of the United States, exempt from all Federal, State, and local
taxes, except estate and inheritance taxes. In like manner the 3f per cent notes
will be convertible into the 4f per cent notes.
The amount of the issue will be $4,500,000,000, which, with the deferred installments of income and profits taxes payable, in respect to last year's income and profits,
during the period covered by the maturity dates of Treasury certificates of indebtedness now outstanding, will fully provide for the retirement of such certificates.
The issue will be limited to $4,500,000,000 except as it may be necessary to increase
or decrease the amount to facilitate allotment. Oversubscriptions will be rejected
and allotments made on a graduated scale similar in its general plan to-that adopted
in connection with the first Liberty loan. Allotment will be made in full on sub"
scriptions up to-and including $10,000.
The notes of both series will be dated and bear interest from May 20, 1919, and will
mature on May 20, 1923. Interest will be payable on December 15, 1919, and thereafter semiaririually on June 15 and December 15, and at maturity. All or any of the
notes may be redeemed before maturity at the option of the United States on June 15
or December 15, 1922, at par and accrued interest.
In fixing the terms of the issue, the Treasury has been guided largely by the desire
to devise a security which will not only prove attractive to the people of the country
in the first instance, but, the terms of which should insure a good market for the notes
after the campaign is ever and identical prices for the two series, and should not affect
injuriously the market for the existing bonds of the Liberty loans.
This will be the last Liberty loan. Although as the remaining war bills are presented
further borrowing must be done, I anticipate that the requirements of the Government,
in excess of the amount of taxes and other income can, in view of the decreasing scale
of expenditure, be readily financed by the issue of Treasury certificates from time to
time as heretofore, which may be ultimately refunded by the issue of notes or bonds
without the aid of another great popular campaign such as has characterized the Liberty
loans.
<
^
I am sure that the people of America will subscribe to this Victory loan in the same
spirit of patriotism which they have shown in the past"to the end that the notes may be
as widely distributed as possible,.and that our banking institutions may be left free
to supply the credit necessary for the purpose of industry and commerce and the full




SECRETARY OF THE TREASURY.

51

employment of labor. Let the world see that the patriots of America, out of their
boundless resources, arid with the same enthusiasm and devotion to country with which
they, prosecuted the war to a \ictbrious conclusion, are determined to finish .the job.

Probably as a result of the certificate program, the country had
acquired the impression that the loan would amount to $5,000,000,000
or $6,000,000,000, and the announcement that $4,500,000,000 would
be sufficient for the issue had a beneficial effect. In fixing the
amount of the loan, the Treasury?- exercised its best judgment as to
the sum which, having regard to the huge tax receipts which were
being collected during the year, and the huge amounts of Liberty
bonds so recently issued, it believed could be well absorbed. I t was
decided to reject any oversubscription of the issue, because the
offering of an unlimited amount of the notes undoubtedly would have
decreased any buying power, or eliminated the possibility of any
buying power, after the loan was over and in effect would have curtailed the subscriptions. After the first loan and during the time of
hostilities, with an unknown war period before us and unknown liabilities growing out of the war afterwards, the Ti-easury was bound
to take all or substantially all the subscriptions it could get. Unquestionably that was a wise course during the period of the war.
Now that hostilities were over and we knew approximately the dimensions of the Government's problem, it was believed that the closed
issue would better serve the purpose.
One of the principal diificulties that confronted the department
at the opening of the campaign and in the months immediately
jpreceding was a certain apathy among the people owing to a lack of
understanding of the financial needs of the Government. I t was
necessary for the Treasury and the Liberty loan committees to undertake an extensive campaign to inform the public that while the guns
had,,ce£ised.to..fire, ithe war, bills..were.stilLbeing, received and many
obligations of the Government yet remained to be satisfied. The
Secretary made a tour of the country for the purpose of arousing
the interest of the people and advising them of the requirements of
the Treasury. He visited and made public speeches in the following
cities: Pittsburgh, Pa.; Minneapolis, Minn.; St. Paul, Miim.; Chicago,
111.; Baltimore, Md.,; Richmond, Va.; Norfolk, Va.; New York City;
Cleveland, Ohio; Cincinnati, Ohio; Louisville, Ky.; Indianapolis,
Ind.; Omaha, Nebr.; Denver, Colo.; Hutchinson, Kans.; Oklahoma
City, Okla.; St. Louis, Mo.; Atlanta, Ga.; Charleston, S. C.; Philadelphia, Pa.; Boston, Mass.; and Providence, R. I.
The campaign for the loan found its expression and echo iii every
city, town, hamlet, and rural district of the country. T'he Treasury
felt that all that was needed to assure the subscription of the notes
was to reach the people with full and reliable information as to the
Government's necessities. That faith was fully sustained by the
result!'

• ^ •••- ^ •''••• ••
•




52

REPORT ON T H E FINANCES.

Like all previous issues, the loan was a great success, amply rewarding all the preparation and all the laborious work of the War Loan
Organization and justifying the confident expectation of the Governinent and its steady trust in the loyalty of Americans and their
capacity to accomplish the seemingly impossible. The patriotism of
peace proved to be as great and as self-sacrificing as, the patriotism
of war. The Victory loan was more than a victory; it was a thanksgiving. The result was a significant achievement in the face of dire
predictions and was a further manifestation of the solidarity of the
people and their love of the United States.
The total subscriptions, which were widely distributed among the
people, amounted to $5,249,908,300—an oversubscription of $749,908,300, or 16.66 per cent. In accordance with the terms of the
issue the oversubscription was rejected, and subscription's allotted
to the amount of $4,500,000,000, which has been since slightly reduced
as the result of adjustments and cancellations of Army and Navy
subscriptions. The ainount of subscriptions allotted, corrected to
September 30, 1919, was. $4,498,312,650.
Allotment of subscriptions was made on the following basis:
Class of subscriptions.

Per cent allotted.

A and B, up to and including S50,000
C and D, over $50 000 and up to and including $200,000..
<E, asfollows:
Over $200,000 and up to and including $500,000
Over $500,000 and up to and including $2,500,000

'...

Over $2,500,000 and up to and including $15,000,000
Over $15,000,000 and up to but not including $30,000,000
$30,000,000 and up to but not including $50,000,000
$50,000,000

100 per cent.
80 per cent but not less than
$50,000 notes.
...

. .

70 per cent but not less than
$160,000 notes.
60 per cent but not less than
$350,000 notes.
50 per cent but not less than
$1,500,000 notes.
45 per cent but not less thaa
$7,-500,000 notes.
42.4 per cent.
42.39 plus per cent—($21,196,600 notes).

In order to facilitate the gradual payment for subscriptions and
accommodate the convenience of investors in the notes as far as
possible, subscribers were permitted to make payment on the following installment plan, stretching over the six months' period from May
10, 1919, to November 11, 1919:
10 per cent with application on or before May 10.
10 per cent on July 15.
20 per cent on August 12.
20 per cent on September 9.
20 per cent on October 7.
20 per cent on November 11, with accrued interest on deferred
installments.
Payment in full could be made with application or on May 20 (except
as to subscriptions subject to allotment, in which case payment might
be completed on June 3) provided the 10 per cent required with




53

SECRETARY OF THE TREASURY.

application had been duly paid on or before May 10. I t was also
permissible to complete payment on any installment date with accrued
interest.
The subjoined table shows the subscriptions allotted, payments
received, and original deliveries of registered and coupon notes as of
September 30, 1919:
Staiem,ent of subscriptions allotted, payments received, a.nd original deliveries of registered
and coupon notes of the 4 i per cent a.nd <5f per cent. Victory Liberty loan as of Sept. 30,_
1919.

'

Boston.

Philadelphia.

New York.

"•

Cleveland.

Richmond.

Subscriptions
allotted
(corrected to Sept. 30,
$371,910,150.00 $1,318,041,150.00 $376,290,100.00 $443,802,250.00 $210,889,300. 00
1919)
P a y m e n t s received b y
Treasurer U n i t e d S t a t e s 349,784,050.00 1.276,177,120.00 363,527,915.00 426,552,970.00 194,508,750. 00
62,696,520.00 17,755,265.00 25,873,920.00 24,459,150.00
33,189,150.00
Less p a r t p a y m e n t s
F u l l paid subscriptions

316,594,900.00 1,213,480,600.00 345.772.650. 00 400.679,050.00 170,049,600.00

Original delivery:
4f , per cent coupon
notes '
. . 238,248,150.00
4|- per cent registered
28,106,150.00
notes
Total 4J per cent
notes

266,348,300.00

Original delivery:
3 | per cent coupon
notes
.:.
3f per cent registered
notes

77,506,100.00

16,124,250.00

42,593,500.00

18,962,400.00

832,886,050.00 294,172,300.00 359,358,250.00 160,545,900.00

42,741,450.00

362,998,500.00

45,742,600.00

31,725,550.00

9,153,150. 00

3,430,700^00

6,247,500.00

1,016,300.00

2,580,850.00

332,050.00

46,172,150.00

T o t a l 3i p e r c e n t
notes
G r a n d t o t a l , origin a l deliveries

755,379,950.00 278,048,050.00 316,764,750. 00 141,583,500.00

369,246,000.00

46,758,900.00

34,306,400.00

9,485,200.00

312,520,450.00 1,202,132,050.00 340,931,200.00 393,664,650.00 170,031,100.00

' v i c t o r y L i b e r t y loan notes
deliverable

4,074,450.00

• 11,348,550.00

Atlanta.

/

4,841,450.00

Chicago.

7,014,400.00

'St. Louis.

18,500.00

Minneapolis.

S u b s c r i p t i o n s allotted (corrected to Sept. 30,
1919)
$133,080,800.00 $694,330,000.00 $201,787,600.00 $170,076,650.00
P a y m e n t s received b y T r e a s u r e r U n i t e d
125,860,424.50
states
•
10,538,724.50
Less p a r t p a y m e n t s
F u l l paid subscripticms
Original delivery:
4 | per cent coupon n o t es
3 | per cent registered n otes
T o t a l 4 | per cent not es
Original delivery:
3f per c e n t coupon n o t es
3f per cent registered E otes
• Total 3 | per c e n t notes
G r a n d t o t a l , original deliveries
Victory L i b e r t y loan notes d e l i v e r a b l e . . .




659,130,130.00
52,770,030.00

197,009,530.00 154,687,159.07
7,153,230.00 22,583,869.07

115,321,700.00

606,360,100.00

189,856,300.00 132,103,300.00

92,920,400.00
10,706,450.00

454,313,350.00
87,904,500.00

148,700,500.00 100 ."iQO 700 00
36,046,050.00 24,124,860.00

103,626,850.00

542,217,850.00

184,746,650.00 124 715 550 00

5,615,900.00
896,900.00

56,673,950.00
6,059,600.00

6,512,800.00

62,633,650.00

110,139,650.00

604,851,400.00

5,182,050.00

1,508,700.00

4,450,000.00
544,900.00

4,428,760:00
1 251 650 00

4,994,900.00

5,680,400.00

189,741,450.00 130,396,950; 00
114,850.00

1,707,350.00

•

54

REPORT ON T H E FINANCES.

Statement of subscriptions allotted, payments received, and original deliveries of registered
and coupon notes,of the 4\ per cent and 31 per cent Victory Liberty loan as of Sept. 30,
1919—Continued.
Kansas

aty.

Dallas.

San
Francisco.

Special
Treasury
allotment.

Total.

Subscriptions allotted (corrected to Sept. 30,1919).... $192,429,300.00 $84,002,600.00 $294,905,060.00 i$6,767,800.00 $4,498,312;650.00
Payments received by Treasurer United States
179,258,260.00 74,264,690.00 275,361,397.50 1,836,850.00 4 277 938 136.07
Less part payments
319,873,936.07
19,080,660.00 14,483,240.00 29,290,297.50
Full paid subscriptions .160,177,700.00 69,771,350.00 246,061,100.00 1,836,860.00 3,968,064,206.-00
Original delivery:
4f per cent coupon notes. 103,879,460.00 48,216,600.00 216,989,360.00 1,836,860.00 2,896,470,600.00
4 | per cent registered
notes
42,212,400.00 6,262,000.00 14,258,000.00
403,790,660.00
Total 4 | per cent
notes
Original delivery:
3f per cent coupon notes.
3 | per cent registered
notes
, Total dl per cent
notes
Orand total, original
deliveries.
Victory Liberty loan notes
deliverable................

146,091,850.00 63.468,600.00 230,247,360.00 1,836,860.00 3; 300,261,250.00
7,128,660.00

2,862,300.00

14,362,450.00

587,773,250.00

1,798,960.00

710,400.00

649,800.00

25,519,600.00

8,927,600.00

3,672,700.00

16,002,260.00

613,292,850.00

166,019,460.00 57,041,300.00 246,249,600.00 1,835,850.00 3,913,564,100.00
6,158,250.00

2,730,050.00

811,500.00

44,510,100.00

1 Includes adjustment Oct. 1,1919.
NOTE.—Payments as shown by Treasurer United States. Full-paid subscriptions and couppn notes
delivered as shown by monthly statement of Federal reserve banks. Registered notes delivered as shown
by records of Secretary's offlce, Division of Loans and Currency.

There are attached hereto a;S Exhibit 11, page 253, various tables
showing the results of the Victory loan. These were compiled by the
War Loan Organization and are based upon the subscriptions a»
originally reported. Since that time there have been various adjustments in the figures, particularly in connection with Army and
Navy subscriptions, which, under the special plan, were subject to
cancellation in certain circumstances. The final allotment and deliveries upon original issue, corrected to September 30, 1919, are in
accordance with the above table.
TREASURY CERTIFICATES OF INDEBTEDNESS.

Every issue of Treasury certificates of indebtedness from the beginning of the war to date has been a success. This means oftemporary financing has provided the Government with funds in
advance of receipts from the sales of bonds or notes or in anticipation
of revenue from income and profits taxes, and has served the additional helpful purpose of distributing the payments of bond and note
subscriptions and of taxes gradually over extended periods of time,
avoiding tremendous transfers of funds on any one date and consequent money stringency.




SECRETARY OF THE TREASURY.

55

The execution of the certificate and Liberty loan ]program was
made possible by the creation of a great system of depositary banks,
referred to more in detail elsewhere in this report undcj.' the heading
'^Public Moneys and Special Depositaries." Bank deposits in
America are distributed among some 30,000 banks and trust companies scattered throughout the country. By the designation of
nearly 10,000 banks and trust companies as special depositaries of
the Government and the sale to them and to many others of certificates
of indebtedness, the Treasury tapped the whole credit resources of
the people and made them available to the Government for the winning of the war in the intervals between the great Liberty loans and
in anticipation of income and profits taxes. Through the development of this plan, banks and trust companies are having increasing
success in the distribution of the securities to their customers.
The issues pf certificates have fallen into three general classes, (I)
those issued in anticipation of loans, (2) those issued in anticipation
of income and profits taxes, and (3) special issues. The special issues
may be subdivided into three groups, (a) those issued under the
Pittman Act, (&) issues payable ,in foreign currency and discussed
elsewhere in this report under the heading "Loans to Foreign Governments," and (c) special issues of very short maturity for temporary
purposes.
°
The aggregate amount of all issues since the beginning of the war
to October 31, 1919, was $32,706,964,903.34. Of that sum $18,657,988,000 was placed with the public in anticipation of sales of bonds
and notes, $6,060,866,000 in anticipation of tax payments, and
$7,988,110,903.34 comprised the special issues: The amount outstanding on October 31, 1919, aggregated $3,736,352,300.37, consisting, as shown by the following table, of $1,827,586,500 tax certificates,
$1,634,671,000 loan certificates, $255,475,000 issues under the Pittman Act, $15,741,300,37 other special issues, and $2,878,500 matured
certificates on which interest has ceased:.
.
Statement of Treasury certificates outstanding Oct. 31, 1919.
Tax certificates:
Series T-5 dated June 3, 1919, due Dec. 15, 1919
Series T-7 dated July 1, 1919, due Dec. 15, 1919.

,

Total tax certificates due Dec. 15, 1919

.
$236, 760, 500. 00
510,109, 000. 00
746, 869, 500. 00

Series T-8 dated July 15, 1919, due Mar. 15, 1920

322,116^ 500. 00

Series T-9 dated Sept. 15, 1919, due Mar. 15, 1920

101,131, 500. 00>

Total tax certificates due Mar. 15, 1920
Series T-lO dated Sept. 15, 1919, due Sept. 15, 1920




.^.

423, 248, 000. 00
657, 469, 000. 00

56

.

REPORT ON T H E FINANCES.

Loan certificates:
Series A-^1920 dated Aug. 1, 1919, due Jan. 2, 1920. .
Series B-1920 dated Aug. 15, 1919, due U n . 15, 1920
.....
Series C-1920 dated Sept. 2, 1919, due Feb. 2, 1920... .^
Total loan certificates series 1920

$532, 024, 500.00
530, 329, 000. 00
572, 317, 500. 00^
1, 634, 671, 000. 00

RECAPITULATION.

Tax certificates due Dec. 15j 1919
T a x certificates due Mar. 15, 1920
Tax certificates due Sept. 15, 1920.

'.

:
:-,--.-..

. Total tax certificates.
•
Loan certificates due Jan. 2, Jan. 15, and Feb. 2, 1920..
Total tax and loan certificates
Pittman Act certificates....
.Other special certificates. .
'
Matured certificates on which interest has ceased
Total outstanding Oct. 31, 19l9.

1, 827, 586, 500. 00
1, 634, 671, 000. OQ
:

'.•..
'.
.\'

$746, 869, 500. 00
423, 248, 000. 00
657; 469, 000. 00

3, 462, 257, 500. 00
255, 475, 000. 00
15, 74.1, 300. 37
2, 878, 500. 00
3, 736, 352, 300. 37

The certificate program subsequent to the Victor}^ Liberty loan is
discussed in the beginning of this report. In an.ticipation of that loan
there were 10 issues of certificates offered in the main at fortnightly
intervals over the period from December 5, 1918, to May 1, 1919.
The plan for these issues was announced, as far as it could be determined in advance, in the following letter from Secretary McAdoo to
the banks and trust companies of the country:
WASHINGTON, November 27, 1918.

DEAR S I R : I am sure that every patriotic banker as well as ever^'' patriotic citizen
in the United States recognizes the imperative duty of financing the Government
not only to the conclusion bf the armistice b u t until peace has been determined and
war bills have be^n paid. Until the peace treaty is signed a splendid army of
American heroes must be kept on duty in France as a guaranty that the kind of peace'
for which America has fought will be secured. The expense of maintaining our
forces in .'Europe, both upon land and upon sea, and other war bills, must be paid.
They can not be paid unless the Treasury continues to have the adequate support ^
of the bankers and people of America.
I am sure that I do not have to emphasize the appeal to the patriotism of America.
That patriotism is not of the incomplete or unfinished sort; it will not be content
with half doing the glorious work we have so auspiciously begun. I t will be content
only with a realization of all of the fruits of our glorious victories, and this can not
be accomplished until the war has been finsinced and peace—the handsome peace
which America wishes to secure to the world—has been escorted back to America
as well as to the other nations of the world.
I t is, therefore, necessary that a rational program of Government financing shali
be executed. The policy adopted in February last and again in June of laying before
the banking institutions of the country as nearly as may be the requirements of the
Government during the period prior to the third and fourth Liberty loans m e t
with very gratifying response, which provided adequately for the necessities of t h e
Government without strain or inconvenience; and I am writing now to inform you
of the program for the ensuing five months, so far as one can be made at this time,
in order that every bank and trust company in the United States may haye adequate




SECRETARY OF THE TREASURY.

-57

notice and be able to prepare itself to meet patriotically the requirements of t h e
Goyernment. I am sending a similar letter, to every bank and trust company in the
United States.
The expenditures of the Government, excluding transactions i n the principal of
the public debt, during this fiscal year, beginning July 1, 1918, to and includingNovember 23, 1918, a period of less than five months, amounted to $8,213,070,568.65,
according to the daily Treasury statements. Such expenditures during the current
month of November to and including November 23 amounted to $1,577,148,144.93,.
or at the rate of nearly $2,000,000,000 for the month. The proceeds of the fourth
Liberty loan in excess of the arnount of Treasury certificates issued in anticipation
of that loan have been exhausted; and the remaining installment payments to be
rnade on; subscriptions to the fourth Liberty, loan will but little more than cover
the Treasury' certificates of indebtedness issued in anticipation of that loan and as
yet unpaid. Evidently some time must pass before the readjustment from a war
to a peace basis can reflect itself in material diminution of the daily csish outgo from"
the Treasury. Indeed, the wise policy of prompt liquidation, of contracts might
actually result for a time in the acceleration of demands upon the Tireasur^^ whilestrengthening and making more liquid, the banking position of the country.
Uncertainti^sr^dth respect to pending revenue legislation make it impracticable
and inexpedient to borrow further at this time in anticipation of. taxes. In this
period of readjustment it would be difficult to set in motion any plan for the continuous sale of Government bonds, and it seems that the wise policy vdll be to planfor ohe more great popular campaign in the spring for the sale of bonds, which should
be of short maturities, and meanwhile to provide for the Government's necessitiesby the issue of Treasury certificates at fortnightly intervals. The firist issue of the:
certificates will be dated December 5, 1918, and will mature-May 6,1919, with interest
at 4^ per cent; and similar issues, i t is expected, will be made on Thursday of every
other week following December 5.
I t is not at this moment possible to forecast the cash disbursements of the Government during the peiiod of some five months which must intervene before the proceeds
of another great public loan could reach the Treasury, nor, therefore, to announce
at this time the minimum amount of each fortnightly issue of certificates further
than'to say that in all probability it will not be less than $500,000,000 nor more than
$750,000,000. The Federal reserve banks will advise all National and State banks
in their respective districts of the amount of certificates' which they are expected
to take from time to time in pursuance of this program, which amount can be figured,
roughly to equal 2^ per cent of the gross resources of each bank and trust company
for every period of two weeks, or a tbtal of 5 per cent monthly.
I appeal with confidence to the patriotic bankers to continue to furnisJi the financial!
assistance imperatively required by the Government to support America's sons on
land and sea until the final consummation of their wonderful victories.
. Cordially, yours,
'W. Gr. MCADOO.
To the P R E S I D E N T OF THE B A N K OR T R U S T COMPANY A D D R E S S E D .

The maturity of each issue in anticipation of the Victory loan was
five months (except series V K, where the maturity exceeded five
months by only one week) and the rate of interest was 4^ per cent..
The aggregate amount issued was $6,157,589,500, which has all been
retired from Victory note subscriptions, cash in bank, or refunding
operations. Some of the issues were called for redemption in advance
of maturity and in other cases, when possible, offers were made to
redeem the certificates in advance of maturity at the option of the




58

REPORT ON T H E FINANCES.

holders. To the extent that such calls were made or such offers
accepted, the retirement of the certificates was facilitated, and the
expense of interest charges to the Government was saved. This
policy has been consistently pursued whenever the position of the
Treasury would permit.
,
Including^ two issues mentioned in the pr^eyioiis; arinuai report of
the Secretary of the Treasury, there were eight issues of certificates,
aggregating $3,354,787,500, in anticipation of income and profits
taxes payable in the calendar year 1919. There have been three
issues, aggregating $1,081,675,000, in anticipation of income and
profits taxes payable in the calendar year 1920. The first issue on
August 20, 1918, in anticipation of 1919 taxes, bore interest at the
rate of 4 per cent. All succeeding issues were at the rate of 4J per
cent until September 15, 1919, when the rate for the series inaturing
in six months, series T 9, was reduced to 4J per cent. The maturities
of all the outstanding issues of tax certificates coincide with the
dates for the payments of income and profits taxes. The outstanding
issues mature on December 15, 1919, March 15, 1920, and September 15, 1920. December 15, 1919, is the date for the payment
of the fourth installment of income and profits taxes for the year
1919. March 15 and September 15, ,1920^ are the first and third
installment dates for the payment of inconie and .profits, t
for
the year 1920.
I n offering tax certificates to the public, every possible effort has
been made to advise taxpayers of their availability. About the
middle of January, 1919, in advance of the passage of the revenue
act approved February 24, 1919, and when it was uncertain what
installment dates for the payment of income and profits taxes would
ultimately be carried in the new law, the Treasury offered an issue
of certificates with sufficient elasticity as to the date when they would
be receivable in payment of such taxes to cover any possible changes
in the bill as it was then pe,nding" in the Congress. The issue was
described in the following letter addressed to taxpayers:
WASHINGTON, January 14, 1919.

DEAR S I R : In order that those who will have income and profits taxes to pay may
prepare themselves in advance for these payments and accumulate gradually the funds
necessary to meet them, an issue of 4^ per cent Treasury certificates of indebtedness,
dated January 16, 1919, and maturing June 17, 1919, is being offered for subscription.
These certificates, which are more fully described in the inclosed Treasury Department Circular No. 133 (Exhibit 26, page 280), will be accepted at par with an adjustment
of accrued interest in payment of income and profits taxes when payable at or within
sixty days before the maturity of the certificates (i. e., on and after April 18 and on
or before June 17). Under the existing revenue law, income and profits taxes are
payable on June 15, except in the case of those corporations wnich pay their taxes on
the basis of a fiscal year other than the calendar year. Under the pending revenue
bill aspassed by-the Senate aninstallment of such taxes is payable on June 15, except
in the case of those persons and corporations who pay their taxes on the basis of a fiscal




SECRETARY OF T H E TREASURY.'."'

59-

year other than the calendar year; and I am informed that the House conferees have
indicated their acceptance of this provision of the Senate bill.
These Treasury certificates are absolutely payable in cash at rnaturity if the holder
does not make use of them in payment of taxes, and the United States reserves no
option to call them for redemption before maturity. They carry exemption from State
and local taxes, except inheritance taxes, and from the normal Federal income tax.
These features, together with the liberal interest rate and short maturity,.make these
certificate&'particulaily-desirableas aHemporarydnvestmeht for o t h e i ^
A similar issue of certificates dated November 7, 1918, maturing March 15, 1919, was
announced on November 6 and it became necessary to close the issue on November
27, although very heavy subscriptions were being reported daily and the demand had
by no means been satisfied.. The total amount of subscriptions allotted for that issue
was $794,172,500 and it was not believed desirable to have any greater amount of
certificates maturing on that date.
.
Taxpayers and others who purchase these certificates will not oidy make a wise
investment of their money insuring a liberal return and early repayment, but will be
performing a service of patriotism b y lending material aid to the Government in meeting the tremendous expenditures growing out of the war. At the moniiBnt the armistice
was signed the effort of the United States in men and materials was about reaching
the peak, and the bills which were incurred during that period are coming fast into
t h e Treasury. The expenditures of the Government during the si::t months ended
December 31 exceeded ten and one-half billion dollars and in the month of December
alone exceeded two billion dollars. I t is safe to say that without the unstinted effort
which was made by America the war could not have been brought as promptly to a
successful conclusion. We shall'not now. grudge the-payment of the bills-which were
incurred to bring about that glorious result.
Very truly, yours,
CARTER GLASS, Secretary.
To the TAXPAYER ADDRESSED.

Wide publicity has been given to all offers of tax certificates from
time to time, in order that taxpayers might paitriotically assist the
financial operations of the Government and at the same time serve
their own convenience by saving in anticipation of their taxes by
means of a wise investment, assuring a liberal return. Similar efforts
to obtain the largest possible distribution among invcistors of loan
certificates have been made in respect to all the issuers subsequent
to the Victory loan. The success of these efforts for. the distribution of loan and tax certificates appears from the fact that of
$3,465,136,000 of loan and tax certificates outstanding on October
31 the Federal Keserve Board's reports show that the holdings of all
reporting member banks as of November 7, 1919, amounted to
only $847,558,000. From the fact that on the average 80.5 per cent
of the subscriptions for certificates are made by qualified depositaries
and that on the average 79 per cent of the Government deposits
during the period of the offerings were held by the banks included
in these reports to the Federal Reserve Board, the Treasury estimates
t h a t 63.5 per cent of the certificates outstanding, or $2,200,361,360,
were originally subscribed for by all reporting memb(ir banks, and
that therefore they have distributed among investors about 62 per
cent of the certificates originally subscribed for by them-




60

EEPORT ON T H E FINANCES.

A table showing in detail all the issues of certificates of indebtedness, from the beginning of the war to October 31, 1919, is attached
hereto as Exhibit 12, page 258. Public announcements of the variousofferings of c'^rtificates of indebtedness in anticipation of loans and
taxes, togethjcr with calls for redemption, before maturit}^, and offers-.
to redeem at.^he option of the holders, which have been issued sincethe previous--annual report of the Secretary of the Treasury, are likewise attached as Exhibits 13 to 41, gages.266 to 290.
WAR-SAVINGS CERTIFICATES.

Sales of war-savings stamps and certificates and thrift stamps
have proceeded throughout the year, and the Treasury plans the continuation of this wholesome movement with unabated vigor in theinterest of savings and investment in Government securities.' Thecampaign was conducted in the calendar year 1919 under an organization remodeled, according to the plan evolved in the latter part of
1918 and described in the previous report of.the Secretary of the
Treasury. The work i n the field has been in charge of organizations
for each of the several Federal reserve districts under the direction
and supervision of the governors of the respective Federal reservebanks. Each governor appointed a district director. I n some districts a ''director of war-loan organization'^ was appointed ih charge
of all war-loan activities, including those relating to the war-savings
securities, but in other districts a separate ''director of savings" was
designated. At the beginning of the calendar year 1919, a savingsdivision was created in the Treasury in charge of a director of savings.
This division is part of the Treasury's War Loan Organization and
is under the general supervision of the Treasury director of War Loan
Organization.' The governors of the Federal reserve banks areresponsible for the conduct of the savings rnovem^ent in their respective districts, and the work is carried on under plans adapted to the
special needs of the particular districts, subject to general principles
outlined by the Secretary of the Treasury. The Treasury savings
division, initiates or executes the work of a general or national character, coordinates the activities in the districts, and acts as a service
bureau, furnishing the district organizations with suggestions and.
material for local use.
No change was made in 1919 in the thrift stamps used in 1918, thestamps being undated and non-interest-bearing securities. The 1919
war savings stamps and certificates are identical in terms with thestamps and certificates of the 1918 issue, except for the fact that they
mature on January 1, 1924, instead of January 1, 1923. The form,,
however, was changed. The 1919 stamps are smaller in size, blue in
color, and bear the portrait head of Benjamin Franklin.. The terms-




SECRETARY OF THE TREASURY.

61

of the issue appear in Department Circular No. 128, dated. December
18, 1918, attached hereto as Exhibit 42, page 291. ..<K.- • ^
I n order to meet the demand for war-savings securities in single
denominations larger than $5, the Treasury, in July, 1919, announced
t h e issue of war-savings certificates of two additional denominations,
one of $100 and the other of $1,000, maturity value. These certifi-cates, which for convenience were described as "Treasury savings
•certificates," are a part of the 1919 series of war-savings certificates
and are subject to the provision of the authorizing act that it is not
lawful for any one person at any one time to hold war-savings certificates of any one series (of whatever issue or denomination) to an
aggregate amount exceeding $1,000, maturity value. The Treasury
savings certificates are war-savings certificates of larger denominations, and they have corresponding terms as to increasing sales and
redemption values each month and the same period of maturity.
The certificates are all registered, by means of detachable registration
stubs, and the registration records are kept in the Treasury rather
than in the post offices. I t was also provided that the redemption
should be made by the Treasury direct rather than through the post
offices. Like other war-savings certificates, these certificates may
be redeemed prior to maturity, but they differ in that they can not be
redeemed before the second calendar month following the month in
which they were purchased. Treasury Department Circulars Nos. 143
a n d 149, dated July 1, 1919, and J u l y 31, 1919, respectively, attached
hereto as Exhibits 43 and 44, pages 295 and 302, describe the new
certificates in detail and prescribe the terms and conditions governing
their issue and redemption and the rights of their holders. The
sales of these certificates up to the present indicate that they meet
a real demand.
The cash receipts from the sale of thrift and war savings stamps
and Treasury savings certificates, using the figures in the daily
Treasury statements for the last day of each month, from the first
month of their issue to October 31, 1919, have been as follows:
1917—December.
1918—January
February
March
April
May
June. July
August
September
October
November.
December.




.'

.
^

$10, 236, 451, 32
24,559, 722.15
41,148, 244.22
53, 967, 864, 49
60,972, 984.12
57, 956, 640.12
:
58, 250, 485.00
- . . . . , 211, 417, 942. 61
. . 129, 044, 200.62
97, 614,581.48
89, 084, 097.31
73, 689, 846.00
63,970, 813.47

"

1971,913,872.91

62

REPORT ON T H E FINANCES.

1919—January
February
March....>
April.....
May...
June
July
August
September
October
Total

............:....
.....:..............

:

:

$70,996,041.14
15,816,539.27
10,143,081.68
9,572,728.48
6,558,198.33
5,269,535.51
5,176, 865.12
..,.
6,201,164.07 ^
6, 111, 944.78 ^
7,316,467.60
$143,162,565.98
1,115,076,438.89

While, naturally, with the termination of the popular campaigns of
the- war period, which.^made instant- appeal .to > the patriotic, impulse
of that time, sales dropped sharply to a lower level, the upward trend
appearing in the figures for the recent months indicates that the
efforts of the savings organization to combat the present tendency to
waste and extravagance which has come as a reaction to the wartime economies are now having their effect.
The redemptions for the same period have totaled $204,391,451.45.
These redemptions were largely of the issues preceding 1919, and
it is felt that they represent chiefly the release of securities purchased
as a result of the war-time appeal by persons who were not prepared
to hold them permanently as an investment.
The measure of the usefulness of the war-savings organization
and of the savings movement is not to be found in the sales of war
savings securities alone. The war-savings organization is charged
with the duty of carrying oh a movement for saving and investment
in, and holding of. Government securities of all kinds—Liberty bonds^
Victory notes, and Treasury certificates of indebtedness as well as
war-savings securities. - These activities of the savings organization
are specificaUy contributory to the sale from time to time of Government securities of all kinds to finance the remainder of the war bills
and the floating debt. The savings movement has two objects—
first, to sell the war-savings securities; and, second, to develop and
protect the secondary market for all war issues, to assure the permanence of the war-time achievement in selling Government securities
to millions of investors among the American public, to increase the
number of such investors, and to build up permanently habits of
regular saving and investment in United States Government securities. The two objects focus to the same point, namely, promoting
the steady purchase and holding of United States Government
securities of all kinds. In addition to selling the war-savings securities, the organization carries on a work largely of an informational
character designed to protect the value of the outstanding war loans
and to prepare .the marke,t. for new .offerings, This involves a cam-




SECRETARY OF THE TREASURY.

63

paign to defeat the efforts of traffickers who attempt to obtain the
securities for less than the market prices or in exchange for worthless
stocks or shares in fraudulent promotions, and also the dissemination of general information as to the value and desirability of Government securities. The most is made of every legitimate opportunity to impress the importance of saving and investment in Government securities upon the public through established publications and
through special printed matter where it is believed that results can
be obtained thereby. The present high cost of living has presented
a real opportunity of service for the movement to enforce the realization that increased production, saving, and investment present the
most direct and potent means of solving this pressing economic
problem.
The organization has accomplished a very important work in
organizing the savings movement in the schools of the country. I t
has been realized that the schools are a most important means of
inculcating the saving habit and of building up for the future a body
of people who have the habit of saving and the tendency to turn to
Government securities for investment. The Department of the Interior, through its Bureau of Education, is rendering valuable cooperation. Important progress has been made in securing the cooperation of State superintendents of education and in obtaining the introduction of savings material in textbooks, and it is expected that
next year the study oi saving will be a part of the regular course in
a very great number of public schools and other educational institutions throughout the country. The schoolrooms, to a large degree,
have also been organized for the regular purchase of thrift and warsavings stamps.
Another very important work has been in establishing the movement in industrial and commercial organizations. A la:rge number
of associations, plants, and mercantile establishments have given the
savings movement their indorsement and have organiz.ed savings
societies for the regular purchase of the war-savings securities. The
movement has also been indorsed and organized in women's clubs,
fraternal organizations and labor bodies, and assistance has been
received-frbm the churches. Through the valuable cooperation of
the Department of Agricultiire, effective work has been done among
agricultural organizations. The cooperation of the schools and the
other organizations described not only has great present value, but it
promises for the future a_ means to carry on the movement with a
reduction of expense and of direct effort on the part of the Treasury
and district savings organizations.
The sale of the war-savings securities will be continued in 1920,
and the new series are now in course of preparation. SubstantiaUy
the same thrift stamps and thrift cards now iii use wiU be used




64

; REPORT ON THE FINANCES.

in 1920. The war-savings stamps and certificates and the Treasuryi>
savings certificates for 1920 wiU be substantiaUy the same in terms-;
and conditions, but some alterations wiU be made in the forms. The
1920 war-savings stamp will be carmine in color/ wiU bear the head
of George Washington, and the size will approximate the larger stamp
used in 1918. The Treasury savings certificates, $100 denomination,=
wiU be orange in color, and the $1,000 denomination wiU be green.
The Treasury savings division was recently reorganized, and. a
similar reorganization is now in process in the' districts, as a consequence of which it is hoped that they will render greater and more
effective service in 1920, notwithstanding the fact that the expense
of their operations will be materially less than in formcT years.
Detailed provisions for the surrender and exchange, by agents, of
th(3 war-savings stamps, series of 1918, and for the continuation,
appointment and operations of agents for the year 1919 appear in
Department Circulars Nos. 126, 130, and 131, the first dated-December 10, 1918, and the latter two December 23, 1918, which are
attached as Exhibits Nos. 45, 46, and 47, pages 308, 309 and 311.
LOANS TO FOREIGN GOVERNMENTS.

Under the acts of Congress of April 24, 1917, September 24, 1917,
April. 4, 1918, and July 9, 1918, the Secretary of the Treasury
continued to establish credits in favor of foreign Governments
engaged in war with enemies of the United States and to the extent
of credits so established to make advances to such Governments
through the purchase at par of their respective obligations. Since
the last report credits were established in favor of Belgium, the
Czecho-Slovak Republic, France, Great Britain, Greece, Italy, Roumania, and Serbia, and advances have been made to these countries and also to Cuba.and Liberia under credits previously estab-^
lished. No credits, were established in favor of Russia during the
year, nor were any advances made to that country, and the balance
of credit which had previously been established above^'the amount
of the cash actuaUy advanced was withdrawn. In certain instances,
in which the purpose was accomplished for which a credit had been
established or an advance had been made without. requiring the
total amount of the credit or the advance, the balance of credit was
withdrawn or the unused portion of the advance was repaid. Certain
other repayments were made in connection with the routine of the
accounts. None of the repayments constitutes part of a general
program of repayment by any foreign Government. The total
appropriation provided by Congress for loans to foreign Governments
is $10,000,000,000. From April 24, 1917, up to November 15, 1919,




65

SECRETARY OF THE TREASURY.

the credits established, after deducting credits which had been
withdrawn, and the cash advances were as follows:
Credits
established.

Belgium
Cuba
Czechoslovakia
France
Great Britain
-.1
Oreece
Italy
y.
Liberia... .
Ronman'a Russia
Serbia

Cash advanced.

I $338,745,000.00
10,000,000.00
52,690,000.00
2 2,887,477,800.00
3 4,277,000,000.00

9,647,419,494.84

Total

S343,445,000.00
10,000,000.00
55,330,000.00
3,047,974,777.24
4,277,000,000.00
48.236,629.05
1,620;922,872.99
. 5,000,000.00
25,000,000.00
187,729.750.00
'..
26,780; 465.56

9,416,371,888.55

-

"i

'1,610,922,872.99
26,000.00
25,000,000.00
187,729,7.50.00
26,780,465.56

Other charges
agamst credits.

Balances
under
established
credits.
$4,700,000.00

"$ii6,'o6o,'66i).'66"
48,236,029.05

158,236,629.05

2,640,000.00
50,496,977.24
10,000,000.00
4,974,000.00

72,810,977.24

1 $10,000 of this amount repaid by the Belgian Government.
2 $12,147,000 of this amouni; repaid by the French Government.
3 $57,164,007.99 of this amount repaid by the British Government.

I t is difficult to exaggerate the great purposes served and the great
results accomplished by these advances to foreign Governments. I n
the most critical stages of the war they immeasurably assisted America's gallant associates in obtaining the munitions, supplies, and
equipment that were so imperatively needed to meet the enemy's
offensives or to carry the fighting into his territory, and probably of
equal importance was the fact that they served to hearten the allied
armies and peoples by the Iviiowledge that the vast credit resources
of the United States were being shared with them for the effective
prosecution of a common cause. Conversely, it is not difficult to
estimate the disheartening effect that these loans of biUions and the
willingness of America to lend for the prosecution of the war as much
more as was needed to the limit of her ability must have had upon
the spirit and morale of the peoples and armies of the enemy.
I n the beginning, before the creation of our great Army, the principal assistance of America'was necessarily through foreign loans,
and it was then that these advances proved so very potent in contributing to the final victory. Loans to Russia in 1917 kept that
great nation in the war and held the German troops upon the eastern
front for six precious months. Similarly in each grave crisis, whether
on the Italian front or on the battle fields of France or Belgium, the
loans from the United States gave the Allies the means of replenishing supplies and equipment, and inspired their fighting forces and
the peoples behind them witbrenewed hope and confidence and with
strengthened determination in the face of an advancing foe. The
service of these loans in assisting to hold the battle fronts of Europe
until the might of our heroic Army could be felt effectively, made
possible, beyond the shadow of a doubt, the ending of the war in the
140325—FI 1 9 1 9 — - 5




66

REPORT ON T H E FINANCES.

fall of 1918. Without this aid to "the allied Governments, the war
, unquestionably would have been prolonged, if not lost, with the
resultant great additional cost in life and treasure.
Detailed statements showing the dates and amounts of credits and
advances to foreign Governments ^are attached hereto as Exhibits
48 and 49, pages 312 and 316. , Currencies needed by the United States in France, Great Britain,
and Italy for our war expenditures in those countries continued to
be provided by the respective foreign Governments under an arrangement whereby the dollar equivalent of the amounts so provided was
made available to the respective foreign Governments for use to meet
their war expenditures in the United States, and thus the needs of
these Governments for advances from the United States were reduced
by a corresponding amount. This plan was also extended to Belgium.
The following tabulation shows the amount of foreign currencies so
placed at the disposal of the United States and the dollar equivalents
paid therefor in the United States for the period commencing during
the month of January, 1918, up to November 15, 1919:
Country.
Belgium
France
Great Britain
Italy.
Total

Francs.
2,500,000.00
" 5,709,031,418.08

Pounds sterling.

87,768,387/13/1

Lire.

97,583,742.51

Dollar equivalent.
366,300.37
1,110,138,235.98
401,393,060.05
14,425,092.25
1,526,322,688.65

In June,. 1918, the requirements of the American Expeditionary
Forces for pesetas were indicated to the Treasury to be extremely
heavy. At that time Spanish exchange was at a premium of about
40 per cent. In order to obviate the necessity of purchasing pesetas
at so large a premium a representative of the Treasury went to Spain
and in August, 1918, made arrangements whereby a syndicate of
Spanish banks agreed to extend credits up to 250,000,000 pesetas to
be availed of through the acceptance, of bills drawn by American
banks, members of the Federal Reserve ^System. In, order to avail
of this arrangement the Treasury sold certificates of indebtedness
payable in pesetas. The total amount of credits availed of and of
obligations so sold aggregated 155,000,000 pesetas. The bills were
discounted on the basis of 44 per cent interest, which, together
with the acceptance commission and certain other charges, made
the total cost of the money at the rate of about 5J per cent per
annum. Partly as a result of the credits so arranged the rate for
Spanish exchange soon began to drop, and the Treasury has lately
reduced by 80,000,000 pesetas the amount of its peseta obligations.
So far as necessary this was done by the purchase of pesetas in the
exchange market at par or less.




SECRETARY OF THE TREASURY.

67

All interest which has become due on the obligations of foreign
Governments held by the United States has been paid in cash with
*a relatively unimportant exception pending adjustm.Qnt. To the
extent that such interest has not been paid from other resources of
the foreign Governments concerned it has been paid from the proceeds of loans made by the United States Government. With the
termination of the war and the rapidly approaching exhaustion of
the appropriation it was considered necessary and appropriate for
the Secretary of the Treasury, as contemplated by the Liberty bond
acts, to take up with the foreign Governments the funding of the^
demand obligations now held by the United States into long-time
obligations and the funding during the reconstruction period, say for
two or three years, of interest on the obligations. In view of the present derangement of the foreign exchanges it would add to the difficulties of the situation and would not be to the advantage of the
United States to require cash payment of interest.
The authority given by first, second, third, and fourth Liberty bond
acts to make loans to foreign Governments was for the purpose of
national defense and the prosecution of the war. In order to assist
in meeting needs growing out of the war, the Treasury recommended
the enactment of legislation extending the authority \^ithin certain
limits b u t without increasing the aggregate amount of the appropriation. By the Victory Liberty loan act approved March 3^
1919 (Exhibit 7, page 235), the Secretary of the Treasury was authorized, within the $10,000,000,000 previously appropriated, to
make loans to foreign Governments then engiaged in \v^ar with enemies of the United States for the purpose of providing for purchases
of any property owned directly or indirectly by the United States
not needed by the United States or of any wheat, the price of which
has been or may be guaranteed by the United States. The Secretary of the Treasury is empowered to establish credits under this
auth ori t}^ untU the expiration of 18 months after the proclamation
df peace. Thus far no credits have been established under this
provision.
'
The Inter-Ally Purchasing Commission, constituted in August^
1917, through formal arrangements entered into by the Secretary of
the Treasury with the approval of the President on behalf of the
United States with representatives of the Governments of the Allies,
was terminated on December 14,1918, and such of its functions- as it
was desirable to continue were taken over by the Treasury. These
functions came to an end when the foreign Governments ceased
making new purchases to be paid for out of advances from, the
Treasury.




68

REPORT ON TFIE FINANCES.
WAR LOAN ORGANIZATION.

The flotation of the Victory Liberty loan and the sales of certificates
of indebtedness were conducted through the same form of organization which made such memorable successes of the previous offerings
of war securities to the public. Under the general direction and
guidance of the Treasury, the 12 Federal reserve banks, as fiscal
agents of the United States, continued to serve as the centers of the
War Loan Organization in their respective districts throughout which
were organized Liberty loian committees composed of volunteers
who operated in their respective localities in behalf of the Victory
campaign.
During the months following the armistice and preceding the
offering of the Victory loan, there developed a very natural desire
on the part of the members of the War Loan Organization throughout
the country, who had left their usual pursuits in life to serve the
Government in the critical crisis of war, to return to their normalactivities. These men and women were volunteers in the great
cause of liberty; their families and businesses had been neglected and
personal matters required their attention. I t could not be expected
that they would continue indefinitely in the volunteer service of the
Government at the expense of every personal consideration and of
their own livelihood. The patriotism and mettle of these workers
were so well known to the Treasury that it was believed that an
appeal for one more and final effort in a great popular campaign
would receive a gratifying response.
On December 20, 1918, a few days after assuming the office of
Secretary of the Treasury, I issued the following appeal for the continued support to the Treasury of the War Loan Organization:
In assuming the office of Secretary of the Treasury, I desire to say a few words to the
American people, and particularly to the splendid organizations of men and women
whose unselfish labors, under the leadership of my great predecessor, have made the
story of our war finance one of the most glorious chapters in the history of America's
-part in the war.
Millions of Americans have contributed in the most vital, tangible, and necessary
way to the winning of the war. They have loaned their dollars to their country
with no small sacrifice of personal comfort and enjoyment, and have given largely of
personal effort and service. For all time we have disproved the slander that Americans are a money-loving people, incapable of risiug above materialistic thiugs. In
the 18 short months of the war the American people subscribed for $18,000,000,000 of
Liberty bonds and war-savings certificates. The banking institutions and the people of the country financed the requirements of the war in anticipation of the Liberty
loans and of the taxes for the fiscal year ended June 30, 1918, by the purchase of a
total of 112,500,000,000 of Treasury certificates of indebtedness, all of which had
been retired or provided for out of taxes or bond issues at the time the armistice was
signed.
The expenditures of the Government, excluding transactions in the principal of
the public debt, during the current fiscal year, beginning July 1,1918, to and including




SECRETARY OF THE TREASURY.

,

69

December 16, 1918, exceeded $9,600,000,000. Expenditures in the month of November nearly equalled $2,000,000,000, and in the current month ( f December, to
D
and including December 16, exceeded $1,000,000,000. The proceeds of the fourth
Liberty loan so far received have all been spent and the remaining installments payable on subscriptions to that loan will be needed to meet maturing Treasury certificates of indebtedness issued in anticipation of that loan and as yet unpaid. Since
the armistice was signed Secretary McAdoo has estimated that the cash outgo from the
Treasury during the current fiscal year ending June 30, 1919, will amount to
$18,000,000,000 and much more than half of that amount has already/' been expended
in the five and one-half months which have elapsed. The treaty of i»eace has not yet
been signed, nor any important part of our Army demobilized. Production of war
materials and supplies had reached the peak at the time the armistice was signed and
the bills incurred during that period of maximum production must be paid.
The Treasury must issue another large loan before the end of the fiscal year, and I
am entirely in accord with the policy aheady outlined—that this loan should take the
form of securities of short maturities.
It is vitally important that the Treasury should continue in a most energetic way
the sale of war savings stamps and certificates. Among the valuable and much
needed lessons we have partly learned from the war is that of thrift and intelligent
expenditure. Thrift helped to win the war and will help us to take full advantage of
a victorious peace. It is therefore imperative that we do not rela^i: into old habits
of wasteful expenditure and imperative that the habit of reasonable living (on the
part of those of both large and small means) so easily acquired during the war period
be continued.
Millions of our people have become holders of bonds of their Government, but some
of them seem to feel that they are under no further obligation to retain these bonds,
and they are selling them and using the money for unnecessary purpoees or exchanging
them for other securities of very doubtful value. So long as the United States needs
to sell bonds those who hold the present issues should not dispose of them except
under the spur of urgent necessity. They have invested in the best security in the
world, and it is both to their own interest and to that of their Government that these
securities be retained.
Organizations of patriotic men and women numbering probably well over 2,000,000
have been created and have given their time and services to the sale oi Liberty bonds
and war-savings certificates. These great bodies of earnest and patriotic people,
called together almost at the outset of the war and augmented continually by new recruits, have accomplished a task which seems almost superhuman. My admiration
is great not only for the work accomplished but for the spirit in whicb it was accomplished. It is my earnest wish to retain and continue these great organizations until
the work has been completed.
We face this work at a time when we are handicapped in many ways. There is no
doubt that there is throughout the country a feeling of relaxation—;a feeling of selfsatisfaction at the work already performed and a strong and not unrcjasonable call to
take up once more individual and business interest and activities. The organizations were prepared for the task which would have confronted them had the war
continued throughout the year 1919, or longer, and I am confident that despite these
handicaps they will not now relax their efforts and leave the task unfinished. Victory has come to us earlier than we might reasonably have expected, but victory will
not jCause us to neglect the completion of that work which made Adctory possible.
Our men on the other side still have their work before them and so have we. They
will not leave until the task is fully accomplished, nor shall we.
I am sure then that the Treasury Department can, with confidence, offer another
Liberty loan, and continue the sale of war-savings certificates kno\^ing that the or-




70

.

, REPORT ON THE FINANCES.

ganizations will respond once more to the call for service and will at once prepare the
ground and sow the seed so that the harvest may be abundantly fruitful.

The above statement was later followed by an announcement that
the Victory loan would be the last Liberty loan; that is to say, the
last war loan floated by means of a great popular campaign. I t was
anticipated that necessary future borrowings could be made in the
form of certificates of indebtedness which, if need be, might be refunded by the issue of notes or bonds without the aid of another
popular campaign, such as those of the Liberty loans.
T h a t statement of policy saved the Liberty loan committees from
disintegration, and saved the Victory loan from failure, because it
€ould not have been floated as a popular issue without the services
of these volunteer workers. As was to be expected from men and
women of such proved sterling worth and exalted love of country,
they answered the Treasury's call with definite assurances that a
supreme effort would be made by every worker to make the loan a
success that was comparable with the results of the issues sold during the period of actual warfare. These pledges were entirely fulfilled and, with the disbandment of this great volunteer army of
workers, the Treasury desires to make due acknowledgment of the
value of their patriotic service and to express its sincere gratitude
for the loyal and effective work which made the unprecedented
results of the loans possible.
The Victory loan campaign conducted by the War Loan Organization
pointed out the great investment value of the notes, and its keynote
was an intensive call to the patriotism of the people to ''finish the
j o b ' ' with the largest possible distribution of the securities. Banks,
bankers, trust companies, business men, associations and societies,
and thousands of men and women throughout the country patriotically cooperated with the Treasury and the War Loan Organization
in making the last popular loan a splendid and unqualified success.
Men and women in every part of the land patriotically and unselfishly devoted their best efforts through days of unflagging labor to
the service of the Government, and richly earned the Nation's
gratitude.
'
The organization for the sale of war savings securities is discussed
elsewhere in this report under the heading ^'War savings certificates. '^
After the conclusion of the Victory loan, Lewis B. Franklin, of New
York, who had served as director of the War Loan Organization from
the beginning, resigned to return to private life, and was succeeded
by John H. Mason, of Philadelphia, who had been a member of the
Liberty.loan organization of the Philadelphia Federal Reserve district, and who since the fall of 1918 had served as director of tho
organization in that district.




SECRETARY OF THE TREASURY.

71

War loan imhlicity.
The publicity campaigns conducted by the War Loan Organization
of the Treasury in the interest of the five war loans are without parallel in history. The campaign in behalf of the Victory issue was as
intensive and widespread as those for the previous loans. I t embraced every avenue of publicity and propaganda. -A.U media of
arousing the interest and inviting the attention of the people to the
imperative needs of the Government and the great value of the Victory notes as a means of saving and investment were utilized.
Machinery drafted for publicity purposes ranged from the seeiningly
insignificant subscriber's button to the mightiest engines of war from
land and sea. The printed and spoken word of men prominent in all
walks of life and the greatest art of the Nation were m.arshaled into
service. The combined result was an agency that foicibly carried
the message of the Treasury into every home in the country.
Newspapers, magazines, trade journals, and other publications
gave unlimited space in their news and advertising columns to the
interest of the loan. Press associations carried columns of reading
material. Millions of posters designed by leading artists, street-car
advertising cards, and innumerable booklets were distributed. Five
thousand widely known men and women spoke in behalf of the issue
under direction of the Speakers' Bureau of the Treasury. More than
100,000 clergymen of all denominations delivered Liberty loan sermons, while Four-Minute Men to the number of several thousand
spoke dafly in theaters and at other places of assembly,.
, War exhibit trains traveled from city to city carrying American,
aUied, and captured German war materiel. Aerial demonstrations
by celebrated aces were given in over 80 cities. Eighty-five thousand
captured German helmets were presented to salesmen as prizes.
Medals cast from German cannon were presented as rewards to
workers. An honor flag was granted to cities that exceeded their
quotas.
Theatrical managers and members of the profession cooperated
heartily. Sales were made in theaters, and actors and actresses contributed of their time and talent to the success of the issue. Motionpicture theaters and stars of the profession gave their support unstintedly. Films were purchased at cost and many were contributed.
American soldiers, sailors, and marines from the camps and ships
in America and from the army of Gen. Pershing and the fleet of
Admiral Sims lent valiant aid to the campaign both as speakers and
salesmen. Picked veterans from the armies of the nations associated
with America in the war toured many cities of the country and
captured German submarines were exhibited in important ports.
The above relates to the publicity which was conducted on a
national scale. I n addition, the publicity branch of the War Loan




72

REPORT ON T H E FINANCES.

Organization in the Treasury supervised and coordinated the propaganda activities of the publicity committees in the several Federal
reserve districts, which operated under the immediate direction of
the Federal reserve banks. These committees conducted extensive
campaigns of publicity that were of especial application locally or
met the particular needs of the districts concerned. They heartily
cooperated with the central organization in Washington and rendered
service of very great magnitude and value.
Since the conclusion of the Victory loan, publicity has been continued in connection with the sale of certificates of indebtedness and
thrift stamps and war savings stamps and certificates, and in promotion of the movement for saving and investment in Government
securities.
NATIONAL W O M A N ' S LIBERTY LOAN COMMITTEE.

The successful service of the national woman's Liberty loan committee and of its effective nation-wide organization of patriotic women
was brought to a notable climax in the Victory loan campaign.
With the signing of the armistice and the natural tendency of all volunteers to feel that their services were no longer required, the disintegration of this organization seemed inevitable. In response to the
appeal of the Treasury, however, the committee and each of its State
chairmen assured the department that the organization would remain
intact and efficient as long as its services were required in the loan
operations of the Government. The entire organization redeemed
that promise by the continuation of its splendid work during the
Victory loan campaign.
The Treasury desires to record its deep appreciation of the effective
service of the patriotic women who so loyally worked for the loans
and cooperated with the department in each of the campaigns. The
committee assisted in immeasurable degree in mobilizing the womanhood of the United States and, in helping the mothers, wives, and
sisters of the heroic sons of America who went to France for the sake
of the liberty of their country and of mankind to understand the
purposes of the war and the needs of the Government to prosecute
it to a successful.conclusion. The committee and its organization
achieved a high degree of success in arousing the sentiment of the
people and in obtaining subscriptions to the securities of the Government.
LIBERTY BONDS AND VICTORY NOTES OUTSTANDING.

On June 30, 1919, the total amount of Liberty bonds and Victory
notes outstanding and deliverable was $19,126,517,200. Exclusive
of interim certificates which were issued only in connection with the




SECRETARY OF THE TREASURY.

73

first Liberty loan, this large amount was distributed in 78,710,703
pieces, represented by denominations ranging from $50 to $100,000.
Of t h a t number, 39,932,957, or more than one-half, consisted of $50
bonds and notes. The number of $50 and $100 bonds and notes
outstanding was 66,644,458, or more than 84 per cent of the total,
while the number of $50, $100 and $500 bonds and notes was
70,244,817, or more" than 89 per cent- of the total. These percentages would have been increased if the entire Victory loan had been
issued by June 30. The Victory notes were in process qi issue at
that time and only a part of the total was outstanding at the close
of the fiscal year.
The amount represented by the $50 denomination on June 30, 1919,
was $1,996,647,850; by the $100 denomination $2,671,150,100; by the
$500 denomination $1,800,179,500, and by the $1,000 denomination
$7,936,230,000. These figures show that $6,467,977,450 Was represented by $50, $100 and $500 bonds and notes, or approximately
33 per cent of the total outstanding. The combined total of $50,
$100, $500 and $1,000 denominations amounted to $14,404,207,450,
or 75 per cent of the total outstanding, whfle the combined total of
the denominations ranging from $50 to $10,000 was $18,331,117,450,
or 95 per cent of the total amount outstanding.
Whfle the large number of small bonds and notes which were stfll
outstanding at the close of the fiscal year is encouraging as indicating
the continued widespread distribution of the bonds among investors
who never before had placed their savings in securities of any.kind,
unfortunately it is unquestionably true that a large number of small
holders have parted with their bonds and notes when it was most
desirable for themselves and their Government t h a t they should hold
them as investments. There is attached hereto as Exhibit 50,
page 324, a detailed statement of denominational exchanges of all
coupon Liberty bonds and Victory notes, by Federal reserve districts, up to .September 30, 1919. The original deliveries of $50
coupon bonds and notes amounted to $2,661,386,150. Of these
there was surrendered for denominational exchange a total of $737,806,600 and there was issued on denominational exchange a total of
$189,987,000 of $50 coupon bonds and notes, making a net decrease
in the amount of outstanding $50 coupon bonds and notes on September 30, 1919, of $547,819,600. The original deliveries of $100
coupon bonds and notes amounted to $3,196,166,800. Of these
there was surrendered for denominational exchange a total of $576,129,500, and there was issued on denominational exchange a total of
$132,848,100 of $100 coupon bonds and notes, making a net decrease
in the .amount of outstanding $100 coupon bonds and notes on September 30, 1919^ of $443,281,400. The original deliveries of $1,000
coupon bonds and notes amounted to $9,417,227,000. Of these there




74

REPORT ON THE FINANCES.

was surrendered for denominational exchange a total of $445,039,000,
and there was issued on denominational exchange a total of $1,540,545,000 of $1,000 coupon bonds and notes, making a net increase in
the amount of outstanding $1,000 coupon bonds and notes of $1,095,506,000 on September 30, 1919.
I t is obviously impossible to demonstrate what proportion of the
bonds and notes surrendered for the purposes of exchange into other
denominations have been sold, b u t unquestionably a large part of
the transactions mentioned above represent sales of the small denominations. This assumption is borne out by the large amount of such
bonds or notes which were exchanged for higher denominations,
particularly the $1,000 denomination. The observation of the
Department has been t h a t in practicaUy all cases the high point of
surrender of the securities for the purpose of exchange appears to be
at or near the termination of the life of partial payment plans.
This would indicate t h a t many small investors, as soon as they complete the payment for their securities, offer them on the market for
sale. I t is a great mistake for the peoJ)le of the country, who patrioticaUy bought the Government's obligations during the period of the
war, to forego the great advantages which accrue to them by holding
their securities. They represent savings which wiU improve their
welfare, and rather than part with them they should determine upon
a course of further saving and invest their accumulations in Government obligations. I t is sincerely to be hoped t h a t all holders of
Liberty bonds and Victory notes wiU retain and increase their
investments and dispose of them only under the pressure of compelling necessity.
The following table shows in detaU the outstanding issues of
Liberty bonds and Victory notes, by denominations, at the close of
the fiscal year.
^




Liberty bonds and Victory notes outstanding, by denominations, June 30, i9l9.
Denominations.
Total.

Loans.

$50
F i r s t L i b e r t y loan 3^ per cent b o n d s of 1932-1947 a n d
i n t e r i m certificates:
Coupon.
Registered
I n t e r i m certificates
First L i b e r t y loan c o n v e r t e d 4 per c e n t b o n d s of
1932-1947:
Coupon
Registered
F i r s t L i b e r t y loan c o n v e r t e d 41 per c e n t b o n d s of
1932-1947:
Coupon
Registered
F i r s t L i b e r t y loan second c o n v e r t e d 4^ per cent
b o n d s of 1932-1947:
Coupon
Registered
Second L i b e r t y loan 4 per cent b o n d s of 1927-1942:
Coupon
:
Registered.
:
"
Second L i b e r t y loan c o n v e r t e d 4J per c e n t b o n d s of
1927-1942:
Coupon
Registered
T h i r d L i b e r t y loan 4^ per c e n t b o n d s of 1928:
Coupon
Registered
F o u r t h L i b e r t y loan 4J per c e n t b o n d s of 1933-1938-.
Coupon
:
Registered
F o u r a n d three q u a r t e r s per cent V i c t o r y L i b e r t y
loan notes of 1922-1923:
Coupon
Registered
,
.•
T h r e e a n d t h r e e - q u a r t e r s per c e n t V i c t o r y L i b e r t y
loan notes of 1922-1923:
Coupon
Registered




SlOO

$500

$1,000

$5,000

$57,946,350

$69,795,000
3,957,500

$68,018,000
4,266,000

$923,700,000
21,569,000

$24,920,000

$10,000

$50,000

$100,000

$76,700,000 $44,850,000 $112,600,000

$1,119,459,350
288,862,500
1,749,750
146,729,800
21,062,950

O

42,517,900
401,950

48,499,900
5,061,500

22,816,000
4,410,500

30,926,000
7,059,000

1,310,000
1,870,000

660,000
1,960,000

300,000

29,939,500
1,190,700

55,181,000
7,780,900

54,644,500
13,092,500

144,947,000
28,029,000

16,210,000
11,635,000

15,930,000
13,610,000

5,650,000

276,550
31,700

379,800
123,000

260,000
164,000

1,218,000
349,000

105,000
155,000

140,000
. 290,000

2,379,350
1,112,700

H

163,161,500
4,142,150

173,255,400
14,578,300

84,233,500
13,532,500

168,221,000
23,790,000

15,410,000
9,150,000

13,980,000
10,100,000

3,000,000

618,261,400
85,942,950

H

124,721,500
4,453,650

196,634,900
21,024,200

197,000,500 1,223,864,000
93,839,000
37,424,500

215,540,000
49,620,000

460,070,000
91,210,000

39,450,000 107,400,000

2,417,830,900
444,421,350

d

555,450,250
15,099,050

603,876,600
58,497,800

352,259,500 1,374,936,000
109,048,000
63,915,500

181,430,000
43,040,000

359,880,000
69,970,000

37,650,000 133,500,000

3,427,832,350
530,720,350

715,355,650
26,192,150

897,695,500
108,313,400

501,403,000 2,425,595,000
103,415,000
172,057,000

427,125,000
67,390,000

965,420,000
120,320,000

46,300,000 216,900,000

5,932,594,150
860,887,550

252,601,050
2,862,500

384,758,700
20,792,300

246,486,000
30,887,000

894,724,000
65,877,000

152,180,000
15,895,000

306,750,000
14,930,000

7,700,000

17,800,000

2,237,499,750
176,743,80q_

302,000
1,750

927,500
16,900

1,906,500
44,500

225,911,000
571,000

36,530,000
1,555,000

131,180,000
2,740,000

2,600,000

4,700,000

396,757,000
12,229,150

7,650,000.

5,600,000

316,852,000
86,588,100

;>

o
^
^
M-

CTI

Liberty bonds and Victory notes outstanding, by denominations, June 30, 1919—Continued.

Oi

Denominations.
Total. .

Loans.
$50
Total:
Coupon .
Registered
Interim certificates
Grand total
Total number of pieces (exclusive of interim
certificates)
....




$100

$500

$1,000

$5,000

$10,000

$50,000

$100,000

$1,942,272,250 $2,431,004,300 $1,529,027,500 $7,414,042,000 $1,045,840,000 $2,254,010,000
$16,616,196,050
.522,188,000
54,375,600
240,145,800
271,152,000
225,230,000
401,830,000 $192,150,000 $601,500,000 2,508,571,400
1,749,750
1,996, 647,850

2,671,150,100

1,800,179,500

7,936,230,000

39,932,957

26,711,501

3,600,359

7,936,230

1,271,070,000 2,655,840,000
254,214

265,584

192,150,000

601,500,000

19,126,517,200

3,843

6,015

78,710,703

o
o
H
W
H-l

>
o
w
Ul

SECRETARY OF THE TREASURY.

77

A recapitulation of transactions in Liberty bonds and Victory notes
from the dates of the respective issues to June 30, 1919, separately
.compiled for each loan, is embraced in Exhibit 51, page 338. These
figures indicate that in the vast operations of the five loans the department issued securities of an aggregate value of $27,868,140,100, of
which $8,814,442,250 had been retired through conversion, exchange,
purchase, etc. Including $72,819,350 of securities in process of issue
against securities canceled, the amount outstandingon June 30, 1919,
was, as stated ahove, $19,126,517,200.
There is attached hereto as Exhibit 52, page:) 344, Form L & C
265, dated October 16, 1919, which shows the dates on which interest on the various issues of Liberty bonds and Victory notes is payable and the amount of any interest coupon pertaining to any bond
or note of the Liberty issues.
CONVERSION OF LIBERTY BONDS.

On January 15, 1919, attention of the Congress was drawn to the
fact that a large number of holders of 4 per cent Liberty bonds had
not exercised the privilege of converting such bonds into 4i per cent
bonds, and announcement was made that a recommendation would
. be submitted for the extension of the privilege, which had expired
on November 9, 1918. It was believed that those who had not
availed themselves of the conversion privilege fell chiefly among the
group of small holders who were unaccustomed to bond investments
and who,^ on account of the very wide distribution of Liberty bonds,
were not reached by the general public announcements of the Treasury
and could not, except in the case of registered bonds, be reached by
department circular. The Congress adopted the recommendation of
the Treasury, and in section 5 of the Victory Liberty loan act (Exhibit
7, page 235) authorized the extension of the privilege of converting
the 4 per cent bonds of the first Liberty loan converted and the 4 per
cent bonds of the second Liberty loan into 4 J per cent bonds for such
period and upon such terms and conditions and subject to such rules
and regulations as. the Secretary of the Treasury may prescribe.
Regulations governing these conversions are embodied in Department
Circular No. 137, dated March 7, 1919, and in the supplements thereto
dated June 10, 1919, and November 1, 1919 (Exhibits 53, 54, and 55,
pages 348, 352, and 354). Under the terms of these circulars the
extended privilege may be terminated on six months' public notice
given in such ma.nner as the Secretary of the Treasury shall prescribe.
. In spite of this extension of the conversion privilege and the publicity which has been given to it, approximately $750,000,000 face
amount of 4 per cent Liberty bonds in coupon form remained outstanding unconverted on September 1, 1919. Of these coupon bonds.




78

REPORT ON T H E FINANCES.

the second Liberty loan 4 per cent bonds had no coupons attached
for interest accruing after November 15, 1919, and the first Liberty
loan converted 4 per cent bonds had no coupons attached for interest accruing after December 15, 1919. On and after said dates,,
respectively, these bonds would become exchangeable, according totheir terms, for like bonds with all subsequent coupons attached^
but if not presented for conversion until said dates, respectively,
would not be deemed to be converted until May 15 and June 15,
1920, respectively, and the bonds issued upon conversion would not
begin to bear interest at 4^ per cent per annum until said dates.
The 41 per cent bonds so issued would have no coupons attached,
and would be exchangeable on and after said dates, respectively, for
like bonds with all subsequent coupons attached.
I n order to avoid expense to the United States and inconvenience
to holders of the 4 per cent coupon Liberty bonds, and in order to
make the necessary provisions for the payment of the 4 per cent
interest accruing thereon after November 15 and December 15, 1919,.
respectively, special rules and regulations were accordingly prescribed
governing the exchange and conversion of 4 per cent coupon bonds,
of the second Liberty loan and of the first Liberty loan converted.
These rules and regulations are set forth in full in Treasury Depar,tment Circular No. 158, dated September 8,1919 (Exhibit 56, page 358)^
and are in substance as follows:
(1) Holders of 4 per cent coupon bonds of the second Liberty
loan and of the first Liberty loan converted desiring to avail themselves of the conversion privilege were urged to present them for
conversion promptly, before November 15, 1919, and December 15,.
1919, respectively, and it was provided that in that event they would
be deemed to present their bonds for conversion only and wouldi
receive upon such conversions bonds bearing interest at 4 J per cent
per annum from November 15, 1919, and December 15, 1919, re-^
spectively, with coupons attached covering interest to May 15, 1920,^
and June 15, 1920, respectively.
(2) Holders of 4 per cent coupon bonds of the second Liberty loan
and of the first Liberty loan converted desiring to avail themselves of
the conversion privilege but neglecting to present their bonds for conversionbefore November 15,1919, and December 15,1919,respectively,,
were advised to retain their 4 per cent coupon bonds temporarily
until the Treasury Department should announce that the 4^ per cent
coupon bonds of the second Liberty loan converted and of the first
Liberty loan converted with coupons attached covering interest to
maturity were available for delivery (which, it is exjpected, will beabout March 15, 1920), and then present their 4 per cent bonds,
promptly for conversion and exchange into such 4J per cent bonds...
In this connection, it was provided that all 4 per cent coupon Liberty^




SECRETARY OF T H E TREASURY.

79

bonds presented on or after November 15, 1919, and December 15,
1919, respectively, for exchange into bonds with all subsequent'
coupons attached would, unless otherwise expressly indicated in writing by the holder, be deemed to be presented for conversion into 4 J
per cent bonds, as well as for exchange, and be held in suspense
pending the date when the 4 J per cent bonds with all subsequent
coupons attached should be available for delivery.
(3) I t was further provided that, after November 15, 1919, and
December 15, 1919, respectively, 4 per cent bonds of the second
Liberty loan and of the first Liberty loan converted, with all subsequent coupons attached, would be issued in exchange for the 4 per
cent bonds for which they are expressed to be exchangeable; if specifically requested, but that it was not expected that such permanent
4 per cent bonds would be available for delivery before March 15,
1920.
The following statement, by denominations, of unconverted 4 per
cent bonds outstanding on June 30, 1919, indicates that the amount
is chiefly in the, liands of small investors: .
Outstanding June 30, 1919.
Denomination.

Second 4's.

$42,919,850
53,561,400
27,226,500
37,985,000
3,180,000
2,620,000
300,000

$167,303,650
187,833,700
97,766,000
192,011,000
24,560,000
24,080,000
7,650,000
3,000,000

167,792,750.

$50
100
500
1,000
5,000
10,000
50,000
100,000

First 4's.

704,204,350

On April 24, 1919, the privilege of converting 3§ per cent bonds of
the first Liberty loan into first Liberty loan second converted 4J per
cent bonds expired pursuant to the terms of Departinent Circular
No. 123, dated October 24, 1918, set forth as an exhibit to the previous annual report. Only $3,492,050 face amount of 4^ per cent
bonds were issued pursuant to this conversion privilege.
The following tabulation shows the total conversions of Liberty
bonds from the dates when the respective privileges arose to the
termination thereof, or to June 30, 1919:
First Liberty loan converted 4 per cent bonds of 1932-1947, Nov..15, 1917-May 15, 1918.
Surrendered for conversion:
First Liberty loan 3^ per cent interim certificates of 1932-1947... |473, 917,250
First Liberty loan 3i per cent coupon bonds of 1932-1947
89,103, 500
First Liberty loan 3^ per cent registered bonds of 1932-1947.
5, 297, 700
Total




568, 318,450

8'0

REPORT ON T H E FINANCES.

Issued upon conversion:
First Liberty loan converted 4 per cent coupon bonds of 1932-1947. $498, 275,700
First Liberty loan converted 4 per cent registered bonds of 19321947
70, 042,750
Total

•

568, 318, 450

First Liberty loan converted 4 \ per cent bonds of 1932-1947, as of June SO, 191.9.
Surrendered for conversion:
• First Liberty loan 3^ per cent coupon bonds of 1932-1947
First Liberty loan ^ per cent registered bonds of 1932-1947
First Liberty loan converted 4 per cent coupon bonds of 1932-1947.
First Liberty loan converted 4 per cent registered bonds of 19321947
Total

i

$6,118, 650
1,454, 800
344, 648, 850
53, 220, 850
405, 443,150

Issued upon conversion:
First Liberty loan converted 4^ per cent coupon bonds of 19321947
:
:
First Liberty loan converted 4^ per cent registered bonds of 19321947.
!
Total

326, 718,150
78, 725, O O
O
405,443,150

First Liberty loan second converted 4 \ per cent bonds of 1932-1947, Oct. 24,1918-Apr. 24t
1919.
Surrendered for conversion:
First Liberty loan 3^ per cent coupon bonds of 1932-1947
$2, 900, 550
First Liberty loan 3^ per cent-registered bonds of 1932-1947
'
591, 500
Total

:

3,492, 050

Issued upon conversion:
First Liberty loan second converted 4J per cent coupon bonds
of 1932-1947
First Liberty loan second converted 4J per cent registered bonds
of 1932-1947.:
• ...
Total

:.....

2, 442, 900
1,049,150
3,492,050

Second Liberty loan converted 4 i per cent bonds of 1927-1942, as of June 30, 1919.
Surrendered for conversion:
Second Liberty loan 4 per cent coupon bonds
Second Liberty loan 4 per cent registered bonds
Total
Issued upon conversion:
Second Liberty loan 4^ per cent coupon bonds.
Second Liberty loan 4J per cent registered bonds
Total....;

$2, 715,294, 400
31Q, 315,450
, . 3,034, 609, 850

2, 620,595, 200
414,014, 650
3,034, 609,850

No privflege of conversion arose with respect to previous issues of
Government securities by reason of the issue of Victory notes.




SECRETARY OF T H E TREASURY.

81

INTERCONVERSION OF VICTORY NOTES.

Under the terms of the offering of the Victory Liberty loan, the two
series of notes of that issue, bearing interest, respectively, at 3 | per
cent and 4 | per cent per annum, are freely interconvertible throughout their life, subject to the terms of the circular offering the notes
and the rules and regulations of the Secretary bf the Treasury.
Rules and regulations governing the exercise of the conversion
privilege are. embodied in Department Circular No. 139, dated May
20, 1919, and supplement thereto, dated November 1, 1919 (Exhibits
57 and 58, pages 362 and 369). The issue of the notes upon full-paid
subscriptions was sufficiently advanced to permit the opening of the
conversion privilege on July 15, 1919.
EXCHANGE AND TRANSFER OF LIBERTY BONDS AND VICTORY NOTES.

From the beginning of the war to the close of the fiscal year 1919
there were 17,373,132 Liberty bonds and Victory notes exchanged or
transferred in an aggregate face amount of $2,661,104,450, the transactions including exchange of coupon for registered issues, and vice
versa, denominational exchanges and transfers ofregistered issues.
Transactions involving coupon issues only were conducted chiefly at
the Federal reserve banks as fiscal agents of the United States. WhUe
some transactions in connection with the registered issues were conducted in part at the Federal reserve banks, all such dsxchanges or
transfers are finaUy consummated at the Treasury, where the record
of registered bonds is kept.
Treasury Department Circular No. 141, dated September 15, 1919
(Exhibit 60, page 375), establishes rules and regulations governing
transactions in Liberty bonds and Victory notes. There was also
issued on the same date a statement giving information with respect
to the registration of bonds and notes (Exhibit 61, page 394). The
widest possible distribution of these announcements has been made
in order to familiarize the people with the method of effecting exchanges and transfers. A copy of the circular and of tlie statement
were sent to every bank and trust company in the United States,
accompanied by a letter urging their cooperation in handling transactions for their customers (Exhibit 59, page 373).
This circular covers the matter of exchange and transfer of Liberty bonds and Victory notes in detail, including such important matters as assignments in case of death of a registered owner, assignments
for minors, and the rules respecting bonds or notes registered in the
names of two or more persons. I t also sets forth the ofiicers authorized to witness assignments. The Treasury is anxious to facilitate
the assignments of registered bonds and notes, but its policy in this
140325—FI 1 9 1 9 — - 6




82

.

REPORT ON T H E FINANCES.

respect must be controlled by considerations of safety to the Government and to the registered holder. The department believes it has
gone as far as it may with security in conferring general authority
with respect to witnessing assignments. The Treasury must rely
upon the good faith of the witnessing officer in requiring positive
identification of the registered holder executing the assignment, and
it is deemed wise to restrict the general authority to witness assignments to certain Treasury and other Federal officers, the executive
officers of the Federal reserve banks, and the executive officers of
incorporated banks and trust companies.
From the beginning of the war-loan operations the Treasury has been
particularly anxious to afford every possible inducement to investors
in Government securities to hold them in registered form. This is
particularly desirable in the case of the small denominations which
are in the hands of people who have no facilities for safekeeping,
and the department has repeatedly urged upon the public the great
advantages of registration. The result of its efforts in this direction
may be seen from the fact that the registered issues of the first four
loans up to June 30, 1919, had increased over $600,000,000 from the
time of original deliveries.
PURCHASES OF LIBERTY BONDS BY THE TREASURY.

The authority conferred upon the Secretary of the Treasury by
section 6 of'the act approved April 4, 1918 (Third Liberty bond act),
to purchase Liberty bonds in order to stabilize the market prices of
the securities, has been exercised from time to time during the year.
Liberty bonds have been purchased, canceled and retired in accordance with the law, as necessary to support the market. As a matter
of practical convenience the services of the War Finance Corporation
have been utilized in this«*connection. The bonds have been purchased by the corporation at the market price for its own account,
and subsequently the accumulated stocks have been taken over by the
Treasury at the average cost to the corporation, plus accrued interest.
These purchases have served the purposes of the law, particularly
when heavy sales were pressing upon the market. Many of these
sales were the result of conditions produced by the ending of the war.
Some of the smaUer holders, who changed their occupations during
the winter on account of the dislocation of industries, found it necessary to dispose of their securities. Large corporations that during
the war had been able to hold Government bonds, either with their
own resources or on borrowed capital, also found it necessary to liquidate on account of changed financial conditions due to economic dislocation attendant upon the ending of the war. During all this
period without endeavoring to hold the borids to levels that could




83

SECRETARY OF THE TREASURY.

not be maintained, it was the constant endeavor of the Treasury to
maintain the stability of the market for Government securities.
The terms of the Victory loan had a favorable influence on the
market situation.
The following bonds have been purchased, canceled, and retired by
the Treasury from the bond-purchase fund to November 15, 1919:
Liberty bonds purchased from bond-purchase fund from Apr. 12, 1918, to Nov. 15, 1919.

First Liberty loan converted 4 per cent and 4^ per cent
bonds of 1932-1947
Second Liberty loan 4 per cent and converted 4^ per cent
bonds of 1927-1942
Third Liberty loan 4^ per cent bonds of 1928
Fourth Liberty loan 4^ per cent bonds of 1933-1938....-. . . .
Total

Principal
amount
purchased.

Amount paid.

$25,115,000

$23,841,677.60

$398,633.59

371,215,000
208,635,500
348,115,000

353,346,965.55
200,895,393.00
329,821,4&5.00

6,364,544.95
1,687,060.05
5 052 217. 71

953,080,500

Loan.

907,905,523.15

13,502,456.30

Amount of
accrued interest paid.

The difference between the par amount of bonds purchased and
the principal amount paid therefor, $45,174,973.85, appears on the
books of the Treasury as a miscellaneous receipt.
Section 3 of the act approved April 24, 1917 (first Liberty bond
act), and section 3 of the act approved September 24, 1917 (second
Liberty bond act), as amended, authorize the Secretary of the
Treasury to apply any repayments of the principal of loans to foreign
Governments to the redemption or purchase of any bonds issued
under authority of such acts. Certain of the loans to foreign Governments have been repaid, as stated elsewhere in this report under the
heading ^'Loans to foreign Governments,'' and the proceeds of the
repayments have been applied to the purchase of Liberty bonds,
which have been canceled and retired, as follows:
Bonds purchased as the result of payment of foreign loans, to Nov. 15, 1919.
OBLIGATIONS OF FOREIGN GOVERNMENTS REPAID.
Government.
France
Do.
Do. . . .
Belgium
France. . . . .
Great Britain
Do. .
.
Do
Do. . . .
Do




Date.
Jan. 1,1919
Mar. 31,1919
Mar. 14,1919
July 18,1919
Aug. 11, 1919
do
Sept. 18,1919
Sept. 23,1919
Oct. 11,1919
Oct. 27,1919

Amount
repaid.
$3,384,000.00
588,000.00
3,598,000. 00
10, 000.00
4,577,000. 00
22,000,000. 00
10, 000,000. 00
10,000,000. 00
7,164,.007.99
8,000,000.00

84

REPORT ON T H E

FINANCES.

Bonds purchased as the result of payment of foreign loans, to Nov. 15,1919—Continued.
BOND PURCHASES.

Loan.

Third Liberty loan 4^ per cent bonds of 1928
Fourth Liberty loan 4^ per cent bonds of 1933-1938
Total...:

Principal
amount
purchased.

Amount
paid.

Amount of
accrued
interest
paid.

$62, 297, 200 $59,090,313.78
2,5.14,950
2,230,482.32

$702,901.66
51, 690. 47

61,320,796.10

754 592.13

64,812,150

The bond-purchase fund, while designed primarily for another
and more immediate purpose, has operated also, as the above analysis
shows, in the nature of a preliminary sinking fund in advance of the
operation of a scientific plan for the retirement of the debt
through purchases or redemptions over a period of years. , The
authority to purchase bonds through the bond-purchase fund expires
one year after the termination of the war. The Congress, how^ever,
has already provided the plan for t h e gradual retirement of the debt
by means of a cumiUative sinking fund.
CUMULATIVE SINKING FUND.

Provision for the establishment of a cumulative sinking fund in the
Treasury for the retirement of bonds and notes issued under the
first, second, third, and fourth Liberty bond acts and the Victory
Liberty loan act is made by section 6 of the act approyed March 3,
1919 (Exhibit 7, page 235), in accordance with recommendations
submitted by the Ti-easury and adopted by the Congress. The law
permanently appropriates for such sinking fund for the fiscal year
beginning July 1, 1920, and for each fiscal year thereafter until the
debt is discharged an amount equal to the sum of ^' (1) 2J per centum
of the aggregate amount of such bonds and notes outstanding on July
1, 1920, less an amount equal to the par amount of any obligations,
of foreign governments held by the United States on July 1, 1920,
and (2) the interest which would have been payable during the fiscal
year for which the appropriation is made on the bonds and notes
purchased, redeemed, or paid out of the sinking fund during such
year or in previous years./'
I t will be noted that the Secretary of the Treasury, in accordance
with the terms of this law, will ascertain the aggregate amount of
such bonds and notes outstanding on July 1, 1920, less the par
amount of obligations of foreign governments held by the United
States on that date. Two and one-half per cent of that sum is
appropriated annually as a fixed amount and without variation for
the payment of such bonds and notes a t maturity or fbr their
redemption or purchase before maturity. As bonds or notes are paid,




SECRETARY OF THE TREASURY.

85

redeemed, or purchased from this appropriation, there is also appropriated yearly and cumulatively for the sinking fund an amount
equivalent to the interest which would have been payable on such
bonds or notes if they had not been retired.
A cumulative sinking fund has the advantage of making the
amount to be set aside for the service of the debt both on account
of interest and sinking fund substantially a permanent item at a
fixed figure until the debt is retired. The maturities and redemption dates for Liberty loan bonds, as stated in my testimony before
the Ways and Means Committee, were arranged with great wisdom
and thoughtftilness by Secretary McAdoo, the bonds of the second
loan being redeemable during the period between 1927 and 1942,
those of the third loan beiiig payable in 1928, those of the fourth
loan being redeemable during the period between 1933 and 1938,
and those of the fii'st loan being redeemable during the period
between 1932 and 1947. The notes of the Victory Liberty loan are
of short maturity, being redeemable in 1922 and payable in 1923.
With redemption dates and maturities stretching over the period
from 1922 to 1947, it will always be in the power of the Government
to use the sinking fund effectively for the redemption or payment of
bonds and notes of the Liberty loans.
It is calculated that the operation of the cumulative sinking fund
provision will retire the funded war debt of the United States in the
neighborhood of twenty-five years, except with respect to an amount
equal to the loans to foreign governments outstanding on July 1,
1920. The retirement of the latter is provided for by the authority
to apply repayments of foreign obligations to the retirement of
United States obligations, and as foreign obligations are paid a
corresponding amount of United States obligations may be redeemed
or purchased, and canceled and retired.
The act of March 3, 1919, also repealed the old sinking-fund
statutes which had proved unworkable and resulted in nothing more
or less than a bookkeeping account. They did not retire the debt.
The new law which takes the place of the provisions tl].us repealed
can never descend to the state of uselessness which they occupied as
long as the Government keeps faith with investors in its obligations.
The formal offering of the Victory Liberty loan by Department
Circular No. 138 quoted the cumulative sinking-fund section of the
Victory Liberty loan act. To make the plan effective, sinking-fund
charges must be met out of revenues received from taxation. Any
thought in the future of suspending the operation of the cumulative
sinking fund or of meeting its charges through the sale of securities
would be mot only unwise in the extreme from the standpoint of the
Government's finances and the ultimate wiping out of the war debt




86

REPORT. ON T H E FINANCES.

but would be a breach of faith with every subscriber to the Victory
Liberty loan and with every holder of the Liberty bonds. Whatever
may be necessary in the future financing of the Government, nothing
must be peimitted to interfere with the effective operation of the
cumulative sinking fund and the consequent gradual retirement of
the war debt.
VICTORY LIBERTY LOAN SUBSCRIPTIONS BY PERSONS IN THE MILITARY
AND NAVAL FORCES.

At the time of the Victory Liberty loan campaign, both mflitary
and naval forces were undergoing rapid demobilization, and the
efforts of the Treasury and of the War and Navy Departments in
connection with the purchase of Victory notes by soldiers and sailors
were directed chiefly toward affording them full opportunity to place
subscriptions on reasonable terms. Under date of April 21, 1919,
the Secretary of the Treasury promulgated regulations defining
special arrangements for subscriptions from persons in the mflitary
forces (Exhibit 62, page 397). These regulations followed the same
general lines as were in force for the third and fourth Liberty loans,
as reported in the annual report for the fiscal year 1918, payments
being made, however, by reservations from pay instead of by allotments of pay. In addition. Treasury regulations defining special
arrangements for subscriptions by persons in the naval forces were
prescribed by the Secretary for the first time, under date of April 21,
1919 (Exhibit 63, page 399). These regulations followed the same
lines as those prescribed for the Army, payment being made for the^
notes subscribed for by means of checkages against pay. Cash sales
to persons hi the military and naval forces also were made in considerable amounts during the campaign with the cooperation of the
respective departments.
The total subscriptions for Victory notes reported by the Army
under the special regulations, including cash sales, amounted to
$1,906,050, and the total subscriptions reported by the Navy under
the special plan, including cash sales, amounted to $6,912,750.
Apart frora the subscriptions made by members of the military and
naval forces, many officers and men, by speeches and other activities,
imparted a marked additional stimulus to the general Liberty loan
campaign.
ACCEPTANCE OF LIBERTY BONDS AS SECURITY.

I n accordance with the recommendation contained in the annual
report for the fiscal year 1918, provision was made by section 1320
of the revenue act of 1918, approved February 24,1919, for the acceptance of Liberty bonds and other United States bonds as security in




SECRETARY OF THE TREASURY.

87

lieu of surety or sureties on penal bonds. For the purpose of this
statute, the term penal bond is defined to include any recognizance,
stipulation, bond, guaranty, or undertaking, with surety or sureties,
required to be furnished by the laws of the United States or regulations made pursuant thereto. Pursuant to the authority so conferred,
the Secretary has prescribed detailed rules and regulations for carrying the section into effect, in Treasury Department Circular No. 154,
dated June 30,1919 (Exhibit 64, page 402). Completefiguresas to the
bonds deposited in lieu of surety or sureties pursuant to this circular
are not avaflable,' inasmuch as the bonds may be accepted by bondapproving officers of the Government generally, and may be deposited
with the Federal reserve banks and - branches as well as with the
Treasurer of the United States. More than $520,000 face amount
of bonds so accepted, however, had been deposited with the Treasurer
of the United States up to October 31, 1919.
Special regulations also have been issued in line with this statute
and circular, under which Liberty bonds may be accepted as security
in lieu of penal bonds to secure the payment of floor taxes on distflled
spirits, tobacco manufactures, and other commodities, and as security
for claims for abatement, and in connection with replacement funds.
The following amounts of Liberty bonds have been received by the
Bureau of Internal Revenue and held as security for the payment of
floor taxes or otherwise taken as' security in lieu of sureties:
Received during the fiscal year ended June 30, 1918.
Received during the fiscal year ended June 30, 1919....
Received from June 30 to Oct. 31, 1919
Total....

,

$4, 431, 450
1, 269, 300
5, 050
5, 705, 800

ACCEPTANCE OF LIBERTY BONDS AND VICTORY NOTES IN PAYMENT
OP ESTATE OR INHERITANCE TAXES.

As stated in the annual report for the fiscal year 1918, the act of
April 4, 1918, added a new section, 14, to the act approved
September 24, 1917, known as the second Liberty bond act, providing that bonds of the United States bearing interesi) at a higher
rate than 4 per cent per annum might be accepted at par and accrued
interest, under rules and regulations prescribed by the Secretary of
the Treasury, in payment of estate or inheritance taxes iihposed by
the United States, if owned continuously by the decedent for at
least six month prior to the date of death and a part of his estate at
the time of death. Pursuant to this section, detailed rules and regulations governing the acceptance of Liberty bonds for estate or inheritance taxes were prescribed by the Secretary in Treasury Department
Circular No. 132, dated January 30, 1919 (Exhibit 65, page 412). The




88

REPORT ON T H E

FINANCES.

act of March 3, 1919, known as the Victory liberty loan act (Exhibit
7, page 235) added to the second Liberty bond act a new section.
No. 18, authorizing the issue of notes of the United States, subdivision (d) of which extended the provisions above described to
notes issued under authority of said section. Pursuant to this provision, the 4 | per cent Victory notes will be receivable in payment
of estate or inheritance taxes, and rules and regulations governing
their acceptance have been prescribed in Treasury Department
Circular No. 151, dated June 24, 1919 (Exhibit 66, page 421). The
3 | per cent Victory notes are not under existing law acceptable in
payment of estate or inheritance taxes.
The following table shows the total face amounts of Liberty bonds
accepted in payment of estate or inheritance taxes up to and including October 31, 1919:
Loan.

Par amount
of bonds.

First Liberty loan converted 4J per cent b o n d s . . .
Second Liberty loan converted 4J per cent bonds.
Third Liberty loan 4^ per cent bonds
—
Fourth Liberty loan 4£ per cent bonds

$16,450
143,350
109,300
2,000

OF THE UNITED

$101.72
1,439.68
1,324.13
29.37

271,100

Total........

LOANS SECURED BY OBLIGATIONS

Interest
paid. ,

2,894.90

STATES.

Section 5200 of the Revised Statutes as amended by the acts of September 24,1918, March 3,1919, and October 22,1919, authorizes any
national bank to lend to a single borrower, on the security of Liberty
bonds, Victory notes, or Treasury certificates of indebtedness, to a
practically unlimited extent if such loans conform to the regulations
prescribed by the Comptroller of the Currency with the approval of the
Secretary of the Treasury. Under these regulations it is provided
that in addition to a loan amounting to 10 per cent of the unimpaired
capital and surplus fund, already permitted by law, a national bank
may grant another loan to the same borrower amounting to 10 per
cent of the unimpaired capital and surplus if secured by a like face
amount of Liberty bonds. Victory notes, and certificates of indebtedness of the United States issued since April 24, 1917, and a further
unlimited amount if secured by such obligations having a face value
of $105 for every $100 loaned.
It is believed that this increased authority to lend on the security
of Government pbligations had a very beneficial effect in aiding in the
flotation of the fourth Liberty loan, the largest of the four Liberty
loans placed, and also aided in the placing of the Victory notes.
The regulations promulgated by the Comptroller of the Currency
and approved by the Secretary of the Treasury ena-bled the national
banks to make these loans to an unlimited extent as long as the
loans were secured by 105 per cent of Liberty bonds. Victory notes,



SECRETARY OF THE TREASURY.

89

or Treasury certificates of indebtedness, ''until December 31, 1920,
or until such later date as the Comptroller of the Currency, with the
approval of the Secretary of the Treasury, may prescribe. ^
^
The mere fact that national banks had the right to lend to customers on the security of Liberty bonds to this unlimited extent
had a stimulating effect even upon buyers of Liberty bonds who did
not have occasion to pledge their holdings. The knowledge that
they could borrow on them if they needed to do so naturally encouraged many to subscribe for more than they would otherwise have
taken.
The sworn reports of the national banks show that on September
12, 1919, the total amount of Liberty bonds of all issues upon which
all national banks were lending was $915,211,000.
The amount of Treasury certificates of indebtedness upon which
the national banks were lending on the same date was $32,379,000.
These figures are interesting when we consider that the total
amount of Liberty bonds placed through the national banks was
$8,603,711,205, or 50.6 per cent, a majority of the entire allotments
by the Government, amounting to approximately $17,000,000,000.
These records, therefore, show that on September 12, 1919, the
national banks were making loans on less than 5 J per cent of the total
amount of Liberty bonds which the Government allotted.
The amount of Victory notes allotted by the Government was
$4,500,000,000. On September 12, 1919, the national banks reported
that the total amount of Victory notes held as coUateral aggregated
$297,819,000.
LIBERTY LOAN SUBSCRIPTIONS IN DEFAULT.

Pursuant to the provisions of Treasury Department Circular No.
78, dated May 14, 1917, offering the first Liberty loan for subscription, the Secretary of the Treasury has declared forfeited all delin-quent first Liberty loan subscriptions filed with an official agency,
together with all payments made thereon and all right and interest
in the bonds allotted. This forfeiture was declared by Treasury
Department Circular No. 135^ dated February 5, 1919, attached
hereto as Exhibit 67, page 424. Pursuant to this circular all forfeited installment payments are covered into the Treasury to the
credit of miscellaneous receipts.
Similar action has been taken pursuant to the provisions of Treasury Department Circular No, 90, dated October 1, 1917, offering
the second Liberty loan for subscription, as to all delinquent subscriptions to the second Liberty loan, by Treasury Department
Circular No. 156, dated November 15, 1919, attached hereto as
Exhibit 68, page 425.




