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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

1930
WITH APPENDICES

UNITED STATES
GOVERNMENT PRINTING OFFICE
'

WASHINGTON: 1931

For sale by the Superintendent of Documents, Washington, D. C.




Price $1.50 (cloth)




TREASURY DEPARTMENT

Doeument'No. 3024
Secretary

150

CONTENTS
Page

Summary of the year
Budget results
Receipts
Expenditures
Surplus
,
The public debt
General review of operations
Cost of Government borrowing
Credit conditions ^
:
_
Treasury bills...
...Cumulative sinking fund
.
Three and one-half per cent Treasury notes
.
Two per cent Consols of 1930. J
....
Debt payment
...
...
Condition of the Treasury
...
.
General fund of the Treasury
The currency trust fund and the gold reserve-fund
...
Gold held for the Federal Reserve Board
Business conditions and Federal revenue
Changes in the volume of industrial production
Changes in trade and distribution
Price changes of commodities and securities
Corporate and individual incomes
.
i
Estimates of receipts and expenditures
Income taxation
.
^.
Recommendations for legislations
.
_-Amendments to the second Liberty bond act
...
Railroad obligations
Avoidance of international double taxation
Income tax administration
'
The Income Tax Unit
The Board of Tax Appeals
The settlement policy
Conclusions
The tariff act of 1930
Available funds for public debt retirement
.
Cumulative sinking fund
Receipts from foreign governmentsEstate taxes paid in bonds or notes
Franchise tax receipts from Federal reserve banks and Federal intermediate credit banks
.
Forfeitures, gifts, etc
Surplus of receipts
Reduction in the net balance in the general fund




\

III

1
2
2
8
11
13
13
17
18
22
24
24
25
26
28
28
29
30
30
31
32
32
33
34
38
38
38
40
44
44
46
49
51
52
53
56
56
59
60
60
61
61
62

IV

CONTENTS

Agreement with Germany
Army costs
Mixed claims
Treasury administration of alien and mixed claims
Claims against Germany
War claims arbiter
,
Austria
Hungary
Obligations of foreign governments^
Austria
__..
.
Czechoslovakia
France
.
Currency
Small-size currency
Discontinuance of the coinage of the quarter-eagle
Branch, group, and chain banking
Federal public building program
Authorizations
Construction, contracts, and expenditures
Sites....
.
Contracts for outside professional services
Porto Rican Hurricane Relief Commission._
Coast Guard
.
Bureau of Customs...
Prohibition law enforcement
Narcotic law enforcement
Public Health Service
.
Federal Farm Loan Bureau
National farm loan associations
.
Loans
Real estate
Securities markets and interest rates
Relations with the Federal Farm Board
Receiverships of three j oint stock land banks
.
Legislation
"
^

.

'.
.

.
.

..... —

Page
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64
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81
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84
87
90
92
92
98
99
99
100
100
101
102
104

ADMINISTRATIVE REPORTS OF BUREAUS AND DIVISIONS
Accounts and Deposits, Office of the Commissioner of
Railroad obligations...
.
Section 204
Section 209
.
.
Section 2 1 0 . . . . .
....
Securities owned by the United States Government
Trust funds administered by the Treasury
Adjusted service certificate fund
Civil service retirement and disability fund
District of Columbia teachers' retirement fund
Foreign service retirement and disability fund
Library of Congress trust fund
United States Government life insurance fund
Division of Bookkeeping and Warrants
Receipts
Appropriations and expenditures



...
.....

...
.

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121
121
122

Accounts and Deposits, OflSce of the Commissioner of—Continued.
Division of Bookkeeping and Warrants—Continued.
Financial reports
•
Duplicate checks, outstanding liabilities, etc
Budget matters and special deposit accounts
Miscellaneous
Division of Deposits
.
Amount of deposits
Number and classes of depositaries
Interest on deposits
...
Actuary, Government
Appointments, Division of
Employees of the Treasury Department
Section of surety bonds
.
Budget and improvement committee
.
'Chief clerk and superintendent, office of
Housing of Treasury activities
Improvements, painting, etc
Treasury Department telephone exchange
Sites for public buildings
l
^.
Seville exposition
.
Coast Guard
.
...i
Protection to navigation
Enforcement of customs and other laws
Communications
Equipment
^
The academy, stations, bases, repair depot, etc
Personnel
.
.
Awards of life-saving medals
.
Appropriations, expenditures, and balances
Comptroller of the Currency.
National banks organized, consohdated, insolvent, in voluntary
liquidation, and in existence
Condition of national banks
^.
Banks other than national
All reporting banks
Customs, Bureau of
.
Reorganization and expansion of bureau
.
Receipts
Volume of business
...
Weighing
Appraisement of merchandise
..._
Districts and ports
L
Miscellaneous
Disbursing clerk
I
Engraving and Printing, Bureau of
Enrollment and disbarment of attorneys and agents, committee on
Federal Farm Loan Bureau
Operations of Federal land banks
Operations of joint stock land banks
...
Operations of Federal intermediate credit banks
Financial and economic research, section of
General Supply Committee
.




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199

VI

CONTENTS

Internal Revenue, Bureau of.^_..
.
General..
i
Internal revenue receipts
.
Refunds and additional assessments.
...
Cost of administration
Income Tax Unit
Examination of returns
,
Additional revenue
..
Reduction in number of 60-day letters mailed as related to appeals
filed....
Claims and overassessments
.
Prior year returns pending
The audit in the
field
.
Production statistics
.
Personnel
Special advisory committee
^
...
Miscellaneous Tax Unit
L
.
Estate taxes
,
.
/Miscellaneous taxes..
Tobacco taxes
Appeals and review section
Accounts and Collections Unit
'.
Collection accounting division
Collectors' personnel, equipment, and space division
^
Disbursement accounting division
General Counsel's Office
Appeals division
Interpretative division
Civil division
....
.
-.._
Penal division
.
...
Review division
,
—
Administrative division
Mint Bureau
...
Institutions of the mint service.:
Coinage
.
Gold and silver operations
Lindbergh medal
.Refineries
.
.
Additions and improvements
1
•
Gold and silver in the United States
—
Appropriations, expenses, income, etc
.,
—
Personnel classification officer
Appeals and classification sheets
Efficiency ratings
'
Prohibition, Bureau of
Organization and procedure
Activities
.
Personnel
; Narcotics
......
Public Debt Service
Division of Loans and Currency
Issue and retirement of securities
—
Individual registered accounts activities
^




Page.
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233
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CONTENTS
Public Debt Service^—Continued.
Division of Loans and Currency—Continued.
Claims,..
-.-i
Safe-keeping of securities
Mutilated paper and redeemed currency
_.
Publicity.
.
.
.
Register of the Treasury..^
Division of Public Debt Accounts and Audit
—
Division of Paper Custody.
.
Destruction Committee..
,Public Health Service...
_
-_._..._
Division of Sanitary Reports and Statistics
Division of Foreign and Insular Quarantine and Immigration
Division of Domestic Quarantine
.. — . . .
Division of Scientific Research. .
^
Division of Marine Hospitals and Relief
:
Division of Venereal Diseases
Narcotics Division (Division of Mental Hygiene)
Division of Personnel and Accounts
Secret Service Division
Supervising Architect, Office of the
Federal public building program
_.
Keyes-Elliott Act
.
.
.._..._.
General authorizations
'
Specific authorizations of projects
Contracts
..
Expenditures and outstanding contract obligations
Sites.
Contracts for outside professional services
c--Remodeling and enlarging public buildings
Annual appropriations for maintenance, repairs, etc., of public
buildings
.
Miscellaneous work
.
Total expenditures, liabilities, and unencumbered balances
.
Supply, Division of
...
Expenditures from various appropriations
.
Stationery supplies —
.
.
—
Printing and binding
.
Department advertising
_.._
Engraving work
Treasurer of the United States
War Finance Corporation.

VII

Page
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280

EXHIBITS
THE PUBLIC

DEBT

Issues of December, 1929
Exhibit 1. Offering of certificates of indebtedness. Series TS-1930 (3J^per
cent) (press release, December 6, 1929, with Department Circular No.
419) . - - Exhibit 2. Subscriptions and allotments, certificates of indebtedness.
Series TS-1930 (from press releases, December 10, 1929, and December
11, 1929)
.




283
285

VIII

CONTENTS
Page

Exhibit 3. Inviting tenders for Treasury bills dated December 17, 1929,
and maturing March 17, 1930 (press release, December 10, 1929)
Exhibit 4. Acceptance of tenders for Treasury bills dated December 17,
1929, and maturing March 17, 1930 (press release, December 14, 1929) -

286
287

Issue of February, 1930
Exhibit 5. Inviting tenders for Treasury bills dated February 18, 1930,
and maturing May 19, 1930 (press release, February 11, 1930).__
Exhibit 6. Acceptance of tenders for Treasury bills dated February 18,
1930, and maturing May 19, 1930 (press release, February 15, 1930)...

287
288

Issue of March, 1930
Exhibit 7. Offering of certificates of indebtedness, Series TD-1930 (3}i
per cent) (press release, March 7, 1930, with Department Circular No.
422)
Exhibit 8. Subscriptions and allotments, certificates of indebtedness.
Series TD-1930 (from press releases, March 11, 1930, and March 13,
1930, revised)

289
290

Issue of April, 1930
Exhibit 9. Inviting tenders for Treasury bills dated April 15, 1930, and
maturing July 14, 1930 (press release, AprU 7, 1930)
Exhibit 10. Acceptance of tenders for Treasury biUs dated April 15, 1930,
and maturing July 14, 1930 (press release, April 12, 1930)

291
292

Issue of May, 1930
Exhibit 11. Inviting tenders for Treasury bills dated May 19, 1930, and .
maturing August 18, 1930 (press release. May 12, 1930).
292
Exhibit 12. Acceptance of tenders for Treasury bills dated May 19, 1930,
and maturing August 18, 1930 (press release. May 16, 1930)
293
Issue of June, 1930
Exhibit 13. Offering of certificates of indebtedness. Series TJ-1931
(2 7/8 per cent) (press release, June 7, 1930, with Department Circular
No. 424)
Exhibit 14. Subscriptions and allotments, certificates of indebtedness,
Series TJ-1931 (from press releases, June 11, 1930, and June 13, 1930..

294
296

Issue of July, 1930
Exhibit 15. Inviting tenders for Treasury bills dated July' 14, 1930, and
maturing September 15, 1930 (press release, July 7, 1930)
Exhibit 16. Acceptance of tenders for Treasury bills dated July 14, 1930,
and maturing September 15, 1930 (press release, July 11, 1930)

296
297

Issue of August, 1930
Exhibit 17. Inviting tenders for Treasury bills dated August 18, 1930, and
maturing November 17, 1930 (press release, August 11, 1930)
Exhibit 18. Acceptance of tenders for Treasury bills dated August 18,
1930, and maturing November 17,1930 (press release, August, 15, 1930).




298
299

CONTENTS

IX

Issue of September, 1930
Page
Exhibit 19. Offering of certificates of indebtedness. Series TS-1931 (2Ji
per cent) (press release, September 8, 1930, with Department Circular
No. 427)
....
Exhibit 20. Subscriptions and allotments, certificates of indebtedness.
Series TS-1931 (from press releases, September 11, 1930, and September
12, 1 9 3 0 ) . . . - . . - .
.
....
..
Issues of October, 1930
Exhibit 21. Inviting tenders for two issues of Treasury bills dated October
15 and 16, 1930, and maturing December 16 and 17, 1930, respectively
(pressrelease, October 7, 1 9 3 0 ) . . .
Exhibit 22. Acceptance of tenders for two issues of Treasury bills dated
October 15 and 16, 1930, and maturing December 16 and 17, 1930,
respectively (pressrelease, October 11, 1930)
;

299
301

302
303

Legislation and regulations concerning Treasury hills
Exhibit 23. Regulations governing the sale and issue of Treasury bills
(Department Circular No. 418)
Exhibit 24. An act providing certain exemptions from taxation for Treasury bills (Public No. 376, 71st Cong., H. R. 12440)
Exhibit 25. Amended regulations governing the sale and issue of Treasury
bills (circular letter dated June 30, 1930, with Department Circular
No. 418, as amended)_..

303
308
309

Miscellaneous
Exhibit 26. Announcement that Consols of 1930 will not be caUed for
redemption on April 2, 1930 (press release, December 12, 1929)
Exhibit 27. Notice of call for redemption of Treasury notes of Series
A-1930-32 and B-1930-32 (press release, September 10, 1930, with
Department Circular No. 428)
„

316
315

OBLIGATIONS OF FOREIGN GOVERNMENTS

Austria
Exhibit 28. Agreement for the funding of the indebtedness of Austria to
the United States
^^
Exhibit 29. Statement of Secretary of the Treasury MeUon concerning the
agreement for the settlement of the relief indebtedness of Austria to the
UnitedStates (pressrelease, May 8, 1930)
Exhibit 30. Expression of appreciation of Austria in concluding the
funding agreement between Austria and the United States (press release.
May 8, 1930)
_....

316
322
323

France
Exhibit 31. Statement by Undersecretary of the Treasury MiUs before the
Committee on Ways and Means, December 10, 1929, relative to the bill
providing for the settlement of the indebtedness of France to the United
States
.
Exhibit 32. An act to authorize the settlement of the indebtedness of the
French Republic to the United States of America (Public No. 24, 71st
Cong., H. R. 6585)




324
328

CONTENTS

Exhibit 33. Balance paid by France on account of the annuities under the
funding agreement of April 29, 1926 (press release, December 27, 1929) Exhibit 34. Statement of Secretary of the Treasury Mellon concerning
the funding of the indebtedness of France to the United States (press
release, AprU 15, 1930)
:

329
330

° General
Exhibit 35. Statements of the Treasury covering payments received from
the several foreign governments on account of their indebtedness to the
United States (press releases, December 16, 1929, and June 16, 1930)..

331

MIXED CLAIMS

Exhibit 36. Statement of Acting Secretary of the Treasury Mills relative
to a proposed agreement covering payments by Germany to the United
States on account of army costs and mixed claims (press release,
December 29,1929)
334
Exhibit 37. Statement of Undersecretary of the Treasury Mills before the
Committee on Ways and Means, March 10, 1930, relative to the bill to
authorize the settlement of the indebtedness of Germany to the United
States on account of the awards of the Mixed Claims Commission,
United States and Germany, and the costs of the United States army
of occupation
^
334
Exhibit 38. An act to authorize the settlement of the indebtedness of the
German Reich to the United States on account of the awards of the
Mixed Claims Commission, United States and Germany, and the costs
of the United States army of occupation (Public No. 307, 71st Cong., .
H. R. 10480)
.
..,
340
Exhibit 39. Agreement between Germany and the United States, signed
June 23, 1930, providing for the final discharge of obligations of Germany
to the United States in respect of the awards of the Mixed Claims
Commission, United States and Germany, and the costs of the United
States army of occupation
341
Exhibit 40. Statement of Secretary of the Treasury Mellon, June 23, 1930,
announcing the signing of the agreement between Germany and the
United States providing for the final discharge of the obligations of Germany to the United States in respect of the awards of the Mixed Claims
Commission, United States and Germany, and the costs of the United
.
States army of occupation (press release, June 23, 1930)
347
Exhibit 41. Joint resolution extending for two years the time within which,
American claimants may make application for payment, under the
settlement of war claims act of 1928, of awards of the Mixed Claims
Commission and of the Tripartite Claims Commission, and for one year
the time within which claims may be filed with the Alien Property
Custodian (Public Res. No. 48, 71st Cong., S. J. Res. 109)
348
Exhibit 42. Joint resolution authorizing the immediate appropriation of
certain amounts authorized to be appropriated by the settlement of war
. claims act of 1928 (Public Res. No. 77, 71st Cong., H. J. Res. 328)
348
Exhibit 43. An act to carry out the recommendation of the President in
connection with the late-claims agreement entered into pursuant to the
settlement of war claims act of 1928 (Public No. 411, 71st Cong.,
H. R. 8881)--^349




CONTENTS
•

XI
Page

Exhibit 44. Regulations No. 4;—Payments on account of the tentative
awards of the war claims arbiter on account of ships (Department Circular No. 425)
Exhibit 45. Statement of Secretary of the Treasury Mellon concerning the.
funding of the indebtedness of Germany to the United States on account
of the awards of the Mixed Claims Commission and the costs of the
United States army of occupation (press release, November 7, 1930)
Exhibit 46. America's Separate Agreement with Germany, an address bv
Undersecretary of the Treasury Mills at the meeting of the Academy of
Political Science, New York City, November 14, 1930

349

354
354

TAXATION

Exhibit 47. Statement of Undersecretary of the Treasury Mills before the
Committee on Ways and Means, December 4,. 1929, relative to the joint
resolution to reduce rate of income tax for the calendar year 1929
Exhibit 48. Joint resolution reducing rates of income tax for the calendar
year 1929 (Public Res. No. 23, 71st Cong., H. J. Res. 1 3 3 ) . . . . . Exhibit 49. Outline of the Federal tax system as of June 30, 1930.
Exhibit 50. International Double Taxation, an address by Undersecretary
of the Treasury Mills before the Conference on International Double.
Taxation, Washington, D. C , February 14, 1930
.
Exhibit 51. Statement of Secretary of the Treasury Mellon before the
Committee on Ways and Means, February 28, 1930, relative to the bill
> to reduce international double taxation
Exhibit 52. Statement of Secretary of the Treasury Mellon relative to tax
refunds (press release, October 31, 1930). _

358
364
366
374
376
380

P R O H I B I T I O N AND NARCOTICS

Exhibit 53. Statement of Secretary of the Treasury Mellon before the
Committee on Expenditures in the Executive Departments of the House
of Representatives, January 22, 1930, relative to the bill providing for
the creation of a Bureau of Prohibition in the Department of Justice
and for the transfer to that department of certain functions in the
administration ofthe prohibition act
^
^Exhibit 54. An act to transfer to the Attorney General certain functions
in the administration of the national prohibition act, to create a Bureau
of Prohibition in the Department of Justice, and for other purposes
. . (Public No. 273, 71st Cong., H. R. 8574)
-Exhibit 55. An act to create in the Treasury Department a Bureau of
Narcotics, and for other purposes (Public No. 357, 71st Cong., H. R.
11143)
....
...
Exhibit 56. Joint resolution to amend the act entitled ''An act to create in
- the Treasury Department a Bureau of Narcotics, and for other purposes," approved June 14, 1930 (Public Res. No. 96, 71st Cong., H. J.
Res. 367)
....
._
Exhibit 57. Order signed by Secretary of the Treasury Mellon, July 1,
1930, prescribing the duties and powers of the Commissioner and other
officers and employees of the Bureau of Narcotics, including the field
service
PUBLIC

381

383
386

389

389

BUILDINGS

Exhibit 58. The Public Building Program, a radio address by Assistant
• Secretary of the Treasury Heath, February 20, 1 9 3 0 , , . , - , _ - _ . 391



XII

CONTENTS
Page

Exhibit 59. Statement of Secretary of the Treasury Mellon regarding the
present status of the governmental building program (press release,
March 23, 1930)
....
Exhibit 60. The Public Building Program, an address by Assistant Secretary of the Treasury Heath before the Michigan Bankers Association,
Grand Rapids, Mich., June 11, 1930
PUBLIC

399

HEALTH

Exhibit 61. An act to provide for the coordination of the public health
activities of the Government, and for other purposes (Public No. 106,
71st Cong., H. R. 8807)
Exhibit 62. An act to establish and operate a National Institute of Health,
to create a system of fellowships in said institute, and to authorize the
Government to accept donations for use in ascertaining the cause, prevention, and cure of disease affecting human beings, and for other purposes (Public No. 251, 71st Cong., S. 1171)
DISCONTINUANCE

397

OF COINAGE

O F T H E $2.50 GOLD

402

406

PIECE

Exhibit 63. Letter from Secretary of the Treasury Mellon to the President
of the Senate, dated January 17, 1930, transmitting draft of proposed bill
to provide for the discontinuance of the coinage of the $2.50 gold piece..
Exhibit 64. Ari act to discontinue the coinage of the $2.50 gold piece (Public No. I l l , 71st Cong., H. R. 9894)

406
407

MISCELLANEOUS

Exhibit 65. Order signed by Secretary of the Treasury Mellon, November
1, 1929, directing the General Supply Committee to report directly to the
Assistant Secretary in charge of public buildings and miscellaneous
Exhibit 66. Special deposits of public moneys under the act of Congress
approved September 24, 1917, as amended (Department Circular No.
92, revised October 1,1928, and supplemented December 15,1929)
Exhibit 67. Regulations governing deposit of public moneys and payment
of Government checks and warrants (Department Circular No. 176,
amended and supplemented)
—
Exhibit 68. An act to provide for the classification of extraordinary
expenditures contributing to the deficiency of postal revenues (Public
No. 316, 71st Cong., S. 3599)
.Exhibit 69. Excerpt from a letter of the Postmaster General to the
Secretary of the Treasury, dated October 18, 1930, certifying extraordinary expenditures contributing to the deficiency of postal revenues
for the fiscal year ended June 30, 1930, in pursuance of Public Act'No.
316, 71st Cong., approved June 9,1930 (40 Stat. 5 2 3 ) . - - - .
Exhibit 70. Description Of change in form of exhibiting the analysis of
receipts and expenditures in the Daily Statement of the Treasury, July 1,
1930
liixhibit 71. Joint resolution to authorize additional appropriations for the
relief of Porto Rico (Public Res. No. 33, 71st Cong., S. J. Res. 118)
hixhibit 72. Federal aid to States—Statement listing the appropriations
providing for Federal aid to States, and presenting by class of appropriation the reference to the organic or first appropriation act, the last
appropriation act, and summaries of the bases of allotments and expenditures
-




408
408
413
432"

432
433
436

437

CONTENTS
Exhibit 73. Stateinent of Undersecretary of the Treasury Mills before the
Committee on Interstate and Foreign Commerce, April 24, 1930, relative
to the bill to regulate the entry of persons into the United States, to
establish a border patrol in the Coast Guard, and for other purposes.
.
Exhibit 74. The Customs Service, an address by Undersecretary of the
Treasury Mills, February 19, 1930, ,at a dinner of the Customs Field
Service, Washington, D. C
Exhibit 75. Accomplishments of the Treasury Department during 1929, a
radio address by Secretary bf the Treasury Mellon, December 4, 1929-Exhibit 76. Some recent accomplishments of the Treasury, a radio address
by Assistant Secretary of the Treasury Hope, July 14, 1930

XIII

447
451
455
459

TABLES
RECEIPTS AND EXPENDITURES

General tables
Table 1. Receipts and expenditures for the fiscal year 1930, classified according to funds (revised daily statement basis)
-_Table 2. Comparison of detailed receipts for the fiscal years 1929 and 1930
(warrant basis)
Table 3. Comparison of detailed expenditures chargeable against ordinary
receipts for the fiscal years 1929 and 1930 (checks issued basis)
Table 4. Summary of ordinary receipts, expenditures chargeable against
ordinary receipts, and surplus or deficit, for the fiscal years 1916 to 1930
(daily statement basis)
Table 5. Ordinary receipts, expenditures chargeable against ordinary receipts, and surplus or deficit for the fiscal years 1916 to 1930 (daily statement basis)
'
Table 6. Receipts and expenditures for the fiscal years 1791 to 1930
(warrant basis)
Table 7. Summary of ordinary receipts, expenditures chargeable against
ordinary receipts, and excess of receipts or expenditures, by months,
from July 1, 1927, to October 31, 1930 (daily statement basis)
Table 8. Expenditures, by months, classified according to departments
and establishments, for the fiscal year 1930 (daily statement basis)

469
471
480
488
489
494
506
508

Specific receipts and expenditures
Table 9. Comparison of detailed internal revenue receipts for the fiscal
years 1929 and 1930 (collection basis)
Table 10. Internal revenue receipts, by sources, for the fiscal years 1916 to
1930 (collection basis)
Table 11. Internal revenue receipts, by months, total, and by present
major sources, July, 1928, to September, 1930 (collection basis)
Table 12. Internal revenue receipts, by States and Territories, for the
fiscal years 1929 and 1930 (collection basis)
Table 13. Expenses of the Internal Revenue Service for the fiscal year
1930 (checks issued basis)
:
Table 14. Customs duties (estimated), value of imports entered for consumption, and ratio of duties to value of dutiable imports and to value
of all imports, for the years 1867 to 1929 (on basis of reports of the Bureau of Foreign and Domestic Commerce)




512
513
516
517
519

523

XIV

CONTENTS
Page

Table 15. Customs duties (estimated), and ratio of duties to value of
dutiable imports, by tariff schedules, for the years 1890 to 1929 (on basis
of reports of the Bureau of Foreign aiid Domestic Commerce)
- . . ^ 525
Table 16. Customs statistics, by districts, for the fiscal year 1930 (coUection basis)
:
530
Table 17. Customs receipts, by districts, for the Jiscal year 1930 (warrant
basis)
534
Table 18. Panama Canal receipts and expenditures for the fiscal years 1903
to 1930 (warrant basis)
_.
535
Estimates of receipts and appropriations
Table 19. Actual receipts for the fiscal year 1930 and estimated receipts
for the fiscal years 1931 and 1932 (on basis of reports from the Bureau
ofthe Budget)
t
Table 20. Appropriations for 1931 compared with estimates of appropriations for 1932 (on basis of reports from the Bureau of the Budget)
Table 21. Appropriations for the fiscal years 1916 to 1931, including
estimated permanent and indefinite appropriations and deficiencies
for prior years
Table 22. Accountability statement of appropriations, by acts of Congress, placed upon the books of the Treasury Departinent during the
fiscal year 1930
Table 23. Appropriations, expenditures, amounts carried to surplus fund,
and unexpended balances for the fiscal years 1911 to 1930 (warrant basis).
PUBLIC

536
543
545
548
550

DEBT

Public deht outstanding
Table 24. Public debt outstanding June 30, 1930, by issues
Table 25. Description of the public debt issues outstanding June 30, 1930.
Table 26. Principal of the public debt outstanding at the end of each
fiscal year from 1853 to 1930
Table 27. Interest-bearing debt outstanding June 30, 1930, classified
according to kind of security and callable period or payable date

551
554
560
561

Transactions in the public debt during the fiscal year 1930
Table 28. Public debt retirements chargeable against ordinary receipts during the fiscal year 1930, and cumulative totals to June 30,1929 and 1930Table 29. Summary of transactions in interest-bearing and noninterestbearing securities during the fiscal year 1930
Table 30. Summary of transactions in interest-bearing securities during
the fiscal year 1930
Table 31. Transactions in noninterest-bearing securities, by issues, during
the fiscal year 1930
1
Table 32. Treasury notes, certificates of indebtedness, and Treasury bills
issued through each Federal reserve bank and the Treasury Department
during the fiscal year 1930
..

562
565
568
570
573

Transactions in public deht securities from dates of issue .
Table 33. Transactions in interest-bearing securities outstanding, by
issues, June 30, 1930, from dates of. issue, showing reconciliation of
account of the Treasurer of the United States with security account




575

CONTENTS

XV
Page

Table 34. Summary of operations in Liberty loans having conversion
features, from dates of issue to June 30, 1930

579

Transactions in the public debt by years
Table 35. Transactions in the public debt for the fiscal years 1927 to 1930.
Table 36. Net increases ( + ) and net decreases (--) in the public debt, by
issues, for the fiscal years 1918 to 1930 (warrant basis)
Table 37. PubUc debt issues between AprU 6, 1917, and June 30, 1930,
rates, dates of isue, call and/or maturity, and amounts issued.
Table 38. Public debt retirements, by issues, for the fiscal years 1927 to
1930 (warrant basis)
...
Table 39. Reconciliation of public debt issues and retirements with (1)
public debt retirements, by sources, (2) balance in the general fund,
and (3) outstanding public debt, for the fiscal years 1918 to 1930 (revised
daily statement basis)
^
Table 40. Sources of debt increase ajid decrease for the fiscal years 1916 to
1930 (daily statement basis)

580
581
584
589

590
592

Cumulative sinking fund transactions
Table 41. Cumulative sinking fund transactions during the fiscal year 1930.
Table 42. Cumulative sinking fund transactions for the fiscal years 1921
to 1930.
.
—Table 43. Securities retired through the cumulative sinking fund, par
amount and principal cost, to June 30, 1930

593
593
594

Interest on the public debt
Table 44. Interest on the public debt payable, paid, and outstanding
unpaid for the fiscal year 1930
.
Table 45. Interest paid on the public debt, by issues, for the fiscal years
1918 to 1930 (warrant basis) — - . .
Table 46. Rates of interest payable on outstanding public debt

594
595
596

CONDITION OF THE TREASURY EXCLUSIVE OF PUBLIC DEBT
LIABILITIES

Table 47, Current assests and liabilities of the Treasury at the close of the
fiscal years 1928, 1929, and 1930 (revised daily statement basis)
Table 48. Net balance in the general fund at the end of each month, from
October, 1915, to September, 1930 (daily statement basis)
Table 49. Securities owned by the United States Government, June 30,
1930
.--

597
598
600

TRANSACTIONS WITH RAILROADS

Table 50. Obligations of carriers acquired pursuant to section 207 of the
transportation act, 1920, as amended
Table 51. Payments to carriers from July 1, 1929, to June 30, 1930, under
the guaranty provided for in section 209 of the transportation act, 1920,
as amended, and payments by carriers to the United States under the
same section
Table 52. Loans to carriers under section 210 of the transportation act,
1920, as amended, and repayments on such loans from July 1, 1929, to
June 30, 1930, together with cumulative total, and amounts outstanding
June 30, 1929, and June 30, 1930



602

602

603

XVI

CONTENTS
STOCK AND CIRCULATION OF MONEY IN THE UNITED STATES
Page

Table 53. Stock of money, money in the Treasury, in the Federal reserve
banks, and in circulation at the end of each fiscal year from 1913 to
1930
Table 54. Stock of money, classified by kinds, at the end of each fiscal
year from 1913 to 1930
.....
Table 55. Money in circulation, classified by kinds, at the end of each
fiscal year from 1913 to 1930
'...
Table 56. Money in circulation, classified by kinds, June 30, 1930...

604
605
606
607

MISCELLANEOUS

Table 57. Principal of the funded and unfunded indebtedness of foreign
governments to the United States, the accrued and unpaid interest
thereon, and payments on account of principal and interest, as of
November 15, 1930
^
Table 58. Money cost of the World War to the United States Government
to June 30, 1930
1
Table 59. Insular and District of Columbia loans outstanding and
changes during the fiscal year 1930
.
Table 60. Estimated amount of wholly tax-exempt bonds outstanding,
by years, on June 30, 1913 to 1928, and at the end of each month,
from January, 1929, to August, 1930, classified by type of obligor
Table 61. Partially tax-exempt United States securities outstanding, by
years, on June 30, 1917 to 1928, and at the end of each month, from
January, 1929, to August, 1930
Table 62. Federal aid to States—Net disbursements for Federal aid to
States, on basis of warrants issued, during the fiscal years 1920 to 1930,
inclusive; and amounts appropriated for the fiscal year 1931, classified
by appropriations from which direct payments are made to States and
by the more iinportant appropriations providing for expenditures by
the Government in cooperation with States, municipalities, or other
civil organizations for investigative, regulatory, protective, or construction work
.
Table 63. Federal aid to States—Expenditures made by the Government
as direct payments to States under cooperative arrangements during the
fiscal year 1930__-_
-

608
609
613
615
616

617

623

PERSONNEL

Table 64. Comparison of the number of employees in the departmental
and field services of the Treasury On June 30, 1929, and August 31,
1930
Table 65. Number of persons retired, or eligible for retirement, retained in
the departmental and field services of the Treasury under the civil,
service retirement act, August 31, 1930^
Table 66. Number of employees in the departmental services of the
Treasury in Washington, by months, from June 30, 1929, to August
31, 1930
.
..




626
626
627

APPENDICES TO REPORT ON THE FINANCES
Report of the Treasurer:
Page
Receipts and expenditures for the fiscal years 1929 and 1930
631
Pay warrant transactions
631
Foreign currencies purchased
,
632
Collection items
633
District of Columbia securities
' 634
Checking accounts - 634
Boston, Cape Cod & New York Canal Co. bonds
634
Investments for the trust fund, relief and rehabUitation, longshoremen's and harbor workers' compensation act
635
Panama Canal
635
Payment of coupons from United States securities
'.
635
Payment of interest on the registered securities of the United States..
635
Transactions on account of the Post Office Department
635
District of Columbia teachers' retirement fund...:.
636
Transactions in the public debt
.
636
Statement of the Treasury of the United States. 642
The general fund
" 642
Net available cash balance
643
The gold reserve fund
,
644
Gold fund. Federal Reserve Board
644
Gold in the Treasury
645
Securities held in trust
645
Securities held to secure postal-savings funds, June 30, 1929, and
June 30, 1930, and changes during 1930
_-646
Withdrawal of bonds to secure circulation
647
Special trust funds
...
647
Depositaries of the United States-_:
..^
650
Public moneys in depositary banks
^
650
Interest on public moneys held by depositary banks
651
Restoration of depositary balances
652
Coin and gold bar shipments or transfers
L
652
Recoinage of gold, subsidiary sUver, and minor coins
653
Purchases of gold bullion at the mints and assay offices
653
Stock of metallic money in the L nited States
654
Redemption of Federal reserve and national currenc}^
_655
Shipments of paper currency from Washington
:
657
Paper currency
658
Issue of new small-size currency
.
664
United States paper currency, by denominations, held in reserve.._.
664
United States paper currency prepared for issue and amount issued,
by fiscal years from 1921
'
665
United States paper currency issued, by months, during the fiscal
years 1929 and 1930
..
---_..
665
12101—31

2




XVII

XVIII

CONTENTS

Report of the Treasurer—Continued.
Page
Lnited States paper currency redeemed, by months, during the fiscal
years 1929 and 1930
--666
United States paper currency issued, redeemed, and outstanding for
the fiscal year 1930
666
United States paper currency outstanding, by months, during the
fiscal years 1929 and 1930
666
Ratio of small denominations to aU paper currency outstanding
667
Paper currency outstanding June 30, 1929 and 1930
667
Legal tender qualities of U nited States currency
671
General account of the Treasurer of the U nited States
672
Tables from the report of the Treasurer:
No. 1. General distribution of the assets and liabilities of the Treasury,
June 30, 1930...
676
No. 2. Available assets and liabilities of the Treasury at the close of
June 30, 1929 and 1930.._677
No. 3. Distribution of the General Treasury balance, June 30, 1930.
678
No. 4. Assets of the Treasury other than gold, silver, notes, and certificates at the end of each month, from July, 1927
678
No. 5. Assets of the Treasury at the end of each month, from July,
1927
.-679
No. 6. Liabilities of the Treasury at the end of each month, from July,
1927
680
No. 7. United States" notes of each denomination issued, redeemed,
and outstanding at the close of the fiscal years 1927, 1928, 1929, and
^ 1930
-681
No. 8. Gold certificates of each denomination issued, redeemed, and
outstanding at the close of the fiscal years 1927, 1928, 1929, and
1930
£
.
682
No. 9. Silver certificates of each denomination issued, redeemed, and
outstanding at the close of the fiscal years 1927, 1928,. 1929, and
1930
-.
.
683
No. 10. Treasury notes of 1890 of each denomination issued, redeemed,
and outstanding at the close of the fiscal years 1927, 1928, 1929, and
1930
-—
684
No. 11. Amount of United States notes, gold and silver certificates,
and Treasury notes of each denomination issued, redeemed, and outstanding at the close of the fiscal years 1927, 1928, 1929 and 1930685
No. 12. Federal reserve banks and branches, general, limited, insular,
special, and foreign banks designated as Government depositaries
of public moneys, with the balances held June 30, 1930- .
686
No. 13. Old demand notes of each denomination issued, redeemed,
and outstanding Jiine 30, 1930..
687
No. 14. Fractional currency of each denomination issued, redeemed,
and outstanding June 30, 1930
..
688
No. 15. Compound-interest notes of ea'ch denomination issued, redeemed, and outstanding June 30, 1930
688
No. 16. One and two year notes of each denomination issued, redeemed, and outstanding June 30, 1930
688
No. 17. Seven-thirty notes issued, redeemed, and outstanding June
30, 1930
.
..
688
No. 18. Refunding certificates, act of February 26, 1879, issued, redeemed, and outistanding June 30, 1930
• 689
No. 19. Public debt obligations retired during the fiscalyear 1930
.
689




CONTENTS
Tables from the report of the Treasurer—Continued.
No. 20. Number of banks with semiannual duty levied, by fiscal years,
and number of depositaries with bonds as security at close of each
fiscal year, from 1921
.
No. 21. Principal of obligations of the insular governments paid during the fiscal year 1930
---No. 22. Coupons from obligations of the insular governments paid
during the fiscal year 1930, classified by loans
No. 23. Checks issued and paid by the Treasurer for interest on registered bonds of the insular governments during the fiscal year 1930.
No. 24. Coupons from United States obligations paid during the fiscal
year 1930, classified by loans
--_
No. 25. Checks issued by the Secretary and paid by the Treasurer for
interest on registered obligations of the United States during the
fiscal year 1930-.
No. 26. Money deposited in the Treasury each month of the fiscal
year 1930 for the redemption of national-bank notes
No. 27. Amount of currency counted into the cash of the National
Bank Redemption Agency and redeemed notes delivered, by fiscal
years from 1921 to 1929, and by months during the fiscal year 1930.
No. 28. Currency received for redemption by the National Bank Redemption Agency from the principal cities and other places, by
fiscal years, from 1921, in thousands of doUars
No. 29. Mode of payment for currency redeemed at the National
Bank Redemption Agency, by fiscal years, from 1921^
No. 30. Deposits, redemptions, assessments for expenses, and transfers and repayments on account of the 5 per cent redemption fund
of National and Federal reserve banks, by fiscal years, from 1921-No. 31. Deposits and redemptions on account of the retirement of
circulation, by fiscal years, from 1921
._No. 32. Expenses incurred in the redemption of National and Federal
reserve currency, by fiscal years, from 1921
No. 33. Amount of national-bank notes redeemed and assorted during
the fiscal year 1930, and the assessment for expenses of redemption.
No. 34. Amount and number of pieces of Federal reserve notes and
Federal reserve bank notes redeemed during the fiscal year 1930,
and the assessment for exp^enses of redemption
No. 35. General cash account of the National Bank Redemption
Agency for the fiscal year 1930, and from July 1, 1874
No. 36. Number of pieces of currency, by kinds and by denominations,
redeemed and delivered by the National Bank Redemption Agency
during the fiscal year 1930, by months
No. 37. Average amount of national-bank notes outstanding and the
redemptions, by fiscal years, from 1875
No. 38. Federal reserve notes, canceled and uncanceled, forwarded
by Federal reserve banks and branches, counted and delivered to
the Comptroller of the Currency for credit of Federal reserve agents,
by fiscal years, from 1916
No. 39 Amount of money outside of the Treasury, the amount held
by Federal reserve banks and agents, and the amount in circulation,
the per capita, and the estimated population of the United States,
on the last day of each month from July 1928
No. 40. Total amount expiended on account of the Panama Canal, on
basis of warrants drawn, the receipts covered into the Treasury, and
the proceeds of sales of bonds to the close of the fiscal year 1930



XIX
Page
692
693
693
694
695
696
696
697
698
698
698
699
699
700
700
701
702
704

704

705
705

XX

CONTENTS

Report of the Director of the Mint (abridged):
Page
Institutions of the mint service
.
707
Coinage
'
^..
707
Gold operations
708
Silver operations
^
708
Refineries
.
708
Additions and improvements
708
Lindbergh medal
709
Stock of coin and monetary bullion in the United States
709
Production of gold and silver
710
Industrial consumption of gold and silver.
.
710
Import and export of domestic gold coin
710
Revision of statistics on consumption of gold in industrial arts, also
reconciliation of gold statistics, 1914-1928
710
Appropriations, expenses, and income
711
Deposits of gold and silver, income, expenses, and employees, by
institutions, fiscal year 1930
712
Domestic coinage
712
Coinage by the United States for other countries
713
Issue of fine gold bairs for gold coin and gold buUion
713
Receipts and disbursements of gold bullion and balances on hand
714
Purchase of minor coinage metal for use in domestic coinage
715
Minor-coin distribution costs
715
Minor coins outstanding
715
Operations of the assay departments
.
716
Proof bullion
.
716
Operations of the melting and refining and of the coining departments,
fiscal year 1930
716
Refining operations
.—.
718
Ingot melts made
719
Fineness of melts for gold and sUver ingots
720
Commercial and certificate bars manufactured..
720
Bullion gains and losses
.
722
Wastage of coinage metal, and loss on sale of sweeps
, 722
Engraving department
723
Medals sold
:...
723
Employees
.—
724
Work of the minor assay offices
724
Gold receipts at Seattle
725
Laboratory, Bureau of the Mint
.
725
Assay Commission's annual test of coin
.
727
Excerpts from the addenda to the report of the Director of the Mint—
Deposits and purchases of gold during the fiscal year ended June
30, 1930
730
Deposits and purchases of silver during the fiscal year ended June
30, 1930....
..
.
.
732
Deposits of gold at United States mints and assay offices since
1873
734
Deposits of silver at United States mints and assay offices since
1873
--735
Authority for United States coinage, by denominations, with
standard weight and fineness, and total coined
736
Coinage of each mint, by value, with grand total pieces, since
organization to close of business December 31, 192^
739




CONTENTS
Report of the Director of the Mint—Continued.
Excerpts from the addenda to the report of the Director of the
Mint—Continued.
Coinage of each mint during the past 10 calendar years
Combined gold coinage of the mints of the United States, by
denominations and calendar years, since their organization
Combined silver coinage of the mints of the United States, by
denominations and calendar years, since their organization __.
Combined minor coinage of the mints of the United States, by
denominations and calendar years, since their organization. _
Total gold, sUver, and minor coinage of the United States, by calendar years
.
Stock of domestic coin in the United States, June 30, 1930
Bullion in mints and assay offices, June 30, 1930
Basic metallic stock, June 30, 1925 to 1930
Location, ownership, and per capita circulation of United States
money, June 30, 1930
Estimated monetary stock of gold and silver in the United
States and the amount per capita at the close of each fiscal year
since 1873
^
Stock of money in the United States, December 31, 1929
Location, ownership, and per capita circulation of United States
money, December 31, 1929
Monetary stock of gold in the United States since 1873
ReconcUiation of gold statistics (United States), 1914-1928
Average price of an ounce of gold in London and United States
equivalent since 1870
1
.
Average commercial ratio of silver to gold each calendar year
since 1687, with gold considered as of legal monetary value
Ratio of silver to gold, as affected by World War
^
Values of foreign moneys, October 1, 1930
Monetary stock of the principal countries of the world, end of cal<
»
endaryear 1928
.
Monetary stock of the principal countries of the world, end of calendar year 1929
World production of gold and sUver, 1928 and 1929
Production of gold.and silver in the world since 1860
Production of gold and silver in the world since the discovery of
. America
.
j
Report of the Comptroller of the Currency (abridged):
Legislation recommended-^
Amendments to the national bank act
Amendments to the laws of the District of Columbia
Organization and liquidation of national banks
....
Branches
._
National banks in the trust
field
National bank failures
Bank failures other than national
National bank circulation
Redemption of national and Federal reserve bank circulation
National banks of issue
'
Condition of national banks at date of each call during the year
National bank liabilities on account of bills payable and rediscounts-Loans and discounts of national banks..^
.




XXI
Page
740
744
746
748
750
752
752
752
753
754
755
756
757
758
780
781
781
782
786
790
794
797
798
801
811
813
814
819
827
835
835
837
837
838
842
843

XXII

CONTENTS

Report of the ComptroUer of the Currency—Continued.
... page
Comparative changes in demand and time deposits, loans and discounts, United States Government and other bonds and securities
owned, and the amount of reserve of national banks with Federal
reserve banks since June 30, 1926
.
848
United States Government securities owned by national banks in
reserve cities and States
849
Investments of national banks
~ 851
Per capita demand and time and savings deposits in all reporting
banks—
.
.
856
Earnings, expenses, and dividends of national banks
864
National banks classified according to capital stock
877
National bank examiners
878
Convictions of national bank officers and others for violations of the
national banking laws during the year ended October 31, 1930---.
883
Federal reserve banks—
Assets and liabilities
889
Federal reserve bank discount rates
891
Discount rates prevailing in Federal reserve bank and branch
cities
891
Rates for money in New York
893
New York clearing house
895
Clearing house associations in the 12 Federal reserve bank cities and
elsewhere
.
895
Banks other than national—
State (commercial) banks
:
898
Loan and trust companies-900
Stock savings banks
.
902
Mutual savings banks.
904
Savings depositors and deposits in mutual and stock savings
banks
906
Private banks
909
Resources and liabilities of all reporting banks other than ^
national
..
911
National banks
915
All reporting banks in the United States and possessions
919
Banks in the District of Columbia—
Earnings, expenses, apd dividends of banks other than national.
932
Building and loan associations
933
Building and loan associations in the United States
..,..,....
934
Money in the United States
..
937
Imports and exports of merchandise, gold, and silver
938
Federal land banks
939
Joint stock land banks
..
940
Federal intermediate credit banks
.
942
National agricultural credit corporations
943
, United States postal savings system
.
944
School savings banking
950
Savings banks in principal countries of the world
951
Resources of leading foreign banks of issue
953
Expenses of the Currency Bureau
954




CONTENTS

XXIII

Report of the Commissioner of Internal Revenue (abridged):
Page
Collections . 955
Cost of administration
'.
957
Income Tax Unit___
:
957
Examination of returns
957
Analysis of production
-957
Additional revenue. _.
957
Claims and overassessments
958
Reduced cost of personneL..
• 959
The pending job
959
Tax years 1917 to 1928, inclusive
.
959
Cases reopened
960
Current years
960
Audit in Washington
'.
961
Excess-profits tax years
.
961
Tax years 1922 to 1926
961
Reduction in the number of 60-day letters mailed as related to
®
appeals
filed..962
The audit in the
field
962
Changes in policy and procedure
964
Present organization
967
Field procedure division-967
Field divisions
....
967
Audit review division
969
Valuation division
971
Clearing division
972
Claims control section
973
Statistical section
973
Records division
974
Personnel section
975
Rules and regulations section
976
Service section
.
976
Personnel.
977
Special Advisory Committee
978
MisceUaneous Tax Unit
981
Personnel and pay roU
981
Taxes coUected
981
Appeals and review section
98.2
Estate tax division...
.
982
Miscellaneous division
^
984
Tobacco division
988
Accounts and Collections Unit
990
Collection accounting division
990
Collectors' personnel, equipment, and space division
992
Disbursement accounting division
993
Office of the General Counsel
994
Appeals division
994
Interpretative division.
997
Penal division
999
CivU division
1002
Review division
1005
Administrative division
.:
1008
Bureau and field personnel
1008




XXIV

CONTENTS

Report of the Commissioner of Internal Revenue—Continued.
page
Tables from the report of the Commissioner of Internal Revenue—
Summary of monthly internal revenue receipts for years ended
June 30, 1929 and 1930, by sources..
^
. 1010
Summary of internal revenue receipts, years ended June 30,1929
and 1930, by sources
. . 1022
Summary of internal revenue receipts, years ended June 30, 1929
and 1930, by coUection districts
1023
. Summary of internal revenue receipts, year ended June 30, 1930,
by States
.
.
1025
Summary of income tax receipts from corporations and individuals, year ended June 30, 1930, by States
1026
Summary of receipts from income tax, years ended June 30, 1928,
1929, and 1930, by States, with per cent of increase or decrease
in 1930 compared with 1929
1027
Total internal revenue receipts, years ended June 30, 1863-1930. _ 1028
Internal revenue tax on products from Philippine Islands, years
ended June 30,1929 and 1930, by articles taxed
. . . . ''1028
Internal revenue tax on products from Porto Rico, years ended
June 30,1929 and 1930, by articles taxed
.
. 1028
INDEX
1030




SECRETARIES OF THE TREASURY AND PRESIDENTS UNDER
WHOM THEY SERVED
NOTE.—Robert Morris, the first financial officer of the Government, was Superintendent of Finance
from 1781 to 1784. Upon the resignation of Morris, the powers conferred upon him were transferred to the
"Board of the Treasury." Those who finally accepted positions on this board were John Lewis Gervais,
Samuel Osgood, and Walter Livingston. The board served until Hamilton assumed office in 1789.
Term of service
Secretaries of Treasury
IfromSept.
Feb.
Jan.
May
Feb.
Oct.
Oct.
Mar.
Mar.
Aug.
May
Sept.
July
Mar.
Sept.
Mar.
July
Mar.
Mar.
July
Mar.
Mar.
Dec.
Jan.
Mar.

Jan.
Dec.
May
Feb.
Oct.
Oct.
Mar.
Mar.
June
May
Sept.
June
Mar.
Sept.
Mar.
May
Mar.
Mar.
July
Mar.
Mar.
Dec.
12.1860 Jan.
15.1861 Mar.
7,1861 June

11,1789
3,1795
1,1801
14.1801
9,1814
6,1814
22.1816
7,1825
6,1829
8,1831
29,1833
23,1833
1,1834
6,1841
13,1841
8.1843
4.1844
8.1845
8,1849
23,1850
7,1853
7,1867

Presidents

To—
31,1795
31.1800
13.1801
9,1814
5.1814
21,1816
6,1825
5.1829
20,1831
28,1833
22.1833
25.1834
3,1841
11,1841
1,1843
2.1844
7,1845
5,1849

22,1850
6,1853
6,1857
8.1860
14,1861
6.1861
30,1864

Alexander Hamilton, New York
Oliver Wolcott, Connecticut
Samuel Dexter, Massachusetts
Albert Gallatin, Pennsylvania '
George W. Campbell, Tennessee
Alexander J. Dallas, Pennsylvania..
Wm. H. Crawford, Georgia
Richard Rush, Pennsylvania *
Samuel D. Ingham, Pennsylvania 8..
Louis McLane, Delaware
Wm. J. Duane, Pennsylvania
Roger B. Taney, Maryland *
Levi Woodbury, New Hampshire«..
Thomas Ewing, Ohio ^
Walter Forward, Pennsylvania^
John C. Spencer, New York 8
Geo. M . Bibb, Kentucky..
Robt. J. Walker, Mississippi»
Wm. M . Meredith, Pennsylvania...
Thos. Corwin, Ohio
James Guthrie, Kentucky
Howell Cobb, Georgia lo
Philip F . Thomas, Maryland
John A. Dix, New York.
Salmon P . Chase, Ohio "

Washington.
Washington, Adams.
Adams, Jefferson.
Jefferson, Madison.
Madison.
Madison.
Madison, Monroe.
Adams, J. Q.
Jackson.
Jackson.
Jackson.
Jackson.
Jackson, Van Buren.
Harrison, Tyler.
Tyler.
Tyler.
Tyler, Polk.
Polk.
Taylor, Fillmore.
Fillmore.
Pierce.
Buchanan.
Buchanan.
Buchanan.
Lincoln.

* While holding the office of Secretary of the Treasury, Gallatin was commissioned envoy extraordinary
and minister plenipotentiary Apr. 17,1813, with John Quincy Adams and James A, Bayard, to negotiate
peace with Great Britain. On Feb. 9, 1814, his seat as Secretary of the Treasury was declared vacant
because of his absence in Europe. William Jones, of Pennsylvania (Secretary of the Navy), acted ad
interim Secretary of the Treasury from Apr. 21,1813, to Feb. 9,1814.
* Rush was nominated Mar. 5,1825, confirmed and commissioned Mar. 7, 1825, but did not enter upon
the discharge of his duties until Aug. 1,1825. Samuel L. Southard, of New Jersey (Secretary of the Navy),
served as ad interim Secretary of the Treasury from Mar. 7 to July 31,1825.
• Asbury Dickens (chief clerk), ad interim Secretary of the Treasury from June 21 to Aug. 7,1831.
* McClintock Young (chief clerk), ad interim Secretary of the Treasury from June 25 to 30,1834.
* McClintock Young (chief clerk), ad interim Secretary of the Treasury from Mar. 4 to 6,1841.
• McClintock Young (chief clerk), ad interim Secretary of the Treasury Sept. 12,1841.
' McClintock Young (chief clerk), ad interim Secretary of the Treasury from Mar. 1 to 7,1843.
• Spencer resigned as Secretary of the Treasury May 2,1844; McClintock Young (chief clerk), ad interim
Secretary of the Treasury from May 2 to July 3,1844.
• McClintock Young (chief clerk), ad interim Secretary of the Treasury from Mar. 6 to 7,1849.
i * Isaac Toucy, of Connecticut (Secretary of the Navy), acted as Secretary of the Treasury ad interim
*
from Dec. 10 to 12,1860.
" George Harrington, District of Columbia (Assistant Secretary), ad interim Secretary of the Treasury
from July 1 to 4,1864.




XXV

XXVI

SECRETARIES OF T H E TREASURY

Secretaries of the Treasury and Presidents under whom they served—Continued
Term of service
Secretaries of Treasury
From—
July
Mar.
Mar.
Mar.
June
July
Mar.
Mar.
Nov.
Sept.
Oct.
Mar.
Apr.
Mar.
Feb.
Mar.
Mar.
Feb.
•Mar.
Mar.
Mar.
Dec.
Feb.
Mar

5,1864
9,1865
12,1869
17,1873
4.1874
7,1876
10,1877
8,1881
14,1881
25,1884
31,1884
8,1885
1,1887
7,1889
25.1891
7,1893
6,1897
1,1902
4,1907
8.1909
6,1913
16,1918
2.1920
4.1921

Presidents

ToMar. 3,1865
Mar. 3.1869
Mar. 16,1873
June 3,1874
June 20,1876
Mar. 9,1877
Mar. 3,1881
Nov. 13,1881
Sept. 4.1884
Oct. 30,1884
Mar. 7.1885
Mar. 31,1887
Mar. 6,1889
Jan. 29.1891
Mar. 6,1893
Mar. 5,1897
Jan. 31,1902
Mar. 3,1907
Mar. 7,1909
Mar. 5,1913
Dec. 15,1918
Feb. 1.1920
Mar. 3.1921

Wm. P. Fessenden, Maine "
Hugh McCulloch, Indiana " "
,
Geo. S. Boutwell, Massachusetts
Wm. A. Richardson, Massachusetts,
Benj. H. Bristow, Kentucky »
»
Lot M. Morrill, Maine
-.
John Sherman, Ohio ^o
Wm. Windom, Minnesota "
^
Chas. J. Folger, New York i 8 . . .
Walter Q. Gresham, Indiana
Hugh McCulloch, Indiana »*
.,
Daniel Manning, New York
Chas. S. Fairchild, New York:
Wm. Windom, Minnesota >' lo
Chas. Foster, Ohioz
John G. Carlisle, Kentucky
Lyman J. Gage, Illinois
L. M. Shaw, Iowa
George B. Cortelyou, New York
Franklin MacVeagh, Illinois.
W. G. McAdoo, New York
Carter Glass, Virginia
David F . Houston, Missouri
,
Andrew W. Mellon, Pennsylvania-

Lincoln.
Lincoln, Johnson.
Grant.
Grant.
Grant.
Grant, Hayes.
Hayes.
Garfield, Arthur.
Arthur.
Arthur.
Arthur, Cleveland.
Cleveland.
Cleveland, Harrison.
Harrison.
Harrison, Cleveland.
Cleveland, McKinley.
McKinley, Roosevelt.
Roosevelt.
\".
Roosevelt.
Taft.
Wilson.
Wilson.
Wilson.
Harding, Coolidge,
Hoovisr.' , ,

1 George Harrington (Assistant Secretary), ad interim Secretary of the Treasury from Mar. 4 to 8,1865.
2
" John F. Hartley, of Maine (Assistant Secretary), ad interim Secretary of the Treasury from Mar. 5
to 11, 1869.
1* Hugh McCulloch was Secretary from Mar. 9,1865, to Mar. 3,1869, and also from Oct. 31,1884, to Mar.
7, 1885.
1 Charles F. Conant, of New Hampshire (Assistant Secretary), ad interim Secretary of the Treasury
5
from June 21 to 30 (July 6), 1876.
1 Henry F . French, of Massachusetts (Assistant Secretary), ad interim Secretary of the Treasury from
8
Mar. 4 to 7, 1881.
1 William Windom was Secretary from Mar. 8,1881, to Nov. 13,1881, and also from Mar. 7,1889,-to Jan.
7
29,1891.
18 Charles E. Coon, of New York (Assistant Secretary), ad interim Secretary of the Treasury from Sept.
4 to 7,1884; Henry F . French, of Massachusetts (Assistant Secretary), ad interim Sept. 8 to 14,1884; Charles
E. Coon ad interim Sept. 15 to 24,1884.
.
1 A. B. Nettleton, of Minnesota (Assistant Secretary), ad interim Secretary of the Treasury from Jan.
9
30 to Feb. 24, 189L

UNDERSECRETARIES OF THE TREASURY AND PRESIDENTS
AND SECRETARIES UNDER WHOM THEY SERVED
Term of service .
Undersecretaries i
From—

Secretaries

Presidents

To-

July 1,1921 Nov. 17,19!^3
Nov. 20,1923 Jan. 31,1927
Mar. 4,1927

Harding, Coolidge.
S. Parker Gilbert, jr., New Jersey...... MeUon
Coolidge.
Garrard B. Winston, Illinois . .
. . Mellon
Ogden L. Mills, New York
Mellon.—— Coolidge, Hoover.

I Office established act June 16,1921.




ASSISTANT SECEETABIES OP THE TBEASURY

XXVII

ASSISTANT SECRETARIES OF THE TREASURY AND PRESIDENTS AND SECRETARIES UNDER WHOM THEY SERVED
Term of service
Assistant Secretaries i
FromMar.
Oct.
Nov.
Mar.

12,1849
10,1849
16,1850
14,1853

Mar. 13,1857

Charles B. Penrose, Pennsylvania
Allen A. Hall, Pennsylvania
William L. Hodge, Tennessee
Peter G'. Washington, District of
Columbia.
Jan. 16,1861 Philip Clayton, Georgia

Oct.; 9,1849
Nov. 15,1850
Mar. 13,1853
Mar. 12,1857

Mar. 13,1861 July : 11,1865
Mar. 18,a864

June 15,1865

Jan.

5.1865

Nov. 30,1867

July 11,1865

May 4,1875

Dec. 2,1867
Mar. 20,1869

May 31,1868
Mar. 17,1873

Mar. 8,1873 June 11,1874
July

1,1874

Secretari^

Presidents

Meredith..
Meredith, Corwin.
Corwin, Guthrie..
Guthrie, Cobb

Taylor.
Taylor, Fillmore.
Fillmore, Pierce.
Pierce, Buchanan.

To-

Apr.

3,1877

Mar. 4,1875 June 30,1876
Aug. 12,1876 Mar. 9,1885

Apr. 3,1877
Dec. 9,1877
Apr. 10,1880

Dec. 8,1877
Mar. 31,1880
Dec. 31,1881

Feb. 28,1882
Apr. 17,1884

Apr. 16,1884
Nov. 10,1885

Mar. 14,1885 Apr. 1,1887
Nov. 10,1885 June 30,1886
July 12,1886 Mar. 12,1889

Cobb, Thomas,
Dix.
George Harrington, District of Chase, Fessenden,
McCulloch.
Columbia.2
Maunsell B. Field, New Y o r k . . . Chase, Fessenden,
McCulloch.
William E. Chandler, New Fessenden, McCulloch.
Hampshire.
McCulloch, BoutJohn F. Hartley, Maine
well, Richardson, Bristow.
Edmund Cooper, Tennessee..... McCulloch
William A. Richardson, Massa- Boutwell
chusetts.
Frederick A. Sawyer, South Caro- Richardson, Brislina.
tow.
Charles F. Conant, New Hamp- Bristow, Morrill,
shire.
Sherman.
Curtis F. Burnam, Kentucky
Bristow
Henry F. French, Massachusetts. Morrill, Sherman,
Windom, Folger, Gresham,
McCulloch,
Manning.
Richard C. McCormick, Arizona. Sherman...
Sherman
John B. Hawley, Illinois
WinJ. Kendrick Upton, New Hamp- Sherman,
dom, Fogler.
shire.
Folger
...1.,
John C. New, Indiana
Charles E. Coon, New York..... Folger, Gresham,
McCulloch,
Manning.
Charles S. Fairchild, New York.. Manning
William E. Smith, New York... Manning
Hugh S. Thompson, South Caro- Manning, Fairlina.
child, Windom.
Isaac N. Maynard, New York...-. Fairchild, Windom.
George H. Tichner, Illinois
Windom
George T. Batchelder, New York Windom
A. B. Nettleton, Minnesota
Windom, Foster..
Oliver L. Spaulding, Michigan... Windom, Foster,
Carlisle.
Lorenzo Crounse, Nebraska...
Foster.-John H. Gear, Iowa
._
Foster.-Genio M. Lambertson, Nebraska. Foster, Carlisle...

Buchanan.
Lincoln, Johnson.
Lincoln, Johnson.
Lincoln, Johnson.
Johnson, Grant.

Johnson.
Grant.
Grant.
Grant, Hayes.
Grant.
Grant, Hayes,
Garfield, Arthur,
Cleveland.

Hayes.
Hayes,
Garfield,
Arthur.
Arthur. ^
Arthur, Cleveland.

Cleveland.
Cleveland.
Cleveland, Harrison.
Apr. 6,1887 Mar. 11,1889
Cleveland, Harrison.
Apr. 1,1889 July 20,1890
Harrison.
Apr. 1,1889 Oct. 31,1890
Harrison.
July 22,1890 Dec. 1,1892
Harrison.
July 23,1890 June 30,1893
Harrison, Cleveland.
Apr. 27,1891 Oct. 31,1892
Harrison.
Nov. 22,1892 Mar. 3,1893
Harrison.
Dec. 23,1892 Apr. 3,1893
Harrison, Cleveland.
1 Office established act Mar. 3, 1849; appointed by the Secretary. Act Mar. 3, 1857, made the office
presidential.
> Act Mar. 14,1864, provides one additional Assistant Secretary.
» Act July 11,1890, provides for an additional Assistant Secretary.




ASSISTANT SECRiiTARIES OF T S E fMAStJUY

XXvllt

Assistant Secretaries of the Treasury and Presidents and Secretaries under whom
they served—Continued
Term of service
Assistant Secretaries i
From—

Secretaries

Presidents

To—

Apr. 12,1893

Apr.

Apr. 13,1893

Mar. 31,1897

Charles S. Hamlin, Massachu- Carlisle, Gage..
setts.
William E. Curtis, New Y o r k . . . Carlisle, Gage..

July

1,1893

May 4,1897

Scott Wike, Illinois..

Carlisle, Gage..

Apr.
Apr.

7,1897
7,1897

Mar. 10,1899
Mar. 4,1903

William B. Howell, New Jersey.
Oliver L. Spaulding, Michigan..

Gage
Gage, Shaw.

7,1897

June 1,1897
Mar. 13,1899

Mar. 5,1901 Frank A. Vanderlip, Illinois. .
June 3,1906 Horace A. Taylor, Wisconsin.

Gage
Gage, Shaw.

Mar. 6,1901

Apr. 15,1903

Gage,. Shaw.

Mar. 5,1903
May 27,1903
Mar. 5,1905

Mar. 5,1905
Jan. 21,1907
Nov. 1,1909

Milton E. Ailes, Ohio..
Robert B. Armstrong, Iowa
Charles H. Keep, New York
James B. Reynolds, MassachU'
setts.
John H, Edwards, Ohio
Arthur F. Statter, Oregon
Beekman Winthrop, New York..
Louis A. Coolidge, Massachusetts-

Cleveland,
McKinley.
Cleveland,
McKinley.
Cleveland,
McKinley.
McKinley.
McKinley, Roosevelt.
McKinley.
McKinley, Roosevelt.
McKinley, Roosevelt.
Roosevelt.
Roosevelt.
Roosevelt, Taft.

Shaw
Shaw...
Shaw, CortelyoU;
MacVeagh.
July 1,1906 Mar. 15,1908
Shaw, Cortelyou.. Roosevelt.
Roosevelt.
Jan. 22,1907 vFeb. 28,1907
Shaw
Roosevelt.
Apr. 23.1907 Mar. 6,1909
Cortelyou
Mar. 17.1908 Apr. 10,1909
Cortelyou, Mac- Roosevelt, Taft.
Veagh.
Apr. 5,1909 June 8,1910 Charles D. Norton, Illinois
MacVeagh
Taft.
Apr. 19.1909 Apr. 3,1911 Charles D. Hilles, New Y o r k . . . MacVeagh
Taft.
Nov. 27,1909 July 31,1913 JamesF. Curtis, Massachusetts.. MacVeagh, Mc- Taft, Wilson.
Adoo.
June 8,1910 July 3,1912 A. Piatt Andrew, Massachusetts. MacVeagh
Taft.
Apr. 4,1911 Mar. 3,1913 Robert 0 . Bailey, Illinois
MacVeagh
Taft.
MacVeagh, Mc- Taft, Wilson.
July 20,1912 Sept. 30,1913 Sherman P. Allen, Vermont
Adoo.
Mar. 24,1913 Feb. 2,1914 John Skelton Williams, Virginia. McAdoo..
Wilson.
Aug. 1,1913 Aug. 9,1914 Charles S. Hamlin, Massachu- McAdoo
Wilson.
setts.
Oct. 1,1913 Oct. 1,1917 Byron R. Newton, New York.... McAdoo
Wilson.
Mar. 24,1914 Jan. 26,1917 William P. Malburn, Colorado... McAdoo
Wilson.
Aug. 17,1914 Mar. 15,1917 Andrew J. Peters, Massachusetts. McAdoo
Wilson.
Apr. 17,1917 Aug. 28,1918 Oscar T. Crosby, Virginia
McAdoo
-. Wilson.
June 22,1917 Nov. 20,1919 Leo S. Rowe, Pennsylvania
McAdoo, Glass... Wilson.
Oct. 5,1917 Aug. 26,1921 James H, Moyle, Utah
McAdoo, Glass, Wilson, Harding.
Houston, Mellon.
Oct. 30,1917 July 5,1920 Russell C. Leffingwell,* New McAdoo, Glass, Wilson.
York.
Houston.
McAdoo, Glass... Wilson.
Dec. 15,1917 Jan. 31,1919 Thomas B. Love, Texas
McAdoo, Glass, Wilson.
Sept. 4,1918 June 30,1920 Albert Rathbone, New York
Houston.
Houston...
Mar. 5,1919 | Nov. 15,1920 I Jouett Shouse, Kansas..
I Glass, Houston...I Wilson.
Glass, Houston
Nov. 21,1919 June 14,1920 Norman H. Davis, Tennessee
Wilson.
Houston, Mellon.. Wilson, Harding.
June 15,1920 Apr. 14,1921 Nicholas Kelley, New .York
Mellon..!
July 6,1920 I June 30,1921 | S. Parker Gilbert, jr.. New Jer- Houston, Mellon.. Wilson,.Harding.
sey.»
Dec. 4,1920 I May 31,1921 1 Ewing Laporte, Missouri..
I Houston, Mellon..! Wilson,Harding.
Dec- 4,1920 I Mar. 4,1921 | Angus W. McLean, North Caro- | Houston..
'. Wilson.
lina.
1 Office established act Mar. 3, 1849; appointed by the Secretary, Act Mar. 3, 1857, made the office
presidential.
«Act Oct. 6,1917, provided for two additional Assistant Secretaries for dura.tion of war and six months
after.
» Became Undersecretary July 1,1921.




ASSISTANT SECRETAHIES 01^ THE TREAStJltY

XXIX

Assistant Secretaries of the Treasury and Presidents and Secretaries under whom
they served—Continued
' Term of service
Assistant Secretaries i
From—
Mar.
May
Dec.
Mar.
July
July
Apr.
Dec.
Aug.
Nov.

16,1921
4,1921
23,1921
3,1923
9,1923
1,1924
1,1925
28,1926
1,1927
7,1927

Presidents

.Secretaries

ToMar.
July
July
July
Nov.
Nov.
July
June

31,1925
9,1923
25,1922
13,1926
19,1923
5,1927
31,1927
25,1929

Aug. 31,1929

June 26,1929
Nov. 21,1929

Eliot Wadsworth, Massachusetts.
Edward Clifford, Illinois
Elmer Dover, Washington..
McKenzie Moss, Kentucky
Garrard B. Winston, Illinois « —
Charles S. Dewey, Illinois
Lincoln C. Andrews, New York..
Carl T. Schuneman, Minnesota..
Seymour Lowman, New York...
Henry Herrick Bond, Massachusetts.
Ferry K. Heath, Michigan
Walter Ewing Hope. New York..

Mellon...
Mellon
Mellon
Mellon . .
Mellon
Mellon
Mellon
Mellon
Mellon
Mellon
Mellon
Mellon

Harding, Coolidge.
Harding.
Harding.
. . Harding, Coolidge.
Harding, Coolidge.
Coolidge.
Coolidge.
Coolidge, Hoover.
Coolidge, Hoover.
Coolidge, Hoover.
-. Hoover.
Hoover.

» Office established act Mar. 3, 1849; appointed by the Secretary. Act Mar. 3, 1857, made the office
presidential.
"« Became Undersecretary Nov. 20, 1923.

ASSISTANTS TO THE SECRETARY OF THE TREASURY ' AND
PRESIDENTS AND SECRETARIES UNDER
WHOM THEY SERVED
Term of service
Assistants to the Secretary
From—
Sept. 11,1789
Mar. 6,1917

May 8,1792
Mar. 4,1921

Secretaries

Presidents

To—
Hamilton
Tench Coxe, Pennsylvania
George R. Cooksey, District of Columbia. McAdoo, Glass,
Houston.

Washington.
Wilson.

1 Office established Sept. 2,1789; abolished act May 8,1792; reestablished act Mar. 3,1917. Appointed
by the Secretary.




XXX

PRINCIPAL ADMINISTRATIVE AND STAFF OFFICERS

PRINCIPAL ADMINISTRATIVE AND STAFF OFFICERS OF THE
TREASURY DEPARTMENT AS OF NOVEMBER IS, 1930
OFFICE OF T H E SECRETARY
Andrew W. Mellon
Ogden L. Mills
Ferry K. Heath
Seymour Lowman
.
>
Walter Ewing Hope
John Kieley
W. Norman Thompson
Charles R. Schoeneman
H. R. Sheppard
Francis C. Rose
Frank A. Birgfeld...
W. R. Stark
Joseph S. McCoy
W. H. Moran.
James E. Harper
Thomas L. Lawrence
L. C. Spangler
Robert Le. Fevre
John L. Summers

-... Secretary of the Treasury.
Undersecretary of the Treasury.
- . . Assistant Secretary of the Treasury
Assistant Secretary of the Treasury.
Assistant Secretary of the Treasury.
Assistant to the Secretary.
Executive Assistant to the Undersecretary.
Assistant to the Undersecretary.
Assistant to Assistant Secretary.
Assistant to Assistant Secretary.
Chief Clerk and Superintendent.
Chief, Section of Financial and Economic Research.
Government Actuary.
Chief, Secret Service JDivision.
Chief, Division of Appointments.
Chief, Section of Surety Bonds.
Chief, Division of Supply.
Superintendent of Supplies, General Supply Committee.
Disbursing Clerk.
SPECIAL STAFF ASSISTANTS

David E. Finley
B..H. Bartholo\7—r
Albert G. Redpath
Leo C. Martin.. . - . - . - .
Edward J. Cunningham
John G. Harlan

-

Special Assistant to the Secretary.
Special Assistant to the Secretary In matters of legislation.
Special Assistant to the Undersecretary.
Special Assistant to Assistant Secretary. '
Member of the War Loan Staff.
Assistant Member of the War Loan Staff.

CONSULTING A R C H I T E C T U R A L SPECIALISTS
Edward H. Bennett, Chairman.
Louis Ayres.
Arthur Brown, jr.
William A. Delano.

Clarence C. Zantzinger.
Louis A. Simon.
John Russell Pope.
PUBLIC D E B T SERVICE

William S. Broughton
S. R. Jacobs
Rene W. Barr
E.E.Jones
Frank A. DeGroot.
Marvin Wesley
Melvin R. Loafman
Maurice A. Emerson

-

Commissioner of the Public Debt.
Assistant Commissioner of the Public Debt.
.- Deputy Commissioner ofthe Public Debt.
Register of the Treasury.
Assistant Register of the Treasury.
Chief, Division of Loans and Currency.
Chief, Division of Accounts and Audit.
Chief, Division of Paper Custody.

OFFICE OF T H E COMMISSIONER OF ACCOUNTS AND DEPOSITS
Robert Q. Hand
Daniel W. Bell
Edward F. Bartelt
Edward D. Batchelder

Commissioner of Accounts and Deposits.
Assistant Commissioner.
Chief, Division of Bookkeeping and Warrants.
Chief, Division of Deposits.

OFFICE OF THE COMPTROLLER OF THE CURRENCY
J. W. Pole
F. G. Await
Eugene H. Gough
I. L. Proctor
W. P. Folger
I. E. Fonts
George R. Marble




Comptroller of the Currency.
Deputy Comptroller.
Deputy Comptroller.
Deputy Comptroller.
Chief, National Bank Examiners.
.-.- Supervising Receiver, Insolvent National Bank Division.
. „ Chief Clerk.

-

PRINCIPAL ADMINISTRATIVE

AND STAFF OFFICERS

OFFICE OF T H E TREASURER OF T H E U N I T E D BTATES
Walter O. Woods
-..
George O. Barnes..-.—-..J. O. Wallace

Treasurer of the United States.
Assistant Treasurer.
Chief Clerk.

,

OFFICE OF T H E COMMISSIONER OF I N T E R N A L R E V E N U E
David Burnet
Harris F . Mires
J. C. Wilmer
George J. Schoeneman
R. M. Estes
Pressly R. Baldridge
A. R. Marrs
L. C. Mitchell
Clarence M. Charest

Commissioner of Intemal Revenue.
Assistant to the Commissioner.
Deputy Commissioner.
Deputy Commissioner.
Deputy Commissioner.
Special Deputy Commissioner.
Assistant Commissioner.
Assistant Commissioner.
General Counsel.

BUREAU OF INDUSTRIAL ALCOHOL
James M . Doran
B. R. Rhees
J . J . Britt
h

—

'

Commissioner of Industrial Alcohol.
Deputy Commissioner of Industrial Alcohol.
1. Chief Counsel.
BUREAU OF NARCOTICS

Harry J. Anslinger
Vacant

Commissioner of Narcotics.
Deputy Commissioner of Narcotics.
BUREAU OF CUSTOMS

Frank X. A. Eble
Frank Dow
H. A. Benner
Thomas J. Gorman
Joseph D. Nevius.---

Commissioner of Customs.
Assistant Commissioner of Customs.
Depilty Commissioner of Customs.
Assistant Deputy Commissioner of Customs.
General Counsel.

>

M I N T BUREAU
Robert J. Grant
Mary M. O'Reilly

Director of the Mint.
Assistant Director.

FEDERAL F A R M LOAN BUREAU
Paul Bestor
John H. Quill
Louis J. Pettijohn
Albert C. Williams—
George R. CookseyFloyd R. Harrison
Chester Morrill
Leo H. Paulger

-

Farm Loan Commissioner.
— Member.
Mernber.
Member.
Member.
Member.
Secretary and General Counsel.
Chief, Division of Examination.

BUREAU OF ENGRAVING AND P R I N T I N G
Alvin W. Hall
Clark R. Long
Jesse E. Swigart

Director of the Bureau of Engraving and Printing.
Assistant Director (Administration).
Assistant Director (Production).

BUREAU OF THE PUBLIC HEALTH SERVICE
Hugh S. Cummtng
Taliaferro Clark
C. C. Pierce
L. R. Thompson
F . C. Smith
W. F . Draper--.Francis A. Carmelia
Ralph C. Williams
Walter L. Tread way
P . S. Masterson




Surgeon General.
Assistant Surgeon
Assistant Surgeon
Assistant Surgeon
Assistant Surgeon
Assistant Surgeon
Assistant Surgeon
Assistant Surgeon
Assistant Surgeon
Chief Clerk,

General.
General.
General.
General.
General.
General.
General.
General.

XXXI

XXXII

PRINCIPAL ADMINISTRATIVE AND STAFF

OFFICERS

U N I T E D STATES COAST GUARD
Rear Admiral F . C. Billard
Capt. B. M. Chiswell
E. L. Hutchison
Oliver M. Maxam..

Commandant.
Assistant Commandant.
Chief Clerk and Chief, Division of Finance.
Chief, Division of Operations.

OFFICE OF T H E SUPERVISING A R C H I T E C T
James A. Wetmore
Henry G. Sherwood
George 0 . Von Nerta

Acting Supervising Architect.
Executive Officer.
Technical Officer.

STANDING DEPARTMENTAL COMMITTEES
B U D G E T AND I M P R O V E M E N T C O M M I T T E E
S. R. Jacobs, Chairman.
W. N . Thomspon.
D. S. Bliss.
F . A. Birgfeld.
L. C. Martin.
D.W.Bell.

J. H. Schaefer.
Arthur E. Wilson.
M. E. Slindee.
F . J. Lawton.
J. Greenberg, Secretary.

C O M M I T T E E ON E N R O L L M E N T AND D I S B A R M E N T OF A T T O R N E Y S AND AGENTS
S. R. Jacobs, Chairman.
James B. Corridon, Vice Chairman,
H. C. Armstrong.
P. R. Baldridge.

p . V. Emery.
J. E. Harper.
Lawrence Becker, Attorney.
Lee Brock, Secretary.

C O M M I T T E E ON P E R S O N N E L
F . A. Birgfeld, Chairman.
J. E. Harper.
S. R. Jacobs.
C O M M I T T E E ON CIVIL SERVICE R E T I R E M E N T
F. A. Birgfeld, Chairman.
J. E. Harper..
W. N . Thompson.
Frank Dow.
C O M M I T T E E ON S I M P L I F I E D OFFICE P R O C E D U R E




F. A. Birgfeld, Chairman
W. T. Sherwood.
J. L. Nuber.
A. W. Starratt.

' 12101—31

3




XXXIV

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ANNUAL REPORT ON THE FINANCES
TREASURY DEPARTMENT,

Washington, D. C , November 20, 1930.
S I R : I hiave the honor to make the following report:
The finances of the Federal Government for the fiscal year 1930
continued the favorable record of recent years. Receipts exceeded
expenditures and a further substantial reduction was made in the
public debt. Ordinary receipts amounted to $4,177,941,702, expenditures chargeable against ordinary receipts to $3,994,152,487, and
surplus receipts to $183,789,215. The gross public debt was reduced
by $745,889,448,. and stood on June 30, 1930, at $16,185,308,299.
The year closed with approximatiely the same surplus as the fiscal year
1929, an increase in receipts being offset by a corresponding increase
in expenditures chargeable against these receipts. The surplus figures
for 1930, however, were not strictly comparable to 1929, since certain
foreign interest payments were made in cash rather than in securities,
thus diminishing public debt retirements chargeable against ordinary
receipts and increasing the surplus by a corresponding amount. This
method of payment was a departure from the practice of a number of years of making payments with obligations of this Government. Had the former practice been employed, these pa^^ments,
as in the past, would automatically have constituted public debt
retirements chargeable against ordinary receipts and the surplus would
have been approximately $110,000,000 instead of $183,789,215.
The increase in ordinary receipts over 1929 was due in the main to the
effect of active industry and trade on the major source of revenue—
taxable incomes for the calendar years 1928 and 1929—and to increased receipts on foreign indebtedness. Larger expenditures reflected the increased amounts for general governmental activities and
also the net amount loaned from the agricultural marketing fund
established under the authorization of the agricultural marketing act
approved June 15, 1929. As in preceding years the major part of
the reduction in the public debt was through the sinking fund and
through other regular debt retirement operations. The public debt
operations were conducted at the most favorable rates in recent years,
owing to the low money rates which prevailed throughout most of
the fiscal year.
Of special importance to the finances of the year was the income
tax reduction for corporations and individuals enacted by Congress
in December, 1929. The reduction applied to income taxes for the
calendar year 1929 payable for the most part in 1930. Consequently,




1

2

EEPORT ON TSJE FINANCES

the revenue collected in the fiscal year 1930 was about $80,000,000
less than it would have been at 1928 tax rates. Owing to the uncer-,
tain prospect of a surplus for the fiscal years subsequent to 1930,
this tax reduction was made applicable only to taxes payable on the
income for 1929. This is the first instance in which income tax rates
have been reduced for a single calendar year in order to relieve individuals and corporations from taxes when a surplus of receipts was
anticipated without assurance that this surplus would continue for
more than one year. During the calendar year 1930 the income tax
reduction afforded relief to both individuals and corporations during
a period of unfavorable business developments.
Of further special interest in 1930 is the financing conducted by
the Treasury through the new Treasury bills provided for in the act
of June 17, 1929, which was amended by the act approved June 17,
1930. This new instrument of financing is now established as a
valuable supplement to certificates of indebtedness in the conduct
of short-term borrowing operations.
BUDGET RESULTS

Receipts

,

The total ordinary receipts of the Federal Government during the
fiscal year 1930 were $4,177,941,702, an increase of almost $145,000,000 over the fiscal year 1929. The change from 1929 to 1930 in the
5,000

A L L OTHER
F0RE.rON OBLIGATIOrSS

3,000

INCOME. A N O
PROFITS T A X t S

1923
1924
1925
1926
1927
1926
1929
1930
CHART 2.—Principal sources of ordinary receipts for the fiscal years 1923 to 1930

receipts from each of the major sources of revenue is shown in the
table following; and the trend, by major sources, as compared with
preceding years, is shown in Chart 2. During the past year there




SECEETARY OF THE TREASURY

was an increase in the receipts from each of the major sources of
revenue with the exception of customs duties.
Ordinary receipts classified according to major sources for the fiscal years 1929
and 1930^
[In millions of dollars]
1929

Classes of ordinary receipts
Receipts from taxation:
Customs
Internal revenueIncome t a x e s Current corporation
Current individual _ _. .
Back taxes 2

602.3

.

_
_

_.

^

Total income tax...
Miscellaneous internal revenue-^
Tax on small cigarettes
All other tobacco taxes
Stamp tax on capital stock transfers
Stamp tax on bonds and capital stock issues, e t c . . . .
Estate tax
_
All other internal revenue 2
Total miscellaneous internal revenue
Total receipts from taxation
Miscellaneous receipts:
Proceeds from Government-owned securitiesForeign obligations
.
Another
All other receipts, including trust funds. . . _.
Total miscellaneous receipts
Total ordinary receipts

1930

Increase Decrease

587.0

15.3

1,075.3
1,019.0
236.4

1,117.8
1,060.9.
. 232.3

42.5
41.9

2,330. 7

2,411.0

80.3

341.9
92.6
37.6
17.9
61.9
56.5

359.8
90.6
46.7
22.6
64.8
43.9

17.9

607.3

628.3

21.0

3,640.3

3,626.3

86.0

199.1
22.6
271.3

239.5
20.3
291.8

40.4

9.1
4.7
2.9

20.5

492.9

551.6
4,177.9

2.0

11.6

'

2.2

58.7

4,033.2

4.1

144.7

1 On basis of daily Treasury statements (unrevised) supplemented by reports of the Commissioner of
Internal Revenue.
* Includes adjustment to basis of daily Treasury statement (unrevised).

Receipts from taxes increased $86,000,000 and from other sources
$58,700,000. Receipts from taxation, strictly speaking, represent
that portion of the Government reven.ue which is derived from
authorized levies upon the people primarily to secure funds for the
conduct of governmental activities. Nontax receipts are composed
of amounts received by the Government incidental to the performance
of its various functions; among these receipts are included the proceeds of Government-owned obligations, fees (including consular,
passport, and patent fees), fines and penalties, rents and royalties,
the immigration head tax, the tax on the circulation of national
banks, seigniorage on coinage of subsidiary silver and minor coins,
and receipts of trust funds which are invested as specified for the
particular trust. The changes in receipts from specific sources are
considered in detail in the following paragraphs.
Considerably more than half of the ordinary receipts are derived
from taxes on the income of individuals and corporations. These
receipts were $2,411,000,000 in 1930, as compared with $2,330,700,000




4

REPORT ON T ^ E

FINANCES

in 1929, or an increase of $80,300,000. The collections from income
taxes due in prior years, or back taxes, decreased from $237,000,000
in 1929 to $232,000,000 in 1930,' or about $5,000,000. Back taxes
include additional assessments, penalties, and interest, on returns
for prior years determined as a result of audit, and the payments
on delinquent returns. Smaller receipts from back taxes are due
to the reduced volume of additional assessments oti returns of recent
years, as compared with the volume of such assessments on the
returns for war years. The present status of the audit of income
tax returns is summarized on pages 44 to 53. Receipts from current
income taxes increased $84,400,000 in 1930, from $2,094,300,000 to
$2,178,700,000, reflecting changes in the taxes on incomes returned
for current years as considered below.
In December, 1929, Congress made special provision to reduce the
tax rates on incomes for the calendar year 1929. I t was then apparent
that the tax yield at 1928 rates would be more than sufficient for
budget requirements in the fiscal year 1930, including the regular
retirements of the public debt chargeable against ordinary receipts.
This was due primarily to the increase in incomes of both corporations
and individuals during the years immediately preceding, especially
in the calendar year 1928. Accordingly, provision was made to reduce
by 1 per cent t h e normal rates on individual income and the rate on
corporation income applicable to incomes reported for the calendar
year 1929. This tax reduction affects for the most part receipts during the calendar year 1930, therefore affecting both.the fiscal 3^ears
1930 and 1931. According to the Treasury's estimates, corporation
income tax receipts during the calendar year 1930 would be reduced
by about $90,000,000 and individual income tax receipts by about
$70,000,000, distributed approximately equally over the fiscal 3^ears
1930 dnd 1931. The tax reduction would pertain to the entire taxable
net income of corporations and to the net income of individuals
subject to normal tax rates.
Current income tax collections from corporations V e r e $1,117,800,000 in the fiscal year 1930 as compared with $1,075,300,000 in
the preceding fiscal year, an increase of $42,500,000. In general, this
increase reflects the growth in corporate income for the calendar
years 1928 and 1929 which more than offset the reductions in tax
rate from 13K per cent to 12 per cent for 1928 incomes, and from 12
per cent to 11 per cent for 1929 incomes.
Current income tax collections from individuals increased almost
as much as those from corporations, from $1,019,000,000 to $1,060,900,000, or $41,900,000. All of this increase, however, was due to
collections from July to December, 1929, on the unusually large individual incomes for 1928. During the last sixmonths of the fiscal
4 These figures for back tax collections are before adjustments made in data in the table on page 3.




SECRETARY OF THE TEEASURY

5

year, collections, which were largely on incomes for the calendar year
1929, were more than $100,000,000 below the preceding year, in part
due to the special reduction of 1 per cent in the normal rates of tax
on 1929 incomes and in part due to the effect on taxable incomes of
the precipitous decline in security prices in the latter part of 1929.
In spite of this decline, however, individual incomes were, with the
exception of the 1928 incomes, at new high levels reflecting largely
the effect of active industry and trade on the growth of income from
certain sources, such as salaries, interest, and dividend payments.
Receipts from miscellaneous internal revenue taxes increased from
$607,300,000 to $628,300,000 or $21,000,000. The changes for the
major sources are summarized graphically in Chart 3. In contrast to
income taxes, most of these taxes are due currently and so reflect
MILLION
DOLLARS
I, OOO

ALL OTHE.RS
ADMISSIONS AND DUtS

DOCUMC.NTARY STAMPS
INCLUDING PLAYING CARDS

::':A'}i:

400

p.

•^mx.

ESTATE. TAX

V%
^

TOBACCO TAXE.3
200

. 1923

1924.

1925

1926

1927

1928

1929

1930

CHART 3.—Principal sources of miscellaneous internal revenue collections for the fiscal years 1923 to 1930

current changes in the sources to which they relate. Over 90 per
cent of the miscellaneous internal revenue comes from three groups
of taxes—tobacco taxes, documentary stamp taxes, including playing cards, and the estate tax. Increases in receipts from these three
sources of about $32,000,000, as compared with 1929, were offset
somewhat by decreases in receipts from other taxes, mainly from
delinquent taxes under repealed laws. During the fiscal year 1929
collections were largely completed on these delinquent taxes resulting in smaller receipts in 1930, particularly for the tax on manufacturers' sales bf automobiles, repealed in the revenue act of 1928,
and fcir the corporation capital stock tax repealed in the revenue act
of 1926.
The tobacco taxes constitute not only the major source of internal
revenue other than income taxes, but also the source which has been
least effected by changing business conditions. Collections during




b

REPORT ON T H E FINANCES

1930 were $450,300,000 as compared with $434,400,000 in the preceding year, an increase of about $15,900,000. The increase during 1930
was relatively small in comparison with recent years and especially
in comparison with the unusual increase of $38,000,000 in the fiscal
year 1929. The tax on small cigarettes showed an increase of $17,900,000 while the taxes on all other tobacco products decreased by
$2,000,000. Although the collections on small cigarettes failed to
increase as much as in 1929, oi* even as much as the average for recent
years, the total collections reached a new high level of almost
$360,000,000 which represents tax-paid withdrawals of about
120,000,000,000 cigarettes. The volume of cigarettes consumed each
year is now considerably more than double that of 10 years ago. In
contrast, the decrease in collections from taxes on tobacco products
other than cigarettes indicates the effect on the consumption of other
tobacco products of the increasing use of cigarettes. The tax-paid
withdrawals of cigars and of smoking and chewing tobacco have
declined about 20 per cent during the past 10-year period.
Collections from documentary stamps, representing largely taxes
on capital stock transfers and capital issues, increased $13,600,000 to
a total of almost $78,000,000, as a result of the unusual situation in
the security markets. The revenue from documentary stamps thus
exceeded any preceding year except 1920, notwithstanding the reductions in the number of these taxes and in the rates of tax in the
revenue acts subsequent to the war. The stamp tax on the unusual
volume of capital stock transfers is primarily responsible for the
large receipts. The unprecedented activity in the stock market was
refiected in increased collections during the first part of the fiscal year
so that by the end of November receipts from the capital stock
transfer tax were almost $11,000,000 larger than the record receipts
for the same period in the previous fiscal year. The volume of
transfers continued large for the remaining months of the fiscal year
1930 and collections for the year as a whole, at $46,700,000, were
$9,100,000 larger than the year before and almost double the receipts
from this tax (luring the fiscal year 1928. There were also increased
collections from stamps in the group including taxes on issues of
bonds, capital stock, etc., and the total for the year for this group
was almost $5,000,000 larger than the preceding fiscal year.
Estate tax collections were only slightly larger, $64,800,000, as
compared with $61,900,000 the preceding year, but the increase is
significant in view of the marked revision in these taxes in the 1926
revenue act, involving increase in the amount of the gross estate
exempt from tax, decrease in the rates of tax, and increase, to 80
per cent of the Federal tax, in the credit allowed for State inheritance
taxes paid. The continued high level of collections is due in part to
the additional assessments determined as a result of the audit of re


SECRETARY OF T H E TREASURY

7

turns filed and in part to the increase in the value of estates in recent
years. The value of total gross estates filed during the calendar year
1929 was $3,844,000,000, or $341,000,000 more than in returns filed
during the calendar year 1928.
Customs receipts were $587,000,000, or $15,300,000 less than in
1929. The unusual tariff and trade conditions during the year resulted in wide fluctuations in the monthly receipts. During the
first part of the year, July to October, inclusive, collections were in
record volume. Beginning November, however, they reflected the
general depression in trade and to a certain extent the effect on imports of the prolonged tariff discussion. Collections for January to
April, inclusive, were at the lowest levels under the 1922 act, so low
in fact that the cumulative receipts from the beginning of the fiscal
year, which in October showed an increase of $11,000,000 over the
preceding year, were at the end of April $38,000,000 smaller than the
year before. The closing months of 1930 witnessed an abnormal increase in the imports of those dutiable commodities affected by the
upward rate revisions in the tariff act of 1930, then in its final stages.
Collections during these months reached new record totals. Over
$72,000,000 of duties were received in June, as compared with
$52,000,000 the preceding June.
Miscellaneous receipts from nontax items increased from $492,900,000 in 1929 to $551,600,000 in 1930, or $58,700,000. Almost
half of these receipts are derived from Government-owned securities.
Small amounts are derived from a wide variety of minor sources.
The most important change during 1930 was in the receipts from
foreign obligations which were $239,500,000, or $40,400,000 larger
than in the preceding year. Receipts from France were about
$37,000,000 more than in 1929. The debt funding agreement with
France was approved by Congress, December 18, 1929, effective as
of June 15, 1925. Payments during 1930 included not only the
amount of $35,000,000 due for that year under the agreement but
also the additional amount of about $22,000,000 to put on a current
basis the annuity payments, due under the agreement, as shown on
page 50 of the annual report for 1929.
The Treasury's estimate of total tax receipts for the fiscal year 1930
compared very satisfactorily with the results. Total tax receipts of
$3,626,000,000 were $11,000,000 less than the estimated receipts of
$3,637,000,000 as adjusted for the income tax rediiction. Income
taxes were estimated at $2,480,000,000 before the tax reduction
for 1929 was enacted. Taking into consideration the effect of the
tax reduction applicable to collections due in the last half of the fiscal
year, the estimate is reduced to $2,400,000,000, which is $11,000,000
less than the actual receipts, a relatively small discrepancy in




8

REPORT ON THE FINANCES

view of the large volume of receipts involved and the unusual conditions affecting incomes derived in 1929 from the sale of securities.
Back tax collections were $12,000,000 larger and current collections
on incordes $1,000,000 smaller than anticipated. The collections
from both corporations and individuals were very close to the estimates. Miscellaneous internal revenue receipts of $628,000,000
were $7,000,000 less than estimated, a difference accounted for by
offsetting discrepancies for various items. Tobacco taxes failed by
almost $15,000,000 to reach the anticipated figure of $465,000,000
due to slower growth than anticipated in cigarette collections, especially during the latter part of the fiscal year. This decUne was offset
in part by collections on documentary stamps, about $8,000,000
in excess of the estimates. Customs duties, including the tonnage
tax, were estimated at $602,000,000, or $15,000,000 in excess of the
final results. The unusual conditions during the year, as mentioned
previously, account for this discrepancy.
Expenditures
Total expenditures chargeable against ordinary receipts amounted
to $3,994,152,487 for the fiscal year 1930 as compared to $3,848,463,i90 for 1929, an increase of $145,689,297, or 3.8 per cent. Of
this total, ordinary expenditures (i. e., the amount expended exclusive
of public debt retirements chargeable against ordinary receipts)
amounted to $3,440,268,884 during this fiscal year as compared to
$3,298,859,486 last year, an increase of $141,409,398. Public debt
retirements chargeable against ordinary receipts were $553,883,603
this year compared to $549,603,704 in the preceding year, an increase
of $4,279,899. Comparisons between expenditures for 1929 and 1930
are presented in the following table.




SECRETARY OF THE TREASURY
Expenditures chargeable against ordinary receipts, classified according to major
groups, for the fiscal years 1929 and 1930
[On basis of daily Treasury statements (unrevised). In millions of dollars]
Classes of expenditures
Ordinary expenditures:
General expendituresLegislative
——
Executive proper
State Department
Treasury Department..i
War Department
Department of Justice.Post OflQce Department
Navy Department
Interior Department.
:..
Department of Agriculture
'..
Department of Commerce
Department of Labor
Veterans' Bureau
_
Other independent oflfices and commissions..
District of Columbia and unclassifled items.
Total

.^.

other ordinary expenditures:
Interest on public debt
Refunds of tax receipts
Postal deficiency
Shipping Board
Agricultural marketing fund, net..
All other, including trust funds...

1929

1930

Increase Decrease

17.5
.5
13.3
200.4
416.9
28.9
43.1
364.6
301.1
171.2
40.0
11.3
417.3
40.3
40.1

20.0
.7
14.2
193.1
453.5
32.5
.1
374.2
290.0
177.6
54.3
10.6
446.9
49.5
45.5

2,106. 5

2,162. 7

678.3
212.6
94.7
16.9

659.3
158.0
91.7
31.7
150.0

15.8
i5o:o
85.2

190.9

Total.

1,192.4

1,277. 6

Total ordinary expenditures

3,298.9

2.6
.2

36.6
3.6
43.0

6.4
14.3

'ii.'i
.7

9.2
5.4
56.2
19.0
54.6
3.0
4.0

3,440.3

Public debt retirements chargeable against ordinary receipts..

549.6

553.9

4.3

Total expenditures chargeable against ordinary receipts.

3,848.5

. 3,994.2

145.7

The increase of $145,700,000 in total expenditures chargeable
against ordinary receipts reflects an increase of $56,200,000 in the socalled general expenditures for operating the Federal Government
and an increase in all other expenditures of $89,500,000. General
expenditures for operating the various Government departments,
including the legislative and executive branches, increased over 2.6
per cent and all other expenditures increased slightly over 5.1 per cent
compared with 1929.
The increased expenditures for general government reflect largely
increases of $36,600,000 for the War Department, $29,600,000 for the
Veterans' Bureau, and $14,300,000 for the Department of Commerce;
the latter represents largely increased expenditures in connection
with the work of the Bureau of the Census. These increases were
partly offset by declines of about $43,000,000 for.the Post Office
Department, $11,100,000 for the Interior Department, and $7,300,000
for the Treasury Department. In this connection it shciuld be noted
that nonrecurring expenditures of the Post Office Department
were exceptionally large in 1929, owing to the compensation to
railroads during that year for mail transportation service rendered
in earlier years. This payment made in 1929 explains in large




10

REPORT ON T H E FINANCES

measure the decline of $43,000,000 in the amount expended for the
department in 1930 compared with the previous year.
The increase in other expenditures chargeable to ordinary receipts
is accounted for primarily by loans from the fund established by the
agricultural marketing act approved June 15, 1929, in the net amount
of about $150,000,000 for the fiscal year. Increases in expenditures
were partly offset by a decline of $19,000,000 in interest payments on
the public debt and by a reduction of $54,600,000 in the refunds of
internal revenue and customs receipts.
Chart 4 shows the trend of total expenditures chargeable against
ordinary receipts since 1923. Two tendencies are noticeable: The
BILLION
DOLLARS
St-

ar.

WW.

ALL OTHER

PUBLIC DEBT
SINKING FUND RETIREMENTS

'^Xhi

INTEREST ON PUBLIC DEBT

ig?.'^

I09A

1925

192^^

1927

I92d

1929

1930

CHART 4.—Principal classes bf expenditures chargeable against ordinary receipts for the fiscal years
1923 to 1930

proportion of general expenditures to total expenditures has remained fairly constant, varying between 51 per cent and 55 per
cent, and the proportion of interest payments has consistently
declined from 28 per cent of total expenditures in 1923 to 17 per
cent in 1930. The amounts expended for general government have
varied between. $2,974,000,000 and $3,440,000,000. The increase
in these expenditures over the period reflects in considerable measure growth in the responsibilities which devolve upon the Federal
Government for many types of supervisory, developmental, and
research activities. The decline in interest payments on the public
debt is the result of reduction both in the public debt outstanding
an(i in the average annual rate of interest.