90

REPORT ON T H E FINANCES.
COUPON LIBERTY BONDS IN PERMANENT FORM.

The difficulties experienced in the issue of coupon bonds of the
first Liberty loan, to which were attached coupons covering interest
to the final maturity date, together with the possibilities of conversions pursuant to the conversion privilege and the certainty that
large numbers of coupon bonds would be exchanged for registered
bonds, caused the Treasury, beginning'with the 4 per cent bonds
of the second Liberty loan, to issue coupon bonds in so-called
temporary form—that is, with coupons attached covering interest
for only two years or two years and a fraction. This procedure
has enabled the department to make early delivery of coupon
, bonds subscribed for and has materially reduced the loss which
would otherwise have been involved in the cancellation, upon
conversion or exchange, of bonds with all coupons to maturity
attached. The determining factor responsible for the issue of these
temporary bonds, however, was the impossibility of printing bonds
by the million of pieces for delivery within any reasonable period if
such bonds were to have attached thereto coupons covering interest
to the final maturity of the loan. The work of preparing coupon
bonds of the several issues with coupons attached covering interest
from the date of the last coupon originally attached to the date of
final maturity with respect to each loan is proceeding satisfactorily
at the Bureau of Engraving and Printing. I t is expected that the
4J per cent bonds of the third Liberty loan will be available for
delivery on and after March 15, 1920; that the 4J per cent bonds
of the second Liberty loan converted will be available for delivery
on and after May 15, 1920; that the 4J per cent bon.ds of the first
Liberty loan' converted will be available for delivery on and after
June 15, 1920; that the 4J per cent bonds of the fourth Liberty loan
will be available for delivery on and after October 15, 1920; and
that the 4^ per cent bonds of the first Liberty loan second converted
will be available for delivery on and after December 15, 1920. The
4 per cent bonds of the first Liberty loan converted and the 4 per
cent bonds of the second Liberty loaii will be available for delivery
on or about March 15, 1920, and every effort will be made to have
the 4J per cent bonds of the first Liberty loan converted and of the
second Liberty loan converted available for delivery on or about
the same date.
I n accordance with the terms of the so-called temporary bonds
originally issued, such bonds are exchangeable, without charge by
the United States, on and after the maturity date of the last coupons thereto attached for like bonds with all subsequent coupons
attached. The department is proceeding with arrangements to




SECRETARY OF THE TREASURY.

91

provide for these exchanges with the least possible inconvenience to
the holders, and the public will be advised with respect thereto by
Treasury Department circular prescribing fullrules and regulations.
OFFICIAL TITLES OF LIBERTY BONDS AND VICTORY LIBERTY NOTES.

Recognizing the need for short titles for the various issues of
Liberty bonds and Victory Liberty notes, the Treasury ha;s give.n its
official sanction to the use of certain abbreviated titles that are fairly
descriptive of the respective loans. These will serve as a inatter of
convenience in connection with the daily transactions in these securities, and it is to be hoped that banks, newspapers and all others
having occasion to refer to the bonds and notes will employ the officially approved short titles so that the people of the country may
become so familiar with the names of the respective issues that they
will readfly identify them and thus be protected from misrepresentation with respect to any of the outstanding securites. Following
are the official or formal titles of the several issues and the approved
short titles thereof:
Formal titles.
Short titles.
First Liberty loan 3^ per cent bonds of 1932-47..
.First 3^'s.
First Liberty loan converted 4 per cent bonds of 1932-47
First 4's.
First Liberty loan converted 4^ per cent bonds of 1932-47
First 4-|-'s.
First Liberty loan second converted 4^ per cent bonds of
1932-47'
First Second 4i's.
Second LibertyToan 4 per cent bonds of 1927-42
Second 4's.
Second Liberty loan converted 4^ per cent bonds of 1927-42
Second 4J's.
Third Liberty loan 4^ per cent bonds of 1928
Third 4J's.
Fourth Liberty loan 4^ per cent bonds of 1933-38...
: . . . . . .Fourth 4i'8.
Victory Liberty loan 4} per cent convertible gold notes of
1922-23
.Victory 4 f s .
Victory Liberty loan 3 | per cent convertible gold notes of
1922-23
Victory 3|^s.
AUTHORIZATIONS FOR ISSUES OF LIBERTY BONDS AND VICTORY NOTES.

The Secretary of the Treasury was authorized by the first, second,
third, and fourth Liberty bond acts to issue bonds in amounts aggregating $22,000,000,000. ' The authority has been exercised to the
extent of $16,977,335,850, leaving a balance of Liberty bonds which
may be issued under existing law of $5,022,664,150. By the Victory
Liberty loan act the Secretary was authorized to issue notes of the
United States to the aggregate amount of $7,000,000,000. Deducting the amount of allotted subscriptions to the Victory Liberty loan,
corrected to September 30, 1919, namely $4,498,312,650, the balance
of Victory notes which may be issued under existing law is approximately $2,501,687,350. The following statement summarizes the
authorizations for bonds and notes, the issues, and the amount of
such securities that may be issued under existing law.




92

REPORT ON T H E FINANCES.

The first Liberty bond act (Apr. 24, 1917) authorized new issues of
bonds not to exceed
| 5 , 000, 000, 000
The same act authorized the issue under the terms of such act of the
unissued bonds previously authorized as follows:
For construction of Panama Canal (act Aug. 5, 1909), but including the unissued Panama Canal bonds authorized to be issued
for the nitrate plant (act June 3, 1916) and for the Shipping
Board (act Sept. 7, 1916), the amount of issued postal-savings
bonds being deducted from the amount authorized (approximately)
-^
225, 000, 000
For extraordinary expenditures (act Mar. 3, 1917)
100, 000, 000
For expediting naval construction (act Mar. 4, 1917)
150, 000, 000
And an additional amount to provide for payment of loan of
1908-1918
63, 945, 460
Total authorization under first Liberty bond act
First Liberty loan subscriptions allotted
'

5, 538, 945, 460
2, 000, 000, 000

Balance bonds unissued under first Liberty bond act

3, 538, 945, 460

The second Liberty bond act (Sept. 24, 1917) authorized the issue of
bonds (in addition to the |2,000, 000, 000 alloted under the first
Liberty bond act), not to exceed in the aggregate
7, 538, 945, 460
And provided that of such sum $3, 538, 945, 460 should be in lieu
of unissued bonds authorized by the first Liberty bond act.
The third Liberty bond act (Apr. 4, 1918) increased the authority for
the issue of bonds to
12, 000, 000,000
The fourth Liberty bond act (July 9, 1918) further
authority to
Issues of Liberty bonds under second Liberty bond act
act as amended:
Subscriptions allotted—
Second Liberty loan.
Third Liberty loan.
Fourth Liberty loan

increased such
20, 000, 000,000
and under such

$3, 807, 891, 900
4,176, 516, 850
6, 992, 927,100
14, 977, 335, 850

Balance authority under existing law" for issues of Liberty
bonds
:

5, 022, 664,150

Authorization of issues of Victory notes.
The Victory Liberty loan act (approved Mar. 3, 1919) authorized the
issue of notes of the United States not to exceed in the aggregate-. $7,000,000,000
Issues of Victory notes: Victory Liberty loan, allotted subscriptions,
corrected to Sept. 30, 1919
4, 498,312, 650
Balance authority under existing law for issues of notes

2, 501,687, 350

RECAPITULATION.

Under existing authority of law there may be issued:
Bonds..
Notes
Total




5,022,664,150
2, 501, 687. 350
7, 524, 351, 500

SECRETARY OF T H E TREASURY.

93

ILLEGITIMATE TRAFFIC IN GOVERNMENT OBLIGATIONS.

The Treasury has been much concerned during the past year over the
illegitimate and dishonest traffic in Liberty bonds and war-savings
certificates and stamps. A number of unscrupulous and mipatriotic
persons, by advertisements in the daily press and through personal solicitation in letters and otherwise, have purchased these securities from
the owners at prices far below their market price in the case of bonds,
and in the case of war-savings certificates considerably below their redemption value, and have redeemed such certificates at a profit by
cashing them at post offices. The Treasury has used every means
to frustrate the operations of such swindlers and has urged owners of
Government securities, whenever it becomes necessary for them to
part with them, to deal with reliable banks, trust companies, and
others of dependable reputation, and in case of war-savings certificates
to go direct to a postmaster, the only official redeeming agency.
On January 28, 1919, the following public warning against dishonest
operators in Liberty bonds was issued:
My attention has been directed to the activities of unscrupulous persons who have
been operating extensively throughout the country and who are swindling the owners
of Liberty b.onds by purchasing bonds at prices far below their actual worth.
These swindlers get the attention of Liberty bond owners by publishing advertisements calculated to make the unsuspecting bond owner believe that the highest market
price can be secured for his bond through the agency of the advertiser. Such is rarely,
if ever, the case. Records of transactions of this character, brought to the attention
pf the Department of Justice and the Treasury Department, prove conclusively that
these swindlers take every advantage of bond owners who are forced into their clutches
by paying the lowest possible price which the owner will accept—and generally far
below the actual value of the bonds.
I regret to observe that many reputable newspapers are being victimized by accepting the advertisements of these swindlers, and I appeal to all newspaper publishers
to scrutinize very carefully the character of individuals who use their columns to offer
to buy Liberty bonds. As a newspaper publisher, I believe that it is the duty of publishers to protect their readers against imscrupulous advertisers. ;
Other swindlers endeavor to trade worthless articles or securities of little value for.
Liberty bonds, and I appeal to patriotic publishers to assist in putting an end to this
practice.
The Treasury Department will take such steps as are possible under the law to protect the interests of holders of Liberty bonds, and will use every means at its command
to bring to justice all who seek to defraud the people who have so patriotically assisted
in winning the war by investing their savings in Liberty bonds and war-saving stamps.
Owners of Liberty bonds and war-sa^dng stamps should in no circumstances part
with these securities unless necessity compels, and then they should deal only with
reliable banks, trust companies, banking institutions, and others whose reputation for
integrity is beyond question. If it is necessary to sell Liberty bonds the highest market value should be received.
The Treasury Department will welcome information concerning the operations of
these swindlers in any part of the country.




94

REPORT ON T H E FINANCES.

The Treasury, with the cooperation of the Post Office Department,
has also taken various steps throughout the year to meet the situation
with respect to war-saving certificates and stamps. These certificates, by the terms of their issue, are not transferable. Under date of
January 23, 1919, the Post Office Department issued instructions to
postmasters throughout the country directing them to refuse to pay
any war-savings certificates where it was apparent that changes had
been made in the name of the original owner or where the certificate
was presented by anyone known to be publicly buying or offering to
buy war-savings stamps or certificates from the owners, unless positive
evidence was submitted that the certificate presented was originally
issued to the person then demanding payment. On January 27, 1919,
the Secretary of the Treasury issued the following statement calling
the attention of the public to the activities of these sharpers:
My attention. has been directed, to the numerous offers made by unscrupulous
persons through advertisements and in other ways to b u y war-savings certificate
stamps, and as a result of such offers I am informed that owners of such securities have
suffered material losses which could have been avoided b y redemption of the warsavings certificate stamps at post offices as provided by law.
I therefore direct the attention of the public, particularly such persons as have made
offers of the character above mentioned, to the following terms and conditions which
are printed on the back of the war-savings certificate of the series of 1918:
This certificate is of no value except to the owner named hereon, and is not transferable.
•
The law provides that no one person shall at any one time hold war-savings certificates to an ag2:regate amount exceeding $1,000.
Certificate.—This certifies that, subject to the terms and conditions printed hereon^
the owner named on the back hereof will be entitled to receive on January 1, 1923,
in respect of each United States war-savings certificate stamp of the series of 1918 then
aflaxed hereto, the amount indicated thereon as then payable, or, at his option, will
be entitled to. receive at any earlier date, in respect of each such stamp then affixed
hereto, the lesser amount indicated in the table printed hereon..
Treasury Department Circular No. 128, issued December 18, 1918, and referring to
war-savings certificate stamps, series of 1919, contains amongst others the following
provisions:
Any owner of a war-savings certificate, series of 1919, at his option, will be entitled
to receive, at any time after January 10, 1919, and prior to January 1, 1924, at a moneyorder post office (the office where registered in the case of a registered certificate), upon
surrender of his certificate and upon compliance with all other provisions thereof, in
respect of each war-savings certificate stamp, series of 1919, then affixed to such certificate, the amount indicated in the following table, but no post office shall make any
such payment until 10 days after receiving: written demand therefor, and such certifi. eate must be surrendered for payment within 60 days after such demand, otherwise
the demand will be deemed to be waived and a new demand will be required before
payment.
War-savings certificates, series of 1919, are not transferable and will be payable
only to the respective owners named thereon, except in the case of the death or disability of any such owner.
I t shall not be lawful for any one person at any time to hold war-savings certificates
of any one series to an aggregate amount exceeding $1,000 (maturity value).
I n order that the interests of owners of war-savings certificate stamps of either series
may be safeguarded, I hereby notify all persons to refrain from offers to buy warsavings stamps or accept same in trade.




SECRETARY OF' THE TREASURY.

95

The Post Office Department, cooperating with the Treasury Department, has issued
instructions wherebj^ payment will be refused whenever it is apparent that changes
have been made in the name of the-original owner of any certificates which may be
presented to post offices for redemption.
' I earnestly request newspapers and magazines to give this matter the fullest amount
of publicity in order that the rights of millions of people—investors in United States
Government securities—may be fully protected.'

And again on May 26, 1919, the following announcement was. made
urging holders to redeem their certificates through post offices, if
necessity coinpelled them to dispose of their stamps, and to avoid
dealing with scalpers:
The Treasury has been greatly concerned by the receipt of reports of dishonest
^traffic in war-savings certificates and stamps. These securities were not intended
to be negotiable and, for the protection of the owners in case their necessities required,
provision was made for redemption-of war-savings certificates at post offices upon
10 days' notice at a fixed price, representing the original purchase price with an addition for'interest. No obstacles have at any time been placed by the Treasury in
the way of the redemption of these war-savings certificates, and it should be generally
understood that the owner of a certificate has an absolute right to redeem it in accordance with its terms. Any case of a refusal to make such redemption, if brought to the
attention of the Treasury, will result in prompt action.
The Government needs the money and hopes the holders of war-savings certificates
will retain them, b u t it will place no obstacle in the way of those bona fide holders
who request repayment. On the other hand, the Secretary will exercise every means
within the power of the Treasury, and has asked the cooperation of the Post Office
Department, to prevent payment being made to those rascals who are buying the
certificates and stamps for less than their redemption value and promptly turning
them in to the Government for redemption at a profit, and serves notice upon those
people who are engaging in this disreputable business that this is the settled pplicy of
the Treasury.
I n this connection attention is invited to the following extract from the instructions
issued to postmasters by the Post Office Departinent, under date of January 23, 1919,
with respect to the redemption of war-savings certificates presented by persons or
firms known to be buying or publicly offering to buy war-savings stamps or certificates
from their owners:'
Postmasters are further instructed not to pay any war-savings certificates presented
by persons or firms known to be buying, or publicly offering to buy, war-savings
stamps or certificates from the owners, unless positive evidence is submitted that the
certificates were originally issued to the persons or firms presenting them for payment.
I urge all patriotic holders of war-savings certificates to hold their certificates if they
can and, if they can nqt, to avoid all dealers in war-savings certificates and redeem the
certificates through post offices.

The savings organization, by publicity and otherwise, has also
worked to the same end; and other measures of a more direct nature
are in contemplation.
ISSUES OF FRAUDULENT AND WORTHLESS SECURITIES.

The attention of the Congress again is invited to the necessity of
enacting legislation to protect the people of the United States from
grave injury growing out of the issue of securities of doubtful worth




96

REPORT ON T H E FINANCES.

and in many cases of fraudulent character. Unscrupulous promoters,
moreover, have tempted patriotic subscribers to the war obligations
of the Government, particularly those who were unaccustomed to
investments, to exchange Liberty bonds for their worthless stocks,
causing financial loss to innocent victims and prejudicing the national
finances by the resultant sale on the market of Government securities by those who have thus obtained possession of them.
The Capital Issues Committee has reported upon the subject somewhat in detail. During the war the committee was unable to reach the
unpatriotic or dishonest stock vendor because of lack of power under
the law to compel submission to its jurisdiction. The experience of
the committee, however, has been laid before the Congress and the
Treasury has presented to the House Ways and Means Committee
and to the Senate Committee on Finance a bill proposed by the Capital Issues Committee and with the general purposes of which this
departjaient is in accord. The Secretary's letter and the committee's
bill are attached hereto as Exhibit 69, page 426. The importance of
the enactment of legislation along these lines was emphasized by the
President in his address to the Congress, August 8, 1919, on '^The
Cost of Living" in the following words:
May I not add that there is a bill now pending before the Congress which, if passed,
would do much to stop speculation and to prevent the fraudulent methods of promotion by which our people are annually fleeced of many millions of hard-earned money?
I refer to the measure proposed by the Capital Issues Committee for the control of
security issues. . It is a measure formulated by men who know the actual conditions
of business and its adoption would serve a great and. beneficent purpose.

I t may be that action by the Congress alone will not suffice to
suppress the evil effectually and that the problem will require supplementary legislation by the several States to reach agents who rely
upon personal conversations and solicitations without the use of the
mails or any other governmental agency of the United States. The
Treasury respectfully urges the Congress to give consideration to
this important matter, and it is earnestly hoped that such action as is
necessary will be taken by the States in coordination with legislation
by the Congress.
TAX EXEMPTIONS OF LIBERTY BONDS AND VICTORY NOTES.

The 4 | per cent Victory notes are exempt, both as to principal
and interest, from all taxation now or hereafter imposed by the
United States, any State, or any of the possessions of the United
States, or by any local taxing authority, except (a) estate or inheritance taxes, and (&) graduated additional income taxes, commonly
known as surtaxes, and excess-profits and war-profits taxes, now or
hereafter imposed by the United States upon the income or profits of




SECRETARY OF.THE TREASURY.

°

97

individuals, partnerships, associations, or corporations. T h e ' 3 | per
cent Victory notes are exempt, both as to principal and interest, from
all taxation (except estate or inheritance taxes) now or hereafter
imposed by the United States, any State, or any of the possessions of
the United States, or by any local taxing authority.
The Victory Liberty loan act also provided, in section 2, for certain further exemptions of Liberty bonds from Federal income surtaxes and profits taxes. These exemptions were in addition to the
exemptions conferred by the second Liberty bond act and the supplement to the second Liberty bond act, and were designed to stabilize
further the market prices of the outstanding Liberty bonds. Section^
2 (a) of the Victory Liberty loan act granted an exemption up to
$30,000 in the aggregate of first Liberty loan converted 4 per cent
bonds, first Liberty loan converted 4J.per cent bonds, first Liberty
loan second converted 4J per cent bonds, second Liberty loan 4 per
cent bonds, second Liberty loan converted 4^ per cent bonds, third
Liberty loan 4J per cent bonds, and fourth Liberty loan 4J per cent
bonds, as to the interest received on and after January 1, 1919, until
the expiration of five years after the termination of the war. This
exemption was not made conditional upon subscription to Victory
notes. Section 2 (h) granted a further exemption up to $20,000 in
the aggregate of such 4 per cent and 4 J per cent Liberty bonds as to
the interest received on and after January 1, 1919, this exemption
being conditional upon original subscription to and continued holding
at the date of the tax return of one-third as many notes of the Victory
Liberty loan, and extending through the life of such notes of the
Victory Liberty loan.
Accordingly the tax exemptions of Liberty bonds and Victory notes
may now be summarized as follows:
I. Four per cent and 4i per cent bonds and 4f per cent Victory notes are exempt
from all Federal, State, and local taxation, except (a) estate or inheritance taxes,
and (6) Federal income surtaxes and profits taxes, as follows:
(1) First Liberty loan converted 4 per cent bonds of 1932-1947 (first 4's); (2) first
Liberty loan converted 4J per cent bonds of 1932-1947 (fia:st 4^'s); (3) first Liberty
loan second converted 4J per cent bonds of 1932-1947 (first second 4i's); (4) second
Liberty loan 4 per cent bonds of 1927-1942 (second 4's); (5) second Liberty loan converted 4J per cent bonds of 1927-1942 (second 4}'s); (6) third Liberty loan 4J per
cent bonds of 1928 (third 4i's); (7) fourth Liberty loan 4i per cent bonds of 1933-1938
(fourth 4i's); and (8) Victory Liberty loan 4} per cent convertible gold notes of 19221923 (4} per cent Victory notes) are. exempt, both as to principal and interest, from
all taxation now or hereafter imposed by the United States, any State, or any of
the possessions of the United States, or by any local taxing authority, except (a)
estate or inheritance taxes, and (6) graduated additional income taxes, commonly
known as surtaxes, and excess-profits and war-profits taxes, now or hereafter imposed .
by the United States upon the income or profits of individuals, partnerships, associations, or corporations.
140325—n 1919
7




98

REPORT ON T H E FINANCES.

I I . Four per cent and 4J per cent bonds are entitled to limited exemptions .''rom
Federal income surtaxes and profits taxes, as follows:
Four per cent and 4^ per cent Liberty bonds (but not 4 | per cent Victory notes) are
entitled to certain limited exemptions from graduated additional income taxes,
commonly known as surtaxes, and excess-profits and war-profits taxes, now or hereafter imposed b y the United States, upon the income or profits of individuals,
partnerships, associations, or corporations, in respect to the interest on principal
amounts thereof, as follows:
1. Five thousand dollars in the aggregate of first 4's, first 4J's, first second 4^'8,
second 4's and 4|^'s, third 4Vs, fourth 4^'s, Treasury certificates, and war-savings certificates.
2. Thirty thousand dollars'of first second 4^'s, until the expiration of two years after
the* termination of the war.
3. Thirty thousand dollars of fourth 4^'s, until the expiration of two years after the
termination of the war.
4. Thirty thousand dollars in the aggregate of first 4's, first 4.i's, first second 4^'s,
second 4's and 4J's, third 4J's, and fourth 4^'s, as to t h e interest received on and
after January 1, 1919, until the expiration of five years after the termination of
the war.
5. Forty-five thousand dollars in the aggregate of first 4's, first 4i's, second 4's and
4i's, and third 4i's, as to the interest received after January 1,1918, until the expiration
of two years after the termination of the war; this exeniption conditional on original
subscription to, and continued holding at the, date of the tax return of, two-thirds
as many bonds of the fourth Liberty loan.
6. Twenty thousand dollars in the aggregate of first 4'8, first 4^'s, first second 4J'8,
second 4's and 4^'s, third 4 | ' s , and fourth 4|'8, as to the interest received on and after
January 1, 1919; thia exemption conditional upon original subscription to, and continued holding at the date of the tax return of, one-third as many notes of the Victory
Liberty loan, and extending through the life of such notes of the Victory Liberty
loan.
"
One hundred and sixty thousand dollars total possible exemptions from Federal
income^surtaxes and profits taxes, subject to conditions above summarized.
I I I . Three and one-half per cent bonds and 3f per cent notes are exempt from all
Federal, State, and local taxation, except estate or inheritance taxes, as follows:
(1) First Liberty loan 3^ per cent bonds of 1932-1947, and (2) Victory Liberty loan
3f per cent convertible gold notes of 1922-1923, are exempt, both as to principal and
interest, from all taxation (except estate or inheritance taxes) now or hereafter imposed
by the United States, any State, or any of the possessions of the United States, or by any
local taxing authority.

In this connection I believe it my duty to direct your attention to
the need of simplification of the limited exemptions from surtaxes and
profits taxes, summarized in paragraph II above, which were con-r
ferred upon the holders of Liberty bonds by legislation enacted from
time to time during the period of the war.
Of these exemptions, exemption No. 1-continues throughout the life
of the various securities concerned and is not susceptible of change
or consolidation with any other exemption. Exemptions No. 3 and
No. 5 both continue untfl the expiration of two years after the termination of the war. No. 3 is unconditional, but No. 5 is conditioned
on original subscription to and continued holding at the date of the tax




SECRETARY OF THE TREASURY.

99

return of two-thirds as many bonds of the fourth Liberty loan. I
suggest, accordingly, that No. 3 and No. 5 be consolidated, and inasmuch as the condition which was imposed at the time exemption No.
5 was conferred has served its purpose, that that condition may now be
removed in the interest of simplicity of administration, and also for the
benefit of the market for Liberty bonds. Exemption No. 2 is confined
to one issue of bonds which aggregates only $3,492,050, and it can
not be removed, nor be consolidated with other exemptions without grave loss to the revenue. Exemptions No. 4 and No. 6 continue, the one untfl the expiration of five years after the termination of the war and the other through the life of the notes of the Victory Liberty loan. No. 4 is unconditional, but No. 6 is conditioned on
original subscription to and continued holding at the date of the tax
return of one-third as many notes of the Victory Liberty loan. I
suggest that these two exemptions be combined and that, for the
reasons above given with relation to exemption No. 5, the condition
be removed. This will extend somewhat the life of the $20,000 exemption, but I believe the simplicity of administration and the
benefit to the market for Liberty bonds wfll justify the course proposed.
.
The only objection to these simplified arrangements which occurs
to the Treasury is that they may confer upon holders of bonds who did
not subscribe or hold bonds or notes as required by the acts of Congress certain exemptions from taxation, which were conferred upon
original subscribers. On the other hand, they take away no right
which any holder has and in so far as they confer rights upon
those not now holders, they will in the end benefit original subscribers who are still holders by improving the market value of their
bonds or notes. I t is impossible to present any accurate calculation
of the consequences to the Treasury of the amendments of the law
proposed. I do not hesitate, however, to express my confident
judgment that the loss in revenue wfll be relatively slight and that the
gain to the Treasury which will result from the increased attractiveness of the taxable issues of the Liberty loans and the consequent
benefit to the Government's credit, as well as the simplicity of administration, wfll amply compensate the Treasury for that slight loss.
These simplified exemptions could be established by a statutory
provision reading substantially as follows:
That in addition to the exemptions provided in section 7 of the second Liberty bond
act and in subdivision (3) of section 1 of the supplement to second Liberty bond act,
4 per cent and 4i per cent Liberty bonds shall be exempt from graduated additional
income taxes, commonly known as surtaxes, and excess-profits and war-profits taxes,
now or hereafter imposed by the United States, upon the income or profits of individuals, partnerships, associations, or corporations, in respect to the interest on aggregate
principal amounts thereof, as follows: $125,000 aggregate principal amount thereof




100

REPORT ON T H E FINANCES.

after January 1, 1920, and until the expiration of two years after the date of the termination of the war between the United States and the German Government, and
$50,000 aggregate principal amount thereof after the expiration of two years and until
the expiration of five years after the date of the termination of t h e war between t h e
United States and t h e German Government. The exemptions hereby conferred are
not subject to the conditions and limitations respectively imposed in subdivisions
(1) and (2) of section 1 of the supplement to second Liberty bond act and in section 2
of t h e Victory Liberty loan act, and are in lieu of and not in addition to the exemptions
therein contained.
BOND AND NOTE DESIGNS.

In the preparation of the Liberty bonds and the Victory notes,,
involving the issuance of so many millions of pieces of war securities,
every effort has been made to protect the Treasury and the public
and to circumvent counterfeiting and denominational raising. The
Government's established high standards of engraving and plate
printing have been maintained. Color work has been introduced
when appropriate, and the bonds and notes have been printed on the
distinctive bank-note paper adopted by the Treasury for currency
issues, in which rows of red and blue silk fiber are woven during the
process of manufacture. Profiting by experience of the past with
respect to currency issues, a multiplicity of designs has been avoided.
Distinctive portraits have been assigned to each denomination for
all issues, and following the same principle the backs of each denomination are printed in a uniform color for all issues. These distinctive
features will greatly serve in preventing denominational raising.
With such a vast amount of war securities outstanding, it is important
that the people become thoroughly familiar with the characteristics
of each issue in order that they may not be imposed upon by the
unscrupulous. In general, the distinctive features appertaining toall issues of Liberty bonds and Victory notes are as follows:
Denomination.
S50
100
500
1,000
5,000
10,000
50,000
100,000

Portrait on
face of bonds.
Jefferson
Jackson . ;
Washington
Lincoln
Monroe
CleV eland
McKinley
Grant

Color of backs of
bonds and coupons.
Brown.
Orange.
Dark blue.
Green.
Red.
Purple.
. Olive.
Light blue.

One exception occurs: the backs of the $10,000 denomination of
the first 3Vs, registered, are printed in brown.
CURRENCY DESIGNS.

Following the policy pursued with respect to uniform denominational designs for Liberty bonds and Victory notes, the Treasury is
now undertaking to adopt a distinctive characteristic for each denom-




SECRETARY OF THE TREASURY.

101

ination of all forms of currency in circulation. Instructions have
been issued to the Bureau of Engraving and Printing to prepare a
uniform portrait that will represent each denomination of all issues
of paper money. As Federal reserve notes and Federal reserve bank
notes are now largely in circulation, it has been decided to adopt for.
all forms of currency the portraits that appear on those notes. The
bureau is engaged on the work and the changes will be effected as
soon as possible. This standardization will serve as a safeguard
and protection against note raising, as well as in the interest of
economy. I t will assist bankers, business men, and the people
generally in detecting attempted counterfeits, one of 'the most
fruitful causes of which has been the absence of distinctive denominational features in the currency.
One of the greatest dangers to the Treasury and to the public in
connection with the question of counterfeiting has been the multiplicity of designs of our various forms of currency. The question
of revision of currency designs has been under consideration by the
Treasury for many years, but it has been deemed important to take
this particular step with respect to denominational distinction
without awaiting deliberation on the general subject.
The denominational portraits appearing on Federal reserve notes
and Federal reserve bank notes, and which now have been prescribed
for future issues of all kinds of currency, are as follows:
Denominations.

'

$1
2
5
10
20
50

Portrait.
Washington.
Jefferson.
Lincoln.
Jackson.
Cleveland.
Grant.

Denominations.
$100
500
1,000
5,000
10,000

Portrait.
Franklin.
Marshall.
Hamilton.
Madison.
.Chase.

THE FEDERAL RESERVE SYSTEM.

During the past year the Federal reserve system has continued to
render important service by assisting the Government in its war
finance operations and by enabling the banks to support the efforts
of the Treasury without neglecting the interests of commerce and
industry.
Between October 25, 1918, and October 31, 1919, the total of discounted bills held by the Federal reserve banks has grown from
$1,546,164,000 to $2,128,547,000. Of the latter total, $1,681,082,000
is represented by paper secured by Government war obligations, as
against $1,092,417,000 on the earlier date. During the period under
review the Federal reserve banks, as before, very properly abstained
from directly investing their funds in Government war securities.
The bulk of Government securities held at present by the Federal




102

REPORT ON THE FINANCES.

reserve banks consists of United States bonds and 1-year 2 per
cent certificates to secure Federal reserve bank-note circulation.
Holdings of Government war securities proper represent almost
altogether temporary'purchases of Liberty bonds. Victory notes,
and Treasury certificates to accommodate member and nonmember
banks. No material changes in members' reserve deposits or in
net deposits of the F.ederal reserve banks have occurred during the
year, increases in these items being due largely to the accession of
new members.
Federal reserve note circulation stood on October 31, 1919, at
$2,752,876,000, only slightly below the highest figure on record
($2,753,457v,000 reported for October 24, 1919), the corresponding
amount for October 25, 1918, being $2,507,912,000. The large
amount of notes in circulation on both dates mentioned is due in
part to the seasonal requirements for currency during the cropmoving period, while the greater amount this year compared with
the preceding year reflects largely the higher price level prevailing
a t the present time. During the period the Federal reserve banks'
aggregate liabilities on Federal reserve bank notes in circulation
increased from $58,859,000 to $254,933,000, this increase corresponding approximately to the amount of silver certificates of small
denominations retired in accordance with the provisions of the act
of April 23, 1918, known as the Pittman Act.
Gold reserves of the Federal reserve banks, which were
$2,045,132,000 on October 25, 1918, continued to increase, largely
through deposits by the Treasury, and stood a t $2,201,804,000 on
June 6, 1919, just before the removal by the Goyernment of the
embargo on gold exports on June 9. After that date an almost continuous decline in gold reserves is noted for a period of three months,
.deposits by the Treasury not being sufficient to offset withdrawals for
export. During the months of September and October gains in gold
reserves were caused through the acquisition by the Federal reserve
banks of gold received in payment for food sold by the United States
Grain Corporation to the German Government. „ On October 31, total
gold reserves were $2,138,000,000, or about 93 millions more than on
October 25, 1918.
Owing largely to the seasonal character of Government income and
profits tax collections, great variation is shown in the amounts of
balances carried by the Federal reserve banks on Government account, the maxiinum amounts occurring on the dates when large tax
payments felldue. During the period under review the total Government balances ranged between 26 millions on June 6, 1919, and 286
millions on March 21, 1919, the Friday following the date when the
first installment of income and excess-profits taxes fell due. The
average of these balances for the period covered was 126 millions,




103

SECRETARY OF THE TREASURY.

an average somewhat lower than the corresponding average for the
calendar year 1918.
Discount rates of the Federal reserve banks show but little change
during the fiscal year and whatever changes occurred were parallel
to changes in the rates charge/! on war paper. The rate on 15-day
paper secured by United States war obligations early in 1918 was
raised to 4 per cent, and this was the ruling rate at which the bulk of
the discounts was made by most of the Federal reserve banks. The
90-day rate on war paper was maintained at 4i per cent, except
that temporarily a 4 per cent rate was adopted to encourage the
financing by the member banks of the fourth Liberty loan. Rates
on ordinary commercial paper, as a rule, were fixed one-fourth to
three-fourths per cent higher than the corresponding rates on war
paper, with the result that since the middle of December, 1918, the
share of war paper in the banks' holdings of discounted bills never
fell much below 80 per cent.
A statement showing the changes for the period, November 1,1918,
to June 30, 1919', in the loans and discounts'of national banks, their
holdings of Government securities and their gross deposits follows:
[In thousands of dollars.]
Date.
Nov. 1,1918.
Dec. 31.1918.
Mar. 4,1919..
May 12,1919.
June 30,1919

Loans and
discounts.
10,096,940
9,918,294
9,691,187
9,904,821
10,574,838

Government
securities.
3,156,312
2,949,878
3,681,607
4,028,140
3,171,912

Gros?
deposits.
15,051,473
15,423,081
15,299,807
15,903,796
15,924,865

.Loans and discounts showed relatively small changes between
November 1, 1918, and May 12, 1919, but increased by over 650
millions between the latter date and June 30. On the other hand. Government security holdings which had gone up from 3,156 millions on
November 1, 1918, to 4,028 millions on May 12, declined to 3,172
millions on June 30, as the result largely of the redemption of Treasury certificates. Gross deposits, with the exception of the period
between the last of December, 1918, and March, 1919, show a continuous growth, the total on June 30 last being about 874 inillions
in excess of the November, 1918, total.
WAR FINANCE CORPORATION.

With the signing of the armistice there was necessarily a narrowing of the scope of the operations of the War Finance Corporation
because of the limitation of the law which restricted the advances of
the corporation to/^purposes necessary and contributory to the war."
The corporation previously had entered into a number of engage-




104

REPORT ON THE FINANCES.

ments, however, which it was necessary to carry out in accordance
with the terms agreed upon, as borrowers had made their plans in
good faith, relying upon the assistance of the corporation. Among
such advances were cattle loans in drouth-stricken sections of the
country for the purpose of preserving the breeding herds. These
loans were, as previous ones of the same character, of very great
service in conserving the meat supply of the Nation.
While considerable amounts thus were advanced, a large amount
of money was returned to the corporation during the year in repayment of advances, and with very few exceptions the emergency funds
provided by the Government have been promptly repaid on maturity
of the loans.
In line with! the recommendations of the Treasury, the Congress
extended the functions of the corporation with respect to financing
foreign trade by the following amendment to the War Finance
Corporation Act, which was incorporated in the Victory Loan act:
SEC 21. (a) That the corporation shall be empowered and aujhorize'd, in order to
promote commerce with foreign nations through the extension of credits, to make
advances upon such terms, not inconsistent with the provisions of this section, as it
may prescribe, for periods not exceeding five years from the respective dates of such
advances:
(1) To any person, firm, corporation, or association engaged in the business in the
United States of exporting therefrom domestic products to foreign countries, if suchperson, firm, corporation, or association|is, in the opinion of the board of directors of
the corporation, unable to obtain funds upon reasonable terms through banking
channels. Any such advance shall be made only for the purpose of assisting in the
exportation of'such products, and shall be limited, in amount to not more than the
contract price therefor, including insiu-ance and carrying or transportation charges
to the foreign point of destination if and to the extent that such insurance and carrying
or transportation charges are payable in the United States by such exporter to domestic
insurers and carriers. The rate of interest charged on any such advance shall not be
less than 1 per centum per annum in excess of the rate of discount for ninety-day commercial paper prevailing at the time of such advance at the Federal reserve bank of
the district in which the borrower is located; and
(2) To any bank, banker, or trust company in the United^ States which after this
section takes effect makes an advance to any such person, firm, corporation, or association for the purpose of assisting in the exportation of such products. Any such advance
shall not exceed the amount remaining unpaid of the advances made by such bank,
banker, or trust company to such person, firm, corporation, or association for such
purpose.
(b) The aggregate of the advances made by the corporation under this section remaining unpaid shall never at any time exceed the sum of $1,000,000,000.
(c) Notwithstanding the limitation of section 1 the advances provided for by this
section may be made until the expiration of one year after the termination of the war
between the United States and the German Government as fixed by proclamation of
the President. Any such advance made by the corporation shall be made upon the
promissory note or notes of the borrower, with full and adequate security in each
instance by indorsement, guaranty, or otherwise. The corporation shall retain power
to require additional security at any time. The corporation in its discretion may upon
like security extend the time of payment of any such advance through renewals,




SECRETARY OF THE TREASURY.

105

the substitution of new obligations, or otherwise, but the time for the payment of any
such advance shall not be extended beyond five years from the date on which it was
originally made.

During the first few months after the passage of the above amendment, loans made by the Treasury to foreign governments, the
authorization of the War Department to sell its surplus stock on
credit, the authority of the Food Administration to sell on credit,
and special measures passed by the Congress fbr the relief of European
nations sufficed to maintain an exceptionally high level of exports,
but the time has now arrived when this new authority conferred upon
the War Finance Corporation is beginning to be used in the way
contemplated by the law.
Failure of the appropriation for the Eailroad Administration created
a sudden emergency in which the War Finance Corporation was able
to be of great assistance.. I t was felt by the directors t h a t this aid
came well within the powers of the corporation in view of the fact
that the maintenance of our transportation system for the purpose
of keeping up a steady fiow of supplies to American troops still in
Europe and for the purpose of facilitating demobihzation constituted
an essential part of operations necessary and contributory to the war.
I n March, 1919, the directors, farcing the large requirements of the
railroads, decided to issue $200,000,000 of 1-year 5 per cent bonds
of the corporation. This issue was quickly taken) just prior to the
issue of the Victory loan and ample funds, for any emergency were
thereby provided. In connection with the financing of railroad
requirements, the War Finance Corporation advanced to the Director
General, on proper security, $50,000,000, and to the raihoads on
security of certificates of indebtedness of the Director General of
Railroads $65,094,830. The action of the War Finance Corporation
not only furnished money in the sums mentioned, but made feasible
the prompt and patriotic cooperation of the bankers of the country in
assisting the raihoads. On the assembling of the Congress, the appropriation for the raihoads was promptly passed and both the Raihoad
Administration and the railroads repaid these emergency loans. The
corporation still has outstanding loans to railroads to the extent of
$70,358,210.
The corporation has continued its function as a dealer in Government securities under section 11 of the act, and has been of great
service in stabihzing the Government bond market.
After the signing of the armistice, numerous changes in the organization of the War Finance Corporation occurred. W. P.'\G. Harding
resigned as managing director, continuing as director, and was succeeded as managing director by Eugene Meyer, jr. Clifford M. Leonard,
who served as director during the war period, found it necessary on




106

REPORT ON THE FINANCES.

account of his health and business to resign. Sherman Allen, secretary
and treasurer, resigned to enter private business,, and was succeeded by
R. R. Burklin. The general counsel of the corporation, George S..
Franldin and Samuel W. Fordyce, jr., as well as associate counsel
Frank M. Peters and Morton G. Bogue, were compelled to give u p
their public service to resume their private activities. M. C. Elliott
was elected consulting counsel and Louis B. Wehle general couiiseL
The subjoined statement shows the condition of the corporation as
of November 15, 1919:
ASSETS.
Due from depositaries:
Treasurer ofthe United States
Cattle loan agency

-.

S13,467,262.56
1,466.41
• $13,468,728. ^7

Advances under the provisions ofthe act:
Total
Total
Balance
Balance
advances.
repayments, outstanding, outstanding.
Section 7.paragraphs... $2,997,202.61 $2,596,410.12
$400,792.49
Section 7; paragraph 2... 1,712,575.00
437,125.00
1,275,450.00
Sections
550,000.00
550,000.00
Section 9:
Railroads
204,794,520.00 134,436,310.00 $70,358,210.00
• Public utilities
39,661,400.00 17,124,767.85 22,536,632.15
Warehouse receipts . 25,211,500.00 25,211,500.00
Industrial loans
23,776,152.00 22,737,500.00
1,038,652.00
Cattle loans
7,779,826.13
5,074,915.28
2,704,910.85 96,638,405.00.
Total.'.
306,483,175.74 208,168,528.25
United States bonds and Treasury certificates of indebtedness
United States bonds purchased, not yet delivered
Public utility bonds
Accrued interest receivable on loans
Furniture and equipment
Total assets

98,314,647.4^
482,544,097.70
4,208,269.2958,400.00.
1,174,554.00
9,242.49
599,777,939.94

LIABILITIES.
.Capital stock paid in (authorized $500,000,000)
$455,000,000.001-year 5 per cent gold bonds, Series A
$200,000,000.00
Less araount repurchased by corporation
67,807,000.00 132,193,000.00'
Interest and sundry profits..
17,830,069.86
Less:
Interest paid on 1-year 5 per cent gold bonds of the War
Finance Corporation
$3,873,171.40
Accrued interest paid on United States Government obligations purchased
i
888,761.03
Expenses, of issue of 5 per cent gold bonds of the War
Finance Corporation
233,079.23
Administrative expenses since organization
250,118.26
5,245,129.92
Net interest and sundry profits (collected)
."
12,584,939.94
Total liabilities

*.

599,777,939. 94

From the above statement it wUl be seen that the War Finance Corporation holds large amounts of the various issues of Liberty bonds
as well as considerable amounts of Treasury certificates. Liquidation of the Treasury certificates at maturity and the sale of a large
part of the holdings of bonds to the Treasury for its bond purchase




SECRETARY OF THE TREASURY.

107

fund will enable the corporation to liquidate its bonded indebtedness due April 1, 1920, and also to provide funds to a considerable
extent for advances to foreign trade.
CAPITAL ISSUES COMMITTEE.

The Capital Issues Committee completed its work shortly after the
signing of the armistice and suspended active operations on December 31, 1918. The committee rendered its final report to the Congress on February 28, 1919, and was formally dissolved by the
President on August 30, 1919.
From the date of its organization on May 17, 1918, to the close of
its active operations on December 31, 1918, the committee received
and passed upon 3,309 applications involving new securities of an
aggregate value of $3,777,313,000. The total amount disapproved
by the committee was $917,133,000.
In passing upon issues of securities for public and private enterprises entirely from the standpoint of the national interest, the committee performed a most important function during the war and
served an imperative purpose in conserving investment capital,
labor, and material for the use of the Government and essential industries. The committee operated as the logical corollary of the War
Finance Corporation.
The proclamation of the President dissolving the committee on
August 30, 1919, and placing its records in the custody of the Federal
Trade Commission was as follows:
BY T H E P R E S I D E N T OF T H E U N I T E D S T A T E S OP A M E R I C A — A

PROCLAMATION.

Whereas Congress on-April 5, 1918, enacted a law known as "The war finance corporation act;" and
Whereas, under section 206 of said act, it is provided that the President may at
any time by proclamation declare that the title relating to the capital issues-committee
is no longer necessary and that'thereupon it shall cease to be in effect:
Now therefore, I, Woodrow Wilson, President of the United States, by virtue of the
authority in me vested, do hereby proclaim and declare that title 2 of said war finance
corporation act, relating to the capital issues committee, is no longer necessary, and I
further direct that the committee shall close up its affairs, and that all the records,
including letters, correspondence, and testimony in the possession of said committee
be turned over to the Federal Trade Commission.
In witness whereof I have hereunto set my hand and caused the seal of the United
States to be aflaxed.
Done this 30th day of August, in the year of our Lord 1919, and of the independence of the United States of America the one hundred and forty-fourth.
WOODROW WILSON.

By the President:
ROBERT LANSING,

Secretary of State.




108

REPORT ON T H E FINANCES.
GOLD.

The stock of gold money in the United States, including coin and
bullion, was $2,872,525,066 on November 1, L919, a decrease of
$207,259,700 as compared with November 1, 1918, and an increase of $985,254,402 as compared with August 1, 1914, or at the
beginning of the war in Europe. About one-third of the world's
monetary stock of gold is estimated to be held by the United States.
After the termination of the embargo on the export movement of
gold on June 9, 1919, there were moderate withdrawals, which naturally reduced the monetary stock. The amount of gold money in
the country on June 1, 1919, and on the first day of each succeeding
month until November was as follows:
J u n e 1, 1919
J u l y l , i919.....
Aug. 1, 1919

$3,092, 037, 699
3,026,591,090
2,989,548,109

Sept. 1, 1919
Oct. 1, 1919
Nov. 1. 1919

$2,944,727,731
2,905,726,555
2, 872, 525,066

The rising cost of labor and material has rendered gold mining,
not only in this country, but in all parts of the world, progressively
less and less profitable during the past two years, with the result of a
decreased output of gold in all parts of the world. There resulted
considerable public discussion as to what steps, if any, might wisely
be taken to relieve this situation. On November 2, 1918, my predecessor appointed a committee, consisting of Albert Strauss, vicegovernor of the Federal Reserve Board, chairman; Edwin F. Gay,
dean of the graduate school of business administration. Harvard University; Raymond T. Baker, Director of the Mint; Emmet D. Boyle,
governor of Nevada; and Pope Yeatman, mining engineer, to consider and report on the subject. The conclusions reached by the
committee commend themselves to me as sound and meet with my
entire approval. Their report follows:
F E B R U A R Y 11,

1919.

To the Honorable the SECRETARY OP THE T R E A S U R Y . '

SIR: On November 2, 1918, your predecessor appointed the undersigned a committee to investigate present conditions in the gold-mining industry and to study
the problem carefully and thoroughly with a view to definitely ascertaining all the
difficulties confronting gold production and submitting suggestions of sane and sound
methods of relief.
The nature of the problem submitted to the committee was well stated in the letter .
of Secretary McAdoo to Delegate Sulzer, of Alaska, under date of June 10, 1918, to
which reference has been made in almost all resolutions or discussions of the subject
since that time. That letter is reproduced herewith (Exhibit 70, page 431).
At that time the war was at its height and there was every prospect of a prolonged
war. Contrary to the belief apparently entertained in many quarters the structure
of banking credit in any country during war.time does not depend very much, if at all,
on the amount of gold t h a t can be made available as a reserve for that structure.
Undoubtedly the rise in prices in this country since 1914 is to a great extent due to
the heavy importations of gold during 1915 and 1916, but it does not follow that the




SECRETARY OF THE TREASURY.

109

export of a corresponding amount of gold at the present time would operate to bring
down prices. As a matter of fact it is the judgment of this committee that it would
not so operate until we.have reached or approached normal peace conditions. In
time of peace the gold reserve is undoubtedly an important factor in controlling the
credit structure, but in time of war that structure is determined by other causes.
This distinction is sometimes overlooked and much inaccurate thinking is due to this
oversight. Under war conditions the imperative necessity of the Government for the
production of war essentials determines Government expenditure, and this expenditure
can not be modified to meet the banking needs of the country; on the contrary, the
banking policies of the country must conform to the fiscal policy of the Grovernment.
Under these circumstances, the only way in which the expansion of banking credits
can be checked is by a reduction of civil demands to correspond with the expanding
needs for Government expenditure. The credit saved through this reduction of civil
demands becomes available to the Government through the purchase of Government
securities, or through the payment of taxes. To the extent to which such saving and
resulting investment does not take place Government obligations must be taken by
the banks, giving rise to credits to the Government which create additional purchasing power for the.use of the Government. This additional purcha,sing power,
in turn, competes with the demands of private individuals, driving up prices against
the Government and against the civil consumer and ultimately impairs the individual's purchasing power to an amount roughly equivalent to the impairment that
might better have been brought about through voluntary saving. The credit structure
thus erected depends inevitably upon Government needs and upon the willingness
and ability of the community to impose upon itself voluntary restraint in expenditure.
In other words, the structure will be high if the community fails to save.
The results in saving achieved in the United States were remarkable, but no
program of saving can be instantly put into effect, and the expansion of the credit
structure that took place under these circumstances was inevitable and could not
have been controlled through any reduction in the gold reserve.
This being so and a long war being believed in prospect, it was important to maintain a strong gold reserve in order that there might be no impairment of confidence
in the convertibility of our currency and in our ability ultimately to settle any international indebtedness in gold.
The cessation of hostilities has radically changed this situation, and, with the
change in the situation, any need of particular effort to promote or stimulate our
gold production which may have existed has ceased. There is now no danger of an
impairment of confidence. The dimensions of our financial problems are becoming
clear and we know that we can without permanent strain meet any financial requirement the Government will be willing to assume. Some further expansion of credit
may result from our expenditures for demobilization and readjustment, but we can
look forward to a comparatively early contraction of our credit structure with the
attending circumstances of a free gold market and a gold reserve that shall once more
perform its normal function of regulating credit conditions. That movement will,
we believe, be both preceded and accompanied by lower commodity prices.
Under these circumstances, there is in our opinion no need for artificial stimulation of gold production. Not only has any need therefor passed, but there have
come into operation causes that will in due time restore all industry, including the
mining of gold, to a normal basis. Gold mining will then become again normally
profitable and respond automatically to normal stimuli.
It is therefore the judgment of this committee that no steps should be taken by the
Government to stimulate or promote the production of gold.
The representatives of.the gold mining interests very properly based their suggestions
for relief on the public necessity for a larger production of gold and not on the hardships




110

REPORT ON TFIE FINANCES.

suffered b y them as parties interested in an industry in which the margin of profit had
been rapidly shrinking, and in many cases had entirely disappeared or been tm-ned into
a loss. They recognized that such diminishing profits and such losses were inevitable
under the shifting conditions of war, and that merely as producers they had no better
claim to relief than any other section of the community suffering a reduction of profits
or incurring losses under the changing incidence of war conditions.
In the course of its consideration of the subject referred to it this committee has conferred with a committee appointed b y the American Gold Conference held at Reno in
August, 1918, under the presidency of Gov. Emmet D. Boyle, of Nevada. I t has had
the benefit of the very complete survey of the conditions of the gold mining industry
contained in the report dated October 30, 1918, of the committee appointed by the
Secretary of the Interior to study the gold situation, of which Hennen Jennings, esq.,
was chairman, and of the report dated November 29, 1918, of the gold production com. mittee appdinted by the commissioners of the British Treasury under the chairmaaship
of Lord Inchcape. T h e y h a v e conferred with or secured the views of Prof. Irving Fisher
and other eminent economists, besides which they have had referred to them a considerable volume of correspondence expressing widely varying views which had been
received b y the Secretary of the Treasury and the Director of the Mint.
I t is interesting to note that the British Treasury committee arrived at the same conclusion as that which we have reached.
We can not refrain from expressing gratification at the substantial unanimity of
opinion among those whose position or experience entitles their views to respectful consideration against suggested measures of relief that would have had a" tendency to undermine or upset our standards of value.
Respectfully submitted.
ALBERT STRAUSS.
E D W I N F . GAY.
RAYMOND T . B A K E R .
EMMET D . BOYLE.
P O P E YEATMAN.

SILVER.

The conversion of silver dollars for use as bullion continued virtually throughout the fiscal year, the work having been coinpleted
on May 6, 1919, when the Secretary announced that he did not contemplate any further sales of silver under the act of April 23, 1918,
generally known as the Pittman Act, except to the Directorof the Mint.
Over 191,000,000 standard silver dollars were melted during the
year. That amount, together with the dollars melted in the preceding fiscal year, enabled the Treasury to complete the arrangement
entered into in May, 1918, with the British Government for the shipment to India of 200,000,000 fine ounces of silver resulting from the
melting of silver dollars under the authority of the Pittman Act.
The following tables show various operations under that act from
the date of its passage to October 31, 1919:




Ill

SECRETARY OF T H E TREAStJRY.
TABLE I.—Silver dollars melted.

Dollars melted (whereof $3,177,554 represented dollars in Treasury and
the balance was made available b y t h e retirement of silver certificates)
$260,121, 554
TABLE I I . ^ S i l v e r certificates withdrawn from circulation and canceled.
Denominations.

$1
$2
$5.....
$10
$20
$50
$100
$500

Amount net.

$112,718,265
35,624,260
'....
92,960,115
6,956,820
6,396,340
2,262,400
24,300
1,500

,
:

Total face value

256, 944, 000

TABLE III.—Federal reserve bank notes issued Apr. 30, 1918, to Oct. 31, 1919.
Net issue.
$174,241,436
46,624,364
34,170,435
1,608,910
1,254,700

$1
S2

$5
$10
$20
Total
Less notes redeemed but not assorted by denominations
Notes outstanding October 31,1919
,

257,899,845
1,656,000
256,243,845

The Federal reserve bank notes which have been issued, as stated
in the above table, are secured as follows:
United
United
United
United
Special

States loan of 1925, 4 per cent
States consols of 1930, 2 per ceut
States Panama loan 1916, 2 per cent
States Panama loan 1918, 2 per cent
certificates of indebtedness, 2 per cent
TotaL...

,

$1, 768,000
4,523,100
130, 300
258,000
255,475,000
262,154,400

The announcement of May 6, 1919, coupled with the removal on
that day of all restrictions on the export of silver, more fully discussed elsewhere in this report under the heading ^^The International
Financial Situation,'^ had the effect of freeing the silver market from
the control of war measures. The market price of silver in the New
York market has since fluctuated as follows:
Maximum and minimum prices of silver, by months, since Moy 6, 1919.
Maximum.
May.
June
Juiy.

$1,215
1.1425
1.09375




Minimum.
$1.0125
1.085
1.035

Maximum. Minimum.
August —
September
October..-

$1.1675
1.2125
1.2575

$1.0825
1.12
1.1725

112

REPORT ON T H E

FINANCES.

PUBLIC MONEYS AND SPECIAL DEPOSITARIES.

The Treasury continued throughout the year the policy of deposit-*
ing proceeds from Liberty loan subscriptions and purchases of certificates of indebtedness in incorporated banks and trust companies
designated by the Secretary as special depositaries for the purpose.
Any incorporated bank or trust company is eligible for such special
designation in accordance with the provisions of Department Circular
No. 92, as amended and supplemented, April 17, 1919 (Exhibit 71,
page 432). The entire receipts from Liberty loan subscriptions and
certificate sales during the fiscal year 1919 were deposited with
special depositaries, the Federal reserve banks, branch Federal
reserve banks, and the Treasurer of the Uhited States.
At the beginning of the fiscal year 1919 there were 6,510 special
depositaries and at the close of the year there were 9,550, of which
4,511 were national banks and 5,039 State banks and trust companies. Both national and State banks were designated as such
depositaries in every State in the Union, i
The amount of Government deposits in these depositaries out
June 30, 1919, was $905,397,000, and on October 31, 1919,
$422,776,000. These speciah deposits, like deposits in the regular
depositaries for Government funds, paid the Treasury interest at
the rate of 2 per cent per annum. The amount of interest received
from such depositaries for the fiscal year 1919 was $20,996,202.36,
while the amount of interest received from this source from the
date, of the creation of the special depositaries in the early part of
the war to June 30, 1919, was $31,921,081.82, as shown by the following table:
Interest collected to June 30, 1919, by Federal reserve districts, on deposits in special depositaries on account of sales of Liberty honds. Victory notes, and certificates of indebtedness and income and profits tax payments under acts of Apr. 24-> 1917, Sept. 24, 1917.,
Apr. 4, 1918, Sept. 24, 1918, July 9, 1918, and Mar. 3, 1919.

Federal reserve
district.

April 24 tc July I t o Dec. Jan. 1 to June July 1 to Dec. Jan. 1 to June
Jime 30,
31,1918.
31,1917.
30,1918.
30,1919.
1917.

Total.

Boston
$733, 867.20 $3,130, 513.40
$5,340.47
$495,044.28 , $757,345.98 $1,138,915.47
6,720,162.97 2,968,858.77 14,932, 139.69
New York
338,480.60 2,418,335.72 2,486,301.63
1,059,668.15
596,436.23
2,414, 493.85
1,044. 64
Philadelphia
200,276. Q4
557,068.79
872,392.10
696,750.48
2,662, 844.98
Cleveland
,
290,482.56
803,219.84
109,503.64
242, 735.18
562, 352.48
Richmond
,
81,252.94
128,860.72
144,165.99
203; 550.98
472, 244.98
252.06
Atlanta
28,189.21
96,086.74
974j334.63 1,107; 399.81
9,023.53
3,049, 234.75
300,428.59
658,048.19
Chicago
403,488.76
56,412.34
268,726.24
St. Louis
369, 776. 91 1,098, 404.25
164,790.29
677, 413.71
32,520. 68
168,309.21
Minneapolis
311, 793.53
332,145.49
831, 784.16
39,634.27
150,897. 61
Kansas City
309, 106. 79
268,329.88
1,353.62
518, 414.69
35,888. 58
80,191.52
Dallas
132, 651.09
377,421.12
2,726.51
590, 811.02
1,317, 441.91
137,996. 92
208,486.34
San Francisco
New
Orleans
79,005.33
8,140.55
26,332.71
60,320.38
branch
253,798. 97
Total.

358,221.43 4,142,794.84




6,423,863.19

12,644,323.82

8,351,878.54

31,921,081.82

Si:CRETARY OF T H E TREASURY.

113

The necessity for depositing income and profits taxes in special
depositary banks during the fiscal year 1919 was obviated by two
factors:
(1) Such taxes were permitted by law to be paid in four quarterly
installments instead of having to be made in one payment as heretofore.
.
(2) Treasury certificates of indebtedness receivable in payment
of income and profits taxes were sold in advance to taxpaj/^ers. By
this method the financial problem had adjusted itself before the
taxes were due and no shifting of large sums of money resulted.
By Department Circular No. 144 (Exhibit 72, page 438) collectors of
internal revenue are required to deposit their entire receipts i n Fed. eral reserve banks or branch banks where such banks are located in
the headquarters city of the collector. Where the collector is not
located in a Federal reserve or branch Federal reserve city, he deposits cash and checks drawn on local banks (other than checks
received exclusively in payment of income and profits taxes in the
months of March, June, September, and December) with local
national bank depositaries. AU out-of-town checks (and checks in
payment of income and profits taxes in the months of March, June,
September, and December) are forwarded to the Federal reserve
bank or a branch of the Federal reserve bank in the district in which
the collector's office is located. This use of the coUection system of
the Federal reserve banks permits the Treasury to obtain earlier
credit for checks received in payment of internal-revenue taxes and
obviates the necessity of maintaining larger public balances in
depositary banks to enable them to carry the float resulting from the
. immediate credit to the Government's account of the amount of.the
. great number of checks received on account of taxes.
UNITED STATES DEPOSITARIES I N FOREIGN COUNTRIES.

Depositaries of public moneys of the United States were appointed
in Belgium during the fiscal year 1919, and in addition the Treasury
continued such depositaries in France, Great Britain, Italy, Spain,
Switzerland, Argentina, and Canada. These depositaries were
designated under the authority vested in the Secretary of the Treasury
by section 8 of the act of September 24, 1917, as amended. They
were of great service to disbursing officers of the Government, particularly those of the Army and Navy, in making prompt payments and
transacting public business in foreign countries.
PAYMENT OF SPANISH-AMERICAN WAR BONDS.

Additional bonds of the 3 per cent loan of 1908-1918, popularly
known as the Spanish-American war loan, which matured and ceased
to bear interest on August 1, 1918, were presented to the '.Freasury
140325—EI 1919




-8

114

REPORT ON T H E FINANCES.

for payment during the fiscal year 1919. On the date of maturity
there were $63,945,460 of these bonds outstanding.. During the first
moiith after maturity $55,414,960, of the securities were presented for
payment. Other amounts have been presented from time to time
until on June 30, 1919, $936, 000 were outstanding, and on October 1,
.1919, $858,600 were outstanding. Thus during the period of the
creation of a new war debt—the greatest in the history of America—
the debt remaining from- the last previous war in which the United
States was engaged has been virtually extinguished. While the
amount is relatively small when measured 3y the standards of these
record-breaking days, its payment, particularly in the circumstances,
reflects the policy of the United States in promptly discharging its
obligations
BOND-SECURED CIRCULATION OF THE NATIONAL BANKS.

The situation with respect to operations under section 18 of the
Federal reserve act in connection with the retirement of bond-secured
circulation of the national banks and the refunding of 2 per cent
bonds bearing the circulation privilege into one-year 3 per cent Treasury notes and 30-year 3 per cent bonds remained unchanged throughout the fiscal year 1919., Owing to the demands for currency, applications from member banks for the sale of bonds securing circulation
were negligible and no 2 per cent bonds bearing the circulation privilege were retired during the year. I t should be pointed out, however, t h a t the amount of bonds available for securing circulation Was
reduced during the year by $63,945,460 by reason of the maturity of
the Spanish-American war 3 per cent bonds which became due and
payable on August 1, 1918.
On January 1, 1919, the balance of $9,301,000 one-year 3 per cent
Treasury notes then outstanding matured, were paid, and the optiori
held for their renewal was not exercised by ihe Secretary. With this
payment the total amount of one-year 3 iper cent Treasury notes,
aggregating $27,362,000, issued under section 18 of the Federal reserve act in lieu of retired 2 per cent boniis having the circulation
privilege has been retired and no longer appears as an item of thc
public debt.
j
United States bonds bearing the circulation privilege were outstanding on October 31, 1919, as follows:
4
2
2
2

per
per
per
per

cent
cent
cent
cent

loan of 1925
consols of 1930
Panamas of 1916-1936
Panamas of 1918-1938




J

$118,489,900
599,724, 050
48, 954,180
25, 947, 400
793,115, 530

SECRETARY OF THE TREASURY.

115

The amount of national bank circulation secured by United States
bonds on October 31, 1919, was $722,394,325, as compared with
$721,471,138 on October 31, 1918.
FUNDS FOR ARMY PAYMENTS IN EUROPE.

The method of providing Army payments in Europe, which was
outlined in the report for the fiscal year 1918, has been continued
up to the present time. This plan has greatly facilitated payments
to United States troops in Europe and the settlement of other
Government obligations incurred in foreign countries.
Minor- modifications of the original scheme have been made to
meet changing conditions abroad, such, for instance, as the transfer
frona Paris to Washington, toward the end of the fiscal year, of the
auditing of the accounts of disbursing officers in the military establishment. Under the provisions of the Army payment plan, the cash
balance maintained in France has been available to pay the checks of
any disbursing officer of the Army located in that country; likewise,
the cash balance maintained in England has been available to pay
checks of any Army disbursing officer located in that country. I t
has not been necessary to carry a balance for the credit of each
officer and under each appropriation. This method has greatly
reduced the amount of cash balances in foreign countries required to
finance the Army. I t has been of great assistance to the Treasury
in reducing the constant drain on the general fund. Since the
Government has had to borrow money to meet its current expenditures, the reduction of transfers from the general fund results in
the saving of interest charges. Much has been saved in that direction and experience has fully justified the value of the Army payment
plan.
AUDIT OF ACCOUNTS ABROAD.

The general purposes of section 12 of the act of Septeinber 24,
1917, providing for the audit of the accounts of the military establishment abroad, were fulfiUed during the fiscal year. The audit
was authorized by law not only to facilitate the operations of disbursing officers of the military forces but also to avoid the necessity
of shipping each month from Europe the originals of vouchers and
pay roUs, thus subjecting them to the danger of loss by submarines
and other war perils. Because of the progress made in the demobi-.
lization of the Army the Assistant Auditor for the War Department
abroad was recalled just prior to June 30, 1919, and the work carried
on at Paris by t h a t office is now being performed by a division, established for the purpose, in the office of Auditor for the War Department at Washington.




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REPORT ON T H E FINANCES

I t was thought advisable to continue the office of the assistant
comptroller in Paris after tlie recall of the auditor's force untU
such time as disbursements by the military establishment abroad
should be reduced materially. I t was believed that Army disbursing
officers would be assisted and many erroneous payments prevented
by continuing the facUities -accorded them of obtaining advance
decisions on proposed pa3nn:ents and such similar assistance as
could be rendered by the office. This view has been justified by subsequent events and in addition the services of the assistant comptroUer in Paris have beeii utUized in connection with financial transactions under the direction of the Secretary of the Treasury, such as
the daily transmission to the Treasury Department of a statement
of receipts, disbursements, and balances reported by the French
Treasury, the supervision over indemnity bonds and issuance of
duplicate checks where disbursing officers' checks have been lost,
and other miscellaneous work of the department. After the close
of the fiscal year 1919 the assistant comptroller's office in Paris was
directed to close up its work about October 1, and the employees of
that office were directed to return to Washington.
The accounts of disbursing officers, with the vouchers and papers
connected therewith, ffied with the assistant auditor in Paris, were
shipped to Washington in June, 1919. | These accounts contain
the original pay rolls and vouchers covering the disbursements of
the Army during the entire period of our participation in the fighting in Europe. Through the cooperation of the War Department
in arranging for the transportation, these papers, filling several
freight cars, were received in Washington promptly and safely.
Their value historically and in adjusting the pay due soldiers, living
and dead, as well as in settling claims of all kinds, is apparent.
They will be needed as original evidence for many years.
A BUDGET SYSTEM.

For many years the question of a budget system has been discussed
by the country in a rather desultory and disinterested manner.
Secretaries of the Treasury have earnestly recommended the creation
of a budgetary plan under which the Government's outgo would be
properly related to its income along the lines of intelligent and
scientific control and responsibility. The time when this question
might be considered from a purely academic point of view as to what
is desirable as an improvement has now passed. The compelling
force of necessity has arrived. There has been a wholesome public
discussion of the matter in recent months, accompanied by an increasing realization on the part of the pub' ic of the imperative need
of budgetary reform. The large expense involved in the aftermath
of the war, the interest and sinking-fund charges on the public debt,



SECRETARY OF THE TREASURY.

117

and the growth of the Government leave no room for doubt that we
shall never return to the prewar standard of expenditures. The cost
of running the Government of this great Nation will mount into huge
sums, which will be increased as additional burdens upon,the taxpayers of the country by every element of duplicated effort, waste
and inefficiency. There can be no question or argument now as to
the necessity of a budget system, and the people of the country,
aroused to the needs of the situation, will sooner or later insist upon.
the adoption of an effective plan, for the answer to inaction is increased taxation.
The Treasury is pleased to note that the Congress already is giving
careful consideration to this important question and has been glad
of the opportunity to present its views. That there should be one
single authority responsible for the preparation and execution of the
Governinent's program of finance and that appropriations should be
made not independently of each other but with reference to one single
comprehensive plan of expenditure properly related to the Government's income there can be no doubt. The burden of preparing the
budget must, in the nature of the case, if the work is to be properly
done and responsibility centered instead of divided, rest upon the
Executive. The supervision of the preparation of the budget should
be vested in the Secretary of the Treasury, who is the chief fiscal
officer of the Government and, as such, should be the representative
of the President in budgetary control. The budget, as thus prepared
for the President and on his responsibility, should not, as such, be
increased by the Congress, and the department has ventured to express the opinion that appropriations should be considered by a single
committee of the House of Representatives and the Senate. As a
further step in the plan, unquestionably the audit system should be
reformed by the consolidation of the offices of the Comptroller of
the Treasury and the Auditors of the Treasury into one central
organization, to which would be transferred the present duties and
powers of the comptroller and the auditors, with the added authority
to examine into and make report upon the inethods emploj^ed and
the results obtained by the executive departments of the Government. Such reports should be submitted to the Congress and to the
Secretary of the Treasury.
Some sincere advocates of a budgetary system, in their enthusiasm
to see the movement started and believing that it is not possible to
obtain a reasonably complete plan in the beginning, have suggested
that the reform be accomplished by gradual stages. With that view
the Treasury does not agree, because such a program undoubtedly
would retard rather than accelerate true budgetary reform. All
movements of change proceed slowly and gradually through a period
of discussion, but when the time for action arrives they must take




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REPORT ON THE FINANCES.

effective form if they are to succeed. Modification of the present
system will not be a budget simply because it is called a budget.
An effective plan must deal with the three fundamental aspects of
the problem, namely, the centering of responsibility in the Executive,
the exercise of self control in the Congress and the consolidation and
expansion of the audit system. Any other plan would be misleading
to the country and only result in the postponement of the desired
reform.
The Treasury sincerely hopes that the Congress will proceed
promptly and vigorously with the consideration of this important
question. The views of this Department are set forth in detail in
the following statement, which was presentejd to the Select Committee
on the Budget of the House of Representatives on October 4, 1919:
I am heartily in favor of a budget system. Without effective control over governmental expenditures and limitation of them to the |Government's income we shall
bring down upon our heads the splendid structure which our fathers have built and
which we have preserved. The very success (which you \vill pardon me if I call brilliant) with which the Treasury has financed the stupendous requirements imposedupon America by the great war may become a menace. All sense of values seems to
have departed from among us. The departments, bureaus, and boards, all inspired
by a laudable enthusiasm for their work, but some by a less laudable instinct to magnify
its importance, bombard the committees of Congress with projects, some more or less
meritorious, some of no merit whatever, but all conceived in sublime indifference to
the fact that the great business of government is being run at a loss and that each one
of these projects increases the deficit of the Government, and consequently the burden
to be thrown upon the great body of people, whether the deficit be met by increasing
taxes or byfioatingadditional loans. For no fallacy is more grotesque than the assumption that by issuing bonds or notes.or certificates of indebtedness now we may pass on
to future generations, the burden of our own extravagance. . The burden of these
issues will have tp be met to-day, not only in the interest and sinking-fund charges
added to an already heavy load but in the expansion of credit which is inevitable as a
result of the issue of such securities, constituting as they do a prime basis for additional
credit in the hands of the holders, whoever they may be. I shall not elaborate upon
that point, but I want to say to you in all solemnity that one hundred inillion American
people will pay for the extravagance of the Government, whether that extravagance
finds its incidence in governmental waste or in the desire to accomplish real or fancied
benefits for a portion of the community.
Let us now get back to bedrock. Let us remember that there can be no spending
by the Government without paying by the Government and that the Government
can not pay except out of the pockets of the people, Let us remember, too, that in
the last analysis taxes and the cost of Goverhment loans are borne by 100,000,000
people. The burden of taxation, the burden of credit expansion, is inevitably shifted
to the whole people of the United States. Some methods of finance are better than
others. Some taxes are less readily adapted to being shifted from the backs of the
original taxpayers, presumably better able to bear them, to the backs of the people as
a whole, but in the long run the burden of governmental waste and extravagance falls
more heavily upon the poor than upon the well-to-do and more heavily upon the wellto-do than upon the rich. By graduated income taxes we tend to mitigate this consequence, but we can not wholly avoid it. Let us notl fail to remember that the Government of the United States is simply a name for the| people of the United States and
that all of the people of the United States will pay^in inverse order to their ability




SECRETARY OF THE TREASURY.

119

for extravagances of the * Government perpetrated in the interest of a portion of t h e
people or a section of the country.
You, gentlemen, I am sure, have learned as well as 1 by long service in Congress t h a t
the instincts and enthusiasms of departments, bureaus, and boards find support in
the committees of Congress appointed to have charge of their particular affairs. As a
result we find that governmental expenditure initiated in a department of the Government charged with the specific business of creating an army, or of creating a navy, or
of creating a merchant marine, or of stimulating commerce, or of protecting labor, or
of aiding the development of agriculture, is submitted to the Congress without consultation with or approA^al by the finance officer of the Government, the Secretary of
the Treasury, who serves merely as a messenger, and whose office is charged with t h e
heavy burden of finding financial means in loans and taxes to meet expenditures;
and when it reaches the Congress is referred to the corresponding committees of t h e
Congress whose specific function is also to see to the development of the Army, t h e
Navy, the merchant marine, etc. And the Congress passes upon all of these projects-^good, bad, a n d indifferent—^without a report from the Committee on Ways and
Means or the Committee on Finance, the committees of Congress which share with t h e
Secretary of the Treasury the heavy burden of finance.
I t undoubtedly is true that, oftener than otherwise, the sum of- department estimates
is greater than allowed by the committees of Congress. I have heard it said t h a t this
is invariably so. I suspect that estimates are frequently contrived with a confident
expectation of such a fate. Nevertheless, it must be admitted that each jurisdictional committee deals with estimates in a singularly sympathetic spirit that would
not be manifested by a budgetary official charged with the responsibility of advising
the Congress as to the levying of taxes as well as with the responsibility oif collecting
the money of which appropriations are made. Moreover, it will not be denied that
these various jurisdictional committees, acting separately and without complete information concerning, the activities of one another, accentuate the importance of the
departments, bureaus, and boards which they respectively have under their care.
This would not be so if appropriations were made by a single committee, any more
than would the initial estimates be allowed so far to exceed the- probable revenues if
the finance, minister of the Government were given power to- assemble, review, and
alter them before transmitting them to the Congress. Extravagance of executive
departments and bureaus would thereby be appreciably restrained. I think it amazing that.-under such a system the Congress has done so well for so long a time;, b u t I
feel constrained to warn you gentlemen, in view of the greatly expanded activities
of the Government and the extraordinary financial burdens-which the country must
end-iu'e,: that it would be hazardous to continue on the old way of transacting t h e
public business.
The Government of t h e United States is like a great company whose operating
managers, publicity managers, sales managers, purchasing departm ent ^ are given.
carte blanche to make- expenditures conceived by them to be in the interest of t h e
4evelopment of the business, without consultation, with, or control, by those officers,
of the company who are charged with t h e business of ascertaining its revenues and-,
borrowing the money to make good their deficiencies.
Or, again, the Government of the United States is like a private family in which t h e
wife, having charge of the spending part of the family's business, were given carte
blanche to buy houses, yachts, automobiles, clothes,>nd food, and to. employ servants,
as she might find wise, with, a view to increasing the comfort, improving the education, cultivating the taste, and enhancing the prestige and social standing ofthe
family; and the husband's sole business were to see that there was money in the bank
to meet her checks as they Were presented.
That is a most pronounced hyperbole, b u t it is literally true that the Secretary of
the Treasury under existing law and practice is unable to obtain from any department




120

REPORT ON THE FINANCES.

of the Government an accurate or approximately accurate estimate of its expenditures
for a few weeks in advance, not to say months or years. He must be guided not by
information furnished by them, but'by his own shrewid guess as a result of putting
together an infinite number of little facts and figures. That the Treasury has been
able, notwithstanding these intolerable Conditions, to finance the Government through
the great war and up to this date without impairing the credit, but, on the contrary,
with enhancement of the credit of the Government of the United States, is due', first,
to the loyalty and devotion of the whole American people throughout the period of
the war, to the magnificent efforts of the patriotic Liberty loan organizations, to the
unqualified support given the Treasury by the Congress without regard to party, and,
if I may say soj to the rather exceptional skill and ingenuity with which the Treasury
has been conducted during this difficult period. But 1 say to you it is an intolerable
thing that such conditions should exist and that the welfare and economic life of the
American people should be at the hazard of such things as these.
As a former colleague, and in a spirit of frank comradeship which such association
inspires, I am prompted here to enter a complaint which may not be ascribed to a
•desire to be critical, but to a hope that it may be given serious attention in behalf of
:administrative efficiency. The Congress votes with a lavish hand stupendous sums
^conceived in a magnificent spirit of generosity with a view to the enhancement of the
prestige of the Nation, or for the benefit of this or that element in the community.
This it does upon the advice of the committee of Congress charged with the business
of caring for such special interests. Then, speaking through the great Committee
on Appropriations, it pursues a policy of restriction with relation to the expenditures
of some of the departments of the Government which makes it impossible for those
departments to conduct the vast affairs imposed upon them with efficiency and
economy. The Government of the United States today is spending hundreds of
millions of dollars, even billions of dollars, for armies, fbr navies, for merchant fleets,
and other magnificent activities and at the same time refusing the payment of a living
wage to the faithful clerks and employees in departments of the Government charged
with the stupendous responsibility of transacting these vast affairs honestly, expeditiously, and economically.
While your committee is considering a budget and an audit in the interest of the
Government, the Government of the United States is in danger of losing millions of
dollars because some of the departments charged with the conduct of its business are
undermanned, limited to the employment of less efficient help than they should have,
and provided with insufficient space to house those eniployees. While you are considering the reform of the audit, the work in the office ofl the auditors is months behind
because of the failure to provide" ah adequate force or adequate space to transact
their business.
While you discuss the budget plans and audit plans the Congress withholds the
necessary funds to erect an adequate vault for the protection of the vast gold store of
the United States. It withholds the necessary appropriation to enable the Treasury
of the United States to count Federal reserve bank notes and national-bank note^
turned in for redemption, with the result that the Treasury is unable to take credit
for those notes and is obliged to borrow corresponding sums of moneys at interest running at 4J per cent and 4^ per cent and this notwithstanding that any appropriation
made for this purpose will be charged back to the banks and cost not one penny to
the Government of the United States. Bonds, notes, and gold with the custody of
which the Treasury is charged are inadequately protected. There is an insufficient
force to care for them. The force we have is underpaid! The work in the Treasurer's
Office is behind, the work in the Division of Loans and Currency is behind, the work in
the Division of Public Moneys is behind, the work in the Register's Office is behind,
the work in the offices of all the auditors is behind, and the securities and moneys of




SECRETARY OF THE TREASURY.

121

the United States are inadequately protected because the Congress withholds the
necessary appropriations.
I have spoken of the need of an executive budget covering all appropriations asked
for by the executive departments. But let us be honest with ourselves and honest
with the American pjeople. A budget which does not cover the initiation or increase
of appropriations by Congress "will be a semblance of the real thing. I note that not a
little has been said about the constitutional prerogatives of Congress, but I know of
no clause in our Constitution that will prevent^ the Congress exercising self-control.
The Houses of Congress can, by amendment of their own rules, surround with proper
safeguards the initiation and the increase of appropriations by Congress.
To-day the credit of the United States is imperiled by projects initiated and supported
on the floor of Congress with a view to captm'ing the so-called soldier vote. I do not
believe for a minute there is any such thing as the soldier vote. I do not believe that
that magnificent body of strong, brave, lusty young men who went out to France, or
were ready to go, want to see the people of the United States exploited.in order that
each of them may receive a donation. I do not believe these fine young men, if they '
realized what it is that is proposed in their behalf, would accept a gift made at the
expense of their fathers and mothers and sisters and the children that are to come after
them in order'to give them a holiday. While of course you can not commit to terms of
money the value of the service rendered by the Army of America, I call your attention
to the fact that the actual pay of our soldiers was doubled at the outset of the war, that
our soldiers have been paid with liberality never dreamed of in the history of this or
any other country, and that the projects now advocated so lavishly and with so little
regard for the welfare of the Arcierican people are not limited to those heroic men who
suffered injury or death at the hands of the enemy, nbt even to those who actually saw
the front, not even to those who were sent to France. These projects extend to everyone of some four and one-half million men, mostly young men, who were included in
the military and naval forces of the United States, even to those of their number who
sought and obtained employment of a character which would relie've them from being
exposed to personal risk.
It has been the disheartening task of the Treasury to examine scores and scores of
bills drawn and presented with a view to benefiting a section of the country or a portion
of its citizenship at the expense of the whole. Many of these bills were apparently
devised to avoid the appearance of an appropriation by requiring the Secretary
of the Treasury to issue bonds, notes, or certificates of indebtedness to meet the expenditure involved, and all of these bills were such as would not be reached by a
purely executive budget.
I have said the finances of the United States are in excellent condition. I have said in
substance that I do not anticipate a deficit in the current fiscal year in excess of $1,000,000,000, and that that deficit is covered by deferred installments of the Victory loan,
payable within the fiscal year. I have said that there need be no more Liberty loans.
But I say to you in all solemnity that if a prompt and immediate halt is not called to
this great peril there must be another Liberty loan, and you gentlemen will have to go
out to the people of the United States and call'upon them to subscribe for bonds,
the proceeds of which are to be given away to the well and strong young men who
you and I and the American people know went out in a spirit of unselfishness, not one of self-seeking, to fight for their country. You may ask the old men
and the widows, the school children, the rich and the poor, who responded to the call
of their country to the number of twenty millions during the period of the war to
respond again to this call for a donation. I hope I shall never shrink from the performance of any public duty, yet I do not covet the task of making such an appeal, and I
shall not willingly be a party to offering this affront to the generous, heroic, unselfish
Army and Navy of America that saved the freedom of the world.




122

REPORT ON T H E FINANCES.

The Congress may propose to pay this gift in bonds themselves; but that should n o t
fool anyone. If bonds are given away to the soldiers the issuance in that manner of
those bonds will depress the prices of existing bonds so gravely as to imperil the credit
of the United States and force additional sacrifices fi-om the twenty million peoplewho participated in financing the war, in providing the pay, food, and munitions
which made it possible for our splendid Army to contribute decisively to the great
victory."
I have spoken of the initiation of appropriations in Congress. Let me speaksalso>
of the increase of appropriations. As you all know, and as I know after 17 years i n
Congress and not more than half as many months in the Treasury, the processes employed in framing and passing public buildings and rivers and harbors bills lead tO'
a great waste of the money of the people. The continuance of the United States Government's activities where ihey are not needed, whether those activities be Army
posts or subtreasuries or hospitals, would have scant consideration in a real businessbudget submitted b y a finance minister duly empowered b y law and managed through.
Congress by a single committee under rules of limitation imposed by the Congress OIL
itself. In my belief you can not make a real budget unless you face these facts and
deal with them. The Congress of the United States in attempting this great reform
in the interest of economy and efficiency will fail and fail utterly if, while imposing
the necessary firm control over the expenditures of the executive departments, it failsto exercise the sublime quality of self-control.
Coming to matters of detail, let me summarize briefiy my views as follows: First,.
a budget, to be effective, must cover all appropriations and all increases of appropriations, whether initiated in the executive departments or in the Congress. The
bureau of the budget should be in the office of the Secretary of the Treasury, the officer
of the Government charged with the heavy burden of finding the means to finance
its requirenients. The division of responsibility is the bane of our Government. I t
is intolerable that the Secretary of the Treasury should have no voice in the determination of the expenditures of the Government. It is intolerable to think that his function should be merely to go out and borrow the money when someone else has spent
it without consultation with him or consideration of the means to raise it. The preparation of the budget should be the principal duty of the finance minister. We a l l
know that the President can not do this thing.
We all know that a bureau chief in the office of the President would be helpless toassert his opinion in opposition to the members of the President's Cabinet. Projectsof the Government involving expenditures should | be determined in conference
between the members of the Cabinet concerned, and jthe President's decision should
be final. So far as concerns the question how much money can be raised in loanS:;
and taxes and to what amount, therefore, the total expenditures of the Government,
should be limited and for all budgetary work the President should obtain his ^advicefrom the Secretary of the Treasury and not from a iDureau chief appointed for thepurpose and parallelling the work of the Secretary of the Treasury. The budget
plans presented to this comrnittee generally do not contemplate increasing the voiceof the Secretary of the Treasury in determining the Government's expenditures, but,
on the contrary, contemplate depriving him of such voice as he already has.. I ask
you what there is in-the record of the Treasury of the United States from the time of
Alexander Hamilton to this present day which justifies this distrust? Which of the
departments of the Government has deserved better of the American people or of
this Congress? What reason, have you to believe that the Secretary of the Treasury,
with the support of the great institution over which he presides, the oldest of Government departments, can not, if due authority be conferred upon him, undertake this
task so vital to the welfare of the people and so vital to the success of the administration.
of his office? We multiply boards and bureaus, we multiply clerks and statisticians,
and perpetually we attempt to hobble those great officers of the Government upon.




SECRETARY OF THE TREASURY.

123'

whom rest the responsibility for producing the necessary results. Why not go back
to first principles and trust these men until they fail you and then get rid of them?"
What good can come of a policy of imposing tremendous responsibility upon the great
officers of the Government and. then tying their hands so that they can accomplish
nothing?
Whether the budget service should be iii the form of a bureau in the Treasury is a
matter of detail which can b e worked out. V^atever form such a staff of the Secretary
of the Treasury should take, I am inclined to believe that it should be composed of
experts whose"tenure of office, with the possible exception of the head, would be in
the nature of permanence.
If this additional duty should be imposed upon the Secretary of the Treasury, I
think it would.be wise to relieve him of acti^dties which have no relation to the financial operations of the Government. The department should retain all the fiscal
bureaus and divisions, and the Coast Guard, which has to d o m t h the collection and
protection of the revenue; b u t in a readjustment of this character I think that it could
well dispense with.the Bureau of War Risk Insurance, the Bureau of Public Health
and perhaps the Super^^ising Architect's Office.
Second, when the budget has been received.by the Congress it will be accepted as
the President's program of finance. If I may venture an opinion as to whether the
budget should be considered in one committee or distributed among the present committees that consider appropriations, I should say that it would be preferable to consider it as a whole and by one committee. The forum of consideration, however, is
not quite so important as the question of the disposition of the budget at the hands of
Congress. That, in my judgment, is of the essence of an effective budget. AVhile
Congress shpuld retain the right to reduce the estimates, I believe that it should, as
far as the budget itself is concerned, put some distinct limitation on the right to iricrease
any item either in committee or on the floor unless recornmended by the Secretary
of the Treasury, or, in the absence of such recommendation, unless approved by twothirds of the membership of Congress. The only increase on the floor which should
be permitted would be the restoration of an item reduced by the committee to t h e
original figure recommended by the Secretary.
Under such a scheme the budget would come out of Congress practically as t h e
President's budget and for which he must stand definitely responsible before t h e
country. If the Congress desired .to propose new expenditures, it should be done in
a separate bill, and if the expenditure which such legislation would entail would m a k e .
the total expenditures exceed the estimated revenues, the Congress should provide
in the bill of appropriation specifically for the requii^ed revenue t o m a k e up the deficit.
In this^ way Congress would not forfeit any right to initiate appropriations, but such
right would be only separated from the budget.
The program would stand before the country with a clear line of demarcation as to
the appropriations for which the President was responsible and those for which the
Congress assumed the principal responsibility.
Third, there should be an audit and an effectiye audit. The audit now provided
by law is effective when made to insure that expenditures have been made in accordance with law. The first step before Congress is to appropriate funds sufficient to
enable the auditors to make the audit which is provided for under existing law. T h e
second step is to enlarge the scope of the audit, strengthen the powers and enlarge t h e
force so that there may be covered also the question whether expenditures have been
made efficiently, economically, and without duplication. For this purpose i t is vitally
necessary, that there should be.only one auditor instead of half a dozen. I t is desirable
that the offices of the comptroller and auditors should be rolled into one. As a step
in that direction Secretary McAdoo on October 25*, 1918, issued an order directing t h e
Comptroller of the Treasury to exercise administrative supervision and direction of
all the auditing offices. This was the first time that the auditors were placed under




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REPORT ON T H E FINANCES,

the administrative control of the comptroller, and the order Vv^as as far as it was possible
to go without amendment of the law.
In connection with the suggestion that the Comptroller of the Treasury and the
auditors be divorced from the Treasury Department and erected as an independent
establishment, it is not clearly defined in any of the proposals just what change is
contemplated in the accounting system. I t must be reraembered that the comptroller
and the auditors are not merely auditors of expenditures with'respoct to their regularity
and legality, b u t they are the accounting officers of the Treasury.
They pass upon and check t h e accounts in connection with every financial transaction, whether i t relates to t h e receipt of money, to direct pa^onents out of t h e Treasury,
to repayments to t h e credit of appropriations, to credif;s to disbursing officers, or to
payments b y disbursing officers.
ary
I n t h e management of t h e Nation's finances t h e Secreta of t h e Treasury must have
an effective system of accounting and bookkeeping. If t h e comptroller and auditors
were transferred from t h e Treasury I am inclined to t h i n k t h a t it would be necessary
to duplicate much of this accounting and bookkeeping in their offices. If t h e comptroller, as an independent officer, is to be in a position to give information to t h e Congress, as t h e suggestion seems to contemplate, unquestionably it would be necessary
for him to duplicate t h e bookkeeping operations of t h e ^Division of Public Moneys and
t h e Division of Bookkeeping and AVarrants of t h e Treasury Department, and also some
of t h e bookkeeping operations of t h e office of t h e Treasurer of the United States. At
t h e present time, however, I express no definite opinion on this suggested change because it has not been p u t forward in such detail as to permit t h e expression of judgment
from the standpoint of t h e accounting and bookkeeping requirements of t h e Treasury.
If the auditing department should be without t h e walls of t h e Treasury, it is vital t h a t
t h e auditor or comptroller, whatever he may be called, should be as free from interference b y t h e members of the legislature and by members of t h e other departments of the
Government as he is now in t h e Treasury. I t has been t h e d u t y and t h e pleasure of the
Treasury Department to uphold the comptroller in his independence as a quasi judicial officer, even in cases where his determinations did not commend themselves to t h e
Treasury. I t is, of course, only human for the comptroller to favor his own personal elevation from a subordinate to an independent position. There is nothing blameworthy
in that. The present comptroller has m y support and confidence. He is a brave, upright and, on t h e whole, wise public servant. Whether any comptroller would be able to
exercise his functions as effectively and freely, deprived' of t h e support and prestige of
t h e great Treasury Department and left to s t a n d upon his own feet as t h e head of an independent office, I am doubtful. On t h e whole, I am inclined to t h e view t h a t t h e best
interests of efficiency and economy require t h a t the auditlbe conducted under the supervision of t h e finance minister of t h e Government, t h e ruan upon whose shoulders will
fall the consequences of extravagance and waste.
. The act of March 4, 1909, provides:
Immediately upon the receipt of t h e regular annual estimates of appropriations
needed for t h e various branches of t h e Government it shalll be the d u t y of the Secretary
• of t h e Treasury to estimate as nearly as may be t h e revenues of the Government for the
ensuing fiscal year, and if the estimates for appropriations, including t h e estimated
amount necessary to meet all continuing and permanent appropriations, shall exceed
t h e estimated revenues the Secretary of the Treasury shall transmit t h e estimates to
Congress as heretofore required b y law and at once-transinit a detailed statement of all
of said estimates to t h e President, to t h e end t h a t he I may, in giving Congress information of t h e state of t h e Union and in recommending to their consideration such
measures as he may judge necessary, advise the Congress how in his judgment t h e estimated appropriations could with least injury to t h e public service be rediiced so as to
bring the,appropriations within the.estimated revenues, or, if such reduction be not
in his judgment practicable without undue injury to tile public service, t h a t he may
recommend to Congress such loans or new taxes as may be necessary to cover t h e
deficiency.




SECRETARY OF THE TREASURY.

125

I t has been stated t h a t this section of law contemplates the preparation of an adequate book of estimates along budgetarj^ lines. Such, in m y judgment, is not t h e case.
I n t h e first place the act states t h a t in case t h e estimates for appropriations exceed t h e
estimated revenues, a detailed statement shall be made to t h e President b y t h e Secretary of the Treasury in order t h a t he may advise the Congress how in his judgment
t h e estimated appropriations could with least injury to t h e public service be reduced,
or, if t h e y can not be reduced, in order t h a t he may recommend such loans or new
taxes as may be necessary to cover t h e deficiency. I call your particular attention to
the fact t h a t the act states t h a t in t h e contingency mentioned t h e President may recommend how t h e appropriations may be reduced. T h a t is an implicit sanction b y law
of t h e present situation, or at least a recognition in t h e statute t h a t the estimates as now
submitted are compiled without regard to t h e Nation's income. When the estimates
go to Congress under any proper system, t h e y should represent in the first instance t h e
minimum requirements of t h e Government as related to its prospective receipts.
I n the second place I invite attention to the fact that this law applies only to the .
regular annual estimates of appropriations, that is to say, the appropriations which
are submitted for the ensuing fiscal year. I t does not apply to estimates for deficiencies and supplemental appropriations. When the Secretary of the Treasury sends
the Book of Estimates to the Congress, less than one-half of the current fiscal year has
expired, b u t there is no requirement in law for any action whatever on the part of
the executive in case of an estimated deficit in the Treasury at the end of that current
fiscal year as a result of deficiency and supplemental estimates.
I n the third place I should point out that this law compares estimated receipts and
estimates of appropriations, whereas it should compare estimated receipts and estimated expenditures. At the time it was drawn, however, it was not customary for.
the Secretary of the Treasury to estimate the expenditure for the ensuing fiscal year.
I t has been stated that no.attention has been paid to the statute. The facts are these:
The estimates for the fiscal year 1911 were transmitted to Congress December 6,1909,
and therefore were the first regular annual estimates of appropriations to be transmitted after the passage of the law.
The 1911 estimates showed an estimated excess of ordinary receipts over ordinary
appropriations of $35,931,327.49, but with the Panama Canal appropriations added
instead of a surplus there would be shown a deficit of $12,132,197.21. As authority
existed for the issue of Panama Canal bonds, undoubtedly it was held that the act of
March 4, 1909, did not apply, there being more than sufficient revenue to meet the
estimated ordinary appropriations for 1911. This assumption is confirmed b y the
fact that the annual report of Secretary MacVeagh for 1909 refers to the sale of bonds
or certificates of indebtedness to meet anticipated deficit shown in the estimates.
For the year 1912 the same condition was presented, it being estimated that the
ordinary receipts would exceed the ordinary appropriations by approximately $49,500,000, b u t taking the Panama Canal appropriation into account there would be a
deficit of more than $7,000,000. A similar condition existed for 1913.
The estimates for 1914, sent to Congress on December 2, 1912, were $732,556,023.03
and estimated receipts $710,000,000, showing an estimated deficit of $22,556,023.03,
exclusive of Panama Canal appropriations. President Taft reported this deficiency
i n his message to the Congress December 6, 1912, and in his annual report submitted
to the Congress in December, 1912, Secretary MacVeagh made the following observation :
These estimates of appropriations, of course, are based upon conditions that how
exist and upon the laws which now prevail; and between now.and the end of the fiscal
year 1914 much may occur through legislative action to change the basis upon which
they are made. There are also included in these estimates items for projected public
works the payments for which will not be concluded during the fiscal year in question.




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REPORT ON T H E FINANCES.

Estimates for 1915, transmitted to Congress December 1, 1913, showed estimated
ordinary*receipts of $728,000,000 and estimated ordinary appropriations of $714,684,'675.02, the. estimated surplus of ordinary receipts being $13,315,000, exclusive of
Panama Canal appropriations. When the Government's revenue was largely decreased
h y reason of the European war. President Wilson delivered a special message to Congress on September 4, 1914, urging that additional revenue of 100j000,000 be raised
through internal taxation.
For 1916, the estimated excess of ordinary receipts over ordinary appropriations
was $21,234,895.20.
The annual report of the Secretary of the Treasury of December 6, 1915, pages 48
to 52, deals with receipts and disbursements for 1916 and 1917, and recommended the
means of obtaining the additional revenue required for the fiscal year 1917. In
conformity with the statute. President Wilson similarly dealt with the situation in
liis message to Congress December 7.
The annual report of the Secretary of the Treasury, sent to Congress in December,
1916, referred to the estimates for the fiscal year ending June 30, 1918. The estimates
indicated that there would be a deficit on account of the program of preparedness. The
Secretary pointed out that on account of the untried new revenue laws relating to
taxation of inheritances and war munitions, and- the uncertainties as to the actual
•expenditure that might be made on account of the large program for preparedness,
i t was very difficult to estimate with accuracy the receipts and expenditures for the
fiscal year 1917 and particularly for the fiscal year 1918." He urged upon the attention
of Congress the necessity of passing such measures as would provide additional revenue
t o meet the preparedness program. This was only a few months before the declaration of war. After war was declared, the Secretary of the Treasury was in constant
ouch with the Committee on Ways and Means of the House and the Finance Committee of the Senate, advising them periodically of the^ needs of the Government.
As a result of these ad^dces the Congress levied taxes and authorized issues of securities as the needs of the Government developed.
REVOLVING FUNDS AND REIMBURSEMENTS OF APPROPRIATIONS.

The necessity during the period of war emergency. of providing
•greater freedom of administrative action involving the use of public
moneys has been recognized by the Congress in various ways. The
•expedient of appropriating for so-called '^revolving funds^' has co'me
into existence and from time to time there has been repeated the
practice which finds ample precedent in the past of authorizing
^specific appropriations to be reimbursed by moneys received from
the sales of Government property and supplies, or otherwise, so
as to renew or increase the amounts originally appropriated. The
device of appropriating for revolving funds developed during the war,
while that of providing for the reimbursement of appropriations
is of. long standing. They are essentially the same in principleSuch measures doubtless were necessary in the cases iii which they
were employed during the crisis of war, when it was desirable to
grant wide discretion and extensive powers an order to permit the
largest effort to be devoted to the supreme task of defeating the
enemy.




SECRETARY OF THE TREASURY.

127

Now that, the war emergency has passed, the Treasury desires to
invite the attention of the Congress to the grave menace to the control of appropriations and to the finances of the Government involved
in any extension of appropriations of this character, or even of their
continuance, unless in clearly exceptional cases. By such appropriations the revenues of the Government affected never become
unconditionally available to meet general expenditures, but are
appropriated atitomatically for special purposes, without further
control by the Congress and without any new consideration of the
merits of the additional expenditure. These appropriations by
their very nature tend to produce expenditures which, if considered
anew, might not be authorized by the Congress, and I believe that
their discontinuance, to the utmost limit possible, is an essential
condition of any program for rigid economy in Government expenditure. To appropriate receipts accruing to the Government in this
manner for special purposes takes the money just as truly out of the
Treasury as if directly appropriated in specific sums, but at the same
time conceals the real extent of the appropriation involved. I feel
very strongly that, in general, the receipts of the Government should
be covered into the Treasury unconditionally without being affected
h y any special trust or purpose, and that, so far as may be, expenditures of the Government should be made pursuant to direct appropriation of the Congress.
While revolving funds and the like may be regarded as emergency
measures growing out of war needs and not likely of repetition
under ordinary conditions, it is thought advisable to bring the subject to the attention- of the Congress at this time because of the
tendency to seek administrative liberty of action with relation to
public moneys, without the usual Treasury supervision. The disposition of administrative officers is to acquire as wide discretionary
control over appropriations for their departments or establishments
as the Congress will permit, and every recognition by the Congress of
the need of such administrative control in specific cases is accepted
as an argument for further and similar grants of authority. The
discretionary power allowed over expenditures from specific or annual
appropriations, in ordinary circumstances, is not a matter which
concerns the Treasury except in the routine discharge of the statutory duties of its officers. But the grant from the Treasury of a
revolving fund with or without qualifications or limitations as to its
use, or the increase of appropriations by so-called reimbursements,
creates a situation that is indefinite and uncertain both from the
viewpoint of the Congress and of the Treasury.
In addition, it is pertinent to point out that appropriations of this
character present large and important accounting difficulties in that
they bring into Government affairs features somewhat unfamiliar in




J28

REPORT ON THE FINANCES.

the accepted scheme of accountability to the Treasury, and which,
furthermore, are not wholly in keeping with the permanent statutory
requirements from which the intent of the Congress with reference
to appropriations and accounting for public moneys has hitherto
been drawn. The general intent of the Congress with reference to
the use of appropriations and the accountability of responsible
officers to the Treasury for all moneys received by them for the use
of the United States from any sources whatever are well settled.
Moreover, the. appropriation acts themselves usually contain a
statement of intent by means of limiting clauses or provisos wliich
serve as guides to Treasury administration. The intent of the words
'^revolving fund'' in appropriation acts, however, is not always
apparent, and resort is necessarily had to construction in the light
of acknowledged principles as applied to the objects to be accomplished. The difficulties are not all of interpretation from an accounting viewpoint. There remains a large field of transactions based
upon the revolving-fund principle over which the Treasury has no
opportunity of exercising supervision. This loophole in fiscal control
permits large expenditures without adequate accountability and
makes difficult the application of proper administrative measures in
relation to the basic specific appropriation itself. The provisions
for an accounting and the disposition of revenues, for example,
appear to relate solely to final balances and not to the transactions
leading up to them. The whole revolving-fund principle is out of
harmony with the permanent legislation that has heretofore safeguarded the use of public moneys, and makes difficult the fulfiUment
o^ the statutory duties imposed upon the Treasury. I t was justifiable
only in the emergency of war.
Mention also should be made of the statistical difficulties encountered in connection with such appropriations. Under the law and
in accordance with long-established custom, receipts which are covered into the Treasury as reimbursements of appropriations, and likewise receipts that are credited to revolving funds, do not appear as
receipts on the daily and other financial statements of the Government, but they are deducted from the expenditures. This is an .
undesirable procedure. The law should require that such moneys be
deposited in the Treasury as receipts of the Government.
These manifestations of present-day tendencies show a serious
departure from the orderly procedure with respect to appropriations,
and the subject is commended in its relation to the Treasury as one
worthy of careful consideration with the hope that, with the passing
of the war emergency, the Congress wiU not permit the extension of
these principles but wiU meet the needs of all Government agencies, as
far as possible, by definite appropriations with the requirement that




SECRETARY OF THE TREASURY.

•

129

all receipts accruing to the United States from whatever source shaU
be covered into the Treasury for the general purposes of the Government.
INCORPORATED GOVERNMENT AGENCIES.

The subject of incorporated Government agencies is closely related
in its importance to the Treasury to that of appropriation for
revolving funds and reimbursable appropriations. This means of'
handling some large and unusual activities of the Governinent was
necessary during the war, but, now that the emergency has passed,
there can be no justification, generaUy speaking, for the creation of
new Government-owned corporations or the continuation of those in
existence except in unusual cases or for the purpose of winding up
their affairs. At the least, such agencies should not be exempted
from amenability in future to the accounting laws of the United
States and the regulations of the Treasury made in pursuance to the
statutes unless good and controUing reasons are given therefor. The
particular advantage (which I should rather call menace in time of
peace) accruing to Government functions so organized, is the freedom
which they enjoy in the expenditure of public money without thelegal restrictions that the Congress has imposed withrespect to the usual
transactions of the Government. If these activities were sustained
by specific appropriations and were required to withdraw their funds
from the Treasury in the manner prescribed for other Government
estabhshments with the same accountability both as to disbursements and receipts, there would be httle or no ground for the corporate form of organization.
Attention has been called particularly to this recent innovation
among the instrumentalities of Government by reason of the requirement of the Congress by act of J u l y l , 1918, long after operations had been undertaken along commercial lines without regard
to Treasury accountability, that the Secretary of the Treasury should
assume the responsibility of an audit of the financial transactions of
the United vStates Shipping Board Emergency Fleet Corporation,
under such rules and regulations as he should prescribe. I t is almost needless to say that a task of that nature imposed at so late
a day is well-nigh impossible of fulfillment with any marked degree
of satisfaction.
Authorization given by the Congress empowered the corporation
to control certain specific appropriations and account for them to
its own board of management and in such reports as are required to
be made to the Congress. The congressional appropriations were
not disbursed, therefore, through a disbursing officer and charged to
him on the books of the Treasury as in ordinary circumstances, but
were given to the corporation on settlements made by a Treasury
140325—ril919




9

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REPORT ON THE FINANCES.

auditor as moneys due and paid on settlement warrants, for which
there is no accounting to the Treasury. The action of the Treasury
in this respect was in accord with law and with the evident purpose
of the Congress in having the specific appropriations made from,
public funds spent as the money of any corporation would be spent,
without reference to the laws. limiting and restricting the use of
m.oneys by the regular departments and establishments of the Governnient. Under such conditions vast sums have been handled . as
earnings and as expenditures without regard to their character as
public moneys and without the restraining application of the Treasury regulations which have been brought into being by reason of
the legal requirements and restrictions surrounding the Government's
financial transactions in ordinary circumstances.
A mere glance at the situation occupied by these incorporated
agencies under private control and at their manifest weaknesses when
compared with government-controlled agencies or with business
corporations not connected with the Government will bring conviction
that the device is not a happy, one for the Government's finances or
a satisfactory one to the managers charged with responsibility for
their economical administration. This is due not alone to the inherent difference of men and methods, trained under different systems
and evolved from different schools of efficiency, but also to a difference in the view taken of the objects to be accomplished. Government officers charged with administrative achievement are charged
at the same time with obedience to restrictions placed upon the use
of appropriated funds, and the object of their endeavors is thus made
twofold. A proper regard for the interests of the public treasury is
not the least of their duties. The ofRcers of a private corporation
seeking its own ends find the object of their efforts in the accumulation
of business profits, unrestrained by any other law, as a rule, than is
to be found in penal legislation. But the objective of business
profits is in itself a restraint and a guide to their actions and, above
all, a check on extravagant expenditures and on inefficiency. The
corporation created and utihzed as a Government agency, however,
operating on a capital for which it has no accountability and which
has been drawn from the public treasury with a prospect of further
access to public funds in time of need, whether the need shall arise
from successful expansion or wasteful expenditure, has none of these
restraints; and its objective may depart ever so far from congressional intent without a test or any standard by which its full accomphshment or failure may be measured. These concerns become,
primarily, spending agencies without the restrictions and obligations
imposed by law upon Government establishments or those imposed
by invested capital upon private corporations which are to be tested




SECRETARY OF THE TREASURY.

131

by profits earned. They stand alone, therefore, without tests or
standards; without regulations or responsibihty imposed by Government authority or by individual holders of their securities; and
without other guaranty of integrity and efficiency than may be derived
from the selection of their officers, who may be given an arbitrary
power over their affairs.
Other cases than the Emergency Fleet Corporation could be cited
as typical of the anomalous position of such incorporated agencies
with respect to the Treasury; but it is thought that the difficulties
of safeguarding the public interests and carrying out the statutory
intent with respect to the public funds must be obvious from a mere
statement of their character. But for the somewhat prevailing tendency to make commercial methods applicable to Government transactions there is little or no excuse for excepting such agencies, now
that the war emergency has passed, from the usual requirements
and restrictions built up on the experience of many years and preserved by legislative enactment for general application to the financial transactions of the Government.
I t is. undeniable t h a t government has come to mean very largely
a scientific busmess organization operating for the benefit of the
public. I t s operations must be based on efficient handling of
public finances for the benefit of those in whose interest the machine
is run or else it is a failure with respect to those irfterests. In this
sense its operations have a direct bearing on the living cost and the
material wcilfare of the individual. In no respect is this direct connection between the public treasury and the welfare of the individual
more advantageously manifested than in the economies and safe;
guards and efficiencies which should surround the business activities
of the Government.
There are very substantial grounds to be found in experience for
the view that strictly governmental establishments are oftener than
not administered more efficiently than many business concerns that
are frequently pointed out as models for the business of government,
and that government methods are more effectiye for the purposes of
government than are the methods employed by private corporations. Certainly it would seem that the time has come when the
use of revolving funds and the employment as governmental
agencies of chartered corporations operating under individual personal control, and all similar devices, are no longer justified by
emergency needs; They inherently contain possibilities of extravagant methods of accomplishing results which might be accomplished better and more economically by means of the tried and
tested machinery distinctively governmental in character and operation.




132

REPORT ON T H E FINANCES.

The experience of the Treasury confirms the view that the so-called
red tape of government in accounting can be shown upon fair
analysis to be but an orderly.procedure^of safeguards and checks,
easily followed by one who has a proper regard for the interests of
the public, and presenting no obstacles to business efficiency except
to those who have an interest to serve by promoting a certain laxity
of administration. And nothing promotes so rapidly an atmosphere of laxity as a removal of the legislative restraints long and
zealously imposed by the Congress with respect to appropriations
from the public funds or a weakening of the established requhement
that public moneys shall be deposited in the public treasury and
withdrawn only in consequence of legislative authorization.
With reference to the public funds, the consideration by the Congress of the use of incorporated agencies as instrumentalities of
government is urged.
CHECKING ACCOUNTS OF GOVERNMENT CORPORATIONS AND THE
RAILROAD ADMINISTRATION CARRIED BY THE TREASURER.

The United States Shipping Board Emergency Fleet Corporation,
the United States Housing Corporation, the War Finance Corporation, and the United States Food Administration Grain Corporation
have continued to maintain checking balances with the Treasurer of
the United States, as outlined in the previous annual report of the
Secretary of the Treasury.
The total amount of the checks drawn on the Treasurer by the
United States Shipping Board Emergency Fleet Corporation which
have been paid from February ,28, 1918, when the balances of that
corporation were transferred to the Treasurer, to October 31, 1919,
was $4,331,872,379.71. The total balances on deposit with the Treasurer on October 31, held for credit of the disbursing agents of the
corporation, amounted to $208,332,821.86.
The total amount of the checks drawn on the Treasurer by the
United States Housing Corporation which have been paid from July
27, 1918, when the checking credit was established on the books of
the Treasurer for the. corporation, to October 31, 1919, was $123,696,668.98. The total balances, on deposit with the Treasurer on
October 31, held for credit of disbursing agents of^ the corporation,
amounted to $4,557,892.25.
The total "amount of checks drawn on the Treasurer by the War
Finance Corporation which have been paid from June 2, 1918, when
the checking credit was established on the books of the Treasurer
. for the corporation, to October 31, 1919, was $1,454,988,813.34. The
-total amount of balances on deposit with the Treasurer on October 31,
held for credit of the War Finance Corporation, was $28,165,824.59.




SECRETARY OF THE TREASURY.

133

The United States Food Administration Grain Corporation has
not used the Treasurer's office to the same extent as the other Government-owned corporations enumerated above. The total checks
paid by the Treasurer from October 31, 1918, when the first credit
was established for the Grain Corporation, to October 31, 1919, was
$436,200,000. The total amount of balances, on deposit with the
Treasurer on October 31, held for credit of the corporatiori, was
$177,290,209.70.
In addition to the above, the Russian bureau of the War Trade
Board arid the Raikoad Administration maintained checking
accounts with the Treasurer of the United States. The total amount
of checks drawn on the Treasurer by the Russian bureau of the
War Trade Board which have°been paid from November 30, 1918,
when the checking account was established on the books of the
Treasurer for the corporation, to October 31, 1919, was $11,639,807.69. The total amount of balances on deposit with the Treasurer
on October 31, held for the credit of the Russian Bureau of the
War Trade Board, was $1,048,987.03.
The total amount of checks drawn on the Treasurer by the Railroad Administration, which have been paid from April 13,1918, when
the first checking account was established on the books of the Treasurer for the Raihoad Administration, to October 31, 1919, was
$1,313,977,605.60. The total amount of balances on deposit with the
Treasurer on October 31, held for the credit of disbursing agents of
the Railroad Administration, was $17,373,159.60.
Pursuant to the request of the Director General of Railroads, the
Treasurer of the United States was designated as his agency for the
payment of the principal and interest of the certificates of indebtedness issued by the Director General of Railroads on account of compensation for the possession, use, control, and operation of raihoads
and systems of transportation under Federal control; for motive
power, cars, or other necessary equipment, or parts thereof^ or
material or supplies therefor, furnished to the director general for
use on or in connection with the operation or utilization of the
property of raihoads and systems of transportation under Federal
control; and for the purchase or construction of boats, barges, tugs,
and other transportation facilities furnished to the director general
for use on or in connection with the operation or utilization of the
property of raihoads and systems pf transportation and of inland,
canal, and coastwise waterways" under Federal control.
The Treasurer has paid these certificates of indebtedness directly
and through the Federal reserve banks. The holders of the certificates were notified that payment of principal and interest, to
July 15, 1919, inclusive, would be made at the Treasury in Washing-




134

REPORT ON T H E FINANCES.

ton, or, at the option of the holders of the certificates, at the Federal
reserve banks.
To make payment of these certificates the treasurer of the Railroad Administration established a credit of $288,526,150.13 with the
Treasurer of the United States. The payments made by the Treasurer of the United States from July 15, 1919, to September 30, 1919,
amounted to $288,399,222.46.
The total amount of payments which have been made by the
Treasurer for the above-named Government-owned corporations
and the Railroad Administration up to and including October 31,
1919, were $7,960,774,497.78.
The plans evolved by the Treasury for handling the accounts and
disbursements of these agencies cf the Government have been
operated to the entire satisfaction of all concerned. The funds
have been assured absolute security and appropriated moneys
running into large amounts have not been withdrawn from the
Treasury until needed to pay obligations of the Government, thus
reducing the amount of Government borrowings with the consequent
saving in interest charges.
SALARIES OF GOVERNMENT OFFICERS AND EMPLOYEES.

I t is earnestly to be hoped that the Congress wUl give careful
consideration to the question of salaries in the public service. WhUe in ,
the light of experience I can speak only for the Treasury, undoubtedly
the same problem respecting personnel t h a t . confronts this department obtains in the other great Government establishments in
Washington. The largely multiplied business of the Government can
not be conducted with efficiency and economy unless there be
attracted to and retained in the public service a group of highly
trained, weU paid, and permanent officials of supervisory grades.
Uncertainty of tenure in some instances and inadequacy of compensation have closed the public service to many men of the best
type or forced them out of Government employ at the moment of
their greatest usefulness. The war has increased the public debt
more than twenty-fiveofold and has augmented the functions and
activities of the Government in many ways. The duties are greater
and the responsibUities are larger than those of other days, to the
standards of which it is not to be expected that the Government
wUl ever return. The conditions are such that faUure to take the
necessary action to invite and hold in the public service men of
exceptional ability and of real distinction in their fields can result
only in grave burdens to the taxpayers of the country and in possible
disaster.
>




SECRETARY OF THE TREASURY.

135

Already the transaction of the business of the Government is
hampered by deficiencies of personnel due to the return to private
life of many men of large capacity who, during the period of active
warfare, were willing and glad to serve their , country at great
personal sacrifice. I have come to learn that there are heroes in
the civU establishments as well as in the mUitary services, selfsacrificing patriots who toU year in and year out for a bare pittance
when they could command salaries double or treble the amounts
they receive from the Government, b u t who for the love of their
country and for the love of their work have rejected alluring offers
in the field of private enterprise. They were too fine and too patriotic to leave their posts at a time when their services were indispensable. Under the compeUing force of patriotism they made
wiUing sacrifices during the war, b u t with the return of peace, the
Government can not expect to retain these employees indefinitely,
because in justice to themselves and their families they wiU sooner
or later accept the larger opportunities that are open to them in
the world of business and industry unless the Government proposes
to pay them salaries t h a t at least reasonably approach the value
of their services.
Only prompt action by the Congress to buUd up a permanent
and dignified civil service which wiU include men of great ability
and high attainments \5an prevent mistakes and faUures in the transaction of the public business, the consequences of which may be
• calamitous. This does riot raean a wholesale increase in the Government pay roU but such reclassification, new positions and increased
salaries as may be necessary to obtain and hold employees of. the
character so imperatively needed in the interest of economy, efficiency and safety. The Congress has already taken a step in this
direction by the creation of the Joint Commission on the Reclassification of Salaries, and it is to be hoped that that body wUl .find
the solution of the pressing problem of compensation in a plan that
wUl grant a living wage to all employees commensurate with their
relative value to the Government and afford salaries that are comparable with those paid to men and women in private enterpriseRETIREMENT OF CIVIL-SERVICE EMPLOYEES.

The logical corollary of the necessity for adequate salaries for the
personnel of the Government is the imperative need of an equitable
retirement law for civil-service employees. Economy and efficiency
in the public service and justice to faithful employees who have
toiled through the best years of their lives in the interest of the
Government require that provision be made for the retirement of
those who are superannuated or disabled. Previous Secretaries of




136

REPORT ON T H E FINANCES.

the Treasury have urged the passage of such an effective retirement
law, and to their recommendations I give my hearty indorsement.
I n this connection attention is invited to the proposal, of Secretary
McAdoo that the "Congress, in framing a retirement measure, consider the possibilities of an expansion of the principles underlying
war-risk insurance. I agree with my predecessor t h a t the solution
of the problem lies along the lines of insurance with both the Government and the civil employees contributing to a scientific plan that
will provide for retirement as well as insurance against death.
FEDERAL FARM-LOAN SYSTEM.

The Federal farm-loan system has operated effectively and successfully during the past year, amply justifying the great purpose
for which it was created and meeting the expectations of its advocates. The Federal land banks have continued to make loans to
farmers at 5J per cent per annum, and the joint stock land banks at
6 per cent. All loans, as provided by the act, have been made on
the amortization plan, the borrower making a fixed payment, annually or semiannually, which is at least 1 per cent in excess of the
interest charge, such excess being applied on the principal. As the
balance of the principal due decreases the proportion of this level
payment absorbed by the interest charge correspondingly decreases
and a constantly increasing balance is applicable to the extinguishment of the debt. This principle, while familiar.to actuaries and
statisticians, had not been applied in this country to individual
mortgages to any appreciable extent prior to the enactment of the
Federal farm-loan act in July, 1916. The great isuccess of the farmloan system has called attention to the advantages of this method of
paying debts, and the application of the amortization plan to all
mortgages, urban and rural, is now being actively urged by influential private organizations.
During the 12 moriths ended September 30, 1919, loans were made
by the Federal land banks to the farmers of the United States to the
aggregate amount of $129,271,662, an increase of $10,742,839 over
the corresponding period a year ago, and making a total of loans by
the Federal land banks from the inception of the system in March,
1917, of $261,175,346. The subjoined table indicates the amount of
the loans made by each of the banks in the years referred to and in
the aggregate:




137

SECRETARY OF T H E TREASTJRY.

District.

Federal land bank.

Springfield, Mass
Baltimore, Md...
Columbia, S. C...
Louisville, K y . . .
New Orleans, La.
St. Louis, M o . . . .
St. Paul, Minn...
Omaha, Nebr
Wichita, K a n s . . .
Houston, Tex
Berkeley, Calif..Spokane, Wash..
Total

Aggregate
of loans
made from
Loans made Loans made date of orOct. I, 1917, Oct. 1, 1918, ganization
to Sept. 30, to Sept. 30, in March,
1918.
1919.
1917, to
Sept. 30,
1919.
S4,999,630
4,323,150
6,198,905
7,490,700
8,800,135
8,166,065
17,380,500
14,418,050
10,292,922
11,264,287
7,315,800
17,878,679

738,200
277,550
361,150
460,700
722,715
149,270
886,100
267,450
045,000
885,787
019,400
14,458,340

19,913,545
10,401,600
13,891,045
17,959,900
18,192,505
20,895,940
33,605,900
35,390,290
23,311,800
28,666,561
14,065,400
34,880,860

118,528,823

129,271,662

261,175,346

There have been 27 joint stock land banks incorporated by private
capital under the terms of the act, with aggregate capital of $8,500,000. Nineteen of these banks were incorporated during the past year,
and therefore can not be said to be, as yet, in full and active operation.
The loans made by the joint stock land banks aggregate $41,787,359, which added to the loans of the Federal land banks makes a
total of $302,962,705 lent to farmers by all of the banks composing
the system. The banks of this chairacter have grown ver}^-strikingly
in number and in volume of business during the past year. Owing to,
the fact that they were not established until after the Federal land
banks, and that for some time there were only a few in operation,
their loans represent only 14 per cent of the total, but during one
or more recent months they have transacted as high as 30 per cent
of the whole volume of business of the system. Notwithstanding this
division of the field, the Federal, land banks have done ,.a larger
volume of more desirable business than in the previous year, the
membership of existing farm-loan associations has grown, and over
600 new associations have been organized.
A very gratifying feature of the year is the remarkable improvement in the financial position of the Federal land banks. During the
first year of their existence, and part of the second year, they necessarily operated at a loss. This was inevitable, and was anticipated
by the proponents of the system and those who were famUiar with
the business. The 12 banks opened in the spring of 1917 with an
aggregate capital of $9,000,000, of which $8,892,130 was subscribed
by the Government and $107,870 by individuals., Before the close
of the first year over $600,000 of this original capital had been absorbed
by the excess of organization and current expenses over the scanty
receipts of that period. By January 31, 1919, this amount had been




138

REPORT ON THE FINANCES.

made good out of earnings. Under the provision of the Federal farmloan act that after subscriptions to capital stock by farm-loan associations shall amount to $750,000 in any Federal land bank, onefourth of all sums thereafter subscribed shall be applied to the payment and retirement of the stock originally subscribed, eight of
the banks had, up to November 15, 1919, paid and retired $1,198,890
of the stock originally subscribed by the Government, thereby
reducing the amount of stock held by the Government on that date
to $7,693,240. Notwithstanding such retirement of stock originally
subscribed, the aggregate capital stock of the 12 banks increased
from $9,000,000 at the start to $21,321,687 on November 15, 1919.
Up to October 31, 1919, the net earnings of the 12 banks
amounted to $1,278,394.41, of which $202,175 had been carried to
reserve account, $332,923.98 distributed in dividends paid by five
banks upon stock owned by farm-loan associations and individuals,
and $743,295.43 is still carried as undivided profits.
, Another gratifying feature, testifying alike to the security of the
loans made, the ability and wiUingness of borrowers to make payment, and the efficiency of the collection machinery of the banks, is
the unusually small total of delinquencies. To Septeniber 30, 1919,
payments due by borrowers to the banks had accrued to the amount
of $12,666,313.61. Of this sum the amount remaining unpaid on
that date was only $172,456.72, or 1.4 per cent of the total. Of that
amount $86,816.60 was 30 days or less overdue, $25,182.05 from 30
to 60 days, $14,872.85 from 60 to 90 days, and only $45,585.22 over
90 days overdue. This record has been made notwithstanding widespread disaster to crops in several sections of the country.
The Federal farm-loan act provides t h a t ' ' the salaries and expenses
of the Federal farm loan board and the farm loan registrars and
examiners * * * shall be paid by the United States." The
system is now so well established and is in such fi^nancial condition
that this assistance from the Government, in the judgment of the
Federal farm loan board, concurred in by officers of the banks, is no
longer necessary or desirable. The board accordingly has recommended that beginning with the fiscal year 1921 its expenses be provided for by assessments against the Federal land banks and the
joint stock land banks in proportion to their gross assets. Measures
for this purpose have been introduced in both houses of the Congress
and, should the plan be adopted, the Government will be relieved
entirely from the payment of the expenses involved. To have put
the system on such a basis in three years is a very gratifying and satisfactory result.
The primary purpose of the Federal farm-loan system, as expressed
in the title of the act creating it, was ^Ho provide capital for agricul-




SECRETARY OF THE TREASURY.

139

tural development." The accomplishment of that purpose necessarily
involved the possibility of an enhancement of farm-land values. In
so far as such enhancement was based upon increased production or
added attraction to farm life, it was legitimate and desirable. Indeed, there were many sections of the country where, owing either
to the exodus of young men from the farms to industrial pursuits in
the towns, or to local and peculiar conditions, farm lands were selling
at prices much below their intrinsic value as measured by productive
capacity. Any enhancement in land values in these sections which
might incidentally result from the operation of the Federal farm-loan
system was a general public benefit, as tending to check the urban
drift of population and stimulate the local production of foodstuffs.
The Federal Farm Loan Board has had in view from the start, however, the importance of guarding the system from complicity in ,
anything approaching speculation in farm lands or such enhancement in their value as would either make them more difficult for men
of small means to acquire or add to the overhead cost of producing
foodstuffs. The high prices realized by growers for their crops during
the war period were naturally reflected in a general increase in land
values, but the flrst indication of any rapid or speculative rise did
not manifest itself until a few months ago, when it appeared in some
sections of the Middle West. It was claimed, perhaps correctly, in
a recent convention of private loaning agencies, that the advances in
this section were justified and will be permanent. The Federal
Farm Loan Board, however, has thought that in the public interest,
and in pursuance of the policy of conservatism which they have always
followed, it would be better to follow this movement at a safe distance
than to be part of it. They, therefore, issued instructions under date
of May 3, 1919, to the banks under their supervision that where sales
had taken place within a year at prices materially in excess of previous values such sales were not to be taken into account in, the
appraisement of the land, and under date of July 7, 1919, that no
loans in excess of $100 an acre were to be made on land used for
general agricultural purposes, even where the appraisement was
$300 or $400 an. acre.
SEED-GRAIN LOANS TO FARMERS.

The administration of the seed-grain loans made to farmers iri
drouth-stricken areas from the sum of $5,000,000 placed at the joint
disposal of the Treasury Department and the Department of Agriculture by the President from the fund appropriated for the national
security and defense has progressed steadily during the past year.
The nature-and scope of this plan as announced in Joint Circular
No. 1, dated August 2, 1918, of the Treasury Department and the




140

REPORT ON THE FINANCES.

Department of Agriculture is outlined in the Annual Report of the
Secretary of the Treasury for 1918, pages 107-109. • Joint Circular
No. 1 made provision for loans to farmers for the fall planting in 1918
only, but subsequently further advances were authorized, while
several modifications in the administration of the loans became necessary to meet new and changed conditions.
In the autumn of 1918 a scourge of grasshoppers occurred in
certain sections of Kansas shortly after the fall planting in those
sections had been completed. The crops of many of the farmers who
had received advances from the Government were entirely destroyed
by this scourge, and these farmers would havebeen unable to replant
their land that fall had not the Government again extended relief to
them. In department telegram dated November 20, 1918, to the
president of the Federal land bank of Wichita (Exhibit 73, page 443),
the Treasury Department, with the concurrence of the Department
of Agriculture, authorized the Federal land bank of Wichita to make
additional seed-grain loans for fall planting. These second fall
planting loans were-made upon substantially similar terms as the
first fall planting loans; They were limited, however, to those
farmers whose acreage had been planted by means of the first loans
and whose crops had been completely destroyed by grasshoppers, a
fact to be evidenced by a certificate of an agent of the Department
of Agriculture. The maximum loan to any farmer was limited to
an amount not to exceed $150, nor greater than $1.50 per acre, and
a separate guaranty fund (Exhibit 74, page 444) was created distinct
from the first fall planting guaranty fund. I t was provided, however, that any surplus in the second fall plantiag guaranty fund
after the payment of losses should be paid into the first fall planting
guaranty fund. These second fall planting loans were not made to
farmers in the St. Paul and Spokane districts, as the grasshopper
scourge appeared only in certain sections of Kansas.
At about the same time that these second fall planting loans
were authorized, a circular entitled ^'Joint Circular No. 2," dated
November 1, 1918, prescribing ^'Regulations relative to farmers'
seed-grain loans for spring wheat planting in 1919 in drouth-stricken
areas'- (Exhibit 75, page 447) was issued by the Treasury Department
and the Department of Agriculture. This circular authorized loans
for spring wheat planting to farmers who had suffered two successive
crop failures through drouth or winter-killing, and in other respects
created a plan substantially simUar to the plan under which the fall
planting loans were made. No farmer who had received loans for the
purpose of fall planting could take advantage of these spring planting
loans unless the acreage sown by means of the fall planting advances
was less than 100 acres, and then only upon an acreage not to




SECRETARY OF THE TREASURY.

141

exceed the difference between the acreage which the farmer had
planted by means of a former loan and 100 acres. The maximum
loan to any farmer was limited to an amount not to exceed $500
nor greater than $5 per acre. A guaranty fund was created distinct from the first and second fall planting guaranty funds and it
was provided that any balance in such fund remaining after payments
had been made on the notes of the farmers whose crops had proved a
faUure should be applied to reimburse any deficiency existing in the
first and second fall planting guaranty funds. Loans for spring
wheat planting were made only in the Spokane and St. Paul districts.
In the ^spring of 1919 representations were made to the Treasury
Department and to the Department of Agriculture that in some
instances the crops planted in the fall of 1918 by means of Government
advances had been totally destroyed by winter-killing or other
causes, or so nearly so as to render the crops failures under the
provisions of Joint Circular No. 1. In order that such land might not
lie idle, and to assist the farmers concerned in obtaining funds for
their support, as well as for the liquidation of their indebtedness to
the Government, a circular entitled .''Joint Circular No. 3," dated
March 20, 1919, prescribing "Regulations relative to farmers' seedgrain loans in drouth-stricken areas in the matter of determining
crop faUure for the purpose of replanting" (Exhibit 76, page 455) was
issued by the Treasury Department and the Department of Agriculture. Under this circular a farmer whose crop had been destroyed
could apply for permission to plow up his land and plant other crops.
Before this permission was given, however, and to prevent the destruction of a crop which might justify harvesting, an agent of the
Department of Agriculture must make investigation and render to
the land bank a certificate of failure. This certificate must show
that the stand remaining would not produce 5 bushels or more per
acre under good conditions, and that the land would be immediately
planted to other crops. Upon receipt and approval by the bank of
this certificate of failure the farmer was allowed to plow up his land.
I t being customary in certain sections of the Southwest to insure
growing crops against hail, the Federal land bank of Wichita in March,
1919,.suggested the advisability of insuring the crops of farmers who
had received advances from the Government. After a conference of
the representatives of the Treasury Department and the Department
of Agriculture, the Federal Farm Loan Board was instructed to
advise the Federal land bank of Wichita to tal^e the necessary steps to
insure the crops in that section, with the understanding, however, that
the lien of an insurance company on such a crop would be subject to
the lien of the Government. Following this advice, the Federal land
bank of Wichita took out a blanket policy of insurance against
hail of $4 per acre on crops planted by means of Government ad-




142

REPORT ON THE FINANCES.

vances. I t was agreed, however, that if a farmer preferred to take
out insurance of his own accord, he might do so, provided the policy
was made payable to the Federal land bank - or was deposited with
that institution.. Losses by hail having occurred, a circular entitled
" J o i n t Circular No. 4," dated September 2, 1919, prescribing " S u p plemental regulations relative to farmers' seed grain loans in drouthstricken areas covering the matter of insurance of crops "( Exhibit 77,
page 457) was issued by the.Treasury Department and the Department
of Agriculture. This circular prescribed the rules and regulations
governing the rights and liabilities of farmers whose crops were insured against hail or other casualty, and subsequently destroyed
through such causes. I t provided that the Federal land bank as
financial agent of the United States should apply whatever insurance
money it might receive to the payment of the farmer's indebtedness.
The balance, if any, must then be returned to the farmer, who would
not be required to contribute to the guaranty fund, and who would
not be entitled to receive the benefits thereof unless the insurance
money was insufficient to cover his indebtedness. I t is still too early <
to determine the exact amount which the Government will realize
through these insurance policies, but it is safe to say that by securing this insurance the respective guaranty funds will be relieved to
a considerable extent, for the indebtedness of many farmers whose
crops were destroyed by hail will be satisfied out of the insurance
money instead of by payments from the guaranty funds, thus making the pro rata payments applied on the indebtedness of farmers
whose crops have failed through other causes materially greater.
During the summer of 1919 it developed that where a crop would
probably not yield more than 4 bushels per acre, an amount which
would barely pay the reasonable cost of harvesting, thrashing, and
marketing, the farmer would leave his land and go elsewhere to
labor for wages unless he were permitted to receive the proceeds
of his crop for the immediate sustenance of. himself and family.
By letters dated August 13, 1919, to the Federal land bank of Spokane, and September 10, 1919, to the Federal land banks of St.
Paul and Wichita, signed by the Secretary of the Treasury and
the Secretary of Agriculture (Exhibit 78, page 459), the Federal
land banks were authorized to release the Government's lien a on
crop on the receipt of a certificate from an agent of the Department of Agriculture that the crop had not yielded more than 4
bushels per acre, that the yield was not more than sufficient to pay
the reasonable expense of harvesting, thrashing, and marketing, and
that the proceeds were necessary to the immediate support of the
farmer and his family. The release of this lien, of course, did not
cancel the borrower's obligation on his note.




SECRETARY OF THE TREASURY.

143

By virtue of loans actually made and completed under the seedgrain plan, a total of 1,137,810 acres were planted according to reports
from the Federal land banks. As these loans were made only to
farmers who had exhausted their resources and were without commercial basis for credit, this acreage would otherwise have remained
uncultivated in large part if not entirely. The total acreage sown
as reported by the several Federal land banks is as follows:
state.

Kansas
.....^
Oklahoma
Texas
New Mexico
North Dakota
Montana
Washington

Acres.

.,

Total

,
r - - - -,
:

312,594
229, 589
84, 230
4, 947
81,893
421, 617
2, 940
1,137,810

The loans were made to 15,688 farmers, the amount aggregating
$4,200,838. Of this sum the Federal land bank of Wichita made
loans for first fall planting to 8,198 farmers, amounting to $1,873,749;
and for second fall planting to 204 farmers, amounting to $18,596.
The Federal larid bank of Spokane made loans for fall plantuig to
1,287 farmers, amounting to $259,285; and for spring planting to
4,862 farmers, amounting to $1,690,649. The Federal land bank of
St. Paul made loans for fall planting to 271 farmers, amounting to
$51,982; and for spring planting to 866 farmers, amounting to
$306,577.
This general plan enabled more than 15,000 farmers to carry on
their farming operations which otherwise would have been abandoned.
Without some such agency as the Federal land banks through
which these loans were administered as fniancial agents of the Government, the work could never have been done; and the prompt and
satisfactory manner in which this large volume of extraneous business was carried on without disturbing the daily routine of these
banks is a substantial testimonial to the efficiency of their organization. The Federal land bank of Spokane was charged with the
service in Washington and Montana; that of St. Paul with North
Dakota; and that of Wichita with Kansas, New Mexico, Oklahoma,
and Texas.
In Oklahoma and Texas and a portion of the Kansas district
farmers who have received loans have been favored with abundant
harvests and will be able not only to pay their individual indebtedness but also to make substantial contributions to the respective
guaranty funds. In portions of Kansas unfavorable weather conditions and the devastation by grasshoppers resulted in a greatly
reduced yield—in most cases amounting to a tbtal failure as defined




144

REPORT ON T H E FINANCES.
i

in the plan; while unprecedented droughts in the plateau region of
Montana, and North Dakota resulted in almost complete failure
in those sections. Receipts in payment of these seed-grain loans
are now coming in, b u t it is impossible definitely to forecast the
result. The success or failure of the plan does not, however, rest
upon the financial result, but upon the efficiency of the method
employed in extending aid to farmers to tide them over a period of
unprecedented agricultural conditions, and with a view to> increasing
the food supply of the Nation during an emergency and to add to the
national security and defense. In view of the acreage sown under
this general plan, which otherwise would have been abandoned in
large part at least, it may properly be said that the purpose of the
seed-grain loans has been well and fully accomplished.
BUREAU OF INTERNAL REVENUE.^

For nearly eight months of the fiscal year 1919 the Bureau of
Internal Reveriue was under the necessity of operatiag in accordance
with the provisions of the act of 1917, although during the greater
part of that time there was pending in the Congress a bill intended
to produce greatly increased revenues and providing for material
alterations in the existing system of taxation. While the collection
of the various monthly taxes and the work of auditing and adjusting
income and other taxes arising under previous legislation was carried
forward energetically, the bureau was chiefly occupied during this
time with the expansion and improvement of its organization and
with other preparations for the administration of the war-revenue
act of 1918, which became effective flnally on February 24, 1919
Less than three weeks in advance of March 15, the date set for the
flling of income and proflts tax returns and the payment of the flrst
quarterly installment of these taxes under the new law, the bureau
was under the necessity of promulgating regulations and distributing
forms for the use of millions of taxpayers throughout the United
States. This emergent undertaking was satisfactorily performed
through the expedient of issuing and authorizing the use of tentative
forms of return on which the liability to tax, if not deflnitely ascertainable by March 15, might be estimated to the best of the knowledge
and belief of the taxpayer. The flling on March 15 of more than
4,000,000 returns and the payment on that date of more than
$1,000,000,00.0 demonstrated the willingness of virtually all citizens
1 The figures concerning internal-revenue receipts as given in this chapter difler from such figures carried
i n other statements showing the financial condition of the Government because the former represent collections, by internal-revenue ofiScers throughout the country, whereas the latter represent the deposit of
these collections in the Treasury or depositaries during the fiscal year concerned, the differences being
diie to the fact that some of the collections in the latter part of the fiscal year can not be deposited, or are
not reported to the Treasury as deposited, until after June 30, thus carrying them into the following fiscal,
year as recorded in the statements showing the condition of the Treasury.




SECRETARY OF THE TREASURY.

145

to respond promptly, even under the most adverse conditions of
administration, to the obligations imposed on them on account of
the war-revenue requirements of the Government.
I t was estimated that the Revenue Actof 1918 would produce, in
the flrst 12 months, about $6,000,000,000 of revenue. I t appears
from the assessments made on the basis of income and proflts tax
returns flled on March 15, 1919, for the taxable year 1918 that the
amount of the estimate will be realized. As a result of the statutory
provision authorizing the payment of income and proflts taxes in four
quarterly installments falling due March 15, June 15, September 15,
and December 15, approximately one-half of such taxes assessed in
the flscal year 1919 will be paid in the fiscal year 1920. The actual
collections for the fiscal year ended June 30, 1919, including only
two of the four installments of income and profits tax payments,
amounted to $3,839,950,612.05, as compared with $3,694,619,638.72
collected in the fiscal year 1918^ including the payment in full of
income and profits taxes under the Revenue Act of 1917—an increase
of $145,330,973.33. Reports already received of payments of the
third installment of income and profits taxes indicate that with the
fourth installment due December 15, receipts from all other sources
of revenue provided by the act of 1918, and delinquent and additional
income and profits taxes, the aggregate collections during the first 12
months of operation under the new act will closely approach the
original estimate of $6,000,000,000.
Although the delay in the passage of the Revenue Actof 1918 appears
not to have resulted in any serious diminution of the revenue, delay
in the adjustment of difficult cases of tax liability has been unavoidable, and the audit and verification of taxpayers' returns and claims
are not as far advanced at this time as would have been the case had
the provisions of the law been available for the information and study
of taxpayers and administrative officers at an earlier date. In many
thousands of cases it has been necessary, in fairness to taxpayers, to
permit extensions of time for the filing of final returns. This in turn
has delayed consideration by the Bureau of Internal Revenue of the
cases concerned, although the installments due on the estimated
amount of tax had in each case been paid.
The benefits accruing to the Government and the taxpayer
through the organization of a group of representative business and
professional men and a special unit of expert accountants, auditors,
etc., for service in the administration of the first war revenue act
led to the creation of an Advisory Tax Board by the Revenue Act
of 1918. This board was organized" March 13, 1919, ahd was composed of five highly trained and experienced men, including an
economist, an accountant, a lawyer, a manufacturer, and a former
deputy commissioner of internal revenue. During the first few
140325—FI 1919




10

146

REPORT ON T H E FINANCES.

months of operation under the new law the board rendered invaluable
service in the formulation of regulations and in hearing appeals of
taxpayers as well as in advising the income-tax unit of the Bureau
of Internal Revenue in the disposition of involved technical cases.
By October 1, 1919, fundamental and controlling questions had been
determined and regulations and decisions had been constructed to
the point of permittiag the discontinuance of the board, the duties
of which have since been assumed by a special group of tax experts,
lawyers, and accountants who have had wide experience and training
in the bureau, especially iri connection with the operations of the
Advisory Tax Board.
Material changes in the statutory bases of internal taxation made
it necessary in the administration of the first war-revenue -act to
effect important changes in the organization of the bureau at Washington. ^ The development of this policy has led to a similar reorganization of the field force. The 64 collection districts have been
readjusted so that each State in the Union, with the exception of
Nevada, which for the present is embraced in the northern district
of California, constitutes at least one collection district, and, with
the exception noted, the boundaries of all collection districts now
follow State lines. Two or more separate districts have been continued in States where the service seemed to require such arrangement for the time being without necessitating undue duplication of
supervisory work, although it is probable that the number of districts
eventually will be reduced. In this readjustment 10 new collection
districts were established for the States of Maine, Vermont, Rhode
Island, Delaware, Mississippi, North Dakota, Wyoming, Idaho, Utah,
arid Arizona, and the following 10 districts were discontinued: The
second, sixth, seventh, and eighth of Kentucky; the seventh of
Indiana; the fifth and thirteenth of Illinois; the first of Wisconsin;
the ninth of Pennsylvania; and the fifth of North Carolina. The
territory formerly embraced within the abolished districts has been
added to the jurisdiction of other established districts of the same
States. The reorganization of the field service was accomplished
through Executive orders signed by the President on June 27, July
19, and July 29, 1919, and the changes became effective August
1, 1919.
As an important part of the reorganization of the field service,
branch offices for the transaction of the various forms of internalrevenue business and for furnishing advice and ' assistance to taxpayers have been established at important points throughout
several of the collection districts, and it will be the policy to develop
this plan so as to place the tax-service facilities of the Government
within convenient reach of every taxpayer. Eventually, it is intended




SECRETARY OF THE TREASURY.

147

that every principal city and town will have a branch office operated
under the direction of the several collectors of internal revenue.
The special methods of selecting and training employees in the
technical work of the Internal Revenue Service which were worked
out in considerable detail in the bureau at Washington during the
preceding year have been carried into the field. The consequent
mprovement in th'e field personnel has permitted the bureau to take
an important step toward the decentralization of a large amount of
work which in the first year under the new tax laws was handled
entirely at Washington. Income-tax returns of less than $5,000
filed in the fiscal year 1919 were left in the offi.ces of collectors to be
audited and adjusted through conferences with taxpayers. As
rapidly as is consistent with uniform and accurate disposition of
cases, the handling of additional classes of claims and cases will be
assigned to the field officers to relieve the congestion of work at
Washington and to expedite the collection of additional taxes' due,
as well as the payment of refunds to taxpayers. A special effort
has been made to impress on field officers the importance of uniform
courtesy and impartiality in dealing with all taxpayers, so that the
transactions of the bureau with the public may be maintained on a
businesslike and equitable basis.
The legal and accounting force engaged in the administration of
the income and profits tax laws and the audit and verification of
nearly 7,000,000 returns received under the acts of 1917 and 1918 has
been built up rapidly during the past year. Relatively large additions also have been made to the personnel of those units of the Bureau
of Internal Revenue which have immediate supervision of the administration of the laws relating to taxes on estates, commodities, luxuries,
and .child labor. The force at Washington now numbers' 4,088 as
compared with 1,367 at the beginning of the year. The income-tax
unit, which handles the most important subject matter in the bureau,
has been successful in increasing materially the rate of finished
cases, both those involving the assessment of additional taxes and
those involving the refund of amounts erroneously collected as
taxes.
Employers of labor throughout the country have cooperated gen-,
erally with the Bureau of Internal Revenue in the enforcement of the
provisions of the new revenue law imposing a tax of 10 per cent on
the net income of certain kinds of business employing child labor.
The disposition of employers has been to observe the standard set up
in the law by which tax liability may not be incurred and the revenue
officers have met with little difficulty in securing the evidences of age
which are required by the law to establish exemption from tax. This
tax became effective only on April 25, 1919, and ;no employers have as




• 148

REPORT ON THE FINANCES.

yet been found to have subjected themselves to the assessment and
collection of the tax provided.
Under the provisions of the Harrison antinarcotic law, providing
for the registration and taxability of persons authorized to dispense
or sell certain habit-forming narcotic drugs, vigorous efforts have
been continued to apprehend and bring to justice persons guilty of
engaging in the illicit traffic in these drugs. The number of revenue
agents and inspectors specially trained in this line of work has been
increased and a considerable number of convictions have been
secured. During the year final report was made by the committee
appointed to investigate this subject for the department. The wide
prevalence of narcotic drug addiction in many parts of the country,
as well as the inadequacy of the facilities provided for the rescue and
rehabilitation of addicts, is shown by the report. The Revenue Act
of 1918 amended the Harrison antinarcotic law in several important respects. Provision was included for the separate classification
and registration of persons handling narcotic drugs in the various
stages of importation, manufacture, prescription, and distribution,
making possible more effective measures for securing dnformation
from those persons and enforcing the observance of the law. A tax
of 1 cent per ounce is also imposed on the commodity itself, the
payment of which is to be evidenced by the affixing of a stamp in such
manner as to seal the stopper or covering. The result of this measure
is to identify drugs which have passed through the legitimate trade
and those which have been procured through the widespread illicit
traffic in narcotic drugs. On the authority of Supreme Court
decisions rendered during the year, a Treasury decision was issued
defining the responsibility of physicians and druggists in dispensing
and distributing narcotic drugs. The result of the issuance of this
decision, which makes clear the iUegality of prescribing or dispensing
to habitual users any quantity of narcotic drugs except in the course
of legitimate treatment to cure the habit, has been to cut off from
thousands of addicts their accustomed sources of supply. Many of
these persons are without funds to enter private institutions for the
cure of narcotic drug habits and have been reduced to a pitiable
condition in which they constitute a serious menace to many coinmunities. Accordingly, to meet this situation the department has
recommended to the Congress the enactment of legislation which
wiU put the Public Health Service in a position to undertake the
care and treatment of these unfortunates and restore them to a normal
condition.
Such a measure is now pending and its early enactment is urgently
recommended. The comparative ease with which narcotic drugs
may be concealed and smuggled into this country from abroad makes
highly desirable some international agreement by which the narcotic




SECRETARY OF THE TREASURY.

149

drug trade of the world may be regulated and controUed. Such an
agreement is provided in the proposed constitution of the League of
Nations, which sets up authority to perfect the ratification of the
Hague Opium Convention.
Such police functions as have hitherto been assigned for execution
to the Bureau of Internal Revenue have been, in form at least, taxation measures, and it was the judgment of the department t h a t the
enforcement of prohibition, which is essentially unrelated both in
form and substance to taxation, should not be added to the already
onerous responsibilities of this bureau. The Congress, however,
having regard to the activities of revenue officers leading to the
apprehension and conviction of violators of the laws imposing taxes
on the manufacture and sale of alcoholic beverages, has provided by
. recent enactment for the enforcement of prohibition through the
agency of the Bureau of Internal Revenue. To avoid confusion,and
inefficiency in the administration of the tax laws and of the prohibition measure, it is proposed to organize separately within the bureau
a special unit to carry on the prohibition work. Revenue officers of
experience in this line of work and no longer needed for the performance of duties in connection with taxes on the prohibited commodities,
if qualified for the new work, will be transferred to the supervision of
this unit, and sufficient additional force will be provided to carry on
a vigorous program in every State. With the expected cooperation
of all law-abiding citizens and of State and municipal peace officers,
the observance of this law will be energetically sought through both
the dissemination of information and prosecution of offenders.
Synthetic glycerin formula.
The terinination of military operations in November 1918, made it
unnecessary to continue the special project of the chemical laboratory
of the Bureau of Internal Revenue for the promotion of the synthetic
manufacture of glycerin from the fermentation of molasses according
to the formula which had been worked out by the laboratory, as
stated in the preceding annual report of the Secretary of the Treasury.
This formula, however, which had engaged the attention of a considerable staff of chemists for a period of three months, may have considerable commercial value, as it permits the complete recovery of
the raw material in the form of alcohol and potash, as well as glycerin.
The formula has therefore been made available to any manufacturers
who may be interested.
WAR RISK INSURANCE.

The Bureau of War Risk Insurance, created barely five years ago,
has developed from a small beginning into the largest single unit in
the Government service, conducting within itself four separate




150

REPORT ON THE FINANCES.

businesses, each of which is comparable with the greatest of their
kind in the field of private enterprise.^ The records on September 30,
1919, show:
1. A marine and seamen's insurance department—
Haying done a total business of
. . . $2, 390, 080, 236. 54
With premiums collected amounting to.
47, 592. 510. 61 '
Having issued 33,384 policies and paid claims to the
extent of
28,737,146. 47
With a surplus over expenses and refunds of
17,124, 903. 84
2. A stupendous banking business for the dependents of men in
the service making monthly payments of allotments and
family allowances by the Government on 2,057,842 awards
during the period of a year and a half exceeding
531,000,000. 00
3. An employers' liability department—
Now making payments each month on claims for military
and naval compensation to the extent of
2,754, 836.13 •
Having paid burial expenses amounting to^
1,834, 763. 33
4. A life insurance department—
Haviiig written during the period of one year and a half
4,561,974 individual policies representing a total amount
of insurance of
- -.. 39, 817, 391, 500. 00
With premiums between Oct. 6,1917, and Sept. 30,1919, of
approximately.
:..
315,000,000. 00
. With claims, payable to the extent of
,-.
1,042,457,673.48

During the fiscal year 1919 the character of the bureau's functions
was vastly changed from that of the previous year. On June 30,
1918, the United States was engaged in active warfare and the
bureau was receiving daily thousands of applications for insurance,
was issuing inonthly over a million checks for allotments and family
allowances to the dependents of men in the service, and was conducting a vast war-risk insurance business on American vessels, their
cargoes, and the lives of their crews. I n the fiscal year 1918 the
bureau had received comparatively few insurance claims and very
few men had been discharged from the military service, so that the
investigation of claims for payment of military and naval compensation was not extensive. During the first four months of the fiscal
year 1919 the bureau had practically the same conditions to face
as during the previous flscal year with the exception that, as the
casualties in the service had become heavier, it became necessary
to make plans for the prompt payment of claims for insurance and
for inilitary and naval compensation.
But with the signing of the armistice on November I I , 1918, the
whole machinery of operation had to be reversed. The bureau
ceased to issue marine and seamen's insurance as the risks of war disappeared. Men were discharged from inilitary service and allotments and family allowances which theretofore had gone to their
dependents had to be stopped, and the insurance which had been
issued on the lives of men in the Army and Navy had to be treated




SECRETARY OF THE TREASURY.

151

in an individual way rather than in group. During the war, insurance premiums were deducted from the pay of soldiers, sailors, and
marines, but. after discharge the men were required to pay their
premiums direct to the bureau; therefore it was necessary to set up
all the accounting records, notify the men of the date premiums
were,due, and keep them-informed of their privileges under the warrisk insurance act.
As the disabled men were discharged from the military service
and flled claims for compensation, the bureau had to make investigations to determine whether they were eligible for the payment of
compensation as deflned in the act, and make arrangements for
their medical treatment and hospitalization, if necessary.
These changes somewhat revolutionized the work of the bureau
and constituted a task of very great magnitude.
Organization.
The bureau is now organized in 13 divisions, viz. Insurance Division, Compensation and Claims Division, Actuarial Division, Legal
Division, Finance Division, Medical Division, Allotment and Allowance Division, Receipts and Disbursements Division, Liaison,Division, Marine and Seamen's Division, Personnel Division, Chief Clerk,
and Administration Division.
The Insurance Division controls all the records pertaining to military and naval insurance, including the administration of the work
of converting the term insurance policies into the permanent forms
of United States Government life insurance. This division keeps a
record of the date of discharge of every insured man and of all premium paynients made after discharge. I t also administers the
insurance feature of the soldiers' and saUors' civil relief act. The
Compensation and Claims Division receives both death and disability
claims for compensation and insurance, obtains the necessary proofs,
and makes awards thereon. The Actuarial Division perf orms the actuarial work of the bureau, prepares statistical reports on insurance and
on compensation and insurance claims, and has established work report
units in other divisions of the bureau. The Legal Division is the
law office of the bureau, and in this division there is also a section
which controls the licensing of foreign insurance companies in accordance with the ''trading with the enemy act." The Finance
Division has charge of the bookkeeping and flnancial matters of the
bureau. The Medical Division is advisory to the Compensation
and Claims Division, and through it the Public Health Service pro
vides treatment for disabled men entitled thereto. The Allotment and
AUowance Division attends to all matters pertaining to allotments
and family allowances. The Receipts and Disbursements Division




152

REPORT ON THE FINANCES.

sends out all checks for compensation and insurance claims as well as
allotments and family allowances. The Liaison Division is the
contact division of the bureau and has charge of the publication of
all official rulings and buUetins of information and instruction. The
Marine and Seamen's Diyision has charge of insurance on vessels
and cargoes and on the'lives of seamen * in the merchant marine.
The Personnel Division makes all appointments and keeps' the personnel records of the bureau. The Chief Clerk and the Administration Division have charge of mails, supplies, messengers, and
general office work.
The personnel of the bureau increased from 6,703 on July 1, 1918,
to 13,771 on July 1, 1919. To obtain this net increase of 7,068 employees it was necessary to make 11,796 appointments. wSuch a
labor turnover means a tremendous expenditure of time and money,
due to the period of training which every new employee must undergo.
With the reestablishment of more settled conditions in Washington
and throughout the country as a whole, it is expected that the rate
of turnover will be lessened, the service of the bureau correspondingly improved, and the expenses decreased. The large increase in
personnel has been necessary because of the temporary increase in
the work due to the demobilization of the military and naval forces,
despite the fact that many installations of labor-saving mechanical
devices have been made. Of the men at present employed in the
bureau, 47 per cent are ex-service men.
I n February the flrst units moved into the new 11-story War
Risk Building. By the end of September the number of buUdings
occupied by the bureau was reduced from 16 to 4. The new building
is not large enough, and it is necessary to keep certain divisions in
other buUdings, At the present time it is planned to consolida.te the
Insurance Division in the War Risk BuUding and to place in outlying buUdings divisions which are not so large as to prevent lodgement in a single building. The Insurance Division is now housed
in four different buildings in widely scattered sections of the city.
Marine and seamen^s, insurance.
Under the act of September 2, 1914, insurance against war risk
was provided for vessels and their cargoes, and under the amendment
of June 12, 1917, protection was granted to masters and. crews
against loss of life, injury, and detention. The writing of marine
insurance dates from September 28, 1914, whUe the flrst seamen's
insurance policy was issued July 3, 1917. The rates for both types
of policies were withdrawn on January 4, 1919. There remains only
the settlement of unadjusted claims. I t was possible to terminate
the business of this insurance so soon after the signing of the armistice
because protection was provided against the war hazard only.




SECRETARY OF THE TREASURY.

153

Marine insurance—Insurance of hulls, cargoes, and freights, Sept. 2, 1914, to
Sept. 30, 1919.
Total policies written
27,227
Net insurance widtten.
$2,067,406,428. 00
Net premium's received.*.
$46, 749,925. 71
Total losses, including estimated unpresented claims
$29,915,643. 71
Seamen^s insurance.—Insurance written on masters and seamen, July 3, 1917, to
Sept. 30, 1919.
Total policies w r i t t e n —
6,157
Net insurarice written.."
,
$322, 673,808. 54
Net premiums received^ $842,584. 90
Total losses, including estimated unpresented claims
$307,077. 81

Military and naval aUotments and family aUowances.
Article I I of the war-risk insurance act authorizes the bureau to
award aUowances to the famUies and to the dependents of enlisted
men in the MUitary and Naval establishments of the United States,
provided a monthly allotment of $15 is made from the pay of the
men. All enlisted men in the service were required either to make
application for an allowance, which was compulsory for a man
having a wife, chUdren, or a former wife divorced and not remarried to whom alimony had been decreed; or to flle a statement
requesting that no aUowance be awarded, which was optional with
a man having only dependent parents, brothers, sisters, grandchUdren
or grandparents. A great many* requests for exemption from the
compulsory aUotment were flled and were granted by the bureau
when proper cause was shown.
The aUotment and allowance problem during the past year was
completely reversed with the signing of the armistice. The Army
and Navy sent discharge notices which furnished data enabluig the
bureau to terminate the allotments and aUowances. However,
instead of the entire case being closed when a man was discharged,
many cases required more attentiori than if the men had remained in
the service. A very large percentage of the men discharged, who had
made allotments to their famUies and who were entitled to aUowances, began immediately to correspond with the bureau, making
protests regarding the amounts of money received by their dependent
relatives and advising the bureau as to what amounts, in their opinions, should have been paid. As a result there has been an enormous
amount of correspondence in adjusting and terminating these cases.
Applications and awards for family allowances for the period Oct. 6, 1917, to
June 30, 1919.
Applications received
•
4, 391,094
. Number of awards made for men having dependents
2,045,.890
Number of exemption cases submitted
,
• 100,156
Amount of allotiuents paid
$267,955,981
Amount of allowances p a i d . .
$233,167,009




154

REPORT ON THE FINANCES.

Military and naval compensation.
Compensation for death or for disability incurred whUe in the military or naval service is payable to a man or his dependents upon the
presentation and approval of proofs, provided disability or death was
the result of the man's performance of duty and not the result of his
own misconduct.
Article I I I of the war-risk insurance act specifles the amounts of
the military and naval compensation beneflts. For example, a widow
alone receives $25 per month; a widow with one child, $35; a totally
disabled man with neither wife nor child, $30; a totally disabled man
with wife alone, $45; and a man losing both feet, both hands, both
eyes, or who becomes totally blind, or helpless and permanently bedridden, $100 per month. When-the disability is other than total, the
degree of disability is determined and the award made on a percentage
basis; for example, a man 50 per cent disabled having a wife, would
receive $22.50 per month. The basis for permanent, partial disability
at the present time is $30 per month for a single man. Thus a man
who has lost a leg is entitled to from 40 to 70 per cent of $30 per
month. I t is'hoped that the proposal changing the basis to $100
per month will beconie a law.
During the fiscal year 1919 the bureau practically completed the
work arising from claims for military and naval compensation because
of death. After the armistice and the discharge from the service of
the wounded and sick, the number of disability claims increased very
rapidly. The law requires that the disabled man submit to a physical
examination by a medical officer chosen by the bureau. The Public
Health Service has made the majority of these examinations. While
the disabled man is receiving compensation he must submit to reexamination as of ten as requested. To all persons entitled the bureau
provides such medical, surgical, and hospital services and prosthetic
apparatus as are reasonably necessary.
The following table shows the number of men treated in hospitals,
discharged from hospitals, and the number of artificial. limbs furnished by the bureau between October 6, 1917, and September 30,
1919:
Cases admitted to hospitals
Cases discharged from hospitals
Artificial arms supplied
Artificial legs supplied

15, 078
' 8, 943
979
1,103

The medical treatment and hospitalization is done through the
Public Health Service.
The bureau is notified by the Army and Navy of deaths and disabilities incurred in the service. These notifications are in the nature




SECRETARY OF THE TREASURY.

155

of claims and are so carried on the records of the bureau. Investigation, however, of ten.reveals the fact that there is in reality no dependency and that there is, therefore, no claim. At times men are
erroneously reported as dead, relatives frequently can not be
found, and communications are occasionally received definitely
stating that no claim will be made. The principal reason for disallowing corapensation claims on account of the death of men in the
service is that the parents are not dependent, the deceased being single
men. Frequently there are no dependents entitled to compensation.
A few claims have been disaUowed because death was not incurred in
line of duty or was caused by the willful misconduct of the deceased.
The principal reason for disaU owing compensation disability claims
is that disabUity is less than 10 per cent of a total disabUity. There
have been a few cases disallowed because disability was not the result
of service or because it was the result of willful misconduct.
When the status of parents changes so that they would not be
dependent upon the deceased, had he been alive, the payment of compensation is terminated. Widows who remarry and children who
attain 18 years of age are not entitled to the continuation of
compensation payments. In the majority of cases military and naval
compensation awards for disability are terminated either because of
recovery from disability, or because of death of the disabled man.
Compensation is payable whether the dependency of the father
or mother, or both, arises before or after the death .of the person in
the service, provided that dependency arises and claim is made within
five years of the date of death. Compensation for disability is payable prbvided a medical certificate is secured within one year after
discharge stating that the person at the time of his discharge or release was suffering from injury likely to result in death or disability
and provided claim is made within five years after discharge or
resignation. Frequently claims which may become compensable
in the near future are allowed to remain pending. Similarly any
disallowed claim may be reopened when parents become dependent
or when the extent of the disability "increases.
The delay in the settlement of claims for inilitary and nayal compensation because of death is due principally to the necessity of ascertaining from the War and Navy-Departments information as to
whether death occurred inline of duty, to the time requisite to obtain
the return of claim papers properly filled out, or to the inability of the
bureau to communicate with the claimants due to their'failure to
give notice of their change of address. Disability claims are delayed
in settlement because of the necessity of securing medical examination and reexamination or because of the lack of completed claim
papers.
'
.




156

REPORT ON THE FINANCES.

Table showing number of military and naval compensation cases awarded for death and
disability in the period from Oct. 6, 1917, to Sept. 30, 1919.
Claims awarded for death
Claims awarded for disability.

'.

32,831
71,757

,

Total claims awarded for death and disability

104,588

Table showing the amount of monthly payments awarded for military and naval compensation for death dnd disability in the period from Oct. 6, 1917,%o Sept. 30, 1919.
Claims awarded for death
Claims awarded for disability
Total claims awarded for death and disability

$867,495.92
2, 230, 561. 60
3,098, 057. 52

Table showing number of military and naval compensation cases disallowed for death and
disability during the period from Oct. 6, 1917, to Sept. 30, 1919.
Claims disallowed for death
..... r
Claims disallowed for disability

56,193
11, 896

Total claims disallowed for death and disability

68,089

Military and.naval insurance.
The war-risk insurance act provides for the issuance by the United
States of insurance against death and total permanent disability to
every officer and enlisted man, to every member of the Army Nurse
Corps, and to every member of the Navy Nurse Corps when employed
in active service under the War or Navy Departments, upon written
application to the bureau and the payment of premiums. The following table shows the number of applications, the amount of insurance, and the estimated premium income from date of passage of the
war-risk insurance act to June 30, 1919:
Number of applicants for war-risk insurance to June 30, 1919
4, 334,141
Number of applications for war-risk insurance to June 30, 1919
4, 520,178
Total amount of insurance applied for to June 30, 1919.
$39,046,202,000
Average amount of insurance per application
$8, 638
Average amount of insurance per applicant
$9,009
Estimated premium income to June 30, 1919.
$295,000,0,00
The following tables give the number and amount of insurance
claims actually awarded to September 30, 1919:
Contract and automatic insurance—Number of cases awarded for death and for permanen
total disability for the period Oct. 6, 1917, to Sept. 30, 1919.
Contract insurance awards for death
Automatic insurance award's for death
Total insurance awards for death
Contract insurance awards for permanent total disability
Automatic insurance awards for permanent total disability
Total insurance awards for permanent total disability

110,446
5,012
115,458
708
133
841

Total insurance awards for death and for permanent, total disability.. 116,299




SECRETARY OF THE TREASURY.

157

Contract and automatic insurance-^Amouni of insurance upon which.awards have .been
; made for death and for permanent total disability for the period Oct. 6, 1917, to Sept. 30,
1919.
Contract insurance awards for death.
Automatic insurance awards for death
Total insurance awards for death
Contract insurance awards for permanent total
disability.
Automatic insurance awards for p,ermanent,
total disability

$1,013,100, 633.48
22, 554,000.00
$1,035, 654, 633.48
6, 204, 540.00
.

598,500.00

Total insurance awards for permanent total disability
Total insurance awards for death and for permanent total
disability.....
.\

6,803, 040.00
1, 042,457, 673.48

The signing of the armistice on November 11, 1918, was quickly
followed, as is well known, by the demobilization of the Students'
Army Training Corps and other units. I t immediately became
apparent that the bureau must be informed at once as to every
individual discharged to enable it to mark up its insurance records
accordingly and get in touch with the ex-service man to inform him
of the amount of his insurance premium, the date it became due, and
such other facts as were deemed expedient.
A form of notice of discharge was agreed upon by the War and
Navy Departments and the bureau, and arrangements were made
that when a man was discharged from the service this form would
be prepared and sent to the bureau direct and not through inilitary
channels. From this information the bureau was in a position to
stop the payment of allotments and family allowances to the dependents of discharged men and to prepare the way for ex-service
men to pay their premiums direct to the bureau. On the promptness
with which these discharge notices were received depended to a
large extent the proper functioning of the bureau, and it is to be
regretted that in spite of every precaution taken considerable delay
occurred in the receipt of these discharge notices from the military
services.
'
Beginning in December, 19l8, notices of insurance premiums due
were issued, and in January and February hundreds of thousands
were sent out. Of these, thousands were returned because of faulty
addresses, and the bureau still has to contend with this problem of
lack of proper address. However, by cooperation with the Post
Offi.ce Department this situation constantly is being improved.
Coupled with the difficulty of sending out notices which would reach
the discharged men was that resulting from the flood of correspondence from these men, asking about their privileges under the warrisk insurance act and their rights to converted insurance Nearly
all the men were unsettled for a month or two after the termination




158

REPORT ON THE FINANCES.

of military service, and many of them neglected their insurance.
Many could not secure employment at once or did not earn chough
to allow them to maintain their insurance. Thousands of others
never received the premium notices mailed by the bureau. Much
insurance was lapsed because the men had taken i t out only on
account of the danger incident to military service.
There was for a time a lack of information about the methods of
paying premiums, the possibility of reducing the amount of policies,
and the advantages of war-risk insurance. Many men allowed their
insurance to lapse and it was necessary to reach them by an extensive
campaign of conservation. The bureau has made every effort to
point out to each individual the beneflts of Government insurance
and to acquaint him with the simple requirements necessary for the
reinstatement of lapsed policies. From time to time reinstatement
provisions have been liberalized, until now all that is necessary to
reinstate insurance within 18 months after discharge is to remit to
the bureau two months' premiums to cover, respectively, the grace
period of one month during which protection was had, and one
month in advance, with the statement that the insured is in as good
health as at the time of discharge. I t is thought that this recent
regulation relative to reinstatement will be the means of saving to
the insured and their beneflciaries the protection of millions of
dollars of war-risk insurance.
.
.
.
United States Government life insurance.
Section 404 of the war-risk insurance act provides that not later
than flve years after the date of the termination of the war, as declared by proclamation ofthe President, the term insurance shall be
converted, without medical examination, into such form or forms of
insurance as may be prescribed by regulations and as the insured
may request. The insurance offered under the provisions of this
section of the act is known as United States Government life insurance and protects agiainst death and permanent total disability.
Six forms of insurance are being offered: Ordinary life, 20-payment
life, 30-payment life, 20-year endowment, 30-year endowment, and
endowment at age 62. The rates of premium are attached to this
report as Exhibit 79, page 460. Government insurance is very liberal in that the insured is. protected against permanent disability,
no matter at what age disability is incurred. Premiums may be
paid monthly, quarterly, semiannually, or annually at the election of
the insured. The insured will piarticipate in and receive such dividends as may be determined and apportioned by the director, with
the approval of the Secretary of the Treasury. These dividends may
be taken in cash or left on deposit to accumulate at interest at a rate
to be determined by the Secretary of the Treasury.




SECRETARY OF THE TREASURY.

159

The new policies provide for most liberal nonforfeiture and loan
provisions, including cash surrender value of the full reserve calculated on the American Table of Mortality and 3^ per cent interest
at the end of any policy year, or a participating paid-up policy for a
less amount, or participating extended term insurance. The irisured
may borrow from the Government at any time after his policy has
been in force one year, and provided his policy is in force, up to 94 per
cent of the then cash value on the sole security of his policy. There
are no restrictions as to travel, residence, occupation, or military or
naval service.. Claims are payable in 240 monthly installments of
$5.75 for each. $1,000 of.insurance. The proceeds from this insurance
are exempt from all taxation and are not assignable or subject to the
claims of creditors of the insured or any beneficiary except claims of
the United States arising under the war-risk insurance act.
The beneficiary may be changed at any time without the consent
of the beneficiary, provided the new beneficiary is a member of the
permitted class. Provision is made for payment of a life annuity to
the beneficiary with payments for 240 months guaranteed, in lieu of
the regular form of settlement.
Without any great effort being made to secure applications for
conversion, 36,061 applications for converted insurance were received
to September 30, 1919, of which 12,068 applications for $42,435,500
of insurance have been approved, the average policy being for $3,516.
Amendments.
Under the war-risk insurance act an enlisted man was compelled to
make allotment from his pay in favor of his wife, if any, and might
make allotments in favor of certain other dependent persons. In the
case of a wife the Government added an allowaTice,«and in certain
other cases where a man made an allotment to persons dependent on
him for support the Government also made an allowance, but the question of allowance in the latter instances was controlled by the question
of dependency upon the enlisted man. When the war-risk insurance
act was passed on October 6, 1917, and allotments were deducted
from the pay of soldiers and saUors beginning in November, 1917, it
became quite apparent that the bureau could not undertake detaUed
investigations in every instance before checks were sent to dependents
of the men in the mUitary and naval service if the payments were to
go out promptly. So in a great many cases the bureau issued the
checks to the parents of soldiers and saUors in advance of investigation. In the summer of 1918 many investigations of these cases
were made, and it was found that in some cases parents were receiving aUowances to which they were not entitled under the war-risk
insurance act, because they were not dependent. The bureau, therefore, discontmued allowances and, under the law, was compeUed to




160

REPORT ON THE FINANCES.

deduct the previous .payments from future remittances. This condition resulted in the amendment to the war-risk insurance act
(Exhibit 80, page 463) of February 25, 1919, which relieved the bureau
of the requirement to seek reimbursement in cases of this khid,
except where it is conclusively shown that the person receiving the
allowance did not bear the relationship to the enlisted man which is
necessary under the act and except in cases of manifest fraud. .
An amendment to the Federal vocational rehabilitatiori act,
approved July 11,1919 (Exhibit 81,page 464), authorized the Federal •
Board for Vocational Education to place disabled.persons discharged
from the mUitary and naval forces in training without awaiting action
by the Bureau of War Risk Insurance on the question of their eligibUity to compensation under the provisions of the war-risk insurarice
act. This eliminated the delay involved in the previous practice
requiring the submission of such cases to the Bureau of War Risk
Insurance for determination of the question of compensation before
undertaking training.
A man who has lost both hands, or both feet, or both eyes, or
has been helpless or permanently bedridden, as the result of mUitary
or naval service, is entitled to the payment of $100 per month as coriipensation for total permanent disabUity. For cases involving the
loss of both hands and both eyes, or both feet and both eyes, or both
hands and both feet^ the Congress passed an amendment to the act
approved August 6,1919 (Exhibit 82, page 466,) providing another
aUowance of $100 per month for a nurse or attendarit, in addition to
the $100 aUowed for total permanent disabUity.
ENEMY OR ALLY OF ENEMY INSURANCE COMPANIES AND OTHER FOREIGN
INSURANCE COMPANIES.

The jurisdiction of the Federal Government over foreign insurance
compariies doing business in the United States has continued during
the past year, the Treasury administering the provisions of the trading-with-the-enemy act dealing with the question. From time to
time insurance companies already established in foreign countries
are applyuig for licenses to do business in this country. Since
October 6, 1917, or the date when the trading-with-the-enemy act
went into effect, the Treasury has licensed 12 insurance^ companies
which never before did business in the United States.
S O L D I E R S ' AND SAILORS' CIVIL R E L I E F ACT A N D B O N D S I S S U E D THERE-

UNDER.

Article IV of the act approved March 8, 1918, entitled '^An act
to extend protection to the civU rights of members of the-Military
and Naval Establishments of the United States, engaged in the present
war," otherwise known as the soldiers' and sailors' civil relief act




w!^;
*^:-

SECRETARY OF THE TREASURY.

161

(Exhibit §3, page 468), provides that the Governmerit will protectpayments of .insurance premiums in commercial companies on certain
policies on^the lives of men in the military and naval services to the
extent of $5,000 insurance on any one life. The law stipulates that
the premiums due life insurance companies in such instances shall
be certified by the Bureau of War Risk Insurance to the Secretary
of the Treasury, and directs that, to secure the payment of such
premiums, bonds of the United States shall be issued by the
Secretary and registered in the names of the respective insurers.
To June 30, 1919, the Bureau of War Risk Insurance approved
7,074 applications for benefits under this law. These approved
applications protected $11,266,633 of insurance in private companies and societies on the lives of men in the military and naval
services. The amount of premiums guaranteed was $326,747.69.
Some of the premiums were paid by the insured, and to the extent
of such aggregate payments i t was unnecessary to issue bonds as a
guaranty.
v
To June 30, 1919, $179,500 of bonds had been issued to guarantee
the payment of such premiums, of which $100 had been canceled and
$179,400 were outstanding on that date. The issue of bonds by the
Secretary of the Treasury upon the certification of the Bureau of
War Risk Insurance is covered by Treasury Department Circular
No. 115, dated July 1, 1918, which is attached to this report as
Exhibit 84, page 473.
CUSTOMS.

During the fiscal year ended June 30, 1919, the effect of the war
on international trade made itself felt, and, as in the preceding year,
the customs revenues were far below normal. As compared with the
fiscal year ended June 30, 1918, however, there was an increase of
$1,390,079 and a decrease of over $112,000,000 as compared with the
fiscal year ended June 30, 1914, immediately prior to the outbreak of
the war in Europe.
The aggregate receipts collected by the customs service during
the fiscal year 1919 amounted to $186,241,436. Since the sighing of
the armistice, however, a considerable increase in customs revenue, as
compared with the corresponding period in the preceding fiscal year,
is apparent, and it is confidently expected that with the formal
restoration of peace the customs dues collected under existing laws
will increase to their former proportions, i. e., in the neighborhood
of $300,000,000. The value of imports for 1919 amounted to $3,091,369,329, an increase of $146,309,926. over those in 1918, while the
exports during the same period amounted to $7,224,867,829, an
increase of $1,296,582,188 over the exports of 1918, and nearly
$5,000,000,000 greater than the exports reported for the fiscal year
1914.
140325—FI 1919



11

162

.REPORT ON. .THE FINANCES.

.The expenditures of .the customs service during the past fiscal
year amounted to $10,147,576, or an increaseof $138,652 over the
fiscal year 1918. . Although $500,000 was added to the regular customs appropriation to defray expenses incident to the enforcement,
by the custom's authorities, of. certain of the provisions of the espionage and-trading-with-the-enemy acts, the economical expenditure
of this special fund made it possible to return to the treasury an
unexpended balance of over $400,000.
During th^ past fiscal year, up to the signing of the armistice, the
customs service was required to exercise extraordinary vigilance ih
order to insure' the enforcement of the restrictive^measures adopted
by the Government with. respect to the arrival and departure of
persons and the importation and exportation of merchandise from
and to foreign couritries. In fact, during the war period the customs
service became a kind of '^clearing house" in the enforcement of
war-time regulations of.. several departments and governmental
agencies other than the Treasury, notably the State Department,
the War Trade Board, and, to a,more limited extent, the War Department. That all of these duties werp expeditiously and efficiently
performed is a tribute to the loyalty and devotion of the field force,
of the customs service worthy of the recognition'and generous consideration of the Government.'
*
During the past fiscal year it has been possible to resume the anriual
conferences of collectors of customs and appraisers of mercharidise
which were suspended during the.; war period. These conferences
serve a most useful purpose because of the opportunity which they
afford.to discuss problems of common interest and to devise plans
for the improvement of.the service. They serve to strengthen the
esprit de corps of the customs service as well as to standardize the
methods of administration..
Under a new accounting, procedure put into operation throughout
the service during the past fiscal year it was possible to abolish the
use of 194 forms, used under the former system. The new procedure
is, furthermore, expected to result in the saving of about half the
time and labor formerly riecessary at the large naval office ports in
recording the ' transactions and rendering financial reports to the
Auditor, for the Treasury.
During the past fiscal year considerable work devolved upon customs officers by reason of the enforcement by them of the act of
June 7, 1918, commonly known as the motor-boat act. Under that
law, collectors of. customs are required to see that every motor boat
in their districts, except those owned by the Government, is numbered. Not only is it necessary to keep a record of the numbers
assigned to.every motor boat and the names and addresses of the
owners thereof, but subsequent changes of ownership must likewise
be recorded and violations reported to the Secretary of Commerce.




SECRETARY OF THE TREASURY.

163

The enactment of the recent Federal prohibition law also imposed
increased duties.on customs officers during the past fiscal year. As
soon as the manufacture and sale of liquor in this country was prohibited there was noticeable increased activity along the Mexican
and Canadian frontiers in the smuggling of liquors. The special
measures adopted to meet the situation, coupled with the severe penr
alties which have been imposed, will result iii a steady decline in violations of this character. .
In view of the continued demand for space in Federal buildings,
reorganization bf the force employed at the various large ports has
been made during the past year whereby space formerly devoted to
customs purposes has been made available for other Government
agencies.
Every effort has been made during the past fiscal year to simplify,
within the-limits permitted by law, the customs practice and procedure. Furthermore, a number of improvements in the organization
of t h a customs forces were effected with a view to expediting the
conduct of public business.
PUBLIC HEALTH.

. .

The period following the termination of hostilities with Germany,
no less than during the war, ushered.in additional respoiisibilities of
a medical and public health nature which it became the duty of the
Federal Government to discharge.
By far the most responsible of these duties is the important work;
with which the Public Health Service is charged, of affording medical
relief to the discharged heroes of the late war.
After the signing of the armistice, with resultant rapid demobilization, the lack of facilities for providing for the hospital care and
treatment of discharged soldiers, sailors, and marines, who were beneficiaries of the War Risk Insurance Bureau became so acute t h a t
Congress found it necessary to pass-legislation to meet the situation.
I n the act of March 3, 1919, entitled ^^An act to authorize the Secretary of the Treasury to provide hospital and sanatorium facUities
for discharged sick and disabled soldiers, sailors, and marines,',' pror
vision was made for the acquiring by the Public Health Service of
various properties, including hospitals and hospital sites, with equipment, etc., by transfer from the War Department and otherwise.
By the end of the fiscal year, therefore, the Public Health Service had
opened nine hospitals for this class of beneficiaries. Additional
institutions were opened, after the expiration of the fiscal year and
further facilities will be provided for the future. At the present time
virtually all of the beneficiaries of the war risk act are being cared
for through the agencies of the Public Health Service.




164

REPORT ON THE FINANCES.

In addition to caring for our soldiers, sailors, and marines, it was
found desirable shortly after the passage of the above-mentioned
act to enter into reciprocal arrangements with the Canadian Government whereby discharged soldiers of Canada in the United States
are given necessary medical attention at our institutions and American soldiers in Canada are accorded the same privilege in that country.
The better coordination of the medical activities of the Government, so far as they related to the care of the discharged soldier, sailor,
and marine, was effected during the past year by the conclusion of
arrangements with the Federal Board for Vocational Education
whereby medical officers of the Public Health Service are now making
physical examinations, upon request of the District vocational officer
of that board, of disabled men discharged from the service desiring
to enter upon a course of vocational training.
The organization of the forces of the Public Health Service engaged
in this relief work is practically completed. With its coinpletion
it is hoped to have built a machine of the highest efficiency and having
first regard for the welfare of the soldier, sailor, and marine, and to
have afforded facilities generally for carrying on what the Public
Health Service recognizes to be a tremendously important function.
I t might be well to mention in connection with the obtaining of
personnel for this work that the reserve corps, created by the act
of Congress approved October 27, 1918, was of great assistance.
Without the flexibility which it permitted in the corps, the service
would have been unable to obtain sufficient and competent assistants
for this work.
Af^er-the-war program.
Upon the cessation of hostilities, the Public Health Service turned
its attention toward the development of a comprehensive program to
meet the urgent after-the-war health needs. The record of rejec-tions during the draft showed that over 34 per cent of all draft registrants were rejected by examining boards on account of physical
defects and,diseases. Studies previously conducted by the service,
had indicated unmistakably that in large measure these defects and
diseases could have been prevented had proper attention been given
to them, especially in childhood. Therefore, this unsatisfactory condition of the public health is by no means necessary. Its persistence
in the face of the energetic work of many departments and voluntary
organizations shows primarily tl^at health work has not been sufficiently organized and coordinated and has not received from governmental authorities the attention that it merits and must have if the
country is to make rapid recovery fromoWar losses and to render
safe the development of new agricultural and industrial processes.
I t is true that preventable disease rates have been lowered in many
instances, and significant success has followed campaigns against




SECRETARY.OF T H E TREASURY.

165

isolated diseases and insanitary conditions. The tuberculosis rate
has steadily fallen. ' Typhoid fever has been made a negligible factor,
and wherever active intelligent efforts have been made to combat it
yellow fever has been kept out of the country. Nevertheless the
pub^lic at large remains in ignorance of those main principles of
health which investigations and practical experience have shown to
be necessary for the prevention of disease. I t is pitiably evident that
such primary facts as the means of spread of typhoid fever and malaria, the effectiveness of smallpox vaccination, and the elementary
principles of personal hygiene, such as the care of the teeth, are
not known to the public generally. No national, comprehensive campaign, dealing with all phases of the public health, has been conducted. Until that is undertaken the information which the public
wUl have in regard to disease prevention will be fragmentary. The
problem is daily being aggravated by the fact that the population
of the cities and of the country generally is increasing rapidly, making
insanitary conditions more menacing.
In developing a program which will meet urgent national needs
in public health, leadership must be assumed by some central authority. The Public Health Service is the natural agency to do so.
In the past, under authority of Congress, it has built a sound foundation for the conduct of a national campaign for health by determining minimum standards of health and adequate measures for diminishing the annual toll of lives taken by preventable diseases and
insanitary conditions.
The program which the Public Health Service has prepared to meet
these urgent needs is comprehensive, dealing particularly with problems of industrial hygiene, rural hygiene, prevention of the diseases of
infancy and childhood, water supplies, milk supplies, sewage disposal,
malaria, tuberculosis, railway sanitation, municipal sanitation, health
standard, health education, collection of morbidity reports, and the
organization and training for duty in emergency of the reserve of
the Public Health Service.
I t is evident that the success of such a program will depend upon
the active cooperation of Federal, State, and local health authorities and voluntary organizations to a degree not previously
recognized. Experience has shown that this cooperation can best be
secured on the Federal-aid extension principle. The service has
already been authorized by Congress to^ carry on rural sanitation
demonstrations under that plan, but the appropriations have been
wholly inadequate. Additional authority is needed if this principle is
to be extended to the entire fleld of public health. Experience has
shown that this is the most feasible plan for obtaining the proper
coordination of the activities of Federal, State, and local governments.
While there is grave necessity for strict economy in Government
expenditures, it is fruitless and unwise to deny requisite funds for the



-166

. REPORT ON T H E FINANCES.

important work of the Public Health Service when human lives and
the national.welfare may depend upon the judicious use of Federal
money.
'
Influenza..
In addition to activities relative to the controhof the influenza epidemic, the Public Health Service concentrated efforts on the study
of the disease. In view of known epidemiological facts, it is selfevident that the disease is highly communicable. There is a growing
feeling that it may be communicable only in its earliest, stages,.particularly. during the period of incubation.
A large amount of work was done to determine the prophylactic
value of vaccines made from the influenza bacillus and of vaccines containing this organism together with various organisms which were
regarded as secondary invaders and probably as the cause of the pneum.onia which so often complicates influenza. The only experiments
along these lines on which conclusions may be safely .based are those
iri which a portion of the personnel in a group or in an institution was
inoculated a number of days prior to the entrance of infection to the
group or to the institution. Under these controlled coriditions the
vaccines which were tried failed to influence either the morbidity or the
mortality of the disease.
PUBLIC BUILDINGS.

After the signing of the armistice, bids were invited for the construction of authorized Federal buildings and extensions, contracts
for which had been deferred, on account of the imperative needs for
labor, material, transportation, and money in the prosecution of the
war. I t was found impossible, however, to resume building operations to any considerable extent because prices which had been gradually increasing for many months; had reiached a point where, expept
in a few isolated instances, the limits of cost fixed by law were insufficient. .
This condition, affecting more than 100 buildings, has been
brought to the attention of the Congress and estimates have been
submitted of the amounts severally heeded to be provided by way of
increases in limits of cost to enable the department to proceed with
the work of construction.
The restriction placed upon the letting of new contracts for the construction of Federal buildings during the war did not involve the suspension of the work of preparing drawings and speciflcations for
buildings already authorized and n o t . under contract, nor did it
involve the suspension of construction work on buildings already
under contract, and which at the time were in various stages of completion. Construction work, notwithstanding abnormal conditions
of the most discouraging sort, was carried forward as rapidly as, pos.si-




SECRETARY OF THE TREASURY.

ISt

ble, with the result that 73 buildings iand extensions were completed
and made ready for occupancy during the year, . On a production
basis, and as a continuation of the buildi:ig'program of the'preceding
three or four years, this represented a rate of progress of a new building or extension every flve caleridar days.
The Postmaster General having reported to the.Treasury that the
Postal Service' had outgrown iriany of the Federal buildings, the
condition was brought to the attention of the Congress and a l i s t
of the buildings, together with estimates of the cost of extending a
considerable number of them, has been submittedi Similar estimates for the remaining buildings will be transmitted in the near
future.
'
'
i ;
Contractors^ relief act.
When the United States entered the war with Germany on April
6, 1917, there were a large number of buildings under construction,
the contracts for which had been awarded on bids prepared before
that date. The demands which .the war made upon the resources
of the country for skilled workmen and materials variously affected
these contracts.. Priorities given for iriunitions displaced orders
already giveri for building materials or postponed their, being
placed, and the.commandeering of |)lants where vbuildirig materials
were being manufactured, together with transportation difficulties
and increases in cost of freight,: materials, and labor j caused unforeseen delays and expense tocontractorSi With a view to reimbursing
these contractors, their subcontractors, and material men (including
sureties who furnished means to enable failirig; contractors to complete-their contracts; or who completed, same as sureties), an act
e n t i t l e d / / A n act for the relief of contractors and subcontractors
for. the post.offices and other buildings and work under the supervision of the Treasury Department, * and for other purposes," was
passed by the Congress and approved August 25, 1919.
That act provides for the reimbursement of such contractors,
subcontractors, material men, and sureties for their increased costs
due to war conditions for work performed after April 6, 1917, under
Government contracts made or proposals submitted (and afterwards
accepted without change in price) prior to that date. Claims must
be submitted within three months from the passage of the act,
Reimbursement is conflned to the actual increased cost, exclusive
of proflts.
..
:
.
•
Already a number of claims have been flled, but as the act carried
no appropriation for their payment'the Treasury has submitted an
estimate for an appropriation in an amount believed, to be;sufficient
to care for the claims likely to be perfected: soon; and. further estimates will be submitted from time to time as fundsarerequiredi to.
pay claims, as audited.
? • • i A - '. i ': v :. >
; ;; ::




16.8

REPORT ON T H E FINANCES.

National Archives Building.
Many of the priceless archives of the Government are exposed to
destruction and loss for the want of safe and appropriate storage
facilities. The necessity for a building specially designed for the
preservation of these valuable records has long been recognized.
Under authority conferred by the act of March 4, 1913, an examination has been made of the plans of a number of archives buildings
of Europe, outline plans have been prepared and approved, a site
selected, and estimates submitted fbr an appropriation for the land
and the construction of the stack portion of the building. If the
appropriation is made, work on the National Archives Building
will be begun at the earliest practicable moment. The attention
of the Congress is respectfully drawn to the very great and urgent
need of providing funds for the construction of a building for this
important purpose.
COAST GUARD.

Throughout the entire flscal year 1919 the "Cpast Guard, in
accordance with the provisions of the act of January 28, 1915,
continued to operate as a part of the naval forces, and engaged in
the prosecution of the war under the direction of the Secretary of
the Navy.
The vessels of the Coast Guard rendered most useful service in
the carrying out of war operations, and the service personnel were
utilized to great advai^age in various and important war activities
under the direction of the Navj^, Department. .Bea|des serving on
Coast Guard cutteif, officers of the service were attached to naval
vosisels in foreign and domestic waters, were on transport duty,
and were assigned to training stations, aviation stations, navy
yards,. and naval districts. The Coast Guard during ...the World .,
War maintained its high traditions and performed its war-time
duties as part of the military forces of the country with marked
credit an4 distinction.
On September 26, 191^8, while escorting a convoy in European
waters, the Coast Gfuard cutter Tampa was sunk with all hands
in the Bristol Chaimel by a torpedo from an eneijay submarine.
Diligent search was made by destroyers in the vicinity of the disaster, but nothing was found but two unrecognizable bodies in
sailor's uniform and some small pieces of wreckage. There if^re
on board ^ officers, 4 warrant officers, and 100 enhsted men, all of
whom, except the medical officer, belonged to the Coast Guard.
Thus, in the performance of their duty, did 112 gallant officers and
men give up their lives for their country. Wit^ the exeeption/of the
loss of the U. S. S. Cyclops, with her complement, this is the largest •
individual loss of life sustained by our naval forces during the war.




SECRETARY OF THE TREASURY.

169

The Coast Guard was returned to the jurisdiction of theTreasury
on August 28, 1919, by the following Executive order:
EXECUTIVE ORDER.

By virtue of the authority conferred by "An act authorizing the President to coordinate or consolidate executive bureaus, agencies, and offices, and for other purposes, in the interest of economy and the more efficient concentration of the (rovemment," approved May 20, 1918, I do hereby make and publish the following order:
The important purposes for which the operation of the Coast Guard was temporarily
trauMe^rM to the Navy'underthe act apprbved January 28, 1915, entitled **An act
to create the Coast Guard by combining therein the existing Life-Saving Service and
Revenue-Cutter Service" having been accomplished, and, it being for the best in.
terests of the Government and for the efficient service of the Coast Guard in connection
with the collection of the revenue that the Coast Guard be under the supervision of
the Treasury Department, it is hereby directed that the Coast Guard shall on and
after this date operate under the Treasury Department.
WooDROW WILSON.
THE WHITE HOUSE, August 28, 1919.

In accordance with the terms of the above order, the Coast Guard
has ^resumed the perf ormance 'of its peace-time functions under the
Treasury.
ANCHORAGE CONTROL.

Under Title 2 of the espionage act, approved June 15, 1917, the
Secretary of the Treasury was authorized, subject to the approval of
the President, to make and enforce rules and regulations governing
the anchorage and movement of vessels, foreign and domestic, in the
territorial waters of the United States, and to exercise full control
over such vessels while in ports of the United States. Under authority of this act, there was formed a board knol^i as the bqferd on the
anchorage and movement of vessels. This board consisted of three
members, representing the Treasury, War, tod Navy Departments.
An officer, of the-Coast Guardwas^designated-asa representative of
the Treasury on this board and also was made chairman. The
board designated anchorage grounds at the ports of New York;
Philadelphia, Norfolk, San Francisco, and the St. Mary River, and
also prescribed regulations governing the movement of vessels in.
those ports as well as regulations governing the lading and unlading
of explosives. The board did not deem it necei^sary to establish
anchorage grounds and regulations governing the lading of explosives
at other ports!
The office of captain of the port was created at each of the ports
mentioned, except at San Franoisco, and a United States Coast Guard
officer was designated as captain of the port to enfiprofe the regulations.
Many of the enlisted men and officers of the Coast Guard were
engaged in this work and also assisted very materially in the enforcement of other laws and regulations pertairiing to the entrance and




1-7;Q

. REPORT ON THE FINANCES.

departure of persons into and from the United Sta-tes, and in thv
search of vessels for contraband goods.
, • .' .
: '
The Coast Guard officers and men also assisted materially inthe
enforcement of war-time regulations issued by this department pertaining to the operatiori, licensing, etc., of coastwise and harbor, craft.
These special regulations have now been revoked and; all of the
activities above mentioned have practically ceased except those under
the rules and regulations governing the anchorage and movement of
vessels and the handling of explosives, which regulations are still in
full effect and are being enforced by the officers and men of the Coast
Guard.
BUREAU

OF ENGRAVING

AND

PRINTING.

The demands of the Governmerit upon the Bureau of Engraving
and Printing during the flscal year 1919 were the greatest in history.
All previous records were broken by the. engraving, printing, and
delivery,of 447,464,105 sheets of flnished work,,including Liberty
bonds. Victory notes, war-savings stamps, thrift stamps, certiflcates
of indebtedness, farm-loan bonds, stamps, and currency. The task
was carefully and cheerfully performed by the employees of the
bureau, who worked uncomplainingly in day and night shifts. There
is no institution in the Governinent where greater care is necessary
than in the Bureau of Engraving and Printing.
;^:;Prior to the war the law required the printing of the face of all
money, on harid plate-printing presses. To meet the emergency
needs of the Government the statute was modifled so as to authorize
the Secretary of the Treasury to plate print currency and securities
in whatever riaanner and by whatever process he deemed necessary.
Under this authority, together with the installation.of modern machinery and the application of .up-to-date methods, the bureau has
been, equipped to meet the requirements and the necessities of the
Government with respect to currency, stamps, and securities.
.The bureau's cost-accounting system was improved during the
year, and valuable information is now readily available as to the
various operations to enable the director to determine deflnitely the
costs of the.output; This.information is of particular value in connection; w;ith the product for which the bureau is reimbursed.
CONTRACTING AND PURCHASING.

^ ;As the business of the Government expands, there is an increasing
need of centralization under some one authority of the great problem
of: contracting for and purchasing Government supplies. An initial
step in this direction, with respect to contracting for supplies for use
primarily by the Government services in, Washington, was made
by the establishment of the General Supply Committee, but the
scope of its work is narrow at best. Within its limited fleld of




SECRETARY OF THE TREASURY.