11

SECRETARY OF THE TREASURY
Surplus

The surplus of ordinary receipts for the fiscal year 1930 over
expenditures chargeable against these receipts was $183,789,215,
according to the daily Treasury statement, unrevised. The entire
surplus was applied during the year to retirement of the public
debt. A summary of ordinary receipts, expenditures chargeable
against ordinary receipts, and the surplus fop the past nine years is
presented in the accompanying table:
Ordinary receipts, expenditures chargeable against ordinary receipts, and surplus,
for the fiscal years 1922 to 1930
[On basis of daily Treasury statements (unrevised)]

Total ordinary
receipts

Fiscal year

1922
1923
1924-_
1925
1926
1927-_
1928
1929
1930

L . :
-.

.....
-

---.
•
-

--____-_

-

---.
-

-

-

$4,109,104,151
4,007,135, 480
4.012.044.701
3,780,148,684
3,962,755,690
4,129, 394, 441
4,042, 348,156
4,033, 250,225
4.177.941.702

Expenditures
chargeable
against ordinary
receipts
$3,795,302, 500'
3,697, 478,020
3,506,677,715
3,529, 643, 446
3,584,987,873
3,493,584, 519
3, 643, 519,875
3,848, 463,190
3,994,152, 487

Surplus

$313,801,651
309,657,460
505,366,986
250,505,238
377,767,817
635,809,922
398,828,281
184,787,035
183,789,215

Compared with expenditures, the surplus indicates that ordinary
receipts were only 4.6 pier cent in excess of the Government's requirements. As stated in my last report, the management of Federal
finances so as to accomplish such a close adjustment of receipts to
expenditures is considered by the Treasury to be very satisfactory,
especially in view of the fact that sinking fund and other debt
retirement operations are adequate to retire the public debt at a
reasonably rapid rate.
The surplus receipts were larger than anticipated. The estimated
surplus shown in the Secretary's annual report for 1929 was $225,,i581,534. This amount was subsequently redueied to $145,581,534
:*:to allow for the income tax reduction authorized by Congress in
.December, 1929. The surplus receipts were about $38,000,000 in
iexcess of this adjusted estimate. The major variations between the
actual results and the estimates are summarized in the following
table:
Principal variations in ordinary receipts and expenditures chargeable against
ordinary receipts, as compared with estimates for the fiscal year 1930
[In millions of dollars]
^ ,.
. ,
Ordinary receipts:
Tax receipts.--Miscellaneous receipts
T o t a l ordinary receipts
^•Afteriadjustmeot for 1929 tax reducf ion.



Actual greater
(+) or less (-)
than estimate
_---_-_---_
i —10. 7
+19. 4
„,^,
,,„,^„^^^^-,_-,__-___Mh8/7

12

REPORT ON THE FINANCES

Principal variations in ordinary receipts and expenditures chargeable agains
ordinary receipts, as compared with estimates for the fiscal year 19SO—Con.
[In millions of dollars]

Expenditures chargeable against ordinary receipts:
Actual greater
r\ ^'
J -.t
(+) or less (-)
Ordinary expenditures—
than estimate ,
General expenditures
—31.7
Agricultural marketing fund (net)
+75. 0
Other
+3. 7
Total ordinary^expenditures
+47. 0
Public debt expenditures chargeable against ordinary receipts.—76. 5
Total expenditures chargeable against ordinary receipts
—29. 5
Surplus

1 +38.2

Total ordinary receipts were substantially as estimated. Tax
receipts failed by $10,700,000 to reach the estimated figure, but this
loss was more than offset by the fact that miscellaneous receipts
were $19,400,000 in excess of expectations. Ordinary expenditures
were $47,000,000 more than anticipated. Although general expenditures for Government departments were $31,700,000 under the estimates, other ordinary expenditures exceeded the estimates by
$78,700,000 due principally to the amounts loaned from the agricultural marketing fund.
Notwithstanding the increase in ordinary expenditures, as compared
with the estimates, the surplus exceeded the estimated $145,581,534.
This was due to the fact that public debt retirements chargeable
against ordinary receipts were about $76,500,000 less than anticipated
chiefly as a result of foreign payments made in cash instead of in
securities. In the Budget it was assumed that payments by foreign
governments would be made in United States obligations. Under the
various acts relating to foreign indebtedness, payments of interest
and principal may be made in United States obligations. The securities so received have been canceled, automatically reducing the.
public debt, and such retirements have been included in the public
debt retirements chargeable against ordinary receipts. As explained
on page 37, it has been the practice of foreign governments in recent
years to make practically all payments, in securities. Accordingly,
it has been the Government's practice to include among the estimated
public debt retirements chargeable against ordinary receipts amounts
approximately equal to the prospective receipts from foreign governments. In June, 1930, however, payments by foreign governments
of principal and interest were made in cash. Of these cash payments
the entire amoimt on account of interest, and that part of payments
of principal on account of surplus war and relief supplies sold on
credit (as described on page 59), are not required by law to be used for
debt retirement. Therefore public debt retirements from these receipts
'. } Aftei* adjustment for 1929 tax reduction.




13

SECRETARY OF THE TREASURY

could not be included in retirements chargeable against ordinary
receipts for 191^0.
In order to facilitate the interpretation of Government accounts
and of the surplus in the future, a revision was made in the analysis
of receipts and expenditures included in the daily Treasury statement, effective July 1, 1930, whereby the operations of special funds
and trust funds are shown separately from the operations of the
general fund. The description of this revised statement appears as
Exhibit 70, page 433.
THE PUBLIC DEBT i

General review of operations
Fiscal year 1930.—During the fiscal year 1930 public debt receipts
on all accounts aggregated $3,722,970,170.85 and expenditures,
$4,468,859,619. 27. Accordingly the gross debt of $16,931,197,747.60
outstanding at the beginning of the year was reduced to $16,185,308,299.18 at the end. The net reduction in the debt was $745,889,448.42,
of which amount $553,883,603.25 was discharged from ordinary
receipts through the cumulative sinking fund and other established
debt retirement accounts. The balance of the reduction was effected
chiefly through retirements from surplus. The total interest-bearing
debt was reduced $717,049,029.35, the matured debt on which interest
has ceased was reduced $19,036,029, and the debt bearing no
interest was reduced $9,804,390.07. The reduction in the interestbearing debt was almost wholly confined to the short-term issues, a
net total of $703,682,019.35 being retired, including $627,994,000
3 K per cent Treasury notes.
The following comparison of the various classes of debt outstanding
on June 30, 1929, and on June 30, 1930, indicates the character of the
changes effected during the year, which, as stated above, are confined
almost entirely to the short-dated debt.
Changes in the public deht outstanding June 30, 1929 and 1930, hy classes
June 30, 1929
Interest-bearing debt:
Regular issues—
Pre-war bonds
._-_
Liberty b o n d s . . . . . .
Treasury bondJL...
Total bonds
Treasury notes.
Certificates of iadebtedness
Treasury bills
Treasury savini^s certiflcates
.—
Total regular issues
Special issues Treajiury notes (trust funds)...
Total interest-bearing debt
..
Matured debt on which interest has c e a s e d . . . „ .
Debt bearing no interest...
Total gross debt.
... .

June 30, 1930

$770,207,310.00
8,217,508,450. 00
3,136,986,600.00
12,124,702,360.00
2,254,109, 500. 00
1,640,199,500.00

+$2,337, 540. 00
$772,544,850.00
8,201,803,900.00
-16,704,550. 00
3,136,986,600.00
12, 111, 335,350.00
—13,367,010.00
1,626,115,500. 00 -627,994,000.00
1,264,354,500.00 —375,845,000.00
155,916,000. 00 -1-155,916,000.00
13,028,019.35
-13,028,019.35
16,032,039,379.35 15,157,721,350.00 —874,318,029. 35
606,902,000.00
764,171,000. 00 -f 157,269,000.00
16,638,941,379.35 15,921,892,350.00 -717,049,029.36
31,715,370.26
50, 751,399. 26
-19,036,029.00
-9,804,390.07
231,700,678.92
241,504,968.99
16,931,197,747.60 16,185,308,299.18 —746,889,448.42

1 Amounts under this heading are on the basis of daily Treasury statements (revised).



Increase (+) or
decrease (—) .

14

REPORT ON THE FINANCES

In the course of the year six regular issues of Treasury certificates
of indebtedness, in the aggregate amount of about $2,100,000,000,
matured on quarterly tax-payment dates. There was the custoniary
concentration in the Treasury's receipts around these dates, As is
usual under such circumstances, the Treasury's requirements on a
given quarterly tax-payment date were determined on the basis of the
estimated excess, over current receipts, of maturing Treasury obligations and of ordinary expenditures for the subsequent quarter. Until
the mid-December financing in 1929, it had been the practice to
provide for the full quarterly requirements, so determined, through
an issue of certificates of indebtedness, the proceeds of which were left
on deposit with the purchasing banks until required by the Treasury
to meet its current expenditures. This procedure was followed in
providing for requirements for the quarter beginning September 15,
1929, but thereafter certificates were not invariably issued to meet the
total estimated requirements between quarterly tax-payment dates.
Instead they were issued in somewhat sinaller amounts and were
supplemented by subsequent sales of Treasury bills for cash. Four
regular issues of Treasury certificates of indebtedness, in the aggregate amount of $1,814,062,000, and four supplementary issues of
Treasury bills, in the aggregate ainount of $312,024,000, were made
during the fiscal year.
The Treasury's requirements for the quarter beginning September
15 were met through an issue of 4% per cent certificates of indebtedness. Series TJ-1930, dated September 16, 1929, with a 9-month
maturity on June 16, 1930. Subscriptions aggregating $1,480,696,500
were received and a total of $549,707,500 was allotted and issued.
Particulars concerning this issue were given in the report for 1929.
For the quarterly financing necessary to meet the payments due on
December 15, 1929, including about $700,000,000 of maturing certificates, and to place the Treasury in funds for meeting the greater
part of its requirements up to the next tax-payment date on March 15,
1930, subscriptions were invited on D^xember 6, 1929, for an issue of
3}^ per cent certificates of indebtedness. Series TS-1930, dated December 16, 1929, with a 9-month maturity on September 15, 1930.
Subscriptions aggregating $722,552,500 were received, and a total of
$351,640,500 was allotted and issued.. Supplementing this issue of
certificates, and for immediate cash requirements, tenders were
invited on December 10 for an issue of $100,000,000 of Treasury bills,
dated December 17,1929, with a 90-day maturity on March 17,1930.
This was the initial offering of Treasury bills, the new type of shortterm security issuable on a discount basis under competitive bidding
and designed to supplement regular issues of certificates of indebtedness as a part of the short-term financing. For this issue tenders
aggregating $223,901,000 were received. The highest bid receivecl




SECRETARY OF THE TREASURY

15

was 99.310, equivalent to a bank discount rate of 2.76 per cent, and
the lowest bid accepted was 99.152, equivalent to a bank discount
rate of 3.392 per cent. The average price received for the issue was
99.181, equivalent to a bank discount rate of 3.276 per cent. The
Treasury's requirements for the same quarter were further supplemented by a second offering of Treasury bills announced on February 11, 1930, tenders being invited for 90-day bills, dated February
18,1930, to mature on May 19,1930, to the amount of $50,000,000, or
thereabouts. Tenders aggregating $186,183,000 were received, and a
total of $56,108,000 was accepted at prices ranging from 99.250 down
to 99.125, the average price being 99.173, equivalent to a bank discount rate of 3.306 per cent.
On March 7,1930, subscriptions were invited for an issue of 9-month
3% per cent certificates of indebtedness of Series TD-1930, dated and
bearing interest from March 15, 1930, and maturing on December
15,1930. For this issue subscriptions aggregating $1,290,990,000 were
received, and a total of $483,341,000 was allotted and issued. Following the precedcint and procedure established in the preceding C[uarter,
this regular issue of certificates of indebtedness was supplemented and
followed by iss;ues of Treasury bills when needed for the Tresasury's
further requirements up to; the next tax-payment date on June 15.
Two issues wei'e subsequently made as a part of the quarter's financing. On April 7, 1930, tenders were invited for bills dated April 15,
1930, with a 90-day maturity on July 14, 1930, to the amount of
$50,000,000 or thereabouts. Tenders aggregating $132,377,000 were
received, and a total of $51,316,000 accepted at prices from 99.315
to 99.250, the average price accepted being 99.267, equivalent to a
bank discount rate of 2.933 per cent. For the other issue tenders
were invited on May 12, 1930, for bills dated May 19, with a 91-day
maturity on August 18,1930, to the amount of $100,000,000, or thereabouts. Tenders aggregating $275,674,000 were received, and
$104,600,000 were accepted at prices from 99.400 to 99.331, making the
average price for the issue 99.357, equivalent to a bank discount rate
of 2.544 per cent.
The final offering of short-term securities for the year was announced
on June 7, 1930, when subscriptions were invited for an issue of 12month 2% per cent certificates of indebtedness. Series TJ-1931,
dated and bearing interest from June 16, 1930, and maturing
on June 15, 1931. Subscriptions aggregating $2,398,792,000 were
received, and a total of $429,373,000 was allotted and issued.
Department circulars and public announcements covering the
above issues will be found in the appended exhibits except for those
covering the issue of certificates on September 16, 1929, which will
12101—31

4




16

REPORT ON THE FINANCES

be found in report for 1929. Some further consideration of Treasury
bills appears later in this report.
First quarter, 1931.—The issue of certificates of indebtedness of
June 16 was supplemented after the close of the fiscal year 1930 by
two issues of Treasury bills to complete provisions for the quarter
ended September 15. On July 7, 1930, tenders were invited for an
issue of $50,000,000, or thereabouts, the bills to be dated July 14 and
to mature on September 15, 1930, a 63-day term. Tenders were
received in the aggregate amount of $328,968,000, and $50,920,000
were accepted at prices from 99.720 to 99.660 and averaging 99.672,
the average rate on a bank discount basis being 1.876 per cent. On
August 11, 1930, tenders were invited for an issue of about $120,000,000, the bills to be dated August 18 and to mature in 91 days, on
November 17, 1930. Tenders to the total amount of $397,162,000
were received, and a total of $120,000,000 was accepted at prices
ranging from 99.593 to 99.473, with the average price 99.505, making
the average rate 1.960 on a bank discount basis.
For the Treasury's requirements on the September 15, 1930, taxpayment date, an issue of 12-month 2% per cent certificates of
indebtedness of Series TS-1931, to the amount of $325,000,000, or
thereabouts, was offered for subscription on September 8, 1930,
with certificates dated September 15, 1930, to mature on September
15, 1931. Although the interest rate was the lowest ever offered by
the Treasury on a regular short-term issue, subscriptions aggregating
$1,237,502,500 were received, the issue being about four times oversubscribed. A total of $334,211,000 was accepted.
The official circular governing the certificate issue, and all public
announcements concerning that issue and the two issues of Treasury
bills after June 30, 1930, will be found in the appended exhibits.
Summary of issues.—Summary data regarding the certificates of
indebtedness issued from September 16, 1929, to September 15, 1930,
and the Treasury bills issued from December 17, 1929, to August
18, 1930, are presented in the following tables:
Issues of certificates of indebtedness, September 15, 1929, to September 15, 1930
Issue

Date of issue

Date of
maturity

Rate

Amount
issued

J

Series TJ-1930
Series TS-1930 „
Series TD-1930.
Series TJ-1931
Series TS-1931




Sept.
Dec.
Mar.
June
Sept.

16,1929
16,1929
15,1930
16,1930
15,1930

June
Sept.
Dec.
June
Sept.

16,1930
15,1930
15,1930
15,1931
15,1931

Per cent

$549, 707,600
351,640,500
SH 483, 341, 000
SV, 429,373,000
2H 334, 211,000

m

SECRETARY OF THE TREASURY

17

Issues of Treasury hills, December 17, 1929, to August 18, 1930

Date of
issue

Days to
maturity

Dec. 17,1929.

90

Feb. 18,1930.

90

Apr. 15,1930.

90

May 19,1930.

91

July 14, 1930.

63

Aug, 18,1930.

91

Date of
maturity

Price (per
$100)

Rates corresponding to indicated
prices
Bank
True
discount discount

Av.
H.
L.
May 19,1930 Av.
H.
L.
July 14,1930 Av.
H.
L.
Aug. 18,1930 Av.
H.
L.
Sept. 15,1930 Av.
H.
L.
Nov. 17,1930 Av.
H.
L.
Mar. 17,1930

$99.181
99. 310
99.152
99.173
99. 250
99.125
99.267
99. 315
99. 250
99.357
99. 400
99. 331
99.672
99. 720
99. 660
99.505
99. 593
99. 473

Total amount Face (maturity)
value, total
received
issue

Per cent Per cent
3.276
3.350 $99,180, 780. 45 $100,000,000. 00
2. 818
2.760
3. 392
3. 469
3.306
3.380
55, 644, 231. 50
56, 108,000.00
3.065
3.000
3. 580
3.500
2.933
2.996
50,939, 735. 00
51,316,000.00
2. 797
2.740
3.065
3.000
2.544
2.596 103,927, 282. 00 104, (500, 000. 00
2.374
2.421
2.647
2.701
1.909
1.876
60, 752, 788. 70
50,920, 000. 00
1.627
1.600
1.977
1.943
1.960
1.997 119,405,468. 74 120, 000,000. 00
1.639
1.610
2.125
2.085

Cost of Government borrowing

The cost of Grovernment borrowing during the year was sulDstantially below that of the preceding year, due chiefly to the unusually
low rates at which new securities were issued. An additional factor
was the use of Treasury bills as a supplement to the regular financing
through certificates of indebtedness.
The rates at which new issues of Government securities can be
marketed are dependent upon conditions in the money market, as
evidenced in part by current market quotations on loans of similar
character and maturity. As outlined in succeeding paragraphs,
short-term money rates in 1929 reached the highest levels in recent
years and subsequently dropped to new postwar low levels. Rates
on new Government issues during the period show similar striking
changes. Rates of 5% and 4% per cent on certificates issued on June
15 and September 16,1929, respectively, represented the highest rates
at which Govei-nment securities have been marketed since 1921.
The issues of June and September, 1930, carried rates of 2% and 2?^
per cent, respectively. Prior to the June issue, the lowest rate carried
by comparable Government securities was 2% per cent, the rate on
certificates issued in June and September, 1924. Furthermore, on
July 14 and October 15 and 16, 1930, funds were obtained through the
sale of Treasury bills at still lower rates, the average bank discount
rate on these issues being approximately 1% per cent. The steady
decline in rates of debt issues after September 15, 1929, is shown in
the summary data above for these issues.
The range in rates on certificates of indebtedness issued during the
fiscal year 1929 was 4^ to 5% per cent, while during 1930 rates on



18

REPORT ON THE FINANCES

similar issues range from 2% to 4% per cent, with these issues after
September 16,1929, at or below 3K per cent. The highest rate on any
debt issue after September 16,1929, was slightly over 3}^ per cent, as
compared with 4^ per cent, the lowest rate in the preceding fiscal year.
The special use of the Treasury bills as a supplement to the usual
method of short-term financing further reduced the cost of borrowing. Funds secured in February, April, and May through the issue
of Treasury bills would otherwise have been borrowed in the regular
issues of certificates of indebtedness on the quarterly tax-payment
dates, that is, in December for the February issue and in March for the
April and May issues. Costs were thus lowered somewhat through
the reduction in the period for which credit was extended to the Government prior to its use. Furthermore, in the case of the latter two
issues of Treasury bills the Treasury was able to borrow at lower
rates than at the preceding quarterly tax-payment date owing to the
rapidity of the decline in open market money rates during the period
Credit conditions
During the year ended June 30,1930, banking and credit conditions
in the United States went through a complete readjustment. Money
rates, which at the beginning of the period were at a higher level than
at any time since 1920, began to decline rapidly about the middle of
November, 1929, and by the summer of 1930 were at the lowest levels
of postwar years. Factors accounting for both the advance and the
subsequent decline in the cost of credit were dominated largely by
conditions in the security market.
For several years prior, to the autumn of 1929, particularly after
1926, security prices rose continuously and rapidly and the volume of
trading showed unusual expansion. By September, 1929, security
prices were at an unprecedentedly high level and the volume of trading had grown to record proportions. The speculative movement
in this country and the consequent high rates for money were attracting funds from all parts of the United States and from abroad and
were exerting a disturbing influence on business and credit conditions
throughout the world.
Rapid growth in the volume of loans made for speculative purposes
caused the Federal reserve system as early as 1928 to adopt a firm
money policy. This policy was expressed at first in permitting gold
exports, which were in larger volume at the time, to exert their customary firming influence on credit conditions, anci later in sales of
United States securities and in successive increases in discount rates
from a level of 3K per cent at the end of 1927 to 5 per cent at the
beginning of 1929, together with increases in buying rates on acceptances. As a result of gold exports and open-market operations of the



SECRETARY OF THE TREASURY

19

reserve banks, and notwithstanding the rise in discount ra,tes, the
volume of member bank discounts increased rapidly during the first
half of 1928 and was close to a billion dollars during most of the following year, a volume not exceeded since the early postwar years. In
these circumstances money conditions became increasingly firm and
there was a definite slackening in the growth of member banli credit,
including loans extended by member banks to brokers and dealers in
securities. Continued growth in the demand for credit ftrom the
security market, however, was met by large increases in loans to
brokers made by corporations and other nonbanking lenders. At the
beginning of 1929 it was evident that conditions leading to the adoption of the reserve system's firm money policy still continued. In
February the Federal Reserve Board issued to the reserve banks and
to the public a statement pointing out that in the prevailing circumstances the granting of additional security loans or the maintenance
of a large volume of such loans by member banks that were heavily
or continuously in debt to the Federal reserve banks constituted an
improper use of Federal reserve facilities.
During the spring of 1929 there was a reduction in the volume of
member bank loans and investments, the decline representing a
decrease in loans on securities and in investment holdings, offset in
a measure by a partly seasonal increase in so-called other loans. In
June, however, loans on securities advanced again and so-called other
loans continued to increase.
Renewed increase in speculative activity in the security market,
after the temporary slackening in the spring, was reflected in further
demands for funds to finance operations in securities^ and by midsummer of 1929 money rates were at the highest level in more than
seven years. The greatest increase occurred in open-market rates,
and particularly in rates for money used to finance stock market
transactions. Open-market rates on time loans on securities at 8 to
8K per cent in June were about 2}^ per cent higher than a yeai* earlier.
Rates on bankers acceptances at 5K per cent were about Iji per cent
above the level of the year before, and rates on commercial i)aper at
6 per cent were 1% per cent higher, while rates on bank loans to
customers were on the average about one-half of 1 per cenf: higher
than a year earlier.
Attracted by the prevailing high level of money rates and by
opportunities for speculative profits, funds flowed into this country
from abroad during most of 1929. This led to an inward movement
of gold, which added about $270,000,000 to the country's stock of
monetary gold between January and October of that year. The
increase in gold stock was, however, not reflected in a reduction of
member bank discounts at the reserve banks, but was taken ui> largely
in the liquidation of reserve bank acceptance holdings, which carried



20

REPORT ON T H E FINANCES

a higher rate than discounts, and in part by further sales of United
States securities by the reserve banks.
At the commencement of the agricultural harvesting and marketing
season, in July and August, reserve bank buying rates on acceptances
w^ere reduced from a level of 5}i per cent for various maturities to 5}^
for the same maturities, and on August 9 the discount rate at the
New York Reserve Bank was advanced from 5 to 6 per cent. The
establishment of lower rates on acceptances, as compared with the
New York discount rate, encouraged the sale of acceptances to the
reserve banks as the season progressed and the volume of acceptances
drawn and outstanding increased. As a consequence, bill holdings of
reserve banks increased more rapidly than the seasonal demand for
additional reserve bank credit, so that discounts for member banks
in New York City declined and conditions in the money market
became easier.
During the last half of 1929 very marked changes occurred in the
business and credit situation. Industrial production, which had
reached record high levels at the middle of the year, commenced to
decline in July. The outlook for corporation profits was adversely
affected by continuing evidence of decreasing business activity and
actual reports of reduced earnings. In the security market, notwithstandingfc»omeeasing in the money situation, rates on collateral loans
continued at a high level. Security prices commenced to decline in
September. At the same time the volume of loans to brokers
continuecl to increase with exceptional rapidity, a fact which, in the
face of declining security prices, was evidence of a movement of securities from holders with large equities to holders with smaller equities,
or from stronger into weaker hands. The position of the security
market was further weakened by the occurrence of a conspicuous
failure in the British market and by withdrawals of foreign funds from
this country. On September 26 the Bank of England, following recurrent declines in its reserves, increased its discount rate from 5^ per
cerit to 6K per cent. These developments, coming at a time when
industry was reacting from an earlier overstimulation in important
lines, culminated in October and November in violent declines in
security prices. Despite some recovery during the last month of the
year, stock prices at the end of December, as measured by the Standard Statistics index of 404 stocks, were about 35 per cent below the
high point whicii was reached in September.
The break in security prices was accompanied by a liquidation of
loans on an unprecedented scale. Total reported loans to brokers in
New York City declined from about $8,550,000,000 at the beginning
of October to about $4,000,000,000 at the end of the year. This
decrease of about $4,550,000,000 reflected chiefly the withdrawal of
funds from the market by lenders other than rnember banks. In its



SECRETARY OF THE TREASURY

21

initial stages this withdrawal of funds resulted in New York City
member banks taking over the loans of these other lenders. By the
end of the year, however, loans to brokers by member banks in New
York City also declined, averaging lower in December than in August
and September. Notwithstanding some increase in member bank
loans on securities to others than brokers, the net liquidation of
reported loans on securities amounted to about $4,000,000,000 for
the period.
During the first half of 1930 loans to brokers in New York City by
nonbank lenders continued to decline, and there was considerable
shifting of brokers' loans to member bank account, chiefly at member
banks in New York City. By the end of June, however, security
loans of all member banks were about $150,000,000 larger than at the
end of 1929 and about $340,000,000 larger than at the beginning of
October of that year. This growth in the security loans of loaember
banks was not as large as the liquidation of loans by nonbanking
lenders, and total reported loans on securities declined further during
the first half of 1930, bringing the net reduction for the nine months
ended June 30, 1930, to nearly $5,000,000,000.
During the first week of heavy liquidation in the security market,
when loans to brokers by member banks in New York City were
sharply increased to offset the withdrawal of funds from the market
by nonbank lenders and out-of-town banks, there was a corresponding increase in member bank deposits, and consequently in the required reserves of member banks. With the passing of the speculative situation, however, the Federal reserve policy which, for about
two years had been directed toward firm money, was reversed and
became favorable to easier money conditions. During the week ended
October 30 the reserve banks bought $150,000,000 of United States
securities in the open market, reducing by that amount the need for
additional ruember bank borrowing and so facilitating the process
of liquidation which was in progress. In November and Descember
the reserve banks made additional purchases of securities. By the
beginning of 1930 their security holdings amounted to about $500,000,000, compared to about $150,000,000 during the summer of 1929.
Subsequent purchases brought the total to about $600,000,000 in
September. Federal reserve rates were also reduced. Beginning
with the reduction in the discount rate at the New York bank from
6 per cent to 5 per cent on November 1, 1929, there were successive
reductions at all reserve banks, and by the end of Septembeir, 1930,
the rate was 3 per cent at Boston, 2K per cent at New York, and
3K per cent at all other reserve banks. Buying rates on acceptances
were also reduced and on October 1,1930, ranged from 1% per (3ent for
maturities up to 75 days to 2% per cent for four to six month bills.




22

REPORT ON THE FINANCES

The decline in money rates in this country in the autumn of 1929
had resulted in an outward movement of about $100,000,000 of gold
before the end of the year. Beginning in January, however, there
was a net inflow of gold, reflecting chiefly imports from South America
and the Orient,, and by the end of June the country's stock of gold
was higher by $200,000,000 than a year earlier. In July and August
gold moved outward again, chiefly to France and Canada, biit these
gold exports did not result in firmer conditions in the money market,
since their effect was counterbalanced in July by a decline in the
domestic demand for currency and in August by open market purchases of securities by the reserve banks. In the autumn member
bank indebtedness at the reserve banks, at a level below $200,000,000,
showed a decrease of about $800,000,000 from the year before.
Reflecting decline in the demand for credit in the security market
and also in the demand by trade and industry, together with an inflow
of gold from abroad and the easy money policy of the Federal reserve
system, money rates in the summer aad early autumn of 1930 were at
the lowest levels of the postwar period. At the end of September
the open market rate on 90-day bankers' acceptances was 1% per
cent and on prime commercial paper 3 per cent, compared with 5%
per cent and 6}{ per cent, respectively, a year earlier, and 2 per cent
and S-SVi per cent at the low point in the middle of 1924. Open
market rates on time loans secured by stocks and bonds as collateral
were quoted at 2}^-2% per cent, compared to 9-9% a year before,
and an average of 2.6 per cent for the last week of July, 1924. Rates
charged customers were on the average about 1 ji per cent below the
high point reached in October, 1929, and at the lowest level since
1921.
Treasury bills
Reference has already been made in this report to the initial issue
of Treasury bills as a part of the financing for the quarter beginning
on December 15, 1929. Some discussion of this new type of shortterm security was presented in my report for 1929, and the general
circular fixing the terms of the bills and the conditions of their issue
was included in that report. On December 10, in announcing the
initial issue to be made on December 17, 1929, the following statement was made:
This offering will constitute the first issue of Treasury bills, which are a new
form of Government security authorized by a law enacted by the last Congress.
While the law authorizes the issuance of Treasury bills with a 12-month maturity, generally speaking they will be issued, as in the case of this offering, with a
90-day maturity or with a maturity not in excess of three months. Issued from
time to time as the current financial needs of the Government may dictate and
with frequent and convenient maturities, they should furnish an attractive
medium for short-term investment. They are intended to supplement rather




SECRETARY OF THE TREASURY

23

than to supplant Treasury certificates of indebtedness, which, with maturities
usually ranging from 6 to 12 months, have up to the present time constituted the
principal medium of short-term Government financing.
Treasury bills offer certain advantages as compared with Treasury certificates.
Their issue can be timed to coincide almost exactly with the needs for funds as
compared with the existing practice of borrowing four times a year on fixed dates
through certificate offerings; they will not be sold at par with an interest rate
fixed by the Treasury but at a discount rate fixed by the subscribers through
competitive bidding; their maturities can be timed to correspond closely to the
actual collection of income taxes instead of falling on the nominal date of tax
payment; and, finally, the Treasury should be able to take advantage of periods
of seasonal ease for short-term borrowing instead of being compelled to offer a
large issue of securities during a temporary stringency and high money rates.
The Treasury Department believes that Treasury bills will prove l/O be an
efficient and economical additional medium through which the short-terra financing of the Government may be conducted and hopes that they will receive a
favorable reception on the part of the. public.

I t will be recalled that under the act approved June 17, 1929,
authorizing their issue. Treasury bills were exempt as to piincipal
and interest from all taxation (except estate or inheritance taxes),
but that gains from the sale or other disposition of Treasury bills
were subject to income tax and losses were deductible. As a practical matter, little or no revenue could be realized from taxing gains on
Treasury bills. This follows from the fact that gains and losses in
practically all cases would offset each other and, in any case, would be
inconsequential because of the short term of the bills and the narrow
range within which their prices fluctuate. Furthermore, the bookkeeping records required in order to calculate gains, as differentiated
from exempt interest, were so complicated that a very real sales
resistance resulted. The situation was brought to the attention of
the Congress, which provided a corrective measure through t;he act
approved June 17, 1930. This act provided that capital gains on
Treasury bills should be exempt from taxation and that losses should
not be deductible. This new provision of law required a clia.nge in
the terms of Treasury bills thereafter to be issued and a change in
the method of showing on tax returns the income received on such
bills. In consequence of these changes an amended Department
Circular No. 418 and Treasury Decision 4292, both dated June 25,
1930, were issued. Treasury Decision 4292 is incorporated in the
amended circular, which will be found as Exhibit 25, appearing on
page 309 of this report.
By the close of the last fiscal year Treasury bills were successfully
established as one of the important means for short-term financing;
and except for the disability just referred to, which had been removed by the act of Congress approved June 17, 1930, they were
fully meeting the Treasury's expectations. Issues of Treasury bills
offered subsequently were subject to the amended law.




24

REPORT ON THE FINANCES

Cumulative sinking fund
For the fiscal year 1930 the appropriation for the sinking fund was
as follows:
Unexpended balance from 1929
$29. 18
Initial credit
.
253,404,864. 87
Secondary credit:
Derived from retirements prior to July
1,1930
.
$123,905,360.28
Derived from retirements during 1930-_
5, 615, 313. 86
129, 520, 674. 14
Total, including unexpended balance

382, 925, 568. 19

In response to a public offer made on July 11 and closed on July
16, 1929, Federal reserve banks purchased for the sinking fund, on
tenders by holders, $75,864,950 face amount of 3K per cent Treasury
notes. Series A-1930-1932, at 98 and accrued interest. In connection
with the issue of 4% per cent 9-month certificates of indebtedness
dated September 16, 1929, $100,000,000 face amount of 3K per cent
Treasury notes of the three outstanding series was acquired for account of the sinking fund through receipt at a fixed price of 98 and
accrued interest in part payment for the certificates. From time to
time additional amounts of 3K per cent Treasury notes were purchased at the market, a total of $202,354,000 face amount being so
acquired at a principal cost of $200,545,125, an average price of
slightly over 99%2. In addition, $150,000 face amount of first 4's
were purchased at 95 and interest, and $10,000,000 face amount of
fourth 4M's were purchased, $2,500,000 at 982%2 and $7,500,000 at
^ ^ 2 and interest. Debt aggregating $388,368,950 in face amount
%%
accordingly was retired at a principal cost of $382,925,400.49.
A statement concerning the operations on account of the cumulative sinking fund from its inception to the close of 1930 will be found
on page 593 of this report.
Three and one-half per cent Treasury notes
On September 10, 1930, a call was issued for the redemption on
March 15, 1931, of all outstanding 3^ per cent Treasury notes of
Series A-1930-1932 and Series B-1930-1932. These two series of 3K
per cent Treasury notes were issued in connection with the refunding
of the second Liberty loan. Series A-1930-1932, in total amount
$1,360,456,450, was issued on March 15, 1927, in exchange for second
Liberty loan 4}^ per cent bonds, and Series B-1930-1932, in total
amount $619,495,700, was issued on September 15, 1927—$368,973,100 in exchange for second Liberty loan 4}^ per cent bonds and $250,522,600 against cash subscriptions. Each series carried a 5-year
maturity, but was made subject to call, on six months' notice, on any



SECRETARY OF THE TREASURY

25

interest-payment date on and after three years from date of issue.
Series A accordingly became subject to call on March 15 and Series
B|on September 15, 1930. Up to the date of the call on September
10 there,had been retired $711,380,100 of the original issue of Series
A and $119,192,000 of Series B, or an aggregate total of $830,572,100.
The following table summarizes the operations in these securities:
Transactions in Sji per cent Treasury notes of 1930-1932, Series A and B, from
date of issue to September 10^ 1930
Issued:

Amount

Series A-1930-1932
Series B-1930-1932

1

$1, 360, 456, 450
619, 495, 700

Total

1,979,952,150

Retired:
Sinking fund
Payments from foreign governments^
Surplus receipts
.
Miscellaneous...^
Total

:

-

__-.

Outstanding, September 10, 1930:
Series A-1930-1932....
Series B-1930-1932
Total

366, 614, 150
275, 990,150
145, 000, 000
42,967,800
830, 572, 100

.

.
-

649, 076, 350
500,303,700
1, 149, 380, 050

. A third issue of similar notes. Series C-1930-1932, was made on
January 16, 1928, in total amount $607,399,650, all in exchange for
third Liberty loan 4}^ per cent bonds as a part of the refunding of
that loan. A total of $451,722,450 remains outstanding. These
notes will mature on December 15, 1932, but may be called for
redemption, on six months' notice, on any interest-payment date on
and after December 15, 1930.
Department Circular No. 428, dated September 10, 1930, calling
the notes of Series A-1930-1932 and Series B-1930-1932 for redemption, and the public announcement on September 10, concerning the
call, will be found as Exhibit 27, page 315.
Two per cent Consols of 1930
The 2 per cent Consols of 1930 were issued under authority of the
act approved March 14, 1900, in refunding of certain other outstanding bonds at higher rates of interest. They were dated April 1, 1900,
and the law provided that they should be payable at the pleasure of
the United States after 30 years from the date of their issue. The
terms were fixed accordingly and the bonds given an indeterminate




26

ilEt>OllT ON TH:fi FINANCES

maturity after April 1, 1930. On December 12, 1929, the following
public statement was issued:
In view of the many inquiries received at the Treasury with respect to the
2 per cent Consols of 1930 which, by their terms, are redeemable at the pleasure
of the United States after April 1, 1930, Secretary Mellon to-day announced that
these bonds would not be called for redemption on April 2, 1930, which is the
earliest date the option reserved to the United States may be exercised.

The Panama 2's likewise are now subject to call, but have fixed
maturities, one series in 1936 and the other in 1938. These three
issues of 2 per cent bonds are the only outstanding bonds of the
United States bearing the so-called circulation privilege, and on June
30, 1930, a total of $666,219,750, of an aggregate total of $674, 625,630
outstanding, was on deposit with the Treasurer of the United States
as security for the issue of circulating notes by national banks.
Debt payment _
The reduction in the war debt commenced in the fiscal year 1920.
During the 11 full fiscal years from the beginning of that fiscal year
on July 1, 1919, to the close of the last fiscal year on June 30, 1930,
more than $9,296,000,000 of the public debt was retired—about 36^
per cent or more than one-third. It will be recalled that the Congress provided for the liquidation of the war debt through two definite provisions—(1) the cumulative sinking fund, and (2) the application of any repayments of the principal of loans to foreign governments under the Liberty bond acts. Each year's budget makes
full provision for the execution of these two basic provisions for
debt payment. In addition, the Congress has directed the application of certain miscellaneous receipts to debt reduction, and has
authorized the receipt of interest-bearing obligations of the United
States for any amounts due from foreign governments on account of
principal or interest under the debt settlements, which authority has
largely been availed of by foreign governments. The aggregate of
the several accounts makes up what has been termed *Hhe permanent debt reduction program," and all expenditures for such accounts
are chargeable against ordinary receipts. In recognition of the soundness of making early progress in the reduction of war-time indebtedness when prosperity and productive taxes have yielded receipts
in excess of expenditures, surplus receipts have also been applied
to the retirement of outstanding debt. The following summary
shows the principal accounts through which the war debt has been
discharged, with the percentage of each to the total retirements
indicated. A more detailed description of the funds for debt reduction appears on pages 56 to 63.




27

SECRETAUlf OF I H E O^KEAStTBY
Summary of reduction in gross debt, from June SO, 1919, to June 30, 1930
[On basis of daily Treasury statements (revised)] i

Per cent

Amount
Gross debt outstanding:
June 30,1919
June 30, 1930

-- $25,482, 034,418.49
16,185, 308, 299.18

..-

9,296,726,119.31

Total reduction
Debt reduction:
Chargeable to ordinary receiptsCumulative sinking fund
Received from foreign governments$376,904,500
Cash repayments of principal _
Bonds, etc., received as principal.
205,446,800
Bonds, etc., received as interest
.- 906,369,150
Total from foreign governments
MiscellaneousFranchise tax receipts$146,620,599.09
Federal reserve banks
2,409,863.31
Federal intermediate credit b a n k s —
66,171,200.00
Federal e^itate taxes...
....
15,224,281.75
Gifts, forfeitures, etc

3,187,468,300.00

34.29

1,488, 720,450. 00

16.01

230,425,944.15

2.48

4,906,614, 694.15

52.78

From surplus of receipts.-

913, 382, 020.>23
3,476,729,404.93

9 82
37.40

Total reducition

9, 296, 726,119.31

100.00

Total miscellaneous
Total chargeable to ordinary receipts...
Through reduction in general fund balance. . $1,226,164,935.26
Balance June 30, 1919
. . • 312,782,915.03
Balance June 30, 1930

1 Figures on basis of daily Treasury statements (unrevised) appear in Table 40, p. 592.

The course of the interest-bearing debt outstanding and of the
computed rate of the interest charge on that debt, for a period of
years, is shown in the accompanying chart:
BILLION
DOLLARS
3 0

/^ \

1

V.J

0

I N T E R L 5 T - B L / USING

>EBT

eo

^
COMPUTED

.X

irg T E R E S T

^-\__

RAT

- ~

_

PER
CENT
4.5

'-

->-.^-^_

10

y

^

^

•

1920

I9ZI

1923

19Z4

1925

192.6

1927

1928

19e9

1930

C'bait 5,—Interest;-bearing public debt outstanding and ratio of the computed annual interest charge
to the interest-bearing public debt, by months, from Deceraber. 1918, to June, 1930




28

BEPORT ON THE EINANCES

Between June 30, 1919, and June 30, 1930, the annual interest
charge, computed on the basis of the interest-bearing debt outstanding on those dates, was reduced from $1,054,000,000 to $606,000,000,
or almost $450,000,000, and the average rate was reduced from
4.178 on the former to 3.807 per cent on the latter date. The effect
on the budget of reduced charges for interest is in part offset, since
any reduction in interest through sinking fund retirements results
in an increase in the sinking fund appropriation in like amount, the
amount in this respect as estimated for 1931 being $138,747,000 of a
total available appropriation of about $392,152,000.
CONDITION OF THE TREASURY

On June 30, 1930, the gross pubhc debt of the United States Government amounted to $16,185,308,299, and the net balance (cash)
in the general fund of the Treasury on the basis of daily Treasury
statements (revised) was $312,782,915. These figures represent a
decrease of $745,889,449 in the public debt, and a decrease of $11,723,936 in the net balance (cash) of the Treasury in the fiscal year 1930.
Bullion and coin amounting to $2,134,486,728 on June 30, 1930,
held in trust by the Treasury against United States currency outstanding, showed an increase of $124,075,049 during the fiscal year.
Bullion and coin, amounting to $1,796,239,234 on June 30, 1930,
held in trust by the T ^ a s u r y for the Federal Reserve Board, showed
an increase of $233,813,655 during the fiscal year.
General fund of the Treasury
All cash receipts of the Government, except as otherwise authorized
by law, are credited to the general fund and all expenditures are made
therefrom. This fund shows the assets in the Treasury in the form
of cash and deposit credits and certain current liabilities set off against
such assets. The net balance of this fund represents the working
cash balance required in connection with the receipts and expenditures
of the Government. The net change from the close of the previous
fiscal year is accounted for as follows:
Summary of the net changes in the general fund balance between June SO, 1929,
and June SO, 1930, on the basis of daily Treasury statements {revised)
Net balance per daily Treasury statement, June 30, 1929
$326,713,002.63
Deduct net excess of expenditures over receipts in June reports subsequently received
2, 206,151.80
Net balance June 30, 1929 (revised)
$324, 508,850. 83
Excess of ordinary receipts over expenditures chargeable against ordinary receipts in the
180.281,909.37
fiscalyear 1930
Total to be accounted for
504, 788, 760. 20
Public debt retirements:
Surplus revenue (this is additional to $553,883,603.25 sinking fund and other debt retirements chargeable against ordinary receipts)
180, 281,909. 37
Reduction in net balance in general fund
11, 723,935. 80
Net balance per daily Treasury statement, June 30, 1930
$318,607,168.11
Deduct net excess of expenditures over receipts in June reports subsequently received..
5,824, 253.08
Net balance June 30, 1930 (revised)
_._".
312, 782,915.03
Total..
504,788,760.20




SECRETARY OF THE TREASURY

- 29

General fund of the Treasury, June 30, 1930 {revised figures)
In Treasury offices:

Gold
—
Standard silver dollars
United States notes
Federal reserve notes
Federal reserve bank notes
National bank notes.
Subsidiary silver coins
Minor coins
Silver bullion (at cost)
Unclassified (collections, etc.)

$51,254,731.39
6,599,227.00
2,847,706.00
283,720.00
52,165.00
55,806.50
5,233,513.12
4,177,685.07
6,622,158.31
869,693.92

_
-

In Federal reserve banks:
"To creditof Treasurer of United States
Intransit

—.

In special depositary banks: Account of sales of certificates of indebtedness
In general, limited and insular depositary banks:
To credit of Treasurer of United States
To credit of other Government officers
Intransit
—

$77,996,406. 31

26,524,266.32
1,612.080.40

6,957,078.78
18,914,649.46
1,455,539.23
27,327,267.47

In foreign depositary banks:
To credit of Treasurer of United States
To credit of other Government officers
Intransit

:...

In treasury of Philip]3ine Islands:
To credit of Treasurer of United States
Intransit
Total current a s s e t s . . . . . .
Deduct current liabilities:
Federal reserve note 5 per cent fund (gold).
Less notes in pro(;ess of redemption

28,136,346.72
296,623,336.64

293,071.47
1,319,067.67
880,681.77
225,627.14
276.53

^

2,492,820.91

225,903.67
432,802,081.72

$36,675,622.56
1,442,350.00

35, 233, 272. 56
National bank note 5 per cent fund
28, 226,376. 32
Less notes in pro cess of redemption
19,263,897.00
8, 962,479. 32
Treasurer's checks outstanding
645,381.46
Post Office Department balance
9,846,556.48
Board of trustees, postal savings system, balances
9,142,427.03
Balance to credit of postmasters, etc
54,463,085.01
Retirement of additional circulating notes (act of May 30, 1908)
1,900.00
Uncollected items, exchanges, e t c . . .
1,724,064.83
Balance in Treasury June 30,1930

120,019,166.69
312,782,915.03

The currency trust fund and the gold reserve fund
The respective amounts of gold coin and bullion and silver dollars
held in the Tieasury on June 30, 1930, against equal amounts of outstanding gold certificates, silver certificates, and Treasury notes of
1890, were as follows:
Gold coin and bullion..
Silver dollars
-_..
Silver dollars, against Treasury notes of 1890
Total

$1, 489, 989, 479
487, 198, 111
..
1, 260, 050
1,978,447,640

On June 30, 1930, the gold reserve against United States notes and
Treasury notes of 1890 was $156,039,088. The United States notes,
for which thiis reserve is held, are outstanding in the amount of
$346,681,016, a sum which is fixed by law. When such notes are
received they are reissued. The Treasury notes of 1890, for which this
gold reserve is also held, were outstanding on June 30, 1930, in the
iamount of $1,260,050. When such notes are received they are not
reissued.



30

REPORT ON THE FINANCES

Gold held for the Federal Reserve Board
The Treasury also holds in trust a large amount of gold for the
account of the Federal Reserve Board. This is known on the books
of the Treasury as ^^Gold fund. Federal Reserve Board," and
amounted on June 30, 1930, to $1,796,239,234, an increase of $233,813,655 in the fiscal year. The fund is an aggregate of net deposits
of gold made by the Federal reserve banks, principally for the purpose of effecting clearance settlements among themselves, and by the
Federal reserve agents of gold received by them as part of the security
against outstanding Federal reserve notes.
Against the gold in the general fund, amounting on June 30, 1930,
to $51,254,731, there was a liability of $36,675,622 for the Treasurer's
5 per cent gold redemption fund for Federal reserve notes ($1,442,350
notes in process of redemption are a charge against this amount).
This gold is part of the gold received by Federal reserve agents as
security against outstanding Federal reserve notes.
BUSINESS CONDITIONS AND FEDERAL REVENUE

The Federal revenues consist, in large part, of receipts of taxes on
the incomes of corporations and individuals. These, as well as other
sources of revenue, such as customs receipts, are primarily dependent
upon changes in business conditions. An examination of available
information regarding developments in industry and commerce,
particularly those which bear most directly upon the course of incomes,
is therefore essential to the consideration of Federal revenues.
The extent to which changes in taxable income can be related to
statistics of current business conditions is limited not only by the
multiplicity of factors affecting income, but also by the fact that
many corporations and individuals engage in operations that, are
not adequately reflected by available measures of industrial and trade
activity. This is particularly true of such corporations as public
utilities and banking and financial organizations. Individual and
partnership incomes, although responsive to change in the general
economic situation, contain certain elements, such as wages and salaries, interest, rents, and royalties, and in a measure dividends, which
tend to be less completely and less promptly affected by current
changes in basic conditions than are other forms of income.
Changes in corporation and individual incomes are not immediately
reflected in changes in Federal income tax collections, nor are conditions prevailing in any calendar year fully effective in income tax
collections for a single fiscal year. This follows from the fact that
the bulk of both corporation and individual incomes is reported on a
calendar year basis, the tax being paid in the succeeding year. Thus
Federal income tax receipts in the fiscal year 1930 reflected changes




SECRETARY OF THE TREASURY

31

in incomes for two calendar years; collections during the last six
months of 1929 were based chiefly on 1928 incomes and collections
during the flrst six months of 1930 on 1929 incomes.
The factors which exert a basic influence on incomes in general,
together with the more important special factors affecting certain
classes of income, are disclosed by a review of industrial production,
trade and distribution, and the price movements both of commodities and of securities.
Changes in the volume of industrial production
During the first half of 1929 the physical volume of industrial
production increased from the high level of 1928 and by mid year
was in record volume. After June, 1929, production began to decline,
at first gradually, and after October very rapidly, so that at the end
of the year it was at about the same level as that reached at the lowest
point of the 1927 recession, a decline of about 22 per cent from the
^midsummer peak. The greatest decline occurred in such principal
industries as those producing iron and steel, automobiles, and rubber
tires. In certain other important industries, as in the food, tobacco,
leather, and oil industries, the decrease was much less drastic. In
spite of the sharp decline in the latter half of 1929, the average volume of production for the year was the largest on record, about 7 per
cent larger than for 1928.
During the first three quarters of 1930, production continued at low
levels, averaging lower than in any year since 1924. After some
recovery during the first quarter of the year, there was further sharp
decline in subsequent months to levels in the third quarter considerably lower than at the close of 1929. Reduction in the volume of
industrial production between the middle of 1929 and September,
1930, of over 29 per cent was almost as large as that experienced
during the early postwar decline between January, 1920, and April,
1921.
Construction activity, not covered by customary measures of industrial production, had been at a relatively high level during 1928, but
in the first half bf 1929 the total volume of contracts declined somewhat, reflecting a marked decrease in the volume of residential
building. During the last half of the year the total volume of construction declined further and for the year as a whole was smaller
than in any other year since 1924. In the flrst three quarters of 1930
an increase in contracts awarded for public works and utilities offset
in a measure the declines in residential, commercial, and industrial
building, but the total volume of contracts awarded during the period
was about 20 per cent smaller than during the corresponding period
in 1929.
12101—31

5




32

REPORT ON T H E FINANCES

Changes in trade and distribution
During most of 1929 trade and distribution were at a high level.
Measures commonly used, such as freight carloadings, and department store sales reached high levels in 1929. During the latter half
of that year, however, as in the case of production, both lines of activity began to decline, freight carloadings after the second quarter and
department store sales after the third quarter. Further decline in
trade and distribution occurred during the first three quarters of 1930.
From their peaks in 1929 freight carloadings showed a decline in
September, 1930, of approximately 20 per cent and department store
sales, a decline of nearly 13 per cent, after allowance for seasonal
changes.
Foreign trade presents somewhat similar comparisons. During
1928 and 1929 the monthly average value of exports was at the highest
level of recent postwar years, and of imports was larger than in any
year except 1926. By the end of 1929, however, recession in industry
and trade both here and abroad was reflected in declines in the vol-^
ume of foreign trade, which continued during most of the first three
quarters of 1930. This decline was a factor in the general business
situation, affecting in a measure the course of corporate and individual
incomes. Moreover, the decline in dutiable imports has been reflected
in reduced customs collections, which are an important item of Federal
revenue.
Price changes of commodities and securities
Changes in the prices of commodities and securities are also major
factors affecting corporate and individual incomes, particularly when
the changes are as marked as those which occurred during the
past year.
Subsequent to the severe decline in wholesale commodity prices
from their exceptionally high levels of 1920, the combined average of
selected wholesale prices had fluctuated in a relatively narrow range
through the flrst half of 1929. In August, 1929, however, prices
began a decline that continued at an accelerated rate through the
first half of 1930, and in September the average showed a decrease
of more than 14 per cent from the high point of the year before.
Although the decline was by no means as severe as that experienced
in. 1920 and 1921, it was the most drastic decline that has occurred
since that time and brought the average to the lowest level for the
last decade. Changes in the level of wholesale prices were not confined to any one class of commodity, but represented the combined
effect of movements of individual commodities. Declines have been
greatest, however, in the prices of raw materials in which production
is not readily adjustable to conditions of supply. Consideration of




SECRETARY OF THE TREASURY

33

prices classified according to three major groups—farm products and
their manufactures, mineral and forest products and their manufactures, and raw imports and their manufactures—indicates that all
three groups Iiave participated in the recent dechne in the average.
By July, 1930, farm products and their manufactures showed a
decrease of more than 17 per cent from the high point of 1929; there
were some price increases during the third quarter of 1930, and by
September thci average for this group^had risen approximately 2^ per
cent from the low of July. Between June, 1929, and September, 1930,
mineral and forest products and their manufactures declined by
nearly 10 per cent. Raw imports and their manufactures declined
approximately 24 per cent from January, 1929, to September, 1930.
Prices of securities, especially of common stocks, fluctuated violently during 1929 and the flrst three quarters of 1930. Following
several years of sustained, and at times rapid, increases the prices of
common stocks advanced sharply during the third quarter of 1929
to unprecedentedly high levels. During the last quarter of 1929
they dropped to about two-thirds of their value at the peak. Following some recovery during the early part of 1930, stock prices
began to decline in April, and by the middle of October, 1930, were
below the low levels of the autumn of 1929.
These developments in the security market during 1929 and 1930
have exerted an important influence on both individual and corporate incomes. Profits from the^sale of securities while security
prices were rising resulted in increasing amounts of both individual
and corporate incomes. Furthermore, increase in incomes arising
from this source, as well as from activity in trade and industry, was
reflected in marked growth in the demand for goods, particularly for
certain class(is of luxury articles. Industry, in turn, increased its
scale of operations to meet the increased demand for products and,
encouraged by favorable conditions in the security market, undertook
flnancing for plant improvement and expansion.
The drop in security prices since the autumn of 1929 undoubtedly
has had a direct adverse effect on incomes. Moreover, readjustment
in consumer demand in consequence of reduced incomes has been a
factor in the decrease in business activity, affecting particularly
industries that had been most stimulated duiring the period of speculative activity by unusual increase in demand for luxury goods.
Corporate and individual incomes
Income tax receipts during the flscal year 1930, as already noted,
were dependent chiefly upon incomes reported for the calendar years
1928 and 1929. Incomes for the latter year also underlie collections
during the first half of the flscal year 1931, collections for the last
half of that fiscal year being determined chiefly by incomes for 1930.




34

REPORT ON THE^ FINANCES

Both corporate and individual taxable incomes were unusually large
in 1928. The taxable net income of corporations reporting net income for 1928 was about 17 per cent larger than for the precediug
year, larger, in fact, than for any other postwar year. Individual
net income showed an increase of about 12 per cent in 1928 as compared with 1927, and was larger than for any other year on record.
Complete data from income tax returns for the calendar year
1929 are not yet available, but tax collections indicate that the taxable
net incomes of corporations were about 9 per cent larger for 1929 than
the amount reported for 1928. The indicated increase in taxable
incomes is smaller than that shown by available published earnings
reports of corporations. Figures for a sample of corporations publishing earnings reports, combined and weighted according to their
probable relationship to all the corporations reporting net income for
tax purposes, show an increase in net income of over 19 per cent for
the calendar year 1929 compared to 1928.
The combined published reports of these corporations for the flrst
three quarters of the calendar year 1930 show marked decreases
from the flrst three quarters of 1929. I t should be noted again that
these flgures are only in a general way indicative of the corporate
incomes reported for tax purposes, since they are based on a small
and, in some respects, an unrepresentative group of corporations,
and since statutory net income reported for tax purpose's frequently
differs materially from published net income. Nevertheless, the
published net income flgures provide a valuable indication of the
direction of change and, to a limited extent, evidence of the magnitude
of change in taxable corporation income.
According to the available information, the incomes for the calendar
year 1929 reported by individuals for tax purposes were slightly
smaller than those reported for the calendar year 1928. Conditions
during the flrst three quarters of 1930, particularly in the security
market, indicate that these incomes will be still smaller for 1930. I t
may be noted, however, that dividend and interest disbursements,
which constitute an important item of individual taxable income,
increased during 1929, and that this increase apparently continued
during the first half of 1930. Since then, however, disbursements of
dividends appear to have declined as compared with 1929.
ESTIMATES OF RECEIPTS AND EXPENDITURES

The following table presents ordinary receipts, and expenditures
chargeable against ordinary receipts, for the fiscal year 1930, on the
basis of daily Treasury statements (unrevised), with corresponding
estimates for the fiscal years 1931 and 1932. Ordinary receipts
include all receipts other than those arising from public debt transactions. Ordinary expenditures exclude all expenditures for the




35

SECSETAEl' OF THE TREASURY

retirement of the public debt. Expenditures chargeable against
ordinary reci^ipts include ordinary expenditures and the retirements
of the public debt from the sinking fund and from special receipts
described in detail on pages 56 to 61. Expenditures chargeable
against ordinary receipts do not include retirements of the public
debt from the surplus and from a reduction in the general fund balance.
The estimates in the table are on the basis of the latest information
received from the Bureau of the Budget.
Receipts and expenditures for the fiscal year 1930, on the basis of daily Treasury
statements {unrevised), and estimated receipts and expenditures for the fiscal years
1931 and 1932
1930

1931

1932

RECEIPTS

Ordinary
Customs.. -

$587,000,903. 25

Internal revenue:
Income tax
Miscellaneous internal revenue

$502,000,000.00

$612,000,000. 00

2,410,986,977. 53 2,190,000,000. 00
628, 308,035. 85
623,000, 000. 00
3,039, 295,013. 38 2, 813,000, 000. 00

Miscellaneous receii)ts:
Proceeds of Government-owned securitiesForeign obligationsPrincipal
Interest
,
Railroad securities
.....
All other seourities
Proceeds sale of surplus property
Panama Canal tolls, etc
...._.
Other miscellaneous

2, 260,000,000. 00
676,000,000.00
2,936,000,000.00

97,634, 287. 76
141,931, 519. 26
11, 485, 514.81
8, 785,657. 61
15,830,586.97
28,253,127. 75
247, 725,091. 20
551, 645,785.1

Total ordinary receipts

4,177,941, 701.!

51, 597,841. 00
184, 531, 210. 00
3, 559, 907. 00
10,018, 918. 00
15,126, 512. 00
27, 655, 435. 00
227, 375, 420. 00
519,865,243. 00

62,349,946.00
184, 260, 4'M. 00
• 8,924,3J0.00
10, 532, 2B8. 00
15, 303, 075. UU
27, 648, 000. 00
228,101, 814. 00
537,119,927. 00

3,834,865, 243.00

4,085,119,927.00

30, 554,100. 00
417, 200. 00
16,488, 100. 00
263, 249,700. 00
477,074, 600. 00
45,946, 700. 00
75, 000. 00
374, 627,500. 00
77,815, 500.00
203,814, 900.00
61,430, 200. 00
11,899, 800. 00
748, 242,600. 00
53,861, 900. 00
46,859, 900. 00

28,733, 700. 00
468, 700.00
16,460, 100. 00
240,152, 300. 00
452,851, 100.00
51,311, 500. 00
75, 000.00
375,555, 000. 00
87,195, 600. 00
229,162, 900.00
64,825, 400. 00
13,408, 500. 00
789, 623,100. 00
60,049, 600. 00
46, 750,000.00

EXPENDITURES

Ordinary (checks and warrants paid, etc.)
General expenditunss:
Legislative estal)lishment..Executive proper
State Department
Treasury Department
War Department
Department of Justice...
Post Office Department
Navy Department
Interior Department
Departinent of Agriculture
Department of Commerce
Department of Labor
Veterans' Admi;aistration
Other independent offices and commissions .
District of Columbia
Total
Add unclassified items
Total
Interest on public debt
Refunds of receipts:
Customs..1
Internal revenu6i
Postal deficiency.
Panama Canal
.-.

J
:

..^

Footnotes at end of table.




19, 986,820. 64
690,263. 00
14, 170,408. 87
1193, 114, 012. 63
2 453,524,973. 41
3 32,483,080. 31
58,198. 91
374, 165,638. 55
<290, 027,905. 76
177, 580, 581.10
54, 299,106.12
10, 654, 405. 63
1446, 955, 630. 33
49, 495,746. 47
45, 079, 613. 67

2,162, 286,385. 40 2,412,357,700.00
422, 550. 04

.._..._...

2,446, 622, 500. 00

2,162, 708,935.44 2,412. 357, 700.00
603,000,000. 00
6 659,347,613. 07

2, 446,622, 500.00
581,000,000.00

24,091,809.24
133,852,182. 70
91, 714.450.89
11,328, 541. 69

20,265, 500. 00
98, 511,000. 00
111, 202, 200. 00
11, 697,300. 00

20,815,500. 00
96,531, 500. 00
114,041,000. 00
11,905, 700. 00

36

REPORT ON THE FINANCES

Receipts and expenditures for the fiscal year 1930, on the basis of daily Treasury
statements {unrevised), and estimated receipts and expenditures for the fiscal years
1931 and 1932—Contmued
1930

1931

1932

EXPENDITURES—continued
Ordinary (checks snd w a r r a n t s p a i d , etc.)—Con.
Operations in special a c c o u n t s :
Railroads
W a r Finance Corporation
Shipping B o a r d . Agricultural m a r k e t i n g loan fund (net)
Alien p r o p e r t y f u n d s . .
Adjusted service certificate fund
Civil service r e t i r e m e n t a n d disability fund
I n v e s t m e n t of t r u s t funds:
G o v e r n m e r t t life i n s u r a n c e fund
D i s t r i c t of C o l u m b i a teachers' r e t i r e m e n t fund
Foreign Service r e t i r e m e n t f u n d .
General railroad c o n t i n g e n t fund
Total ordinary expenditures

..

.

P u b l i c d e b t r e t i r e m e n t s chargeable against ord i n a r y receipts:
Sinking fund
P u r c h a s e s from foreign r e p a y m e n t s
Received from foreign g o v e r n m e n t s u n d e r
debt settlements
Received from estate taxes
P u r c h a s e s from franchise tax receipts (Federal
reserve b a n k s a n d Federal i n t e r m e d i a t e
credit b a n k s )
Forfeitures, gifts, etc

7 $4,795,787. 55
' 58,838.54
31, 695,159. 06
149,958, 273. 55
968,985.50
8112, 312, 726. 75
8 20, 433,867. 39

7 $1,460,000.00
"50,000.00
47, 585, 000. 00
100, 000, 000. 00
7 500, 000. 00
112, 000, 000. 00
20,850,000.00

$76, 450. 000. 00
75, 000, 000. 00
7 600, 000. 00
112, 000, 000. 00
20, 850,000. 00

43, 469,104.81
516, 706.13
« 313, 282.13
2, 411,871. 58

35, 621, 200. 00
640,000. 00
216, 000. 00
. 2,500,000.00

27,888,100.00
690,000. 00
215, 000. 00
2, 500, 000. 00

3, 440, 268,883. 84

3,574,435,900.00

3, 586,009,300.00

391, 660,000. 00
48, 246,000. 00

409,410, 600. 00
57, 749, 300. 00

4,455,000.00
60, 703. 25

400, 000. 00
200, 000. 00

1,150, 000.00
. 200,000.00

553,883, 603. 25

440, 506, 000. 00

468, 509,900. 00

T o t a l e x p e n d i t u r e s chargeable against ordinary receipts. _
_ 3, 994,152, 487. 09

4.014,941,900. 00

4, 054, 519, 200. 00

Total

.

.

Excess of o r d i n a r y receipts over total e x p e n d i t u r e s
chargeable against o r d i n a r y receipts (see n o t e ) Excess of e x p e n d i t u r e s chargeable against ordin a r y receipts over o r d i n a r y receipts (see note) .

388, 368,950.00
51,135. 000. 00
109, 790, 850. 00
73,100. 00

30,600,727.00

183,789, 214. 90
180,076,657.00

NOTE.—If trust fund receipts and expenditures are excluded on the basis of figures used in the Budget,
the surplus for the fiscal year 1930 would be $186,480,561.44; for 1931 the estimated deficit, $178,995,657; and
for 1932 the estimated surplus, $30,685,281.
1 See note 3.
2 See note 5.
» Since July 1,1930, figures opposite the caption "Department of Justice" include expenditures on account
of the Bureau of Prohibition. Prior to that date such payments were included under the caption "Treasury
Department."
* See note 5.
5 Prior to Aug. 1, 1930, figures opposite the caption "Veterans' Administration" represent payments
made for account of the Veterans' Bureau only. After that date they include payments for account of the
Veterans' Bureau and also those of the character formerly made by the Bureau of Pensions and for account
ofthe National Homes for Disabled Volunteer Soldiers previously included under Interior Department and
War Department, respectively.
8 Includes $523,090.98 accrued discount on war-savings securities of matured series.
7 Excess credits, deduct.
8 The difference between amounts of above charges and amounts appropriated are due to working balances
required for use in making authorized payments from the fund. Receipts on account of this fund are
credited against expenditures.
8 Includas $216,000 on account of appropriation from the general fund and $97,282.13 on account of salary
deductions and earnings. Beginning with the fiscal 5'ear 1931 this item will represent only the amount
appropriated from the general fund, the receipt from deductions and earnings being used as credits against
(deductions from) expenditures.

The present estimate of total ordinary receipts for 1931, at $3,834,865,243, is nearly $400,000,000 smaller than the one which was submitted to Congress in my previous annual report. The earlier
estimate did not take into consideration the 1 per cent income tax
reduction and was made at a time when it was impossible to appraise
the severity of the business depression then in its early stages.
Reduction in that estimate was made necessary by subsequent
developments in industry and commerce, as well as in the security



SECRETARY OF THE TREASURY

37

market, whicii indicated that both corporation and individual incomes
would be smaller than had been anticipated; and by the effect of such
developments on the volume of foreign trade and the customs receipts.
Exclusive of the $80,000,000 tax-reduction item the principal reductions in estimated receipts are as follows: income tax, $190,000,000,
and customs, $100,000,000.
It will be observed that in both the fiscal years 1931 and 1932
interest received from foreign governments on account of their
obligations ti3 the United States, funded in accordance with the
debt settlement agreements, is treated as general fund receipts available for current expenditures, including interest on our own debt.
The Liberty bond acts, under the terms of which funds were advanced
to those associated with us in the World War, provide that all repayments on account of principal should be applied to the reduction
of our public debt. No similar provision was made covering interest
payments. The various debt settlement agreements provide that if
the debtors so elect, both principal and interest payments may be
made in securities of the United States issued since April 6, 1917,
with the exception of unmatured Treasury bills, such securities to
be accepted at par and accrued interest. When any United States
Government securities may be acquired at a discount, it is obviously
to the advantage of our foreign debtors to acquire these securities
and make payment therewith at par; whereas, when the United
States Government securities may not be acquired except at a premium, it is equally obvious that it is to their advantage to pay in
cash. Up to the last fiscal year the privilege of paying in securities
was availed of to a very large extent. When these securities were
received by the Treasury Department they were canceled and
automatically retired and the public debt reduced accordingly.
Inasmuch as during the entire period since the debt settlements
were effected the Government has closed each fiscal year with an
ample surplus, as a practical matter it was immaterial whether
foreign interest payments were earmarked for debt retirement
or treated as available for current expenditures. As a matter of
fact, when paid in securities they have been listed as public debt
retirements (chargeable against ordinary receipts. But had they
not been so treated, they would simply have served to increase the
surplus, and, since the surplus was applied to debt retirement,
they would in either event have been apphed to the reduction of the
public debt.
When interest has been received in cash, it has automatically
been available for current expenditures. When interest has been
received in seicurities, the Treasury up to the present time has automatically diminished the debt by that amount. The securities once
received could not be reissued^ and the amounts were not needed for



38

REPORT ON THE FINANCES

current use in a period of ample revenues and annual surpluses.
The policy consistently pursued by the Treasury Department has
been to reduce our war debt as rapidly as possible in days of plenty.
This, of course, implied as a corollary that in periods of depression,
when the Government revenue is restricted, the rate of debt reduction should be slowed up, but not to the extent of infringing on the
statutory requirements.
In so far as the fiscal year 1931 is concerned, it is reasonably
certain that December interest payments on account of foreig:n
debts will be paid in cash, and it is quite possible that this may be
equally true in June. So far as the fiscal year 1932 is concerned,
it is impossible to forecast what method of payment foreign debtors
will elect, though it is entirely possible that part of the interest
payments will be made in securities. Should this be done, the
securities received must, as a practical matter, be canceled and
retired; however, should the current cash requirements of the
Government require the issuance of an equivalent amount of new
securities this equivalent amount should not be looked upon as
indicating an increase in the public debt or an unbalanced budget.
INCOME TAXATION

In recommending last year a 1 per cent decrease in the normal tax
rate applied to individual and corporation incomes for the calendar
year 1929, the Treasury pointed out that whether the decrease could
be continued or not would depend entirely upon the revenue prospects
at the time the Congress met in December, 1930. I t was stated that
under the circumstances prevailing at the time, ''while a surplus
justifies some measure of tax relief and while the taxpayer should
receive the fullest possible benefits from the prosperous condition of
the Treasury during the given fiscal year, it is impossible to assure
the permanency of the reduced rates."
The above stated estimates of receipts and expenditures indicate
that the temporary decrease can not be continued during the current
year. The budget for the fiscal year 1932 is barely balanced, while
during the fiscal year 1931 it is now estimated that expenditures will
exceed current receipts by about $180,000,000. This anticipated
deficit may be covered in part at least by drawing on the general
fund balance.
RECOMMENDATIONS FOR LEGISLATION

Amendments to the second Liberty bond act
The second Liberty bond act, as amended (Sec. 752, title 31,
U. S. C.) authorizes the Secretary of the Treasury, with the approval




SECRETARY OF THE TREASURY

39

of the President, to issue bonds in an amount ''not exceeding in the
aggregate $20,000,000,000.'' A total of $18,107,942,750 in bonds has
been issued under authority of that act, leaving a balance issuable
thereunder at the present time of $1,892,057,250.
, A total of $1,933,545,750 of first Liberty loan bonds,, $536,290,450
of which bear 4% per cent interest, $5,004,950 4 per cent interest,
and $1,392,250,350 3 ^ per cent interest, are callable in June, 1932.
A total of $6,268,241,150 of 4:% per cent fourth Liberty loan bonds
are callable in October, 1933. While it is impossible to forecast at
this time what form future refunding operations will take, it is obvious
that the orderly and economical management of the public debt
requires that the Treasury Department should have complete freedom
in determining the character of securities to be issued and should
not be confronted with any arbitrary limitation which was not intended to apply to these circumstances. Moreover, it is highly
desirable that the authority be provided well in advance of actual
needs.
I t is recommended, therefore, that additional authority be given
for the issue of $8,000,000,000 in bonds under the provisions of the
second Liberty bond act, as amended. .
In this connection I renew the recommendation contained in my
annual report for the fiscal year ended June 30,1928, that the Congress
consider a further amendment to the second Liberty bond act, as
amended, authorizing the Secretary of the Treasury to exempt further
issues of securities from the surtax as well as the normal tax. In the
act pf June 17, 1929, Congress modified the second Liberty bond act,
as amended, by providing that all certificates of indebtedness and
Treasury billsi issued thereafter should be exempt both as to principal
and interest from all taxes, except estate and inheritance taxes. I
renew my,recommendation that this exemption be extended td bonds.
Special legislation is not required in the case of notes, since the Secretary of the Treasury is authorized by existing law to make this
exemption applicable to notes.
Some time ago the Treasury Department earnestly recommended
the adoption of a constitutional amendment permitting the Federal
and State Governments, respectively, to tax securities to be issued
in the future, which under present constitutional provision are not
taxable. There appears, however, to be no immediate prospect of
such an amendment being adopted. Pending its adoption, there is
no reason why the Treasury Department, in marketing securities,
should be at a disadvantage as compared with States and their subdivisions, or why there should be discrimination against individual
investors who desire to acquire United States Government securities.
I t is idle to argue that the issuance of United States tax-exempt
securities would furnish convenient means of income tax avoidance.




40

REPORT ON T H E FINANCES

As long as the States and their political subdivisions continue to issue
securities which are wholly tax exempt at the rate of $1,000,000,000
a year, there is at all times an ample supply of gilt-edge securities
available to those desiring to escape income-tax payment through
investment in tax-exempt securities. Limiting the Federal Government to the issuance of securities exempt only from the normal
income tax does not result in increased income tax collections, but
simply in a higher interest cost to the Government.
In so far as individual iuvestors are concerned, the present situation
gives rise to discrimination as between them and corporations. Corporations being only subject to the normal tax. United States securities in their hands are completely tax exempt, whereas practically all
such securities in the hands of individuals are subject to surtaxes.
The yield on United States securities for many individual investors
does not, therefore, compare favorably with the yield on similar securities held by corporations, nor does it compare favorably with the
yield on State and iriunicipal securities, which are usually wholly free
from all taxation.
Railroad obligations
Under the provisions of the Federal control act, approved March 21,
1918, and of the transportation act, 1920, the Government of the
United States acquired obligations of railroads in the aggregate
principal amount of over $985,000,000, bearing interest at the rate of
6 per cent per annum. The carriers have repaid over $930,000,000 of
this amount, leaving a balance due as of June 30, 1930, of about
$55,000,000. In addition, the carriers have paid to the Government
as interest on these obligations the sum of about $209,000,000.
At the time that the Government made loans to the carriers or
acquired their obligations as a result of indebtedness previously incurred, we had just emerged from the World War; the state of the
money market and the financial condition of the carriers did not
permit the carriers to borrow suJS&cient funds in the market to carry
them through the reconstruction period. As a result of this situation
it became necessary for the Government to make loans to the carriers
to help them out of their difficulties and in addition to fund their
indebtedness to the Government incurred during the period of Federal
control.
The rate of interest was fixed by law at 6 per cent. Since this rate
was higher than that ordinarily paid by the Government for borrowed
funds and also higher than most of the carriers would be required to
pay under normal conditions, it was desirable for the carriers to
refinance their obligations as soon as economic conditions permitted
in order to save interest costs. In consequence of this relatively high
rate the Government was able to sell certain of the obligations at
par and accrued interest.



SECRETARY OF THE TREASURY

41

As we passed out of the reconstruction period the earnings of the
carriers improved, the money market became easier, and consequently som(5 of the carriers began to refinance their obligations
through theii: bankers at lower rates of interest, thus effecting a
substantial saving in interest costs and at the same time enabling
them to repay substantial amounts of their obligations to the Government. The improved financial situation also enabled the Government
to sell at not less than par and accrued iuterest some of the obligations
acquired under the Federal control act and under section 207 of the
transportation act. The Government likewise had opportunities to
sell obligations acquired under section 210 of the transportation act.
However, the Attorney General advised the Secretary of the Treasury
that there was no authority to sell or dispose of the obligations acquired under section 210 of the transportation act, 1920 (33 Op.
Atty. Gen. 423, ,34 Op. Atty. Gen. 151), although he interpreted
the statute as permitting the sale of obligations acquired under the
Federal control act and section 207 of the transportation act (33 Op.
Atty. Gen. 151).
Of the $55,000,000 principal amount of obligations of carriers still
held by the CTOvernment, about 50 per cent Mall probably be collected
in full. The financial condition of the carriers obligated on the
remainder indicates that the Government may not be able to collect
the full amount due. Some of these carriers are already in receivership. Since, with regard to the obligations acquired under section
210 of the transportation act, the Government is unable to make any
adjustments either in principal or in interest due on them from the
embarrassed carriers, the diflSiculties in readjusting the carriers'
finances are greatly increased and in some cases reorganization plans
are frustrated. With respect to the carriers in receivership it is
believed that the Government should be in a position to cooperate
fully with the receivers, bondholders' committees and others in any
reorganization plan which may be approved by the court haying
jurisdiction. If the Government is not permitted to carry its share
of the burdens which must be borne by all the security holders in
a reorganization plan, the difficulties and delays resulting therefrom
will not only impair the value of the Government's claim but will also
jeopardize tlie service which the carrier can tender the public. In
addition to the Government's being in the position of preventing a
reorganization, it will be forced to share with other security holders
in the liquidating value obtained at a forced sale of the properties.
In this connection the following statement shows the names of the
carriers which are in receivership at the present time, the amount of
the indebte(].ness owing to the Government, and the face amount of
collateral held in each case.




Railroads in receivership, indebtedness to the United States, and collateral held, October 28, 1930
Collateral

Indebtedness
Carrier
Principal

Accrued and
unpaid
interest

to

Total

Type of security

Face amount

Section 202
Wichita Northwestern Ry. Co

Receiver's equity in $600,000 first consolidated bonds deposited
as collateral under sec. 210.

$50,000.00

$50,000.00

Section 207
1,250,000.00

Minneapolis & St. Louis R. R. Co

$562, 500.00

1,812, 500.00

$1,500,000.00

. Section 210
Fort Dodge, Des Moines & Southern R. R. Co
Gainesville & Northwestern R. R. Co
Georgia & Florida Ry., Receiver of the

200, 000.00
.75,000.00

11,155.93
33, 569. 53

792,000.00

47, 520. 00

Minneapolis & St. Louis R. R. Co

1,382,000. 00

599,987. 00

Missouri & North Arkansas Ry. Co

3, 500,000.00

1,131,641.66

Salt Lake & Utah R. R. Co .

872, 600.00

314,080.80

Virginia Southern R. R. Co . . .
Wichita Northwestern Ry. Co

38, 000. 00
381, 750. 00

13,039. 56
148,882. 50

..'

Sections 209 and 212
Minneapolis & St. Louis R. R. Co
Missouri & North Arkansas R. R.
Total

Refunding and extension mortgage 5 per cent^bonds. Series A,
of the carrier.

400,000.00
75,000. 00
f
839,520.00 1 1,100,000.00
800,000.00
2,377,000. 00
1, 981,987.00

First mortgage 5 per cent gold bonds of the carrier.
First mortgage 6 per cent gold bonds of the carrier.
First mortgage 20-year 6 per cent gold bonds of the Georgia &
Florida R. R.
Receiver's certificates. Series B.i
Refunding and extension mortgage 5 per cent bonds, Series A, of
the carrier.
4, 631, 641. 66
5,000,000.00 First mortgage 6 per cent bonds of the carrier.
f
830,300. 00 First mortgage 6 per cent gold bonds of the carrier.
1,186, 680.80 \
500,000. 00 7 per cent cumulative first preferred stock of the carrier.
I
500,000. 00 7 per cent cumulative preferred stock of the carrier.
51, 039. 56
76,000.00 First mortgage 6 per cent gold bonds of the carrier.
600,000.00 First consolidated mortgage 6 per cent bonds of the carrier.
530, 632. 50
211,155.93
108,569. 53

Overpayments
. ..

292,022. 23
41, 375. 41

: . 8,874, 747. 64 2,862,376.98

292.022. 23
41,375. 41

670,000.00
100,000.00

11, 737,124. 62

14, 528,300.00

Surety bonds.
Do

1 Receiver's certificates not yet received but their deposit as additional collateral has been ordered by court having jurisdiction (United States District Court for the Southern
District of Georgia).




o
H
O

>
a
Ul

SECRETARY OF THE TREASURY ,

43

The indebtedness due under sections 202 and 207 of the transportation act includes receivers' certificates and notes, respectively,
acquired by the Director General of Railroads.
The indebtedness due under sections 209 and 212 represents overpayments made by the Treasury on certificates of the Interstate Commerce Commission under that section of the law known as "Guaranty
to carriers after termination of Federal control."
Section 210 of the transportation act authorized the Secretary
of the Treasuiy to make loans to carriers on certificates of the Interstate Commerce Commission. The commission specified in its
certificates the collateral which each carrier was required to deposit
with the Secretary of the Treasury as security for the loans made.
At the time the loans were made the collateral usually had a market
value not less than 25 per cent in excess of the amount of the loan
made by the Government and hence was considered sufficient. Subsequent events, however, which forced some of the carriers into
receivership have resulted in such a depreciation of the collateral
that if the collateral were liquidated to-day the proceeds would be
insufficient to discharge in full the Government's claim.
During the last session of the Congress bills were introduced
(S. 4254, H. R. 12601, 71st Cong., 2d sess.) authorizing the Secretary
of the Treasury with the concurrence of the Interstate Commerce
Commission, in cases where carriers were in receivership, to compromise claims or to exchange evidences of indebtedness arising out
of advances raade under section 210 of the transportation act. In
order to enable the Government to cooperate in such plans for reorganization as appear to be in the best interest of the Government,
and to permit the maintenance of the carrier as a public convenience
and necessity, I believe that some such authority should be vested
in the executive branch of the Government. I t seems to me desirable
that the Government retire as soon as practicable from participation
in the financing of railroads. I t is recommended, therefore, that legislation be enac;ted which will authorize the Secretary of the Treasury,
with the concurrence of the Interstate Commerce Commission, to
compromise claims or to cooperate in connection with any reorganization plan or to make such other arrangements as he may deem
for the best interests of the United States for the repayment of the
indebtedness of carriers incurred under sections 209 and 210 of the
transportation act. The Secretary of the Treasury should also be
given authority to sell at not less than par and accrued interest
obligations acquired from carriers under section 210 of the transpor' tation act.
I t is further recommended that a reduction may be made in the
interest rate being paid on advances under section 210 of the transportation act, in those cases in which the Secretary of the Treasury,



44

REPORT ON THE FINANCES

with the concurrence of the Interstate Commerce Commission,
considers that such a reduction will assist the carrier in avoiding
receivership, provided that the interest rate shall not be less than 3K
per cent.
Avoidance of international double taxation
In my annual report for the fiscal year ended June 30, 1929,1 summarized the important developments in the movement to eliminate
international double taxation and mentioned the studies on this subject which were being made by the Treasury Department. During
the past year several more double taxation conventions have been
added to the 18 already concluded between various European countries, the latest being that signed by France and Italy.
The developments in other countries were considered in the preparation of H. R. 10165, introduced in the House of Representatives
on February 21, 1930, by Chairman Hawley, of the Ways and Means
Committee. The principles contained in this bill are sound, and I
again recommend its enactment with certain amendments which subsequent studies have shown to be advisable.
A number of important governments will probably be able and
willing to meet the provisions in the proposed legislation by means of
reciprocal legislation. Many European countries, however, prefer
treaties, which are considered to be less susceptible to change than
legislative enactments. In the case of some countries, reciprocal
legislation is impossible because our tax system and theirs differ
fundamentally. In order to meet these situations, the appropriate
executive oflacials should be empowered, within limits defined by
Congress, to enter into written agreements based on the principles of
the proposed legislation.
INCOME TAX ADMINISTRATION

The Bureau of Internal Revenue has had two major objectives in
income tax administration during the past three years. The first
is the reduction in the volume of unclosed returns for early years,
especially the war years. The second, which has been less spectacular,
is the development of an efficient as well as a rapid audit of the large
number of returns filed each year, so that returns will be closed
within a reasonable period prior to the end of the period of limitation on assessment, with only a minimum kept open by appeals to
the Board of Tax Appeals. The attainment of both objectives is essential if the accumulation of cases before the Board of Tax Appeals
is to be further relieved and accumulation prevented.
For returns for 1928 and subsequent years, the law prescribes
in general (1) that the tax must be assessed within two years after
the return is filed and (2) that a refund must be allowed or made




SECRETARY OF THE TREASURY

45

within two years from the time the tax is paid, unless during that
period a claim for refund is filed. Accordingly, in the bureau's program the requirement is stressed that every effort be made to reach
agreements with taxpayers as to their tax liabihty promptly and
within the 2-year period. Otherwise, either waivers must be accepted extending the period of limitation on assessment, resulting in
an accumulation of unclosed returns; or 60-day deficiency notices
must be sent before the expiration of the statutory period in cases
where there appear to have been underpayments of tax, with an inevitable increases in the appeals taken by taxpayers to the Board of
Tax Appeals and an accumulation of new cases before that body.
At the beginning of the fiscal year 1930 the income tax returns
before the Bureau of Internal Revenue for closing included:
(1) Original returns before the Income Tax Unit for audit and
new and reopened returns, totaling 270,447;
(2) Other returns, totaling about 3,500,000, filed and unaudited,
practically all for 1928, with respect to which the administrative
procedure which precedes audit had not been completed;
(3) Returns, totaling 2,246, awaiting action of the taxpayer after
the sending of 60-day deficiency notices; ^ and
(4) Returns with respect to which 18,301 appeals were pending
before the Board of Tax Appeals on June 30,1929.
The first two groups of returns mentioned include those original
returns on which the bureau had not finished its work of determining
the tax and the reopened and new returns, while the last two groups
comprise the returns with respect to which the bureau had completed
its work and had sent 60-day notices of the deficiencies in tax determined, to wiiich the taxpayers had not agreed. Since agreements
with taxpayers are impossible with respect to some of the returns
which iiivolv(5 unsettled questions of law, or of law and fact, an independent body, the Board of Tax Appeals, has been established to settle
the differences in these cases, to which the taxpayers may appeal from
the 60-day deficiency notices. However, if the board is to function
properly, the appeals to that body must be kept at a minimum.
During the fiscal year 1930 there were about 5,000,000 tax returns
filed with the bureau. Only about half of these, however, are destined for au(]it by the Income Tax Unit. The balance, comprised
mainly of ret:urns of individuals showing small income, remain in the
collectors' ofiices for audit and are usually closed within a year after
they are filed.
1 If an agreement can not be reached with the taxpayer as to his tax liability, a 60-day notice of deficiency
in tax proposed is sent to the taxpayer. If no appeal from the notice is taken to the Board of Tax Appeals
within the 60-day period provided by law the deficiency is assessed, and the return recorded closed. If an
appeal is taken to the board, the assessment is not made (and the return is not recorded closed) until the
action of the board becomes final.




46

REPORT ON T H E FINANCES

There has been a steady increase from year to year in the number
of the more important tax returns being filed with the bureau, as
shown by the table below:
Number of income tax returns filed by individuals with net income of $5,000 and
over and by corporations, 1921 to 1928
Individual r e t u r n s
w i t h n e t income of
$5,000 a n d over

Corporation r e t u r n s

T a x year
Number

1921
1922
1923
1924...
1925
1926
1927
1928

:
.-

P e r cent
increase
over preceding year

525,606
594, 211
614,403
697,138
830, 670
894,868
913, 597
1, 010, 887

13.1
3.4
13.5
19.2
7.7
2.1
10.6

Number .

P e r cent
increase
over preceding year

356,397
382,883
398,933
417, 421
430, 072
455, 320
475, 031
495,892

7.4
4.2
4.6
3.0
5.9
4.3
4.4

There were only 525,606 individual returns showing net incomes in
excess of $5,000 filed for 1921, as compared with 1,010,887 for 1928,
an increase in eight years of 92.3 per cent. The number pf corporation income tax returns filed increased from 356,397 for 1921 to
495,892 for 1928 or 39.1 per cent.
The Income Tax Unit
During the fiscal year 1930 the Income Tax Unit received 2,133,478
original returns for audit (approximately two-thirds of which were
for 1928 filed for the most part prior to the opening of the fiscal year
and about one-third for 1929 filed after January 1, 1930) and 115,953
new returns and reopened returns for tax years prior to 1928. (It
should be noted that the Income Tax Unit does not receive, during
the same fiscal year in which they are filed, all of the returns to be
audited by it, since the greater portion of the returns are filed in
March, and the administrative procedure in the collectors' offices and
ih Washington, which precedes audit, is not completed by the end of
the fiscal year.) The unit thus had before it for closing during the
year a little over 2,500,000 returns.^ The result of the work upon
these returns, as compared with that for the fiscal year 1929, is
summarized in the table below. Through its own offices, that is,
without an appeal having been taken to the board, the unit assessed
the final tax and thus closed 2,291,896 returns. Of the remaining
227,982 returns, 221,893 were returns on hand at the end of the year
for original audit or as reopened returns, 2,282 were awaiting action
' This total does not include returns with respect to which 60-day deficiency notices had been sent prior
to the beginning of the year.




47

SECRETARY OP THE TREASURY

of the taxpayer after the sending of 60-day deficiency notices, and
3,807 were involved in appeals to the board. In other words, 91
per cent of the returns before the unit for the determination of. tax
were closed during the year, and only one-sixth of one per cent of
the returns audited by the Income Tax Unit were involved in appeals
to the board. This percentage would, of course, be substantially
less if all th(i returns filed with the bureau, including those audited
in the collectors' offices, were taken into consideration.
Summary of work of the Income Tax Unit for the fiscal years 1929 and 1930
Number
1929

1930

328,186

270,447

226,431
1,915,144

115,953
2,133,478

Total..._

2,141,575

2,249,431

Total to be disposed of...

2,469,761

2, 619,878

159,948

124,124

4,474
14,410

2,900
7,761

178,832

134, 786

1,683
63, 708
1, 947,161

1,850
49,038
2,106,223

2,191, 374

2,291,896

270,447
2,246

221,893
2,282

Returns on hand, in Washington and in field, at beeiTininff of vear i
Returns received during year:
Reopened and new
Original

Returns closed during year: 2
Additional assessment except jeopardy—
Before 60-day deficiency notice
After 60-da3r deficiency notice 3—
AgreementDefault
Total
Jeopardy assessment
Certificate of overassessment
No change
_.
Total closed »
Returns not closed during year:
Reopened or OD. hand for audit in Washingi.on and in field at end of year
Awaiting action of taxpayer after the sendin g of 60-day deficiency notice
Involved in appeals to Board during year, on 60-day deficiency notices sent
during year *

6,694

3,807

278, 387

Total not clofied

227,982

1 This total does not include returns with respect to which 60-day deficiency notices were sent prior to
the beginning of thu year.
J Excludes returns closed through decision of Board of Tax Appeals.
3 Includes some rciturns with respect to which 60-day deficiency notices were sent prior to the beginning
of the year.
* These figures dO' not agree with the number of returns with respect to which appeals were taken during
the year since many of such appeals were from determinations set forth in 60-day deficiency notices sent
prior to the beginning of the year. The number of these returns with respect to which appeals were taken
were 8,144 and 5,810, respectively, for 1929 and 1930.

Progress in tax agreements.—The effectiveness of the bureau in
reaching agreements with taxpayers as to their tax liability is shown
first by the increasing proportion of final assessments of tax made
without the use of the 60-day deficiency notice. Of the total returns
closed by the Income Tax Unit during the year with additional tax
(other than returns closed by jeopardy assessment and by decision
of the Board of Tax Appeals), agreement was reached without the
use of the 60-day deficiency notice on 92 per cent of the number of
returns as compared with 89 per cent of the number of returns during
12101—31

6




48

REPORT ON T H E FINANCES

the fiscal year 1929. Correspondingly, the number of 60-day deficiency notices issued declined^ from 16,980 in the preceding fiscal
year to 13,658 and the number of returns with respect to which appeals
were taken to the board from 5,694 to 3,807.^ The decrease in the
use of the 60-day deficiency notice is even more striking in comparison with a total of 38,537 60-day deficiency notices issued in the
fiscal year 1928.
With this report of substantial progress, the bureau is ready to
face a year of work of unusual volume. In January, February, and
particularly March, 1931, the period of limitation on assessment
expires for taxes on incomes returned for both the calendar years
1927 and 1928 as a result of the cutting down, by the revenue act
of 1928, of the limitation period from three years for 1927 to two years
for 1928. Therefore, the bureau must complete its work on the
returns of two years during the coming fiscal year, while, under a
normal schedule, the statute of limitations would run on the returns
of a single calendar year during each fiscal year. However, at the
beginning of the fiscal year 1931 the number of unaudited returns had
been reduced to a new low level, and a substantial portion of the
1927 and 1928 returns had been audited and closed.
Audit of returns for earlier years.—Further reductions were made
during the year in the number of original returns for 1921 and prior
years awaiting determination of tax by the Income Tax Unit. The
number was reduced during that period by one-half, that is, from 307
to 153.
The number of original returns awaiting action by the unit should
not be confused with the returns for the same years which are now
before the unit as the result of the development of new returns and
the reopening of old returns. These returns for 1921 and prior years
totaled i,158 and are shown in the table below, by years, in comparison with the number of original returns awaiting action.
Returns for 1921 and prior years before the Income Tax Unit , June SO, 1930
Raturns
Tax year
Original
1917
1918
1919
1920
1921

. . .

-

Total

New and
reopened

Total

12
24
36
44
37

135
198
234
323
268

147
222
270
367
305

153

1,158

1,311

As a result of the fihng of claims for refund and of the discovery
of dehnquent taxpayers, a certain number of new returns and of
reopened returns is normally to be expected from year to year.
1 See note 4 to table on page 47.



49

SECRETARY OF THE TREASURY

The fact that some of these returns remain unclosed in no sense
indicates a failure by the bureau to determine expeditiously the
tax on original returns filed. It is to be noted that there'were
only 115,953 new returns and reopened returns during the fiscal
year 1930 as compared with 226,431 for 1929.
Returns for certain years subsequent to 1921 must also be included in ccnsidering the bureau's problem of closing returns for
earlier years. In fact, all the returns as to which the period of
limitation on assessment would normally have expired must be
considered as belonging in the category of "returns for earher years"
to be closed as promptly as possible. On June 30, 1930, returns for
the years 1922 to 1926 were in this category, since the period of
limitation on assessment expired by March, 1930, in the case of the
returns for the latest year mentioned, 1926. These returns are
shown in the table below:
Returns for 1922 to 1926, inclusive, before the Income Tax Unit, J u n e 30, 1930
Returns
Tax year
Original

Total

_._
.-

1922
1923
1924
1925
1926-Total

New and .
reopened

-

93
164
726
1,084
3,164

373
590
1,102
1,472
2,650

466
754
1,828
2,556
6,814

..

5,231

6,187

11,418

--

The Board of Tax Appeals
The work of the Board of Tax Appeals has continued along the
encouraging lines described in the annual report for last year. That
year witnessed the first substantial decline in the large volume of
appeals awaiting action which had accumulated steadily since 1924.
There was a further substantial decrease in 1930, as shown below:
Number of appeals pending before the Board of Tax Appeals on J u n e SO, 1925-1930
T
ork
J u n e 30—
1925
1926
1927

Number
of appeals
--.- 3,494
12,048
18,481

T
nn.
J une oU—
1928
1929
1930

-

Number
of appeals
21,639
18,301
16,035

The significance of this decline with relation to the Treasury's
program for the more effective closing of current tax returns is
apparent.
During 1930 the number of appeals disposed of by the board again
exceeded the number filed, and the total number on hand was consequently reduced by 2,266. The monthly disposals compared with



50

REPORT ON T H E

FINANCES

appeals filed are shown in the chart below. This reduction is especially^ gratifying to the Treasury in view of the fact that a marked
decline again took place in the number of new appeals taken to
the board.

\9iZ'?
192.6
19a7
1926
1929
1930
Chart 6.—Number of appeals docketed, formal decisions rendered, 'and total number of appeals
disposed of by the Board of Tax Appeals, from December, 1924, to September, 1930

The total number of appeals disposed of by the board during the
fiscal year 1930 was 6,991. Of these disposals^ 4,467 (63.9 per cent)
were the result of stipulations or agreements effected between the
Government and the taxpayers without the necessity of a formal
board trial; 1,533 (21.9 per cent) were the result of formal trials;
and 991 (14.2 per cent) were the result of dismissals. The bureau,
through the special advisory committee and the review division
of the general counsel's office, made it possible for the board to dispose of this large number of the appeals upon stipulation. The work
of the special advisory committee and of the review division, in
connection with the appeals considered by them, is summarized in
the table below, which shows that stipulations were effected in about
60 per cent of such appeals.
Appeals considered hy the special advisory committee and the review division of the
general counsel's ofiice duriiig ihe fiscal year 1930

Appeals considered

Stipulated
Defense recommended
Total...




Special
advisory
committee

2,856
1,751

Review division of
counsel's
office

Total

690
523

3,546
2,274

1,213

5,820

51

SECRETARY OF THE TREASURY

A comparison of the total appeals disposed of by the board with
the appeals disposed of upon stipulation is shown in the chart below.