171

operations it has accomplished something in. the reduction of purchase
prices, but has left untouched the disadvantages to the public service
at large which arise from a diversiflcation of administrative views
as to general and special needs and from a similar diversification
iri the form of the contract obligations assumed under the different
branches of the service.
Similarly the establishment of Government fuel yards as authorized by the act of July 1, 1918, was a step in the general direction of
centralized control to the advantage of the public service. But again
the field of operations was made a limited one and its benefits confined
to the branches of the Federal service and the municipal government
in the District of Columbia and immediate vichiity.
These measures would seem to cover but a fraction of the general
requirements for central control over contracting and purchasing.
There is no good reason why the field of operations of a centralized
authority of this character should be .confined to a lesser territory
than that marked by national boundaries, or why the benefits of
organization, business judgment, and efficient methods should be
employed only locally when the need for them is as widespread as the public service itself. I t is thought t h a t the whole needs of the
Goverririient in matters of contracting and purchasing, without
regard -to geographical points at which such needs may arise within
the continental limits, could be as well, or better, served.by the
establishmerit of a central machinery as can the needs at any given
point, Nuchas the District of Columbia.
I t cari riot be questioned that procuring supplies, including contracting for supplies for works of construction and manufactured
airticles or fabricated materials, is a task single in its nature, and one
which would lend itself to central organization properly planned
and equipped for its purposes, with a permanent chain of depots
and warehouses lor supplying expeditiously the requirements of all
headquarters and field services. Of nearly equal importance in the
advantages to be gained are the two questions of improved efficiency
at a lower operiating cost and the securing of supplies at lower prices.
A t present, without previous cooperation, the various branches of the
public service are competitors among themselves in the markets
which they seek, arid their similar needs often operate to increase
prices for each other under the general rule of supply and demand.
This is ari administrative problem of great importance in the interests
of economy and efficiency, and I am sure that it will require but a
cursory examination of the waste and duplication that inevitably
must accompany the present system to make manifest the desirability
for some-drastic reform along the lines suggested.
The view has been advanced from some quartiers that certain
branches of service, whose requirements are specialized or highly




172

REPORT ON THE FINANCES.

technical in character, would not obtain 'satisfactory results except
through their own personnel. I t is not seen that this view is
tenable upon an analysis of the situation. If technical or expert
services are available, now in the various establishments of the
Government, the same services could be utilized by a central control.
The more or less centralized machinery brought into operation by
the necessities of the world war may be cited as an answer tb objections of this character. I n practically all branches of the public
service dealing with war activities the business control of technical
equipment and its procm'oment was placed in the hands of others
than the technical experts whose knowledge was essential to the
design and choice of the equipment itself. Similarly, and more
effectively perhaps, a central business control of procm-ement and
distribution in time of peace can avaU itself of expert services and
technical, knowledge wherever found within the Government. The
fact that business men from civil life were called upon in a period of
urgent haste to undertake the procurement through, commercial
chan|tfels of highly specialized articles of fabrication or manufactilre
and that their efforts were successfully applied with the cooperation
of the technical experts within the service, is a sufficient indication
that a central business control of procurement is not incompatible
with the control by the appropriate branches of the character and
choice of their technical supplies.
Aside from the economies to be derived from the application of
good business judgment to purchasing, storing, and distributing, the
establishment of a central control would have an influence of the
utmost value ogi the contractual relations of the Government.
Under the present divided control these are lacking in the uniformity
which should obtain, and for that reason occasion many adjustments
by the Treasury in the settlement of legal claims which might be
avoided under a proper system of standardization of contract forms
and manageriient. The prevaUing deflciencies in this respect came
into view to an unprecedented degree as a result of recent war activities and have served to bring the subject into fresh and serious consideration. I t will be recalled that a condition existed in contract
affairs which necessitated legislative action for their adjustment not
wholly within the strictly legal obligations of the Government.
I t will require a trained and skillful organization, with all the
facilities necessary for expansions in periods of emergency, if like
experiences are to be avoided in the future. Under the urgency of
the moment contract forms were disregarded in features essential to
the interests of the Government and in many cases were entirely
supplanted by informal agreements, written and oral. Form and
procedure imposed by present laws were quite generaUy disregarded,
and often were unknown to the officials drawn from civil life and




SECRETARY OF THE TREASURY.

173

charged with the procurement of supplies because of their knowledge of industrial conditions. I t is obvious that an established and
effective, central control, capable of expanding its facilities as circumstances require, would meet emergencies with greater security
to the interests of the Government and contractors alike.
In the Government's everyday affairs, however, the need is just
as urgent, arid a lack of uniformity in the written instruments of
contract is not alone responsible for the numerous claims against the
Treasury. Faulty form and lack of standardization are supplemented
to the disadvantage of the Government and contractors by the uncertainty and differences of construction rendered by administrative
officers during the period of fulflllment, by unwarranted administrative acts in contravention of explicit terms of contract, both for and
against the interests of contracting parties, and by all the many,
omissions and commissions which are dua to the absence of a single
supervision.
I t is thought that these and a host of evils not touched upon can
best be eradicated by combining in one establishment the adequate
authority for contracting and purchasing, 4nih all needed facilities,
and unlimited as to its fleld of operations within the United States.
To state it in its simplest form, it is a mere, matter of combining in
one establishment the classes of business common to all, with proper
provision for specialized needs. I t is not open to doubt that such
action would redound iirimeasurably to the benefit of the public
treasury and relieve all branches of the public service of a burden
of duties not now administered satisfactorily to the disbursing and
accounting authorities. Nor is it open to doubt that it can be
effectively accomplished.
Something might be said of the advantages which would accrue to
the public interests from measures which might be designed to cure
specific evils alone, such as requiring as separate considerations
greater uniformity in contract forms and methods of contracting, a
revision of the statutory requirements as to advertising and proposals,
and kindred reforms, each desirable in itself. But these would leave
unsolved the really big problem presented by the situation as a whole.
As has been pointed out in the annual report of the Comptroller of
the Treasury, the sums involved are large, the public interests concerned are vital and far-reaching, the administrative and accounting
duties are complex and burdensome, and the private interests concerned are equally important, often involving the business success
or failure of contractors. The contract requirements of the Government standing alone constitute almost a department of Government
in themselves, with their own legal and equitable considerations, and
a mass of laws and court decisions surrounding their fulfillment,
adjustment, and settlement. The present moment, with the experi-




174

. REPORT ON T H E FINANCES.:".

ences of the war fresh in mind and much data available for consideration, would seem to be a propitious one for the study ,6f all purchasing
and contracting needs and the proper establishment of machinery
necessary to an efficient, expeditious, and economical fulfillment of
those needs for the purposes of both ordinary periods and periods of
crisis.
I t has been considered whether some action might be taken by
executive authority, in the absence of legislative enactment, to bring
purchasing and contracting operations as found in the various depart-.
ments: and independent establishments into some sort of correlation
for the entire executive branch of the Government, but it is thought
that the magnitude of the task and its intimate contact with all
agencies of that branch argue for a completeriess of control and such
legal authority for the step as can be granted by the Congress aloneA proper regard for economical and efficient administration, its
bearings on the public treasury, and the judgment of competent
critics all combine, to urge the establishment of such an agency as the
one proposed. Unlike many projects for which consideration is.so
often asked, it would unify and tend to contract rather than expand
the administration of present activities.
.;
GENERAL SUPPLY COMMITTEE.

In advance of provision for the centralized control of all contracting for and purchasing of supplies for Washington and the^field,
as recommended above, it is urgently suggested that prompt measures
be taken at least to remodel and expand the functions of the General
Supply Committee, which at the present time is only an agency of
contracting for Government supplies. I n the absence of the suggested
gerieral legislation, a plan should be evolved under which common
supplies required for use by two or more of the executive departments or independent establishments of the Government in Washington would be contracted for, purchased, stored, and distributed
through a single bureau. In lieu of the General Supply Committee
there should be created a bureau of supplies consisting of three
divisions, one of which should include the present general functions
of the General Supply Committee, to be known as the division of
contracts, the second to be known as the division of purchases, and
the third to include the present Division of Property Transfer of tbe
committee and to be known as the division of stores. This would
require the inaintenance of a suitable warehouse adequately stocked
with all articles in common use for distribution to the Government
service. The ability to carry in stock various classes of supplies,
commonly required by the departments would permit the prompt
filling of all requests and obviate the necessity for open-ma,rket purchases which, to a great extent, exists at the present time. Such a!




SECRETARY OF THE TREASURY.

175

bureau would.be able to buy supplies at opportune seasons and in
quantities that undoubtedly would greatly reduce the cost.
With respect to the operations of the General Supply Committee
during the fiscal year 1919, the records show that reported purchases
by the various Government offices under contracts negotiated by the
Secretary of, the Treasury through the committee amounted to
$10,321,438.18. As certain establishments are not required by law
to report purchases and others failed to report fully, the total amount
of purchases during the year probably exceeded $15,000,000.
After the signing of the armistice, it became apparent that large
quantities of office material, supplies, and equipment would become
surplus because of the cessation of war activities, and on December
3, 1918, the President, on the recommendation of this department,
issued an Executive order directing that surplus material, supplies,
and equipment, falling into disuse because of the cessation of war
activities, or for other reasons, be transferred to the Secretary of the
Treasury for reissue to other Government establishments through
the Gerieral Supply Committee. Under that order the General Supply Committee functions as a clearing house for the executive departments' and independent establishments of the Government in the
District of Columbia, in that it takes over all the surplus material,
supplies, and equipment, classifies, warehouses, repairs, and reissues
it from time to time to other governmental establishments as their'
needs arise. In making purchases from available funds for needed
office material, supplies, and equipment the order required the several
executive departments and independent establishments and the
municipal government of the District of Columbia to buy from the
stores,of the General Supply Committee if the articles were obtainable from that source.
To carry the order into effect, the Congress granted an appropriation of $100,000 for the remainder of the fiscal year 1919 and for the
fiscal year 1920, and stipulated that the Executive order shall continue in eff.ect until June 30, 1920, without modification, except that
proceeds from the transfer of appropriations thereunder shall be
coyered into the Treasury as,miscellaneous receipts.
From December 10, 1918, to June 30, 1919, there was transferred
to the General Supply Committee $1,031,948.54 worth of material,
of which $555,195.34 worth was issued. That amount includes discounts aUowed on account of deterioration from use which equaled
15f per cent. ./The balance chargeable to stores account was, therefore, $476,753.20. The total expense of operation; that is, overhead
charges, for the period mentioned was $24,297.30, or 4-A- per cent of
gross sales
.
Section 5 of the act approved July 11, 1919, provided that the
heads of the several executive departments arid other.responsible




176

REPORT ON T H E FINANCES.

officials, in expending appropriations contained in t h a t or any other
act, so far as possible, should purchase material, supplies, and equipment, when needed and funds were available, from other services of
the Government possessing material, supplies, and equipment no
longer required because of the cessation of war activities.
To carry out that provision of the law, the duties of the General
Supply Committee were further increased by the Executive order of
August 27, 1919, by which the committee was designated as a central
body of information with respect to supplies, and, as such, to receive
reports of aU surplus material, supplies, and equipment available by
reason of the cessation of war activities in Government services
throughout the United States. Record of material reported as surplus
is maintained in the committee for the information of all Government
departments and establishments.
There has been transferred to the General Supply Committee,
under the Executive order of December 3, 1918, certain motor equipment, which it is unable to sell to other services of the Government.
This consists of a number of old and badly worn trucks, automobile
bodies, and motor cycles, which it would appear to be to the interest
of the Government to sell at public auction. I t is, therefore, recommended th^t the necessary authority be granted to permit the sale
of equipment now or hereafter transferred to the General Supply
Committee, for which there is no demand, and the sale Of which
would be in the interest of the Government, and further that, in the
case of articles purchased at high prices during the war, the committee be allowed to transfer them to governmental services at a fair
market value.
THE INTERNATIONAL HIGH COMMISSION.

The work of t l ^ International High Commission has gone on
steadily through the fiscal year 1919 with a constantly growing
record of accomplishment. With the signing of the armistice and
the conclusion of hostilities, it was felt that the time was opportune
and appropriate for the holding of a second Pan-American financial
conference. Accordingly, at the suggestion of the cominission which
was established to carry out the recommendations of the first PanAmerican conference, the President, through the Secretary of State,
has invited the governments of Central and South America again
to send their ministers of finance and other appropriate representatives to confer with the Secretary of the Treasury at Washington
in January, 1920, on the financial and commercial problems of the
American Republics. This second conference will open on January
12 and close on January 17.
Acting under the direction and coordination of the central executive council, the various national sections of the cominission are now




SECRETARY OF THE TREASURY.

177

engaged in studying a tentative program for the second conference
which has been formulated by the council and in assembling data
for consideration at that meeting. Careful studies of the public debt,
currency system, banking laws and practices, and principal'economic
requirements of each Republic of Central and South America and
the West Indies have been undertaken. The council also is giving
particular attention to questions of communication and transportation and has set on foot a detailed investigation of the requirements
for the rehabilitation and extension ^of maritime and land transportation facilities in Latin America. In this connection the council is
receiving the hearty cooperation of the Department of Commerce
and the United States Shipping Board, which have undertaken
special surveys of transportation necessities in order to make the
information available for the conference. Data also is being obtained with respect to the cable and wireless situation in Latin
America.
The International Trade-Mark Registratiori Bureau at Habana
has advanced still further toward effective operation, and the last
obstacles to its actual receipt and registration of trade-marks from
the countries of the Northern Group were being cleared up as the
fiscal year ended. I t is now actively functioning. Our own enjoyment of all the benefits of the trade-mark convention of 1910, so
far as it is in effect, was somewhat handicapped during the fiscal
year 1919 by the lack of enabling legislation to permit the Commissioner of Patents to open a register for marks communicated to
him from the international bureau'or bureaus. That difficulty, it is
hoped, will be overcome during the present fiscal year.
This convention will serve as a practical device for the better
security of the industrial property and good will of manufacturers
and exporters not only in the United States, but in all the American
Republics. I t seeks to make the process of registration simultaneous, expeditious, and inexpensive; it does not affect the substance
of domestic trade-mark regulations in any manner. I t merely provides that the registrant in any one of the signatory countries may
secure through the international bureaus registration in all the other
signatory countries, provided there is no inherent obstacle in the
nature of his trade-mark or in the technical provisions of the domestic
trade-mark law. The rights acquired are not everywhere the same.
The registrant is p u t on an equal footing with the domestic applicant
for trade-mark registration in each of the countries to which the
international trade-mark bureaus communicate the fact of its international registration. He acquires no greater rights than citizens of
those countries, nor any less. He gets as much protection in those
countries as their laws afford, just as citizens of those countries
acquire as much protection in his country as his domestic law will
140325—FI 1919^




12

178

RJEPORT ON THE FINANCES.

grant. I t is a notable achievement of the Ihternational High Com^
mission to have assisted in removing a cause of uncertainty, delay,
and loss in the protection of our foreign commerce, and to have
stimulated the commerce of-other countries by encouraging .the distribution among them of all articles wherein proprietary right and
good wiU constitute important assets.
Associated with the preparation for the financial conference is
the study that has been undertaken by the commission of the laws
under which corporations and branches of foreign companies may organize or operate in the Republics of Central and South America.,
This inquiry is in line with the purpose of the commission to study
the commercial law of the American Republics in the hope of removing
the chief obstacles to closer commercial intercourse and gradually
bringing about an approximation to the scientific standards of international commercial law and practice. With that serious object in
view, the, commission has not ceased to labor for uniformity of the law
relating to bills of exchange and checks, bills of lading, warehouse
receipts, and conditional sales. The careful consideration of the
models proposed for legislation on any of these topics will require, on
the part of the national legislatures of Latin America, a by no means
inconsiderable period of time, as it has required and still requires in
the legislatures of bur several States in this country. The council is
satisfied, however, with the progress made in this most important
field and looks for the gradual acceptance of the rules and standards
of practice submitted.
During the year special attention was given by all of the national
sections to the two important conventions proposed by the council
several years ago, the first relating to an international gold clearance
fund and the second having to do with the simplification of regulations governing commercial travelers and their samples (Exhibits 85
and 86, f)ages 475 and 477). The commercial traveler convention
has been signed by the United States and Uruguay, Guatemala,
Salvador, Panama, Venezuela and Paraguay. Negotiations with a
dozen other countries are now under way. The gold clearance fund
convention is also in process of negotiation, although it was not
formally signed with any country before the end of the fiscal year. .
The commission is endeavoring to popularize the use of the Brussels
classffication of merchandise for statistical purposes, and to that end
has issued a series of bulletins presenting the annual import and export statistics of each of the Republics, arranged in accordance with
the Brussels classification and with values expressed in national
currencies as well as in the international money of account agreed upon
by the commission for this purpose and known as the Panamericano.
The Department of Commerce publishes in English the material relating to the United States, while the commission publishes in
Spanish and English alike the material relating to the othei* republics.



SECRETARY OF THE TREASURY.

179

• At the beginning of the fiscal year 1919, the expenses of the-'commissiori'were still being defrayed from an appropriation of $40,000
made in the act apprbved February 7; 1916. The Sixty-fifth Congress
appropriated $25,000 for thefiscal year 1919. The use of that appropriation, however, did not begin until October, 1918, when the appro, priation of 1916 was exhausted. At the close of the fiscal year a
balance of $11,000 reverted to the general fund. For the fiscal year
1920 the Congress has appropriated the sum of $25,000 for the expenses of the commission. The sum of $50,000 also has been appro. priated for the second Pan American Financial Conference, to remain available until expended.
In order properly to carry on the work of the United States section
of the International High Commission during the fiscal year 1921,
with due regard for its record of accomplishment and the important
matters it has undertaken', it is my conviction that the appropriation
made by the Congress should be increased to $30,000.
During the year 1919 the membership of the United States section
of the commission was as follows: The Secretary of the Treasury,
chairman; John Bassett Moore, vice chairman; Duncan U. Fletcher,
Andrew J. Peters, Paul M. Warburg, Samuel Untermyer, John H.
Fahey, and John H. Wigmore. L. S. Rowe, secretary general.
The vacant place on the commission has since been filled by Herbert
Fleishhacker, of San Francisco, formerly a member of the Federal
Advisory Council and president of the Anglo and London Paris
National Bank. The staff of the commission consists of an assistant
secretary general, six technical assistants, and a corresponding number of clerical assistants.
SURETY BONDS FOR GOVERNMENT OFFICERS.

The attention of the Corigress is directed to the increasing number
of bonds required by the Government from its employees. I t is
estimated that approximately 200,000 employees, including the
Postal Service, give fidelity bonds in varying penalties ranging from
$500 for a rural letter carrier to $500,000 for an assistant treasurer of
the United States. Most of these bonds are executed by bonding
companies, and the premiums, which are paid by the employees
themselves, are fixed within the limitation of the act approved
August 5, 1909.
The growth and extent of the business suggest the desirability of
considering the establishment of apian whereby the Government would
bond its own employees, who would pay premiums into a mutual
fidelity fund to be used for the payment of losses arising under the
bonds. This would be a wholly safe and satisfactory way of affording
protection to the Government and at the same time undoubtedly
reducing the premium charge to employees. In this connection i t



180

REPORT ON THE FINANCES.

should be pointed out that the joint commission of Congress created
by the act of August 5, 1909, recommended the creation of a,mutual
bonding fund as the solution of the Government's bonding problem.
If such a plan be not adopted at this time, attention is caUed to the
work now being done by the Treasury through the supervision
exercised over bonding companies writing bonds for Government
officers in all departments. The act of March 23, 1910, amending the
act.of August 13, 1894, merely transferred from the Attorney General
to the Secretary of the Treasury the limited supervision provided for
under the last-mentioned act, b u t did not give the Treasury Depart-,
ment any additional supervisory authority over these bonding
companies. Reasonable funds should be provided to permit the
effective enforcement of the statute by affording facUities for making
periodical examinations of the financial condition of bonding companies, thereby securing a larger measure of protection for the Government. A large sum would not be required for this purpose.
Under regulations approved by the Secretary of the Treasury,
bonding companies doing business with the Government are not
permitted to assume a liability on account of any single risk or bond,
with the exception of certain customs and internal-revenue bonds, in
excess of 10 per cent of their capital and surplus as fixed by the
Treasury Department. WhUe the bonding companies have acquiesced in the rigid enforcement of this 10 per cent limitation, it is
believed that the best interests of the Government would be served
if appropriate legislation were enacted by the Congress definitely
fixing the limit of liability. I t is respectfuUy recommended that the
act of March 23, 1910, be amended accordingly.
REPRESENTATION OF TREASURY ON W A R TRADE BOARD.

The Secretary of the Treasury continued during the current year to
be represented on the War Trade Board, thus keeping t h a t board in
touch with the financial policies of the Treasury Department and
securing for the Treasury Department the benefit of full information
in regard to the trade and blockade policies of the War Trade Board.
Following the signing of the armistice, the War Trade Board undertook to remove restrictions on trade as rapidly as conditions warranted such removal, and by June 30, 1919, all b u t a few remnants of
those restrictions had been removed. By order of the President, the
functions of the War Trade Board were on that date transferred to
the Department of State to be administered by the War Trade Board
section of the Department of State, and the existence of the. War
Trade Board came to an end.
I take this occasion to record my judgment of the valuable service
performed by that board and my appreciation of its cordial cooperation with this department.




SECRETARY OF T H E TREASURY.
„• •

,/

P A N A M A CANAL.,

181
'-

'•

The general fand bf the Treasury was charged during the fiscal
year 1919 with $12,265,775.08 on account of the Panama Canal,
including $1,726,857.87 for construction work and $10,538,917.21 for
fortifications, maintenance, and miscellaneous expenditures. The
general fund was credited during the year with $6,777,046.55 receipts
from tolls, etc., making a net expenditure for the year of $5,488,728.53.
The total amount expended for canal construction, fortifications,
maintenance, etc., from the general fund to June 30, 1919, exclusive
'of reimbursements from sales of bonds, was $313,474,507.02, whUe
the amounts received from Panama Canal bonds, including premiums
thereon, issued in. 1907, 1908, 1909, 1911, and 1912 was
$138,600,869.02, making the total expenditures on account of th©
Panama Canal to the close of the fiscal year 1919 $452,075,376.04,
CONTINGENT FUND.

I respectfuUy request that the Congress appropriate for the fiscal
year 1921 the sum of $15,000 as a contingent fund for the Secretary
of the Treasury. This amount was asked for the fiscal year 1920,
but was not granted.
Out of this fund in previous years improved methods and economies have been effected and duplication of work eliminated.
FINANCES.

The foUovdng statements showing receipts, disbursements, estimates, and the condition of the Treasury are submitted:
R E C E I P T S AND DISBURSEMENTS.^

Fiscal year 1919.
The receipts and disbursements of the Government during the fiscal
year ended eJune 30, 1919, were as follows:
'

(See details on pages 188 to 198.)
GENERAL F U N D .

Receipts into the general fund, including trust-fund receipts, but
excluding postal revenues:
Customs
Internal revenue—
Income and excess-profits taxe.s
$2, 600, 762, 734. 84
Miscellaneous
1, 239, 468, 260. 0 !
Sales of public lands
Miscellaneous
Total ordinary receipts..

$183, 428, 624. 78

3,840,230,994.85
1, 404, 705.12
622, 539, 52?. 71
4, 647, 603, 852. 46

1 "Disbursements," as used in this statement, in addition to actual expenditures, include unexpended
balances to the credit of disbursing oflQcers.




182

. REPORT ON THE FINANCES.

Disbursements,^ from the general fund for cur- •
rent expenses and capital outlays, including
trust-fund disbursements, but excluding
postal service paid from postal revenues and
^ Panama Canal disbursements:
For civil establishment—
Legislative establishment
$16, 605, 836.15
;
Executive proper, including Tariff
Commission, .War Trade Board,
War Industries Board, Alien Prop- «
erty Custodian, and Committee on
Public Information
21,497, 674. 97
State Department..
20,248,594.49
Treasury Department proper....
171, 319, 616. 58
Bureau of War Risk Insurance
'^ 101, 943, 693." 27
Public buildings, construction, sites,
equipment, and maintenance
16, 651, 372. 40
War Department proper
20,162,504.50
Department of Justice
15,216,025. 43
Post Office Department proper
"
2,062,433. 96
Postal deficiencies for prior years . .
343, 511.15
Navy Department proper
9, 773, 378. 04
Interior Department . p r o p e r . . . . . . . . .
29,120, 861. 52
Department of Agriculture....
...
36, 888, 371. 28
Department of Commerce
15, 668, 534.14 .
Department of Labor
13, 290, ^90. 61
United States Shipping Board......... 1,871, 201, 577. 51
Federal control of transportation sys'' tems
-.. - , 349, 238,385: 21
War Finance Corporation...'.
295,000,000. 00
Food and Fuel Administrations
117, 644,584. 08
Council of National Defense
554,039. 43
Bureau of Industrial Housing.
70,483, 879. 32
Interstate Commerce Commission... .
5,688,651.38
Federal Trade Commission..
1,595,737.29
Federal Board for Vocational Education
3, 549,442. 64
Employees' Compensation Commission
1, 536,434. 80
Smithsonian Institution and National
V .
Museum
'
668,668.06
Other independent offices
6, 370, 516. 00
. District of Columbia
' 16, 565,433. 74
$3, 230, 890, 247. 95
For War Department—
For Military . Establishment, as foi- ,
lows—
Support of the Army, 17,304,078,826.17;. Military Academy,
. . .
$2,434,088.16;
-fortifications,
,^
$1,863,133,573.18; a r s e n a l s ,
.
/
$13,060,745.32; civilian military
training camps, $1,104,902.84;
registration . and selection/for
'
'i • \
military service, $15,037,579.62;
. , \
military posts and miscella'neous, $9,674,564..............'9,208, 524, 279.29
1 "Disbursements," as used in this statement, in addition to actual expenditures, include unexpended
balances to the credit of disbursing officers.
, ,
' .
,
:
2 Exclusive of allotments of pay.



SECRETARY OF THE TREASURY.
Disbursements^ from the general fund for cur= ^
rent expenses and capital outlays, including
trust-fund disbursements, b u t excluding
postal service paid from postal revenues and
Panama Canal disbursements—Continued.
For War Department—Continued.
For rivers and harbors
For war miscellaneous^ civil, including national homes, $4,461,122.80;
soldiers' deposit fund, $755,658.91;
cemeteries, parks, claims, etc.,
$6,240,017.13

183
^ ^,

$33,078, 306. 32

11,456,798.84

^$ 9, 253, 059, 384. 45
For Naval Establishment, including construction of new vessels, machinery, armament, equipment, improvement at
navy yards, and miscellaneous
^2, 009, 272, 388. 53
For Indian Service
.34, 593, 256. 69
Forpensions
,
221, 614, 78L 44
For interest on the public debt.'.
615, 867, 337. 32
15,365,297,396.38
Add difference arising in adjustment of miscellaneous accounts..........!...
Total ordinary disbursements

65,345.38
15, 365, 362, 741. 76

Excess of ordinary disbursements.
10, 717, 758, 889. 30
Special disbursements:
Purchase of obligations of foreign governments
$3,477,850,265.56
Purchase of farm-loan bonds
96, 662, 398. 59
Total special disbursements
Panama Canal:
Receipts from tolls, e t c . . . . . . . . . . . . . . . . . . . .
Disbursements for canal

3,574j 512, 664.15
6, 777, 046. 55
l2, 265, 775. 08

Excess of canal disbursements

5,488, 728. 53

Excess of disbursements over receipts, exclusive, of public
debt..
14, 297, 760, 28L 98
Public debt—receipts and deposits:
First Liberty loan
'.
.
$8,485. 38
Second Liberty loan
2,404.00.
Third Liberty loan.
932,106,419. 03
Fourth Liberty loan.
6, 959", 504,587. 00
Victory Liberty loan
3,467, 844, 971. 77
War-savings certificates
738, 247, 741. 07
Certificates of indebtedness
16, 955, 327, 890. 00
Deposits to retire Federal reserve bank
notes and national bank notes
22, 644, 757. 50
Deposits for postal-savings bonds
289, 260. 00
Total public-debt receipts

29,075, 976,515. 75

1" Disbursements," as used in this statement, in addition to actual expenditures, include unexpended
balances to the credit of disbursing officers.
2 Includes allotments of pay.




184

REPORT ON T H E FINANCES.

Publicdebt—redemptions and purchases:
First Liberty loan, converted at 4^ per
cent
$4,003,050. 00
Second Liberty loan.
8,000,000. 00
Second Liberty loan, converted at 4J per
cent- ,
172, 357, 600. 00
Third Liberty loan
201, 660, 500. 00
Fourth Liberty loan
' 165,000, 000. 00
Loan of 1908-1918
63, 009,460. 00
War-savings certificates..:
134,047, 603. 63
Certificates of indebtedness
15, 046, 532, 900. 00
. One-year Treasury notes
19,150,000. 00
. Federal reserve bank notes and national
bank notes retired
23, 717, 892. 50
Miscellaneous redemptions, public d e b t . . . .
87,003. 00
Total public debt disbursements

15, 837, 566, 009.13

Excess of public-debt receipts over public-debt disbursements
;
$13, 238,410, 506. 62
Excess of total disbursements over total receipts
1, 059, 349, 775. 36
SUMMARY OF G E N E R A L F U N D - TRANSACTIONS,

Fiscal year ended June 30, 1919.
Receipts.
Disbursements.
Ordinary receipts, including trust-fund receipts, b u t excluding postal revenues
$4, 647, 603,852. 46
Disbursements^ for current expenses and capital outlays, including trust-fund disburse-.
ments, b u t excluding postaL service paid
from postal revenues and Panama Canal
disbursements.:
$15, 365, 362, 741. 76
Special disbursements
'.
3,574,512, 664.15
Panama Canal receipts, tolls, etc
6, 777, 046. 55
Panama Canal disbursements
•.
12, 265, 775. 08
Public debt—receipts and deposits.
29, 075, 976,515. 75
Public debt—redemptions and purchases
15,837,566,009.13
Total receipts into the general fund
Excess of disbursements over receipts

33, 730, 357,414. 76
1, 059, 349, 775. 36

Grand totals
34, 789, 707,190. 12 34, 789, 707,190.12
General-fund balances:
Balance free of current obligations, June 30, 1918
1, 319, 347, 364.14
Pay warrants issued in excess of receipts,
as above, fiscal year 1919
$1, 059, 349, 775. 36 .
Deduct increase in disbursing oflScers'
credits, June 30, 1919, over disbursing
officers' credits, June 30, 1918
794, 069, 792.42
265, 279, 982. 94
1, 054, 067, 381. 20
Deduct increase in matured interest obligations outstanding
June 30, 1919, over such obligations outstanding June.30,
1918.T:
:
51, 335, 339. 20
Balance free of current obligations, June 30, 1919
1,002, 732,042. 00
1 "Disbursements," as used in this statement, in addition to actual expenditures, include unexpended
balances to the credit of disbursing officers.




185

SECRETARY OF THE TREASURY.
POSTAL SERVICE.

^'

"'

[Exclusive of Post Office Department proper, which is included in " civil establishment."]
Postal-revenue r e c e i p t s . . . . . :
Postal service paid from postal revenues

$364,847,126. 20
362,50'4, 274. 24
2, 342, 851. 96

Excess of receipts
U N I T E D STATES N O T E S ( G R E E N B A C K S ) .

Issues to replace worn and mutilated notes
243,184, 000. 00
Worn and mutilated notes retired
243,184, 000. 00
The redemptions during the year of the notes unfit for circulation necessitated the
issue of a like amount thereof to maintain the outstanding aggregate of the notes as
required b y law.
GOLD R E S E R V E F U N D .

Balance in reserve fund June 30, 1918
$152, 979, 025. 63
Balance in reserve fund June 30,' 19l9
152, 979, 025.63
The redemptions of notes for gold from the reserve fund during t h e year were:
United States notes, $1, 506, 000.
As the redeemed notes were exchanged each day for gold in the general fund, the
reserve was maintained at the fixed sum required b y law, including $2,979,025.63
tax on additional circulation received under act of May 30, 1908.
TRUST FUNDS.

(Held for the redemption of the notes and certificates for which they are respectively
pledged.)
Gold coin and bullion
Silver dollars.
Silver dollars, 1890

$735, 779, 491 Gold certificates
out169,148, 295
standing.
$1, 550, 259, 669
1, 745,161
Less amount i n the
Treasury
....
814, 480,178
Net.

735,779, 491

Silver certificates outstanding.......
Less amount i n the
Treasury
Net

203, 943, 000
34, 794, 705
169,148, 295

Treasury notes (1890)
outstanding
Less amount in the
Treasury.
Net

1, 754, 000
8, 839
1,745,161
906, 672, 947

906,672,947
GOLD SETTLEMENT FUND, FEDERAL RESERVE BOARD.

Gold coin.




.-.

$1,416,086, 099.10

186

REPORT ON T H E FINANCES.
SINKING FUND.

The securities redeemed on account of the sinking fund, included
in general-fund disbursements, were as foUows:
Fractional c u r r e n c y . . . . . . . . . .
,
One-year notes of 1863
Funded loan of 1 8 9 1 . . . . : . . . . . . . . . .
Refunding certificates
Funded loan of 1907
Compound-interest notes
Consols of 1867

- -. -.

... -

:
,
'.

Total---.

$1, 823
30
4,050
360
80,550
90
100
87,003

CONDITION OF THE TREASURY J U N E 30,

1919.

The public debt of the United States at the close of the fiscal year
1919 is set forth in detail, as follows:
Interest-bearing debt:
Loan of 1925, 4 per cent
Consols of 1930, 2 per cent
Panama Canal loan, 2 per cent.
Panama Canal loan, 3 per c e n t . . . . . . . . . . . .
Postal savings bonds, 2^ per cent
Conversion bonds, 3 per cent
Certificates of i n d e b t e d n e s s . . . :
War savijigs certiii cates
First Liberty loan, 3J per cent
First Liberty loan converted, 4 per c e n t . .
First Liberty loan converted, 4 i per cent.
First Liberty loan" "second converted, 4 i
percent.........
'..'.
Second Liberty loan, 4 per cent
'.-...
Second Liberty loan converted, 4 i per cent
Third Liberty loan, 4 i per cent
Fourth Liberty loan, 4J per cent
Victory Liberty loan^ 3|, and 4f per cent..

$118,489, 900. 00
599, 724,050.00
74,901,580. 00
50,000, 000^ 00
11, 349, 960. 00
28,894, 500. 00
3, 624,983,490. 00
953, 997,434. 77
1,410, 071, 600. 00
167, 792, 750. 00
403,440,100: 00
' 3,492,050.00
704,204, 350. 00
2, 862-, 252, 250. 00
3, 958,552, 700. 00
6, 794, 504, 587. 00
3,467, 844, 971. 77
$25, 234,496, 273. 54

Debt on which inter;est has ceased:
Funded loan of 1891..
. Loanofl904
Funded loan of 1907
Loan of 1908-1918
Refunding certificates
Old d e b t . . . .
Certificates of indebtedness, matured

20,800.00
13,050.00
407; 350. 00
936,000. 00
10, 840. 00
900, 330. 26
8, 821,000. 00
11,109, 370. 26

Debt bearing no interest:
United States notes (greenbacks)
Bank notes, redemption account
Old demand n o t e s . . . . . . . ,
Fractional currency

, 346, 681, 016. 00
35, 830,457. 00
, 53,:012, 50
.6, 843, 314. 82
. 389, 407, 800: 3^

Total interest and noninterest bearing debt, exclusive of
certificates and notes offset by coin and silver bullion




25, 635,013,444.12

SECRETARY OF THE TREASURY.
CASH IN THE TREASURY,, J U ^ E 30,

487

1919.

[From revised statements.]
Reserve fund:
Gold coin and bullion...'.
Trustpunds:
Gold coin and bullion
Silver dollars
Silver dollars of 1890

$152, 979, 025. 63

"

.,

735, 779,491. 00
169,148,295.00
I, 745,161, 00
906,672,947.00

Gold settlement fund. Federal Reserve Board:
Gold coin and bullion
•General fund:
In Treasury oflaces—
Gold coin
Standard silver dollars
,.
United States notes
Federal reserve notes.. -•
Federal reserve bank notesNational-bank notes,.
Certified checks on banks
Subsidiary silver coin
:
Minor coin...
,
Silver bullion (af cost)
Unclassified (unassorted currency,
etc.)
Public debt paid, awaiting reimbursement
In Federal land banks
In Federal reserve banks
•.'.
Intransit
•
In special depositaries— ,
Account of sales of certificates of indebtedness...................
I n national-bank depositaries—
To credit of Treasurer of the United
States-.:--....:-:...."......
To credit of other Government officers
. . ..Intransit
In treasury of Philippine Islands—
To credit of Treasurer of the United
States
,.
To credit of other Government officers.
: ' •
I n foreign depositaries—
To credit of Treasurer of the.United
':
States
Deduct current liabilities—
National-bank note 5
per cent f u n d . . . . . . $22,473,804.75
Less, notes in process
. of redemption
22,473,. 804. 75




1,416,086,099.10

$211, 596, 388. 87
56,497, 779. 00
13,818,465.00
44, 227, 987. 50
24,421, 249. 50
47,161,186. 43
155, 953. 84'
10,983,939.20
892,802.67
16,423,918.22
3,490,532.19
425,940.50
430,096,142.92
500,000.00
55,300,485.16
30,172,896:09
•
•—

85,473,38L25

.905,411,514.76
^
41,123,406.30
11, 276,533. 88
9,148,927.09
•

,

61,548,867.27

7,758,105.57
1,555, 333. 91
9,313,439.48

22, 885,165. 93
1,515,228,51161

188

REPORT O N T H E FINANClES.

General fund—Continued.
Treasurer's checks outstanding
<i..
Post Office Department balance
Board of trustees. Postal Savings System
balance
:
Balance to credit of postmasters, clerks
^ of court, etc
Undistributed assets of insolvent national
banks
Deposits for—
Redemption of Federal reserve notes
(5 per cent fund)
'
Redemption of Federal reserve bank
notes (5 per cent f u n d ) . . . - :
Retirement of additional circulating
notes, act of May 30, 1908
Miscellaneous redemption a c c o u n t s . . .

$605, 856. 76
17,051, 943.10
7, 743, 397. 88
21,482, OOL 63
1, 236, 360. 25

205, 230, 742. 20
9,534, 850. 00
275,100. 00
25, 903, 324. 53
$289, 063, 576. 35

Balance in t h e Treasury, J u n e 30, 1919, as
per Financial Statement of t h e United
States Government
'
Settlement w a n ants, coupons, and checks
outstanding—
Treasury w a r r a n t s . . . . - . . . - - .
7,199, 695. 03
Matured interest obligations
• '80,145,012. 72
Disbursing officers' checks.
136,088,185. 51
^
Balance in t h e Treasury, J u n e 30, 1919, free of
current obligations: -

1, 226,164, 935. 26

223,432, 893. 26
1,002, 732,042. 00

Comparison of receipts, fiscal years 1919 and t918.
1919

Customs
Internalrevenue: .
Incbme and excess profits
taxes
Miscellaneous
Sales of public 1 ands
Consular fees..:
Chinese indemnity
Profits on coinage, bullion deposits, etc
Payment of interest by Pacific railways
Tax on circulation of national
banks.
Interest on obligations of
foreign Governments
Principal payments on foreign loans
Interest on public deposits...
Premium on war-risk insurance
Night services.custom service.
Customs fees, nnes, penalties,
etc
Interest on loans to railroad
companies
Sale of war suppUes, War Department
Payment by German Government under terms of

Increase, 1919.

1918

$183,428,624.78

2,600,762,734.84
1,239,468,260.01
1,404,705.12
1,159,144.69

$182,768,988.71
857,
1,
1.

894.28
590.53
455.31
574.21
679.76

11,963, 244.27

• $669,636.07
$238,237,159. < 4
:
382,424,669.48

564,750.11)
90,429.52
269,679.7ii
10,521,442.08

686.35

5,310. 60

148.03

458.63

3,806, 646.42

3;

075.78

249,570.64

322,162, 228.04

107,

016. 83

214,666,211.21
7,570,000.00
12,192,928.64

7,570, 000. 00
23,709, 714.84
4,225,398.48
286,929.93

312.25
428.10

1,345, 687.89

702,067.48

15,501.83
643,620.41

2,871, 584.86

2,871,584. 86

13,802, 217.12

13,802,217.12

18,123,929.81
8>riiiisf^iC6
18,123,929.8i
3,910,175.75
3,910,175.75
Sale of German war supplies.
Emergency shipping fund,
3,860,000.00
3,860,000.00
construction of barges, etc..
Interest on advance pay1,973,541.14
1,973,541.14
ments to contractors
Donation of royalty on ma716,884.75
716,884.75
chine guns
' Estimated where complete reports are not available.




Decrease, 1919.

30,122,913.7/

189

SECRETARY OF T H E TREASURY.
Comparison of receipts, fiscal years 1919 and 1918—Continued.
1919
Proceeds pf mihtia property
lost or destroyed
Earnings of radio service
Navy hospital and clothing
funds, fines, forfeitures,etc.
Sales of ordnance materials,etc
Land fees
Revenues of national parks...
Fees on letters patent
Depredations on public lands.
Deposits for surveying public
^ lands
'..
Oregon and Caliiomia land
grant fund
Proceeds of townsites. Reclamation Service
Forest reserve fund
Immigrant fund
Naturalization fees
Proceeds of seal and fox skins.
Alaska fund
Judicial fees, fines, penalties,
etc
S u r p l u s postal revenues,
prior vears
Estimated increased postage.
Sales of Government property.
Rent of public buildings,
rroimds, etc
Sales of lands and buildings..
Sales to Indians
Franchise tax
District of Columbia, general
reeceipts
'.
Funds contributed for river
, and harbor improvements .
Reimbursements on account
of expenditures made for
Indian tribes
Assessments on Federal rereserve banks, for salaries,
etc
,
Assessments On n a t i o n a l
banks for expensesof examiners
Liquidation of capital stock,
Federal land banks
Discount on bonds purchased.
Sale of farm loan bonds
,Interest on farm loan bonds..
MisGellaneous

$28,917.69
221,131.19

$17,
291,

Increase, 1919.

1918

741,465.47
4,162,016.20
1,196,570.93
133,815.41
2,022,770.99
57,061.77
41,092.16
155,217.64

47

812,
249,
, 191,
168,
1,100,
36,

$11,096.22
$70,771. 89
70,799.76
3,912,099.54
5,461.65
34,297.73
78,176.41
20,766.69

97,068; 43

55,976.27

320,033.22

164,815.58
5,628.07

55,362.49
4,512,173.93
1,175,293.49
387,795.50
309,803.35
247,943.63
1,731,360.05

Decrease, 1919.

976,934.53
158,077.06
181,696.00
205,608.84
"58,'684 86
1,146,228.14

585,131.91

18,000,000.00
71,906,000.00
15,477,857.80

8,442,299.25
32,833,000.00
13,372,942.48

3,639,063.52
238,935.00
241,577.85

3,159,997.82
36,147.40
65," 378.'37"
"i,'i34,'234 48

10,.661,-285.44

722,210.51

2,282,588.00

1,033,463. 00

303,624.07

46,988.85

256,635.22

2,614,778.42

1,496,306.98

1,118,471.44

1/065,121.65

1,018,392.13

626,321.00
22,878,516.48
6,345,000.00
3,619,992.25
4,775,111.21

2,478,943.65
6,545,000.00
289,201.84
2,187,583.21

46,729.52
626,321.00
20,399,572.83
200,000.00
3,330,790.41
2,587,528.00

TRUST F U N D S .

Department of State:
Miscellaneous trust funds.
War Department:
Army deposit funds
Soldiers' Home permanent fund
. Miscellaneous trust funds.
Navy Department:
Navy deposit fund
Marine Corps deposit
fund.
Interior Department:
Proceeds of Indian lands.
Indian moneys, proceeds
of labor
Miscellaneous trust funds.
Personal fimds of patients, St. Elizabeths
Hospital
,
Pension money, St. Elizabeths Hospital
Navy pension fund
District ofColumbia:
Miscellaneous trust-fund
deposits
Washington redemption
fund
Police and firemen's relieffund
Other trust funds
Total.




16,239.94

847,170.61

714,009.89

577,948.44
1,020.00

47,029.60

477,176.19

493,416.13

839,641.16

80,409.00

7, 529.,45
136,061.45
1,020.00
33,379.40

• 99,696.77

228,344.06

128,647.29

2,275,347.37

2,549,723.76

272,376.39

13,972,533.67
56,280.92

13,696,842.00
492,258.36

275,691.67
435,977.44

77, 917. 51

56,052.01

21,865. 50

75,824.80
2,009.09

69,077.74
2,261.86

6,747.06

545,242.44

437,882. 93

107,359.51

196,231.95

195,099.44

1,132.51

165,533.49
7,241.93

141,172.15
8,858.81

24,361.34

4,172;-635,828.46

758,134,207.04

4,647,507,145.88'

252.77

1,616.88
283;'262r889.62

no

REPORT ON T H E FINANCES.
Comparison of receipts, fiscal years 1919 and 1918—Continued.
1919

1918

Increase, 1919.

Decrease, 1919.

TBUST FUNDS—continued.
District of Columbia—Contd.
Deduct—
Moneys covered by
warrant in year
subsequent to the
deposit thereof
AddMoneys received in
fiscal year but not
• covered by warrant.
•
Ordinary receipts. J ..

$1,638,786.71

$264,029.43

$1,374,757. 28

4,645,868,359.17

4,172,371,799.03

756,759,449. 76

1, 735,493.29
4,647,603,852.46

Panama Canal:
6,777,046.55
Receipts from tolls, etc...
Publicdebt:
8,485.38
First Liberty loan....
Second Liberty loan
2,404.00
Third Liberty loan
932,106,419.03
Fourth Liberty loan
6,959,504,587.00
Victory Liberty loan
3,467,844,971.77
Certificates of indebtedness
16,955,327,890.00
War-savings certificates
738,247,741.07
One-vear Treasury notes
Postal savings bonds. . . .
289,260.00
.Bank-note fund
22,644,757.50
Public debt receipts
Total receipts, exclusive of postal..
Postal revenues
Total receipts, including postal

. 1,638, 786. 71

$283,262,889.62'

96,706. 58

4,174,010,585.74

756,856,156.34

6,414,570.25

283,262,889.62

362,476.30

523,112,200.01
3,807,863,516.00
3,243,045,138.47

523,103,714. 65
3,807,861,112.OC
2,310,938,719.44
6,959, 504. 587.00
3,467,844,971.77

9,017,648, 500.00
352,769,265.13
19,150,000.00
1,020, 940.00
10,279, 650.00

7,937,679,390.00
385,478,475.94

16,974,889,209.61

18,762,872, 532.21

6,661,785,226.07

33,730,357,414. 76 21,155,314,365.60
364,847,126. 20
344,475,962.24

19,520,091,164.85
20,371,163.96

6,945,048,115.69'

21,499,790,327.84

19,540,462,328.81

6,945,048,115.69-

29,075,976,515.75

34,095,204.540.96

19,150,000.00"
731,680.00-

12,365,107.50

Comparison of disbursements,^ fiscal years 1919 and 1918.
1919

1918

Increase, 1919.

Decrease, 1919.

CIVIL ESTABLISHMENT.

Legislative:
Senate
, House of Representatives.
Legislative, miscellaneous
Public Printer
Library of Congress
Botanic Garden
Total legislative
Executive proper:
Salaries and expenses
Relief, etc., American
citizens in Europe
European food relief
United States --Tariff
C0TnTTli,<5910T1

Temporary govermnentf or W^est Indian Islands
National security and deBureau of Efficiency:....

$2,034,463.06
5,303,885.99
232,614.23
8,232,838.68
742,153.31
59,880.88

$1,944,762.48
5,331,470.93
338,291.10
7,682,847.65
692,345.73
52,334.80

$89,700.58

16,605,836.15

16,042,052.69

697,045.27

. 220,053.26

245,848.07

79,581.58
47,697.37

102,760.66

199,578.35

191,872.83

$27,584.94
105,676.87

133,261.81
25,794.81

47,697.37

23,179.08

7,705.52
200,000.00

200,000.00
7,703,083.69
104,555.04
715,954.04

549,991.03
49,807.58
7,546.08

7,283,577.84
101,105.80
617,550.42

419,505.85
3,389.24
98,403.62

Expenses, trading with
360,000.00
360,000.00
the enemy act
960,487.99
218,530.30
• 1,179,018.29
Alien Property Custodian
5,668:381.76
701,289.59
6,369,671.35
War Trade Board
1 ."Disbursements." as used in these tables;in additionto actual expenditures, include unexpended
balances to the credit of disbursing officers.




SECRETARY OF THE TREASURY.

19'!

Comparison of disbursements,^ fiscal years 1919 and 1918—Continued.
1919

1918

Increase, 1919.

Decrease, 1919.

CIVIL ESTABLISHMENT—con.

Executive proper—Con.
War Industries Board
Committee on Public
Information
Total executive proper.
Department of State:
Salaries and expenses
Foreign intercourseDiplomatic salaries...
Consular salaries .
Contingent expenses
of foreign missions..
Post allowances
Contingencies of consulates
Emergencies arising
in the Diplomatic
and Consular Service
Relief of American
citizens in Mexico
and Germany
Representation of interests of foreign
governmeTits
Relief of American
seamen...
Payment to Panama
Payment to Republic
of Nicaragua .
National security and
defense
Miscellaneous items
Trustfunds
Total Department
of State

$1,939,141.37

$1,939,141.37

2,739,340.63

2,739,340.63
21,497,674.97

$9,822,595.51

12,084,053.35

1,036,168.73

.637,097.75

399,070.98

1^282,029.96
2,196,842.98

920,935.47
1,632,835.25

361,094.49
564,007.73

1,170,698.47
772,388.27

1,089,306.39
233,051.66

81,392.08
539,336.61

1,099,458.45

662,641.46

436,816.99

272,439.34

223,739.64

48,699.70

113,437.51

56,149.73

57,287.78

19,218.84

. 2,141.87

17,076.97

11.3,470.11
250,000.00

117,177.45
250,000.00

. $408,973.89

I...

'
3,707.34
2,750,000.00

2,750,000.00
11,358,857.. 41
550,337.31
1.3,247.11

942,026.77
438,803.95
75.3,371.19

10,416,830.64
111,533.36

20,248,594.49

10,709,278.58

13,033,147.33

740,124.08
3,493,831.42

Treasury Department:
Salaries, Secretary's office
269,911.54
658,187.44
and divisions thereof
928,099.08
Contingent fund for Secretary
3,933.61
7,608.26
3,674.75
InternationaL:aigh Com9,372.63
Tnission..,,
17,992.16
8,619.53
Contingent expenses of
497,215.19
331,026.86
166,188.33
department
Customs ServiceCollecting customs
394,348.86
10,174,397.04
9,780,048.18
revenues
National security and
defense
131,305.31
131,305.31
Refunding, excess of
448,314.50
3,610,706.96
4,059,021.46
deposits
Debentures or draw4,109,970.93
12,063,204.34
7,953,233.41
backs
Compensation in lieu
3,586.58
6,355.00
9,941.58
of moieties 1
11,439.41
3,102.65
8,336.76
Miscellaneous refunds
Internal Revenue Service8,058,231.84
12,091,679.99
20,149,911.83
Expenses of collecting.
3,526,742.89
6,470,392.02
9,997.134.91
Refunds and reliefs- 288,435.98
587,851.16
299,415.18
Miscellaneous.
Suppressing counterfeit292,381.11
232,835.99
59,545.12
ing and other crimes...
2,908,621.96
840,715.45
' 2,067,906.51
Accounting offices
1,249,764.27
147,408.41
1,102,355.86
Miscellaneous offices
6,286,720.75
3,103,682.13
Public Health Service ..
3,183,038.62
84,204.15
183,554.30
Epidemic diseases
267,758.45
' Promotinghealth of mili402,948.69
450,102.12
tary forces
47,153.43
1" Disbursements," as used in these tables, in addition to actual expenditures, include unexpended
balances to the credit of the disbursing officers.




192

REPORT ON THE FINANCES.
Comparison of disbursements,^ fiscal years 1919 and 1918—Continued.
1919

1918

Increase, 1919.

Decrease, 1919.

CIVIL ESTABLISHMENT—con.
Treasury Department—Con.
W a r R i s k I n s u r a n c e 2—
Salaries a n d expenses.
Losses
Military a n d n a v a l
compensation
Military a n d n a v a l
family a l l o w a n c e . -.
Military a n d n a v a l
insurance
N a t i o n a l security a n d
defense
Federal
Farm
Loan
BoardSalaries a n d e x p e n s e s .
Engraving and printing-.
P a p e r , etc., for U n i t e d
s t a t e s securities
P r e p a r a t i o n a n d issue of
F e d e r a l reserve n o t e s . . .
E x p e n s e s of loans
Charges on bullion s o l d . . .
Loss on silver dollars
m e l t e d or b r o k e n u p . . .
Coast G u a r d
:
R e v e n u e vessels
Independent Treasury.. Mints a n d assay offices...
P u b l i c buildings—
Sites, c o n s t r u c t i o n ,
and equipment
Current maintenance.
Expositions
Salaries a n d expenses, n a tional bank examiners..
N a t i o n a l security a n d d e fense
Increase of c o m p e n s a t i o n . .
Miscellaneous i t e m s
Special f u n d s P h i l i p p i n e special
funds
N i g h t services, Cust o m s Service
P o r t o Rico special
funds
Total Treasury Department
War Department:
Salaries a n d expenses
' A d d i t i o n a l eniployees —
T e m p o r a r y omce buildings
PubUc buildings
and
grounds
Increase of compensation.
Total War Department.
Navy Department:
Salaries a n d expenses —
A d d i t i o n a l einployees
T e m p o r a r y office b u i l d ings
Increase of compensation.
Total Navy
ment

$12,872,729.78
7,499,346.96

$1,768,393.56
22,771,326.05

$11,104,336.22

11,493,837.10

545,012.91

10,948,824.19
151,194,525.42

$15,271,979.09

193,444,460.92

42,249,935.50

3 126,430,622.28

3 329,757.54

3,063,940.79

1,198,137.84

1,865,802.95

212,673.00
5,326,285.79

200,654.05
4,188,670.41

12,018.95
1,137,615.38

662,659.53

126,760,379182

508,284.20

154,375.33

291,522.71
28,594,377.10
497,290.09

19,481.02
9,716,951.78

272,041.69
18,877,425.32
497,290.09

43,850,645.28
11,207,131.15
289,023.95
636,253.40
1,552,793.67

15,465,585.18
6,819,392.04
42,931.88
640,607.22
1,769,947.82

28,385,060.10
4,387,739.11
246,092.07

10,184)242.67
6,672,167.18

12,206,527.03
6,180,498.99
6,971.65

491,668.19

1,031,356.85

1,006,208.37

25,148.48

5,259,195.75
3,747,009.01
638,010.58

160,535.57
1,717,754.78
263,202.11

5,098,660.18
2,029,254.23
374,808.47

1,016,861.61

637,262.16

379,599.45

284,986.04

271,178.24

13,807.80

953,521.03

1,039,685.40

289,914,682.25

181,848,005.86

257,463,451.45

• 3,481,678.48
14,951,889.70

4,}43,499.72
8,865,434.70

6,086,455.00

4,353.82
217,154.15
2,022,284;36
6,'97i."65

6,164.37
149,396,775.06
661,821.24
4,475,484.11

4,475,484.11
682,674.03
1,046,262.29

638,115.63
. 110,932.59

44,558.40
935,329.70

20,162,504.50

18,233,466.75

7,066,343.10

1,682,031.80
1,102,402.48

1,351,812.67
433,381.10

330,219.13
669,021.38

6,844,007.03
144,936.73

49,420.00

6,844,007.03
95,516.73

9,773,378.04

1,834,613.77

7,938,764.27

5,137,305.35

Depart-

» " D i s b u r s e m e n t s , " as used i n t h e s e t a b l e s , i n a d d i t i o n t o a c t u a l e x p e n d i t u r e , i n c l u d e u n e x p e n d e d
balances t o t h e credit of t h e d i s b u r s i n g officers.
« E x c l u s i v e of a l l o t m e n t s of p a y .
,
3 E x c e s s of r e p a y m e n t s .




SECRETARY OF THE TREASURY.

193

Comparison of disbursements,^ fiscal years 1919 and 1918—Continued.
1918

Increase, 1919.

Decrease, 1919.

CIVIL ESTABLISHMENT—con.
Interior D e p a r t m e n t :
Salaries a n d expenses,
office of Secretary
General L a n d Office
P u b l i c L a n d s Service
P a y m e n t of u n p a i d t a x e s
on lands inA^olved in
Oregon & California R .
R . forfeiture s u i t
N a t i o n a l security a n d defense
I n d i a n Office.
P e n s i o n Office
P a t e n t Office
B u r e a u of E d u c a t i o n
Colleges for agriculture
and the mechanic a r t s . .
Geological S u r v e y
Rureau.of Mines
F u e l yards. D i s t r i c t of
Columbia
•
Office of S u p e r i n t e n d e n t
of Capitol B u i l d i n g a n d
Grounds
National parks
Territorial governments.
St. E l i z a b e t h ' s H o s p i t a l . .
O t h e r beneficiaries
C o n s t r u c t i o n , etc., of railroads i n A l a s k a . . . :
Increase of compensation.
Miscellaneous i t e m s
Special f u n d s Reclamation fund
Five, t l u e e , a n d two
per cent funds, sales
of lands
Proceeds, tovm sites,
Alaska
R e v e n u e s of n a t i o n a l
- parks and Hot
Springs, A r k
Deposits for sm-veying p u b l i c lands
P u b l i c schools, Alask a fund
Miscellaneous t r u s t funds.
Total Interior Department
rPost Office D e p a r t m e n t :
Salaries a n d expenses
Deficiency i n postal revenues
Increase of compensation.
Miscellaneous i t e m s
Total Post
partment

$1,139,707.02
676,455.17
2,421,560.86

$1,012,079.75
642,801.57
2,391,607.12

25,234.81

1,504,841.60

396,921.80
297,068.98
1,302,962.94
1,505,618.40
383,648.83

184,195.72
305,394.77
1,411,407.17
1,511,044.01
333,133.78

2,500,000.00
1,292,711.19
1,582,573.27

2,500,000.00
1,700,150.66
1,259,650.84

$1,479,606.79
212,726.08
8,325.79
108,444.23
5,425.61
50,515.05
407,439.47
322,922.43
1,077,409.22

1,077,409.22
1,042,117.89
765,481.46
103,568. 75
694,351.38
292,227.71

899,155:16
575,017.01
23,767.63
412,058.92
381,926.64

5,284,698.43
1,046,571.90
652,798.91

11,535,605.26
742,253.68
168,402.70

4,209,530.59
85,073.42

77,642.01

142,962.73
190,464.45
79,801.12
282,292.46

5,205,480.25

24,008.87

89,698.93
,250,906.83
304,318.22
484,396.21
995,949.66
7,431.41
24,008.87

83,985.67

264,195.66

63,064.24

70,195.66

49,667.14
121,842.67

45,989.57
113,823.38

3,677.57
8,019.29

29,120,861.52

35,271,820.52

3,382,179.^72

1,763,754.67

1,657,353.33

106,401.34

343,511.15
151,718.46
146,960.83

2,221,094.54
88,500.00
188,467.11

63,218.46

2,405,945.11

4,155,414.9

169,619.80

6,643,142.93

6,428,449.,68

214,693.25

3,164,127.56

2,693,854.94

470,272.62.

3,470,027.85
894,971.74
367,990.17
1,619,599.58
2,165,105.26
^
235,991.89

3,491,549.92
747,828.39
378,276.00
1,-287,733.52
2,099,749.88
245,270.98

501,639.72
222,944.42

544,512. 37
206,818.09

210,834,614.49
435,522.06

6,828,000.00
467,323.41

Office-De-

D e p a r t m e n t of Agriculture:
Salaries a n d miscellaneous
:..:
A n i m a l I n d u s t r y , expenses."
Meat inspection, A n i m a l
Industry
Entomology, e x p e n s e s . . .
Soils, expenses
M a r k e t s , expenses
iPlant I n d u s t r y , expenses
P u r c h a s e of seeds
Biological S u r v e y , expenses
Crop .Estimates, e x p e n s e s .
P r o c u r i n g , etc., n i t r a t e of
soda. -:
Public Roads, expenses..

$127,627.27
33,653.60
29,953.74

180,209.99
7,131.42

9,533,138.72

1,877,583.39
*""4i,*566.'28
1,919,089.67

21,522.07
147,143.35
*i6,'285."83
331,866.06
65,355.38
9,279.09
42,872.65
16,126.33
17,662,614.49
31,801.35

1 " D i s b u r s e m e n t s , " as used in those t a b l e s , in a d d i t i o n t o a c t u a l e x p e n d i t u r e , i n c l i i d e u n e x p e n d e d
tb alances to t h e credit of t h e di'^bursing officers.
. "IS Excess of r e p a y m e n t s .

140325—FI 1919


13

194

REPORT OIT T H E FIITAlSrCES.
Comparison of disbursements,^ fiscal years 1919 and 1918.—Continued.
.1919

1918

Increase, 1919.

Decrease, 1919.

CIVIL ESTABLISHMENT—con.

Department of AgricultureContinued.
Stimulating agriculture
and facihtating distribution of products
Forest Service
Acquisition of lands for
protection of waters h e d s , n a v i g a b le
streams.
Cooperative construction,
rural post roads, etc
National security and defense
Bureau of Chemistry
States Relation Service,
expenses
N Cooperative
extension
work.
.
Weather Bureau, expenses
..,.
Increase of compensation
Cooperative work. Forest
Service. . "
Special f u n d s Payments to States
and T e r r i t o r i e s
from National Forests fund.
Roads and trails for
States.. •
Miscellaneous special
funds

$8,377,361.94
3,296,563. 89

$6,349,055.19
4,203,841.76

$2,028,306.75

1,151,169.40

867,636.14

283,533. 26

3,665,693.92

843,474.49

2,822,219.43

872,868.68
818,474.74

806,745.21

$967,277.87

872,868.68
11,729.53

2,916,336.05

2,820,355.06

95,980.99

2,568,066.29

2,075,054.37

493,011.92

1,523,035.18
1,164,160.68

1,461,985.17
686,156.00

61,050.01
478,004.68

421,269.86

88,917.96

332,351.90

876,334.39

848,874.01

27,460.38

280,459.13

226,127.99

54,331.14

70,128.44

61,870.93

8,257.51

Total Department
of Agriculture—

36,888,371.28

46,759,461.46

8,814,563.17

Department of Commerce:
Salaries and expenses
Bureau of Standards
Census Office
Foreign and Domestic

370,786.74
1,593,100.15
1,121,351.36

359,176.20
1,378,390.93
1,184,192.61

11,610.54
214,709.22

504,902.58

456,749.15

48,153.43

Commp.rp.ft

Coast and Geodetic Survey
Lighthouse
Establishment .
Bureau of Fisheries
Bureau of Navigation..
National security and
defense..
Increase of compensation
Fish hatcheries....
Steamboat - Inspection
Service
Miscellaneous items

1,002,802.93

1,116,029.77

6,662,179.05
1,029,189.00
216,820.83
1,734,705.08
635,372.69
10,412.97

5,588,181.29
1,105,703.54
226,053.92
755,696.73
449,871.15
32,598.10

1,073,997.76

782,795.45
4,115.31

647,143.89
1,369.21

15,668,534.14

13,301,156.49

2,651,378.50

225,838.78

200,842.96

24,995.82

419,242.89
720,243.45
132,984.13
2,550,117.13
231,918.03
318,435.87

388,475.89
382,566.97
857,525. 45
2,647,574.86
212,104.88
312,757.23

30,767.00
337,676.48

62,841.25

135,651.56
2,746.10

Total Department of
Commerce

18.685,653.35

1,384,674.68

Department of Labor:
Salaries and expenses
Bureau of Labor Statistics
Bureau of Naturalization
Bureau of Immigration...
Regulating immigration..
Immigrant stations
ChUdren's Bureau
^ National Security, and
Defense
War Emergency Employment Service
war Labor Administration
Increase of compensation.
Miscellaneous.
. . .
Total Department of
Labor

113,226.84

979,008.35
.185,501.54

19,813.15
5,678.64

1,968,708.53

584,033.85

5,480,201.23

189,947.37 . o 5,290,253.86

1,022,474.06
220,020.26
306.25

140,786. 24
265. 75

1,022,474.06
79,234.02
40.50

13,290,490.61

5,916,881.45

8,195,608.21

76,514.54
9,233.09
22;185.13

284,000.85

724, .541.32
• 97,457.73

•

821,999.05

* " Disbursements," as used in these tables, in addition to actual expenditures, include unexpended
balances to the credit of disbursing officers.




195

SECEETABY OF THE TBEASUEY.
Comparison of disbursements,^ fiscal years 1919 and 1918—Continued.
1919

1918

Increase, 1919.

Decrease, 1919.

CIVIL ESTABLISHMENT—con.

Department of Justice:
Salaries and expenses
Salaries of justices, assistant attorneys, etc
. Court of Claims
National security and defense... ,
Salaries, fees, etc., of
marshals
Fees of witnesses
Salaries and fees, district
attorneys
Fees of jurors.
Fees of clerks.
Fees of commissioners
Support of prisoners
Pay of bailiffs
;...
Miscellaneous expenses,
United States courts...
Detection and prosecution of crimes
Penitentiaries
Increase of compensation.
Miscellaneous items
..
Total Department of
Justice......
Independent bureaus and
offices:
Interstate
Commerce
Commission.
Federal control of transportation systems
Smithsonian Institution..
National Museum
Zoological Park
Salaries^tc, Federal Reserve Board
Council of National Defense
War Finance Corporation.
Capital Issues Committee.
Advisory Coramittee for
Aeronautics
U n i t e d Statt^s E m ployees' Compensation
Commission
Board for Vocational Education
United States Shipping
BoardSalaries and expenses.
-Permanent fund
Emergency shipping
fund
" National security and
defense
'.
Food and Fuel AdministrationsSalaries and expenses.
Control of food and
iuel
National security and
defense.
Bureau
of Industnal
Hou.sing and Transportation
•Interdepartmental Social
Hygiene Board
Exports Administrative
Board
Federal Trade Commission
State, War, and Navy
Departraent Builciings.
Special fund, Alaskan relief
Other independent offices.
Total independent bureaus and offices

$905,910.27

81,852. 20

$987,762. 47

1,896,459.41
71,555. 70

1,795,055.26
72,390.67

$101,404.15

1,435,210.38

1,413,090.19

22,120.19

1,728,280.20
1,160,475.50

1,586,523.10
1,134,651.08

141,761.10
25,824. 42

690,227.42
1,191,395.76
315,112.37
284,435. 85
706,970.56
244,127. 65

659,531. 68
1,109,066.94
226,400.10
267,764. 51
728,797.17
224,624.69

30,695. 74
82,328.82
88,712.27
16,671.34

467,801.94

"""S34.'97

21,826.61
19,502. 96
46,607. 38

421,194. 56

2,000,836.07
1,520,697.93
309,423. 65
287,100. 77

1,180,428.89
982,631.29
177,372.17
265,096.02

820,407.18
538,066.64
132,051.48
22,004.75

15,216,025.43

13,232,380.79

2,088,158.42

5,688,651.38

5,399,618.66

289,032. 72

349,238,385.21
197,419.22
359,233.70
112,015.14

150,000,000.00
185,560.78
384,362.03
95,806.00

199,238,385. 21
11,858.44

2,331,760.03

1,532,015.17

799,744.86

554,039.43
295,000,000.00
142,402.31

1,093,858. 55
55,000,000.00
10,000.00

104,513. 78

228,497. 80
1,536,434. 80

25,128.33
16,209.14

539,819.12
240,000,000.00.
132,402.31

80,900.65
719, 936.26

147,597.15
•

316,498.54

3,549,442.64

1,412, 882. 74

2,136,55Q. PO

797,280.67

391,535.18
44,000,000.00

405, 745.49

1,865,715,419.34

807,575,773.73

1,058,139,645.61

4,688, 877.50

^ 10,059,580.43

44,000,000.00

5,370, 702.93

7,133,467.03

2,643,026.36

4,490,440.67

100,000,000.00

50,000,000.00

50,000,000.00

10,511.117,05

2,687,649.39

7,823,467.66

70,483,879.32

25,000.00

70,458,879.32
1,720,122. 93

1,720,122.93

250, COO. 00>

250,000.00
1,595,737.29

1,466,423.65

129.313.64

1,662,668.93

451,004.40

1,211,664.53

18, 753.95
266,310.05

24,801.80
344,205.91

2,723,531,915.72

1,135,833,941.69

6,047. 85i
77,895. 86
1,637,967,568.12

50,269,594.09'

' "Disbursements," as used in these tables, in addition to actual expenditures, include unexpended
balances to the credit of disbursing officers.




196

REPORT OJST T H E

FINANCES.

Comparison of disbursements,^ fiscal years 1919 and 1918—Continued.
1919

1918

Increase, 1919. • Decrease, 1919.

CIVIL ESTABLISHMENT—con.
D i s t r i c t of Columbi'a:
Salaries a n d e x p e n s e s . . . .
Special f u n d s Water department...
. Washington
Aqueduct .. Miscellaneous special
funds
Trust f u n d s Miscellaneous trustfund deposits
Washington redempt i o n fund
.Police a n d firemen s
relief f u n d . .
O t h e r t r u s t funds

$14,745,056.78

$12,921,524.51

558,680.17

537,996.75

20,6a3.42

233,028.IS

188,605.28

44,422.90

_ 53,471.15

3,443.14

50,028.01

601,673.35

414,493.43

187,179. 92

201,473.05

186,251.17

15,221.88

-164,736.57
7,314.49

135,238.11
18,858.36

29, 498.46

T o t a l D i s t r i c t of
. Columbia

16,565,433. 74

14,406,410.75

2,170,566.80

11„543.S7

T o t a l civil e s t a b lishment

3,230,890,247. 95

1,507,367,481.29

1,963,722,447.57

240,199.680.91

4,217,681,223.60
1,487,081,171.25
187,503,697.17
2,390,296,943.61
355,260,488.11
67,138,834. 66
479,281,370.08
2,434,088.16
3,337,820.41
2 3,980,711. 08

2,336,259,761.87
797,460,465.13
110,390,044.08
1,663,199,383.09
264,243,520. 89
67,210,410.36
336,331,468.60
1,211,737.93
7,025,599.01
39,609,063.34

1,881,421,461.73
689,620,706.12
77,113,653.09 .
727,097,560. 52
91,016,967.22

$1,823, 532.27

$11,543.87

WAR DEPARTMENT..
Military Establishment.
Q u a r t e r m a s t e r Corps. . . .
P a y , e t c . , of t h e A r m y 1
Medical D e p a r t m e n t
Ordnance Department
Engineer Department
Signal Service
Aviation
Military Academy
M i l i t a r y posts
National Guard
Civilian m i l i t a r y t r a i n i n g
camps
R e g i s t r a t i o n a n d selection for
m i l i t a r y service
I n c r e a s e of c o m p e n s a t i o n . . .
Miscellaneous i t e m s
Special fund; o r d n a n c e m a terial powder e t c
Total Military Establishment. . .

71,575. 70
142,949,901.48
1,222,350.23
3,687,778. 60
43,589,774.42

1,104,902.84

5,290,124. 59

15,037,579.62
3,828,656.97
2,542,109. 76

13,517,308.77
" 1,764,005. 29
2,024,814. 40

3 23,895. 87

47,224. 58

9,208,524,279. 29

, 5,645,584,931.93

3,614,544,818. 28

3,074,749.07
203,910.09

781,568. 78
, 411,517.16

2,293,180.29

4,185,221. 75
1,520,270. 85
2,064,651. 68
. 517, 295. 36
71,120.45
51,605,470.92

War, miscellaneous, civil.
N a t i o n a l cemeteries
National parks
N a t i o n a l h o m e s for disabled
soldiers
S t a t e h o m e s for disabled soldiers
.
Soldiers' H o m e i n t e r e s t account
.
Monuments
B r i d g e across P o t o m a c R i v e r ,
Georgetown, D . C
J u d g m e n t s of courts
. .
W a r claims a n d relief acts
Miscellaneous i t e m s . . .
I n c r e a s e of c o m p e n s a t i o n
Special funds:
Wagon roads, etc.,
A l a s k a fund
Miscallaneous s p e c i a l
funds

3,870,724. 52

•

207,607. 07

4,537,882.99

667,158.47

590,398.28

928,719. 21

101,274.66
23,300.00

98,163. 75
28,000.00

3,110.91

467,000.00
1,021,486.51
60,782.31
346,765.38
341,032.36

255,000.00
72,839.39
44,027.65
494,336.32
177,780.44

212,000.00
948,647.12
16,754.66

32,506.42
740.97 1

•

338,320.93
4,700. 00

147,570.94
163,251.92

256,230.31

223,723. 89

7,172. 56

6.431.59

1 *• Disbursements," as used in these tables, in addition to actual expenditures, include unexpended
balances to the credit of disbursing officers.
2 Includes payments of Army allotments by the Bureau of War Risk Insurance.
3 Excess of repayments.




SECRETARY OF THE TREASURY.

197

Comparison of disbursements, ^fiscalyears 1919 and 1918—Continued.
Increase, 1919.

1919

1918

S755,658.91

$479,803.14

566,160.96
308.40

597,068.16

11,456,798.84

9,170,109. 86

3,913,109.07

25,451,14L49
5,765,018f33

24,209,554.99
4,464,393.81

1,241,586. 50
1,300,624.52

1,862,146. 50

919,633.09

Decrease, 1919.

942,513. 41

"WAR D E P A R T M E N T — c o n .

War, miscellaneous, civil—
Continued.
T r u s t funds:
P a y o f t h e A r m y , deposit
fund
Soldiers' H o m e p e r m a n e n t fund
T o t a l W a r , miscellaneous, civil

$275,855. 77
$30,907.20
308.40
1,626,420.09

Rivers a n d harbors.
I m p r o v i n g rivers
Improving harbors
Special funds for rivers a n d
harbors
Total rivers a n d harbors
Total War Department.
'

33,078,306.3^

29,593,581.89

3,484,724. 43

9,253,059,384.45

5,684,348,623.68

3,621,942,651.78

463,584,589. 89
96,239,138.34
20,863,626.52

353,532,156.03
58,148,850.00
17,224,199.71

110,052,433. 86
38,090,288.34
3,639,426.81

68,374,542.27
221,043,017.51
59,575,005. 92

55,693,350.54
189,677,881.54
42,039,835.30

12,681,191.73
31,365,135.97
17,535,170.62

194,594,135.00

70,400,690.01

124,187,444.99

53,231,891. 01

NAVY D E P A R T M E N T .

Naval Establishm.ent.
Increase of t h e N a v y
B u r e a u of Yard*? a n d Dnok^
B u r e a u of N a v i g a t i o n
B u r e a u of Construction a n d
Repair
B u r e a u of O r d n a n c e
B u r e a u of S t e a m E n g i n e e r i n g .
B u r e a u of Supplies a n d A c counts
B u r e a u of Medicine a n d S u r - '
gery
M a r m e Corps
Naval Academv
P a v of t h e N a v y
Aviation.
J u d g m e n t s , Court of C l a i m s . . .
General a c c o u n t of a d v a n c e s
Miscellaneous i t e m s
N a t i o n a l security a n d defense
I n c r e a s e of c o m p e n s a t i o n
Special funds:
N a v a l h o s p i t a l fund
F i n e s a n d forfeitures
Clothing fund
Miscellaneous snecial funds
Trustfunds:
P a y , Marine Corps, deposit f u n d . . .
. P a y o f t h e N a v y , deposit
fund
Prize m o n e y
.

Total Naval Establishment

15,859,690.25
2 73,018, 960.12
4,553,839. 87
2 297,601,541.65
101,655,645.78
125. 815. 57
363,623,257.42
301,528.61

7. 784,602.09
2 46,544,483.34
2,379,052.34
2130,726,660.36
27,212,201.42
12,578.31
• 354, 980,660.02
201,291.06

626,275.44
644,731.53

658,477.15
3,520,658.11

31,159, 746.99
171,118.58
27,836,529.17

208,127.77
766,843.10
6,609,011.042 5,450.33

8,075,088.16
26,474,476.78
2,174,787.53
166,874,881.29
74,443,444.36
113.237'. 26
8,642,597.40
100, 237.55
32,201.71
2, 875,926. 58
1,367,874.76
595,724. 52
21,227,518.13
5,450.33

83,817. 87

196,243.73

112,425.86

55,317.00
11.21

• 124,267.76
123.44

68,960.76
112.23

2,"009,272,388. 53

1,368,642,793.84

645,682,811.11

1,131,820.36
630,110.83
758,574.20

1,029,350.40
552,580.01
707, 776.85

102,469.96
77,530.82
. 50, 797.35

1,272,809.45
4,105,871.56
4,269,161.52
22,424,908. 77

1,579,540.96
4,365,788.40
4,066,848.74
18,586,514.67

202,312.78
3,838,394.10

34,593,256.69

30,888,400.03

4,271,505.01

5,053,216.42

INDIAN SERVICE.

C u r r e n t a n d c o n t i n g e n t expenses
Fulfilling t r e a t y s t i p u l a t i o n s . .
Miscellaneous s u p p o r t s
I n t e r e s t on I n d i a n trust-fund
accounts
S u p p o r t of I n d i a n schools
Miscellaneous expenses
T r u s t funds . . .
Total Indian Service...

•

306,731.51
259,916.84

566,648.35

1" Disbursements," as used in these tables, in addition to actual expenditures, include unexpended
balances to the credit of disbursing officers.
2 Includes payments of allotments by the Bureau of War Risk Insurance.
^ 8 Excess of repayments.




198

REPORT ON T H E FINANCES.
Comparison of disbursements, ^ fiscal years 1919 and 1918—Continued.
1919

Pensions.
Interest on the public debt....
Deduct repayments received
in fiscal year but not covered by w a r r a n t . . . . . .

1918

Increase, 1919.

Decrease, 1919.

$221,614,781.44
615,867,337.32

$181,137,754.12
197,526,608.36

$40,477,027.32
418,340,728. 96

15,365/297,396.38

8,069,911,661.32

6,694,437,171.75

$299,051,436.60

298,986,091.31

3,446,110.82

3,511,456.20

15,361,851, 285.56

8,966,400, 205.12

6,694,437,171.75

3,511,456.20

132,060.91

3,379,395. 29

15,365,362,741.76

8,966,532,266.03

6,697,816,567.04

Special disbursements:
Purchase of obligations of
foreign governments
Purchase of farm loan
bonds

3,477,850,265.56

4,739,434,750.00

96,662,398.59

65,153,254.15

31,509,144.44

Total special disbursements

3,574,512,664.15

4,804,588,004.15

31,509,144.44

Panama Canal disbursements

12,265,775.08

20,787,624.92

Add-repayments covered by
warrant in year subsequent
to the deposit thereof
Total ordinary
ments 2

disburse-

Public debt:
First Liberty loan, con-verted at 4J per cent
4,003,050.00
' Second Liberty loan
8,000,000.00
Second Liberty loan, converted at 4^ per c e n t . . .
172,357,600.00
Third Liberty loan
201,660,500.00
Fourth Liberty loan
165,000,000.00
Loan of 1908-1918
63,009,460.00
Certificates of indebtedness, various rates
15,046,532,900.00
War Savings certificates..
134,047,603.63
1-year Treasury notes, 3
per cent.
19,150,000.00
Bank-note fund
23,717,892.50
Funded loan of 1907
80,550.00
Miscellaneous redemp6,453.00
tions

65 345 38

298,986,091.31

1,261,584,484.44

1,261,584,484.44
8,521,849.84

656,000.00
61,050,000.00

3,347,050.00

14,935,500.00

172,357,600.00
186,725,000.00
165,000,000.00
63,009,460.00

7,578,271,732.00
2,971,967.80

7,468,261,168.00
131,075,635.83

27,362,000.00
21,611,225.00
18,200.00

2,106,667.50
62,3.50.00

53, a50,000.00

8,212,000.00

2,450.33

.4,002.67

' Total public debt disburse15,837,566,009.13
ments.

7,706,879,075.13

8,191,948,934.00

61,262,000.00

Total disbursements,
exclusive of postal.... 34,789,707,190.12
Postal Service, payable from
362,504,274.24
postal revenues 3

21,498,786,970.23

14,921,274,645.48

1,630,354,425.59

324,849,188.16

37,655,086.08

21,823,636,158.39

14,958,929,731.56

Total disbursements,
including postal

35,152,211,464.36

1,630,354,42,5.59

1 " Disbursements/' as used in these tables, in addition to actual expenditure, include unexpended
balances to the credit of the disbursing officers.
2 Exclusive of Panama Canal, public debt, special disbursements, and Postal Service.
8 Exclusive of grants from the Treasury for deficiencies in postal revenues included in expenses of civil
establishment, p. 193.

ESTIMATES FOR THE FISCAL YEARS 1920 AND 1921.

The estimates of receipts and expenditures for the fiscal years ending June 30, 1920; and June 30, 1921, are given in the subjoined
tables. The estimates of receipts are based upon existing laws. The
estimates of expenditures were made by the respective Government
departments and independent establishments.




SECRETARY OF THE TREASURY.

199

The following tabulation summarizes the estimated receipts and
expenditures for the fiscal year 1920 and, on the basis of the latest
information received from the various departments, shows the estimated results at the close of the year:
FISCAL Y E A R 1920.

Balance in the Treasury June 30, 1919, free of current obligations.... $1, 002, 732, 042
Estimated receipts:
Ordinary
$6,100, 250, 000
PanamaCanal...
,
7,200,000
Publicdebt
1,210,556,634
.Total
$7, 318, 006, 634
Estimated expenditures:
Ordinary (exclusive of expenditures from such additional appropriations as may be made
for the Railroad Administration)
6,097, 237, 892
Special and Panama Canal
715, 284, 837
Public
debt
(including
$3,633,804,490 certificates of
indebtedness
outstanding
June 30, 1919)
4,664,104,490
. Total (incomplete)

11, 476, 627, 219

Excess of estimated expenditures (incomplete) over estimated receipts
4,158, 620, 585
Estimated deficit in the general fund June 30,1920::
Estimated amount necessary for balance in the general fund
June 30, 1920

3,155, 888, 543

Estimated gross deficiency June 30, 1920

3, 905, 888, 543

750, 000, 000

There are many uncertainties in connection with the above figures
which must be taken into consideration in attempting to forecast
the condition of the Treasury at the close of .the current fiscal year,
and, of course, this department is not in possession of information
that would enable it to form an opinion as to the deficiency estimates
which may be presented to the Congress nor as to the additional
appropriations the Congress may make.
On July 25, 1919, in a letter to the banks and trust companies of
the country, which is quoted in full elsewhere in this report, it was
roughly estimated that the expenditures would exceed the receipts
for the fiscal year 1920 by not more than $1,032,000,000, the amount
of the deferred installments of the Victory loan. That estimate was
made upon the assumption that the amount of certificates of indebtedness outstanding on June 30, 1919, would be taken care of through
funding operations or otherwise. The estimate of receipts now presented exceeds that shown in the letter referred to by $783,006,634.




200

REPORT ON T H E FINANCES.

The difference is largely in the item ^'Miscellaneous receipts," and
for the most part represents salvage of war materials and supplies.
Such receipts as these should clearly be applied to the reduction of
the floating debt, represented by certificates of indebtedness..
I t is important to point out that the estimated expenditures for
the Railroad Administration for the fiscal year 1920 are based
entirely upon appropriations already made, and do not include any
expenditures that may result from such additional appropriations
as may be granted for the current year. The Railroad Administration
on the date of this report was unable to estimate what' additional
sums would be expended during the fiscal 3^ear 1920, inasmuch as
the amounts that will be required are almost entirely dependent
upon congressional action in connection with the return of the railroads to private control and the settlement of accounts between the
carriers and the Government.
The follo^ying is a summary of the estimated receipts and expenditures for the fiscal year 1921 and, on the basis of incomplete information, shows the estimated results at the close of the year:
FISCAL Y E A R 1921.

Estimated deficit in general fund June 30, 1920 (as above)
Estimated receipts:
Ordinary
. | 5 , 412, 000, 000
PanamaCanaL
'
8,000,000
Public debt
200, 350, 000

|3,155, 888, 543

TotaL:.......:
15, 620, 350, 000
Estimated expenditures:
Ordinary (exclusive of expenditures
by the Railroad Administration,
of expenditures from appropriation of $280, 000,000 included by
the Shipping Board in the Book
of Estimates, of expenditures oil
account of increased compensation of Government employees, of
expenditures on account of increased compensation in the Postal
Service, of expenditures on account of new construction in the
Navy)
3, 517, 752, 594 .
Panama Canal
18, 245, 391
Publicdebt
437,800,000
Total (incomplete)

3, 973, 797, 985

Excess of estimated receipts over estimated expenditures-(incomplete). 1, 646, 552, 015
Estimated deficit in the general fund June 30, 1921
1, 509, 336, 528
Estimated amount necessary for balance in the general fund
June 30, 1921.
500, 000, 000
Estimated gross deficiency June 30, 1921




2, 009, 336, 528

SECRETARY OF THE TREASURY.

201

There are even more uncertainties in the estimates for the fiscal
year 1921, as stated in the above table, than in the estimates for the
current fiscal year. For instance, the estimated receipts include
$500,000,000, representing the capital stock of the Uriited States
Grain Corporation, which the Wheat Director hopes to return during
the first half of the fiscal 3^ear 1921. I t is not possible for the director to state positively at this time that the amount will be returned.
With respect to estimated expenditures for the fiscal year 1921,
it should be pointed out that the Railroad Administration is unable
to make an estimate of expenditures during that fiscal year, for the
same reason that it is unable to make an estimate of additional
expenditures for the current fiscal year. The Chairman of the
United States ^ Shipping Board did not include in the estimate of
expenditures for the Shipping Board and the Emergency Fleet
Corporation any part of the $280,000,000 for additional ship construction which has been incorporated in the estimate of appropriations for 1921, because, he states, that the matter is dependent upon
the action of the President and the Congress in connection with
future policy. As it is not known whether the Congress will continue the present increased compensation of Government employees
or revise the salaries on the basis of the report of the Joint Congressional Commission on Reclassification of Salaries, no estimate of
expenditures in this connection could be included. The above
figures likewise do not include any estimate on account of increased
compensation in the Postal Service, an'd the Postmaster General
states that if the legislation in this respect enacted this year is
repeated next year it will require an additional expenditure of
$40,000,000., The figures submitted by the Secretary of the Navy
include no estimate for new construction, as, it was necessary for
him to study the question further and consequently defer his recommendations until the Congress shall have assembled in regular session.
The above figures show that the estimated expenditures for both
of the fiscal years 1920 and 1921 are incomplete. This is particularly
true with respect to the latter. Even in their incomplete form, the
figures indicate that there will be a deficit in the Treasury at the
close of the two-year period ending June 30, 1921, of $1,509,336,528,
if the floating debt is decreased by the amount of certificates of
indebtedness outstanding on June 30, 1919. The amount of such
debt should be reduced as rapidly as possible, and certainly to the
extent of receipts on account of salvage from war materials and
supplies, the repayment of stock of Government-owned corporations,
and the like.
In connection with the receipts of both fiscal years referred to
above, it should be borne in mind that the word '^ordinary" in the
tables has purely a technical meaning, and that in '^ ordinary receipts"




202

REPORT ON T H E FINANCES.

are included such exceptional items as repayment of foreign loans,
salvage of war materials and supplies by the War and Navy Departments, and repayments of appropriations by .the Shipping Board,
Wheat Director, etc.
The estimates of receipts and expenditures for the two fiscal years
are given in further detail in the following tables:
Fiscal year 1920.
RECEIPTS.

Ordinary receipts:
From customs
From internal revenue—
Income and profits t a x . :
Miscellaneous

$275, 000, 000
$3, 750, 000, 000
1, 240, 000, 000
^

From sales of public lands
From miscellaneous sources

4,990,000,000
1, 250, 000
834, 000, 000

Total estimated ordinary receipts
Panama Canal:
Estimated receipts from tolls, etc

6,100, 250, 000

Total estimated receipts, exclusive of public debt
Publicdebt:
Third Liberty loan
$1, 365, 293
^ Fourth Liberty loan.
33,568,663
Victory Liberty loan
1, 030, 372, 678
War-savings certificates
125, 000, 000
Deposits to retire Federal reserve bank
notes and national bank notes
20, 000, 000
Postal-sayings bonds
250,000

6,107, 450, 000

Total estimated public debt receipts

7, 200, 000

'.

Grand total estimated receipts

1, 210, 556, 634
7, 318, 006, 634

EXPENDITURES.

For civil establishment:
Legislative establishment
Executive proper, including Tariff Commission and Alien Property Custodian
•.
State Department.
.'
Treasury Department proper.
.
^
Public buildings, construction, sites, and equipment
War-risk insurance, $176,325,140, less premium credits
. $136,500,000
\.:
War Department proper
Department of Justice
Post Office Department proper.
Navy Department proper
1
Interior Department proper
Department of Agriculture.
:
Department of Commerce
Department of Labor
Shipping Board
Wheat guarantee fund
European food relief




$18, 518,085
,

2,139, 017
11, 662, 595
113,120, 000
9, 000, 000
39, 825,140
7, 350,000
16, 800,000
1, 950,000
2,125,000
38, 385, 277
51, 647, 400
33, 454,034
5, 406, 322
371,016, 521
350,000,000
99,000.000

SECRETARY OF THE' TREASURY.
For civil establishment—^^Continued.
Council of National Defense
Federal control of transportation s^^stems ^
War Finance Corporation
Housing Corporation
. State, War, and Navy Department buildings. .
Federal Board for Vocational Education. .•
.'
Interdepartmental Social Hygiene 'Board..,
' Federal Trade Commission
. Employees' Compensation Commission
Interstate Commerce Commission
Other independent offices
Expenses of loans
Increase of compensation, all departments.
Additional compensation, Postal Service.
District of Columbia
Total civil establishment
For War Department:
Military Establishment
Rivers and harbors
Miscellaneous—War, Civil.
For Navy Department:
Naval Establishment, exclusive of build- ing program
Navy building program

203

.^..

-

2, 234, 375, 892
| l j 650, 000, 000
38, 000, 000
16, 657, 000
•

689, 875, 000
158, 000, 000
•

For Indian Service
For pensions...
For interest on the public debt
Total estimated ordinary expenditures
Special expenditures:
Purchase of obligations of foreign governments
Panama Canal:
Expenditures for the canal

•.

Total estimated expenditures, exclusive of public d e b t . . .
Publicdebt:
War saving certificates
$175, 000,000
Certificates of indebtedness outstanding
June 30,1919
3, 633, 804, 490
Retirement of bank notes
25,000,000
Bond purchase fund..
740, 000, 000
Bonds purchased from payments on foreign
. .
obligations
I
-.
90,000,000
Miscellaneous redemptions of the d e b t . . .
300, 000
Total estimated public debt expenditures
Grand total estimated expenditures

$250, 000
750, 770, 855
150, 000, 000
4,600,000
2, 279,854
34, 258, 244
2, 459, 772
1,045, 000
2, 317, 500
4, 593, 267
1,149, 540
24,337, 500
30, 760, 000
35, 698, 400
18, 456, 569

1,704^657,000

847,875,000
38,000, 000
220,030,000
1, 052, 300,000
6,097, 237, 892
700,000, 000
15, 284, 837
6, 812,522, 729

4, 664,104, 490
11,476, 627, 219

• .1 The. estimated expenditures for Federal control of transportation systems for the fiscal year 1920 are
based entirely upon appropriations already made and do not include any expenditm-es that may result
> from such additional appropriations as may be granted for 1920. The United States Railroad Administration on the date of this report was unable to estimate what additional sums would be expended during the
fiscal year 1920, inasmuch as the amounts that will be required are almost entirely dependent upon congressional action in connection with the return of the railroads to private control.




204

REPORT ON T H E FINANCES.

Estimated excess'of;expenditures over receipts exclusive of public •
debt, fiscal year 3 920
:
Estimated excess of total expenditures over total receipts, fiscal
year 1920

$705, 072, 729
4,158, 620,585

Postal Service.
The Post Office Department estimates that the postal revenues for
the fiscal year 1920 will be $386,600,000, with expenditures for the
Postal Service for the same period of $387,800,000, exclusive of
additional compensation to be paid from the general fund of the
Treasury.
Fiscal year 1921.
.'
'
RECEIPTS.

Ordinary receipts:
From customs
From internal revenue— •
Income and profits taxes
Miscellaneous

...'..

'..:

$3, 000, 000, 000
1,190, 000, 000
—
•

From sales of public lands
From miscellaneous sources
Total estimated ordinary receipts
Panama Canal:
Estimated receipts from tolls, etc

$325,000,000

4,190, 000,000
1, 000,000
896,000,000
5,412,000,000

•

Total estimated receipts, exclusive of public debt
Publicdebt:
War-savings certificates
$175, 000, 000
Deposits to retire Federal reserve bank
notes and national-bank notes
25, 000, 000
' Postal sa^dngs bonds
350, 000
Total estimated public-debt receipts
Grand total estimated receipts

$8,000,000
5, 420, 000,000

200, 350,000
5, 620, 350,000

EXPENDITURES.^ ^

For civil establishment:
Legislative establishment
Executive proper, including Tarifi Commission and Alien
Property Custodian
State Department
Treasury Department proper
Public buildings, .construction, sites, and equipment
War-risk insurance, $297,649,600, less premium credits,
$100,000,000
War Department proper
Department of Justice
Post Office Department proper
....'.

19,. 727, 016
2,145, 644
13, 005,961
' 130, 880, 000
12, 000, 000
197,649,600
8,115,000
17, 800,000
2,050,000

1 Do not include any estimated expenditure on accdunt of increased compensation of Government
employees, nor on account of increased compensation in the Postal Service.
2 No estimate of expenditures by the United States Railroad Adininistration for the fiscal year 1921 is
included, because on the date of this report the Railroad Administration was unable to make an estimate
for that fiscal year, inasmuch as the sums that will be required are almost entirely dependent upon con.
gressional action in connection with the return of the railroads to private control.




SECRETARY OF T H E TREASURY.
For civil establishment—Continued.
Navy Department proper.
.Interior Department proper.
Department of Agriculture
Department of Commerce
Department of Labor
Shipping Board ^
Council of National Defense
Housing Corporation
>
Federal Board for Vocational Education..
Interdepartmental Social Hygiene Board.
Federal Trade Commission
Employees Compensation Commission
Interstate Commerce Commission
State, War, and Navy buildings
Other independent offices
District of Columbia
,.
Expense of loans
,
Total civil establishment ^ ^
For War Department:
Military Establishment
Rivers and.harbors
Miscellaneous—War, Civil...

205
$3,000,000
53,856, 092
77,206, 650
25, 767, 645
9, 564, 624
34, 590,100
320, 000
. 1,203,028
38,750,000
2, 500, 000
1,283,130
2, 960, 000
3,971,000
2, 264, 505
2, 289,000
20,320,599
12, 456, Q O
O
'695, 675, 594

$921,000,000
40,000,000
19, 772, 000
980,772, 000

For Navy Department:^ .
Naval Establishment, exclusive of building program
Navy building program
•

386, 752, 000
185,248, 000

For Indian Service
For pensions
'
For interest on the public debt

572,000, 000
36,775,000
215,030,000
1,017,500,000.

Total estimated ordinary expenditures (incomplete).
Panama Canal:
Expenditures for the canal •.