1925

19a6

1927

l9^6

I9a9

l<»3 0

Chart 7.—Output of the Board of Tax Appeals, the Special Advisory Committee, and the Review
Division of the General Counsel's Oflice

However, the board's problem in disposing of appeals involving
disputed tax questions of considerable legal importance is by no means
solved. Although striking progress has been made in the last few
years with respect to the number o t appeals disposed of, the seriousness of the board's task in connection with remaining large cases
involving issues of considerable difficulty is apparent. The average
amount of tax involved in appeals pending increased from $35,517 on
June 30, 1929, to $37,213 on June 30, 1930.
I t is encouraging to note that the board is steadily reducing the
amount in dispute in the cases involving the war years, as is indicated
by the changes from 1929 to 1930 in the distribution, between the
war and the subsequent years, of additional assessments made as a
result of board decisions. Of the total number of returns closed by
the Income Tax Unit during 1930 as a result of the board's action,
28.9 per cent were for 1921 and prior years as c()mpared with 49.7
per cent in 1929. Of the total additional taxes including penalty
and interest, assessed in accordance with the board's decisions, 61.2
per cent related to the war years in 1930 as compared with 81.0 per
cent in 1929.
The settlement policy
In the summer of 1927 the Treasury was confronted with the
possibility of an impending breakdown in the system prescribed by
statute for the collection of tax deficiencies; in order to remedy the
situation, the policy was inaugurated, where satisfactory agreements



52

REPORT ON T H E FINANCES

as to tax liability could be reached, of the settlement of tax cases
administratively—that is, without litigation. A most thorough
survey of the situation had proved conclusively that if the income
tax was to be retained as the major source of revenue, the disputes
relating thereto, except in relatively few cases, would have to be
determined and settled nqt by litigation but under the flexible,
speedy, and economical procedure of the administrative agency
primarily charged with that duty. The Treasury plans were
explained in detail to the appropriate committees of Congress, and
the success which has followed fully justifies their approval.
As has been frequently pointed out, the settlement policy is applicable whether a deficiency in tax or an overpayment in tax is involved.
Under the Federal tax system, overpayments and deficiencies are
inevitable. Overpayments must be adjusted by refunds or credits
to the taxpayer, and deficiencies must be adjusted by additional payment on the part of the taxpayer. These adjustments must be made
promptly and at the least possible cost to the taxpayer and the
Government. To compel taxpayers to resort to the courts to obtain
refunds of amounts admittedly overpaid would not only be unfair,
but would be detrimental to the effective administration of the
revenue laws. An income tax can not survive if several years of
litigation must intervene after the taxable income has been earned
and reported before the proper liability has been finally determined
and the appropriate adjustment has been made, whether resulting
in a refund or credit or the payment of an additional tax. Litigation
does not provide a satisfactory medium for determining the innumerable complexities involved in difficult and complicated income tax
cases which frequently require the services of accountants, engineers, and other experts. Certainty of liability can be gained within
a reasonable period after the close of the taxable year only through
administrative action. Litigation is necessary only when a taxpayer
is unwilling to accept the decision of the administrative officials.
The Treasury is confident that the procedure it has established,
with the many independent reviews and checks, fully protects the
interests of the Government and at the same time affords to taxpayers an opportunity for final determinations which are reasonably
prompt. The Treasury proposes to continue its present policies in
this respect.
Conclusions
There has been a substantial accomplishment by the bureau during
the fiscal year 1930 in its efforts to develop an efficient and rapid
audit of the returns being filed currently, as shown by the large percentage of such returns promptly closed without appeal and by the




SECRETARY OF THE TREASURY

53

marked reduction both in the 60-day deficiency notices issued and
in the appeals taken to the Board of Tax Appeals.
Further progress has been made toward relieving the congestion of
cases pending before the Board of Tax Appeals. Although the number of appeals on the board's docket is still large, it is believed that
it has been reduced to manageable proportions. In fact, any case
actually ready for trial may now be assured of an early hearing.
The experi<3nce of the year lends further justification to the policy
of the settlement of cases wherever possible by administrative action
without resorting to litigation and calls for the continued application
of that policy.
The removal of the bureau to its new building was effected at the
end of the fisical year with a minimum of interference with its work,
and the assembling of the various divisions under one roof should
contribute materially to greater operating efficiency.
Th'e bureau has exerted its full effort during the year, while fully
protecting the interests of the Government, to establish a better
relationship between the taxpayer and the bureau, and to insure to
the taxpayer a full hearing and fair treatment. I t is believed from
various expi'cssions received that encouraging progress has been
made along this line.
THE TARIFF ACT OF 1930

The tariff act of 1930 was approved by the President on June 17,
1930, and became effective on the following day.
The new act provides for numerous changes in rates. An analysis
made by th(i United States Tariff' Commission indicates that of the
.3,296 items specifically mentioned as dutiable in either the tariff act
of 1922 or the present act, the rates on 1,125, or 34 per cent, were
changed. Of these changes 890 were increases, including 50 transfers
from the iree to the dutiable list, and 235 were decreases, including 75
transfers from the dutiable to the free list. The more significant rate
increases pertained primarily to agricultural and related products.
The tariff act of 1930 contains improved provisions for a flexible
tariff system which permit more prompt correction of inconsistencies
and inaccuracies in rates which operations under the act may disclose.
I t also provides that the Tariff Commission shall conduct investigations of costs of production and report on the need for rate revision.
In the act of 1922 responsibility for instituting investigations by the
Tariff Commission was imposed upon the President, whereas under
the present act the Tariff Commission will conduct its investigations
upon the request of the President or of either or both houses of the
Congress, or upon its own motion or when in the judgment of the
commission there is sufficient reason therefor, upon application of
any interested party. The commission is charged with the duty of



. 54

REPORT ON THE FINANCES

reporting its findings to the President and specifying changes in
rates for his approval or disapproval.
Many of the administrative changes embodied in the new tariff act
were recommended by the Treasury Department, as a result of the
administration of earlier tariff laws. In general, these changes enlarge
the discretionary power of the department in admimstrative matters,
safeguard the revenue, simplify procedure, and remove certain difficulties formerly resulting in hardship and injustice to importers.
The more important of these changes are summarized below.
Of great importance from the point of view of the revenue is the discretionary power given to the Secretary in the new act to require from
importers such bonds or other security as he may deem necessary
for the protection of the revenue. Other important changes looking
specifically to the safeguarding of the revenue include the reinstatement in the new tariff act, at the recommendation of the Treasury,
of a provision, repealed in the 1922 act, which authorizes search by
customs employees of property (other than a dwelling) of any person
whomsoever; and the new provision requiring the entry of antique
furniture at ports specified by the Secretary where officers, qualified
to judge,of these articles, are stationed; and the further provision for
the payment of an additional duty or penalty of 25 per cent on any
such article imported for sale if rejected as unauthentic in respect to
the antiquity claimed as a basis for free entry.
Important new provisions designed to remove certain sources of
inconvenience and hardship to importers under the 1922 act include
the following:
(1) Regulations for the entry of goods have been made more
flexible. The 1930 act allows the entry of merchandise on the original
bill of lading, or the duplicate therieof, or on the carrier's certificate,
thus obviating the inconvenience of filing the original bill of lading or
giving bond therefor, as required under the former act. I t is further
provided that the collector shall return the original bill of lading with
the notation of entry of goods. Also, merchandise can be released
only to or upon the order of the carrier, and the collector is thus relieved
of considerable responsibility in the delivery of merchandise to consignees. Furthermore, it is now within the discretionary power of the
department to make such exceptions to the requirement of a certified
invoice as are deemed necessary. Under the old law it was necessary
to require large numbers of invoices, or bonds therefor, which were
never used by the customs. As recommended by the Treasury, the
Secretary is now empowered to make such exceptions, as he deems
advisable, to many specific details formerly required in every invoice.
The new provisions afford an opportunity by regulation to relieve
many importers from administrative details and also greatly to
decrease the work of the Bureau of Customs.




SECRETARY OF T H E TREASURY

^55

(2) An important change in the 1930 act permits either party in
any case to appeal from the Court of Customs and Patent Appeals
to the Supreme Court, without the consent of the other, as formerly
provided.
(3) Merchandise not conforming to sample or specification may
now, under certain safeguards, be exported with refund as drawback
of duties. Furthermore, provision is made for the substitution of
domestic or nonduty-paid sugar or nonferrous metals for similar
duty-paid imported materials in the claim for drawback of duties
under certain specified conditions. Under this new provision drawback may be claimed under the specified conditions on exports of
manufactures of sugar and nonferrous metals, even where no dutiable
sugar or nonferrous metal appears in the exported article.
(4) The appraisal value of merchandise is now specified by law
as the basis for determining the rate to be imposed. Formerly court
decisions varied as to whether the appraised or entered value should
be taken as the basis for applying ad valorem rates.
(5) The new law extends the time within which an appeal for reappraisement may be taken by the consignee or his agent from 10 to 30
days after notice of such appraisement.
(6) The new law provides that in the absence of protest or fraud,
final action with reference to the reliquidation of an entry—that is, the
redetermination of the duties thereon—is limited to 60 days. This was
desirable in order that the importer may be assured that he is in no
danger of further demand for duties on such merchandise. The period
allowed the collector for review, upon protest of the liquidation of an •
entry, has been extended to 90 days. The purpose of the longer period
is to prevent appeal to the Customs Court of well-founded protests
because of insufficient time for consideration by the collector. Furthermore, the new act contains a provision to prevent an importer
from keeping an entry from final liquidation indefinitely by protesting
one item of ihe entry after another.
(7) Uncertified checks. United States notes, and national bank
notes have been made legal payment for duties.
The most important provisions extending the discretion of the
Secretary, in addition to provisions already mentioned, include the
following:
(1) The settlement of claims for abatement or for refund of duties
due to loss of, or damage to, merchandise while in the custody of the
Government has agaui been transferred to the jurisdiction of the Secretary in accordance with recommendations of the department. This
restores the procedure in effect prior to the tariff act of 1922.
(2) As recommended by the Treasury, the net amount of foreign
bounties or grants may now be estimated, instead of definitely ascertained, as a basis for imposing the additional tax equal in amount



56

REPORT ON THE PINANCES

to the bounty. Definite information on foreign bounties has been
very difficult to obtain.
(3) As recommended by the Treasury, the Secretary has been given
discretionary powers in making regulations to obviate the difficulties
which developed in a literal interpretation of the provisions for
" m a r k i n g " imported merchandise.
(4) Provisions concerning the licensing of customhouse brokers,
which formerly did^ not provide sufficient regulation, now increase
greatly the powers of the Secretary and include the right of appeal to
the Customs Court.

AVAILABLE FUNDS FOR PUBLIC DEBT RETIREMENT
Inquiries received by the Treasury from time to time, indicate
that the funds available for retirement of the public debt are not
clearly understood. The following statement has been prepared to
meet such inquiries.
There are seven sources of funds for debt retirements:
I. Chargeable against ordinary receipts:
1. Cumulative sinking fund.
2. Receipts from foreign governments.
3. Estate taxes paid in bonds or notes.
4. Franchise tax receipts.
5. Forfeitures, gifts, etc.
I I . Other:
1. Surplus of receipts.
2. Reduction in net balance in general fund.
The amounts of debt retired during the period from June 30, 1919,
to June 30, 1930, from each of these sources, on the basis of daily
Treasury statements (revised), are summarized on page 27 and are
shown by years, on the basis of daily Treasury statements (unrevised),
in Table 40, page 592. Figures shown below are on the latter basis.
Cumulative sinking fund
The sinking fund was established by the provisions of section 6 (a)
of the Victory Liberty loan act approved March 3, 1919, as amended,
and is applicable to the retirement of bonds and notes issued under
authority of the first, second, third, fourth, and the Victory Liberty
loan acts, and to bonds and notes issued under these acts for refunding
purposes. The appropriation made each fiscal year for the sinking
fund by the Victory Liberty loan act [sec. 6 (a)l is:
(1) Two and one-half per cent of the aggregate amount of Liberty bonds and
Victory 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 ($253,404,864.87).
(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,



SECRETARY OF THE TREASURY

57

Further provisions of the act prohibit the purchase or redemption
of the bonds or notes for sinking fund account at an average cost
above par and accrued interest, and require all bonds or notes so
acquired to be canceled and not reissued. I t is apparent, therefore, that the sinking fund is not a " f u n d " in the sense of an amount
of cash or investments set aside in a special account. I t is, in fact, a
permanent and indefinite appropriation made each fiscal year, is
available until expended, and may be used only for the purpose and
within the limits specified.
The definite sum appropriated each fiscal year under (1) above is
$253,404,864.87. To illustrate the cumulative feature, assume that
the amount available the first year (fiscal year 1921) was used in the
purchase at par of $253,404,850 face amount of Aji per cent Liberty
bonds. Assume also, for the sake of simplicity, that the amount available each year is used to purchase outstanding obligations at the beginning of the year (except for small unexpended balances) and not
throughout the year as in the actual operation of the fund. The
amount available for purchases at the beginning of the second year
would be $253,404,864.87 plus interest on the purchases made during
the first year at the rate of 4% per cent per annum, amounting to
$10,769,706.13, or an aggregate of $264,174,571. If like purchases
of $264,174,550 were made during the second year, the amount available at the beginning of the third year would be $253,404,864.87 plus
interest at 4% per cent per annum on previous purchases aggregating
$517,579,400 ($253,404,850 plus $264,174,550) amounting to
$21,997,124.50, or an aggregate of $275,401,989.37. These figures
are not, of course, actual transactions, but are given merely to illustrate the principle involved.
The cumulative feature of the Government's sinking fund is similar
in principle to sinking fund provisions commonly made in connection with bond issues by the larger corporations, in which a specified
sum is required to be paid annually to a trustee for investment,
through market purchases or otherwise, in the bonds of the debtor
for the retirement of which the sinking fund was created. As the
coupons on these investments mature they are presented by the
trustee to the debtor for payment and thus provide additional funds
for like investment. In that manner the amount of the sinking fund
available to the trustee increases gradually each year by the amount
of the interest charge on the bonds so purchased. The amount
to be paid each year in order to retire the debt at maturity depends
on the amount of the bonds issued, the period covered, and the
interest rate. For example, annual payments of $28.80 -I- invested at
the beginning of each year at 5 per cent compound interest payable
annually will amount to $1,000 in 20 years. At 4 per cent compound
interest, annual payments of $32.29+ will amount to $1,000 in 20
years.



58

RE.P0RT ON T H E

FINANCES

There is given below a practical illustration of the operation of
a sinking fund on the basis of an interest rate of 4.44 per cent payable
semiannually, which, in final totals, gives approximately the same netresult as the Government's sinking fund transactions to the close of
the fiscal yesiY 1930. The interest rate in this instance is somewhat
higher than the 4j^ per cent Liberty bond rates, due primarily to the
earlier purchases in substantial amourits of the 4% per cent Victory
Liberty loan notes, including refunding issues for such notes. As
above indicated, the sinking fund law provides that purchases may
not be made at an average cost above par; consequently, it is necessary for the Government, in its refunding operations, to arrange
maturities so that sufficient obligations will be available at par for
the sinking fund purchases. As is well known, the refunding operations have been made at a substantially lower average rate of interest
than was carried by the Liberty loans. For example, sinking fund
purchases during the fiscal year 1930 were confined almost exclusively
to the 3K per cent 3-5-year Treasury notes issued as part of the refunding operation for the second Liberty loan which was called for
payment on November 15, 1927, and with respect to which all but
twenty-one millions face amount bore interest at the rate of 4%
per cent per annum. As more purchases are made of bonds and notes
issued at rates substantially below 4K per cent, the average interest
rate on sinking fund purchases should decrease to less than 4^4
per cent.
Operations over a 10-year period for a n assumed sinking fund established by a n n u a l
payments of $253,4-00,000, made i n the middle of each fiscal year, and bearing
interest at the rate of 4-44 P^f cent per a n n u m , payable semiannually, together
with comparative figures for actual expenditures made for account of the Govern^
menVs sinking fund
[In millions of dollars]
Annual additions to the fund
Amount in
fundat
beginning
of year

Year

1
2
3
4
5
6
7

.
_.
•

8
9...
10
Total

259.0
529.6
812.4
1,107. 9
1,416. 6
1, 739. 2
2,076. 3
2,428. 5
2, 796. 5

Interest on
Fixed
fixed
amount
amount to
(mid-year end of year
payment) ^ (6 months)'

Interest on
amount in
fund at beginning of
year

Total

Amount
expended
each year
for sinking fund
account

253.4
253.4
253.4
253.4
253.4
253.4
253.4
253.4
• 253.4
253.4

5.6
5.6
5.6
5.6
5.6
5.6
5.6
5.6
5.6
5.6

11.6
23.8
36.5
49.7
63.6
78.1
93.2
109.0
125.5

259.0
270.6
282.8
295.5
308. 7
322.6
337.1
352.2
368.0
384.5

254.8
274.5
284.1
294.9
306.7
321.2
336.9
355.1
370.2
382.9

2, 534. 0

56.0

591.0

3,181.0

3,181.3

1 In actual practice operations for the sinking fund are conducted throughout the year; for purposes of
simphcity it is assumed that the fixed annual addition to the sinking fund is made at the middle of the
year. In consequence interest on the payment is computed for the balance of the year.




SECRETARY OF THE TREASURY

59.

Receipts fi'om foreign governments
Under the provisions of section 3 of the first Liberty bond act and
section 3 of the second Liberty bond act, as amended and supplemented, the Secretary of the Treasury is authorized to apply any
payments made by foreign governments on account of the principal
of their obligations given for cash advances under authority of those
acts to the redemption or purchase of bonds issued under said acts at
not more than par and accrued interest. If, such bonds can not be so
redeemed or purchased, he shall apply such payments to the redemption or purchase of any other outstanding interest-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.
All payments on account of the principal of loans made under
authority of the Liberty loan acts must be applied to debt reduction.
Payments on account of interest on such loans are not specifically
required by law to be used for debt retirement, but may be used to
meet expenditures chargeable against ordinary receipts.
In each of the foreign debt settlements as approved by specific
acts of Congress, provision is made whereby the debtor government
can, at its option, make payment of the principal and interest due
thereunder in any obhgations of the United States issued since April
6, 1917, in the form acceptable under general regulations of the
Treasury Department governing transactions in United States obligations, which shall be accepted at par and accrued interest to the
date of payment, irrespective of the maturity dates of such obligations. The act approved June 17, 1929, excepted unmatured Treasury bills from the class of obligations of the United States available
for this purpose. When foreign payments are made in obligations of
the United States, the obligations are canceled and the debt reduced
accordingly. Generally speaking, obligations of the United States
will not be used in making the payments unless they can be purchased below par and are still quoted in the market at or below par
when the required 30 days'^advance notice is given to the Treasury
with respect to the form of the payment next due. Out of $1,438,000,000 aggregate payments received to June 30, 1930, on account of
principal and interest due under the debt settlements, $1,112,000,000
has been made in obligations of the United States, $94,000,000 in
cash applicable under the law to debt retirement, and $232,000,000
in cash not applicable to debt retirement.
Included in the debt settlements with Belgium, Czechoslovakia,
, France, Rumania, and Yugoslavia are amounts due not only on
account of cash advances under the Liberty loan acts, but also on
account of other indebtedness to the United States from sources such
as the sale on credit of surplus war materials by the War and Navy
Departments, of relief supplies by the American Relief Administration



60

REPORT ON THE FINANCES

and by the United States Grain Corporation and of services by the
United States Shipping Board. When payments are received on
account of the principal of the indebtedness under any of these five
debt settlements, the amount required to be used for debt retirement is the percentage of the total principal payment that the
indebtedness on account of cash advances included therein bears to
the total indebtedness as funded. No indebtedness on account of
cash advances is included in the debt settlements with Austria,
Estonia, Finland, Hungary, Latvia, Lithuania, and Poland, and
consequently payments received from these seven countries are not
required by law to be used for debt retirement.
Estate taxes paid in bonds or notes
The second Liberty bond act as amended provides that any bonds
or notes of the United States bearing interest at a higher rate than
4 per cent per annum which have been owned by any person continuously for at least six months prior to the date of his death, and
which upon such date constitute part of his estate, shall, under rules
and regulations prescribed by the Secretary of the Treasury, be
receivable by the United States at par and accrued interest in payment of any estate or inheritance taxes imposed by the United States,
under or by virtue of any present or future law upon such estate or
the inheritance thereof. When bonds or notes are received in payment of estate taxes under this authorization they are canceled and
the debt is reduced accordingly. Generally speaking, estate tax payments will not be made in these obligations unless they are quoted
at a discount on the market. The total receipts from this source to
the close of business June 30, 1930, aggregate $66,000,000, of which
amount all but $142,150 was received prior to the fiscal year 1925.
Franchise tax receipts from Federal reserve banks and Federal intermediate credit banks
Section 7 of the Federal reserve act, as amended, provides that in
the case of each Federal reserve bank, after necessary expenses have
been paid or provided for and after provision is made for an annual
dividend of 6 per cent on the paid-in capital stock, the net earnings
shall be paid into a surplus fund until this fund amounts to 100 per
cent of the subscribed capital stock of such bank and thereafter
10 per cent of such earnings shall be paid into the surplus, and
that the net earnings over and above the provisions for these payments shall be paid to the United States as a franchise tax. It is
further provided that receipts of this franchise tax by the United
States shall, in the discretion of the Secretary of the Treasury, be used
to supplement the gold reserve against outstanding United States



SECRETARY OP THE TREASURY

61

notes (greenbacks) or shall be applied to the reduction of the outstanding bonded indebtedness of the United States under regulations
prescribed by the Secretary of the Treasury.
The total amount received on this account to June 30, 1930, aggregates $147,100,000, of which about 80 per cent was received in the
fiscal years 1921 and 1922. Under the requirements for application
of these receipts, only a comparatively small amount has been added
to the gold reserve against United States notes, the greater part having
been applied to reduction of the interest-bearing debt.
Section 206 (b) of the agricultural credits act of 1923 provides
that after necessary expenses of each Federal intermediate credit
bank have been paid or provided for, the net earnings shall be divided
into equal parts, one-half to be paid to the United States and the
balance to be paid into the surplus fund of the bank until this fund
shall amount to 100 per cent of the subscribed capital stock of such
bank and thereafter'10 per cent of the net earnings shall be paid into
the surplus. I t is further provided that after these requirements are
met the balance of the net earnings shall be paid the United States as
a franchise tax. Further provisions of this act require the application of receipts of this franchise tax, as in the case of similar receipts
from the Federal reserve banks, to the gold reserve against outstanding United States notes (greenbacks) or to reduction of the bonded
indebtedness of the United States. The total amount received to
June 30, 1930, on account of franchise tax payments from the Federal
intermediate credit banks aggregated $2,400,000, which has been
applied in the manner above indicated for application of like receipts
from the Federal reserve banks.
Forfejbtures, gifts, etc.
Debt reductions from this source arise principally from Government obligations received by the Treasury on account of forfeitures
of bail bonds of aliens, gifts made to the Government by individuals,
and bonds taken by other departments of the Government for various
purposes, etc. When these obligations are presented to the Treasury
in settlement of accounts and are, for the most part, unmatured, they
are canceled and credit given as receipt items for the principal amount
and the matured coupons attached thereto. The total retirements
from this source since 1919 aggregate ^$15,000,000, which, however,
includes $4,800,000 of fractional currency written off the debt on
December 31, 1920, on account of that amount estimated to have
been lost or destroyed in circulation.
Surplus of receipts
Section 2 of the act approved March 3, 1881, authorizes the application of the surplus receipts to reduction of the public debt. The



62

REPORT ON T H E FINANCES

surplus represents the amount of ordinary receipts for each fiscal
year in excess of the amount of expenditures chargeable against
them. The total of surpluses from the fiscal year 1920 to the fiscal
year 1930, both inclusive, aggregates $3,459,000,000, all of which
has been applied to reduction of the debt. In this connection it is
estimated that about one-half of these surpluses was due to realizations on war assets such as sales of surplus war property, sales and
payments of railroad obligations acquired under the provisions of
the Federal control act and of the transportation act, 1920, and collections of back taxes largely under the high rates prevailing during
and immediately after the war period, etc. The surplus is applied
to the reduction of the debt either through open-market purchases or
through decreased borrowings on the quarterly tax-payment dates.
The greater part of the reduction above mentioned has been effected
under the latter procedure. Through prompt application of the
surplus to retirement of the debt at the time the surplus accrues, the
maximum saving is made in interest costs and also the accumulation
of a large idle general fund balance is avoided. The figures representing the surplus for any particular fiscal year, therefore, do not
indicate an equivalent amount of increased cash in the Treasury.
On the contrarjT-, only a sufficient amount of cash is k ^pt in the general fund to meet requirements from one quarterly tax-payment date
to the next.
Reduction in the net balance in the general fund
Prior to the World War the annual expenditures of the Government were about $750,000,000. In the fiscal year 1919 the expenditures were about $18,500,000,000. This large increase, paid out of
borrowings for the most part, made necessary the carrying of a
large increase in the net balance in the general fund, supplied from
borrowings, which on June 30, 1919, was $1,251,000,000. In the
fiscal year 1920 the expenditures decreased to about $6,500,000,000,
and on June 30, 1920, the general fund balance was $357,000,000, a
reduction of $894,000,000 from the preceding June 30, which had
been apphed to debt reduction in that fiscal year. Up to the close
of business on June 30, 1930, the net amount of additional reductions in the net balance aggregates $39,000,000, making an aggregate debt reduction from this source since 1919 of $933,000,000.
Variations will always occur in the net general fund balance at the
close of one fiscal year as compared with the preceding fiscal year,
as it is not possible to fix the amount at a definite sum. The amount
of the balance at the close of any fiscal year is determined, as nearly
as possible, by the cash needs to the next quarterly tax-payment
date in September following, after taking into consideration the




SECRETARY OF THE TREASURY

63

probability of additional borrowings in the interim through sales of
short-term Treasury bills.
AGREEMENT WITH GERMANY
The indebtedness of the German Government to the United States
is on account of the costs of the American army of occupation and
the awards entered by the Mixed Claims Commission, United States
and Germany, in favor of American citizens and the United States.
The payments from Germany on account of this indebtedness up to
September 1, 1929, have been made under the provisions of the
army cost agreement of May 25, 1923, and of the Paris agreement
of January 14,1925. The so-called Young plan became effective as of
September 1, 1929, and superseded all previous agreements and
arrangements covering payments by Germany on account of its
obligations growing out of the war. Since the United States did not
become a party to the so-called Young plan, it became necessary
to negotiate a separate agreement with Germany for the satisfaction of American claims. An agreement was reached with the
German Government under the terms of which there are to be paid
to the United States an average annuity of 66,100,000 reichsmarks
for a period of 37 years and a flat annuity of 40,800,000 reichsmarks
for 15 years thereafter.
These annuities are divided under the agreiement so as to provide
an average annuity of 25,300,000 reichsmarks for a period of 37 years
in full satisfaction of our claim against Germany on account of army
costs, and a flat annuity of 40,800,000 reichsmarks for 52 years in payment of the awards of the Mixed Claims Commission, United States
and Germany. This agreement was submitted to the Congress with
the recommendation that the Secretary of the Treasury, with the
approval of the President, be authorized to execute it. The bill introduced for this purpose passed the Congress and was approved by the
President on June 5, 1930, and the agreement therein authorized was
executed on June 23, 1930, by the German ambassador to the United
States on behalf of his Government and by the Secretary of the
Treasury with the approval of the President on behalf of the United
States. The German Government had, by appropriate legislation,
previously authorized the conclusion of the agreement. The bonds
of the German Government provided for in this agreement representing the indebtedness were delivered to the Treasury under date of
November 7,1930. Germany has paid in full the bonds that matured
March 31 and September 30, 1930.
While the Young plan became effective as of September 1, 1929,
it did not actually come into operation until May 17, 1930. I t was
therefore necessary during the period September 1, 1929, to May 17,
1930, to continue in force and effect the agreements and a r r a n g e
12101—31

7




64

REPORT ON T H E FINANCES

ments made under the Dawes plan.. The agent general for reparation payments was authorized and directed to make payments to the
creditor governments in the same manner as under the Dawes plan,
but on the basis of the annuities stipulated in the Young plan. The
United States continued to receive monthly payments as usual, with
the understanding that any payments so received during the interim
period would be applied to the bonds first maturing under the agreement to be concluded between the United States and Germany.
A copy of the statement issued to the press under date of December 29, 1929, a copy of the statement made by Undersecretary of
the Treasury Mills on March 10, 1930, before the Ways and Means
Committee on the bill to authorize the settlement of the indebtedness
of the German Government to the United States, a copy of the act
of Congress approved June 5, 1930, a copy of the agreement concluded June 23, 1930, and a copy of the statement issued to the press
at the time the agreement was executed will be found as Exhibits 36
to 40, pages 334 to 347 of this report.
Army costs
On September 1, 1929, there was due from Germany on account of the costs of the American army of occupation the sum
of $193,936,765.20, as compared with the original amount of $292,663,435.79. The agreement with Germany contemplated a reduction
of 10 per cent in the total amount of the army costs originally due the
United States, France and Great Britain having accepted a similar
reduction under the Young plan. This meant a reduction for the
United States of $29,266,343.58, leaving a balance due as of September 1, 1929, of $164,670,421.62. The agreement concluded with
Germany provides that this sum shall be paid over a period of 37
years on the basis of an average annuity of 25,300,000 reichsmarks,
or about $6,000,000. The total payments on this account will aggregate over the 37-year period approximately $249,000,000, the difference of approximately $85,000,000 representing in effect the interest
the United States will receive for the army costs payments, the receipt
of which is postponed from 15 years to 37 years. The army costs
account as of October 1, 1930, stood as follows (excluding the 10 per
cent reduction mentioned above):




SECRETARY OF THE TREASURY

65

Total army cost charges (gross), including expenses of Interallied Rhineland High Commission (American department). $292, 663, 435. 79
Credits to Germany:
Armistice funds (cash requisition on
German Government)
$37, 509, 605. 97
Provost
fines
159, 033. 64
Abandoned enemy war material
5, 240, 759. 29
Armistice trucks
1, 532, 088. 34
Spare parts for armistice trucks
355,546.73
Coal acquired by army of occupation
756. 33
44,797,790.30
247, 865, 645. 49
Payments received:
Under the army cost agreement of May
25, 1923, which was superseded by
agreement of Jan. 14, 1925
__Under Paris agreement of Jan. 14, 1925.
Under debt agreement of June 23, 1930.

14, 725, 154. 40
39, 203, 725. 89
9, 031, 468. 94
62, 960, 349. 23

Balance due as of Oct. 1, 1930

184, 905, 296. 26

Germany has paid to the United States the sum of $9,031,468.94,
representing the principal of bonds Nos. 1 and 2, due March 31 and
September 30, 1930, in the respective amounts of 25,100,000 reichsmarks and 12,750,000 reichsmarks, on account of army costs under
the agreement of June 23, 1930.
Mixed claims
The agreement concluded June 23, 1930, with the Government of
Germany provides for the payment to the United States of 40,800,000
reichsmarks ($9,700,000) on March 31, 1930, and 20,400,000 reichsmarks ($4,850,000) on September 30 and March 31 each year thereafter up to March 31, 1981. The Government of Germany has paid
under this agreement on account of the awards of the Mixed Claims
Commission the sum of $14,608,903.36, representing the principal of
bonds Nos. 1 and 2, due March 31 and September 30, 1930, in the
respective amounts of 40,800,000 reichsmarks and 20,400,000 reichsmarks. The total payments made by Germany on account of mixed
claims up to September 30, 1930, aggregated $46,791,964.23.
I t is not possible at this time to furnish an accurate statement of
the amount of payments to be made on account of the awards of the
Mixed Claims Commission for the reason that the commission has
not yet completed its work. I t is hoped that the work of the commission will be in such.condition bv this time next vear that a full




66

REPORT ON THE FINANCES

statement of the amount due on account of these awards can be
presented in the annual report.
TREASURY ADMINISTRATION OF ALIEN AND MIXED CLAIMS

The settlement of war claims act of 1928 authorized the Secretary
of the Treasury to make payments on account of (1) awards of the
Mixed Claims Commission, United. States and Germany, for claims
of American nationals against the Government of Germany; (2)
awards of the Tripartite Claims Commission for claims of American
nationals against the Government of Austria and Hungary; and (3)
awards of the War Claims Arbiter for claims of German, Austrian,
and Hungarian nationals against the Government of the United
States.
During the past year the settlement of war claims act of 1928 was
amended so as to extend the time in which application may be filed
with the Secretary of the Treasury for payment on account of the
awards of the Mixed Claims Commission and the Tripartite Claims
Commission from two years to four years from March 10, 1928. It
was also amended so that the sums to have been appropriated after
the date on which the awards of the war claims arbiter are certified to
the Secretary of the Treasury for payment are now authorized to be
appropriated at any time but not to be available until after such
Awards are certified for payment.
In accordance with a recommendation of the President the act was
further amended so that the one-half of 1 per cent deducted by the
Secretary of the Treasury, as authorized by the act, from the payments
made on account of the awards entered by the Mixed Claims Commission under the agreement of December 31, 1928, should be made
available to the German Government for defraying such expenses as
may be incurred by that Government in connection with the adjudication of those claims. The German Government has been requested
to furnish the Treasury with a statement of its expenses applicable to
the adjudication of such claims. Upon receipt of that statement the
deductions thus far made or so much as may be required will be paid
over to the German Government to apply on account of such expenses.
The amendments referred to may be found as Exhibits 41 to 43,
on pages 348 to 349 of this report.
Claims against Germany
During the past year the Treasury has continued to make payments on account of the awards of the Mixed Claims Commission,
United States and Germany. Thie payments made during the past
year have been for the most part on account of the awards entered
under the agreement of December 31, 1928, and on account of the




SECRETARY OF THE TREASURY

67

awards entered under the agreement of August 10, 1922, which exceed
$100,000 in amount. Of the last-mentioned class of awards, a payment of 9 per cent of the remaining unpaid principal was made on
December 16, 1929, a payment of 7 per cent was made on March 31,
1930, and a payment of 12 per cent was made on September 30,
1930. The funds available for this purpose were the receipts from
Germany, earnings on investments, and the proceeds of investments
made by the Alien Property Custodian in 5 per cent participating
certificates under section 25 of the trading with the enemy act,
as amended (20 per cent of the value of the property of German
nationals temporarily withheld).
Up to October 1, 1930, the Treasury has made payments in the
aggregate amount of $114,501,453.66 on account of the awards of
the Mixed Claims Commission, from which there was deducted
$572,507.98, representing one-half of 1 per cent for reimbursement
to the United States on account of expenses incurred, making net
payments to claimants of $113,928,945.68. The following summary
statement shows by class the number and amount of awards certified
to the Treasury by the Secretary of State, the amount paid on account,
and the balance due as of October 1, 1930:




Number and amount of awards of the Mixed Claims Commission, United States and Germany, certified to the Secretary of the Treasury by the
Secretary of State; and the amount paid and balance due, by class, as of October 1, 1930
'
Class II
Class I
Total
numAwards on
NumAwards of
ber of Total amounts Numaccount of
ber of
$100,000 and
ber of
awards
death
less
awards personal and
injury awards

Awards certified

1. Amount due on account:
Principal of a w a r d s Agreement of Aug. 10,1922 . _
Agreement of Dec. 31, 1928-__

-

4,503 $114,121,253. 74
3,361,211. 30
2,081

_

415
94

$3,468,437.75
464,625. 00

3,791
1,981

$14,669,283.07
2,205,252. 02

Class III
Number of
awards

297
6

Awards over
$100,000

$95,983, 532. 92
691,434. 28

117,482,465.04
118,313.03

Total due claimants

_..

2. Payments made on account up to Oct. 1, 1930:
Principal of a w a r d s Agreement of Aug. 10, 1922
_
_
Agreement of Dec. 31, 1928..
_.
Interest to Jan. 1, 1928, at rates specified in awards—

_

Asfrppmpnf of D P P 31 1928

Interest at 5 per cent per annum from Jan. 1, 1928, on total amount payable as of Jan. 1,1928, to date of payment, as directed by the settlement
Total payment to Oct 1 1930
Less one-half of 1 per cent deduction from each payment—
Affreement of Auc 10 1922 navable to United States
Agreement of Dec 31, 1928
Net pa^nnents made to claimants up to Oct. 1,1930




16,826, 522. 59

96,604,666.67

728,426.13
96,786. 62

6,639,075.12
860, 725. 20

42,909,294.61
322,105. 61

4,758,175.60

24,326,322.91

139,836,066.79

96,674, 967. 20
. 70,300. 53

o
%
o
H

. 13,589,638.29

4,161
1,965

163,872.12

1,075,414.44

12,350,351.73

182,510,203.49

:

__

3,932, 962. 76

168,920,565.20

Total payable to Jan. 1, 1928 .
. . . .
Interest thereon to date of payment or if unpaid to Oct. 1, 1930, at 5 per
cent per annum, as specified in the settlement of war claims act of 1928.

16,874,636.09
48,012. 50

50,276,795. 86
1,279,617.33

Interest to Jan. 1, 1928, at rates specified in a w a r d s Agreement of Aug. 10, 1922
Agreement of Dec. 31,1928.

3,932,962. 76

117,364,152.01

Less amounts paid by Alien Property Custodian and others

C^
00

4,922,047.62

25,401,737.35

152,186,418. 62

>
o

14,428,940.45
2,074,176. 24

184,065,745.51
662,730. 72

Ul

101,960,623. 71
3,183,930. 96
7,286,487. 81
897,703. 68

413
88

3,466,837.75
447,025. 00
727,884.41
93,140. 38

3,748
1,877

6,558, 603.40
804,563. 30

1,172,807.50

160,538. 35

1,012,269.15

114,501,453. 66

4,894,425.89

24,878,661.54

550,153. 01
22,354.97

21,471.12
3,000.99

113, 928,945. 68

4,869,953.78

108, 352. 79
16,040.33
24,754,158.42

84,728,476. 23
420,329.10
3,313. 65
84,304,833. 48

HH

3. Balance due on account:
Principal of awards—
Agreement of Aug. 20, 1922
Agreement of Dec. 31,1928
_
Interest to Jan. 1, 1928, at rates specified in the a w a r d s Agreement of August 10, 1922
__
Agreement of Dec. .31, 1928
_.._
Accrued interest at 5 per cent per annum from Jan. 1, 1928, on total
amount payable as of Jan. 1,1928, to Oct. 1,1930
^
'
Balance due claimants as of Oct. 1, 1930.

342
116

54,951,711.61
499,385. 86

2,600.00
17,500. 00

81,013. 44
69,808.14

641. 72
3,646.24

43
104

192,330.12
131,076.78

297
6

54,766,781. 49
360,809.07

80,471.72
56,161. 90

12,416,830.79

3,333. 77

63,145. 29

12,360,351.73

68,008,749.83

27,621.73

623,185. 81

67,457,942.29

1 Payments on this class of awards are first applied on account of the total amount payable as of Jan. 1,1928, as directed by the settlement of war claims act of 1928, until total of
all payments on the 3 classes equals 80 per cent of the amount payable Jan. 1, 1928. This amount represents payments of $100,000 and additional 30 per cent, 10 per cent, 7 per cent,
9 per cent, 7 per cent, and 12 per cent, respectively, on account to each claimant (less one-half of 1 per cent). Payment of accrued interest since Jan. 1, 1928, on this class qf claims
deferred in accordance with act.




Ul

O

o

>

Ul

o
o

70

REPORT ON T H E FINANCES

War claims arbiter
Under the settlement of war claims act of 1928, it is the duty of
the war claims arbiter, within certain limitations, to hear the claims
of the German, Austrian, and Hungarian nationals and to determine
the fair compensation to be paid by the United States for ships
seized by it, a radio station sold to the United States, and patents
sold or used by the United States.
On June 5, 1930, the arbiter entered tentative awards for 94
merchant ships belonging to German nationals, together with certain
property contained therein, in the aggregate amount of $74,243,000,
including simple interest thereon at 5 per cent per annum from July 2,
1921, to December 31, 1928, and certified them to the Secretary of
the Treasury for payment under dates of June 13 and 16, 1930. The
Treasury immediately prepared regulations covering such payments
and issued them, together vidth a form for makuig application for
payment, to the claimants under date of June 23, 1930. The Secretary of the ^Treasury determined on the same date that, of the
$25,000,000 reserved from the appropriation of $50,000,000 made in
May, 1928, for payments on account of the tentative awards of the
arbiter, the sum of $20,000,000 should be paid on account of the
tentative awards entered by the arbiter on account of ships and
property contained therein. Each claimant, therefore, received
26.935152525 per cent of his tentative award. Substantially all of
the payments on this account were made on July 18, 1930. The
arbiter has not certified to the Secretary of the Treasury any awards
on account of the claims other than the tentative awards covering
ships and property contained therein.
Under the amendment of the settlement of war claims act referred
to above, which authorized the appropriation of additional funds at
any time to pay the awards of the arbiter, but which are not to be
available until such awards are certified to the Treasury for payment,
there was appropriated in the second deficiency appropriation act
of June 3, 1930, such additional amounts as may be necessary to pay
the aggregate of the awards of the arbiter, to be immediately available
after the date on which such awards are certified for payment and within the limit of $100,000,000 authorized for the claims of German nationals against the United States and the limit of $1,000,000 for the claims
of the Austrian and Hungarian nationals against the United States.
The Treasury is therefore in a position to make immediately such
additional payments on account of the final awards of the arbiter as
will equal 50 per cent of the total amount of the awards entered in
favor of German nationals and to make payment in full of the awards
entered in favor of the Austrian and Hungarian nationals as authorized by the settlement of war claims act, and thus save interest at




SECRETARY OF THE TREASURY

71

the rate of 5 per cent per annum. The remaining 50 per cent of the
appropriation made available for the awards of the arbiter in favor
of German nationals will be used, as authorized by the settlement of
war claims act, to make payment of the awards of the Mixed Claims
Commission in favor of American nationals. The balance due on
account of the awards in favor of German nationals will be paid, as
and when funds are available for that purpose, in accordance with
the priorities estabhshed by the settlement of war claims act.
A copy of department circular No. 425, of June 23, 1930, contaiuing
the regulations covering payments on account of the tentative awards
of the arbiter for ships and the form of application for payment will
be found as Exhibit 44, page 349 of this report.
The foUowing statement shows the funds deposited in the German
special deposit account and the payments made therefrom up to
October 1,1930:
Statement showing ihe funds deposited in the German special deposit account and the
payments made therefrom up to October 1, 1930
Receipts:
Unallocated interest fund.
$25, 000, 000. 00
Appropriation for ships, patents, and
radio station
50, 000, 000. 00
Receipts from Germany—
2}i per cent of
Dawes's annuities available for
reparations
(Paris agreement
of Jan. 14,1925). $32, 183, 060. 87
Under GermanAmerican agreement June 23,
1930
14, 608, 903. 36
46,791,964.23
Investments of Alien Property Custodian under section 25 of trading with
the enemy act, as amended.
14, 751, 252. 38
Earnings and profits on investments.^_.
3, 627, 531. 69
=—'•
— $140, 170^748, 30
Payments:
On account of the
awards of the Mixed
Claims Commission
as shown in above
statement—
Under agreement
of Aug. 10,1922.$109, 480, 279. 28
Under agreement
of Dec. 31,1928..
4,448,666.40
113, 928, 945. 68




72

REPORT ON THE FINANCES

Payments—Continued.
On account of tentative awards, war
claims arbiter, for ships
$19, 999, 786. 94
One-half of 1 per cent deduction from
payments (total deductions $550,153.01, of which $37,044.38 has not
yet been covered into miscellaneous
receipts)
_-_.__
513, 108. 63
One-half of 1 per cent deduction from
payments on account of awards under
new agreement ($22,354.97 held to pay
expenses of German commission, act
of June 21, 1930).
Advances for i expenses of Treasury
(limited to $25,000 per annum). .
17,175. 00
Advances to war claims arbiter for expenses...
96, 900. 00

.

$134, 555, 916. 25
Balance available in German special
deposit account (including investments).—
-.
Made up as follows (principal cost)—
$5,267,950 face amount of fourth Liberty loan 4:%
per cent bonds
Cash balance
._

5, 614, 832. 05
5,435,087.09
179,744. 96
5,614,832.05

Of the above-mentioned balance the sum of $5,000,000 is reserved
to make payments on account of tentative awards of the war claims
arbiter for patents and a radio station belonging to German nationals
and seized by the United States during the war. The remaining
balance will be used to make payments on account of awards of the
Mixed Claims Commission. In view of the fact that the agreement,
concluded June 23, 1930, with Germany, providuig for the payments
on account of these awards, stipulates that such payments shall be
made on March 31 and September 30 of each year, it will be the policy
of the department hereafter to distribute such funds to the claimants
on or about those dates. When the war claims arbiter enters final
awards in favor of the German nationals on account of their claims,
50 per cent of any additional appropriation over and above the
$50,000,000 first appropriated will be available for payment on
account of the awards of the Mixed Claims Commission entered in
favor of American nationals.
Austria
Section 25 (g) of the trading with the enemy act, as amended by
the settlement of war claims act of 1928, authorized and directed
the Alien Property Custodian to transfer to the Secretary of the



SECRETARY OF THE TREASURY

73

Treasury for deposit in the Austrian special deposit account all
money and the proceeds of aU property, including aU income, dividends, interest, annuities, and earnings accumulated in respect
thereof owned by the Austrian Government or any corporation all
the stock of which is owned by or on behalf of the Austrian Government. The Alien Property Custodian transferred to the Secretary
of the Treasury under dates of December 7, 1928, and August 22,
1929, the sum of $1,449,119.29, which belonged to the Austrian Government, including earnings on the principal of such funds after
March 4, 1923. The Alien Property Custodian was not, however, at
the time of the transfers of these funds able to determine what earnuigs had accumulated in the so-called unallocated interest fund
account prior to March 4, 1923, which belonged to the Austrian
Government. Since that time he has determined that these earnings
amounted to $311,473.94, together with a further sum of $115.32,
representing principal, which have been transferred and deposited
in the Austrian special deposit account. In so far as these funds are
not needed to make payment on account of the awards of the Tripartite Claims Commission against Austria they have been returned
to the Austrian Government through the Austrian minister at Washington. The sum of $1,122,814.70 was returned under date of August
22, 1929, and $311,589.26 un;der date of September 26, 1930.
In last year's annual report the Austrian special deposit account
showed a balance of $7,714.87, representing funds reserved by the
Treasury to pay the awards for which proper applications had not
been received from the claimants. Since that time additional
payments have been made, and the balance in the account has now
been reduced to $1,441.52. There still remain 12 unpaid awards
representing the above balance.
Hungary
There has been no change in the situation with respect to the
awards entered by the Tripartite Claims Commission against Hungary. As set out in last year's annual report, the Treasury received
from the Government of Hungary the amount of $8,250 in partial
satisfaction of these awards. The commissioner of the Tripartite
Claims Commission has not yet certified to the Treasury any of the
awards entered against the Government of Hungary.
These awards may not be certified to the Treasury for payment
until the Hungarian Government has deposited sufficient funds
with the Treasury to pay such awards, as the commissioner is
directed by the settlement of war claims act to certify to the Secretary of the Treasury that the funds so deposited by the Hungarian Government are sufficient to pay the awards entered by the
commission.



74

REPORT ON THE FINANCES

It appears that the Hungarian Government is prepared to provide
the United States with sufficient funds to meet the payments on
account of the awards entered against it, but there is a question, because of certain ''most favored nation'' clauses in its respective debt
agreements with the Governments of France and Italy, as to whether
it can make such payments without making similar payments to those
governments. While the payment to the United States would involve
no more than $180,000, the payments to the other countries would
amount to millions of dollars. The United States Government has
approached these governments with a view to having these ''most
favored nation" clauses waived in this case, but no definite answer
has yet been received. It is hoped, however, that some way can
be found whereby Hungary can make payment on account of the
awards in the near future.
OBLIGATIONS OF FOREIGN GOVERNMENTS

During the fiscal year 1930 the Treasury received from foreign
governments on account of their indebtedness to the United States
the sum of $239,565,807.02, of which $97,634,287.76 was for account
of principal and $141,931,519.26 was for account of interest. Of the
total payments received, the sum of $129,006,255.78 was made in
cash and $109,790,850 was made, in at^cordance with the options
granted in the various funding agreements, in obligations of the
United States Government issued since April 6, 1917, which were
accepted at par and accrued interest to the date of payment, the
accrued interest amounting to $768,701.24. This represented a
material. change in the form of payment as compared with previous
years. During the past few years it has been advantageous for the
foreign governments to make payment on account of their indebtedness in obligations of the United States because they could purchase
such obligations in the market at, a discount and receive credit for
them at par. This condition prevailed in the first part of the fiscal
year 1930, during which time the Treasury received payments aggregating $121,378,776.78, of which $109,790,850 was received in obligations of the United States. During the latter part of the year,
however, money market conditions underwent a decided change so that
prior to the June, 1930, payments all obligations of theUnited States
were quoted in the market at a premium. Thus, it became unprofitable for foreign governments to make their payments in United
States securities, and payments aggregating $118,187,030.24 during
the last half of the fiscal year were all made in cash.
The followiQg statement shows the total payments received on
account of principal due under the funding agreements up to the end
pf the fiscal year.




SECRETARY OF THE TREASURY

75

Aggregate payments of principal to June 30, 1930, under funding, agreements
I n U n i t e d States obligations
Cash

Country

Accrued inFace a m o u n t terest to d a t e
of p a y m e n t
Austria
Belgium
.
Czechoslovakia
Finland
France
_
Great Britain
Greece
Hungary
Italy
Lithuania
Rumania
Yugoslavia

.
.
-

-- -

.

...

1
. . . .

.

__

.
.

Total

. .
-

..

$576,112.00
7, 660,042.81
10, 600,434.32
191,084.98
147,932,079.04
35,744.29
497,000.00
62, 240. 50
15,000, 029. 75
197, 258.00
2,000,000.00
1,000,000.00
185,641,026.69

$5,342,900
4,482,150
148,850
11,971,100
173, 545, 200

$57,-067.19
17. 415. 68
1, 065. 02
. 96,820.96
419,065. 71

9,956, 600

43,370.25

205, 446,800

634, 784.81

T o t a l principal
payments

$675,112.00
13,050,000.00
15,000,000.00
341,000 00
160,000,000.00
174,000,000.00
497,000. 00
62, 240.60
25,000,000. 00
197, 258.00
2,000 000 00
1,000,000.00
391,722,610.50

The following statement shows the total payments received on
account of interest due under the funding agreements up to the end
of the fiscal year:
Aggregate interest payments to June SO, 1930, under funding agreements
I n U n i t e d States obligations

I n b o n d s of
d e b t o r governments

Country

Belgium .
Estonia
Finland
Great Britain
Greece
Hungary
Latvia
Lithuania
Poland . . .
Total

. .
...
$43, 556. 50
402,465. 00
446, 020. 50

Cash

T o t a l interest
p a y m e n t s , inAccrued in- cluding accrued
Face a m o u n t terest to d a t e interest funded
of p a y m e n t

$6, 241,0§9. 67
725,015.87
1,442,438.46
116,151,419.84
* 482,660.00
336, 284. 65
306,000.00
611,144. 04
10,137, 391.12

$4,947,060
123,900
645,150
897,618,400
46,000
94,050
2,995, 600

4,374. 77

$11,240,000.00
850,000.00
1,990,425.00
1,017,360,000.00
482, 660.00
379,840.15
350 000 00
1,107, 659.04
13,137,365.89

136,432,443.66

906, 369,150

3, 650,336. 93

1,046,897,950.08

$51,860.33
1,084.13
2,836. 64
3, 590,180.16

A statement showing the principal of the funded and unfunded
indebtedness of foreign governments to the United States, the accrued
and unpaid interest thereon, and the payments on account of principal and interest as of November 15, 1930, will be found as Table 57,
page 608 of this report.
Austria
Under date of May 8, 1930, an agreement for the settlement of the
relief indebtedness of the Government of Austria to the United States
was executed by the Austrian Minister to the United States on behalf
of his government and by the Secretary of the Treasury, with the
approval of the President, on behalf of the United States. This
agreement was authorized by act; of Congress approved February




76

REPORT ON T H E FINANCES

4, 1929, and the conditions under which it was made were fully explained in the annual report for the fiscal year 1929. The terms of
the settlement agreed upon are the same as those offered by Austria
and accepted by all of its other relief creditor governments. The
bonds of Austria have not yet been delivered to the Treasury, although
Austria has made the payments as they became due.
A copy of the agreement, a copy of the statement issued to the
press by the Secretary of the Treasury at the time of the execution
of the agreement, and a copy of the statement issued by the Austrian
Minister on the same date will be found as Exhibits 28 to 30, on
pages 316 to 323 of this report.
Czechoslovakia
The Government of Czechoslovakia has not yet ratified the funding agreement concluded on October 13, 1925, and for that reason
has not delivered bonds as provided for under the agreement in
exchange for the obligations now held. Czechoslovakia has, however,
continued to make payments regularly under the funding agreement.
France
The debt-funding agreement concluded April 29, 1926, with the
Government of France for the settlement of its indebtedness to the
United States was authorized by an act of Congress approved December 18, 1929. Upon approval of this act the agreement became
immediately effective, as the Government of France had formally
ratified it on July 27, 1929.
As stated in previous annual reports, it was understood that all
payments made by the French Government since June 15, 1925, as
of which date the indebtedness was funded, on account of interest
on the indebtedness for surplus war material and on account of
principal of the indebtedness for cash advances, would, upon final
ratification of the agreement, be applied toward the annuities first
due under that agreement. The French Government had paid the
sum of $112,932,065.37 on these accounts up to December 18, 1929.
The annuities due and payable up to this date under the agreement
aggregated $125,000,000, leaving a balance of $12,067,934.63, to be
paid by France. This balance was paid to the United States on
December 26, 1929, which placed bhe annuities due under the agreement on a current basis.
Under date of April 15, 1930, gold bonds of the French Government were delivered to the Treasury in exchange for the obligations
held, thus finally completing the funding of the indebtedness of the
French Government to the United States.




SECRETARY OF THE TREASURY

77

A copy of the agreement wiU be found on page 236 of the annual
report for 1926. A copy of the statement made by Undersecretary
of the Treasury Mills before the Ways and Means Committee on
December 10, 1929, in connection with the bill then pending authorizing the settlement of the indebtedness of France to the United States,
a copy of the act of Congress approved December 18, 1929, a copy
of the statement issued December 27, 1929, concerning the payment
made December 26, 1930, by France to the United States, and a copy
of the statement issued April 15, 1930, concerning the exchange of
obligations, wiU be found as Exhibits 31 to 34, pages 324 to 330 of this
report.
CURRENCY

Small-size currency
The issue of the new, small-size currency was inaugurated July 10,
1929. At that time there was outstanding a total of $4,997,000,000
old-size currency, about 823,000,000 pieces. For the first six months
after the initial issue replacement of the old-size currency with the
new was gradual and largely governed by the redemption of old-size
^currency unfit for further circulation. Since January 1, 1930, the
old-size currency has been canceled as received and all currency
issued has been of the new, small size. Although it had largely disappeared from actual circulation, yet on June 30, 1930, there remained
outstanding a total of $1,056,000,000 old-size currency, about 126,000,000 pieces. This had been further reduced on October 31, 1930,
to nearly $860,000,000, or about 108,000,000 pieces.
The issue of the new, small-size currency followed a long period of
preparation, which had been preceded by an exhaustive study covering
all phases of the currency product, as a result of which study it had
been concluded to reduce the size and to formulate wholly new designs
on a denominational basis. These were the most important changes
made in the currency product since the first issue early in the Civil
War period.
In prior reports a full account of the new currency has been given,
and it is now necessary only to report its successful issue and the
realization of the department's expectations. The reduction in size
has brought about a more convenient currency for the use of the public. It has resulted in lower production costs. It makes it possible,
if required, to print greatly increased quantities without materially
increasing the physical plant. It results in economy in handling and
storing currency, as the bulk is about one-third less, which economy
extends to every bank throughout the country. The new designs,
formulated on a denominational basis, with every possible simplification but with all essential safeguards and characteristics, have
eliminated confusion and uncertainty. It is now possible for one to



78

REPORT ON THE FINANCES

become familiar with the outstanding features of each denominational
design and so more readily detect alterations of denominations.
Further details regarding amounts of new currency issued and
amounts of new and old currency outstanding will be found on page 279
of this report.
Discontinuance of the coinage of the guarter-eagle
Upon the recommendation of the Treasury, the coinage and issue
of the $2.50 gold coin was discontiuued by an act of Congress
approved on April 11,1930. That this coin was not well adapted for
use in circulation, owing to its smallness, has been demonstrated
over a period of years. Moreover, the coins were iu demand almost
exclusively for use at the Christmas season and generally were returned'
to the reserve banks and the Treasury or disappeared from circulation soon after their issuance. The existing supply of these coins
was inadequate to meet the holiday requirements and the gold which
would have been required to manufacture an adequate supply was
needed for other more important purposes. I t did not seem desirable,
therefore, to continue the issuance of a coin which served no business need and which consumed gold and mint coinage capacity needed
to meet other requirements more in the public interest.
BRANCH, GROUP, AND CHAIN BANKING

In my last annual report I referred to the recent growth in branch
and group banking, to the influences which lie back of this growth,
and to the need for thorough study of the situation. Active investigation of the subject is now in progress.
The status of bi^nch-operating and multiple banking systems at
the present time is indicated by data conipiled by the Federal Reserve
Board. According to the board's statistics, on June 30, 1930, 817 of
the 23,852 banks of all classes ^ in the country were operating 3,618
branch offices, as compared to 818 banks with 3,440 branches at the
end of June, 1929. On the same date 2,144 banks were reported as
affiliated in chain or group systems, as against 1,802 so reported a
year earlier. Although the number of branch bank systems decreased
by one during the year 1.930, 68 banks which were previously nonbranch-operating organizations established branches. This addition
to the number of branch-operating banks was offset mainly by
decreases resulting from mergers and suspensions. The banks that
were operating branches at the end of June, 1930, included 165
national banks with a total of 1,041 branches; 169 State member
banks of the Federal reserve system with 1,308 branches; and 483
nonmember banks with 1,269 branches.
Exclusive of private banks not under State supervision.




SECRETARY OF THE TREASURY

79

The loans and investments of branch-operating banks aggregated
$25,161,000,000 on June 30, 1930, or about 43 per cent of the loans
and investments of all banks ia the country, which totaled $58,108,000,000 on that date. Branch-operating banks numbering 575, with loans
and investments of about $20,613,000,000, were located in States
which permit branches only in the city in which the parent bank is
located or in contiguous or immediately adjoining territory, while 218 ^
branch-operatiug banks with loans and investments of about $4,047,000,000 were reported from banks in the nine States and the District of Columbia which permit state-wide branch banking.
The area in which branch banking existed on June 30, 1930,
comprised the District of Columbia and all States except Colorado,
Connecticut, Florida, Idaho, Illinois, Iowa, Kansas, Missouri, Montana, Nevada, New Mexico, Texas, Utah, and West Virginia, in
which States the establishment of branch offices is prohibited, and
North Dakota, Oklahoma, South Dakota, and Wyoming where no
legislation respecting branch banking has been enacted. Very few
branches existed, however, in some of the States included in the
branch-bankiag area, in fact, 4 of the States had a total of only 7
branches. Moreover, in 8 of the States hi which 1 or more branches
were in operation in June 1930—Alabama, Arkansas, Indiana, Minnesota, Nebraska, Oregon, Washington, and Wisconsin—the establishment of additional branches is prohibited. State-wide branch banking is permitted in 10 States: Arizona, California, Delaware, District
of Columbia, Maryland, North Carolina, Rhode Island, South Carolina, Vermont, and Virginia.
Problems raised by the recent increase in the number of branch,
group, and chain banking organizations are now the subject of investigation. During the past year a committee of Congress has conducted
a broad inquiry of the subject, obtaining testimony from many leading banking authorities. The subject is also being studied by the
Comptroller of the Currency and by the Federal Reserve Board.
These and investigations by various private groups, should provide a
valuable fund of information by which to judge the relative advantages
and limitations of various forms of banking organizations, and should
indicate the character of such legislative measures as may be necessary to insure the orderly development of our banking structure
along the lines best suited to meet the varying and expanding needs
of the country's industry and commerce. In view of the great importance to the Nation of a strong and efficient banking system organized
to provide for the requirements of the smallest as well as the largest
users of credit, commitments regarding legislation governing the opera1 Of the remaining branch-operating banks, 23 were in States where the establishment of new branches
Is prohibited, and 1 was in New Hampshire where State legislation contains no provision relating to
branch banking.

12101—31

8




80

REPORT ON THE FINANCES

tion of branch, group, and chain systems should await the completion
of investigations now in progress.
FEDERAL PUBLIC BUILDING PROGRAM
The Federal building program under the direction of this department grew out of a nation-wide survey by the Secretary of the Treasury and the Postmaster General. I t includes in the District of
Columbia sites and construction of the following:
Authorized projects:
Administration building. Department of Agriculture
Extension, Government Printing Office
Internal Revenue Building.
.
Commerce Building
Extensible building, Department of Agriculture
Archives Building^
.
Additional stories. Liberty Loan Building
.
Economics Building (purchased building)
Supreme Court site
Water mains
.__.-Projects submitted to Congress to be specifically authorized under
authority of Keyes-Elliott Act, approved Mar. 31, 1930 ^ are:
Post Office Department Building
Interstate Commerce or General Accounting Office
Department of Labor Building
Connecting wing between Labor and Interstate Commerce
Buildings
..
Department of Justice
__-.
Public Health Service Building.
_.__
State, War, and Navy Building, remodeling
Landscape work
'
Extension and remodeling of power plant, Department of Agriculture
.

Limit of cost
$2, 000, 000
1, 250, 000
10, 000, 000
17,500,000
5, 750, 000
8,750,000
375, 000
350, 000
1,768,741
225, 000
10,300,000
4, 500, 000
4, 750, 000
2, 000, 000
10, 000, 000
865,000
3, 000, 000
60, 000
85,000

Over the country at large, it includes post offices, customs buildings, inspection stations, courthouses. Federal office buildings, marine
hospitals, quarantine stations, immigration stations, and assay offices.
Authorizations
At the time my report for the fiscal year 1929 was submitted, the
Congress had made general authorizations of $290,000,000 for the
Federal building program, including $25,000,000 for the triangle site
in the District of Columbia, with total specific authorizations of 334
projects, 325 involving $192,487,010.80 for the country at large, and
9 projects, involving $47,943,741 for the District of Columbia. As a
result of reclassification of some projects, the number authorized was
336 on June 30, 1930, the total amount of specific authorizations
remaining at $240,430,751.80. In addition $21,680,000 had been
1 This authorization was amended in certain particulars by the Keyes-Elliott Act, but the limit of
cost remained the same.
> These projects were authorized by act of Congress, July 3,1930.




SECRETARY OF THE TREASURY

81

specifically appropriated for the triangle site in the District of Columbia, making total specific authorizations and specific appropriations
of $262,110,751.80.
The Keyes-Elliott Act, approved March 31, 1930, increased the
general authorizations to $568,000,000, including $48,000,000 which
it is expected will be realized from the sale of Government-owned
properties. Of the total amount authorized, $378,000,000 is for
projects in the country at large and $190,000,000 for projects in the
District of Columbia. Previous to the passage of this act, existing
legislation requiied that the amounts authorized be expended over a
period of 10 years at the rate of $35,000,000 annually. This act
increased the permissible annual expenditure to $50,000,000 ($35,000,000 in the country at large and $15,000,000 in the District of Columbia) and represents an extension of the period of expenditure to 11
3^ears.
Specific projects in addition to the 336 previously mentioned were
not authorized, however, until July 3, 1930, just after the close of
the fiscal year, when 221 projects for the country at large and 10 projects for the District of Columbia were specifically authorized, involving approximately $130,000,000 in limit of cost. Of these 39 are
modifications or augmentations of previous authorizations; thus the
total number of authorized projects for the country at large is 509 and
for the District of Columbia, ^19.
Construction, contracts, and expenditures
In the country at large 80 projects had been completed and 57
were in course of construction on June 30, 1930; in the District of
Columbia 4 had been completed, 1 was nearing completion, the Department of Commerce Building was about two-thirds completed, and the
extensible Agricultural Building was started. Under the specific authorizations and appropriations amounting to $262,110,751.80, as of
June 30, 1930, a total of $105,026,686.23 had been expendedfor
obligated for expenditure on that date. Of this amount $68,296,390.60 had been expended, leaving a balance of outstanding contracts
amounting to $36,730,295.63, $24,248,665.59 contracts in the country
at large, and $12,481,630.04 in the District of Columbia. Of the
total expenditures, amounting to $68,296,390.60, the amounts
expended during the fiscal year 1930 were $16,808,905.76 in the
country at large and $24,675,613.01 in the District of Columbia.
The obligations undertaken duiing the fiscal year 1930 for construction in the country at large amounted to $32,104,441; and among the
contracts awarded were those for the following large projects, the
amounts indicating the limits of cost.




82

REPORT ON THE FINANCES

Post office, Baltimore, Md
Post office, Milwaukee, Wis
Post office, Brooklyn, N. Y
Marine hospital, New Orleans, La
Federal and Territorial building, Juneau, Alaska
Post office, Tampa, Fla
Post office, Lima, Ohip

$3, 300, 000
1, 850, 000
2, 700, 000
2,000,000
795, 000
550, 000
475, 000

In the District of Columbia a contract was awarded for the extensible building. Department of Agriculture, amounting to $5,688,000.
The total obligations for construction in the country at large and in
the District of Columbia undertaken during the fiscal jehr 1930
amounted to $37,792,441. In addition $7,032,762.85 was obligated
for the triangle site in the District qf Columbia.
Sites
In the country at large the cost of sites is included in the total
limit of cost. In the District of Columbia, where the cost of sites is
included in only a few specific projects, a total of $40,000,000 has
been authorized for the purchase of land, of'which $21,680,000 had
been appropriated to June 30, 1930. The following was the status
of sites on June 30, 1930:
In the country at large, at the commencement of the fiscal year
1930, 68 sites had been acquired at a cost of_
$13, 198, 806. 08
During the fiscal year 1930, 67 sites were acquired at a cost of__
9, 328, 214. 86
Proposals for 38 sites have been accepted in the amount of
3, 587, 216. 66
Nineteen sites have been selected and the Attorney General
requested to institute condemnation proceedings, involving
approximately
7, 195, 620. 00
In the District of Columbia at the commencement of the fiscal
year 1930, expenditures for sites amounted to
4, 003, 108. 04
Expenditures during the fiscal year 1930 amounted to
6, 447, 552. 60
Sites in process of acquisition, either by negotiation, or condemnation, will bring the total amount to approximately
18, 000, 000. 00

In line with President Hoover's policy of increased construction
as a means of relieving unemployment and aiding business recovery,
the Treasury is accelerating its immediate building program to the
limit of the annual permissible expenditures. The Treasury Department has mapped out a program for putting under way during the
fiscal year 1931 approximately $100,000,000 of public building work,
$75,000,000 of which is for the country at large to be handled by the
Office of the Supervising Architect, and $25,000,000 for projects now
being handled by private architects both in the District of Columbia
and the country at large.
Contracts for outside professional services
Under the Keyes-Elliott Act, w^hich authorized the employment of
private architects to the extent deemed necessary by the Secretary



SECRETARY OF THE TREASURY

83

of the Treasury, contracts have been entered into with architects for
drawings and specifications for a number of large and important
buildings aggregating in cost about $100,000,000. The following
buildings in the District of Columbia, with the limit of cost in each
case, are included in this total:
Department of Justice
.
.
$10, 000, 000
The group of buildings comprising the Department of Labor, Interstate Commerce (or General Accounting Office), and connecting
building
11, 250, 000
Post Office Department
10, 300, 000
Office of the Public Health Service
865, 000
Remodeling State, War, and Navy Building
.
3, 000,000
Archives Building
.
8, 750, 000

The Treasury has other building projects under its supervision
which are not stiictly part of the so-called public building program;
for example, the Coast Guard Academy at New London, Conn.,
and the Narcotic Farm at Lexington, Ky.
In addition to the total of construction work under the direction
of the Treasury, there are other building projects contemplated or
in course of construction in the District of Columbia, including a new
building for the Supreme Court, the Arlington Memorial Bridge, office
buildings and additions for the Senate and House of Representatives,
and the so-called municipal center, which will house the administrative
activities of the District of Columbia.
There are also building projects in contemplation or in course of
construction in the country at large and in foreign countries, under
the supervision of other Government departments, such as the reformatory at Chillicothe, Ohio, under the Department of Justice, and
legations and consular establishments in various foreign countries
under the State Department, for which the Office of the Supervising
Architect is rendering partial service.
Furthermore, the Office of the Supervising Architect has charge of
many projects of remodeling and enlarging public buildings and the
maintenance and repairs of all buildings under the supervision of the
Treasury. These activities are described in detail in the administrative report of this office, page 261 of this report, where complete
data with reference to the public building program are also shown.
THE PORTO RICAN HURRICANE RELIEF COMMISSION

The Porto Rican Hurricane Relief Commission established by an act
of Congress approved December 21, 1928 (Public Resolution No. 74,
Seventieth Congress), is composed of the Secretary of the Treasury,
the Secretary of War, and the Secretary of Agriculture, the Secretary
of War being designated chairman. To date the amount authorized
by Congress to be appropriated for use by the commission aggregates




84

REPORT ON THE FINANCES

$11,150,000, of which amount $9,150,000 has already been appropriated. Of the amount already appropriated, $6,000,000 was for loans
to individual Porto Rican farmers, $2,000,000 for ^Hhe rebuilding and
repair of schoolhouses damaged or destroyed by the hurricane in the
small towns and rural districts of Porto Rico and for the employment
of labor and purchase of materials for repairing insular and rural
municipal roads," $1,000,000 ^^for the employment of labor and the
purchase of supplies, materials, and equipment for repairing and
constructing insular roads," and $100,000 for ^Hhe purchase and distribution within the devastated area of Porto Rico of seeds and seedlings * * *." Two million dollars was appropriated during the
fiscal year 1930.
During the year the commission carried forward its rehabilitation
program initiated last year and described in the last annual report.
The $6,000,000 appropriated for loans has either been expended or
obligated, under loan contracts by which the borrowers receive the
advances in monthly installments. This practice, coupled with a
rigid inspection service, promotes the use of the most approved rehabilitation methods. To September 30, 1930, there had been received about 4,600 eligible applications for loans, of which somewhat
more than 3,075 in the aggregate sum of approximately $5,800,000
have been approved. A few of the loans have already been repaid.
The department detailed from the Supervising Architect's Office
draftsmen and construction engineers to assist in the planning and
supervision of the work of repairing and rebuilding the schoolhouses
damaged or destroyed by the hurricane. All the repair work, involving about 400 schools, was completed in April, 1930, at a total cost
of approximately $300,000. The reconstruction of 330 schools was
undertaken at a cost of about $1,000,000 and of these, 260 had been
completed by November 1, 1930, and a large number of the remaining
70 were in such an advanced stage as to require only one or two
weeks' work to complete them.
The program for the repair of municipal and insular roads has gone
steadily forward and has been of great assistance to the farmers in
enabling them to reach their markets, and, of course, has been of
inestimable aid in the general rehabilitation work of the entire island.
COAST GUARD

The following is a summary of the principal operations of the
Coast Guard for the fiscal year 1930, in which comparisons vath the
preceding year 1929 are indicated:




85

SECEETABY OF THE TREASURY

1929

1930

6,004
4,375
Lives saved or persons rescued from peril
Persons on board vessels assisted._
_.
_.
18,725
29,079
Persons in distress cared for
879
924
87, 033
80,263
Vessels boarded and papers examined
2,671
2,441
Vessels seized or reported for violations of law
,
$424, 725
$438,765
Fines and penalties incurred by vessels reported.
Regattas and marine parades patrolled
,
104
137
5,241
4,419
Instances of lives saved and vessels assisted
4, 867
6,960
Instances of miscellaneous assistance
Derelicts and other obstructions to navigation removed or destroyed
267
233
$38, 200
$30,905
Value of derelicts recovered and delivered to owners
$49,128, 375 $49,018,073
Value of vessels assisted (including cargoes)
4,271
3,992
Persons examined for certificates as lifeboat men

Increase
(+) or decrease (—)
+1,629
+10,364
+45
+6,770
-130
+$14,040
' +33
+822
+1,093
-34
-$7,295
-$110,302
-279

During the fiscal year 1929, 5 of the 10 cutters authorized by the
act approved June 10, 1926, were completed and placed in commission. Appropriation having been made, contract was entered into
on March 16, 1929, for the construction and equipment of 3 more of
the 10 cutters. Appropriations were also made to commence and to
complete the ninth of the cutters, and contract was entered into on
November 18, 1929, for its construction and equipment. The work
on the four cutters is progressing satisfactorily. Appropriation has
been made to commence the tenth cutter, the last of the lot, and
design plans are under way.
An act approved May 15, 1930, made provision for additional
patrol boats and their equipment to be constructed or purchased in
the discretion of the Secretary of the Treasury. Design work has
been undertaken with regard to these boats.
An act approved April 18, 1930, authorizes the Secretary of the
Treasury to construct and equip one Coast Guard cutter. The
second deficiency act, approved July 3, 1930, appropriates $450,000
for commencing the cutter. Preliminary studies have been undertaken looking to the preparation of designs for this cutter.
During the year one cutter and two harbor cutters were taken out
of service.
In pursuance of the act approved February 16, 1929, funds for the
construction and equipment of the new Coast Guard Academy,
which was discussed in my previous report j have been appropriated,
and plans, drawings, etc., are in course of preparation.
On June 30, 1930, there were on the active list of the Coast Guard
365 regular commissioned officers, 39 temporary commissioned officers,
97 cadets, 76 chief warrant officers, 514 regular warrant officers,
278 temporary warrant officers, 10,762 enlisted men, and 267 civilian
employees in the field, of which 227 were per diem civilian employees
at the Coast Guard depot, Curtis Bay, Md. During the year there
were 8,565 applicants for enlistment, of which number 1,828 were
enlisted. The percentage of men reenlisting upon expiration of




86

REPORT ON T H E FINANCES

enlistment has increased during the past four years from 72 per cent
to 86 per cent, which is an encouraging sign and indicates the
prevalence of a commendable service spirit.
The Secretary of the Treasury, under the provisions of law, awarded
during the year 28 hfe-saving medals of honor (5 gold and 23 silver)
in recognition of bravery exhibited in the rescue or attempted rescue
of persons from drowning.
With respect to the law. enforcement work of the Coast Guard for
the prevention of smuggling of liquor into the United States from
the sea, no material change in general conditions since last year's
report has taken place. Determined efforts are constantly being
made to smuggle liquor into the country. There is no doubt that
the smuggling interests are highly organized and are bending every
effort, including the expenditure of large sums of money for the most
modern and efficient equipment, to circumvent the operations of the
Coast Guard, and there are undoubtedly some illegal landings of
liquor. I t is believed that the Coast Guard is now doing all that can
possibly be accomplished with its existing strength in personnel and
equipment afloat and on shore.
Smuggling operations on the Great Lakes have been very active.
I t is yet too early to determine with any degree of certainty the
permanent effects of the recent Canadian law forbidding clearance
of liquor cargoes for the United States from Canadian ports.
Coast Guard officers continue to serve as captains of the port to
enforce the regulations at a number of ports throughout the country.
As can be appreciated, this, work is of the greatest importance to
the maritime interests in the larger ports of the country, especially,
for example, in the great port of New York, The demands upon
the captains of the port to perform various functions in the interest
of the smooth operation of shipping are constantly increasing.
Federal rules and regulations regarding the use of anchorage grounds
have been prescribed for the harbor of Annapolis, Md.
The airplane reporting system, established in 1929 along the Atlantic seaboard, has continued to observe and report the passage of all
passing planes. Thousands of planes have been reported during the
year; no plane using the system has been lost, and many planes, due
to accident or stress of weather, have been assisted by the Coast
Guard stations.
Three telephone lines operated by the Weather Bureau for some
years have been transferred to the Coast Guard. Appropriation was
allowed for the reconstruction of two of these lines, and the work is
now in progress, but it is not expected that the funds available will
permit the complete reconstruction.
The renewing of approximately 40 miles of submarine cable along
the Florida coast, for which appropriation has been made, will be
carried on and brought to a conclusion during the fiscal year 1931.



87

SECRETARY OF THE TREASURY

During the year improvements have been made throughout the
seryice in the radio material, both aboard ships and at shore stations,
so as to bring about a higher state of efficiency in handling communications by radio. A Coast Guard radio schoo! is in operation at the
receiving unit at New London, Conn., for the training of men to
become radiomen to fill vacancies throughout the service. Sixtythree men were graduated from this school during the year.
International ice patrol was carried on, as customary, by the Coast
Guard in the vicinity of the Grand Banks of Newfoundland along
the trans-Atlantic steamship lanes where icebergs constitute a menace
to navigation. Icebergs were reported off the eastern edge of the
Grand Banks at an unusually early date in 1930. On February 7 a
berg was reported almost on the westbound tracks then in effect
between Europe and the United States. The number of icebergs
that drifted south of Newfoundland between January 1 and June 13,
1930, is estimated to have been about 440. Although this number
is considerably greater than is normally the case, ice conditions were
not as severe as in the season of 1929.
BUREAU OF CUSTOMS

Customs receipts, although slightly smaller than during the preceding fiscal year, did not decline in the same proportion as did the
value of imported goods; the value of imports was 10 per cent less than
in 1929, while customs duties fell oft' only about 2}i per cent. In view
of the fact that the trend of prices was downward during the period,
this diff'erence in the rate of decline may be attributed in part to a
decline in the value of some of the leading dutiable imports on which
specific duties are levied, notably sugar and wool, without a corresponding decrease in collections; and in part to lower values for some
of the important classes of duty-free goods, notably coffee, raw silk,
and crude rubber. Foreign trade and customs collections are summarized in the following table:
Merchandise exports and imports, the trade balance, and customs collected for the
fiscal years 1924 to 1930
[In millions of dollars]

Exports

Year

Imports

4,312
4,866
4,753
4,968
4,877
6,373
4,694

3,654
3,824
4,465
4,252
4,147
4,292
3,849

Excess of
exports Customscolover
lected
imports

N

1924
1925
1926
1927
1928
1929
1930

-

-

.

.




.-

758
1,040
289
716
730
1,082
•845

545
649
680
606
568
603
587

88

_

REPORT ON T H E FINANCES

The proportion of free to dutiable goods remained the same
as during the preceding, fiscal year, free goods constituting
65.6 per cent of the total imports for consumption. Duty-free imports
have constituted a remarkably steady proportion of the total during
each of the past five years, remaining between 64 and 66 per cent, as
compared with less than 60 per cent during 1924 and 1925, the preceding years under the tariff effective for the period outlined in the
table.
For each of the first five months of the past fiscal year, imports
exceeded those of the corresponding nionths of the previous year by
a substantial margin. The slowing ap of trade, accompanying the
stock market collapse, resulted in a sharp decline in imports in
December, and the continued business depression manifested itself
in a smaller volume of imports during each of the remaining months
of the fiscal year as compared with the corresponding months of the
previous year. Imports were also affected by the uncertainty attending the extended consideration of the tariff bill. Instead of exceeding
the record level of 1926, therefore, as might have been expected on
the basis of the volume of imports early in the year, total imports
during 1930 were smaller than during any of the preceding four years
and exceeded those of 1925 by less than 1 per cent.
All of the classes of imports declined during 1930 as compared with
the previous fiscal year, the total decrease amounting to $443,000,000,
or 10.3 per cent. Manufactured foodstuffs showed the largest proportionate decline—16.2 per cent—and the rates of decrease for crude
materials and crude foodstuffs (13.3 per cent and 12 per cent, respectively) also exceeded the rate of decrease for all imports. Almost
half of the decrease in imports was due to the recession of $201,000,000
in the value of imports of crude materials, large decreases in value of
the leading crude commodities, such as crude rubber, raw wool, and raw
silk contributing to this total; unmanufactured tobacco, while slightly
higher in price, was imported in so much smaller quantities that the
decline in its total value amounted to almost $15,000,000.
The smallest amount, as well as percentage of decline in imports,
occurred in finished manufactures, which were only 4.5 per cent less
than in 1929. Semimanufactures also decreased at a more moderate
rate, their value being 7.6 per cent smaller than during the previous
fiscal year.
Looking at imports from the viewpoint of Government revenue,
the six leading sources are cane siigar, unmanufactured tobacco, raw
wool, wool manufactures, cotton manufactures, and silk manufactures.
The tariff on these items produces half the customs receipts, although
the imports of these commodities constitute only from, 10 to 15 per
cent of the total imports. The changes in imports of these chief




89

SECRETARY OF THE TREASURY
customs-producing commodities during the fiscal year
compared with 1929 are shown below:

Commodity

Quantity (in million pounds)
1929

Cane sugar
.
Tobacco, unmanufactured
Wool and mohair _._ . . . _ _ . _ _ . . _
Wool manufactures, including yarns
Cotton manufactures, including yarns
Silk, manufactured

9,505
79
271

1930
7,282
63
220

Value (in millions)
1929

1930

$212.6
55.8
86.5
80.1
71.6
40.2

$158. 6
47.6
59.4
. 62.5
60.6
31.9

1930 as

Per cent decrease
Quantity
23.3
20.3
18.6

Value
25.4
14.8
31.3
21.9
16.4
20.6

Because of the short period intervening between the approval
of the tariff act on June 17, 1930, and the close of the year the duties
collected thereunder constitute such a small fraction of the total
customs receipts of $587,000,903 for the fiscal year 1930 as to preclude an analysis of the eff'ects of the new act on commerce.
Considerable time was spent by departmental and customs officers
during the jesiT assisting committees in Congress in preparing the
administrative provisions of the tariff' act.
The number of entries filed during 1930 exceeded by 25,180 the
number filed during 1929. The number and appraised value of
seizures made during the fiscal year 1930 exceeded those made during
the preceding fiscal year by 4,717 and $2,072,390, respectively.
There was a decided increase in international highway traffic,
728,751 more automobiles entering the United States during the year
than during the fiscal 5^ear 1929. Travel by airplane is meeting with
increased popularity and there are now two more air fields designated
as airports than existed during the preceding fiscal year and 26 more
air fields have been designated temporarily as airports.
Following a complete survey of the needs of the service. Congress
appropriated funds during the fiscal year for 90 additional employees
in the bureau, consisting of administrative officers, attorneys, accountants, and others.
The legal activities of the bureau, formerly under the direction of a
deputy commissioner, were reorganized and placed under the direction
of a general counsel, with two assistants, one in immediate charge of
the legal divisions and the other in charge of a corps of special attorneys. The former reviews decisions prepared in the legal divisions,
approves and forwards to the general counsel for further review those
which are satisfactory and refers to the assistant in charge of the
special attorneys for further research all doubtful cases and cases of
exceptional importance. This procedure provides a thorough and
complete review of all cases and safeguards the Government's interests
as well as those of commerce and industry.




90

REPORT ON THE FINANCES

The divisions of the bureau concerned with the business administration of the service were organized into an administrative unit
which was placed in charge of a deputy commissioner, an additional
deputy having been authorized by the tariff act of 1930.
The files of legal correspondence consisting of approximately
300,00.0 subjects and the administrative files are being reorganized
under the most modern system. The work on the personnel files has
been completed and that on the legal files is still in progress.
Under the tariff act of 1930 certain duties of the Treasury Department with regard to the United States Customs Court, such as the
appointment and fixing of the compensation of clerks and other
employees, the official records, paper and equipnicnt, together with
the unexpended balance of certain appropriations, were transferred to
the Department of Justice.
PROHIBITION LAW ENFORCEMENT

The prohibition reorganization act, which became effective on
J u l j 1, 1930, provided for the creation of a Bureau of Prohibition in
the Department of Justice, for the transfer to the Attorney General
of duties incident to the enforcement of the penal provisions of the
national prohibition act, and for joint action of the Secretary of the
Treasury and the Attorney General in prescribing regulations relating
to permits. The Bureau of Prohibition in the Treasury became
the Bureau of Industrial Alcohol, retaining jurisdiction over the
administration of the permissive provisions of the national prohibition act. The functions of the Bureau of Industrial Alcohol thus
comprise chiefiy the direct supervision of production of industrial
alcohol under restrictions designed to avoid the diversion of such
alcohol to illegal uses and, in conjunction with the Attorney General,
the control of permits. On July 1, 1930, the transfer of appropriate
personnel, records, etc., from the Bureau of Prohibition in the Treasury to the Bureau of Prohibition in the Department of Justice was
effected. Appropriations pertaining to enforcement activities were
also transferred to the Bureau of Prohibition in the Department of
Justice in the amount of $9,000,000. Inasmuch as the reorganization act did not become effective until July 1, 1930, the administration and enforcement of the national prohibition act continued
under the full jurisdiction of the Secretary of the Treasury during
the past fiscal year.
Agents of the Bureau of Prohibition made 68,173 arrests, and
seized 8,633 automobiles valued at $3,290,830.88, and 64 boats
valued at $687,480. Federal agents also furnished the evidence to
the State authorities in many cases prosecuted in the State courts.
The administration of the act relating to industrial alcohol and
liquors for medicinal purposes entails the supervision of the operation



SECRETARY OF THE TREASURY

91

of the largest chemical and drug manufacturers in the country whose
productions are essential materials in almost every line of commercial
activity. The manufacture of varnishes, paints, lacquers, smokeless
powders, artificial silk, dyes, essential medicinal alkaloids, and coaltar derivatives illustrates the broad field covered. In the medicinal
field the supervision covers the use of alcohol and medicinal liquors
by hospitals, sanitariums, institutions for medical research, physicians,
and others having.professional uses for alcohol. In the research and
educational field the supervision covers the procurement and use of
alcohol by universities, colleges. Government and State institutions.
The bureau supervises also the production and use of ethyl alcohol,
a very important industrial product. Supervision of the production
and distribution of wine for sacramental purposes is also a function
of the Bureau of Industrial Alcohol. The extent of the scope of the
activities of the bureau is easily understood when it is seen that on
June 30, 1930, there were 167,830 permits in force throughout the
United States and the territories. Of this number 9,402 permits
were for the manufacture of alcohol, manufacture and use of denatured
alcohol, and for hospitals and schools to obtain alcohol tax free.
Doctors, dentists, and veterinarians held 110,319 permits for the use
of alcohol and liquors in their profession.
The amount of legally manufactured whisky in bond has been
reduced to a point where it will barely be sufficient for a 5-year supply.
Whisky is required by law to be 4 years old before it may be bottled
in bond. Permits were therefore granted during the year for the
manufacture of approximately one year's supply for storage in bond.
In the Prohibition Bureau laboratory continual research and experimentation were carried on to develop improved denaturing formul2e
which will better meet the requirements both of industry and of
prohibition enforcement. During the year the discontinuance of a
previously used denatured-alcohol formula has practically eliminated
the diversion of alcohol by recovery from lacquer thinners and varnish.
A permit was granted to a chemical concern for the production on
a commercial scale of alcohol from ethylene gas. This plant is now
operating and producing a large quantity of ethyl alcohol, and
apparently the mechanical difficulties of producing synthetic ethyl
alcohol from ethylene have been solved. This probably represents
the most interesting development in the industrial-alcohol trade that
has occurred for many years.
Under a special appropriation for the purpose, five factual monographs were published and distributed relating to law observance and
enforcement, as follows: The Training of Enforcement Personnel,
Industrial Alcohol, State Cooperation, Public Cooperation, and
Padlock Procedure. The reaction of the press and public to these
monographs was distinctly favorable. Their distribution throughout



92

REPORT ON THE FINANCES

the States proved of value in strengthening cooperation with the
Federal Government in law enforcement and in bringing about a
more sympathetic understanding of the problems and objectives of
the Government.
The process of placing the entire personnel of the Bureau of Prohibition in the classified civil service, as provided by law, was completed during the year. It has brought about a marked improvement
in the personnel of the prohibition service.
The instruction of agents and inspectors in law and criminal investigation was continued. Courses including written lectures or lessons
on constitution and law and on criminal investigation were made
available to agents and other employees. There were 1,875 employees who took advantage of these instruction courses.
NARCOTIC LAW ENFORCEMENT

Narcotic drugs only in the form of crude opium and coca leaves
may be lawfully imported into the United States, and the quantities
imported are limited to the amounts ascertained to be necessary for
medicinal and other legitimate uses. The control of narcotic drugs
legally imported, inanufactured, and distributed is in the main
reasonably effectual. The quantity of such drugs diverted to
illegal uses is comparatively small. The principal enforcement
problems are concerned with the smuggling and subsequent illegal
distribution of opium, morphine, heroin, and cocaine.
On June 30, 1930, there were 287 persons registered under the
Harrison narcotic law, as amended, as importers and manufacturers,
1,725 as wholesale dealers, 53,118 as retail dealers, 148,079 as practitioners, and 127,594 as dealers in and manufacturers of untaxed
narcotic preparations, or a total of 330,803 registrants.
During the year ended June 30, 1930, a total of 9,270 cases of
criminal character was reported by Federal narcotic officers. There
were 4,962 convictions in such cases for which the courts imposed
sentences aggregating 11,832 years, 6 months and 29 days, and fines
amounting to $235,791.81. There were 1,114 cases compromised, the
aggregate amount collected being $57,086.81. Narcotic drugs and
preparations amounting to 23,948 ounces were purchased or seized
as evidence in connection with the enforcement of these acts.
The Porter bill was approved June 14, 1930, under which the
enforcement of the narcotic laws was separated from the Bureau of
Prohibition, and a Bureau of Narcotics created to take over these
activities on July 1, 1930.
PUBLIC HEALTH SERVICE

The health record of the year ended June 30, 1930, was exceptionally good not only in the United States but throughout the world
where vital statistics are available. Cholera and yellow fever did



SECRETARY OF THE TREASURY

93

not appear in continental United States during the year. However,
constant vigilance is still necessary to protect the country from these
scourges which still constitute a real danger.
Cholera appeared at Manila and on several islands in the central
and south central part of the archipelago in May, 1930. At the end
of the year the number of cases was increasing. The disease has
appeared in these islands frequently in recent years, but the epidemics
have not assumed the devastating proportions which formerly characterized this disease in the Philippines.
During the year plague appeared in all of the grand divisions of
the world except Australia. No human case of plague was reported
in the United States or its possessions, but plague-infected squirrels
were found in California, where they have constituted a menace for
many years, and plague-infected rats were reported from the district
of Hamakua, on the Island of Hawaii. While these foci of infection
exist and plague continues to be prevalent in many of the ports with
which we have commerce, precautions against this disease are
necessary.
In the United States there were no widespread epidemics during the
fiscal year. Meningococcus meningitis, which had been increasing
in this country for several years, declined somewhat during the spring
of 1930, at least below the high prevalence of 1929.
An outstanding illustration of the value of public health work is the
decrease in the prevalence of diphtheria. The calendar year 1929
registered another low mark for this disease. Only 71.5 cases per
100,000 population were reported to the Public Health Service by 44
States, and the diphtheria death rate in these States was 6.5 per
100,000 population. During the first five years of the present century
the annual diphtheria death rate averaged 29.6 per 100,000 population.
The reduction in the death rate shows a saving of 28,000 lives in 1929
which would have been lost from diphtheria if the death rate of 1901 to
1905 had continued. Even this wonderful improvement, would be
bettered if people generally realized the advantages of timely protection against diphtheria.
Another disease which can be easily prevented is smallpox. It is
not creditable to the people of the United States that during the year
1929 about 42,000 cases of smallpox were reported to the Public
Health Service—more cases of the disease than were reported by any
other country except British India.
The birth rate in the United States has been steadily decreasing
since 1915, when comparable annual statistics first became available.
The average annual birth rate for the five years 1915 to 1919 was 24.3
per 1,000 population; from 1920 to 1924 it was 23.1 per 1,000; and
from 1925 to 1929 it was 20.2 per 1,000 population. The birth rate




94

REPORT ON T H E FINANCES

for the calendar year 1929, based on preliminary figures, was 18.8 per
1,000 population.
The death rate in the United States has been declining since the beginning of the present century. The annual death rates per 1,000
population since 1900 are as follows:
1900 to
1905 to
1910 to
1915 to

1904
1909
1914
1919..

'.1

16. 5 1920 to 1924
15. 4 1925 to 1929
14. 2 1929 (provisional)
14. 6

.

._

12. 1
11.9
11.9

Much of the improvement in the death rates in the last 30 years
has resulted from better control of the communicable diseases, the
prevention of deaths of infants, and general improvement in sanitary
and living conditions. The annual averages of deaths of infants
under 1 year of age per 1,000 live births suice the establishment of the
birth registration area are as follows:
1915 to 1919
1920 to 1924

.

97
77

1925 to 1929
1929 (provisional)

69
67

During the year ended June 30, 1930, at the suggestion of the
Surgeon General of the Public Health Service, the Government of
the Uiiited States entered into a special agreement with the Government of Canada, under the provisions of articles 56 and 57 of the
International Sanitary Convention of Paris, 1926, providing for
the reciprocal recognition by either country of quarantine practice
granted by the other country to vessels from foreign ports entering
the international waters of the Great Lakes and St. Lawrence River
or Puget Sound and its tributaries. This agreement, concluded in
October, 1929, has proved of considerable benefit to maritime commerce entering these international waters destined to ports in both
countries.
The rapid increase of international aerial transportation, from the
standpoint of the transmission of communicable diseases, has become
a matter of serious interest, not only to this country but also to the
countries of Central and South America and the countries of Europe,
Africa, and Asia. As a consequence, a preliminary draft of a proposed
international agreement for the sanitary control of international
aerial navigation was prepared by a special international commission
known as the Quarantine Commission of Air Navigation, which met
in Paris on March 11, 1930, and was submitted to the permanent
committee of the Office International d'Hygiene Publique during its
May (1930) session. The Surgeon General of the Public Health
Service, who represents this Government on that committee, was
requested to ascertain the views of the Pan American countries with
reference to any technical changes deemed advisable in the proposed
draft, and the subject will probably be a major one for discussion at
the meeting of this committee in Paris in Ootober, 1930.




SECRETABY OF THE TREASURY

95

In November, 1929, there began to be reported in various sections
of the United States the occurrence of an unusual sickness with a high
mortality rate. Investigations revealed that the disease was psittacosis and that these cases were associated with recently imported
parrots. Executive Order No. 5264, dated January 24, 1930, w:as
issued restricting for the time being the introduction of parrots into
the United States until the identity of the causative organism and
the unknown means of the transmission of the disease could be
studied in order that it might be prevented or controlled. Epidemiological studies were undertaken at the beginning of the outbreak of
psittacosis, and laboratory studies are now in progress. Eleven laboratory infections occurred among the personnel at the Hygienic
Laboratory, one of which proved fatal.
The special regulations of the Secretary governing the transportation
of passengers iTom oriental ports to United States ports, prescribed in
accordance with Executive Order No. 5143, dated June 21, 1929,
continued in force during the fiscal year and have proved effectual
in attaining the essential control of the danger theretofore presented
by the introduction of epidemic meningococcus meningitis into the
United States from oriental ports.
After detailed studies, legislation was introduced during the year
which would authorize 24-hour quarantine inspection service at all
United States ports. Any extension of the present sunrise-to-sunset
hours of duty will require additional funds for the employment of
additional personnel. Furthermore, the provisions of existing law
require all ports to be treated on a basis of equality as regards quarantine matters. Therefore the extension of quarantine inspection beyond the hour of sunset at any port should be conditioned upon the
need for similar service in the majority of ports.
Measures for the prevention of the interstate spread of disease are
being carried out by the Public Health Service with increasing effectiveness. Through the active cooperation of State and municipal
health agencies, 81 per cent of the 2,526 sources of drinking water
used by railroads, and 78 per cent of the 282 sources used by vessels
are now under sanitary supervision and control.
Through a reciprocal arrangement between the Public Health Service and the Department of Pensions and National Health of Canada,
similar methods of certifying water supplies and inspecting drinkingwater systems of vessels plying between the two countries on the
Great Lakes are in operation, and an exchange of certificates for the
drinking water taken on board in the respective countries is regularly
made. A similar arrangement is in force regarding shipments of shellfish between the United States and Canada. These reciprocal
arrangements have worked out to the entire satisfaction of the health
authorities of both countries.
12101—31

^
9




96

REPORT ON T H E FINANCES

Due in considerable part to the demonstration work in rural sanitation and the studies which have been made in this field, public health
administrators are now generally agreed that local official health
service under the direction of local whole-time health officers is the
most essential element in the development of an adequate system of
effective and economical public health service in the United States.
State health departments in increasing numbers are obtaining authorization and appropriations to enable them more nearly to do their
proportionate part in the development and maintenance of such
whole-time local health service.
Plague still exists in ground squirrels in California. These infected
rodents are distributed over large areas in the central and coast
counties. The squirrel eradication activities of the Public Health
Service and the county horticultural commissioners, whUe reducing
the spread of the infection, are not on a sufficient scale to produce
lasting results.
The act of Congress approved April 9, 1930, authorized the establishment of additional divisions at the Hygienic Laboratory, allowing
greater specialization in research. This act also changed the name
of the advisory board for the Hygienic Laboratory to the national
advisory health council, enlarged its functions, and authorized the
appointment of five additional members from representatives of the
public health profession.
By the act of Congress approved May 26, 1930, the name of the
Hygienic Laboratory was changed to the National Institute of Health,
with liberal provisions for reorganization and expansion. The general
purposes of the act are to provide increased facilities for investigations
of the diseases of man and matters pertaining to the public health;
to encourage research and the training of individuals in this field; to
permit the Government to accept bequests to the institute; and to
enable it to cooperate with scientific institutions in research work.
In connection with the outbreak of the so-called Jamaica ginger
paralysis, involving over 10,000 persons in this country, according to
the Director of Prohibition, studies were undertaken to identify
chemically the toxic material in the suspected ginger extract.
During the fiscal year the epidemiological studies of trachoma which
were begun during the spring of 1926 were completed.
The marine hospitals and other relief stations of the Public Health
Service continued to furnish hospital care and out-patient treatment
to seamen from American merchant ships and other legal beneficiaries.
Relief stations were operated in 155 ports of the United States, Alaska,
Porto Rico, Virgin Islands, Philippine Islands, Honolulu, and the
Canal Zone.
Attention was directed last year to the organization of the
committee on research in syphilis and to the development of a




SECRETARY OP THE TREASURY

97

program, through the cooperation of the committee and the Public
Health Service with leading universities and research institutions in
the United States, for studies of the various aspects of syphilis and
its control. I t is believed that the Pubhc Health Service in developing this plan has been instrumental in inaugurating the most important research program in the field of venereal disease control
ever attempted in this country. Throughout the fiscal year 1930 at
five of the leading clinics in the United States there has been in progress a joint special inquiry into the results of treatment of syphilis.
Special studies in the treatment of gonorrhea and the transmission
of syphilis, previously inaugurated by the Public Health Servic^e,
have been continued.
The campaign undertaken by the Public Health Service in 1928 to
enlist the cooperation of the shipping industry in a movement toward
prevention of venereal diseases among seamen in the merchant marine
has been continued. The response of many of the leading companies
has been exceedingly gratifying and reports of results obtained in a
number of instances have been most encouraging.
The building program has made satisfactory progress. The new
marine hospitals at Detroit and Cleveland have been completed and
occupied and the new out-patient office in Philadelphia will shortly
be ready for occupancy. Construction has begun on the new marine
hospitals in San Francisco, New Orleans, and Galveston, and plans
are in course of preparation for those at Baltimore, Stapleton, and
Seattle, for which appropriations are available. Other projects are
contemplated to improve facilities at the marine hospitals in Boston,
Buffalo, Chicago, Evansville, Louisville, Memphis, Mobile, Pittsburgh, Key West, Norfolk, Portland, Me., Fort Stanton, N. Mex.,
and Carville, La.
The year has been characterized by additional legislation seeking
to coordinate and crystallize the functions of the Narcotics Division
of the Public Health Service. At the close of the year, the functions
of the division included the administration of the two United States
narcotic farms authorized in the act of January 19, 1929; studies,
investigations, and dissemination of information as to the nature of
drug addiction and the best methods of treatment and rehabilitation
of persons addicted to the use of habit-forming drugs; cooperation
with State and local jurisdictions in this field; the furnishing of
medical and psychiatric service in Federal penal and correctional
institutions; studies of the quantities of such drugs necessary to supply
the normal and emergency medicinal and scientific requirements of
the United States; and, lastly, studies and investigations of the
causes, prevalence, and means for the prevention and treatment of
mental and nervous diseases.




98

REPORT ON T H E FINANCES

The act approved April 9, 1930, not only provided for the coordination of important public health activities of the Federal Government,
but also definitely fixed the pay, allowances, and periods of service
required for promotion of commissioned officers of the Public Health
Service on a parity mth those provided by law for officers of the
Medical Corps of the Army. Under this legislation it is also possible
to offer commissions to qualified dental, sanitary engineer, and pharmacist personnel. It is felt that these provisions in the act will go
far toward building up an efficient, highly trained organization for
future public health needs.
As stated in my report of last year, however, difficulty is^still experienced in securing and retaining the services of qualified young
medical officers in the entrance grade of assistant surgeon. During
the fiscal year just closed, exaiminations were held on three occasions
at Washington, New Orleans, Chicago, San Francisco, and New York.
The examinations were widely announced through medical journals
and at hospitals and medical schools, yet during the year only 40
candidates for commission passed all of the examinations, and 2 of
those who passed subsequently declined their commissions. These
additions were offset by 14 resignations during the year, 13 of which
were in the grade of assistant surgeon, with the result that only partial
progress has been made in filling the number of positions authorized
by appropriations during the past three years. The extension,
to consulates in Canada and Mexico, of the work of examining intending immigrants, which is desired by the State Department,
has for this reason been delayed.
FEDERAL FARM LOAN BUREAU
The Farm Loan Board has carried forward its program of close and
constant supervision of the farm loan system, with the result that the
progress and improvements in the activities of the Farm Loan Bureau
and in the conduct of the business of the banks, discussed in my last
annual report, have been continued during the past year. While
agricultural conditions in some parts of the country, and to some
extent the unusual situation iii the money and securities markets
during the first half of the fiscal year, have made, the task more difficult, the banks generally have been in a position to handle their
problems on a sound and efficient basis. This has been due in some
measure at least to the policy of the Farm Loan Board in cooperating
with the directors of the banks in reorganizing and strengthening
their management wherever necessary. In some cases, at the request
of the banks concerned, the chief of the division of examinations of
the bureau, has made, under the direction of the board, what may be
called ''management examinations," following which recommendations have been made to the directors regarding the personnel and




SECRETARY OF THE TREASURY

99

organization. The results attained have been exceedingly beneficial,
particularly in connection with banks faced with difficulties.
National farm loan associations
Much attention has been given by the board during the past year
to national farm loan associations, of which there are 4,659. Thorough
examinations, which are being made of the associations regularly,
have resulted in material improvements. The secretary-treasurer is
the active executive officer of each association and, whenever any
delinquency on his part is discovered, the board and the Federal land
bank of the district cooperate with the directors of the association
in remedying the situation.
The question of adequate compensation for secretary-treasurers has
continued to receive the consideration of the board and the banks.
Eleven banks, with the approval of the board, have made special
arrangements for paying secretary-treasurers in their districts for
their cooperation in connection with the collection of aniortization
installments and of taxes and insurance premiums which have been
advanced by the banks for the protection of their loans. The twelfth
bank has not provided a special plan because the rate of compensation received by the secretary-treasurers from the dividends paid to
the associations by the bank and new business obtained made this
unnecessary.
Progress has been made also in the classification of associations in
accordance, with their financial condition, taking into consideration
any indebtedness to the banks and their ability to meet their obligations currently. These classifications are made by the banks periodically. They form the basis upon which the banks determine
whether the proceeds of stock in the bank held as security for a loan,
which stock is retired when the loan is paid, shall be paid to the association or applied in whole or in part on any indebtedness owed
the bank by the association. In addition, the Federal land banks are
cooperating with the associations in their respective districts by entering into agreements with them for the purpose of minimizing losses
and of obviating, as far as possible, the necessity of taking deficiency
judgments against associations in connection \i^ith defaulted loans for
which they are liable by reason of their indorsements. Under this
procedure, the associations' interests, as well as the banks', are protected, and acquired real estate is handled and disposed of in an orderly
manner.
Loans
The volume of loans closed by the land banks continued to decline
during the past year. This is a result in large part of the falling off
in the volume of applications received, although lending operations




100

REPORT ON THE FINANCES

of the joint stock land banks, particularly, have been affected by an
unfavorable bond market.
The Federal land banks generally report that they have accepted
all the good eligible loans offered. The repayments of Federal land
bank loans amount to nearly $50,000,000 annually, and this sum has
been practically sufficient to meet the demand for loans from these
banks.
The volume of credit extended by the Federal intermediate credit
banks during the last fiscal year was the largest in the history of the
banks, as will be shown more fully below.
Real estate
The Farm Loan Board has encouraged the land banks which have
accumulated real estate to create efficient organizations to handle and
dispose of the properties on a satisfactory basis as soon as possible.
This has brought gratifying results in many instances. In spite of the
difficulties inherent in the situation, sales of acquired properties were
made in relatively large volume, total sales by the 12 Federal land banks
during the fiscal year aggregating $8,571,348, as against $8,113,721
in the previous year, and by 49 joint stock land banks $8,207,375
compared with $5,713,241 in the previous year. While total acquirements exceeded total sales, the net amount of real estate, after deducting charge-offs and reserves, represented a relatively small proportion
of the total assets of the banks. At the close of the fiscal year, the
net carrying value of real estate owned outright and subject to redemption by the 12 Federal land banks was only 1.4 per cent of the
total assets of the banks. In the case of the joint stock land banks,
10 included no real estate or sheriffs' certificates, judgments, etc.,
in their assets, having disposed of or charged off all that were acquired,
while a total of 26, or more than one-half, either carried no such realestate items or the net amounts included constituted less than 2 per
cent of their total assets.
Securities markets and interest rates
I t was pointed out in nay last annual report that, in view of the
developments in the money market, the Federal land banks had
endeavored to avoid in so far as possible the issuance of long-term
bonds at high rates of interest and to meet their requirements for
loan funds primarily through repayments and installment payments
on loans and such temporary financing as seemed to be desirable and
necessary. This policy has been continued during the past fiscal
year. Out of a total of $20,700,000 of bonds issued, $2,450,000
represented long-term financing. Of the balance, one short-term
issue of $9,500,000 of 5 per cent bonds was made in October, 1929.




SECRETARY OF THE TREASURY

101

• 0

In February, 1930, $8,750,000 of 4^ per cent short-term bonds were
issued, all of the October issue having been either retired, or refunded
by the February issue. As previously indicated, the repayments on
loans were sufficient to meet the major requirements of the Federal
land banks in this connection. During the fiscal year, seven of the
banks advanced their interest rate on loans to 6 per cent, the other
five remaining at 5K per cent. By the end of the year, however,
five had reduced their rate again to 5K per cent.
The unsatisfactory conditions that prevailed in the general bond
market extended, of course, to the bonds of the joint stock land banks.
In addition, the market for the latter securities has been depressed
by the fact that three of the banks had been placed in the hands of
receivers, which tended to affect adversely securities issued by joint
stock land banks, notwithstanding the fact that each bank should be
considered by investors on its individual merits. During the year,
joint stock land banks issued bonds aggregating $3,310,000, all of
which represented long-term financing. Of the total, $1,050,000 carried an interest rate of 4^ per cent, $1,000,000 a rate of 4% per cent,
and the balance a rate of 5 per cent. The loans of most of the banks
were made at 6 per cent.
During the year the Federal intermediate credit banks issued debentures aggregating $163,105,000. This was the largest amount issued
in any year in their history and reflected the increase in the volume of
their business referred to above. Both the interest rates and maturities of these securities were affected by money market conditions.
The interest rate on the debentures issued during October, 1929,
averaged 5.22 per cent, the highest monthly average during the fiscal
year. After that the. rates declined steadily, arriving at a low point
in June, when the average was only 3.30 per cent. During that
month one $2,000,000 issue of debentures was placed at 3 per cent
and since the close of.the fiscal year the debentures have carried a
3 per cent interest rate. Maturities likewise reflected the changes in
money market conditions, the maturities tending to be shorter in
October, when the average was about 3K months, but increasing thereafter until they reached an average of 5.9 months in June. The decline
in cost of funds in the latter part of the year, of course, was followed
by a lowering in the rates of interest on both loans and discounts.
Relations with the Federal Farm Board
During the past year the Federal Farm Loan Board and the 12
Federal intermediate credit banks have cooperated with the Federal
Farm Board in the conduct of their respective loaning operations.
Each of the Federal intermediate credit banks executed a memorandum of understanding with the Federal Farm Board providing, in




102

REPORT ON THE FINANCES
0

general, for an exchange of information relating to cooperative marketing associations assembled by the banks or the Federal Farm Board,
and for making available to the Farm Board the facilities of the banks
for the closing of its loans. The banks, therefore, afford a medium
through which the Federal Farm Board frequently is able to obtain
necessary documents, credit information, advice as to provisions of
local State laws, and other matters. When requested to do so, the
banks also hold notes or other documents for the account of the
Federal Farm Board, and, when authorized, they receive collections
and disburse funds for the same account. Through the cooperative
marketing associations the Federal Farm Board has aided in establishing agricultural credit corporations which make loans to individual
farmers, rediscounting the paper with the Federal intermediate credit
banks. One of the difficulties experienced by the banks in extending
their facilities to meet the demands of agriculture has been the lack
of sufficient financing institutions with adequate capital to handle the
financing of individual farmers. The establishment of credit corporations with a sufficient paid-in capital to enable them to function
properly, will permit a substantially greater amount of credit to be
extended b}^ the banks.
Receiverships of three joint stock land banks
The three joint stock land banks in receivership have required much
of the time and thought of the board. In connection with the
receiverships at Kansas City and Milwaukee, negotiations have been
carried on by the bondholders' and stockholders' committees looking
to the development of plans for terminating the receiverships through
reorganization or otherwise, and numerous conferences have been
held. In the case of the Kansas City receivership these negotiations
have resulted in a definite proposal by A. O. Stewart, of San Francisco, which has been embodied in a plan adopted by the bondholders'
protective committee and approved by the stockholders' protective
committee, which is to become operative if 95 per cent of the bondholders, or such less number as may be acceptable to Mr. Stewart,
agree. The board has indicated that a reorganization pursuant to
this plan, or any satisfactory modification, will meet with its approval.
The plan contemplates the formation of a strong new joint stock land
bank with Missouri and Kansas as its loan territory, and that the
assets of the present bank which are not to be used for the purpose
of creating the new joint stock land bank shall go into a separate
liquidation corporation. The plan has been published and distributed and is now under consideration by the bondholders. I t has not
appeared to be feasible to develop any plan for the reorganization or
early liquidation of the Ohio Joint Stock Land Bank which, however,
has only a relatively sm^^ll amount of assets.




SECRETARY OF THE TREASURY

103

One liquidating dividend from the proceeds of pledged assets of,
the Bankers Joint Stock Land Bank of Milwaukee, amounting to
15 per cent of the principal of the outstanding bonds of the bank as
of July 1, 1927, and the accrued unpaid interest thereon to that date,
has been declared, and since then the receiver has accumulated a
sufficient amount of additional cash, which has been invested in
Government securities, to enable the payment of another dividend
whenever the situation with respect to the powers of the board or
the development of plans for the liquidation of the bank through a
sale of its assets has been clarified. Two liquidating dividends of
10 per cent each of the amount of the principal of the bonds outstanding of the Ohio Joint Stock Land Bank as of September 1, 1927,
and the accrued unpaid interest thereon to that date, have been declared, and the declaration of further dividends is lilcewise being
held in abeyance.
The receivers are liquidating the assets in their control in an
orderly way without sacrifice of their value, and substantial progress
is being made in that direction, but, of course, without the intervention of acceptable plans for the sale of the assets of these banks in
bulk, the process necessarily will consume many years.
Since June 30, 1929, previous reports by the receivers have been
supplemented by reports published as follows: Kansas City, January 31, 1930; Milwaukee, August 31, 1929, and December 31, 1929;
and Ohio, December 31, 1929. The board has continued its practice
of including in its quarterly printed publication and in its annual
report periodical statements of the condition of the banks as reported
by the receivers upon the basis of their books.
A material factor in the situation affecting the administration of
the three receiverships has been the litigation involving the power of
the Federal Farm Loan Board and its receivers to enforce the statutory double liability of stockholders created by the Federal farm
loan act. This litigation resulted in a decision of the Supreme Court
of the United States on November 4, 1929 (Wheeler v. Greene,
receiver of the Bankers Joint Stock Land Bank of Milwaukee, 280
U. S. 49), that such power was not possessed by the board and its
receiver, but that the statutory double liability "is a liability to
creditors which the creditors may be left to enforce." As a result
bondholders of all three banks instituted proceedings in court to
enforce the liability. Prior to this decision it had been the belief of
the board, supported by three unanimous decisions of the circuit courts
of appeals of the seventh and eighth circuits, that the duty to enforce
this hability devolved upon the board under the Federal farm loan
act. The decision of the Supreme Court made it apparent that it
was desirable to obtain a clarification of the powers of the board in
order to permit it to proceed with the liquidation of the receiverships



104

REPORT ON THE FINANCES

in a satisfactory manner. Accordingly, the board and the Secretary
of the Treasury recommended to the Congress the enactment of a bill
which would make it clear that the board possessed all necessary
powers, on a basis comparable to those of the Comptroller of the
Currency in national bank receiverships. Such a bill (S. 3444) passed
the Senate and a corresponding bill in the House of Representatives
(H. R. 9433) was reported favorably by the House Committee on
Banking and Currency with an amendment which was satisfactory to
the board. These bills now await action in the House of Representatives.
Legislation
During the past fiscal year two amendments were added to the
Federal farm loan act. Both were signed by the President on June
26, 1930, just at the close of the second session of the Seventy-first
Congress.
Early in January, 1930, in my reply to a request froria the chairman
of the Senate Committee on Banking and Currency for an expression
of the views of the Treasury Department regarding a proposed bill,
it was stated, in part, ' ' * *, * the suggestion has been made that
it would be reasonable in the public interest to limit the assessments
made against the banks under section 3 of the Federal farm loan act
to the salaries and expenses of the employees of the Federal Farm
Loan Bureau engaged in its division of examinations. This view of
the matter appeals to the Federal Farm Loan Board and this department as meriting the favorable consideration of the Congress
* * *." I t was further explained that the expenses of the employees engaged in the division of examinations approximated 42 per cent
of the total expenses of the Farm Loan Bureau.
Following this suggestion a bill (S. 4028) was introduced during
March, providing that beginning July 1, 1930, and thereafter, the
assessments to be made under section 3 of the farm loan act against
the banks of the system, should be the amount of the ''expenses and
salaries of the employees engaged in the work of the division of
examinations of the Federal Farm Loan Bureau." This bill was
accepted by both Houses and signed by the President, as indicated
above.
The second amendment to the farm loan act came as a result of
a bill introduced during April, 1930. This bill (S. 4287) provided
for two changes, as foUows:
(1) I t permits the Federal intermediate credit banks to make
loans or advances direct to eligible financing organizations, which
formerly were permitted only the rediscount privUege with these
banks. As stated in my letter to the chairman of the Senate Committee on Banking and Currency regarding this feature of the bUl,




SECRETARY OF T H E TREASURY

105

it was " t h e view of the Federal Farm Loan Board that such an
amendment would sirnplify and facUitate the business transactions of
the Federal intermediate*credit banks with eligible financing institutions without in any respect departing from the fundamental purpose
of the law, as it would permit Federal intermediate credit banks to
accept as security for the bUls payable of such institutions the same
paper that may now be discounted or purchased."
(2) The second provision of the bUl permits the Federal intermediate credit banks to make loans and to discount paper, under the
conditions stated in the law, having a maturity of less than six
months, which was formerly the minimum. The removal of this
limitation seemed desirable, since in the course of orderly marketing
cooperative marketing associations usually require commodity credit
for shorter periods than six months, as well as for periods extending
beyond six months. Other agencies, country banks, agricultural
credit corporations, and livestock loan companies eligible to do
business with the Federal intermediate credit banks also find it
desirable at times to discount agricultural paper which has a maturity
at the time of discount of less than six months. In the circumstances, the removal of the 6-month limitation, it is believed, makes
it possible for the banks to serve the needs of marketing and production credit more satisfactorily and adequately without departing
from or impairing the fundamental purposes of the system. This
bUl was likewise accepted by both Houses and became effective
June 26, 1930, upon signature by the President.
Attention is invited to the attached reports of the various bureaus
and divisions of the Treasury Department and to the exhibits and
tables accompanying the report on the finances.

Secretary of the Treasury.
To the PRESIDENT OF THE SENATE.







ADMINISTRATIVE REPORTS
OF BUREAUS AND DIVISIONS




107




ADMINISTRATIVE REPORTS OF BUREAUS AND
DIVISIONS
OFFICE OF THE COMMISSIONER

OF ACCOUNTS AND DEPOSITS

Railroad obligations
The total receipts during the fiscal year on account of railroad
securities amounted to $11,485,583.81, of which $8,113,475.47 was on
account of principal and $3,372,108.34 was on account of interest.
The railroad securities have been gradually reduced each year until
the principal of the obligations on hand at the close of the fiscal year
under review amounted to only $54,792,274.87. The following
statement shows the total amount of railroad obligations by classes
originally held by the United States Government, the amount held
on June 30, 1930, and payments received on account:
Railroad obligations held originally by the United States Government, amount held
June 80, 1930, and total payments of principal and interest received
Principal
amount originally held
Federal control act:
Equipment trust notes
Section 7
Transportation act:. '
Section 207
Section 210
_.Total

Principal
amount held
on June 30,
1930

Total payments received
Principal

Interest

$346, 556, 750. 00
93,401, 755.00

$168,000.00

$346, 388, 750.00
93,401,755.00

$45,262,896.93
23,354 495 32

-

254, 334, 891. 00
290,800, 667.00

5,219, 300.00
49,404,974.87.

249,115, 591. 00
241,395, 692.13

54,109,147.35
86, 646,625.62

-

985, 094,063.00

54, 792, 274. 87

930, 301, 788.13

209,373,165. 22

During the year the equipment trust notes as shown by the above
table were reduced by payments received from the Minneapolis &
St. Louis Railroad Co. Reductions were also made in the obligations acquired under section 210 of the transportation act, 1920, as
amended, principally due to payments, amounting to $6,943,979
received on account of the obligations of the Chicago Great Western
Railroad Co. and the Boston & Maine Railroad. For detailed
statements of the obligations held and payments made on account of
principal, see Tables 50 to 52, pages 602 and 603.
Section 20^.—This section provides for reimbursement of deficits
of the so-called short-line raUroads during Federal control. No
payments were made by the Government to carriers during the fiscal
year on this account. The total payments to June 30, 1930, were




109

n o

RtiPOM ON a?HE I^INANCES

$10,967,801.80, of which $9,046,412.99 was paid to carriers direct
and $1,921,388.81 was paid to the Director General of Railroads on
account of amounts certified to be due from the carriers to the
President as operator of the transportation systems under Federal
control.
^
Section 209.—This section provides for the guaranty of net raUway
operating income during the six months' period immediately following
the termination of Federal control on March 1, 1920. During the
fiscal year there was paid to carriers on this account the sum of
$108,217.02, which, after deducting repayments of $59,288.44 made
during the fiscal year by carriers on account of overpayments under
this section, brings the net payments to $531,756,045.71 between
March, 1920, and June 30, 1930. The following carriers are still
indebted to the United States on account of overpayments made
under the provisions of paragraph {g) of this section:
Great Northern Railway Co
$1, 329, 785. 98
Minneapolis & St. Louis Railroad Co., receiver
292, 022. 23
Missouri & North Arkansas Railroad Co., receiver
41, 375. 46
Oregon Electric Railway Co. (subsidiary Spokane, Portland &
Seattle Railway Co.)
.
25,741.83
Spokane, Portland & Seattle Railway Co
104, 273. 48
Total

.

.

1, 793, 198. 98

In some cases these claims are in litigation and the others have
been placed in the hands of the Attorney General of the United States.
For a detailed statement showing partial and final payments to
carriers and amounts received from carriers on account of overpayments, see Table 51, page 602.
Section 210.—This section established a revolving fund of
$300,000,000 to be used for loans to raUroads under the conditions
set forth in a certificate of the Interstate Commerce Commission
authorizing each loan, and also for paying judgments, decrees, and
awards rendered against the Director General of RaUroads. No new
loans are being made because the time for making application therefor
has expired. The expenditures by the director general during the
fiscal year for this purpose amounted to $172,562.82, making net
expenditures by him on this account to June 30,1930, of $33,823,448.82.
For a statement showing the principal amount of obligations held
as of June 30, 1929 and 1930, on account of loans made, see Table 52,
page 603.
The following statement shows the amounts of principal and interest
due from carriers in default as of June 30, 1930, on account of their
obligations for loans under this section:




111

SEOREfAUY OF THE TUEASUEY

Principal and interest due from carriers in default on June 30, 19S0, on account
of loans under section 210
Principal in
default

Name of carrier
Aransas Harbor Terminal Railway
Des Moines & Central Ralroad
_
Fort Dodge, Des Moines & Southern Railroad Co..
Georgia & Florida Railway
...^
_,
Gainesville & Northwestern Railroad C o . .
Minneapolis & St. Louis Railroad Co
Missouri & North Arkansas Railway Co
,
Salt Lake & Utah Railroad Co
Shearwood Railway Co
.._
Virginia Blue Ridge Railroad Co
•.
Virginia Southern Railroad Co
Waterloo, Cedar Falls & Northern Railway Co
Wichita Northwestern Railway Co
Total

$45, 693.17

(0
0)
(')

75, 000. 00

(0
(0

Interest in
default

Total in
default

$133,035. 00
5,157. 34
23, 760.00
20, 966. 65
568, 527.00
1,039, 970. 47
287, 902.80

78, 500. 00
1, 906.76
106, 000. 00

(0
(0
(0
307,099.93

25, 440. 00
11,899. 56
635,073. 57
148,882. 50
2, 900, 614.89

$45,693.17
133, 035.00
5,157.34
23, 760.00
95, 966. 65
568, 527.00
1,039, 970.47
366, 402.80
1, 906. 76
131, 440.00
11,899. 56
635,073. 57
148,882.50
3,207,714.82

1 Principal not yet due.

Securities owned by the United States Government
The aggregate amount of securities owned by the Government on
June 30, 1930, as compiled from the latest reports received, was
$11,639,563,681.44 as against $11,115,050,159.87 on June 30, 1929,
an increase of $524,513,521.57. A summary comparison of the
holdings at the end of the last two fiscal years is as follows:
Summary of securities owned by the United States on June 30, 1929 and 1930
June 30,1929

Security
Foreign obligations:
Received under debt settlements
Aiiother -

--

Total
.
:
Capital stock of war emergency corporations
Railroad obligations
•
_
Capital stock of Panama Railroad
_.Capital stock of Inland Waterways Corporation .
Capital stock of Federal land banks
Capital stock of Federal intermediate credit banks
Miscellaneous securities received by War and Navy Departments and U. S Shipping Board
Total

:.

-

--

June 30,1930

$7, 257, 927, 794. 93 $11,086,120,082. 43
3, 639, 636, 271. 90
320, 787,222.80
10,897, 564,066.83
42,143,894.39
62, 698, 691, 99
7,000,000. 00
7,500,000. 00
383,028. 75
30, 000,000. 00
67, 760, 477. 91
11,116,050,159.87

11, 406, 907,305. 23
47, 569,880. 40
54, 792,274.87
7,000, 000.00
9,000,000.00
292, 519. 25
30,000,000.00
84,001, 701. 69
11, 639, 563, 681. 44

There was a substantial increase in the foreign obligations, amounting in round figures to $509,000,000, due principally to the exchange
of funded bonds of the Government of the French Republic for the
old bonds held, pursuant to the debt agreement of April 29, 1926.
The total amount of the funded bonds received amounted to $4,025,000,000 and the obligations surrendered in exchange for these bonds
amounted to approximately $3,340,000,000, the difference representing the accrued and unpaid interest funded into bonds. This
increase was partially offset by the payments received on account
of principal during the year under the various debt settlements.
12101—31

10




112

REPORT ON THE FINANCES

Other increases comprise about $16,200,000 in miscellaneous securities due almost entirely to additional securities acquired by the United
States Shipping Board; $1,500,000 in the capital stock of the Inland
Waterways Corporation, which was called during the year, pursuant to
the authority contained in the act of May 29, 1928, to give the corporation greater working capital; and $5,000,000 in the capital stock
of war emergency corporations. The increase in the capital stock of
war emergency corporations was the result of the procedure of offsetting the deposits made by the corporations with the Treasury
against their liabilities to the Treasury on capital stock account. The
cash balance in the Treasury tb the credit of the United States
Shipping Board at the close of the fiscal year showed a decrease of
about $7,000,000, and the cash balance to the credit of the United
States Housing Corporation showed an increase of about $2,000,000
as compared with the balances of last year, making a net change of
$5,000,000.
A detailed statement of the securities held on June 30, 1930, will
be found as Table 49, page 600.
Trust funds administered by the Treasury
Adjusted service certificate fund.—Investments for the account of the
adjusted service certificate fund were made during the fiscal year
1930 in special issues of Treasury notes bearing interest at the rate
of 4 per cent per annum in accordance with the procedure outlined in
the Annual Report of the Secretary of the Treasury for the Fiscal
Year 1925.
Investments made during the year amounted to $137,800,000, of
which. $112,000,000 represented funds appropriated by Congress,
$5,700,000 represented the proceeds of maturing notes reinvested, and
$20,100,000 was derived from interest on investments. Redemptions
during the year provided funds for authorized payments amounting
to $15,900,000, on which interest amounting to $352,175.31 was paid
to the date of redemption.
A statement of the condition of the fund as of June 30, 1930, is as
follows:
Adjusted service certificate fund, June SO, 1980
FUND ACCOUNT

Appropriations:
To June 30, 1929
Available Jan. 1, 1930._.
Interest on investments

., $560, 000, 000. 00
112, 000, 000. 00
60, 455, 164. 90

^

Veterans' Bureau checks paid by Treasurer, United States
Balance in fund June 30, 1930




.

732,455,164.90
101, 988, 900. 53
" 630, 466, 264. 37
_

SECRETARY OF THE TREASURY

113

FUND ASSETS

Investments:
4 per cent Treasury notes—
Dated

Jan. 1, 1926
Mar.5, 1926__._
Jan. 1, 1927
Jan. 1, 1928
Jan. 1, 1929
Jan. 1, 1930

Maturing

Jan.
Jan.
Jan.
Jan.
Jan.
Jan.

1, 1931>.-__
1, 1931
1, 1932
1, 1933
1, 1934
1, 1935

$46, 900, 000. 00
. 70,000,000.00
123, 400, 000. 00
123,400,000.00 '
127, 700, 000. 00
137,800,000.00
$629, 200, 000. 00
Balance to credit of disbursing officers of the Veterans' Bureau.
1, 266, 264. 37
Total fund assets June 30, 1930

630, 466, 264. 37

Civil service retirement and disability fund.—During the year the
Treasury continued to make investments for account of the civil
service retirement and disabUity fund in special issues of Treasury
notes bearing interest at the rate of 4 per cent per annum in accordance with the procedure outlined in the Annual Report of the Secretary
of the Treasury for the Fiscal Year 1926.
Total credits to the fund during the fiscal year amounted to
$58,929,623.60, of which $29,048,108.65 was on account of deductions
from basic compensation of employees and service credit payments,
$9,381,514.95 represented interest and profits on investments, and
$20,500,000 was appropriated by Congress for the purpose of continuing to finance the liabUity of the Government in connection with the
fund. Of the increase representing interest and profits on investments,
$3,482,257.53 represented interest due June 30, 1929, but owing to
the fact that such date was Sunday, this amount was not credited in
the fund until July 1, 1929. Deducting this amount from the total
credits on this account leaves $5,899,257.42 as interest and profits on
account of investments in the fund applicable to the fiscal year under
review. Expenditures on account of refunds to employees, annuities,
etc., amounted during the fiscal year to $18,147,216.91 as compared
with $16,043,373.24 for the previous year. The total earnings and
profits on investments to June 30, 1930, amounted to $23,557,198.44.
The following statement shows the status df the fund as of June 30,
1930:
Civil service retirement and disability fund, June SO, 1930
Credits:
On account of deductions from basic compensation of employees and service credit payments from Aug. 1, 1920,
to June 30, 1930
.
$199, 900, 551. 92
Appropriations:
To Jurie 30, 1929
.
$19, 950, 000
Available July 1, 1929
. 20, 500, 000
40,450,000.00
Interest and profits on investments
23, 557, 198. 44




263,907,750.36

114

REPORT ON THE FINANCES

Less disbursements on account of annuities and refunds:
Total

-

.

$106, 996, 802. 33
156, 910, 948. 03

Assets:
Face amount
Principal cost
$22, 695, 050 fourth Liberty loan 4){ per
cent-$22, 399, 454. 01
31, 200, 000 4 per cent special Treasury
notes payable June 30,
1931
- . - 31, 200, 000. 00
14, 400, 000 4 per cent special Treasury
notes payable June 30,
1932
14, 400, 000. 00
47, 800, 000 4 per cent special Treasury
notes payable June 30,
1933
47, 800, 000. 00
35, 800, 000 4 per cent special Treasury
notes payable June 30,
1934
35, 800, 000. 00
4, 900, 000 4 per cent special Treasury
notes payable June 30,
1935
4, 900, 000. 00
156, 795, 050
Unexpended balances:
Disbursing account
On books of the Secretary of the Treasury _

156, 499, 454. 01
364,528.61
46, 965. 41
411, 494. 02

Total fund assets as of J u n e 30, 1930

156, 910, 948. 03

District of Columbia teachers^ retirement fund.—The act of January
15, 1920, as amended by the District of Columbia appropriation act
of June 5, 1920, vested the administration of this fund in the Commissioners of the District of Columbia, except that it was directed that
such funds shall be held and invested by the Treasurer of the United
States. A further amendment of June 11, 1926, created a reserve
fund as a result of annual appropriations and authorized the investments on account of such fund to be held by the Treasurer of the
United States separate from the investments on account of contributions of teachers. During the fiscal year 1930, the Treasurer
purchased for account of the deductions fund $329,000 face amount
4)i per cent Federal farm loan bonds at a principal cost of $306,814.63
and for account of the Government reserves fund $269,000 face
amount of 4}^ per cent Federal farm loan bonds at a principal cost of
$243,549.18.
The following statement shows the status of the combined funds
as of June 30, 1930:




SECRETARY OF THE TREASURY

115

District of Columbia teachers' retirement fund, June 30, 1930
Credits:
o
On account of deductions from basic compensation of
teachers from January 15, 1920, to June 30, 1930--$2, 540, 439. 98
Appropriations—
To June 30, 1929
$1, 068, 456. 03
Available July 1, 1929400, 000. 00
1, 468, 456. 03
Interest on investments. _:
531, 028. 12
4, 539, 924. 13
1>201, 987. 80

Less disbursements on account of annuities and refunds
Balance in fund June 30, 1930-

3, 337, 936. 33

Assets:
Deductions fund—
Face amount

Principal cost

$26, 850 4J4 per cent first Liberty loan
converted
$27, 529. 64
735, 750 4>^ per cent fourth Liberty loan.
704, 371. 27
10, 000 4}4 per cent Treasury bonds of
1947-52
10,000.00
55, 320 4 per cent Federal farm loan
bonds_-_
54, 660. 95
1, 073, 880 4:}i per cent Federal farm loan
bonds
1,050,733.10
417, 440 4)^ per cent Federal farm loan
bonds
426,788.96
91, 380 4% per cent Federal farm loan
bonds
94,627.91
1,000 5 per cent Federal farm loan
bonds
1,030.00
182, 000 4>^ per cent Philippine Islands
bonds.-..
197, 669. 56
2,593,620

2, 567, 4 n . 39

Government reserves fund—
215, 640 4 per cent Federal farm loan
bonds
. 535, 600 4:}i per cent Federal farm loan
bonds
100 4% per cent Federal farm loan
bonds
761, 340
Accrued interest paid in 1930, repayable in 1931
Unexpended balances:
On books of Secretary of.the Treasury
Treasurer, United States, disbursing account.

208,050.78
509,910.94
IOL 64

718, 063. 36
= = = = =

3,285,474.76
809. 16

51, 277. 67
374. 86
61,652.43

Total fund assets June 30, 19»0



3,337,936.33

116

REPORT ON THE FINANCES

Foreign service retirement and disability fund.—Investments for
account of the foreign service retirement and disability fund were
made duriug the fiscal year 1930 in special issues of Treasury notes
bearing interest at the rate of 4 per cent per annum ia accordance
with the procedure outlined in the Annual Report of the Secretary of
the Treasury for the Fiscal Year 1927.
Credits to the fund during the year aggregated $441,419.27, of
which $167,293.86 was on account of deductions from basic compensation of employees and service credit payments, $58,125.41 represented interest and profits on investments, and $216,000 was appropriated by Congress for the purpose of continuing the financing of the
liability of the Government in connection with the fund. Of the
amount credited to the fund on account of interest and profits on
investments, $18,223.45 represented interest which was due on
June 30, 1929, but owing to the fact that that date was Sunday the
ainount could not be credited to the fund until July 1, 1929. After
deducting this amount from the total credits on account of interest
and profits, there was credited to the fund on this account as applicable
to the fiscal year under review $39,901.96. Net advances to the
disbursing officer of the State Department for the payment of
annuities and refunds, etc., amounted during the fiscal year to
$129,142.59, as compared with $90,923.51 for the previous year.
The total interest and profits credited in the fund to June 30, 1930,
amounted to $99,706.17.
The following statement shows the status of the fund as of June
30,1930:
Foreign service retirement and disability fund, June 30, 1930
Credits:
On account of deductions from basic compensation and service
credit payments of employees subject to the foreign service
act
.
Appropriations—
To June 30, 1929
$213,000
Available July 1, 1929
: . . . . . 216,000
Interest and profits on investments

.

-

$939,225.67

429,000.00
99, 706. 17
1, 467, 93L84

Less net advances to disbursing officer of the State Department
for the payment of annuities and refunds
._
Balance in fund June 30, 1930




-

515, 853. 93
952,077.91

117

SECBETARY OF THE TKEASUBY
Assets:
Face amount

Principal cost

$79,150 4}i per cent fourth Liberty loan
$81, 069. 85
385,000 4 per cent special Treasury notes, due
June 30, 1933
385, OOO 00
454,000 4 per cent special Treasury notes, due
June 30, 1934
454,000.00
32,000 4 per cent special Treasury notes, due
June 30, 1935
.....
32,000.00
950, 150

"

$952,069. 85

Unexpended balance June 30, 1930, on books of the Secretary of
the Treasury
._
__.
Total fund assets June 30,.1930

8. 06
952, 077. 91

Library of Congress trust fund.—Under the act of March 3, 1925, as
amended, a Library of Congress Trust Fund Board, consisting of the
Secretary of the Treasury, the chairman of iuhe Joint Committee on
the Library, the Librarian of Congress, and two persons appointed
by the President, is authorized to accept, receive, hold, and administer such gifts or bequests of personal property for the benefit of or in
connection with the Library, its collections, or its service as may be
approved by the board and by the Joint Committee on the Library.
The moneys or securities given or bequeathed to the board are
required to be receipted for by the Secretary of the Treasury, who is
authorized to invest, reinvest, or retain investments as the board may
determine. In accordance with the pohcy adopted by the board,
investments and reinvestments of the trust funds are made in interestbearing securities of high rating.
The following statement shows the earnings collected on account
of each donation:
Library of Congress trust fund earnings to June SO, 1930
Income account
Donation

Beethoven
Benjamin
Bowker
_._
Carnegie
."
Coolidge
Guggenheim
Huntington..
Wilbur
-

:.

._
_
^

Total




Total collected to
June 30,
1929

_

_._
_
.:.

_. _
_

Collected
during
fiscal year
1930

Total collected to
June 30,
1930

8,073. 75
6,772. 22

$219.09
3,282. 60
84.30
3,733.00
8,748.05
1,531. 25
6,675. 00
7,963. 72

$219.09
11, 245.00
361.49
9, 208.13
31,684.82
1, 531. 25
14, 748. 75
14, 735.94

51,497. 56

32, 236. 91

83,734.47

$7,962. 50
277.19
5,475.13
22,936.77

118

REPORT ON THE FINANCES

The following statement shows the priucipal cash accounts for each
donation:
Library of Congress trust fund—Cash receipts, cost of investments, and unexpended
balances for fiscal year 19S0
Donation

Beethoven
Carnegie
Coolidge
Guggenheim..
Hungington..
Wilbur
Total.

Unexpended Cash receipts Cash avail- Cost of invest-] Unexpended.
balance
able for
during fiscal
balance
ments
June 30,1929
investment
year 1930
June 30,1930

$70. 75
2, 640.90
993.75
3,705.40

$9,900. 00

44, 066. 66

$10,000. 00
70.75
17,427.18
75, O O 00
C.
993. 75
44, 066. 66

143,852.94

147,658. 34

137,857.00

$10,000.00
14, 786. 28
. 75,000. 00

9, 927.00
74. 250. 00

$100. 00
70.75
7, 500.18
750.00
993.75

43, 780. 00

9,701.34

Substantially all of the unexpended balances above mentioned were
invested shortly after the close of the fiscal year.
The board received during the past year a gift from the Beethoven
association to be known as the Sonneck memorial fund, the income
from which is to be devoted to the aid and advancement of musical
research. This sum was invested in $10,000 face amount of Canadian
National Railway 5 per cent guaranteed gold bonds, due October 1,
1969, at a principal cost of $9,900.
The board received on account of the securities held in the donation made by Mrs. Elizabeth Sprague Coolidge, subscription rights
to bji shares of common stock of the Commonwealth Edison Co.;
8M shares of common stock of the Public Service Co. of Northern
lUuiois; and 28}^ shares of stock of the American Telephone & Telegraph Co. The subscription rights were sold on the market for
$9,536.28. There was also received on account of this donation the
sum of $500, representing 10 per cent payment on account of $5,000
face amount of Chicago Railw:ay 5 per cent bonds; $750 through
the sale of the bonds of the Potosi Rio Verde Railway Co.; and $4,000
received from the American Ship Building Co. as a payment m connection with the reduction of its capital stock. A part of these funds
was iavested in $7,000 face amount of Canadian National Railway
5 per cent guaranteed gold bonds due October 1, 1969, at a principal
cost of $6,930, and in $3,000 face amount of the same bonds due
July 1, 1969, at a principal cost of $2,997.
The board received also from the Daniel Guggenheim Fund for
the Promotion of Aeronautics (Inc.), a gift of $140,000 for the establishment of a chair of aeronautics, to provide for the assembling of a
complete aeronautical library for research purposes, and the collection of aeronautical historical material. Of this sum, $75,000 was
stipulated as ah endowment in the Library of a ''chair of aeronautics,"
the income from which is to be utihzed for the chief of the section in




119

SECRETARY OF THE TREASURY

addition to any stipend he may receive from the Government. The
balance of the fund is to provide salaries for the director or chief
of section for a period of two years, and for acquiring a collection of
aeronautical historical material, subject, however, to the condition
that Congress shall provide certain appropriations for carrying on
this work. That part of the fund donated as an endowment for a
chair of aeronautics was invested in $75,000 face amount of Harbour
Commissioners of Montreal 40-year 5 per cent first mortgage guaranteed gold bonds, at a principal cost of $74,250.
The board received on account of the Wilbur donation subscription
rights to 16Q% shares of the common stock of the Public Service Co.
of Northern Illinois, which were sold on the market for the sum of
$43,846.66. This sum was invested in $44,000 face amount of Canadian National Railway 5 per cent guaranteed gold bonds, due October
1, 1969, at a principal cost of $43,780.
The following statement shows the securities held by the board for
account of each donation as of-June 30, 1930. The securities are all
held in safe-keeping by the Treasurer of the United States, subject to
the order of the Secretary of the Treasury, for account of the board.
Library of Congress trust fund board securiiies held June SO, 1930
Name of security

Face amount Rate per
cent

Class of security

Elizabeth Sprague Coolidge donation
Canadian National Railways Co_
Chicago Railways Co
Great Northern Ry. Co
Houston Home Telephone Co
Missouri Pacific R. R. Co
New England Telephone & Telegraph
Co.
Public Service Co. of Northern Ilhnois.
Rio Grande Southern R. R. Co
-..
Utah Power & Light Co
Jacob M. and Tillie Fine and Charles
and Birdie Fine.
American Ship Building Co
American Telephone & Telegraph Co..
American Window Glass Co —
Board of Trade Building Trust of
Boston.
Commonwealth Edison Co..
Elgin National Watch Co
1
Mexican Northern Ry. C o . . .
Public Service Co. of Northern Illinois.

$10,000.00
4, 500.00
10,000.00
100.00
2,000. 00
16, 400.00
13, 000.00
1,000.00
10,000.00
10,000.00

b

Guaranteed gold bonds.

5
b

First and refunding mortgage bonds.
First mortgage bonds.

5 1 First mortgage bonds.
General mortgage bonds.
7 1 First mortgage bonds.

i'Al
b
b

5H

First and refunding mortgage bonds.
First mortgage bonds.
Do.
Promissory note.

6,000. 00
17,100. 00
2, 500. 00
700. 00

Common stock.
Do.
Do.
Do.

12,400.00
9, 375.00
800.00
5,000.00

Do.
Do.
Do.
Preferred stock.

6

Carnegie donation
Commonwealth Edison Co
Missouri Pacific R. R. Co
New England Telephone & Telegraph
Co.

52,000.00
5,000. 00
25,400.00

4V^
b

i'A

First mortgage collateral bonds.
First and refunding mortgage bonds.
First mortgage bonds.

Archer M. Huntington donation
Central Pacific Ry. Co.__
Missouri Pacific R. R. Co

105,000. 00
49, 500.00

4
5

First and refunding mortgage bonds.
Do.

100,000.00

7

Preferred stock.

James B. Wilbur donation
Public Service Co. of Northern Illinois.
William E. Benjamin donation
Standard Oil Co. of California




33,150,00

Common stook.

120

REPORT ON T H E FINANCES

Library of Congress trust fund board securities held June SO, 1930—Continued
Face amount Rate per
cent

Name of security
R. R. Bowker donation i
Detroit Edison Co
.
German Government.i
Japanese Government
Austrian Government
Harry F. Guggenheim donation
Harbor Commissioners of Montreal
. Beethoven Association donation
Canadian National Railways
Total . . - . . - -

_.

$5,000.00
2,000.00
2,000.00
1,000.00

5
7

m

Class of security

First mortgage bonds.
German external loan.
Sinking fund gold bonds.
Sinking fund bonds, guaranteed loan.

7
Guaranteed gold bonds.

75,000.00
5
10,000.00
595,925.00

Guaranteed gold bonds.
5

1 Life interest in six-sevenths of income retained under terms of donation.

United States Government life insurance fund.—Under the provisions
of section 18 of the act approved December 24, 1919, as amended
March 4, 1923, the Secretary of the Treasury is required to invest
in interest-bearing obligations of the United States or in bonds of
the Federal land banks all moneys received in payment of premiums
on converted insurance in excess of authorized payments. Due to
the act approved March 3, 1927, authorizing the Director of the
United States Veterans' Bureau to make loans to veterans upon their
adjusted service certificates out of the United States Government
life insurance fund, the funds available for other investments during
the past year have been very small. Practically all of the funds
available during the fiscal year under review were used to make
loans to veterans, but whenever the accumulated funds temporarily
exceeded the requirements for this purpose and the authorized
payments, the excess was invested in United States securities. During
the year the total Government securities decreased $37,000,000 face
amount. The Director of the Veterans' Bureau reported total
loans to veterans to June 30, 1930, aggregating $279,723,856.44
Monthly reports are made by the Treasury to the Veterans' Bureau
of all securities in the fund and the principal cost thereof as the
result of investments made by the Secretary of the Treasury, and
periodic verifications of the security holdings are made through
reports rendered to the director by the safe-keeping offices.
The investments as of June 30, 1930, were as follows:
Government life insurance fund, June SO, 1930
Par value
Fourth Liberty loan i}4 per cent bonds of 1933-1938
4 ^ per cent Treasury bonds of 1947-1952
Total...
4/^ per cent Federal farm loan bonds
4 ^ per cent Federal farm loan bonds.
. .
. . .
Total investments made by the Secretary of the Treasury...
Loans to veterans as reported by the Director of the United States
Veterans' Bureau
Total investments in the fund




Principal cost

$25, 741, 800. 00
49,173, 200. 00
74,915,000.00
32,550,000.00
69, 200,000. 00
176, 665,000.00

$25,196, 795. 03
49, 201,905. 28
74,398,700. 31
32,477, 590.04
69, 742,644. 40
176,618,934.75

279,723,856. 44
456,388,856.44

279,723,866.44
466,342.791.19

SECRETARY OF THE TREASURY

121

Division of Bookkeeping and Wa^rrants
The Division of Bookkeeping and Warrants issues, in the name of
the Secretary of the Treasury, all warrants on the United States
Treasury, and under section 10 of the act of July 31, 1894, keeps the
official accounts relating to the receipt, appropriation, and expenditure of the public money covering all departments and establishments
of the Government.
A summary of the receipts and expenditures of the Government for
the fiscal year ended June 30, 1930, is given below on the basis of
daily Treasury statements, revised. The details may be found on
pages 469 to 471 of this report.
Receipts
Expenditures v
Surplus

$4, 174, 051, 545. 77
3, 993, 769, 636. 40
180, 281, 909. 37

The work of the division, which has many other duties not particularly related to the foregoing, may be classified as follows:
(1) Receipts..
(2) Appropriations and expenditures.
(3) Financial reports.
(4) Duplicate checks, outstanding liabilities, etc.
(5) Budget matters and special deposit accounts.
(6) Miscellaneous matters.
Receipts.—Title 31, section 495, of the United States Code, requires
public depositaries to issue duplicate receipts for moneys of the United
States deposited with them, transmitting the original forthwith to the
Secretary of the Treasury and delivering the duplicate to the depositor;
and title 31, section 147, of the United States Code, provides that all
receipts for moneys received by the Treasurer of the United States
shall be indorsed upon warrants signed by the Secretary of the Treasury, without which warrants, so signed, no acknowledgment for
money received into the Public Treasury shall be valid. Certificates
of deposit are forwarded daily to the Secretary of the Treasury
by depositary banks through the Treasurer of the United States,
with daily transcripts of their accounts. After the certificates of
deposit have been cleared by the Treasurer, they are transmitted
to the Secretary of the Treasury, Division of Bookkeeping and Warrants, for covering into the Treasury. Here the certificates are
examined, segregated, classified according to executive departments
and independent establishments, and then covered into the Treasury.
The original warrant is transmitted to the Treasurer of the United
States; one copy is retained in the files of the Division of Bookkeeping and Warrants, and the other is sent to the General
Accounting Office for its permanent files.
1 Includes $553,883,603.25 public debt retirements chargeable against ordinary receipts.




1^2

RJEPORT O N T H E FINANCES

A cumulative record is maintained of all deposits covered into the
Treasury, classified according to source of revenue and each separate
head of appropriation. The division also maintains a cumulative
record of the deposits made by each depositing officer. A departmental deposit list is used as a means of notifying the administrative
office concerned of the fact t h a t the deposits referred to therein have
been formally covered into the Treasury as required by law.
Under the present system of covering money into the Treasury,
warrants are written from original certificates of deposit. The system
furnishes not only a complete description of each deposit on covering
warrants but also provides an absolute check upon the accuracy of
the postings of the d-eposits to accounts of depositors, revenues, and appropriations. I t also enables the division to keep the covering work in
a current status, facilitates the audit of fiscal officers' accounts, and
provides an improved method of reporting figures to the Treasurer
for use in daily Treasury statements.
During the fiscal year ended June 30, 1930, the sum of $8,025,104,850.86 was received and covered into the Treasury by warrant.
There were no uncovered moneys on June 30, 1930.
Appropriations and expenditures.—The duties of the division
relating to the appropriation and expenditure of public money are
based upon article 1 of the Constitution, which provides that no
money shall be drawn from the Treasury except in consequence of
appropriations made by law, and upon title 31, section 47, of the
United States Code, which provides that the Treasurer of the United
States shall disburse the moneys of the United States only upon
warrants drawn by the Secretary of the Treasury.
The warrants issued under the several classes during the fiscal year
1930 are summarized below:
Number
Covering warrants 2
Investment warrants (debits)
Investment warrants (credits)
Appropriation warrants
Accountable warrants
Settlement warrants
Transfer-appropriation w a r r a n t s
(debits)
Transfer-appropriation w a r r a n t s
(credits)
Transfer warrants (debits)
Counter warrants (credits)
Surplus-fimd warrants
Total

Ordinary

Public debt i

Total

8,790 $4,481,114,102. 86 $3, 543,990, 748. 00 $8,025,104, 850. 86
207, 974, 364. 89
118
21,717, 000. 00
229, 691, 364. 89
50, 705, 364.89
118
229, 691,364. 89
178,986, 000. 00
587 3, 539,870, 527. 20 4,468, 860, 515. 63 8, 008, 731,042. 83
21,031 3,456, 039, 834. 36 4,447,149,196.42 7,903,189,030.78
25, 372
76, 901,951.48
76,901, 951.48
• 361

87, 604,162. 92

548, 601, 503. 88

636, 205,666.80

361
595
595
47

87, 604,162. 92
3 826,407, 913.08
8 826,407, 913. 08
583,261, 099. 76

548, 601, 503. 88
14,383, 308.80
14,383, 308. 80

636, 205,666.80
840, 791, 221. 88
840, 791, 221. 88
583,261,099.76

56,900

14,223,891,397.44

13, 786, 673,085.41 28, 010, 564,482. 86

1 Includes public debt retirements chargeable against ordinary receipts.
2 Includes both revenues and repayments to appropriations.
3 Issued principally on account of Army account of advances and general account of advances (Navy).

A detaUed description of the classes and functions of the several
warrants issued by the division is set forth on page 106 of the Secretary's annual report for 1929.



123

SECRETARY OF THE TREASURY

Under the act of June 29, 1922 (42 Stat. 669), the Treasury is required to keep a special account of receipts and expenditures of the
District of Columbia. The transactions in this account during the
fiscal year 1930 on warrants-issued basis are as follows:
General funds

Special funds

T r u s t funds

Total

B a l a n c e J u n e 30,1929
R e v e n u e s , fiscalyear 1930

i$14,969,790.12
8 29, 572, 209. 47

$488, 782. 87
3, 319, 217. 81

2 $390, 238. 69
4 2,303,169.17

$15, 848, 811. 68
35,194, 596. 45

E x p e n d i t u r e s , fiscal year 1930..

4.4, 541,999. 59
5 29, 873, 582. 60

3,808,000. 68
6 3,133, 609. 26

2, 693,407. 86
2, 340, 617. 36

51,043,408.13
35, 347, 809. 22

674,391.42

352, 790. 50

15, 695, 598. 91

B a l a n c e J u n e 30,1930

14, 668,416. 99

^ Exclusive of $4,000 transferred from "Teachers' retirement appropriated fund, D. C , 1929," to
"Teachers' retirement fund, Government reserves, D. C. (trust fund)," for investment.
2 Includes $4,000 transfer referred to in note 1.
8 Exclusive of $444,040.20 general revenues of the District of Columbia covered into the Treasury to credit
of" Policemen and firemen's relief fund (trust fund)" under the act of Sept. 1,1916 (vol. 39, p. 718, sec. 12),
to meet deficiencies in said fund.
• Includes $444,040.20 referred to in note 3.
« Exclusive of $9,000,000 payable from revenues of the United States.
9 Includes $53,469.40 for "Purchase and maintenance of traflSc lights, D. C , 1927 and 1928" (special
fund), carried to surplus fund of Treasury under provisions of act of June 20,1874 (18 Stat. 110, 111, sec. 5).

Financial reports.—This division compiles (1) the annual combined
statement of the receipts, expenditures, balances, etc., of the Government; (2) the annual digest of appropriations; (3) financial tables on
receipts, expenditures, and appropriations for inclusion in the annual
report of the Secretary of the Treasury, and (4) statistical data relating to the receipts, appropriations, and expenditures of the Government such as may be requested by Congress, executive departments,
research institutions, and the general public.
The combined statement of receipts and expenditures is a financial
report (consisting of about 440 pages) required to be submitted to
Congress annually under section 15 of the act of July 31, 1894. I t is
a transcript of the warrants, ledgers, and registers maintained in the
appropriation-bookkeeping, and receipts sections of this division. In
accordance with the requirements of the act, the receipts are classified,
in so far as practicable, by ports, districts, and States, and the expenditures by each separate head of appropriation. The receipts and
expenditures are also classified according to funds; i. e., general,
special, trust, and District of Columbia. Under each separate head of
appropriation is shown:
1. Unexpended balance at beginning of year:
(a) On books of Treasury.
(6) To credit of disbursing officers.
2. Appropriations.
3. Expenditures:
(a) Warrants-issued basis.
{b) Checks-issued basis.
, 4. Amount carried to surplus fund.
5. Unexpended balance at close of year,
(a) On books of Treasury.
(6) To credit of disbursing officers.



124

REPORT ON THE FINANCES

The Digest of Appropriations contains a digest of each appropriation, together with legislation pertaining thereto, classified according
to departments and official appropriation titles as carried on the books
of the Treasury. The document is published for administrative,
disbursing, and accounting officers of the Government for use in
connection with the preparation, examination, and approval of
estimates, disbursements, accounts, vouchers, settlements, and
warrants relating to or affecting the appropriations made by Congress
covering the period for which the report is made. The preparation
of this document, which consists of approximately 700 pages, requires
an examination and analysis of appropriation acts and aU legislation
affecting appropriations.
The financial tables prepared by this division for the Secretary's
report have for their basis, principally, the figures contained in the
annual combined statement of receipts and expenditures and the
annual digest of appropriations, but are presented in a more summarized form. The statistical data prepared by this division have
for their basis, principally the figures contained in the combined
statement of receipts and expenditures, and the annual digest of
appropriations. Examples of these data are statements on Federal
aid to States, and relief legislation provided by Congress on account
of catastrophes, such as earthquakes, cyclones, drought, etc.
Duplicate checks, outstanding liabilities, etc.—This division has
supervision of the issuance of duplicate disbursing officers' checks
for the whole Government service and the certification of claims to
the General Accounting Office for the proceeds of checks which have
been covered into the trust fund known as outstanding liabUities; and
also has administrative supervision of the appropriations for ^^Contingent expenses, public moneys," covering the transportation of
paper currency and coin between Federal reserve banks, their
branches, the mints, and the Treasury, and the appropriation for
recoinage of gold, silver, and minor coins.
When an original check is lost, stolen, or destroyed, disbursing
officers and agents of the United States are authorized, under section
3646 of the Revised Statutes, as amended, to issue a duplicate check
within three years after the date of the original check. Upon receipt
of a satisfactory bond of indemnity, and affidavit proving ownership
and loss of the original check, a duplicate check is approved by the
Chief of the Division of Bookkeeping and Warrants for the Secretary
of the Treasury.
Under the provisions of sections 306 to 310 of the Revised Statutes,
disbursing officers' checks which have remained outstanding and
unpaid for three years are deposited and covered into the Treasury
to the credit of a trust fund known as outstanding liabilities. At the
close of each fiscal year the General Accounting Office reports to the




SECRETARY OF THE TREASURY

125

Division of Bookkeeping and Warrants all checks drawn by United
States disbursing officers which have remained outstanding and
unpaid for three full fiscal years. The Secretary of the Treasury,
through the Chief of the Division of Bookkeeping and Warrants,
instructs the Treasurer to transfer the ariiounts of these checks from
the official checking accounts of the disbursing officers concerned to
the credit of the trust fund ^'Outstanding liabilities." Certificates
of deposit issued by the Treasurer of the United States in accordance
with these instructions are examined and the amounts thereof
covered into the Treasury by warrant. A full description of each
check is entered in a register of outstanding liabilities, the amount of
the check being placed to the personal credit of the payee, subject to
claim therefor. In connection with each claim there must be filed
with this office either the check itself, or, if the check is lost, a satisfactory bond of indemnity, with proof of ownership and loss of the
check. , After an administrative examination has been made by this
office, the case is certified to the General Accounting Office for the
issuance of a certificate of settlement, upon the receipt of which
a settlement warrant is issued by this division in favor of the payee,
and a charge made against the credit previously entered in the outstanding liabilities register. The undelivered checks remaining in
the hands of public officers for three full fiscal years are transmitted
to this office for file.
The appropriation '^Contingent expenses, public moneys" covers
the payment of postage on mutilated United States paper currency
shipped from the Federal reserve banks and branches to Washington
for redemption; insurance on new currency sent from Washington
under frank to Federal reserve banks and branches; expenses of coin
shipments between Federal reserve banks, the mints, and the
Treasury; and also the purchase of coin bags, fiber boards, webbing
straps, and telegraph service incident to the foregoing. The work
requires the usual administrative examination and approval of
vouchers, and their certification to the disbursing clerk of the Treasury Department for payment, and the keeping of administrative
accounts, including records showing the movement of the various
kinds of currency and coin.
Appropriations for the recoinage of gold, silver, and minor coins
cover the difference between the. actual value of such coins and their
value after recoinage. Reimbursements are made to the Treasurer of
of the United States for adjustment of his accounts upon vouchers
submitted to this office by the mints.
This division also has jurisdiction over the deposit of forfeited bonds,
donations, and amounts received for the so-called conscience fund
and the deposit and transfer of disbursing funds, and gives instructions relative to the issuance of second original checks of disbursing
officers issued in favor of governmental agencies.



126

REPORT ON THE FINANCES

Budget matters and special deposit accounts.—Section 214 (a) of
the Budget and Accounting Act, approved June 10, 1921 (42 Stat.
23), provides for the designation by the head of each department of a
budget officer, whose duty it is to prepare the departmental estimates. In pursuance of the above-mentioned act the Undersecretary of the Treasury has been designated budget officer of the Treasury Department. The budget work of the Division of Bookkeepiug
and Warrants involves the preparation of circulars of instructions
relating to estimates of receipts, appropriations, and expenditures of
the Treasury Department; apportionments of appropriations; reserves, etc.; the editing and assembling of the estimates in proper form
for submission to the Bureau of the Budget; the preparation of correspondence and reports thereon and the maintenance of statistical
records relating thereto; the submission of certain reports to Congress;
the preparation of economy reports; the handling of certified claims
and claims for damages under the act of December 28, 1922, etc.
This division also handles the work in connection with the special
deposit accounts of the Secretary of the Treasury, which cover offers
in compromise under the provisions of section 3489 of the Revised
Statutes, involving all departments and establishments, and deposits
by public building contractors and other matters; maintains accounts
with alien property trust funds in the Treasury and makes a semiannual audit of alien property trust fund earnings; preaudits payments of awards under the settlement of war claims act of 1928,
which provides for the settlement of World War claims of American
nationals against Germany, Austria, and Hungary, and of nationals
of those countries against the United States; and makes an annual
administrative examination of balance sheets and profit and loss
statements of Federal reserve banks and Federal intermediate credit
banks submitted in connection with payments by these banks of
franchise tax due the Government.
Under the act of October 6, 1917, and the settlement of war claims
act of 1928, approved March 10, 1928 (44 Stat. 254), the Secretary
of the Treasury held on June 30, 1930, for account of the Alien Property Custodian securities in the face amount of $58,205,300. During
the year the following transactions were made in this account:
Securities:
Held June 30, 1929
Purchased and exchanged
Sold dr redeemed
Held June 30, 1930

..
.__

$93, 515, 300
46, 964, 000
140, 479, 300
82, 274, 000
58, 205, 300

The above sales included $1,000,000 of securities sold on July 15,
1929, and $1,100,000 of securities sold on June 25,1930, the proceeds




SECRETARY OF THE TREASURY

127

of which, together with $650,000 face ainount of Treasury notes, were
transferred to the German special deposit account.
Under decision of the Supreme Court of the United States, dated
May 24, 1926, in the case of Max Henkels, appellant, v. Howard
Sutherland, as Alien Property Custodian, and Frank White, as
Treasurer of theUnited States, and opinions of the Attorney General,
dated August 25, 1926, and July 7, 1927, rendered in connection
therewith, there has been paid by the Treasury to eligible claimants
upon determination of the Attorney General to September 1, 1930,
the sum of $5,278,994, and to the Alien Property Custodian for administrative expenses the sum of $70,361.71. Further payments of
this character, except as to those which were not completed by the
Treasury at the time of the enactment of the settlement of war claims
act of 1928, are made by the Alien Property Custodian under the
provisions of section 26 (b) of said act. In connection with these
cases the sum of $155,745.41 was withheld from. claimants by the
Treasury pending determination of their income tax liability, if any.
Of the amount so withheld $116,308.01 has been refunded or paid to
the Commissioner of Internal Revenue, leaving a balance in this
account of $39,437.40.
The total amount paid during the fiscal year 1930, upon authorizations of the Alien Property Custodian and the Attorney General, was
$41,458,825.76,
i
Miscellaneous.—In addition to the foregoing, the following matters
are handled under the.immediate supervision of the Chief and Assistant Chief of the Division of Bookkeeping and Warrants: Requests of
disbursing officers (a) to carry cash at their own risk and to receive
advances of funds from the Treasury in excess of the penalties named
in their bonds, under the provisions of section 3620 of the Revised
Statutes and Treasury Department Circulars Nos. 195, dated January 24, 1921, and 316, dated December 21, 1922, and (6) for waivers
of delinquency in rendition of accounts and permission to merge
accounts, under the provisions of section 12 of the act approved July
31, 1894 (28 Stat. 209); the making of reports to committees of Congress on proposedor pending legislation; the certification to Congress
of judgments against the Government in district courts and the
Court of Claims; requests for decisions of the Comptroller General
of the United States and opinions of the Attorney General; court
subpoenas on the Secretary of the Treasury; claims under private
relief acts; and the preparation of correspondence relating to receipts,
appropriations, expenditures, claims, contracts, etc., from the organization of the Government to the present time,
121Q1—31

11




128

REPORT ON T H E FINANCES

Dhision of Deposits
The Division of Deposits is charged with the administration of
matters pertaiuing to the designation and supervision of Government
depositaries and the deposit of Government funds in such depositaries.
The function of the depositary system, aside from the special depositaries, is to provide facilities for all receiving and disbursing
officers of the Government and for the safekeeping and prompt remittance of all public moneys or other funds deposited by Government
officers. Depositaries are designated and maintained only where
required to provide necessary facilities.
Amount of deposits.—The following statement indicates the Government deposits held by depositary banks on June 30, 1929 and 1930:
Government deposits held by depositary banks on J u n e SO, 1929 and 1930
Type of depositary

June 30, 1929

June 30,1930

Federal reserve banks and branches
Special depositaries!
.
Foreign depositaries:
To credit of Treasurer of the United States
To credit of other Government oflicers
.
.
Member bank depositaries:
To credit of Treasurer of the United States _
. .
To credit of other Government oflQcers
...__
Insular depositaries:
To credit of Treasurer of the United States
_
To credit of other Government officers.-.
._
Philippine treasury, to the credit ofthe Treasurer of the United States. .

$35,891, 389.40
356,841,912.95

$26, 524, 266. 32
296, 623,336. 64

309, 331.85
1,290,288.40

293,071. 47
1,319, 067. 67

7,145.973. 07
18, 653,092. 02

6,924,196.97
17, 344,168. 50

56,857.12
147,106.94
1, 001,055.41

32,881. 81
1, 570,480. 96
225, 627.14

421, 337,007.16

350,857,097.48

Total

-

--

The foregoing deposits fall into the following general classes: (1)
Deposits with Federal reserve banks and branches which are not
fixed in amounts but fluctuate broadly from day to day throughout
the year as a result of receipts and disbursements of the Government
or of transfers between this and other classes of depositaries. (2)
Fixed balances to the credit of the Treasurer of the United States
maintained with general member bank depositaries in the United
States and with depositaries in foreign countries and insular possessions of the United States as a basis for the transaction of some
essential business of the Government. These deposits are subject
to withdrawal on demand and to adjustment from time to time in
proportion to the amount and character of the busiaess transacted.
(3) Deposits carried with general and hmited depositaries in the
United States and with foreign and insular depositaries in the form
of official accounts of Government officers other than the Treasurer
for safekeeping and to facilitate current disbursements. In the
United States proper these deposits, with few exceptions, are maintained by the United States district courts and their officers or by
postmasters. The Treasury does not control such deposits directly.




SECRETARY OF THE TREASURY

. 120

but designates and supervises the depositaries and has custody of
the collateral to secure the deposits. (4) Deposits in special depositaries designated under the Liberty loan acts. These are not
direct deposits made by the Treasury, but are the result of the
subscription of banks to current offerings of Government securities
for which, under the terms of the offering, qualified depositaries
may make payment by credit. Such deposits are subject to withdrawal on demand and, as a general rule, are withdrawn, in installment
calls, over a comparatively short period.
During the past fiscal year there has been no change in the weiiestablished policy of the Treasury with respect to the designatioA of
depositaries and the carrying of Government deposits therewith.
Adjustments within the system were in part attributable to the
changed demands of the Government for depositary facilities in
certain localities, and in part to the unusually large number of consolidations, mergers, liquidations, etc., of member bank depositaries.
As a result of the continued close supervision given to general depositary accounts, the additional depositaries of this class designated,
and the increases granted in the depositary accounts, were more than
offset by the discontinuance of existing depositaries and reductions
in excess deposits. During the year 21 general depositaries, authorized to carry an aggregate of $742,000 to the credit of the Treasurer
of the United States, were discontinued; and fixed balances of other
general depositaries were reduced by $35,000. Fifteen general
depositaries with fixed balances aggregating $240,000 were designated,
and the balances of seven were increased by $405,000. There was
therefore a net decrease of six in the number of general depositaries
and of $132,000 in the total fixed balances during the year.
An important feature of the work of the Division of Deposits
during the year was the checking of reports received from all national
banks (approximately 7,400) through the Comptroller of the Currency
in the form of sworn statements as to the amount and character of
Government deposits on the books of such banks. As a result of
the check, about 100 new limited depositaries were designated,
approximately 300 additional Government accounts are being reported to the Treasury, and the important fact was established that
all major Government accounts carried with national banks are
collaterally secured. These additions also resulted in an increased
revenue to the Government from the collection of interest upon the
depositary accoimts.
The special depositary system was adopted as a war measure and
has continued to function successfully during the postwar period of
debt reduction. The trend in this system during recent years, however, both as to the number .of depositaries and the balances held
by them, has been downward. The average daily deposits with all




130

REPORT ON THE FINANCE^

special depositaries during the fiscal year 1930 was $132,611,994, as
compared with an average balance of $195,496,324 during the preceding year, and was the lowest point reached since the establishment
of the system. This situation is, in part, due to the sale during the
year of Treasury bills for cash on a discount basis, which, of course,
carried no deposit privilege in contrast to issues of Treasury certificates of indebtedness.
Incidental to the administration of Government depositaries and
the deposit of Government funds therein, the division supervises the
liquidation of Government claims against insolvent depositary
banks. During the year six depositary banks were declared insolvent. At the time of closing, these banks were indebted to the
Government on their depositary accounts in an amount aggregating
$37,256.33. Four accounts were settled in full prior to June 30, 1930,
one has been liquidated subsequent to that date, and one case'involving $6,692.76 remains unsettled to date.
The Division of Deposits during the year also handled matters
relating to the issuance of instructions to receiving and disbursing
officers, the acceptance and release of collateral pledged by banks
to secure Government deposits, questions pertaining to the recovery
on lost and uncollected checks in payment of obligations to the
United States, and many correlated details.
During the year the regulations governing the deposit of public
moneys were revised, and appear in Department Circular No. 176,
as amended and supplemented, published as of September 2, 1930.
A copy of this circular is attached hereto as Exhibit 67, page 413.
Number and classes of depositaries.—The following statement shows
the number and classes of depositaries maintained by the Treasury
and changes during the fiscal year 1930:
Number and changes in each class oj depositaries during the fiscal year 1930
Class of depositary
Federal reserve banks (including branches) .
General
Limited
Insular (including Philippine treasury)
Foreign
Special-.
Total-

June 30,
1929

Discontinued

Designated

June 30,
1930

12
322
972
7
9
2,249

376

3
221

12
316
1 1,035
3
12
2 2,094

3,671

462

363

3,472

15
124

1 In addition, 159 branch banks are carried on the depositary list of the Treasury under the designation
of the parent banks.
2 833 special depositaries held deposits on June 30,1930.

With respect to the limited depositaries, 107 by pledging additional
collateral qualified to accept increased amounts of deposits made by
postmasters and United States courts and their officers for credit in
their official checking accounts. In 54 cases reductions were made




SECRETARY OF THE TREASURY

131

in the maximum qualifications as a result of the withdrawal of
collateral.
Insular depositaries were maintained in the Canal Zone, Porto
Rico, and the Philippine Islands. During the year two depositaries
were transferred to the foreign list.
Foreign depositaries were maintained in the following countries:
Belgium, 1; China, 2; England, 2; France, 3 (1 designated during
year); Haiti, 1; Italy, 1; and Panama, 2.
Of the 2,094 special depositaries on June 30, 1930, 1,287 were
national banks and 807 were State banks and trust companies.
Interest on deposits.—With the exception of Federal reserve banks,
all Government depositaries are required to pay interest at the rate
of 2 per cent per annum upon daily balances. This interest during
recent years has constituted a material source of revenue to the
Treasury. The interest received upon deposits with special depositaries during the fiscal year 1930 was $2,652,239.88, and the total
received from this source from AprU 24, 1917, to June 30, 1930, was
$84,537,149.82. Interest received from all other depositaries during
the year was $518,817.15, and the total amount received from June
1, 1913, when the requirement became effective, to June 30, 1930,
was $20,467,580.83.




GOVERNMENT ACTUARY

During the fiscal year 1930 the office of the Government actuary has
kept a record of the daUy market prices of all outstanding securities of
the United States. The investment value of these securities, based
upon their prices in each case, has been computed. These statistics
have been embodied in circular form, printed, and issued as ^'Government Actuary, Form A." Form A, dated June 1, 1930, covered 13
different classes of bonds and three series of notes. Of all the securities
so listed, only three were pre-war issues.
In addition to circular Form A, the investment value of certain
United States bonds and of the notes and certificates outstanding,
based upon their closing New York market price, has been computed
daily upon receipt of such quotations from the Federal Reserve Bank
of New York, by wire, immediately upon the close of the New York
Stock Exchange.
Estimates of the population of the United States have been prepared
as of each month of the year, and also estimates of the population as
of the 1st of July, 1930, for each State, Territory, and possession of
the United States.
Numerous estimates as to the revenues of the United States have
been made. Tables have been prepared, such as a statement of the
profit or loss on national bank circulation and interest tables. Computations of other offices and amortization tables have been verified.
Extensive studies have been made of the finances of the Government, especially as to the revenues. The conclusions derived therefrom were for the use of the department and of the Congress.
. Statistics of various kinds were furnished upon request during the
year to committees. Congressmen, various Government offices, and
other inquirers.
The actuary, as one of the board of actuaries connected with the
civil service retirement law, has attended the conferences of the board
and has appeared, before congressional committees as a member of
this board in connection with the annuities of retired employees as
affected by pending legislation. The annual report of the board was
approved by this office.
During the sessions of Congress that prepared and enacted the tariff
act of 1930, the actuary was detailed to the Finance Committee of
the Senate for work thereon.
132




DIVISION OF APPOINTMENTS

Employees of the Treasury Department
Number.—The total number of employees in the Treasury Department in Washington on August 31, 1930, was 946 less than on June
30,1929. In July, 1929, the Bureau of Engraving and Printing dropped
approximately 600 temporary employees. The principal reductions
in the regular force during the period covered by the report occurred
in the Division of Ijoans and Currency, the Bureau of Engraving and
Printing, the Bureau of Internal Revenue, and the Office of the Register of the Treasury. There has been a considerable increase in the
personnel of the Bureau of Customs due to a reorganization of the
functions of the bureau and a broadening of the scope of work. There
was also a large increase in the Office of the Supervising Architect,
made necessary by the building program authorized by Congress. The
other bureaus and offices of the department show small increases or
decreases in the personnel.
The number of employees in the departmental service of the Treasury, classified according to bureaus and offices at the end of each month
from June, 1929, to August, 1930, is shown in Table 66, page 627 of
this report. A comparisDn of the number of employees in the departmental and field services of the Treasury on June 30, 1929, and August
31, 1930, is contained in Table 64, page 626.
Retirement.—From September 1, 1929, to August 31, 1930, 158
persons were retired from the departmental seryice of the Treasury
Department, 27 of whom were four years or more beyond the retirement age and 10 were retired by their own option. During the same
period 386 persons were retired from the field services of the Treasury
Department, 189 of whom were four years or more beyond the retirement age and 10 were retired by their own option. At the present
time 95 persons above the retirement age are retained in the Treasury
Department in Washington and 372 in its field service. By reason of
their expert knowledge and special qualifications the CivU Service
Commission has approved the continuance in the service of two
employees, one in the departmental service and one in the field service,
who were more than four years beyond the age of retirement.
Table 65, page 626, shows the number of persons retired and the
number retained in the departmental andfieldservices of the Treasury
under the provisions of the retirement act.




133

134

REPORT ON THE FINANCES

Section of surety bonds
On June 30, 1930, there were 90 companies holding certificates of
authority from the Secretary of the Treasury under the act of Congress of August 13, 1894, as amended by the act of Congress of
March 23, 1910, to quahfy as sole sureties on recognizances, stipulations, bonds, and undertakings permitted or required by the laws
of the United States, to be given with one or more sureties. Six of
these companies were branches of foreign companies, authorized to
act only as reinsurers. Changes in the outstanding certificates of
authority during the period ended August 31, 1930, are indicated
in the following table:
Companies authorized as of June 30, 1929
Changes during the year ended June 30, 1930:
Certificates issued
:
Certificates terminated—
Companies ceasing business
Company voluntarily ceasing business with United States_
Company in process of dissolution

87
8
3
1
1
—-

5
3

Companies authorized as of June 30, 1930
Further changes to August 31, 1930:
, Certificates issued
Certificate terminated, company voluntarily ceasing fidelity and
surety business

90
2
1
1

Companies authorized as of August 31, 1930

91

Application pending
Company in process of merging

1
1

The extent of the business activities and financial resources of 89
of the companies authorized as of June 30, 1930, as shown by their
financial reports for the year ended December 31, 1929, are briefly
tabulated as follows:
Total
Total
Total
Total
Total
Total

net premiums written
net losses paid___
net fidelity and surety premiums written
net fidelity and surety losses paid
admitted assets,
liabilities, exclusive of capital funds

._ $559, 749, 444. 64
251, 491, 202. 15
•.. 102, 113, 467. 86
37, 102, 328. 72
962, 014, 894. 85
586, 978, 364. 68

Capital, surplus, and reserves available for
protection of policyholders and obligees:
Capital
$145, 310, 693. 33
Surplus-.
206, 534, 154. 10
Voluntary contingent reserves
23, 191, 682. 74




375, 036, 530. 17

SECRETARY OF THE TREASURY

135

The capital funds available for the protection of policyholders and
obligees of the 89 reporting companies, were increased during the
year 1929 by the aggregate amount of $10,625,236.98, as shown by
the following tabulation:
Summary of operations of 89 reporting companies for the year ended December 31,
1929
Net interest and rents earned..$34, 695, 176. 42
Less:
Net losses from investment profit and loss
items—
$14, 767, 511, 94
Net losses from underwriting
18, 762, 696. 56
33, 530, 208. 50
Net profit from operations
Net surplus paid in by stockholders
Less:
Cash dividends declared. $20, 384, 059. 35
Remittances to home
offices
by
foreign
branches
3, 404, 377. 13

1, 164, 967. 92
26, 834, 937. 21

23,788,436.48
—
Net cash capital paid in by stockholders
Increase in surplus available for protection of policyholders and obligees

3,046,500.73
6, 413, 768. 33
10, 625, 236. 98

The losses on investments are particularly noticeable when compared with the previous year. Substantially the same 89 companies
show a net profit of $1,813,855 during 1928 as against a net loss of
$14,767,511.94 duriag 1929. This unusual difference is clearly the
result of the exceptional decline in security values during the year
covered by this report. While the effect of this decline has been felt
by some of the companies, it has apparently not seriously affected
the operations or financial status of those companies that were
adequately reserved in all their departments with special reserves to
care for fiuctuations in security values.
The volume of surety and casualty premiums has developed rapidly
in recent years, with the result that many competitive companies have
entered that field. Some of these recently organized companies were
formed with minimum capital and surplus requirements, and it is
these companies with limited resources that have found it difficult to
go forward on a successful basis. Many of the old-line, well-established companies found it necessary to increase their resources by the
creation of new capital and surplus funds.
These established facts are strong reasons for renewing the department's previous recommendations for a higher capital and surplus
. requirement of surety and casualty companies authorized to write



136

REPORT ON THE FINANCES

bonds in favor of the United States. It is hoped that this matter
will have the careful and early consideration of Congress.
There is now pending in the Senate legislation suggested by the
Treasury which has had the approval of the House of Representatives
on two occasions, abolishing the mandatory requirement for the
'renewal of official bonds every four years as provided by the act of
Congress of March 2, 1895, and providing for the optional renewal of
such bonds in the discretion of the officers whose duty it is to take
and approve them. Practically all official bonds are now executed by
corporate sureties which are under the jurisdiction of the Treasury
and which make quarterly reports of their financial condition to it.
The requirement for the quadrennial renewal for the purpose of determining the sufficiency of sureties is no longer necessary as to practically all bonds, and involves considerable expense and clerical work.
In accordance with the act of Congress approved March 8, 1928,
postal officers and employees have been relieved from the requirement
to renew their bonds every four years, and the pending legislation if:
enacted will apply uniformly to the entire Federal service with
resulting economy and improvement in administrative procedure.




BUDGET AND IMPROVEMENT COMMITTEE

The budget and improvement committee is responsible, under the
direction of the Undersecretary and budget officer, for the preparation and examination of Treasury estimates of appropriations and
for the improvement of administrative methods and procedure within
the Treasury Department. In addition to examining all estimates,
the committee makes inquiries as to the reserves which may be set
up under the various appropriations and considers other matters
affecting expenditures of the department. I t makes inquiries along
various lines with the purpose of improving methods and procedure,
and from time to time, under special instructions, makes a detailed
examination of some particular office or service of the department.
Its reports and recommendation's thereon are submitted to the
Secretary of the Treasury, through the budget officer of the department.
The Director, Bureau of the Budget, requested that estimates
for the fiscal year 1932 be in his hands not later than July 15, 1930,
instead of September 15, 1930, as required by law. This necessitated the preparation of such estimates during the months of May
and June. Heads of bureaus and offices submitted estimates, exclusive of interest on and retirements of the public debt payable
from ordinary receipts and the amounts for the support of the Bureau
of the Budget, aggregating $312,626,751, which included $160,778,867 for ordinary annual appropriations, $26,847,884 for permanent and indefinite appropriations and special funds, $60,000,000
for refunding internal revenue taxes illegally collected, $60,000,000
for public buildiags construction under the act of May 25, 1926, as
amended, and $5,000,000 for acquisition of land in the so-called
triangle in Washington, D. C. These estimates were given an exhaustive examination by the budget officer, with the assistance of
the committee, and as a result thereof and based on his recoinmendations, the Secretary of the Treasury approved deductions aggregating $8,459,153 and submitted the remainder to the Bureau of the
Budget with his approval. The following statement shows the
amounts appropriated for 1931; the amounts of the estimates submitted by heads of bureaus and offices, deducted by the Secretary,
and approved by the Secretary; and the increase or decrease as compared with the appropriations for 1931:
137




138

REPORT ON T H E FINANCES
Appropriations for 1931 and estimates for 1932
Estimates for 1932

,
Appropriations for
1931

Submitted
by bureaus
and offices

Disapproved
by Secretary

Approved
by Secretary

Ordinary annual appropriations... $146, 000, 741 $160, 778,867 $8,409,153
Permanent and indefinite appropriations and special funds
26.847, 884
50,000
26, 429, 935
Refunding: taxes illegally collected
60, 000, 000
130, 000, 000
Public buildings construction, act
60, 000, 000
May 25, 1926, as amended
48, 000, 000
Acquisition of Triangle properties.
. 5, 000, 000
9,000.000

$152,369,714

8,459,153

304,167,598

Total

1 359,430,676 •312,626,751

Increase or
decrease in
approved
estimates
for 1932 as
compared
with appropriations for
1931
+$6,368.973

26, 797, 884
60, 000, 000

+367,949
— 70 000 000

60, 000, 000
5, 000, 000

+ 12, 000, O O
Ol
- 4 , 000, 000
—55,263,078

1 Exclusive of automatic increases under the Brookhart Salary Act of July 3, 1930.

During the fiscal year 1930 supplemental and deficiency estimates
were submitted aggregating $41,331,160. After examination by the
budget officer, with the assistance of the committee, these estimates
were revised and reduced to $36,879,860.
At the beginning of the fiscal year 1930 general reserves amounting
to $923,300 were set aside from appropriations for that year to meet
extraordinary or emergency demands that might arise. Subsequently
additional reserves of $286,653.37 were added and reserves amounting
to $752,812.50 were released, leaving a balance of $457,140.87 in the
general reserve at the close of the fiscal year.
For the fiscal year 1931, heads of bureaus and offices recommended
reserves amounting to $693, 869. After examination by the committee, $388,400 was added, makiag a total for the year of $1,082,269.
In accordance with the instructions of the President, dated July
29, 1930, the department was systematically canvassed with the
purpose of determining what reduction could be made in the various
items of estimated expenditures for the fiscal year 1931. After examination of the reports from heads of bureaus and offices it was determined, as of July 1, 1930, that by the exercise of rigid economy in
detailed expenditures and by deferring expenditures where practicable
the estimated cash withdrawals from the Treasury for account of the
Treasury Department might be reduced by $18,590,990, of which
amount $1,575,140 was under ordinary annual appropriations. As
a result of the survey, $4,505,855 was added to the general reserves
under ordinary annual appropriations already set up.
The budget and improvement committee was appointed July 8,
1922. It has examined estimates for the budgets of 1924 to 1932,
inclusive, as well as supplemental and deficiency estimates. As a
result of its examinations and on its recommendations, items aggregating $89,606,312 have been disapproved and deducted from said estimates before they were transmitted to the Bureau of the Budget.



OFFICE OF CHIEF CLERK AND SUPERINTENDENT

Housing of Treasury activities
During the fiscal year the Bureau of Customs and the Bureau of
Prohibition were moved from C BuUding, one of the temporary
structures located at Sixth and B Streets SW., to 1300 E Street NW.,
a buUding formerly occupied by the Southern Railway Company.
The Public Buildings Commission assigned the first three floors of
that building to the Bureau of Prohibition, and the fourth floor to
the Bureau of Customs. A part of the force of the Office of the Supervising Architect was transferred from the Albee Building at Fifteenth
and G Streets NW. and the fourth floor of the Treasury Building to
the sixth floor of the building at 1300 E Street NW.
Near the close of the fiscal year the Bureau of Internal Revenue
moved from its several locations in the Treasury Building, Annex
No. 1, Press Building, Walker-Johnson Building, Temporary Building
C, Temporary Building No. 5, the Architect's Building, and 462
Louisiana Avenue NW., to the new buUding constructed at Twelfth
and B Streets NW. The United States Board of Tax Appeals,
occupying space in the Earle Building at Thirteenth and E Streets
NW., and the United States Court of Customs and Patent Appeals,
occupying space in the National Savings & Trust Building, Fifteenth
Street and New York Avenue NW., were moved into the new Internal
Revenue Building.
The space vacated by the Bureau of Internal Revenue in the
Treasury Building was assigned to certain offices already located in
the Treasury Building in order to relieve a very congested condition.
Upon approval of the Public BuUdings Commission, the following
activities were assigned space in Treasury Annex No. 1: The Solicitor
of the Treasury, previously in the Walker-Johnson Building; the
photograph gallery of the Office of the Supervising Architect, previously in the Walker-Johnson Building; the Coast Guard, previously
in the Darby and G. A. R. Buildings; the Bureau of Narcotics,
previously in 1300 E Street NW.; the Secretary's files, previously in
1418 to 1420 Pennsylvania Avenue NW.; and the Treasury Department cabinet shop and files belonging to the War Finance Corporation, Farm Loan Board, Federal Reserve Board, Solicitor of the Treasury, and the Division of Bookkeeping and Warrants, previously in
the basement of Poll's Theater.




139

140

REPORT ON THE FINANCES

•

Improvements, painting, etc.

During the year the following contracts for improvements, etc.,
were awarded:
Repairing skylight over south portico, $1,445.
Repairing area walls at the Auditor's Building, $2,541.
Installing new window sashes in the north and south courts
of the Treasury Building, $11,895.
Repairing ceiling of roof in south portico of the Treasury
BuUding, $5,998.
Constructing skylights over center and northeast portions of
Treasury Building to provide more adequate light and
ventilation for the technical forces of the Office of the
Supervising Architect, $13,257.36.
Alterations to small building in north courtyard to provide
necessary space for the sample room of the Office of the Supervising Architect, $7,687.25.
Considerable work had to be accomplished in both the Treasury
Building and Annex No. 1 in the way of painting, renovating, and
partition work before the new activities could be moved in.
Treasury Department telephone exchange
On May 31, 1930, the Chesapeake & Potomac Telephone Co.
completed a new private branch dial exchange to serve the entire
Treasury Department in the District of Columbia, except the Public
Health Service. The change from manual to dial was coincident
with the occupancy of the new Internal Revenue BuUding and
replaced a former 3-position manual switchboard in the general
counsel's office, Walker-Johnson Building; a 2-position manual switchboard in the Bureau of Engraving and Printing; and a 10-position
manual switchboard in the Treasury BuUding.
A 7-position manual switchboard is operated in the Treasury
Building in conjunction with the dial system now handling special
calls, toll calls, trouble calls, and all incoming calls where the„ person
calling either has no dial equipment or is uncertain as to the proper
number of the telephone on which to locate certain officials and
employees. Some 2,200 direct lines are in use at the present time.
I t is anticipated when everyone becomes famUiar with this new system that the annual saving wUl amount to between $15,000 and
$20,000 over the expense incident to the operation of the three old
manual switchboards.




SECRETARY OF THE TREASURY

141

Sites for public buildings
Agreements were made and rents collected from 87 tenants occupying property on the Supreme Court site for a portion of the fiscal
year to May 1, 1930, when notices to vacate, in order to enable the
demolition of the buildings to make way for construction work,
were effective.
The chief clerk as custodian of sites also caused the vacating of
properties located on the block between B and C Streets and Thirteenth and Linworth Place SW., as rapidly as the property was
purchased by the Government in order that the buildings might be
razed and the site cleared for construction work for the Department
of Agriculture Building. As certain properties in the block bounded
by B and C, Linworth, and Fourteenth Streets SW., were purchased,
rental agreements were entered into in cases where the Department
of Agriculture did not desire to occupy the buildings. I n other
cases the occupants were requested to vacate in order that the
Department of Agriculture might move its forces in and thus save
the expense of renting quarters elsewhere.
The purchase of property also continued in the so-called triangle,
and in most instances the property purchased was immediately
rented for a fair consideration.
The total rentals collected during the fiscal year amounted to
upwards of $200,000.
Seville exposition
The international exposition held at Seville, Spain, was officially
closed June 21, 1930, and immediate steps were taken by the Treasury
Department representative to pack and ship the Treasury exhibit.
From reports made by the commissioner, as well as the Spanish
officials, the exposition was very successful and the Treasury Department's participation greatly appreciated.




COAST GUARD

The following is a summary of the principal operations of the
Coast Guard for the fiscal year 1930 in which comparisons with the
preceding year 1929 are indicated:

Lives saved or persons rescued from peril
Persons on board vessels assisted
..Persons in distress cared for
.-..
Vessels boarded and papers examined
_.
Vessels seized or reported for violations of law
Fines and penalties incurred by vessels reported
_.
Regattas and marine parades patrolled
Instances of lives saved and vessels assisted
Instances of miscellaneous assistance.
_-.
Derelicts and other obstructions to navigation removed
destroyed
j..
Value of derelicts recovered and delivered to owners..
Value of vessels assisted (including cargoes)
Persons examined for certificates as lifeboat men

Increase
(+) or decrease (—)

1930

1929

4,375
18, 725

6,004
29, 079

879

924

80,263
2,571
$424, 725

87,033
2,441
$438, 765

104

137

4,419
4,867

5,241
5,960

267

233

$38,200
$30,905
$49,128, 375 $49, 018, 073
4,271
3,992

+1, 629
+10, 354
+45
+6. 770
-130
+$14, 040
+33
+822
+1, 093
-34
-$7,295
-$110, 302
-279

The persons saved or rescued from peril during the year numbered
6,004, being 1,629 in excess of the year 1929, and the largest number
on record. The total number of last ances of assistance rendered was
11,201, as against 9,286 in the year 1929, also a record never before
attained in the history of the service. There was an appreciable
increase in the year in the number of persons on board vessels assisted
by the Coast Guard. The accompanying table also indicates increasing activity of the service units in boarding and examining vessels
in the interests of the enforcement of the laws of the United States.
Assistance in various ways was rendered by the Coast Guard to other
branches of the Federal Government in 421 instances during the year.
The operations of the service throughout and the service discipline
continued to be very satisfactory. The number of desertions has
materially decreased in the past several years, as has also the number
of early discharges arising from various causes. The percentage of
men reenlisting upon expiration of enlistment has increased during the
past 4 years from 72 per cent to 86 per cent, which is an encouraging sign and indicates the prevalence of a commendable service
spirit. Every reasonable effort is made to guard against the enlistment or retention in the service of undesirable persons to the end that
the existing high standard of service morale may not be impaired.
Protection to navigation
International ice patrol.—Thi^ patrol is carried on annually by the
Coast Guard in the vicinity of the Grand Banks of Newfoundland
along the trans-Atlantic steamship lanes where in the spring and
142




SECRETARY OF THE TREASURY

143

early summer icebergs form a menace to navigation. Its purpose
is to find and keep in touch with icebergs and field ice, and to report
their presence and location to the Hydrographic Office of the Navy,
and to broadcast the information by radio for the protection of shipping. The patrol for the season of 1929 was discontinued on August
3, 1929.
Icebergs were reported off the eastern edge of the Grand Banks at
an unusually early date in 1930. On February 7 a berg was reported
less than 60 miles northeast of the Tail, almost on the westbound
tracks then in effect between Europe and the United States. The
Tampa was dispatched from Boston, Mass., on February 11 to make
an ice-observation cruise, and, finding that ice conditions were
unusually far advanced for the date, an immediate inauguration of
the ice-patrol work was necessary. The Mojave relieved the Tampa
of ice-patrol duty on February 27, 1930. Thereafter, during the
season, the Mojave and the Modoc, basing on Halifax, Nova Scotia,
alternately kept up the patrol in 15-day periods, with the Tampa as
the stand-by vessel. Although the number of icebergs that drifted
south of Newfoundland between January 1 and June 13, 1930, was
considerably greater than is normally the case, ice conditions were not
nearly so severe as they were in the season of 1929.
During the season, 67 oceanographic stations were occupied for
the purpose of continuing the annual study of currents and subsurface oceanographic conditions. Salinities of all water samples
taken at the stations were obtained by the electrical conductivity
method before the discontinuance of the patrol, and the stations
were at once dynamically calculated in accordance with formulas
in Coast Guard Bulletin No. 14. The other main features of the
scientific program consisted in taking soundings with the fathometer
and in constructing numerous isotherm charts.
During the season, cooperating vessels sent in by radio 6,097
water-temperature reports. These values, combined with those
taken from the logs of the patrol cutters themselves, permitted the
construction of weekly isotherm charts as well as the usual one for
each 15-day patrol cruise. These surf ace-temperature charts are of
great importance to the patrol. I t can now be quite definitely
stated that they are the best practicable means that the patrol
possesses for predicting the movements of the ice and for determining
its location.
•
Radio communications were more voluminous than in any other
year except 1929, which had a larger and a very much heavier ice
season. As in previous years, the most gratifying cooperation by
radio was had from ship and shore stations.
12101—31

12




144

REPORT ON THE FINANCES

A commissioned officer of the Coast Guard, as is usual, was
detailed to accompany the cutters throughout the patrol as oceanographer. The patrol, which covered a period of 117 days, was discontinued for the season on June 10, 1930.
Winter cruising.—In order better to safeguard shipping, the
President annually designates certain Coast Guard vessels to perform
special cruising on the coast in the season of severe weather, usuaUy
from December 1 to March 31, to afford aid to distressed navigators.
On November 7, 1929, the President, upon the recommendation of
the Secretary of the Treasury, designated the following-named
Coast Guard cutters to perform this duty: Ossipee,.Mojave, Tampa,
Acushnet, Champlain, Seneca, Gresham, Mendota, Manning, Carrabasset, Modoc, and Yamacraw. The Mojave and the Modoc were
withdrawn and assigned to the international ice patrol.
These cutters cruised more than 58,000 miles; afforded assistance to
25 vessels whose values, including cargoes, amounted to nearly
$2,050,000, and on board which there were 211 persons; removed 3
derelicts; and boarded and examined 409 vessels in the interests of
the enforcement of United States laws.
Anchorage and movements of vessels.—The rules and regulations
governing the anchorage and movements of vessels at the larger
ports of the country, and at other places where Federal regulations
are in effect, continued to be enforced by the Coast Guard during
the year. Federal rules and regulations regarding the use of anchorage
grounds have been prescribed for the harbor of Annapolis, Md.
Coast Guard officers continue to serve as captains of the port to
enforce the regulations at a number of ports throughout the country.
As can be appreciated, this work is of the greatest importance to the
maritime interests in the larger ports of the country, especially in
the great port of New York. The demands upon the captains of
the port to perform various functions in the interest of the smooth
operation of shipping are constantly increasing.
Enforcement of- customs and other laws
The duties of the Coast Guard having to do with the general
enforcement of the customs laws and the navigation and motor
boat laws of the United States were carried on satisfactorily during
the year. These general duties in connection with the enforcement
of the customs laws are supplemented by the assignment of harbor
cutters and harbor launches of the Coast Guard at the principal
ports to assist the customs authorities in boarding incoming vessels
and in performing other customs work. Assistance is also annually
rendered by the Coast Guard to other branches of the public
service in the enforcement of the Federal laws intrusted to their
jurisdiction.




SECRETARY OF THE TREASURY

145

Liquor smuggling.—With respect to the law enforcement work of
the Coast Guard for the prevention of smuggling of liquor into the
United States from the sea, there is no material change in general
conditions since last year's report. There is no doubt that the
smuggling interests are highly organized and are. bending every
eft'ort, including the expenditure of large sums of money for the
most modern and efficient equipment, to circumvent the operations
of the Coast Guard, which is most earnestly and actively patrolling
the seas at all seasons and in all weathers. Considering the manifold
difficulties of the problem, the results accomplished are very satisfactory. I t is believed that the Coast Guard is now doing all that
can possibly be accomplished with its existing strength ia personnel
and equipment afloat and on shore.
Smuggling operations on the Great Lakes have been very active.
I t is yet too early to determine with any degree of certainty the permanent effects of the recent Canadian law forbidding clearance of
liquor cargoes for the United States from Canadian ports.
Cruises in northern waters.—T^he regular annual patrol of the waters
of the North Pacific Ocean, Bering Sea, and southeastern Alaska,
was conducted for the season of 1929 by the Coast Guard cutters
Chelan, Unalga, Haida, Northland, and Snohomish. The primary
purpose of this patrol is to enforce the convention of July 7, 1911,
between the United States, Great Britain, Russia, and Japan, and
the laws and regulations for the protection of the fur seal and sea
otter and of game, the fisheries, and fur-bearing animals of Alaska.
In the performance of their duties these cutters cruised 55,000 mUes,
assisted 13 vessels, afforded medical and dental aid in 419 instances,
transported 325^ persons, and boarded 102 vessels in the interests of
the enforcement of the laws of the United States.
In addition to their primary duties, numerous helpful and useful
offices inuring to the benefit, health, and well-being of the inhabitants
of the regions visited are extended by the Coast Guard vessels constituting this annual patrol. Other Federal agencies are assisted,
transportation is afforded Government officials, school-teachers and
others, persons found in need are succored, medical, surgical, and
dental aid is furnished the natives, food and other supplies and freight
are delivered to isolated settlements, mails are transported, justice is
administered, vessels in distress are assisted, and numberless other
ministrations extended.
o
. The patrol for the season of 1930, in progress at the close of the
fiscal year, is being conducted by the Coast Guard cutters Chelan,
Unalga, Haida, Northland, and Snohomish.
Northern Pacific halibut fishery.—The Coast Guard cutters Unalga,
Snohomish, and Chelan were assigned in the fiscal year 1930 to the
annual duty of patroUing certain waters off the coast of Washington



146

REPORT ON THE FINANCES

and southeastern Alaska in the enforcement of the law with respect to
halibut fishing, which work is performed in behalf of the Bureau of
Fisheries, Department of Commerce. These cutters were engaged on
this duty at various periods.
Communications
The communication service is concerned with the provision, construction, maintenance, and operation of all communication facilities
of the Coast Guard, the design and development of materials, and the
instruction and training of the personnel connected therewith. The
methods of communication in the Coast Guard are, in general, the
telegraph, telephone, radio in its various applications, underwater
sound signals, and visual signals. The facUities of communication
are so appointed and coordinated that the duties devolving upon the
system may be transacted in the most efficient and expeditious
manner.
Telephone and telegraph lines and cables.—The Coast Guard owns
and operates a coastal communication system consisting of a telephone and telegraph line system of approximately 1,419 miles of pole
line, 2,177 miles of open wire aerial circuits, 29 miles of aerial and
underground cables, and 569 miles of submarine cable, all divided
into 187 separate and distinct telephone aiid telegraph lines. Through
these facilities telephone and telegraph service is furnished to 298
Coast Guard units, including the Coast Guard (life-saving) stations,
160 lighthouses, and 46 other Government stations. The greater
part of these lines is connected with the central offices of commercial
telephone systems, thus affording local and long-distance telephone
and telegraph service for all the units connected.
^
In addition to the general routine overhauling and repairing of the
telephone and telegraph lines, an extensive rebuilding project was
begun during the year along the New Jersey coast, and the submarine cable between the mainland and Egmont Key, Fla., at the
entrance to Tampa Bay, was renewed.
The Chief Coordinator was instrumental in effecting the transfer
from the Weather Bureau to the Coast Guard of three telephone lines
which were operated by the Weather Bureau for some years. They
consisted of 135 miles of pole line between Cape Henry, Va., and Cape
Hatteras, N. C , 91 miles of pole line between Port Angeles and
Tatoosh Island, Wash., along the soyth shore of Puget Sound, and
33 mUes of submarine cable between Charlevoix and Beaver Island,
Mich. Appropriation was allowed for the reconstruction of the first
two lines named, and the work is now in progress, but it is not expected
that the funds available will permit the complete reconstruction.
The renewing of approximately 40 miles of submarine cable along
the Florida coast, for which appropriation has been had, will be carried
on and brought to a conclusion during the fiscal year 1931.