3,517,752,594

Total estimated expenditures, exclusive of public debt
Public debt :S
Sinking fund
>
$287, 500, 000
War-savings certificates
125,000,000
Retirement of Federal reserve bank notes
and national-bank notes
25,000,000-

3,535,997, 985

18,245,391

1 The United States Shipping Board states that this estimate does not take into consideration any ex penditure from the appropriation of S280,000,000, which it is estimated mil be required for the flscal year
1921, "if the President and the Congress shall decide that the Shipping Board should go forward and build
additional passenger ships and such cargo and tank steamers as may be necessary to make a well-balanced
program for a permanent merchant marine."
,
.
2Do not include any estimated expenditure on account of increased compensation of Government
employees, nor on account of increased compensation in the Postal Service.
3 No estimate of expenditures by the United States Railroad Administration for the fiscal year 1921 is
included, because on the date of this report the Railroad Administration was unable to make an estimate
for that fiscal year, inasmuch as the sums that will be required are almost entirely dependent upon congressional action in connection with the returh of the railroads to private control.
< The Secretary of the Navy states that this estimate does not include any estim.ated expenditures for
new construction.
6 Purchases of bonds under authority of sec. 6 of the act of Apr. 4, 1918 (bond purchase fund),-are net
included as an item of estiinated cxnenditure; this authority expires one year after the termijiation of the
war, and the Secretary reserves decision with respect to such pmchases after July 1, 1920.




206

REPORT ON T H E FINANCES.

Public debt—Continued..

.

Miscellaneous redemptions of the debt

$300, 000

Total estimated public debt expenditures

'.

$437,800,000

Grand total estimated expenditures
Estimated excess of receipts over expenditures, exclusive of
public debt, fiscal year 1921
Estimated excess of total receipts over total expenditures (incomplete), fiscal year 1921
:
,

3, 973, 797, 985
1,884,002,015
1, 646, 552,015

Postal Service.
The Post Office Department estimates that the postal revenues for
the fiscal year 1921 will amount to $415,500,000, with expenditures
for the Postal Service for the same period of $407,680,000, exclusive
of any increased compensation in the Postal Service.
Estimates of ctppropriations,^ fiscal year 1921.
The estimates of appropriations for the fiscal year 1921, as submitted by the Go^'ernment departments and offices, are as follows:
liegislative establishment
^.
Executive establishment:
ExecutiA^e proper
Department of State.
TreasuryDepartment-...
War Department proper
State, War, and Navy Department Building, expenses.
Navy Department proper.
Department of Interior
Post Office Department
Department of Agriculture
Department of Commerce
Department of Labor
Department of Justice
Judicial establishment
Foreign intercourse.
Military Establishment:
Suppoit of the Army
Military Academy."
National Guard

$9, 025, 297. 25
$999, 880. 00
1, 571, 350. 00
73,405,101.36
6, 615, 248. 01
2, 329, 550. 00
'3, 097, 870. OO'
6, 287,185. 00
2, 093, 870. 00
37, 528,102. 00
12, 778, 337. 40
1, 700, 430. 00
704. 540. 00
149, 111, 463. 77
1, 634,190. 00
11, 243, 250. 91

'

897, 392, 020. 00
6, 778, 637. 20
85, 408, 000. 00
989, 578, 657. 20

Naval Establishment, including increase of the
Navy, $185, 248, 000
,
Indian affairs.
Pensions
Public works:
Legislative
Treasury Department, public buildings
and works

542, 031, 804. SP
12, 994, 494. 27
215, 030, 000. 00
48,546. 50
9, 449, 796. 00

1 These estimates of appropriations do not include any estimates for the following: The Railroad Administrati on;'increased compensation of Government employees; increased compensation for the postal service'
new construction program in the Navy.




207

SECKETABY OF THE TREASURY.
Public works—Continued.
War Department—
Military—
Fortifications... $117, 793, 330. 00
Arsenals
7, 278, 259. 00
Military p o s t s . .
14, 225, 251. 67
Rivers and harbors..
53, 659, 265. 00
Other civil public
1, 622, 05L 00
works
Panama Canal
:
Navy Department
Department of Interior, including reclamation fund
,
Department of Commerce
Department of Labor
Department of Justice
Postal Service, payable from postal revenues. .
Miscellaneous:
Legislative
Executive
Treasury Department
War Department
Department of Interior
Department of Commerce
Department of Labor
Department of Justice
District of Columbia
United States Shipping Board
United States Employees' Compensation
Commission
Council of National Defense
National Ad\T.sory Committee for Aeronautics.
Smithsonian Institution and National Museum
Interstate Commerce Commission
Board of Mediation and Conciliation.
Federal Trade Commission
Interdepartmental Social Hygiene Board.
Federal Board for Vocational Education...
United States Housing Corporation.
Arlington M^emorial Bridge Commission...
Rock Creek and Potomac Parkway Commission

$194, 578,156. 67
18, 245, 391. 00
31, 099, 450. 00
22, 347, 070. 00
6, 759, 900. 00 |
1,198, 500. 00
195, 000. 00
$283, 921, 810.17
391,713,673.00
10, 770, 291. 20
1,221, 344. 00
247, 396, 025. 50
8,306, 844. 04
10, 876, 83L 25
14,163, 801. 00
6, 075, 644. 00
15, 237, 241.35
19,179, 716. 03
447, 755, 061. 59
2, 953, 660. 00
320, 000. 00
437, 000. 00
842, 020. 00
3,971,000.00
50, 000. 00
1,283,130.00 i
2,500,000.00 !
38,750,000.00 i
1,203,028.00 I

25,000.00 I
I

400,000.00 !
833, 717, 637. 96

Permanent annual appropriations:
Interest on the public debt
Refunds—
Customs and internal revenue.
Other refunds
Sinking fund
Miscellaneous
Total estimated appropriations for 1921




1,017,500,000.00 I
25,207,000.00 j
22,840,600.00 |
287,500,000.00 i
72,360,152.29
11,425,407, 752. 29
I4, 865,410, 031. 62

i

208

REPORT ON T H E FINANCES.

Deduct:
Postal Service payable from postal revenues, $391,713,673;
sinking fund $287,500,000; Panama Canal, $18,245,391; an
aggregate of....,
Total estimates for ordinary appropriations for 1921
Add estimates for Panama Canal appropriation
Add sinking fund requirement

$697, 459, 064. 00
4,167, 950, 967. 62
18, 245, 391. 00
287, 500, 000. 00

Total estimated appropriations for 1921, to become a charge
upon the general fund.
' 4, 473, 696, 358. 62
ESTIMATES FOR 1921 AND APPROPRIATIONS FOR 1920.

Comparison of the estimates for 1921 with the appropriations for
1920 shows a decrease in the 1921 estimates of $1,155,790,000.80,
including the Panama Canal and sinking fund,, as exhibited in the
table following:
Statement of estimates of appropriations for 1921 compared with appropriations for 1920.
[ E x c l u d i n g p o s t a l service p a y a b l e from t h e p o s t a l r e v e n u e , a n d p u b l i c d e b t . l

D e p a r t m e n t s , etc.

Legislative
Executive:
Executive proper.
Alien P r o p e r t y Custodian
W h e a t g u a r a n t e e fund
E u r o p e a n food relief
Tariff Commission
Civil Service Commission
,
D e p a r t m e n t of S t a t e :
D e p a r t m e n t of S t a t e p r o p e r
Foreign intercourse
Treasury Department:
Treasurj^ D e p a r t m e n t exclusive of public
buildings
P u b l i c buildings
War-risk i n s u r a n c e
-.
War Department:
War Department proper
Military E s t a b l i s h m e n t —
( E s t i m a t e s for Military E s t a b l i s h m e n t
for 1921, .11,128,950,497.87;
appropriat i o n s for 1920, $787,889,950.70.)
Army
Military A c a d e m y .
National' G u a r d . •
Fortifications
Arsenals.,
Military posts a n d miscellaneous
Rivers and harbors
Miscellaneous war, civil i t e m s
Navy Department:
N a v y D e p a r t m e n t proper
Naval Establishment—
( E s t i m a t e s for N a v a l E s t a b l i s h m e n t for
1921, $577,576,260.80; a p p r o p r i a t i o n s for
1920, $622,374,718.88.)
^ N a v a l E s t a b l i s h m e n t , exclusive of
building program
N a v y building p r o g r a m
D e p a r t m e n t of t h e I n t e r i o r :
D e p a r t m e n t of t h e Interior, exclusive of
I n d i a n s a n d pensions
Pensions
Indians
P o s t Office D e p a r t m e n t :
P o s t Ofiice D e p a r t m e n t , exclusive of Postal
Service




Increase, 1921
estimates over
1920 appropriations ( + ) ; decrease (—).

1921 e s t i m a t e s ,
including permanent amiual.

1920 a p p r o p r i a tions, i n c l u d i n g
permanent
annual.

$19,844,934. 95

$16,524,132.61

394,130.00
785,094.00
400,000'. 00
042,000.00

556,580.00
800,000.00
1,000,000, GOO. 00
100,000,000.00
300,000.00
• 466,200.00

162,450.00
14,906.00
-1,000,000,000.00
•- 100,000,000.00
-f
100,000.00
-1175,800.00

1, 571,350.00
11,349,250.91

1,283,460.00
10,304,135.27

287,890.00
1,045,115.64

133,298, 526. 86
9.449.796.00
213,999,600.00

117,310,319.58
9,378,850.00
113,862,806.00

-1- 15,988,207.28
-h
70,946.00
-i- 100,136,794.00

6.615.248.01

7, 573,550.12

897,467, 020.00
6,778, 637.20
85,408, 000.00
117,793, 330. 00
7,278, 259.00
14,225, 251.67
60,403, 865.00
12,931, 895.04

759,222,127.50
2,277,932.20
13,177,750.00
11,214,291.00
1,970,000.00
27,850.00
43,192,964.00
17,925,730.00

138,244,892.50
4,500,705.00
72,230,250.07
106,579,039.00
5,308,259.00
14,197,401.60
17.210.901.00
4,993,834.96

3,097,870.00

2,223,010.00

874,860. 00

392,328,260.80
185,248,000.00

489,374,718.88
133,000,000.00

-f-

42,571,332.54
215,030,000.00
36,769,494.27

34,788,791.68
215,030,000.00
18,327,397.03

-H

7,782,540.86

4-

18,442.097.24

2,093,870.00

1,986,662.97

-f

107.207.03

-\-

-

$3,320,802.34

958,302.11

97,046,458.08
52,248,000.00

209

SECRETARY OE THE TREASURY.

Statement of estimates of appropriations for 1921 • compared with appropriations for
79^^?—Continued.
1920 appropria^
1921 estimates,
including perma- tions, mcluding
permanent i
nent annual.
annual.

Departments, etc.

$72,568,102.00 $143,171,270.00
Department of Agriculture
33,705,038.40
Department of Commerce
30,570,400.03
8,974,574.00
Department of Labor
4,747,782.46
17,946,47L35
Department of Justice
16,402,450.34
Independent offices:
Smithsonian , Institution and National
M;useum
902,020.00
698,715.00
Interstate Commerce Commission
3,971,000.00
4,596,600.00
Federal Trade Commission
1,283,130.00
1,205,000.00
United States Shipping Board.
356,772,986.00
447,755,061.59
Federal Control of Transportation Systems..
750, ooo; 000.00
Housing Corporation
2,068,970.00
1,203,028.00
1,400,000.00
2,500,000.00
Interdepartmental Social Hygiene Board...
Council of National Defense
,
320.000.00
Federal Board for Vocational Education
42,586,000.00
22,182,000.00
National Advisory Committee for Aero437,000.00
nautics
175,000.00
Board of Mediation and Conciliation
.-..
50,000.00
44,540.00
Arlington Memorial Bridge Commission
25,000.00
Employees Compensation Commission
2,953,660.00
1,119,290. ()0
Rock Creek and Potomac Parkway Com400,000.00
250,000.00
mission
State, War, and Navy Department Buildings.
2,329,550.00
2,408,038.75
Indigent in Alaska relief fund
25,000.00
25,000.00
• Arlington Memorial Amphitheater Commission
•
77,000.00
16,396.321. ()0
District of (Columbia.
.'.
20,285,316.03
1,017,500,000.00 1,052,300,000.00
Interest on the public debt
12.456,000.00
24.337,500.00
Expenses of loans
'
30,760,000.00
Increase of compensation
35,698,400.00
Additional compensation, Postal Service

Increase, 1921
estimates over
1920 appropriations (4-); decrease (—).
- $70,603,168.00
-f3,134,638.37
+
4,226,791.54
-f
1,544,021.01
203,305.00
625,600,00
78,130.00
90,982,075.59
750,000,000.00
865,942.00
1,100,000.00
320,000.00
20,404,000.00
262,000.00
5,460.00
25.000.00
1,834,370.00
150,000.00
78,488.75
77,000.00
3,888,995.03
34,800,000.00
11,881,500.00
30,760,000.00
35,698,40().00

Ordinary...
PanamaCanal..

4,167,950,967.62
18,245,39L00

5,619,506,522.42
9,979,837.00

-1,451,555,554.80
-f
8,265,554.00

Ordinary and Panama Canal.
Sinking fund

4,186,196,358.62
287,500,000.00

5,629,486,359.42

-1,443,290,000.80
+ 287,500,000.00

4,473,696,358.62

5,629,486,359.42

-1,155,790,000.80

Total ordinary, Panama Canal, and
sinking fund

Exhibit of appropriations for 1920.
Appropriations made for the fiscal year 1920
I
and for prior years during t h e third session
i
of the Sixty-fifth Congress and the first ses.1 .
sion of the .Sixty-sixth Congress, including
^ ^
j
.
revised estimated permanent and indefinite
|
appropriations, and appropriations for the
;
Postal Service payable from postal revenues
;$6, 453, 984, 749. 56
Deduct:
'
|
Postal Service for 1920 payable from the
'
postal revenues.
$401, 216,149. 00 | •
Postal deficiencies of prior years payable
I
from postal revenues.
7,150,000. 00 j
Deficiencies and supplementals for prior.
.
j
years
..'.
416,132, 241.14 |
-—:~
! 824, 498, 390.14
Total appropriations for 1920, exclusive of deficiencies and |
Postal Service payable-fromrpostal revenues
i 5, 629,486,359. 42
Agreeing with the appropriations for 1920 shown in the preceding table, against
which t h e estimates

of appropriations

submitted

for

1921 show

a decrease of

$1,451,555,554.80 in the ordinary and $1,443,290,000.80, including the Panama Canal.
• 140325—FI 1919




14

I

210

REPORT ON THE FINANCES.

Attention is respectfully called to further divisions of this report,
to wit, the condensed annual reports of the various bureaus and
divisions of the Treasury Department, and the tables accompanying
the report on the finances.
' CARTER GLASS,

Secretary.
To the SPEAKER OF THE H O U S E OF REPRESENTATIVES.




EXHIBITSrACCOMPANYraG THE REPORT OK THE FINANCES.




211




EXHIBITS.
E X H I B I T 1.

A.
Preliminary financial statement of the United States Govermnent for the period frorn Apr. 6, 1917, to Jime 30, 1919.
[On the basis of daily Treasury statements.!
R E C E I P T S A N D DISBURSEMENTS.
Net balance in the general fund Apr. 5, 1917
$92,317,710:27 Disbursements, exclusive of principal of public debt, Apr. 6, 1917, to
Receipts, exclusive of principal of pubhc debt, Apr. 6, 1917, to June
June 30, 1919
:
-.
$32,427,469,054. 72
24,183,034,599.7©
30, 1919
:
9,384, 278, 70S. 22 PubUc-debt disbursements, Apr. 6, 1917, to .Time 30, 1919
Public-debt receipts, Apr. 6, 1917, to June 30, 1919
48,385,572,053.47 Net balance in the general fund June 30, 1919
1,251,664,827.54
Total

57,852,168,481.

Total

O

57,862,168,481. 96
O

PUBLIC DEBT AND EXPENDITURES.
Total disbursements for war period, exclusive of principal of pubhc
debt
S32,427,4.69,054.72
Total receipts for war period, exclusive of principal of public debt. ..
9,384,278,708.22

Total .gross debt June 30, 1919
Total gross debt Apr. 5, 1917
Gross debt increase for war period
Net balance in the general fund June 30, 1919
Net balance in the general fund Apr. 5, 1917
Net increase in balance in general fund

Excess of disbursements over receipts, for war period




23,.043,190,346.50

Net debt increase for war period

SI, 251,664,827.54
92,317,710r27

S25,484,506,160.05
1,281,968,696.28
24,202,537,463.77

>
Ul
1,159,347,117.27
23,043,190,346.50

M
CO

B.

tvo

Preliminary statement ofthe public debt of the United States Government, June 30, 1919.
[On the basis of daily Treasury statements.]

Bonds;
Consols of 1930
Loan of 1925
Panama's of 1916-36
Panama'sof 1918-38
Panama's of 1961
Conversion bonds
Postalsavings bonds

•

:
.-

First Liberty loan
Second Liberty loan
Third Liberty loan
Fourth Liberty loan
Total bonds. 1
Notes: Victory Liberty loan
Treasury certificates:
Loan and tax
Pittman Act
Special issues
:




-

§88.3,359,990.00
1,984,796,730.00
• '
3,566,464,969.00
E
3/958,560,357.50
S
6,794,504,557.00
>^
—•
16,304,320,613.50
M

'

17,187,685,603.50
3,467,840,956.77

:
S3,273,000,000.00
178,723,000.00
182,494,490.00

•

War savings certificates (net cash receipts)
Old debt on which interest has ceased
Noninterest-bearing debt
Total gross debt

$599,724,050.00
118,489,900.00
48,954,180.00
25,947,400.00 ,
50,000,000.00
28,894,500.00
11,349,960.00

:
:

:

3,634,217,490.00
956,023,121.45
2,355,250.26
236,382,738.07
25,484,506,160.05

O

^
^
H
td
H
^
S
fe

Statement slwwing classified receipts of the United States Government, exclusive of the principal of the public debt, by months, from Apr. 6, 1917, to
Jwie-30, 1919, as published in daily Treasury statements.
Customs.

Income and
profits t a x .

Miscellaneous
internal revenue.

Miscellaneous
revenue.

P a n a m a Canal.

Total.

S17,863,547.22
28,660,148.60
IS,686,805.14

T o t a ' Apr. 6 to J u n e 30, 1917
J u l y , 1917
A u g u s t , 1917
S e p t e m b e r , 1917
October, 1M7
N o v e m b e r , 1917
December, 1917
J a n u a r y , 1918
F e b r u a r v . 1918
March, 1918
April, 1918
May, 1.-M ;
J u n e , 191S

:
'..

T o t a . for fiscal year 1918
J u l y , 191S
:
A u g u s t , 1918..
f
S e p t e m b e r , ldl8
:
. October. 191S
N o v e m b e r , 191S
D e c e m b e r , 1918
'.
J a n u a r y , 1919
:
F e b r u a r y , 1919
March, 1919
A p r i l , 1919
May, 1919
^Jl'ne,.J1919^.^.. . ^ . ^ . . . . --,-.. -^. .^^^...^^......
T o t a l for fiscal year 1919

S21,075,386.24
107,601,090.34
195,230,281.19

$35,387,512.86
50,009,778. 45
56,993,915.16

S5,801,920.33
•11,361,950.32
14,120,100.17

S314,793.31
634,421.46
694,056.30

§83,446,159.96
198; 267; 389.17
285,725,157.96

65,210,500.96

A pr. 6 to 30, 1917
May, 1917
. 3 Line, 1917, revised

323,906,757.77

142,391,206.47

31,286,970.82

1,643,271.07

567,438,707.09

15,805, 129.91
15,902, 255.99
15,201, 388.70
13,647, 946. 24
11,935,'•389. 41
11,247, 214.10
12,163, 216.06
12,019, 441.74
18,106; 373.13
16,445; 531.99
19,925; 706.94
17, 598, 789. 28

9, 478,
4, 248;091.69
6,026; 475.01
5, 9S7,901.91
6, 720,898.26
13, 725,534. 51
11,428, 560.88
13, 200,936.38
31,424, 027.09
83,012, 299.95
342,101, 796.75
885.43
1, 786,647,

50, S95,-•959. 22
43,922; 598.77
41,265; 393.95
50,318; 414.27
81,536; 702. 42
61, 425; 075.62
61,665; 347.96
59,115, 478.32
89,635: 237:66
93, l i s ; 711.68
135,081 929.01
101,052 171.39

7, 575,979.09
9,839 107.31
12,967!317.09
20,226;866.64
39,175,579.26
18,034,677.89
17,796 189.59
14,177 234.29
16,536,309.47
16,111,894.79
97,254,972. 78
22,817,686. 62

171,687.08
584,477.10
648,787. 75
277,158. 50
122,208.09
626,568.30
302,895.38
585,348. 96
1,047,330. 70
635,705.85
378, 705. 51
655,481.06

83,927 636.28
74,496;530.86
76,109,362.50
90,458,290.56
139,490,777.44
105,059,070.42
103,356 209.87
99,09S: 439.69
156,749;278.05
209,319,144.26
594,746,110.99
1,931,772,013.78

2,314,006,291.;

872,028,020. 27

292,513,814.82

6,036,354.28

3,664,582,864.70

72
15,837.
105,948. 066.11
497,490, 376.62
83, 736;123.50
14,175; 802. 76
30, 795;666.13
89,005, 937. 44
36,308, 166. 21
12, 719,024.43
93,327, 251.94
30,136, 620.58
11,453 096.69
99, 743,394.83
28,820, 184.49
12, 583;861.29
117,65S, 483.35
61,916: 648.37
9,681,907. 59
112,281, 675.18
43,141, 373. 49'
12, 732,514. 54
94,310, 163.04
30,341: 312.50
14,979, 078.02
118,240, 897.00
17,876, 270.46 1,129,82i;269.04
135,059, 054.46
034.35
107,696,
20,14i; 4S6.97
115,265, 091.71
50,614, 139.20
20,896: 644.65
143..11
_21,3S0: 290.27. _'971,695 , S66._31_ . 131,-919,

21,974, 810.55
22,645: 000.23
13, 757;134.67
16,058, 975.73
169,112, 403.43
93
14,213,
82
27,054:
22,36i: 050.46
31,555,382.12
159,228, 529.45
92,026, 548.47
_56,_151,.439.19

179,998,383.49

619.994.14
899,439.10
94,391.05
604,815.02
734.419.15
431,587.99
626,489.31
767,529.81
355,127.60
427,185.33
459, 786. 65
353,824.88^

641, 877,137.14
152: 252,031.72
15i; 884,653.80
151 580,759.96
310; 994,263.19
203 902,264.23
842,841.34
. 195;
162 759,163.83
1,297 848,946.22
422, 552,300.56
279, 262,210.68
-1,181,.500,-563.76 -

184,457,857.39

3,018,783,687.29

1,296,501,291.67

646,139,700.05

6,374,590.03

326,906,757.77
2,314,006,291.84
3,018,783,687.29

142,391,206.47
872,028,020. 27
1,296,501,291.67

31,286,970.82
292,513,814.82
646,139, 700.05

1,643,271.07
6,036,354.28
6,374,590.03

5,659,696,736.90

2,310,920,518.41

969,940,485.69

14,054,215.38

9,384,278,708.22

H

W

H

>
Ul

567,438,707.09
3,664,582,864.70
5,152,257,136. 43

429,566,751.84

K!

O

5,152,257,136.43

65,210,500.96
179,998,383.49
184,457,867.39

O

KECAPITULATION

A p r . 6 t o J u n e 30, 1917
Fiscal year 1918
Fiscal year 1919
Grand totals




^.
-

to

D.
Statement showing classified disbursements of the United States Government, exclusive ofthe principal of the public debt, by months, from Apr. 6, 1917
"
-.
to June-SO, 1.919, as published in daily Treasury statements.
Ordinary.

Total.

S200,000,000.00
407,500,000.00
277,500,000.00

S7,885) 770. 50
4,962, 746. 28
919,445.78

S279,213,777.20
526,565,555.96
410,107,295.39

885,000,000.00

13,757,962.56

1,215,886,628.55

299,031.05
277, 438,000.54
349: 013,305.34
452: 015,359.94
512: 952,035.17
511; 297,425.62
715, 302,039.83
675: 209,068.43
SI9; 955,357. 25
910; 755,758. 95
1,068; 203,026.82
1,203; 914,905.85

452, 500,000.00
478,000: 000.00
396,000: 000.00
480, 700:000.00
471,929: 750.00
492,000; 000.00
370,200, 000.00
325,000, 000.00
317, .500:000.00
287, .500:000.00
424,000; 000.00
242, 700,000.00

1,511 814.92
2,019; 353.50
1,354, 980.35
1,623, 392. 58
1,200; 022.36
1,914, 433.70
4,854, 005.85
12,477, 917.31
18,338, 441.98
17,031, 020.28
15,992, 206.83
5,958 796. 56

662, 310,845.97
757: 457,364.14
746: 378,285.69
944: 368,752. 52
986: 081,807.-53
1,10.5;211,859.32
1,090, 356,045.69
1,012: 686,985.74
1,155; 793,809.241,215, 287,779. 23
1,508, 195,233.65
1,512, .573,702.42

7,874, .386,324. 91

4,738,029,750.00

;4,286,395. 23

12,696,702,471.14

1,2.59, 782,599.23
1,524, 901,777.74
1,274, 505,845.05
1,174, 522,406.40
1,655, 0.51,004.19
1,570, 890,396.88
1,6.59,580,520. 24
1,0.3.5,130,805.19
1,042, 182, .523. 55
1,003, 852,122.73
907, 492,923.94
727, 845,814.48

343,485, 000.00
279,250; 000.00
2S2,150,000.00
489,100, 000.00
278,949: 597.70
. 389,052;
000.00
290,250, SOO.00
145,397: 302.30
322,350: 000.00
409,608; 608.27
194,911, 857. 29
54, 750,000.00

5,015 055.21
1,351 445.28
608; 440. 22
1,139, 854.59
1,218, 607.04
1,033, 4.58. 60
12,519, 629.59
9,385 796.13
15,279; 251.96
15,457, 575.38
9,932, 690. .50
26,794, 135.35

1,608, 282,654.44
1,805: 513,223.02
1,5.57: 264,285.27
1,664: 862,260.99
1,935: 249,308.93
975,855.48
2,oeo: 350,949.83
1,962: 913.903.62
1,189: 8II; 785. 51
1,379: 928,306.38
1,428; 337,471.73
1,112, 389,949.83

14,93.5,848,739.62

3,479, 255,265.56

9,775,949.85

18,514,879,955.03

317,118,665.99
7,874,386,324.91
14,935,848,739.62

885,000,000.00
4,738,029,750.00
3,479,255,265. 56

13, 767,962. 56
84,286,396.23
99,775,949.85

1,215,886,628.55
12,696,702,471.14
18,514,879,955.03

23,127,3.53,730. 52

9,102,285,015.55

197,830,308.64

32,427,459,0.54.72

S71,328,006.70
114,102,809. 68
131,587,849.61

•
-

T o t a l A p r . 6, 1917, t o J i m e 30, 1917
;

—

O t h e r special.

317,118,655.99

A p r . 6 t o 30, 1917
M a y , 1917
J i m e , 1917 (revised)

July, 1917....:
A u g u s t , 1917
S e p t e m b e r , 1917
October, 1917
N o v e m b e r , 1917
D e c e m b e r , 1917
J a n u a r y , 1918
F e b r u a r y , 1918
M a r c h , 1918
A p r i l , 1918
M a y , 1918
J u n e , 1918

Foreign loans.

,
t

to

hjO
H
O

H
T o t a l for fiscal year 1918
J u l y , 1918
A u g u s t , 1918
S e p t e m b e r , 1918
October, 1918
N o v e m b e r , 1918
D e c e m b e r , 1918
J a n u a r y , 1919
F e b r u a r y , 1919
M a r c h , 1919
A p r i l , 1919
M a y , 1919
J u n e , 1919

•

.'
:

"

T o t a l for fiscal year 1919
RECAPITULATION.

Apr. 6, 1917, to J u n e 30, 1917
Fiscal year 1918
Fiscal year 1919
Grand totals




o
-

._,

>
a
U)

SECRETARY OF T H E TREASURY.
EXHIBIT

217

2.

[REVOKING PROCLAMATIONS, O R D E R S , ETC., PROHIBITING EXP O R T S 0 : F COIN, B U L L I O N A N D C U R R E N C Y — E X C E P T I N G P A R T
OF RUSSIA.]
PROCLAMATION.

Whereas, by ^drtue of the authority vestecJ. in the President by the
Act approved June 15, 1917, known as the Espionage Act, the
President issued a proclamation dated August 27, 1917, which was
amended by a subsequent proclamation dated September 7, 1917,
prohibiting the export of coin, buUion and currency from the Uniteci
States or its territorial possessions to certain specified countries
except at such time or time^ and under such regulations and orders,
and subject to such limitations and exceptions as the President shall
prescribe; and
Whereas, by virtue of the authority vested in the President by the
above mentioned Act of Congress, the President by Executive order
dated September 7, 1917, directed that the regulations, orders,
limitations and exceptions prescribed by him in relation to the export
of coin, bullion and currency should be administered by the Secretary
of the Treasury, and upon his recommendation prescribed certain
regulations in relation thereto; and
Whereas, by Executive order, dated October 12, 1917, made under
authority of the act aforesaid and of the act approved October 6,
1917, known as the Trading-with-thcrEnemy Act, the President
vested in the Secretary of the Treasury the executiye administration
of any investigation, regulation or prohibition of any transactions in
foreign exchange, export, or earmarking of gold or silver coin, bullion
or currency, transfers of credit in any form (other than credits relating
solely to transactions to be executed wholly within.the United States)
and transfers of evidences of indebtedness or of the ownership of
property between the United States and any foreign country or
between residents of one or more foreign countries by any person
within the United States, and further vested in the Secretary of the
Treasury the authority and power to require any person engaged in
any such transaction to furnish, under oath, complete information
relative thereto, including the production of any books of account,
contracts, letters, or other papers in connection therewith in. the
custody or control of such person, either before or after such transaction is co:Qipleted; and
Whereas, by said Executive order, dated October 12, 1917, the
President authorized and directed the Secretary of the Treasury for
the purpose of such executive admiiiistration to take such measures,
adopt such administrative procedure, and use such agency or agencies
as he may from time to time deem necessary and proper for that
purpose; and
Whereas, the Secretary of the Treasury, with the approval of the
President, by order dated November 23, 1917, adopted certain administrative procedure for the executive administration, authority
and jpower vested in the Secretary of the Treasury by said Executive
order, dated October 12, 1917, and designated the Federal Reserve
Board to act as the agency of the Secretary of the Treasury, subject
to the approval of the Secretary of the Treasury, to carry out such




218

REPORT OJST T H E FINANCES.

executive administration, authority and power vested in the Secretary
of the Treasuiy as hereinbefore recited; and
Whereas, upon the recommendation of the Secretary of the Treasury
and in order to vest all necessary authority in the Federal Reserve
Board to act as the agency of the Secretary of the Treasury in the
performance of certain duties therein imposed, the President did by
Executive order, dated January 26, 1918, prescribe certain orders,
rules and regulations in respect of such executive administration,
authority and power amending the regulations theretofore prescribed
by Executive order dated September 7, 1917; and
Whereas, in the judgment of the President, except as hereinafter
stated, the public safety of the United States does not now require
the prohibition of the exportation of coin, bullion and currency from
the. United States or its territorial 'possessions, nor the investigation,
regulation or prohibition of any transaction in foreign exchange or
the enforcement of any of the orders, rules, regulations and administrative procedure hereinbefore mentioned.
Now, therefore, I, Woodrow Wilson, President of the United States
of America, under and by virtue of the authority vested in me by the
acts aforesaid, do hereby proclaim to all whom it may concern that,
except as hereinafter specified, the aforementioned proclamations in
so far as they prohibit the exportation of coin, bullion or currency,
and the aforementioned power and authority vested in the Secretary
of the Treasury and in the Federal Reserve Board, and all orders,
rules and regulations issued or prescribed in connection therewith
are hereby revoked and cancelled. In so far as the proclamations,
orders, rules and regulations hereinbefore mentioned may be necessary
to enable the Secretary of the Treasury and the Federal Reserve
Board effectively to control in the manner therein provided, and to
the extent deemed advisable by the Secretary of the Treasury and
the Fed'eral Reserve Board, all exportations of coin, bullion and currency to that part of Russia now under the control of the so-called
Bolshevik Government, and any and all dealings or exchange transactions in Russian rubles or transfer of credit or exchange transactions
with that, part of Russia now under the control of the so-called
Bolshevik Government, and any and all transfers of credit or exchange
transactions with territories in respect of which such transactions are
at present permitted only through the American Relief Administration, they are hereby continued in force and effect.
In testimony whereof I have hereunto set my hand and caused the
seal of the United States to be aflSxed.
Done in the City of Paris this 26th day of June in the year of our
Lord one thousand nine hundred and nineteen, and of the Independence of the United States of America the one hundred and forty
third.
[SEAL.]

WOODROW WILSON.

By the President:
ROBERT LANSING,

Secretary of State.




(No. 1528-A.)

SECRETARY OF T H E

TREASURY.

219

E X H I B I T 3.

The following table shows the cash expenditures of the Government for the fiscal years ended June 30, 1917, June 30,1918, and June
30, 1919, as published in the daily Treasury statements and classified
according to departments and establishments:
EXPENDITURES.
Fiscal year 1917.

Legislative
E x e c u t i v e proper
State Department
Treasury Department
War Department
D e p a r t m e n t of Justice
Post Office D e p a r t m e n t
Navy Pepartment
Interior D e p a r t m e n t
D e p a r t m e n t of Agriculture
D e p a r t m e n t of Commerce
D e p a r t m e n t of L a b o r
U n i t e d States Shipping Board
Federal control of t r a n s p o r t a t i o n s y s t e m s . . .
. W a r F i n a n c e Corporation
'
Food a n d F u e l A d m i n i s t r a t i o n s
Other i n d e p e n d e n t offices a n d commissions.
District of Columbia
.•
I n t e r e s t on p u b l i c d e b t
Unclassified
Total ordinary e x p e n d i t u r e s

Fiscal y e a r 1918.

Fiscal year 1919.

$15, 092,373.97
S15,825,506. 72
S17,090,106. 24
17,467,352.03
1,280,484.85
9, 662,847.53
20,766,400.14
6. 159,316.41
9, 892,898. 09
500,426.53
227,277,657.81
84, 294,313. 65
152,
358, 158,351.12 4,850, 687,186. 88 8,995,880,266.18
964,628.18
15,717,022.36
10, 555,401. 25
12, 173,103. 28
2,412,250.05
1,895,578. 21
4, 840,485.80
2,002,310,785.02
239, 632,756.53
288,285,627.61
216, 415,516.48 1,278, 556,893.96
244, 870,188. 28
39,246,454.41
29, 547,234. 01
42, 833,808.82
15,589, 514. 30
11; 589, 792. 94
12,469,268.09
12,942,558.75
3,8.52, 111. 34
5,681,550. 83 1,820,606,870.90
14, 291,282. 96
770, 263,996.17
358,795,274.60
120, 929,168. 38
302,521,846. 92
44, 859,896.40
87,338,207.08
54,714,740.06
558,829.88
75,375,809.41
12, 446,832.46
681, 595. 39
16,014,105.80
14 743,277.14
232,376. 66
619,215, 569.17
189; 469,620.31
314,285.49
895,050.-84
26
1,041,672,611.24 7,874,.38e,324.91 14,935,848,739.62

SPECIAL.

P a n a m a Canal
P a y m e n t for W e s t I n d i a n Islands
P u r c h a s e of obligations of foreign G o v e r n m e n t s . . .
P u r c h a s e of fann-loan b o n d s
Subscription t o stock. Federal l a n d b a n k s
Total special e x p e n d i t u r e s
T o t a l ordinary a n d special e x p e n d i t u r e s .

19,745,015.02
25,000,000. 00
885,000,000.00

19,268,099.30

13,195,522.37

4,738,029,750.00
65,018,296.93

3,479,255,255.56
86,580,427.48

4,822,316,146.23

3,579,031,215.41

1.980,297,941.26 12,696,702,471.14

18,514,879,955.03

0,315.00
938,625, .330. 02

PUBLIC D E B T .

Certificates of indebtedness redeemed
War-savings certificates redeemed
Bonds, interest-bearing notes, a n d certificates retired
:.One-year T r e a s u r y notes r e d e e m e d (sec. 18, Federal reserve act, a p p r o v e d Dec. 23,1913)
N a t i o n a l - b a n k notes a n d Federal reserve b a n k
notes retired (acts of J u l y 14, 1890, a n d D e c . 23,
1913)
First L i b e r t y b o n d s retired
,
Second L i b e r t y b o n d s retired
,
T h i r d L i b e r t y b o n d s retired
F o u r t h L i b e r t y b o n d s retired

626,196,844. 66

7,086,312,732.00
2,727,345. 96

15,538,078,900.00
131,519,529.91

18,398. 75

20,550. 33

63,029,583.00

4,390,000. 00'^

27,352,000.00

19,150,000. 00

40,574,115. 50

21,625,225. 00
656,000.00
61,050,000.00
14,935,500. 00

23,718,797. 5C
4,003,050.00
180,351,000.00
201,555,700.00
165,000,000.00

671,179,358.91

7,214,689,453.29

16,326,506,550.41

Grand total e x p e n d i t u r e s , as per daily Treasu r y s t a t e m e n t , J u n e 30,1917
.'
2,651,477,300.17
Grand t o t a l e x p e n d i t u r e s , as per daily Treasu r y s t a t e m e n t , J u n e 30, 1918
19,911,391,924.43
Grand t o t a l e x p e n d i t u r e s , as per daily Treasu r y s t a t e m e n t , J u n e 30, 1919

34,841,386,515.44

Total p u b l i c d e b t e x p e n d i t u r e s




to
to

EXHIBIT 4.
FINANCIAL STATEMENT OF THE UNITED STATES GOVERNMENT, J U N E

o

ao, I9i9,

[Formerly issued as '^ Statement ofthe Public Debt."l
CASH AVAILABLE TO PAY MATURING OBLIGATIONS.
Amount.

Amount.
Balance held by the Treasurer of the United States as per daily Treasury statement fo.r June 30,1919
%l, 251,664,827.54
Deduct—
Net excess of disbursements over receipts in June reports subsequently received

25,499,892.28

Settlement warrants, matured interest obligations, and checls outstanding:
Treasury warrants.
. Matured interest obligations'
Disbursing officers' checks
Balance free of current obligations.-i-^-^rrrriiT^.^

1,226,164,935.26

S7,199,695. 03
80,145,012. 72
136,088,185. 51
1,002,732,042.00
1,226,164,935.26

O
H
O

1 The unpaid interest due on Liberty loans is estimated in cases where complete reports have not been received.
PUBLIC DEBT.
Amount.
DEBT ON WHICH. INTEREST HAS CEASED SINCE MATURITY
ON P R E S E N T A T I O N ) .

DEBT BEARING NO I N T E R E S T (PAYABLE ON P R E S E N T A T I O N ) .

Obligations required to be reissued when redeemed:
United States notes
Less gold reserve

T

Excess of notes over reserve
'
.
Obligations that will be retired on presentation:
Old demand notes
National-bank notes and Federal reserve bank notes assumed by
the United States on deposit of lawful money for their retirement.
Fractional currency
Total




Amount.

S346,681,015.00
152,979, 025.63
193,701, 990.37
53, 012.50
35,830,457. 00
6,843,314.82
236,428,774.69

(PAYABLE

Funded loan of 1891, continued at 2 per cent, called for redemption
May 18, 1900; interest ceased Aug. IS, 1900
-.
Funded loan of 1891, matured Sept 2 1891
Loan of 1904 matured Feb 2 190^
Funded loan of 1907, matm'ed July 2 1907 . .
Refunding certificates, matured July 1, 1907
Old debt matured at various dates prior to Jan. 1,1891, and other items
of debt matured at various rates subsequent to Jan 1, 1861
Certificates of indebtedness, at various interest rates, matured
Loan of 1903-19IS
Total

>
o
w
Ui

SI, 000. 00
19,800. 00
13,050.00
•407,350.00
10,840.00
900,330.26
8,821,000.00
936,000. 00
11,109,370.26

Financial statement ofthe United States Government, June SO, 1919—Continued.
PUBLIC DEBT—Continued.
I N T E R E S T - B E A R I N G DEBT (PAYABLE ON OR AFTER SPECIFIED F U T U R E D A T E S ) .

Outstanding June 3.0, 1919. ,

Detail.
Authorizing act.

Title of loan.

Rate.

When
issued.

When redeemable or
payable.

Interest
payable.

Payable after Apr. 1,
1930.
Payable after Feb. 1,
1925.
Redeemable
after
Aug. 1, 1916.
Payable Aug. 1, 1936.
(Redeemable
after
Nov. 1, 1918.
PayableNov. 1,1938.
Payable June 1,1961..

Jan., Apr.,
July, Oct.
Feb., May,
Aug., Nov.

Consols of 1930

Mar. 14, 1900.

2 per cent.

1900

Loan of 1925

Jan. 14, 1875..

4 per cent.

1895-96

Panama Canal loan of
1916-1936.

June 28,1902, and Dec. |2 per cent.
21, 1905.

1906

do....

1908
1911

Panama Canal loan of
1918-1938.
Panama Canal loan of
1961.

•

do

Conversion bonds

Aug. 5, 1909, Feb. 4, 3 per cent.
1910, and Mar. 2,
1911.
Dec. 23, 1913
....do.-.

Certificates of indebtedness (various).

Sept. 24, 1917,
amended.

Certificates of indebtedness.

Sept. 24, 1917, as
amended; Apr. 23,
1918.

2 per cent..

First Liberty loan

Apr.24, 1917

3.> per cent.

1917

First Liberty loan
converted.

Apr.24,1917; Sept. 24, \ i per cent..
1917.

1917

fApr. 24,1917; Sept. 24, Mi percent.
t 1917, as amended.

1918

Do
First Liberty loan
second converted.
Second Liberty loan.




.do..
Sept. 24, 1917.

as

Various.

..do.'
4 per cent..

1916-17
1918-19

1918
1917

{

Amomit issued.
Registered..

Coupon.

Total.

$646,250,150. 00 $598,031,100.00

$1,692,950.00

$599,724,050.00

162,315,400.00 105,036, 50.00

13,4.53,650-. 00

118,489,900.00

48,948,080.00

6,100.00

48,9.54,180.00

....do

H
pi

....do.

30,000,000.00

25,835,520.00

111,880.00

• 25,947,400.00

Mar., June,
Sept., Dec.

50,000,000.00

43,389,600.00

6,61.0,400.00

50,000,000.00

28,894,500.00
28,894,500. 00 6,705,000.00 22,189,500.00
Payable 30 years from Jan., Apr.,
July, Oct.
date of issue.
3,446,260,490. 00 3,446,260,490.00
Various, not exceed- At maturitj"^ 4,719,582,490.00
ing 1 year from
or earlier
date of issue.
178,723,000.00
178,723,000.00 178,723,000.00
1 year from date of Jan., July.
issue.
Redeemable on or
after June 15, 1932.
Payable June 15,1947.
Redeemable on or
after June 15,1932.
Payable June 15,1947.
Redeemable on or after June 15, 1932.
Payable June 15,1947.
Redeemable on or after June 15, 1932.
Payable .June 15,1947.
Redeemable on or after Nov. 15, 1927.
Payable Nov. 15,1942.

o

•June, Dec.

1,989,45.5,5.50.00 288,862,500.00 1,121,209,100.00

1,410,071,600.00

•....do.....

568,318,4.50.00

21,062,950.00

146,729,800.00

405,443,150.00

86,588., 100.00

316,852,000.00

1,112,700.00

2,379,350.00

85;942,950.00

618,261,400.00

>
Ui

a

3,492,050.00

3,807,864,200.00

H

403,440,100.00

3,492,0.50.00

W

167,792,750. 00

•June, Dec.

o

704,204,350.00

•-...do
>May, Nov.

to

to
to
to

Financial statement of the United States Government, June 30, 1919—Continued.
PUBLIC D E B T - C o n t i n u e d .
INTEREST-BEARING DEBT (PAYABLE ON OR AFTER SPECIFIED FUTURi: DATES)—Continued.
Detail.

O u t s t a n d i n g J u n e 30,1919.
A i n o u n t issued.

T i t l e of l o a n .

Authorizing act.

Rate.

do

Victory L i b e r t y l o a n . .

do

War-savings and
thrift s t a m p s , series
1918-19.

do

4 per ceiit •3..

1^ OS t a l savings b o n d s >Junc25, 1910
(first t o s i x t e e n t h
series).

1918

Interest
payable.

[•May, N o v

Registered.

Coupon.

Total.

§3,0.34,609,850.00 1444,421,.3.50.00 S2,4I7,830,900. 00 $2,852,2.52,2.50.00

Mar., S e p t . . . .4,175,148,700.00 5.30,720,350.00 3,427,832, .350. 00

3,958,552,700.00

[•A.pr., Oct

'6,959,504,587.00

6,794,504,587. 00

[•June, Dec

2 3,467,844,971.77

3,467,844,971.77

) Atmaturity3.

[ R e d e e m a b l e after 1
3''ear' from d a t e of
[•Jan., J u l y , . . .
issue.
Payable 20 years from
[ d a t e of issue.

1911-1919 <
21 per c e n t . .

A ggrcgate of interest-bearing
debt.

^ T i e n r e d e e m a b l e or
payable.

( R e d e e m a b l e on or af< t e r N o v . 15, 1927.
[ P a y a b l e N o v . 15,1942.
1918
P a v a b l e Sent. 15,1928( R e d e e m a b l e on or afdo
\ t e r Oct. 15, 1933.
:...;......
1918
[ P a y a b l e Oct. 15,1938.
( R e d e e m a b l e J u n e 15,
f3^ a n d 4f } 1919
\ or Dec. 15, 1922.
\
p e r cent.
[ P a y a b l e M a y 20,1923.
1917-1919 P a y a b l e J a n . 1, 1923,
•
a n d J a n . 1,1924.

Second L i b e r t y loan, S e p t . 24, 1917, as >i} p e r c e n t . .
converted.
amended.
Third Libertv l o a n . . .
......do
do
F o u r t h Libert)'^ l o a n . .

When
issued..

953,.997,4.34.77

41,091,017,006.20

11,349,960.OC

10,576,000.00

o

11,.349,960. 00

>
25;234,496,273. 54

31,384,445,994.97

•

1 This amount represents receipts of the Treasurer of the United States on account of principal of bonds of the Fourth I.yiberty loan to June 30.
2 This amoimt represents receipts of the Treasurer of the United Stales on account of principal of notes of the Victory Liberty loan to .J une 30.
.
3 The average issue price of war-savmgs stamps for the years 1918 and 1919 with interest at 4 per cent per annum compounded quarterly for the average period to maturity will
ainount to $5 on Jan. 1, 1923, and Jan. 1, 1924, respectively. . Thrift stamps do not bear interest.
• This amoimt represents receipts of the Treasurer of the United States on account of proceeds of sales of war-sayings certificate stamps and United States thrift stamps.
»




o

953,997,4.34.77

573,960. 00

w

o
w

Financial statement of the United Slates Government, June 9, 1919~Gontinned.
PUB L i e D EB T—Continued,
RECAPITULATION.
•

Amoimt. .

Amount.
GROSS D E B T .

Debt bearing no interest . .
.Debt on which interest has ceased..:
Tn teres t-b earing debt
Gross debt i

N E T "DEBT.

. . .

$2:36,428,774.69
11,109,370.26
2.5,2:34,496,273.54
25,482,0-34,418.49

Gross debt
.• . . J
Deduct—
Balance free of current oblic'ations . . . :
Net debt 2

1 Total gross debt June 30,1919, on the basis of daily Treasm'y statements
Net amount of public debt payments in transit, etc., June 30,1919

.

$25,482,034,418.49
1,002,732,042.00
U>

24,479,302,376.49

$25,484,506,160.05
2,471,741.56
25,482,034,418.49
2 No deduction is made on account of obligations of foreign governments or other investments. The, amount of $9,102,285,015.56 has been expended to above date in this and
preceding fiscal years for purchase of the obligations of foreign governments and $7,570,000 of such obligations have been repaid.

;

PAY WARRANTS DRAWN (NET).
Month of June,
1919.

O

H
Month of June,
1918.

Fiscal year 1919 to Fiscal year 1918 to
corresponding date.
date.

Ordinary: .
• $1,122,867.56
$16,042,052.69
Legislative estabhshment
$643, 024.34
$16,605,&36.15
611,390.08
1 6,597,070.31
9,822,595.51
Executive proper
21,497,674.97
6,852, 128.05
718,503.01
10,709,278.58
State Department
20,248,594.49
Treasury Department»,2 9,6.32,
970.84
2 273,263,309.85
2 163,677,075.70
2 33,246,873.95
Excluding public buildings
:.
1,050, 400.08
1,256,439.66
16,651,372.40
18,170,930.16
Public buildings
War Department3 258,512,
829.92
3 797,117,057.16 3 9, 208,524,279.29
5 5,645,.584,931.93
Military establisliment.
18,2.33,466.75
2,403,905.16
20,162,504.50
Civil estabhshment—War Department proper.,
1,478, 849.86
9,170,109.86
423,935.39
11,456,798.84
Miscellaneous war, civil
273, 581.40
29,593,581.89
2,910,177.67
3.3,078,306.32Rivers and harbors
,
3,938,080.89
13,232,380.79
15,216,025.43
638,676.24
357, 368.21
Department of Justice
,
Post Office Department1,934,320.44
150,519.94
2,062,433.96
186, 106.25
Excluding Postal Service
,
2,221,094.54
2,221,094.54
343,511.15
Postal deficiencies
1 Excess of repayments.
2 Includes all warrants drawn for payments by the Bureau of War Risk Insurance except for Army, Navy^ and Marine Corps allotments of pay.
8 Includes warrants for allotments of Army pay paid by the Treasury Department under the War Risk Insurance act.




O

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H

w
w

to
to
CO

to
to

Financial statement of the United States Government, June 30, 1919—Continued.
PAY WARRANTS DRAWN (NET)—Continued.
Month of June,
1919.
Ordinary—Continued.
Navy DepartmentNaval establishment
Civil establishment
Interior DepartmentExcluding pensions and Indians
Pensions
Indians
.-.
Department of Agriculture
Department of Commerce
Departmient of Labor
Federal'control of transportation systems...
War Finance Corporation
United States Shipping Board
Other independent offices and commissions.
District of Columbia
. Interest on the- public debt
Total ordinary
Panama Canal: Pay warrants for construction, etc.
Special:
Purchase of obhgations of foreign governments.
Purchase of farm loan bonds
Total warrants drawn on general fund, exclusive of public debt.

Month of June,
1918.

Fiscal year 1919 to Fiscal year 1918 to
corresponding date.
to date.

1 $144,889,870.41 1 $2,009,272,388.53
199,897.69
9,773,378.04

1 $1,3-68,642,793.84
, 1,834,613.77

83,734,319.48
2,018,897.32
1,044,890.19
84,550,010.48

1,373,654.28
17,247,4:35.92
2,237,964.75
4,009,299.38
• 1,124,677.44
681,937.02
30,000,000.00
50,000,000.00
• 135,900,815.07
2 4,187,031.29
985,882.51
65,445,074.72

29,120, 861.52
221,614, 781.44
34,593; 256.69
36,888, 371.28
15,668, 534.14
13,290, 490.61
349,238, 385.21
295,000, 000.00
1,871,201, 577.51
208,091, 953.00
16,565 433.74
615,867; 337.32

35,271, 820.52
181,137, 754.12
30,888, 400.03
46,759,461.46
13,301, 156.49
5,916,881.45
150,000,000.00
55,000,000.30
862,026, 889.34
68,807,052.35
14,406,410.75
197,526, 608.36

539,058,959.16
2 510,103.58

1,292,7.30,918.26
1,559,869.63

15,365,297,396.38
12,265,775.08

8,959,9115661.32
• 20,787,624.92

54,750,000.00
34,999,938.37

243,105,000.00
3,153,254.15

3,477,850,265.56
96,662,398.59

4,739,434,750.00
65,153,254.15

628,298,793.95

1,540,549,042.04

18,952,075,8.35.61

13,795,287,290.39

1 .$87,731,959.71
2,086,848.94
1,211,425.21
18,871,017.23
2,170,708.47
2 3,264,014.46
1,365,599.22
655,641.18
2 180,771.66

1 Includes warrants for allotments of Navy and Marine Corps pay paid by the Treasury Department under the War Risk Insurance act.
2 Excess of repayments.
MEMORANDA.
Amount.
Amount due the United States from the Central Branch ofthe Union Pacific R. R. on account of bonds issued:
Principal
Interest
Total




:

$1,600,0(30.00
1,975,161.19
3,-575,161.19

O

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o

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225

SECRETARY OF THE TREASURY.
EXHIBIT

5.

BESULTS OF EOUKTH LIBERTY LOAN, ACCOBDING TO STATISTICS
COMPILED BY THE WAil LOAN OH'GANIZATION ON THE BASIS OF
SUBSCBIPTIONS OBIGINALLY BEPOBTED.
Results according to Federal reserve districts.

Quota.

District.

Subscriptions
received.

PercentPer cent
age of
quota sub- Subscribers. population
subscribed.
scribed.

Boston
New York
Philadelphia...
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis...
Kansas City...
Pallas
San Francisco.

$500,000,000
1,800,000,000
500,000,000
600,000,000
280,000,000
192,000,000
870,000,000
260,000,000
210,000,000
260,000,000
126,000,000
402,000,000

$632, 124,850
2,044, 931,750
598, 763,650
701, 909,800
352, 685,200
217, 885,200
969, 209,000
295, 340,250
242, 046,050
295, 951,450
146, 090,500
462, 250,000

120.60
113. 60
119. 75
116.98
125.95
113.48
111.40
113. 59
115.30
113. 82
115. 94
114.98

Total
:...
United States Treasury..
Grand total..

6,000,000,000

6,959,187,700
1 33,885,550

115.98

1,000,000,000

1,647,634
3, 604,101
1,771,151
2,409,659
1,211,972
947,0474,300,312
1,395,299
1,301,856
1,311,626
753,960
2,123,063

23.6
27.4
26.6
25.8 .
13.0
9.4
30.3
15.0
21.1
17.1
13.3
21.1

6,993,073,250

22,777,1

2L9

1 Includes Army subscriptions, subject to change.

The percentage of population subscribed is based on the estimated population of the
United States on July 1, 1917, namely, 103,620,273.
Results according to classifications.
Number of
subscribers.

Amount of
subscriptions
received.

$50
$100
$150 to $950
$1,000 to $4,950
$5,000 to $9,950
$10,000 and over

13,468,440
5,850,147
2,558,513
723,823
89,634
87,123

$673,422,000
585,014,700
862,566,900
999,253,950
481,794,700
3,357,135,450

59.13
25.69
n.23
3.18
.39
.38

9.8
8.4
12.4
14.3
6.9
48.2

Total
Treasury subscriptions

22,777, 680

6,959,187,700
133,885,550

100.00

100.0

Class.

Grand total

6,993,073,250
1 Includes Army subscriptions, subject to change.

140325—FI1919




-15

Per cent of Per cent of
total sub- total subscribers. scriptions.

226

R E P O R T O N T H E mSTAlSTCES.

Subscriptions, by States.

Quota.

Subscriptions
received.

Alabama
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
District of Columbia.
Florida
Georgia
Idaho
.'.
Illinois
....
Indiana
Iowa
Kansas
Kentucky...
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New' H a m p s h i r e . . . . .
New Jersey
New Mexico
New York
North Carolina.......
North Dakota
....
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island
South Carolina
South Dakota
Tennessee
Texas
Utah
:....,
Vermont
,
Virginia
,
Washington '.
West Virginia
,
Wisconsin
Wyoming
;

$30,230,000
11,096,200
25,411,000
257,556,400
37,204,900
84,882,700
13,513,000
27,608,000
23,931,000
54,319,000
14,549,400
401,677,000
125,843,000
147,900,000
66,576,450
54,260,050
47,160,000
20,524,600
82,180,000
328, 637,700
156,400,000
123,000,000
23,803,000
157,585,450
16,000,000
68,665,200
5,033,850
20,372,800
180,044,000
3,242,400
1,637,929,900
39,900,000
19,000,000
327,407,750
40,917,400
33,708,100
691,757,000
50,600,000
32,452,000
31,000,000
50,013,000
107,784,000
18,570,800
13,202,300
63,980,000
58,215,800
45,748,200
112,550,000
7,922,200

$36,216,500
14,533,700
26,657,650
291,134,950
42,007,550
124,558,750
22,621,300
1 51,262,100
27,538,350
62,814,550
16,895,150
467,291,200
136,753, SOO
158,155,400
73,914,550
64, 217,800
50,438,350
27,694,150
88,064,800
405,257,500
177,349,000
133,315,250
27,708,150
177,244,300
22,489,050
75,583,200
5,996,150
21,979,050
236,816,600
5,898,150
1,826,448,250
- 48,185,850
21,657,450
384,864,300
48,724,300
38,362,550
812,217,400
61,350,300
38,580,550
36,815,850
55,867,250
124,651,500
19,878,600
15,315,450
86,079,500
70,189,650
54,748,900
122,397,300
10,183,150

Alaska..
Hawaii..

5,991,865,550
1,369,400
6,765,050

6,948,926,100
3,180,950
7,080,650

Total
Treasury subscriptions.

1,000,000,000 6,959,187,700
2 33,885,550

State.

Grand total.




6,000,000,000

6,993,073,250

Per cent
Number of Percentage
quota
subPopulation.
population
subscribers. subscribed.
scribed.
119.1
122.05
104.9
113.0
112.9
146.7
167.4
1 185.7
115.1
115.6
116.1
116.5
108.6
106.9
111.0
118.2
107.2
133.9
107.16
124.1
113.3
108.4
116.4
112.5
140.6
110.0
119.1
107.8
131.5
181.3
111.6
120.8
113.9
117.5
119.0
116.4
117.4
121.2
118.9
118.7
111.1
115.5
100.7
116.0
134.5
120.5
119.6
108.7
126.2
101-6
232.2
104. 6

2,363,939
203,230
81,976
263,588
152, 111
1,766,343
1,150,565
3,029,032
193,965
988,320
439,830
1,245,373
58,647
215,160
1241,076
369,282
113,051
916,185
251,951
2,895,841
111,465
445,176
2,124,346
6,234,995
2,835,492 • 686,640
2,224,771
• 587,773
1,851,870
331,824
2,394,093
268,083
1,856,954
141,410
777,340
118,270
1,373,672
257,776
3,775,973
910,228
3,094,266
892,209
2,312,445 , 642,948
1,976,570
179,115
• 3,429,595
761,295
472,936
129,099
1,284,126
271,532
29,282
110,738
103,905
444,429
813,605
3,014,194
35,077
423,649
lO; 460,182 2,882,274
151,551
2,434,381
169,091
765,319
1,424,711
5,212,085
285, Oil
2,289,855
213,854
861,992
2,349,195
8,660,042
128,101
625.865
151,633
1,643,205
188,973
716,972
230, 812
2,304,629
632,026
4,515,423
125,767
443.866
62,038
364,946
253,834
2,213,025
407,511
1,597,400
206,549
1,412,602
537,817
2,527,167
63,645
184,970

8.06
31.1
8.6
37.9
19.5
35.3
27.7
165.8
12.3
8.7
25.0
34.0
24.2
26.4
17.9
11.2
7.7
15.2
18.8
24.1
25.6
27.8
9.1
22.2
27.3
21.1
26.3
23.4
26.9
8.5
27.6
6.2
22.1
27.3
12.5
, 25.8
27.1
20.4
9.2
26.3
10.0
13.9
28.3
16.9
11.5
25.5
14.6
21.3
38.7

103,620,273

22,746,677
12,080
18,923

2L95

103,620,273

22,777,6

21.98

103,620, 273

1 Includes numerous Navy subscriptions.
2 Includes Army subscriptions, subject to change.

21.98

22,7

SECRETARY OF THE TREASURY.
Subscriptions in cities having a population of 25,000 or over.
I

Quota.

City.

A k r o n , Ohio
Albany, N . Y
Allentown, P a
!
Altoona, P a
Amsterdam, N . Y
Asheville, N . C
A t l a n t a , Ga
A t l a n t i c City, N . J
Auburn, N. Y
A u g u s t a , Ga
,
A u r o r a , 111. '.
Austin, Tex
B a l t i m o r e , Md
B a t t l e Creek, Mich
B a y City, Mich
Bayonne, N . J
Beaumont, Tex
Bethlehem and South Bethlehem, Pa.
Binghamton, N . Y
,
B i r m i n g h a m , Ala
,
B l o o m i n g t o n , 111
'
B o s t o n , Mass
B r i d g e p o r t , Conn
B r o c k t o n , Mass
Brookline, Mass
Buffalo, N . Y . . . . .
Burlington, Iowa
C a m b r i d g e , Mass
:
Camden, N. J
C a n t o n , Ohio '.
Cedar Rapids, Iowa
Charleston, S.C
Charleston, W . Va
Charlotte, N . C
Chattanooga, T e m i
Chelsea, Mass
Chester, P a
Chicago, 111
Chicopee, Mass
C i n c i n n a t i , Ohio
Clarksburg, W . Va
Cleveland, Ohio
Clinton, Iowa
Cohoes, N . Y
Colorado Springs, Colo
C o l u m b i a , S. C
C o l u m b u s , Ohio
Council "iilufiis, Iov7a
Covington, K y
C u m b e r l a n d , Md
Dallas. T e x
D a n v i l l e , 111
Danville, Va
Davenport, Iowa
T
D a y t o n , Ohio
,
D e c a t u r , III
D e n v e r , Colo
D e s Moines, I o w a . .
D e t r o i t , Mich
D u b u q u e , Iowa
D u l u t h , Minn
Durham, N . C
E a s t Chicago, I n d
Easton, P a . . .
E a s t Orange, N . J
E a s t S t . L o u i s , 111
E l g i n , III
Elizabeth, N. J
Elmira,N.Y
E l Paso, Tex
Erie, Pa
E v a n s t o n , 111
Evans-\dlle, I n d . . .
E v e r e t t , Mass
.-.
Fall R i v e r , Mass
F i t c h b u r g , Mass
F l i n t , Mich
Fort Smith, Ark
Fort Wayne, Ind
Fort Worth, Tex




$9,954,600
15,889,700
5,480,900
2,290,350
2,019,200
1,365,500
14,204,150
4,907,200
2,652,800
3,117,350
1,241,300
60,525,500
2,250,000
2,356,200
2,428,300
4,374,150
• 3,947,400
8,332,650
1,500,000
120,470,000
8,84J.,800
3,580,000
6,340,000
61,648,000
7,540,000
7,704,900
6,217,000
2,289,500
6,164,100
4,265,900
3,306,900
6,361,350
1,506,000
3,886,550
252,000,000
1,280,000
38,372,750
2,669,100
112,100,950
1,533,200
2,574,000
3,825,600
12,351,100
1,945,400
2,079,500
9,300,000
1,382,100
3,164,150
6,577,050
17,911,750
1,539,144
7,300,000
1,563,300
3,671,450
2,061,800
3,303,350
4,288,400
3,566,400
2,665,600
6,270,300
6,338,000
1,402,000
7,368,000
3,378,200
3,144,361
1,600,000

s
a d
Per
Subscriptions E u t i me rt eof Population. p o p u l centn
n mb
atio
received
subscribed.
subscribers.
$11,024,650
15,937,350
5,510,900
3,645,950
3,362,500
1,986,100
17,342,000
4,429,000
3,440,350
. 3,635,650
1,998,700
1,607,050
63,238,400
3,430,200
3,226,900
4,052,200
2,607,450
4,996,550
4,396,800
9,698,000
1„539,850
138,911,150
11,479,150
4,817,400
7,949,950
65,765,650
1,364,700
8,800,850
8,989,000
6,261,300
3,224,4.00
6,170,700
5,244,450
3,906,200
6,761,550
1,747,650
5,563,900
288,211,750
1,563,700
47,107,600
2,974,900
125,303,850
1,031,850
2,115,400
2,854,650
3,950,600
16,181,850
1,835,400
2,170,100
2,206,900
12,718,500
1,700,150
1,544,950
4,876,600
8,560,100
2,637,250
18,797,350
7,610,200
73,842,050
2,258,100
8,448,300
1,660,550
2,101,700
4,028,350
4,500,250
3,988,050
1,636,850
4,959,350
3,847,300
2,830,450
7,734,900
2,344,000
6,458,800
1,522,600
8,931,650
3,979,200
4,733,350
1,583,550
7,028,700
5,939,600

4,442,100

1 P o p u l a t i o n t a k e n from 1910 census„

97,341
37,258
30,361
32,530
9,883
7,506
39,031
' 16,598
12,436
11,645
10,199
5,461
159,650
12,488
12,930
7;071
11,840
25,551
13,724
47,515
6,591
250,000
62,738
14,315
7,^6
184,588
5,451
239,266
36,305
21,066
19,137
19,845
12,463
10,938
26,105
4,490
18,427
1,000,711
9,006
154,620
10,685
285,295
3,890
7,495
24,779
53,170
5,528
10,876
8,140
35,838
6,611
5,412
23,307
• 47,134
8,829
22,321
209,632
10,063
33,100
2,618
13,073
10,513
17,585
31,024
7,553
20,166
20,321
9,962
39,474
12,896
23,486
9,021
16,967
118,60
34,955
6,906
33,650
18,142

160,000
104,199
70,000
60,000
37,103
30,000
1154,839
60,000
37,385
41,040
34,204
34,814
600,000
29,480
47,942
50,000
27,711
54,142
53,973
1 132,685
27,25,8686,092
121,579
156,878
127,792
468,558
25,030
1104,839
110,000
1 50,217
37,308
65,000
35,000
45,000
144,604
132,452
75,000
2,497,722
125,401
1364,463
30,000
1560,663
27,386
25,211

60.83
35.76
43.37
54.22
26.64
25.02
25.21
27.66
33.00
28.37
29.82
15. 69'
26.61
42.36
26.97
14.14
42.73
47.19
25.43
35.81
24.18
36.44
5L60
25.17
26.29
39.39
21.78
37.45
33.00
4L95
51.29
30.53
35.61
24.31
58.53
13.84
24.57
40.06
35.46
42.42
35.62
50.89
14.20
29.73

40,000
1181,548
31,484
1 53,270
26,000
124,527
32,261
25,000
48,811
1116,577
39,631
245,523
101,598
571,784
39,873
100,000
30,000
28,743
35,000
42,458
158,547
28,203
100,000
38,120
63,705
1 66,525
28,591
71,284
133,484
1119,295
137,826
80,000
25,000
76,183 I
104,562 I

61.95
29.29
17.56
20.42
3L 31
28.78
20.49
21.65
47.75
40.43
22.28
21.97
' 36.66
25.24
33.10
8.73
45.48
30.04
41.42
52.99
26.78
20.17
53.31
15.64^
59.34
45.11
32.95
26.94
14.22
3L35
43.69
•27.62
44.17
17.35

228

REPORT oisr T H E FUSTANCES.
Subscriptions in cities having a population of 25,000 or over—Continued.
City.

Galveston, T e x
Gary, I n d
Grand Rapids, Mich..
Green B a y , W i s
Greensboro, N . C
Greenville, S. C
Hagerstown, Md
H a m i l t o n , Ohio
Hammond, Ind
Hamtramck, M i c h —
Harrisburg, P a
Hartford, C o r m . . . . ; . .
H a v e r h i l l , Mass
Hazletown, P a
H i g h l a n d P a r k , Mich.
Hoboken, N. J
.,
H o l y o k e , Mass
,
Hopewell, V a
Houston, Tex
Huntington, W . V a . . .
Indianapohs, I n d — . .
Jackson, Mich
Jacksonville, F l a
.,
Jamestown, N . Y
Jersey City, N . J
Johnstown, Pa
Joliet, III
J o p h n , Mo
K a l a m a z o o , Mich
K a n s a s City, K a n s . . . .
K a n s a s City, Mo
,
Kenosha, Wis
Kingston, N . Y
Knoxville, Tenn
Lancaster, P a
L a n s i n g , Mich
•.
L a w r e n c e , Mass
Lebanon, Pa
-.
Lexington, K y
L i m a , Ohio
Lincoln, N e b r
Little Rock, Ark
..
L o r a i n , Ohio
Los Angeles, Calif
Louisvihe, i t y
Lowell, Mass
Lynchburg, Va
L y n n , Mass
Macon, G a
Madison, W i s
Maiden, Mass
Manchester. N . H
McKeesporr, P a
Memphis, Tenn
Meriden, Conn
Milwaukee, Wis
Miimeapohs, M i n n . . . . .
Mobile, Ala
Moline,, 111
M o n t g o m e r y , Ala
..
Montclair, N . J . . . ; . . . .
Mount Vernon, N . Y . .
Muncie, I n d . . ,
Muskegon, Mich
Muskogee, O k l a . . . . . . . .
Nanticoke, P a
Nashua.N. H
Nashville, T e n n
Newark, N. J . . . .
..
Newark, O h i o . . .
..
N e w Bedford, M a s s . . ; .
: New Britain, C o n n . . : .
New Brunswick, N . J .
Newburgh, N . Y
..
N e w Castle, P a
New Haven, Conn.....
N e w Orleans, L a
.;.
Newport, K y
Newport, R . I




Quota.

$2,365,500
9,137,000
1,214,750
1,366,400
1,533,300
1,976,000
1,997,150
6,133,650
16,346,000.
3,379,800
3,264,200
8,389,300
4,459,000
600,000
10,185,000
2,277,200
2,048,450
6,704,800
2,897,100
21,524,400
5,224,650
2,203,270
1,477,500
' 2,400,000
1,802,750
22,361,500
1,903,922
2,212,000
3,685,550
7,499,100
.1,789,450
5,583,000
2,208,050
2,613,250
1,691,050
1,934,250
2,650,000
1,261,200
41,366,900
15,714,000
6,982,200
3,306,200
6,060,000
2,872,050
2,601,000
4,665,000
2,938,250
11,940,000
1,960,000
28,440,970
27,600,000
3,225,950
2,455,950
2,374,600
1,816,600
1,269,000
1,010,800
1,677,850
1,060,050
1,167,000
9,532,850
38,198,200
1,230,450
7,558,000
3,178,000
3,Oil, 600
3,197,600
2,854,050
12,297,000
28,904,500
688,900
3,000,000

Esti a d
P e r cent
Subscriptions n u m me rt eof
b
Population, p o p u l a t i o n
received
subscribers.
subscribed.
$2,849,400
2,918,100
11,943,050
1,672,550
2,418,600
1,974,300
2,097,250
2,460,050
1,524,250
278,300
6,891,100
36,422,600
3,507,800
3,728,300
4,755,350
11,607,200
5,836,850
794,300
,12,624,450
2,821,550
23,811,850
2,207,850
8,678,450
3,136,450
18,235,700
6,576,300
3,147,100
1,589,800
2,425,100
2,128,400
23,475,900
3,446,550
2,499,200
4,397,200
7,979,500
2,111,200
7,402,200
2,823,300
3,438,200
2,037,550
2,819,300
4,673,300
2,237,650
48,686,350
16,000,000
8,354,350
3,952,800
7,122,950
3,070,150
3,168,200
3,045,250
7,386,350
3,538,550
11,932,750
2,325,900
34,139,950
28,346,000
3,516,100
2,552,000
2,514,100
4,149,750
2,389,000
2,015,550
2,118,650
1,748,100
1,064,350
1,425,900
11,949,150
59,840,250
1,134,300
8,707,550
5,733,400
3,419,150
3,229,350
3,790,550
15,507,600
28,373,900
1,836,000
3,204,650

6,840
28,882
47,913
9,146
8,108
5,910
9,133
10,846
12,582
3,737
36,149
72,286
15,299
7,145
7,023
48,534
20,000
2,425
33,185
11,884
94,368
18,729
27,131
15,800
54,572
14,212
.18,127
11.'
15,094
5,328
15,420
21,510
15,390
28,442
15,504
7,879
11,719
17,971
12,731
246,001
65,000
31,266
7,231
39,458
9,672
13,780
15,854
11,879
15,371
28,828
11,719
69,047
93,468
10,565
16,704
10,302
9,156
10,714
10,979
15,306
5,245
7,355
38,856
79,360
6,057
17,292
18,624
7,435
8,122
12,846
64,102
67,031
10,472
10,232

I P o p u l a t i o n t a k e n from 1910 c e n s u s .

16.34
44.43
37.35
3L16
27.03
23.64
36.53
30.74
48; 08
14.95
50.20
73.08
34.68
18.80
28.09
69.00
34.64
8.08
29.55
23.77
34.73
52.96
47.02
43.19
20.38
18.95
47.69

41,863
65,000
128,291
29,353
30,000
25,000
25,000
135,279
26,171
25,000
72,015
198,915
1 44,115
38,000
25,000
170,324
157,730
30,000
112,307
50,000
271,708
35,363
1 57,699
36,580
1267,7.79
75,000
38,010
32,848
48,886
91,658
281,911
31,576
26,771
136,346
50,853
40,498
1 85,892
30,000
135,099
130,508
46,515
53,811
1 28,883
1319,198
235,114
1106,294
35,000
189,336
140,665
30,699
144,404
170,063
42,694
^143,231
32,066
436,535
380,000
151,521
27,451
138,136
25,000
37,008
35,085
26,100

33.40
44.08
77.07
27.65
29.41.
20.66
44.17
23.78
44.89
35.70
16.95
36.00
20.13
36.55
16.82
24.60
20.51
60.85
27.01
36.62
28.95
31.29
58.64

28,126
126,005
1110,364
500,000
125,404
196,652
143,916
25,000
29,603
136,280
1133,605
1339,075
130,309
127,149

18.65
28.28
35.21
15.87
23.84
17.89
42.41
29.74
27.44
35.41
47.98
19.77
34.55
37.69

24.52
47.80
19.90
42.43
42.30
38.00
33.11
5L68
22.45
38.41

SECRETARY OF T H E TREASURY.

229

Subscriptions in cities having a population of 25,000 or over—Continued.

City.

Newport News, Va
N e w Rochelle, N . Y . . .
N e w t o n , Mass
New York City..
Niagara Falls, N . Y . . ,
Norfolk, V a
Norristown, Pa
North Hudson, N . J . . .
N o r w a l k , Conn..
Norwich, Conn
O a k l a n d , Calif.
O a k P a r k , 111......
O k l a h o m a City, O k l a . .
Omaha, Nebr
Orange, N . J .
Oshkosh, W i s .•
Passaic, N . J
Paterson, N . J
Pawtucket, R. I.
Peoria, 111
P e r t h Amboy," N . J
Petersburg. Va
Philadelphia, Pa
Pittsburgh, Pa
Pittsfield. Mass.
Plainfield, N . J . . . „ . . . .
P o r t l a n d , Me
P o r t l a n d , Oreg
Portsmouth. Va
Pottsville, P a
Poughkeepsie, N . Y . . .
Providence, R . I
P u e b l o , Colo
Q u i n c y , 111
Q u i n c y , Mass
Racine, Wis
Raleigh,N. C
Reading, Pa
Richmond, Va
Roanoke, Va
Rochester, N . Y
Rockford, 111
R o c k I s l a n d , 111
Saginaw, Mich
Salem, M a s s .
Salt L a k e City, U t a h .
San Antonio, Tex
S a n Francisco, Calif..
S a v a n n a h , Ga
Schenectady) N . Y . . .
Scranton, Pa
Seattle, Wash
Shamoldn,'Pa
Sheboygan, W i s
Shenandoah, P a
Shreveport, L a
Sioux C i t y , I o w a
Somerville, M a s s . . . . .
South Bend, Ind
Spaitanburg, S.C
Spokane, W a s h . .
Springfield, 111...:
Springfield, Mass
Springfield, Mo
Springfield, Ohio
S t . Joseph, Mo
S t . Louis, Mo..^
St. P a u l , M i n n
Stamford, C o n n
Syracuse^. Y
Tacoma, W a s h
Tampa, Fla
T a u n t o n , Mass
Terre Haute, Ind
Toledo, Ohio
Topeka, K a n s
Trenton, N. J
Troy, N . Y
Tulsa, Okla
:....
Utica, N Y . . . .




Quota.

$1,483,800
1,941,400
5,778,000
1,334,082,400
3,596,300
8,415,200
3,240,700
5,976,900
1,828,600
• 2,260,000
13,320,350
4,123,000
9,921,750
1,573,400
1,557,899
4,515,900
8,544,300
6,000,.000
4,917,100
1,672,200
2,757,600
259,198,000
144,988,800
3,500,000
3„488,900
4,401,800
18,188,600
974,600
2,976,200
4,258,000
30,000,000
1,787,050
2,843,157
3,000,000
2,434,500
8,538,300
19,782,900
2,762,300
31,100,200
2,700,000
3,-190,000
10,212,700
4,725,000
107,876,500
6,282,200
3,892,000
14,868,600
25,959,675
1,578,900
1,164,700
1,171,600
3,775,000
2,800,000
1,610,400
5,6.42,600
3,404,600
14,000,000
2,743,000
2,978,450
3,824,000
75,856,900
18,000,000
3,046,600
20,706,800
5,690,000
3,416,000
2,015,000
18,519,800
2,313,650
10,048,750
7,334,600
6,905,450
10,814,900

s
a d
Per ce
Subscriptions Eu t i me rt eof Population. p o p u l a t in tn
n mb
o
.received.
subscribers.
subscribed.
$2,399,400
3,641,000
8,734,000
1,482,081,800
4,054,750
10,579,650
2,995,600
5,473,800
2,272,800
2,827,900
13,629,550
1,672,350
4,984,950
10,388,400
2,275,200
2,088,200
' 6,219,800
10,377,450
7,841,900
5,423,900
1,798,-300
3,672,700
306,870,950
151,833,400
4,236,350
4,102,550
6,325,450
19,586,250
2,005,350
2,837,750
4,110,100
38,103,300
2,028,800
2,250,000
3,348,850
3,663,800
2,573,100
9,692,900
24,674,750
3,834,850
32,024,350
5,423,900
2,622,350
4,896,000
3,667,000
11,227,000
5,316,450
110,836,150
6,364,400
5,303,200
15,808,150
29,536,050
1,609,750
1,635,950
1,151,700
4,255,950
3,931,300
3,076,000
4,259,900
2,286,000
6,958,651
4,851,100
16,147,350
2,569,600
3,415,600
4,072,800
79,009,800
19,311,550
3,458,600
20,499,150
6,139,850
3,440,750
2,370,550
5,230,800
19,748,400
3,127,800
9,595,550
7,306,050
7,607,700
11,752,900

•

17,085
10,024
12,775
1,657,787
14,305
36,753
10,035
30,968
8,498
11,848
80,525
9,395

30,000
37,759
139,806
5,602,841
37,353
125,000
31,401
100,000
26,899
28,219
1150,174
26,654

56.95
26.55
32.09
29.59
38.30
29.40
3L96
30.97
31.59
41.99
53.62
35.25

8,673
7,008
27,817
47,085
12,902
31,228
9,636
4,951
502,700
236,565
13,201
11,643
16,713
90,125
15,494
5,957
9,621
73,029

129,630
36,065
154,773
1125,600
151,622
71,458
50,000
35,000
1,800,000
1533,905
132,121
25,000
158,571
1207,214
40,000
25,000
30,390
1224,326

29.27
19.43
50.78
37.48
24.99
43.70
19.27
14.15
27.93
44.31
41.10
46.57
28.56
43.49
38.74
23.83
31.66
32.55

7,800
26,256
19,514
5,087
42,752
29,064
15,574
126,709
31,228
13,616
15,310
11,796
51,322
25,704
241,266
23,579
10,681
62,375
132,652
2,810
7,151
2,933
10,-883
16,057
18,516
20,092
6,195
35,721
. 13,408
44,197
12,775
10,001

36,730
132,642
46,486
25,000
130,000
160,000
45,000
256,417
71,458
28,926
55,642
143,697
192,777
123,831
1416,912
165,064
99,517
146,811
1237,194
40,000
28,559
30,000
40,000
57,078
177,236
68,946
25,000
1 104,402
61,120
188,926
38,685
46,921

21.24
80.44
41.98
20.35
32.89
18.17
34.61
49.42
43.70
47.07
27.52
26.99
55.32
20.76
• 57.87
36.25
10.73
42.49
55.93
7.03
25.04
9.78
27.21
28.13
23.97
29.14
24.78
34.21
21.94
49.70
33.02
21.31

287,654
65,808
18,644
50,356
38,226
11,601
7,247
18,951
82,303

1687,029
300,000
30,884
155,624
83,743
138,524
134,259
66,083
1168,497

41.87
21.94
60.37
32.36
45.65
30.11
21.15
28.68
48.85

53,061
20,145

110,000
77,916

48.24
25.85

40,917

85,692

47.75

J P o p u l a t i o n t a k e n from 1910 c e n s u s .

230

REPORT oisr T H E FUSTANCES.
Subscriptions in cities having a population of 25,000 or over—Continued.

City.

Waco, Tex
Waltham, Mass
Washington, D . C . . .
Waterbury, Conn
Waterloo, Iowa
Watertown. N. Y . . .
Wheeling, W . V a . . . .
Wichita, Kans
Wilkes-Barre, Pa
Wilhamsport, Pa
Wilmington, Del
Wilmington, N . C
Wihston-Salem, N. C
Woonsocket, R. I
Worcester, Mass
Yonkers, N . Y
York, Pa
,
Youngstown, O h i o . .
Zanesville, Ohio
,

Quota.

$2,030,400
1,962,000
27,608,000
6,221,800
1,550,000
4,167,400
7,754,450
2,981,000
9,438,300
4,495,700
11,294,750
3,681,000
2,468,100
3,000,000
15,043,600
3,452,400
4,535,250
10,137,200
2,449,550

I Population taken from 1910 census.

Subscriptions
received.

$2,246,200
2,340,350
2 49,619,450
8,977,200
2,145,000
4,383,250
8,865,900
4,532,200
9,552,900
4,555,350
18,126,450
2,031,850
2,873,950
3,918,200
19,239,150
5,236,350
5,047,100
14,083,800
2^470,250

Estimated
P e r cent
n u m b e r of Population. p o p u l a t i o n
subscribers.
subscribed.
9,177
10,497
. 2 241,076
53,000
9,789
10,268
20,620

33,385
127,834
400,000
173,141
35,569
29,894
141,641

27.49
37.71
2 60.27
72.46
27.63
34.35
49.28

41,844
13,039
39,800
6,654
8,579
9,639
62,934
24,092
14,516
49,763
10,785

80,000
35,000
100,000
30,(00
36,000
138,125
1145,986
99,838
66,000
179,066
128,026

52.3i
37.25
39.80
21.85
23.83
,26.28
43.11
24.13
26.39
62.94
38.48

2 Includes numerous Navy subscriptions.

NOTE.—Seven cities of 25,000 population or over in the Ninth Federal Reserve
District are not reported, inasmucn as figures were unobtainable.




/
1
i
1
,
1
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. 1

SECRETARY OF THE TREASURY.
EXHIBIT

231,

6.

DBAFT O F F I F T H L I B E B T Y BOND BILL PBOPOSED BY THE TBEASUBY TO THE HOUSE WAYS AND MEANS COMMITTEE, FEBBUABY
10, 1919.

Be it enacted hy the Senate and House of Representatives ofthe United
States of America in Congress assemlled. That section one of the second
Liberty bond act, as amended, is hereby further amended by striking
out the figures $20,000,000,000 and inserting in Heu thereof the figures
$25,000,000,000, and by adding the following clause:
^^Any bonds maturing npt later than ten years from the date
thereof may bear interest at such rate or rates, notwithstanding the
limitation hereinbefore contained, and may be made payable at or
before maturity at such premium or premiums as the Secretary of
the Treasury may prescribe.'^
S E C 2. That the Second Liberty Bond Act is hereby amended by
adding thereto a new section to read as follows:
^'SEC. 18. That in addition to the bonds and certificates of indebtedness and war savings certificates authorized by the Second L i b e r t j
Bond Act and. amendments thereto, the Secretary of the Treasury is
authorized to borrow from time to time on the credit of the United
States for the purposes of said Act and amendments thereto and to
meet public expenditures authorized by law, such sum or sums as in
his judgment may be necessary, and to issue therefor notes of the
United States at not less than par in such form or forms and subject
to such terms and conditions and at such rate or rates of interest as
he may prescribe, and each note so issued shall be payable at such
time not less than one year or more than five years from the date of
its issue, and may be redeemable before maturity upon such terms
and conditions, and may be payable at or before maturity at such ,
premium, and the interest accruing thereon shall be payable at such
time or times as the Secretary of the Treasury may prescribe. The
sum of such notes outstanding hereunder shall not at any onetime exceed in the aggregate $10,000,000,000. None of such notesshall bear
the circulation privilege. The principal and interest thereof shall be
payable in United States gold coin of the present standard of value.
The word 'bond' where it appears in Sections eight, nine, ten, fourteen
and fifteen of this Act and Section five thousand two hundred of the
Revised Statutes, b u t in said sections only, shall be deemed to include
notes issued hereunder.'' .
SEC. 3. That notwithstanding the provisions of the Second Liberty
Bond Act and of any other act,
(a) War savings certificates of the United States heretofore or
hereafter issued shall be exempt from taxation as fully and to the
same extent as bonds of the United States issued under Section 1 of
the First Liberty Bond Act.
(b) Bonds, notes, and certificates of indebtedness of the United
States of any series hereafter issued shall be exempt from taxation if,
as and to the extent prescribed by the Secretary of the Treasury in
connection with the issue thereof.
(c) Subscribers for any subsequent series of bonds or any series of
notes of the United States shall be entitled to additional exemptions
from taxation in respect to bonds of the First Liberty Loan converted,




232

REPORT OK THE FINANCES.

the Second Liberty Loan converted and unconverted, the Third Liberty Loan, and the Fourth Liberty Loan owned by them if, as and
to the extent prescribed by the Secretar}^ of the Treasury in connection with the issue of such subsequent series of bonds or of such series
of notes.
Section 3 of the Fourth Liberty Bond Act is hereby amended to
read as follows:
«
'^SEC. 3. That, notwithstanding the provisions of the Second Liberty Bond Act and of the War Finance Corporation Act and of any
other Act, bonds, notes, and certificates of indebtedness of the United
States and bonds of the War Finance Corporation shall, while beneficially owned by a nonresident alien individual, or by a foreign
corporation, partnership, or association, not engaged in business in
the United States, be exempt both as to principal and interest from
any and all taxation now or hereafter imposed by the United States,
any State, or any of the possessions of the United States or by any
local taxing authority.''
SEC. 4. That the privilege of converting four per centum bonds of
the First Liberty Loan converted and four per centum bonds of the
Second Liberty Loan into four and one-fourth per centum bonds,
which privilege arose on May ninth, nineteen hundred and eighteen,
and expired on November ninth, nineteen hundred and eighteen, may
be extended by the Secretary of the Treasury for such period, upon
such terms and conditions and subject to such rules and regulations
as he may prescribe: Provided, however, That for the purpose of computing the amount of interest payable, bonds presented for conversion under any such extension shall be deemed to be converted on
the dates for the payment of the semiannual interest on the respective
bonds so presented for conversion, next succeeding the date of such
presentation.
^ ' SEC. 5. That at the expiration of one year after the termination of
the war, and annually thereafter until all bonds and note;s hereinafter referred to shall be retired, the Secretary of the Treasury shall
set aside, as a cumulative sinking fund for the retirement of the war
debt, such amount as he shall deem necessary under the provisions of
this section, and the amount so set aside by the Secretary of the
Treasury in each such'year is hereby appropriated for the purposes
of this section to be available until all such bonds and notes are retired. Bonds and notes purchased, redeemed, or paid out of the
sinking fund shall be canceled and retired and shall not be reissued.
The Secretary of the Treasury shall from time to time, beginning one
year after the termination of the war and continuing until the war
debt is retired, piirchase for the sinking fund bonds and notes issued
under authority of the First Liberty Bond Act, the Second Liberty
Bond Act, the Third Liberty Bond Act, the Fourth Liberty Bond
Act, and this Act, including converted bonds, at such prices and upon
such terms and conditions as he may prescribe. The aggregate par
amount of all such bonds and notes purchased in any sinking-fund'
year shall equal as nearly as may be but shall not exceed two and
one-half per centum of the aggregate amount of such bonds and iiotes
outstanding at the expiration of one year after the termination of the
war plus (in the case of any sinking-fund year after the first) any
amount herein authorized to be expended for such purchases not
expended in any previous year or years and an amount equal to the




SECRETARY OF THE TREASURY.-

233

interest on all bonds and notes retired by means of the sinking fund.
The sinking fund may be applied to the payment of bonds or notes
at maturity or ,to the redemption thereof before maturity as well as
to the purchase thereof. The average cost of the bonds and notes
purchased shall not exceed par and accrued interest.
SEC. 6. That the proviso at the end of. section two of the Second
Liberty Bond Act as amended by the Third Liberty Bond Act and
the Fourth Liberty Bond Act is hereby amended to read as follows:
^ Provided, That the authority granted by this section to the Secre^
tary of the Treasury to establish credits for foreign governments, as
aforesaid, shall cease one year after the termination of the war between the United States and the Imperial German Government:
And provided further. That for the purpose of promoting commerce with
foreign nations such credits may, after February fifteenth, nineteen
hundred and nineteen, be established by the Secretary of theTreasury,
with the approval of the President, to provide for purchases in the
United States for export therefrom and for expenditures in the United
States in connection with such purchases and for the payment of
interest to the United States: J.7i(Z provided further. That after the
termination of the war such credits may, with the approval of the
President, be established in favor of the governments of such foreign
countries as were previously engaged in war with enemies of the United
States."
SEC. 7. That the obligations of foreign governments acquired
by the Secretary of the Treasury by virtue of the provisions of the
First Liberty Bond Act and the Second Liberty Bond Act, and amendments and supplements thereto, shall mature at such dates as shall
be determined by the Secretary of the Treasury: Provided^ That such
obligations acquired by virtue of the provisions of the First Liberty
Bond Act, or through the conversion of short-time obligations acquired under said Act, shall mature not later than June fifteenth,
nineteen hundred and forty-seven, and all other such obligations of
foreign governments shall mature not later than October fifteenth,
nineteen hundred and thirty-eight.
SEC. 8. That the War Finance Corporation Act is hereby amended
by adding to Title I thereof a new section, to read as follows:
' ' S E C . 21. That the corporation shall be empowered and authorized, in order to promote commerce with foreign nations through
the extension of credits, to make advances upon such terms, not inconsistent with the provisions of this section, for periods not exceeding
five years from the respective dates of such advances to any person, .
firm, corporation, or association engaged in the business in the
United States of exporting therefrom domestic raw materials, agricultural products, manufactured articles, and other commodities to
foreign countries, or to make advances to any bank, banker, or trust
company conducting business in the United States which shall have
made advances to any such person, firm, corporation, or association
after this Act shall have taken effect.
"Such advances shall be limited in amount to not more than the
market value of the goods to be exported at the port of shipment and
at the time of shipment (as estimated and determined by the corporation), plus insurarice and carrying or transportation charges to the
foreign point of destination if and to the extent that such insurance
and carrying or transportation charges are payable in the United




234

REPORT ON THE FINANCES.

States to domestic insurers and carriers: Provided, That any sucn
advances to a bank, banker, or trust company shall not exceed the
amount remaining unpaid of the advances made by any such bank,
banker, or trust company to any such person, firm, corporation, or
association :v47i(i provided further, That the aggregate of the advances
made by the corporation under this section remaining unpaid shall
never at any time exceed the sum of $1,000,000,000.
"Notwithstanding the limitation of Section 1 of this Act, the
advances provided for by this section may be made until the expiration of one year after the termination of the war, the date of such
termination to be fixed by proclamation of the President of the United
States. All such advances shall be made upon the promissory note
or notes of the borrower, secured in each instance by endorsement,
guarantee or otherwise as the Corporation shall deem adequate. The
Corporation in its discretion may extend the time of repayment of
any such advance tlirough renewals, the substitution of new obligations or otherwise, provided that the time for the repayment of any
advance shall not be extended beyond five years from the date on
which the same was originally made."
SEC. 9. That the last sentence but one of section 15 of the War
Finance Cor])oration. Act be, and is hereby, amended to read as
follows:
'^Beginning twelve months after the termination of the war, the
date of such termination to. be fixed by a proclamation of the President of the United States, the directors of the Corporation shall
proceed to liquidate its assets and to wind up its affairs, but the
directors of the Corporation in their discretion, may, from time to
time, prior to such date, sell and dispose of any securities or othei
property acquired by the Corporation."
SEC. 10. That the short title of this Act shall be "Fifth Liberty
Bond Act."




SECRETARY OF T H E TREASURY.

235

E X H I B I T 7.

VICTOBY LIBEBTY LOAN ACT.
[PUBLIC—No. 328—65TH CONGRESS.]
[H. R. 16136.]
An Act To amend the Liberty Bond Acts and the War Finance
Corporation Act, and for other purposes.

Be it enacted hy the Senate and Rouse of Representatives of the
TJnited States of America in Congress assembled. That the Second
Liberty Bond Act is hereby amended by adding thereto a new section to read as follows:
" S E C . 18. (a) That in addition to the bonds and certificates of
indebtedness and war-savings certificates authorized by this Act
and amendments thereto, the Secretary of the Treasury, with the
approval of the President, is authorized to borrow from time to
time on the credit of the United States for the purposes of this Act,
and to meet public expenditures authorized by law, not exceeding,
in the aggregate $7,000,000,000, and to issue therefor notes of the
United States at not less than par in such form or forms and denomination or denominations, containing such terms and conditions, and
at such rate or rates of interest, as the Secretary of the Treasury may
prescribe, and each series of notes so issued shall be payable at such
time not less than, one year nor more than five years from the date
of its issue as he may prescribe, and may be redeemable before maturity (at the option of the United States) in whole or in part, upon
not more than one year's nor less than four months' notice, and under
such rules and regulations and during such period as he may prescribe.
'' (b) The notes herein authorized may be issued in any one or
more o f t h e following series as the Secretary of the Treasury may
prescribe in connection with the issue thereof:
"(1) Exempt, both as to principal and interest, from all taxation
(except estate or inheritance taxes) now or hereafter imposed by the
United States, any State, or any of the possessions of the United
States, or by any local taxing authority;
" (2) Exempt, both as to principal and interest, from all taxation
now or hereaiter imposed by the United States, any State, or any
of the possessions of the United States, or by any local taxing authority, except (a) estate or inheritance taxes, and (b) graduated additional income taxes, commonly known as surtaxes, and excessprofits and war-profits taxes, now or hereafter imposed by the United
States, upon the income or profits of individuals, partnerships,
associations, or corporations;
"(3) Exempt, both as to principal and interest, as provided in
paragraph (2); and with an additional exemption from the taxes
referred *to in clause yh) of such paragraph, of the interest on an
amount of such .notes the principal of which does not exceed $30,000,
owned by any individual, partnership, association, or corporation; or
"(4) Exempt, both as to principal and interest, from all taxation
now or hereaiter imposed by the United States, any State, or any
of the possessions oi the United States, or by any local taxing authorit}^, exceipt (a) estate or inheritance taxes, and (b) all income,




236

R E P O R T O N THE FINANCES.

excess-profits, and war-profits taxes, now or hereafter imposed by
the United States, upon the income or profits of individuals, partnerships, associations, or corporations. '
'' (c) If the notes authorized under this section are offered in
more than one series bearing the same date of issue, the holder of
notes of any such series shall (under such rules and regulations' as
may be prescribed b y the Secretary of the Treasury) have the option
of having such notes held by him converted at par intp notes of
any other such series offered bearing the same date of issue.
(d) None of the notes authorized by this section shall bear the
circulation privilege. The principal and interest thereof shall be
payable in United States gold coin of the present standard of value.
The word 'bond', or 'bonds' where it appears in sections 8, 9, 10,
14, and 15 of this Act as amended, and sections 3702, 3703, 3704,
and 3705 of the Revised Statutes, and section 5200 of the Revised
Statutes as amended, but in such sections only, shall be deemed
to include notes issued under this section."
SEC. 2. (a) That until the expiration of five years after the date
of the termination of the war between the United States and the
German Government, as fixed by proclamation of the President,
in addition to the exemptions provided in section 7 of the Second
Liberty Bond Act in respect to the interest on an amount of -bonds
and certificates, authorized by such Act and amendments thereto,
the principal of which does not exceed in the aggregate $5,000, and
in addition to all other exemptions provided in the Second Liberty
Bond Act or the Supplement to Second Liberty Bond Act, the interest received on and after January 1, 1919, on an amount of bonds
of the First Liberty Loan Converted, dated November 15, 1917,
May 9, 1918, or October 24,1918, the Second Liberty Loan converted
and unconverted, the Third Liberty Loan, and the Fourth Liberty
Loan, the principal of which does not exceed $30,000 in the aggregate,
owned by any individual, partnership, association, or corporation,
shall be exempt from graduated additional income taxes, commonly
known as surtaxes, and excess-profits and war-profits taxes, now
or hereafter imposed by the United States, upon the income or
profits of individuals, partnerships, associations, or corporations.
(b) In addition to the exemption provided in subdivision (a), and
in addition to the other exemptions therein referred tb, the interest
received on and after January 1, 1919, on an amount of the bonds
therein specified the principal of which does not exceed $20,000 in
the aggregate, owned by an}^ individual, partnership, association, or
corporation, shall be exempt from the taxes therein specified: Provided, That no owner of such bonds shall be entitled to such exemption in respect to the interest on an aggregate principal amount ofv
such bonds exceeding three times the principal amount of notes of
the Victory Liberty Loan originally subscribed for by such owner
and still owned by him at the date of his tax return.
SEC. 3. That section 5 of the Second Liberty Bond Act, as amended
by section 4 of the Third Liberty Bond Act, is hereby fiirther amended
by striking out i\iQ figures "$8,000,000,000" and inserting in lieu
thereof the figures "$10,000,000,000."
SEC. 4. That section 3 of the Fourth Liberty Bond Act is hereby
amended to read as follows:




SECRETARY OF THE TREASURY.