SECRETARY OF THE TREASURY

147

The system of aircraft checking by Coast Guard stations which
was put in operation during the fiscal year 1929 calls for the most
expeditious means of communication along the coast. This activity
is proving of great importance, and showing increasing usefulness,
but the present telephone facilities are not wholly adequate to meet
the necessities of the situation.
The scope of the program inaugurated toward a more scientific
study and investigation of all telephone circuits with the view of
improving the quality of transmission and increasing the distances
over which reliable communication can be had, to which matter reference was made in last year's report, has been enlarged and extended
during the present year. The continuation of such investigation is of
interest and importance to the service.
Radio.—It was stated in last year's report that the program for modernization of the radio equipment of vessels and other units, begun a
few years ago, was completed during that year. A similar program
was of necessity undertaken by all organizations, commercial as well
as governmental, due to the transition from the so-called spark method
of radio transmission to the modern method of employing the vacuum
tube. This produced a complete change in the radio art. 'A little
more than six years have passed since the first modern radio equipment
was installed on a Coast Guard unit. I t is essential to keep abreast
of rapid changes in the field of radio in order that the Coast Guard
may not be in the unfortunate position of interfering with or becoming
involved with commercial and other Government radio stations, all
of which are keeping abreast of radio development. Until the time
arrives when the radio situation throughout the world becomes more
stable than it is at present, it will be ne.cessary to provide more fre^
quent replacements of radio equipment with newer and more recently
developed apparatus than would be the case were the radio art more
stabilized.
During the year improvements have been made throughout the
service in the radio material, both aboard ships and at shore stations,
so as to bring about a higher state of efficiency in handliag communications by radio. No major projects were undertaken.
An officer of the Coast Guard continues to represent the Treasury
Department on the Interdepartmental Radio Advisory Committee,
which committee coordinates certain governmental activities and acts
in an advisory capacity to the Secretary of Commerce. This officer
has also been representing the Treasury Department on the interdepartmental committee in preparation for the international radio
conference to be held at Madrid in 1932.
Training of communication personnel.—Special training for communication personnel has continued throughout the year. Two radio
electricians (warrant officers) of the Coast Guard and six radio men




148

REPORT ON THE FINANCES

(enlisted men) were graduated from appropriate radio schools operating under the Navy. A Coast Guard radio school is in operation at
the receiving unit at New London, Conn., for the training of men to
become radiomen to fill vacancies throughout the service. Sixtythree men were graduated from this school during the year.
Eguipment
Floating eguipment.—On June 30, 1930, there were in the Coast
Guard in commission 20 cruising cutters of the first class and 15 of the
second class, 18 Coast Guard destroyers, 35 harbor cutters and harbor
launches, thirty-three 125-foot patrol boats, thirteen 100-foot patrol
boats, one hundred and ninety 75-foot patrol boats, 16 other patrol
boats, 75 cabin picket boats, and 30 open picket boats. The abovementioned floating equipment does not include the primarUy lifesaviag boat equipment attached to Coast Guard vessels and stations.
During the fiscal year 1929, 5 of the 10 cutters authorized by the
act approved June 10,1926, were completed and placed in commission.
Appropriation having been made therefor, contract was entered into
on March 16, 1929, with the General Engineering & Dry Dock Co.,
Oakland, Calif., for the construction and equipment of 3 more of the
10 cutters. Appropriations were also made to commence and to complete the ninth of the cutters, and contract was entered into on
November 18, 1929, with the above-named company for its construction and equipment. The work on the four cutters is proceeding
satisfactorily. Appropriation has been made to commence the tenth
cutter, the last of the lot, and design plans are under way.
An act approved May 15, 1930, makes provision for additional
patrol boats and their equipment, to be constructed or purchased in
the discretion of the Secretary of the Treasury. Design work has
been undertaken with regard to these boats. This act also provides
for repairing, altering, equipping, and placing in commission vessels
or boats transferred from the Navy Department to the Treasury
Department for the use of the Coast Guard. In pursuance of this act
it is the purpose of the Navy Department to transfer several destroyers
to the Treasury Department to take the places of certain destroyers
that have outlived their usefulness.
An act approved April 18, 1930, authorizes the Secretary of the
Treasury to construct and equip one Coast Guard cutter, to be' of
appropriate design and construction suitable for service in assisting
shipping on the waters of Lake Michigan, and provides that the total
cost of construction and of original equipment of said cutter shall not
exceed $650,000. The second deficiency act, approved July. 3, 1930,
appropriates $450,000 for comraencing the cutter. Preliminary
studies have been undertaken looking to the preparation of designs
for this cutter.




SECRETARY OF THE TREASURY-

149

During the year the cutter Manning and the harbor cutters Tioga
and AB-11 were placed out of commission. The two harbor cutters
have been sold and the Manning is to be sold.
Some of the steel repair work on the cutter Ossipee, which was overhauled and reconditioned at the Coast Guard depot, had to be done
by private parties under contract because of the lack of docking
facilities at the depot. Routine repairs to cruising cutters were made
during the year under contract.with navy yards and private parties.
Contracts have been let for the construction of a number of smaU
motor boats.
Aviation.—During the fiscal jesiv 1930, Coast Guard aircraft cruised
a total of 67,655 miles and searched over an area of 801,067 square
'miles. The airplanes were in the air 907.5 hours, and over 3,100
vessels were identified.
On 18 occasions the airplanes were called upon to search for lost
boats, persons, and various kinds of property. Searching the ocean
for lost fishermen and disabled small boats has become an important
duty of Coast Guard airplanes. In the winter months, in the North
Atlantic, lost boats must be found quickly or the occupants will perish
from exposure. Airplanes can search over large areas quickly and
notify surface craft by radio of the location of the boat.
The airplane reporting system established in 1929 along the Atlantic
seaboard has reported the passage of thousands of planes during the
year. No plane using the system has been lost; and many planes
have been assisted by the Coast Guard stations. Reporting of passing airplanes is of inestimable value to passenger air-transport lines.
The system operates without cost either to the owners of the aircraft
or to the Government.
During the year, plans and specifications were prepared for the
replacement of the present aircraft equipment of the Coast Guard.
This equipment, purchased in 1927, has proven the necessity for airplane operation in the service and has indicated the type of airplane
that is required. The new planes, designed to meet the particular
requirements of the Coast Guard, will be contracted for during 1931.
Ordnance.—The year has been, a very satisfactory one with respect
to ordnance and gunnery. Changes have been effected tending to
increase efficiency in the maintenance of equipment, and excellent
progress has been made in the training of personnel along gunnery
lines.
All the destroyers in active commission held short-range battle
practice, day-spotting practice, long-range battle practice, and smallarms target practice. About 75 per cent of the cutters held the prescribed gunnery exercises and more than half of the vessels of this
class conducted small-arms target practice. Reports of battle practice have been received from all but one section base, representing




150

^ REPORT ON THE FINANCES

76 per cent of all 75-foot patrol boats, and every base except one has
held small-arms target practice. While only one life-saving district
has submitted a small-arms target practice report, there is every indication that interest in small-arms training is increasing at Coast Guard
stations as well as at other units of the service.
On Egmont Key, off St. Petersburg, Fla., an excellent small-arms
range accommodating 20 targets has been constructed. Plans have
been made for the enlargement of the target range on Ediz Hook at
Port Angeles, Wash., to accommodate 20 targets in order that better
facilities may be avaUable for the training of units of the northwestern division.
While the Coast Guard now has its own ranges at Cape May,,
N. J., Virginia Beach, Va., Egmont Key, Fla., and Ediz Hook in the
State of Washington, there is stUl ,great need for ranges and they wUl
be constructed as fast as funds avaUable wUl permit. The Marine
Corps ranges at Quantico, Va., and Parris Island, S. C , also various
National Guard ranges, have been placed at the disposal of the Coast
Guard for the trainuig of personnel and this privUege of utUizing the
facUities of other organizations has been of great benefit to the
service.
During the year 15 men were given the course for small-arms
coaches at the Virginia Beach rifle range. These men were then
assigned to the various districts to iastruct the men at stations in the
use of small arms. Two men were given the armorer's course at the
Marine Corps depot at PhUadelphia, Pa., this instruction being given
in order to provide the service with men specially trained in the repair
and upkeep of small arms.
Two classes, a total of eight men, were given three months' instruction at the Naval Gun Factory, Washington, D. C. Nearly all
the warrant gunners of the Coast Guard have now had this training
in the repair and upkeep of guns and mounts, adjustment of sights
and testing for alignment, the principles of optical equipment, care
and adjustment of short-base range finders, and other matters
tending to increase efficiency and lower maintenance costs.
The Army, Navy, and Marine Corps have most generously assisted the Coast Guard in the furnishing of equipment and in the
training of personnel. The interest and cooperation of these services
have been of great benefit, and grateful acknowledgment of their
help is made.
The academy, stations, bases, repair depot, etc.
Coast Guard Academy.—There were 96 cadets under instruction at
the Coast Guard Academy, at New London, Conn., at the close of
the fiscal year, and 1 cadet, first class, in the hospital at Fort Stanton,
N. Mex. The resignations of 14 cadets were accepted and 1 cadet




SECRETARY OF THE TREASURY

151

was dismissed duruig the year. In May, 1930, 27 cadets were graduated and commissions were issued to them as ensigns. Entrance
examinations of candidates for cadets were held beginniag June 18,
1930, and as the result of these examinations 53 appointments have
become effective.
The practice cruise for cadets for 1929 was carried on by the
Coast Guard cutters Champlain and Mendota. The cruise began on
July 5, 1929, and uicluded visits to Atlantic and Gulf coast ports,
extending from Gardiners Bay, L. I., to Galveston, Tex., and was
concluded on August 25.
These same cutters composed the practice cruise for 1930, and left
New London, Conn., on June 9. The itinerary includes calls at the
folio whig foreign ports: Funchal, Madeira; Casablanca, Morocco;
Antwerp, Belgium; Danzig, Germany; Gdynia, Poland; Stockholm,
Sweden; Copenhagen, Denmark; Oslo, Norway; Glasgow, Scotland;
and also Gardiners Bay, Long Island. The cruise was in progress at
the close of the fiscal year.
These annual practice cruises are made with the object of affording
the cadets practical training in the theoretical subjects they pursue
at the academy and of instructing them ih their professional duties.
They also provide an excellent opportunity to observe the cadets and
to instill into them the traditions and standards of the service at sea.
Funds for beginning the construction and equipment of the new
academy, in pursuance of the act approved February 16, 1929, have
been appropriated since the report of last year which discussed the
subject, and the plans, drawings, etc., are in course of preparation by
the Office of the Supervising Architect.
Stations and bases.—On June 30, 1930, there were 253 Coast Guard
(hfe-saving) stations in an active status. There were 1 floating section
base, 16 shore section bases, and 1 subbase established for law enforcement purposes. The service craft attached to these bases operate
primarily against smuggling activities.
Rebuilding, repairs, alterations, additions, and improvements,
extensive and minor in character, were completed during the year at
154 Coast Guard (life-saving) stations, 15 section bases, 5 Coast Guard
divisions, 3 radio stations, the academy, the depot, and 3 miscellaneous
units. Contracts were awarded or work was begun within the year
for rebuilding, alterations, and improvements at nine Coast Guard
(life-saving) stations, the depot, academy, and two radio stations.
Repair depot.—The Coast Guard cutter Ossipee underwent major
repairs and a thorough overhauling and reconditioning during the year
at the Coast Guard repair depot at Curtis Bay, Md. The Coast
Guard cutter Tallapoosa was at the depot undergoing simUar repairs,,
overhauling, and reconditioning, at the close of the year. Routine
repairs and overhaul of a number of cutters and their equipment were
also performed by the depot.



152

REPORT ON THE FINANCES

During the year the boat-building shop at the depot constructed 59
standard boats for distribution to various units of the Coast Guard.
Among these were eight 36-foot 6-inch motor lifeboats of the new type;
Personnel
On June 30, 1930, there were on the active list of the Coast Guard
365 regular commissioned officers, 39 temporary commissioned officers, 97 cadets, 76 chief warrant officers, 514 regular warrant officers,
278 temporary warrant officers, 10,762 enlisted men, and 267 civilian
employees in the field, of which 227 were per diem civilian employees
at the Coast Guard depot, Curtis Bay, Md.
Recruiting.—The recruiting service of the Coast Guard on June 30,
1930, comprised 10 main stations and 33 substations. During the year
there were 8,565 applicants for enlistment of which number 1,828
were enlisted, 2,099 rejected for physical disability, and'4,638 for
other disabling causes, The large number of rejections for causes
other than physical defects was due largely to the thorough manner
in which applicants for enlistment were investigated. No pains are
spared to enlist only those men who are wholly desirable.
Recruits enlisted during the year were trained at the Coast Guard
receiving unit. New London, Conn. On June 14, 1930, a receiving
unit was established at Goat Island, San Francisco, Calif.
Welfare.—In pursuance of an established policy, every effort has
been made to so expend the recreation and welfare funds that the
greatest possible good would accrue to the enlisted personnel of the
service. Due to exigencies which arose during the year, a part of the
allotment originally allowed for recreation had to be withheld, to be
utilized for other purposes. However, by using the general fund
reserved for expenditure by the commandant to purchase larger items
of equipment, many additional units have been equipped witli radio
receiving sets, motion-picture projectors, and similar articles.
The Coast Guard Institute, established at New London, Conn.,
has had a most successful year. On June 30, 1930, the school had
1,314 enlisted men enrolled for various correspondence courses, and
in addition 7 commissioned officers and 48 warrant officers had availed
themselves of the opportunity to pursue courses through the institute
by paying the cost thereof. During the year 16,515 papers were
graded by the institute, 108 students were awarded International
Correspondence School diplomas, and 290 received certificates upon
the completion of rating courses. At the close of the year there was a
long waiting list due to the fact that funds were not avaUable for
the purchase of the necessary textbooks and other material needed
for additional students. The instructors not only carried on
the regular work of marking and grading papers, but have also
assisted in the compilation of examinations for enlisted men for



SECRETARY OF THE TREASURY

153

advancement to higher ratings and have graded many of these
examination papers. The institute has proved to be a project which is
of great value to the service, and the enlisted men generally are looking upon it as a stepping stone to self-betterment. It is, therefore,
hoped that the scope of the enterprise may be enlarged.
The Bureau of Navigation, Navy Department, has cooperated to
the fullest extent in supplying rating courses for enlisted men and
in furnishing film service to units of the Coast Guard. It is desired
to acknowledge this generous assistance and to express grateful
appreciation of it.
The means of recreation and the opportunities for education which
have been made avaUable to the enlisted men have done much to
raise the standard of morale and increase the general efficiency of
the service.
Awards of life-saving medals
The Secretary of the Treasury, under the provisions of law, awarded
during the year 28 life-saving medals of honor (5 gold and 23 sUver)
in recognition of bravery exhibited in the rescue or attempted rescue
of persons from^ drowning in waters over which the United States
has jurisdiction or upon an American vessel.
Appropriations, expenditures, and balances
The appropriations avaUable for the Coast Guard for the fiscal
year 1930, the expenditures thei^efrom, and the balances are as follows:
Title of appropriation

Expended
Appropriation and obligated Unobligated
balance

$292, 992.07
$4,562.93
$297, 555. 00
Salaries, oflQce of Coast Guard, 1930
81,238.85
19,367, 000. 00 19, 285,761.15
Pay and allowances, Coast Guard, 1930
.
52, 712. 66
2,395, 000. 00 2, 342,287.34
Fuel and water, Coast Guard, 1930
1,934, 082. 61
65,917.39
2,000, 000.00
Outfits, Coast Guard, 1930
11,753. 88
413, 246.12
425, 000.00
Rebuilding and repairing stations, etc., Coast Guard, 1930.-27,178.72
322, 821.28
350, 000.00
Mileage, etc., Coast Guard, 1930.
1, 234. 23
16, 765.77
Draft animals, Coast Guard, 1930
18, 000. 00
3,187. 59
96, 812.41
Communication lines, Coast Guard, 1930
^
100, 000. 00
2,420. 21
87, 195.79
Civilian employees, Coast Guard, 1930
89, 616. 00
1,902.85
268, 097.15
Contingent expenses. Coast Guard, 1930
270, 000.00
36, 770. 52
2, 083,229.48
Repairs to Coast Guard vessels, 1930..-2,120, 000.00
15,039.83
Construction and equipment of Coast Guard cutters, 1930..- 2, 200,000. 00 2,184,960.17
100, 000. 00
Construction and equipment of Coast Guard cutters, 1930-31..
100, 000. 00
Coast Guard Academy.'
9, 950.89
9, 950. 89
000. 00
144,000.00
Seaplanes, Coast Guard, 1929-30
144, 400. 69
6, 399.04
4,001. 65
Establishing Coast Guard stations, 1929-30
10, 000.00
67, 629.15
82, 370.85
Repairs to Coast Guard vessels, 1930-31
150, 000. 00
250,110. 70
9,889.30
Motor boats. Coast Guard, 1930
260, 000.00
9, 500. 00
20, 500. 00
Communication lines, Coast Guard, 1930-31
30, 000. 00
24, 683.93
825,316.07
Coast Guard Academy, 1930-31
850, 000.00
1, 500. 00 2, 648, 500.00
Additional vessels, Coast Guard, 1930-31
2, 650,250. 00
29, 355.00
140,895.00
Retired pay, former Life-Saving Service, 1930-31
170,




COMiPTROLLER OF THE CURRENCY

National banks organized, consolidated, insolvent, in voluntary liguidation, and in existence
From the inauguration of the national banking system in 1863 to
June 30, 1930, charters have been issued to 13,479 national banking
associations, of which 7,311 are in existence. By reason of liquidations, consolidations, and failures, 6,168 associations have been
terminated.
•
The authorized capital of the banks in existence on June 30, 1930,
was $1,753,765,629, an increase during the fiscal year of $118,456,714.
While charters were issued during the year to 133 associations, there
was a net decrease of 276 in the number of banks—that is, from 7,587
to 7,311—by reason of voluntary liquidations, receiverships, and
consolidations.
Summaries of operations during the last year relating to the number
and capital of national banks organized, increases and reductions of
capital, with number of national banks organized under various acts
of Congress and number closed for various reasons during the existence
of the system, together with the number organized, consolidated,
failed, liquidated, and in existence in each State and geographical
division, are shown in the statements following:
Organization, capital stock changes, %nd liquidations of national banks during the
fiscal year 1930
Total
Number
of banks

Charters granted
Increases of capital (282 banks 0Restored to solvency
Voluntary liquidations
Receiverships 2
Decreases of capital (16 banks)
Closed under consolidation act of Nov. 7, 1918, and
capital decrease incident thereto.
Net decrease in banks
Net increase in capital
Charters in force June 30, 1929, and authorized capital..
Charters in force June 30, 1930, and authorized
capital

Capital

.....

133

$19,600,000
156, 796,564
250,000

268
87

46,842,900
7,390,000
1,950,000

Number
of banks

136

2,556,950
«419

Capital

$176,646,564

» 68,739,850

276

118,456,714
"7,'587" 1,635,308,915
7,311

1,753,765,629

»Includes 20 increases aggregating $32,255,700, which were effected as a result of consolidations under
the actof Nov. 7,1918 and 31 increases aggregating $62,432,600, incident to the consolidation of State banks
with national banks under the act of Feb. 25,1927, and 81 increases by stock dividends aggregating $8,216,630.
2 Includes 7 banks with aggregate capital of $550,000, which had been previously reported in voluntary
liquid'.ition.

154




155

SECfeETARt OF T S E d?fefiAStJB,Y

Number of national banks organized since February 25, 1863, passed out of the
system, and in existence June 30, 1930
Organized under—
Act of Feb. 25, 1863
456
Act of June 3, 1864
8, 317
Gold currency act, July 12, 1870_
10
Act of Mar. 14, 1900
4, 696
Total number of national banks organized
Voluntary liquidations
Expirations of corporate existence.Consolidations under act of Nov. 7, 1918
Receiverships, exclusive of those restored to solvency

13, 479
4, 346
208
309
1, 305

Total number passed out of the system

6, 168

Number now in existence

7, 311

Number of national banks organized, consolidated under act of November 7, 1918,
insolvent, in voluntary liquidation, and in existence on June SO, 1930, by States,
etc.
Consolidated
Organized u n d e r act I n s o l v e n t I n liquidation
N o v . 7,
1918

States, etc.

Maine...
New Hampshire
Vermont
Massachusetts
R h o d e Island
Connecticut

.

_

T o t a l N e w E n g l a n d States

T o t a l E a s t e r n States

.'.
_
. .
.

T o t a l S o u t h e r n States

. . .




. ...

59
13
23
175
51
47

62
56
45
152
10
62

26

36

368

377

44
13
30
1
4

52
10
56
1
2
4

300
62
223
13
48
10

558
297
848
16
77
12

2,681

.

4
8
16
2
6

954
382
1,157
30
128
30

...

2
1
1
16
2
. 4

807

•..

New York
N e w Jersey
Pennsylvania... .
Delaware
Maryland
D i s t r i c t of C o l u m b i a . _

Virginia
W e s t Virginia
N o r t h Carolina
South Carolina..
Georgia
^...
Florida..
Alabama
Mississippi
Louisiana
Texas—-1
;
Arkansas
Kentucky
Tennessee

I n existence

92

125

656

1,808

236
164
130
113
172
123
166
71
86
1,065
125
233
195

12
5
4
5
6
1
1
2
2
15
1
9
5

9
12
18
27
25
31
21
4
8
78
16
7
11

58
35
44
42
66
36
43
30
43
376
40
83
80

167
112
64
39
75
55
101
35
33
596
68
134
99

2,879

68

267

976

1,568

113
74
77
359
65
119

156

REPORT ON THE FINANCES

Number of national hanks organized, consolidated under act of November 7, 1918,
insolvent, in voluntary liquidation, and in existence on June 30, 1930, by States,
etc.—Continued
Consolidated
I n liquiOrganized u n d e r act I n s o l v e n t d a t i o n
N o v . 7,
1918

s t a t e s , etc.

I n existence

315
212
474
126
155
265
248
126

.

638
403
723
269
242
464
607
276

20
7
9
4
7
6
4
9

42
30
46
19
14
68
101
19

•

. 3, 522

66

339

1,196

1,921

.

254
213
381
437
191
67
205
79
718

3
1
1
.4
2

11

75
62
53
60
64
12
29
24
60

63
53
IM
138
62
20
53
29
365

113
97
173
245
63
25
120
26
282

2,535

26

429

937

1,144

213
139
499
108
38
16
30

16
1
• 12

32
14
"27
27
4
2
3

60
31
254
40
13
4
13

105
93
206
41
19
10
14

T o t a l Pacific S t a t e s .

1,043

31

109

415

488

Alaska
.
T h e T e r r i t o r y of H a w a i i .
Porto R i c o . -

5
6
1

1
4
1

4
1

Ohio
Indiana
Illinois
Michigan.Wisconsin
Minnesota
Iowa__
Missouri:!

.
.
._
- .

.

T o t a l M i d d l e W e s t e r n States
North Dakota
South D a k o t a
Nebraska
Kansas
Montana
Wyoming
Colorado
N e w Mexico
Oklahoma

. . .
j

•

:

T o t a l W e s t e r n States
Washington
Oregon
California
Idaho
Utah...
Nevada
Arizona
1

. .

T o t a l Alaska a n d island possessions
T o t a l U n i t e d States a n d possessions




3

2

1

12

309

6

1

13,479

261
164
194
120
66
125"
164
122

1,306

5

4,554

7,311

157

SECEETABY OF T H E TREASTJBY

Condition of national banks
A summary of the resources and liabUities of national banks in the
continental United States, Alaska, and Hawaii on June 30, 1930, as
compared with June 29, 1929, is as follows:
Summary of condition of national banks on J u n e 29, 1929, and J u n e SO, 1930
[Dollars in thousands]
June 29,
1929

Classification

Number of banks...

7,636

June 30,
1930,
7,252

Increase.
(+) or decrease (—)
-284

RESOURCES

Loans and discounts (including rediscounts)....
Overdrafts
_
Investments
Banking house, furniture and
fixtures
Real estate owned other than banking house
Cash in vault..
Reserve with Federal reserve banks or other reserve agents.
Other amounts diie from banks
Exchanges for clearing house and other cash items
Other resources..
• Total

..

$14,801,130 $14, 887, 752
9,462
' 10,193
888,171
6, 666i 635
787, 750
747, 684
124, 684
118, 839
342, 507
298,003
421,676
1, 344,951
353, 669
1,854,187
297, 487
785, 006
003,491
823, 700
27,440, 228 29,116,639

+$86,622
-741
+231, 636
+40, 066
. +5,745
+44, 504
+76, 725
+499,482
+512,481
+179, 791
+1, 676, 311

LIABILITIES

Capital stock paid in
1, 627, 376
Surplus
1,479, 062
487, 504
Undivided, profits—net
Reserves" for dividends, contingencies, etc
80,832
Reserves for interest, taxes, and other expenses accrued and unpaid
73,968
National bank circulation
649,452
Due to banksi
2,176, 932
Certified and cashiers' checks and cash letters of credit and travelers'
checks outstanding.
,
372, 550
Demand deposits...
10, 604, 268
Time deposits (including postal savings)'
8,317,096
United States deposits
_.
228, 243
'",• Total deposits
21,698,088
Billsjpayable and rediscounts
714, 507
Agreements to repurchase securities sold
49,660
Acceptances executed for customers
392, 623
Other liabilities
•...
287,167
Total
^
Riatio of loans and discounts to total deposits (per cent)




1,743,974
1, 591,339
545,873
94,962
79,129
662,339
2, 679,821

+116, 599
+112, 287
+58, 369
+14,130
+5,161
+2,887
+603,889

738,327
10,926, 201
8,762, 671
171,964

+365,777
+421,933
+435,476
-66, 279

2S, 268,884
. 229,033
8,173
511, 007
• 391,826

-\-l, 670,796
-485,474

-41.487
+118, 384
+104, 669

27,440, 228 29,116, 539 +1, 676, 311
68.63
63.98
-4.55

158

REPORT ON T H E FINANCES

The resources and liabilities of the national banks on the date of
each report since June 29, 1929, are shown in the following statement:
Abstract of reports of condition of national banks at the date of each report since
J u n e 29, 1929
.. (Dollars in thousands]
Classification
Number of banks.

June 29,
1929
7,536

Oct. 4,
1929
7,473

Dec. 31,
1929
7,408

Mar. 27,
1930
7,316

June 30,
1930
7,252

RESOURCES

Loans and discounts (including redis$14, 801,130 $14,961,877 $15,150,046 $14,648,753 $14,887,762
counts) L-^-.
9,452
10,193
16,533
9,943
10,181
Overdrafts
United States Government securities
2,753,941
2,803,860 2,704,874 2,612,087 2.722,843
owned
Other bonds, stocks, securities', etc.,
4,134,230
3,852,675 3, 741,014 3,845,756 3,832,829
owned
619,530
509, 433
397,333
484,728
617, 616
Customers' hability account of acceptances.
747, 684
765,866
746,419
787,750
766,193
Banking house, furniture and fixtures .
Real estate owned other than banking
121, 684
124, 584
118, 839
125,823
123, 613
house
1,421, 676
, 344,961 1,320,427 1,348,046 1,363, 651
Reserve with Federal reserve banks
342, 607
347,362
393,330
350, 641
298,003
Cash in vault..
---.3,579,892
!, 569,098 2,970,190 3, 413,047 2,507,770
Due from banks.-71,264
69,921
93,034
45,106
70,095
Outside checks and other cash items
Redemption fund and due from United
32,821
32,854
32,928
32,740
33,025
States Treasurer--Acceptances of other banks" and bills of
244,100
203,966
164,866
188,925
230,961
exchange or drafts sold with indorsement.
17,696
18,000
20,186
21,929
26,985
Securities borrowed
199,641
200,752
208,575
196,573
218,761
Other resources.......:...
27,348,498

29,116,639

1, 627,375 1, 671,274 1,704,473 1,704, 408
Capital stock paid in
1, 479,052 1,516,241 1,548,376 1, 653,644
Surplus
541,195
497,043
487,604
655,873
Undivided profits—net
91,911
79,467
80,832
61,759
Reserves for dividends, contingencies, etc..
Reserves for interest, taxes, and other ex71,931
88,759
73,968
86,476
penses accrued and unpaid
649,703
646,420
649,452
641,104
National-bank notes outstanding
2,648, 482 2,829,960 3,146,301 2,762, 093
Due to banks 2
10,504,268 10, 568, 012 11,089,432 10,163,225
Demand deposits
Time deposits (including postal savings)... 8,317,095 8, 301,761 8, 434,442 8,514,864
200, 796
202,274
103,318
228,243
United States deposits
21,598,088 21,901,997 22,778,493 21,640,978
Total deposits
/Agreements to repurchase United States
10,123
31,981
41,690
49, 660
Government or other .securities sold
225, 664
657,572
545,687
714, 507
Bills payable and rediscounts.
Acceptances of other banks and bills of
203,966
188,925
230,961
164, 866
exchange or drafts sold with indorsement
626,497
523,194
392, 623
479,931
Acceptances executed for customers
Acceptances executed by other banks for
11,304
12, 638
20,618
18, 648
account of reporting banks
18,000
26, 985
21,929
20,186
Securities borrowed
.
98,203
79, 922
74,287
83,467
Other habihties

1,743,974
1,691,339
645,873
94,962

27,440,228

Total

27,924,310

28,882,483

LIABILITIES

Total

27,440,228

27,924,310

28,882,483

27,348,498

79,129
652,339
3,418,148
10,926,201
8,752, 671
171,964
23,268,884
8,173
229,033
244,100
511,007
15,644
17,696
114,586
29,116,639

1 Includes customers' habihty under letters of credit.
2 Includes certified and cashiers' checks, and cash letters of credit and travelers' checks outstanding.




159

SECRETARY OF THE TREASURY

Banks other than national
A summary of the resources and liabilities of reporting banks other
than national in the continental United States, Alaska, and insular
possessions, on June 30, 1930, as compared with June 29, 1929, is as
follows:
Resources and liabilities of banks other than national on June SO, 1930, compared
with June 29, 1929
[Dollars in thousandsl

Classification

June 29,
1929

Number of banks

June 30,
1930

Increase
(+) or de
crease (—)

16, 827
RESOURCES

Loans and discounts, including rediscounts
Overdrafts
Investments,.
.
Banking house, furniture, and fixtures
Real estate owned other than banking house
Cash in vault
Reserve with Federal reserve banks or other reserve agents..
Other amounts due from banks
Exchanges for clearing house and other cash i t e m s . . .
Other resources
Total

526, 675,139 $26, 572,918 -$1,002,221
46, 664
-6,678
39,986
10, 692, 203 11,056, 657
+364, 354
+15,837
1, 006, 770 1, 022, 607
+28, 590
271, 977
300, 667
621,925
523,463
+ 1 , 538
1, 847, 249 2, Oil, 426
+164,177
1, 713, 338 1,640, 656
-72, 682
906, 766 1,587,148
+6,80, 382
-1,989
1,160, 246 1,148, 267
44, 732, 277 44,903,585

+171,308

LIABILITIES

Capital stock paid in
Surplus
Undivided profits—net
Reserves for dividends, contingencies, etc...
Reserves for interest, taxes, and other expenses accrued and unpaid.
Due to banks
Certified and cashiers' checks and cash letters of credit and trav
elers' checks outstanding
Demand deposits..
Time deposits (including postal savings)
United States deposits
Deposits not classified
Total deposits
Bills payable and rediscounts
Agreements to repurchase securities sold
'....
Acceptances executed for customers.
Other liabilities

12101—31-

-13




2,145,445
3,377,660
608, 931
173,314
43, 608
1, 667, 299

-24,158
+245,014
-951
+92, 663
-26, 200
+204, 034

464,880
876, 950
845, 896 13,172, 315
470, 522 20, 712, 790
57, 869
41, 768
117,199
20,121
36, 312,663 36,678,311
436, 784
916,196
39, 606
5,863
74,962
57, 294
378,781 1,425,066

+412, 070
-673, 681
+242,268
-16, 111
+97, 078
+266,768
-479,412
+33, 642
+17, 668
+46, 284

44, 732,277

Total

169, 603
132, 646
609,882
80, 661
68, 808
453, 265

+171,308

44,903, 685

160

REPORT ON THE FINANCES

All reporting banks
(National, State (commercial), savings, and private banks, and loan and trust
. companies)

Reporting banks on June 30, 1930, numbered 24,079, which included 7,252 national banks and 16,827 banks other than national.
A comparison of the resources and liabUities of all reporting banks
on June 29, 1929, and June 30, 1930, follows:
Resources and liabilities of all reporting hanks on June 30, 1930, compared with
June 29, 1929
[Dollars in thousands]
June 29,
1929

Classification

Number of banks

...

26,330

June 30
1930
24,079

Increase
(+) or decrease (—)
-1,251

RESOURCES

Loans and discounts (including rediscounts)
Overdrafts
Investments
Banking house, furniture, and fixtures
Real estate owned other than banking house
Cash in vault
Reserve with Federal reserve banks or other reserve agents
Other amounts due from b a n k s . . . . .
Exchanges for clearing-house and other cash i t e m s . . .
Other resources
TotaL

$41, 376, 269 $40,460, 670 -$915, 699
56,857
- 7 , 419
49, 438
348,738 17, 944, 728
+695,990
754,454
+55, 903
1, 810, 357
390, 816
+34,335
425,161
819, 928
+46,042
866, 970
192, 200 3,433,102
+240, 902
567, 625 3,994,325
+426, 800
691, 772' 2, 884, 635 +1,192, 863
973, 946 2,151, 748
+177, 802
72,172, 606 74, 020,124 + 1 , 847, 619

LIABILITIES

Capital stock paid in
Surplus
Undivided profits—net
Reserves for dividends, contingencies, etc
Reserves for interest, taxes, and other expenses accrued and unpaid.
National bank circulation
Due to banks
.,
t.
-.
Certified and cashiers' checks and cash letters of credit and travelers'checks outstanding
Demand deposits--Time deposits (including postal savings)
United States deposits
-Deposits not classified
Total deposits
-^..
Bills payable and rediscounts...
Agreements to repurchase securities sold
Acceptances executed for customers
Other liabilities
Total




796,978
611, 698.
097,386
161,483
142, 776
649,462
629,197

3,889,419
4, 968, 999
1,154, 804
268, 276
122, 737
662, 339
4, 337,120

+92,441
+357,301
+67,418
+106, 793
-20, 039
+2, 887
+707, 923

1, 615, 277
837,430
+777, 847
360,164 24, 098, 516
-251, 648
787, 617 29,465, 361
+677, 744
286,112.
213,722
-72,390
20,121
117,199
+97,078
910,641 69,847,196 +1,936,664
630,703
665, 817
-964, 886
65, 523
47,678
- 7 , 845
449,917
685, 969
+136, 052
665, 948 1,816, 891
+150, 943
72,^172,505

74,020,124

+ 1 , 847. 619

161

SECRETARY OF THE TREASURY

The following statement shows the number of national banks
June 30, 1930, in each State, with the amount of capital and total
resources, in comparison with similar information for all reporting
banks:
Number, capital, and resources of national banks, and all reporting banks, June 30,
1930, hy States i
All b a n k s , including n a t i o n a l
banks

National banks
States, etc.

Number of
banks

52
Maine
56
New Hampshire
45
Vermont .
152
Massachusetts
•..
Rhode Island
10
62
Connecticut
T o t a l N e w E n g l a n d States
377
NewYork.556
N e w Jersey
297
Pennsylvania.
845
Delaware. _
16
M a r y l a n d ._
77
12
D i s t r i c t of C o l u m b i a
T o t a l E a s t e r n States
1,803
Virginia -.:
157
West Virginia
111
North Carolina..
64
South Carolina.36
Georgia
75
Florida--..
56
Alabama
101
Mississippi
36
Louisiana
31
Texas
693
Arkansas
...
67
Kentucky.133
Tennessee . 99
Total Southern S t a t e s . . . .
, 1,556
Ohio
308
Indiana
210
Illinois-. 462
Michigan
..126
Wisconsin
155
Minnesota-_ .
263
Iowa
•
_
241
Missouri
125
T o t a l M i d d l e W e s t e r n S t a t e s . _. 1,890
North Dakota
112
96
South Dakota
Nebraska..
171
Kansas
245
Montana
. . .
63
Wyoming
. 25
Colorado 120
N e w Mexico
26
Oklahoma
_ .
278
Total Western States.
1,135
Washington.
105
Oregon..
93
California
^
.
206
Idaho
41
Utah
18
Nevada
10
Arizona
.
. . . .
14
486
T o t a l Pacific States
Alaska
4
T h e T e r r i t o r y of H a w a i i
1
P o r t o Rico
Philippines
6
T o t a l possessions
T o t a l U n i t e d States a n d posses7,262
sions
_




Capital
(000
omitted)

NumT o t a l resources (000 ber of
banks
omitted)

$7,370
5,726
5,160
113,283
4,520
21,412

$160,048
90,860
77,932
1,811,601
60,986
318,219

157,470
436,009
56, 610
165,087
1,648
13,109
10,776
683, 238
29,319
13,890
11,476
5,825
19, 395
15, 785
18,270
5, 470
9,126
. 80,678
6,090
18, 833
24, 409
. 25b, 464
68, 665
33,333
105,040
32,090
33,145
38,485
21,470
36, 225
367,453
5,496
4, 786
14,866
17, 577
4,985
2,270
12, 600
1,910
26,470

2,519,645
7, 657, 389
1,040,789
3, 236,964
24,094
262,226
172,894

Capital
(000
omitted)
$13,960
6,955
8,011
162,773
16,425
49,708
257,832
962,006
143,363
384,446
13,112
42,223
23,928
1, 659,078
68, 899
32,174
33, 652«
15, 663
39, 395
26,618
28,806
16,164
34,481
115,103
20, 403
49,861
44,117

3,550
463
290
391
173
398
207
321
316
222
1,293
396
662
479
5,500
989
916
1, 683
765
936
1,015
1,262
1,235
8,800
366
374
773
1,061
185
83
270
63
598

•

$474,738
325,946
277,153
4,920,463
696,846
1, 519, 210
8,114,346
23, 297,812
2,800,499
6,968,476
189,632
1,003, 671
324, 684
34, 584, 774

614, 226

131
121
103
449
36
253
1,092
1,122
560
1,541
61
226
40

12, 3 9 i 356
382, 231
199, 651
136,493
85,797
280, 290
212,991
230, 547
92,350
130,087
1,063, 605
85,017
278, 583
335, 328
3, 612,970
873, 390
469,668
1, 718,002
651,123
534, 361
673,896
342,920
• 551, 866
6,815,116
84,483
81,009
265,105
264,435
96, 505
40,938
270, 661
38,060
423,092

T o t a l resources (000
omitted)

1,043, 518
10,026
11, 620
30, 537
40,260
10, 765
4,240
17,938
3,020
33, 505

6,440,620
3, 394,085
1,178,355
4,882,319
2,388,842
1,109,114
1,118,267
964,739
1, 628,332
16,664,043
128,428
168,906
451,078
503,607
176, 674
71, 341
341, 589
52, 692
616, 545

194,867
76, 666
338, 703
125,693
71,317
61,488
63, 657
112,148

663, 460
415,821
448, 564
205, 324
435,631
306,841
334,693
264,431
527,061
1,362, 782
253,376
643,432
579, 324

90, 947
26,100
13,496
143,957
2,676
3,300
1,600
1,960
192,977

1, 553,178
346,776
240,309
2, 528,059
46,076
59,842
22, 377
34,708

3,763
333
228
437
137
102
36
' 45

161,891
40,947
21,266
231,384
6,043
11, 626
3,317
6,861

2,409, 660
583, 560
325,338
4, 236,459
100,715
196,640
48,473
97, 694

3,277,146

275
3,150

5,338
38,790

320,434
915
11,312
6,971
13, 242

3,426

44,128

1,317
17
20
19
11
67

32,440

6, 587,879
14,511
122,003
53, 605
128, 783
318,802

1, 743,974

29,116, 539

24,079

3,8JB9,419

•74,020,124

'

Resources and liabilities of all reporting banks, June SO, 1924 to 1930

to

[Dollars i n t h o u s a n d s ]
Classification
N u m b e r of b a n k s . .

1924

1926

1926

1927

29,348

28,841

$31, 427,717
56,334
14,228, 746
6,121,093
.1, 590, 259
1,992,370
911, 500
816,672

J $33, 883,733
50,259
16, 400,113
6, 774,392
1, 736, 586
2, 181,137
951,286
079, 632

67,144,690

62,067,037

64,893,362

68,132, 568

114, 203
967,359
971,730

169,711
173,334
007, 439

3,273,303
3,471,968
1,063,171

3,376, 498
3, 764,627
1,131,206

6 64,618
651,155
656,649
48,882,296
187,827
4,330,605

6 70,326
660,946
1,119,943
51,132,554
194,024
4, 289,337

28,146

1928

1929

1930

26,213

25,330

$39, 542,067
$37,270,378
43, 450
60,407
17, 255,093
18,771,814
6,900,402
6,722, 248
1,979,578
2,067,663
2,181,167
1,753,098
1,007,896
887,846
1 1, 494, 594
1,779,186

$41,376, 269
56,867
17,348,738
6,759, 725
2,145,270
1,691,772
819,928
1,973,946

$40, 460,670
49,438
17,944,728
7,427,427
2, 235, 508
2,884,635
865,970
2,151,748

71, 574,328

72,172, 606

74,020,124

3, 525, 522
4,145, 529
1, 226,361

3,889,419
4,968,999
1,154,804
268,276
122,737
652,339
1,615,277
53,563,877
213,722
4,337,120
117,199
3,116,365
74,020,124

27,061

24,079

RESOURCES

Loans and discounts (including rediscounts)..
Overdrafts
Bonds, stocks, and other securities
Due from other banks and bankers 2
Real estate, fm*niture, etc.3.
Checks and other cash items *
Cash on h a n d . .
other resources
TotaL.

$36,233, 490
49,470
15,815,141
6,769,061
1,851,967
2,037, 561
996,520
1,140,152

O

O

LIABILITIES

Capital stock paid in
Surplus fund
Undivided profits—net
-...
Reserves for dividends, contingencies, etc
Reserves for interest, taxes, and other expenses accrued and unpaid .
Circulation (national banks)
Certified checks and cashiers' checks..
Demand and time deposits
United States deposits
Due to other banks and bankers
Deposits not classified
Other liabilities ?
'
Total..

2,015,049

2,312,770

2, 403,197

3, 530,941

3,796,978
4,611,698
1,097,386
161, 483
142,776
649,462
837, 430
63,137,781
286,112
3, 629,197
20,121
3,802,091

62,057,037

64,893,362

68,132, 568

71, 574,328

72,172, 606

(5)
(5)

(5)

6 60,078
648, 494
698,861
765,942
147, 220
370,909

729,686
664,867
954,121
152,302
928,292
1,662,140
67,144,1

1 Includes acceptances reported by national banks.
2 Includes lawful reserve with Federal reserve banks.
3 Includes real estate owned other than banking house.
* Includes exchanges for clearing house.
6 Included in undivided profits.
6 For national banks only; figures for banks other than national included in undivided profits.
' Includes bills payable and rediscounts.




(«)

(5)

(5)

6 83, 763
649,095
864, 685
53, 244,698
222,816
4,081,028

o
teJ
CD

BUREAU OF CUSTOMS

The function of the Bureau of Customs is to enforce the tariff law,
which, in the language of the tariff act of 1922, the act in force during
all but 13 days of the fiscal year 1930, is an act ^Ho provide revenue,
to regulate commerce with foreign countries, to encourage the industries of the United States, and for other purposes,'' to which has
•been added by the tariff act of 1930, approved June 17, 1930, *Ho
protect American labor.'' In addition to these duties, the Customs
Service enforces all other customs laws and assists in the work of
other departments and activities, such as the collection and accounting for head tax, fines, and other receipts for the Immigration Service,
tonnage tax for the Departnient of Comm:erce, fines and other receipts for the Public Health Service; the enforcement of plant and
animal quarantine, pure food, motor boat, and other laws; and the
disbursement of funds at various points for the Coast Guard, Public
Health Service, and the Supervising Architect.
These tasks require an organization of approximately 10,000 officers
and employees, distributed throughout 48 'customs districts; extensive equipment for the weighing, measuring, sampling, and handling
of imported merchandise; warehouses, labdratories, and other facilities for its examination and appraisement; and automobiles and
boats for the patrol of over 5,000 miles of international border lines
on land and rivers. To supervise and direct this extensive organization, with its varied and complex activities, there was avaUable in
the bureau a total of only 92 employees, including everyone from the
messengers to the commissioner, a force fojund to be inadequate to
properly control and direct the field force. :
Reorganization and expansion^ of bureau
A survey undertaken to determine the needs of the bureau, both as
to personnel and organization, developed facts on the basis of which
appropriations were secured to increase its; force by 90 employees.
Of this number 19 are attorneys; 43, clerksi in the division of mails
and files; and the remaining 28, officers and derks distributed through
the several activities of the adininistrative unit.
The additional attorneys will provide a legal staff capable of
promptly handling the volume of work, yet allowing sufficient time
to permit the careful analysis and mature deliberation required to
properly prepare decisions in the many intricate and difficult cases
submitted to the bureau, frequently involving large sums of money.
Danger to the revenue and the possibility ojF domestic manufactures
being placed at a disadvantage in competition with foreign commodities through erroneous interpretations of the tariff law are further
eliminated by providing a more adequate review of decisions than




163

164

PuEP0.RT ON THE FINANCES

I

could be given by the deputy commissioner in charge of the legal
divisions, who formerly was without an assistant.
Ofiice of General Counsel.—The reorganization plan provides for a
general counsel and two assistants in lieu of the one deputy commissioner in charge of legal activities. One assistant general counsel
will have immediate supervision over the legal divisions and the
other over a staff of special attorneys of broad experience in customs
law and procedure. Decisions prepared in the legal divisions will
be reviewed by the assistant general counsel in charge of these divisions, who will forward to the general counsel those which meet with
his unqualified approval and refer to the assistant general counsel
in charge of the special attorneys those which, in his opinion, are of
doubtful soundness or are of such exceptional importance as to require further study and research.
The general counsel will review the approved cases forwarded to
him and, if satisfied with the decisions, will approve and forward them
for signature. If he disagrees with the conclusions reached, he will
refer the cases to the assistant in charge of the special attorneys for
further study and research. Cases of unusual complexity a^nd those
involving exceptionaUy large sums of money, or which may have
important and far-reaching efl'ects on commerce and industry, may
be referred for study and research direct to the assistant general
counsel in charge of the special attorneys.
This plan of procedure will afford far greater protection, both to
the Government and commerce, than was formerly possible with the
limited personnel available.
Division of Appeals and Protests.—Provision is made also for the
organization of a new legal division to be known as the division of
appeals and protests to which wUl be assigned the following subjects:
1. Appeals and protests:
American labor.
American producers.
2. Allowance for loss (casualty).
3. Bonds.
4. Countervailing duties, bounty grant.
5. Discrimination by foreign countries.
6. Dumping.

7. Port examination reports.
8. Prohibited importations:
Convict-made goods.
Copyrights.
Immoral articles.
Trade-marks.
9. Unfair practices.

This will relieve congestion in the four other legal divisions and do
much to expedite action in these cases, as well as provide for their
more thorough study.
^
Division of Mails and Files.—Forty-three of the additional employees
wiU be assigned to the division of maUs and ffles, the legal correspondence and records of which cover departmental action under the tariff
laws of 1897, 1909, 1913, the emergency act of 1921, and the intricate
tariff act of 1922, and comprise approximately 300,000 subject files.




SECRETARY OF THE TREASURY

165

These records contain many important precedents of great value to
the attorneys but, through lack of sufficient personnel and modern
filing methods, they have not been properly iassembled, protected, and
made available for ready reference. An expert, detaUed from the
department, is devising a system for their classification and filing.
Thirty employees detailed to the bureau from the division of loans
and currency completed the work on the personnel ffles, which are
now in satisfactory condition.
In' 1914 the bureau received an average of 154 pieces of mail per
day, which increased to 550 pieces in 1930. i
Deputy Commissioner.—The business administration of the service,
formerly under the direct supervision of the Commissioner and Assistant Commissioner of Customs, exerc^ised through the several division
chiefs, was organized into an administrative unit the head of which
exercises immediate supervision over thisi branch of the bureau's
activities. Upon the passage of the tariff act of 1930, pursuant to
authority contained therein, this officer was appointed a deputy
commissioner.
{
This organization now places an administrative officer in immediate
charge of each of the three distinct lines of customs activities, namely,
the general counsel in charge of the legal unit, a deputy commissioner
in charge of the administrative unit, and a; deputy commissioner in
charge of the investigative unit. The accompanying administrative
chart shows the organization of the bureau and the lines of supervision
over the several activities and divisions.
i
Classification of ofiicers and field employees:,—The bureau, during the
year, lost a chief of one of the legal divisions, an assistant chief of
another legal division, and two attorneys holding responsible positions, because of more attractive salaries and opportunities in other
activities. The training of attorneys in customs law a;nd procedure
requires considerable time, and these losses severely handicapped the
proper functioning of the legal staff.
It was apparent that the grades and salaries of executive officers,
chiefs of divisions, and the more responsible positions of attorney must
be raised in order to retain experienced officers and employees in the
service and to attract to the service, by providing an incentive for
advancement, the higher grade and better qualified employees.
Under the classification act, however, it was impossible to raise the
grades of the officers concerned because the commissioner's salary
was fixed in the highest grade provided under the classification act
and the subordinate officers each placed one grade below, in their
respective positions, which brought chiefs of divisions and most
responsible attorneys to a grade below that which provided an
attractive salary for employees of the experience and ability required.




COMMISSIONELR.
ASSISTANT COMMISSIONER.

EXECUTIVE

ASSISTANT

SPECIAL ASSISTANT
TO THE COMMISSIONER

TO THE
COMMISSIONER

ADMINISTRATIVE
LE:C,AU

GENERAL

ASSISTANT
GENERAL COUNSEL ~

SECRtTARIE*

INVESTIGATIVE

UNIT

UNIT

U N \ T

ASSISTANT
"IciENERAL COUNSEL

D I V I S I O N OF
TARIFF
CLASSIFICATION

DIVISION OF
DRAWBACK
AND BONDS

DIVISION o r
XNTRY AND
APPRAISEMENT

- D E P U T Y COMMISSIONER
ASSISTANT
DEPUTY COMMISSIONER

DEPUTY COMMISSIONtll
ASSISTANT TO T H E
DEPUTY COMMISSIDNEH

COUNSEL i

D I V I S I O N OF
FISCAL
ADMINISTRATION

DIVISION OPS T A T I S T I C S AND
RESEARCH

HEADQUARTERS
PORTS
( F I E L D SERVICE)

BALTIMORE
BOSTON

JUNEAU
LOS
ANGELES

BRIDGEPORT
BUFFALO

LOUISVILLE
MEMPHIS

C H A R L E S T O N , S.C.
CHICAGO
CLEVELAND
DENVER
DES MOINES
DETROIT

MILWAUKEE
MINNEAPOLIS

DULUTH
EL PASO
GALVESTON
GREAT
FALLS
HONOLULU

NORFOLK.

INDIANAPOLIS

DIVISION OF
ENGINEERING
AND WEI&HINQ

PORTLAND, ME.
PORTLAND, ORE.
PROVIDENCE
ROCHESTER
ST.
ALBANS
ST.
LOUIS

MOBILE

ST.

N E W ORLEANS
N E W YORK
NOGALES

S A L T LAKE C I T Y
SAN A N T O N I O

OGDENSBURG
OMAHA
PEMBINA
PHILADELPHIA
PITTSBURGH
PORT A R T H U R

THOMAS,V.I.

SAN DIEGO
SAN FRANCISCO
SAN J U A N , P a..
SAVANNAH
SEATTLE
TAMPA
WILMINGTON, NC

DIVISION OF
APPEALS AND PROTESTS




CHART S.—Organization of the Bureau of Customs

D I V I S I O N OF
PERSONNEL

CUSTOMS
SERVICE
SCHOOL

•
DOMESTIC
HEADQUARTERS r

BALTIMORE
BOSTON
CHICAGO
EL
PASO
NEW ORLEANS
NEW
YORK
ST P A U L
3AN FRANCISCO
SEATTLE
TAMPA

CUSTOMS
INFORMATION
EXCHANGE

FOREIGN
OFFICES

BERLIN
KOBE
LONDON
MILAN
MONTREAL
PARIS
PRAGUE
SHANGHAI
WINNIPEG

SECRETARY OF THE TREASURY

167

Upon presentation of the facts to Congress the situation was
promptly remedied. The commissioner was placed in a higher
grade by law and on the same basis as the Commissioner of Internal
Kevenue. This permitted the moving up of subordinate officers by
one grade, thus fixing a higher standard which makes possible the
employment and retention in the service of a force of well-qualified
and experienced officers and attorneys.
i
During the year, the bureau continued its study of the classification
of the field service. Tentative allocations were made of approximately 10,000 field positions to specific grades fixed by the Personnel
Classification Board in its preliminary specifications. These aUocations were made for use as a basis by the'board in formulating its
report to Congress.
^
Legislation.—The bureau cooperated closely during the year with
committees of Congress in framing provisions covering administrative
procedure in the new tariff act. The act itself was in force for a
period of only 13 days during the fiscal year- so that a statement concerning its effect on the customs revenue and the import business
generally can not be made.
An act authorizing the furnishing of heat, light, and living quarters
to officers and employees stationed in foreign countries, and a provision in the tariff act of 1930 authorizing the payment of traveling
expenses of the famUies of customs officers transferred to and from
foreign stations or between foreign posts of jduty will be very helpful
in conducting the Customs Foreign Service.*
Legislation was also enacted authorizing the use of the customs
appropriation for the construction of small buUdings for border activities, rio project to exceed $3,000 in cost. This will make possible the
provision of much better facUities for inspection.
Considerable work was done in the bureau on the revision of the
customs regulations in anticipation of the passage of the new tariff'
act. This work, however, could not be completed before the close of
the year because of the short time intervening between the enactment
of the law and the close of the year.
'
Conference of customs officers.—A conference of customs field administrative officers was held in Washington in February, at which
were discussed many important problems jof customs law and procedure, business administration, and ways and means to improve
the service so as to attain a maximum of efficiency with a minimum
of expenditure.
Receipts
Customs collections foUowed a somewhat unusual course during
the year as a result in part of the extended consideration of rate
revisions to be enacted into the pending tariff act. While this
legislation was pending the import situation was affected by the



168

REPORT 0 ^ T H E FIITANCES

hesitancy of some importers to place orders abroad without definite
knowledge of the tarifl' rates which might prevail when the merchandise reached the United States. At times, particularly toward the
end of the fiscal year, there was a tendency to hold certain classes of
merchandise in bonded warehouses pending developments in regard
to changes in tariff rates; and when the tariff act reached the final
stages large quantities of merchandise affected by rate increases were
withdrawn from bond and entered for consumption. Collections
were also influenced to a very important degree by the decline in
business activity which became pronounced by the end of 1929 and
continued throughout the balance of the fiscal year. The decrease
in collections for the fiscal year as a whole, however, was less than
had been anticipated, chiefly as the result of heavy collections on
withdrawals of merchandise from warehouses and on cargo entered
in the last few days before the tariff act, approved June 17, 1930,
went into effect.
At the port of New York, during the period intervening between
the passage of the act and its signing by the President, withdrawals
from warehouses of bonded merchandise subject to rate increases
under the new act brought the payments of duties to amounts unprecedented in the history of the port. The statement below shows
these extraordinary receipts for the four days preceding the effective
date of the act:
June 13
June 14

$2, 259, 708
. _ . 11, 242, 137

June 16
June 17

$5,987,074
2, 130, 210

These receipts, amounting to more than $20,000,000 for the four
days, compare with an average of $47,000,000 for the entire month of
June during the preceding five years.
On the other hand, certain goods dutiable under the old law but
placed on the free list in the new act, were retained in warehouse
untU the provisions of the new act became effective. An outstanding instance of this kind occurred at Chicago, where warehouses were
fflled to capacity with chicle, dutiable at 10 cents per pound under
the old act but free under the new act. The Government lost approximately one and one-half million dollars in duty on this commodity
alone at Chicago by its being held in warehouse untU the tariff act of
1930 went into effect.
The customs receipts for the fiscal year 1930, which include duties
and tonnage tax, amounted to $587,000,903, only $15,819,253 less
than the receipts for the previous fiscal year which, in the circumstances, is a very favorable showing when consideration is given to
the fact that the receipts for the fiscal year 1929 were the highest in
the history of the Government, with the exception of those for the
fiscal year 1927.




169

SECRETARY OF .THE TREASURY

The duties collected under the increased^ rates of the tarift' act of
1930 are not materially reflected in the total receipts, as the new act
was in effect for only 13 days of the year and the volume of imports
during this short period was below normal. •
Miscellaneous customs receipts also were lower than for the fiscal
year 1929 by $58,782. This difference is due to a decrease of $10,164
in the proceeds from the sale of unclaimed and abandoned merchandise, $13,333 in proceeds from sale of seizures, $31,153 in fines, and
$4,132 in miscellaneous items.
The total number and appraised value of seizures for 1930 exceeded
those for the previous year but the more extensive patrol operations
required the withdrawal of a greater number of forfeited automobUes
and boats from sale and their assignment for official use. While this
results in a reduction in the proceeds from sale, it is an advantage to
the Government, as by this means patrol equipment is provided at
very low cost, the only expense incurred being that connected with
the seizure and forfeiture and any necessary repairs to put the equipment in serviceable condition.
The statement below shows in detaU all collections, refunds, and
net proceeds from all sources for the fiscal years 1929 and 1930:
1929
Collections:
Duties
MiscellaneousSale of unclaimed merchandise and abandoned goods . _
_ . . -._
Sale of seizures
Fines __ .
-_. _ .
All other customs receipts
._

1930

$587, 000,903

$602, 820,156
$21,743
133,493
2, 095,980
84,840

$31,907 !
146,826
2,127,133
88,972 ,
o onA pop

Total

--.

Refunds:
Refunds of excessive duties
Drawback payments..
_ . . . _ .

' 605, 214,994
8,284,205 '
13,244,760 i

9, 710, 252
14,444,625
Ol cop q c c

Net cUvStoms receipts from all sources^

, 583,686,029

o

ppc

fXCC

589, 336,959
OA 1CA

P77

565,182,082

The proceeds from the sale of unclainied and abandoned merchandise and seizures do not represent the total amount received from
such sales and deposited in the Treasury since the amount of duties
accruing on such merchandise is deducted; and deposited as duties.
The amounts in the foregoing table, therefore, show only the balances
remaining from the proceeds of sale after; deduction of duties and
expenses connected with the sale.
j




170

•REPORT ON" T H E

FUSTANCES

Volume of business
Entries.—While there was a decrease in the customs receipts,
there was an increase of 25,180 in the number of entries filed. The
number of entries of all classes for the fiscal years 1929 and 1930 is
shown in the comparative statement below:
Number of entries
Class of entries
1929
Consumption:
Free
Dutiable
Informal
Mail
Baggage
_.
Warehouse and rewarehouse
Immediate transportation without appraisement.
Transportation and exportation..
Warehouse withdrawals, duty paid
Warehouse wit hdrawals, all ot her
All other entries
.,.
Drawback notices of intent....
Drawback entries
^—

1930

264,194
501,705
214,503
838, 228
397,823
65,773
146,714
124, 064
264, 593
37,660
24, 200
265,888
29, 799
3,176,144

Total entries..!

270,038
484,131
220, 689
848, 643
437,969
66, 637
143,094
105,470
276, 612
33,752
30,805
251, 268
31, 616
3, 200,324

A steady increase in entries during the past five years is shown in
the following summary of the total number of entries of all classes:
•

Number
of entries

Fiscal year
1926
1927.
1928

.-

2,861, 513
3,000,859
3,079,732

Number
of entries

Fiscal year
1929
1930

^

3,175,144
3,200, 324

Vessels.—With the exception of the number of vessels cleared for
domestic ports, the number of entrances and clearances of vessels for
the year was less than for the preceding year. The number of
vessels cleared for domestic ports increased by 1,099, but the total
number of all entrances and clearances decreased by 15,224.
The detaU of the entrances and clearances of vessels for the fiscal
years 1929 and 1930 is shown in the following comparative statement:
Vessels
Number entered:
From foreign ports—
In ballast
Bulk cargo...
General cargo
From domestic ports
Number cleared:
For foreign ports
For domestic ports




1929

^

1930

20,422
13,494
17,159
40, 382

17,142
13,410
15,408
33, 255

49, 744

45, 663
42,440

41, 341

171

SECRETARY OF THE TREASURY

Highway trafiic.—The international traffic by highway, with the
construction of more improved roads and the continued more general
use of the automobUe, maintained its decided increase of past years.
The number of vehicles which entered the United States during the
fiscal year 1930 exceeded the number entered during the previous
fiscal year by 728,751. The greatest increase in traffic was over the
mtern.a tional bridges at Detroit and Buff alp.
The table below shows the vehicular traffic by customs districts for
the fiscal years 1929 and 1930:
N u m b e r of a u t o m o b i l e
entries

N u m b e r of a u t o m o b i l e
entries
Customs district

Custorhs district
1929

Alaska
.
Arizona
Buffalo
Dakota
Duluth
El Paso
Los Angeles
Maine
Minnesota

. .

16, 925
1,229,811
2, 387,998
117, 626
86, 230
946, 802
1 2, 636, 722
1, 256,436
1, 076,146

..L..

1929

1930
21, 338 M o n t a n a . .
.. .. .
J
1, 331, 203 O h i o
2,561,761
Rochester.!
.
119, 098 S t . L a w r e n c e
99, 633 S a n A n t o n i o
.. .
1, 052,888 S a n D i e g o .
.1
1 2, 287, 087 V e r m o n t
1,161, 786 W a s h i n g t o n
1, 526, 981
72 1
Total

64, 964
3,310
470
328, 013
985,869

1930

460,697
237,999

89,244
3,181
476
352, 056
1,030,197
1 52, 835
518, 397
267,637

11,736.008

12, 464, 769

1 All of the border ports in southern California were formerly included in the Los Angeles district. Just
before the close of the year this district was divided and the border ports placed in the San Diego district.

Air trafiic.—International travel by airplane has greatly increased
since last year. At Detroit, 349 planes entered during the fiscal year
1930, as against 24 the preceding year. In the Florida district the
first commercial line of airplanes between the United States and
foreign countries was established between Miami and Habana, Cuba,
on September 15, 1928. By April, 1930, this service was extended to
the Canal Zone, South and Central America, Porto Rico, and the
British West Indies. Other international iair lines were established
until Florida is now the northern terminus j and aircraft center for all
West Indian, South and Central American,air routes.
The following table, showing the number of airplanes and passengers
leaving and entering the Florida district ifor the fiscal years 1928,
1929, and 1930, emphasizes the increase iri popularity of this means
of travel:
.
;
A i r p l a n e passengers

Airplanes
Year
Entering
1928
1929--.
1930

-

176
1,190
1,948

Departing
176
1,190
1,962

Entering
438
2,819
4,980

Departing
437
2,819
6,020

Other statistics indicating for the several districts the expenditures,
volume of customs transactions, values of! imports and exports, the
cost of collection, etc., are published in Table 16, page 530 of this
report, j
.



172

REPORT ON THE FINANCES

Passengers.—The 12,464,759 automobiles and other vehicles which
crossed the borders into the United States during the year carried
37,089,175 passengers; 10,029,942 passengers arrived by boat and
1,973,201 arrived by train. Almost four times as many passengers
entered the United States by highway as by boat and more than
three times as many as the combined number that entered by boat
and railroad.
Baggage examination.—The work of examining the baggage of
millions of passengers is a task of large proportions. This is made
more difficult by the fact that during the tourist season the number
greatly exceeds that at any other period of the year. From August 15
to October 15 is the height of the season of returning tourists at New
York and this period presents an exceptionaUy difficult inspection
problem. For example, on Monday, September 9, 1929, there arrived
at New York 8,689 passengers, of whom 5,665 were landed on the piers
between 8.15 a. m. and 10.20 a. m. On Monday, September 23, 1929,
10,117 passengers arrived, and of this number, 5,637 were landed
from seven ships from 8.35 a. m. to 10 a. m. These passengers were
distributed on piers more or less distant from one another, and the
work of examining their baggage severely taxed the force of inspectors,
as at the same time there was the usual volume of work relating to the
inspection of cargo merchandise.
The congestion in the handling of baggage at New York during the
height of the tourist season was relieved this year to a great extent
by detaihng experienced inspectors from other ports who were utilized
solely in the examination of passengers' baggage. Four inspectors
were detailed from Baltimore and eight from Boston for a period of 40
days, and six from. Philadelphia for 43 days. The, success of this
experiment justifies an annual arrangement of this kind.
A committee of 25 representative business men was appointed to
study the problem of efficiently handling passengers' baggage at
New York and to make recommendations for the improvement of
the service to the public, the protection of the revenue, and the
enforcement of the customs laws. As a result of conferences of customs officials with this committee, seven specially qualified customs
officers were detailed on experimental voyages for the purpose of
obtaining first-hand. information for the Treasury Department for
use in preparing a booklet of instructions to the traveling public;
also to assist passengers in the preparation of their baggage declarations. These officers conferred with ships' officers and passengers,
consular officials, and managers of tourist agencies, and furnished
information and assistance to all of them singly and in groups.
They also reported various criticisms and suggestions, many of them
helpful and constructive.




173

SECRETARY OF T H E TREASURY

Seizures.—In enforcement of customs laws during the past year, a
decided improvement has been shown in many phases due to the
greater familiarity on the part of the public with what is required by
law and to the cooperation of those actively engaged in commerce.
The number of seizures made for violations of the customs laws,
classified by groups of commodities and the appraised values of such
seizures, for the fiscal years 1929 and 1930, are listed in the following
table:
1930

1929
Class of commodities

Number pf Appraised Number of Appraised
value
value
seizures
seizures;

Furs
Jewelry and precious stones -.
Livestock and farm products
Wearing apparel
..
Miscellaneous
Total
Narcotics

.

..

9,891

.

.

.

Alcohol
.
..
.
Liquors
Ale and beer
._ .
Automobiles
Boats
Airplanes
Horses and horse-drawn vehicles .

.

7,636

5, 479.136

482,781

142

126. 417

,

.

3,896,818

136

. .
.

$61,509
1,657,958
19, 422
426,798
3.313, 449

$36,164
623,256
11,033
217,005
3,008,360

..

208.491

.
.

167,034
(1)

.

0)

625, Oil
1, 231,322
39.660
8,618

570,100
426,756

.

10,762

Total

24,368

1,216,109

31,435

2. 061,645

Grand total

34,395

5, 694,708

39.112

7,667.098

.

.

i No appraised value reported, as commodity is a prohibited importation and has no sale value.

The number of gallons of liquors and alcohol seized and the number
of vehicles, etc., used in transporting liquors seized are listed in the
following table:
Vehicles

Gallons
Items

items
1929

Alcohol.
Liquors
Ale and beer..

Total

59,478
283,480
269. 678

.

:.

23.230
286.920
262,046

602. 636

661,196

1929

1930
Automobiles
Boats
Airplanes ' . .
Horses
and
vehicles...
Total

2,236
671

.
.
horse-drawn
-

1930
2,354
951
22

200

216

3,106

3,543

The total increase in the appraised value of seizures over that for
the preceding year is $2,072,390. This increase is made up largely
by the increase in seizures of jewelry and precious stones, wearing
apparel, and boats, these increases amounting to $1,034,702, $209,793, and $804,566, respectively. The seizure of 22 airplanes during
the year just closed indicates that this means of transportation is
coming into use in connection with smuggling operations, as no such
seizures were made during the preceding year.



174

REPORT ON THE FINANCES

In connection with the seizures made, there were 2,816 arrests,
conviction being obtained in 1,412 cases, or an increase of 563 convictions as compared with the previous year. The fines collected in
the criminal cases amounted to $185,333, while the imprisonment
imposed approximated 650 years. The remaining cases are still
pending or have been prosecuted under laws other than the customs
laws.
Kecords have been kept this year for the first time of the number
of seizures made by the several branches of the customs service and
other governmental agencies for violations of the customs laws, and
of seizures made by customs officers for other governmental organizations. Thctotals of this statement, by activities, published below,
vary somewhat from those in the preceding consolidated table of all
seizures. In the table of consolidated seizures, the appraised value
bf alcohol, $157,000, is included in the total appraised values of the
seizures but is omitted in the table of seizures classified by activities.
With this item eliniinated, the variations in totals are not material and
are possibly due to duplications where seizures have been made jointly
by several activities. Steps have been taken to prevent a recurrence
of such duplications.
Seizures made by the Customs Service and other governmental agencies for violations
of the customs laws during the fiscal year 1930
Merchandise

Narcotics

Liquor

Boats

AlcoNumBeer, hol,
NumBranch of service by which Number
ber
ber
gallons gal- Numseizure was made
of
of
of Gallons
lons ber
Value
Value
seisei-'
seizures
zures
zm-es
Customs patrol-.
Customs agents
Customs Service, exclusive
of patrol and agents

227 $16,087 2,723 70,044 101,007 3,970
429 4,252,455
3,613
71 4,306
8
138,887 7,187 1, 209,574 27,830 72,891 67, 577 10,641

Entire Customs Service
Coast Guard
Immigration
....
Customs assisted by other
oflacers
Local officers

143 141,399 7,843 5,478,116 30,624 147,241 172,097 14, 619
1,252
10
273 102,338 63,174 3,998
502 548 8,457 22,806
904
28

Grand total.

$1,650
862

135
44

7
6

126
72

Automobiles

Horses, etc.

Value

Number Value

ber
Customs patrol
Customs agents
Customs Service, exclusive of patrol and agents

1,139 $316,831
46 23,692

Entire Customs Service..
Coast Guard._
Immigration.
Customs assisted by other officers
Local officers

1,711 532,940
6,385
15
227 49,337
5,864
32
120 43,520

202

638,046

224




644
13,906

5,480,049 31,643 267,000 272,625

146

Branch of service by which seizure
was made

Grand total.

6,493
2,471

526

2,105

Airplanes
ber

Value

189
50

Value

437 $440,749
58 74, 710 •
200,452
583
279
66

716,911
508,890
6,393
2,350
2,370
1,235,914

Total Total
num- numTotal
ber appraised
ber
vehi- seivalue
cles zures

161 $4^ 616
3
400

$13,110
16,750

1,741 2,959 $793,042
118
603 4,368,868

6,913

29,860
3,500
2,800
4,000

2,511 38,610 6,905,138
295
283 520,027
316
576
59,427
38
135
8,371
131
79
49,967

40,160

3,291 39,683 7,642,930

192,417

662 35,148 1,743,228

395
15
25
7,348

175

SECRETARY OP THE TREASURY

Seizures made by customs ofiicers and transferred to other governmental organizations
during the fiscal year 1930
Number
Number of persons Numof
appre- ber of
seizm'es hended boats

Branch of service to which transfer
was made

Narcotic division
Immigration.......
Prohibition
Justice
Commerce
AgricultureMunicipal authorities

23

.

Total

123
5
11
237
60
1459

10
643
103
7

Gallons
Liquors

Alcohol

Beer

4
'

3
§"

37
3

4,941

200

57

10

66
829

Number
of
automobiles

11

96

6

3

54

5,037

205

60

» Seizures other than boats, automobiles, liquors, beer, and alcohol not listed by commodities.

Two different attempts to smuggle narcotics on a large scale in
passengers' baggage were frustrated at the port of New York. The
guilty parties in both cases were arrested, found guilty, and sentenced
to prison for attempted smuggling.
i
Weighing
Notable progress has been made in the past year in providing new
weighing equipment which will permit handling larger volumes of
merchandise at a reduced cost to both the Government and to importers. The installation of a number of dormant automatic scales
on steamship piers on which wool and burlaps are handled, to replace
portable beam scales, now permits the weighing of these commodities
in direct transit from the piers to the cars, instead of requiring
rehandling for the purpose of weighing.
The application of automatic scales to the weighing of tobacco, on
which commodity the rate of duty is high, should result in an appreciable increase in revenue, due to the eliniination of the personal
error which is ever present in manual weighing.
Four special automatic weighing and recording scales, designed in
the bureau for the weighing of raw sugar in transit on a monorail
system, were installed as an integral part of the importers' conveyor
system and permit weighing without labor cost to the Government.
Cattle scales have been provided at several border ports at which
it was necessary in the past to estimaite the weight of such
importations.
Appraisement of merchandise
The new appraiser's warehouse at New York, completed during the
fiscal year 1929 and described in some detail in the annual report for
that year, was utilized to the fullest extent during the present year.
With the modern and complete facUities of this warehouse, it is now
possible to make a thorough examination, appraisal, and delivery of
merchandise, on an average of not more than 48 hours per case, and
12101—31

14




c
176

REPORT ON THE FINANCES

the facUities and equipment for loading and unloading trucks on the
first floor have eliminated all congestion in the streets surrounding
the warehouse.
The last session of Congress made appropriation for a similar
modern appraiser's warehouse at Chicago, but less extensive as to
space.
During the fiscal year 1930, 876,185 examination packages were
received in the various appraisers' stores, as shown in detaU by ports
in the following table:
St. Louis
Cleveland
Los Angeles
Boston
New York
Seattle
Buffalo
San Francisco

_.__

10, 981
9, 245
37,028
58, 996
496, 791
30,118
3, 801
85, 535 |

Philadelphia
New Orleans
Portland
Detroit
Chicago____
Baltimore
Total

_,
.

.

48, 033
10, 589
8, 799
9, 862
43,391
23, 016

__- 876,185

After several years of intensive work, evidence of violation of the
antidumping act in importations of butyl acetate from Germany
was developed, as a result of which, dumping and additional duties
amounting to approximately $4,000,000 were found to be due at
New York alone.
The importation of spurious antiques has reached considerable
proportions, especially in furniture and glassware. Over $300,000 in
duties were coUected at the port of New York on furniture alone,
which had been entered free as antiques and found upon examination
to be of modern construction. Expert antique examiners have been
sent from New York at different times to other ports and as a result
of their appraisement the Government collected thousands of dollars
on furniture and glassware alleged to be antique.
Districts and ports
Under the authority contained in the sundry civU act of August
1, 1914, the customs district of San Diego was established, in which
are included the border ports of southern California and San Diego,
the latter port being designated as the headquarters of the district.
Five new ports of entry were established, namely, Carbury, N. Dak.,
Reidsville, N. C , OrovUle, Wash., Fort Pierce, Fla., and San Luis,
Ariz. Two ports, Souris, N. Dak., and Lewiston, N . Y., were
abolished.
Two more airports of entry—Ajo, Ariz., and Brownsville, Tex.—
are now avaUable for international air travel. A number of air fields,
hsted below, were also designated during the year as temporary:
airports:
Alhambra (Los Angeles), Calif., Western Air Express Terminal.
Bellingham, Wash., Bellingham Airport.




SECRETARY OF THE TREASURY

177

Detroit, Mich., Ford Airport.
Derby, Vt., Canadian Gateway Airport.
Douglas, Ariz., Douglas International Airport. .
Eagle Pass, Tex., Eagle Pass Airport.
;
El Paso, Tex., Municipal Airport.
Great Falls, Mont., Great Falls Municipal Airport.
Glendale (Los Angeles), Calif., Grand Central Air Terminal.
Havre, Mont., Havre Municipal Airport.
'
Juneau, Alaska, Juneau Airport.
i
Ketchikan, Alaska, Ketchikan Airport.
!
Laredo, Tex., Laredo Airdrome.
1
Malone, N. Y., Malone Airport.
I
Miami, Fla., Curtiss-Wright Flying Service Base,! Marine Division
Miami, Fla., Dinner Key Seaplane Base.
Palm Beach, Fla., Curtiss Flying Base.
Pembina, N. Dak., MuniciparAirport.
Portal, N. Dak., Portal Airport.
Port Angeles, Wash., Port Angeles Airport.
;
Port Townsend, Wash., Port Townsend Airport.
Plattsburg, N. Y., Mobodo Airport.
Scobey, Mont., Scobey Airport.
San Diego, Calif., San Diego Muncipal Airport (Lindbergh Field).
Spokane, Wash., Felts Field (Spokane Municipal Airport).
Watertown, N. Y., Watertown Muncipal Airport.

Miscellaneous

\
I

Investigative activities .—The investigative! branch of the Customs
Bureau, under the supervision of a deputy cohamissioner, has a normal
strength of 150 agents in the United States and 25 attaches abroad.
The agents employed in this country conduct all classes of major
investigations in connection with violations of the customs laws,
make periodic examinations of the accounts and procedure in the
various customs collection districts, and perform such other duties as
may from time to time be assigned to them. The attaches abroad
are engaged chiefly in investigations to determine market values
of exported merchandise and develop information of attempted
smuggling of merchandise into the United S|tates.
Port examinations.—The customs agents assigned to the port examination commission made examinations of the accounts and procedure
in nine customs collection districts during the year. As a result of
these examinations substantial progress was made in establishing
uniformity in the transaction of the customs business in the various
districts. The agents' reports enabled the bureau to supervise
more effectively the operations of the Customs Service and to adjust
such differences as must arise from time to time because of the
geographical dissimilarity and varying local conditions of its constituent units.
Undervaluations.—Large numbers of undervaluation cases were
developed by customs agents during the year in connection with the



178

REPORT ON THE FINANCES

importation of a wide range of commodities. This class of fraud
usually originates abroad in connection with the preparation of consular invoices which are used in making entry of the merchandise
upon its arrival in the United States. By constant vigUance and
intelligent effort customs agents performing this class of work are
able to safeguard the customs revenue as well as protect honest
merchants in the conduct of their businesses.
Invaluable service is rendered by the attaches stationed abroad
in getting first-hand data which are useful in proving undervaluation.
The investigations by the attaches undoubtedly also prevent many
frauds.
Compromises offered in cases where undervaluations were detected
by customs agents during the year aggregated nearly $102,000.
Baggage seizures.—Through sources of information developed by
them, customs agents were able to make many seizures from passengers arriving in the United States who faUed to declare all purchases
made by them abroad.
In the month of December, 1929, in one district, seizures for
failure to declare, on information furnished by customs agents,
totaled in value $150,142, penalties in the amount of $137,775 were
assessed and paid, and merchandise with an appraised value of
$67,258 was forfeited. The total revenue derived from the activities
of customs agents on this class of work during the year exceeded
$612,000.
False invoicing and entry.—At one of the principal ports certain
merchandise carrying a high rate of duty was invoiced and entered as
other merchandise dutiable at a low rate. The merchandise was
seized, large sums were assessed and collected as civil penalties, and
the conspirators prosecuted and convicted.
Smuggling.—The source of a great portion of the narcotics unlawfully sold in the United States was discovered by customs agents
who uncovered an extensive scheme of smuggling and transportation
to inland ports.
With the constant improvement in the methods of liquor, smugglers, customs agents have as promptly improved their own methods
in effecting the apprehension and conviction of this class of violators
of the customs laws. Many customs agents are devoting their time,
largely to the development of criminal and conspiracy cases against
smugglers after seizures have been made.,
During the year there was put into effect and successfully carried
out an arrangement whereby every major seizure was made the subject of immediate investigation by customs agents to fully develop the
criminal feature of the case. In all such cases customs agents interrogated the prisoners, sought and secured additional witnesses who




SECRETARY OF THE TREASURY

179

could testify in the Government's behalf, presented the cases to United
States commissioners, drew up proper criminal case reports to United
States attorneys, assisted in the presentation of the cases to grand
juries, cooperated with United States marshals in locating and insuring the presence of defendants and witnesses at the trials, and collaborated with United States attorneys in the presentation of testimony
during the proceedings in Federal court.
In addition thereto, aU civil matters in connection with such seizures
including petitions for mitigation, remission, and relief from fines,
penalties, and forfeitures, which required investigation, were inquired
into and reported on by customs agents. !
As an evidence of the volume of the work performed in the above
connection, during the year in one district alone 273 such criminal
cases were investigated and reports thereon made to United States
attorneys involving 423 defendants, and ' 165 civil petitions were
investigated and reports thereon addressed to the referring officers.
None of these activities are disclosed in the statistical table appended
to this summary of activities.
Information of contemplated violations of the customs laws and
related statutes transmitted to the enforcement division of the collectors' forces and to other interested agencies made possible many
seizures of a major character during the year.
As a result of the thorough investigation by customs agents of
applicants for positions as customs patrol inspectors at Detroit and
the schooling in customs laws and procediire given them after appointment, the patrol force was brought t o a high state of efficiency
and the traflicking in liquor across the Detroit River and contiguous
waters was greatly reduced.
i
Investigations were promptly made by customs agents of all seizures, proper case reports were submitted ito the United States attorneys, and many convictions and salutary sentences were obtained.
Customs information exchange.—The customs information exchange
carried on its activities as the clearing house for information respecting
market values and classifications for the entire customs service.
In this capacity the following work was performed by the customs
information exchange during the year:
j
:

Appraisers* reports of value received
Appraisement appeal reports received
Advanced value reports received
Changes in value circulated
Requests for investigation abroad-

Number

;

17, 166
5, 103
5, 499
4, 751
1, 304

In addition to the documents indicated: in the above
customs information exchange prepares and distributes,
index cards of Treasury Decisions. There is disseminated,
circular giving the sailing dates of vessels from foreign



table, the
monthly,
weekly, a
ports for

180

REPORT ON THE FINANCES

America, and the dates they are due to arrive at various ports in the
United States for the use of appraising and other ofiicers throughout
the Customs Service.
In connection with the criminal investigative work performed by
the customs agents, a system of circularization of pertinent data
relative to the criminal (such as name, description, offenses charged,
etc.) has been instituted and is carried on through the medium of the
customs information exchange. In this manner it is possible to have
at hand in every customs office information as to whether smugglers
arrested in their districts have been charged with similar offenses
in other districts.
Drawback.—The number of drawback investigations made by customs agents showed a general increase throughout the country.
These investigations require the ascertainment of the manufacturing
processes of almost every line of industry using imported merchandise,
the rendering of assistance to manufacturers in the formulating of a
system of records whereby the identity of the imported merchandise
can be maintained from the time of importation, throughout the
manufacturing process, to the exportation thereof. The importance
of this work is indicated by the fact that the total drawback payments
predicated upon customs agents' reports during the year amounted to
$14,444,625.
WhUe the foregoing is descriptive of the tangible results of the
efforts of the investigative arm of the Customs Service during the
year, it is not possible to gauge accurately the effectiveness of this
branch because its primary function is the prevention of frauds on
the customs revenue. No precise estimate can be made as to the
saving to the Government through this protection afforded the
revenue.
Summary.—The foUowing statistical statement is an indication of
the work and the results accomplished by the investigative branch of
the service during the j^ear, in so far as direct results are susceptible
of measure in dollars and cents or by count of individual cases:
Number

Ports examined-Drawback investigations
Foreign investigations made
ArrestsConvictions
-__Acquittals
Failures to indict
Indictments pending
Seizures made
Seizures appraised
Seizures released or pending
Appraised value of seized merchandise




.

191
1, 856
1, 953
_
706
.
594
139
39
212
945
809
191
Amount
. - $2, 963, 014. 09
__

SECRETARY OF T H E TREASURY
;

181
Amount

Fines, penalties, and forfeitures incurred, exclusive of court fines._ $1, 421, 986. 06
Proceeds of sale of seized merchandise
115, 969. 24
Increased and additional duties collected^
[
101, 911. 75
Amount deposited in offers of compromise
^
612, 062. 56
Fines imposed by United States Courts
'
82, 430. 00
Bail forfeited
152, 050 00
Total fines, penalties, forfeitures, etc_-__

2, 486, 409. 61

The actual recoveries and penalties assessed as the result of the
activities of the customs agents during the past fiscal year aggregated
$2,486,410. The total cost of operating the unit during the same
period, in this country and abroad, amounted to less than $970,000.
The service is not only self-supporting but shows a substantial profit
from its operations.
^




DISBURSING CLERK

The following is a summary of the work performed by the office of
the disbursing clerk during the fiscal year 1930:
Number
Disbursements:
Checks (salaries, expenses, supplies, etc.)
Cash (salaries)
_..
Checks (refunding taxes illegally collected)
Total
Collections on account of rents, sales, etc
Vouchers paid
Schedules of claims for tax refunds
Appropriations under which disbursements were made.

Amount

323, 698
182, 620
117,147

$61, 569,237. 02
16, 216,629.18
107,126,476.70

623, 365

184, 902, 342. 90

5i730

1,901,948.81

7,066
634

The cash payments and the checks for salaries, expenses, supplies,
etc., cover disbursements for all bureaus and divisions of the Treasury
Department in the District of Columbia (except the Bureau of
Engraving and Printing), and a large portion of the salaries and
expenses outside the District of Columbia under the Public Health
Service, the Supervising Architect's Office, the Bureau of Internal
Revenue, the Bureau of Prohibition, the Federal Farm Loan Board,
the Comptroller of the Currency, the Coast Guard, the Secret Service,
the Bureau of Customs, and the Public Debt Service.
Collections represent moneys received and accounted for on account
of rents of buildings and sites, sales of public property, etc., under
various bureaus and offices of the department.
182




BUREAU OF ENGRAVING AND PRINTING

Following the completion on; June 30, 1929, of the printing of the
initial supply of new small currency, which was placed in circulation
on July 10, 1929, a general readjustment took place during the year,
as the various departments of the bureau gradually settled down to
a normal operating basis. The latter part of the fiscal year 1929 was
marked by a tremendous increase in currency production, necessitating the employment of additional help and considerable overtime. A sharp decline in the demand for currency, which immediately followed the issuance of the initial supply of the new-size notes,
required not only the immediate disposition of the temporary personnel engaged in the unprecedented production of the last half of
the fiscal year' 1929, but also an adjustment of the permanent force
to meet the new production program. The services of the temporary
force were discontinued on July 6, 1929, while the surplus help employed in a permanent capacity was absorbed through the restoration
of the rotating furlough system.
Deliveries of all classes of work (currency expressed in 12-subject
sheets) during the year amounted to 338,541,969 sheets, as compared with 346,406,035 for the previous year, a decrease of 7,864,066,
or 2.27 per cent. There was a decrease of 8,058,556 sheets of currency, customs, revenue, and postage stamps and misceUaneous
items and an increase of 794,490 sheets of bonds, notes, and certificates. In addition to the printing of the delivered sheets, the bureau
printed, at the request of the Federal Reserve Board, a reserve stock
of 2,125,000 sheets of backs and 2,125,000 sheets of backs and faces
of Federal reserve notes for the various Federal reserve banks.
The average number of persons employed during the year was
4,741, as compared with 4,920 during the previous fiscal year, a
decrease of 179 persons, or 3.64 per cent.
There was expended during the year a total of $9,806,803.11 as
compared with $10,603,971.77 in the fiscal year 1929, a decrease of
$797,168.66, or 7.51 per cent. It wiU be noted that, although the
deliveries decreased 2.27 per cent, the expenditures, including the
cost of the reserve stock of 4,250,000 sheets of unfinished Federal
reserve notes, decreased 7.51 per cent, and the average personnel
employed during the year decreased 3.64 per cent.
As a result of the announcement, on January 12, 1929, of the inclusion of national bank notes in the small note program, steps were
taken immediately to accomplish this change, and by the end of
the fiscal year 1929 the designing and nearly aU of the engraving




!

183

184

.REPORT ON THE FINANCES

were accomplished. Only 10,519 sheets, however, had been printed
and delivered in that year. The balance, 4,424,269 sheets, of the
initial orders for the conversion of old size to new size national bank
notes, were printed and delivered in the first four months of the
fiscal year 1930. In order to complete this work during the time
allotted it was necessary to employ 12 temporary pressmen and 7
temporary compositors, which enabled the surface printing presses
to be operated in two 8-hour shifts during that period.
Through the reduction in size of national bank notes it was found
practical to print them on power presses, eliminating the use of the
old-style hand presses. Consequently, the only remaining section of
the plate-printing division equipped with hand presses was closed
during the early part of the fiscal year. The presses were removed
and sold and the fioor space assigned to another division.
Since fewer employees are required to produce the annual supply
of the new small notes, it became necessary either to consider a
reduction in the permanent force, or to operate the bureau on a
rotating furlough system. After careful consideration, keeping in'
mind the interests of both the employees and the department, the
latter course was adopted. Every operating division was placed on
a rotating furlough basis from October 1 to the end of the fiscal year.
The number of days taken ranged from one to six days a month,
depending upon the quantity of work performed in each division.
During several of the months, the furlough was partially relieved by
the transfer of some of the surplus employees to the national bank
redemption agency of the Treasurer's Office, and to the office of the
Comptroller of the Currency, which offices required additional employees in connection with the work of retiring old-size notes.
The work of changing the substation from 25-cycJe, 6,600 volts,
to 60-cycle, 13,200 volts, made satisfactory progress during the year.
On June 30, 1930, the project was approximately 95 per cent completed. Practically all of the equipment has been installed and two
of the four rotary converters and the power transformers have been
connected and are in regular service.
The following is a statement of the percentage of spoilage, based on
the number of sheets delivered, since 1918:
Per cent

1918
19191920
1921
1922

-^
-_

4.63
6.48
5.44
7.39
6.63

Per cent

1923
1924.1

1925
1926
1927

7.11 1928
12.69 1929
5.80 1930.-_._3.70
2.11

Per cent

2.02
J-

2.68

4.16

In addition to the reduction in the size of the sheets of distinctive
paper, referred to last year, from 13% by 17}^ inches to 13% by 16%
inches, it was found that a further reduction could be made to 13 by
16K inches. More accurate registration of faces on backs is being



SECRETARY OF THE TREASURY

185

obtained in the printing and a substantial annual saving will hereafter be made to the public debt service in the cost of paper.
The experiments conducted in 1929 with an automatic feeder for
use on currency-trimming machines proved successful. As a result a
contract for 25 machines of the new design was awarded. On June 30,
1930, 13 of these machines had been delivered and were in operation.
An additional order for 25 machines was also placed. I t is estimated
that 50 machines will meet all production requirements. The feature
of the new machine is that it feeds the sheet and operates the trimming device automatically, thereby dispensing with the old process
of feeding by hand and operating by pedal. The improved machines
not only insure uniform margins, but greatly relieve employees from
physical strain.
I
The experiments referred to last year with an electric drying attachment to fiat-bed power plate-pirinting presses continued throughout
the year. After a practical trial for a period of several months, the
attachment was removed to permit several electrical and mechanical
improvements to be made. The tests made thereafter showed satisfactory results and another machine is now being built.
Among the major mechanical improvements accomplished during
the year were the installation of an electric furnace in the hardening
room of the engraving division, replacing the old-style gas furnace;
the installation of a plate-graining machine in the engraving division,
through the use of which better and more durable surface printing
plates have been produced; the installation of vacuum pumps to
operate the automatic feeders on various machines throughout the
plant; and the installation of unit heaters in the inclosure leading from
Fourteenth Street to the east entrance of the building. A machine
for wetting large sizes of paper for plate printing was completed during the year, and a separator for removing moisture from the compressed-air system was purchased and installed.
Studies carried on during the year consisted of a continuation of
the research work in developing a currency paper more durable than
the paper now in use and of establishing an automatic temperature,
control on gumming boxes attacbed to rotary presses on which postage
stamps are printed. Further experiments were also made with a view
to a possible improvement in the adhesive qualities of postage-stamp
gum. The study in connection with the enhancement of the value
of macerated pulp also continued throughout the year.
The Ibero-American Exposition at SeviUe, Spain, was officially
closed on June 21, 1930. The bureau exhibit, which was on display
during the entire period of the exposition, and which was in charge
of an experienced plate printer, was dismantled and returned to this




186

REPORT ON T H E FINANCES

plant. The bureau representative stated that this display was one of
the best patronized exhibits of those entered by the United States
Government.
A history of the bureau, which was prepared and printed last year
for distribution to libraries, schools, and the general public, proved
to be a popular public document. During the first 14 months the
history was placed on sale, approximately 12,400 copies were sold.
The usual annual inventories of plates and securities were conducted by the several committees charged with those duties. . In each
instance the auditors' reports indicated that the securities and plates
on hand were in agreement with the records established in the audit-,
ing offices, as well as those maintained in the bureau.
A comparative statement of appropriations, receipts, and expenditures for the fiscal years 1929 and 1930 follows:
1929

1930

Increase

Decrease

•
Appropriated by Congress:
Salaries
Compensation of employees
Plate printing
•Materials and miscellaneous expenses
Reimbursements to appropriations from other
bureaus for work completed:
Compensation of employees
Plate printing
Materials and miscellaneous expenses '

$684, 345.00
3,266,916.00
1,630, 000.00
895,000.00

2,152,190.29
666,142.19
1,226,634.91

2,025,249. 20
650,289.02
1,030,022.09

10,831,990.39

Total

$674,825.00
3,461,178.00
1, 762,020.00
1,000,000.00

10,081,820.31

$9,620.00

126,941.09
16,863.17
195,612.82
9,620.00

769,690.08
760,170.08

Net
Expended:
Salaries
Compensation of employees
Plate printing
Materials and miscellaneous expenses ^

674,749.16
5,274,706.82
2,096,619.82
1,860,728.31

92.49

10,603,971.77

Totals

674,656.67
6,559,873.55
2,287,869.34
2,181,572.21

9,806,803.11

92.49

286,167.73
191,249.62
320,843.90
797,261.15
797,168.66

Net
Unexpended balance:
Salaries
_
Compensation of employees
Plate printing
_
Materials and miscellaneous expenses
Total
Net.

$184,263.00
132,020.00
106,000.00

.-.-.

168.33
43,494.74
140,292.85
44,062.70

9,695.84
17,458.38
183,669.20
64,293.78

228,018.62

276,017.20

9,427.51
43,376.35
20,231.08
73,034.94

26,036.36

26,036.36

46,998.68

1 An additional amount of $12,680.64, received from sale of by-products and useless property, was deposited to the credit of the Treasurer of the United States as miscellaneous receipts.
2 Includes $15,000 transferred to Bureau of Standards for research work.
8 Includes $281,014.86. and $276,641.02 transferred to retirement fund in the fiscal years 1929 and 1930,
respectively.




187

SECRETARY OF THE TREASURY

A comparative statement of deliveries of finished work in the fiscal
years 1929 and 1930 follows: !
Sheets

Face value,
1930

Classes
1929
Currency (12-subject sheets):
United States notes
Silver certificates
Gold certificates
National bank currency..
Federal reserve notes
Total..
Bonds, notes, and certificates:
Pre-war bonds...
L
Liberty bonds.
Treasury bonds
Treasury notes
L
Certificates ofindebtedness
L
Treasury bills
'.
Insular bonds—
;
Philippine Islands
L
Porto Rican.._
I
Farm loan bonds
i
Collateral trust debentures
i
Philippine treasury certificates
i
Interim transfer certificates for postal savings;
bonds
1
Interim certificates for Philippine Islands;
bonds...
_._
!
Interim certificates for Porto Rican bonds...Bonds evidencing indebtedness of foreign
governments to the Government of the
United States
SpecimensTreasury bonds
,
Treasury notes
_
Certificates of indebtedness
j
Treasury bills
j
Insular b o n d s Philippine Islands
Porto Rican
Farm loan bonds
C ollateral. trust debentures
_
Bonds evidencing indebtedness of foreign
governments to the Government of the
United States
_
Total..

5,886,3331-^
54,996,666%
2,466,000
4,986,331%
23,335,000

9,044,000
44,722,000
6,992, 000
8,676,302%
20,342,137

$437,052,000
536,664,000
1,976,880,000
942,215,920
3,092,496,000

91,668,33m

88,675,439%

6,985,307,920

5,255
218,143%
208, 516%
3,026
195,925

16,626
192,141%
3,750
3,850
93.200
6,464

117, 749,440
810, 590, 000
41,000,000
480,000,000
3,402,500,000
745,806,000

2,000
3,138^
140,425
6,662

3,250
3, 3301^
46.201
17,167
1,898,600

3,250, 000
750,000
48,675,400
687,840,000
11,002,750

712, 000

1,000

1,000

500
873

2,125
4,750

678

186

IH
1
I
1
iH

1,498,1671M2

Stamps:
Customs
!.
54,500
125,000
Customs for Philippine Islands
Internal revenue—
United States (includes opium)
_
88,116,2455J68
Philippine
.._
145, 608%
Porto Rican
191,700
Specimens, United States (includes
opium)
._
_
12
Postage s t a m p s 151,176,203
United States
_
United States, surcharged "Hawaii,
69,7978^00
1778-1928"
United States, surcharged "Canal Zone".
77,904
Canal Zone
._
Philippines
546,936
SpecimensUnited States
-.338^00
United States, surcharged "Hawaii,
1778-1928"
2^00
3,127
Postal-savings stamps
Total.




1930

240,606,374iiiM700

4
314
6

2,292,657^2
60, 000

88,761,876iOHo2
142, 645
533,900
24
146, 614, 762

6,249,163, 590

Subjects, 1930
2,100,000
8,749,672,628
17,384,880
63,390, 000
12
16,496, 570,060

3,656
34,368
5,372

355,600
3,436,800
537,200

56

3,639

2,810Mo
235,159,3694^10

281,010
25,323,631,829

188

REPORT ON T H E FINANCES

Sheets

Face value,
1930

Classes
1929
Miscellaneous:
Checks
Drafts.
Warrants
Commissions
_
'Certificates
Transportation requests
Liquor permits
Other miscellaneous
Blank paper..
Specimens
Total...-

1930

6,444,8181^
6,825
47,341
34, 092
1,163,172 H
347,490
4,484,991%
192,627 i%o
. 10, 464
1,339

-

7,191,206
10, 7621^
60, 332
234, 720
1, 731,4994^
199, 987
2,848,900
136,939i6H80
60
96%

12, 733,161 Ho

Grand total

$36, 021,655
22, 525
297, 532
125,437
4,139, 010
999,935
n, 791, 200
2, 544,887

12,414, 503 iH 80

346,406,035871^550

740
65,942,921

338, 541, 96935^530

The following statement shows total deliveries made, total expenses,
and average number of employees engaged by the bureau since 1878:
Fiscal
year—

1878
1879
1880
1881
1882....1883
1884.
1885
1886
1887
1888
1889
1890
1891
1892
1893:
1894
1895
1896
1897. _..--.
1898
1899
1900......
1901
1902
1903
1904

Total
number
of sheets
delivered
13,098, 756
21, 394,030
23,438,798
26, 017, 661
31,112,484
33, 330, 746
• 30, 206,865
28, 217, 706
26, 655,496
32, 652, 207
38, 040,984
39, 207,164
36, 512, 719
46, 390, 381
52, 508,438
48,853, 528
56, 616,961
70,886, 033
86, 050, 695
86,174, 766
92,979,478
112,161,122
116,909,423
121, 658, 291
139,167, 359
155, 743, 691
169,918, 061

Expenditures

Average
number
of employees

$538,861. 33
814, 077. 01
883,171.95
901,165. 26
936, 757. 62
1,104,986.43
977, 301.85
965,195.47
763, 207. 84
794,477.90
948,995.83
932, 577 78
1,012,789 18
1, 265, 263 29
1, 316, 585 89
1, 238,464. 36
1, 317, 389. 61
1,439, 265. 94
1,469, 359. 70
1,450, 611. 86
1, 570, 598.46 .
1,884,441. 39
2, Oil, 702. 01
2, 393,494. 26
2,967, 091. 74
3,136, 477. 73
3,159,940. 69

1 Currency expressed in 12-subject sheets.




Fiscal
year—

522
1906
804
1906
905
1907
958
1908
1,011
1909
,1,173
1910
1,193
1911
1,133
1912
886
1913
840
1914
895
1915
917
1916
992
1917
1,161
1918
1,358
1919
1,333
i920
1,380
1921
1,427 1 1922
1,519 1 1923
1,605
1924.
•1, 623 1925
1,903
1926
1,999
1927
2,364
1928
2,672
1929
2,850
1930
2,928

Total
number
of sheets
delivered
165,354,514
180, 289, 766
201,123, 528
• 210,589,197
239,405, 723
252,710,864
262,806,113
262,434, 739
287,192,192
280, 272, 828
307, 634, 334
300, 711,800
343, 345, 005
396, 790, 285
447,464,105
402, 711, 759
438, 694, 824
416, 820,113
411, 546,429
431,868, 658
464,869, 695
482, 307,106
490,264, 868
483,455,932
629, 742, 699
1 338, 541,969

Expenditures

$3, 292, 217 06
3, 355,186 23
3, 849, 064 39
3, 841,173 60
4, 355,935 65
4, 375, 365. 57
4,180, 284. 20
4, 319, 246. 57
4,449,726. 22
4, 372,922. 81
6, 039, 204.80
5, 066, 048 72
6, 324,118 70
9, 086, 303 90
11, 571,186.10
11,854,171.45
13,965, 233. 57
10,812, 756. 38
10,106, 320. 28
9,401,925. 68
10,041,457.46
10,483, 674. 68
10,415,742. 42
9, 734,996.41
10, 603,971. 77
9,806,803 11

Average'
number
of e m ployees
3,002
3,084
3,437
3,572
3,977
3,964
3,814
3,899
3,920
3,932
4,119
4,048
4,221
6,214
7,508
6,912
7,097
6,416
5,535
4,980
5,098
5,173
5,097
4,979
4,920
4,741

COMMITTEE ON ENROLLMENT AND DISBARMENT OF ATTORNEYS
AND AGENTS

The committee on enrollment and disbarment of attorneys and
agents, created by Department Circular No. 230, dated February 15,
1921, is responsible tor the examination of applicants wishing to
practice as attorneys, agents, or other representatives before the
Treasury Department or offices thereof, and receives complaints,
conducts hearings, and makes inquiries concerning violations of the
regulations by enrolled practitioners. The conclusions of this committee in each case are submitted as recommendations to the Secretary of the Treasury.
During the fiscal year 1930,12,481 applications for enrollment of
attorneys and agents were apprcived and 26 were disapproved. Since
the organization of the committee in 1921, 27,836 applications have
been approved and 456 disapproved. Some 8,600 persons were
enrolled prior to the organization of the committee and many of them
are now in active practice. ^
A large part of the committee's work arises from complaints filed
with the committee charging violations by enrolled practitioners of
the regulations governing practice before the department. All such
complaints are carefully investigated, and, if found sufficient to
warrant action, a formal complaint is prepared by the committee's
attorney, to which the respondent is required to answer under oath.
If the answer is accepted as satisfactory, the complaint is dismissed;
otherwise a formal hearing is held by the committee, at which the
respondent may appear in person and be represented by counsel. A
respondent in any such disbarment proceedings is entitled to a trial
according to ^'due process of law"; therefore all such hearings before
the committee are conducted with practically the same formality
and under the same rules of law which apply to trials in civil actions.
After the hearing, the committee reports to the Secretary its finding
of facts, and if the complaint has been proven the committee recommends that the respondent be disbarred from further practice before
the department, suspended from practice for a definite period, or
reprimanded.
On June 30, 1929, complaints against 93 individuals were awaiting
final disposition. During the past year 56 new complaints were filed.
In 12 cases the answer of the respondent was accepted as sufficient
and the complaint was dismissed. In 62 cases formal hearings were
held by the committee on 47 days; in 17 cases it was found that the
charges were not proven and the complaints were dismissed; and in




189

190

REPORT ON THE FINANCES

45 cases the charges were found proven in whole or in part and the
Secretary imposed penalties as follows: 15 were disbarred from further
practice before the Treasury Department, 11 were suspended from
practice for various periods, and 19 were reprimanded. At the close
of the year there were 75 complaints awaiting final disposition. Since
the organization of the committee in 1921, 84 practitioners have been
disbarred, 97 have been suspended for various periods, and 125 have
been reprimanded.
It is the policy of this committee to give an attorney or agent
opportunity to show cause why formal disbarment proceedings should
not be instituted against him; 15 such cases occurred during the year.