237

" S E C . 3. That, notwithstanding the provisions of the Second
Liberty Bond Act or of the War Finance Corporation Act or of any
other Act, bonds, notes, and certificates of indebtedness of the
United States and bonds of the War Finance Corporation shall, while
beneficially owned by a nonresident alien individual, or a foreign
corporation, partnership, or association, not engaged in business in
the United States, be exempt both as to principal and interest from
any and all taxation now or hereafter imposed by the United States,
any State, or any of the possessions of the United States or by any
local taxing authority."
SEC. 5. That the privilege of converting 4 per centum bonds of the
First Liberty Loan converted and 4 per centum bonds of the Second
Liberty Loan into 4J per centum bonds, which privilege arose on
May 9, 1918, and expired on November 9, 1918, may be extended
by the Secretary of the Treasury for such period, upon such terms
and conditions and subject to such rules and regulations, as he may
prescribe. For the purpose of computing the amount of interest
payable, bonds presented for conversion under any such extension
shall be deemed to be converted on the dates for-the payment of the
semiannual interest on the respective bonds so presented for conversion next succeeding the date of such presentation.
SEC. 6. (a) That there is hereby created in the Treasury a cumulative sinking fund for the retirement of bonds and notes issued under
the First Liberty Bond Act, the Second Liberty Bond Act, the Third
Liberty Bond Act, the Fourth Liberty Bond Act, or under this Act,
and outstanding on July 1, 1920. The siaking fund and all additions
thereto are hereby appropriated for the payment of such bonds and
notes at maturity, or for the redemption or purchase thereof before
maturity by the Secretary of the Treasury at such prices and upon
such terms and conditions as he shall prescribe, and shall be available
until air such bonds and notes are retired. The average cost qf the
bonds and notes purchased shall not exceed par and accrued interest.
Bonds and notes purchased, redeemed, or paid out of the sinking
fund shall be canceled and retired and shall not be reissued. For the
fiscal year begiQning July 1, 1920, and for each fiscal year thereafter,
until all such Don ds and notes are retired-there is hereby appropriated,
out of any money in the Treasury not otherwise appropriated, for
the p'arposes of such sinking fund, an amount eq^aal to the sum of
(1) 2 i per centum of the aggregate amount of sucn bonds and notes
outstanding on July 1, 1920, less an amount equal to the par amount
of any obligations of foreign Governments held by the United States
on July 1, 1920, and (2) the interest which would have been payable
duruig the fiscal year for which the appropriation is made on the bonds
and, notes purchased, redeemed, or paid out of the sinking fund
during such year or in previous years.
The Secretary of the Treasury shall submit to Congress at the
begianiag of each regular session a separate annual report of the
action taken under the authority contained in this section.
(b) Sections 3688, 3694, 3695, and 3696 of the Revised Statutes,
and so much of section 3689 of the Revised Statutes as provides a
permanent annual appropriation of 1 per centum of the entire debt
of the United States to be set apart as a sinking fund, are hereby
repealed.




238

REPORT ON THE FINANCES.

SEC. 7. (a) That until thp expiration of eighteen months after the
termination of the war between the United States and the German
Government, as fixed by proclamation of the President, the Secretary
of the Treasury, with the approval of the President, is hereby authorized on behalf of the-United States to establish, in addition to the
credits authorized by section 2 of the Second Liberty Bond Act, as
amended, credits with the United States for any foreign government
now engaged ia war with the enemies of the United States, for the
purpose only of providing for purchases of any property owned
directly or indirectly by the United States, not needed by the United
States, or of any wheat the price of which has been or may be guaranteed by the United.States. To the extent of the credits so established
from time to time the Secretary of the Treasury is hereby authorized
to make advances to or for the account of any such foreign government and to receive at par from such foreign government for the
amount of any such advances its obligations hereafter issued beariag
such rate or rates of interest, not less than ^ per centum per annum,
maturiag at such date or dates, not later than October 15, 1938, and
contaiaing such terms and conditions, as the Secretary of the Treasury
may from time to time prescribe. The Secretary, with the approval
of the President, is hereby authorized to enter into such arrangements
from time to time with any such foreign government as may be necessary or desirable for establishing such credits and for the payment of
such obligations before maturity.
(b) The Secretary of the Treasury is hereby authorized from time
to time to convert any short-time obligations of foreign governments
which may be received under the authority of this section into longtime obligations of such foreign governments, respectively, maturing
not later than October 15, 1938, and in such form and terms as the
Secretary of the Treasury may prescribe; but the rate or rates of
interest borne by any such long-time obligations at the time of their
acquisition shall not be less than the rate borne by the short-time
obligations so converted into such long-time obligations; and, under
such terms and conditions as he may from time to time prescribe, to
receive payment, on or before maturity, of any obligations .of such
foreign governments acquired on behalf of the United States under
authority of this section, and, with the approval of the President,
to sell any of such obligations (but not at less than par with accrued
interest unless otherwise hereafter provided by law), and to apply
the proceeds thereof, and any payments so received from foreign
governments on account of the priacipal of such obligations, to the
redemption or purchase, at not more than par and accrued interest,
of any bonds oi the United States issued under the authority of the
First Liberty Bond Act or Second Liberty Bond Act as amended and
supplemented, and if such bonds can not be so redeemed or purchased,
the Secretary of the Treasury shall redeem or purchase any other
outstandiag iaterest-bearing obligations of the United States which
may at such time be subject to redemption or which can be purchased
at not more than par and accrued interest.
(c) For the purposes of this section there is appropriated the unex• pended balance of the appropriations made by section 2 of the First
Liberty Bond Act and by section 2 of the Second Liberty Bond Act
as amended by the Third Liberty Bond Act and the Fourth Liberty
Bond Act, but nothing in this section shall be deemed to prohibit the




SECRETARY OF THE TREASURY.

239

use of such unexpended balance or any part thereof for the purposes
of section 2 of the Second Liberty Bond Act, as so amended, suoject
to the limitations therein contained.
SEC. 8. That the obligations of foreign governments acquired by
the Secretary of the Treasury by virtue of the provisions of the First
Liberty Bond Act and the Second Liberty Bond Act, and amendments and supplements thereto, shall mature at such dates as shall
be determined by the Secretary of the TresiSMrj: Provided, That such
obligations acquired by virtue of the provisions of the First Liberty
Bond Act, or through the conversion of short-time obligations acquired
under such Act, shall mature not later than June 15, 1947, and all
other such obligations of foreign governments shall mature not later
than October 15, 1938.
SEC. 9. That the War Finance Corporation Act is hereby amended
by adding to Title I thereof a new section, to read as follows:
'^SEC. 21. (a) That the Corporation shall be empowered and
authorized, in order to promote commerce with foreign nations
through the extension of credits, to make advances upon such terms,
not inconsistent with the provisions of this section, as it may prescribe, for periods not exceeding five years from the respective ,dates
of such advances:
"(1) To any person, firm, corporation, or association engaged in
the busiaess in the United States of exporting therefrom domestic
products to foreign countries, if such person, firm, corporation, or
association is, in the opinion of the board of directors of the Corporation, unable' to obtain funds upon reasonable terms through banking
channels. Any such advance shall be made only for the purpose of
assisting in the exportation of such products, and shall be limited in
amount to not more than the contract price therefor, including insurance and carrying or transportation charges to the foreign point of
destination if and to the extent that such iasurance and carrying or
transportation charges are payable in the United States by such
exporter to domestic insurers and carriers. The rate of interest
charged on any such advance shall not be less than 1 per centum per
annum in excess of the rate of discount for ninety-day commercial
paper prevailing at the time of such advance at the Federal reserve
bank of the district in which the borrower is located; and
" (2) To SLiij^ bank, banker, or trust company in the United States
which after this section takes effect makes an advance to any such
person, firm, corporation, or association for the purpose of assisting
in the exportation of such products. Any such advance shall not
exceed the amount remaining unpaid of the advances made by such
bank, banker, or trust company to such person, firm, corporation, or
association for, such purpose.
" (b) The aggregate of the advances made by the Corporation under
this section remaining unpaid shall never at any time exceed the sum
of $1,000,000,000.
' '
"(c) Notwithstandiag the hmitation of section 1 the advances
provided for by this section may be made until the expiration of one
year after the termination of the war between the United States and
the German Government as fixed by proclamation of the President.
Any such advance made by the Corporation shaU be made upon the
promissory note or notes of. the borrower, with full and adequate
security in each instance by indorsement, guaranty, or otherwise.




240

'

REPORT ON THE FINANCES.

.

The Corporation shall retaia power to require additional security at
any time.- The Corporation in its discretion may upon like security
extend the time of payment of any such advance through renewals,
the substitution of new obligations, or otherwise, but the time for
the payment of any such advance shall not be extended beyond five
years from the date on which it was originally made."
SEC. 10. That section 15 of the War Finance Corporation Act is
hereby amended to read as follows:
"SEC. 15. That all net earnings of the Corporation not required
for its operations shall be accumulated as a reserve fund until such
time as the Corporation liquidates under the terms of this title.
Such reserve fund shall, upon the direction of the board of directors,
with the approval of the Secretary of the Treasury, be invested in
bonds and obligations of the United States, issued or converted after
September 24, 1917, or upon like direction and approval may be
deposited in member banks of the Federal Reserve System, or in
any of the Federal reserve banks, or be used from time to time, as
well as any other fiinds of the Corporation, in the purchase or redemption of any bonds issued by the Corporation. The Federal reserve
banks are hereby authorized to act as depositaries for and as fiscal
agents of the Corporation in the general performance of the powers
conferred by this title. Beginning twelve months after the termination of the war, the date of such termination to be fixed by a proclamation of the President of the United States, the directors of the
Corporation shall proceed to liquidate its assets and to wind up its
affairs, but the directors of the Corporation, in their discretion, may,
from time to time, prior to such date, sell and dispose of any securities
or other property acquired by the Corporation. Any balance
remaining after the pa3mient of all its debts shall be paid into the
Treasury of the United States as miscellaneous receipts, and thereupon
the Corporation shall be dissolved."
SEC. 11. That the short title of this Act shall be "Victory Liberty
Loan Act."
Approved March 3, 1919.




SECRETARY OF THE TREASURY.

241

E X H I B I T 8.
FOBMAL OFFEBING

OF T H E VICTOBY

DEPABTMENT

$4,500,000,000 U N I T E D

STATES

L I B E B T Y LOAN

UNDEB

C I B C U L A B NO. 1 3 8 .

OF AMERICA

CONVERTIBLE

GOLD

NOTES OF 1922-1923.
VICTORY LIBERTY LOAN.

Dated and bearing interest from May 20, 1919. Due May 20,
1923. Redeemable at the option of the United States at par and
accrued interest on June 15 and December 15, 1922. Interest
payable December 15, 1919, and thereafter semiannually on June
15 and December 15, and on May 20, 1923. Authorized b y an act
of Congress approved September 24, 1917, as amended and supplemented by the acts of Congress approved April 4, July 9, and September 24, 1918, and March 3, 1919 (Victory Liberty loan a c t ) .
Offered for subscription in Treasury Department Circular No. 138,
dated April 21, 1919, to which reference is made for full information
concerning the notes and this offering, and from which the statements
on this page are summarized and to which they are subject.
Description of notes.—The notes are offered in two series, the 4 |
per cent series, and the 3f per cent series, which are described in said
Treasury Department Circular No. 138. The notes of the two series
are interconvertible upon the terms and conditions stated in said
circular. Denominations: Coupon and registered notes. $50, $100,
$500, $1,000, $5,000, $10,000: and registered notes, $50,000 and
$100,000.
Applications must reach the Treasury Department, Washmgton, a
Federal reserve bank, or branch thereof, or some incorporated bank
or trust company within the United States (not including outlyiag
territories aad possessions) on or before the close of business May 10,
1919, the right being reserved by the Secretary of the Treasury to
close the subscription on any earlier date. Applications will be
deemed to be for notes of the 4 | per cent series except applications
specifying notes of the 3f per cent series; b u t the subscriber may,
nevertheless, at any time before completion of payment, by notice
in writing, elect to receive notes of either series in the first instance.
Allotment.—The issue will be limited to $4,500,000,000 except
as provided in said circular. Applications from any one subscriber
for an aggregate amount of notes not in excess of $10,000 will be
allotted in full. Applications for aggregate amounts of notes in excess of $10,000 will be received subject to allotment.
Terms, of payment.—Ten per cent with application on or before
May 10, 1919; 10 per cent on July 15, 1919; 20 per cent on August
12, 1919; 20 per cent on September 9, 1919; 20 per cent on October
7, 1919; 20 per cent on November 11, 1919 (with accrued interest
from May 20, 1919, on the five deferred installments).
Payment in full of any subscription for an aggregate amount of
notes not in excess of $10,000 may, if the subscriber so elects, be
made, without rebate of interest, with the application on or before
May 10, 1919. Payment for notes allotted may also be completed
so as to reach a Feaeral reserve bank, or branch thereof, on May 20,
140325—FI 1919




16

242

REPORT ON T H E FINANCES.

1919, or with accrued interest on July 15, August 12, September
9, or October 7, 1919, previous installments having been duly paid.
Completion of payment upon applications subject to allotment can
not be made on May 20, 1919, but may be made after allotment on a
date or dates named in the announcement of allotments, not earlier
than June 3 nor later than June 17, 1919, or on any later installment
date.
Delivery.—Notes will be delivered promptly after due completion
of payment therefor. Notes of the 4 | per cent series may be delivered
prior to May 20, 1919, to subscribers for aggregate amounts of notes
not in excess of $10,000, who make payment in full in cash upon
application on or before May 10, 1919. In making such deliveries
before May 20, the right is reserved to deliver notes of the largest
denomination or denominations, not exceeding $1,000, contained
in the respective amounts of notes subscribed for. Notes will be
delivered by the several Federal reserve banks as fiscal agents of the
United States as far as practicable in accordance with written instructions given by the subscribers, and, within the continental
United States^ at the expense of the United States.
Price 100 per cent and accrued interest:
TREASURY DEPARTMENT,

Washington, April 21, 1919.
L and C 192.

[1919. Department Circular No. 138. Loans and Currency.]
VICTORY L I B E R T Y LOAN.
TREASURY DEPARTMENT,
O F F I C E OF THE SECRETARY,

Washington, April 21, 1919.
The Secretary of the Treasury invites subscriptions, at par and
accrued interest, from the people of the United States, for $4,500,000,000 of United States of America Convertible Gold Notes of
1922-1923 of the Victory liberty loan, authorized by an act of Congress approved September 24, 1917, as amended and supplemented
by the acts of Congress approved April 4, July 9, and September 24,
1918, and March 3, 1919 (Victory Liberty loan act). The notes are
offered in two series.
DESCRIPTION O F NOTES.

Four and three-quarters per cent series.—The 4f per cent convertible
gold notes of 1922-1923 shall be exempt, both as to principal and
interest, from all taxation now or hereafter imposed by the United
States, any State, or any of the possessions of the United States,
or by any local taxing authority, except (a) estate or inheritance
taxes, and (5) graduated additional income taxes, commonly known
as surtaxes, and excess-profits and war-profits taxes, now or hereafter imposed by the United States, upon the income or profits of
individuals, partnerships, associations, or corporations. The notes
of said series shall bear interest at the rate of 4 | per cent per annum.




SECRETARY OF THE TREASURY.

243

Three and three-quarters per cent series.—The 3f per cent convertible gold notes of 1922-1923 shall be exempt, both as to principal
and interest, from all taxation (except estate or inheritance taxes)
now or hereafter imposed by the United States, any State, or any of
the possessions of the United States, or by any local taxing authority.
The notes of said series shall bear interest at the rate of 3 | per cent
per annum.
Denominations; hoth series.—Bearer notes with interest coupons
attached will be issued in denominations of $50, $100, $500, $1,000,
$5,000, and $10,000. Notes registered as to principal, and as to
interest payable after December 15, 1919, will be issued in denominations of $50, $100, $500, $1,000, $5,000, $10,000, $50,000, and
$100,000. Such registered notes will have coupons attached thereto
for interest payable December 15, 1919. Provision will be made for
the interchange of notes of different denominations and of coupon
and registered notes and for the transfer of registered notes, without
charge by the United States, under rules and regulations prescribed
by the Secretary of the Treasury.
Date of notes, interest dates, maturity, and redemption; hoth series.—
The notes will be dated and bear interest from May 20, 1919, and will
mature on May 20, 1923. Interest will be payable on December 15,
1919, and thereafter semiannually on June 15 and December 15, and
on May 20, 1923. The principal and interest of the notes are payable
in United States gold com of the present standard of value. The riotes
may be redeemed at the option of the United States, under such rules
and regulations as the Secretary of the Treasury may prescribe,
on June 15 or December 15, 1922, in whole or in part, as to either or
both series, at par and accrued interest, on four months notice of
redemption given in such manner as the Secretary of the Treasury
shall prescribe. In case of partial redemption of either or both series,
the notes to be redeemed will be deterniined by such method as may
be prescribed by the Secretary of the Treasury. For convenience
in case of any partial redemption, the notes will be issued in several
blocks of approximately equal face amount and bearing distinguishiag
letters. From the date of redemption designated in any such notice
of redemption interest on notes called for redemption shall cease.
Conversion privilege.—Any holder of notes of either series shall have
the option of haviag the.notes held by him converted at par into
notes of the other series, with adjustment in respect to accrued
interest b u t otherwise without charge by the United States, under
such rules and regulations as may be prescribed by the Secretary of
the Treasury. Such rules and regulations may provide for the suspension of such privilege of conversion from time to time, in respect
to all or any part of the notes of either or both series, (a) to and iacluding July 15, 1919, to facilitate deliveries upon the original issue,
(&) for a period not exceeding one month before any interest payment date, and (c) for the period, or any portion thereof, from the
date of any notice of redemption (but not more than four months
and one week prior to the date of redemption) to and iacluding the
date of redemption designated in such notice. In any event, on the
date of redemption designated in any such notice of redemption the
privilege of conversion of all notes thereby called for redemption shall
cease, and if all the notes of either series be called for redemption,
the privilege of conversion of notes of the other series shall cease.



244

REPORT ON THE FINANCES.

The notes are interconvertible, the privilege of conversion extending
to notes issued upon conversion as well as notes issued upon origingd
subscription. The privilege of conversion continues throughout the
life of tne notes subject to the provisions hereof and of such rules and
regulations.
MISCELLANEOUS PROVISIONS OF LAW AND REGULATIONS.

Additional tax exemption for Liherty honds.—-In addition to,all other
exemptions provided by law, the interest received on and after January 1, 1919, on an amount of bonds of the first Liberty loan converted, dated November 15, 1917, May 9, 1918, or October 24, 1918,
the second Liberty loan, converted and unconverted, the third
Liberty loan, and the fourth Liberty loan, the principal of which
does not exceed $20,000 in the aggregate, owned by any individual,
partnership, association, or corporation, shall be exempt from graduated additional income taxes, commonly known as surtaxes, and
excess-profits and war-profits taxes, now or hereafter imposed by the
United States, upon the income or profits of individuals, partnerships,
associations, or corporations: Provided, That no owner of such bonds
shall be entitled to such additional exemption in respect to the interest on an aggregate priacipal amount of such bonds exceeding three
times the principal amount of notes of the Victory Liberty loan
originally subscribed for by such owner and still owned by him at
t h e ^ a t e of,his tax return.
Note purchase fund.—The Secretary of the Treasury is authorized
from time to time, until the expiration of one year after the terniination of the war (as fixed by proclamation of the President), to purchase notes of this issue at such prices arid upon such terms and conditions as he may prescribe. The par amount of notes of this issue
which may be purchased, in the twelve months' period beginning on
the date of issue shall not exceed one-twentieth of the par amount of
such notes originally issued, and in each twelve months' period
thereafter shall not exceed one-twentieth of the amount of the notes
of such issue outstanding at the beginning of such twelve months'
period. The average cost of the notes of this issue purchased in any
such twelve months' period shall not exceed par and accrued interest.
Cumulative sinMng fund.—The Victory Liberty loan act provides
ia section 6 (a) as follows: " T h a t there is hereby created in the
Treasury a cumulative sinking fund for the retirement of bonds and
notes issued under the first Liberty bond act, the second Liberty
bond act, the third Liberty borid act, the fourth Liberty bond act,
or under this act, and outstanding on July 1, 1920. The sinking
fund and all additions thereto are hereby appropriated for the payment of such bonds and notes at maturity, or for the redemption or
purchase thereof before maturity by the Secretary of the Treasury at
such prices and upon such terms and conditions as he shall prescribe,
and shall be available until all such bonds and notes are retired.
The average cost of the bonds and notes purchased shall not exceed
par and accrued interest. Bonds and notes purchased, redeemed, or
paid out of the sinking fund shall be canceled and retired and shall not
be reissued. For the fiscal year beginning July 1, 1920, and for
each fiscal year thereafter, until all such bonds and notes are retired




SECRETARY OF THE TREASURY.

245

there is hereby appropriated, out of any money in the Treasury not
otherwise appropriated, for the purposes of such siaking fund, an
amount equal to the sum of (1) 2^ per centum of the aggregate
amount of such bonds and notes outstanding on July 1, 1920, less an
amount equal to the par amount of any obligations of foreign Governments held by the United States on July 1, 1920, and (2) the
interest which would have been payable during the fiscal year for
which the appropriation is made on the bonds and notes purchased,
redeemed, or paid out of the sinking fund during such year or in previous years."
Further privileges.—The notes will be receivable as security for deposits of public moneys, b u t will not bear the circulation privilege.
APPLICATION, ALLOTMENT, PAYMENT, AND DELIVERY.

Official agencies.—The agencies designated by the Secretary of the
Treasury to receive applications for the notes now offered are the
Treasury Department in Washington, and the Federal reserve banks
in Boston, New York, Philadelphia, Cleveland (with branches at Cincinnati and Pittsburgh), Richmond (with branch at Baltimore),
Atlanta (with branches at New Orleans, Birmingham, and Jacksonville), Chicago (with branch at Detroit), St. Louis (with branches at
Little Rock, Louisville, and Memphis), Minneapolis, Kansas City (with
branches at Omaha and Denver), Dallas (with branch at El Paso), and
San Francisco, (with branches at Salt Lake City, Portland, Seattle,
and Spokane). The Federal reserve banks have been designated as
fiscal agents of the United States, to receive applications, to give
notices of allotments, to receive payments, and to make delivery of
the notes allotted. Subscribers may send their applications, accompanied by the required payment, direct to any of said banks or
branches.
Suhscrihers' agencies.—h^rge numbers of national banks. State
banks, and trust companies., investment bankers, express companies,
newspapers, department stores, and other corporations, firms, and
organizations have patriotically offered to receive and transmit applications for the notes without expense to the applicants. The Secretary of the Treasury appreciates the value of these offers, and will have
application blanks widely distributed, through the Federal reserve
banks, to these institutions throughout the country. Subscribers'
agencies must transmit or cover by their own subscriptions all applications received by them; in the latter case they must specify the
number of subscribers and the aggregate amount of notes subscribed
for by each and furnish such further iriformation as may be prescribed by the Secretary of the Treasury; and allotment may be based
upon such information. No commissions will be paid upon subscriptions, and those who receive and transmit applications are therefore
rendering the service to subscribers as a patriotic duty. Only the
Federal reserve banks are authorized to act as fiscal agents of the
United States in connection with the operations of selling and delivering notes of the Victory Liberty loan.
Terms of application.—^Appli^cations must be accompanied by payment of 10 per cent of the amount of notes applied for. No payment
other than the 10 per cent required upon application should accompany any application for an aggregate amount of notes in excess of




246

REPORT ON THE FINANCES.

$10,000. Applications for an aggregate amount of notes not in excess
of $10,000 may, at the option of the subscriber, be accompanied by
payment in full, at face value without interest, for the note or notes
applied for. Applications must be for notes to an amount of $50 or
some multiple thereof. The subscriber should indicate on the application blank whether coupon or registered notes are desired; if no
Ereference is indicated, either coupon notes or registered notes may
e delivered. All applications will be deemed to be for notes of the
4f per cent series, except applications specif3dng notes of the 3f per
cent series; but the subscriber may, nevertheless, at any time before
completion of payment, by notice in writing, elect to receive notes
of either series in the first instance.
Time of closing application hooks.—Applications accompanied by
payment as aforesaid must reach the Treasury Department or^a Federal reserve bank, or one of said branches, or some incorporated bank
or trust company within the United States (not including outlyiag
territories and possessions), not later than the close of business on
May 10, 1919. Applications received b}^' any incorporated bank or
trust company on or before May 10, 1919, must, by such bank or
trust company, be transmitted to, or covered by its own subscription
to, the Federal reserve bank of the district in which it is located,
reaching such Federal reserve bank not later than the close of business
on May 20, 1919, accompanied by pa3nnent as aforesaid. The right
is reserved by the Secretary of the Treasury to close the subscription
on any earlier date, to reject any applications, and to waive delay in
making application and payment.
AUotment.—Applications from any one subscriber for an aggregate
amount of notes not in excess of $10,000 wUl be allotted in full.
Applications for an aggregate amount of notes in excess of $10,000
will be received subject to allotment. The issue will be limited to
$4,500,000,000, except as it may be necessary to increase the amount
of the issue in order to make allotment in full on applications from
subscribers for aggregate amounts of notes not in excess of $10,000,
and except as it may be necessary to increase or decrease the amount
of the issue in order to facilitate allotment, and the Secretary of the
Treasury reserves the right to reject any application for an aggregate
amount of notes in excess of $10,000, to make allotment of part of
the amount of notes applied for, to make allotment in full upon applications for smaller amounts, and to make reduced allotments upon,
or to reject, applications for larger amounts, and to make classified
allotments and allotments upon a graduated scale; and his action
in these respects will be final. The Secretary of the Treasury can
not undertake to collate applications with a view to the precise
ascertainment of the aggregate amount of notes applied for by
each subscriber and, while reserving the right to reject any application or to reduce the amount of notes applied for in any case where
it appears that the aggregate amount oi notes applied for by any
one subscriber is not truly shown on the face of any one application,
the allotment may be based upon the several applications and reports
filed with the severaf Federal reserve banks and the Treasury Department and without collation within or as between the said banks
and the Treasury Department; and his action in these respects shall
be final. Allotments will be made before June 3, 1919, and the basis




SECRETARY OF THE TREASURY.

247

of allotment will be publicly announced. Notices of allotment will
be mailed promptly thereafter by the several Federal reserve banks.
Terms of payment.—Payment for notes allotted, in addition to the
10 per cent paid on application, must be made so as to reach a
Federal reserve bank or a branch thereof as follows: 10 per cent on
July 15, 20 per cent on August 12, 20 per cent on September 9, 20
per cent on October 7, and 20 per cent on November 11, 1919, with
accrued interest from May 20, 1919, on the five deferred installments.
Receipt of installment payments made to official agencies prior to
payment in full will be acknowledged by the several Federal reserve
banks. Payments must be made when and as herein provided under
penalty of forfeiture of any and all installments previously paid,
and of all right and interest in the notes allotted. Payment for
notes allotted may be sooner completed, b u t only so as to reach a
Federal reserve bank or a branch thereof on May 20, 1919, or, with
accrued interest from May 20, 1919 (the previous installment or
installments having been duly paid), on July 15, August 12, September 9, or October 7, 1919. Payment for notes allotted to subscribers
for aggregate amounts of notes in excess of $10,000 can not be completed on May 20, but may be completed, with accrued interest
irom May 20, 1919, after public announcement of the basis of allotment, on a date or dates, not earlier than June 3, nor later than
June 17, 1919, named in the announcement of allotments, or on any
later installment date. Upon applications for aggregate amounts of
notes in excess of $10,000, no payment other than the 10 per cent
required will be received with the application, and in case oi partial
allotments upon such applications the excess of the 10 per cent
payment will be applied upon the next installment or installments
and no accrued interest will be charged on that part of any installment covered by the amount so applied; and in case of the allotment
of less than 10 per cent of the amount applied for, the balance of
the 10 per cent payment made with the application will be returned
as promptly as possible without interest. In case of the rejection
of any application, the 10 per cent payment made with the application will be returned as promptly as possible without interest.
Payment in United States Treasury certificates oiindehtedness.—Pay-,
ment of (1) the first installment of 10 per cent upon application, or
(2) completion of payment upon application, or^on May 20, 1919,
when and as permitted hereunder, or (3) completion of payment on
the date or dates, not earlier than June 3 nor later than June 17,
1919, named in the announcement of allotments, when and as permitted hereunder, may be made in Treasury certificates of indebtedness of Series V of any issue not previously matured. Payment on
July 15, 1919, and subsequent installment dates, may be made in
Treasury certificates of the issues, if any, maturing or called for
redemption on the said installment dates, respectively. Treasury
certificates will be received at their face value. The accrued interest
on Treasury certificates (which, in the case of payment of the first
installment, or payment in full, when and as permitted hereunder,
on or before May 20,1919, will be computed to May 20, 1919, or earlier
maturity) will be paid to the subscriber. Treasury certificates thus
presented must not be of a larger face value than the amount then
to be paid on the subscription, and subscribers should obtain certifi-




248

REPORT ON THE FINANCES.

cates in appropriate denominations in advance. Treasury certificates
of any series acceptable in payment of taxes will not be accepted in
payment on subscriptions for notes.
How to malce payments.—It is strongly recommended that subscribers avail themselves of the assistance of their own banks and
trust companies, in which case they will, of course, make payments
through such institutions. In cases where they do not do so, subscribers should raake payment either to the Treasury Department
in Washington or to a Federal reserve bank, or branch thereof, in
cash, or by barik draft, certified check, post-office money order, or
express company money order, made payable to the order of the
Secretary of the Treasury, if the application is filed with the Treasury
Department in Washington (thus: "The Secretary of the Treasury,
Victory Liberty loan account"), or, if the application is filed elsewhere,, made payable to the order of the Federal reserve bank of
the district in which the application is filed (thus: "Federal Reserve
Bank of
, Victory Liberty loan account"). Incorporated
banks and trust companies in the United States, duly qualified as
special depositaries of public moneys under Department Circular
No. 92 as amended and supplemented April 17, 1919, may, up to
the amount for which such depositaries respectively shall be qualified
in excess of then existing deposits, when so notified by Federal reserve
banks, make payment by credit of amounts payable hereunder on
or before May 20, and on the date or dates not earlier than June 3
nor later than June 17, 1919, named in the announcement of allotments, and, if and to.the extent from time to time authorized by
the Secretary of the Treasury, on later installment dates.
Delivery.—^Notes will be delivered promptly after due completion
of payment therefor. Notes of the 4 | per cent series may be delivered
prior to May 20, 1919, to subscribers for aggregate amounts of notes
not in excess of $10,000, who make payment in full in cash upon
application on or before May 10, 1919. In making deliveries before
May 20, 1919, the right is reserved to deliver notes of the largest
denomination or denominations, not exceeding $1,000, contained in
the respective amounts of notes subscribed for. A limited amount
of notes of the 4 | per cent series will be made available to incorporated
banks and trust companies within the United States prior to May
10, 1919, for delivery to subscribers for aggregatie amounts of notes
not in excess of $10,000, but only upon the terms and conditions
set out in the official application blank (Form L and C 182) provided
for that purpose. Notes will be delivered by the several Federal
reserve banks as fiscal agents of the United States, as far as practicable in accordance with written instructions given by the subscribers,
and, within the continental United States, at the expense of the
United States.
Interest.—^As the notes are dated May 20, 1919, no accrued interest
will be due on subscriptions for aggregate amounts of notes.not in
excess of $10,000 paid for in full on or before that date, when and as
permitted hereunder. No rebate of interest will be allowed either
on account of full payment in advarice of May 20, 1919, or on account
of the first installment of 10 per cent. Upon completion of payment when and as permitted hereunder on the date or dates, not
earlier than June 3 nor later than June 17, 1919, named in the
announcement of allotments, or upon completion of payment on



SECRETARY OF THE TREASURY.

249

July 15, August 12, September 9, October 7, or November 11, 1919,
the subscriber will be required to pay accrued interest from May
20, 1919, on the deferred installment or installments at the respective
rate or rates borne by the notes to be delivered.
Further details.—The Secretary of the Treasury reserves the right
to make special arrangements for subscriptions for the notes at not
less than par from persons in the military or naval forces, of the
United States.
Further details may be announced by the Secretary of the Treasury
from time to time, information as to which, as well as forms for application, may be obtained from the Treasury Department or through
any Federal reserve bank.
CARTER GLASS,

'




Secretary ofthe Treasury.

250

REPORT ON T H E FINANCES.
EXHIBIT

9.

[Treasury Department, Victory Liberty Loan. Form L & C 181. Loans and Currency.1

FOBM OF APPLICATION FOB NOTES. OF THE VICTOBY LIBEBTY
LOAN.
U N I T E D STATES OF AMERICA CONVERTIBLE GOLD N O T E S OF
1923, VICTORY LIBERTY LOAN.

1922-

APPLICATION FOR NOTES.

Dated,To

THE

SECRETARY OF THE

. . , 1919.

TREASURY:

The undersigned hereby applies for $_
par amount of United
States of America convertible gold notes of 1922-1923,^ and agrees
to pay par for all notes allotted on this application and accrued
interest from May 20, 1919, on any deferred iastaUments, in accordance with the terms of Treasury Department Circular No. 138, dated
April 21, 191^9. The sum of $
^ is inclosed herewith. The
undersigned desires (registered ^) (coupon ^) notes of the denominations indicated below.^
Signature of subscriber in full:
(Mr. Mrs. Miss.)
(First name infull.)
(Middle name or initial.)
(Last name.)
(Or complete legal name of corporation, partnersbip, or other subscriber.)

Address: Number and street
City or town
County

.._._
State

This application should be transmitted through the subscriber's bank, trust company, or other agency acting on his behalf, or it may be filed direct with the Federal
reserve bank of his district or a branch thereof, or the Treasury Department, Washington. It must reach some incorporated bank or trust company in the United
States (not including outlying territories and possessions), or a Federal reserve
bank or a branch thereof, or the Treasury Department, on or before the close of business May 10, 1919.
1 Notes ofthe 4f per cent series will be delivered upon this application, unless otherwise indicated over
the signature ofthe subscriber below.
Please deliver 3f per cent notes upon this application.
(Signature of subscriber.)
2 Applications must be accompanied by payment of 10 per cent of the amount of notes applied for.
Applications for an aggregate amount of notes not in excess of $10,000 may be accotnpanied by payment
in full.
3 Strike out the word "registered" or the word "coupon," which ever form of note is not desired. If
no preference is indicated, either, coupon notes or registered notes may be delivered. Unless otherwise
directed in writing, notes will be delivered to the name and address written above, and if registered, will
be registered in such name and address.
* Indicate below denominations of notes desired. If no indication is given, notes of any denomination
may be delivered.
No. of notes.
Denomination.
Amount.




150
$100
$500
$1,000
$5,000
. $10,000
* $50,000
* $100, 000
* Registered notes only.

TOTAL, $.
(which must agree with amount
of notes applied for.)

SECRETARY OF T H E TREASURY.
EXHIBIT

251

10.

[Treasury Department, Loans and Currency. Form L & C 182.]
FOBM OF APPLICATION BY AN INCOBPOBATED BANK OB T B U S T
COMPANY F O B COUPON NOTES O F T H E VICTOBY L I B E B T Y LOAN
FOB ADVANCE DELIVEBY.
VICTORY LIBERTY LOAN FOUR AND THREE-QUARTERS
CONVERTIBLE GOLD NOTES OF 1922-1923.

PER

CENT

APPLICATION B Y A N INCORPORATED B A N K O R T R U S T COMPANY

FOR

COUPON NOTES FOR ADVANCE DELIVERY.
Dated,
To

THE FEDERAL R E S E R V E B A N K OF
AS FISCAL A G E N T OF THE U N I T E D STATES:

.., 1919.°
,

The undersigned hereby applies for $
par amount of United
States of America four and three-quarters per cent convertible gold
notes of 1922-1923 in coupon form described,in Treasury Department
Circular No. 138, dated AprU 21, 1919, which the undersigned expects
to be able to sell to subscribers for cash for advance delivery upon the
terms set forth in said circular and in this application. Please deliver
such notes to the undersigned as soon as triey are avaUable.
The undersigned hereby agrees to use its best efforts to obtain
subscriptions for said nates at par, and that it wUl not sell, nor offer .
for sale, nor enter into any agreement for the sale of, nor deliver,
any of the notes obtained upon this application before June 17, 1919,
except against payment in full in cash of the par amount thereof
upon application on or before May 10, 1919, by subscribers for aggregate amounts of such notes not in excess of $10,000 for any one
subscriber. In making deliveries to such subscribers, the undersigned
hereby agrees to deliver, in so far as practicable, notes of the largest
denomination or denominations, not exceeding $1,000, contained in
the respective amounts of notes subscribed for. The undersigned
hereby agrees to hold any notes obtained upon this application
remaining unsold at the close of business on May 10, 1919, and at the
direction of the above-named Federal reserve bank, as fiscal agent
of the United States, either (1) to redeliver such notes to such Federal
reserve bank on demand against repayment of the face amount thereof
without interest, or (2) to retain such of said notes as may be covered
by any aUotment made to the undersigned for itself or its customers
upon subscriptions filed with such Federal reserve baiik.
In payments at par for the amount of notes hereby applied for—
A. Please charge our account with
$..
B. We inclose check for
:
$
C. We inclose certificate of advice showing that there
has been deposited with the undersigned for
your account, as fiscal agent of the United
States, in accordance with Treasury Depart- ,
ment Circular No. 92, as amended and supple• . mented, the sum of (see note 1 ) . $
D. We iaclose (or you may apply for our account)
Treasury certificates of indebtedness. Series
V
(seenote2)
$




252

R E P O R T ON THE FINANCES.

The undersigned desires to receive upon this application coupon
notes in the following denominations:
. of
_
$50 each, $ . . . . . . . '
of
$100 each,
..
. of
$500 each,
of $1,000 each,
of $5,000 each,
. J . . . . of $10,000 each, . . . . . . .
Total,
Signature in full of applicant incorporated bank or trust company:
.By
Official title
Address in fuU
NOTE 1.—If the applicant bank or trust company is duly qualified as a special
depositary of public moneys to a sufficient amount in excess of then existing deposits,
payment may be made upon this application by credit upon notification by a Federal
reserve bank. If the applicant is not so qualified as a depositary, payment must be
made by cash, certified check, bank draft, or charge against its account with a Federal
reserve bank, br in Treasury certificates as pro^dded in note 2 below. A qualified
depositary making payment by credit for note's delivered on this application will not
be required to pay interest on the resulting deposit for the period prior to May 20,
1919, except upon the amounts and from the dates of payments to it by subscribers for
notes delivered upon this application. The depositary will be required to render separate sworn reports to the Federal reserve bank of its district to date of May 19, inclusive, on Form L (revised), public moneys, showing the daily amounts remaining
unsold of the notes so paid for by credit.
NOTE 2.—Treasury certificates of indebtedness of Series V A and V B, but of no
other series, will be accepted at their face value in payment for notes applied for,
interest thereon to cease at maturity on May 6,1919, and May 20,1919, respectively, or
earlier if and to the extent that the notes delivered in exchange therefor are earlier
sold to subscribers for cash. Accrued interest on Treasury certificates so accepted
to maturity, or td such earlier date of sale of the notes delivered in exchange therefor,
will be paid by the Federal reserve bank after May 6,1919, or May 20, 3919, as the case
may be, upon receipt of a separate sworn report from the applicant bank or trust company giving the amounts and dates of cash payments to it by subscribers for notes
so delivered. The applicant bank or trust company will be required to render such
reports to the above-named Federal reserve bank on Treasurer's Form 5780 (revised),
showing the daily amounts of such notes sold, to date of May 5, inclusive, in case of
payment in Treasury certificates of. Series V A, and to date of May 19, inclusive, in
case of payment in Treasury certificates of Series V B.




253

SECRETARY OF THE TREASURY.
EXHIBIT

11.

B E S U L T S OF VICTOBY L I B E B T Y LOAN SUBSCBIPTIONS, ACCOBDI N G TO S T A T I S T I C S C O M P I L E D B Y T H E W A B L O A N O B G A N I Z A T I O N
ON T H E B A S I S O F S U B S C B I P T I O N S A S O B I G I N A L L Y B E P O B T E D .
Results by Federal Reserve Districts.

Quota.

Subscriptions
received.

Percentage of
quota
subscribed.

Boston
New York
Philadelphia..
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis...
Kansas City...
Dallas
San Francisco.

$375,000,000
1,350,000,000
375,000,000
450,000,000
210,000,000
144,000,000
652,500,000
195,000,000
157,500,000
195,000,000
94,500,000
. 301,500,000

$425,159,950
1,762,684,900
422,756,100
496,750,650
225,146,850
143,062,050
772,046,550
210,431,950
• 176,114,850
197,989,100
87,504,250
319,120,800

113.38
130.57
112.73
110.39
107.21
99.34
118.32
107.91
111.82
101.53
92.60
105.84

817,822
2,484:, 532
984,975
1,253,334
500,000
320,699
2,267,411
367,444
931,767
680,967
200,000
994,944

11.7
18.9
14.8
13.4
5.3
3.1
16.0
3.9
18.0
9.1
3.5
15.0

Total
:...
United States Treasury..
Grand total.

4,500,000,000

5,238,768,000
111,140,300

116.41 11,803,895

11.3

4,500,000,000

5,249,908,300

District.

Percentage of
Subscrib- populaers.
tion subscribed.

1 Includes Army and Nasry subscriptions subject to change.
The percentage of population subscribed is based on the estimated population of
t h e United States on J u l y 1, 1917, namely, 103,620,273.
Results by States.

state.

Alabama
Arizona
Arkansas
California
Colorado
:.
Connecticut.
,
Delaware
,
District of Columbia
Florida
.,
Georgia
,
Idaho
,
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine....
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire
New Jersey
New Mexico
.'...
New York
North Carolina
North Dakota
Ohio




Quota.

$23,482,000
7,756,800
20,541,150
191,427,300
28,385,350
63,665,100
12,889,600
20,307,000
17,288,000
41,154,000
11,039,650
306,416,650
96,328,200
110,•925,000
49,442,750
41,640,750
35,411,600
17;348,800
58, 653,000
245,356,600
118,425,000
92,000,000
22,632,800
•70,531,250
11 000,000
5i; 907,900
3,611,700
15,279,600
140,737,000
3,050,700
,228,447,400
31,101,000
500,000
• 18,
249' 678,400

Subscriptions
received.

$21,742,1.50
6,679,900
20,488,600
203,025,300
30,051,250
9.5,466,2.50
13,807,650
28,362,250
18,884,150
39,443,100
11,669,900
371,873,002
105,102,950
111,787,450
51,657,200
49,075,350
34,333,350
19,027,700
62,688,750
252,767,.450
155,787,450
96, 677,250
18,951,750
73,578,"050
12,527,100
44,019,150
3,668,700
16,937,050
178,645,050
1,130,850
,607,199,250.
27,164,250
„ 18,890,700
281,908,250

Percentage of
quota Population.
subscribed.
92.59
86.11
99.74
106. 58
105. 86
149. 95
107.12
139. 66
109.23
95.84
105. 71
121.3
109.1
100.77
104.52
117.8
96.95
109.67
106.8
103.02
135.7
105.08
105. 8
104.3
113.88
84.71
101.5
110.7
126.9
37.06
130.84
87.34
102.11
112.98

Number
subscribers.

60,598
2,363,939
30,665
263, . 8
58
.50,989
1,766,343
519,178
3,029,032
118,716
988,320
200,931
1,245,373
25,979
215,160
141,582
369,282
3.3,432
916,185
97,568
2,895,841
52,404
445,176
1,174,348
6,234,665
320,333
2,835,000
307,195
2,224,771
153,164
1,851,870
. 92,509
2,394,000
79,892
1,856,954
53,476
777,340
126,987
1,373,672
466,173
3,775,973
402,130
3,094,000
490,594
2,312,445
41,433
1,976,000
193,793
3,429,016
75,985
472,936
1,284,126
137,229
9,221
110,738
444,429
50,117
3,014,194
446,713
423,649
15,444
10,460,182 2,029,910
2,434,381
50,834
765,319
101,064
5,212,085
771,329

Percentage of
population subscribed.
2.5
11.6
2.8
17.14
12.01
16.1
12.07
38.3
3.6
3.3
11.8 •
18.8
11.3
13.3
8.2
3.8
4.3
6.8
9.2
12.3
13
21.26
2.09
5.6
16.06
10.67
8.3
11.2
14.8
3.6
19.4
2.08
13.2
14.7

254

REPORT ON T H E FINANCES.
Results by States—Continued.

State.

Subscriptions
received.

Quota.

Percentage of
quota
subscribed.

Population.

Number
subscribers.

Percentage of
population s u b scribed.

$30,693,850
26,798,400
509,646,900
37,500,000
24,948,000
22,500,000
40,344, 900
80,605,500
13,851, 900
9,515,000
51,366,000
44,365,250
34,160,850
105,183, 950
. 6,414,550
954,900
4, 788,000

Total.....

$33,331,300
28,409,350
564,173,200
45,446,050
22,994,300
24,589,400
44,343,800
75,254,400
13,720,400
11,648,300
60,016,250
47, 975,350
39,866,150
94,296,100
7,198,450
1,428,850
5,005,650
11,140,300

108.66
106.01
110.69
121.18
92.17
109.28
109.9
93.36
99.05
122.42
116.82
108.13
116.4
89.6
112.04
140.96
104.54

2,289/855
861,992
8,660,042
625.865
1,643,205
716.972
2,304,629
4,515,423
443.866
364, 946
2,213,025
1,597,400
1,412,602
2,527,167
184,970
64^ 356
191,909

84,128
73,004
1,289,764
66,443
38,27P
121,49
66,61
288, 97
52,78
29,31
144,84/
173,42,
56,16 i
355,625
28,331
5,431
9,676

3.6
8.4
14.8
10.6
2.3
16.9
2.8
6.9
11.6
8.02
6.5
10.8
3.9
14
15.3
8.4
5.04

4,500,000,000

Oklahoma.
Oregon
Pennsylvania..
Rhodelsland...
South Carolina.
South Dakota..
Termessee
Texas
Utah
Vermont
,
Virginia
Washington
West Virginia..
Wisconsin
Wyoming
Alaska
Hawaii
U . S. T r e a s u r y . ,

5,249,908,300

116.66

103,907,256

11,803, 895

11.3

Subscriptions in cities having a population of 25,000 or over.

City.

A k r o n , Ohio
Albany, N . Y . . .
,
Allentown, P a
Altoona, P a
Amsterdam, N. Y
Asheville, N . C
A t l a n t a , Ga
A t l a n t i c City, N . J
Auburn, N. Y
A u g u s t a . Ga
A u r o r a , 111
Austin, Tex
B a l t i m o r e , Md
B a n g o r , Me
B a t t l e Creek, Mich
B a y City, M i c h .
Bayonne, N . J
Beaumont, Tex
Bethlehem and South Bethlehem, Pa.
Binghamton, N. Y
Birmingham, Ala
B l o o m i n g t o n , 111
Boston, Mass.
B r i d g e p o r t , Conn
B r o c k t o n , Mass
:
B r o o k l i n e , Mass
,
Buffalo, N . Y . . . . . .
Burlington, Iowa
Butte, Mont
C a l u m e t , Mich
Cambridge, M a s s . . . ;
Camden, N. J
C a n t o n . Ohio
Cedar R a p i d s , Iowa
Charleston, S.C
Charlotte, N . C
Charleston, W . Va
Chattanooga, Tenn
Chelsea, Mass
Chester, P a
Chicago a n d Cook C o u n t y , 111
Chicopee, Mass
Cincinnati, Ohio
Clarksburg, W . V a
'..




Quota.

$8,225,550
11,917,300
3,806,100
1,841,850
1,814,400
926,600
10,772,500
3,086,300
2,162,200
2,299,200
1,519,600
42,403,400
1,236,000
1,767,100
1,765,200
3,718,450
2,960,500
6,911,500
96,567,000
6,631,300
2,813,000
4,755,000
46,236,300
3,000,000
571,000
5,655,000
6,659,600
5,031,900
4,886,700
2,658,400
3,209,200
5,029,100
1,128,700
3,492,350
189,225,000
860,000
28,812,400
1,754,300

s
at d
S u b s c r i p t i o n s E u t i me r eof
n mb
received.
subscribers.

$8,710,200
13,505,400
4,196,000
• 1,941,200
2,338,000
1,105,600
11,833,500
3,312,700
2,413,950
2,327,900
1,558,450
1,435,100
45,231,850
1,498,100
2,200,000
4,000,000
2,766,800
1,814,750
4,113,100
3,125,500
6,043,950
1,429,900
126,582,250
6,925,400
3,208,700
1,425,200
61,283,950
1,301,000
2, 907,750
626,350
4,198,900
7, 834,500
5,127, 750
2,323,750
5,292,6.50
2,999, 800
3,307,45.0
5,083,100
927,450
4,733,950
235,000,000
201,050
38,052,850
1,541,400

57,893
29,805
16,591
• 5,905
4,617
2,285
16,173
6,836
9,901
5,281
6,17.8
2,825
86,581
2,799
7,500
5,000
16,357
5,999
8,800
7,961
12,793
3,213
151,574
22,702
11,407
2,781
147,682
1,641
8,519
718
2,781
24,448
14,749
9,506
8,212
2,896
7,367
8,088
2,782
19,801
800,000
472
88,598
. 2,662

Population.

160,000
104,199
70,000
60,000
37,103
30,000
154,839
60,000
37,385
41,040
34,204
34,814
600,000
26,000
29,480
47,942
50,000
27,711
54,142
53,973
132,685
27,258
686,092
121,579
56,878
27,792
468,558
25,030
39,165
35,000
104,839
110,000
50,217
37,308
65,000
45,000
35,000
44,604
32,452
. 75,000
2,497,722
25,401
364,463
30,000

Percentage of
population s u b scribed.
36.2
28.6
23.7
9.8
12.4
7.61
10.5
11.4
26.5
12.9
18.1
8.1
14.43
10.8
25.4
10.4
32.7
21.6
16.3
14.7
9.6
11.8
22.1
18.7
20.1
10.0
31.5
6.6
21.8
2.1
2.7
22.2
29.4
25.5
12.63
6.4
21.05
18.1
8.6
26.4
32.0
1.9
24.3
8.87

SECRETARY OF THE TREASURY.

255

Subscriptions in cities having a populateon of .25,000 or oveir—Continued.

City.

Cleveland, Ohio
Clinton, Iowa
Cohoes, N . Y
Colorado Springs, Colo..
Columbia, S . C . . .
Columbus. Ohio
Council Bluffs, Iowa....
Covington, Ky
Cumberland, Md
Dallas. Tex
Danville, 111
Dayton, Ohio
Davenport, Iowa
Decatur, 111
Denver, Colo
Des Moines, Iowa
Detroit, Mich
Dubuque, Iowa
Duluth, Miim
Durham, N . C
East Chicago, Md
East Orange, N . J :
Easton, Pa
East St. Louis, 111
Elgin, 111
Elizabeth, N. J
Elmira, N . Y
El Paso, T e x . . . . .
Erie, P a . . .
Evansville, Ind
.
Everett, Mass
Fall River, Mass
Fitchburg, Mass
Flint, Mich
Fort Smith, Ark
Fort Wayne, Ind
Fort Worth, Tex
Galveston, Tex
Gary, Ind
Grand Rapids, Mich....
Great Falls, M:ont..
Green Bay, Wis
Greensboro, N. C
Greenville, S.C
Hagerstown, Md
Hamilton, Ohio
Hammond, Ind
Hamtramck, Mich
Harrisburg, Pa
Hartford, Conn
Haverhill, Mass
Hazelton, Pa
Highland Park, Mich...
Hoboken, N . J
Holyoke, Mass
Houston,. Tex
Huntington, W. Va
Indianapolis, Ind
Jackson, Mich
Jacksonville, Fla
Jamestown, N . Y
Jersey City, N. J
Johnstown, Pa
Joliet, 111
Joplin, Mo
Kalamazoo, Mich
Kansas City, Kans
Kansas City, Mo
Kenosha, Wis
Kingston, N . Y
Knoxville, Term
La Crosse, Wis
Lancaster, Pa
Lansing, Mich
Lawrence, Mass
Lebanon, Pa
Lewiston, Me
Lexington, Ky
Lima, Ohio




Quota.

$80,658,900
1,149,900
1,772,350
3,494,800
9,723,050
1,408,750
1,562,650
7,000,000
5,907,800
13,433,800
5,500,000
1,420,200
1,686,200
2,650,20O
2,600,000
3,216,200
- 2,674,800
2,156,900
5,105,100
4,612,250
1,051,500
5,551,350
2,533,500
1,241,900
4,100,000
1,516,350
9,000,000
1,001,550
1,367,600
1,516,700
1,419,550
4,420,400
12,353,000
2,534,000
2,379,450
5,751,100
3,445,000
7,479,250
1,568,900
5,094,B50
2,172,800
14,156,100
4,476,100
898,700
1,643,100
18,000,000
1,734,100
2,840,000
1,060,000
4,736,100
4,187,000
1,586,950
840,000
1,987,850
1,351,900

Subscriptions
received.

Estimated
number of
subscribers.

186,751
2,340
2,492
4,985
8,489
34,259
3,133
5,828
2,292
16,266
•2,718
15,782
12,700
3,638
39,013
10,313
131,000
3,500
27,117
1,507
6,385
8,674
7,697
14,332
4,120
11,676
10,369
9,611
15,173
8,410
2,651
6,763
4,603
20,217
3,100
14,340
16,330
8,663
17,667
22,359
4,218
5,320
2,205
2,187
5,286
3,592
7,683
475
21,521
37,848,150
45,5172,678,850
5,095
3,445,450
9,053
3,856,050
1,965
6,586,850
21,396
4,162,450
9,259
8,019,250
32,797
1,494,850
3,235
17,961,350
68,000
1,651,550
8,839
5,233,800
8,036
2,314,150
7,739
14,186,850
18,813
4,434,950
17,478
3,000,000
13,000
979,950
2,143
1,829,350
6,363
2,066,350
11,173
21,588,600
• 52,832
3,202,450
9,180
2,081,900
2,744
2,288,850
6,057
1,289,950
2,684
4,860,250
8,880
1,588,000
8,981
3,750,000
7,851
1,699,450
3,612
864,250
2,121
2,553,850 I
3,120
1,409,300 I
2,964

$84,380,950
1,253,500
1,250,250
1,865,500
5,430,700
12,164,550
1,154,150
1,679,300
1,529,800
7,308,100
1,311,000
6,239,850
3,510,000
2,041,400
13,795,650
6,225,250
86,236,000
1,622,900
6,576,250
1,418,100
931,950
2,666,950
3,178,250
2,772,600
1,376,150
4,480,800
2,704,600
2,112,750
5,047,500
4,612,550
522,600
5,656,800
2,719,900
3,503,650
1,361,000
5,750,000
4,765,900
• 2,417,350
1,887,000
7,467,550
1,075,100
1,161,900
1,070,950
1,427,300
1,605,700
1,909,200
1,134,900
150,200
4,753,650

Population.

560,663
27,386
25,211
32,971
40,000
181,548
31,484
53,270
26,000
124,527
32,261
116,577
48,811
39,631
245,523
101,598
571,748
39,873
100,000
30,000
28,743
42,458
35,000
58,547
28,203
100,000
38,120
63,705
66,525
69,647
33,484
119,295
37,826
80,000
25,000
76,183
104,562
41,86365,000
128,291
40,000
29,353
30,000
25,000
25,000
35,279
26;171
25,000
72,015
98,915
44,115
38,000
25,000
70,324
57,730
112,307
50,000
271,708 i
35,363
57,699
36,580
267,779
75,000
38,010
32,848
48,886
91,658
281,911
31,576
26,771
36,346
30,417
50,853
40,498
85,892
30,000
26,247
35,099
30,508

Percentage of
population subscribed.
33.3
8.5
9.9
15.1
21.22
18.9
10.0
10.9
8.8
13.1
8.4
13.5
26.0
9.2
15.9
10.2
22.9
8.8
27.1
5.02
22.2
20.4
22.0
24.5
14.6
11.7
27.2
15.1
22.8
12.1
7.9
5.7
12.2
25.3
12.4
18.8
15.6
20.7
27.2
17.4
10.5
18.1
7.35
8.74
21.14
10.2
29.4
1.9
29.9
46.0
11.5
.23.8
7.9
30.4
16.0
29.2
6.47
25.0
25.0
13.9
21.2
7.0
23.3
34.2
6.5
13.0
12.2
18.7
29.1
10.2
16.7
8.8
17.5
22.2
9.1
12.0
8.1
8.9
9.7

256

REPORT ON THE FINANCES.
Subscriptions in cities having a population or 25,000 or over—Continued.

City.

Lincoln, Nebr
L i t t l e Rock, A r k
L o r a i n , Ohio
L o s Angeles, Calif
Louisville, K y
L o w e l l , Mass
Lynchburg, Va
L y n n , Mass
Macon, Ga
Madison, W i s
M a i d e n , Mass
Manchester, N . H
McKeesport, Pa
Memphis, T e n n
Meriden, Conn
Milwaukee, W i s . .
Minneapolis, Minn
Mobile, Ala
Moline, 111
M o n t g o m e r y , Ala
Montclair, N ' . J
Mt. Vernon, N . Y
Muncie, Tnd
Muskegon Mich
Muskogee, Okla
Nashua, N. H . . . ^
Nashville, T e n n . . _
, ,
N e w a r k , 1^. J
Newark, Ohio..
N e w Bedford, Mass
N e w "Britain, Conn .
N e w Brunswick, N . J
Newburgh, N . Y
N e w Castle, P a
N e w Haven, Conn
N e w Orleans, L a
Newport, K y
Newport, R . I
Newport News, Va
N e w Rochelle, N . Y
N e w t o n , Mass
NewYork, N . Y
Niagara Falls, N . Y
Norfolk, V a
Norristo^wn, P a
North Hudson,N. J
Norwalk, Conn
O a k l a n d , Calif
O k l a h o m a City, Okla
"
O m a h a , N e b r '..'..'.
Orange, N . J
.. . . . . .
Oswego, N . Y
Oshkosh, W i s . .
Paducah," K y
PassaicN.J
Paterson, N . J
Pawtucket, R . I
Peoria, 111
Perth Amboy, N . J
Petersburg, Va
Philadelphia, Pa
Pittsbmgh, Pa
Pittsfield, Mass
:
Plainfip.lrl, "NT. T.
Portland, Me. 1
P o r t l a n d , Oreg
Portsmouth. Va
Pottsville, P a
Poughkeepsie, N . Y
Providence, R . I
P u e b l o , Colo
Qninp.y, m .. _
Q u i n c y , Mass
Racine, W i s . :
Raleigh, N . C
Reading, Pa.
Richmond, V a . . .
Roanoke, Va...!




Quota.

$1,289,550
4,025,600
1,170,800
31,848,900
10,663,150
5,275,000
2,376,400
4,545,000
2,120,350
1,950,000
3,502,000
2,383,900
9,570,950
1,470,000
20,700,000
2,536,150
1,783,550
1,942,200
1,362,400
5,136,050
880,300
6,318,800
31,245,900
952,150
5,700,000
. . . .
2,385,000
2,218,200
2,398,100
2,251,950
9,224,000
20,235,050
610,100
2,100,000
1,677,400
1,456,100
4,335,000
1,000,561,600
2,697,200
7,535,100
:...
2,,254,950
3,874,500
1,371,500
9,974,925
3,057,300
8,889,100
1,286,700
1,214,500
,
. . .

937,600
3,386,900
6,408,200
4,500,000

, ,, ,

1,254,100
2,368,300
187,374,500
102,083,450
2,638,000
2,573,500
3,705,200
14,786,325
937,200
2,137,550
2,893,700
22,500,000
' 1,297,650
1,317,600
. 2,250,000
1,733,000
5,884,350
15,563,650
2,101,000

Subscriptions
received.

Estimated
n u m b e r of
subscribers.

$1,564,000
4,615,500
1,439,100
33,078,250
11,434,300
5,098,900
3,018,650
5,159,950
2,201,350
2,191,350
1,832,000
4,306,100
1,847,550
9,610,200
1,790,200
35,847,000'
18,578,800
2,491,700
2,281,350
1,460,150
3,054,350
2,758,200
1,703,200
1,325,400
5,909,900
986,650
6,275,850
41,383,450
1,043,100
6,518,000
3,217,4002,641,450
3,109,050
2,443,900
10,935,800
20,567,450
1,019,500
1,621,000
2,272,500
2,252,650
2,149,700
1,326,301,600
3,217,000
8,644,400
2,095,000
4,563,200
1,844,150
10,695,200
3,375,000
9,524,850
1,760,600
1,857,950
1,454,800
970,400
4,216,100
9,708,850
4,338,450
3,909,550
1,340,150
2,323,550
208,450,500
103,727,300
3,940,700
3,035,950
5,575,350
. 15,690,550
1,384,550
2,137,200
3,414,050
36,640,250
1,559,000
1,586,000
1,520,450
2,278,150
1,379,950
6,077,750
17,283,200
2,535,650

6,557
5,941
2,200
108,558
29,525
8,160
4,630
21,696
2,864
6,631
5,926
4,151
3,681
9,000
6,684
57,410
69,548
7,337
10,038
2,494
6,380
5,767
3,784
8,160
2,427
3,666
5,714
52,518
3,964
10,873
7,704
9,375
6,277
6,555
2i;796
36,005
3,441
3,930
11,654
5,538
619
1,404,299
13,140
• 20,260
4,868
5,787
3,814
48,591
8,640
25,948
5,000
5,301
3,836
4,553
10,523
30,922
5,847
20,000
6,445
2,084
350,903
' 131,544
7,460
6,345
14,630
32,906
8,586
2,571
7,256
49,459
8,909
5,500
4,788
15,572
2,234
10,147
18,892
13,907

. Population.

46,515
53,811
28,883
319,998
235,114
106,294
35,000
89,336
40,665
30,699
44,404
70,063
42,694
143,231
32,066
436,535
380,000
51,521
27,451
38,136
25,000
37,008
35,085
26,100
44,218
26,005
110,364
500,000
25,404
96,652
43,916
25,000
29,603
36,280
133,605
339,075
30,309
27,149
30,000
37,759
39,806
5,602,841
37,353
125,000
31,401
100,000
26,899
150,174
92,943
165,470
29,630
26,435
36,065
30,000
54,773
125,600'
51,622
71,458
50,000
35,000
1,800,000
533,905
32,121
25,000
58,571
207,214
40,000
25,000
30,390
224,326
54,492
36,730
32,642
46,486
25,000
130,000
160,000
45,000

Percentage of
population subscribed.
14.1

n.o
7.6
33.9
12.6
7.7
13.22
24.3
7.0
2L6
13.3
5.9
8.6
6.3
20.8
13.2
18.3
14.2
36.6
6.5
25.5
15.6
10.8
31.3
5.5
14.1
5.2
10.5
15.6

n.2

17.5
37.5
2L2
18.1
16.3
10.6
11.4
14.5
38.84
14.7
L6
25.1
35.2
. 16.2
15.5
5.8
14.2
32.4
9.3
15.7
17.2
20.1
10.6
15.2
19.2
24.6

n.3

28.0
12.9
5.9
19.5
24.6
23.2
25.4
25.0
15.9
2L46
10.3
23.9
22.0 >
16.3
15.0
14.7
33.5
8.93
7.8
11.8
30.9

SECRETARY OF THE TREASURY.

257

Subscriptions in cities having a population of 25,000 or o-yer—Continued.

Quota.

City.

Rochester, N. Y
Rockford, 111
Rock Island, 111
Saginaw, Mich
Salem, Mass
Salt Lake City, Utah.
San Antonio, Tex
San Francisco, Calif..
Savannah, Ga
Schenectady, N . Y . . .
Scranton, Pa
Seattle, Wash
Shamokin, Pa
Sheyboygan, W i s . . . .
Shenandoah, Pa
Shreveport, La
Sioux City, Iowa
Somerville, Mass
South Bend, Ind
Spartanburg, S.C
Spokane, Wash
Springfield, 111
Springfield, Mass
Springfield, Mo*
Springfield, Ohio
St. Joseph, Mo
St. Louis, Mo
.
St. Paul, Minn
Stamford, Conn
Superior, Wis
Syracuse, N . Y
Tacoma, Wash
Tampa, .Fla
Taunton,. Mass
Terre Haute, Ind
Toledo, Ohio...
Topeka, Kans
Trenton, N . J
Troy, N . Y
Tulsa, Okla
Utica, N . Y
Waco, Tex
Waltham, Mass
Washington, D. C
Waterburv, Conn
Waterloo, Iowa
Watertown, N . Y . . . .
Wheeling, W. Va
Wichita, Kans
Wilkes-Barre, P a . . . . .
Williamsport, Pa
Wilmington, Del
Wilmmgton, N. C
WinstOn-Salem, N. C.
Woonsocket, R. I
Worcester, Mass
Yonkers, N . Y .
York, Pa
Youngstown, Ohio. ..
Zanesville, O h i o . . . . . .

140325—FI 1919-




$23,440,300

2,393,000
7,494,950
3,657,300
79,318,150
4,266,150
3,-519,000
10,350,400
18,301,400
1,148,550
852,750
2,246,000
2,100,000
1,094,350
5,248,350
9,000,000
1,936,500
2,340,000
3,204,700
51,342,800
13,500,000
2,285,000
1,010,000
15,530,100
4,234,000
2,706,100
1,511,250
14,651,950
1,963,100
7,331,100
4,900,500
5,136,050
. 8,111,200
1,125,000
1,471,500
20,307,000
4,667,000
3,125,500
.5,631,200
3,319,300
6,823,550
2,921,950
10,035,950
2,464,150
1,692,200
2,250,000
11,283,000
2,559,300
3,102,300
8,219,050
1,721,100

-17

Subscriptions Estimated
number of
received.
subscribers.

$25,688,150
3,393,000
1,474,250
3,313,300
3,344,150
7,646,800
3,649,950
' 79,691,550
4,615,900
4,506,650

10,881,400
19,331,250
1,314,400
1,529,050
828,000
2,850,000
2,913,750
669,600
3,267,950
1,209,700
5,517,850
3,362,350
10,245,250
2,006,000
2,453,050
3,353,450
51,795,850
13,412,100
2,520,500
1,737,600
15,615,250
4,488,500
2,336,100
1,395,950
.3,044,850
15,561,000
2,242,600
7,859,650
5,843,400
5,909,900
8,292,650
1,233,500
1,236,^:000
28,384,150
6,217,800
1,237,700
5,095,450
5,735,300
3,419,200
7,233,950
3,148,450
10,332,500
1,990,800
1,763,450
1,471,050
12,651,700
3,335,350
4,184,250
8,792,550
1,824,800

4
22,
12,
143
11
19;
41
71
2;
2,
1
5i
8,
3i
6
2;
15:
2
21
4:
2
11
135:
52:
, 10:
6
22:

15:
2;
3
3;
39;
8,
26,
10,
7,
16!
4;
3:
141
18,
5
4
8
1:
23;

10;
18,
7;
1
3:
28,
9,

14
36
• 4

Population.

256,417
71,458
28,926
55,642
43,697
92,777
123,831
416,912
65,064
99,517
146,811
237,194
40,000
28,559
30,000
40,000
57,078
77,236
68,946
25,000
104,402
61,120
88,926
38,685
46,921
85,236
687,029
300,000
30,884
40,384
155,624
83,743
38,524
34,259
66,083
168,497
48,726
110,000
77,916
30,575
85,692
33,385
27,834
400,000
73,141
35,559
29,894
41,641
70,772
80,000
35,000
100,000
30,000
36,000
38,125
145,986
99,838
55,000
79,066

. 28,026

Percentage of
population subscribed.
27.7
11.1
28.2
IB.l
9.7
24.7

10.4
34.5
17.5
19.2
28.1
30.1
6.0
9.7
^6.2
13.0
14.7
4.7
9.8
8.04
14.6
4.6
24.5
10.3
4.5
13.1
19.7
17.4
32.7
14.9
14.7
18.1
7.4
9.3
5.2
23.7
.17.8
24.1
13.8
24.4
19.5
12.5
14.2
35.3
25.0
15.7
13.9
21.5
9.9
29.3.
29.7
18.2
24.85
5.2
8.6
19.8
10.0
26.5
46.6
16.5

EXHIBIT

12,

cn

00

ISSUES OF CEBTIFICATES OF INDEBTEDNESS FBOM A P B . 6, 1917, TO OCT. 3 1 , 1919.
F e d e r a l reserve district.
A u t h o r i z i n g act.

R a t e per
cent.

Total
amount.

A p r . 25,1917 J u n o 30,1917
M a y 10,1917 J u l y 17,1917
M a y 25,1917 J u l y 30,1917
J u n e 8,1917 . . . . . d o

' 3
3
3f
3i

'

Aug.
Aug.
Sept.
Sept.
Oct.
Oct.

9,1917 N o v . 15,1917
28,1917 N o v . 30,1917
17,1917 Dec. 15,1917
26,1917 . . . . . d o . . . . . . .
18,1917 N o v . 22.1917
^ , 1 9 1 7 Dec. 15,1917

3|
4
4
4

Philadelphia.

$268,20.5,000
200,000,000
200,000,000
200,000,000

$15,800,000
12,167,000
11,200,000
18,200,000

$136,150,000
98,512,000
125,300,000
100,500,000

$14,000,000
10,000,000
9,000,000
10,400,000

57,367,000

460,462,000

43,400,000

58,900,000

13,703,000

13,305,000

300,000,000
250,000,000
300,000,000
400,000,000
385,197,000
685,296,000

19,400,000
15,140,000
12,171,000
.22,174,000
30,149,000
33,010,000

175,000,000
152,938,000
204,347,000
212,100,000
179,475,000
543,683,000

12,800,000
9,882,000
8,850,000
20,000,000
24,000,000
13,600,000

33,700,000
24,157,000
25,113,000
34,209,000
38,863,000
26,471,000

2,800,000
7,235,000
3,180,000
7,004,000
'8,323,000
11,472,000

4,300,000
4,848,000
2,280,000
8,289,000
6,535,000
. 5,883,000

132,044,000 1,467,543,000

89,132,000

182,513,000

40,014,000

32,135,000

Cleveland.

Richmond.

Atlanta.

$5,350,000$14,000,000
2,753,000
15,000,000
2,000,000
10,800,000
19,100,000 -• 3,600,000

$8,000,000
2,605,000
1,700,000
1,000,000

o
H
O

>

•

^

•

O
Jan.
Feb.
Feb.
Mar.
Apr.

22,1918
8,1918
27,1918
20,1918
10,1918

A p r . -22,1918

• .

Issued in anticipation of t h e fourth
L i b e r t y loan:
Sept. 24,1917, as a m e n d e d A p r .
4,1918SeriesIV> A
Series I V , B




New York.

2,320,493,000

-

Issued in a n t i c i p a t i o n of t h e t h i r d
L i b e r t y loan:
S e p t 24,1917
Do
Do
Do
Do
Sept. 24,1917, as a m e n d e d A p r
4,1918
Total

Boston.

first

Issued in a n t i c i p a t i o n of t h e second
L i b e r t y loan:
A p r 24 1917
1:
DoDo . . . .
Sept. 24,1917
Do
Do
:
Total

D a t e of
maturity.

868,205,000

Issued in a n t i c i p a t i o n of t h e
L i b e r t y loan:
A p r 24 1917
Do
Do
Do
Total

D a t e of issue.

A p r . 22,1918
May. 9,1918
M a y 28,1918
J i m e 18,1918
J u l y 9,1918
July

4
4

t

41

517,826,500

18,1918

3,012,085,-500

•

J u n e 25,1918
J u l y 9,1918

Oct 24,1918
N o v . 7,1918

400,000,000
500,000,000
500,000,000
543,032,500
.551,226,500

4h

839,.646,500
753,938,000

20,025,000
29,134,000
35,369,000
53,690,000
39,731,000

209,685,000
241,322,000
172,666,500
193,700,500
21-5,448,000

36,468,000

222,486,000

214,417,000 1,255,308,000

53,000,000
53,100,000

64;:590,000
56,273,500

312,844,500
273,219,500

22,500,000
30,000,000
33,000,000
38,000,000
38,000,000

26,000,000
34,000,000
44,500,000
48,400,000
46,000.000

7,000,000
12,131,000
18,148,000
16,234,500
11,219,000

9,507,000
12,391,000
14,814,000.
14,557,000
17,095,000

35,000,000

39,133,500

. 11,097,000

11,209,000

196,500,000

238,0.33,500

75,829,500

79,573,000

80,000,000
66,550,000

19,013,000
15,073,-500

17,233,500
16,021,500

U2

Series IV,
Series IV,
Series IV,
Series IV,
Series IV,

C.
D.
E..
F..
G..

July
Aug.
Sept.
Sept.
Oct.

23,1918
6,1918
3,1918
17,1918
1,1918

Nov 21,1918
Dec.
5,1918
Jan. 2,1919
Jan. 16,1919
Jan. 30,1919

Total.
Issued iji anticipation of the Victory
Liberty loan:
Sept'. 24,1917, as amended Apr.
4,1918—
Series V, A
,
SeriesV, B
,
SeriesV, C
,
SeriesV, D
SeriesV, E
,
Series V, F
:...,
SeriesV, G
Sept. 24,1917, as amended Apr.
4,1918, and Mar. 3,1919—
SeriesV, H
'
Series V, J
'..
SeriesV, K

4,659,820,000

Dec.
Dec.
Jan.
Jan.
Jan.
Feb.
Feb.

5,1918
19,1918
2,1919
16,1919
30,1919
13,1919
.27,1919

Mar. 13,1919
Apr. 10,1919
May 1,1919

Mav
May
June
June
July
July
July

Total.




13,168,500
14,968,500
16,205,500
15,872,000
21,387,500

36,872,500
38,400,000
42,061,000
45, 778,000
46,808,500

55,927,000
52,500,000
74,088,000
59,321,500
52,182,500

381,152,500 1,680,989,000

316,020,000

440,569,000

117,983,500

114,857,000

47,901,000
45,010,500
60,154,500
49,090,500
48,800,000
48,421,500
41,909,000

222.830,000
199; 117,000
300,977,500
203,609,500
265,844,500
217,497,500
174,501,500

44,128,000
40,409,500
53,-300,000
43,533,500
46,173,000
43,323,500
38,247,000

.50,700,000
52,000,000
66,250,000
„ 50,400,000
. 60,786,500
59,100,000
51,225,000

17,963,500
20,552,000
19,571,000
18,753,500
20,836,500
18,977,500
17,501,000

11,600,000
16,349,500
15.26.5,500
12; 288,000
16,262,500
15,482,000
14,977,500

Aug. 12,1919
Sept. 9,1919
Oct. 7,1919

542,197,000
646,025,000
591,308,000

48,454,000
4.3,705,000
42, .346,500

183,111,500
275.355,000
212;301,000

36,758,000
39,160,500
35,301,500

53,300,000
62,000,000
49,000,000

15,764,500
18,843,500
18,734,000

13,175,500
13,274,500
14, 636,500

475,792,500 2,255,145,000

420,334,500

554,761,500

187,497,000

143,311,500

Jan. 2,1920
•Tan. 15,1920
Feb.
2,1920

, 9,790,500
8,951,000
10,493,500

14,858,000
15,427,500
19,312,000

129,737,500

29,235,000

49,597,500

533,801,500
532,152,000
573,841,500

41,935,500
43,855,500
45,765,500

192,326,000
201,904,500
252,679,000

36,264,500
36,276,000
27,155,000

45,330,000
45,319,000
39,088,500

1,639,795,000

Total.
Issued in anticipation of income and
proflts taxes. 1918:
Sept. 24,1917
Do-.-.
Do
- Do
..Sept. 24,1917, as amended Apr.
4,1918...."
:.
Do

16,886,000
. 14,397,000
18,957,000
18,449,000
15,208,000

211,714,000
207,287,000
210,068,500
216,264,500
249,591,000

613,438,000
572,494,000
751,684,500
600,101,500
687,381,500
620,578,500
532,381,500

6,157,589,500

Aug.
1,1919
Aug. 15,1919
Sept. 2,1919

48,267,500
49,509,000
57,424,000
54,710,000
50,378,500

6,1919
20,1919
3,1919
17,1919
1,1919
15,1919
29,1919

Total.
Loan certificates of 1920:
Sept. 24,1917, as amended Apr.
4,1918, and Mar. 3,1919—
Series A, 1920
Series B, 1920
Series C, 1920

584,750,500
575,706,500
639,493,000
625,216,500
611,069,000

131,556,500

646,909,500

99,695,500

Nov. 30,1917
Jan. 2,1918
Feb. 15,1918
Mar. 15,1918

June 25,1918
do
.-.-do
..--do.

691,872,000
491,822,500
74.100,000
n o ; 962,000

20,921,000
16,163,500
8,790,500
6,735,590

494,070,500
239,954,000
14,007,500
10,252,500

11,492,000
34,796,000
4,680,000
10,474,500

115,230,500
70,069,500
15,402,500
55,615,500

2,415,000
8,948,500
1,917,000
2,725,500

....do...
.-..do...

71,880,000
183,767,000

6,071,500
24,578,000

12,000,500
61,188,000

14,-511,500
19,583,000

10,587,500
18,547,000

2,049,000
2,767,000

83,260,000

831,473,000

95,537,006

285,452,500

20,822,000

i
ci

2,749,500
1,05-5,500

1,624,403,500

O

1,555,000
5,551,000
1,269,000
826,000

Apr. 15,1918
May 15,1918

U2

a

13,006,000

to
CO

Issues of Certificates of indebtedness from Apr. 6., 1917, to Oct. 31, 1919—Continued.

to

o

F e d e r a l reserve district.
A u t h o r i z i n g act.

D a t e of issue.

D a t e of
maturity.

R a t e per
cent.

Total
amount.
Bcston.

Issued i n a n t i c i p a t i o n of income a n d
profits t a x e s , 1919:
S e p t . 24,1917, a s a m e n d e d A p r .
4.1918T a x series of 1919
Series T
Series T - 2
S e p t . 24,1917, a s a m e n d e d A p r .
4,1918, a n d Mar. 3,1919—
Series T - 3
Series T - 4
. .
Series T - 5
Series T - 6
Series T - 7

Richmond.

Atlanta.

4
4h

$157,552,500
794,172,500
392,-381,000

$12,025,500
88,728,000
36,276,500

$44,766,000
350,847,500
165,622,000

$10,523,500
29,283,500
19,744,000

$29,968,500
112,500,000
78,641,500

$4,205,000
12,458,000
10,652,000

$3,412,000
11,487,000
6,533,500

Mar. 15,1919
J u n e 3,1919
do
J u l y 1,1919
do

June
Sept.
Dec.
Sept.
Dec.

4i
4J

407,918,500
526,139,500
238,711,500
326,468,000
511,444,000

29,015,000
32,215,500
8,924,500
14,188,000
35,538,500

227,964,000
212,337,000
78,557,500
129,254,000
242,504,000

18,874,000
18,686,500
8,031,000
14,730,000
21,129,000

46,187,000
62,280,000
33,894,000
30,551,000
41,418,500

8,831,500
23,208,000
8,264,000
10,753,000
14,147,500

3,920,000
13,228,000
6,984,000
15,152,000
10,697,500

256,911,500 1,451,852,000

141,001,500

435,440,500

92,519,000

71,414,000

16,1919
15,1919
15,1919
15,1919
15,1919

^

^
4|
4*

o

n
o

tei
J u l y 15,1919
Sept. 15,1919
do

Mar. 15,1920
do
S e p t . 15,1920

4^
4i
4i

323,074,500
101,131,500
657,469,000
1,081,675,000

Total




Cleveland.

J u l y 15,1919
Mar. 15,1919
J u n e 17,1919

3,354,787,-500

Special issues t o secure F e d e r a l reserve b a n k n o t e s :
S e p t . 24, 1917, as a m e n d e d A p r .
4,1918, a n d A p r . 23, 1 9 1 8 . . . . . .
Special issues p a y a b l e i n foreign
currency:
Sept. 24,1917, a s a m e n d e d A p r .
4,1918, J u l y 9,1918, a n d S e p t .
24 1918
Special s'hort-term issues:
Sept. 24, 1917; Sept. 24, 1917, asl
a m e n d e d A p r . 4, .1918, a n d
Mar 3 1919
J

Philadelphia.

Aug. 20,1918
N o v . 7,1918
J a n . 16,1919

Total
Issued i n a n t i c i p a t i o n of income a n d
profits t a x e s , 1920:
Sept. 24,1917, a s a m e n d e d —
Series T - 8
Series T - 9
Series T-10

New York.

0)

• 0)

0)
(6)

1 Various, beginning Aug. 20, 1918.
2 One year from date of issue."

2

255,475,000.00

13,446,000
5,704,000
31,752,000

12,369,500
.5,563,000
.54,586,500

29,070,000
8,788,000
53,802,000

7,394,000
2,999,500
10,339,500

12,441,500
3,706,000
5,618,000

50,902,000 " 554,352,000-

72,519,000

. 91,660,000

20,733,000

21,765,500

21,436,000

58,576,000

29,180,000

23,299,000

11,660,000

14,564,000

103,000,000 5,467,500,000

83,000,000

238,000,000

60,000,000

21,000,000

116,450,500
25,582,500
412,319,000

5 105,165,000.00

{ 1:1}7,627,470^903.34

3 Various, begiiming Nov^ 27, 1918.
< Various, beginning Feb. 25, 1919.

5 510,000,000 pesetas.
6 Various,

>

Issues of certificates of indebtedness from Apr. 6, 1917, to Oct. SI, 1919—Continued.
Federal reserve district.
Authorized.
Issued in. anticipation of the first
Liberty loan:
Apr. 24,1917
Do..
Do
Do
Total.
Issued in anticipation of the second
Liberty loan:
Apr.'24,1917
...
Do
:
Do
Sept. 24, 1917
Do
Do....-.--..
Total Issued in anticipation of the third
Liberty loan:
Sept. 24, 1917
-.
Do
Do
Do...
Do
:
Sept. 24, 1917, as amended Apr.
• 4,1918
Total Issued iu anticipation of the fourth
Liberty loan:
Sept'. 24, 1917, as amended Apr.
4,1918—
Series IV, A
Series IV, B
Series IV,C
Series IV, D
Series IV, E
Series IV, F
SeriesIV, G--.Total.




Date of issue.

Date of.
maturity.

Rate per
cent.

Treasury
Department.

$10,400,000
• 7,045,000
7,200,000
8,100,000

$2,500,000
4,500,000
2,400,000
5,200,000

$8,000,000
9,500,000
7,200,000
5,600,000

$7,000,000
5,525,000
2^400,000
3,300,000

32,745,000

14,600,000

30,300,000

18,225,000

36,900,000

15,600,000
15,095,000
21,169,000
35,629,000
32,963,000
18,141,000

7,900000
4,188,000
4,874,000
11,000,000
12,710,000
5,028,000

3,700,000
2,025,000
2,000,000
7,000,000
9,541,000
5,205,000

7,100,000
4,542,000
4,619,000
9,000,000
10,600,000
2,178,000

4,700,000
2,430,000
2,367,000
10,595,000
12,038,000
7,217,000

13,000,000
7,520,000
9,030,000
23,000,000
20,000,000
la, 408,000

45,700,000

29,471,000

38,039,000

39,347,000

85,958,000

30,359,000
42,352,000
59,168,000
64,414,000
65,850,000

18,090,000
20,064,000
25,709,000
22,842,000
21,181,000

10,750,000
15,000,000
17,000,000
16,000,000
15,600,000

12,000,000
21,411,000
23,736,500
26,116,500
25,000,000

13,084,000
14,076,000
19,000,000
15,000,000
16,602,500

21,000,000
25,000,000
33,500,000
30,250,000
39,500,000

63,212,000

25,698,500

15,000,000

20,260,500

13,162,500

23,540,500

325,355,000

9,1917 Nov. 15,1917
28,1917 Nov. 30,1917
17,1917 Dec. 15,1917
26,1917 .-.-do.
18,1917 N o v . 22,1917
24,1917 Dec. 15,1917

$16,400,000
24; 893,000
16,600,000
19,800,000

138,597,000

Aug.
Aug.
Sept.
Sept.
Oct.
Oct.

25,1917 June 30,1917
10,1917 July 17,1917
25,19,17 July 30,1917,
8,1917 ...'.do

St. Louis.

77,693,000

Apr.
May
May
June

Minneapolis. Kansas City.

San
Francisco.

Chicago.

133,584,500

89,350,000

128,524,500

90,925,000

172,790,500

131,481,500
101,203,000
83,310,500
87,292,500
88,279,000
88,878,500
82,759,000

34,654,000
31,260,500
25,952,500
24,056,000
25,501,500
24,178,500
21,360,000

20,000,000
22,100,000
16,8i00,000
12,260,000
17,200,000
17,700,000
21,500,000

28,410,500
30,031,500
23,369,000
25,126,000
25,913,000
22,816,000
21,200,000

18,481,500
14,452,000
10,156,000
7,579,500
11,295,500
11,898,500

9,457,000

48,000,000 11,938,000.00
39,000,000 35,653,000.00
4,327,000.00
38,000,000
4,581,000.00
37,750,000
3,000,000.00
49,500,000
3,000,000.00
46,350,000
2,817,000.00
46,420,000

663,204,000

186,963,000

127,560,000

^176,866,000

83,320,000

305,020,000 65,316,000.00

Dallas.

.$20,000,000 $10,605,000.00
7,500,000
4,200,000
5,200,000

10,605,000.00

t?^
H

::::::::;::::" fe
Kj

;;;;

o
hrj

H
Jan.
Feb.
Feb.
Mar.
Apr.

22,1918 Apr. 22,1918
8,1918 May 9,1918
27,1918 May 28,1918
20,1918 June 18,1918
10,1918 July 9,1918

Apr. 22,1918

June
July
July
Aug.
Sept.
Sept.
Oct.

25,1918
9,1918
23,19,18
6,1918
3,1918
17,1918
1,1918

July 18,1918

Oct. 24,1918
Nov. 7,1918
Nov. 21,1918
Dec. 5,1918
Jan. 2,1919
Jan. 16,1919
Jan. '30,1919

•"3,'ii9,"666.'66

3,389,000.00
3,828,000.00
1,559,000.00 '

w

H
g
K

^

S

-^—^— S
11,895,000.00

.^

to

Issue of certificates of indebtedness from Apr. 6, 1917, to Oct. 31, 1975^—Coritinued.

to
to

F e d e r a l reserve district.
Authorizing act.

D a t e of issue.

D a t e of
maturity.

R a t e per
cent.
Chicago.

Issued i n a n t i c i p a t i o n of t h e V i c t o r y
L i b e r t y loan:
Sept. 24, 1917, as a m e n d e d A p r .
4, 1918—
Series V. A
SeriesV B
. . .
Series V, C
Series V, D
Series V , E
Seiies V , F
Series V, G
Sept: 24,1917. as a m e n d e d A p r .
4, 1918, a n d Mar. 3, 1919—
Series V, H
SeriesV, J
Series V, K . . .

' Total




K a n s a s City.

$97,235,500
as, 189,500
108,647,000
97,774.500
103.048; 500
91,677,500
. 82,044,000

$24,2-31.500
21,319;500
30,927,000
26.445,500
29;678,500
. 27,405,000
21,225,500

$24.500,000
22,265 000
26,500,000
27,760,000
24,600,000
23,610,000
18,720,000

$21,115,000
20,778,500
19,050,500
18,403,500
20,000,000 •
18,500,000
20,040,000

82, 656,500
• 99,886,000
107,256,-500

22,219,000
21,761, .500
20,07.5,000

18,000,000
18,310,000
14,615,500

245,288,000

79,723,000
70,582,000
63,193,500

Dallas.

Treasury
Department.

May
May
June
June
July
July
July

6,1919
20,1919
3,1919
17,1919
1.1919
15,1919
29,1919

$8,833,500
7; 363,000
5.714,000
8,043,000
5,951,500
10,939,000
13,106,000

$42,400,000
40,000,000
45,000,000
40,000,000
45,400,000
40,000,000
35, SOO, 000

16,750.000
13,ooo; 000
, 20,107,500

14,358,000
12,879,000
14,3.59,000

35,450,000
^27,850,000
' 38,575.000

4,000,000 00

218,880,500

187,745,000

101,540,000

390,475,000

23,397,500. 00

21,700,000
.20,569,000
17,975,500

• 17,514.000
17,300,000
16,000,000

20,000,000
20. 238,500
16,000,000

16,185,000
14,429,000
23,179,000

38,175,000
37,300,000
43,000,000

213,498,500

5,1918
19,1918
2,1919
16,1919
30,1919
13,1919
27,1919

60,244,500

'50,814,000

56,238,500

53,793,000

118,475,000

4
4
4
4

30,139,500
48,054,500
15,709,000
13,286,500

.3,833,000
11,168,500
1,661,500
2,063,500

1,743,000
5,230,000
1,25.5,000
720,000

1,072,000
17,075,000
498.500
. 824,500

5,388,-500
15,180,000
1,505,-500
1,022,000

4
4

15,742,000
40,002,500

901,500
3,075,000

.850,000
1,600; 000

1,028,000
.538,500

1,092,000
4,762,500

4,297,500
6,069,-500

162,934,000

22,703,000

11,398,000

21,036,500

28,950,500

47,831,090

4:.-

^

41
4i
4^4J

$4,140,000.00
327,500.00
4,000,000. 00

o

5,645.000. 00
3,085; 000.00

O
Mar. 13,1919
Apr. 10,1919
May 1,1919

Aug. 12,1919
S e p t . 9,1919
Oct. 7,1919

%
4|

2,200,000. 00

>
Aug. 1,1919
Auc. 1-5,1919
Sept. 2,1919

.Ian.
2,1920
.Ian. 15,1920
F e b . 2,1920

4J

Total
Issued i n a n t i c i p a t i o n of i n c o m e a n d
profits taxes, 1918:
Sept. 24, 1917
Do
Do
Do
:....
Sept. 24, 1917, as a m e n d e d Apr.
4. 1918
Do

Minneapolis.

9.53,415,500

Dec.
Dec.
Jan.
Jan.
Jan.
Feb.
Feb.

Total
I'Oan certiflcates of 1920:
Sept. 24, 1917, as a m e n d e d Apr.
4, 1918, a n d Mar. 3, 1919—
Series A. 1920
Series "B; 1920
Series C. 1920 •

St. L o u i s .

San
Francisco.

N o v . 30,1917
Jan.
2,1918
F e b . 15,1918
Mar. 15,1918

J u n e 25,1918
do
do
do

A p r . 15,1918 . - - - . d o
May 15,1918 . . - . - d o

-

4,012,000
19,632,000
7,404,000
6,416,000

o
Ul

I s s u e d i n a n t i c i p a t i o n of i n c o m e a n d
profits t a x e s , 1919:
S e p t . 24,1917, as a m e n d e d A p r .
4,1918—
T a x series of 1919
Series T
Series T - 2
S e p t . 24,1917, as a m e n d e d A p r .
4,1918, a n d Mar. 3,1919—
Series T - 3 .
Series T-4
:
Series T - 5 . .
Series T - 6
'.
Series T - 7 .
Total

A u g . 20,1918
N o v . 7,1918
J a n . 16,1919

J u l y 15,1919
M a r . 15,1919
J u n e 17,1919

4
4^
4i

22,003,000
103,828,000
42,045,000-

4,712,000
17,109,500
4,335,500

1,829,000
10,220,500
3,030,000

3,662,500
7,443,500
4,101,000

4,173,000
12,103,000
4,350,000

16,272,500
38,164,000
17,050,000

M a r . 15,1919
J u n e 3,1919
do
J u l y 1,1919
do

June
Sept.
Dec.
Sept.
Dec.

H

48,301,500
79,163,000
63,326,500
46,516,000
58,624,000

6,437,000
12,854,500
6,906,500
11,203,500
11,963,500

3,502,000
10,468,500
2,600,500
10,000,000
10,000,000

1,820,000
7,681,500
2,502,500
8,222,000
6,551,500-

3,417,500
15,815,500
3,036,000
6,221,500
12,823,500

9,649,000
30,201,500
15,684,500
12,134,000
27,001,000

17,543,000.00
19,045,500.00

463,807,000

75,522,000

51,650,500

41,984,500

61,940,000

166,156,500

44,588,500.00

16,1919
15,1919
15,1919
15,1919
15,1919

tl
il

:

I s s u e d i n a n t i c i p a t i o n of i n c o m e
a n d profits t a x e s , 1920:
S e p t . 24,1917, as a m e n d e d —
Series T - 8
Series T-9
Series T-10
Total .

o
•

^

M a r . 15,1920
do
S e p t . 15,1920

8,866,500
4,750-, 000
7,750,000

7,670,000
2,835,000
4,165,000

8,681,000
3,491,500
8,232,500

24,551,500
10,000,000
21,500,000

5,645,000.00

27,045,500

21,366,500

14,670,000

20,405,000

56,051,500

5,645,000.00

17,068,000

8,380,000

12,820,000

8,200,000

>

' 10,680,000

pi
Kl
O
hrj

W
0)

5105,165,000.00

1 '•'

1 Various, besrinning Aug. 20, 1918.
- One vear rom date o* issue.




11,198,500
.3,614,500
12,232,500

39,6^12,000

41
4^

65,290,500
24,097,500
35,172,000
124,560,000

J u l y 15,1919
S e p t . 15,1919
...do

. .

Special issues t o secure F e d e r a l reserve b a n k n o t e s :
S e p t . 24, 1917, as a m e n d e d A p r .
4, 1918, a n d A p r . 23,1918
Special issues p a y a b l e i n foreign
currency:
Sept. 24, 1917, as a m e n d e d A p r .
4,1918, J u l y 9,1918, a n d S e p t .
24,1918
Special s h o r t - t e r m issues:
S e p t . 24, 1917; S e p t . 24, 1917, as
a m e n d e d A p r . 4, 1918, a n d
Mar. 3,1919

8,000,000.00

{ I'M

806,000,000

34,000,000

51,500,000

3 Various, beginning Nov. 27, 1918.
• Various, beginning Feb. 25, 1919.

8,000,000

20,000,000

121,000,000 614,470,903.34

5 "8007000,000 pesetas.
6 Various.

to
CO

Issues of certificates of indebtedness from Apr. 6, 1917, to Oct. 31, 1919—Continued.

to

RECAPITULATION.
Federal reserve district.
Issued—

Total amount.
Boston.

Loan certificates:
In anticipation
In anticipation
In anticipation
In anticipation
In anticipation
Series of 1920

of the first Liberty loan
of the second Liberty loan
of the third Liberty loan
of thefourth Liberty loan.-.
of the Victory Liberty loan...-

Total loan certificates

.

Tax certificates:
In anticipation of income and profits taxes 1918
In anticipation of income and profits taxes 1919.
In anticipation of income and profits taxes 1920 . . .
Total tax certificates . .
Special issues to secure Federal reserve bank notes.
Special issues payable in foreign currency
Special short-term issues..
. .
.
Grand total, all issues




^

.^.

New York.

$868,205,000.00
2,320,493,000.00
3,012,085,500.00
4,659,820,000.00
6,157,589,500.00
1,639,795,000.00

$57,367,000
132,044,000
214,417,000
381,152,500
475,792,500
131,556,500

$460,462,0001,467,543,000
1,255,308,000
1,680,989,000
2,255,145,000
646,909,500

18,657,988,000.00

1,392,329,500

7,766,356,500

1,624,403,500.00
3,354,787,500.00
1,081,675,000.00

83,260,000
256,911,500
50,902,000

6,060,866,000.00
255,475,000.00
105,165., 000.00
7,627,470,903.34
32,706,964,903.34

Philadelphia.

Cleveland.

Richmond.

Atlanta.

$58,900,000
182,513,000
238,033,500
440,569,000
554,761,500
129,737,500

$13,703,000
40,014,000
75,829,500
117,983,500
187,497,000
29,235,000

$13,305,000
32,135,000
79,573,000
114,857,000
143,311,500
49,597,500

1,165,082,000

1,604,514,500

464,262,000

432,779,000

831,473,000
1,451,852,000
554,352,000

95,537,000
141,001,500
72,519,000

285,452,500
435,440,500
91,660,.000

20,822,000
92,519,000
20,733,000

13,006,000
71,414,000
21,765,500

H

391,073,500

2,837,677,000

309,057,500

812,553,000

134,074,000

106,185,500

w

21,436,000

58,576,000

29,180,000

23,299,000

11,660,000

14,564,000

M

103,000,000

5,467,500,000

83,000,000

238,000,000

60,000,000

21,000,000

1,907,839,000

16,130,109,500

1,586,319,500

2,678,366,500

669,996,000

574,528,500

>
o

$43,400,000.
89,132,000
196,500,000
316,020,000
420,334,500 •
99,695,500

o
o

Ui

RECAPITULATION-Continued.
Federal reserve district.
Issued—
Chicago.
Loan certificates:
In anticipation
In anticipation
In anticipation
In anticipation
In anticipation
Series of 1920

St. Louis.

MinneapoUs.

Kansas City.

Dallas.

San Francisco.

Treasury
Department.

$77,693,000
138,597,000
325,355,000
663,204,000
953.415,500
213;498,500

$32,745,000
45,700,000
- 133,584,500
=
186,963,000
245,288,000
60,244,500

$14,600,000
29,471,000
89,350,000
127,560,000
218,880,500
50,814,000

$30,300,000
38,039,000
128,524,500
176,866,000
187,745,000
56,238,500

$18,225,000
39,347,000
90,925,000
83,320,000
101,546,000
53,793,000

$36,900,000
85,958,000
172,-790,500
305,020,000
390,475,000
118,475,000

$10,605,000.00

.2,371,763,000

704,525,000

530,675,500

617,713,000

387,156,000

1,109,618; 500

111,213,500.00

162,934,000
463,807,000
124,560,000

22,703,000
75,522,000
27,045,500

11,398,000
51,650,500
21,366,500

• 21,036,500
41,984,500
14,670,000

47,831,000
166,156,500
56,051,500

44,588,500.00
5,645,000.00

751,301,000

of the first Liberty loan .
of the second Liberty loan
of the third Liberty loan..
of the fourth Liberty loan
of the Victory Liberty loan
.'

125,270,500

84,415,000

77,691,000

111,295,500

270,039,000

50,233,500.00

39,612,000

17,068,000

8,380,000

12,820,000

8,200,000

10,680,000

806,000,000

34,000,000

51,500,000

8,000,000

20,000,000

3,968,676,000

880,863,500

674,970i500

716,224,000

526,651,500

11,895,000.00
65,316,000.00
23,397,500.00

• Ui
Q

Total loan certificates
Tax certificates:
In anticipation of income and profits taxes 1918.
In anticipation of income aiid proflts taxes 1919 .
In anticipation of income and profits taxes 1920
Total tax certificates

.

Special issues to secure Federal reserve bank notes
Special issues payable in foreign currency
Special short-term issues
Grand total, all issues..,.




-

28,950,500
61,940,000 .
20,405,000

>
K{
O

^^
H

121,000,000

105,165,000.00
614,470,903.34

1,511,337,500

881,082,903.34

H
W

W

>
d
pi

to
Oi
Or

266

REPORT ON T H E EUsTAiNCES.
EXHIBIT

13.

T B E A S U B Y C E B T I F I C A T E S O F I N D E B T E D N E S S , S E B I E S V A, F O U B
A N D O N E - H A L F F E B C E N T , D A T E D D E C E M B E B 6, 1 9 1 8 , D U E M A Y
6, 1 9 1 9 .

WASHINGTON, Novemher 27, 1918.

The Secretary of the Treasury under the authority of the act approved September 24, 1917, as amended by the act approved April 4,
1918, offers for subscription, at par and accrued interest, through the
Federal reserve banks, $600,000,000 or more Treasury certificates of
indebtedness. Series V A, dated and bearing interest from December
5, 1918, payable May 6, 1919, with interest at the rate of 4^ per cent
per annum. Applications will be received at the Federal reserve
banks. Subscription books will close at the close of business December 10, 1918. Certificates will be issued in denominations of $500,
$1,000, $5,000, $10,000, and $100,000. Said certificates, shall, be
exempt, both as to principal and interest, from all taxation now or
hereafter imposed by the United States, any State, or any of the
possessions of the United States, or by any local taxing authority,
except ia) estate or inheritance taxes, and (Jb) graduated additional
income taxes, commonly known as surtaxes, and excess-profits and
war-profits taxes, now or hereafter imposed by the United States,
upon the income or profits of individuals, partnerships, associations, or
corporations. The interest on an amount of bonds and certificates
authorized by said act approved September 24, 1917, and amendments
thereto, the principal of which does not exceed in the aggregate
$5,000, owned by any individual, partnership, association, or corporation, shall be exempt from the taxes provided for in clause (6) above.
Upon 10 days' public notice, given in such manner as may be determined by the Secretary of the Treasury, the certificates of this series
may be redeemed as a whole at par and accrued iriterest on or after
any date, occurring before the maturity of such certificates, set for the
payment of the first installment of the subscription price of any bonds
offered for subscription by the United States after the offering and
before the maturity of such certificates. The certificates oi this
series, whether or not called for redemption, will be accepted at par,
with adjustment of accrued interest, if tendered on such installment
date in payment on the subscription price then payable of any such
bonds subscribed for by and allotted to holders of such certificates.
The certificates of this series do not bear the circulation privilege and
will not be accepted in payment of taxes. The right is reserved to
reject any subscription and to allot less than the amount of certificates
applied for and to close the subscriptions at any time without notice.
Payment at par and accrued interest for certificates allotted must be
made on and after December 5, 1918, and on or before December 10,
1918. After allotment and upon payment Federal reserve banks will
issue interim receipts pending delivery of the definitive certificates.
Qualified depositaries will be permitted to make payment by credit
for certificates allotted to them for themselves and their customer J
up to an amount for which each shall have qualified in excess of
existing deposits when so notified by Federal reserve banks. As
fiscal agents of the United States, Federal reserve banks are authorized and requested to receive subscriptions and to make allotment in
full in the order of the receipt of applications up to amounts indicated
by the Secretary of the Treasury to the Federal reserve banks of the
respective districts.




SECRETARY OF THE TREASURY.
EXHIBIT

267

14.

T B E A S U B Y CEBTIFICATES OF I N D E B T E D N E S S . S E B I E S V B, F O U B
AISTD O N E - H A L F F E B C E N T , D A T E D D E C E M B E B 1 9 , 1 9 1 8 , D U E M A Y
20, 1919.

WAsumoTOJ^, Decemher 12, 1918.
The Secretary of the Treasury under the authority of the act
approved September 24, 1917, as amended by the act approved
April 4, 1918, offers for subscription, at par and accrued interest,
through the Federal reserve banks, $500,000,000 or more Treasury
certifioates of indebtedness, Series V B, dated aud bearing interest
from December 19, 1918, payable May 20,1919, with interest at the rate
of 4 i per oent per annum. Applications will be receiyed at the Federal
reserve banks. Subscription books will close at the close of business
December 26, 1918. Certifioates will be issued in denominations of
$500, $1,000, $5,000, $10,000, and $100,000. Said certificates shall be
exempt, both as to principal and interest, from all taxation now or
\ hiereafter im.posed by the United States, any State, or any of the possessions of the United States, or by any local taxing authority, except
(a) estate or inheritance taxes, and (h) graduated additional income
taxes, commonly known as surtaxes, and excess-profits and warprofits taxes, now or hereafter imposed by the United States, upon
the inconie or profits of individuals, partnerships, associations, or
corporations. The interest on an amount of bonds and certificates
authorized by said act approved September 24, 1917, and amendments thereto, the principal of which does not exceed in the aggregate
$5,000, owned by any individual, partnership, association, or corporation, shall be exempt from the taxes provided for in clause (h)
above. Upon 10 days' public notice, given in such manner as may
be determined by the Secretary of the Treasury, the certificates of
this series may be redeemed as a whole at par and accrued interest
on or after any date, occurring before the maturity of such certificates,
set for the payment of the first installment of the subscription price
of any bonds offered for subscription by the United States after the
offering and before the maturity of such certificates. The certificates
of this series, whether or not called for redemption, will be accepted
at par, with adjustment of accrued interest, if tendered on such
installment date in payment on the subscription price then payable
of any such, bonds subscribed for by and allotted to holders of such
certificates. The certificates of this series do not bear the circulation
privilege and will not be accepted in payment of taxes. The right is
reserved to reject any subscription and to allot less than the amount
of certificates applied for and to close the subscriptions at any time
without notice. Payment at par and accrued interest for certificates
allotted must be made on and after December 19, 1918, and on or
before Deceniber 26, 1918. After allotment and upon payment
Federal reserve banks will issue interim receipts pending delivery of
the definitive certificates. Qualified deppsitaries will be permitted
to make payment by credit for certificates allotted to them for themselves and their customers up to an ainount for which ^ach shall have
qualified in excess of existing deposits when so notified by Federal
reserve banks. As fiscal agents of the United States, Federal reserve
banks are authorized and requested to receive subscriptions and to
make allotment in full in the order of the receipt of applications up
to amounts indicated by the Secretary of the Treasury to the .Federal
reserve banks of the respective districts.



268

REPORT ON T H E PINANCES.
EXHIBIT

15.

TBEASUBY "CEBTIFICATES OF INDEBTEDNESS, SEBIES V C, FOUB
AND ONE-HALF F E B CENT, DATED JANUABY 2, 1919, DUE JUNE
3, 1919.
WASHINGTON, December 28, 1918.

The Secretary of the Treasury under the authority of the act approved Septeinber 24, 1917, as amended by the act approved April 4?
1918, offers for subscription at par and accrued interest, through the
Federal reserve banks, $750,000,000 or more Treasury certificates of
indebtedness. Series V C dated and bearing interest from January 2,
1919, payable June 3, 1919, with interest at the rate of 4^ per cent
per annum. Applications will be received at the Federal reserve
banks. Subscription books will close at the close of business January 7, 1919. Certificates will be issued in denominations of $500,
$1,000, $5,000, $10,000 and $100,000. Said certificates shall be
exempt, both as to principal and interest, from all taxation riow or
hereaiter imposed by the United States, any State, or any of the
possessions of the United States, or by any local taxing authority,
except {a) estate or inheritance taxes, and (Jb) graduated additional
income taxes, commonly known as surtaxes, and excess profits and
war-profits taxes, now or hereafter imposed by the United States,
upon the income or profits of individuals, partnerships, associations,
or corporations. The interest on an amount of bonds and certificates
authorized by said act approved September 24, 1917, and amendments
thereto, the principal oi which does not exceed in the aggregate
$5,000, owned by any individual, partnership, association, or corporation, shall be exempt from the taxes provided for in clause Qf) above.
Upon 10 days' public notice, given in such manner as may be determined by the Secretary of the Treasury, the certificates of this series
may be redeemed as a whole at par and accrued interest on or after
any date, occurring before the maturity of such certificates, set for
the payment of the first installment of the subscription price of any
bonds offered for subscription by the United States after the offering
and before the maturity of such certificates.. The certificates of this
series, whether or not called f ors redemption, will be accepted at par,
with adjustment of accrued interest, if tendered on such installment
date in payment on the subscription price then payable of any such
bonds subscribed for by and aUotted to holders of such certificates.
The certificates of this series do not bear th'e circulation privilege and
will not be accepted in payment of taxes. The right is reserved to
reject any subscription and to allot less than the amount of certificates
applied for and to close the subscriptions at any time without notice.
Payment at par and accrued interest for certificates allotted must be
made on and after January 2, 1919, and on or before January 7, 1919.
After allotment and upon payment Federal reserve banks will issue
interim receipts pending delivery of the definitive certificates. Quahfied depositaries will be permitted to make payment by credit for
certificates allotted to them for themselves and their customers up to
an amount for which each shall have qualified in excess of existing
deposits when so notified by Federal reserve banks. As fiscal agents
of the United States, Federal reserve banks are authorized and requested to receive subscriptions and to make allotment in full in the
order of the receipt of applications up to amounts indicated by the
Secretary of the Treasury, to the Federal reserve banks of the respective districts.



SECRETARY OP THE TREASURY.

269

E X H I B I T 16.

TBEASUBY CEBTIFICATES OF INDEBTEDNESS, SEBIES V D, FOUB
AND ONE-HALF F E B CENT, DATED JANUABY 16, 1919, DUE JUNE
17,1919.
WASHINGTON, J a n u a r y 8, 1919.

The Secretary of the i?reasury under the authority, of the act
approved September 24, 1917, as amended by the act approved
April 4, 1918, offers for subscription, at par and accrued interest
through the Federal reserve banks $600,000,000 or more Treasury
certificates of indebtedness. Series V D, dated and bearing interest
from January 16, 1919, payable June 17, 1919, with interest at the
rate of ^4^ per cent per annum. Applications will be received at the
Federal reserve banks. Subscription books will close at the close of
business January 21, 1919. Certificates will be issued in denominations of $500, $1,000, $5,000, $10,000, and $100,000. Said certificates
shall be exempt, both as to principal and interest, from all taxation
now or hereafter imposed by the United States, any State, or any of
the possessions of the United States, or by any local taxing authority,
except {a) estate or inheritance taxes, and (&) graduated additional
income taxes, commonly known as surtaxes, and excess profits and
war-profits taxes, now or hereafter in>posed by the United States,
upon the income or profits of individuals, partnerships, associations,
or corporations. The interest on an amount of bonds and certificates
authorized by said act approved September 24, 1917, and amendments thereto, the principal of which does not exceed in the aggregate $5,000, owned by any individual, partnership, association, or
corporation, shall be exempt from the taxes provided for in clause
(Jb) above. Upon 10 days' public notice, given in such manner as
may be determined by the Secretary of the Treasury, the certificates
of this series, may be redeemed as a whole at par and accrued interest
on or after any date, occurring before the maturity of such certificates,
set for the payment of the first installment of the subscription price
of any bonds offered for subscription by the United States after the
offering and before the maturity of such certificates. The certificates
of this series whether or not called for redemption, will be accepted
at par, with adjustment of accrued interest, if tendered on such installment date iri payment on the subscription price then payable of
any such bonds subscribed for by and allotted to holders of such certificates. The certificates of this series do not bear the circulation
privilege and will not be accepted in payriaent of taxes. ' The right is
reserved to reject any subscription and to allot less than the amount
of certificates applied for and to close the subscriptions at any time
without notice, r a y m e n t at par and accrued interest for certificates
allotted must be made on and after January 16, 1919, and on or before
January 21, 1919. After allotment and upon payment Federal
reserve banks will issue interim receipts pending delivery of the definitive certificates. Qualified depositaries will be permitted to make
payment by credit for certificates allotted to them for themselves
and their customers up to an amount for which each shall have qualified in excess of existing deposits when so notified by Federal reserve
banks. Treasury Certificates of Indebtedness of Series IV F, dated
September 17, 1918, and maturing January 16, 1919, will be accepted
at par with an adjustment of accrued interest in payment for any




270

REPORT ON T H E PINANCES.

certificates of the Series V D now offered which shall be subscribed for
and allotted. As fiscal agents of the United States, Federal reserve
banks are authorized and requested to receive subscriptions and to
make allotment in full in the order of the receipt of applications up
to amounts indicated by the Secretary of the Treasury to the Federal
reserve banks of the respective districts.
EXHIBIT

17.

T B E A S U B Y CEBTIFICATES OF INDEBTEDNESS, S E B I E S V E, F O U B
AND ONE-HALF F E B CENT, DATED J A N U A B Y 30, 1919, DUE
JULY 1,1919.

WASHINGTON, J a n u a r y 21^., 1919.

The Secretary of the Treasury, under the authority of the act
approved September 24, 1917, as amended by the act approved
April 4, 1918, offers for subscription, at par and accrued interest,
through the Federal reserve banks, $600,000,000 or more Treasury
certificates of indebtedness. Series V E, dated and bearing interest
from January 30, 1919, payable July 1, 1919, with interest at the
rate of ^.\ pep ceint per annum. Applications WTU be received at the
Federal reserve banks. Subscription books will close at the close of
business February 6, 1919. Certificates will be issued in denominations of $500, $1,000, $5,000, $10,000, and $100,000. Said certificates shall be exempt, both as to principal and interest,, from all
taxation now or hereafter imposed by the United States, any State,
or any of ,the possessions of the United States, or by any local taxing
authority, except (a) estate or inheritance taxes, and (6) graduated
additional income taxes, commonly known as surtaxes, and excessprofits and war-profits taxes, now or hereafter imposed by the
United States upon the income or profits of individuals, partnerships,
associations, or corporations. The interest on an amount of bonds
and certificates authorized by said act approved September 24, 1917,
and amendments thereto, the principal of w^hich does not exceed in
the aggregate $5,000, owned by any individual, partnership, association, or corporation shall be exempt from the taxes provided for
in clause Qf) above. Upon 10 days' public notice, given in such manner as may be determined by the Secretary of the Treasury, the
certificates of this series riiay be redeemed as a whole at par and
accrued interest on or after any date occurring before the maturity
of such certificates set for the payment of the first installment of
the subscription price of any bonds offered for subscription by the
United States after the offering and before the maturity of such
certificates. The certificates of this series, whether or not called
for redemption, will be accepted at par, with adjustment of accrued
interest, if tendered on such installment date in payment on the
subscription price then payable of any such bonds subscribed for by
and allotted to holders of such certificates. The certificates of this
series do not bear the circulation privilege and will not be accepted
in payment of taxes. The right is reserved to reject any subscription and to allot less than the amount of certificates applied for and
to close the subscriptions at any time without notice. Payment at
par and accrued interest for certificates aUotted must be made on
and after Jan.uary 30, 1919, and on or before February 6, 1919.
After aUotment and upon payment Federal reserve banks will issue




SECRETARY OP THE TREASURY.

271

interim receipts pending delivery of the definitive certificates. Qualified depositaries will be permitted to make payment by credit for
certificates aUotted to them for themselves and their customers up
to an amount for which each shaU have qualified in excess of existing
deposits when so notified by Federal reserve banks. As fiscal
agents of the United States, Federal reserve banks are authorized
and requested to receive subscriptions and to make allotment in
full in the order of the receipt of applications up to amounts indicated by the Secretary of the Treasury to the Feaeral reserve banks
of the respective districts.
EXHIBIT

18.

TBEASUBY CEBTIFICATES OF INDEBTEDNESS, SEBIES V F, FOUB
AND ONE-HALF F E B CENT, DATED FEBBUABY 13, 1919, DUE
JULY 16, 1919.
WASHINGTON, February 7, 1919.

The Secretary of the Treasury under the authority of the act
approved September 24, 1917, as amended by the act approved
April 4, 1918, offers for subscription, at par and accrued interest,
through the Federal reserve banks, $600,000,000 or more Treasury
certificates of indebtedness, Series V F, dated and bearing interest,
from February 13, 1919, payable July 15, 1919, with interest at the
rate of 4J per cent per annum. Applications will be received at the
Federal reserve banks. Subscription books will close at the close of
business February 20, 1919. Certificates will be issued in denominations of $500, $1,000, $5,000, $10,000, and $100,000. Said certificates
shall be exempt, both as to principal and interest, from all taxation
now or hereafter imposed by the United States, any State, or any of
the possessions of the United States, or by any local taxing authority,
except {a) estate or inheritance taxes, and (Jb) graduated additional
income taxes;, commonly known as surtaxes, and excess-profits and
war-profits taxes, now or hereafter imposed by the United States,
upon the income or profits of individuals, partnerships, associations,
or corporations. The interest on an amount of bonds and certificates
authorized by said act approved Septeniber 24, 1917, and amendments thereto, the principal of which does not exceed in the aggregate
$5,000, owned by any individual, partnership, association, or corporation, shall be exempt from the taxes provided, for in clause (&)
above. Upon 10 days' public notice, given in such manner as may be.
determined by the Secretary of the Treasury, the certificates of this
series may be redeemed as a whole at par and accrued interest on or
after any date, occurring before the maturity of such certificates, set
for the payment of the first installment of the subscription price of
any bonds offered for subscription by the United States after the
offering and before the maturity of such certificates. The certificates
of this series, whether or not called for redemption, will be. accepted
at par with adjustment of accrued interest, ii tendered on such installment date in payment on the subscription price then payable of
any such bonds subscribed for by and allotted to holders of such
certificates. The certificates of this series do not bear the circulation
privilege and will not be accepted in payment of taxes. The right is
reserved to reject any subscription and to allot less than the amount
of certificates applied for and to close the subscriptions at any time




272

REPORT ON T H E PINANCES.

without notice. Payment at par and accrued interest for certificates allotted must be made on and after February 13, 1919, and on
or before February 20, 1919. After aUotment and upon payment
Federal reserve banks will, issue, interiin receipts pending delivery
of the definitive certificates. Qualified depositaries will be permitted
to make payment by credit for certificates allotted to them for themselves and their customers up to an amount for which each shall
have qualified in excess of the .existing deposits when so notified by
Federal reserve banks. As fiscal agents of the United States, Federal
reserve banks are authorized and requested to receive subscriptions
and to make allotment in full in the order of the receipt of applications up to amounts indicated by the Secretary of the Treasury to the
Federal reserve bariks of the respective districts.
EXHIBIT

19.

T B E A S U B Y C E B T I F I C A T E S O F I N D E B T E D N E S S , S E B I E S V G, F O U B
AND ONE-HALF F E B CENT, DATED F E B B U A B Y 27, 1919, DUE
JULY 29, 1919.

WASHINGTON, February 21, 1919.

The Secretary of the Treasury, under the authority of the act
approved September 24, 1917, as amended by the act approved
April 4, 1918, offers for subscription, at par and accrued interest
through the Federal reserve banks, $500,000,000 or more Treasury
certificates of indebtedness. Series V G, dated and bearing interest
from February 27, 1919, payable July 29, 1919, with interest at the
rate of 4^ per cent per annum. Applications will be received at the
Federal reserve banks. Subscription books wiU close at the close
of business March 6, 1919. Certificates will be issued in denominations of $500, $1,000, $5,000, $10,000, and $100,000. Said certificates shall be exempt, both as to principal and interest, from all
taxation now or hereafter imposed by the United States, any State,
or any of the possessions of the United States, or by any local taxing
authority, except (a) estate'^or inheritance taxes, and (&) graduated
additional income taxes, commonly known as surtaxes, and excessprofits and war-profits taxes, now or hereafter imposed by the United
States, upon the income or profits of individuals, partnerships,
associations, or corporations. The interest on an amount of bonds
and certificates authorized by said act approved September 24, 1917,
and amendments thereto, the principal of which does not exceed in
the aggregate $5,000, owned by any individual, partnership, asssociation, or corporation, shaU be exempt from the taxes provided
for in clause (Jb) above. Upon 10 days' public notice, given in such
manner as may be determined by the Secretary of the Treasury,
the certificates of this series may be' redeemed as a whole at par and
accrued interest on or after any date, occurring before the maturity
of such certificates, set for the payment of the first installment of
the subscription price of any bonds or notes offered for subscription
by the United States after the offering and before the maturity of
such certificates. The certificates of this series, whether or not
called for redemption, wiU be accepted at par, with adjustment of
accrued interest, if tendered on such installrnent date in payment on
the subscription price then payable of any such bonds or notes
subscribed for, by, and allotted to holders of such certificates. The




SECRETARY OF THE TREASURY.

273

certificates of these series do not bear the circulation privilege and
will not be accepted in payment of taxes. The right is reserved
to reject any subscription and to allot less than the amount of certificates applied for and to close the subscriptions at any time without
notice. Payment at par and accrued interest for certificates allotted
must be ,made on and after February 27, 1919, and on or before
March 6, '1919. After allotment and upori payment, Federal reserve
banks will issue interim receipts pendmg delivery of the definitive
certificates. Qualified depositaries will be permitted to make payment by credit for certificates allotted to them for themselves and
their customers up to an ainount for which each shall have qualified
in excess of existing deposits when so notified by Federal reserve
banks. As: fiscal agents of the United States, Federal reserve banks
are authorized and requested to receive subscriptions and t o m a k e
allotment in full in the order of the receipt of applications up to
amounts indicated by the Secretary of the Treasury to the Federal
reserve banks of the respective districts.
EXHIBIT

20.

TBEASUBY CEBTIFICATES OF INDEBTEDNESS, SEBIES V H, FOUB
AND ONE-HALF F E B CENT, DATED MABCH 13, 1919, DUE AUGUST
12,1919.
WASHINGTON, ]\Iarch 7, 1919.

The Secretary of the Treasury under the authority of the act approved September 24, 1917, as amended, offers for subscription, at
par and accrued interest, through the Federal reserve banks, $500,000,000 or more Treasury certificates of indebtedness, Series V H,
dated and t>earing interest from March 13, 1919, payable August 12,
1919, with interest at the rate of 4^ per cent per annum. Applications
will be received at the Federal reserve banks. Subscription books
will close at the close of business March 20, 1919. Certificates will
be issued in denominations of $500, $1,000, $5,000, $10,000, and
$100,000. Said certificates shall be exempt, both as to principal and
interest, from all taxation now or hereafter imposed by the United
States, any State, or any of the possessions of the United States, or by
any local taxing authority, except (a) estate or inheritance taxes, and
(&) graduated additional income taxes, commonly known as surtaxes,
and excess-profits and war-profits taxes, now or hereafter imposed by
the United States, upon the income or profits of individuals, partnerships, associations, or corporations. The interest on an amount oJf
bonds and certificates autnorized by said act approved September 24,
1917, and amendments thereto, the principal ofwhich does not exceed
in the aggregate $5,000, owned by any individual, partnership,
assbpiation, or corporation, shall be exempt from the taxes provided
for in clause (6) above. Upon 10 days' public notice, given in such
manner as may be determined by the Secretary of the Treasury, the
certificates of this series may be redeemed as a whole at par and accrued interest on or after any date, occurring before the maturity
of such certi£.cates., set for the payment of the first installment of the
subscription price of any bonds or notes offered for subscription by the
United States after the offering and before the maturity of such
certificates. The certificates of this series, whether or not called for
redemption, will be accepted at par, with adjustment of accrued
140325—FI 1919




18

274

REPORT ON T H E FINANCES.

interest, if tendered on such installment date in payment on the
subscription price then payable of any such bonds or notes subscribed
for by and allotted to holders of such certificates. The certificates of
this series do not bear the circulation privilege and will not be accepted
in payment of taxes. The right is reserved to reject any subscription
and to allot less than the amount of certificates applied for and to close
the subscriptions at any time without notice, r a y m e n t at par and
accrued interest for certificates allotted must be made on and after
March 13, 1919, and on or before March 20, 1919. After allotment
and upon payment Federal reserve banks will issue interim receipts
pending dmivery of the definitive certificates. Qualified depositaries
will be permitted to make payment by credit for certificates allotted
to them for themselves and their customers up to an amount for which
each shall have qualified in excess of existing deposits when so notified
by Federal reserve banks. Treasury certificates of indebtedness of
Series V A maturing May 6, 1919, will be accepted at par with an
adjustment of accrued interest in payment for not exceeding 50 per
cent of the amount of any certificates of Series V H now offered which
shall be subscribed for and allotted to any subscriber. As fiscal
agents of the United States, Federal reserve banks are authorized and
requested to receive subscriptions and to make allotment in full in the
order of the receipt of applications up to amounts indicated by the
Secretary of the Treasury to the Federal reserve banks of the respective districts.
EXHIBIT

21.

T B E A S U B Y CEBTIFICATES OF I N D E B T E D N E S S , S E B I E S V J, F O U B
A N D O N E - H A L F F E B C E N T , D A T E D A F B I L 10, 1 9 1 9 , D U E S E P T E M B E B 9, 1919.
I
WASHINGTON, April 7, 1919.

The Secretary of the Treasury, under the authority of the act
approved September 24, 1917, as amended, offers for subscription, a t
par and accrued, interest, through the Federal reserve banks,
$500,000,000 or more Treasury certificates of indebtedness. Series V J,
dated and bearing interest from April 10, 1919, payable September 9,
1919, with interest at the rate of 4^ per cent per annum. Applications will be received at the Federal reserve banks. Subscription
books wiU close at the close of business AprU 17, 1919. Certificates
wiU be issued in denominations of °$500, $1,000, $5,000, $10,000, and
$100,000. Said certificates shall be exempt, both as to principal and
interest, from aU taxation now or hereafter imposed by the United
States, any State, or any of the possessions of the United States, or
by any local taxing authority, except (a) estate or inheritance taxes,
and (b) graduated additional income taxes, commonly known as surtaxes, and excess-profits and war-profits taxes, now or hereafter
imposed by the United States, upon the income or profits of individuals, partnerships, associations, or corporations. The interest on an^
amount of bonds and-certificates authorized by said act approved
September 24, 1917, and amendments thereto, the principal ofwhich
does not exceed in the aggregate $5,000, owned by any individual,
partnership, association, or corporation, shall be exempt from the
taxes provided for in clause (&) above. Upon 10 days' public notice,
given in. such manner as may be determined by the Secretary of the
Treasury, the certificate of this series may be redeemed as a whole




SECRETARY OP THE TREASURY.

275

at par and accrued interest on or after any date, occurring before the
maturity of such certificates, set for the payment of the fii'st installment of the subscription price of any bonds or notes offered for subscription by the United States after the offering and before the
maturity of such certificates. The certificates of this series, whether
or not called for redemption, wUl be accepted at par, with adjustment
of accrued interest, if tendered on such installment date in payment
on the subscription price then payable of any such bonds or notes
subscribed for by and aUotted to holders of such certificates. The
certificates of this series do not bear the circulation privilege and wUl
not be accepted in payment of taxes. The right is reserved to reject
any subscription and to allot less than the amount of certificates
applied for and to close the subscriptions at any time without notice.
Payment at par and accrued interest for certificates allotted must be
made on and after April 10, 1919, and on or before AprU 17, 1919.
After aUotment and upon payment Federal reserve banks will issue
interim receipts pending delivery of the definitive certificates. Qualified depositaries will be permitted to make payinent by credit for
certificates allotted to them for themselves and their customers up
to an amount for which each shall have qualified in excess of existing
deposits when so notified by Federal reserve banks. Treasury certificates of indebtedness of Series V A maturing May 6, 1919, wUl be
accepted at par with an adjustment of accrued interest in payment
for any certificates of Series V J now offered which shaU be subscribed
for and allotted to any subscriber. As fiscal agents of the United
States, Federal reserve banks are authorized and requested to receive
subscriptions and to make aUotment in fuU in the order of the receipt
of applications up to amounts indicated by the Secretary of the
Treasury to the Federal reserve banks of the respective districts.
EXHIBIT

22.

T B E A S U B Y C E B T I F I C A T E S O F I N D E B T E D N E S S , S E B I E S V K, F O U B
A N D O N E - H A L F F E B C E N T , D A T E D M A Y 1, 1 9 1 9 , D U E O C T O B E B 7 ,
1919.
WASHINGTON, April 22, 1919.

, The Secretary of the Treasury, under the authority of the act
approved September 24^ 1917, as amended, offers for subscription,
at par and accrued interest,- through the Federal reserve banks,
$500,000,000, or more, Treasury certificates of indebtedness, Series
V K, dated and bearing interest from May 1, 1919, payable October
7, 1919, with interest at the rate of 4 i per cent per annum. Applications will be received at the Federal reserve banks
Subscription
books will close at the close of business May 8, 1919. Certificates
will be issued in denominations of $500, $1,000, $5,000, $10,000, and
$100,000. Said certificates shall be exempt, both as to principal
and interest, from all taxation now or hereafter'imposed by the
United States, any State, or any of the possessions of the United
States, or by any local taxing authority, except (a) estate or inheritance taxes, and (6) graduated additional income taxes, commonly
known as surtaxes, and excess-profits and war-profits taxes^ now or
hereafter imposed by the United States, upon the income or profits
of individuals, partnerships, associations, or corporations. The
interest on ah amount of bonds and certificates authorized by said




276

REPORT ON T H E PINANCES.

act approved September 24, 1917, and amendments thereto, the
principal of which does not exceed in the aggregate $5,000, owned
by any individual, partnership, association, or corporation, shall be
exempt from the taxes provided for in clause (&) above. Upon 10
days' public notice, given iri such manner as may be determined by
the Secretary of the Treasury, the certificates of this series may be
redeemed as a whole at par and accrued interest on or after the date
set for the payment of the first installment of the subscription price
of the notes of the Victory Liberty loan. The certificates of this
series, whether or not called for redemption, will be accepted at par,
with adjustment of accrued interest, if tendered on such installment
date in payment on the subscription price then playable of any such
notes subscribed for by and- allotted to holders of such certificates.
The certificates of this series do not bear the circulation privilege
and will not be accepted in payment of taxes. The right is reserved
to reject any subscription and to allot less than the amount of certificates applied for and to close the subscriptions at any time without notice. Payment at par and accrued interest for certificates
allotted must be made on and after May 1, 1919, and on or before
May 8, 1919. After allotment and upon payment Federal reserve
banks will issue interim receipts pending delivery of the definitive
certificates. Qualified depositaries will be permitted to make payment by credit for certificates allotted to them for themselves and
their customers up to an amount for which each shall have qualified
in excess of existing deposits when so notified by Federal reserve
banks. Treasury certificates of indebtedness of Series V A maturing
May 6, 1919, will be accepted at par with an adjustment of accrued
interest in pa3nnerit for any certificates of Series V K now offered
which shall be subscribed for and allotted to ariy subscriber. As
fiscal agents of the United States, Federal reserve banks are authorized and requested to receive subscriptions and to make allotment
in full in the order of the receipt of applications up to amounts
indicated by the Secretary of the Treasury to the Federal reserve
banks of the respective districts.
EXHIBIT

23.

[Department Circular No. 159. Loans and Currency.]
F O U B AND ONE-HALF F E B CENT T B E A S U B Y CEBTIFICATES OF
I N D E B T E D N E S S , S E B I E S A 1 9 2 0 . D A T E D A U G U S T 1, 1 9 1 9 . D U E
J A N U A B Y 2, 1920.

The Secretary of the Treasury, urider the authority of the act
approved September 24, 1917, as amended, offers for subscription, at
par and accrued interest, through the Federal reserve banks. Treasury
certificates of indebtedness, Series A 1920, dated and bearing interest
from August 1, 1919, payable January 2, 1920, with interest at the
rate of four and' one-half per cent per annum.
Applications will be received at the Federal reserve banks.
Bearer certificates, without coupons, will be issued in denominations of $500, $1,000, $5,000, $10,000, and $100,000.
Said certificates shaU be exempt, both as to principal and interest,
from all taxation now or hereaiter imposed by the United States,
any State, or any of the possessions of the United States, or by any
local taxing authority, except (a) estate or inheritance taxes, and




SECRETARY OP THE TREASURY.

277

(6) graduated additional incoirie taxes, commonly known as surtaxes,
a^nd excess-profits and war-profits taxes, now or hereafter imposed by
the United States, upon the income or profits of individuals, partnerships, associations, or corporations. The interest on an amount of
bonds and certificates authorized by said act approved September
24, 1917, and amendments thereto, the principal of which does not
exceed in the aggregate $5,000, owned by any individual, partnership, association, or corporation, shall be exempt from the taxes
provided for in clause (6) above.
If any notes should be offered for subscription by the United States
after the off'ering and before the maturity of such certificates, and
the subscription price of such notes be payable on or before the maturity of such certificates, then such certificates will be accepted a t
par, with adjustment of accrued interest, in payment on the subscription price when payable of any such notes subscribed for by and
allotted to holders of such certificates. The certificates of this series
do not bear the circulation privilege, and will not be accepted in payment of taxes or on Victory loan subscriptions.
The right is reserved to reject any subscription and to allot less
than the amount of certificates applied for and to close the subscriptions at any time without notice. Payment at par and accrued
interest for certificates allotted must be made on or before August 1,
1919, or on later allotment. After allotment and upon payment
Federal reserve banks may issue interim receipts pending delivery of
the definitive certificates. Any qualified depositary will be permitted to make payment by credit for certificates allotted to it for
itself and its customers up to any amount for which it shall be
qualified in excess of existing deposits, when so notified by Federal
reserve banks. Treasury certificates of indebtedness of Series V H,
maturing August 12, V J, maturing September 9, and V K, maturing
October 7, 1919, will be accepted at par with an adjustment of accrued interest in payment for any certificates of the Series A
1920, now offered which shaU be subscribed for and aUotted.
. As fiscal agents of the United States, Federal reserve banks are
authorized and requested to receive subscriptions and to make allotment in full in the order of the receipt of applications up to amounts
indicated by the Secretary of the Treasury to the Federal reserve
banks of the respective districts.
CARTER GLASS,

Secretary of the Treasury.
TREASURY DEPARTMENT,
O F F I C E OP THE SECRETARY,

July 25, 1919.
To

THE

INVESTOR:

Almost any banking institution in the United States will handle your subscription
for you, or you may make subscription direct to the Federal reserve bank of your
district.




278

REPORT ON T H E PINANCES.
EXHIBIT

24.

[Department Circular No. 160. Loans and Currency.]

F O U B AND ONE-HALF F E B CENT T B E A S U B Y CEBTIFICATES OF
I N D E B T E D N E S S , S E B I E S B 1920. DATED AUGUST 16, 1919. DUE
JANUABY" 15, 1920.

The Secretary of the Treasury, under the authority of the act
approved September 24, 1917, as amended, offers for subscription,
at par and accrued interest, through the Federal reserve banks.
Treasury certificates of indebtedness. Series B 1920, dated and bearing
interest from August 15, 1919, payable January 15, 1920, with interest at the rate of four and one-half per cent per annum.
Applications will be received at the Federal reserve banks.
Bearer certificates, without coupons, will be issued in denominations
of $500, $1,000, $5,000, $10,000, and $100,000.
Said certificates shall be exempt, both as to principal and interest,
from all taxation now or hereafter imposed by the United States,
any State, or any of the possessions of the United States, or by any
local taxing authority, except (a) estate or inheritance taxes, and
Q)) graduated additional income taxes, commonly known as surtaxes,
and excess-profits and war-profits taxes, now or hereafter imposed
by the United States, upon the income or profits of individuals,
partnerships, associations, or corporations. The interest on an
amount of bonds and certificates authorized by said act approved
September 24, 1917, and amendments thereto, the principal of which
does not exceed in the aggregate $5,000, owned by any ^individual,
partnership, association, or corporation, shall be exempt from the
taxes provided for in clause (&) above.
If any notes should be offered for subscription by the United States
\^after the offering and before the maturity of such certificates, and the
subscription price of such notes be payable on or before the maturity
of such certificates, then such certificates will be accepted at par,
with adjustment of accrued interest, in paymerit on the subscription
price when payable of any such notes subscribed for by and allotted
to holders of such certificates. The certificates of this series do not
bear the circulation privilege, and will not be accepted in payment
of taxes or on Victory loan subscriptions.
The right is reserved to reject any subscription and to allot less
than the amount of certificates applied for and to close the subscriptions at any time without notice. Payment at par and accrued interest for certificates allotted must be made on or before August 15,
1919, or on later allotment. After allotment and upon payment Federal reserve banks may issue interim receipts pending delivery of the
definitive certificates. Any qualified depositary will be permitted
to make payment by credit for certificates allotted to it for itself and
its customers up to any amount for which it shall be qualified in
excess of existing deposits, when so notified by the Federal reserve
bank of its district. Treasury certificates of indebtedness of Series
V J, maturing September 9, and V K, maturing October 7, 1919, will
be accepted at par with an adjustment of accrued interest in payment
for any certificates of the Series B 1920 now offered which shall be
.subscribed for and allotted.
As fiscal agents of the United States Federal reserve banks are
authorized and requested to receive subscriptions and to make allot-




SECRETARY OP THE TREASURY.

279

riaent in full in the order of the receipt of applications up to amounts
indicated by the Secretary of the Treasury to the Federal reserve
banks of the respective districts.
CARTER GLASS,

Secretary of ihe Treasury.
TREASURY DEPARTMENT,
O F F I C E OP THE SECRETARY,

August 8, 1919.
To THE

INVESTOR:

Almost any banking institution in the United States will handle your subscription
for you, or you may make subscription direct to the Federal reserve bank of your district.
E X H I B I T 25.
[Department Circular No. 161. Loans and Currency.]
F O U B AND ONE-HALF F E B CENT T B E A S U B Y CEBTIFICATES OF
I N D E B T E D N E S S , S E B I E S C 1920. DATED S E P T E M B E B 2, 1919.
DUE F E B B U A B Y 2, 1920.

The Secretary of the Treasury, under the authority of the act
approved September 24, 1917, as amended, offers for subscription
a t par and accrued interest, through the Federal reserve banks,
Treasury certificates of indebtedness. Series C 1920, dated and bearing interest from September 2, 1919, payable February 2, 1920,
with interest at the rate of four and one-half per cent per annum.
Applications wUl be received at the Federal reserve banks.
Bearer certificates, without coupons, wUl be issued in denominations of $500, $1,000, $5,000, $10,000, and $100,000.
Said certificates shall be exempt, both as to principal and interest, from aU taxation now or hereafter imposed by the United States,
any State, or any of the possessions of the United States, or by any
local taxing authority, except (a) estate or inheritance taxes, and
(Jb) graduated additiorial income taxes, commonly known as surtaxes, and excess-profits and war-profits taxes, now or hereafter
imposed by the United States, upon the income or profits of individuals, partnerships, associations, or corporatioris. The interest on
an amount of bonds and certificates authorized by said act approved
September 24, 1917, and amendments thereto, the principal ofwhich
does not exceed in the aggregate $5,000, owned by ariy individual,
partnership, association, or corporation, shall be exempt from the
taxes provided for in clause (6) above.
If any notes should be offered for subscription by the United
States after the offering and before the maturity of such certificates,
«and the subscription price of such notes or the first instaUment
thereof be payable on a date occurring at or before the maturity of
such certificates, then on and after such date {a) such certificates
will be accepted at par with an adjustment of accrued interest in
payment on the subscription price, when payable, at or before the
maturity or redemption of such certificates, of any such notes subscribed for by arid aUotted to holders of such certificates; and (Jb)
upon ten days' public notice given in such manner as may be determined by the Secretary of the Treasury the certificates of this series
may be redeemed as a whole at par and accrued interest. The certificates of this series do not bear the circulation privUege, and wiU not
be accepted in payment of taxes or on Victory loan subscriptions.



280

REPORT ON T H E FINANCES.

The right is reserved to reject any subscription and to allot less
than the amount of certificates applied for and to close the sub^
scriptions at any time without notice. Payinent at par and accrued
interest for certificates allotted must be made on or before September
2, 1919, or on later allotment. After allotment and upon payment
Federal reserve banks may issue interim receipts pending delivery
of the definitive certificates. Any qualified depositary will be permitted to make payment by credit for certificates allotted to i t
for itself and its customers up to any amount for which it shall bequalified in excess of existing deposits, when so notified by the
Federal reserve bank of its district. Treasury certificates of indebtedness of Series VJ, maturing September 9, and VK, maturing October
7, 1919, and of Series T4 and T6, maturing September 15, 1919 (with
any unmatured interest coupons attached), will be accepted at p a r
with an adjustment of accrued interest in payment for any certificates
of the Series C 1920 now offered which shall be subscribed for and
allotted.
As fiscal agents of the United States, Federal reserve banks areauthorized and requested to receive subscriptions and to make allotment in full in the order of the receipt of applications up to amounts
indicated by the Secretary of the Treasury to the Federal reserve
banks of the respective districts.
,
TREASURY DEPARTMENT,
O P P I C E OP THE SECRETARY,

CARTER GLASS,

Secretary ofthe Treasury.

. August 25, 1919.
To

THE

INVESTOR:

Almost any banking institution in the United States will handle your subscription
for you, or you may make subscription direct to the Federal Reserve bank of your
district.
E X H I B I T 26.
[Department Circular No. 133. Loans and Currency.]
F O U B A N D O N E - H A L F F E B CENT. T B E A S U B Y C E B T I F I C A T E S O F
I N D E B T E D N E S S , S E B I E S T 2. D A T E D J A N U A B Y 1 6 , 1 9 1 9 . DUE;
JUNE 17, 1919.

The Secretary of the Treasury, under the authority of the act
approved September 24, 1917, as amended by the act approved
April 4, 1918, offers for subscription, at par and accrued mterest,.
through the Federal reserve banks, a limited amount of Treasury
certificates of indebtedness, series T 2, dated' and bearing interest
frpm January 16, 1919, payable June 17, 1919, with interest at the
rate of 43^ per cent per annum.
Applications wiU be received at the Federal reserve banks.
Certificates will be issued in denominations of $500, $1,000, $5,000,.
$10,000, and $100,000.
Said certificates shall be exempt, both as to principal and interest,
from all taxation now* or hereaiter imposed by the United States,
any State, or any of the possessions of the United States, or by any
local taxing authority, except {a) estate.or inheritance taxes, and
(Jf) graduated additional income taxes, commonly known as surtaxes,,
and excess-profits and war-profit^ taxes, now or hereafter imposed
by the United States, upon the income or profits of individuals,
partnerships, associations, or corporations. The interest on an
amount oi bonds and certificates authorized by said act approved



SECRETARY OP THE TREASURY.

281

September 24, 1917, and amendments thereto, the principal of which
does not exceed in the aggregate $5,000, owned by any individual,
partnership, association, or corporation, shall be exempt from the
taxes provided for in clause (6) above.
Certificates of this series will be accepted at par, with an adjustment of accrued interest, during such time and under such rules
and regulations as shall be prescribed or approved by the Secretary
of the Treasury, in payment of income and profits taxes when payable at or within 60 days before the maturity of the certificates.
The certificates of this series do not bear the circulation privilege,
and will not be accepted in payment on bond subscriptions.
. The right is reserved to reject any subscription and to aUot less
than the araount of certificates applied for and to close the subscriptions at any time without notice. Payment at par and accrued
interest for certificates allotted must be made on January 16, 1919,
or later allotment. After aUotment and upon pajrment Federal
reserve banks wUl issue interim receipts pending delivery of the
definitive certificates. Qualified depositaries will be permitted to
make payment by credit for certificates allotted to theiri for themselves and their customers up to an amount for which each shall
have qualified in excess of existing deposits when so notified by
Federal reserve banks. Treasury certificates of indebtedness of
Series IV F and IV G, maturing January 16 ahd January 30, respectively, and certificates of the tax series of 1919 (maturing July 15),
with aU unmatured interest coupons attached, wUf be accepted at
par, with an adjustment of accrued interest, in paynient for any certificates of the series T 2 now offered which shaU be subscribed for
and allotted.
As fiscal agents of the United States, Federal reserve banks are
authorized and requested to receive subscriptions and to make
allotment in fuU in the order of the receipt of applicatioris up to
amounts indicated by the Secretary of the Treasury to the Federal
reserve banks of the respective districts.
CARTER GLASS,

Secretary of the Treasury..
TREASURY DEPARTMENT,
OFFICE OF THE SECRETARY,

January 8, 1919.
E X H I B I T 27.
[Department Circular No. 136. Loans and Currency.]

FOUB AND ONE-HALF F E B CENT TBEASUBY CEBTIFICATES OF
INDEBTEDNESS, SEBIES T 3. DATED MABCH 15, 1919, DUE
JUNE 16, 1919.

The Secretary of the Treasury, under the authority of the act
approved September 24, 1917, as amended, offers for subscription, at
par and accrued interest, through the Federal reserve banks, a
limited amount of Treasury certificates of indebtedness, Series T 3,
dated and bearing interest from March 15 1919, payable June 16,
1919, with interest at the rate of four and one-half per cent per
annum.
Applications will be received at the Federal reserve banks.
Bearer certificates with one interest coupon attached will be
issued in denominations of $500, $1,000, $5,000, $10,000, and $100,000.



282

REPORT ON T H E FINANCES.

Said certificates shall be exempt, both as to principal and interest,
from aU taxation now or hereafter imposed by the United States,
any State, or any of the possessions of the United States, or by any
local taxing authority, except (a) estate or inheritarice taxes, and
(6) graduated additional income taxes, commonly known as surtaxes,
and excess profits and war-profits taxes, now or hereafter imposed
by the United States, upon the income or profits of individuals,
partnerships, associations, or corporations. The interest on an
amount of bonds and certificates authorized by said act approved
September 24, 1917, and ameridments thereto, the principal ofwhich
does not exceed in the aggregate $5,000, owned by any individual,
partnership, association, or corporation, shaU be exempt from the
taxes provided for in clause (6) above.
Certificates of this series will be accepted at par, with an adjustment of accrued interest, during such time and under such rules and
regulations as shaU be prescribed or approved by the Secretary of
the Treasury, in payment of income ahd profits taxes when payable
at OT within sixty days before the maturity of the certificates. The
certificates of this series do not bear the circulation privilege, and will
not be accepted in payment on Liberty loan subscriptions.
The right is reserved to reject any subscription and to allot less
than the amount of certificates applied for and to close the subscriptions at any time without notice. Payment at par and accrued
interest for certificates aUotted must be made on or before March 15,
1919, or on later aUotment. After aUotment and upon payment
Federal reserve banks wUl issue interim receipts pending delivery of
the definitive certificates. Qualified depositaries will be permitted
to make payment by credit for certificates aUotted to them for themselves and their customers up to. an amount for which each shall
have qualified in excess of existing deposits when so notified by
Federal reserve banks. Treasury certificates of indebtedness of
Series T, maturing March 15, Series T 2, maturing June 17, and tax
series of 1919, maturing July 15 (with interest coupons maturing
May 15 and July 15 attached), wiU be accepted at par with an
adj;ustment of accrued interest in payment for any certificates of
the Series T 3 now offered which shall be subscribed for and allotted.
I n case of payment before M-Bxch 15, 1919, in Treasury certificates
of any of said three series, interest will nevertheless be paid to March
15, 1919, in the case of certificates of Series T 2, to the holders of
such certificates, and, in the case of certificates of Series T and of the
tax series of 1919, to the holders of the coupons for such interest,
which should be detached and presented for payment in the ordinary
course when due.
As fiscal agents of the United States, Federal reserve banks are
authorized and requested to receive subscriptions and to make
allotment in full in the order of the receipt of applications up to
amounts indicated by the Secretary of the Treasury to the Federal
reserve banks of the respective districts.
CARTER GLASS,

Secretary of the Treasury.
TREASURY DEPARTMENT.
OPPICE OF THE SECRETARY,




February 24, 1919.

SECRETARY OP T H E TREASURY.

283

E X H I B I T 28.
[Department Circular No. 146. Loans and Currency.]

FOUB AND ONE-HALF F E B CENT TBEASUBY CEBTIFICATES OF
INDEBTEDNESS. DATED JUNE 3^ 1919. SEBIES T 4, DUE
SEPTEMBEB 15, 1919. SEBIES T 5, DUE DECEMBEB 15, 1919.

The Secretary of the Treasury, under the authority of the act
approved September 24, 1917, as amended, offers for subscription,
at par and accrued interest, through the Federal reserve banks, a
limited amount of Treasury certificates of indebtedness, in two series,
both dated and bearing interest from June 3, 1919, at the rate of
four and one-half per cent per annum, the certificates of Series T 4
being payable on September 15, 1919, and the certificates of Series
T 5 on December 15, 1919.
Applications will be received at the Federal reserve banks.
Bearer certificates 'with one interest coupon attached, payable at the
maturity of the certificates, respectively, will be issued in denominations of $500, $1,000, $5,000, $10,000 and $100,000.
Said certificates shall be exempt, both as to principal and interest,
from all taxation now or hereafter imposed by the United States,
any State, or any of the possessions of the United States, or by any
local taxing authority, except (a) estate or inheritance taxes, and (b)
graduated additional income taxes, commonly known as surtaxes, and
excess profits and war-profits taxes, now or hereafter imposed by the
United States, upon the income or profits of individuals, partnerships,
associations, or corporations. The interest on an amourit of bonds
and certificates authorized by said act approved September 24, 1917,
and amendments thereto, the principal of which does not exceed in
the aggregate $5,000, owned by any individual, partnership, association, or corporation, shall be exempt from the taxes provided for
in clause (&) above.
Certificates of these series will be accepted at par, with an adjustment of accrued interest, during such time and under such rules and
regulations as shall be prescribed or approved by the Secretary of
the Treasury, in payment of income and profits taxes payable at the
maturity of the certificates, respectively. The certificates of these
series do not bear the circulation privilege, and will not be accepted
in payment on Victory loan subscriptions.
The right is reserevd to reject any subscription and to allot less
than the amount of certificates of either or both series applied for
and to close the subscriptions as to either or both series at any "time.
without notice. Payment at par and accrued interest for certificates
allotted must be made on or before June 3, 1919, or on later allotment.
After allotment and upon payment Federal reserve banks will issue
interim receipts pending delivery of the definitive certificates. Qualified depositaries will be permitted to rnake payment by credit for certificates allotted to them for themselves and their customers up to an
amount' for which each shall have qualified in excess of existing
deposits when so notified by Federal reserve banks. Treasury certificates of indebtedness of any and all series maturing on or before
July 1, 1919, and not overdue (with any unmatured interest coupons
attached), will be accepted at par with an adjustment of accrued
interest in payment for any certificates of the Series T 4 and T 5 now
offered which shall be subscribed for and allotted.




284

REPORT ON THE PINANCES.

As fiscal agents of the United States, Federal reserve banks are
authorized and requested to receive subscriptions and to make
allotment in full in the order of the receipt of applications up to
amounts indicated by the Secretary of the Treasury to the Federal
reserve banks of the respective districts.
'
-;
CARTER GLASS,

V

Secretary of the Treasury.
TREASURY DEPARTMENT,
O F F I C E OF THE S E C R E T A R Y ,

..

"

..» . .
^"^

May 17, 1919.
EXHIBIT

J^Jj'
29.

[Department Circular No. 152. Loans and Currency.]

FOUB AND ONE-HALF F E B CENT TBEASUBY CEBTIFICATES OF
INDEBTEDNESS. DATED JULY 1, 1919. SEBIES T 6, DUE SEPTEMBEB 15, 1919. SEBIES T 7, DUE DECEMBEB 15, 1919.

The Secretary of the Treasury, under the authority of the act
approved September 24, 1917, as amended, offers for subscription,
at par and accrued interest, through the Federal reserve banks, a
limited amount of Treasury certincates of indebtedness, in two
series, both dated and bearing interest from July 1, 1919, at the rate
of 4^ per cent per annum, the certificates of Series T 6 being
payable on September 15, 1919, and the certificates of Series T 7
on December 15, 1919.
Applications will be received at the Federal reserve banks.
Bearer certificates with one interest coupon attached, payable
at the maturity of the certificates, respiectively, wiU be issued in
denominations of $500, $1,000, $5,000, $10,000, and $100,000.
Said certificates,shall be exempt, both as to principal and interest,
from all taxation now or hereafter imposed by the United States,
any State, or any of the possessions of the United States, or by any
local taxing authority, except {a) estate or inheritance taxes, and (&)
graduated additional income taxes, commonly known as surtaxes, and
excess profits and war-profits taxes, now or hereafter imposed by the
United vStates, upon the income or profits of individuals, partnerships,
associations, or corporations. The interest on an amount of bonds
and certificates authorized by said act approved September 24,1917,
and amendments thereto, the principal of which does not exceed
in the aggregate $5,000, owned by any individual, partnership,,
association, or corporation, shaU be exempt from the taxes provided
for in clause (6) above.
Certificates of these series wiU be accepted at par, with an adjustmerit of accrued interest, during such time and under such rules
and regulations as shaU be prescribed or approved by the Secretary
of the Treasury, in payment of income and profits taxes payable at
the maturity of the certificates, respectively. The certificates of
these series do not bear the circulation privilege, and will not be
accepted in payment on Victory loan subscriptions.
The right is reserved to reject any subscription and to allot less
than the amount of certificates of either or both series applied for
and to close the subscriptions as to either or both series at any time
without notice. Payment at par and accrued interest for certificates
allotted must be made on or before July 1, 1919, or on later allot-




SECRETARY OF THE TREASURY.

285

ment. After allotment and upon payment Federal reserve banks
will issue interim receipts pending delivery of the definitive certificates. Qualified depositaries wiU be permitted to. make payment
by credit for certificates allotted to them for themselves and their
customers up to an amount for which each shall have qualified in
excess of existing deposits when so notified by Federal reserve
banks. Treasury certificates of indebtedness of any and all series
maturing on or before September 9, 1919, and not overdue (with ariy
unmatured interest coupons attached), wiU be accepted at par with
an adjustment of accrued interest in payment for any certificates
of the Series T 6 and T 7 now offered which shall be subscribed for
and aUotted.
As fiscal agents of the United States, Federal reserve banks are
authorized and requested to receive subscriptions and to make
aUotment in full in the order of the receipt of applications up to
aniounts indicated by the Secretary of the Treasury to the Federal
reserve banks of the respective districts.
CARTER GLASS,

Secretary of the Treasury.
TREASURY DEPARTMENT,
OFFICE OP THE SECRETARY,

June 21^, 1919.
EXHIBIT

30.

[Department Circular No. 155. Loans and Currency.]

FOUB AND ONE-HALF F E B CENT TBEASUBY CEBTIFICATES OF
INDEBTEDNESS, S E B I E S T 8. DATED JULY 15, 1919. DUE
MABCH 15, 1920.

The Secretary of the Treasury, under the authority of the act approved September 24, 1917, as amended, offers for subscription, at
par and accrued interest, through the Federal reserve banks, a limited amount of Treasury certificates of indebtedriess, Series T 8, dated
and bearing interest from July 15, 1919, payable March 15, 1920,
with interest at the rate of 4^ per cent per annum.
Applications wiU be received at the Federal reserve banks.
Bearer certificates with one interest coupon attached will be
issued in denominations of $500, $1,000, $5,000, $10,000, and $100,000.
Said certificates shaU be exempt, both as to principal and interest,
from all taxation now or hereafter imposed by the United States,
any State, or any of the possessions of the United States, or by any
local taxing authority, except {a) estate or inheritance taxes, and (&)
graduated additional income taxes, commonly known as surtaxes,
and excess profits and war-profits taxes, now or hereafter imposed
by. the United States, upon the income or pi:ofits of individuals,
partnerships, associations, or corporations. The interest on an
amount of bonds and certificates authorized by said act approved
September 24, 1917, and amendments thereto, the principal of which
does not exceed in the aggregate $5,000, owned by any individual
partnership, association, or corporation shall be exeinpt from the
taxes provided for in clause (6) above.
Certificates of this series wUl be accepted at par, with an adjustment of accrued interest, during such time and under such rules and




286

REPORT ON T H E FINANCES.

regulations as shall be prescribed or approved by the Secretary of the
Treasury, in payment of income and profits taxes payable at the maturity of the certificates. The certificates of this series do not bear
the circulation priyilege, and will not be accepted in payment on
Victory loan subscriptions.
The right is reserved to reject any subscription and to allot less
than the amount of certificates applied for and to close the subscriptions at any time without notice. Payinent at par and accrued interest for certificates allotted must be made on or before July l 5 ,
1919, or on later aUotment. After allotment and upon payment
Federal reserve banks wiU issue interim receipts pending delivery
of the definitive certificates. Qualified depositaries will be permitted
to make payment by credit for certificates allotted to them for themselves and their customers up to an amount for which each shall have
qualified in excess of existing deposits.when so notified by Federal
reserve banks. Treasury certificates of indebtedness of any and
all series maturing on or before October 7, 1919, and not overdue;
except Series T 4, dated June 3, f919, maturing September 15, 1919,
and Series T 6, dated July 1, 1919, inaturing September 15, 1919,
will be iaccepted at par with an adjustment of accrued interest in
payment for any certificates of the Series T 8 now offered which
shall be subscribed for and allotted.
As fiscal agents of the United States, Federal reserve banks are
authorized and requested to receive subscriptions and to make aUotment in full in the order of the receipt of applications up to amounts
indicated by the Secretary of the Treasury to the Federal reserve
bariks of the respective districts.
CARTER GLASS,

Secretary ofthe Treasury.
TREASURY DEPARTMENT,
O F F I C E OP THE SECRETARY,

July 10, 1919.
E X H I B I T 31.
[Department Circular No. 162. Loans and Currency.]

T B E A S U B Y C E B T I F I C A T E S OF I N D E B T E D N E S S . D A T E D S E P T E M B E B 1 5 , 1 9 1 9 . S E B I E S T 9, F O U B A N D O N E - F O U B T H F E B C E N T ,
D U E MABCH 15, 1920. S E B I E S T 10, F O U B AND ONE-HALF F E B
CENT, DUE S E P T E M B E B 15, 1920.

The Secretary of the Treasury, under the authority of the act approved September 24, ,1917, as amended, offers for subscription, at
par and accrued interest, through the Federal reserve banks. Treasury certificates of indebtedness, in two series, both dated and bearing
interest from September 15, 1919, the certificates of Series T 9 being
payable on March 15, 1920, and bearing interest at the rate of 4^
per cent per annum, and the certificates of Series T 10 being payable
on September 15, 1920, and bearing interest at the rate of 4^ per cent
per annum payable semiannually.
Applications will be received at the Federal reserve banks.
Bearer certificates will be issued in denominations of $500, $1,000,
$5,000, $10,000, and $100,000. The certificates of Series T 9 wiUhave
one interest coupon attached, payable March 15, 1920, and the certificates of Series T 10 two interest coupons attached, payable March
15 and September 15, 1920.




SECRETARY

OF THE TREASURY.

287

Said certificates shall be exempt, both as to principal and interest,
from all taxation now or hereafter imposed by the United States, any
State, or any of the possessions of the United States, or by a;riy local taxing authority, except (a) estate or inheritance taxes, arid (h) graduated
additional income taxes, commonly known as surtaxes, and excess
profits and war-profits taxes, now or hereafter imposed by the United
States upon the income or profits of individuals, partnerships, associations, or corporations. The interest on an amount of bonds and
certificates authorized by said act approved September 24, 1917, and
amendments thereto, the principal of which does not exceed in the
aggregate $5,000, owned by any individual, partnership, association,
or corporation, shall be exeinpt from the taxes provided for in.clause
' (b) above.
Certificates of these series will be accepted a t par, with an adjustment of accrued interest during such times and under sucli rules and
regulations as shall be prescribed or approved by the Secretary of
the Treasury, in. paym ent of income and profits taxes payable at the
maturity of the certificates, respectively. The certificates of these
series do not bear the circulation privilege.
The right is reserved to reject any subscription and to allot less
than the amount of certificates of either or both series applied for
and to close the subscriptions as to either or both series at any time
without notice. Payment at par and accrued interest for certificates
allotted must be made on or before September 15, 1919, or on later
allotment. After allotment and upon payment Federal reserve
banks may issue interim receipts pending delivery of the definitive
certificates. Any qualified depositary will be permitted to make payment by credit for certificates allotted to it for itself and its customers
up to any amount for which it shall be qualified in excess of existing
deposits when so notified by the Federal reserve bank of its district.
Treasury certificates ^of indebtedness of any issue maturing on or
after September 15, 1919, and now outstanding (with any unmatured
coupons attached), will be accepted at par with an adjustment of
accrued interest in pa5maent for any certificates of the Series T 9
and T 10 now offered which shall be subscribed for and allotted.
As fiscal agents of the United States, Federal reserve banks are
authorized and requested to receive subscriptions and to make allotment in full in the order of the receipt of applications up to amounts
indicated by the Secretary of the Treasury to the Federal reserve
banks of the respective districts.
CARTER GLASS,

Secretary ofthe Treasury.
TREASURY DEPARTMENT,
OFFICE OF THE SECRETARY,

September 8, 1919.
To

THE

INVESTOR:

Almost any banking institution in the United States will handle your subscription
for you,, or you may make subscription direct to the Federal reserve bank of your
district.




288

REPORT ON T H E FINANCES.
EXHIBIT

32.

CALL F O B B E D E M P T I O N B E F O B E M A T U B I T Y OF T B E A S U B Y
CEBTIFICATES OF I N D E B T E D N E S S , S E B I E S IV D. '

Notice to holders oj United States Treasury certificates of indebtedness
of Series I V D, dated August 6, 1918, and maturing December 5,
1918.
All United States Treasury certificates of indebtedness of Series
IV D, dated August 6, 1918, and maturing Deceniber 5, 1918, are
hereby called for redemption on November 21, 1918, at par and
accrued interest, pursuant to the provision for such redemption contained in the certificates. On November 21, 1918, interest on all
certificates of said series will cease to accrue.
W. G. MCADOO,

Secretary qf the Treasury.
NOVEMBER 8,

1918.
EXHIBIT

33.

CALL F O B B E D E M P T I O N B E F O B E MATUBITY OF T B E A S U B Y
CEBTIFICATES OF I N D E B T E D N E S S , S E B I E S IV E.

Notice to holders of United States Treasury certificates of indebtedness
qf Series IV E, dated September 3, 1918, and maturing January 2,
1919.
All United States Treasury certificates of indebtedness of Series
IV E, dated Septeriaber 3, 1918, and maturing January 2, 1919, -are
hereby called for redemption on December 19,1918, at par and accrued
interest, pursuant to the provision for such redemption contained in
the certificates. On December 19, 1918, interest on all certificates
of said series will cease to accrue.
W. G. MCADOO,

Secretary ofthe Treasury.
DECEMBER 4,

1918.
EXHIBIT

34.

O F F E B TO B E D E E M B E F O B E M A T U B I T Y , AT H O L D E B ' S O P T I O N ,
T B E A S U B Y C E B T I F I C A T E S O F I N D E B T E D N E S S , S E B I E S V A.

WAsnmGTOi^, March 21, 1919.
Treasury certificates of indebtedness of Series V A mature May 6,
1919. In view of the determination to open the Victory Liberty
loan campaign April 21, it is apparent that this issue must be refunded before the proceeds of the loan can reach the Treasury.
Accordingly, the Secretary of theTreasury has authorized theFederal
reserve banks, until further notice, to redeem, in cash, before maturity
at par and accrued interest to date of redemption. Treasury certificates of indebtedness of Series V A, dated December 5, 1918, at the
holder's option, the right being reserved, "however, to make such redemption, only after 10 days' notice, from the holder to the Federal
reserve bank of the district, of the intention to exercise such option.




SECRETARY OF THE TREASURY.
EXHIBIT

289

35.

O F F E B TO B E D E E M B E F O B E M A T U B I T Y , A T T H E H O L D E B ' S O P T I O N ,
T B E A S U B Y CEBTIFICATES OF I N D E B T E D N E S S OF ALL S E B I E S
M A T U B I N G ON O B B E F O B E J U L Y 1, 1 9 1 9 .
WASHINGTON,

June 9, 1919.

S T A T E M E N T B Y SECRETARY GLASS.

The Secretary of the Treasury has authorized the Federal reserve
banks on and after Tuesday, June 10, and until further notice, to
redeem in cash before maturity, at par and accrued interest to the
date of redemption. Treasury certificates of indebtedness of any and
all series maturing on or before July 1, 1919, and not overdue, at the =
holder's option. This action is made possible by the very large payments, approximately $3,500,000,000, received to date on account of
subscriptions to the Victoiy Liberty loan. I take this occasion to
repeat that there has been no change whatever in the Treasury's
plans for future Government financing which were stated on April 14
in the official announcement of the amount and terms of the Victory
Liberty loan..
EXHIBIT

36.

CALL F O B B E D E M P T I O N B E F O B E MATUBITY OF CEBTIFICATES OF
I N D E B T E D N E S S , S E B I E S V G.

Notice to holders of United States Treasury certificates of indebtedness of
Series V G, dated February 27, 1919, and maturing July 29, 1919.
• All United States Treasury certificates of indebtedness of Series
V G, dated February 27, 1919, and maturing July 29, 1919, are hereby
called for redemption on July 1, 1919, at par and accrued interest
pursuant to the provision for such redemption contained in the certificates. On July 1, 1919, interest on all certificates of said series will
cease to accrue. Holders of certificates of said series shall, nevertheless, have the privilege of exchanging such certificates ori or before
July 1, 1919, at par with an adjustment of accrued interest, for
Treasury certificates of indebtedness of series T 4, dated June 3, 1919,
maturing September 15, 1919.
CARTER GLASS,

Secretary of the Treasury.
J U N E 20,

1919.
EXHIBIT

37.

O F F E B TO B E D E E M AT T H E H O L D E B ' S O P T I O N , T B E A S U B Y C E B T I F I C A T E S O F I N D E B T E D N E S S O F S E B I E S V G, P B I O B TO T H E
D A T E ON \^nHICH S U C H C E B T I F I C A T E S H A D B E E N C A L L E D F O B
BEDEMPTION.
WASHINGTON,

June 21, 1919.

STATEMENT BY SECRETARY GLASS.

The Secretary of the Treasury has authorized the Federal reserve
])anks on and after Monday, June 23, and until further notice, to
redeem in cash before July 1, 1919, at the holder's option, at par
and accrued interest to the date of such optional redemption, Treasury
certificates of indebtedness of Series V G, dated February 27, 1919,
maturing July 29, 1919, which have been called for redemption on
July 1, 1919.
140325—FI 1919




19

290

REPORT ON T H E FINANCES.
EXHIBIT

38.

O F F E B TO B E D E E M B E F O B E M A T U B I T Y , AT T H E H O L D E B ' S O P T I O N ,
T B E A S U B Y CEBTIFICATES OF I N D E B T E D N E S S , S E B I E S V F.
WASHINGTON,
, STATEMENT BY SECRETARY GLASS.

July 4, 1919. \

The Se.cretary of the Treasury has authorized the Federal reserve
banks on and after Tuesday, July 8, and until further notice to
redeem in cash before July 15, 1919, at the holder's option, at par
and accrued interest to the date of such optional redemntion. Treasury certificates of indebtedness, of Series V F, dated February 13,.
1919, and maturing July 15, 1919.
EXHIBIT

39.

O F F E B TO B E D E E M B E F O B E M A T U I t l T Y , A T T H E H O L D E B ' S O P T I O N ,
T B E A S U B Y C E B T I F I C A T E S OF I N D E B T E D N E S S , S E B I E S V J.

y^x^-Km(^TO^, August 25, 1919.
STATEMENT BY SECRETARY GLASS.

The Secretary of the Treasury has authorized the Federal reserve
bariks on and after Tuesday, September 2, to redeem in cash before
maturity at the holder's option, at par and accrued interest to the
date of such optional redemption, Treasury certificates of indebtedness of Series V J, dated April 10, 1919, and maturing September
9, 1919.
EXHIBIT

40.

CALL F O B B E D E M P T I O N , B E F O B E MATUBITY, OF T B E A S U B Y
C E B T I F I C A T E S O F I N D E B T E D N E S S , S E B I E S V K.
-

Notice to holders of United States Treasury certificates of indebtedness
qf Series V K, dated. May 1, 1919, and maturing October 7, 1919.
All United States Treasury certificates of indebtedness of Series
V K, dated May 1, 1919, and maturing October 7, 1919, are hereby
called for redemption on Septeniber 15, 1919, at par and accrued interest, pursuant to the provision for such redemption contained in t h e
certificates. On September 15, 1919, interest on all certificates of
said series will cease to accrue. .
CARTER GLASS,

Secretary of the Treasury.
SEPTEMBER 4,

1919.

v
EXHIBIT

41.
V

O F F E B TO B E D E E M B E F O B E M A T U B I T Y , AT T H E H O L D E B ' S O P T I O N ^
T B E A S U B Y C E B T I F I C A T E S O F I N D E B T E D N E S S , S E B I E S MATUB-^
I N G S E P T . 1 5 , 1 9 1 9 , A N D A L S O S E B I E S V K, P B I O B TO D A T E O N
WHICH CALLED F O B BEDEMPTION.

WABumGTOi^i, September 8, 1919.
STATEMENT BY SECRETARY GLASS.

The Secretary of the Treasury has authorized the Federal reserve
banks, ori and after Tuesday, September 9, and until further notice,,
to redeem in cash before September 15, 1919, at the holder's option,,
at par and accrued interest to the date of such optional redemption,
Treasury certificates of indebtedness of both the series which m a t u r e
on September 15, 1919 (with the coupons maturing September 15,.
1919, attached), and of Series V K, whicli have been called for redemp tion on said date.



EXHIBIT

42.

[1918. Department Circular No. 128. Loans and Currency.!
UNITED STATES OF AMEBICA WAB-SAVINGS
S E B I E S OF 1919.

CEBTIFICATES,,

TREASURY DEPARTMENT,
OFFICE OF THE SECRETARY,.

Washington, D. C, December 18, 1918J
The Secretary of the Treasury offers for sale to the people of the^
United States an issue of United States war-savings certificates, series
of 1919, authorized by act of Congress, approved September 24, 1917,.
as amended and supplemented. Payments for or on account of suck
war-savings certificates must be evidenced by United States war-savings certificate stamps, series of 1919, which are to be affixed thereto;.
The sum of war-savings certificates of.all issues outstanding shall n o t
at any one time exceed in the aggregate $4,000,000,000 (maturity^
value). I t shall not be lawful for any one person at any one time tohold war-savings certificates of any one series to an aggregate amount
exceeding $1,000 (maturity).
War-savings certificates, series of 1919, war-savings certificatestamps, series of 1919, and United States thrift stamps (described
below) may be purchased, on and after Januar}^ 1, 1919, at the priceshereinafter mentioned, at post offices, and at numerous banks and
other agencies appointed by the Secretary of the Treasury.
1. DESCRIPTION OF WAR-SAVINGS CERTIFICATES, SERIES OF 1919.

A United States war-savings certificate, series of 1919, will be an
obligation of the United States when, and only when, one or more
United States war-savings certificate stamps, series of 1919, shall
be affixed thereto. Each of such war-savings certificates will have
spaces for 20 war-savings certificate stamps, series of 1919, and each
of such stamps thereto affixed will have a maturity value of $5 OB
January 1, 1924, which will accordingly give each such certificate^,
when bearing its full complement of such stamps, a maturity value of
$100 on said date. No war-savings certificate will be issued unless a t
the same time one or more war-savings certificate stamps shall be
purchased and affixed thereto, but no additional charge will be made
for the war-savings certificate itself. The name of the owner of each
war-savings certificate must be written upon such certificate at the
time of the issue thereof.
War-savings certificate stamps, series of 1919, will be issued in 1919*
at the following prices:
January
February
March
April
;
May
June

"




|4.12
4.13
, . . . . 4.14
4.15
4.16
4.17

July
August
September
October
November
December

-..•
''.

4. I g
4.1^
4. 20
4.21
4. 22
4. 2S

:
291

292

REPORT ON T H E . FINANCES.

The average issue price above fixed for the year 1919 with interest
at 4 per cent per annum coriapounded quarterly for the average
period to maturity will amount to $5 on January 1, 1924.'
War-savings certificate stamps, series of 1919, shall not be affixed
to war-savings certificates, series of 1918, nor shall war-savings cer-^
tificate stamps, series of 1918, be affixed to war-savings certificates,
series of 1919. Such stamps affixed to war-savings certificates of
another .series will not add to the value thereof.
2. PAYMENT AT MATURITY.

Owners of war-savings certificates, series of 1919, will be entitled to
receive, on January 1, 1924, at the Treasury Department in Washington, or at a money-order post office (the office where registered in
the case of a registered certificate), upon surrender of such certificates
and upon compliance with all other provisions thereof, $5 in respect
of each war-savings certificate stamp, series of 1919, then affixed
thereto, but no post office shall be required to make any such payment until 10 days after receiving written demand therefor.
3. PAYMENT PRIOR TO MATURITY.

Any owner of a war-savings certificate, series of 1919, at his
option, will be entitled to receive, at any tirrie after January 10, 1919,
and prior to January 1, 1924, at a money-order post office (the office
where registered in the case of a registered certificate), upon surrender
of his certificate and upon compliance with all other provisions
thereof, in respect of each war-savings certificate stamp,> series of
1919, then affixed to such certificate, the amount indicated in the
foUowuig table, but no nost office shall make any such payment
until 10 days after receiving written demand therefor, and such
certificate must be surrendered for payment within 60 days after
such demand, otherwise the demand wUl be deemed.to be waived
and a new deriiand will be required before payment.
Month.
January...
February..
. March
April
May
June
July
August —
September
.October...
November.
December.

1919
$4.12
4.13
4.14
4.15
4.16
4.17
4.18
4.19
4.20
4.21
4.22
4.23

1920
S4.24
4.25'
4.26
4.27
4.28
4.29
4.30
4.31
4.32
4.33
4.34
4.35

S4.36
4.37
4.38
4.39
4.40
4.41
4.42
4.43
4.44
4.45
4.46
4.47

$4.48
4.49
4.50
4.51
4.52
4.53
4.54
4.55
4.56
4.57
4.58
4.59

$4.60
4.61
4.62
4.63
4.64
4.65
4.66
4.67
4.68
4.69
4.70
4.71

January 1, 1924,
4. REGISTRATION.

War-savings certificates, series of 1919, ijiay be registered without
cost to the owners at any post ofl&ce of the first, second, or third class,
or at certain specially authorized post offices of the fourth class,
subject to such regulations as the Postmaster General may from time




293

SECRETARY OF THE TREASURY.

to time prescribe, and payment in respect of any certificate so registered will be made only at the post office where registered. Unless
registered, the United States will n o t be liable if payment in respect
of any certificate or certificates be made to a person not the rightful
owner thereof. The Postmaster General may, by regulation, provide
for the transmission of registered certificates by mail to the post office
of registration for payment, and return of proceeds by money order,
in cases in which it appears that the owner is unable to secure payment personaUy, or by a representative, pursuant to regulations
therefor.
War-saving certificates, series of 1919, are not transferable and will
be pay'able only to the respective owners named thereon, except in the
case of the death of disability of any such owner.
5. TAX EXEMPTION.

War-saving certificates, series of 1919, shall be exempt, both as to
principal and interest from all taxation now or hereafter imposed b y
the United States, any State, or any of the possessions of the United
States, or by any local taxing authority, except (a) estate or inheritance taxes, and (Jb) graduated additional iricome taxes, commonly
known as surtaxes, and excess-profits and war-profits taxes, now or
hereafter imposed by the United States, upon the income or profits of
individuals, partnerships, associations, or corporations. The interest
on an amount of bonds and certificates, authorized by said act approved September 24, 1917, and amendments thereto, the principal
of which does not exceed in the aggregate $5,000, o^med by any individual,, partnership, association, or corporation, shall be exempt frqm
the taxes provided for in clause (b) above.
6. THRIFT CARDS AND THRIFT STAMPS.

Payments on account of war-savings certificates, series of 1919
may also be evidenced by United States thrift stamps, issued at any
time on or after December 3,1917, having a face value of 25 cents each
but bearing no interest. United States thrift stamps, however, must
not be afl&xed to war-savings certificates but only to thrift cards,
which may be obtained without cost. Thrift stamps as such are not
directly redeemable in cash, but each thrift card will have spaces for
16 such thrift stamps, and a thrift card, when bearing its full complement of such stamps, may be exchanged at a post office, dr other authorized agency, after December 31, 1918, and on or before December
31, 1919, for a war-savings certificate stamp, series of 1919, and upon
such exchange the owner of such thrift card must pay the difference
between $4 and the current issue price of war-savings certificate
stamps, series of 1919, during the month in which such exchange is
made, as shown by the following table:
January
February
March
April.
May.
June

:




1

|4.12
4.13
4.14
4.15
4.16
4. 17

July
August
September
October
November
December

•
°.
1

$4.18
4. ] 9
4. 20
4. 21
4. 22
4. 23

294

REPORT ON THE FINANCES.

7 . RIGHTS OF HOLDERS OF WAR-SAVINGS CERTIFICATES, SERIES OF
1919.

All the provisions of Treasury Department Circular No. 108 (WarSavings Circular No. 8), dated January 21, .1918, further defining
rights, of holders of war-savings certificates, apply to and govern
rights, of holders of war-savings certificates, series of 1919, except
as herein expressly modified with respect to war-savings certificates,
series of 1919, to wit:
(a) In paragraph I thereof, the maturity, date specified shall read
/ ^ J a n u a r y 1, 1924.'^
(6) In paragraph VI thereof, the $1,000 limitation o n t h e holdings
of a single person will refer to a maturity value of $1,000 of certificates .
of the series of .1919, without reference to any holdings of certificates
of any other series.
(c) In paragraph.XI there shalfbe inserted in the receipt thereby
required to be signed after the words ^^War-savings certificates'^
the words''of any one series."
. (d) In paragraph X I V the aggregate , amount of certificates received and held as therein provided will refer to the aggregate amount
of certificates of the series of 1919 without reference to any holdings
of certificates of any other series.
. 8 .

OTHER DETAILS.

War-savings certificates, series of 1919, will not be receivable as
security for deposits of public money, and will not bear the circulation privilege.
The Secretary of the Treasury reserves the right at any time to
withdraw this circular as a whole, or to amend from time to time
any of the provisions thereof, to withdraw war-savings certificates,
series of 1919, war-savings certificate stamps, series of 1919, or
United States thrift stamps from sale, to refuse to issue or to permit
t o be issued any war-savings certificates, series of 1919, or thrift
oards, and to refuse to sell or to permit to be sold any war-savings
oertificates, series of 1919, or war-savings certificates stamps, series
of 1919, or United States thrift stainps to any person, firm, corporation, or association.
The right is also reserved to make from time to time any supplemental or amendatory regulations which shall not modify or impair
the terms and conditions of war-savings certificates issued or to be
issued in pursuance of said act of September 24, 1917, as aniended
and supplemented.
Further details may be announced by the Secretary of the Treasury
from time to time, information as to which will be promptly furnished to postmasters at money-order post offices and to other agents.




CARTER GLASS,

Secretary.

EXHIBIT

43.

[1919. Department Circular No. 143. Loans and Current y.i

TREASURY SAVINGS CERTIFICATES.
TREASURY DEPARTMENT,
OFFICE OF THE SECRETARY,

Washington, July 1, 1919.
1. Under authority of an act of Congress approved Septeraber 24,*
1917, as amended and supplemented, the Secretary of the Treasury
offers for sale to the people of the United States an issue of United
States war-savings certificates, series of 1919, in registered form,
in denoininations of $100 and $1,000 (maturity value), hereinafter
called Treasury savings certificates. This issue of Treasury savings
certificates is in addition ,to the issue of war-savings certificates,
series of 1919, offered pursuant-to Department Circular No. 128,
dated December 18, 1918, but both issues of certificates are included
within the series of 1919 of United States war-savings certificates.
I t shall not be lawful for any one person at any one time to hold
war-savings certificates of the series of 1919 (of whatever issue or
denomination) to an aggregate amount exceeding $1,000 (rnaturity
value). The sum of war-savings certificates of all issues outstanding
shall not at any one time exceed in the aggregate $4,000,000,000
(maturity value).
2. Treasury savings^ certificates in the denomination of $100
(maturity value) may be purchased at post offices of the first and
second class, and such other post offices as the Postmaster General
may from time to time designate for that purpose; and Treasury
savings certificates in denominations of $100 and $1,000 (maturity
value) may be purchased at incorporated banks and trust companies
which are agents of the second class for the sale of war-savings
certificates, series of 1919, and qualified to obtain certificates to the
amount of $1,000 (maturity value) or more.
iDESCRIPTION OF TREASURY SAVINGS CERTIFICATES.

3. Treasury savings certificates will be issued only in registered
form, and shall bear the name of the owner thereof, which shall be
inscribed thereon by the issuing agent at the time of the issue thereof.
At the time of issue of each such certificate the registration stub
attached thereto shall be inscribed in the same manner by the issuing
agent, and shall be detached and forwarded in the manner hereinafter
directed for transmission to the Treasury Department at Washington.
The registration stubs shall remain at the Treasury Department at
Washington and shall constitute the basis for the Department's
record of the registered ownership of the certificates, i n addition
to the registration stub above described, the certificates will be




295

296

REPORT ON T H E FINANCES.

provided with an additional stub, designed for execution b y impression from the original registration stub, which additional stub shall
be retained by issuing agent banks and trust companies subject
uo the order of the Secretary of the Treasury, and by issuing post
offices in such manner as the Postmaster General shall direct. The
certificates will not be transferable, and will be payable only to the
owner named thereon except in case of death or disability of the
owner and in such case will be payable as provided in regulations
prescribed by the Secretary of the Treasury. The certificates will
ngt be valid unless the owner's name is duly inscribed thereon by an
authorized agent at the time of issue thereof.
TAX EXEMPTION.

4. Treasury savings certificates shall be exeinpt, both as to principal
and interest, from all taxation now or hereafter imposed by the United
States, any State, or any of the possessions of the United States, or
by any local taxing authority, except (a) estate or inheritance taxes,
and (h) graduated additional income taxes, commonly known as surtaxes, and excess-profits and war-profits taxes, now or hereafter imposed by the United States, upon the income or profits of individuals,
partnerships, associations, or corporations. The interest ori an
amount of bonds and certificates authorized by said act approved
September 24, 1917, and amendmerits thereto, the principal ofwhich
does not exceed in the aggregate $5,000, owned by any individual,
partnership, association, or corporation, shall be exempt frorii the
taxes provided for in clause (&) above.
ISSUE PRICES.

5.. Treasury savings certificates will be issued, in 1919 at the following prices:
^
DENOMINATION OF $100.

January
February
March
April.-.
May
June
July
August
September
October
November
December

:

$82. 40
82. 60
82. 80
83.00
.•.. 83. 20
83.40
83.60
-. 83. 80
84. 00
84. 20
• 84. 40
84.-60

DENOMINATION UF $1,000.

January
February
March..'.
April...
May
June
July
August
September
October
November
December

:

$824. 00
826. 00
828. 00
830.. 00
832.00
834.00
836.00
838. 00
840. 00
842. 00
844. 00
846. 00

6. The average issue prices above fixed for the year 1919, with
interest at 4 per cent per annum compounded quarterly for the average period to maturity, will amount to $100 and $1,000, respectively,
on January 1, 1924.
PAYMENT AT MATURITY.

7. Owners of Treasury savings certificates will be entitled to receive on January 1, 1924, the face amounts as stated thereon. On
and after January 1, 1924, payment of the certificates wUl be made




297

SECRETARY OF THE TREASURY.

upon presentation and surrender thereof by maU or otherwise at the
Office of the ^Secretary of theTreasur}^, Division of Loans arid Currency,
Washington, and upon compliance with all other provisions thereof,
provided the form of demand for payment appearing on the back thereof shall be- properly signed by the owner in the presence of, and duly
certified by, a United States postmaster, an executive officer of an
incorporated bank or trust company, or any other person duly designated by the Secretary of the Treasury fo"r the purpose. Iri case of
the death or disabUity of the owner a special lorm of. demand for
payment prescribed by the Secretary of the Treasur}^ must be duly
executed.
•
PAYMENT PRIOR TO MATURITY.

8. The owner of a Treasury savings certificate, at his option, will
be entitled to receive prior to January 1, 1924, the amount indicated
in the foUowing tables (and in the table appearing on the back of the
certificate) with respect to certificates of the denomination concerned.
Payment prior to January 1, 1924, of the amount payable in respect
of any such certificate will only be made 10 days after presentation,
surrender, and demand, iriade as aforesaid at the Office of the Secretary of the Treasury, Division of Loans and Currency, Washington,
and upon compliance with all other provisions thereof; but in no
event shall such demand be made prior to the second calendar month
following the calendar month in which the certificate is issued to
the owner.
Tables shoiuing. how Treasury savings certificates increase in value.
DENOMINATION OF $100.
1919

Montb.
Januarv
February
March
April
May
June
July .
August
September..
October
November...
IDecember
J a n . 1, 1924

.

.
.

•-.

$82.40
82.60
82.80
83.00
83.20
83.40
83.60
• 83.80
84.00
84.20
84.40
84.60

1920

1921

1922

1923

$84. 80
85.00
85. 20
85.40
85.60
85.80
86.00
86.20
86.40
86.60
86.80
87.00

$87. 20
87.40
87.60
87.80
88.00
88.20
88.40
88.60
88.80
89.00
89. 20
89.40

$89.60
89.80
90.00
90.20
90.40
90.60
90.80
91.00
91.20 •
91.40
91.60
9L80

$92.00
92.2a
92.4a

.

92. ea
92.8a
93.00
.93.20
93.4a
93.60
93.8a

94. oa
94.20

100. oa

DENOMINATION OF $1,000.
January
February...
March
April
May
June
July
August
September..
October
November..
December..
Jan. 1,1924.




$824.00
826.00
828. 00
830.00
832. 00
834.00
836.00
838. 00
840.00
842. 00
844.00
846.00

$872. 00
$848.00
874.00
850.00
876. 00
852.00
878.00
854.00
856.00 • 880.00
882.00
858.00
884.00
860.00
886.00
8S2. 00
888. 00
864.00
890. 00
866.00
892.00
868. 00
894.00
870. 00

$920. oa
$898.00
922.00
898. 00
924.00
900.00
928.00
902.00
928.00
904.00
930.00'
906.00
932.00'
908.00
910.00
934. oa
912.00
936.00^
914. 00 . 938.00'
916.00
940.00
918. 00
942, 00

i,ooaoa

:298

REPORT ON T H E FINANCES.

ISSUE ON SURRENDER OF OTHER WAR-SAVINGS CERTIFICATES.

9. A United States war-savings certificate, series of 1919, issued
pursuant to Department Circular No. 128, dated December 18, 1918,
which has not been registered and which bears the full complement
of 20 war-savings certificate stamps, series of 1919, may be received
i n exchange for a Treasury savings certificate in the denomination of
$100 (maturity value) inscribed in the same name as the certificate
tendered in eixchange, upon presentation and surrender to any post
office authorized to issue and sell Treasury savings certificates in the
•denomination of $100 (maturity value), or to any other agent for the
sale of Treasury savings certificates in either denomiation, and 10
such war-savings certificates may in like manner be received in exchange for a Treasury savings certificate in the denomination of'$1,000
(maturity value) inscribed in the same name as the certificate tendered in exchange, upon presentation and surrender to any agent for
the sale of Treasury savings certificates in the denomination of $1,000
(maturity value). No previous demand for payment of certificates
so surrendered will be required, and the exchange will be made in
•each case without payment to or by the United States.
10. A United States war-savings certificate, series of 1919, issued
pursuant to Department Circular No. 128, dated December 18, 1918,
which has been registered and which bears the full complement of 20
war-savings certificate stamps, series of 1919, may in like manner be ,
Teceived in exchange for a Treasury sayings certificate in the denomination of $100 (maturity value) inscribed in the same name as such
Tegistered certificate, when tendered therefor by the registered owner
to the post office of registration, provided that such post office is
authorized to issue and sell Treasury savings certificates.
11. War-savings certificates, series of 19I87 detached wai savings
certificate stamps, war-savmgs certificates bearing less than 20 warsavings certificate stamps, thrift cards with thrift stamps affixed, and
thrift stamps will not be received in exchange or payment for Treasu r y savings certificates.
METHODS OF DISTRIBUTION AND SALE.

12. Treasury savings certificates in the denomination of $100
(maturity value) may be purchased from post offices of the first and
•second class, and from such other post offices as the Postmaster Gen•eral may, from time to time, designate for that purpose, and from
incorporated banks and trust companies which are duly qualified as
agents of the second class, for the sale of war-savings certificates,
series of 1919, to the amount of $1,000 or more, pursuant to Department Circular No. 130, as heretofore or hereafter amended and supplemented. Such post offices and incorporated banks and trust
companies are hereby designated as agents for the sale of Treasury
rsavings certificates in the denomination of $100 (maturity value) subject to the provisions hereof.
13. Treasury savings certificates in the denomination of $1,000
(maturity value) may be purchased only at incorporated banks and
trust companies which are duly qualified as agents of the second
olass for the sale of war-savings certificates, series of 1919, to the
amount of $1,000 or more, pursuant to Department Circular No. 130,




SECRETARY OF THE TREASURY.

299

.as heretofore or hereafter amended and supplemented. Such incorporated banks and trust companies are hereby designated as agents
for the sale of such certificates in the denomiriation of $1,000 (maturity
value) subject to the piovisions hereof.
14. In reporting sales of Treasury savings certificates and in
•accounting for the proceeds thereof. Federal reserve banks and
incorporated banks and trust companies acting as agents will enter
in their accounts the serial numbers of such certificates covered by
rsuch accounts.
15. Every incorporated bank or trust company which is a cash
agent of the second class and qualified hereunder will transmit to the
Federal reserve bank from which it receives war-savings certificates
for sale, the original registration stub detached from each Treasury
savings certificate sold by it immediately upon the issue of such certificate or not later than.the close of the month in which sold. Such
Federal reserve bank will note the serial number appearing on the
stub (for comparison with the next report rendered by such agent),
and will forward the stub to the Secretary of the Treasury, Divisiori
of Loans and Currency, Washington, so as to reach*the Treasury
Department not later than the month succeeding the month in which
the certificate is sold.
16. Every incorporated bank or trust cornpany,which is a collateral
agent of the second class and qualified hereunder will attach to its
monthly account to the Federal reserve bank with which such agent
shall have deposited the collateral security required under Department Circular No. 130, as heretofore or hereafter amended and supplemented, the original registration stubs detached frorii all Treasury
savings certificates ,sold by it within such month. The Federal
reserve bank receiving such stubs will see that a registration stub is
a t hand for each such certificate reported sold, and will forward all
registration stubs to the Secretary of the Treasur}^, Division of Loans
and Currency, Washington, so as to reach the Treasury Department
not later than the morith succeeding the month in which the certificate
is sold.
'
^
17. Original registration stubs detached from Treasury savings
•certificates sold by post offices will be attached to the accounts of
sales of such certificates rendered to the Third Assistant Postmaster
General, Division of Stamps, and will be forwarded by the Post Office
Department to the Secretary of the Treasury, Division of Loans and
Currency, Washington, so as to reach the Treasury Department not
later than the month succeeding the month in which the certificate
is sold.
18. Agents of the second class may qualify for the sale of Treasury
savings certificates by deposit of cash or pledge of coUateral, as the
oase may be, in the manner prescribed by Department Circular No.
130, as heretofore or hereafter amended and supplemented, the amount
of such cash or collateral to be determined by the issue prices of
Treasury savings certificates delivered to such agents for sale, in the
same manner as provided in said circular with respect to war-savings
certificate stamps delivered to agents appointed thereunder.
19. The duties and obligations of such agents of the second class,
as provided in said Department Circular No. 130, as heretofore or
hereafter amended and supplemented, with reference to the receipt




300

REPORT ON T H E PINANCES.

and sale of war-savings certificate stamps, and the payment of
the proceeds thereof, and accounting therefor, and redelivery
thereof, are hereby extended to, and shall govern, the transactions
of such agents, respectively, with respect to Treasury savings certificates, and such agents will by the receipt or sale of Treasury
savings certificates be conclusively presumed to have assented to all
the terms and provisions hereof, and to the retention of any collateral
security pledged pursuant to said circular as collateral secuiity
thereunder and hereunder. Each collateral agent of the. second
class in accounting for the proceeds of sales of Treasury savings
certificates shall be entitled to receive appropriate credit for each
United States war-savings certificate, series of 1919, issued pursuant
to Department Circular No. 128, dated December 18, 1918, and
bearing the full complement of 20 war-savings certificate stamps,
series of 1919, which is received in exchange for Treasury savings
certificates and transmitted to the Federal reserve bank with its
account.
.
20. An incorporated bank or trust company acting as a cash agent
of the second class for the sale of Treasury savings certificates which
receives in exchange for such certificates war-savings certificates,
series of 1919, issued pursuant to Department Circular No. 128,
dated December 18, 1918, and bearing the full complement of 20
United States war-savings certificate stamps, seiies of 1919, may
secure cash reimbursement for the war-savings certificates so received
in exchange, from the Federal reserve bank from which it receives
war-savings certificates for sale, upon the surrender of the warsavings certificates so received to such Federal reserve bank, at the
time of forwarding the registration stubs for the Treasury savings
certificates in exchange for which they were received. The Federal
reserve bank will thereupon pay to such agents the value of such
certificate stated in said Circular No. 128 as the surrender value of
such certificates on the date of their receipt in exchange for Treasury
savings certificates, and no previous demand for payment shall be
required.
OTHER DETAILS.