\




FEDERAL FARM LOAN BUREAU
Operations of Federal land banks
During the year 1930 the Federal land banks cTosed 12,825 loans,
amounting in the aggregate to $47,159,800. These brought the total
credit extended by these banks from organization to June 30, 1930,
to 506,358 loans m an amount of $1,631,420,564.87. On June 30,
1930, the net amount of mortgage loans outstanding was $1,192,719,716.81 and the farm loan bonds of Federal land banks outstanding,
including $10,100 of bonds matured or caUed for redemption but not
including $1,833,580 held by banks of issue, were $1,179,255,260.
The combined capital stock of all Federal land banks on June 30,
1930, amounted to $65,939,366.75, of which $64,818,652.50 was
owned by national farm loan associations; $129,855 by borrowers
through agents; $345 by individual subscribers; $697,995 by individual
subscribers through the Porto Rico branch, and $292,519.25 by the
Federal Government. This latter figure was decreased from $383,028.75 during the year througli retirement in the manner provided
by the farm loan act. The 12 banks reported legal reserves totaling
$13,279,474.59, and undivided profits of $4,632,334.29. In addition
to the legal reserves, they had special reserves against real estate,
delinquent installments, etc., and other reserves aggregating $17,151,736.50.
.
:
National farm loan associations decreased in number from 4,664 to
4,659.
The loan rates of each bank at the beginning and end of the year,
and the changes made during that period are shown in the table below:
Loan rates o/ Federal land banks during the fiscal year 1930
Changed to—

June

Name of bank

Springfield
Baltimore
Porto Rico .
Columbia
Louisville...
New Orleans.
St. Louis
St. Paul
Omaha. .
. . .
Wichita
Houston
Berkeley
.
Spokane

30, 1929

Rate

Percent Per cent
bH
5
6
614
51^
6H
6H
bH
5
bH
5
bH
51.^

. . .
.—

6
bH
bH
bH
6
634

Date

July 15
Nov. 1
do
Sept. 2
Aug. 19
Sept. 1
' Oct. 16
6
61^ Oct. 21
bH July 9
6
Oct. 16
bH July 16
July 1
bH

Changed to—
Rate

Date

Changed to—
Rate

Date

Per cent

Per cent

6
6

Nov. 1
Nov. 4

61^

Feb. 10

bH
6
6

Feb. 16
Nov. 1
Oct. 21

bH

Mar. 1

bH Feb. 16
bH - . . . d o . . _ .

June
30, 1930

Per cent
bH
6
QH
6
51-^
51^

bH
bH
bH
bH
bH
bH

The following table shows the net mortgage loans and total assets,
together with principal liabUities of each Federal land bank, on June
30, 1930:
12101—31

15




191

192

REPORT ON TB:E FINANCES
Principal assets and liabilities of Federal land hanks on June 30, 1930
Name of bank

Springfield. _.
Baltimore
Columbia
Louisville
New Orleans..
St. Louis
St. Paul
Omaha
Wichita
Houston
Berkeley
Spokane
TotaL.

Total assets i

$55, 293, 592
73, 782, 652
71, 641, 207
128,937, 427
121, 052, 574
112, 672, 021
137,907, 333
174,310,976
95, 739, 415
158, 016,897
, 56, 614,931
106, 418,804
1, 292, 387,829

Net mortgage
loans

$49,800,063
69,029, 703
59, 875, 242
122,470, 610
109,793, 600
107, 629,460
120, 635, 802
167,570, 745
88,940, 085
151, 590, 065
51,880,5'40
93, 503,802
1,192,719,717

Bonds outstanding 2

Capital
stock

$50, 626, 280 $2,988, 612
67,450, 560 3,846, 775
66, 067,400 3,306, 385
117,113, 620 6,677, 240
111, 149,980 6,184,415
103,991, 820 5,871, 270
127,067, 000 6,727,625
158, 560, 860 9, 057, 055
87, 663,740 4, 777,805
142, 638,460 8, 202, 715
. 51,709,620 3,082,432
95, 305, 820 5, 217, 038
1,179, 246,160 65,939,367

Reserves
and undivided
profits 3
$464, 062
797,258
741, 502
2,758,674
1, 277,352
774,078
1,089,357
3, 248,193
1,493, 461
4, 595,617
674, 336
3,806
17,917, 695

1 Total assets have been decreased by the amount of special reserves set up against particular assets.
2 Bonds on hand and bonds matured or called but not yet presented for payment are not included.
3 Special reserves set up against particular assets not included.

Operations of joint stock land banks
There was no change during the year in the number of joint stock
land banks, which comprised 48 banks in operation, 1 in process of
voluntary liquidation, and 3 in receivership. As stated elsewhere in
this report, a plan for the reorganization of the properties and affairs
of the Kansas City Joint Stock Land Bank, one of the three in receivership, has been agreed upon by the bondholders' protective committee
and the stockholders' protective committee and has been submitted
to the bondholders of the bank for their acceptance.
Loans numbering 1,322 and amounting to $8,345,538.45 were made
by the joint stock land banks during the year, bringing the total
closed by these banks since organization to June 30, 1930, to 128,588
loans, in an amount of $891,046,808.66.
The combined capital stock of 49 joint stock land banks on June
30, 1930, as shown by reports submitted by them to the Farm
Loan Board, was $41,743,060.24. Legal reserves were $5,551,059.69
and surplus paid in, surplus earned, and undivided profits were
$6,890,213.82. I n addition, they reported special reserves against
real estate, delinquent installments, etc., and other reserves totaling
$3,534,821.56. Five joint stock land banks reported deficits aggregating $2,422,133.91. On June 30, 1930, the net amount of mortgage
loans outstanding was $569,363,240.98 and the amount of farm loan
bonds of joint stock land banks outstanding was $557,728,900, including $3,600 bonds matured or called for redemption but not including
$6,440,700 held by banks of issue. In addition, the three banks in
receivership had $39,061,396.75 of mortgage loans outstanding.
The aggregate amount of bonds of these three banks outstanding
on the respective dates on which they were placed in receivership was
$61,517,400. The Federal Farm Loan Board has authorized the
payment of a liquidating dividend from proceeds of pledged assets of
the Bankers' Joint Stock Land Bank of Milwaukee of 15 per cent of



193

SECRETARY OF THE TREASURY

the principal of the bonds of that bank outstanding when it was placed
in receivership and of the unpaid accrued interest thereon to that date.
The board has also authorized the payment of two hquidating dividends from the proceeds of pledged assets of the Ohio Joint Stock
Land Bank of Cincinnati; each dividend being 10 per cent of the
principal of the bonds of that bank outstanding when it was placed
in receivership and of the unpaid accrued interest thereon to that date.
The following table shows the net mortgage loans and total assets,
together with principal liabUitiek of each bank, as of June 30, 1930:
Principal assets and liabilities of joint stock land banks ^ on June SO, 1930

Name and location of bank

Total
assets 2

347,837
Atlanta, Atlanta, Ga
098,389
Atlantic, Raleigh, N. C .
_
753, 394
Burlington, Burlington, Iowa
273, 227
California, San Francisco, Calif.
646,464
Chicago, Chicago, 111
907, 729
Dallas, Dallas, Tex
988, 633
Denver, Denver, Colo
_
135, 501
Des Moines, Des Moines, Iowa...
180, 944
First Carolinas, Columbia, S. C.._
659,627
First, Fort Wayne, Ind
290, 375
First, Montgomery, Ala
353, 399
First, New Orleans, La
969, 046
First Texas, Houston, Tex
586, 958
First Trust, Chicago, 111
659, 548
Fletcher, Indianapolis, Ind
353, 246
Fremont, Lincoln, Nebr
_.
739,776
Greenbrier, Lewisburg, W. Va
241,420
Greensboro, Greensboro, N. C
_
341,798
Illinois, Monticello, 111
024, 250
Illinois Midwest, Edwardsville, 111
864,157
Indianapohs, Indianapolis, I n d . . .
850, 022
Iowa, Sioux City, Iowa
255, 640
Kentucky, Lexington, Ky
_
597, 034
Lafayette, Lafayette, Ind
637, 974
Lincoln, Lincoln, Nebr..
329,188
Louisville, Louisville, Ky__
716, 766
Maryland-Virginia, Baltimore, Md
027,338
Minneapolis Trust, Minneapolis, Minn
512, 524
Mississippi, Memphis, Tenn.
_.
247, 300
New York, Rochester, N. Y
039, 249
North Carolina, Durham, N. C__
105, 491
Northwest,.Portland, Oregon
307, 558
Ohio-Pennsylvania, Cleveland, Ohio
431, 981
Oregon-Washington, Portland, Oreg
..822, 865
Pacific Coast, Portland, Oreg
827, 658
Pacific Coast, Salt Lake City, Utah
129,455
Pacific Coast, San Francisco, Calif
-..
922,973
Pennsylvania, Philadelphia, Pa
651, 246
Potomac, Washington, D. C
483,441
St. Louis, St. Louis, M o . . .
_.._._
655, 353
San Antonio, San Antonio, Tex
241,907
Southern Minnesota, Minneapolis, Minn
837, 888
Southwest, Little Rock, ilrk
879,517
Tennessee, Memphis, Tenn
066, 253
Union, Detroit, Mich
__
237, 526
Union, Louisville, Ky
_
_.:.
611, 056
Union Trust, Indianapolis, I n d . . .
_..
264,179
Virginia-Carolina, Elizabeth City, N. C
736, 830
Virginian, Charleston, W. Va
Total..
_
624,631,930

Net mort- Bonds outgage loans standing 3

$5, 615,013 $5, 771, 000
16, 205, 326 14,177, 000
3, 361,478 3, 374, 500
14, 389,308 14,409,000
44, 266,195 48,018,600
39, 963, 834 38,166, 000
614,143, 372 12,712, 500
10, 253,413 12,175, 000
.10, 548,927 11, 007,000
8,120,615
7, 690,100
8,724,379
8,433,000
3,982, 953 3, 924,000
7,338,628
7,149,000
8 73,640,869 67, 991, 000
15,698, 313 14, 720, 600
8, 585,781 . 8,077,000
2, 587, 206 2, 373, 000
4, 777,459 4, 694, 000
7,122, 987 6, 711, 000
5, 689, 907 5, 260, 000
704, 055
682, 500
7,069,892
6,892, 600
11,093, 976 11, 088, 000
9, 097, 995 8, 790, 200
35, 030, 755 33, 392, 000
6, 875, 240 6, 668, 000
2, 628, 720 2, m , 000
4, 854, 402 4, 239, 000
4,129, 511 3, 872, 000
13,108, 934 12, 704, 000
13,496, 886 13, 539, 000
30, 840
13,477, 727 12,876, 000
3,079, 534 3, 021, 000
7,463, 532 6,925, 000
4, 637, 943 4, 300, 000
20,713,645 18,042,000
6,469, 985 6, 237, 000
9 6, 209, 210 6, 849, 500
19, 767, 836 19, 312,000
18, 588,928 17, 538,000
16, 646, 309 22, 580, 700
4, 616,904 4,331, 600
3, 680, 351 3,472, 000
9, 227, 545 8, 904, 500.
2, 689, 709 2,906,000
160,000
460, 740
6, 696,014 6,4.65, 000
14, 211, 260 13,904,400

Capital
stock

Surplus,
reserves,
and undivided profits <

$350,000
$136,484
907, 500
436,478
6 56, 232
250, 000
678,399
916, 000
4, 000,000
(«)
2, 571, 200
835, 537
1,184, 800
619,049
1,150, 000
785, 000
(«)
400,000
(5)
550,000
490, 329
250, 000
162,751
650,000
114,559
4, 600, 000
165, 245
750, 000
907,150
850, 000
909, 287
250,000
273,709
250,000
69,137
450,000
205,092
350, 000
99,897
250,000
117, 608
500, 000
14,486
650, 000
357, 696
300,000
250,811
2, 711,400
410, 258
500, 000 ' 873,957
250, 000
55, 978
450,000
136,306
350, 000
296,419
800, 000
153, 056
700, 000
251, 301
. 87,160
459, 8li
770, 000
16, 817
250, 000
316,986
450,000
52,008
300, 000
261, 930
1,400, 000
93, 765
418, 500
582, 016
400,000
110,004
1,430,000
179,187
1, 226, 500
379,406
3, 000, 000
399, 576
285,000
(5)
250, 000
95,916
600, 000
92, 028
250, 000
230, 207
250, 000
36, 291
400, 000
92,189
1,160,000
246, 506

394,434
569,363,241 557,726,300 41,743,060 13,116,296

1 Joint stock land banks in receivership not included.
2 Total assets have been decreased by the amount of special reserves set up against particular assets.
3 Bonds on hand and bonds*matured or called but not yet presented for payment not included.
< Special reserves set up against particular assets not included.
5 These banks had deficits as follows: Burlington, $12,496; Chicago, $1,039,599; Des Moines, $498,338;
First Carolinas, $57,468; Southern Minnesota, $814,232.
8 Before deducting a reserve of $11,826.
;
1 Before deducting a reserve of $106,181.
8 Before deducting a reserve of $502,439.
;
» Before deducting a reserve of $6,026.




194

REPORT ON THE FINANCES

Operations of Federal intermediate credit ba^nks
During the fiscal year these banks made original loans to cooperative marketing associations of $51,883,676.53 and granted renewals
of $10,160,377.37. These amounts brought the original advances
from organization to June 30, 1930, to $322,431,341.25 and the
renewals to $180,274,217.48. The loans outstanding on that date
were $27,024,837.56.
Original discounts closed during the year amounted to $64,281,119.44 and renewals of discounts to $34,875,936.74, bringing the
total original discounts closed from date of organization to June
30, 1930, to $327,521,452.42 and the discounts renewed to $160,894,052.68. The total discounts outstanding on that date were
$64,640,504.89.
Under the law, 50 per cent of the net earnings of the Federal
intermediate credit banks each year must be paid into the Treasury
as a franchise tax. The amount of net earnings for the calendar
year 1929, after providing reserves of $1,035,096.17, was $344,461.12 and the amount of franchise tax paid into the Treasury was
$172,230.57. This compares with earnings of $516,173.02, after
deducting reserves of $469,221.66, and a franchise tax of $258,086.51
during the calendar year 1928.
On June 30, 1930, the surplus, reserves, and undivided profits of
11 banks aggregated $3,478,519.43. The remaining bank had a
deficit of $715,281.92, as compared with a deficit of $912,214.61 at
the close of the preceding fiscal year.
The loan and discount rates charged by each bank at the beginning
and end of the year, and the changes made during that period are
shown in the table following.




195

SECRETARY OP THE TREASURY

Loan a7id discou7it rates of Federal intermediate credit hanks during the fiscal year
I 1930
Changed to—
June 30,
1929

Name of bank

Springfield:
Loans.Discounts
Baltimore:
Loans.
Discounts
Porto Rico: Discounts
Columbia:
Loans
Discounts
Louisville:
Loans.Discounts^„. . . . . .
New Orleans:
Loans _
Discounts
St. Louis:
Loans
Discounts
St. Paul:
Loans
..
Discounts.
Omaha:
Loans..
Discounts .
Wichita:
Loans
Discounts
Houston:
Loans
Discounts.
Berkeley. £.Loans ._
Discounts
Spokane:
Loans
Discounts

iDate

Rate

P.ct.
5
6

Changed to—
Rate

Rate

Changed t o Rate

Date

6
5
6

6
6

Mar. 15
-.-do
.j.do

4 ^ June 16
4M ...do

Nov. 20
-.-do

51^
6M

61/2 Dec. 16
6 ^ ...do.....

bH Jan.
bH ...do

2

bH Oct. 15
bH Nov. 16

5
6

Feb. 16
...do

6
5

Mar. 16
...do

i H Apr. 16
i H ...do

6
6
6
5

bH

5H
6M

5
6

6
6

Dec. 16
5H . . . d o

6
6

63^ . . . d o
-.-do
5M .J.do
5M - . d o
6
Nov. 10
6 .J-do

63^

Feb. 15
Aug. 15

b H Dec. 27 . 6
5
bH . . . d o . . . .
bVi Dec.

Do.
t^ May 15

Rate

6

6

Jan. 28
...do

i

Feb. 15

i A June 16
i A ...do

Dec. 31
...do

5
5

Feb. 15
—do..-,.

Apr. 15
Do.

bH ...do
b H ...do

6
6

Feb. 7

i H Apr. 30
Do.
iH

bVi Dec. 16
bY2 . . . d o . . . . .

5
5

Dec. 31
—do.....

i H Apr. 15
iH

Date

P.ct.

Changed to—
Rate

Date

Changed to—
Rate

Date

.

iA
iA
5
Mar.
ti —do 27

4H May 15
41^ ...do

i H June 16
i H ...do

.—.___
.

—
—

.

\ti .June 16
do

......
.

.

June 30,
1930

P.ct.
4
4

P.ct.

P.ct.

_
—

-

Mar 27
Do.

May 16
...do

5
5

i Changed to—

. . .

Jan. 15
Do.

May 15 . 41/2 June 16
.J.do
41/2 ...do

bH *6i^ Dec. 11
.J.do
bH

6
6

b
6

iVi June 2
i'A . . . d o

Nov. 21
-..do

6H
6M

.

Date

P.ct.
P.ct.
P.ct.
P.ct.
May^ 16
June 18
i H Apr. 16
i
i ...do
i H ...do
i'A -..do

Name of bank
Springfield:
ifOans.
Discounts
Baltimore:
Loans
_
Discounts . . .
Porto Rico: Discounts
Columbia:
Tioans
Discounts
Louisville:
Loans
Discounts
New Orleans:
Loans
Discounts
St. Louis:
Loans
Discounts
St. Paul:
Loans
Discounts
Omaha:
Loans
Discounts.
Wichita:
Loans
Discounts
Houston:
Loans
• Discounts
Berkeley:
Loans
Discounts
Spokane:
Loans
Discounts.,

Date

Changed to—

iH
iH
iA
iA

ti

^'

iA
iA
iA
iA
5

i i'A May 15
[ i A — do

5

o
>
,.._
.

May 16
—do

1
.
..




<
:

. do
P. .June 16

iA
i'A
iH
iH

i H June 16
i H ...do

iH
iH

i A May 15
........
^
1 iA . . . d o

^'A
i'A

....

196

REPORT ON T H E FINANCES

The following table shows the loans and discounts and total assets,
together with principal liabilities of each Federal intermediate credit
bank, on June 30, 1930:
Principal assets and liabilities of Federal intermediate credit banks on June SO, 1930

Name of bank

Total assets

Springfield...
Baltimore--.
Columbia
Louisville
New Orleans.
St. Louis
St. Paul
Omaha
Wichita
Houston
.
Berkeley
Spokane

$14,044,050
5, 773,934
11,216,441

Total..

133, 214,853

5, 397, 671
13, 383, 630
6, 358, 637
15,927,116
10,171,878
6,112,468
17,425,184
16,350,925,
13, 052,917

Loans and
discounts

707,142
823, 379
640, 662
591, 096
182, 874
956, 785
282, 296
913, 208
941, 941
028, 926
953, 914
643,120
91, 665, 342

Debentures
outstanding

Surplus, reserves, and
Paid-in
capital stock undivided
profits

10, 200, 000
4, 650, 000
500, 000
11, 600,000
10, 000, 000
6,800,000

$2, 000,000
2, 000,000
5, 000, 000
2, 000, 000
2, 000, 000
2, 000,000
2, 000, 000
2, 000, 000
2, 000, 000
2, 000, 000
5, 000, 000
2, 000, 000

64,445, 000

30, 000,000

$8, 500,000
350,000
6,450,000
6,395,000

1 Debentures held by banks of issue and debentures matured are not included.
2 Deficit of $716,282.




$318, 746
401,195
(2)

394, 06-1
233, 043
268, 655
363, 625
359,912
407,741
441, 334
290, 209
3,478, 519

SECTION OF FINANCIAL AND ECONOMIC RESEARCH

The section performs a combined research, editorial, and service
function for the Treasury, largely in the field of finance. Upon
request or on the initiative of the section, studies and investigations
in taxation, public debt, and other subjects in or related to the field
of public finance are conducted.! These projects, the results of which
are for the most part for confidential use within the department, are
undertaken with a view to providing information for the use of Treasury officials in formulating the policies of the department and in
improving Treasury methods and records. Information on business
and financial developments is made available currently to Treasury
officials.
;
The specific tasks performed during the year were as follows:
(1) The customary estimates of tax receipts for the two succeeding
fiscal years were prepared. These, together with forecasts of other
Treasury agencies, were the basis of the Treasury's regular estimates
of Federal revenue.
(2) Under the general supervision' of the Undersecretary of the
Treasury, the Annual Report of the Secretary of the Treasury for
1929 was outlined, assembled, edited, and indexed, and part of the
material in the body of the report prepared.
(3) The section also assisted in editing the statistics of income
compiled from income tax returns for 1928, published by the Bureau
of Internal Revenue, and in editing and revising several other publications of the Treasury.
(4) Articles discussing various phases of our public finance
appearing in periodicals, encyclopaedias, etc., under Treasury authorization, together with material for public use by Treasury officials,
were prepared i n p a r t or in whole in the section.
(5) The financial, economic, and bibliographical information service to Members of Congress and to the general public was continued,
and a diversified correspondence, dealing with problems of public and
general finance, was conducted.
(6) An estimate was issued each month of the tax exempt securities outstanding, including total outstanding State,local. Territorial,
and insular indebtedness.
. (7) During the sessions of Congress a digest of the progress of
financial and other economic legislation was made and distributed
daily.
i




197 .

198

REPORT ON THE FINANCES

(8) One hundred and twenty-three volumes, ten periodicals, and
two services, besides a large number of valuable reports and pamphlets, were added during the year to the general Treasury library
and to the Ubrary of standard and recent books and of important
domestic and foreign periodicals, both a part of this section, for the
use of the entire Treasury staff. The index of material in current
periodicals and other publications on subjects of interest to the Treasury was continued.




GENERAL SUPPLY COMMITTEE

A summary of the transactions of the General Supply Committee
for thefiscalyears'1928, 1929, and 1930, will be found in the following
table:
Summary of transactions of the General Supply Committee for the fiscal years 1928,
1929, and 1930
1928

P u r c h a s e s from General S u p p l y C o m m i t t e e contractors
R e c e i p t s from disposition of s u r p l u s
property:
A u c t i o n sales
C o n t r a c t sales
Transfers t o G o v e r n m e n t a c t i v i t i e s . .
Total.
Grand total

1929

$8,835,799.40

$9,299,289.41

96,739.80
47,141. 73
44,267. 72
188,149. 25
9,023,948. 66

46,323.47
90,329.12
16,804. 39
153,456. 98
9,452.746.39

1930

1930 compared
w i t h 1929, increase ( + ) or
decrease (—)

$11,869,481.51 +$2,570,192.10

43,601.04
134, 653. 66
15, 507.98
193, 662. 57
12,063,144. 08

—2,722. 43
-f 44,224.43
-1,296.41
+40,205. 59
+2,610,397.69

Value of purchases reported by executive ^departments under contracts negotiated hy
the Secretary of the Treasury through the General Supply Committee for the fiscal
years, 1926 to 1930, hy classes
!
Class N o . i
1_.
_
2
3
4
5
6_—
7
8 —.
9
10
11
12
13
14
15
16
17
.:
18
19
20
21
.—

Total

_

1926

1927

1928

$860,650.96
134,354.67
314,542.71
106,719.49
118.689.42
186,063. 50
233,224.35
233,761.49
764,243.65
576.136.43
124,608.39
254,731.02
4,312. 42
20,649.20
718,717.03
1,613.03
486,911.78
666,294.70
463,593.34
459,893.87

$1,061,239.13
159,282.15
227,621.29
82,147.46
82,866. 60
245,273.92
319,628. 68
258,115.25
986,628.60
618, 680.39
119,322.63
324,734.73
3,946.66
17,198.46
742,668.22
1,698.92
486,966.63
930,683.00
462,719.66
477,801.43

$869,388.99
246,242.94
260,920.31
90,996. 39
87,355. 32
297,926.12
349,708.43
396,046. 01
963,672.00
733, 671.30
139,800. 50
287, 600.93
3,144.17
26,270. 63
740,061.64
972.47
1,041,051.47
1.158,713.99
639,039. 86
615,416.93

6,726, 600.35

7,606,923. 41

8, 835,799. 40

1929
$1,093,098.34
359,602.36
432,863. 78
166,371. 37
126,069. 69
408,281. 44
459,862. 27
408,643.81
1,157,423. 72
823,467.41
227,388. 86
370,126. 38
3,887.27
22,892.21
805,192.60
569.62
387,604. 58
996,039.78
528,493. 58
503,256.92
18,363. 62
9,299,289.41

1930
$1,362,880. 04
354 009 77
431,402. 76
207.586 93
125? 571.73
373,224.34
490,798. 61
538, 672 00
1, 636,752.64
1,013,956. 79
161,432.33
413,913.64
3,060.14
23,951.29
949,410.13
644.90
633,659.69
1,962,665.09
716,769.36
659,125.25
10,104.08
11,869,481. 51

Class No.—
1 Class No.—
11. Feed, forage, and seed.
1. Stationery, paper and paper articles, draft12. Photographic supplies, meteorological apparaing supplies, and school supplies.
i
2. Hardware, metals, brief cases, hand bags, tus,microscopes, surveying instruments, and meatinspection supplies.
leather goods, and shoe findings.
13. Engraving, printing, and lithographic sup3. Dry goods, flags, wearing apparel, boots,
plies (excluding supplies for the Government
shoes, slippers, window shades, and cordage. ;
Printing OfBce and the Bureau of Engraving and
4. Drugs, medicines, and chemicals.
Printing). '
5. Laboratory apparatus, hospital appliances,
14. Ice.
and surgical instruments.
15. Incandescent electric lamps.
6. Electrical, engineering, a n d p l u m b i n g
16. Incandescent gas-lamp supplies.
supplies.
17. Automobile and motor cycle accessories, motor
7. Lumber, millwork, excelsior, sawdust, packcycles, tires and tubes.
ing boxes, building materials, slag, stone, and
18. Computing, addressing, dictating, duplicating,
asphalt, oil, and tar for road building.
folding and sealing machines; labor-saving devices;
8. Brushes, glass, lubricants, fuel oils, paints,
typewriting machines, exchange allowances, repair
and painters' supplies.
parts, and equipment.
9. Furniture and floor coverings.
19. Electric service.
10. Groceries, provisions, cleaner, floor machines
20. Telephone service.
and vacuum cleaners, floor wax, polish, scour21. Athletic supplies andplay ground equipment.
ing compound, soaps, soap dispensers, meat, fish,
lard, oleomargarine, and household supplies.
NOTE.—The value of purchases, by classes, for earlier years is shown in the following reports: 1913 to 1918,
in 1921 report, p. 488; 1919 to 1925. in 1928 report, p. 234.




199

200

REPORT ON THE FINANCES

Receipts from surplus and salvaged materials disposed of by the Ge7ieral Supply
Committee for the fiscal years 1921 to 1930
Auction
sales

Fiscal year

1921.
1922.
1923.
1924.
1925.
1926.
1927.
1928.
1929.
1930.

Contract
sales 1

$20, 186. 32
79, 595.35
114, 492. 74
179, 613.00
63, 112. 81
83, 310. 32
66, 258.13
739. 80
323. 47
601.04

Transfers

$3,230. 45
138,129. 25
130,390.40
165,972. 77
130,929.07
79,190.92
47,141.73
2 90,329.12
2 134, 663. 55

Total

$989,234.26
686; 097. 35
324,376. 77
150,002. 96.
78,028. 61
48,450.84
33,086. 62
44,267.72
16,804. 39
16.507.98

, 009,420. 57
767,923.15
576, 998. 76
460,006. 36
307,114.19
262, 690. 23
177,534. 67
188,149. 25
153,456. 98
150,061. 53

1 Includes estimated amounts of $75,000 in 1923 and 1924 and $80,000 in 1926, and actual amounts of
$50,633.58 in 1926, $29,704.41 in 1927, and $23,029.36 in 1928, received from the sale of waste paper from the
various departments; the receipts for which do not pass through the General Supply Committee but are
paid direct to the selling services and deposited in the Treasury by them.
a Includes amount collected for waste paper by the District of Columbia.government—$849.65 in 1929
and $878.87 in 1930.

Number of specifications mailed by the General Supply Committee, bids received,
contracts entered into, items on which awards and no awards were made, and
samples received and retained for the fiscal year 1930
Contracts
Sets of
specificaBids
tions
received
mailed

Class No.i

1
2

..„

si::.-!
4

5
_
6
7
8
9.
10
11
12
13..
14
15
16
17
18
19
20
21...

_

-

—

-.

.

-

-.

Total
1 See titles of classes on p. 199.




Samples
received

4,839
1,094
2,195
115
918
587
156
604
423
4,138
26
160
74

51

276
114
188
44
73
94
43
98
68
690
40
68
9
3
6
1
74
51
1
1
8

8,000

1,830

1,162
466
966
175
224
319
206
405
390
2,701
164
130
45
9
19
6
439
134

Number

Award
items

Samples
retained

No award
items

2,645
2,601
2,017
- 1,410
1,183
1,792
863
773
1,642
927
613
1,913
46
31
108
54
234
1,607
50
123
66

1,029
414
441
23
369
106
32
60
254
897
8
66
34

91
161
80
124
135
121
137
23
44
145
15
119
5

84
19

21
4
31

215

164
74
105
36
47
73
35
59
39
356
30
45
9
3
4
1
47
46
1
1
5

64

7

16,803

1,170

20,198

3,890

1,263

220
39

201

SECRETAEY OF THE TREASURY

Statement of surplus property received and issued by the General Supply Committee, by departments and establishments, for the fiscal year 1930
Issues
Department or establishment
Cost 1
Balance on hand
;.
Agriculture Department
L
Botanic Gardens
.-.
L
Commerce Department
^..-L
District of Columbia
'.
Federal Farm Board....
.'.
Federal Power Commission
L
Federal Trade Conimission....
General Accounting Ofiace
1.
George Washington Bicentennial Commission..
Government Printing Oflice
L
House of Representatives
'.
Interior Department
-:.
Interstate Commerce Commission
..1.
Justice Department
->
Labor Department
•.
Library of Congress
.
.
National Advisory Committee for Aeronautics;.
National Guard, District of Columbia
L
Navy Department
..:
;.
Panama Canal
'.
Post Office Department
Public Buildings and Public Parks
.
L
Smithsonian Institution
;.
State Department
j .
Treasury Department...
L
U. S. Board of Mediation
.;.
U. S. Civil Service Commission...
J..
U. S. Court of Customs and Patent Appeals...
U. S. Railroad Administration
J.
U. S. Senate
..
U. S. Shipping Board
j.
U. S. Tarifl Commission
J.
U. S. Veterans' Bureau
J.
War Department
J.
Total

Serviceable Unserviceable
property, property,
junk
Charge 2 for reissue

812.90
12.60
641.03
916.71
11.15
4.00
285.06

$2,137.32
9.50
408. 51
2,817.42
9.65
3.00
964.80

67.60
572. 60
166. 25
040. 20
493. 06
636. 20
590. 90

67,50
432. 00
1,142.75
866.45
395.61
636. 20
451. 71

.25
32.00
425.40
31.80
102. 69
88.00
94.35
316. 98
!, 394. 52

.25
24.00
392.13
26.85
77.89
84.75
76.72
308. 94
2,001.66

16.00
36.25
107. 60
.12
45.60
, 652.44
809.60

107.60
.12
45.37
1,348.69
658.50

18,202. 25

J..

15.00
27.19

16,607.98

$29,406.72

$9,000.00
76,339.13

198. 38
11.00

72,176. 07

800.00

1,430. 81
550. 00

12,883. 50

1,656.84
4, 693.78

100.00
36,642.99

739. 21
59.60
1, 467. 55

200.00
1,047. 00

130. 75
10,621. 41
28. 36
46.10
1,499. 92
361. 75

2,812. 21

18.25

18,065.84

9,448.41

1,038.00
10,631.61

18,952.08
22,396.91

113,737. 26

231,406.82

1 Original cost of surplus property as shown by transfer invoices from departments.
2 Transfer price of surplus property issued to| departments.

Recapitulation of surplus property stores account of the General Supply Committee
for the fiscal year 1930
Balance of stores as of June 30, 1929
$38, 406. 72
Transferred to the General Supply Committee during the fiscal
year 1930
-1
- - - 306, 736. 35
I

Total...-

!-

•

•

-

345, 143. 07

Net sales to departments and estatjlishments
___
_
15, 507. 98
Discounts allowed on above
\
2, 694. 27
Net proceeds from auction sales...;
^
.
28, 837. 23
Reimbursements to departments and expense account of auction
sales
.
14,763.81
Difference between invoiced value ^nd proceeds from auction sales. 201, 495. 53
Balance on hand June 30, 1930-__'..
81,844. 25
345, 143. 07
Net decrease in "stores during the fiscal year 1930,^^ ^^^.^«^-.,---- 204, 189. $0




BUREAU OF INTERNAL REVENUE

General
Internal revenue receipts.—Receipts* from internal revenue taxes
during the fiscal years 1929 and 1930 were as follows:
Summary of internal revenue receipts for the fiscal years 1929 and 1930
[On basis of reports of collections, see p. 468]
1929

Sources
Income tax:
Corporation ^
Individual
Total

$1,235,733,256. 24 $1,263,414,466.60
1,096,541,172.40
1,146,844,763.68
-.

Estates of decedents
_
Tobacco manufactures, etc
Other miscellaneous taxes'
Receipts under national prohibition laws
Internal revenue collected through customs offices.
Total
Grand total

Increase

1930

$27,681, 210.36
51,303,591. 28

2,331,274,428.64

2,410,259,230.28

78,984,801. 64

61,897,141.48
434,444,643.21
110,706,776.99
727,006.93
4,479.18

64,769,625.04
450,339,060.50
113,657,469.64
1,105,171.74
15,186.07

2,872,483.56
15,894,517. 29
2,950,682. 56
• 378,165.81
10,706. 89

607,779,946.79

629,886,502.89

22,106,666.10

2,939,054,376.43

3,040,145,733.17

101,091,357.74

1 Includes income tax on Alaska railroads (act of July 18, 1914) amounting to $13,517.52 for 1929, and
$15,346.36 for 1930.
»Includes $11,942,548.29 for 1929 and $2,607,604.84 for 1930, delinquent taxes collected under repealed laws.

In this summary tax receipts are classified according to the administrative organization for the audit of returns, as between the Income
Tax Unit, the Estate Tax Division, the Tobacco Division, and the
Miscellaneous Division. A statement of collections by taxes in detail
appears in Table 9, page 512.
Refunds and additional assessments.—In the foregoing statement of
receipts no deductions have been made on account of refunds, which
during the fiscal year 1930 were paid from the several appropriations
as follows:
Refunding taxes illegaUy collected, 1928 and prior years
Refunding taxes illegally collected, 1929 and prior years
Refunding taxes illegally collected, 1930 and prior years
Total

$3, 986. 95
22, 170, 741. 33
104, 661, 604. 94
126, 836, 333. 22

* The figures concerning internal revenue receipts as given in this statement differ from such figures
carried in other Treasury statements showing the financial condition of the Government, because the
former represents collections by internal revenue officers throughout the country, including deposits by
postmasters of amounts received from sale of internal revenue stamps and deposits of internal revenue
collected through customs offices, while the latter represent the deposits of these collections in the Treasury or depositaries during the fiscal year concerned, the differences being due 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.

202




203

SECRETARY OF T H E TREASURY

In addition to the above amount there were certain repayments as
provided under specific appropriations which were not refunds of
taxes erroneously paid under' our present internal revenue laws.
The redemption of stamps represents the return to the Government
of stamps purchased by the taxpayer in excess of his requirements.
The stamps so redeemed during the fiscal year, including interest,
totaled $744,239.85. Repayinents under the appropriation acts
'^Refunding legacy taxes, act of;March 30,1928,^' and '^Repayment of
taxes erroneously collected under the act of June 13, 1898,'^ totaling
$44,934.84 relate to claims uncier repealed tax laws, the interpretation of which has been changed by court decision.
Number of schedules and claims, amount refunded, and interest allowed on each^lass
of tax during the fiscal year 1930.
Appropriation and class of tax

Schedules Claims

"Refunding taxes illegally collected," for the'fiscal
years 1928 and prior years, 1929 and prior years, and
1930 and prior years:
I
Capitalstock....
_
i
Estate
I
Income
Miscellaneous
i
Sales
.-.
Spirits-narcotics
Tobacco
^
Total

Amount refunded

Interest included

52
1,234
5,733
36
76
57
17

126,836,333.22

3,010

189
6

Total
Refunding legacy taxes, act of Mar. 30, 1928J
Repayment of taxes erroneously collected under
the act of June 13,1898

119,891

146
30
13
.

Repayments (not refunds) of taxes erroneously collected:
Redemption of stamps:
Miscellaneous
Spirits-narcotics..
_
i
Tobacco
:

$429,627. 90
$89,574. 70
, 6,686,277.97
1,118,201. 34
118,203,238.31 36,516,874.99
16,763.35
131,080.52
228,178.41
1,458,824. 72
3,096.95
26,147.14
21.99
1,136. 66

7,205

1

332
1,616
116,479
133
796
504
31

3,761

133
618
18
3
.

3

37,971,711. 73

385,520. 33
2, 717.46
356,002.06

13,483. 28
21.15

744,239. 85
13,664.18

13,504.43

31,370. 66

20,044. 26

Offset against these tax refunds are the additional assessments
resulting from office audits and field investigations which amounted
to $303,055,026.98^ as follows::
Additional assessments made during the fiscal year 1930, by class of tax^—
Class of tax

'

Income-Estate--.Gift
Capital stockSales
Miscellaneous
Tobacco

.-__
4
—-1..
.

Amount

.--.

$264, 302, 130. 16
27, 656, 938. 96
92, 554. 94
2, 522. 50
809, 434. 64
10,095,377. 74
96, 068. 04

.

--

.--_

303, 055, 026. 98

.
-

-

Total
<%

-

•
•

1 This total includes for income taxes, $208,429,063.16 from the Income Tax Unit and $55,873,067 from the
Accounts and Collections Unit; for miscellaneous internal revenue, $29,101,355.82 from the Miscellaneous
Tax Unit and $9,661,541 from the Accounts and Collections Unit. The assessments of the Income Tax
Unit include $36,124,266.65 made under the jeopardy provisions of sections 279 and 280 of the revenue act of
1926 and section 273 of the revenue act of 1928.




204

REPORT ON THE FINANCES

If the tax refunds during the year on account of erroneous or illegal
collections for 1930 and prior years, amounting to $126,836,333.22,
were deducted from the gross collections of $3,040,145,733.17, the net
collections for the fiscal year would be $2,913,309,399.95. The gross
collections, however, are used for comparative purposes in this report.
It is interesting 'to note that the $1,254,317,890.62 of refunds of
taxes erroneously or illegally collected which were made during the
past 14 years are approximately 23 per cent of the $5,345,202,277 of
additional assessments resulting from office audits and field investigations made during the same period. The ratio of the total refunds to
the total internal revenue receipts amounting to $44,032,371,357.94
duqng the period is approximately 2.8 per cent.
Cost of administration.—The amount expended and obligated in
administering the internal revenue tax laws for the fiscal year 1930
was $34,352,063.41. This does not include the amount expended for
refunding taxes illegally or erroneousl}^ collected, which is in no sense
an administrative expense. The aggregate receipts of internal revenue
were $3,040,145,733.17, which makes the cost of operation for. the
fiscal year 1930 $1J3 for each $100 collected as compared with $1.17
for the fiscal year 1929.
Income Tax Unit
The Income Tax Unit has charge of the auditing and closing of all
income tax returns except certain returns of small incomes for which
the auditing problems are not difficult. The latter are settled in the
collectors' offices under the administration of the Accounts and Collections Unit. For its work, the Income Tax Unit has an organization
of auditors in Washington and a field force throughout the country.
Examination of returns.—The number of returns examined and
closed during the year by the Washington and the field organizations
of the unit was 2,297,351, of which 1,872,268 were filed by individuals
and partnerships and 425,083 by corporations. The number closed,
during the preceding fiscal period was 2,198,695.
Additional revenue.—The total additional revenue made available
for collection was $172,304,836.51 as compared with $260,227,744.14
for the previous fiscal year. These additional revenues are classified
below to show the amounts involved as additional tax, penalties, and
interest, and also the agreement procedure involved in reaching a
settlement with the taxpayer.




205

SECRETARY OF THE TREASURY

Additio7ial revenue made available for collection during the fiscal years .1929 and
1930, classified according to the tax, penalty, and interest, and the agreement
procedure involved
\
1929
Amount
I. Tax, interest, and penalty:
Tax..
Interest
Penalty..-

1930 .

L... $206,832,643.54
i
33,150,045.30
'---.
1,823, 704.63

Total additional revenue

'.

Per cent

79.5 $140, 350,442. 57
12.7 25,586,805.26
.7
1, 379,428. 62

81.5
14.8
8

92.9
7.1

167, 316, 676.45
4,988,160.06

97 1
2.9

260, 227, 744.14

100.0

172,304,836.61

100 0

39,309,376.89

16.2

31,421, 761. 70

18.8

86, 360,630.13

35.3

65,021,641.98

32 9

16,426,074.62
43, 754,229.66

6.8
18.1

9, 604,125.30
20,868,302.79

5; 7
12.4

Total
L... 241,806,393.47
Rejected claims for abatement and credit...L... 18,421,350.67

II. Agreement procedure involved in settlement:
Mimeograph 3552 i
Regular procedureAgreements executed by taxpayer without 60-day letters
'
Agreements executed by taxpayer and
filed subsequent to 60-day letters.....
Appeal not filed within 60-day period..
Entered after decision by Board of Tax
Appeals
'-

Amount

Per cent

66,967,083.17

23.6

60,600,844.68

30 2

241,806,393. 47

Total

100.0

167,316,676.45

100.0

1 The effect of mimeograph 3552 is to shorten the interest period when the additional tax is agreed to by
taxpayer and field force. The abovefigurescover assessments made during the periods June 1, 1928, to
May 31,1929 and June 1,1929, to Apr. 30,1930. ;

In addition to the amount of revenue thus made available, additional taxes were also assessed;under the jeopardy provisions of the
several revenue acts, as follows:
Additional revenue assessed under the jeopardy provisions of revenue acts during the
fiscal years 1929 and 1930
1929
Under bankruptcy and dissolution procedure.i.
Return believed to be fraudulently rendered ...L
Total assessed
Interest
Penalties
1
• Grand total..-.

'.

i
L

1930

$22,680,189.76
14,088,768.77

.

$19,822,481.57
6,786,822.13

36,668,958.53
6,687, 329.38
8, 509,137.67

26,609,303,70
5,669,651. 79
3,946,271.16

.50,866,425.58

36,124,226.66

Reduction in number of BO-day letters mailed as related to appeals
filed.—During the year the Income Tax Unit issued 13,658 60-day
letters as compared with 16,980 and 38,537 for 1929 and 1928, respectively. The issuance of the OO-day letter represents the final audit
action of the Income Tax Unit on cases concerning which the bureau
and the taxpayer fail to reach an agreement. A decrease in 60-day
letters indicates that more cases are being closed within the bureau by
agreement with taxpayers and fewer cases are being appealed to the
Board of Tax Appeals. This, of course, is the objective toward which
the efforts of the bureau are directed.




206

REPORT ON T H E FINANCES

The number of appeals filed during the year with the Board of Tax
Appeals was 4,113, including 5,810 taxable years. During 1929 and
1928, 5,139 and 9,908 appeals were filed, including 8,144 and 16,376
taxable years, respectively. Petitions were filed with the Board of
Tax Appeals, including proposed assessments of $83,255,660.93, and
penalties totaling $2,637,280.03. The amount petitioned during the
previous year, including penalties, was $151,017,846.34.
Claims and overassessments.—The following table shows the number of refund claims adjusted and the certificates of overassessment'
issued, together with the amounts of overassessment involved during
the fiscal years 1929 and 1930:
Refund claims adjusted and overassessments determined during the fiscal years 1929
and 1930
1929
Claims:
Pending at beginning of year
Filed during year
Total to be adjusted...
Allowed in full or in part
.
Rejected
Total adjusted
Adjusted and awaiting action in,General Counsel's Office
Pending at end of year
°
Certificates of overassessment issued when no claim had been filed...
Amount of overassessments determined on all claims settled b y Abatement
Credit
.
. . .
_
Refund
Total
Interest
Grand total
.
.
.

1930

Number
12,818
60,299
63,117
34,736
16,386
60.120
253
13,250
42,329
Amount
$176,398,377.68
36,535,245.42
126,695,318. 51
339,628,941. 61
38,768,622.33
378,297,563.84

Number
13,250
41,346
54,596
31,317
12,849
44,166
2,382
12,812
36,969
Amount
$124,019,819.63
35,819,633.37
81,687,363.32
241,626,816.32
36,616,874. 99
278,042,691.31

NOTE.—The amount involved in claims filed during the year was $299,619,106.17, as compared with
$613,052,371.28 the preceding year. Of the claims adjusted during the year, the amounts rejected totaled
$164,093,902.48 as compared with .$237,573,989.16 the preceding year.

There were adjusted during the year 16,881 coUectors' claims (included in the foregoing), in 15,395 of which abatements or credits
were recommended and in 1,486, refunds. These claims were largely
of the multiple-item type, i. e., each covering several returns, and
involved 18,867 returns for abatement or credit and 72,062 for refund.
Prior year returns pending.—The total number of returns pending
on June 30, 1930, before the several audit sections of the Washington
office for the tax years 1917 to 1927, inclusive, was as follows, classified by original returns and by reopened or new returns:
Returns pending on June 30, 1930, hy tax years
Tax year
1917
1918
1919..
1920.
1921
1922
1923




Total
134
204
241
325
261
404
613

Original Reopened
or new
12
24
36
44
37
93
164

122
180
206
281
224
311
449

Tax year
1924
1925
1926
1927-

Total

Original Reopened
or new

1,663
2,166
4,608
12,391
Total........

726
1,084
3,164
11,137

827
1,081
1,444
1,264

22,899

16,621

6,378

SECRETARY OF THE TREASURY

207

The audit in the field.—During the year revenue agents and auditors
in the office of internal revenue agents in charge submitted recommendations for the closing of 449,784 returns. Thorough audits in
the field were made of 204,077 returns, while for 124,212 returns, the
audit involved investigation of specific items which, to be allowed as
deductions, etc., demanded further consideration and support. For
121,495 returns the field forces concluded, after a second survey, that
the returns should be accepted without field audit.
Of the returns audited in the field, deficiency taxes were proposed
on 115,153, overassessments on 35,943, and no change on 177,193.
Agreements were secured in the field as to 120,673 of the 151,096
changed returns. The amount of the deficiency taxes involved in
cases where agreements were secured by the field forces was
$59,242,248.78.
During the fiscal year 1931 the field divisions will conduct field or
office investigations in 145,992 returns for 1928 and prior years and
in approximately 400,000 returns for 1929.
Production statistics.—^As a part of income tax administration during the year, 326,977 individual and 103,306 corporation returns were
forwarded to revenue agents and 186,583 individual returns to collectors for investigation. Thqre were received and routed to the
proper destination for audit review 336,715 reports. Of the total
number of reports received, 297,728 were forwarded by revenue
agents in charge and 38,987 by collectors of internal revenue. There
were returned from collectors aiid agents 278,526 returns, which upon
review in the field required no examination. In answer to requests
from the office of the general counsel, there were furnished 16,182
returns and other documents. Approximately 33,000 bankruptcy
and dissolution cases were forwarded to the office of the general
counsel and other offices of the bureau.
There were received and sorted 8,235,265 information reports of
salaries, interest, and dividends, and 2,100,000 forms showing names
and addresses of taxpayers, a total of 10,335,265. There were
5,976,150 reports forwarded to-the several collectors for comparison
with individual returns on Form 1040-A, and for the discovery of
delinquent taxpayers. Information reports were compared with
1,567,850 individual returns. Form 1040, of the ^^accepted'' class on
file in Washington, which disclosed apparent understatements of
income by approximately 35,000 taxpayers.
Personnel.—The personnel of the departmental and field forces of
the Income Tax Unit was reduced by 149 employees during the year.
12101—31

16




208

REPORT ON T H E

FINANCES

Number of employees i n the Income Tax Unit on J u n e 30, 1929 and 1930
June 30,
1929

June 30,
1930

Increase(-f-)
or decrease

(-)
Departmental force:
Techjiical
Clerical
Total
Field force:
Technical
Clerical...
Total
Grand total— . . . .

.1

900
1,314
2,214

870
1,240
2,110

_

2,630
749
3,379
6,593

2,583
751
3,334
6,444

. ..

. ..

..

—30
-74
-104

-47
+2
-45
-149

Special advisory, committee
The function of the special advisory committee is to consider cases
pending before the bureau, the Board of Tax Appeals, or the courts,
for the purpose of attempting to reach settlement thereof without
litigation. I n those cases for which settlement is reached, the final
responsibility therefor rests with the committee, with the approval of
the commissioner. The work of the committee over a period of
approximately three years has proved conclusively the assertion of the
Bureau of Internal Revenue that Federal taxation is and should be a
matter of administration and not litigation.
The activities of the committee in the disposition of cases handled
have been orderly, so that the result in each case disposed of by the
committee shall have been consistent with the proven facts and the
law thereto applicable. Every endeavor has been made to maintain
the completed work on the highest possible standard of excellency.
During the three years of its existence the committee has considered
20,771 cases, involving 33,786 tax years. Of this number, settlements were effected in 13,276, or 63.9 per cent, of the cases considered
to a conclusion. The remainder, or 7,495 cases, were recommended
for defense, no basis for settlement having been reached. Further
statistics of the committee show that, of the cases included in the
latter group and decided by the board to date, the bureau has been
sustained in 71.6 per cent of total deficiencies involved. Of the remaining 28.4 per cent of the total deficiencies not affirmed by the
board, it was found that the board's decisions in part covered issues not
acquiesced in by the commissioner on prior cases and issues raised
before the board b u t not raised before the committee.
During the ensuing fiscal year the committee will be given additional
jurischction of cases appealed to the Board of Tax Appeals w\n.eh
involve law issues and the settlement of estate taxes. This is in line
with the commissioner's policy of concentrating the settlement work
of the bureau in one organization. Heretofore, the committee's
jurischction has been confined to considering proposals for settlement
of cases involving questions of fact or mixed questions of law and fact.



209

SECRETARY OF THE TREASURY

Under the proposed plan such limitation will be removed and cases
involving strictly issues of law and questions involving estate taxes,
heretofore submitted to the review division of the office of the general
counsel, will be referred to this committee for consideration of proposals for settlement as submitted by taxpayers.
Miscellaneous Tax Unit
The Miscellaneous Tax Unit;is charged with the administration of
air taxes other than income taxes. The unit is composed of the estate
tax division, the miscellaneous division, the tobacco division, and an
appeals and review section, which is attached to the office of the
deputy commissionei: in charge. The personnel of the unit was
reduced during the year, in part in the miscellaneous division due to
the completion of the work in connection with repealed taxes,.and in
part in the estate tax field force due to the effect on administrative
work of the increase in the specific exemption of estates from $50,000
to $100,000, as provided in the revenue act of 1926, and also tc) more
efficient methods employed in the field work.
Estate taxes.—Estate tax collections amounted to $64,769,625.04
compared with $61,897,141.48 for 1929. These collections include
payments on original returns filed and payments of additional taxes,
penalty, and interest assessed as a result of the audit of returns by the
estate tax division. The anticipated decrease in collections as a result
of the 80 per cent credit for State inheritance taxes failed to materialize this year due to a general increase in values of gross estates and
to the collection of a large amount of back taxes through stipulation
and final agreement.
There were filed during the year 10,308 estate tax returns showing
tax of $39,024,268.66, compared with 9,719 such returns showing tax
of $26,161,918.60 in 1929. The administrative work involved in
auditing returns during the year is summarized below:
Summary of audit of estate tax returns for the fiscal years 1929 and 1930

'
Major tax reports submitted by field force
Returns audited in Washington

1

Returns on hand for audit at end of year:
In field for investigation
. . .
In Washington for audit

L

Total

1929
. . . . .

9,482
12,970

1

On hand at end of year
Deficiency taxes assessed




——

.

."._..

3,501
1,467

2,768
1,206
3,974

162
1,744

._

10,092
13, 949

4,968

.
•

Protest letters of taxpayers as a result of tax determined by audit:
On hand at beginning of year
i
Received during year
-. Total to be disposed of
Disposed of

1930

80
1,898

1,906
1,826

1,978
1,864

80
..

.

124

$20,802,610.78

$20,169 289 96

210

REPORT ON THE FINANCES

The estate tax field force, operating under the direction of the deputy
commissioner through internal revenue agents in charge, submitted
610 more major tax reports during the year than in 1929, with a 4
per cent reduction in personnel. During 1930, 178 final closing agreements with estate taxpayers were approved by the Secretary of
the Treasury under section 606 of the revenue act of 1928, and 240
estate tax cases were adjudicated by the United States Board of Tax
Appeals.
The overassessments and abatements allowed during the year on
estate and gift taxes totaled $40,249,653.65. The amounts allowed
and the claims disposed of during the year are classified by refund
and by abatement claims in the following table. It should be noted
that the 80 per cent credit for State inheritance taxes paid, allowed
under the revenue act of 1926, is in some cases claimed as a refund or
abatement after the tax return has been filed.
Summary of administrative work during the fiscal year 1930 on claims against estate
and gift taxes paid
Estate tax
Refund
Number of
cases

Aniount

C l a i m s filed:
O n h a n d J u l y 1,
1929
1...
360 $13, 643, 787.10
Received during
8,070, 346. 20
year
. 1,193
T o t a l t o b e disposed of
-_ 1, 553

Gift t a x
Abatement

Number of
cases

Amount

Refund
Number of
cases

Amount

Abatement
Number of A m o u n t
cases

31 $305, 760. 74.

185

$990,413. 61

3,121

21,145,148. 99

22

161,712.36

2

$1,428.15

21,714,133. 30

3,306

22,135, 562. 60

63

467,473.10

2

1,428.15

970
200

4,920,670. 53
6, 502, 703. 46

3,146
28

21, 647, 508. 25
44, 273. 44

22
23

91,942.11
248, 640. 63

2

1,428.16

T o t a l disposed of. 1,170
O n h a n d J u n e 30,
383
1930

11,423, 373.99

3,174

21,591, 781. 69

45

340,482. 74

10, 290,759. 31

132

543, 780. 91

8

126,990. 36

461, 267. 67

1.482

12,073,094. 34

6

4

41, 344. 94

Allowed
Rejected

N o claims filed—overassessments a l l o w e d - .
I n t e r e s t o n claims
allowed . .
T o t a l a m o u n t allowed
including interest- .

618

1,093,465. 50
6,465,403. 70

4,196. 32
24, 735.84

33,620,602.59

120,874. 27

42, 773.09

Miscellaneous taxes.—Total collections of taxes under the administration of the miscellaneous division amounted to $113,406,994.42 for
the year compared with $110,175,145.39 for 1929. These are shown
by specific taxes in the following table:




211

SECRETARY OF T H E TREASURY
Miscellaneous taxes collected during the fiscal years 1929 and 1930
1929
Miscellaneous s t a m p a n d special taxes:
B o n d s o f i n d e b t e d n e s s , capital stock issues, e t c
C a p i t a l stock sales or transfers
Sales of produce for future delivery _ .
P l a y i n g cards
.
Oleomargarine special a n d s t a m p taxes
...
A d u l t e r a t e d a n d process or r e n o v a t e d b u t t e r , filled
cheese, a n d mixed
flour.
^.

1930

$17,868, 372.17
37, 595,927. 33
3,333,427.14
5,375,804.20
3, 611,153. 44

$22, 611,274. 96
46,698,226. 86
3, 599,875. 58
4,819,292.50
3,919, 387. 75

Increase ( + ) or
decrease (—)
-f $4, 742,902. 79
+9,102,299. 53
-F266,448. 44
— 556,511.70
-f 308, 234. 31

O t h e r miscellaneous taxes:
D u e s a n d initiation fees .
Admissions to theaters, e t c
i.......
Pistols a n d r e v o l v e r s _ .
-._
.
A u t o m o b i l e s 1.
-..
Corporations, on value of capital stock 2 __ ^_
Distilled spirits, fermented liquors, a n d narcotics-T o t a l other miscellaneous taxes . .
T o t a l miscellaneous taxes

.

I Tax repealed, effective May 29,1928.

12, 240. 53

11, 608.19

- 6 3 2 . 34

67, 796,924. 81

Total

81, 659, 665. 84

-M3,862, 741. 03

11, 245, 254. 65
6,083,055. 82
165, 684.14
5, 545,865. 90
5,956, 295. 57
13,382,064. 50

12, 521,091. 52
4; 230, 667. 99
344,389. 51
2, 320, 262. 83
46,966. 66
12, 283, 950. 07

42,378, 220. 58

31, 747,328. 58

-M, 275,836. 87
-1,852,387.83
-1-178,705. 37
—3, 225,603. 07
—5,909,328.91
-1,098,114.43
— 10,630,892.00

110,175,145.39 1 n3.4nfi.994. 42

-1-3, 231,849. 03

'

'

2 Tax due prior to July 1,1926.

The increase in the receipts from miscellaneous stamp and special
taxes is due chiefly to the large volume of trading on the various
stock exchanges during the last fiscal year and also to the increased
number of taxable issues of bonds and stocks. The increase in the
receipts from taxes on dues and initiation fees is attributed to the
growth in the number of clubs and club memberships. The reduction in the tax on admissions is probably due to the reduction in
prices of admissions to places of amusement, and to the increased
exemptions in the revenue act of 1928.
The administrative work on claims, additional assessments, and
oft'ers in compromise is summarized in the following paragraphs.
There were 7,467 claims received or reopened during the fiscal year
compared with 16,894 received or reopened during 1929. There were
7,531 claims adjusted compared with 21,742 adjusted during 1929,
leaving 1,065 on hand June 30, 1930, compared with 1,129 on hand,
at the close of the previous year. During the year there was allowed
$371,162.10 as interest accrued on taxes refunded compared with
$1,033,885.65 allowed durmg 1929.
A total of $205,228,270.59, representing 201,592 items, was approved by the commissioner on miscellaneous assessment lists,
which relate to assessments of all internal revenue taxes except
those admuiistered by the Income Tax Unit. These lists include all
assessments, original and additional, on the miscellaneous internal
revenue taxes which are not collected by the sale of stamps and the
additional assessments on the latter'group of taxes. There were included in the lists $30,723,223.76^ representing 20,883 additional
assessments, resulting from office audit and field investigations, and
interest totaling $2,670,836.53.
1 These figures are for the 12 months ended June 30, 1930, whereas the figures shown in note 1, page
203, are for the 12 months ended May 31, 1930.




212

REPORT ON THE FINANCES

A small amount of tax liability incurred in connection with sales,
tobacco, capital stock, estate, gift, spirits, narcotics, and miscellaneous
stamp and special taxes is compromised with the taxpayer. The
offers in compromise received and disposed of during the year and
the amounts involved are summarized in the following table:
Offers in compromise received and disposed of during the fiscal years 1929 and 1930
1929
Number
.

4,275
20,735

._

Total to be disposed of
^

Amount

3,390
22,100

$652,242. 00
1, 758,257. 98

•

Total disposed of

_ ..
_

2,029,126. 69

25, 490

2,410,499.98

20,822 1,233,895. 63
142,789. 06
786
200. 00
12

22,006
569
45

1,928,369. 34
76, 720. 42
6, 534.13

21,620

1,376,884.69

22,620

2, Oil, 623. 89

3,390

_.

On hand at end of year

$495,734.42
1, 533, 392. 27

25,010

On hand at beginning of year.
Received during year.

Accepted
Rejected
Withdrawn

1930
Number

Amount

652, 242, 00

2,870

398,876. 09

Tobacco taxes.—Collections from tobacco taxes continued their
steady upward trend, amounting to $450,339,060.50 for the yeair, a
new high level which is an increase of $15,894,517.29, or 3.66 per cenb,
compared with 1929. These collections represent more than 71.5 per
cent of-the miscellaneous internal revenue in the fiscal year 1930 and
exceed total internal revenue receipts from all sources for any j^-ear
prior to 1916. A comparison of collections from various sources for
the fiscal years 1929 and 1930 follows:
Tobacco tax collections for the fiscal years 1929 and 1930
Source

1929
$341,951, 551. 22
61,159,178. 09
22, 548, 667. 59
7,126,908. 99
1,179,625. 53
323,258.73
• 82,508.77
73, 044. 29
434,444, 543. 21

Small cigarettes
Chewing and smoking tobacco.
Large cigars
Snuff..
Cigarette papers and tubes
Small cigars.
Large cigarettes
-..
Miscellaneous collections
..
Total

Increase (-I-) or
decrease (—)

1930
$359,816,274. 69
60,098,186. 23
21,141,016.19
7, 542,105. 43
1,323,885.12
301, 512. 05
65,100. 49
50,981. 30
450,339,060. 50

+$17,864,723.47
-1,060,991.86
-1,407,552.40
+415,196. 44
+144, 359. 59
- 2 1 , 746. 68
-17,408.28
-22,062.99
+15,894,517.29

In the seven States shown below, the tobacco tax collections
amounted to $411,183,280.28, or 91.29 per cent of the total tobacco
tax collections.
Tobacco tax collections from seveii States during the fiscal year 1930

state

North Carolina
Virginia
Kentucky.. .
New York




Amount

$256,729,938.33
77, 598,461. 52
20,592,005. 73
16, 092,218. 04
15,090,231.68

Per cent
of total
tobacco
tax collections
57.00
17.23
4.57
3.67
3.35

state

California
Ohio
Total

Amount

._

Per cent,
of total
tobacco
tax collections

$13,668,198.88
11,412,226.10

3.04
2.53

411,183,280. 28

91.29

SECRETARY bF THE TREASURY

213

Appeals and review section.—^The appeals and review section holds
hearings in cases arising under the various tax laws administered by
the Miscellaneous Tax Unit, renders on request from the heads of
divisions opinions on law questions arising in connection with the
administration of such tax laws, and reviews the action taken by the
divisions on all claims for refund or abatement allowed for amounts
in excess of $500. The majority of the hearings are held in connection with estate taxes, although a large number involve the various
taxes, such as documentary stamp, excise taxes, and taxes on admissions and dues, etc. During tjhe year the appeals and review section held 497 hearings, prepared 516 formal opinions on cases in which
hearings had been held or on which formal opinion had been requested
by heads of divisions, and reviewed 4,101 claims for refund and abatement and estate and gift tax ciases resulting in certificates of overassessment.
'
There were 34 cases on hand at the close of the year awaiting hearings scheduled for future dates; 29 cases in the hands of members of
the section awaiting further evidence from taxpayers; 10 cases in the
hands of members awaiting supplemental reports from the field; 24
cases under consideration where all evidence had been submitted;
and 6 cases finally acted upon which awaited attention of the securities section of the bureau.
Accounts and Collections Unit
The Accounts and Collections Unit, which is the central administrative organization for the 64 collection districts, is divided into three
divisions—the collection accounting division; the collectors' personnel,
equipment, and space division; and the disbursement accounting
division.
Collection accounting division.—The collection accounting division
is charged with the following duties: The construction of accounting
systems for use in collectors' offices; the preparation of instructions
to collectors of internal revenue on office and field activities; the
preparation of the procedure for the intensive audit of the individual returns on Form 1040-A and a number of the smaller individual returns on Form 1040; the auditing of collectors' revenue
accounts current and collectors' special deposit accounts current for
offers in compromise, surplus proceeds in distraint sales and sums
offered for the purchase of real estate; the issuing of internal revenue
stamps; and the compiling of statistics for officials of the Treasury
Department and the public. The division is charged also with the
duty of preparing, in conjunction with the Income Tax Unit, the
procedure for the preliminary examination in collectors' offices of
about 2,500,000 corporation and individual income tax returns. The
activities of the field force of supervisors of accounts and collections



214

REPORT ON THE FINANCES

and the force of internaj revenue agents on sales and miscellaneous
taxes are controlled and directed by this division under the general
supervision of the deputy commissioner.
During the year the policy of calling on collectors of internal revenue
for assistance in auditing the individual income tax returns on Form
1040 was continued. Approximately 185,000 returns on Form 1040 for
the year 1928 filed in 1929 were assigned to collectors' offices for audit.
At the end of the year there were 13,559 of these cases remaining on
hand in collectors' offices.
The supervisors of accounts and collections submitted 129 reports
covering their examinations of the accounts of the various collectors'
offices compared with 110 reports submitted during 1929. Every
collector's office was examined at least once and most of them twice
during the year. The supervisors installed six new collectors and
four acting collectors, and made 46 transfers of collectors' offices
under renewal bonds.
After having/taken the necessary administrative action in connection therewith, collectors of internal revenue transmitted to the
Bureau of Internal Revenue, or otherwise disposed of, 125,500 claims
as compared with 135,408 duruig 1929, a reduction of 9,908. The
number of claims on hand at the close of the year 1930 was 758,
compared with 928 at the close of the previous year. There were
filed in collectors' offices during the year 5,912,907 tax returns, compared with 5,818,901 for the previous year, an increase of 94,006.
Of the total tax returns filed in 1930, 5,288,373 were income tax returns
compared with 5,199,916 income tax returns filed during the previous
year, an increase in this class of returns of 88,457.
A total of 8,817,283,716 stamps, valued at $548,026,321.75, was
issued to collectors of internal revenue and the Postmaster General,
compared with 8,587,114,720 stamps, valued at $523,786,177.88,
issued during the year 1929.
Internal revenue stamps returned by collectors of internal revenue
and by the Postmaster General and credited in their accounts amounted
to $2,649,497.93, compared with $2,848,738.90 for 1929. The returned stamps were of various kinds and denominations, including
partly-used books and stamps for which there was no sale.
During the year 55,680 warrants for distraiat were served by
deputy collectors of internal revenue, which resulted m the collection
of $33,093,710. An average of 1,588 deputy collectors made a total
of 245,151 revenue-producing investigations, iucluding the serviug
of warrants for distraint. The total amount collected and reported
for assessment by field deputy collectors was $65,524,608. The
average number of inyestigations made per deputy and the average
amount of tax collected and reported for assessment were 156 and
$41,280, respectively.



SECRETARY OF THE TREASURY

215

The special force of internal revenue agents working under the
direction of the accounts and collections unit collected and reported
for assessment $1,175,908, an average of $128,280 per agent.
During the year 148,671 income tax returns were investigated and
5,863,678 information returns on Form 1099 were verified. At the
close of business June 30, 193,0, there were outstanding in the 64
collection districts for field investigation 5,025 income tax returns
for 1928 and prior years and 1,530 for the year 1929, making a total
of 6,555, compared with a total of 5,726 as of June 30, 1929. On
June 30,1930, there were 11,422 warrants in the hands of the collectors'
field forces for collection, compared with 12,781 as of June 30, 1929.
Special attention has been given by collectors of internal revenue
to the discovery of the various classes of delinquent taxes. That
this work has been highly productive of revenue is evidenced by the
fact that the tax collected and reported for assessment as the result
of these investigations during the fiscal year 1930 amounted to $21,130,933. This is by far the largest amoimt of delinquent tax disclosed
for any one year since this office began in 1923 to maintain a classified
record of the revenue produced by collectors' field forces.
Collectors^ personnel, eguipment, and space division.—The division
of collectors' personnel, equipment, and space is charged with the
consideration and granting of allowances to collection districts
covering the employment of personnel and miscellaneous operating
expenses and the keeping of adequate records thereof. The division
passes upon collectors' requisitions for nonexpendable supplies,
mechanical equipment, and office furniture, and the procurement of
space for collectors' offices and branch offices is also handled by this
division.
;
At the beginning of the year there was in the internal revenue
collection service a total authorized force, including collectors, of
5,068 employees, at an annual' salary rate of $10,657,340. At the
close of the year there was a total authorized force, including collectors, of 4,883 employees, at an annual salary rate of $10,391,480.
I t will be observed that duruig the year there was a net reduction of
185 in the total number.of positions and $265,860 in annual salary
rate. This reduction in personnel was brought about gradually by
devising and inaugurating unproved procedures and methods and
the more efficient coordination of the work in the various collection
districts. The reductions in most instances were made by not filling
vacancies occurring on the regular force.
During the year a total of $117,235.14 was expended for the employment of temporary help in collectors'. offices, compared with $113,597.44 during the preceding year, or an increase of $3,637.70.
During the year the sum of $289,245.24 was expended for the rental
of quarters for collectors' offices and branch offices, compared with




216

REPORT ON THE FINANCES

$287,951.91 during the preceding year. The increase of $1,293.33
was due to the necessity for renting commercial space for branch
offices in certain localities as well as slight increases in the rental
rate of quarters leased for certain offices.
Disbursement accounting division.—The disbursement accounting
division is charged with the duty of keeping the accounts in connection with expenditures from appropriations made available by
Congress for the use of the Internal Revenue Bureau and service.
The division is charged also with the responsibility and supervision
of the administrative examination required by law of the disbursing
accounts of 64 collectors of internal revenue and 38 internal revenue
agents in charge, including internal revenue salary payments made
by the collector of customs at San Juan, P. R., as well as the administrative audit of miscellaneous vouchers for transportation, equipment, telephone service, rentals, etc., paid from internal revenue
funds by the disbursing clerk of the Treasury Department and
direct settlements by the General Accounting Office.
The disbursement accounting division administratively examined
and recorded 1,228 monthly accounts of collectors of internal revenue
and internal revenue agents in charge, including internal revenue
salary payments made by the collector of customs at San Juan, P. R.,
together with 47,486 supporting vouchers, in addition to which 3,043
expense vouchers of employees and 8,118 vouchers covering passenger
and freight transportation and miscellaneous expenses were audited
and passed to the disbursing clerk of the Treasury Department and
General Accounting Office for payment. The monthly pay rolls of
the bureau were examined and recorded currently.
General CounseVs Ofiice
The activities of the general counsel's office which embrace the
whole field of Federal taxation, are divided into six divisions—appeals,
interpretative, civil, penal, review, and administrative.
Appeals division.—The appeals division, as in previous years, is
charged with the defense of proposed deficiencies in income, profits,
estate, and gift taxes before the Board of Tax Appeals. The work
of the special advisory committee in the bureau and the review
division of this office are reflected in the number of cases closed by
stipulation. After contested cases are tried and decided by the
board, the appeals division prepares and submits, for the approval
of the general counsel and the Commissioner of Internal Revenue,
recommendations as to whether or not the commissioner should
acquiesce in any adverse decision of the board or prosecute petitions
for review to the circuit courts of appeals or the Court of Appeals for
the District of Columbia. Petitions for review when approved by
the general counsel and the commissioner and authorized by the



217

SECRETARY OF THE TREASURY

Department of Justice are prosecuted before the courts by the appeals
division in cooperation with the latter department, and petitions for
review brought by taxpayers are defended with the same cooperation;
similar responsibility and procedure obtained in all cases of petitions
for certiorari to the Supreme Court of the United States. I t became
necessary during the year to increase by five the number of attorneys
giving their entire time to appellate court work. The number of
attorneys and assistants engaged in hearings work before the board
continued substantially the same as in the previous year.
A summary cif the work of the General Counsel's Office during the
fiscal years 1929 and 1930 is shown in the following table:
Board of Tax Appeals cases received and disposed of during the fiscal years
1929 and 1930 \
1929

1930

Cases
Number
On hand at beginning of year
Filed
.

Number

Amount

. .

21,639
6,458

$697,366, 659. 34
172,865,159. 63

18,301
4,360

$650,000,424. 62
98,007, 598. 43

27, 097
9,105

„

Total to be disposed of.—
Closed
On hand at end of year

Amount

870,231,718. 97
220,231,294.35

22, 661
6,991

748,008,023. 05
161,292, 620.39

18,301

650,000,424.62

16,036

596, 715, 402. 66

I t will be observed that the number of cases disposed of exceeded
the number of new cases filed. Duruig the year 991 appeals were
dismissed for nonprosecution, failure to pay filing fees, lack of jurisdiction, and other misceUaneous reasons.
Forty-six field division hearings were held by the Board of Tax
Appeals in 34 cities during the year, at all of which the commissioner
was represented by attorneys from the appeals division.
A total of 1,192 appeals from decisions of the Board of Tax Appeals
to courts of appeals and to the United States Supreme Court has been
filed since the enactment of the revenue act of 1926, which established this appellate procedure; of this number 682 appeals were pending at the close of the current fiscal year, 510 having been previously
closed. As taxpayers become more familiar with the appellate procedure for court review of board decisions, some increasing litigation
in that respect may be anticipated. Thirteen attorneys were giving
their exclusive attention to this work on June 30, 1930.
Interpretative division.—The interpretative division considers questions of law arising under the several revenue acts imposing uicome,
profits, estate, gift, legacy, admissions and dues, capital stock,
tobacco, oleomargerine, special, stamp, telegraph and telephone, and
transportation taxes; and matters relating to real estate acquired by
the United States under the provisions of the internal revenue laws.




218

REPORT ON T H E FINANCES

I t also considers questions of procedure in connection with the administration of internal revenue laws, including the preparation of
the regulations under such statutes and of most of the Treasury decisions amending these regulations. This division also passes finally on
all matters proposed for publication in the Internal Revenue Bulletin.
Specific questions are submitted for opinion by other branches of
the bureau and by outside correspondents, which are answered in the
form of memoranda or letters. Letters, proposed mimeographs, and
memoranda, prepared elsewhere in the bureau, are submitted for
review and comment.
The following table shows the work of this division for each of the
last five fiscal years:
Jacketed cases
On hand at beginning of year.
Received during year
Disposed of during year
On hand at end of year

1926

236
894
813
317

1927

1928

1929

317

316

422

1,623
1,624

2,221
2,115

1,961
2,071

316

422

312

1930
312
2,224
2,150
386

Taking the number of attorneys employed into consideration,
there was an increase in per capita production of about 6 per cent.
The number of cases disposed of is greater than for any year in the
history of the division.
Civil division.—The civil division, in cooperation with the Department of Justice and the various United States attorneys, handles all
civil internal revenue cases arising in the Federal district courts, the
United States Court of Claims, and the Supreme Court of the District of Columbia, together with a limited number of cases originating
in State courts.
WhUe the Department of Justice and the United States attorneys
acting under its jurisdiction are charged with the responsibility for
the conduct of this litigation, they welcome and encourage the assistance of the General Counsel's Office in the preparation of pleaduigs,
the assembling of evidence, the preparation of briefs, and "the actual
trial or argument of cases in court.
The number of civil internal revenue tax cases decided by the Federal courts during the year 1930 was 382. Of these, 257 were decided
for the Government, 118 against the Government, and 7 partly for
the Government and partly for the taxpayer.
The number of civil cases pending on July 1, 1930, was 3,963 compared with 3,776 on July 1, 1929. During the year 1,783 new civU
cases were received and 1,596 civil cases were closed. Offers in compromise of pending suits received during the year numbered 126.
Compromise cases disposed of, including those pending at the beginning of the fiscal year, numbered 111, of which 71 were accepted and




219

SECRETARY OF THE TREASURY

40 rejected. The total amount of taxes claimed, in these compromises was $5,608,280.35, and $256,795.10 was accepted in lieu thereof.
In order to bring about closer cooperation with the United States
attorneys, collectors of internal revenue, and revenue agents in the
handling of Federal tax matters, the burea^ has established branch
offices of the General Counsel's Office in the field. At the beginning
of the fiscal year legal representatives of the bureau were permanently
assigned to New York, Chicago, Pittsburgh, Boston, Miami, Los
Angeles, Seattle, and St. Paul.
Penal division.—Cases handled by the penal division are classified
as (1) interpretative, and (2) law cases. These are subdivided so
that under each classification there are {a) income tax cases, and (6)
miscellaneous tax cases, the latter involving a large variety of taxes,
such as estate, gift, tobacco, admissions, and excise taxes.
The following table shows the work of the division during the last
two fiscal years:
Cases received and disposed of by the penal divisiori during ihe fiscal years 1929
and 1930
Cases

Pending at beginning of year
Received
.^
Under consideration
Disposed of

_.
,

Pending at end of year

1929

1930

Increase
(+) or decrease (—)

699
1,971

1,211
1,180

+512
-791

2,670
1,459

2,391
1,257

-279
-202

1,211

1,134

-77

The division continued to handle an additional class of work,
namely. Board of Tax Appeals cases involving fraud penalties. Special effort was made during the year finally to dispose of the older
cases, both those which had been in the division longest and those
involving the earlier tax years. This effort has been successful and a
considerable number of the older cases have now been closed. However, certain cases of this character, such as those in litigation, can not
finally be. disposed of until the litigation ends.
Review division.—During the entire fiscal year the work of this
division consisted of two distiuct classes; one, the review of refunds,
credits, and abatements of various kinds of internal revenue taxes
where the amounts exceeded $20,000 for the purpose of preparing the
public decisions required by Treasury Decision 4264 and the reports
to the Joint Congressional Committee on Internal Revenue Taxation
required by section 710 of the revenue act of 1928; and the other,
the review of cases pending before the Board of Tax Appeals for the
purpose of recommending settlement or defense. The first class of




220

REPORT ON THE FINANCES

work was handled by the claims section and the second by the adjustment section of this division.
During the year 1,603 cases were disposed of and in such cases
recommendations were made for the approval of certificates of overassessment totaling $203,470,459.47. In 108 of. the cases in which
overassessments were prepared, reductions were effected, totaling
$7,942,613.63.
Duruig the year public decisions under Treasury Decision 4264
were promulgated in 991 cases and memoranda submitted to the
joint congressional committee under the provisions of section 710
of the revenue act of 1928 in 144 cases.
During the year, the adjustment section considered and disposed
of 1,373 cases, of which 1,213 were disposed of on their merits. Of
these 1,213 cases, 690 were recommended for settlement and 523 were
recommended for defense. Deficiencies proposed in cases settled
were in excess of $36,000,000 whUe in the cases recommended for
defense the deficiencies proposed were in excess of $63,000,000.
I t has been the consistent practice of this division to hold conferences with the taxpayers and in a great majority of the cases such
conferences were held. The taxpayer is always afforded an opportunity to be heard before this division and in those rare instances
where it has been impracticable to hold a conference questions
presented in the case are considered on the briefs.
Administrative division.—The activities of the adininistrative division include the review of offers in compromise and the holding of
conferences on protested cases. The division is charged with the
supervision of the personnel, library, manuscripts, maU, and records,
and devises and inaugurates methods of office procedure, assembles
and reviews efficiency ratings, interviews applicants, and performs
other varied and miscellaneous duties pertaining to the work of the
General Counsel's Office.




MINT BUREAU

. Institutions of the mint service
During the fiscal year 1930, 10 mint service institutions were in
operation—coinage mints at PhUadelphia, San Francisco, and Denver; assay office at New York, which makes large sales of fine gold
bars; mints at New Orleans and Carson City conducted as assay
offices; and assay offices at Boise, Helena, Seattle, and Salt Lake City.
The six last-named institutions are, in effect, bullion purchasing agencies for the large institutions and also serve the public by making
assays of ores and buUion. Electrolytic refineries are operated at the
New York, Denver, and San Francisco institutions.
Coinage
Continued large demand for 1-cent and 5-cent coins, with the usual
output of subsidiary sUver coins, featured the fiscal year 1930. Overtime operation was required at the Philadelphia mint to meet this
demand^ but of shorter duration than during the prior fiscal year
because of improvements made in operating processes. The only
gold coinage was made at Philadelphia and consisted of $1,330,000 in
quarter eagles ($2.50 pieces) to meet the usual Christmas demand.
Most of these smaU gold coins quickly return to vaults after Christmas.
Their undesirabUity for circulation purposes, demonstrated through
a series of years, resulted in legislation (act of April 11, 1930) discontinuing both their coinage and issue by the Treasury after the date of
the act.
Total domestic and foreign coinage amounted to 402,952,200 pieces
as compared with 408,301,350 pieces for the preceding year.
Domestic coinage executed during the fiscal years 1929 and 1930
1930
Gold...
-.Subsidiary silver
Nickels
Cents.-

$1,330,000
9,177,500
2,864,460
2,906, 230
16, 278,180
• 399,467, 200

Total amount
Total number of pieces.

$39,945,000
• 7,488, 700
1,438, 700
2, 786, 650
51, 669,050
361, 650, 350

Foreign coins were executed at the PhUadelphia mint and amounted
to 3,485,000 pieces as compared with 46,651,000 pieces in the fiscal
year 1929.
Foreign coinage executed during the fiscal year 1930
[Number of pieces]
Total

Silver

Nickel

Bronze

Nicaragua..
Venezuela
Costa Rica.

1,060,000
425,000
2,000,000

210,000
425,000

100,000

Total.

3,485,000

635,000

100,000




750,000
2.000.000

221

2, 750, 000

222

REPORT ON T H E FINANCES

Gold and silver operations
Gold receipts and transfers, as summarized in the following table,
totaled $457,045,562.62 for the fiscal year 1930, compared with
$503,702,578.14 for 1929.
Gold receipts and transfers during the fiscal years 1929 and 1930

Acquired by mint service institutions..
U. S. coin received for recoinage
Transfers between mint oflaces

$315,607,366.83 $249,716,846.02
1, 663,787. 66
2, 589, 765. 56
139, 774,408.13 251, 395,967. 56

Total receipts and transfers by mint service institutions.

457,045, 562. 62

503, 702, 578.14

Receipts of purchased silver during the fiscal year 1930 totaled
^4,491,615.09 fine ounces, the average cost of which was 46.69-1- cents
per ounce, total cost being $2,097,304.94. Of the 4,491,615.09 fine
ounces, 1,483,691.88 fine ounces were sUver contained in gold deposits.
SUver receipts, as summarized in the following table, totaled
$10,035,781.97 for the fiscal year 1930, compared with $9,465,390.36
for 1929.
Silver receipts and transfers during the fiscal years 1929 and 1930
[In fine ounces]
1930
Purchased
Received in exchange for bars bearing Government stamp
U. S. coin received for recoinage
Deposited in trust by other governments
Transfers between mint service institutions
Total receipts and transfers by mint service institutions

4,491,615.09
1,763, 551.62
2,853,484. 77
136, 624.29
790, 506. 20
10,036,781.97

1929
2,469,942. 50
1,401,825. 65
2, 524,217. 27
1,433,334.62
1,636,070.32
9,466,390.36

The New York market price of silver during the fiscal year 1930
averaged $0.46291; the lowest price was $0.33250 on June 21, 1930,
.the lowest ever recorded, and the highest price $0,535 on July 19,1929.
Lindbergh medal
By the act approved May 24, 1928, Congress authorized the presentation of a gold medal to Col. Charles A. Lindbergh to commemorate his flight in the Spirit of St. Louis from New York to Paris, May
20 to 21, 1927. The obverse of the medal shows the head of Colonel
Lindbergh wearing the helmet of an aviator. The reverse shows a
flying eagle, typifying the airplane, and the sun and stars, syrnbolizing the flight through day and night. The medal was designed by
Mrs. Laura Gardin Fraser, sculptress, New York City.




SECRETARY OF T H E TREASURY

223

Refineries
The mint service refineries that are operated at New York, Denver,
and San Francisco produced 2,755,400 fine ounces (94.47 tons) of electrolytically refined gold during the past fiscal 3^ear, which compares
with 98.37 tons in the prior year; and 3,156,096 fine ounces (108.2
tons) of electrolytically refined silver, which compares with 113.5
tons during the prior year.
The stock of gold and silver in unrefined bullion on hand at the
end of the fiscal year was 440 tons, an increase of about 28 tons as
compared with the prior year reduction of about 19 tons. The Denver refinery operated only during the last half of the fiscal year,
as during the prior year.
Additions and improvements
The following new and improved machinery and devices and
improved operating methods were introduced in the mint institutions
during the fiscal year under review.
New and improved molds for minor coinage ingots were adopted
in the melting and refining department of the mint at Philadelphia.
The lock on these molds has a two-bearing surface, which permits
the mold to be tightly locked, and eliminates, to a great extent, fins on
the ingots. The shape of the molds has been changed. The long
tapering point has been reduced to a taper of one-half inch instead of
the wedge shape. The device permits an increase of about 2 pounds
in the weight of the ingot, and effects a material saving in scrap.
While the crucibles now being purchased are superior in quality
to those available in recent years, experiments made to test the life of
the crucibles resulted in obtaining 25 per cent greater service than
heretofore.
I t has also been demonstrated that the use of powdered coke
instead of charcoal on nickel melts prevents oxidation, stays on. the
melt better, and in general is more satisfactory than charcoal.
The grinding device, built in the Philadelphia mint shops, for
grinding rather than filing the edges of silver ingots, has proved to be
so satisfactory that hand filing has been: discontinued. This improved method has been used fpr grinding minor coinage ingots for
some years past, but many changes had to be made in the method
before applying it to silver, to safeguard the silver filings.
In the mint at Denver the structural steel hood erected over the
melting furnaces of the refinery melting room in connection with
improvements in flues and dust setthng devices has proved efficient
in saving metallic values.
12101—31

17




224

REPORT ON T H E FINANCES

The new type of melting furnaces installed, using natural gas, insulation against radiation of heat, and preheating of air from waste heat,
has resulted in economy in the use of fuel in the increased production
of ingots. The melting time has been reduced and the service life
of furnace linings has been increased.
Rectangular precipitating and washing tanks have been replaced
with round tanks of Oregon cedar, impregnated with paraffin, which
prevents leakage and improves service conditions.
Chrome-nickel alloys are now used in the cast iron ingot molds,
producing fine grain castings, free from blow holes.
An improved reviewing belt, designed and constructed in the
machinery department of the Denver mint, has been installed in the
coin press room of that institution.
Gold and silver in the United States
Stock of coin and monetary bullion in the United States.—On June 30,
1930, the estimated stock of domestic coin in the United States was
$2,473,244,452, of which $1,496,305,505 was gold, $539,959,520
standard silver dollars, $310,978,375 subsidiary silver coin, and
$126,001,052 minor coin.
The stock of gold bullion in the mints, assay offices, and Federal
reserve banks on the same date was valued at $3,038,560,201, an increase during the year of $122,098,265; the stock of silver bullion in
the Treasury was 11,129,557.07 fine ounces, an increase of 697,727.14
fine ounces.
Production of gold and silver.—Domestic gold production during the
calendar year 1929 was $45,651,400, as compared with $46,165,400
in 1928. The output has declined to about 45 per cent of that for
the record year 1915, when the total was $101,035,700.
Silver of domestic production during 1929 totaled 61,327,868
ounces/valued at $32,687,754; this compares with 58,462,507 ounces,
valued at $34,200,567, for 1928, and with the record production of
1915, 74,961,075 fine ounces, valued at $37,397,300.
Industrial consumption of gold and silver.—Gold consumption in
the industrial arts during the calendar year 1929 is estimated at
$56,903,667, of which $24,873,136 was new material.
Silver used in the arts is estimated at 42,359,082 fine ounces, of
which 30,977,559 fine ounces was new material.
As compared with the prior year, silver consumption was about
6,810,000 ounces more, and gold consumption increased about
$323,000.
Net import and export of domestic gold coin.—The net import of
domestic gold coin during the fiscal year 1930, was $92,264,082;
during the prior fiscal year there was a net import of $45,065,099.




225

SECRETARY OF THE TREASURY

During the 16 fiscal years 1915-1930, since the opening of the World
War, there has been a net export of $1,022,629,070. Since 1870 the
net export of domestic gold coin has been $1,900,278,134.
Appropriations, expenses, income, etc.
Appropriations available for mint service during the fiscal year 1930
totaled $1,710,040 and reimbursements to appropriations for services
rendered amounted to $37,025.69, making a total of $1,747,065.69.
Expenses amounted to $1,709,164.49, of which $1,640,286.24 was
chargeable to appropriations and $68,878.25 chargeable to income.
The income realized by the Treasury from the mint service aggregated $8,461,402.73, of which $7,495,396.37 was seigniorage. The
seigniorage on subsidiary silver coin was $3,121,940.33; on nickel coin,
$2,390,200.61; and on bronze coin, $2,433,255.43.
Summary of appropriations, expenses, and balances, fiscal year 1930
Salaries and
expenses

Item

Transportation of
bullion

Total

$20,000. 00

$1,710,040.00
37, 025. 69

20, 000. 00
14,891.11

1, 747, 065. 69
1, 640, 286. 24

101, 670. 56

Total available
Expenses
_.

$1,690,040. 00
37,025. 69
1, 727, 065. 69
1, 625, 395.13

Appropriations
Earnings credited to appropriations

5,108.89

106, 779.45

Unexpended balances

The number and value of deposits, transfers, gross income, and
expenses for the fiscal year 1930, and the number/ of employees on
June 30, 1930, at each institution, are shown in the following table:
Deposits and transfers of gold and silver, income, expense, and employees, by
institutions, fiscal year 1930
Number of
deposits
of gold
and
silver

Institution

Number of Coining v a l u e
mint
of gold a n d
service silver deposits
t r a n s - a n d transfers
fers

•
Gross income

Gross
expense

Excess of income ( + ) or of
expense ( - )

Employees,
June
30,1930

Philadelphia..
San Francisco
Denver
New York _
N e w Orleans
Carson City
Boise
Helena
Seattle
Salt L a k e C i t y . .

6,875 22,966 $147, 614,448.10 $5, 360, 302. 87
8,902
917 168, 945, 226. 72 1, 626,143. 73
2,266
105 13, 244, 796.04 1, 203,839.05
750 130,166, 324. 03 271,031.33
15, 290
295
387,863. 30
515. 57
180
108, 576. 01
349. 63
226
348,464. 39
959. 34
130
60, 608.18
525. 56
1,648
14
8, 739, 229. 92
4, 210. 52
49
21,906. 30
296. 51

$758,116. 93 + $ 4 , 602,185. 94
285,909. 53 + 1 , 340, 234. 20
+986, 815.14
217,023. 91
- 7 4 , 328. 28
345, 359. 61
-13,761.25
14, 276.82
- 5 , 727.16
6, 076. 69
- 6 , 8 7 0 . 95
7, 830. 29
-6,036.11
6, 561. 67
- 2 3 , 8 0 4 . 25
28,014. 77
- 4 , 0 2 0 . 70
4, 317. 21

291
114
83
120
7
3
4
3
11
2

Total
B u r e a u of t h e M i n t

35,861 24, 752 469,637,442.99 8,468,174. 01 1, 673,487. 43 + 6 , 794, 686. 58
- 4 2 , 448. 34
42,448. 34

638
14

35,861 24,752 469, 637,442. 99 8,468,174.01 1,715, 936. 77 + 6 , 752,238. 24

652

36,461 41,841 512, 544,444.96 5, 724,868. 92 1, 761,385. 30 +3,963,483. 62

659

G r a n d total,
year 1930
Fiscal year 1929

.

fiscal




PERSONNEL CLASSIFICATION OFFICER

Appeals and classification sheets
The activities of the personnel classification officer during the
fiscal year 1930 are summarized as follows:
Number Number
of persons
of appeals i n v o l v e d
Carried over from fiscal year 1929
P r e s e n t e d d u r i n g fiscal year 1930:
Individual...
Group.

175

T o t a l t o b e disposed of

372
276 648
1,048

•

T o t a l acted on:
1929
1930
._
Carried over to flscal year 1931:
1929
1930
.

.

-

-

.

-

181

7
4

.

124

44
137

Disapproved:
1929
1930

603

47
77

Approved:.
1929
1930

Canceled:
1929
1930-

400

372
56 428

11

98
218

316

215
364 579

77
210 287

185
284 469

49
99

148

108
261 369
58
4

62

During the past fiscal year approximately 2,850 classification sheets
were received in the office of the chief clerk. These sheets represented
requests for increase in grade, change in duties, reassignment of duties,
reorganization, and new assignment. They also represented in part
new appointments to the service and, in some instances, requests from
the Personnel Classification Board for description of duties to agree
with those shown on appeals then pending before the board. In each
case the necessary examination was made to determine that an accurate job description was given and in those cases where an increase in
grade was requested a desk investigation was made in order that the
sheets could be forwarded to the board with appropriate recommendations.
Efiiciency ratings
The average efficiency rating of .8,899 employees of the Treasury
departmental service as of May 15, 1930, was 88.4 per cent.
Special instructions were issued to the heads of bureaus and offices
and chiefs of divisions. Secretary's office, concerning the preparation
226




SECRETARY OF THE TREASURY

227

of efficiency ratings and the necessity for the exercise of the greatest
care in the preparation of graphic rating sheets, especially in view of
the department's policy of giving first consideration in the matter
of promotion to those ^'furthest removed from their eligible salary
according to the most recent efficiency rating." The attention of
review boards was particularly invited to the necessity for great care
in ^merging groups of employees in order that the employees in one
section or division of an office would not be placed too high or too
low as related to the employees in the balance of the organization.




BUREAU OF PROHIBITION

Organization and procedure
During the year two laws were enacted affecting the Bureau of
Prohibition in the Treasury Department. The Porter bill, approved
June 14, 1930, separated the enforcement of the narcotic laws from
the Bureau of Prohibition and created a Bureau of Narcotics to take
over these activities. The Williamson bill, approved May 27, 1930,
created a Bureau of Prohibition in the Department of Justice, and
imposed upon the Attorney General the duty of enforcing the penal
provisions of the prohibition laws, of acting jointly with the Secretary of the Treasury in prescribing regulations relating to permits
and in acting upon applications for permits under the national prohibition act. The Williamson bill changed the designation of the
Bureau of Prohibition in the Treasury Department to the Bureau of
Industrial Alcohol. Both bills became effective on July 1, 1930.
Since it was determined that the supply of medicinal spirits in
bonded warehouses on January 1, 1930, was not sufficient to meet
the requirements for the next five years; and inasmuch as the United
States Pharmacopoeia and the act authorizing the bottling of spirits
in bond require whisky to be 4 years old before it is bottled, permits
were'issued for the manufacture during the permit year ending
December 31, 1930, of 2,104,000 proof gallons of whisky and also
50,000 proof gallons of brandy and 50,000 proof gallons of rum for
medicinal and general nonbeverage use.
The manufacture of whisky was aUotted to 12 concentration warehousemen who were distillers or successors to distillers, and 7 distilleries. were operated during the year, producing 1,998,947.6 tax
gallons. These were the first spirits produced for medicinal purposes
since January, 1922.
A division of public relations, functioning under a special appropriation made by Congress, was established during the year for the purpose
of gathering and disseminating official information relating to law
observance and enforcement. An extensive survey of bureau activities was made as a basis for the publication of official monographs
of interest to the public and of special value in Federal and State
official channels. The five monographs published since January 1
are as follows:
Copies

Tlie training of enforcement personnel
Industrial alcohol- _..
State cooperation1
Public cooperation
Padlock procedure
228




125, 000
75, 000
150, 000
100, 000
50, 000

SECRETARY OF THE TREASURY

229

The monographs were distributed to officials of every rank throughout the Federal service, particularly to those Federal agencies having
duties closely coordinated with those of the Treasury Department
and the Department of Justice; and to State officials, from the
governor down through leading judicial, county, municipal, and en|orcement circles. The information was given further broad distribution through public and private groups, and the press.
The instruction of agents and inspectors in the field was continued
as during the previous year. Two lecturers visited the districts and
instructed assembled officers; by February 1 they had covered the
entire country, and every inexperienced agent, as well as others, had
received the instructions. The results were highly gratifying. An
esprit de corps was developed; administrative officials noticed a
marked improvement in the quality of work; and district attorneys
commented on the better preparation of cases for prosecution.
Having aroused a spirit of professionalism toward the work and a
desire for more intensive instruction, the third step in the instructional
program was taken. Correspondence courses in Constitution and
law and criminal investigation were instituted. These courses produced excellent results in the training of the personnel, 1,875 of whom
were taking them for the 4-month period ended June 30, 1930.
Activities
Prohibition agents made 68,173 arrests during the fiscal year 1930,.
and seized 8,633 automobiles valued at $3,290,831, and 64 boats
valued at $687,480. As the result of the work of such agents, prohibition cases against 72,673 individuals were terminated in Federal
courts, resulting in 54,085 convictions, of which number 22,405 were
given jail sentences. The average jail sentence based pn total number
of convictions was 94.3 days and the average sentence for each man
sent to jail was 227.7 days. The courts imposed sentences aggregating
14,172 years and fines amounting to $6,678,733. In addition to these
sentences the courts suspended, paroled, and probated sentences
amounting to 5,305 years and $237,912.
Federal prohibition agents also made the arrests or assisted in
obtaining the evidence in a large number of cases against individuals
prosecuted in State courts. Complete reports showing the total
number of such cases have not been received. Reports which have
been received coyer 10,493 such cases. There were 8,499 cases terminated, and 7,609 convictions obtained. Sentences amounting to
1,563 years in prison and $734,891 in fines were imposed. As a result
of the prohibition cases prosecuted in Federal courts the sum of
$4,709,852 was collected in fines and penalties and covered into the
Treasury.




230

REPORT ON THE FINANCES

The legal work of the bureau has been affected within the past year
by a number of important and far-reaching decisions of the United
States Supreme Court. On May 26, 1930, five decisions were rendered by the Supreme Court on cases involving the renewal or continuation of certain classes of permits. They provide, in effect, that
where there are words of indefinite continuation inserted in the body^
of a permit such permit cannot be withdrawn by regulations, or by
administrative action, or in any other way, save by the surrender of
the permit by the permittee, or for failure to maintain a supporting
bond, or by revocation for violation of the national prohibition act or
regulations made pursuant thereto, and in the way provided by
sections 5 and 9 of the national prohibition act. These decisions will
have the effect of putting into the continuing class a number of permits
that should belong to the annually renewing class. B u t since these
permits are subject to revocation for cause, no serious harm will be
done to prohibition enforcement.
..
The prosecution of the work in asserting, collecting, and bringing
suit for internal revenue taxes and penalties where there are violations
of the national prohibition act has been somewhat retarded during
the year by a decision of the Circuit Court of Appeals for the Fifth
Circuit. This decision practically declares section 35 of the act unconstitutional in that it holds that no civil suit for taxes and penalties
may be brought where there has been a prosecution for a criminal
offense. This suit is pending appeal in the United States Supreme
Court, and will probably be decided at the next term.
The technical division conducts the chemical work of the Bureau
of Prohibition as well as work of this character for the Bureau of ,
Internal Revenue in Washington and supervises generally the activities of the chemical laboratories of the Bureau of Prohibition in the
field. I t has supervision also of work relating to the permissive use
of intoxicating liquors under the national prohibition act. The
administration of certain features of the general internal revenue
laws relating to bonded warehouses and the work in connection with
the concentration of distilled spirits in accordance with the provisions
of the act of February 17, 1922, are under its jurisdiction.
The modification of the formulas for specially denatured alcohol,
which is of greatest importance to both industry and the enforcement
of the national prohibition act, was studied continuously in the
Washington laboratory.. Substantial and important results were
obtained in eliminating weaker formulas from certain lines of industry,
thus reducing diversion and assisting the legitimate industry to
secure denatured alcohol better adapted to its needs. The modification of specially denatured alcohol Formula No. 44-A during the
past year has practically eliminated the diversion of lacquer thinners
and solvents. Research work is being contuiued with the hope of




SECRETARY OF T H E TREASURY

231

further strengthening the specially denatured alcohol formulas not
only with the view to safeguarding the alcohol but also for the purpose of making these formulas more adaptable for use in the arts
and industries. The policy of exercising extreme care in approving
preparations manufactured with specially denatured alcohol has also
substantially reduced the illegal distiUation of alcoholic preparations
for the purpose of obtaining potable alcohol.
There are at present only two completely denatured alcohol
formulas authorized and the reports received from the field officers
throughout the fiscal year indicate that practically no completely
denatured alcohol is being diverted for Ulegal purposes. The policy
of withdrawing certain specially denatured alcohol formulas and the
substitution of others for use in certain lines of industry has continued
to benefit the industriies involved and to reduce substantially diversion
to Ulegal purposes.
After considerable research during the past year a petroleum distUlate known as calol ethatate was required as a denaturant for
ethyl acetate. This denaturant, in conjunction with restrictive
measures relative to the sale and distribution of ethyl acetate, has
practically eliminated the diversion of this product for illegal purposes.
The policy of limiting the production of industrial alcohol to the
actual need of legitimate industry, initiated January 1, 1928, has
proved to be successful. Each industrial alcohol plant is allotted a
fixed quota of the total alcohol to be produced, with a provision that
only 40 per cent of the total quota for the year can be produced
during the first six months of the calendar year provided that legitimate industries do not require an excess pf that quantity. This
program during the past fiscal year has been of great benefit to the
alcohol industry and the trade by preventing an overproduction
of alcohol and thus avoiding unstable conditions in the trade in
regard to their raw material, and has reduced the diversion of
industrial alcohol for illegal purposes by eliminating stocks in excess
of legitimate requirements.
There has been a substantial increase during the year in the quantity of completely denatured alcohol manufactured, which can be
accounted for largely by increase in the number of automobiles
registered in the United States, together with climatic conditions
during the past winter, which required additional completely denatured alcohol for antifreeze purposes. There has been a considerable
decrease in the production of specially denatured alcohol during the .
year, due largely to the business depression and to better supervision
over the manufacture and use of specially denatured alcohol.
During the latter part of the fiscal year, a permanent permit was
granted to a large chemical corporation for the production on a
commercial scale of synthetic ethyl alcohol from ethylene gas. Under



232

REPORT ON THE FINANCES

this permit the company has already produced a large quantity of
ethyl alcohol. The synthetic ethyl alcohol is sufficiently pure to be
used in practically 90 per cent of the preparations and processes now
using ethyl alcohol produced by the fermentation of blackstrap
molasses or grain. If necessary, it could be sufficiently purified to
be used in any preparations or processes now using alcohol produced
by fermentation. . The cost figures of production are not known, but
the mechanical difficulties of producing synthetic ethyl alcohol from
ethylene apparently have been solved. This is probably the most
interesting development in the industrial alcohol trade that has
occurred for ipany years.
During the fiscal year 1930 there were produced 191,859,342.42
proof gallons of alcohol, a decrease of 8,972,708.66 proof gallons, compared with the quantity produced during the preceding year. This
decrease is attributable to the business recession in those industries
using alcohol as a raw chemical, and to the bureau's policy of limiting
production to actual needs of industry. There were withdrawn from
warehouse on payment of tax, 8,250,482.34 proof gallons of alcohol,
a decrease of 641,765.43 proof gallons, compared with the preceding
year; and there were withdrawn for tax-free purposes, including
withdrawals for denaturation, for export, and for use of the United
States hospitals, laboratories, colleges, and other educational institutions, a total of 184,760,197.83 proof gallons of alcohol, a decrease
of 890,710.58 proof gallons compared with the preceding year.
There were withdraAvn tax paid from distillery, and general and
special bonded warehouses, 1,471,881.2 taxable gallons of distilled
spirits (including brandy) other than alcohol, a decrease of 144,776.9
taxable gallons compared with the preceding year. There were two
rum distilleries operating during the year, producing a total of
982,781.7 taxable gallons of ruin; 5,825.2 gallons of this amount were
produced for medicinal purposes and 976,956.5 gallons were produced
for denaturation and exportation, a decrease of 250,457.4 taxable
gallons compared with the previous year.
Twenty-five fruit-brandy distilleries operated during the year,
producing a total of 416,043 taxable gallons of brandy; 50,214.9
gallons of this amount were produced for medicinal purposes and
365,828.1 taxable gallons were produced for the fortification of wines,
which is a. decrease of 828,464.1 taxable gallons compared with the
previous year. This decrease is attributable to the large decrease in
the production of wine during the year.
There were 105,787,537.72 wine gallons of denatured alcohol produced, of which 58,141,740.88 wine gallons were completely denatured
and 47,645,796.84 wine gallons were specially denatured, compared
with 106,960,458.07 wine gallons of denatured alcohol produced during
the previous year, of which 52,405, 451.92 wine gallons were completely
denatured and 54,555,006.15 wine gallons were specially denatured.



SECRETARY OF T H E TREASURY

233

During the year 436 wineries and storerooms were operated, compared with 509 such premises operated during the preceding year.
There were 61 premises discontinued and 10 premises established, a
net decrease of 51 premises. The total production of wine amounted
to 3,154,866.47 gallons, a decrease of 8,227,123.96 gallons compared
with the preceding year. This large decrease in the production of
wine was due largely to overproduction during the previous year, a
smaller grape crop in California in 1929 than in 1928, and to restrictions imposed during the year to prevent diversion of wine withdrawn for the manufacture of wine tonics and vinegar.
Personnel
The past fiscal year brought to practical completion the process
of placing the entire field service of the bureau in the classified civil
service subject to competitive examination as provided by the act of
March 3, 1927. While it has taken some time to complete this
undertaking, due to the unusual character of the civil service examin ation program which involved an exhaustive investigation into the
character and fitness of each competitor, the marked benefits which
have accrued through stabilization of the seryice, and a higher standard and morale, have more than justified the efforts and expense
involved and fulfilled the expectation of those 'interested in the
improvement of personnel in the prohibition service.
The closing month of the year was largely concerned with the task
of separating the personnel of the Bureau of Prohibition in accordance
with the provisions of the act of Congress approved May 27, 1930,
which transferred to the Department of Justice the enforcement of
the penal provisions of the national prohibition act and created ih
that department a Bureau of Prohibition. An actual survey of the
field service was conducted by representatives of the Department
of Justice and the Bureau of Prohibition, Treasury Departinent, in
accordance with this act, which provided that the apportionment of
personnel should be made by joint agreement between the Secretary
of the Treasury and the Attorney General. This surve}^ provided
the basis for the reallocation of personnel on July 1, 1930, between
the Bureau of Prohibition, Department of Justice, and the Bureau
of Industrial Alcohol.
By act of Congress approved June 14, 1930, the narcotic division
of the Bureau of Prohibition, Treasury Department, was abolished
and officers and employees thereof transferred on July 1, 1930, to the
new^ Bureau of Narcotics, Treasury Departinent, created by the act.
The transfer of these employees was a simple problem for the reason
that the narcotic division had been administered as a separate unit,
and, with the exception of a few employees in the central office in




234

REPORT ON THE FINANCES

Washington whose work was not wholly concerned with narcotic
administration, it was possible to transfer the division as an integral
unit.
At the close of the fiscal year there were 339 permanent and 21
teniporary employees on the bureau rolls in the office at Washington
and 4,361 permanent and 37 temporary employees in the field service
of the bureau, making a total of 4,700 permanent and 58 temporary
employees on the rolls of the Bureau of Prohibition on June 30, 1930.
Of this total 2,668 employees were transferred to the Bureau of Prohibition, Department of Justice, on July 1 and 425 employees to the
Bureau of Narcotics, Treasury Department, on the same date, leaving
a force of 1,665 employees in the Bureau of Industrial Alcohol.
Narcotics
On June 30, 1930, there were 330,803 registrations under the Harrison narcotic law, as amended, 287 as importers and manufacturers,
1,725 as wholesale dealers, 53,118 as retail dealers, 148,079 as practitioners, and 127,59,4 as dealers in and manufacturers of untaxed narcotic preparations, the latter number including registrants not required
to pay special tax by reason of paying another tax under the act.
During the year 127,187)^ pounds of opium and 244,705^ pounds of
coca leaves were imported, while during the previous year, 144,925^
pounds of opium and 242,834 pounds of coca leaves were imported, a
decrease of 17,738 pounds of opium and an increase of 1,871K pounds
of coca leaves. In this connection attention is invited to the fact that
only narcotic drugs in the form of crude opium and coca leaves may
lawfully be imported or brought into the United States, and then only
in such quantities as are found to be necessary for medicinal and other
legitimate needs. Exports of narcotic drugs of all kinds amounted to
6,742 ounces in 1929 and 6,466 ounces in 1930, a decrease of 276 ounces.
The net aggregate quantity of pure drugs of all kinds contained in
products sold by manufacturers to domestic purchasers during the
fiscal year 1930 amounted to 406,038 ounces. The drugs exported involved 88,134 taxable ounces of products, and those sold to domestic
purchasers involved 4,522,044 taxable ounces of products. Tax is
paid by stamps at the rate of 1 cent per ounce or fraction thereof for
the entire contents of each package or bottle. A compound or preparation containing a narcotic drug in a quantity exceeding the statutory
exemption is taxed the same as the pure drug.
The foUowing table shows the number of cases of violation by
registered and nonregistered persons of the narcotic laws, including
the act of January 17, 1914, which regulates the manufacture of smoking opium; and the cases disposed of during the year:




SECRETARY OF THE TREASURY

235

Violations of the narcotic laws and the cases disposed of during the fiscal year 1930
U n d e r narcotic laws
other t h a n t h e act of
J a n . 17,1914
Cases

Under
Actof J a n .
. 17, 1914

Registered
persons

Nonregistered persons

1,775
2,222

2,483
7,044

55
4

3,997

9,527

59

4,756
160
16
2,264

4
4

.

202
9
1,098
1,090

T o t a l disposed of

2, 399

.7,196

27

P e n d i n g J u n e 30, 1930.

1,598

2, 331

32

P e n d i n g J u l y 1, 1929
R e p o r t e d d u r i n g 1930

.-_

-.

T o t a l to be disposed of
ConvictedAcquitted
Compromised
Dropped

.

-.
'.
_

.

-_
1..
__

19

There were 3,373 cases dropped and 3,961 cases were pending at the
close of the year.
A total of 4,962 convictions under the narcotic laws including the
smoking opium act was made, for which the courts imposed sentences
aggregating 11,832 years, 6 months, and 29 days. Fines imposed
amounted to $235,791.81. There were 1,114 cases compromised,
the aggregate amount collected being $57,086.81. A total of 9,270
cases of criminal character was reported, and 23,948 ounces of narcotic
drugs and preparations were seized or purchased as evidence through
enforcing these acts. "
The number of agents and inspectors in the narcotic field force
averaged 271. Certain improvements have been made during the year
in the procedure in field offices looking to increased efficiency and
greater enforcement results. A reorganization of the narcotic service,
both field and bureau, was begun,April 1, 1930, and was no.t fully
completed at the close of the fiscal year. Certain changes were made
in the headquarters offices and the territorial extent of some of the
field divisions, and a system for the more complete accounting for
all narcotic drugs seized or purchased as evidence was instituted.
The control of legal importation, manufacture, and distribution
appears to be reasonably effectual. The quantity of narcotic drugs of
domestic manufacture which is diverted to Ulicit use is comparatively
negligible. Smuggling and the subsequent illegal selling of opium,
morphine, heroin, and cocaine continue to be the principal enforcement
problem.




PUBLIC DEBT SERVICE

Division of Loans and Currency
This division is the active agent of the Secretary for the issue of
all public debt obligations of the United States and for conducting
transactions in such obligations after issue. It is also responsible for
the issue of bonds or other obligations of Porto Rico and the Philippine Islands, for which the Treasury Department acts as fiscal agent.
The division undertakes the safekeeping of public debt and insular
loan securities for certain Government offices. It also counts and
delivers to the destruction committee United States currency canceled as unfit and mutilated paper (spoilage, etc.) received from the
Division of Paper Custody and.the Bureau of Engraving and Printing.
Issue and retirement of securities.—The following is a summary of
the activities during the fiscal year in connection with the issue and
retirement of securities conducted through this division. Complete
details of all transactions in public debt securities are presented in
formal statements elsewhere in the report.
(Par value)
Registered

stock shipments to Federal reserve banks:
For exchange transactions
Allotment for original issue
Original issue by the division..
Securities issued on exchange..
Total securities issued and shipped.

Nonregistered

Total

$1, 620,104, 800. 00 $1, 620,104, 800. 00
1 3, 371,832,000. 00 3, 371,832,000.00
2 $1,568, 682,100.00
463,147,850. 00

4, 991,936, 800.00
10,071, 940. 00
38,088,950.00

4,991,936, 800.00
1, 578, 754, 040. 00
501, 236,800. 00

2, 031,829,950. 00

5,040,097,690. 00

7, 071,927, 640. 00

231.036,900. 00
2 1,428,157,965. 00

270,199.900.00
3,441,470. 50

501, 236,800. 00
1,431,599,436.60

RETIEEMENTS

Securities retired on exchange.
Securities cleared for redemption ^
Securities retired on other accounts (i. e.,
claims, credit, and exchange authorization
retirements)--.
Total securities retired

371,409,920. 00

13,120. 00

371,423,040. 00

2,030, 604,785. 00

273, 654,490. 50

2,304, 259, 275. 60

6, 231,322,440. 00

7,206, 698,140.00

108,147.000. 00

108,147,000.00

995, 629, 200. 00

1,001,644,925.00

•STOCK ACTIVITIES

Securities received from Bureau of Engraving
and Printing
'..
Securities restored to stock by Federal reserve
banks
_
•
Stock canceled and delivered to Register of
Treasury:
Securities
Detached matured coupons (5,643,260
pieces)
.:
.

2 1, 974,375, 700. 00

6, 015,726. 00

268, 587,044. 34

1 Includes Treasury bills available for either original issue or exchange.
2 Includes $1,387,500,000 special 1-day certiflcates of indebtedness,
s Represents face value of securities redeemed. .

236




268, 587,044. 34

237

SECRETARY OF THE TREASURY

Individual registered accounts activities.—In connection with public
debt registered issues, individual accounts are maintained and interest
is paid periodically in the form of checks. The accounts open June
30, 1930, were as follows:
Number
of
accounts
Interest-bearing loans:
Pre-war loans.._
_
Liberty and Treasury loans
Treasury notes...

Principal

13,458 $750,913, 250
891,190 2, 608,025,400
13
764,171,000

..-.

904,661 4,123,109,650
10, 261
2, 630,350

Noninterest-bearing loans. Liberty and Victory loans
Total open accounts

914,922

4,126, 640,000

There were 88,137 individual accounts closed for registered Liberty
bonds. Victory notes, and Treasury bonds, and 19,639 accounts were
decreased, representing the retirement of securities amounting to
$486,308,000 par value. In connection with the same loans, 76,363
new accounts amounting to $342,953,900 principal were opened.
Thirty-two thousand and sixty-eight changes of address for the maUing of interest checks were made on the registered accounts during
the year.
Interest on registered Liberty and Treasury bonds was paid on due
dates in the form of 1,784,547 checks, amounting to $109,789,599.51.
On registered securities of the pre-war: loans, 44,623 checks for
$15,635,185.50 were issued and there was certified to the Treasurer
interest payable amounting to $25,114,239.67 on registered Treasury
notes. There were receivecl from the Bureau of Engraving and
Printing 1,849,000 checks as stock, and there were canceled and
delivered to the destruction committee .stock consisting of 7,827
checks.
Claims.—Claims for relief on account of lost, stolen,, destroyed, and
mutilated securities handled by the division during the fiscal year
were as follows:
Number
Number of securi- Par amount
ties
of claims
of securities
(pieces)
Received
Settled:
By reissue or redemption of securities
By recovery of securities
By disallowance of claims
By other disposition (not dainis treatment)
Total settled




3,120

7,552

$984,749.39

1,783
181
138

4, 212
2,020
755
703

477, 404. 64
813, 635.00
32,115.00
3, 268. 00

3,071

7,690

1, 326,422. 64

238

RFPORT ON T H E FINANCES

Safe-keeping of securities.—^At the beginning of the year there were
securities amountuig to $738,689,600 in safe-keeping for various
Government offices, against which formal audited receipts were
outstanding. Throughout the year securities amounting to $274,642,800 were received for safe-keeping and receipts therefor issued,
and securities amounting to $152,343,300 were delivered from safekeeping upon the surrender bf outstanding receipts, leaving a balance
of securities amounting to $860,989,100 in safe-keeping June 30, 1930.
Mutilated paper and redeemed currency.—Mutilated paper verified
and delivered to the destruction committee consisted of 21,049,511
sheets and coupons, of which 20,809,212 sheets and coupons were
received from the Bureau of Engraving and Printing and 240,299
sheets from the Division of Paper Custody.
Redeemed currency counted and delivered to the destruction
committee during the year amounted to 815,553,186 pieces, representing $3,531,152,347.62, detailed as follows:
Number of
pieces

Face value

Old series currency retired from circulation m unfit

Total

67,035, 882
374, 918, 623
55, 030, 660
4,112
4,644

-

1, 773, 700, 591. 62

24, 000
73,000
67,819

.

$275,917, 325. 00
383,899, 019. 00
1,113,858,700.00
24, 500. 00
1, 047. 62

496,993,821

United States notes
Silver certificates
Gold certiflcates
Treasury notes
Fractional currency

1, 200, 000. 00
639, 500, 000. 00
678,190, 000. 00

Old series cmTency, reserve stock
United States notes
Gold certificates—
Gold to order certificates
Total.

.
.:

Total, old series

164, 819

1, 318, 890, 000. 00

497,158, 640

.-..•

3, 092,590, 591. 62

25,164, 549
288, 846, 007
4, 383,990

91, 678, 875. 00
288, 843, 931. 00
58,038,950. 00

New series currency retired from circulation as unfit
United States notes
Silver certificates 1
Gold certificates

__
_
.

Total, new series (unfit)
Grand total

.

_

..
. . . .

318, 394, 546

438, 561, 756. 00

815, 553,186

3, 531,152, 347. 62

1 Slight e.Kcess of pieces is due to redemption of exact half notes at half value.

Publicity.—The division maintains a maUing list, in addition to its
list of holders of registered securities, for the purpose of placing new
public debt offerings, notices of redemption, and such matters before
the public. Approximately 800,000 printed circulars were distributed
to the public during the year by this means.




239

SECRETARY OF THE TREASURY

Register of the Treasury
The function of retiring securities surrendered to the Treasury
Department is vested in the office of the Register of the Treasury.
I t is the Register's duty to certify regularly to the Comptroller General
as to the credits due the Treasurer of the United States for amounts
expended in the redemption of securities and also to establish the
credits due the Federal reserve banks and the Division of Loans and
Currency for securities forwarded by them for retirement on account
of exchanges, replacements, transfer of registration, etc.
In addition to the audit of securities and the maintenance of
accounts and records relating thereto, the register's office maintains
numerical registers which enable the department to furnish the public
with essential information relative to securities retired. Each bearer
security is recorded by its serial number, coded to give a complete
history of that document's retirement. Inquiries received from the
general public and the various agencies of the Federal Government
and answered during the fiscal year 1930 aggregated over 62,000
items.
The foUowing comparative statement sets forth by class of security,
number of pieces, and face value, the securities received, examined,
and filed during the fiscal years 1929 and 1930:
Securities received, examined, and filed in the register's ofiice during the fiscal years
1929 and 1930
1929

1930

Class of security
Pieces

Pieces

Amount

REDEEMED

Bearer
United States securities:
Pre-war loans
Libertyloans
Treasury bonds
Treasury notes
_.
Certificates ofindebtedness..
Treasury bills...
Treasury (war) savings securities
Interest coupons
_.
Securities not affecting public debt.
District of Columbia loans
Total-

77
$45, 610. 00
3, 358,468
957, 564,400. 00
1,403
12, 695,000.00
9,614
184, 950.050. 00
231, 712 1,861,026,700.00
348, 598
24,610,267

169
119, 993

$119, 770. 00
27,502,100.00

30,413
628, 201,900. 00
314, 537 2,191,467, 700.00
5,305
156,046,000. 00
252, 551
667,478. 68
461,780.50
610, 021,107. 62 1 19,203,476 1 494, 385,437. 36
1,050. 00

28,560,139 I 3,526,970,346.30

19,926,447

3,498,185,737.86

24
63,420.00
659, 298
290,159,700.00
174
16,527,000.00
90 2, 379,000,000.00
830,948
141,178, 650. 27
10
94.64

91
16,194
207
89
106,919

82,090. 00
3,373,550.00
21, 717,000.00
1,387,600,000.00
15,635,015. 38

Registered
United States securities:
Pre-war loans
Libertyloans
Treasury notes..
Certificates of indebtedness
Treasury (war) savings securitiesInterest checks (Liberty loans)
Total

1,490,644

Total, redeemed.
Footnote at end of table.

12101—31

2,826, 928,864. 91

123, 500 1,428,307, 655. 38

30,050, 683 6, 353, 899, 211. 21 20,049,947

^18




4,926,493, 393. 24

240

REPORT ON T H E FINANCES

Securities received, examined, and filed i n the register's ofiice during the fiscal years
1929 and 1930—Continued
1929

1930

Class of security
Pieces

Amount

Pieces

R E T I R E D ON ACCOUNT OF EX^CHANGES FOR
OTHER SECURITIES, ETC.

Bearer
U n i t e d States securities:
Pre-war l o a n s .
Libertyloans.
Treasury bonds
T r e a s u r y notes
First ZH per cent L i b e r t y loan i n t e r i m
certificates
—
S t a n d a r d full-paid i n t e r i m certificates...
Certificates o f i n d e b t e d n e s s .
T r e a s u r y bills
_
T r e a s u r y (war) savings securities
Securities n o t affectihg p u b l i c d e b t , insular possessions loans

631
687, 717
44, 010
34,758

$414, 380.00
666,993, 650. 00
149,418,000. 00
329,023, 700.00

1,158
621,161
53,417
71, 347

$704,950.00
448,152, 750.00
132, 342,000.00
495,974, 500.00

61

3, 800. 00

126, 376

1,462, 372,100. 00

49
2
97, 015
35
-1

3, 550. 00
2,100,000.00
959, 260, 500.00
2, 240,000. 00
-5.00

3,422

3, 345, 600. 00

2,134

2,134, 000.00

896,975

T o t a l . __

2, 510, 571,130.00

846, 317

2, 042, 912, 245.00

9,931
163, 575
9,399
5
737

55, 696, 650. 00
254,091, 650.00
47, 432, 650. 00
20, 517,000.00
186,425. 00

14, 887
166,181
12, 208
3
-16

85,901,000.00
414,907, 700. 00
68,026, 750. 00
30,000,000. 00
-76.00

Registered
U n i t e d States securities:
Pre-war loans
Liberty l o a n s . .
_.
Treasury bonds
T r e a s u r y notes
T r e a s u r y (war) savings securities
Securities n o t affecting p u b l i c d e b t ,
insular possessions loans

T o t a l , retired on account of exchanges,
etc
u
--

1,191

2, 503,000.00

2,031

3, 573,000. 00

184,838

Total.

380,427, 375. 00

195, 296

602,408, 375.00

1,081,813

2,890,998, 505.00

1,041,612

2, 645, 320. 620.00

158,639
893,522
146,284

86,275,850.00
215, 542, 700.00
886,248,700.00

-3,000.00
204,503,200.00
1,301,263,000.00
148,198,000.00
35.00
303,187,126.78.

U N I S S U E D STOCK R E T I R E D

Bearer
U n i t e d S t a t e s securities:
P r e - w a r loans
:..
Libertyloans
Certificates of i n d e b t e d n e s s
T r e a s u r y bills
T r e a s u r y (war) savings securities..
I n t e r e s t coupons

9,092,090

248,352,059.72

10,290,536

1,436,419,309.72

6, 739,141

1,957,148,361.78

148,688
462,872
43
1
20,568

703,220,800.00
2,066,443,700.00
81,200.00
N o value.
6,858,600.00

25
107
1

215,100.00
127,150.00
50,000.00

17,235

3,437,476.00

1,103

2,319,000.00

960

2,186,000.00

633,275

Total.

-4
341,495
244,158
16,609
7
6,136,876

2,777,923,300.00

18,328

6,015, 725.00

10,923,810

4,214,342,609.72

6,767,469

1,963,164,086.78

159,347
4,939, 707
45,413
, 44,372

86,735,840.00
1,739,100,750.00
162,113,000.00
613,973,760.00

1,323
1,082,649
63,417
101,760

821, 720.00
680,158,050.00
132,342,000.00
1,124,176,400.00

61

3,800.00

49

3, 550.00

Registered
U n i t e d S t a t e s securities:
P r e - w a r loans
Libertyloans
Treasury bonds
T r e a s u r y notes
T r e a s u r y (war) savings securities!
Securities n o t affecting p u b l i c d e b t , i n s u l a r
possessions loans
TotaL...
T o t a l u n i s s u e d stock retired."
RECAPITULATION

Bearer
U n i t e d S t a t e s securities:
P r e - w a r loans
Libertyloans
Treasury bonds
T r e a s u r y notes
F i r s t ZH per cent L i b e r t y loan i n t e r i m
certificates




241

SECEETARY OF THE TBEASURY

Securities received, examined, and filed in the register's ofiice during the fiscal year
1929 and 1930—Continued
1929

1930

Class of security
Pieces

Pieces

Amount

RECAPITULATION—continued
jBeorer—C ontinued
United States securities—Continued.
Standard full-paid interim certificates.
Certificates ofindebtedness
Treasury bills
Treasury (war) savings securities
Interest coupons
Securities not affecting public debt:
Insular possessions loans
District of Columbia loans

2
$2,100,000.00
655, 710 4,451,991,200.00
306,484,000.00
21, 949
667,478. 68
461,810. 50
252,557
768,373,167.34 1 25,340,362 1 797,572, 564.14

$4,209,647, 500.00
348,598
33, 702,357

3,345,500.00

2,134

2,134,000.00
1,050.00

7,473,960, 786.02

27,611,906

7,498,246,344. 64

168,643
758,980,870.00
1,285,745 2,609,695,050.00
9,442
47, 513,850.00
37,044,000.00
180
90 2, 379,000,000.00
148,223,675.27
852,253
94.64
10

15,003
182,482
12,209
210
89
124,139

86,198,190.00
418,408,400.00
68,076,750.00
51,717,000.00
1,387, 500,000.00
19,072,415.38

3,422

Total.
Registered
United States securities:
Pre-war loans
. Libertyloans
Treasury bonds
Treasury notes
Certificates ofindebtedness
Treasury (war) savings securities
Interest checks (Liberty loans)
Securities not affecting public debt, insular
possessions loans

4,822,000.00

2,991

5,985,279,539.91

337,123

2,036,731, 755. 38.

42,056,306 13,459,240,325.93

Grand total.

2,294
2,308,657

Total

27,849,028

9,534, 978,100.02

6, 759,000.00

1 Includes figures for the June, 1930, settlement month which is in process of audit, and 41 District of
Columbia interest coupons amounting to $37.41.

Division of Public Debt Accounts and Audit
This division maintains administrative control accounts over all
official transactions in the public debt, including those conducted by
the Division of Loans and Currency, the office of the Register of the
Treasury, the office of the Treasurer of the;United States, and the
Federal reserve banks as fiscal agents of the United States, and also
over, transactions involving the manufacture, receipt, custody, and
issue of distinctive and nondistinctive paper used for printing public
debt securities. United States currency, national bank notes. Federal
reserve notes. United States postage stamps, internal revenue stamps,
and other miscellaneous securities and documents in the Bureau of
Engraving and Printing. Numerous administrative audit functions
are performed in connection with the foregoing. The division also
maintains control accounts over various classes of unissued currency
in reserve stocks of the Treasurer of the United States and the Comptroller of the Currency, and conducts administrative examinations
and physical audits of such unissued stocks of currency, of cash balances in custody of the several divisions of the Treasurer's office,
and also of collateral securities held in trust by the Treasurer to
secure national bank currency circulation, postal savings deposits,
postal investments, evidences of the debt of foreign governments, etc.



242

REPORT ON THE FINANCES

Physical audits conducted in the offices of the Public Debt Service
during the fiscal year covered securities of various classes held in
custody as unissued stocks, held as unclaimed or in safe-keeping, and
surrendered securities retired or in process of retirement, registered
interest checks, accounts of registered bondholders, nunierical records
of retired securities, and various security records, et(). The securities involved in these audits totaled over 14,000,000 pieces and
$10,000,000,000 in face value. Eleven mUlion items were checked in
examination of numerical records. A force of 13 auditors and audit
clerks was continuously engaged on this work throughout the year.
Audits in the Bureau of Engraving and Printing during the year
consisted of at least one audit in each division of the bureau with
respect to each class and denomination of distinctive and nondistinctive paper. These audits embraced over 70,000,000 sheets of paper,
approximately 57 per cent of which was sheet counted. The work was
conducted by a force of five auditors regularly assigned to this work,
augmented in some of the larger audits by additional auditors, and
assisted by groups of counters detaUed for that purpose from tbe
Bureau of Engraving and Printing.
In the office of the Treasurer of the United States audits were conducted of all reserve stocks of unissued currency, of the cash balances
in the cash division, the redemption division, and in the national bank
redemption agency, and of collateral securities held in trust in the
securities division. . Audits in the office of the Comptroller of the
Currency covered all reserve stocks of national bank notes and Federal reserve notes. The face value of the currency and securities
covered by the audits in these two offices exceeded $16,000,000,000.
During the fiscal year this division determined and certified credits
to the cumulative sinking fund and amounts in the sinking fund
available for expenditure from time to time, interest on all classes of
public debt securities which became due and payable on their respecT
tive interest payment dates, and the amount of each form of public
debt securities and unpaid interest outstanding each month. I t
prepared estimates of interest to become payable on public debt
securities in future fiscal years and expenditures to be made on account
of retirements for the sinking fund and other special accounts, and
prepared a statement showing the accountabUity of Federal reserve
banks for public debt securities for the use of Federal Reserve Board
examiners in their periodical examinations of those banks. Numerous data pertaining to public debt transactions for various interested
offices and individuals were also compUed.
The character and scope of the accounts maintained in this division, as well as the volume of transactions to which they relate, are
indicated in a measure by the public debt tables appearing elsewhere
in this report which were prepared from those accounts.




243

SECRETARY OF T H E TREASURY

Division of Paper Custody
Operations of the Division of Paper Custody during the fiscal year 1930
On hand
J u l y 1,1929

Kind

On hand
J u n e 30,
1930

Receipts

Issues

Sheets
108, 561,122
30, 50.0
325, 500
85, 651,000
3,127,000
1, 683, 440

Sheets
105,491, 222
20, 505
365, 751
86, 752, 002
2, 667,000
1,463,000

Sheets
26, 601,033
9,995
4,959,011
23,936, 269
1,098,000
896,440

331, 213
2,134, 731

246, 240
3, 798,995

265, 352
544, 293

200,000

87,000

58, 352, 931

202,044, 506

201,003,715

59, 393, 722

1,156
392

9,436
282

9,231
403

1,361
271

D i s t i n c t i v e p a p e r for U n i t e d S t a t e s c u r r e n c y , 'Federal
reserve n o t e s , a n d national b a n k currency, n e w
Sheets
series, t y p e B , 12 subjects
23, 531,133
B a n k note paper, experimental
..
United States bond paper
4, 999, 262
25,037, 271
Internal revenue paper
638,000
Postage s t a m p paper
676,000
Check paper
P a r c h m e n t , artificial p a r c h m e n t , a n d p a r c h m e n t deed
" paper
180, 379
2, 208, 557
Miscellaneous p a p e r
Philippine Islands:
684, 278
D i s t i n c t i v e p a p e r for P h i l i p p i n e c u r r e n c y
165,000
Internal revenue paper
22,051
P o s t a l card
211,000
Porto Rican internal revenue paper
:

TotaL
Rolls, postage s t a m p p a p e r
Rolls, i n t e r n a l r e v e n u e p a p e r

'ii2,'6oo"

684,278
• 278,000
22,051
99,000

N O T E . — B l a n k distinctive p a p e r c o u n t e d J u l y 1, 1929, to J u n e 30, 1930, 104,613,212 sheets.

Custody of Federal reserve notes
OLD

On hand July
1,1929

F e d e r a l reserve b a n k

Boston _
New York
Philadelphia
Cleveland.
Richmond
_
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
-.San F r a n c i s c o .

-_...
.-_

-.- - _-

_-

Total

SERIES

Received

$39,120,000
78,080,000
42, 220,000
13, 740,000
56, 600,000
32, 78u, 000
25, 740, 000
13, 280, 000
16, 620, 000
20.140.000
19, 560,000
19,140,000

'

377,020,000

Issued

On hand June
30,1930

$39,120,000
78,080,000
42, 220,000
13, 740,000
56, 600,000
32,780,000
25, 740,000
13, 280,000
16, 620, 000
20,140,000
19, 560,000
19,140,000
1 377,020, 000

1 I n c l u d e s $268,100,000 delivered to special c o m m i t t e e for d e s t r u c t i o n .
NEW
Boston
New York
Philadelphia...
Cleveland
.Richmond
Atlanta
Chicago
St. Louis
Minneapolis...
Kansas C i t y . . .
Dallas
San Francisco..

Total




SERIES

$118, 720,000
274, 520,000
218,140,000
223, 600,000
21, 960,000
139, 860,000
123, 720,000
32, 720,000
10, 400,000
93,800,000
143, 560,000
1, 406,000,000

$320, 280, 000
751, 740,000
208, 680,000
253,140,000
176,940,000
129, 780,000
768, 336,000
116, 520,000
57,900,000
103.920,000
61,680,000
143, 580,000
3,092,496,000

$218,800,000
410, 400, 000
189^ 600,000
187, 420,000
25, 340,000
103, 320, 000
233,800,000
65, 360,000
11, 500,000
44, 600,000
65; 920,000
165, 420,000
1,721,480,000

$220, 200,000
615, 860,000
237, 220,000
294, 320, 000
173,560,000.
166, 320,000
658, 256, 000
83,880,000
46,400,000
69, 720.000
89, 560, 000
121, 720,000
2, 777,016,000

244

REPORT ON T H E FINANCES

Destruction Committee
Securities received and destroyed during the fiscal year 1930 were
as follows:
Securities received and destroyed during the fiscal year 1930
•

Number of
pieces

Paper currency (canceled, redeemed, unfit obsolete, etc.):
United States currency..
:
National bank notes
_. .
.
Federal reserve notes

..-

818,880,411 $3, 542, 781,797.62
87, 644, 721
810,037, 253. 50
230,824,001 2,922, 979, 460.00
1,167, 349,133

Internal revenue stamps (obsolete)
Mutilated printing (sheets)
._
Unissued stock (canceled, obsolete) bonds, coupons, etc
Photostats




^^(1^^

?

Face amount

21,049,612
8,063, 795
137

7, 275, 798, 511.12
3,146, 688. 27
3,437,913,002.30

PUBLIC HEALTH SERVICE

Division of Sanitary Reports and Statistics
The Public Health Service acts as a clearing house for information
concerning diseases dangerous to the public health. During the
fiscal year reports as to epidemics and the prevalence of diseases were
received from officers of the Public Health Service stationed in foreign
countries and in the United States, from State and local health
departments, from American consuls in all parts of the world, from
foreign governments, the International Office of Public Hygiene, the
Pan American Sanitary Bureau, and the health section of the League of
Nations. This inforraation was abstracted or tabulated and sent to
health officers and other sanitarians by telegraph, letter, or in mimeographed or printed form.
The Public Health Reports was issued each week, part 2 of
volume 44 and part 1 of volume 45 being published during the year
ended June 30. This publication contains articles on subjects
pertaining to public health, current statistics of the prevalence of the
reportable diseases, current reports of mortality, and other information of interest to health officers and sanitarians.
Two volumes of Federal and State laws and regulations pertaining
to public health were issued during the year, and work was continued
on a compilation of IState laws and regulations on the reporting of
communicable diseases with an analysis and judicial decisions on this
subject.
The preparation a.nd dissemination of news articles and radio
lectures on health subjects were continued during the fiscal period
under review. Upori. the invitation of the Public Health Service,
leading specialists in the United States prepared lectures to be sent
out by radio. In this way it has been possible to reach many thousands of persons with helpful information relative to the preservation
of health and the prevention of disease.
One hundred and twenty-seven new service publications were issued
during the year, not including those of the division of venereal
diseases, and 366,690 copies of publications were distributed. More
than two-thirds of th(ise publications were sent in response to individual requests.
Many requests foi: moving-picture films and stereopticon slides
for use in educating the public in matters pertaining to health could
not be complied with owing to lack of funds, but about 1,800 slides
were lent to universities, health officers, and others.




245

246

REPORT ON T H E

FINANCES

An appropriation of $2,500 has been made by Congress, available
July 1, 1930, for the preparation of exhibits designed to demonstrate
the cause of diseases dangerous to the public health, the measures for
preventing their spread, and the means which can be used to avoid
these diseases. This will enable the Public Health Service to respond
to many rec[uests for such material.
Division of Foreign and Insular Quarantine and Immigration
Qua7'antine transactions.—Quarantine officers
vessels and 3,361,729 persons during the year.

inspected

25,571

Inspections by quarantine ofiicers during the year ended J u n e SO, 1930
Vessels
At stations in continental United States...
At insular stations
.._
At foreign ports prior to embarkation
Total

.

Passengers

17,619
3,026
4,926

914,878
141,416
514, 590

1,163,915
216,326
410.604

25, 571

1,670, 884

1, 790,845

Seamen

Of the passengers who embarked at European ports, 56,115 were
vaccinated and 74,509 were deloused under the supervision of medical
officers of the service and their clothing and baggage, amounting to
96,381 pieces, were disinfected.
A total of 5,189 vessels were fumigated either because of the occurrence of disease on board or for the destruction of rodents; 14,047
of tihe dead rats were examined for plague infection.
During the year only five cases of smallpox and no cases of plague,
cholera, yellow fever, or typhus fever arrived at quarantine in the
United States. However, toward the latter part of May, 1930, an
outbreak of cholera occurred in the Philippine Islands. This outbreak
principally involved rural communities, centering in the south central
part of the PhUippine Archipelago. The situation attained threatening proportions. The southern Philippine port of Cebu had become
infected, b u t Manila remained uninfected in the port proper, although
several isolated cases had occurred in the adjacent countryside.
Interisland quarantine has been declared against Cebu, but no quarantine measure of this character is practicable of enforcement against
the small native fishing boats which travel among the islands. The
situation became so threatening that on July 7, 1930, a maritime
quarantine was put into effect against the Philippine Islands as a
measure of protection against the transmission of the infection
particularly through oriental steerage passengers to the Hawaiian
Islands and the Pacific coast ports of the United States.
Health conditions as regards yellow fever, reported during the year
from the port of Para at the mouth of the Amazon River and several




A

SE<3RETARY OF T H E TREi^SURY

247

interior Brazilian ports, were such as to warrant the issuance of a
quarantine declaration against Para and an advisory warning notice
of the possibility of infection of other Brazilian ports from outbreaks
occurring in the interior. The mosquito which carries and spreads
yellow fever has been reported exceedingly prevalent in the South
Atlantic and Gulf coast territory of the United States and the undetected entry of a single case of yellow fever would result in a serious
outbreak. This disease continues to be reported also from the Gold
Coast of Africa, one case having occurred in Liberia where an officer
of the Public Health Service has been especially detailed for duty in
connection with the control of the disease.
The restriction of the transportation of passengers from oriental
ports to United States ports, in accordance with the special regulations
of the Secretary of the Treasury prescribed in acc()rdance with Executive Order No. 5143, dated June 21, 1928, continued in force during
the past year. While these regulations admittedly are exacting,
requiring readjustment of existing maritime practice respecting the
carriage of steerage ])assengers and unavoidably resulting in some
inconvenience and increased costs, their proper observation is by
no means impossible. These regulations have proved effectual in
attaining the essential control of the danger heretofore presented by
the introduction of epidemic meningococcus meningitis into the
United States;.since their adoption only a few cases from the Orient
have arrived at Pacific coast ports, the tcital number of which was
well within the capacity of the avaUable quarantine facilities. From
time to time during the year, as changpd conditions warranted,
amendments to the special meningitis regulations were issued upon
the recommendation of the Surgeon General, modifying the regulations
in so far as consistent with effectiveness and thus removing as'soon as
practicable unnecessary restrictions upon iharitime commerce.
In November, 1929, the occurrence of an unusual sickness, resembling influenza and typhoid fever, with a high mortality rate, began to
be reported in various sections of the United States. Investigation
revealed that these cases were associated with recently imported
parrots. Inasmuch as the parrots involved were not confined to one
species and had been imported from various parts of the world, and
in the absence of other definite knowledge concerning the disease, it
was deemed advisable to stop the importation of all species of parrots
from all countries until the disease could be studied. As a result,
Executive Order No. 526.4, dated January 24, 1930, was issued and,
in accordance with this order, the Secretary of the Treasury, upon the
recommendation of the Surgeon General, issued regulations under
date of February 3, 1930, governing the importation of parrots into
ports of the United States or its possessions.




248

REPORT ON THE FINANCES

During the past year the Public Health Service made the necessary
arrangements for the performance of quarantine and immigration
medical examinations in connection with the establishment of airports
of entry in a number of ports. These arrangements were completed
at Ajo, Douglas, and Nogales, Ariz.; El Paso, Laredo, and Eagle
Pass, Tex.; Portal, N. Dak.; Port Angeles and Bellingham, Wash.;
Newport, Vt.; Malone, N. Y.; Scobey and Havre, Mont.; Detroit,
Mich; and San Pedro, Calif. Information has been received of
the designation of airports of entry at Pembina, N. Dak.; Spokane,
Wash.; Watertown and Plattsburg, N. Y.; Minneapolis, Minn.; and
Great Falls, Mont.; but as there is no medical officer of the Public
Health Service stationed in or near these ports, and as funds for the
employment of additional medical personnel are not avaUable, it was
impracticable to make suitable arrangements for the required quarantine and medical immigration examinations incident to the arrival
of aircraft at these ports from foreign ports. To date a total of 23
airports have been designated airports of entry at which quarantine
and medical immigration inspections are required to be made by the
Public Health Service.
The remarkable development of aerial transportation has brought
with it international sanitary and public health problems of major
importance. Regular lines of aircraft have been established providing direct and rapid communication between areas in Africa, Asia, and
South America (which have long been endemic centers of various
,pestilential diseases, such as cholera, plague, and yellow fever) and
noninfected but infectible territory in Europe, North America, and,
in fact, almost all the remainder of the world. The journey by airplane from most of the endemic centers of these pestUential diseases is
usually'*less than the incubation period of these diseases, excepting
journeys from endemic centers of cholera.
The whole problem of sanitary control of aerial transportation has
been a matter of serious interest not only to this country but to the
countries of Latin America and of Europe, Africa, and Asia. As a
consequence, a preliminary draft of a proposed international agreement for the control of aircraft was prepared by a special international
commission known as the Quarantine Commission of Air Navigation
which met at Paris on March 11, 1930, and was submitted to the permanent committee of the Office International d'Hygiene Publique
during its May, 1930, session. The Surgeon General, who represents
this Government on that committee, was requested to ascertain the
views of the Pan American countries with reference to any technical
changes deemed advisable in the proposed draft, and the subject will
probably be a major one for discussion at the meeting of this committee in Paris in October, 1930.




SECRETARY OF T H E TREASURY

249

Medical inspection of aliens.—There were 1,211,796 alien passengers
and 988,759 alien seamen examined by medical officers at the various
stations in accordance with the act of Congress, approved February
5, 1917; 25,659 passengers and 1,797 seamen were certified to the
immigration officials as being afflicted with, a mental or physical
defect. The most important causes of certification of alien passengers
were trachoma, 380; tuberculosis, 135; feeble-mindedness, 163; insanity, 114; syphilis, 163; gonorrhea, 386. Ofthe alien seamen, 37 were
certified for trachoma, 21 for tuberculosis, 264 for syphilis, 339 for
chancroid, and 611 for gonorrhea.
Examination of alien passengers abroad.—^There were 156,370 applicants for immigration visas examined by medical officers abroad.
Of this number 2,645 were reported to the consular officers as affiicted
with one or more of the diseases listed in class A as mandatorily excludable; 17,522 were reported as affiicted with a disease or condition
listed in class B as liable to affect their ability to earn a living; all of tbe
applicants reported in Class A and 5,963 of those reported in class B
were refused immigrsttion visas by the c(3nsular officers because of
the findings of the m(3dical examination.
Of 147,762 aliens who had been given a preliminary medical examination abroad and to whom visas had been issued, only 23 were
certified upon arrival at a United States port as being afflicted with
class A diseases, resulting in mandatory deportation.
There has been no material change during the past year in the
system of making medical examinations of applicants for immigration
visas in their countries of origin. This system of the examination of
intending immigrants has proVen so satisfactory that it has been
proposed that it be extended to additional foreign countries as soon as
trained medical officers are available for that purpose.
Division of Domestic Quarantine
Cooperative demonstration projects in rural sanitation were carried
on in 202 counties in 24 States. On January 1, 1930, 505 of the 2,500
counties or comparable districts in the United States in which the
local health unit plan is applicable were provided with whole-time
local health service, as compared with 467 on January 1, 1929.
Experience indicates that the best foundation for rural health
service in the United States is the county health department under
the direction of the qualified whole-time county health officer. I t
becomes increasingly evident to tbose with practical experience in the
public health field that agencies concerned with the promotion of
specialized health activities, such as typhoid fever prevention, hookworm control, tuberculosis prevention, malaria control, venereal disease prevention, or cliild and maternity hygiene, can perform most




250

REPORT ON THE FINANCES

effectively and economically by conducting their specific activities
as a part of a comprehensive program of local official health service
under the direction of qualified whole-time local health officers. Over
76 per cent of our rural population is as yet unprovided with official
local health service approaching adequacy. As a consequence, there
is a sacrifice of the health, lives, and material resources of our people
which is needless because preventable, and preventable by measures
readily within our means and demonstrated to be in the highest
sense economical.
In addition to the routine measures for insuring sanitation of
interstate carriers, both trains and vessels, including sanitary supervision and control of drinldng water supplies, an appreciable, amount
of public health engineering work has been conducted in cooperation
with other governmental agencies. Of particular interest in this
connection is a design for a sewage-disposal plant prepared for the
valley floor of Yosemite National Park.
The extent and character of professional services which are being
rendered to other branches of the Government upon request are indicated by the following:
^
National Park Service: Sanitary surveys; designs for water and
sewage-disposal systems; plans for garbage disposal; antimosquito
measures; plans for miscellaneous sanitary projects.
Bureau of Indian Affairs: Sanitary surveys of Indian reservations;
plans and recommendations regarding sewage-disposal and watersupply systems.
Office of the Supervising Architect: Surveys and plans for sewagedisposal and water-supply systems at' border stations.
Bureau of Prisons: Surveys, advice, and plans regarding sanitary
projects and pasteurization of milk.
District of Columbia: A study of the causes of disintegration of a
concrete sewer.
Bureau of Efficiency: Assistance in the preparation of a plumbing
code.
Post Office Department, Forest Service, Lighthouse Service, Coast
Guard, and Veterans' Bureau: Inspections of buUdings and surveys
of sanitary conditions with recommendations.
Trachoma eradication work has been continued in cooperation
with State and local authorities in trachomatous regions. Small
hospitals for the treatment of trachoma patients have been maintained at Rolla, Mo., Knoxville, Tenn., and Richmond, Ky. In
addition, numerous field clinics have been held in the surrounding
country and field nurses have been employed in locating cases, inducing them to apply for treatment, aiid insuring proper follow-up
care after discharge from the clinics and hospitals. At the request
of the State authorities, surveys to determine the prevalence of




SECBETARY OF T H E TREASURY

251

trachoma were made in Decatur County, Ga., and in certain counties in southern Illinois. A considerable prevalence of the disease
was found to exist in both cases, and methods of control were outlined.
Antiplague activities were continued in California. The work
consists of the determination of foci of plague infection in ground
squirrels, with intensive eradication measures around infected areas
and of general control measures over large areas for the reduction of
squirrel infestation.
Rat surveys conducted in San Francisco and Oakland, Calif.,
revealed no evidence of plague infection among the rodents in these
places. The Public Health Service laboratory in San Francisco for
the examination of rodents to determine plague infection was operated as in preceding years. No case of human plague occurred in
the United States during the year.
At the request of their respective State and local health authorities, public health surveys were made of the health departments of
the State of Iowa, Augusta, Ga., Alameda County, Calif., and Pine
Bluff and Fort Smith, Ark., to determine the effectiveness of existing
regulations and methods for preventing the spread of infectious
diseases, in order that recommendations might be submitted for
measures for improvement.
The twenty-eighth annual conference of State and Territorial health
officers with the Public Health Service was held in the National
Museum BuUding at Washington, D. C , June 18 to 20, 1930, and
was attended by representatives of 37 States, the District of Columbia, and the Territory of ^Hawaii.
Division of Scientific Research
At the cancer investigation station work was continued on the
action on tissue cells of oscillating currents of very high frequency,
particularly the thermal action of ultra high frequency currents.
Furthermore, it has been shown that the apparent resistance to reinoculation found in mice which had recovered after treatment is
apparently due to an immunity reaction caused by the growth of the
tumor itself and not to the method of treatment.
At the leprosy investigation station effort was made to individualize
in the observation and care of patients with the particular object of
removing possible contributing causes of aggravations and recrudescences. Efforts have been made to cultivate in vitro the bacillus of
human leprosy and that of rat leprosy. The Rontgenologic study of
the early bone changes in leprosy has been continued.
The continuous county-vdde dusting study, using Paris green as an
anopheline larvicide, whicii was under way ^at the end of the last
fiscal year, was carried on during the present fiscal year. It is



252

REPORT ON THE FINANCES

expected that a minimum of two years will be required before an
accurate evaluation of results can be made. However, it is interesting
to note that the malaria rate found by blood examination in 17 rural
schools in Dougherty County, Ga., which before the work commenced had been 40.4 per cent, fell to 25.3 per cent when taken 12
months later. Flotation experiments designed to make Paris green
effective for a greater length of time when blown over the surface of
water have shown that when Paris green is mixed with calcium and
aluminum stearates its effectiveness is prolonged about 6 days. This
is sufficient to reduce the dusting interval and will result in a considerable saving where large areas are being treated.
The pellagra studies consisted principally of the testing of individual
foodstuffs.
The demand for the Rocky Mountain spotted fever vaccine has
increased each year since its first use in 1925, and a surprising degree
of confidence in its preventive value has been developed. Epidemiologic data collected over a considerable period indicate a quite
definite northward and southward extension of the area in which
Rocky Mountain spotted fever is endemic. During the year cases
have been reported in Saskatchewan, Canada, and New Mexico for
the first time. I t is gratifying to record that Surg. R. R. Spencer
was awarded the gold medal by the American Medical iissociation at
the annual session in June, 1930, for original work in the preparation
of a vaccine against Rocky Mountain spotted fever.
During the past year, investigations at the Hygienic Laboratory
have shown that psittacosis^—the disease associated with parrots—
is due to a filterable virus; a new strain of the meningococcus meningitis organism was isolated; and the probable cause of the so-called
Jamaica ginger paralysis was found. Undulant fever was reported
officially or unofficially in every State of the United States during the
calendar year 1929. A general survey of the disease was made in 20
States, and 109 cases investigated epidemiolbgically by the officer in
charge of studies of this disease. ,
The States of Washington and Massachusetts were added to the
area of distribution for tularsemia, which now comprises 43 States.
Serum from human cases occurring in Canada and Norway have been
found positive for tularsemia.
«
Two acts bearing upon the work and expansion of the Hygienic
Laboratory were passed during the fiscal year. By the act approved
April 9, 1930, authorization was given for the establishment of additional divisions in the laboratory. The name of the advisory board
for the Hygienic Laboratory was changed to the National Advisory
Health Council, the appointment of five additional members was
authorized, and the functions of the board were broadened to include
advice to the Surgeon General in respect to general pubhc health




SECRETARY OF THE TREASURY-

253

activities in addition to the strictly laboratory problems to which it
had been limited. By the act of May 26, 1930, the name of the
Hygienic Laboratory was changed to the National Institute of Health,
additional buildings were authorized, and provisions were made for
the acceptance of donations for the study of fundamental problems of
the diseases of man and. the establishment of fellowships.
The office of industrial hygiene and sanitation was engaged in
studies of natural and artificial ventilation, the practical efficiency of
ventilating devices, thes investigation of the health of workers in
dusty trades, the hazards in the radium dial-painting industry,
natural illumination in factories, schools, and hospitals, the loss of
light due to smoke, industrial poisons, and statistical investigations
relating to industrial hygiene.
Three new research projects in connection with child hygiene were
inaugurated during the year as follows: Studies in the mental hygiene
of childhood, dental hygiene, and the mental status of children of
various types of birth.
During the year the office of milk investigations made complete
milk sanitation surveys of 405 cities located in 22 States.
Statistical investigations have included studies of influenza and
other respiratory diseases, the collection of comparable morbidity
statistics for a rural area and for a moderate sized manufacturing
city, and the collection and publication of monthly mortality statistics.
A resurvey of the pollution and natural purification of the Ohio
River between Cincinnati, Ohio, and Louisville, Ky., was undertaken
for a comparison of past with present conditions,; and to determine
the limit of probable future permissible increase in pollution and the
rates of natural purification.
Division of Marine Hospitals and Relief
The marine hospitals were operated to capacity at all seasons,
although the National Leper Home at Carville, La., where, on an
average, 309 lepers were treated, has a small reserve of vacant beds.
Approximately three-fourths of the hospital patients, of whom there
was a daily average of 4,238, are seamen from American merchant
vessels. There were 1,120 deaths during the year. A total of 402,059
persons applied to the marine hospitals and |other relief stations for
medical service, of whom 286,167 were beneficiaries applying for
treatment, while the remainder received physical examinations not
related to treatment; 871,780 out-patient treatments were given. A
new color vision test has been introduced to eliminate borderline
cases in original applicants for pilot's license, iable-bodied seamen, and
Coast Guard men. This will not affect ship's officers and others
already holding licenses under the less rigid tests for color vision previously employed. A ^jeneral phywsical examination has also been




254

REPORT ON THE FINANCES

introduced at the request of the Steamboat Inspection Service, and
instruction and examination in first aid are given to all licensees.
The Public Health Service continues to furnish all medical services
and medical supplies to the Coast Guard personnel, approximately
13,000 on active duty and retired. The medical facilities of all relief
stations are available and 24 medical and dental officers are detailed
for duty on cruising cutters and at important shore stations. In addition, 109 part-time medical officers are assigned to life-saving stations
and other isolated units. The Coast Guard may also incur emergency
expenses for treatment abroad and at other places where there is no
formal provision for relief.
At the request of the Director of the Veterans' Bureau increasing
numbers of patients from that bureau have been admitted to marine
hospitals in ports where the construction of special hospitals was
thus made unnecessary. The Public Health Service continues to be
the principal medical agent for the Employees' Compensation Commission, and it also made 22,682 physical examinations for the
Civil Service Commission. In addition to operating the marine
hospital at Ellis Island, primarUy for the treatment of detained
immigrants, aliens are admitted at the request of the Immigration
Service to any of the marine hospitals, and these institutions have
also been available for personnel from the Military and Naval establishments, upon official request.
Division of Venereal Diseases
Continuing its work along lines previously established, this division
during the fiscal year 1930, directed its attention chiefly to three
major activities: Scientific research, cooperation with State and local
health authorities, and the dissemination of information concerning
the cause and prevention of the venereal diseases.
'Research projects carried on included further investigation into
the infectivity of cases of syphUis in the late stages of the disease;
a study looking to the evaluation of methods now in general use in
the treatment of syphilis; and further search for a biological product
which might prove efl'ective in the treatment of gonorrhea. A new
project undertaken was concerned with the possible effect of mass
treatment of syphUis, on a community-wide scale, in preventing the
spread of the disease through the removal of sources of infection.
Cooperation with State, local, and other agencies in the conduct of
prevalence surveys was continued, and resurveys were undertaken
in a number, of communities previously studied for the purpose of
obtaining data which might indicate the present trend of venereal
infections in the United States. As in the past, cooperative activities
included the detaU of trained personnel to several States to assist
in developing venereal ^disease control work, and the collection and




SECRETARY OF THE TREASURY

255

dissemination of information concerning the prevalence of syphUis
and gonorrhea. Educational work was continued, through the publication and distribution of literature, the presenting of popular
lectures and scientific papers by various members of the division
staff, and the lending of moving picture films to numerous agencies
and institutions in difl'erent parts of the country.
In the fiscal year 1930, 44 State departments of health reported
374,909 cases of the venereal diseases, an increase over 1929 of 5.1 per
cent. Of this total number, there were 213,309 cases of syphilis,
155,875 cases of gonorrhea, and 5,725 cases of chancroid, representing
an increase in syphilis of 9.1 per cent, a very slight decrease in gonorrhea of four-tenths of 1 per cent, and an increase in chancroid of 20.2
per cent over the preceding year. During this same period there
were admitted to the 477 cooperating clinics operating under the
State departments of health, 124,842 new cases of venereal disease, of
which 73,805 were syphilis, 48,230 gonorrhea, and 2,807 chancroid.
The total number of treatments given in these clinics was 2,440,626.
The States distributed 880,726 doses of arsphenamines for the use
of the clinics and private practitioners, and their laboratories reported 1,632,083 Wassermann tests and 349,259 microscopic examinations for the gonococcus.
Narcotics Division {Division of Mental Hygiene)
The year 1930 was characterized by additional legislation seeking
to coordinate and crystallize the functions of the Narcotics Division
in the office of the Surgeon General of the Public Health Service.
Pursuant to a recommendation of the department, an act of Congress,
approved AprU 9, 1930, authorizes the officer detaUed as chief of
the Narcotics Division to be entitled to the rank, pay, and allowances
of an assistant surgeon general.
The site for the first United States narcotic farm, authorized in
the act approved January 19, 1929, was selected near Lexington,
Ky., on March 13, 1930. The detaUs incident to the selection of
this site were studied by a subcommittee representing the three
departments concerned, and plans are under way for the development of the institution for the care and treatment of persons addicted to the use of habit-forming drugs.
During the year, legislation has been approved and plans have
been perfected whereby the Public Health Service is authorized to
furnish medical service in the Federal penal and correctional establishments under the control of the Department of Justice. This
work wUl be inaugurated during the early part of the next succeeding
fiscal year.
12101—31

19




256

REPORT ON THE FINANCES

Plans were perfected for assembling a suitable medical staff by
the Public Health Service at the United States Penitentiary annex
(United States Disciplinary Barracks), Fort Leavenworth, Kans.,
used for segregating all Federal prisoners addicted to the use of
habit-forming drugs, thus affording opportunities to utUize the
material avaUable in that institution as a training center for field
studies and investigations incident to the establishment of the
narcotic farms. A supplemental appropriation for the pay of personnel was requested for this purpose.
The act approved June 14,1930, changed the name of the Narcotics
Division of the Public Health Service to the Division of Mental
Hygiene, transferring all of the authority, powers, and functions
exercised by the Narcotics Division to the Division of Mental Hygiene.
Plans were inaugurated on July 1, 1929, for the collection of
detaUed information concerning the personal and social characteristics
of all persons coming within the purview of the Federal narcotic
laws. These reports have been tabulated and the results of these
epidemiological studies have been published from time to time in
the Public Health Reports. Studies have also been made during
the past year of the former experiences of States and local jurisdictions pertaining to their attempts to solve the medico-social problem
of drug addiction. A review of the evolution and present status of
narcotic laws has been completed and wUl be published during the
early part of the following fiscal year.
Division of Personnel and Accounts
Personnel.—On July 1, 1930, the regular commissioned corps of the
Public Health Service consisted of the Surgeon General, 30 medical
directors, 31 senior surgeons, 102 surgeons, 33 passed assistant
surgeons, and 59 assistant surgeons—a total of 256 officers. Of this
number, 2 medical directors, 14 senior surgeons, 6 surgeons, and
2 passed assistant surgeons were on waiting orders.
The number of reserve officers on active duty on July 1, 1930, was
57. This number included 1 medical director, 1 senior dental surgeon,
8 surgeons, 15 dental surgeons, 12 passed assistant surgeons, 8 passed
assistant dental surgeons, 5 assistant surgeons, and 7 assistant dental
surgeons.
The following tabulation shows the entire personnel of the service
on July 1, 1930, including part-time employees, all persons paid on a
fee basis, and all w:ho are paid per diem rates when actually employed.
It does not include 4,575 appointees designated as collaborating
epidemiologists and assistant collaborating epidemiologists, who serve
at nominal compensation, and who assist in the coUection of statistics




257

SECRETARY OF THE TREASURY

relating to the prevalence of communicable diseases, being for the
most part officers or employees of State and local health organizations:
Commissioned medical officers, regular corps
Commissioned officers, reserve corps
Acting assistant surgeons
Attending specialists and consultants__^
Contract dental surgeons
Internes
^
Scientific personnel, general
Scientific personnel, National Institute of Health.
Pharmacists_
Administrative assistants
L__
Druggists
Nurses
Aides.
Dietitians
Laboratorians
Pilots
1
Marine engineers _
Clerks
All other employees
:.
•
.
Total

--

._
.
.,.__

^

.

256
57
671
316
38
84
24
32
30
23
13
475
34
23
31
35
37
474
2, 664
5, 317

Financial statement.—Following is a statement of appropriations
and expenditures for the fiscal year 1930:
Appropi.iation title
Salaries, oflBce of Surgeon General...
Pay, etc., commissioned oflScers and pharmacists.
Pay of acting assistant surgeons
Pay of other employees.
Freight, transportation, etc
Maintenance, Hygienic Laboratory
Books
Pay of personnel and maintenance of hospitals...
Quarantine service
Preventing the spread of epidemic diseases
Field investigations of public health
Interstate quarantine service
Studies of rural sanitation
Control of biologic products
Expenses, division of venereal diseases
Narcotic farms.
Total

Appropriated

Expended

$318, 956.00
1,284, 500. 00
345, 840.00
1,090, 850.00
29, 000.00
43, 000. 00
500. 00
1 6,423,897. 60
460, 000. 00
400, 000.00
315, 940.00
68, 620. 00
346, 000.00
46, 620. 00
73, 780.00
2 9,044.70

$318,- 351. 64
1,262, 964.99
346,547.92
1,089,534. 34
28,661.90
42,717.74
497.46
6,406,459.15
456,890.09
276,636.97
313,414.14
67,742. 55
334,203.97
46, 260.47
72,950. 67
8,466.11

11,266,447.30

11,069,289.10

»Includes $787,544.60 reimbursem<mt for care of Veterans' Bureau patients.
> Balance available from $10,000 aippropriated for fiscal years 1929 and 1930.




258

REPORT ON THE FINANCES

The revenues derived from operations of the Public Health Service
during the fiscal year 1930 and covered into the Treasury as misceUaneous receipts are as follows:
Source of revenue:
Amount
Inspection, fumigation, and disinfection of vessels at national
quarantine stations
$561, 649. 87
Care and treatment of pay patients in hospitals and at relief
stations (other than Veterans' Bureau patients)
46, 055. 45
Sale of rations
13, 416. 79
Sale of obsolete, condemned, and unserviceable property
9, 434. 40
Sale of livestock and livestock products
1, 004. 39
Commissions on pay telephones installed in service buildings _
1, 150. 73
Other revenues
2, 972. 07
Total




-

635, 683. 70

SECRET SERVICE DIVISION

Eleven hundred and seventy-four persons were arrested by agents
of the Secret Service E^ivision or by their direction, during the fiscal
year 1930 on charges involving counterfeiting of the obligations of the
United States and forgery, as well as miscellaneous offenses against
the Federal statutes nslating to the Treasury Department and its
several branches. Of the total number taken into custody, 347 were
note counterfeiters and note passers, 129 were note raisers and passers
of altered currency, 208 were coin counterfeiters and passers; 329
were check forgers, 10 were apprehended for negotiating stolen or
forged bonds, and 62 were held for violations of the adjusted service
compensation act.
Sixteen new counterfeit note issues appeared during the year,
warranting the distribution of descriptive warning circulars, while ^
approximately a scores of unidentified counterfeit productions of
varying types of manufacture circulated in different sections of the
coimtry for short periods, some being photographic and hand-drawn
specimens of extremely crude workmanship. Counterfeit notes
aggregating $509,078.30, including fractional currency, and altered
notes aggregating $33,484 were captured or seized during the year
by operatives of the service, and counterfeit coins aggregating
$27,506.67 were also confiscated in connection with raids and subsequent arrests. Of the total amount of counterfeit notes captured,
agents in raids on several plants seized $145,081 before the counterfeiters were able to phice their product in circulation. Agents also
seized or captured 722 plates and glass and film negatives for printing
counterfeit obligations and securities, 163 molds for counterfeiting
coins, IK dies, togethei- with a large quantity of misceUaneous materials and paraphernalia.
Of the total number of persons arrested during the year, 653 were
convicted and sentenced, 42 were acquitted, and 289 are awaiting
action of the courts, while others were variously disposed of, some
being committed to insane asylums and others delivered to military
or police authorities.
During the year agents investigated 1,275 check cases, 86 bond
cases, and 12 war-savings stamp cases; and in check case investigations, received and transmitted to the department in restitution the
sum of $5,404.78.




259

260

REPORT ON THE FINANCES

Investigation of violations of the adjusted service compensation
act, involving altered adjusted service certificates and loans fraudulently obtained, resulted in 62 arrests by agents in 207 cases warranting inquiry.
Three cases involving violation of the farm loan act were investigated by the service, and reports were furnished by field agents in
answer to 133 requests received from the General Supply Committee
for information concerning prospective bidders on Government
supplies.




OFFICE OF THE SUPERVISING ARCHITECT

Federal public building program
The so-called Feder&J public building program under the direction
of this department giew out of a nation-wide survey by the Secretary
of the Treasury and the Postmaster General.
Keyes-Elliott Act
The Keyes-Elliott Act was passed on March 31, 1930. The prin-'
cipal provisions of this act were: (1) An increase in the general authorizations as indicated in the foUowing table; (2) an increase in the
limit of annual expenditures from $35,000,000 to $50,000,000; and
(3) authority permitting the Secretary of the Treasury to employ
private architects for i'ull professional services in lieu of the hmited
service authorized in prior acts.
General authorizations
Total general autho»rizations of the Congress under the Keyes
Elliott and earlier acts covering this program are shown in the
following table. Thes(i general authorizaiions include authorizations
for buildings and sites.
General authorizations for public building program
Total general authorizations for all buildings, extensions, etc., up
to June 30, 1929, including all land authorizations outside of
the District of Columbia and certain ones in the District of
Columbia
.
.
$265, 000, 000
Authorization for purchase of triangle site in the District of Columbia
j.
25, 000, 000
Total general authorizations to June 30, 1929

290, 000, 000

Total increases in authorizations for building and land sites during the fiscal year 1930 under the act of March 31, 1930 (includes
$48;000,000 expected to be realized from the sale of property
now owned by the Government)
263, 000, 000
Authorization for purchase of certain additional sites in the District of Columbia
___
15, 000, 000
. Total general authorizations during the fiscal year 1930. _ 278, OOQ, 000
Total general authonzsitions to June 30, 1930




568, 000, 000
261

262

" REPORT ON THE FINANCES

Specific authorizations of projects
The part of the above general authorizations which have been
authorized or appropriated for use in specific projects by the Congress
at a definite limit of cost for each project up to June 30, 1930, is
shown in the following table:
Number and amounts of specific authorizations for buildings and land, and appropriations for land purchases up to June SO, 1930, under the public building
program
Number of
projects

Amount

Authorizations for specific projects outside the District of Columbia up to
June 30,1930, including all land site authorizations
Authorizations for specific projects in the District of Columbia including
certain, but not all, land site authorizations up to June! 30, 1930

327

$192,487,010.80

9

47,943, 741. 00

Total specific authorizations exclusive of certain land site appropriations in the District of Columhia to -Tune 30, 1930
Specific appropriations for certain additional land sites in the District of
Columbia . ....
.
...
,..,..-,

336

240,430, 751.80
21,680,000.00

Total specific authorizations and appropriations for buildings and land
sites to June 30,1930
. ..

262,110,751.80

Under authority of the Keyes-Elliott Act the department submitted
to Congress through the Bureau of the Budget 231 specific projects,
which included 39 modifications or augmentations of previous
authorizations, involving approximately $130,000,000. These were
authorized just after the close of the fiscal year, by the act of
July 3, 1930, and are in addition to the above.
Contracts
Contracts authorized by the acts of July 3, 1926, March 5, 1928,
May 5, 1928, May 29, 1928, March 4, 1929, and March 26, 1930,
awarded for the construction of new buildings, the remodeling or
extension of existing buildings, and for the purchase of land sites
both within and outside the District of Columbia up to June 30, 1930,
are as follows:
Contracts awarded up to June 30, 1929:
Outside District of Columbia
In the District of Columbia

___

Total
,
Obligations for triangle site in District of Columbia, assumed
up to June 30, 1929
Total contracts awarded and land obligations assumed to
June 30, 1929
Contracts awarded during the fiscal year 1930:
Outside the District of Columbia
In the District of Columbia
Total



_

_

$24, 435, 909. 89
31, 471, 734. 85
55, 907, 644. 74
4, 293, 837. 64
60, 201, 482. 38
32, 104, 441. 00
5,688,000. 00

_____

37, 792, 441. 00

SECRETARY OF THE TREASURY

263

Obligations for triangle sii;e in District of Columbia, assumed
during the fiscal year 1930
_..

$7, 032, 762. 85

Total contracts awarded and land obligations assumed
during the fiscal year 1930____

44,825, 203. 85

Contracts awarded to June 30, 1930:
Outside District of Columbia_.
In the District of Columbia

_

Total
.
Obligations for triangle site in District of Columbia, assumed
up to June 30, 1930

56, 540, 350. 89
37, 159, 734. 86
93, 700, 085. 74
11, 326, 600. 49

Total contracts awarded and land obligations assumed
up to June 30, 1930
105,026,686.23
Balance specifically authorized but yet to be placed under contract
,
146, 730, 666. 06
Balance specifically approj^riated but yet to be obligated for
purchase of sites in District of Columbia
10, 353, 399. 51
Total amount unobligated for land and buildings

157, 084, 065. 57

Of the above contracts awarded during the fiscal year 1930, the
most important, together with total limits of cost, are listed below.
Limit of cost

Baltimore, Md., post office
$3, 300, 000
Milwaukee, Wis., post office
1,850,000
Brooklyn, N. Y., post office
2,700,000
New Orleans, La., marine hospital
;
2, 000, 000
Juneau, Alaska, Federal and territorial building
795, 000
Tampa, Fla., post office
550, 000
Lima, Ohio, post office
'.
'.
475, 000
Washington, D. C , Department of Agriculture extensible building. 5, 750, 000

Expenditures and outstanding contract obligations
Of the $262,110,751.80 specifically authorized and appropriated as
of June 30,1930, $105,026,686.23 in the aggregate, had been obligated
to that date as indicated in the table above. Expenditures had been
made under these obligations to the amount of $68,296,390.60, including expenditures for the fiscal year ended June 30, 1930, amounting to $41,484,518.77, of which $16,808,905.76 referred to the
country at large and $24,675,613.01 to the District of Columbia.
The balance of outstanding contract obligations as of June 30, 1930,
consequently amounted to $36,730,295.63, of which $24,248,665.59
referred to contracts in the country at large and $12,481,630.04
to the District of Columbia.




264'

. REPORT ON THE FINANCES

Sites
The situation with reference to land sites may be summarized
separately as follows:
Status of sites as of June SO, 1930
Sites

Number

Outside the District of Columbia:
Acquired previous to July 1, 1929
Acquired during the fiscal year 1930
Proposals accepted
Selected, condemnation proceedings instituted
.•
Total
J
1
In the District of Columbia: i
Expenditures to July 1, 1929
Expenditures during the fiscal year 1930
Total
In process of acquisition either by negotiation or condemnation proceedings
(approximate)
Total (approximate)
1

Amount
$13,198, 806. 08
9, 328, 214. 86
3, 587, 216. 66
7,195, 620. 00

192

53,309,857. 60
4, 003,108. 04
6,447, 552. 60
10,450, 660. 64
7,649,339. 36
18,000, 000. 00

1 Since sites in the District of Columbia are purchased in small parcels, it is not feasible to indicate the
number of sites purchased.

Contracts for outside professional services
Under the authority of the Keyes-Elliott Act, contracts for architects^ plans have been entered into with architects outside the Treasury
for a number of large and important buildings aggregating in cost
about $100,000,000.
Remodeling and enlarging public buildings
Under the $350,000 annual appropriation for remodeling and enlarging public buildings, 82 buildings received attention under a total
obligation of $348,537, the limit of expenditure for any one building
being $25,000. In 34 of the projects the contracts ranged from
$1,350 to $24,943 and amounted to $334,971.98. The total space
gained under these operations was 58,089 square feet at approximately $6.00 per foot, which is considered very reasonable.
Annual appropriations for maintenance, repairs, etc., of public buildings
The 1930 appropriations for operating force, operating supplies,
repairs and preservation, mechanical equipment, furniture and
repairs to same, and vaults and safes, aggregated $14,080,000. The
Office of the Supervising Architect has charge of 1,383 completed
courthouses, post offices, customhouses, etc., and 58 quarantine
stations and marine hospitals, ,making a total of 1,441 buUdings
throughout the country, to which new buildings and extensions are
added every year. The expenditures under these appropriations
increase accordingly and practically the entire appropriations have
been expended.
Miscellaneous work
Besides the work connected with the public building program, the
Office of the Supervising Architect performed the following services:



265

SECRETARY OF THE TREASURY

Prepared drawings and specifications for the Coast Guard Academy,
New London, Conn., involving approximately $2,000,000.
Made sketches for one narcotic farm, involving approximately
$3,750,000.
Prepared for the State Department, Foreign Service Bureau, drawings in various stages I'or the legations and consular establishments at
Shanghai, China; Mukden, China; Rio de Janeiro, Brazil; Aden,
Arabia; Bluefields, Nicaragua; Santiago, Cuba. Reviewed the drawings and specifications prepared by private architects for the Foreign
Service building at Yokohama, Japan.
Checked for the Depiartment of Justice drawings and specifications
for the reformatory at Chillicothe, Ohio, involving approximately
$3,000,000 and made contracts with private architects for several penal
institutions.
A considerable number of inspections of buildings in the District of
Columbia were made, and a few outside the District of Columbia,
to ascertain the safety of buildings and bearing capacity of the fioor
construction.
Total expenditures, liabilities, and unencumbered balances
The total expenditures of the Office of the Supervising Architect
during the fiscal year 1930, contract liabilities charged against appropriations, and unencumbered balances, in connection with the public
building program as well as miscellaneous building activities, were
as follows:
Expenditures, contract liabilities charged against appropriations, and unencumbered
balances, fiscal year 1930
Expenditures

S t a t u t o r y roll
Sites a n d a d d i t i o n a l l a n d
C o n s t r u c t i o n of n e w b u i l d i n g s
Extensions to buildings
Miscellaneous special i t e m s . .
U n a l l o t t e d a p p r o p r i a t i o n ( l u m p siim)__
R e m o d e l i n g a n d enlarging p u b l i c buildings
H o s p i t a l construction. P u b l i c H e a l t h Service
L a n d s a n d o t h e r p r o p e r t y of t h e U n i t e d States
Repairs and preservation
Mechanical equipment
...J...
V a u l t s a n d safes
O p e r a t i n g supplies
General expenses
F u r n i t u r e a n d repairs
A d d i t i o n a l lock-box e q u i p m e n t
R e n t of t e m p o r a r y q u a r t e r s
O u t s i d e professional s e r v i c e s . . .
Relief of contractors, etc., for p u b l i c b u i l d i n g u n d e r Treasury Department
O p e r a t i n g force

Total..
1 I n c l u d e s $5,000 reserve, 1929; $5,000 reserve, 1930.
2 I n c l u d e s $25,000 reserve, 1929; ;525,000 reserve, 1930.




C o n t r a c t liabilities charged
against a p p r o priations

$380,026.08
17,954,471. 56
22,388,108.92
2,078, 637.42
79,142. 04

$69. 66
6,978,434.34
26,013,426.09
6,769,002.26
22,606.72

541,810. 62

32,122. 35
2,500. 00
8.40
367,172.15
107,123. 83
74,997. 62
377,369. 29
• 105, 540.31
23i, 268. 49
566:00
148,337. 62
9, 775. 65

6.20
1, 532,215.46
680,438.61
130,135. 94
2,892,721. 55
1,499,084.42
956,291.89'
63, 799. 79
712.280. 31
399,459.34

Unencumbered balances, J u n e
30,1930
$4,259. 26
13,296,522.85
18,039,954.08
1,762,026.25
44,633. 75
19, 647,000. 00
3,533.30
1,086. 40
19,251.06
8,309.72
1 47,035. 60
1 205,264. 20
2 363. 655.44
1 7,763. 83
311. 05
387,297. 68
972,663.14

54,848.37
7, 602,244. 54

669,996.14

177,000. 76

69,745, 622. 96

41,910,216.91

54,886,267.26

266

REPORT. ON T H E FINANCES

The following statement, prepared pursuant to the act approved
June 6, 1900 (31 Stat. 592), shows the public buildings under the
control of the Treasury Department, by classes, and the aggregate
expenditures to June 30, 1930, in connection therewith:
Aggregate expenditures to June SO, 1930, for buildings under the control of ihe
Treasury Department, and the unencumbered balance of appropriations
Extensions,
alterations,
and special
items

Construction

Post - office, courthouse, customhouse
buildings, etc
$108,354, 794.73
Courthouse buildings
914, 983.67
Customhouse buildings
23,117, 341. 60
Marine hospital buildings
.
5,975, 174. 70
^ Post-office buildings
91,451, 521.15
Quarantine station buildings
3,096, 488. 50
Veterans' hospital buildings
493, 356.47
Miscellaneous buildings
61,587, 698.54
Total

284,990,258.26

Total.




Total expenditures to June
30, 1930

18,141,815.04 $18,669,049.62 $146,165, 669. 29
1, 545, 644.06
434,973.07
195, 687. 42
3,481,901. 29 2,498,717.30
29,097,960.19
3, 651,013.16 3,462,351.00
13,088,638.86
5,190,747. 85 10, 740,246. 04 107,382,515. 04
2,350,535. 82 1,574,361. 68
7,020,386.00
104,010. 20
369,076. 52
966,442.19
4,741, 640.21 5,862,467. 32
62,191,696.07
38,122,417. 31 43,336,166.13

Cost of sites

Post-office, courthouse, customhouse buildings, etc...
Courthouse buildings
Customhouse buildings
Marine hospital buildings
Post-office buildings
Quarantine station buildings
Miscellaneous buildings
Unallotted appropriation (lump sum)

Annual repairs

530. 52
900, 834.69
3,786, 822. 33
799, 238.97
33, 608.906. 61
308, 837. 60
36,536,022. 94
102,932,193. 66

366,448,841.70

Outstanding liabilities chargeUnencumable against appropriations
bered balance
of appropriations
Bmldings
Sites

! 179,165. 83 $9,904,968.87 $8,912,459.
,
102,141. 97 2,112,152.
104, 687.
916,834. 68
"ioo,'ooo.'6o"
3,864, 628.11
676,911.
2,996,866. 66 6,443,676. 54 8,749,697.
36,506.00
31, 699. 51
156,286.
1,666,906. 86 11,660,985.38 12,424,342.
19,647,000.
6,978,434.34

32,804,936.06

52,683,636.93

DIVISION OF SUPPLY

The Division of Supiply, in the ofl&ce of the Secretary, is the central
procuring or purchashig agency of the Treasury Department, and, as
such, does the purchasing for all local and field activities, with the
exception of those from appropriations for the Bureau of Engraving
and Printing .(which are exempted bylaw), the Coast Guard, and, to
some extent, the Bureau of the Mint. It is charged also with certain
duties closely related to purchasing, such as accounting for funds appropriated or allotted to it; supervision over printing and binding for
the Treasury Departnient and engraving work by the Bureau of Engraving and Printuig for all departments and establishments, unless
money, bonds, or stamps are involved; control over newspaper and
periodical advertising' for the department; routing of all freight,
express, and parcel-post shipments; and warehousing and distribution pf stationery andl. miscellaneous supplies, including blank books
and forms, to WashiiiLgton and field ofl&ces of the Treasury Department. The appropriations to the department for purchases of
stationery, and for printing and binding, are under its administrative
control.
Expenditures from various appropriations
The total cost of purchases made by the Division of Supply during
each of the past five* fiscal years from specified appropriations from
which allotments were made to the division to cover expenditures
made by it, and also purchases chargeable to appropriations from
which no allotments ^^^ere made, are shown in the following table:
Expenditures by Division of Supply for the fiscal years 1926 io 1930, by appropriations
Bureaus and offices, and titles of appropriations
Chief clerk and superintendent:
Contingent expenses, Treasury Department..
Carpets and repairs
File holders and cases
Freight, telegrams, etc
^
Fuel, etc
Furniture, etc
Gas, etc
Motor vehicles
,
M iscellaneous items
,.
Newspaper clippings and books....
Rent
Labor-saving machines
Operating expensesTreasury Department Annex..
Darby Building
Library

Total..




1929

$498. 93
3, 966. 87
9, 856. 30
18,396.30
4,480. 25
18,144. 52
6,976. 42
12, 769.81
986.16|
14,660. 00
13,799. 36

$496.'57
4, 974. 21
9,904.; 21
18,002.161
7,462.
18, 392.51
9,351.86|
11,439.41
997.: 28|
12, 500. 00
13,924.13

11,988.66
3, 560. 03

11,877.40
3,824.36
1,999.76

120,102.51

125,146.'53

$130, 767.06

$929.75
7, 966. 61
35. 00
19,169.44
6,104. 62
1,079. 65
23,426."
10,946. 331
934.49

$977. 83
7,969. 07
52. 81
16,115.60
6, 513.62
922.89
24, 288. 56
11, 649.10
981. 57

39,016.44

31,475.24

2,224. 25
1,466.56
1,000. 00

3,167.60
1, 634.44
990. 63

3.75

114,298. 72 106,638.76

131,760.81

267

268

REPORT ON T H E FINANCES

Expenditures by Division of Supply for the fiscal years 1926 to 1930, hy appropria. tions—Continued
Bureaus and offices, and titles of appropriations
Division of Supply:
Stationery, Treasury Department
Printing and binding. Treasury Department
•
Postage, Treasury Department
General Supply Committee:
Transfer of office materials, supplies,
and equipment
Salaries
• Salaries and expenses
Total
Division of Bookkeeping and Warrants,
contingent expenses, public moneys
Bureau of Customs:
Collecting the revenue from customs...
Equipment, appraisers' stores, New
York
Total

1926

1927

1928

1929

1930

$368,948. 86 $468,666.67 $446,043.39 $432,741.00 $435,810.15
2 788,641. 70 2 892,136. 93 2 792,634.46 2 802,883. 72
1,000.00
1,000.00
986.76
999.96
41,339. 73
77,188.71

114,706.20

115,683.68

128,215.82

133,110.00

487,477.30 1,363,881.86 1,463,885.62 1,354,578.03 1,372,803.83
1,269.92

2,643.23

2,875.39

4,478. 23

1,849.14

233,483.02

271,196.76

216,122.10

395,473.19

598,229.68

69,161.48
233,483.02

216,122.10

271,195.76

454,634.67

598, 229. 68

Public Health Service:
Pay of personnel and maintenance of
hospitals
1,632,874.69 1,670,880.71 1,794,610.31 1, 766 715. 261,980,768.61
Quarantine service
. . ..
296,458.24 311,630.66 276,242. 06 292,784.45 318,214.44
759. 76
Interstate quarantine service
2.463.23
474.99
6,247.36
3, 520. 65
Interstate quarantine service, 1925-26.7,115.34
Maintenance bf Hygienic Laboratory.
34,115. 92
33,959. 64 33,589. 88 34,250. 06 33,287.36
Field investigations
15,600. 72 20,901.09 23,851.61 27,077.31 20,937.79
Preventing the spread of epidemic diseases
21,704.93 33,845.46
32, 711.21 35, 597.34
36,957.06
Preventing the spread of epidemic diseases, 1925-26
25,165.13
Expenses, division of venereal diseases.
2,. 302.06
4, 672.22
3,040.74
3,937.09
4, 373. 97
Control of biologic products
22, 671. 28 18,087.66
16,482.83
19,663.41
19,815.91
Books
493. 24
434.15
494.66
448. 24
497. 96
Studies of rural sanitation
40.00
72.75
Marine hospital, Savannah, Ga
7,641.33
Marine hospital, New Orleans, La
886.26
Survey of salt marsh areas, South At1,734.84
lantic and Gulf States
1, 610. 29 " 1, 083.94
•

Total

2,067,386.85 2,000,813.66 2,195,203.53 2,176,731.38 2,414,561.77

Supervising Architect (account public
buildings):
Repairs and preservation
.
101,089.89 109,039.01 104,692.86 119,680.30 111, 615. 06
96,140. 22 91,730.90 101,009.61 105,392.15 116,102.97
Mechanical equipment
70, 980. 62 49,196.71 100,310.02 84,689. 83 93,424. 59
Vaults and safes
13, 567. 6« 27,625. 56 33,705.64
General expenses
.
46,924.19 65,949.34
Furniture and repairs
664, 956. 75 534,303.43 619,069.99 874,740.96 860,967.47
1,161, 803. 46 1,100, 269.29 1, 097, 299.341,114, 359. 98 1,068, 265. 90
Operating supplies
Total
Bureau of Internal Revenue: Collecting the
internal revenue. . . . .
.
Bureau of Prohibition: Enforcement of
narcotic and national prohibition acts 3...
Public Debt Service:
Expenses of loans (act Sept.. 24, 1917,
as amended and extended)
Public Debt Service .
. . .
Total

1, 998, 537. 621, 912,164. 902,056,087.46 2,345,787.41 2, 316, 225.33
194,899. 85 194,086.16

235,890. 74 194,449.29

133,092. 76 212,828.37

225, 267. 08 lib, 194. 94 144, 512.10

274.423.27,

7, 214.13
33, 621.26

3,632.68 . 27,182.47
36, 506.44 23, 066.11

3,168. 57
28, 224.80

1,913.66
16, 577. 68

40, 735. 39

40.139.12

31,393. 37

18,491.24

50, 248. 58

Total appropriations and allotments . 5, 276,985.12 6,122, 899. 486, 549, 879.12 6, 813,886. 08 7,272,857.17
Purchases from appropriations from which
no allotments were made ^
.
132,147. 66 41,269.26 107,144. 50 96,593.86 213,788.89
Grand total

5,409,132. 78 6,164,168. 74 6,657, 023.62 6, 910,479. 94 7,486,646.06

* Appropriation accounting not done by Division of Supply.
2 Includes receipts from sales of customs forms (reimbursed to the appropriation) and certain expenditures for printing and binding from appropriations other than printing and binding.
8 Under supervision of Commissioner of Internal Revenue prior to fiscal year* 1927.
« Appropriation accounting for these purchases was done by bureaus and offices for which the purchases
were made.




269

SECRETARY OF THE TREASURY

The foregoing expenditures involved the examination and audit of
vouchers for payment through the disbursing clerk of the Treasury
Department, and the writing of purchase orders.
Number of vouchers audited and purchase orders written, and the amount saved in
cash discoimts during the fiscal years 1926 to 1930

1926
1927
1928
1929.
1930

Purchase
orders
written

Vouchers
examined

Fiscal; year

84,465
87,982
94,402
103, 243
116,100

:

_

34,967
38,886
40,700
42,171
»48,571

Amount
saved in
cash discounts
$10,856.87
12,142.9i
19, 288.15
30, 672.99
30,715. 78

^ Exclusive of 4,792 quarterly and. annual contracts made to purchase ice, wood, coal, fuel oil, subsistence
stores, etc.

During the last five years the number of vouchers increased 37K
per cent and the num.ber of purchase orders increased 39 per cent.
The purchase orders in 1930 required the preparation of 8,432 sets of
specifications and the chculation of 63,883 invitations to dealers to
submit quotations, as compared with 7,272 sets of specifications in
1929.
The total amount of cash discounts offered and not taken during
these five years was $1,604.95, or approximately IK per cent of the
total offered. The discounts lost were due generally to failure of
vouchers requiring certification by field oflFicers to reach the division
in time for approval for payment within the discount periods.
The traflBc section furnished 31,201 routings for transportation in
the most economical manner of supplies purchased by the division
and also for shipm.ents made by other activities of the department.
Stationery supplies
The appropriaiions, reimoursemenis, ana expenditures for articles
i n e appropriations, reimbursements, and expenaii
f stationery for the past five years are summarized in the following
of sta*
table:
Appropriations, reimbursements, and expenditures for stationery for the fiscal years
1926 to 1930
1926
Appropriation.
Reimbursements

_.

.

Available Credits
Total expenditures

..

Balance

1927

1928

1929

$437,760.00
67,440.62

$480,000.00
16,110.04

$470,000.00
16,166.25

$420,000.00
13,011.00

$425,000.00
11,431.15

505,200. 52
436,405.17

496,110.04
458, 656. 67

486,166. 25
446,043.39

433, Oil. 00
432,741.00

436,431.16
435,810.15

68,796.35

36, 563.47

40,122.86

270.00

621.00

1930

The value of stationery supplies issued to each bureau, ofl&ce, and
service of the departnient during each of the last five fiscal years is
shown in the following table.



270

REPORT ON T H E FINANCES

Issues of stationery supplies to bureaus, ofiices, and services of the Treasury Department for the fiscal years, 1926 to 1930
Bureau, office, or service

1926

1927

1928

1930

Secretary, Undersecretary, and Assistant
$939, 53 .
$1, 630. 22 $1, 617.03 $1,042. 38 $1,026. 37
Secretaries
430. 62
446. 27
474. 80
675. 62
626. 39
Appointments Division
162. 82
5, 209. 33
3,452. 37
136. 60
Board of Tax Appeals
1,064.49
1,718. 68
614. 77
. 481. 67
1,096. 25
Division of Bookkeeping and Warrants
7,187.14
4, 985. 83
7, 863.68
8, 227.46
6,924. 79
Bureau of Engraving and Printing
534.12
543. 57
667.36
643. 20
358. 28
Bureau of the Budget
2,919. 40
2,886. 27
2,914. 29
2,358.03
6,885.96
Division of Supply
1,119. 27
1,198. 97
936.56
707.76
1,020.76
General Supply Committee
1, 654. 20
1,386. 36
1,364.34
1,629. 29
1, 757. 38
Chief clerk and superintendent..-.
596.27
117. 29
430.76
643.24
1,027.06
Division of Accounts and Deposits
11,056. 61
6,712.82
7,821. 33
8,641. 22
6,429. 24
Comptroller ofthe Currency
...
99.00
54.08
50.33
36.56
61.41
Contingent expenses, national currency
1,391.16
1,407. 81
2,031. 57
1,732. 77
1, 627. 69
Custodians of public buildings
67,099. 34 63,138. 35 72, 030. 83 66,426. 69 77, 260.11
Customs Service
722. 90
797. 00
806. 85
Collector, San Juan, P. R
651.19
778.48
6U.04
571. 29.
Disbursing clerk
723. 61
155.36
Division of Deposits
2,914. 25
2,282.42
2,422.03
3, 681. 73
3, 979. 86
Federal Farm Loan Board
2, 736.30
3,647.07
4, 209. 53
3,977. 02
4, 249.95
Federal Reserve Board
23.36
9.58
23.48
15.38
14.15
Government actuary
884.05
680. 28
919. 66
1, 017.80
1,023. 77
Insolvent national bank fund
233,878.04 203, 234.04 195,135. 01 191, 611. 70 172. 558. 02
^ Internal Revenue Bureau
102. 71
Federal Farm Board
176.85
Customs Service, St. Thomas, V. I
962.96
921. 76
943. 91
1, 284.48
1,134.70
Mint Bureau
1, 767. 22
1,414. 68
1, 737.42
1,473. 24
1, 316.10
National bank examiners
1, 560.04
1,689.97
1,303. 31
1, 686.13
National Bank Redemption Agency
1, 666.92
177. 79
Printing division
(0
(0 .
(0
(0
27, 738. 50
Prohibition Bureau
60,420:09 46, 973. 39 45, 798.86
23, 608.17 48,058.81 20, 581.34 20,025.07
Public Debt Service
12,726.03
25,583.17
Expenses of loans
2, 564. 77
33.20
203.06
16,443. 31 16, 344.10 22,120. 62 21, 70'3.45 22,178. 21
Public'^Health Service
688. 82
823. 61
. Secret Service
_
929. 27
1,220.15
1,001.47
4, 755. 34
7,426. 29
Supervising Architect.
6, 338. 75
10, 347.03
8,481.09
10,395.03
8,791. 39
Treasurer of the United States
9, 678. 39
7,173. 37
8,176.
25,172. 03 26,909.04 25, 640.16 27. 709. 67 33, 266.00
Coast Guard
58
50.69
6.00
War Finance Corporation
12.84
21. 73
14.67
Expended for transportation (partly estimated)
20,000.00
20,335. 68 20,010. 70 19, 500. 00
Total...
.Reimbursed from other appropriations..
Total charged to stationery appropriation
1

453, 224. 24 463, 666. 67 468, 534. 43 451,326. 27 440,922.03
67, 440. 52 15,110.04
16,166. 26 13, Oil. 00 11,431.15
385, 783.72

448, 556. 63 452, 368.18

438,315. 27 429,490.88

1 Included in Division of Supply.

A summary of changes in the value of stocks of stationery supplies
for the past five fiscal years is shown in the following table:
Changes in value of stocks of stationery supplies, for the fiscal years 1926 to 1930
1926

1928

1929

1930

$162,070. 26 $157, 399. 28 $162,367.96 $132,742. 06 $131,665.37
On hand at beginning of fiscal year
436,405.17 458,656. 57 446,043. 39 432, 741.00 435,810.15
Purchased during year
Total
18,475.43 615,955.86 608,411.35 566,483.06 667.476.52
Add value of stationery articles received
from various divisions as surplus for reissue
9,861.13
16,438.42
17,385.40
20,993.69
Less value of stationery articles transferred
to General Supply Committee as surplus
Value available for issue
Issued during year
On hand at end of year

608,326. 56 633,341.25
3, 519.08

1,41L 35

686,476. 65 583,913.94

880.00

153.69

604,807.48 633,341. 25 607. 631. 35 586,476. 65 583, 760. 25
463, 224. 24 463,666.67 468, 634.43 461,326.00 440,922.03
161, 683. 24 169,674. 58 138,996.92

135,150. 65 142,838.22

161,683. 24 169,674. 58 138,996.92
167,399.28 162,367.96 132,742.06

135,150. 65 142,838. 22
131,665.37 143,404.14

Inventory value June 30»
Inventory value July 1^
Inventory values are readjusted July 1 of each year in accordance with new prices on contracts effective
on that date, and invoices are based on replacement costs at dates of shipments.




271

SECRETARY OF THE TREASURY

Shipments of stationery and miscellaneous supplies from the warehouse of the Division of Supply in Washington to field offices were as
follows:
Shipments of stationery supplies for the fiscal years 1928 to 1930
1930

1928
Packages
Stationery and miscellaneous supplies:
Freight and express...
Parcel post
Franked parcels
Blank books and forms by mail

Weight

10,479
2,046
5,408
81,410

Total shipments

Weight

1,284,289 11,883
24, 657 1,566
16,224 7,367
895,395 57,805

343

Government bills of lading used for J'reight and
express shipments
^...