21. Treasury savings certificates will not be receivable as security
for deposits of public - moneys and will not bear the circulation
privilege.
22. The provisions of Treasury Department Circular No. 108
(War-Savings Circular No. 8), dated January 21, 1918, further
defining rights of holders of war-savings certificates, do not apply
to' or govern the rights, of holders of Treasury savings certificates.
The Secretary of the Treasury will shortly issue a new Treasury
Department circular further defining the rights of holders of Treasury
savings certificates and prescribing regulations under which Treasury
savings certificates will be payable in case of the death oi disability
of the owner.
23. The Secretary of the Treasury reserves the right at any time
to withdraw this circular as a whole, or to amend from time to time
any of the provisions thereof, to revoke any or all appointments of
agents, to withdraw Treasury savings certificates from sale, to
refuse to issue or to permit to be issued any such certificates, and to




SECRETARY OP THE TREASURY.

301

refuse to sell or to permit to be sold any such certificates to any
person, firm, corporation, or association.
24. The right is also reserved to make from time to time any supplemental or amendatory regulations which shall not modify or
impair the terms and conditions of Treasury savings certificates
issued in pursuance of said act of September 24, 1917, as amended
and supplemented.
25. JFurther details may be announced by the Secretary of the
Treasury from time to time; information as to which will be promptly
furnished to postmasters and to other agents.




CARTER GLASS,

Secretary ofthe Treasury.

E X H I B I T 44.
[1919. Department Circular No. 149. Loans and Currency-.
UNITED

STATES

OF

AMERICA—TREASURY
CATES.

SAVINGS

CERTIFI-

TREASURY DEPARTMENT,
O F F I C E OF THE SECRETARY,

Washington, July 31, 1919.
To holders of Treasury savings certificates, and others concerned:
The following Treasury Department regulations are hereby prescribed further defining the rights of holders of Treasury saving
certificates issued pursuant to Treasury Department Circular No. 143,
dated July 1, 1919, and determining the terms and conditions upon
which Treasury saving certificates will be payable i n case of the death
or disability of the owner:
I. CERTIFICATES NOT PRESENTED AT MATURITY.
'

--

c

. Treasury saving certificates shall not bear interest after maturity j.
January 1, 1924.
II. LOST, STOLEN, OR DESTROYED CERTIFipATES.

In the event of the loss, theft, or destruction of a Treasury savings
certificate duly issued and registered in accordance with the regulations and instructions governing issue and registratiori, the registered
owner may apply to the Secretary of the Treasury, Division of Loans
and Currency, Washington, on forms prescribed by the Secretary of
the Treasury, either for the issuance of a duplicate certificate or for
the payment of the original certificate. On being satisfied of the
facts as to loss dr destruction., the Secretary of the Treasury
will, after not less than three months have elapsed from the time
of application, issue to the registered owner a duplicate certificate or
make payment of the original certificate, but no duplicate certificate
will be issued after maturity of the original. Any duplicate certificate so issued shall be marked '^duplicate,'' but shall receive a new
number and bear a notation of the number of the original certifiate. Appropriate notation of the issue of the duplicate certificate
or payment of the original certificate will be made on the registration
records of the Treasury. Department. The Secretary of the Treasury
may, in special cases where he deems the facts warrant such action,
require the claimant to give a bond of indemnity, with approved
sureties, against any claim that may thereafter be made on the original certificate. The duplicate certificate, when issued, shall stand
for all purposes in the place and stead of the original lost, stolen, or
destroyed certificate. After the issuance of a duplicate certificate, or
the payment of the original certificate, the original shall cease td
302




•

•

'

.

SECRETARY OF THE TREASURY.

303

have validity for any purpose, and if recovered shall be returned to
the Secretary of the Treasury, Division of Loans and Currency,
Washington, for cancellation.
III. CREDITORS^ RIGHTS.

Payment of Treasury savings certificates will be made to the owner
named thereon notwithstanding any lien, attachment, trustee process,,
garnishment, judgment, receivership, levy, execution, order, decree,
or similar process of law, equity, or in bankruptcy directed against the
owner thereof, but nothing herein contained shall excuse the owner
from full compliance with, or performance of, any lawful judgment,
order," or decree of a court of competent jurisdiction with reference to
disposition of the proceeds of the certificate. Collection of the certificate by the owner pursuant to such judgment, order, or decree, will be
deemed a payment received on behalf of the owner and not for any
other person within the language of the demand printed on the certificate, notwithstanding that the owner is, by such judgment, order,
or decree, required to pay the proceeds to another person. Neither
the United States of America nor any officer or employee thereof shall
be a proper or necessary party to an}^ suit or action with reference tO'
such certificate or the proceeds thereof nor be bound by any judgment,,
order, or decree rendered,or entered therein.
IV. HOLDING OF TREASURY SAVINGS CERTIFICATES BY CORPORATIONS^
PARTNERSHIPS, AND OTHERS.

1. Treasury savings certificates may be issued and registered in the
name of and held by corporations, partnerships, associations, or joint
stock companies.
2. Payment of a certificate registered in the name of a corporation,
partnership, association, or joint-stock company will be made to any
officer or agent presenting proof satisfactory to the Secretary of the
Treasury of his authority to receive payment. No designation may
be made on the certificate or registration stub of an officer or agent
to receive payment on behalf of a corporation, partnership, association, or joint-stock company.
,
y . FIDUCIARIES,

Treasury savings certificates may be issued and registered in the
names of fiduciaries in their representative capacities. Payment of
any such certificate will be made to the fiduciary or fiduciaries, except
that in the event of the death or disqualification of the fiduciary or
fiduciaries payment may be made in the discretion of the Secretary of
the Treasury, to. the person or persons in his opinion beneficially entitled thereto.
VI. TREASURY SAVINGS CERTIFICATES ISSUED TO TWO PERSONS.

Treasury savings certificates may be issued and registered in the
names of two persons (but not more than two) in the alternative, as,
for instance, '^ John Jones or Mary Jones.'' Such certificates will be
payable to either person named thereon without requiring thesignature




304

REPORT ON THE FINANCES.

of the other person and to the survivor of them without proof of the
other person's death, and upon payment to either person the other
shall cease to have any interest therein. No other form of certificate
in the names of two persons is authorized, except to the extent permitted by paragraphs V and I X of this circular. When certificates
are issued in the alternative, the names and addresses of both persons
shall be inscribed on the certificates and on the registration stubs.
In determining whether the $1,000 limitation on the holdings of a
single person has been e'xceeded, the full maturity value of war-savings
certificates of any one series, of whatever issue or denomination, held
with any other person shall be added to the full maturity value of
such certificates held individually, and the sum must not exceed
$1,000 (maturity value).
.
VII. -INFANT HOLDERS OF TREASURY SAVINGS CERTIFICATES.

1. A Treasury savings certificate may be issued and registered in
the name of an infant.
2. If a guardian of the property has, to the knowledge of the Secretary of the Treasury, been appointed for an infant owner of a Treasury
savings certificate, payment of the certificate will be made only to such
guardian, upon presentation of proof satisfactory to the Secretary
of the Treasury of his appointment and qualification.
3. If an infant holder of a Treasury savings certificate for whom no
such guardian has been appointed, to the knowledge of the Secretary
of the Treasury, is at the time payment of such certificate is demanded, of sufficient competency and understanding, in the opinion
of the Secretary of the Treasury, to sign his name to the demand
and to comprehend the nature thereof, payment will be made directly
to such infant owner. In the event that such idfant is not, in the
opinion of the Secretary of the Treasury, of such competency and
understanding, payment will be made to either parent of the infant
with whom the infant resides, or in the event that such infant resides
with neither parent, then to the person with whom such infant resides. In making demand for payment, the representative shall sign
the infant's name as well as the name of such representative.
4. Issuance of a duplicate for, or payment oi, a lost, stolen, or
destroyed certificate which has been registered in the name of an
infant will be to the infant or to a representative, as hereinbefore
provided, upon compliance with the regulations respecting lost,
stolen, or destroyed certificates.
^
v m . DISABILITY OF HOLDERS OF TREASURY SAVINGS CERTIFICATES.

1. Treasury savings certificates held by persons legally declared
to be incompetent to manage their affairs, and for whose estate a
conservator or other legally constituted representative has been
appointed by a court of competent jurisdiction, to the knowledge of
the Secretary of the Treasury, will be paid to such conservator or
legal representative, upon presentation of proof satisfactory to the
Secretary of the Treasury of his appointment and qualification.
2. Certificates held by persons under any other disability will be
paid only to the registered owners of the certificates, except as herein
othei-wise provided.




SECRETARY OF THE TREASURY.

305

I X . REGISTRATION OF TREASURY SAVINGS CERTIFICATES IN FAVOR OF
BENEFICIARY.

1. Treasury savings certificates may be issued and registered payable to a single designated beneficiary in case of death of the registered
owner, as, for instance, ^^John Smith, payable on death to Mary
Smith." I n ' t h a t event the issuing agent shall at the time of issue
inscribe on the certificate and on the registratiori stub the words
^ P a y a b l e on death to
," inserting the name and address of
the beneficiary. Such certificates will be payable to the registered
owner during his or her lifetime, and to the beneficiary upon death
of the owner, provided the beneficiary be then living. If the beneficiary shall predecease the registered owner, the certificate will be
ayable to the owner as though such beneficial registration had not
een made. Second registration in favor of another benefiLciary, or
change of beneficiary, will not be permitted.
2. Should the beneficiary die after the death of the'registered owner,
but before payment of the cer tificate, the regulations covering payment of certificates Held by a deceased owner shall govern the payment of the certfficate as though the beneficiary were such a deceased
owner.

E

X. PAYMENT OF TREASURY SAVINGS CERTIFICATES HELD BY DECEASED
OWNER.

I n case of the death of the owner of a Treasury savings certificate
(other than a certificate registered payable to a beneficiary), payment
will be made to the persons and in the manner hereinafter provided:
1. If the decedent leave a will which is duly admitted to probate,
or die intestate and the estate of such decedent is administered in a
court of competent jurisdiction, payment of such certificate will be
made only to the duly appointed representative of .the estate.
Administration will be required before payment of a Treasur}^ savings
certificate will be made in all cases where the gross personal estate
of the deceased owner exceeds $500 in value, unless the estate of
such decedent is exempt from administration under the laws of the
State of the decedent's domicile.
2. In case no legal representative of the decedent's estate is appointed and either the gross personal estate amounts to $500 or less
in value or the law of the State of decedent's domicile specifically
exempts the estate from administration, the certificate will be paid
to arid on the demand of persons equitably entitled thereto in the
opinion of the Secretary of the Treasury, in the following order of
classes:
First. Husband, wife, next of kin, or other person, who pays the
reasonable funeral expenses, expenses of the last illness, or other
preferred claims against the decedent's estate.
Second. Creditor for funeral expenses, expenses of last illness, or
other preferred claims.
,
Third. Husband, wife, or next of kin of the deceased, in the following order of preference: (1) Husband or wife; (2) child or children;
(3) father; (4) mother; (5) any other of the next of kin of the deceased;
provided, however, that nothing herein contained shall require the
payment of a single certificate to more than one person.
140325—n 1919




20

306

REPORT ON T H E

FINANCES.

XI. SIGNING DEMAND FOR

PAYMENT.

Whenever, pursuant to these regulations, payment of a Treasury
savings certificate is demanded by a person not the original owner
thereof, the form of demand for payment appearing oh the certificate
need not be signed, but such person shall sign in the prescribed manner
a form of demand for paymerit which may be obtained on application
to the Secretary of the Treasury, Division of Loans and Currency,
Washington, and which shall be pasted on the certificate over the
form of demand appearing thereon, as follows:
FORM OF DEMAND FOR PAYMENT.

The undersigned is the person entitled to payment of this certificate, Serial No
under the regulations prescribed by the Secretary of the Treasury, in place of
, the original owner whose name is inscribed hereon, and hereby demarids
payment hereof. Said original owner (or his estate) does.not hold War-Savings Certificates of any one series, of whatever issue or denomination, to an aggregate amount
exceeding $1,000, maturity value.
(Date.)

(Signature of payee.)
No. and street.
T o w n or c i t y

state
Personally appeared before me

.

-.

, known or proved to me to be
(Name of payee.)

-.

of the original owner whose name is inscribed on said

(State connecrion with original owner.)

certificate, and signed the above demand for payment, acknowledging the same to
be his free act and deed.
Witness my hand and official designation:
[SEAL.]

•

(Signature of attesting officer.)
(Official designation.)
Dated a t . . .

,19
XII.

INHERITANCE

TAXES.

Payment of Treasury savings" certificates will be made without
any deduction for inheritance, estate, or transfer taxes on death of
a deceased owner, either State or Federal, and no claim shall lie
^against the United States or any officer or employee thereof for failure to deduct or withhold any such tax. The person to whom payment of the certificate is made shall be liable for all such taxes, if
any shall be due, and the lien thereof shall attach to the proceeds
of the certificate iri his hands.
- .
XIII.

CHANGE

OF

NAME.

In case the name of the owner of a Treasury savings certificate has
since the issuance of the certificate been changed by marriage or by
order or decree of court, the Secretary of the Treasury will accept
the owner's demand for payment signed in the new name, as well as
in the original name, upon being satisfied of the identity of the
person.
XIV. LIMITATION

IN

AMOUNT.

Treasury savings certificates issued pursuant to Treasury Department Circular No. 143, dated July 1, 1919, are included within the
series of 1919 of war-savings certificates. If it shall appear that



SECRETARY OF THE TREASURY.

307

any person has received Treasury savings certificates issued to such
person by way of gift, bonus, dividend, or in any other^lawful manner except the purchase thereof by such person, whereby he holds
war-savings certificates of any one series, of whatever issue or denomination, in excess of an aggregate of. $1,000 (maturity value), the
excess amount of Treasury savings certificates shall be immediately
surrendered to the Secretary of the Treasury, Diyision of Loans and
Currency, Washington, and will be paid at their then value. In any
other case if it shall appear at the time a certificate is presented for
payment that the person presenting the same holds war-savings
certificates of any one series, of whatever issue or denomination, to
an aggregate amount exceeding $1,000 (maturity value), the Secretary of the Treasury may refuse payment of all certificates in excess of
$1,000 (maturity value) and demand surrender of certificates held
by such owner until such holdings of such owner are reduced to $1,000
(maturity value). The Secretary of the Treasury will make appropriate notation on certificates so surrendered, and such certificates
shall have no validity for any purpose. Nothing herein contained
shall prevent the payment of. a certificate of a deceased owner to
the person entitled thereto under these regulations, without regard
to the amount of certificates already owned by such payee, unless i t
shall appear that such deceased owner held war-savings certificates,
of any one series, of whatever issue or denomination, to an aggregate amount exceeding $1,000 (maturity value), in which case only
$1,000 (maturity value) will be paid, and the excess taken up in
accordance with the forgoing provisions.
XV. ADMINISTRATION.

The administration of the foregoing regulations shall be in accordance with such forms and administrative regulations and instructions
as the Secretary of the Treasury shall from time to time prescribe.
The Secretary of the Treasury may in any case accept as sufficient
proof of the identity or of the competency and understanding of the
person making demand for payinent, the fact that the form of demand for payment has been signed in the presence .of, and duly
certified by, a United States postmaster, an executive officer of an
incorporated bank or trust company, or an}^ other person duly designated by the Secretary of the Treasury for the purpose.
The Secretary of the Treasury may make, from time to time, any
further or supplemental or amendatory regulations which shall n o t
modify or impair the terms and conditions of Treasury savings certificates issued in pursuance of the act of Congress approved S e p tember 24, 1917, as amended and supplemented.




CARTER GLASS,

Secretary ofthe Treasury^

EXHIBIT

45.

[1918. Department Circular No. 126. Loans and Currency.1

S U R R E N D E R OF WAR-SAVINGS CERTIFICATE STAMPS, S E R I E S OF
1918, H E L D BY AGENTS OF THE F I R S T CLASS.
TREASURY DEPARTMENT,
OFFICE OF THE SECRETARY,

Washington, December 10, 1918.
From January 1 to 10, 1919, inclusive, each Federal reserve bank
and branch thereof and any incorporated bank or trust company is
authoiized to receive from any authorized agent of the first class
war-savings certificate stamps, series of 1918, for collection, or for
exchange for war-savings certificate stamps, seriesof 1919, and United
States thrift stamps, with cash adjustment, in the following manner:
The aggregate value of war-savings certificate stamps, series of
1918, received from such authorized agent of the first class for exchange shall be computed at the price of $4.24 for each such warsaving certificate stamp. The bank or trust company making the
exchange shall then deliver in exchange therefor, to such authoiized
agent of the first class war-savings certificate stamps, seiies of 1919,
computed at the price of $4.12 each, to the extent that the same may
be delivered without exceeding the aggregate value of the war-savings
certificate stamps, series of 1918, received for exchange and computed as above required. Any balance remaining of such aggregate
value shall be paid by delivery of United States thrift stamps, at 25
cents each, to the extent that may be done without exceeding such
balance, and any balance remaining shall be paid in cash. Such
exchange may be made only on presentation by the authorized agent
of the first class of his certificate of appointment for sale of warsayings certificate stamps, series of 1918, bearing the facsimile signature of the Secretary of the Treasury.
An incorporated bank or trust company receiving war-savings
certificate stamps, series of 1918, for collection or exchange, is
authoiized to deliver, on or before January 20, 1919, such war-savings certificate stamps, series of 1918, so received, to the Federal
reserve bank of its district, together with a statement setting forth
the name of the authorizeci agent of the first class from whom the
same have been received and the number of stamps received from
such agent. On receipt thereof the Federal reserve bank, as fiscal
agent of the United States, will pay such bank or trust company
$4.24 in respect of each war-savings certificate stamp, series of
1918, so delivered; or, at the option oi such bank or trust company,
will, in lieu of paying cash, deliver war-savings certificate stamps,
series of 1919, computed at $4.12 each, and United - States thrift
stamps, computed at 25 cents each, and cash, to an aggregate not exceeding the aggregate value of ,the war-savings certificate stamps,
series of 1918, computed at $4.24, so received.
The foregoing provisions apply only to war-savings certificate
stamps, series of 1918, not affixed to war-savings certificates, and
apply only to collection or exchange of stamps held by authorized
agents of the first class. Banks and trust companies shall not make
such collection or exchange except for persons who are duly authorized agents of the first class, and in the manner above set forth.
W.

G.

MCADOO,

Secretary.
308



EXHIBIT

46.

„ [1918. Department Circular No. 130. Loans and Currency.]

DISTRIBUTION AND SALE OF WAR-SAVINGS CERTIFICATES AND
STAMPS, S E R I E S OF 1919.
TREASURY DEPARTMENT,
O F F I C E OF THE SECRETARY,

December 23,' 1918.
To Federal reserve banlcs, all agents for the sale of war-savings certificates and stam^ps, and others concerned:
The provisions of Department Circular No. 94 (War-Savings Circular No. 1), dated November 15, 1917, under the title ''Method of
distribution and sale," of Department Circular No. 95 (War-Savings
Circular No. 2), dated November 30, 1917, Department Circular No.
96 (War-Sayings Circular No. 3), dated January 2, 1918, and Department Circular No. 101 (War-Sa\ings Circular No. 5), dated
February 19, 1918, are hereby extended, subject to the provisions
hereof arid of Department Circular No. 128, dated December 18, 1918,
to the distribution and sale of United States war-savings certificates
and war-savings certificate stamps, series of 1919, and to the distribution and sale of United States thrift stamps after December 31,
1918.
.
.
. .•
All provisions of said circulars with reference to war-savings certificates and war-savings certificate stamps, seiies of 1918, issued under
Department Circular No. 94, as heretofore and hereby modified,
shall, mutatis mutandis, apply with equal force and effect to warsavings certificates and war-savings certificate stamps, series of 1919,
issued under Departinent Circular No. 128, dated December 18, 1918.
War-savings certificate stamps, series of 1919, and United States
thrift stamps (together with thrift cards and war-savings certificates, series of 191^), will be furnished (1) to post offices for sale to
the public and to agents of the first class, and (2) to Federal reserve
banks, as fiscal agents of the United States, for distribution to agents
of the second class and alsc) for sale to agents of the first class, such
agents being classified as provided in the above-described circulars.
Post offices and Federal reserve banks will maintain available supplies of stamps, certificateSj and cards in amounts sufficient to meet
the requirements for such distribution and sale.
Agents of the first class and cash agents of the second class duly
appointed for the sale of war-savings certificates and war-savings
certificate stamps, series of 1918, may act as such, agents, respectively,
for the sale of such certificates and stamps, series of 1919, without
further application; and they will by the receipt or sale of warsavings certificates or war-savings certificate stamps, series of
1919, or by the receipt or sale of United States thrift stamps after
December 31, 1918, be conclusively presumed to have assented to all
the terms arid provisions hereof.




309

310

REPORT ON THE FINANCES.

Collateral agents of the second" class already qualified to a sufficient amount pursuant to Department Circulars Nos. 95 and 101
for the sale of war-savings certificates' and war-savings certificate
stamps, series of 1918, wiU not be required to file anew formal apphoations for appointment as agents, nor resolutions and pledge agreements, and they will, by the receipt'or sale of war-savings certificates or war-savings certificate stamps, series of 1919, or by the
receipt or sale of United States thrift stamps after December 31,
1918, be conclusively presumed to have assented to aU the terms
and provisiohs hereof. CoUateral security pledged or to be pledged
under any of the circulars above mentioned will be conclusively
deemed to be pledged as coUateral security thereunder and hereunder.
Forms of applications for riew appointments as agents hereunder
will be furnished on application.
The provision that the amount of war-savings certificates sold
t o any one person at any one time should not exceed $100 has been"
repealed by the act approved September 24, 1918, and is no longer
in force.
CoUateral agents of the second class may obtain from a Federal
Teserve bank war-savings certificate stanips, seiies of 1919, in amounts
of $1,000 (maturity value) or less, as well as in amounts in excess
of $1,000 (maturity value). In determining the collateral security
to be deposited and pledged by such agents, war-savings certificate
stamps, series of 1919, shaU be taken at the December, 1919, issue
price. Any such sagent desiring to obtain war-savings certificate
stamps, series of 1919, at such December, 1919, issue price, and
thrift stamps, to the aggregate amount of $50,000 or more, may
deposit and pledge as collateral secuiity, subject to the provisions
hereof, any securities of the classes described in Treasury Department Circular No. 92, of September 21, 1918, as heretofore or here;after amended and supplemented.
The Secretary of the Treasury will make provision for the exchange
of thrift stamps after December 31, 1919, into war-savings certificates, series of 1919, upon payment of the additional amount then
required, or into some other series, or will otherwise protect the
interest of holders of thrift stamps.
No agent shall seU any United States war-savings certificate
stamp, series of 1919, at any price other than the current issue price
of such stamp during the month in which sold, as specified in
Department Circular No. 128.
I t is not lawful for any one person at any one time to hold warsavings certificates, series of 1919 (and war-savings certificates
stamp, series of 1919), to an aggregate amount exceeding $1,000
(maturity value). I t is lawful to hold war-savings certificates,
series of 1919 (and war-savings certificate stamps, series of 1919),
up to an aggregate maturity value of $1,000, regardless of the amount
ot war-savings certificates and war-savings certificate stamps of the
series of 1918 that may already be held.
The Secretary of the Treasury reserves the right to withdraw this
circular or to amend, from time to time, any- of the provisions hereof,
and to terminate any.agency created or existing hereunder.




CARTER GLASS,

Secretary.

E X H I B I T 47.
[1918. Department Circular No. 131. Loans and Currency.1

SURRENDER OF WAR-SAVINGS CERTIFICATE STAMPS, SERIES OF
1918, HELD BY AGENTS OF THE SECOND CLASS.
TREASURY DEPARTMENT,
OFFICE OF THE SECRETARY,

. Washington, D. C, December 23, 1918.
Each coUateral agent of the second class appointed pursuant to
Department Circular No. 95 (War-Savings Circular No. 2), dated
November 30, 1917, is req[uired to deliver to the Federal reserve
bank to which such, agent is required to account, on or before January .10, 1919, all war-savings certificates and war-savings icertificate
stamps, series of 1918, held by such agent at the close of business
December 31, 1918, and shall receive credit for such stamps (at the
December, 1918, issue price) on its account with such Federal reserve bank.
All cash agents of the second class appointed pursuant to Department Circular No. 96 (War-Savings Circular No. 3), dated January
2, 1918, are required to deliver on or before January 10, 1919, to the
Federal reserve bank from which the same wer^ received, all warsavings certificates and war-savings certificate stamps, series of
1918, held by them at the close of business December 31, 1918. The
provisions of said Circular No. 96, requiring such delivery on or
before December 31, 1918, are hereby superseded. Upon such
redelivery, each such cash agent wiU be entitled to return of the
deposit made against the stamps so redelivered, computed in the
manner prescribed in said Circular No. 96; or, at the option of such
agent, such Federal reserve bank will deliver to such agent, in lieu
of returning. such deposit, war-savings certificate stamps, series of
1919, computed at $4.12 each, and United States thrift stamps,
computed at 25 cents each, and cash, to an aggregate value so computed not exceeding the amount of the deposit to be refunded.




CARTER GLASS,

Secretary.
311

CO .

E X H I B I T 48.

to
S T A T E M E N T S H O W I N G D A T E S A N D AMOUNTS OF CREDITS ESTABLISHED TO NOV. 15, 1919, IN FAVOR OF FOREIGN
G O V E R N M E N T S , U N D E R T H E ACTS OF APIt. 2 4 , 1917, SEPT. 24, 1917, APR. 4, 1918, AND JULY 9, 1918.

Dates.

Belgium.

Cuba.

Czechoslovakia.

France.

1917.
A p r . 25
May
3

Great B r i t a i n .

• Greece.

Italy.

Liberia.

Roumania.

Russia.

Serbia.

S200,000,000.00
S25,000,000.00
50,000,000.00

8
14
16 S45,000,000.00
25
June
2
9
14
19
26
^ 30
July
5
17
23
25
27
Aug.
2
2,500,000.OU
10'
11
5,900,000.00
21
23
Sept.
5
^
8
11
15
19
24
26
27
Oct.
2
2,000,000.004
6
8
9
12
3,000,000.00
15

le



SlOO,000,000.00
75,000,000.00

o

S100,000,000.00
75,000,000.00

75,000,000.00

100,000,000.00

10,000,000.00
100,000,000.00

S3,000,000.00

•

75,000,000.00
25,000,000.00
35,000,000.00
15,000,000 00
35,000,000.00
100,000,000.00
85,000,000.00

O

60,000,000.00
75,000,000.00

"
"

W

60,000,000.00
185,000,000.00

166,666,666.00
40,000,000.00

•

5O3 000,000.00
100,000,000.00
100,000,000.00

40,000,000 00
10,000,000.00
50,000,000.00
50,000,000.00

20,000,000.00
40,000,000.00

40,000,000.00

35,666,666.66
50,000,000.00
15,000,000.00
40,000,000.00

15,000,000.00
15,000,000.00
50,000,000.00

20,000,000.00

25,000,000.00
25,000.000.00

Ui

20,000,000.00

"'25,'666,* 666.'66'

20,000,000.00
30,000,000.00
20,000,000.00
25,000,000.00
10,000,000.00
25,000,000.00
435,000,000.00
Nov.
Dec.

245,000,000.00

280,000,000.00
30,000,000.00
7,500,000.00
2,000,000.00
2,000,000.00

S6,666,666.00
1,000,000.00
155,000,000.00

Ui

185,000,000.00

7,500,000.00
1918
10
Jan.
25
29
30
2
Feb.
4
13
Mar
9
11
14
15
Apr.
1
6
24
May
6
13
14
31
J u n e 13
20
22
27
Julv
3
6
12
15
18
19
27
29
A u g . 14,
29
Sept.
9

O
2,000,000.00

9,000,000.00
3,500,000.00
275,000,000.00
3,500,000.00

O

155,000,000.00'

,

S15,000,000.00

>^

50,000,000.00

H

200,000 000.00
9,000,000.00
2,200,000.00

w
200,000,000.00
125,000,000.00

3,250,000.00
•

100,000,000.00

75,000,000.00
200,000,000.00

>

I.,,

100,000,000.00
3,000,000.00

Ui

0 .

3,700,000.00
9,000,000.00

175,000,000.00

K!

$15,790,000.00
2,250,000.00
9,000,000.00

* "
100,000,000.00
10,000,000.00
175,000,000.00

1,680,000.00
2,770,000.00,
9,000,000.00
9,000,000.00




100,000,000.00
100,000,000.00
3,000,000.00
200,000,000.00
400,000,000.00
$5,000,000.00

:;:::;:;:;:::: ; : ; : ; ; : : : ; : ; : : : i

CO
h-l

05

Statements showing dates and amounts of credits established to Nov. 15, 1919, in favor of foreign governments, under the acts of Apr. 24, 1917, Sept.
24, 1917, Apr. 4, 1918, and July 9, 1918—Gonimued.
Dates.

Belgium.

1918.
S e p t . 17
18 S2,770,000.00
9,000,000.00
30
5,000,000.00
Oct.
7
16
17
19
9,000,000.00
23
28^ 3,500,000.00
31
Nov.
6
12
13
9,m,m.ob
15
20
5,600,000.00
29 12,000,000.00
Dec.
3
9
3,200,000.00
12
18
19
1425,000.00
23
24
27 40,000,000.00
30
31
1919.
Jan.
8
13
21
28
Feb.
4
6
8
11
18
21
25
Mar.
3
5

Czechoslovakia.

Cuba.

France.

Great B r i t a i n .

Italy.

Greece.

Liberia.

Roumania.

Russia.

SlOO, 000,000.00

200,000,000.00
$100,000,000.00
100,000,000.00
100,000,000.00
80,000,000.00

pi

0

O

'
100,000,000.00
50,000,000.00

$200,000,000.00

O

$7,000,000.00

>

H

$23,764,036.00

M

. . .0

18,573,000.00
250,000,000.00

19,666.66

,

19,000,000.00
100,000,000.00

'

110,010,000.00

10,000,000.00
118,949,200.00

110,000,000.00
110,000,000. OO-

V

75,000,000.00

.

40,000,000.00

\

/$5,000,000.00
\ 11,666,666.00 J

IIO, 000,000.00
110,500,000.00

2,000,000.00

S15 666 666 66

1 11,000,000.00




h-l

Serbia.

3,250,000.00

40,000,000.00

Co

18,000,000.00
100,000,000.00

,
20,000,000.00

>
o
Ui

Apr.

8
11
12
13
18
25
31
3
8
9
10
11

14
21
•24
May
6
13
14
21
22
June
5
23
27
28
July
1
3
9
23
24
31
A u g . 18
25
27
29
S e p t . 10
17
Oct.
16

5,000,000.00

'"'1*5,'666,'666.'66'
16,500,000.00
11,000,000.00
1 2,157,175.25

2,410,000.00
100,000,000.00
85,000,000.00

100,000,000.00
3,858,930.00
11137,270,250.00

900,000.00
6,330,000.00

'

12,345,000.00

"

20.000,000.00
268,608. 27
5,000,000.00
/ 100,000,000.00
\
1323,824.75

50,000,000.00

1 $5,000,000.00

/1

5,000,000.00

Ui

50,000,000.00

o

50,000,000.00

*
*

1,390,000.00
80,000,000.00

H

1,000,000.00
9,000,000.00

'"i6,'666,"666.'66'

50,666,666.66

1205,000.00

10,000,000.00

5,000,000.00

O

5,000,000.00
1 488,142. 71

H
W
teJ

2,150,000.00

:

13,824,054.01
157,549,000.00
37,947,977.24

"^

4,823,663.05
5,000,000.00
4,550,000.00
4,550;000.00
17,000,000.00
1,146,927.00

i

15,000,000.00

o

139,000,000.00
1,000,000.00
346,420,000.00 15,000,000.00 55,330,000.00 3,075,496,977.24 4,395,000,000.00 48,236,629.05 1,624,746,927.00 $5,000,000.00 31,666,666.00 325,000,000.00
1 3,824,054.01
16,666,666.00 1137,270,250.00
1 27,522,200. 00 . 1118,000,000.00
12,975,000.00 15,000,000.00

27,268,608.27
1488,142.71

343,445,000.00 40,000,000.00 55,330,000.00 3,047,974,777.24 4,277,000,000.00 48,236,629.05 1,620,922,872.99 5,000,000.00 25,000,000.00 187,729,750.00

26,780,465.56

1 Credits withdrawn.
Total credits established in favor of foreign governments, $9,647,419,494.84.

,

NOTE.—A conditional credit of $125,000,000 was established in favor of Russia on Nov. 1, 1917, but in view of the conditions to which the credit was subject and of subsequent
developments in Russia, the credit was never regarded by the Treasury as effective and book entries showing its withdrawal were made on Dec. 28, 1917.




CO
h-l

cn

EXHIBIT

CO
h-l

49.

S T A T E M E N T S H O W I N G D A T E S A N D A M O U N T S O F C A S H A D V A N C E S TO N O V . 1 6 , 1 9 1 9 , TO F O R E I G N G O V E R N M E N T S ,
U N D E R T H E ACTS OF A P R . 24, 1917, S E P T . 24, 1917, A P R . 4, 1 9 1 8 , AND J U L Y 9, 1918.
Dates.

Belgium.

Czechoslovakia.

Cuba.

«

France.

1917.
A p r . 25
May 3
7
8
14
16
19
25
June 2
9
14
16
19
26
30
July. 2
5
6
9
13
20
23
28
Aug. 1
2
3
6
9
13
16
20
21
22
23
24
27
30
31

Great B r i t a i n .

Italy.

Liberia.

Serbia.

Russia.

Roumania.

•

$200,000,000.00
$25,000,000.00
25,000,000.00
25,000,000.00

.

$50,000,000.00
75,000,000.00

o

. 75,000,000.00

H
O

$7,500,000.00
50,000,000.00

•

75,000,000.00

50,000,000.00^
75-, 000,000. 00
25,000,000. 00
50,000,000.00

1, 500,000.00

e

10,000,000.00
30,000, .000. 00

35,000,000.00
• 15,000,000.00
10,000,000.00
25,000,000.00
100,000,000.00

M

tei
20,000,000.00
$35,000,000.00

>

70,000,000. 00
10,000,000.00

o
teJ

85,000,000.00
60,000,000.00

7,500,000. 00

Ui

10,000, OOO.'OO

\

1,000,000. 00

50,000,000.00
8,000,000. 00
32, 000,000. 00

2,500,000.00
$1 000 000. 00
10,000,000. 00

'

50,000,000.00

»

40,000,000. 00
50,000,000. 00
40,000,000.00

1,000,000.00
7,500,000.00




2, 500, 000.00
50,000,000.00
10, 000,000.00

37, 500,000.00

40, 000, 000.00
35,000,000.00

- 16,666,666.66

10,000, 000.00

.,

Sept. 5

40,000,000.00

8
11
12

40,000,000.00

40,000,000.00

10,000,000.00
50,000,000.00

• 13
• 19

21
24
25
26
27
28

1,000,000.00

500,000.00

2,000,000.00

Oct.

1

2
3
4
6
8
9
11
15
16
18
19
22
24
'5
2
27
29
31

40,000,000.00

50, ooq, 000.00
15,000,000.00
35,000,000.00
15,000,000.00

,

40,000,000.00

7,500,000.00

•

15, 000,000.00

,

500, 000.00
2,000,000. 00

50,000,000.00
22,200,000.00
10,000,000.00
15,000,000.00

.
40,000,000.00

"15,000,000.00
.20,000,000.00
2, 000,000.00

20,000,000.00

Dec.

20,000,000.00
25,000,000.00
7,500, OOt). 00'

20,000,000.00

o

•

15,000,000.00

30,000, 000.00
20,000,000. 00

1, 500,000. 00
25,000,000.00

10,000,000.00
10,000,000. 00
30,000,000.00
10,000,000.00

H
teJ

25,000,000.00
31,700,000.00

50,000,000.00

400,000.00

H

Ui

50,000,000.00
40,000,000.00
15,000,000.00

::::::::::::::::::::::::::::::::::
55,000,000.00

1,000,000.00

40,666,666.66

1,329, 750.00

Kl

15,000,000. 00
60,000.000.00

7,500,000.00

1

30,000,000.00
40,000,000.00

3
5

.

7

8
10
12

>.

25,000, 000.00
25,000,000.00

Nov. 1

2
5
7
9
12
13
15
16
19
2023
26

Ui
teJ
o
w
tei
H

15, 000,000.00
-40,000,000.00

2,000,000.00

65,000,000.00
5,000,000.00
55,000,000.00

'
40,000,000.00

'"566," 666.66"




25,666,666.66
1 Refunded.

CO

Statement showing dates and amounts of cash advances to. Nov. 15, 1919, to foreign governments, under the acts of Apr. 24, 1917, Sept. 24, 1917,
Apr. 4, 1918, and July 9, 19.?5—Continued.
Dates.

1917.
D e c . 14
17
19
21
24
26
28
1918.
Jan.
3
48
11
15
19
22
25
31
Feb. 1
5
8
15
19
26
Mar. 5
7
12
14
19
21
23
26
27
28
29
Apr. 2
8
9
11
i6

Belgium.

Cuba.

Czechoslovakia.

France.

Great B r i t a i n .

Italy.

Liberia.

Roumania.

Russia,

Co
'"'
00

Serbia.

$50,000,000.00
$40,000,000.00
$2,000,000.00
45,000,000.00
40,000,000.00

'

7,500,000.00

$80,000,000.00

35,000,000.00

$200,000.00

o

65,oro,ocn.00
30,000,000.00

50,000,000.00
60,000,000.00

~

• 1,000,000.00

_'_

30,000,000.00
30.oro.000.00
30,000,000.00
9,000,000.00

.

30,000,000.00
65,000.000.00
30,000,000.00

^

60,000,000.00
30.000,000.00
30;000,000.00
30,000.000.00

20,000.000.00
20,000,000.00

25,000,000.00
25,000;900.00
.50, ooo; 000.00
35,000,000.00
20,000,000.00

15,000,000 00

500,000.00

20,000.000.00

>
O

tei

35; 000,000.00

1,000.. O C 00
O

Ul
10,000,000 00

$5,000,000. 00
20,000,000 00
15,000,000.00
5,000,000.00

30.000,000.00
2ij;000,000.00

15,000,000.00
41.; 000,000.00
20,000,000.00

30.000,000.00
35,000,'100.00

1.500,000.00




W

35,000,000.00

25,000,000.00
35,000,000.00

i, 666,666.66

_

o
fei

10,000,000.00

18
20
25
29
.30
May 2
7
9
14
15
16
18
21
23
28
31
June 4
6
11
13
15
18
20
21
25
26
27
July 3
5
9
11
12
16
18
19
23
24
25
30
Aug. 1

10,000,000.00

• i, 665,666.66

10,000,000. OO15,000,000.00
20,000,000.00
15,000,000.00

40,000,000.00
25,000,000.00
40,000,000.00

40,000,000.00
20,000,000.00

35,000,000.00
30,000,000.00

15,000,000.00

i, 666, m . 6b

20,000,000.00
30,000,000.00
10,000,000.00
15,000,000.00
20,000,000.00
30,000,000.00

3,666,666.66

40,000,000.00

1,000,000.00

3,666,666.66
8,000,000.00
1,000, 000.00

2,000,000.00
1,700,000.00

2,666,666.66

•

Q

IO, 000,000.00

10,000,000.00
1,000,000.00

10,000,000.00

teJ

20,000,000.00
40,000,000.00
20,000,000.00

tei
H

10,000,000.00

pi
Kl

>

O

10,000,000.00

2,000,000.00
2,000,000.00
5,200,000.00
3,680,000.00
2,000,000.00
.3,000,'000.00

1,405,000.00
10,000,000.00
20,000,000.00
15,000,000.00

20,000,000.00
10,000,000.00
30,000,000.00
20,000,000.00
30,000,000.00

te3
10,000,000.00

>
d

Ui

26,666,666.66

15,000,000.00
20,000,000.00

40,000,000.00

Pi
1,000,000.00

10,000,000.00

1,050,000.00
500,000.00
-1,000,000.00




200,000.00

50,000,000.00

3,000,000.00

,

H
pi
tei

20,000,000.00
15,000,000.00

8,000,000.00
500,000.00

Ui

o

••\'

10,000,000.00

20,000,000.00
15
20
22
27
29
30
31
Sept. 3
5

1,000,000.00

10,000,000.00
45,000,000.00

.......:.:..,..'...

10,000,000.00
30,000,000.00
30,000,000:00
10,000,000.00
30,000,000.00
20,000.000.00
20,000,000.00
40,000,000.00
35,000.000.00
92,000,000.00
30,000,000.00

^
10,000,000.00
200,000.00

16, m , 666.66

10,000,000.00

CO
h-

Statement'shou/ing dates and amounts of cash advances to Nov. 15, 1919, to foreign go'Oernments, under] the acts of Apt. 24, 1917, Sept. ^4, 1^17,
Apr. 4, 1918, and July 9, 1918—Gontinued.
Dates.

1918.
S e p t . 12
17
19
24
26
Oct. 1
2
3
8
10
15
17
22
24
29
31
Nov. 4
6
7
11
12
14 .
15
19
21
26
27
29
Dec. 3
4
5
10
11
12
17
19
23
24
26

Belgium.

Cuba.

Czechoslovakia.

France.

$700,000.00
1,850,000.00
2,600,000.00

$10,000,000.00
15,000,000.00

3,300,000.00

* 20,000,000.00

• Italy.

Great B r i t a i n .

$30,000,000.00
5,000,000.00
20,000,000.00
10,000^000.00
20,000,000.00
10,000,000.00

Liberia.

Roumania.

Russia.

Serbia.

$10,000,000.00
25,000,000.00
$1,200,000.00

10,000,000.00
1,500,000.00
3,000,000.00

5,000,000.00
10,000,000. 00
30,000,000. 00

15,000,000.00

.75,000,000.00
$5,000,000.00

10,000,000.00
25,000,000.00

O

40,000,000.00
20,000,000.00
101,000,000. 00
20,000,000.00

34,000,000.00
10,000,000.00

H
tei

.4,700,000..00
10,000,000. 00
400,000.00
..
1,600,000.00
3,400,000. 00
8,215,000.00

$5,000,000.00

40,000,000. 00

500,000.00

26, m , 666.66

30,000,000. 00
20,000„000. 00
71,427,000. 00

30,000,000. 00
25,000,000. 00

1,500,000. 00

15,000,000. 00

ib, 666, bbb. bb

30,000,000. 00
20,000,000. 00
30,000,000. 00

7,450,000. 00

10,000,000.00
•^-25,000,000.00

1,000,000. 00
30,000) 000. 00

25,666,666.60

5,000,000.00
5,500,000.00
10,000,000.00

tei
•H-l

209,697. 70
20,000,000. 00

2,000,000. 00
1,100,000. 00




10,000,000.00
10,000,000. 00

50,000,000. 00
10,000,000. 00
10,000,000. 00

31 1 14,666,666.661

tei

hj
O
Pi
H

15, m , m . 66

20,000,000.00
10,000,000.00
20,000,000.00
10,000,000.00

3,800,000.00
5,000,000.00
1,300,000.00

to

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1919.
Jan.
2
7
9
13
14
O
16
CO
21
23
25
28
30
Feb. 4

20,000,000.00

ib, bbb, 666.66
6, ibb, bbb. 66
2,666, bbb. bb

20,000,000.00
20,000,000.00

4,866, bbb. bb

10,000,000.00
60,000,000.00
15,000,000.00

1,000,000. 00

10,000,000. 00
81,050,800. 00

4,466,666.66.

25,000.000.00

6,666, bbb. bb
1,500,000.00

10
11
13
18
20
21
25
27
4
Mar.
6
11
13
14
18
19
20
22
24
25
27
31
Apr.
1
3
4
8
10
15
17
22
24
29
May
1
6
. 8
13
15
20

.. 20,000,000. 00

.
.

666, bbb. bb
10,000, 000. 00

7,766,666.66
4,300,000. 00

11,266,666.66
5,566,666.66

6,185,302.30

ib, 666,666.66

10,000,000.00
20,000,000.00
30,000,000.00
10,000,000.00
10,000,000.00
20,000,000.00

10,000,000. 00

15,000,000. 00
lOi 000,000. 00
85,000,000.00
15,000,000. 00
10,000,000.00

5,660,666.00
8,650, bbb. bb




10,000,000.00
10,000,000. 00
10,000,000.00
10,000,000. 00

19,000,000. 00

o

20,000,000. 00
16,500,000.00

tei

5,000,000.00
5,000,000.00

H

.8,250,000.00

3,966, bbb. bb

8,800,000.00
1,300,000.00
3,500,000.00

Pi
tei
H

15,000,000.00

5,000,000.00
5,000,000.00

10,000,000.00

1,750,000.00
2,000,000.00
5,000,000.00

Ui

o

25,000,000.00

- '-

5,900,000.00

300,000.00
4,000,000.00

$5,000,000.00

tei

3,900,000.00

5,366,666. bb

$12,000.00

190,000.00

10,000,000.00
10,000,000.00
40,000,000.00

26,666,666.66
20,000,000.00
10,000,000.00

i6,666,666.66
10,000,000.00 1

Ui

20,000,000.00

Kl

16,666,666.66
10,000,000. 00
^4,000,000,00
20,000,000. 00
65,000,000.00
9,000,000. 00

. 16,006,606.00

10,000,000.00

is, 666,666.66

12,000,000.00
10,000,000. 00
10,000,000.00

36,666,666.66

5,666,666.66
25,000,000. 00 •

16,666,666.66
5,066,666.66
12,666,666.66
. 15,666,666.66

5,666,666.66

4,718,608.27

'61,857.29

CO

to

Statement showing dates and amounts of cash advances to Nov, 15, 1919, to foreign governments, under the acts of Apr. 24, 1917, Sept. 24, 1917,
Apr. 4, 1918, and July 9, 1918—Gontinued.
Dates.

1919.
M a y 22
27
29
Jime 3
4
5
12
16
17
18
19
24
25
July
r
8
9
10
11
17
22
24
29
31
Aug. 5
14
19
21
25
28
Sept. 2
4
10
11
18
25
26
Oct
1
2
7
14

Belgium.

Cuba.

Czechoslovakia.

France.

$11,850,000.00

310,000,000.00

$2,400,000.00
SIO, 000,000.00

Italy.

Great B r i t a i n .

10,000,000.00

4,000,000.00

^

.

Roumania.

Liberia.

to
to

Serbia.

Russia.

$5,000,000.00
$5,000,000.00

5,666,666.66

4,000,000.00
10,000,000.00

5,000,000.00
5,000,000.00

5,000,000.00
900,000.00
10,000,000.00
3,250,000.00
600,000.00

o

7,000,000.00
10,000,000.00
20,000,000.00
5,000,000.00

2,000,000.00

5,000,000.00

i

5,650,000.00
15,000,000.00

teJ

5,000,000.00
5,000,000.00
5,000,000.00
5,000,000.00
5,000,000.00
5,000,000.00
5,000,000.00
10,000,000.00

1
•

5,000,000.00

1,000,000.00




.!

5,000,000.00
10,000,000.00
5,000,000.00
15,000,000.00
5,000,000.00

Ui

j
1

4,175,945.99
5,000,000.00
9,100,000.00
•

17,000,000.00
$6,000.00

10,000,000.00
15,000,000.00
10,000,000.00
30,000,000.00
10,000,000.00

.

1,140,927.00
10,000,000.00
8,000,000.00

1
i

16
17

1,000,000. 00

'"'i6," 666 .'666.'66'

21
24

10, ooo; 000. 00

-

Nov. 11

3,38; 74.5,000.00 $10,000,000.00

8,000. 00

10,000,000. 00
52,690,000.00

2,887,477,800.00

4, 277,000,000.00 1,610,922,872.99

•

26,000.00

25,000,000.00

$192,729,750.00
- 15,000,00.0.00

$26,780,465.56

• 187, 729,750.00

1 Conditional advance not availed of and returned.
Total cash advanced to foreign Governments, $9,416,371,888.55.
Repayments:
^" 'gium.
Belgii
France
:
Great Britain
Total repayments.




•

$10,000.00
12,147,000.00
57,164,007.99
9,321,007.99

I
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CO,.

EXHIBIT

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50.

to

S T A T E M E N T OF D E N O M I N A T I O N A L E X C H A N G E S , B Y F E D E R A L R E S E R V E D I S T R I C T S , OF $ 5 0 COUPON L I B E R T Y
BONDS AND VICTORY NOTES, AS OF S E P T . 30, 1919.
Fir t
F i r s t 3^ per F i r s t 4 per F i r s t 4 i p e r o n ds 4 i secper
cent.
cent.
Cent.
cent.
Origmal deliveries:
Boston
New York
Philadelphia...
Cleveland
Richmond
Atlanta
Chicago
S t . Louis
Minneapolis
K a n s a s City
Dallas
San Francisco..
Treasury

Second 4
per cent.

Second 4i
^
per c e n t .

Third 4i
per c e n t .

F o u r t h 4i
per c e n t .

V i c t o r y 4^
per cent.

,307,750
,662,650
,827,750
,831,250
,330,800
,739,900
,835,200
,521,450
543,200
898,100
882,800
202,500
351,650

$6,062,600
5,778,300
2,691,900
4,158,550
1,645,300
1,091,600
5,717,150
1,727,300
546,050
1,283,650
398,750
1,965,300
438,900

$41,100 $36,412,750 !$15,259,000 $54,539,900
103,050 81,398,350 ' 28,868,100 116,249,950
9,300 30,188,150 10,882,500 63,249,700
4,750 39,298,350 14,719,100 76,269,300
5,598,350 32,158,700
6,350 18,499,050
3,797,050 23,351,150
51,250 10,395,500
38,900 68,247,150 27,269,850 120,265,600
7,394,050 42,862,000
4,300 18.665,450
3,783,500 40,208,800
20,300 23,173,850
5,156,000 44,282,100
6,950 18,367,650
9,713,900
1,750,750 25,517,100
5,750
7,763,650 60,568,400
3,700 29,428,850
2,133,350
14,954,000
1,500

99,853,300

98,935,000

33,505.350

297,200 1383,789,000 147,195,900 701,656,050 !864,586,200 1331,077,600

S u r r e n d e r e d for d e n o m i n a t i o n a l e x c h a n g e :
3,022,150
Boston
".
27,313,900
New York
:
1,424,050
Philadelphia
1,194,300
Cleveland
56,300
Richmond
277.300
Atlaata
3,055,150
Chic ago
"...
154,000
S t . Louis
238,950
Minneapolis
450,750
K a n s a s City
175,850
Dallas
985,350
San Francisco
427,450
Treasury....

663,700
106,150
475,550
801,600
17,900
77,550
556,850
116,900
126,100
185,550
41,750
521,900
281,300

. 452,100
2,867,600
229,750
341,850
28,400
64,150
636,250
• 54,650
21,900
66,500
12,350
107,650
9,200

17,972,800

4,892,350

.Total.

Total.




|$15,504,250
' 24,353,400
8,600,450
7,491,150
4,477,350
3,632,000
13,692,150
2,211,050
3,660,150
4,248,700
2,631,350
9,351,300

38,775,500

[$68,703,050 $24,069,650
150,150,000 58,359,450
60,350,000 28,915,250
103,608,200 46,908,750
47,021,700 15,992,800
29,102,950
7.9S0,400
153.377,450 62,797,850
51,857,100 16,143,200
43,069,650 17,514,200
42,274,650 13,317,850
29,747,100
8,016,600
82,035,500 30,033,250
3,288,850
1,028,350

3,382,800
58,397,050
4,269,600
3,895,450
356,900
348,300
9,191,750
919,3.50
1,421,050
944,250
384,650
2,110,300
•492,7.50

2,148,300 11,943,200 10,766,750
23,212,650 152,772,500 |144,939,650
1,509,900 14,452,150 11,364,950
2,787,050 15,875,400 24,966,050
184,400
1,207,150
1,176,650
401,150
3,169,000
3,920,050
5,346,250 34,118,250 39,514,950
409,950
3,138,750
5,124,250
351,-700
4,105,250
4,643,100
586,000
4,804,000
5,107,000
154,800
1,793,000
1,843,850
782,350
5,913,000 10,124,400
122,150
762,000
1,038,050

799,250
17,381,100
1,362,600
3,974,400
74,250
317,600
5,651,350
442,300
1,046,100
. 741,850
333,750
1,167,600
37,200

17,800 I 86,114,200

37,996,650 |254,053,650 |264,529,700

33,329,350

16,600

1,200

Victory 3^
per cent.

Total.

$9,150 $237,909,200
45,700 ' 485,968,950
6,700 211,721,700
22,850 304,312,250
19,250 130,749,650
82,151,000
9,200
197,050 466,438,350
2,200 145,388,100
72,650 134,592,350
33,750 132,869,400
43,400
79,707,500
28,650 227,381,100
22,196,600
490,550 2,661,386,150
20,100
41,800
9,200
300
400
46,000
5,400
400
500
500

34,198,350
439,049,000
35,097,750
53,836,400
3,101,950
8,575,500
99,116,800
10,360,150
11,959,550
12,885,900
4,740,400
21,713,050
3,171,800
737,806,600

O

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Issued on d e n o m i n a t i o n a l e x c h a n g e :
Boston
New York
Philadelphia
.•
Cleveland
Richmond
Atlanta
Ohicago
S t . Louis
Minneapolis
K a n s a s City
.'
Dallas
San. F r a n c i s c o
Treasury
..'

500

2,266,500
12,296,750
4,908,000
2,373,450
513,400
167.100
1,633,850
519,250
814,450
383,250
183,750
1,380,800
476,150

Total

10,661,300

3,837,600

500

27,916,700

N e t decrease on d e n o m i n a t i o n a l ex
change...-

28,114,200

14,135,200

17.300

58,197.500




,
,
,
,
,
,

784,150
6,711,900
1,434,550
287,200
105,800
146,700
581,050
16,900
26,050
65,850
11,050
217,350
272,750

469,500
294,850,
582,250
471,900
155,700
57,750
259,150
55,200
16,500
44,550
8,450
137,100
284,700

40,700
527,600
61,450
21,350
7,300
39,350
53,250
8,150
6,800
15,300

250
6,750
9,200

707,300
4,324,050
819,500
361,450
138,200
32,650
948,650
122,950
82,900
86,900
57,000
54,150
4,099,950

3,169,100
32,528,400
11,024,650
3,842,700
1,178,050
1,013,800
5,626,750
1,791,650
857,950
544,000
290,800
2,128,200
1,194,700

4,i07,250
19,801,950
10,362,850
8,474,950
1,531,750
1,471,450
7,814,850
1,776,750
404,900
371,800
588,550
5,040,800
3,233,350

118,650
1,358,500
819,600
455,800
68,750
49,800
930,150
79,600
66,700
134,350
97,550
214,700
42,600

20,100
5,200

11,835,650

65,190,750

65,281,200

4,436,750

29,100

189,987,000

188.862,900 199,248,500

28,892.600

95,500

547,819,600

100
3,700

11,983,250
78,849,200
30,012,850
16,288,800
3,698,950
2,978,700
17,851,400
4,370,450
2,276,250
1,646,000
1,237,400
9,179,850
9,613,900

8

I
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CO

to

STATEMENT OF DENOMINATIONAL EXCHANGES, SY FEDERALHESEB-VE DISTRICTS, OF $100 COUPON LIBERTY
BONDS AND VICTORY NOTES, AS OF SEPT. 30, 1919.
First 3^
per cent.
Original deliveries:
Boston
New York
Philadelphia..
Cleveland.:...
Richmond
Atlanta
Chicago-. St. Louis
..
Minneapolis...
Kansas City...
Dallas
San Francisco.
Treasury.
Total.

$15,2.52,
30,300,
11,399
8,255;
5,656',
3,972,
17,603,
3,174,
4,925,
5,740,
3,272,
12,518,

First 4
per cent.

First 4i
percent.

790,000 $8,326,900
403,700 10,215,700
4,177,100
229,300
8,171,300
339,900
2,747,500
441,500
820, 100 1,594,600
733,700 11,093,100
3,505:100
956,800
1,092,100
302,100
2,468,100
854,100
770,900
434,900
4,003,500
352,800
1,112,500
445,800

122,071,600

59,278,400

First
second 4^
per cent.

Second 4
. per cent.

Second 4^
per cent.

Tliird 4 J
per cent.

$32,900 $34,578,900 $18,504,100 $40,941,200
136,300 82,172,700 37,616,800 112,265,400
8,200 30,664,500 13,953,900 53,451,100
11,600 44,891,800 21,583,400 69,926,900
14,300 23,197,700
8,779,900 34,237,100
60,800 10,362,700
5,222,200 27,-399,400
54,900 89,700,500 42,874,900 140,212,200
25,346,000 11,848,900 45,120,300
4,200
7,075,600 56,430; 000
34,500 28,157,900
8,802,400 51,165,-90011,200 23,91.3,700
5,700 12,961,900
3,073,400 27,521,500
7,200 38,275,500 14,463,900 59,610,000
2,021,000
17,400
26,704,800

Victory 4f
per cent.

Victory 3^
per cent.

$57,066,400 $28,046,000
145,001,600 74,125,500
•63,079,400 37,312,300
129,430,500 57,982,500
54,860,800 22,301,700
35;642,600 13,437,000
209,520,500 101,716,-500
55,894,600 25,650,800
78,176,200 38,867,500
63,001,600 24,283,600
36,334,700 10,825,500
95,512,400 42,860,600
2,245,400
734,000

$44,300
234,800
73,900
63,700
30, 900
. 47,200
406,900
20,800
122,100
93,400154,400
80,300

Fomth 4i
per cent.

399,200 444,223,800 220,504,200 720,302,000 1,02-5,766,700 478,143,500

1,372,700

Total.




;to
•a

Total.

$218,583,400
515,473,000
222,349,600
- 356,656,80U
159,267,400
100,558,800
634,916,700
177,522,000
218,183,700
185,334,300
97,35.5,100
276,685,100
33,280,900
3,196,166,800

o

:^
H

.m

S u r r e n d e r e d for d e n o m i n a t i o n a l exBoston
New York
Philadelphia..
Cleveland
Richmond
Atlanta
Chicago
St. L o u i s , . . . . . .
MiimeapoUs...
Kansas C i t y . . .
Dallas
San F r a n c i s c o .
Treasury

•.CO

2,108,100
25,041,200
888.700
921; 200
58,300
295,700
3,278,700
183,300
288,200
. 465,700
. 171,000
1,330,000
678,000

635,300
7,820,500
380,600
•476,400
19,800
71,000
1,247,500
113,700
88,600
• 206,300
40,100
492,300
211,600

336,100
3,006,800
187,000
355,500
31,700
84,900
782,500
64,700
35,300
80,900
23,600
171,900
9,500

35,708,100

11,803,700

5,170,400

4,286,600
1,404,800
2,080,400
49,656,200 22,278,300 97,740,400
1,135,300
1,469,000
6,484,100
2,091,100
8,605,200
2,697,400
170,900
661,800
246,800
509,300
2,864,900
382,400
4,901,900 25,769,600
7,589,500
743,700 • 442,100 2,087,400
4,713,200
1,323,900
603,400
3,592,700
1,044,800
701,300
• 498,400
1,695,100
244,500
2,523,400
4,523,200
1,281,500
285,500
135,900
584,700
600
28,100

70,541,400

35,900,300. 163,608,900

-5,434,200
115,184,000
7,031,600
22,181,100
1,004,000
3,846,600
38,973,000
2,727,300
6,833,500
4,769,000
1,881,200
9,150,100
1,146,400

558,300
16,297,300
830,200
2,781,500
137,300
-.538,800
7,189,900
286,600
2,027,400
739,900
432,600
1,117,400
22,600

11,400
• 170,900
10,800
1,200

220,162,000

32,959,800

246,800

2,100
31,700
500
9,600
• 1,500
5,100
2,000

16,855,200
337,223,100
18,417,300
40,110,600
2,330.600
8,595,700
89,764,300
6,649,300
15,923, IOO
11,602,100
4,991,600
20,591,800
-',3,074,800
576,129,500

%

Issued on denominational exchange:
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Treasury
Total
N e t decrease on d e n o m i n a t i o n a l
exchange




259,600
3,615,700
346,700
115,800
30,300
.45,800
306,300
11,400
18,600
34,100
8,800
190,000
216,700

254,500
1,360,800
161,400
148,100
140,500
50,800
210,700
27,400
14,700
48,300
11,900
117,600
391,200

62,000
641,300
52,300
43,500
11,300
37,200
137,000
10,700
7,900
8,600
200
15,300
4,500

5,199,800

2,837,900

1,031,800

30,508,300

8,965,800

4,138,600

509,800
3,800,400
507,700
272,700
84,100
40,800
603,500
85,100
.105,200
79,900
42,800
103,200
3,838,600

1,210,700
16,182,000
3,258,100
1,936,400
849,900
650,600
2,386,100
593,500
457,000
402,700
225,300
1,268,500
583,500

3,083,200
16,964,700
6,671,200
6,623,700
1,715,900
1,334,700
4,977,100
1,264,300
317,200
366,700
496,000
5,129,700
2,037,100

168,400
1,511,900
890,200
270,100
128,300
79,100
323,600
68,800
129,800
95,400
25,800
315,800
13,700

10,400
28,500
500
400
5,500

300

1,045,200
21,444,000
930,100
X, 031,900
228,800
211,100
1,359,400
222,800
260,000
277,300
168,800
1,100,900
372,100

6,603,800
65,549,400
12,818,200
10,442,200
3,089,100
2,450,500
10,309,200
2,284,000
1,310,400
1,313,000
979,600
8,241,000
7,4.57,700

400

28,652,400

10,073,800

30,004,300

50,981,500

4,020,900

45,300

132,848,100

100

27,700

41,889,000

25,826,500 133,604,600

169,180,500

28,938,900

201,500

443,281,400

Ui

tei

O
Pi

tei
pi

O

^,
W

H
H
pi

CO.

STATEMENT OF DENOMINATIONAL EXCHANGES, BY FEDERAL RESERVE DISTRICTS, OF $600 COUPON LIBERTY
BONDS AND VICTORY NOTES, AS OF SEPT. 30, 1919.
F i r s t 3i
per cent.
O r i g i n a l deliveries:
Boston
New York
Philadelphia...
Cleveland
. Richmond
Atlanta
Chicago
St. L o u i s
Minneapolis
K a n s a s City
Dallas...-.
San Francisco..
Treasm-y
Total.
S u r r e n d e r e d for d e n o m i n a t i o n a l e x change:
Boston
;..
New York
Philadelphia
Cleveland
Richmond
Atlanta
•
Chicago
St. L o u i s . .
Mirmeapolis
'.
Kansas City...:
,
Dallas
S a n Francisco
T r e a s u r y . .•
,...
Total-




First 4
per cent.

F i r s t 4J
per cent.

F i r s t second
4i percent.

Second 4
p e r cent.

H

Second _
p e r cent.

Third 4i
per cent.

F o u r t h 4 V i c t o r y 41 Victory 3f
.
J
per cent
per cent
per cent.

CO

to
oo

Total.

147,000
149,000
213,000
805,000
077,000
067,500
759,000
260,000
687,500
967,500
206,500
618,000
250,000

$5,800,500
8,286,000
3,522,000
10,463,500
2,688,500
1,271,500
10,795,500
4,429,500
855,500
3,228,000
602,500
3,501,000
931,500

$9,500 $22,144,000 $15,075,500 $21,141,000 $28,267,000 $15,878,500
74,000 55,423,500 33,682,000 60,505,000 80,001,000 43,668,000
12,000 23,134,000 14,428,000 30,156,000 38,442,000 30,341,500
1.5,500 42,275,500 29,669,500 43,676,000 58,953,000 38,432,500
15,500 18,557,000
9,984,500 20,265,000 34,520,500 16,369,000
9,491,000
41,500
5,937,500 16,550,000 21,339,500 11,166,000
45,000 68,829,000 44,945,000 74,385,500 104,143,000 64,595,000
5,500 22,456,000 14,436,500 26,432,000 32,274,500 23,750,500
6,070,000 18,210,500 26,147,500 14,257,000
12,000 12,897,000
8,500 18,750,500 11,283,500 26,511,500 34,385,500 18,311,000
6,340,500
7,057,500
2,802,500 12,077,000 16,646,000
1,500
1.3,500 28,197,000 15,057,500 29,961,500 44,050,500 26,134,500
66,500
125,500
10,500
4,184,000
5,500

$153,000
555,000
70,000
131,000
62,000
73,500
831,000
90,000
119,000
224,500
134,500
170,500

97,642,500

84,207,000

56,375,500

259,500 329,212,000 207,556,000 379,996,500 519,180,500 309,310,500

2,614,000

1,986,354,000

1,361,500
8,201,000
640,000
1,075,500
36,000
179,500
1,419,000
121,500
140,500
145,000
37,000
709,500
416,500

124,500
551,500
101,500
310,500
15,500
53,500
272,000
17,500
23,000
23,500
7,500
115,000
139,000

142,000
936,000
122,500
131,500
26,500
25,500
200,500
25,000
21,000
45,000
12,000
54,000
7,000

14,482,500

1,754,500

1,748,500

$10,618,500
22,410,000
9,649,500
8,860,500
4,699,000
3,684,000
14,200,000
3,035,000
3,320,500
4,975,500
1,705,000
10,485,000

$127,234,500
317,753,500
154,968,000
247,282,000
112,238,000
71,622,000
398,528,000
•133,169,500
83,576,500
122,646,000
48,573,500
163,189,000
5,371,000

Pi
H

O

K
408,500
4,347,500
617,500
752,000
56,000
135,500
1,295,500
161,500
247,500
249,000
^86,500
285,000
397,500

951,500
14,664,000
1,676,500
2,788,500
327,000
1,142,000
4,341,000
518,500
751,500
793,000
488,500
945,000
875,500

1,327,500
18,065,000
2,311,000
3,429,500
479,000
830,000
6,233,500
556,000
1,306,500
~ 744,000
. 495,000
1,748,000
878,500

143,000
3,543,000
802,500
658,000
60,000
215,000
1,489,000
69,500
620,000
145,500
213,000
235,000
5,000

21,500
113,000
14,500
8,500

500

553,000
14,376,500
855,000
1,054,000
107,500
210,000
2,565,500
109,000
456,000
195,000
229,500
1,218,000
192,500

500
50,500
3,500
1,500
6,500
5,000
9,000
500

5,033,000
64,800,500
7,141,000
10,208,000
1,107,500
2,791,500
17,866,500
1,582,000
3,567,500
2,346,500
1,574,000
5,318,50O
2,912,500

3,500

22,121,500

9,039,500

30,262,500

38,403,500

8,198,500

234,500

126,249,000

3,000

tei

Ur

I s s u e d on d e n o m i n a t i o n a l e x c h a n g e :
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St.Louis
Minneapolis
K a n s a s City
Dallas
-•
San Francisco
Treasury
,
Total

178,000
4,748,500
325,500
466,000
16,500
46,000
935,500
37,500
61,000
117,500
-30,000
729,500
50,500
-..

Decrease on d e n o m i n a t i o n a l exchange
I n c r e a s e o n d e n o m i n a t i o n a l exchange
N e t decrease..




207,500
1,748,500.
103,000
401,500
15,000
14,500
298,500
44,500
42,500
122,500
16,000
210,500
254,000

7,742,000

3,478,500

54,500
889,500
81,500
144,000
19,000
106,000
242,000
.38,500
13,500
50,500
. 7,500
95,500
10,000
1,7-52,000

364,500
4,231,000
513,500
772,000
133,000
77, 500
1,291,500
227,500
107,500
251,500
79,000
446,500
112,000

660,500
10,350,500
2,177,000
2,534,000
502,000
563,500
4,219,000
744,500
447,000
908,000
431,500
1,533,500
139,000

1,253,000
14,935,000
3,365,500
3,372,000
850,000
647,500
.5,645,500
953,500
441.000
683,500
.439,500
2,126, OOO
227,500

100,500
1,791,000
1,166,500
432,000
106,500
311,500
774,500
147,000
203,000
145,500
56,000
379,500
9,500

5,500
61,000
14,000

500

379,500
17,745,000
598,500
1,085,500
155,000
106,500
2,154,500
269,000
309,500
298,500
164,000
. 1,655,000
249,500

500
500
6,000

3,203,500
56,510,000
8,345,000
9,207.000
1,797; 000
1,874,500
15,567,000
2,463,000
1,625,500
2,577,500
1,224,000
7,176,500
1,058,500

10,500

25,170,000

8,607,000

25,210,000 34,939,500

5,623,000

96,500

112,629,000

10,000

1,500
6,000
1,000
500

• ^ =

432,500

6,740,500
1,724,000

3,500

7.000

3,048,500

5,052,500

3,464,000

2,575,500

138,000

^
O

pi
18,403,000
4,783,000

g
>

13,620,000

O

>

Ui

pi

Ki

CO

to
CD

S T A T E M E N T OF D E N O M I N A T I O N A L E X C H A N G E S , BY F E D E R A L R E S E R V E D I S T R I C T S , OF $ 1 , 0 0 0 COUPON L I B E R T Y
BONDS AND VICTORY NOTES, AS OF S E P T E M B E R 30, 1919.
Firsts^
per c e n t .

Original deliveries:
Boston
New York
. Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San F r a n c i s c o . .
Treasury
Total.
S u r r e n d e r e d on d e n o m i n a t i o n a l
exchange:
Boston
New York
Philadelphia
Cleveland....
Richmond
Atlanta
Chicago
St. Louis
Mirmeapolis
Kansas City
:
Dallas
SanFrancisco
Treasury
Total.




First 4
per cent.

F i r s t 4i
per c e n t .

$102,535,000 ^9,205,000 $17,519,000
462,505,000 40,408,000 44,105,000
9,974,000
74,353,000 12,627,000
75,517,000 23,330,000 19,377,000
6,781,000
24,129,000 10,229,000
3,981,000
15,829,000
4,763,000
81,014,000 21,988,000 19,274,000
8,243,000
22,218,000 10,347,000
1,985,000
13,577,000
2,473,000
4,179,000
18,951,000
5,720,000
1,348,000
7,807,000
2,260,000
8,418,000
50,290,000 10,814,000
2,083,000
705,000

F i r s t seco n d 4^
per cent.

$65,000
586,000
53,000
128,000
49,000
113,000
135,000
11,000
27,000
21,000
2,000
15,000
17,000

Second 4
per cent.

Second 4^
per c e n t .

T h i r d 4i
per c e n t .

F o m t h 4i
per c e n t .

$194,005,000
612,459,000
119,307,000
138,009,000
67,302,000
34,217,000
172,184,000
57,974,000
33,263,000
33,111,000
21,731,000
108,308,000

$146,407,000
598,768,000
90,881,000
113,831,000
45,247,000
24,926,000
138,996,000
44,687,000
17,961,000
24,280,000
. 9,394,000
66,317,000
11,015,000

$131,732,000
555,000,000
115,938,000
104,980,000
54,082,000
42,396,000
143,435,000
53,820,000
27,722,000
36,371,000
25,477,000
93,416,000
21,000

$237,586,000
991,639,000
187,095,000
183,376,000
107,936,000
79,199,000
236,925,000
91,214,000
35,824,000
55,134,000
34,982,000
143,254,000
50,000

Victory 4f
per cent.

$91,164,000
384,227,000
97,069,000
105,351,000
52,795,00043,912,000
142,914,000
68,356,000
20,842,000
35,622,000
15,914,000
79,736,000
7,000

Victory 3^
per cent.

948,725, oop 164,509,000 147,267,000 1,222,000 1,591,870,000 1,332,710,000 1,384,390,000 2,384,214,000 1,137,909,000 324,411,000 9,417,227,000

759,000
3,865,000
1,574,000
355,000
127,000
151,000
621,000
21,000
28,000
56,000
48,000
419,000
477,000

523,000
1,28.5,000
400,000
373,000
66,000
. 70,000
379,000
71,000
16,000
65,000
13,000
135,000
528,000

174,
1,794,
248,
164,
32,
43,
341,
26,
18,
16,
5
17i
64,

4,711,000
16,202,000
1,709,000
2,752,000.
• 554,000
202,000
3,121,000
923,000
886,000
550,000
351,000
3,523,000
3,524,000

3,505,000
20,269,0000
5,939,000
1,207,000
1,925,000
93,000
2,068,000
567,000
343,000
444,000
390,000
390,000
5,867,000

6,656,000
79,115,000
6,659,000
4,481,000
998,000
978,000
6,824,000
1,264,000
925,000
971,000
493,,000
3,706,000
13,226,000

16,852,000
108,201,000
15,990,000
12,761,000
3,194,000
3,239,000
14,790,000
2,105,000'
655,000
913,000
527,000
4,750,000
2,329,000

1,039,000
13,087,000
1,850,000
731,'000
238,000
221,000
2,162,000
178,000
503,000
157,000
155,000
617,000
17,000

280,000
10,732,000
300,000
245,000

807,000
5,000

34,499,000
254,550,000
34,669,000
23,069,000
7,134,000
5,012,000
31,913,000
5,251,000
3,374,000
3,185,000
1,98^,000
14,364,000
26,037,000

8,501,000

3,924,000

2,942,000

39,008,000

43,007,000

126,296,000

186,306,000

20,955,000

14,100,000

445,039,000

13,000

o

Total.

$22,270,000 1962^ 488,000
239,818,000 3,929,155,000
718,229,000
10,932,000
773,062,000
9,163,000
372, 541,000
3,991,000
251, 412,000
2,076,000
23,034,000" 979, 899,000
359, 182,000
2,312,000
1.55,274,000
1,600,000
216, 741,000
3,352,000
119,940,000
1,025,000
565, 406,000
4,838,000
13,898,000

15,000
1,607,000
96,000

CO
CO

O

o

I s s u e d on d e n o m i n a t i o n a l exchange:
Boston
New York
Philadelphia
Cleveland
:
Richmond
Atlanta
:
Chicago
St. Louis
Minneapolis '.
Kansas City
Dallas..:
San Francisco
Treasury
Total.
Decrease on d e n o m i n a t i o n a l
exchange
I n c r e a s e on d e n o m i n a t i o n a l
exchange
Netincrease.




8,466, 000
116,796, 000
4,916, 000
6,443, 000
793. 000
858, 000
16,650, 000
1,119, 000
2,723, 000
1,740, 000
997, 000
5,703, 000
1,272, 000 i

6,029,000
49,345,000
2,420,000
2,677,000
125,000
665,000
6,551,000
414,000
590,000
900,000
382,000
2,307,000
1,459,000

2,165,000
18,344,000
711,000
1,080,000
43,000
159,000
2,742,000
202,000
190,000
305,000
66,000
824,000
460,000

802,000
6,791,000
447,000
714,000
61,000
120,000
1,463,000
133,000
68,000
144,000
. 45,000
248,000
11,000

73,864,000

27,291,000

11,047,000

38,000.

168,476,000

65,363,000

23,367,000

8,105,000

'38,000

129,468,000

37,000

1,000

5,065,000
88,132,000
4,751,000
4,951,000
1,106,000
1,013,000
13,648,000
870,000
1,085,000
1,257,000
452,000
2,075,000
312,000

16,107,000
303,056,000
18,162,000
22,862,000
2,104,000
5,971,000
56,191,000
3,974,000
6,753,000
6,641,000
3,322,000
9,382,000
1,026,000

19,877,000
356,493,000
27,47/8,000
47,772,000
3,016.000
8,177,000
71,664,000
6,063,000
9,375,000
7,791,000
2,948,000
13,621,000
1,689,000

60,040,000
42,000
1,487,000
53,652,000 10,408,000 1,003,054,000 '
64,759,000
750,000
5,124,000
94,041.000
7,202,000
340,000
8,129,000
881,000
. 807,000
16,000
17,786,000
14,179,000
'920,000
184,008,000
4,000
13,705,000
926,000
2,347,000
26,000
23,157,000
999,000
6,000
19,783,000
860,000
10,000
9,082,000
2,272,000
48,000
36,480,000
111,000
180,000
6,521,000

124,717,000

455,551,000

575,964,000

90,847,000

329,255,000

389,658,000

69,892,000

12,750,000 1,540,545,000
1,350,000

81,710,000'

I
S

1,350,000

H

1,096,856,000

W

1,095,506,000

»1
*

CO
CO

S T A T E M E N T O F D E N O M I N A T I O N A L E X C H A N G E S , B Y F E D E R A L R E S E R V E D I S T R I C T S , O F $ 6 , 0 0 0 COUPON
BONDS A N D VICTORY NOTES, AS OF S E P T E M B E R 30, 1919.
First second 4^
per cent.

First 4
per cent.

Original deliveries:
Boston
New York
Philadelphia...
Cleveland
Richmond..:..
Atlanta
Chicago
St. Louis
Minneapolis—
Kansas C i t y —
Dallas
San Francisco. Treasury
Total.
Surrendered lor denominational exchange:
B oston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis.
Kansas City
Dallas
: —
San Francisco
Treasury
Total.




First 4^
per cent.

Second 4
per cent.

$1,240,000
1,980.000
755,000
2,750,000
1,320,000
255,000
2,615,000
. 705,000
195,000
300, 000
300,000
.550,000
85,000

$1,66-5,000
2,955,000
1,450,000
3,140,000
1,455,000
515,000
2,510,000
920, 000
265,000
510, 000
155,000
.580,000
615,000

$40,000 $29,915,000 $29,410,000
10,000 63,910,000 64,745,000
18, .580,000 18,425,000
30,000 34,900,000 29,570,000
14,850,000 11.315.000
3; 395; 000
3,915,000
15,000 34,775,000 32,725,000
6, -535,000 8,605,000
10,000
8, 240, 000 5,200, 000
6,920, 000 6,620.000
4,025,000
7,380,000
'9,665,000 11,5.50,000
2,680,000

13,0-50,000

16,735,000

105,000 239,585,000 228,265,000

Second 4J
per cent

Thira4|per cent.

Fomth 41
•per cent.

$26,030, 000
50,000, 000
21,740, 000
25,415,000
10.110,000
5^750,000
29,195,000
5,225, 000
6,995, 000
6,250, 000
7,105,000
12,310,000

$56,275,000
109,385,000
60, 060,000
60,300,000
27,585, 000
12,900,000
58,465;000
12,125, 000
.9,580, 000
11,460,000
8.200,000
23,31-5,000

Victory ^
per cent.

LIBERTY

Victory 3 |
per cent.

$19,440,000 $5,245,000
43,330,000 14,505, 000
26,800, 000 8,000,000
28,680,000
5,335.000
13,505,000
1,.390; 000
8,265,000
670,000
38,150, 000 7,625,000
8, 070, 000
605,000
3,810,000
865,000'
7,375,000
955,000
3,450,000
395,000
12,31-5,000 - 2,045,000

CO
CO

to
Total.

$169,260,000
3-50,820,000
155,810,000
190,120,000
81, -530, 000
35,665,000
206,075,000
42,800,000
35,150,000
40,390,000
31,010,000
72,330,000
3,380,000

449,650. 000 213,190, 000 47,635,000 1,414,340,000

O
Pi

o'
H:

W

tei.
SO, 000
1,850,000
125,000
15,000
1.5,000
10,000
265,000
5,000

30,000
650,000
65,000
35,000
80,000
60, 000
10, 000
10,000
5, 000

.55, 000
135,000

15,000

2,555,000

960, 000

1,290,000
41,820,000
1,550,000
1,-330,000
455,000
115,000
1,295,000
65,000
135,000
90,000
160,000
385,000
365,000

2,945, 000
815,000
1,440,000
12,865,000 34,840,000 38,190, 000
1,670,000
3,245, 000 8,465,000
4,950,000
665,000
1,985,000
1,160,000
740,000
180,000
790,000
825,000
50,000
3,255,000
4,355,000
1,400,000
370,000
965,000
160, 000
105, 000
255,000
75,000
200, 000
365,000
225,000
330, 000
340, 000
120,000
385,000
775,000
170,000
575,000
740,000
195,000

49,055,000

18,590,000

48,260, 000

64, .340,000

150, 000
S,045,000
1,725,000
775,000
335,000
90,000

i,06o;ooo
120, 000
45,000
110,000
90,000
160,000
25,000
12,730,000

6,760,000
10, 000
1,660,000 139,920,000
230, 000 17.075,000
9,855,000
90,000
2,885,000
2,005,000
45,000.
120, 000 11,810,000
1.690,000
'635,000
10,000
1, 000,000
1,040,000
2,020,000
75,000
2,095,000
60,000
2,300,000

198,79,0, 000

^•
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Issued on denominational exchange:
Boston
New York
Philadelphia
Cleveland. . .
Richmond
...'
Atlanta
Chicago
St L o u i s . .
Minneapolis
.;
Kansas City...
Dallas
San Francisco.
Treasury.
Total
Decrease On d e n o m i n a t i o n a l e x c h a n g e
Increase o n d e n o m i n a t i o n a l exchange
N e t decrease




50,000
1,485,000
75,000
15,000
40,000

1,560,000
29,330,000
760,000
1,155,000
160,000
55,000
1,805, 000
250,000
145,000
115,000
200,000
380,000
230,000

5,000

25,000
105, 000
10,000
10,000
5,000

40,000
25,000

10, 000
55,000

1,945,000

1,065,000

210,000
,

610,000
105,000

^
,

1,305,000
7,035,000
1,640,000
1,005, 000
235,000
45,000
1,210,000
115, 000
•250,000
210,000
105, 000
150,000
95,000

1,760,000
25,685,000
1,555,000
2,130,000
470,000
675,000
4,915,000
405,000
845,000
955,000
-530,000
1,140,000
360,000

3,655,000
27,205,000.
7,185,000
5,245,000
970,000
950,000
7,945,000
1,060,000
1,385,000
1,535, 000
565,000
2,210,000
565,000

36,145,000

125,000
475,000
190,000
55,000

13,400,000

41,425-, 000

12,-910,000

5,190,000

6,83.5,000-

455,000
"2,500,000
1,040,000
870,000
150,000
105,000
1,185,000
35,000
645,000
320,000
" 145,000
445,000
10,000

175,000
745,000
210,000
245,000
25,000
280,000
5,000

60,475,000

7,905, 000

1,715,000

164,075,000

3,865,000

4,825,000

585,000

34,820,000
105,000

5,000
25,000

9,085,000
94,460,000
12,655,000
10,720,000
2,025, 000
1,880,000
17,655,000
1,880,000
3,280,000
3,150,000
1,545,000
4,400,000
1,340,000

34,715,000

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S T A T E M E N T OF D E N O M I N A T I O N A L E X C H A N G E S , BY F E D E R A L R E S E R V E D I S T R I C T S , OF $ 1 0 , 0 0 0 COUPON
BONDS AND VICTORY NOTES, AS OF S E P T E M B E R 30, 1919.
Second
Third
First
First
First second Second
4 per cent. 4i per cent. 4i per cent. 4 per cent. 4^ percent. 44'percent.
Original deliveries:
Boston
New York
Philadelphia...
Cleveland
T ichmond.....
?
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco..
• Treasury




$30,000 $58,160,000 .$61,3-30,000
130,000 177,620,000 229,660,000
38,140,000 42,310,000
60,050,000 64,060,000
19,860,000 12, 730,000
5,790,000
4,-370,000
45,020,000 42,430,000
5,200,000
7,040,000
8,580,000
7,490,000
11,480,000
5,370,000
4,920,000
3,310,000
25, 770,000 16,070,000
10,120,000

$59,650,000 $15,020,000
151,670,000 107,840,000
57,610,000 26,660,000
39,410,000 17,010,000
3,660,000
20,620,000
2,740,000
8,160,000
44,140,000 24,480,000
1,420,000
6,730,000
1,650,000
5,-300,000
2,470,000
4,970,000
1,110,000
3,670,000
7,190,000
24,910,000

.$377,430,000
1,242,790,000
393, 030,000
327, 010,000
118; 490,000
44, 750,000
273, 600,000
.36,930,000
51 310,000
44, 260,000
27, 250,000
.141, 170,000
10 770,000

13,470,000

7

CO
CO

Total.

2,730,000
760,000
130,000
110,000
200,000
800,000
140,000

Total.

Total.... ;:

Victory
Victory
:f percent. 3f percent.

$2,350,000
5,000,000
1,640,000
2,210,000
890,000
160,000
2,060,000
1,310,000
250,000
200,000
60,000
510,000
510,000
17,150,000

160,000 460,590,000 506,290,000 408,610,000 1,044,430,000 426,840,000 211,250,000

3,088,790,000

$1,380,000
2,530,000
1,060,000
1,=990,000
1,640,000

Surrendered for denominational exchange:
* Boston
:
New York
Philadelphia
.,
Cleveland
>
Richmond
Atlanta. Chicago
St. Louis
•
Mirmeapolis
Kansas City
Dallas
"
.
,..-Saji Francisco
Trea.sury

Fomth
4i percent.

LIBERTY

$52,430,000
155,000,000
56,770,000
41,100,000
14,750,000
6,470,000
35,020,000
4,420,000
11,-340,000
6,470,000
7,170,000
17,670,000

$127,080,000
413, .340,000
168,840,000
101,180,000
44,340,000
17,060,000
77,720,000
10,050,000
16,570,000
13,190,000
6,810,000
48,250,000

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w130,000
1.640,000
150,000
160,000
160,000
50,000
10,000
10,000
40,000

960,000
20, .000
10,000.
'60,000
90,000
30,000
10,000

10,000
230,000

'i6,'666"

2,590,000

1,190,000

3,620,000
52,040,000
3,200,000
1,800,000
520,000
140,000
2,100,000
160,000
^ 200,000
40,000
200,000
3,490,000
1,040,000

1,910,000
41,320,000
1,810,000
990,000
1,060,000
40,000
3,920,000
140,000
110,000
150,000
60,000
60,000
2,000,000

1,520,000
63,380,000
7,230,000
3,830,000
1, 730,000
.710,000
4,960,000
650,000
450,000
220,000
280,000
2,110,000
1,560,000

6,280,000
103,640,000
22,520,000
16,380,000
2,980,000
1,110,000
9,340,000
680,000
230,000
270,000
420,000
6,620,000
3,200,000

360,000
16,620,000
3,'450,000
1,140,000
740,-000
90,000
1,870,000
280,000
100,000
70,000
90,000
• 690,000
80,000

60,000
5,900,000
650,000
260,000

10,000
120,000

13,880,000
288,500,000
39,030,000
24,560,000
7,200,000
2,200,000
22,980, OOO"
1,950,000
1,100,000
800,000
1,050,000
13,000,000
8,230,000

68,550,000

53,570,000

88,630,000

173,670,000

25,580,000

10,700,000

424,480,-000

50,000
650,000

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Issued on denominational exchange:
Boston
New York
Philadelphia
Cleveland
•
Richmond
."
Atlanta
Chicago
St. Louis
Minneapolis.
.Kansas Cit}'^
Dallas...
San Francisco
"
Treasury. .
.

10,000
1,020,000
20,000
50,000

1,920,000
34,880,000
940,000
1,440,000
390,000

4o;ooo
50,000
30,000
30,000
110,000
10,000

2,260,000
540,000
170,000
50,000
110,000
3,030,000
3,300,000

110,000

Total

~ 1,210,000

20,000

2,240,000 3,890,000
16,770,000 64,710,000
4,450,000 3,570,000
1,1.30,000 4,260,000
1,880,000
560,000
' 20,000
780,000
1,230,000 5,930,000
460,000 , 520,000
100,000 1,690,000
470,000 . 1,130,000
320,000
. 280,000
140,000 2,130,000
260,000 14,280,000

49,0-30,000 -29,470,000

1,210,000

1 380 nnn

Decrease on denominational exchange
Increase on denominational exchange

-

19,520,000

24,100,000

93,730,000
5,100,000

720,000
11,330,000
92,820,000 14,160,000
980,000
12,620,000
830,000
13,190,000
1,910,000- - 250,000
120,000
1,190,000
2,030,000
15,160,000
120,000
1,040,000
950,000
2,000,000
270,000
1,420,000^
130,000
470,000:
360,000
5,040,000'
1,580, OOP'
159,770,000

20,920,000

13,900,000

4,660,000

150,000
10,370,000
240,000
20,000
70,000
1,290,000
. 90,000
10,000
830,000

20,310,000
225,620,000
22,840,000
20,940,000
5,020,000
2,210,000
28,060,000
2,780,000
4,910,000
3,350,000
1,310,000
11,5-30,000
19,5.30,000

13,070,000'

368,410,000

2,-370,000

g

63,560,000
7,490,000
56,070,000

Net decrease




50,000
890.000

• 1

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CO
CO
C71

RECAPITULATION OF DENOMINATIONAL EXCHANGESOF ALL LOANS SHOWING NET INCREASES AND DECREASES.

CO
CO

[To S e p t e m b e r 30,1919.]

Detail..

Original deliveries:
$50
. $100

F i r s t 3^'s.

First 4's.

First
First 4i's. second 4 | ' s .

Second 4'S.

Second 4J's.

Third 4l's.

F o u r t h 4J's.

Victory 4f's.

Victory
3f's.

Total.

$1,000...
$5,000...
$10,000..

$99,853,300 $98,935,000 $3.3,505,350
122,071,600 124,104,700 59,278,400
97,642, 500 84,207,000 56.375.500
948,725,000 164,509,000 147; 267,000
13,050,000 16,73.5,000
13,470,000 17,1-50,000

$297,200 $383,789,000 $147,195,900 $701,656,050 S864,586,200 $331,077,600
$490,550 $2,661,386,150
399,200
220,504,200
478,143,500
1,372,700 3,196,166,800
720,302,000 1,025,766,700
444,223,800
259,500
379,996,500
207,556,000
309,310,500
2,614,000 1,986,354,000
329,212,000
519,180,500
1,222,000 1,591,870,000 1,332,710,000 1,384,390,000 2,384,214,000 1,137,909,boo 324,411,000 9,417,227,000
206,125,000
239,585,000
105,000
228,265,000
213,190,000 47,635,000 1,414,340,000
449,650,000
408,610,000 1,044,430,000
460,590,000
160,000
506,-290,000
426,840,000 211,250,000 3,088,790,000

Total.

1,268,292,400 498,275,700 330,311,250

2,442,900 3,449,269,800 2,642,521,100 3,801,079,550 6,287,827, i(^Q 2,896,470,600 587,773,250 21,764,263,950

S u r r e n d e r e d for d e n o m i n a t i o n a l exchange.:
$100
S500
$1,000...
15,000...
$10,000..
Total.
I s s u e d on d e n o m i n a t i o n a l
exchange:
$50
SlOO
:
$500
$1,000
, $5,000
$10,000
Total.




38,775,500 17,972,800
35, 708,100 11,803,700
14,482, 500 1,754,500
8, 501,000 3,924,000
2, 555,000
2, 590,000

4,892,350
5,170,400
1,748,500
2, 942,000
960,000
1,190,000

17,800
28, lOO
3,500

86,114. 200
70, 54i; 400
22,121, 500
39,008,000
49,055,000
68,550,000

37,996,650
- 35,900,300
9,039,500
43,007,000
18,590,000
53,570,000

254,053,050
163,608,900
30,262, 500
126,296,000
.48,260,000
88,630,000

264,529,700
220,162,000
38,403, 500
186,306,000
64,340,000
173,670,000

16,903,250

49,400

335,390,100

198,103,450

711,111,050

947,411,200

500
400
10, 500
38,000

27, 916,700
28, 652,400
2-5,170,000
168, 476,000
36,145,000
49,030,000

11,835, 650
10,073,800
8,607,000
124,717,000
13,400,000
29,470,000

65,190,750
30,004,300
25,210,000
455,551,000
41,425,000
93,730,000

49,400

335,390,100

198,103,450

711,111,050

97,467,100

40,600,000

10,661,300
5,199,800
7,742,000
73,864,000

3,837,600
797,450
2,837,900
1,031,800
3,478, 500 1,752,000
27,291,000 11,047,000
1, 945,000 1,065,000
1, 210,000
1,210,000

97,467,100

40,600,000

16,903,2.50

33,329,350
124,600
32,959,800
246,800
8,198,500
234,500
20, 955,000 14,100,000
12,730,000
2,300,000
25,580,000 10,700,000

737,806, 600
576,129, 500
126,249,000
445,039,000
198,790,000
424,480,000

27,705,900

29,100
4,436,750
45.300
4,020, 900
96,500
5, 623,000
90,847,000 12,750,000
1,715,000
7,905,000
20, 920,000 13,070,000

189,987,000
132,848,100
112,629,000
1,540,545,000
164,075,000
368,410,000

947,411,200

133,752, 650 27,705,900

2,508,494,100

teJ

2,508,494,100

65,281,200
50, 981, 500
34,939, 500
575,964,000
60,475,000
159,770,000

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153,752,650

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Increase:
$50..
$100
$500
$1,000
$5,000
$10,000

;
65,363,000

Total

7,000
38,000

3,048,500
129,468,000

81,710,000

25,091,000

8,233,500

45,000

132, 516,500

81,710,000

28,114,200
30, 508,300
6,740, 500

Decrease:
$50
$100
$.500
$1,000
$5,000
$10,000

3,500
8,105,000.
105,000
20,000

65,363,000

Total...:

1,724,000
23,367,000

14,135,200
8,965,800

4;094,900
4,138,600

17,300
27,700

58,197, 500
41,889,000

26,161,000
25,826, 500
432, 500

12,910,000
19, 520,000

5,190,000
24,100,000




65,363,000

25,091,000

8, 233, 500

69,892,000
2,370,000

4,783,000
1,096,856,000
105,000
7,490,000

389,658,000

69,892,000

2,370,000

1,109,234,000

188,862, 900
133, 604,600
5,052,500

199,248, 500
169,180, 500
3,464,000

28,892, 600
28, 938, 900
2, 575, 500

6,835,000

3,865,000
13,900,000

4,825,000
4,660,000

95,500
201,500
138,000
1,350,000
585,000

547,819, 600
443, 281,400
18,403,000
1,350,000
34,820,000
63, 560,000

2,370,000

1,109,234,000

5,100,000

610,000
1,380,000
:

389, 658,000

329, 255,000

45,000

132,516,500

81,710,000

334,355,000

' 334,355,000

389, 658,000

69,892, 000

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EXHIBTT 5 1 .

RECAPITULATION OF TRANSACTIONS IN LIBERTY BONDS AND
V I C T O R Y N O T E S F R O M T H E D A T E S O F T H E RESPECTIVE ISSUES

TO JUNE 30, 1919, SEPARATELY COMPILED FOR EACH LOAN.
First Liberty loan of 1932-1947.
[To June 30, 1919.]

Interim
certificates.

loan conFirst Liberty loan 3^ per First Liberty per cen"^
verted 4
cent bonds.
bonds.,
Registered.

Coupon.

Registered.

Coupon..

Subscriptions received
Sabscriptions allotted
Principal payments received by
Treasurer United States
$1,989,455,780
Less part-paid subscriptions
230
Full-paid subscriptions

•

1,989,455,550

SECURITIES ISSUED.

1,989,455,550
Original subscription deliveries
On exchange or conversioninterim
certificates
...
. ..-. .
$245,779,700 $1,268,008,550 $63,870,750 ' $410,046,800
6,172,000 88,228,900
On conversion
7,301,300
lExchange coupon for registered
87,266,400
Exchange reo'istered'for coupon
3,084,200
37,787,000
Exchange of denoininations
35,785,200
86,023,850
225,000
50,000
Mixed exchanges
1,473,900
1,080,450
Transfers
15,772,200
Total

.

.

1,989,455,550 350,292,200

1,392,044,400

78,474,500

537,145,100

98,122,400
87,9^1,300

53,220,850

344.648,850
7,308,300

SECURITIES R E T I R E D .

On exchange of interim certificates.. 1,987,708,550
On conversion
.'
Exchange of coupon for registered..
Exchange ofregistered for coupon..
Exchange of denominations
Mixed excha