Pack-

2,220,666

Pack-

1,372, 772 11,977 1,306,362
. 552
9,077
21,555
22,101 4,278
17, 483
711,045
-783, 725 92, 408

78, 621 2,200,153 109,215

3,393

Weight

2. 043,967

3,342

3,549

Printing and binding
The appropriation for printing and binding for the fiscal year 1930
was $715,000, of which $708,686.46 was expended and $6,313.54
reverted to the Treasury. To these expenditures should be added
$42,586.14 reimbursed from sales of customs forms and $51,611.12
expended from other appropriations. Thus there were total expenditures of $802,883.72 for all classes of printing and binding handled
through the Division oi: Supply.
Expenditures for printing and binding, by bureaus, ofl&ces, and
services for each of the last five fiscal years are shown in the following
table:
Appropriations, expenditures, and reimbursements for printing and binding for the
fiscal years 1926 to 1930 "
^
SUMMARY
1926

1927

1928

1929

1930

Appropriation, printing and binding,
Treasury D epartment
2 $834,760.00 2$835,000.00 $820, 000. 00 $715,000.00 $716,000 00
R e i m b u r s e m e n t s from sales of cuutoms
42, 616.51
43, 573. 85
44,085.18
forms
46, 639.19
42 586 14
E x p e n d e d from o t h e r a p p r o p r i a t i o n s
36,129. 43
30,495. 85
62,097.88
34, 895.98
61,611.12

Balance _ .

913,495.94
884,276.95

909,069. 70
788, 641. 70

926,183.06
892,095. 22

795, 535.17
792, 634. 45

809,197.26
802,883. 72

29,219.99

Total available.". .
T o t a l expenditures _

120,428.00

34,087. 84

2,900.72

6 313 54

1 Figures subject to slight variatic»ns, due to necessary delays in receiving bills from the Public Printer
for certain items until pending work is completed after the close of each fiscal year.
2 Exclusive of $82,500 available for 1926-27 (44 Stat. 868), which was not expended.

12101—31-

-20




272

REPORT ON THE FINANCES

Appropriations, expenditures, and reimbursements for printing and binding for the
fiscal years 1926 to ^550—Continued
E X P E N D I T U R E S FROM APPROPRIATION FOR PRINTING AND
BUREAUS. OFFICES, AND DIVISIONS
1927

1926
Secretary, U n d e r s e c r e t a r y , a n d A s s i s t a n t
Secretaries
Appointments Division...
B o o k k e e p i n g a n d W a r r a n t s Division
B u r e a u of E n g r a v i n g a n d P r i n t i n g
B u r e a u of P r o h i b i t i o n 3
Chief clerk a n d s u p e r i n t e n d e n t
.-.
Coast G u a r d :
Bureau
Service...
Commissioner of A c c o u n t s a n d D e p o s i t s . .
C o m m i t t e e on e n r o l l m e n t a n d disbarm e n t of a t t o r n e y s a n d agents
C o m p t r o l l e r of t h e C u r r e n c y
C u s t o d i a n s of p u b l i c b u i l d i n g s
Customs:
Bureau
."
Service
.*
Special agency
D i s b u r s i n g clerk
Division of D e p o s i t s
Division of S u p p l y
General S u p p l y C o m m i t t e e
Government actuary
Internal Revenue:
Bureau
P r o h i b i t i o n enforcement
Service
•.
Loans and Currency Division'
Mint:'
Bureau
Service
N a t i o n a l b a n k depositaries
P r i n t i n g division
P u b l i c D e b t Service «
Public Health:
Bureau
Service
Register of t h e T r e a s u r y 6
Secret S e r v i c e . .
Supervising Architect
T r e a s u r e r of t h e U n i t e d States
M a t e r i a l s for b o o k b i n d e r
Miscellaneous
Total-.

$10,084.21
674. 29
8, 957. 94
6,454. 77

Total.

1930

1928
$13, 737. 30
1, 210. 78
11,541.61
6, 723. 40
71, 316. 06
1, 641. 78

BY

$11, 899. 00
. 946.43
23, 747. 91
7, 763.40
50, 888. 98
1,006. 28

$11,472.45
1, 569. 68
11, 530. 20
6,891. 55
75,107. 76
1, 531. 08

1, 382. 57

$12,964. 76
1, 457. 94
18, 919. 53
7,185. 81
59, 277.14
1, 331. 46

11, 985. 41
22,160.93
61.31

14,677. 24
18,477. 33
123. 39

23, 824. 35 [4 25,717.73
22, 378.10
82.96
123. 55

* 36, 634.42
123. 53

49.16
24, 356. 31
1, 259. 27

28,922. 67
1, 806.13

27, 952. 32
1, 002. 08

23, 764. 88
1, 393. 35

25, 709. 69
1, 592.19

6,481.10
42, 563.90
839. 81
712. 29
44.48
4, 618. 44
, 27,147. 50
1, 719.19

5, 531. 28
34,089. 02
1, 389. 86
630. 36
29.96
7, 728. 87
29, 885.11
1, 570. 86

4, 066. 58
35, 968. 64 ^5 34,622.88
434. 69
649. 69
230. 49

64, 794.81
54, 241. 58
341, 576. 22
2,435.43

65, 991. 04

86, 777. 77

179, 002. 79
2, 640. 68

211, 310. 33
2, 814.17

3,406. 92
2, 584. 86
3, 273. 00
516. 39
20, 361. 39

3,337. 25
2, 516. 82
2,120. 98
180.22
24, 036. 20

76,854. 90
4, 359. 27
713.08
296. 33
2, 765. 24
11,167. 76
256. 48
46, 374.47

103, 650. 52
4,182.11

88,129. 44
8,107. 57

327. 95
5, 876.49
11, 908. 81

382. 91
3, 041. 80
12, 966.83

62, 902. 52

63, 847. 64

75, 787.48

57, 500. 05

805, 530. 01

714, 572. 00

786, 912.16

712, 099. 28

708, 686. 46

30,141. 79
36, 005. 28
1, 652. 28

(«)

s 48, 045.10
454.46

(«)

(«)

17,162.10
27, 691. 01
1, 603. 24

10,014. 65
30, 967. 56
1, 614. 27

4263,655.90

REIMBURSED AND EXPENDED FROM
Agricultural C r e d i t C o r p o r a t i o n
B u r e a u of E n g r a v i n g a n d P r i n t i n g . . . . . . .
Collecting t h e r e v e n u e from c u s t o m s .
C o n t i n g e n t expenses, n a t i o n a l c u r r e n c y . . .
• C u s t o m s Service, b l a n k forms »
E x p e n s e s of loans (act Sept. 24, 1917, as
amended and extended)
Expenses, s e t t l e m e n t w a r claims act 1928..
F e d e r a l farm loan b a n k s . . .
F e d e r a l F a r m L o a n B u r e a u (miscellaneous e x p e n s e s ) - . .
I n s o l v e n t n a t i o n a l b a n k fund
Mixed Claims Commission
N a t i o n a l b a n k examiners
_
N a t i o n a l B a n k R e d e m p t i o n Agency
N a t i o n a l Sesquicentennial E x h i b i t i o n
P u b l i c D e b t Service
W o r l d W a r Foreign D e b t C o m m i s s i o n . _.
E n f o r c e m e n t of narcotic a n d n a t i o n a l
p r o h i b i t i o n acts

BINDING,

4246,533.00

3, 662.18
2, 940.12
2, 561. 64

* 5, 761. 94
2,019. 04

« 7, 733.48
1, 982. 53

20, 000. 68

16, 848. 86

(«)

( « ) •

(8)

(«)

12, 637. 85

n02,264.76 «101, 084.19
503.93
6, 668. 29
11,109.45
(8)

493.14
5, 938. 80
12, 624. 83
(8)

OTHER

APPROPRIATIONS

$20.65
2,803.68

$340. 06

749.14
42, 616. 61

1, 254. 59
43, 573.85

$1^ 582. 99
17. 56
3, 562.08
44, 085.18

$2,398.39
56.60
666. 76
46, 639; 19

$2, 806. 86
428. 30
4, 597. 38
42, 686.14

5, 828. 91

24, 249. 84

3,117. 63
136.13

1, 646. 04
91.28

10, 564.91
1, 601. 33
161. 39
12,130. 68
3, 930. 61

9, 819. 28
1, 668. 97

671. 69

687. 32

3, 734. 37
2, 247.05

2, 737. 36
3,166.02

6, 440.16
2, 393.18

12, 404. 44
11, 202. 82
1, 629. 61

10, 337.13
2, 620. 42

12,182. 61
11, 630.46

20.00
3, 614. 05

39.00

666.08

78, 745.94

74, 069. 70

106,183. 06

18, 065. 77
9,048. 82

142. 66

3,448.43

80, 535.17

94,197. 26

3 I n c l u d e d u n d e r B u r e a u of I n t e r n a l R e v e n u e prior to 1927.
4 I n c l u d e s b u r e a u a n d service.
8 I n c l u d e s b u r e a u , service, a n d special agency.
6 C o m b i n e d w i t h C o m m i s s i o n e r of A c c o u n t s a n d D e p o s i t s .
7 P u b l i c D e b t Service includes Register of t h e T r e a s u r y for 1927,1928,1929, a n d 1930, a n d t h e greater p a r t
of L o a n s a n d C u r r e n c y D i v i s i o n for all y e a r s .
8 I n c l u d e d in D i v i s i o n of S u p p l y .
9 R e i m b u r s e d to p r i n t i n g a n d b i n d i n g a p p r o p r i a t i o n *




273

SECBETARY OF T H E TREASURY

Department advertising .
Authorizations to publish advertisements were issued to 3,823
newspapers and periodicals in the fiscal year 1930, compared with
3,207 in 1929, an increase of 616, while expenditures thus authorized
increased from $24,363.67 in 1929 to $31,062.92 in 1930, an increase
of $6,699.25.
Engra7)ing work
A total of 53,397,294 engraved forms were approved by this
ofl&ce for execution by the Bureau of Engraving and Printing for the
several departments and establishments of the Government during
the fiscal year 1930, compared with 55,937,976 in the preceding year.
The following table gives the quantity of each class of forms constituting these totals:
Class
Certificates .
-^
Checks
Commissions .
Drafts
Liquor perriiits . . . .
Transportation requests
Warrants

.

Total




1929

1930

3,143, 569
32, 246, 905
36, Oil
14,800
18, 635, 700
1, 737,450
223, 541

i, 139,010
36,021,656
.125,437
22,625
11,791,200
999,935
297,632

55, 937,976

53,397,294

TREASURER OF THE UNITED STATES

A comparison between total ordinary receipts from all sources,
exclusive of postal revenues, and cash expenditures chargeable against
ordinary receipts, for the fiscal years 1929 and 1930, on the basis of
daily. Treasury statements, revised, is shown in the following table:
1929
Ordinary receipts, exclusive of postal revenues.
Cash expenditures chargeable against ordinary receipts
Surplus.

1930

Increase (+) or
decrease (—)

$4,036, 218,918. 67

$4,174,061,545.77

-t-$137,832, 627.10

3,848,413, 287.11

3, 993,769,636.40

-M45,356, 349. 29

187,806,631. 56

180, 281,909.37

-7, 523,722.19

The abc)ve figures include receipts from tolls, etc., covering movements of tonnage through the Panama Canal, amounting to
$28,271,643.03 for the fiscal year 1930 and $28,131,447.24 for the
previous year, as well as disbursements on account of the canal,
exclusive of fortifications, on the basis of warrants drawn amounting
to $10,247,935.33 for the fiscal year 1930 and $9,970,913.25 for 1929.^
The postal revenues deposited in the Treasury and credited to the
account of the Post Ofl&ce Department amounted to $689,432,702.87.
The receipts and expenditures on account of the principal of the
public debt during the fiscal year 1930 are shown in the following
statement:
Receipts on -account of—
Treasury bills
$312, 024, 000. 00
Certificates of indebtedness
3, 201, 562, 000. 00
Treasury notes (foreign service retirement fund series) _
. 486, 000. 00
Treasury notes (adjusted service series)
137, 800, 000. 00
Treasury notes (civil service retirement fund series)
40, 700, 000. 00
Treasury savings securities
550, 428. 35
Postal savings bonds
2, 337, 540. 00
Deposits for retirement of national bank notes (act of
July 14, 1890)
27, 510, 202. 50
Total

3, 722, 970, 170. 85

Expenditures on account of—
Treasury biUs
.
156, 046, 000. 00
Certificates of indebtedness
3, 578, 967, 700. 00
Treasury notes (foreign service retirement fund series) _
117, 000. 00
Treasury notes (adjusted service series)
21, 600, 000. 00
Treasury notes
628, 201, 900. 00
War savings securities. .^
:
41, 986. 50
1 These figures do.not include dividends on capital stock of the Panama R. R. owned by the United
States, or payments to the Government of Panama under the treaty of Nov. 18,1903, which are included
in the figures presented on page 535.

274




SECRETARY OF THE TREASURY

275

Expenditures on account of—Continued.
Treasury savings securities
,
First Liberty bonds
Second Liberty bonds...
.
.
Third Liberty bonds
...
Fourth Liberty bonds
Victory notes
Other debt items
.
National bank notes and Federal reserve bank notes. _
Total

.

Excess of expenditures

$15, 530, 061. 65
5, 596, 550. 00
4, 092, 850. 00
10, 787, 850. 00
10, 108, 000. 00
290, 400. 00
202,907.62
37, 276, 413. 50
4, 468, 859, 619. 27

l..._

745, 889, 448. 42

The retirements of the debt were effected as follows:
From—

'

Cumulative sinking fund
_
"
.
$388, 368, 950. 00
Purchases and retirements from foreign repayments
61, 135, 000. 00
Amounts received from foreign governments under debt
settlements
109, 790, 850. 00
Amounts received for estate taxes
73, 100. 00
Purchases and retireraents from franchise tax receipts
(Federal reserve 2\,nd Federal intermediate credit
banks)
.
.
4, 455, 000. 00
Forfeitures, gifts, e t c . .
.
.
60, 703. 25
Total...
1
Public debt retirements (Out of surplus and general fund
balance
..,
Total

....1

553, 883, 603. 25
192, 005, 845. 17
745, 889, 448. 42

There was a considerable increase in the gold holdings of the Treasury during the fiscal year due chiefiy to ah excess of imports over
exports. The amount of such holdings on June 30, 1929, on the
basis of daily Treasury statements, revised, was $3,278,368,764.49,
and on June 30, 1930, $3,493,522,532.98, a net increase of $215,153,768.49. The total imports of gold during the year, as reported by
the Department of Commerce, were $342,340,519, and the exports,
$119,195,491. The gold was held on June 30, 1930, on the following
accounts:
For redemption of gold certificates outstanding.'..^
Gold fund, Federal Reserve Board
.
Gold reserve..,
...
.
Gold in general fund
Total

.__

. . $1, 489, 989, 479. 00
1, 796, 239, 234. 56
156, 039, 088. 03
51, 254, 731. 39
3, 493, 522, 532. 98

Of the amount showia in the general fund; $36,675,622.56 was held
for,the redemption of I'ederal reserve notes.
The balance in the gold fund of the Federal Keserve Board at the
close of the fiscal year 1929 was $1,562,425,579.40^ The balance on
June 30, 1930, was $1,796,239,234.56.



276

REPORT ON THE FINANCES

Public moneys on deposit in designated Government depositaries
on June 30, 1930, exclusive of items in transit on that date, amounted
to $350,857,097.48, as shown by the following figures for classes of
depositaries:
In
In
In
In
In
In
In

Federal reserve banks and branches
special depositary banks (war loan deposit accounts)
foreign depositary banks (general and limited)
insular depositary banks (general and limited)
other general depositary banks
other limited depositary banks
treasury of the Philippine Islands
Total

.

$26, 524, 266. 32
296, 623, 336. 64
1, 612, 139. 14
1, 603, 362. 77
13, 131, 335. 12
11, 137, 030. 35
225, 627. 14
350, 857, 097. 48

During the year interest accrued on balances held by general and
limited depositary banks (including insular and foreign) amounting to
$518,817.15, and on balances in special depositary banks arising from
the sales of certificates of indebtedness amounting to $2,652,239.88,
making a total of $3,171,057.03.
Funds aggregating $122,584,559 were transferred by wire through
the Federal reserye banks and branches to general depositary banks
and to the treasury of the PhUippine Islands during the year to restore
balances depleted by the cashing of Government checks and warrants,
as against $120,293,170 during 1929.
United States bonds to the amount of $666,219,750, pledged to
secure national bank note circulation, were held in the custody of
the Treasurer at the close of the fiscal year 1930. United States
bonds and other securities/held by the Treasurer to secure public
deposits in depositary banks (not including special depositary banks)
amounted to $46,705,050, and securities held for the safe-keeping of
postal deposits in postal-savings depositaries amounted to $204,148,422. Under the provisions of law, or by direction of the Secretary
of the Treasury, the Treasurer of the United States is custodian of
additional bonds and other obligations pertaining to several special
trust accounts totaling $11,799,179,393.54%. The aggregate of all
custody holdings is $12,716,252,615.54%.
Interest coupons from United States obligations cashed by the
various Government depositaries during the year and paid, examined,
and verified by the Treasurer numbered 19,203,441 and amounted to
$494,385,830.60. Improved redemption methods connected with
the honoring of interest coupons were put into effective operation
during the past year with the result that errors in coupon assortment
and errors in the invoices submitted by the banks concerned have
been detected and corrected much more promptly and with much
less inconvenience to the banks than was the case prior to the change
in the verification plan. The improvement was accomplished without
any additional cost.



SECRETARY OF THE TREASURY

277

Improved methods relating to the assessment and collection of the
semiannual duty due from national banks on account of their currency
circulation were put into operation during the past year and brought
about a more accurate assessment and a more prompt payment of the
tax. The amount coUected has been subjected to a more painstaking audit which hais resulted in an increase in revenue above the
increas^ed cost incident to the change in method. The increase in
revenue, as a result of the improved procedure, has aggregated about
$9,500.
Checks issued by the^ Division of Loans and Currency, Public Debt
Service, in payment of interest on the registered obligations of the
United States and cashed by the various Government depositaries
were paid and verified by the Treasurer to the namber of 1,805,162,
amounting to $125,271,624.25. Checks in payment of interest on
registered bonds of the insular governments were issued by the
Treasurer to the number of 8,384, amounting to $1,631,420. The
payment of such checks numbered 7,638 and amounted to $1,547,397.50.
The proceeds of currency counted into the Treasurer's cash by the
National Bank Redemption Agency amounted to $750,098,601.45. Of
this sum $730,603,182 was in national bank notes, $415,100 in Federal
reserve bank notes, $18,758,870 in Federal reserve notes, and $321,449.45 in United States currency.
Payments for currency redeemed were made as follows: In Treasurer's checks, $433,084.31; by credits to banks for direct receipts in
Treasurer's ofl&ce, $26,024,937.50; by credits to Federal reserve banks
and branches in genei-al account as transfers of funds for direct
remittances, $723,583,759, and for remittances by member banks,
$51,620.64; and by credits in other accounts, $5,200.
Canceled and uncanceled Federal reserve notes amounting to
$2,621,760,100 were received from Federal reserve banks and branches
for credit of Federal reserve agents. Such notes are settled for
between the Federal reserve banks and Federal reserve agents and
are, therefore, not taken into the Treasurer's cash in the National
Bank Redemption Agency.
United States paper currency (gold certificates, silver certificates,
and United States notei;) issued during the year numbered 882,500,600
pieces with a valuation of $2,409,706,200, as against 626,016,600
pieces with a valuation of $1,346,716,000 for the preceding year.
The redemptions of the three classes of currency numbered 843,655,404
pieces with a valuation of $2,261,755,550, as against 637,184,002
pieces with a valuation of $1,949,925,150 for the prior year, leaving
644,986,084 pieces,with a valuation of $2,364,826,838 outstanding at
the end of the year. Treasury notes of 1890 are no longer issued
and the amount outstanding is gradually being redeemed.




278

REPORT ON T H E FINANCES

United States paper currency shipped from the Treasury in Washington to Treasury offices. Federal reserve banks and branches, and
others amounted to $2,006,728,788 as against $1,597,485,441 for the
previous year. These amounts include unissued stock shipped as
reserve for joiut custody account amounting to $980,000 and $436,-'
470,000, respectively. Only two shipments of currency were made
for joint custody account during the fiscal year 1930, and tAe currency held in these accounts has all been released.
During the year the Treasurer's office authorized and directed shipments or transfers of gold bars and of current gold, silver, and minor
coins, in an aggregate amount of $51,390,094.72, to or from the Treasury, the mints, the assay office in New York, and the Federal reserve
banks and branches for use in public disbursements and exchanges
and for special purposes. Shipments of uncurrent coins to the mints
from the Treasury in Washington and from the Federal reserve banks
and branches were authorized in the amount of $9,068,898.99.
Funds were advanced to United States disbursing officers by accountable warrants issued in an aggregate amount of $2,825,310,604.83. Warrants aggregating $5,128,565,099.22 were also issued
covering public debt principal, interest, and premium payments by
the Treasurer. Treasurer's checks aggregating $76,901,951.48 were
issued on settlement warrants in payment of claims settled by the
Comptroller General; this amount includes claims settled in foreign
currencies, for which drafts were purchased at a total cost of $17,155.27.
Drafts in foreign currencies were also purchased for other departments and bureaus of the Government in the amount of $82,004.06.
Checks drawn on this office by Government disbursing officers
were paid to the number of 33,192,836, a decrease of 465,162 checks,
as compared with the previous year. Balances to the credit of disbursing officers and Government agencies in 3,067 accounts on June
30, 1930, amounted to $270,112,251.36, a decrease of $62,357,651.97
from the total of such balances in 3,062 accounts on June 30, 1929.
The decrease in balances was due largely to the transfer of the checking balance of the United States Railroad Administration to the credit
of the revolviug fund created by section 12 of the Federal control
act of March 21, 1918, as amended. The decrease in the nuniber of
checks resulted, in part, from the reduced number of pensioners and
the fewer redemptions of public debt obligations in 1930.
Payments to correct irregularities in the negotiation of checks were
made to the number of 1,124, amounting to $69,350.72, while in the
previous year the number of cases was 1,003 for $74,286.10. Duphcate checks to the number of 9,545 were requested by payees or indorsees as compared with 8,489 during the previous year, the original
check in each case having been lost, stolen, or destroyed.




279

SECmETARY OF T H E TREASURY

Replacement of the old series paper currency with the new series,
which was begun in July, 1929, has gone steadily forward, as indicated
in the following table:
Issues of new paper currency to June 30, 1930, and old and new series outstanding,
by class and denomination, on June 30, 1930
O u t s t a n d i n g J u n e 30, 1930
Ne\^' serie.3 issued t o
irune 30, 1930
Old series
N u m b e r of
piecies

Amount

N u m b e r of
pieces

Amount

N e w series
N u m b e r of
pieces

Amount

CLASS
U n i t e d States notes
Gold certificates
Silver certiflcates
T r e a s u r y notes of 1890. . .
F e d e r a l reserve notes
N a t i o n a l b a n k notes
F e d e r a l reserve b a n k notes

99, 3,:)6, 000 $393, 544, 000 1 18,279,830 1 $60,039,391 70,221,248 $286, 641, 625
71, 8!)5, 400 1, 299, 970,000 12, 420, 942 299,964,469 66,339, 608 1, 225, 586, 2f 0
751,1!)2,000 751,152,000 49, 708,625
62, 839, 644 427,493,919 427,493,919
492, 642
1, 261, 550
217, 013, 212 2,148, 700,980 28,977,341 468,198, 756 118, 516, 443 1, 278, 302,130
71, 4:{5,100 621,169,940 13, 656, 236 160,176, 788 60, 528, 626 544, 223,580
3,260,042
2, 347, 000

Total
1, 210,81)1, 712 5,214,536,920 125, 782, 616 1, 055, 740, 629 743,099,744 3,762, 247, 504
P e r cent of t o t a l o u t s t a n d ing...
78
22
85
16
DENOMINATION
$1
.._..
$2
$5
$10
$20
$50..
$100
$500
$1,000.. .
$5,000
$10,000 .
. . .
Fractional parts
Total

751, ir.2,000 751,152,000
34,41.2,000
68,824,000
210, 8CiO, 064 1,054, 300, 320
147, 0(i6,830 1,470, 668,300
60,855, 630 1, 217,112, 600
4, 2^1:7,054 212,352, 700
2, 075, 820 207, 582,000
8.3, 260
41, 630, 000
86, 290
86,290,000
4,603
23,015, 000
81, 610,000
8,161

65,064,995 427, 493,919 427,493,919
65,064,995
42,976, 410
15,818,066 21,488, 206
7,909,028
21,994, 738 109,973, 691 133, 584, 616 667,923,080
21, 298,777 212,987, 757 105, 744,194 1,067,441,940
16,179,069 323,681,366 49,315,130 986,302,600
97,620,490
3,495, 085 174, 754, 250
1,952,410
1,806,423 180, 642, 300
1, 256, 997 125, 599, 720
39, 213,000
78,426
55, 941 • 27, 970, 500
80, 995,000
69,487,-500
80, 995
69,488
23,005,000
' 4,165,000
4,601
831
13,420,000
81, 500,000
1,342
8,150
5
61, 554

1, 210, 851, 712 5, 214, 536,920 1125, 782, 616 1 1,065,740,629 743, 099, 744 3, 762, 247,504

1 Excluding $1,000,000 estimated as destroyed in the Chicago fire in October, 1871.

The substitution of the small-size currency for the large size has been
a task of the past year that has not only been an addition to the normal
duties of the Treasurer's Office but has been one that added heavily
to the clerical efforts. On June 30, 85 per cent of the 870,000,000
large-size certificates and notes had been retired. The exchange of
the gold certificates, silver certificates, and United States paper
currency (greenbacks) was accomplished without any additional
clerical expense. The (exchange of national bank notes, the expense of
which is reimbursed by the banks concerned, was provided for by an
appropriation of $179^175. Of that amount about $139,366 was
expended; the balance of $39,809 stands unexpended.




WAR FINANCE CORPORATION
(In liquidation)

The liquidation of the War Finance Corporation, which began on
January 1, 1925, was continued during the fiscal year 1930. By
the act approved March 1, 1929, the liquidation of the corporation's
assets remaining at the close of April 4, 1929, and the winding up
of the affairs of the corporation thereafter were transferred to the
Secretary of the Treasury, who, for such purpose, was given all the
powers and duties of the board of directors of the corporation under
the War Finance Corporation act of AprU 5, 1918, as amended. To
carry out the program of liquidation, the Secretary of the Treasury,
pursuant to authority contained in the law, assigned to a liquidating committee the exercise and performance, under his general superyision and direction, of all powers and duties vested in him by the
act approved March 1, 1929. The liquidating committee consists of
two officials of the Treasury Department who serve without compensation from the corporation.
Only $10,000 of the corporation's original capital of $500,000,000
is outstanding, $4^9,990,000 of capital stock having been canceled
and retired at par. The corporation has paid into the Treasury
$64,352,768.79 on account of earnings.
The amount advanced by the corporation for all purposes, from
its creation, was $690,431,100, of which $688,409,720 has been repaid.
The amount carried on the corporation's books on October 15, 1930,
was $244,500, of which $170,480 represented war loans and $74,020
agricultural and livestock loans (including expense advances of
$2,165). During the year ended October 15, 1930, no expense
advances were made. The total repayments during this period were
$122,920 on account of the corporation's agricultural and livestock
loans (including $100 on account of expense advances), of which
$46,768 was repaid by banking institutions, and $76,152 by livestock
loan companies.
280







EXHIBITS

281




EXHIBITS
THE PUBLIC DEBT
Issues of December, 1929
EXHIBIT

1

Ofiering of certificates of indebtedness, Series TS-19S0 (S)i per cent)
{press release, December 6,1929, with Department Circular No. 4.19)
The Treasury is to-day offering for subscription, at par and accrued
interest, through the Federal reserve banks, an issue of 9-month
3K per cent Treasury certificates of indebtedness of Series TS-1930,
dated and bearing interest from December 16, 1929, and maturing
September 15, 1930. The amount of the offering is $325,000,000, or
thereabouts.
Applications will be received at the Federal reserve banks. The
Treasury will accept in payment for the new certificates, at par,
Treasury certificates of indebtedness of Series TD-1929 and T D 2 1929, both maturing December 15, 1929. Subscriptions for which
payment is to be tendered in certificates of indebtedness maturing December 15, 1929, wUl be given preferred allotment up to
$200,000,000.
Bearer certificates wUl be issued in denoniinations of $500, $1,000,
$5,000, $10,000, and $100,000. The certificates wUl have two interest
coupons attached payable March 15, 1930, and September 15, 1930.
In addition to the offering of certificates of indebtedness, the
Treasury wiU on December 10 offer about $100,000,000 of 90-day
Treasury bills, to be sold on a discount basis to the highest bidders.
Details as to this offering will be made public on the morning of
December 10.
About $700,000,000 of Treasury certificates of indebtedness and
nearly $97,000,000 in interest payments on the public debt, become
due and payable on December 15, 1929.
The text of the official circular giving the terms of the offering of
certificates of indebtedness follows:
[Department Circular No. 419]

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 of Series TS-1930, dated and bearing
interest from December 16, 1929, payable September 15, 1930, with
interest at the rate of 3}^ per cent per annum, payable on a semiannual basis.
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 wiU have two interest
coupons attached, payable March 15, 1930, and September 15, 1930.




283

284

REPORT ON THE FINANCES

The certificates of said series shall be exempt, both as to principal
and interest, from all taxation (except estate and 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 certificates of this series will be accepted at par 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. The certificates of this series will be acceptable to secure deposits of public
moneys, but will not bear the circulation privilege.
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. The Secretary of the Treasury also
reserves the right to make allotment in full upon applications for
smaller amounts, 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. Allotment notices will be sent out promptly
upon allotment, and the basis of the allotment will be publicly
announced.
Payment at par and accrued interest for certificates allotted must
be made on, or before December 16, 1929, or pn 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 TD-1929 and Tp2-1929, both
maturing December 15, 1929, will be accepted at par, in payment for
any certificates of the series now offered which shall be subscribed for
and allotted, with an adjustment of the interest accrued, if any, on the
certificates of the series so paid for.
As fiscal agents of the United States, Federal reserve banks, are
authorized and requested to receive subscriptions and to make allotments on the basis and up to the amounts indicated by the Secretary
of the Treasury to the Federal reserve banks of the respective districts.
A. W.

MELLON,

Secretary of the Treasury.
TREASURY DEPARTMENT,
O F F I C E OF THE SECRETARY,

December 6, 1929.
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. Your special attention is invited to the terms of subscription and allotment as stated above. If you desire to purchase, at the market
price, certificates of the above issue after the subscriptions close, or certificates
of any outstanding issue, you should apply to your own bank, or, if it can not
obtain them for you, to the Federal reserve bank of your district, which will
then endeavor to fill your order in the market.




285

SECRETARY OF THE TREASURY
EXHIBIT 2

Subscriptions and allot7nents, certificates ofindebtedness, Series TS-1930
. (from press releases, December 10, 1929, and December 11, 1929)
Secretary Mellon announced that subscriptions for the issue of
Treasury certificaties of indebtedness, dated December 16, 1929,
series TS-1930, 3)^ per cent, maturing September 15, 1930, closed at
the close of business on Saturday, December 7, 1929.
The reports from the 12 Federal reserve banks show that for the
offering, which was for $325,000,000, or thereabouts, total subscriptions aggregate $722,552,500. Of these subscriptions, $185,381,500
represent subscriptions for which Treasury certificates of indebtedness
of Series TD-1929 and TD2-1929, both maturing December 15,1929,
were tendered in payment, all of which were allotted in full. Allotments on other subscriptions were made as follows: All cash subscriptions in amounts not exceeding $1,000 for any one subscriber
were allotted in full. Cash subscriptions iu amounts over $1,000 but
not exceeding $50,000 were allotted 70 per cent, but not less than
$1,000 on any one subscription; cash subscriptions in amounts over
$50,000 but not exceeding $100,000 were allotted 60 per cent, but not
less than $35,000 on any one subscription; cash subscriptions in
amounts over $100,000 but not exceeding $1,000,000 were allotted
40 per cent, but not less than $60,000 on any one subscription; cash
subscriptions in amounts over $1,000,000 but not exceeding
$25,000,000 were allotted 20 per cent, but not less than $400,000 on
any one subscription; and cash subscriptions in amounts over
$25,000,000 were allotted 10 per cent, but not less than $5,000,000 on
any one subscription.
The subscriptions and allotments were divided among the several
Federal reserve district's and the Treasury as follows:
Federal reserve district
Boston
New York .
Philadelphia
Cleveland
Richmond

. .
._.

Atlnntfl

Chicago
St. Louis

_

-.

Total subscriptions
received

Total subscriptions
allotted

$19,290,000
309, 386, 500
42,122, 000
25,930,500
24, 839, O O
O
27. 876, 000
66, 685, 000
7, 096, 500 .

$7,028. 000 Minneapolis
189,531, 500 Kansas City
16, 500, 000 Dallas
11, 891, 000 San Francisco
13, 659, 000 Treasury
14, 284, 500
Total.
45,141, 000
5,176, 000

Federal reserve district

Total subscriptions
received

. Total subscriptions
allotted

$3,396,000
10,208,500
28,452,000
157, 012, 500
258,000

$1,963,000
6,097,000
14, 009, 500
26,174, 000
196,000

722, 552, 500

351, 640, 500

EXHIBIT 3

Inviting tenders for Trea.sury bills dated December 17,1929, and maturing
March 17, 1980 {jpress release, December 10, 1929)
The Secretary of the Treasury gives notice that tenders are invited
for Treasury bills to the amount of $100,000,000, or thereabouts.
The Treasury bills will be sold on a discount basis to the highest
bidders. Tenders will be received at the Federal reserve banks, or
the branches thereof, up to 2 o'clock p. m., eastern standard time, on
Friday, December 13, 1929. Tenders wUl not be received at the
Treasury Department, Washington.




286

REPORT ON THE FINANCES

The Treasury bills will be dated December 17, 1929, and wUl
mature on March 17, 1930, and on the maturity date the face amount
will be payable without interest. They will be issued in bearer form
only, and in amounts or denominations of $1,000, $10,000, and
$100,000 (maturity value).
I t is urged that tenders be made on the printed forms and forwarded
in the special envelopes which wUl be supplied by the Federal reserve
banks or branches upon application therefor.
No tender for an amount less than $10,000 will be considered.
Each tender must be in multiples of $1,000. The price offered must,
be expressed on the basis of 100, with not more than three decimal
places, e. g., 99.125. Fractions must not be used.
Tenders will be accepted without cash deposit from incorporated
banks and trust companies and from responsible and recognized
dealers in investment securities. Tenders from others must be
accompanied by a deposit of 10 per cent of the face amount of Treasury bills applied for, unless the tenders 'are accompanied by an
express guarantee of payment by an incorporated bank or trust
company.
Immediately after the closing hour for receipt of tenders on December 13 all tenders received at the Federal reserve banks or branches
thereof up to the closing hour wUl be opened and public announcement
of the acceptable prices will follow as soon as possible thereafter,
probably on the following morning. The Secretary of the Treasury
expressly reserves the right to reject any or all tenders or parts of
tenders, and to allot less than the amount applied for, and his action
in any such respect shall be final. Those submitting tenders will be
advised of the acceptance or rejection thereof. Payment at the price
offered for Treasury bills allotted must be made at the Federal reserve
banks in cash or other immediately available funds on or before
December 17, 1929.
The Treasury bUls wUl be exempt, both as to principal and interest
(discount), from all taxation, except estate and inheritance taxes.
The amount of discount at which the Treasury bills are originally
sold by the United States shall be considered as interest for tax
exemption purposes.
Department Circular No. 418, dated November 22, 1929, and this
notice as issued by the Secretary of the Treasury, prescribe the terms
of the Treasury bUls and govern the conditions of their issue. Copies
of the circular may be obtained from any Federal reserve bank or
branch thereof.
This offering will constitute the first issue of Treasury bills, which
are a new form of Government security authorized by a law enacted
by the last Congress. While the law authorizes the issuance of
Treasury bUls with a 12 months' maturity, generally speaking, they
will be issued, as in the case of this offering, with a 90-day maturity
or with a maturity not in excess of 3 months. Issued from time to
time as the current financial needs of the Government may dictate
and with frequent and convenient maturities, they should furnish an
attractive medium for short-term investment. They are intended
to supplement rather than to supplant Treasury certificates of
indebtedness, which with maturities usually ranging from 6 to
12 months, have up to the present time constituted the principal
medium of short-term Government financing.




SECRETARY OF THE TREASURY

287

Treasury bills offer certain advantages as compared with Treasury
certificates. Their issue can be timed to coincide almost exactly
with the needs for funds as compared with the existing practice of
borrowing four times a year on fixed dates through certificate offerings;
they will not be sold at par with an interest rate fixed by the Treasury
but at a discount rate fixed by the subscribers through competitive
bidding; their maturities can be timed to correspond closely to the
actual collection of income taxes instead of falling on the nominal
date of tax payment; and, finally, the Treasury should be able to take
advantage of periods of seasonal ease for short-term borrowing
instead of being compelled to offer a large issue of securities during a
temporary stringency and high money rates.
The Treasury Depa-rtment believes that Treasury bills will prove
to be an efficient and economical additional medium through which
the short-term financing of the Government may be conducted, and
hopes that they will receive a favorable reception on the part of the
public.
EXHIBIT 4

Acceptance of tenders for Treasury bills dated December 17, 1929, and
maturing March 17, 1930 {press release, December 14^ 1929)
The Secretary of the Treasury announced to-day that the tenders
for $100,000,000, or thereabouts, of Treasury bills which were offered
on December 10, 1929, were opened at the Federal reserve banks on
December 13, 1929. The total amount applied for was $223,901,000.
The highest bid made was'99.3.10, equivalent to an interest rate of
about 2% per cent on an annual basis.' The lowest bid accepted was
99.152, equivalent to an interest rate of about 3% per cent on an
annual basis. In order to avoid exceeding the total required, only
about 80 per cent of the amount bid for at the latter price was accepted.
The total amount of bids accepted Was $100,000,000. The average
price of Treasury bills to be issued is 99.181. The Treasury is informed that these securities in so far as rate of discount is concerned
wUl be dealt in on the same basis as bankers' bills. The average
annual rate on a bank discount basis is about 3% per cent.
Issue of February, 1930
EXHIBIT

5

Inviting tenders for Treasury bills dated February 18,1930, and maturing
May 19, 1930 {press release, February 11, 1930)
The Secretary of the Treasury gives notice that tenders are invited
for Treasury bills to the amount of $50,000,000, or thereabouts. The
Treasury bills will be sold on a discount basis to the highest bidders.
Tenders will be received at the Federal reserve banks, or the branches
thereof, up to 2 o'clock p. m., eastern standard time, on February 14,
1930. Tenders will not be received at the Treasury Department,
Washington.
The Treasury bills will be dated February 18, 1930, and will mature
on May 19, 1930, ^nd on the maturity date the face amount will be
J2101—31

^21




288

REPORT ON THE FINANCES

payable without interest. They will be issued in bearer form only,
and in amounts or denominations of $1,000, $10,000, and $100,000
(maturity value).
I t is urged that tenders be made on the printed forms and forwarded
in the special envelopes which will be supplied by the Federal reserve
banks or branches upon application therefor.
No.tender for an aniount less than $1,000 will be considered. Each
tender must be in multiples of $1,000. The price offered must be
expressed on the basis of 100, with not more than three decimal places,
e. g., 99.125. Fractions must not be used.
Tenders will be accepted without cash deposit from incorporated
banks and trust companies and from responsible and recognized dealers
in investment securities. Tenders from others must be accompanied
by a deposit of 10 per cent of the face amount of Treasury bills applied
for, unless the tenders are accompanied by an express guarantee of
payment by an incorporated bank or trust company.
Immediately after the closing hour for receipt of tenders on February 14, all tenders received at the Federal reserve banks or branches
thereof up to the closing hour will be opened and public announcement
of the acceptable prices will follow as soon as possible thereafter,
probably on the following morning. The Secretary of the Treasury
expressly reserves the right to reject any or all tenders or parts of
tenders, and to allot less than the amount applied for, and his action
in any such, respect shall be final. Those submitting tenders will be
advised of the acceptance or rejection thereof. Payment at the price
offered for Treasury bills allotted must be made at the Federal
reserve banks in cash or other immediately available funds on February 18, 1930.
The Treasury bills will be exempt, both as to principal and interest
(discount), from all taxation, except estate and inheritance taxes.
The amount of discount at which the Treasury bills are originally sold
by the United States shall be considered as interest for tax exemption
purposes.
Department Circular No. 418, dated November 22, 1929, and this
notice as issued by the Secretary of the Treasury, prescribe the terms
of the Treasury bills and govern the conditions of their issue. Copies
of the circular may be obtained from any Federal reserve bank or
branch thereof.
EXHIBIT 6

Acceptance of tenders for Treasury bills dated February 18, 1930, and
maturing May 19, 1930 {press release, February 15,1930)
The Secretary of the Treasury announced to-day that the tenders
for $50,000,000, or thereabouts, of Treasury bills which were offered
on February 11, were opened at the Federal reserve banks on February
14, 1930.
The total amount applied for was $186,183,000. The highest bid
made was 99.250, equivalent to an interest rate of about 3 per cent
on an annual basis. The lowest bid accepted was 99.125, equivalent
to an interest rate of about 3}^ per cent on an annual basis. The total
amount of bids accepted was $56,108,000. Th§ average price of
Treasury bills to be issued is 99.174. The average annual rate on a
bank discount basis is about 3.30 per cent.



SJ^ICRETARY OF THE TREASURY

289

Issue of March, 1930
EXHIBIT 7

Ofiering of certificates of iiidebtedness, Series TD-1930 {3}i per cent)
{jpress release, March 7, 1930, with Department Circular No. 4^2)
The Treasury is to-day offering for subscription, at par and accrued
interest, through the Federal reserve banks, an issue of 9-month
3)4 per cent Treasury certificates of indebtedness of Series TD-1930,
dated and bearing interest from March 15,1930, and maturing December 15, 1930. The amount of the offering is $450,000,000, or thereabouts.
Applications will be received at the Federal reserve banks. The
Treasury will accept in payment for the new certificates, at par.
Treasury certificates of indebtedness of Series TM-1930, maturing
March 15, 1930. Subscriptions for which payment is to be tendered
in certificates of indebtedness maturing March 15, 1930, will be given
preferred allotment up to $150,000,000.
Bearer certificates will be issued in denominations of $500, $1,000,
$5,000, $10,000, and $100,000. The certificates wiU have two interest
coupons attached, payable June 15, 1930, and December 15, 1930.
About $404,000,000 of Treasury certificates of indebtedness and
nearly $47,000,000 in interest payments on the public debt become
due and payable on March 15, 1930, and $100,000,000 of Treasury
bills become due and payable on March 17, 1930.
The text of the official circular follows:
[Department Circular No. 422]

The Secretary of t;he Treasury, under the authority of the act
approved September 24, 1917, as amended, offers for subscription, at
par and accrued interesst, through the Federal reserve banks, Treasury
certificates of indebtedness of Series TD^1930, dated and bearing
interest from March 15, 1930, payable December 15, 1930, with
interest at the rate of 3^4 per cent per annum, payable on a semiannual basis.
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 wiU have two interest
coupons attached, payable June 15, 1930, and December 15, 1930.
The certificates of said series shall be exempt, both as to principal
and interest, from all taxation (except estate and 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 certificates of this series will be accepted at par 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 laaturity of the certificates. The certificates of
this series will be acceptable to secure deposits of public moneys, but
will not bear the circulation privilege.
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. The Secretary of the Treasury also
reserves the right to make allotment in full upon applications for
smaller amounts, to make reduced allotments upon, or to reject.



290

REPORT ON THE FINANCES

applications for larger amounts, and to make classified allotments and
allotments upon a graduated scale; and his action in these respects
will be final. Allotment notices will be sent out promptly upon allotment, and the basis of the allotment will be publicly announced.
Payment at par and accrued interest for certificates allotted must
be made on or before March 15, 1930, 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. Treasur}^ certificates of
indebtedness of Series TM-1930, maturing March 15, 1930, wiU be
accepted at par, in payment for any certificates of the series now offered
which shall be subscribed for and allotted, with an adjustment of the
interest accrued, if any, on the certificates of the series so paid for.
As fiscal agents of the United States, Federal reserve banks are
authorized and requested to receive subscriptions and to make allotments on the basis and up to the amounts indicated by the Secretary
of the Treasury to the Federal reserve banks of the respective districts.
A. W. M E L L O N ,

Secretary of the Treasury.
TREASURY DEPARTMENT,
OFFICE OF THE SECRETARY,

March 7, 1930.
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. Your special attention is invited to the terms of subscription and
allotment as stated above. If you desire to purchase, at the market price, certificates of the above issue after the subscriptions close, or certificates of any outstanding issue, you should apply to your own bank, or if it can not obtain them
for you, to the Federal reserve bank of your district, which will then endeavor to
fill your order in the market.
EXHIBIT 8

Subscriptions and allotments, certificates ofindebtedness. Series TD-1930
(/ro?n press releases, March 11,1930, and March 13,1930, revised) ^
Secretary Mellon announced that subscriptions for the issue of
Treasury certificates of indebtedness. Series TD-1930, 3}^ per cent,
dated March 15, 1930, maturing December 15, 1930, closed at the
close of business on March 8, 1930.
Reports received from the 12 Federal reserve banks show that for
the offering, which was for $450,000,000, or thereabouts, total subscriptions aggregate $1,290,990,000. Of these subscriptions, $66,481,500 represent subscriptions for which Treasury certificates of
indebtedness of Series TM-1930, maturing March 15, 1930, were
tendered in payment, all of which were allotted in full. AUotments
on cash subscriptions were made as follows: All subscriptions in
amounts not exceeding $1,000 for any one subscriber were allotted
in full. Subscriptions in amounts over $1,000 but not exceeding
$50,000 for any one subscriber were allotted 80 per cent, but not
1 Revised Mar. 14. 1930.




291

SECH^ETARY OF T H E TREASURY

less than $1,000 for any one subscriber; subscriptions in amounts
over $50,000 but not exceeding $500,000 for any one subscriber were
allotted 60 per cent, but not less than $40,000 for any one subscriber;
subscriptions in amounts over $500,000 but not exceeding $1,000,000
for any one subscriber were allotted 50 per cent, but not less than
$300,000 for any one subscriber; and subscriptions in amounts over
$1,000,000 for any one subscriber were allotted 20 per cent, but not
less than $500,000 for any one subscriber.
The subscriptions and allotments were divided among the several
Federal reserve districts and the Treasury as follows:
F e d e r a l reserve
district

Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis

Total subscriptions
received
$80, 688,500
613,192, 500
88, 843, 500
54, 626, 500
58, 278, 000
57,478,000
98,116, 500
14,116,000

Total subscriptions
allotted

Total subscriptions
received

F e d e r a l reserve
district

$27, 427, 500 M i n n e a p o l i s .
184, 840, 500 K a n s a s C i t y
35.520,000
Dallas
25, 313, 000 San F r a n c i s c o .
35.067,500. J T r e a s u r y
34, 692. 500 1
55,976,600
Total
9, 523,500

.

. .

Total subscriptions
allotted

$6,850, 500
17,849,000
39, 295, 500
161, 670, 000
85, 500

$4,634,500
7,156,500
22, 892, 000
40, 215,- 000
82,000

1, 290, 990, 000

483, 341, 000

Issue of April, 1930
EXHIBIT 9

Inviting tenders for Ti^easury bills dated April 15, 1930, and maturing
July 14, 1930 {jpress release, April 7, 1930)
The Secretary of the Treasury gives notice that tenders are invited
for Treasury bills to the amount of $50,000,000, or thereabouts.
The Treasury bills will be sold on a discount basis to the highest
bidders. Tenders will be received at the Federal reserve banks, or
the branches thereof, up to 2 o'clock p. m.,; eastern standard time,
on AprU 11, 1930. Tenders wiU not be received at the Treasury
Department, Washington.
The Treasury bills will be dated April 15, 1930, and wiU mature on
July 14, 1930, and on the maturity date the face amount will be
payable without interest;. They will be issued in bearer form only,
and in amounts or denominations of $1,000, $10,000, and $100,000
(maturity value).
I t is urged that tenders be made on the printed forms and forwarded in the special envelopes which will be supplied by the Federal
reserve banks or branches upon application therefor.
No tender for an aniount less than $1,000 will be considered.
Each tender must be in multiples of $1,000. The price offered must
be expressed on the basis of 100, with not more than three decimal
places, e. g., 99.125. Fractions must not be used.
Tenders will be accepted without cash deposit from incorporated
banks and trust companies and from responsible and recognized
dealers in investment securities. Tenders from others must be
accompanied by a deposit of 10 per cent of the face amount of Treasury bills applied for, unless the tenders are accompanied by an
express guarantee of payment by an incorporated bank or trust
company.



292

REPORT ON THE FINANCES

Immediately after the closing hour for receipt of tenders on April 11
all tenders received at the Federal reserve banks or branches thereof
up to the closing hour will be opened and public announcement of
the acceptable prices will follow as soon as possible thereafter, probably on the following morning. The Secretary of the Treasury
expressly reserves the right to reject any or all tenders or parts of
tenders, and to allot less than the amount applied for, and his action
in any such respect shall be final. Those submitting tenders will be
advised of the acceptance or rejection thereof. Payment at the price
off'ered for Treasury biUs allotted must be made at the Federal reserve
banks in cash or other immediately available funds on April 15, 1930.
The Treasury bills will be exempt, both as to principal and interest
(discount), from all taxation, except estate and inheritance taxes.
The amount of discount at which the Treasury bills are originally
sold by the United States shall be considered as interest for taxexemption purposes.
Department Circular 418, dated November 22, 1929, and this
notice as issued by the Secretary of the Treasury, prescribe the terms
of the Treasury bills and govern the conditions of their issue. Copies
of the circular may be obtained from any Federal reserve bank or
branch thereof.
EXHIBIT

10

Acceptance of tenders for Treasury bills dated April 15, 1930, and
maturing July 14 j 1930 {^ress release, April 12, 1930)
The Secretary of the Treasury announced to-day that the tenders
for $50,000,000, or thereabouts, of 90-day Treasury bills which were
offered on April 7, were opened at the Federal reserve banks on
AprU 11.
The total amount applied for was $132,377,000. The highest
bid made was 99.315, equivalent to an interest rate of about 2?^
per cent on an annual basis. The lowest bid accepted was 99.250,
equivalent to an interest rate of 3 per cent on an annual basis. The
total amount of bids accepted was $51,316,000. The average
price of Treasury bills to be issued is 99.267. The average annual
rate on a bank discount basis is about 2.93 per cent.

Issue of May, 1930
EXHIBIT

11

Inviting tenders for Treasury bills dated May 19, 1930, and maturing
August 18, 1930 {jpress release. May 12, 1930)
The Secretary of the Treasury gives notice that tenders are invited
for Treasury bills to the amount of $100,000,000, or thereabouts.
The Treasury bills will be sold on a discount basis to the highest
bidders. Tenders will be received at the Federal reserve banks,
or the branches thereof, up to 2 o'clock p. m., eastern standard time,
on May 15, 1930. Tenders will not be received at the Treasury
Department, Washington.




SECRETARY OF THE TREASURY

293

The Treasury bills wUl be dated May 19, 1930, and wiU mature
on August 18, 1930, and on the maturity date the face amount will be
payable without interest. They will be issued in bearer form only,
and in amounts or denominations of $1,000, $10,000, and $100,000
(maturity value).
I t is urged that tenders be made on the printed forms and forwarded
in the special envelopes which will be supplied by the Federal reserve
banks or branches upon application therefor.
No tender for an araount less than $1,000 will be considered.
Each tender must be in multiples of $1,000. The price offered must
be expressed on the basis of 100, with not more than three decimal
places, e. g., 99.125. Fractions must not be used.
Tenders will be accepted without cash deposit from incorporated
banks and trust companies and from responsible and recognized
dealers in investment securities. Tenders from others must be accompanied by a deposit of 10 per cent of the face amount of Treasury
bills applied for, unless the tenders are accompanied by an express
guarantee of payment by an incorporated bank or trust company.
Immediately after the closing hour for receipt of tenders on May
15, 1930, all tenders received at the Federal reserve banks or branches
thereof up to the closing hour will be opened and public announcement
of the acceptable prices will follow as soon as possible thereafter,
probably on the following morning. The Secretary of the Treasury
expressly reserves the right to reject any or all tenders or parts of
tenders, and to allot less than the amount applied for, and his action in
any such respect shall be final. Those submitting tenders will be
advised of the acceptance or rejection thereof: Payment at the price
offered for Treasury bills aUotted must be made at the Federal reserve
banks in cash or other immediately available funds on May 19> 1930.
The Treasury bills will be exempt, both as to principal and interest
(discount), from all taxation, except estate and inheritance taxes.
The amount of discount at which the Treasury biUs are originally
sold by the United States shall be considered as interest for tax
exemption purposes.
Department Circular No. 418, dated November 22, 1929, and this
notice as issued by the Secretary of the Treasury, prescribe the terms
of the Treasury biUs and govern the conditions of their issue. Copies
of the circular may be obtained from any Federal reserve bank or
branch thereof.
EXHIBIT

12

Acceptance of tenders for Treasury bills dated May 19, 1930, and
maturing August 18, 1930 {press release, May 16, 1930)
Acting Secretary of the Treasury Mills announced to-day that the
tenders for $100,000,000, or thereabouts, of Treasury bills dated
May 19 and maturing August 18, which were offered on May 12,
were opened at the Federal reserve banks on May 15.
The totah amount applied for was $275,674,000: The highest
bid made was 99.400, equivalent to an interest rate of about 2)^, per
cent on an annual basis. The lowest bid accepted was 99.331,
equivalent to an interest rate of about 2% per cent on an annual
basis, The total amount of bids accepted was $104,600,000. The




294

REPORT ON T H E

FINANCES

average price of Treasury bills to be issued is 99.356.
rate on a bank discount basis is about 2.54 per cent.

The average

Issue of June, 1930
EXHIBIT

13

Ofiering of certificates of indebtedness, Series TJ-1931 {2% per cent)
{press release, June 7, 1930, with Department Circular No. 424)
The Treasury is to-day offering for subscription, at par and accrued
interest, through the Federal reserve banks, an issue of 12-month
2% per cent Treasury certificates of indebtedness of Series TJ-1931,
dated and bearing interest from June 16, 1930, and maturing June 15,
1931., The amount of the offering is $400,000,000, or thereabouts.
Applications will be received at the Federal reserve banks. The
Treasury will accept in payment for the new certificates, at par.
Treasury certificates of indebtedness of Series TJ-1930, maturing
June 16, 1930. Subscriptions for which payment is to be tendered in
certificates of indebtedness maturing June 16, 1930, will be given
preferred allotment up to $150,000,000.
Bearer certificates will be issued in denominations of $500, $1,000,
$5,000, $10,000, and $100,000. The certificates wiU have two interest coupons attached payable December 15, 1930, and June 15,
1931.
These certificates will be exempt, both as to principal and interest,
from all taxation, except estate and inheritance taxes.
About $550,000,000 of Treasury certificates of indebtedness and
about $95,000,000 in interest payments on the public debt become
due and payable on June 16, 1930.
The text of the official circular follows:
[Department Circular No. 424]

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 of Series TJ-1931, dated and bearing
interest from June 16, 1930, payable June 15, 1931, with interest at
the rate of 2% per cent per annum, payable on a semiannual basis.
Applications will be received at the Federal reserve banks.
Bearer certificates wUl be issued in denominations of $500, $1,000,
$5,000, $10,000, and $100,000. The certificates wiU have two interest
coupons attached, payable December 15, 1930, and June 15, 1931.
The certificates of said series shall be exempt, both as to principal
and interest, from all taxation (except estate and 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 certificates of this series will be accepted at par during such time
and under such rules and regulations as shall be prescribed or approved by the Secretary of the Treasuiy, in payment of income and
profits taxes payable at the maturity of the certificates. The certificates of this series will be acceptable to secure deposits of public
moneys, but will not bear the circulation privilege.




SECRETARY O F THE

TREASURY

295

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. The Secretary of the Treasury
also reserves the right tc» make allotment in fuU upon applications for
smaller amounts, 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 wall be final. Allotment notices will be sent out promptly
upon allotment, and the basis of the allotment wUl be publicly
announced.
Payment at par and accrued interest for certificates allotted must
be made on or before June 16, 1930, 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 TJ-1930, maturing June 16, 1930,
will be accepted at par, in payment for any certificates of the series
now offered which shall be subscribed for and allotted, with an adjustment of the interest accrued, if any, on the certificates of the
series so paid for.
As fiscal agents of the United States, Federal reserve banks are
authorized and requested to receive subscriptions and to. make allotments on the basis and up to the amounts indicated by the Secretary
of the Treasury to the Federal reserve banks of the respective
districts.
A. W.

MELLON,

Secretary of the Treasury.
TREASURY DEPARTMENT,
O F F I C E OF THE SECRETARY,

June 7, 1930.
To the investor:
Almost any banking institu.tion in the United States will handle your subscription for you, or you may make subscription direct to the Federal reserve bank of.
your district. Your special a.ttention is invited to the terms of subscription and
allotment as stated above. If you desire to purchase, at the market price, certificates of the above issue gifter the subscriptions close, or certificates of any
outstanding issue, you should apply to your own bank, or if it can not obtain
them for you, to the Federal reserve bank of your district, which will then endeavor
to fill your order in the market.
EXHIBIT

14

Subscriptions and allotments, certificates of indebtedness, Series TJ-1931
(from press, releases, June 11, 1930, and June 13, 1930)
Secretary Mellon announced that subscriptions for ^ the issue of
Treasury certificates of indebtedness, dated June 16, 1930, Series
TJ-1931, 2% per cent, maturing June 15, 1931, closed at the close of
business on June 9, 1930. The reports received from the 12 Federal
reserve banks show that for the off'ering, which was for $400,000,000,
or thereabouts, total subscriptions aggregate $2,398,792,000. Of
these subscriptions, about $265,000,000 represent subscriptions for



296

REPORT ON T H E FINANCES

which 4% per cent Treasury certificates of indebtedness of Series
TJ-1930, maturing June 16, 1930, were tendered in payment, of
which $148,938,000 were accepted.
Allotments on other subscriptions were made as follows: All cash
subscriptions in amounts not exceeding $10,000 for any one subscriber were allotted. 50 per cent, but not less than $500 on any one
subscription; cash subscriptions in amounts over $10,000 but not
exceeding $100,000 were allotted 40 per cent, but not less than $5,000
on any one subscription; cash subscriptions in amounts over $100,000
but not exceeding $1,000,000 were allotted 20 per cent, but not less
than $40,000 on any one subscription; cash subscriptions in amounts
over $1,000,000 but not exceeding $25,000,000 were alloted 10 per
cent, but not less than $200,000 on any one subscription; and cash
subscriptions in amounts over $25,000,000 were allotted 5 per cent,
but not less than $2,500,000 on any one subscription.
The subscriptions and allotments were divided among the several
Federal reserve districts and the Treasury as follows:
Federal reserve district

Boston.
New York
Philadelphia..
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapohs..
Kansas City..
Dallas
-

Total cash
Total subscrip- Total exchange subscriptions
tions received subscriptions
allotted
allotted

Total subscriptions allotted

Ban Francisco.
Treasury

$188,935,000
1,310,951,000
149,359,500
99,049, 500
74,155, 500
74, 703, 000
128, 275, 500
32, 285, 500
6, 318,'000
17, 613, 500
47, 273, 500
269, 826, 000
46, 500

$806, 500
129, 255,000
262, 500
880,000
286,500
105, 500
13, 506, 000
1,172, 500
304, 500
647, 600
267, 500
1, 362, 000
22, 000

$23,408, 000
107, 038, 500
29,837, 500
19,162, 500
20, 562, 500
20, 738, 500
16, 573, 500
6,118, 000
1, 515, 500
2, 940, 000
12, 557, 000
19,977, 500
6,000

$24, 214, 500
236, 293, 500
30,100, 000
20, 042, 500
20, 849, 000
20, 904, 000
30,079, 500
7, 290, 500
1,820,000
3, 587, 600
12,824, 500
21,339, 500
28,000

Total--.

2, 398, 792, 000

148,938, 000

280,435,000

429,373, 000

Issue of July, 1930
EXHIBIT

15

Inviting tenders for Treasury bills dated July 14, 1930, and maturing
September 15, 1930 {press release, July 7, 1930)
The Secretary of the Treasury gives notice that tenders are
invited for Treasury bills to the amount of $50,000,000, or thereabouts. The Treasury bills will be sold on a discount basis to the
highest bidders. Tenders wUl be received at the Federal reserve
banks, or the branches thereof, up to 2 o'clock p. m., eastern standard
time, on July 10, 1930. Tenders will not be received at the Treasury
Department, Washington.
The Treasury bills wUl be dated July 14, 1930, and will mature on
September 15, 1930, and on the maturity date the face amount will
be payable without interest. They wUl be issued in bearer form only,
and in amounts or denominations of $1,000, $10,000, and $100,000
(maturity value).
Particular attention is invited to the fact that by the act of Congress
approved June 17, 1930, Treasury bills were given an additional
tax exemption feature. T h a t act provides that any gain from the
sale or other disposition of Treasury bUls issued after June 17, 1930,



SECEETARY OF THE TREASURY

297

shall be exempt from all taxation, except estate or inheritance taxes,
and that no loss from the sale or other disposition thereof shall be
allowed as a deduction, or otherwise recognized, for the purposes of
any tax now or hereafter imposed by the United States or any of its
possessions. Accordingly, these Treasury bills wUl be exempt, as to
principal and interest, and any gain from the sale or other disposition
thereof will also be e:s:empt, from all taxation, except estate or
inheritance taxes.
I t is urged that tenders be made on the printed forms and forwarded
in the special envelopes which will be supplied by the Federal reserve
banks or branches upon application therefor.
.
No tender for an amount less than $1,000 will be considered. Each
tender must be in multiples of $1,000. The price offered must be
expressed on the basis of 100, with not more than three decimal
places, e. g., 99.125. Fractions must not be used.
Tenders will be accepted without cash deposit from incorporated
banks and trust companies and from responsible and recognized
dealers in investment securities. Tenders from others must be accompanied by a deposit of 10 per cent of the face amount of Treasury bills
applied for, unless the tenders are accompanied by an express guaranty
of payment by an incorporated bank or trust company.
Immediately after the closing hour for receipt of tenders on July 10,
1930, all tenders received at the Federal reserve banks or branches
thereof up to the closing hour will be opened and public announcement
of the acceptable prices will follow as soon as possible thereafter,
probably on the following morning. The Secretary of the Treasury
expressly reserves the right to reject any or all tenders or parts of
tenders, and to allot less than the amount applied for, and his action
in any such respect shall be final. Those submitting tenders will be
advised of the acceptance or rejection thereof. Payment at the
price offered for Treasury bills allotted must be made at the Federal
reserve banks in cash oi' other immediately available funds on July
14, 1930.
Treasury Department Circular No. 418, as amended, dated June
25, 1930, and this notice as issued by the Secretary of the Treasury,
prescribe the terms of the Treasury bills and govern the conditions
of their issue. Copies of the circular may be obtained from any
Federal reserve bank or l^ranch thereof.

EXHIBIT

16

Acceptance of tenders for Treasury bills dated July 14, 1930, and
maturing September 15, 1930 {jpress release, July 11, 1930)
Acting Secretary of the Treasury Hope announced to-day that
the tenders for $50,000,000, or thereabouts, of Treasury bills dated
July 14, 1930, and maturing September 15, 1930, which were offered
on July 7, 1930, were opened at the Federal reserve banks on July
10, 1930.
The total amount applied for was-$328,968,000. The highest
bid made was 99.720, equivalent to an interest rate of about 1.60
per cent on an annual basis. The lowest bid accepted was 99.660,
equivalent to an interest rate of about 1.94 per cent on an annual




298

REPORT ON THE FINANCES

basis. The total amount of bids accepted was $50,920,000. The
average price of Treasury bills to be issued is 99.672. The average
rate on a bank discount basis is about 1% per cent.

Issue o * August, 1930
<
EXHIBIT

17

Inviting tenders for Treasury bills dated August 18, 1930, and maturing
November 17, 1930 {press release, August 11, 1930)
Acting Secreta.ry of the Treasury Hope gives notice that tenders
are invited for Treasury bills to the amount of $120,000,000, or
thereabouts. The Treasury bills will be sold on a discount basis
to the highest bidders. Tenders will be received a t . t h e Federal
reserve banks, or the branches thereof, up to 2 o'clock p. m., eastern
standard time, on August 14, 1930. Tenders wiU not be received at
the Treasuiy Department, Washington.
The Treasury bills will be dated August 18, 1930, and will mature
on November 17, 1930, and on the maturit}^^ date the face amount
wiU be payable without interest. They will be issued in bearer
form only, and in amounts or denominations of $1,000, $10,000, and
$100,000 (maturity value).
I t is urged that tenders be made on the printed forms and forwarded in the special envelopes which will be supplied by the Federal
reserve banks or branches upon application therefor.
No tender for an amount less than $1,000 will be considered.
Each tender must be in multiples of $1,000. The price offered must
be expressed on the basis of 100, with not more than three decimal
places, e. g., 99.125. Fractions must not be used.
Tenders will be accepted without cash deposit from incorporated
banks and trust companies and from responsible and recognized
dealers in investment securities. Tenders from others must be accompanied by a deposit of 10 per cent of the face amount of Treasury
bills applied for, unless the tenders are accompanied by an express
guaranty of payment by an incorporated bank or trust company.
Immediately after the closing hour for receipt of tenders on August
14, 1930, all tenders received at the Federal reserve banks or branches
thereof up to the closing hour will be opened, and public announcement of the acceptable prices will follow as soon as possible thereafter, probably on the following morning. The Secretary of the
Treasury expressly reserves the right to reject any or all tenders or
parts of tenders, and to allot less than the amount applied for, and
his action in any such respect shall be final. Those submitting
tenders will be advised of the acceptance or rejection thereof. Payment at the price offered for Treasury bills allotted must be made at
the Federal reserve banks in cash or other immediately available
funds on August 18, 1930.
The TreasiLf^y biUs will be exempt, as to principal and interest,
and any gain from the sale or other disposition thereof will also be
exempt, from all taxation, except estate and inheritance taxes. No
loss from the sale or other disposition of the Treasury bills shall be
allowed as a deduction, or otherwise recognized, for the purposes of




SECRETARY OF THE TREASURY

299

any tax now or hereafter imposed by the United States or any of its
possessions.
Treasury Department Circular No. 4.18, as amended, dated June
25, 1930, and this notice as issued by the Secretary of the Treasury,
prescribe the terms of the Treasury bills and govern the conditions
of their issue. Copies of the circular may be obtained from any
Federal reserve bank or branch thereof.

EXHIBIT

18

Acceptance of tenders for Treasury bills, dated August 18, 1930, and
maturing November 17, 1930 {press release, August 15, 1930)
Secretary of the Treasury Mellon announced to-day that the tenders for $120,000,000., or thereabouts, of Treasury bills dated August
18, 1930, and maturing November 17, 1930, which were offered on
August 11, 1930, were opened at the Federal reserve banks on August
14, 1930.
The total amount applied for was $397,162,000. The highest
bid made was 99.593 equivalent to an interest rate of about 1.61
per cent on an annual basis. The lowest bid accepted was 99.473
equivalent to an interest rate of about 2.08 per cent on an annual
basis. The total amount of bids accepted was $120,000,000. The
average price of Treasury bills to be issued is 99.504-1-. The average
rate on a bank discount basis is about 1.96 per cent..
Issue of September, 1930
EXHIBIT

19

Ofiering of certificates of indebtedness. Series TS-1931 {2% per cent)
{press release, September 8, 1930, with Department Circular No.
427)
The Treasury is to-day offering for subscription, at par and accrued interest, through the Federal reserve banks, an issue of 12month 2% per cent Treasury certificates of indebtedness of Series
TS-1931, dated and bearing interest from September 15, 1930, and
maturing September 15, 1931. The amount of the offering is
$325,000,000, or thereabouts.
Applications will be received at the Federal reserve banks. The
Treasury will accept in payment for the new certificates, at par.
Treasury certificates of indebtedness of Series TS-1930 and Treasury
bills'dated July 14, 1930, both maturing September 15, 1930, but
such subscriptions will not be given preferred allotment. •
Bearer certificates will be issued in denominations of $500, $1,000,
$5,000, $10,000, and $100,000. The certificates wiU have two interest
coupons attached paj^able March 15, 1931, and September 15, 1931.
These certificates will be exempt, both as to principal and interest,
from all taxation, except estate and inheritance taxes.
About $350,000,000 of Treasury certificates of indebtedness, about
$51,000,000 in Treasury bUls, and about $35,000,000 m uaterest




300

REPORT ON THE FINANCES

payments on the public debt become due and payable on September
15, 1930.
The text of the official circular follows:
[Department Circular No. 427]

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 of Series TS-1931, dated and
bearing interest from September 15, 1930, payable September 15,
1931, with interest at the rate of 2% 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 wiU have two
interest coupons attached, payable March 15, 1931, and September
15, 1931.
The certificates of said series shall be exempt, both as to principal
and interest, from all taxation (except estate and inheritance taxes)
now or hereafter imposed by the United States, an}^ State, or any of
the possessions of the United States, or by any local taxing authority.
The certificates of this series will be accepted at par 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 ceirtificates. The
certificates of this series will be acceptable to secure deposits of
public moneys, but wUl not bear the circulation privilege.
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. The Secretary of the Treasury
also reserves the right to make allotment in full upon applications for
smaller amounts, 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 wUl be final. Allotment notices wUl be sent out promptly
upon allotment, and the basis of the allotment will be publicly
announced.
Payment at par and accrued interest for certificates allotted must
be made on or before September 15, 1930, 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 wUl 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 TS-1930 and Treasury bUls dated
July 14, 1930, both maturing September 15, 1930, will be accepted,
at par in the case of the certificates and at maturity value in the case
of the Treasury bUls, in payment for any certificates of the series
now offered which shall be subscribed for and allotted, with an
adjustment of the interest accrued, if any, on the certificates of the
series so paid for.
As fiscal agents of the United States, Federal reserve banks are
authorized and requested to receive subscriptions and to make allot-




301

SECRETARY OF THE TREASURY

ments on the basis and up to the amounts indicated by the Secretary
of the Treasury tp the Federal reserve banks of the respective districts.
A. W.

MELLON,

Secretary of the Treasury.
TREASURY DEPARTMENT,
OFFICE OF THE SECRETARY,

September 8, 1930.
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. Your special attention is invited to the terms of subscription and allotment as stated above. If yOu desire to purchase, at the
market price, certificates; of the above jssue after the subscriptions close, or
certificates of any outstaading issue, you should apply to yout own bank, or if
it can not obtain them for you, to the Federarreserve bank, of your district,
which will then endeavor to fill your order in the market.
EXHIBIT

20

Subscriptions and allotments, certificates ofindebtedness, Series TS-19S1
{from press releases, September 11, 1930, and September 12, 1930)
Secretary Mellon announced that subscriptions for the issue of
Treasury certificates of indebtedness, dated September 15, 1930,
Series TS-1931, 2 ^ per cent, maturing September 15, 1931, closed at
the close of business on September 9, 1930. The reports received
from the 12 Federal reserve banks show that for the offering, which
was for $325,000,000,, or thereabouts, total subscriptions aggregate
$1,237,502,500. As previously announced, subscriptions in payment
for which Treasury certificates and Treasury bills maturing September 15, 1930, were tendered were treated as cash subscriptions.
Allotments on subscriptions were made as follows: All subscriptions in amounts not exceeding $1,000 for any one subscriber were
allotted in full; subscriptions in amounts oyer $1,000 but not exceeding $50,000 were allotted 70 per cent, but not less than $1,000 on any
one subscription; subscriptions in amounts over $50,000 but not
exceeding $100,000 were allotted 60 per cent, but not less than
$35,000 on any one subscription; subscriptions in amounts over
$100,000 but not exceeding $500,000 were allotted 40 per cent, but
not less than $60,000 on any one subscription; and subscriptions in
amounts over $500,000 but not exceeding $1,000,000 were allotted
30 per cent, but not less than $200,000 on any one subscription;
subscriptions in amounts over $1,000,000 were allotted 15 per cent,
but not less than $300,000 on any one subscription.
The subscriptions and allotments were divided among the several
Federal reserve districts and the Treasury as follows:
Federal reserve dis- Total subscriptions received
trict
Boston
New York.
Philadelphia
Cleveland.Richmond
A tlontn

Chicago
St. Louis

$56,950, 000
674,087. 000
107, 711, 500
61,028, 000
52, 321, 000
60, 320, 500
160,184, 500
18,779, 000




Total subscriptions
allotted

Federal reserve dis- Total subscriptrict
tions received

$24.502,000
108, 557,000
25,939, 500
23, 531,000
26,137.000
29, 753,000
44,409,000
8,447,000

Minneapolis
Kansas City
Dallas
i
San Francisco
Treasury.Total

.

$4,137,000
20,662.000
60,072.000
71, 233, 500
16, 500
1, 237, 502, 500

Total subscriptions
allotted
$2, 244,600
5, 873, 000
21,200,000
13, 605, 500
12, 500
334,211,000

302

REPORT ON THE FINANCES
Issues of October, 1930
E X H I B I T 21

Inviting tenders for two issues of Treasury bills dated October 15 and 16,
1930, a.nd maturing December 16 and 17, 1930, respectively {jpress
release, October 7, 1930)
The Secretary of the Treasury gives notice that tenders are invited
for Treasury bills to the amount of $100,000,000 or thereabouts.
They will be 62-day bills, and will be sold on a.discount basis to the
highest bidders. Tenders will be received at the Federal reserve
banks, or the branches thereof, up to 2 o'clock p. m., eastern standard
time, on October 10, 1930. Tenders will not be received at the
Treasury Department, Washington.
The Treasury bills will be issued in two series, $50,000,000, or
thereabouts, to be dated October 15, 1930, and maturing on December
16, 1930, and $50,000,000, or thereabouts, to be dated October 16,
1930, and maturing December 17, 1930. Bidders will not be required
or permitted to bid for a particular series, but the Treasury will
apportion each accepted bid equally between the two series in so far
as.the minimum denomination of $1,000 will permit. At maturity
the face amount of the bills will be payable without interest. The
bills will be issued in bearer form only, and in amounts or denominations of $1,000, $10,000, and $100,000 (maturity value).
I t is urged that tenders be made on the printed forms and forwarded
in the special envelopes w^hich will be supplied by the Federal reserve
banks or branches upon application therefor.
No tender for an amount less than $1,000 will be considered. Each
tender must be in multiples of $1,000. The price offered must be
expressed on the basis of 100, with not more than three decimal
places, e. g., 99.125. Fractions must not be used.
Tenders will be accepted without cash deposit from incorporated
banks and trust companies and from responsible and recognized
dealers in investment securities. Tenders from others must be
accompanied by a deposit of 10 per cent of the face amount of Treasury bills applied for, unless the tenders are accompanied by an express
guaranty of payment by an incorporated, bank or trust company.
Immediately after the closing hour for receipt of tenders on October
10, 1930, all tenders received at the Federal reserve banks, or branches
thereof, up to the closing hour will be opened and public announcement of the acceptable prices will follow as soon as possible thereafter,
probably on the following morning. The Secretary of the Treasury
expressly reserves the right to reject an}^ or all tenders or parts of
tenders, and to allot less than the amount applied for, and his action
in any such respect shall be final. Those submitting tenders will be
advised of the acceptance or rejection thereof. With respect to
bidders whose tenders have been accepted, such advice will state the
amount of each series allotted. Payment at the price offered for
Treasury bills allotted must be made at the Federal reserve banks in
cash or other immediately available funds on October 15, 1930, for
the bills allotted bearing that date of issue, and on October 16, 1930,
for bills allotted bearing the latter date of issue.
The Treasury bills will be exempt, as to principal and interest, and
any gain from the sale or other disposition thereof will also be exempt.



SECRETARY OF THE TREASURY

303

from all taxation, except estate and inheritance taxes. No loss from
the sale or other disposition of the Treasury bills shall be aUowed
as a deduction, or otherwise recognized, for the purposes of any
tax now or hereafter imposed by the United States or any of its
possessions.
Treasury Department Circular No. 418, as amended, dated June
25, 1930, and this notice as issued by the Secretary of the Treasury,
prescribe the terms of the Treasury bills and govern the conditions
of their issue. Copies of the circular may be obtained from any
Federal reserve bank or branch thereof.

E X H I B I T 22

Acceptance of tenders for two issues of Treasury bills dated October 15
and 16, 1930, and maturing Decemher 16 and 17, 1930, respectively
{press release, October 11, 1930)
Acting Secretary Mills announced to-day that the tenders for
$100,000,000, or thereahouts, of 62-day Treasury bills which were
offered on October 7, 1930, were opened at the Federal reserve banks
on October 10, 1930. The Treasury's earher announcement provided
that the bills would bc issued in two series, $50,000,000, or thereabouts, dated October 15, 1930, "and/maturing December 16, 1930,
and $50,000,000, or thereabouts, dated October 16, 1930, and maturing December 17, 1930, the accepted bids to be apportioned by the
Treasury equally between the two series, in so far as the minimum
denomination of $1,000 will permit.
The total amount applied for was $360,964,000. The. highest bid
made was 99.736, equivalent to an interest rate of about 1.53 per cent
on an annual basis. The lowest bid accepted was 99.671, equivalent
to an interest rate of about 1.91 per cent on an annual basis. The
total amount of bids accepted was $102,525,000, of which $51,262,000
have been apportioned to the series dated October 15, 1930, maturing
December 16, 1930, and $51,263,000 ha've been apportioned to the
series dated October 16, 1930, maturing December 17, 1930. The
average price of Treasury bills to be issued is abput 99.680. The
average rate on a bank discount basis, is about 1.85 per cent.

Legislation and regulations concerning Treasury bills
EXHIBIT

23

Regulations governing the sale and issue of Treasui'y bills {Department
Circular No. 418)
TREASURY DEPARTMENT,
O F F I C E OF THE SECRETARY,

Washington, November 22, 1929
1. The Secretary of the Treasury is authorized by section 5 of the
second Liberty bond act, as amended,^ to issue Treasury bills on a
1 The statute appears in T. D. 4270, on pages 3 and 4 of this circular.

12101—31

22




(See p. 306 of this report.)

304

REPORT ON THE FINANCES

discount basis and payable at maturity without interest, and to fix
the form, terms, and conditions thereof, and to offer them for sale on
a competitive basis, under such regulations and upon such terms and
conditions as he may prescribe. Pursuant to said authorization, the
Secretary of the Treasury, by public notice, may from time to time
offer Treasury bills for sale and invite tenders therefor, through the
Federal reserve banks. The Treasury bills so off'ered and the tenders
made will be subject to the terms and conditions and to the general
rules and regulations herein contained and also to the terms and
conditions stated in the public notices as issued by the Secretary of
the Treasury from time to time in connection with particular oft'erings.
DESCRIPTION OF TREASURY BILLS

2. Treasury bills are bearer obligations of the United States,
promising to pay a specified amount without interest on a specified
date. They are to be issued on a discount basis. Each Treasury
bill, prior to its issue, must be validated by a Federal reserve bank as
fiscal agent of the United States, and the date of the original issue
thereof, and the amount of discount at which the. bill is then sold by
the United States will be stated thereon. All Treasury bills of the
same maturity, irrespective of the issue date or the amount of discount at which sold, will constitute a single series which will be designated by the due (or maturity) date. Treasury bills will be payable
at maturity upon presentation to the Treasurer of the United States
in Washington or to any Federal reserve bank.
3. Treasury bills will be issued in denominations (maturity value)
of $1,000, $10,000, and $100,000. Exchanges of Treasury bills of the
same series from' higher to lower denominations will be permitted at
Federal reserve banks, but not from lower to higher.
4. Treasury bills will be exempt, both as to principal and interest,
from all taxation (except estate and 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
amount of discount at which Treasury bills are originally sold by the
United States, which will be stated on the face of each bill, shall be
considered to be interest for tax exemption purposes. (The method
of apportioning the discount among successive holders of the bills,
for tax purposes, is prescribed in Treasury Decision 4276, copy
annexed.)
5. Treasury bUls will be acceptable at maturity value to secure
deposits of public moneys, but they will not bear the circulation privilege. Treasury bills will be acceptable at maturity, but not before,
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 Treasury bills. Notes secured
by Treasury bills are eligible for discount or rediscount at Federal
reserve banks by mernber banks, as are notes secured by bonds and
notes of the United States, under the provisions of section 13 of the
Federal reserve act. Treasury bills will be acceptable at maturity,
but not before, in payment of interest or of principal on account of
obligations of foreign governments held by the United States.




SECBBTARY OF THE TREASURY

305

PUBLIC NOTICE

6. When tenders are to be invited, public notice thereof will be
given by the Secretary of the Treasury prior to the date of issue of
the Treasury bills. In ;3uch public notice there will be set forth {a)
the amount of the Treasury bills for which tenders are then invited,
(6) the date or dates of issue, (c) the date or dates when such bills
will become due and payable, {d) the closing hour and date for the
receipt of tenders at the Federal reserve banks, and {e) the date or
dates on which payment for accepted tenders must be made.
TENDERS

7. Tenders, in response to any such public notice, will be received
only at the Federal reserve banks, or branches thereof, and unless
received before the hxed time of closing will be disregarded. No
tender will be accepted for an amount less than $10,000 (maturity
value), and each tender must be for an amount in multiples of $1,000
(maturity value). The price or prices offered by the subscriber for
the amount or amounts (at maturity value) applied for must be stated,
and must be expressed on the basis of 100, with not more than three
decimal places, e. g., 99.125. Fractions must not be used.
8. I t is urged that tenders be submitted on the prescribed forms
and inclosed in special envelopes, securely sealed. On application,
the forms and special envelopes will be supplied by the Federal
reserve bank of the district in which the subscriber is located. If
special envelope is not available, the inscription '^Tender for Treasury
bills'' should be placed cn the envelope used. The instructions of the
Federal reserve banks with respect to the submission of tenders should
be observed. Tenders will be accepted without cash deposit from
incorporated banks and. trust companies and from responsible and
recognized dealers in investment securities. Tenders from others
must be accompanied by a; 10 per cent payment of the face amount of
the Treasury bills applied for; provided, however, that such deposit
will not be required if tlie tender is accompanied by an express guaranty of payment in full by an incorporated bank or trust company.
The forfeiture of the 10 per cent cash deposit may be declared by the
Secretary of the Treasury if payinent in full is not made, in the case
of accepted tenders, on the prescribed date.
9. The time of closing wUl be specified in the public notice. At the
time fixed for closing, all tenders received by the Federal reserve banks,
or branches, will be optened. The Secretary of the Treasury will
determine the acceptable, prices offered and will make public announcement thereof as soon as possible after the opening of bids, probably
on the following morning. Those submitting tenders wUl be advised
by the Federal reserve banks of the acceptance or rejection thereof,
and payment on accepted tenders must be made on the date specified
in the public notice.
10. In considering the acceptance of tenders, the highest prices
offered will be accepted in full down to the amount required, and if
the same price appears iin two or more tenders and it is necessary to
accept only a part of the amount offered at such price, the amount
accepted at such price wUl be prorated iri accordance with the
respective amounts applied for. However, the Secretary of the
Treasury expressly reserves the right on any occasion to reject any or



306

REPORT ON THE FINANCES

all tenders or parts of tenders; and to award less than the amount
applied for; and any action he may take in any such respect or respects
shall be final.
11. Any payments which may be due on account of accepted tenders must be made to the appropriate Federal reserve bank in cash
or other funds that will be immediately available on the due date
specified. Following any such payment, delivery of definitive Treasury bUls (or interim receipts) will be made without cost to the subscriber.
12. Federal reserve banks as fiscal agents of the United States are
authorized to perform such acts as may be necessary to carry out the
provisions of this circular and of the public notice or notices issued in
connection with any offering of Treasury bills.
DESTROYED, MUTILATED, OR DEFACED TREASURY BILLS

13. No relief will be granted on account of the loss or theft of
Treasury bills issued hereunder. Relief will be granted on account
of the destruction, mutilation, or defacement thereof under the
conditions and in accordance with the procedure prescribed in paragraphs 80. and 81 of Treasury Department Circular No. 300, dated
July 31, 1923, so far as applicable.
GENERAL

14. The Secretary of the Treasury reserves the right to withdraw,
amend, or supplement this circular at any time, or from time to time.
A. W.

MELLON,

Secretary of the Treasury.
(T. D. 4276)
Income tax—Exemption of Treasury bills
TREASURY DEPARTMENT,
OFFICE OF COMMISSIONER OF INTERNAL R E V E N U E ,

Washington, D. C.
To Collectors of Internal Revenue and Others Concerned:
Attention is invited to the act entitled '^ An act to amend section 5
of the second Liberty bond act, as amended," approved June 17, 1929
(Pub. No. 11, 71st Cong., H. R. 1648), which, among other things,
authorizes the Secretary of the Treasury to issue Treasury bills on a
discount basis, payable at maturity without interest. T h a t act
amends section 5 of the second Liberty bond act, as amended, to read
as follows, the tax provisions being contained in subdivision (b)
thereof:
SEC. 5. (a) That in addition to the bonds and notes authorized by sections 1
and 18 of this act, as amended, the Secretary of the Treasury is authorized to
borrow from time to time, on the credit of the United States, for the purposes
of this act, to provide for the purchase or redemption before maturity of any
certificates of-indebtedness or Treasury bills issued hereunder, and to meet public
expenditures authorized by law, such sum or sums as in his judgment may be
necessary, and to issue therefor (1) certificates of indebtedness of the United
States at not less than par and at such rate or rates of interest, payable at such
time or times as he may prescribe; or (2) Treasury bills on a discount basis and




SECRETARY OF T H E TREASURY

307

payable at maturity without interest. Treasury bills to be issued hereunder
shall be offered for sale on a competitive basis, under such regulations and upon
such terms and conditions as the Secretary of the Treasury may prescribe, and
the decisions of the Secretary in respect of any issue shall be final. Certificates
of indebtedness and Treasury bills issued hereunder shall be in such form or forms,
and subject to such terins and conditions, shall be payable at such time, not
exceeding one year from the date of issue, and may be redeemable before maturity
upon such terms and conditions as the Secretary of the Treasury may prescribe.
Treasury bills issued hereunder shall not be acceptable before maturity in payrnent of interest or of principal on account of obligations of foreign governments
held by the United States of America. The sum of the par value of such certificates and Treasury bills outstanding hereunder and under section 6 of the first
Liberty bond act shall not at any one time exceed in the aggregate $10,000,000,000.
(6) All certificates of indebtedness and Treasury bills issued hereunder (after
the date upon which this subdivision becomes law) shall be exempt, both as to
principal and interest, from all taxation (except estate and 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; and the amount of
discount at which Treasury bills are originally sold by the United States shall be
considered to be interest within the meaning of this subdivision.
(c) Wherever the words ''bonds and notes of the United States," or "bonds
and notes of the Government of the United States," or "bonds or notes of the
United States" are used in the Federal reserve act, as amended, they shall be
held to include certificates of indebtedness and Treasury bills issued hereunder.

The statement of the managers on the part of the House which
accompanied the conference report (Rept. No. 17, 71st Cong., 1st
» sess.) accompanying H. R. 1648, shows that Congress intended that
the original discount rate at which a Treasury bill is issued should
be regarded in the same way as the interest rate fixed by the security
itself in the case of an interest-bearing obligation, and that the amount
of the discount should be apportioned among the holders according
to the periods of their holdings just as the interest on an interestbearing obligation is apportioned. (See Sol. Op. 46, C. B. 3, p. 90.)
Accordingly, in the case of an original purchaser from the Government who holds a Treasury bill to maturity, the entire amount of
the discount at whicii the bUl was issued is exempt from income tax.
If a bill is sold before maturity, each respective holder is entitled to
treat as exempt from income tax that proportion of the amount of
the discount at which the bill was issued which the number of days
(computed on an actual calendar day basis) the bill was owned
by him bears to the total number of days (computed on an
actual calendar day basis) from the date of the issuance of
the bill to the date of its maturity. In other words, the amount
of the discount at which the bill was issued is to be apportioned among the holders according to the periods of their holdings.
The gain from the sale or other disposition of a Treasury bill (that
is, the excess of the amount realized therefrom less discount from
the date of acquisition to the date of its disposition over the cost
or other basis of the bill) is taxable as ordinary income. A loss from
the sale or other disposition of a Treasury bill (that is, the excess
of the cost or other basis of the bill over the amount realized therefrom less discount from the date of acquisition to the date of its
disposition) is allowable as a deduction. There wUl be stated on
each Treasury bill the amount of the discount at which it was issued.
The foregoing principles may be illustrated by the following
examples:
Example 1.—A 90-day Treasury bill is issued to A on March 17 for $9,900
The bill has a maturity value of $10,000 on the following June 15. A holds the
bill to maturity. He maj^ treat the entire amount of the discount, or $100, as
tax exempt interest.



308

REPORT ON THE FINANCES

Example 2.—A Treasury bill is issued to A as in example 1. A holds the bill
until April 11 (25 days), on which, date he sells it to B for $9,927.78. B holds
the bill to maturity (i. e., for 65 days). A is entitled to treat twenty-five ninetieths of the amount of the discount, or $27.78, as tax exempt interest, that
amount being the proportion of the discount which the number of days A owned
the bill (25) bears to the total number of days for which the bill was issued (90).
Likewise, B is entitled to treat sixty-five ninetieths, or $72.22, as tax exempt
interest.
Example 3.—A Treasury bill is issued to A as in example 1. A holds the bill
until May 1, when he sells it to B for $9,962.50. B holds the bill to maturity.
A is entitled to treat forty-five ninetieths of the amount of the discount, or $50,
as tax exempt interest. A realizes a taxable gain of $12.50 in the transaction,
computed as follows:
The amount A realizes from the sale is $9,962.50, Avhich includes $50, representing discount to him. Therefore, $9,962.50 less $50, or $9,912.50, is the
amount A realizes from the sale in addition to the discount treated as tax exempt
interest. Since the bill cost A $9,900, the amount of the gain is $9,912.50 less
$9,900, or $12.50.
B is also entitled to treat forty-five ninetieths of the amount of the discount,
or $50, as tax exempt interest. B sustains a deductible loss of $12.50 in the
. transaction, computed as follows:
The amourit B realizes upon the maturity of the bill is $10,000, which includes
$50, representing discount to him. Therefore, $10,000 less $50, or $9,950, is
the amount B realizes upon the maturity of the bill in addition to the discount
treated as tax exempt interest. Since the bill cost B $9,962.50, the amount of '
his deductible loss is $9,962.50, less $9,950, or $12.50.
Example ^.-^A Treasury bill is issued to A as in example 1. A holds the bill
until May 1, when he sells it to B for $9,937.50. B holds the bill to maturity. •
'
A is entitled to treat forty-five ninetieths of the a,mount of the discount, or $50,
as tax exempt interest. A sustains a deductible loss of $12.50 in the transaction
computed as follows:
The amount A realizes from the sale is $9,937.50, which includes $50 representing discount to him. Therefore, $9,937.50 less $50, or $9,887.50 is the
amount A realizes from the sale in addition to the discount treated as tax exempt
interest. Since the bill cost A $9,900, the amount of his deductible loss is $9,900
less $9,887.50, or $12.50.
B is also entitled to treat forty-five ninetieths of the amount of the discount,
or $50, as tax exempt interest. B realizes a taxable gain of $12.50 in the transaction, computed as follows:
The amount B realizes upon the maturity of the bill is $10,000, which includes
$50 representing discount to him. Therefore, $10,000 less $50, or $9,950, is
the amount B realizes upon maturity of the bill in addition to the discount
treated as tax exempt interest. Since the bill cost B $9,937.50, the amount of
the gain is $9,950Jess $9,937.50, or $12.50..

This Treasury decision is applicable only to the treatment of
discount in the case of Treasury bills.
R O B T . H . LUCAS,

Commissioner of Internal Revenue.
Approved: November 22, 1929.
A. W.

MELLON,

Secretary of the Treasury.
E X H I B I T 24
[PUBLIC—No. 376—71ST CONGRESS—H. R . 12440]

An act providing certain exemptions f7-'om taxation for Treasury bills
Be it enacted by the Senate and House of Representatives of the United
States of America in Congress assembled, That section 5 of the second
Liberty bond act, as amended (Public, Numbered 11, Seventy-first
Congress, June 17, 1929), is amended by adding at the end thereof
a new subdivision to read as follows:



SECRETARY OF THE TREASURY

309

'' (d) Any gain from the sale or other disposition of Treasury bills
issued hereunder (after the date upon which this subdivision becomes
law) shall be exempt 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; and no loss from the sale or other disposition of such
Treasury bills shall be allowed as a deduction, or otherwise recognized, for the purposes of any tax now or hereafter imposed by t h e
United States or any of its possessions."
Approved, June 17, 1930.

EXHIBIT

25

Amended regulations governing the sale and issue of Treasury bills
{circular letter dated June 30 1930, with Department Circular No,
418, as amended)
J U N E 30,

1930.

S I R : There is inclosed for your information and future reference
copy of an amended Treasury Department Circular No. 418, dated
June 25, 1930, relating to Treasury bills.
The original Treasiury Department Circular 418, dated November
22, 1929, has been changed in one very important respect by this
amended circular. The change occurs in paragraph 4, to which your
attention is invited, and was occasioned by the fact that by the act
of Congress approved June 17, 1930, Treasury bills were given an
additional tax exemption feature.
By that act any gain from the sale or other disposition of Treasury
bills issued after June 17, 1930, will be exempt from all taxation
(except estate or inheritance taxes), and no loss from the sale or
other disposition thereof shall be allowed as a deduction, or otherwise recognized, for the purposes of any tax now or hereafter imposed by the United States or any of its possessions.
This circular is not a specific offering of Treasury bills, but is a
general circular governing the sale and issue of Treasury bills when
offered. Public notice, describing the particular offering, will be
given from time to time by the Secretary of the Treasury when
Treasury bills are off'ered for sale.
Very truly yours,
A.

W.

MELLON,

Secretary of the Treasury.
[Department Circular No. 418, as amended]
TREASURY DEPARTMENT,
O F F I C E OF THE SECRETARY,

Washington, June 25, 1930.
1. The Secretary of the Treasury is authorized by section 5 of the
second Liberty bond act, as amended,^ to issue Treasury bills on a
discount basis and payable at maturity without interest, and to fix
the form, terms, and conditions thereof, and to offer them for sale
on a competitive basis, under such regulations and upon such terms
1 The statute appears in T. D. 4292 on pages 3 and 4 of this circular.




(See p. 313 of this report.)

310

REPORT ON THE FINANCES

and conditions as he may'prescribe. Pursuant to said authorization,
the Secretary of the Treasury, by public notice, may from time to
time offer Treasury bills for sale and invite tenders therefor, through
the Federal reserve banks. The Treasury bills so offered and the
tenders made will be subject to the terms and conditions and to the
general rules and regulations herein contained and also to the terms
and conditions stated in the public notices as issued by the Secretary
of the Treasury from time to time in connection with particular
offerings.
DESCRIPTION OF TREASURY BILLS

2. Treasury bills are bearer obligations of the United States,
promising to pay a specified amount without interest on a specified
date. They are to be issued on a discount basis. Each Treasury
bUl, prior to its issue, must be validated by a Federal reserve bank
as fiscal agent of the United States, and the date of the original issue
thereof will be stated thereon. All Treasury bills of the same maturity, irrespective of the issue date, will constitute a single series
which will be designated by the due (or maturity) date. Treasury
biUs wUl be payable at maturity upon presentation to the Treasurer
of the United States in Washington or to any Federal reserve bank.
3. Treasury bills will be issued in denominations (maturity value)
of $1,000, $10,000, and $100,000. Exchanges of Treasury bills of the
same series from higher to lower denominations will be permitted at
Federal reserve banks, but hot from lower to higher.
4. (a) Treasury bills issued prior to June 17, 1930, will be subject
to the tax exemption provisions stated in Department Circular No.
418, dated November 22, 1929. Gains from the sale or other disposition of such Treasury bills are taxable, and losses from the sale
or other disposition thereof shall be deductible, in the manner prescribed in Treasury Decision 4276, annexed to that circular.
(6) Treasury bills issued subsequent to June 17, 1930, will be
exempt, as to principal and interest, and any gain from the sale or
other disposition of such Treasury bills shall also be exempt, 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; and no loss from
the sale or other disposition of such Treasury bills shall be allowed
as a deduction, or otherwise recognized, for the purposes of any tax
now or hereafter imposed by the United States or any of its possessions.
However, taxpayers making income tax returns are required to report
in their returns, for information purposes, the number and amount
of obligations and securities of the United States owned by them
and the income received therefrom. In reporting in their income
tax returns the amount of Treasury bills (issued subsequent to June
17, 1930) owned by them and the income received therefrom, taxpayers will be governed by the provisions of Treasury Decision 4292,
which appears on pages 3 and 4 of this circular. I t will be noted
from that Treasury Decision that (1) the '^ amount of such obligations and securities" to be so reported is the face or maturity value
of the Treasury bills, and that (2) the 'income received therefrom"
to be reported is the net excess of the amount realized during the
taxable year from the sale or other disposition of the bills over the
cost or other basis thereof, no separate computation of discount




SECRETARY OF T H E TREASURY

311

being necessary. In such cases, and pending revision of the income
tax forms, taxpayers making income tax returns and owning any
such Treasury bills should submit the information required in the
form of a rider attached to the returns.
5. Treasury bills will be acceptable at maturity value to secure
deposits of public moneys, but they will not bear the circulation
privilege. ^ Treasury bills will be acceptable at maturity, but not
before, and under such rules and regulations as shall be prescribed
or approved by the Secretary of the Treasury, in payment of inconie
and profits taxes payable at the maturity of the Treasury bills.
Notes secured by Treasury bills are eligible for discount or rediscount
at Federal reserve banks by member banks, as are notes secured by
bonds and notes of the United States, under the provisions of section
13 of the Federal reserve act. Treasury bUls will be acceptable at
maturity, but not before, in payment of interest or of principal on
account of obligations of foreign governments held by the tJnited
States.
PUBLIC NOTICE

6. When tenders are to be invited, public notice thereof will be
given by the Secretary of the Treasury prior to the date of issue of
the Treasury bills. In such public notice there will be set forth (a)
the amount of the Tieasury bills for which tenders are then invited,
(6) the date or dates of issue, (c) the date or dates when such bills
will become due and payable, {d) the closing hour and date for the
receipt of tenders at the Federal reserve banks, and {e) the date or
dates on which payment for accepted tenders must be made.
TENDERS

7. Tenders, in response to any such public notice, will be received
only at the Federal reserve banks, or branches thereof, and unless
received before the fixed time of closing will be disregarded. No tender will be accepted for an amount less than $1,000 (maturity value),
and each tender must be for an amount in multiples of $1,000 (maturity
value). The price or prices offered by the subscriber for the amount
or amounts (at maturity value) applied for must be stated, and must
be expressed on the basis of 100, with not more than three decimal
places, e. g., 99.125. Fractions must not be used.
8. I t is urged that tenders be submitted on the prescribed forms
and inclosed in special envelopes, securely sealed. On application,
the forms and special envelopes will be supplied by the Federal reserve
bank of the district in which the subscriber is located. If special
envelope is not available, the inscription '^Tender for Treasury bills",
should be placed on the envelope used. The instructions of the
Federal reserve banks with respect to the submission of tenders
should be observed. Tenders will be accepted without cash deposit
from incorporated banks and trust companies and from responsible
and recognized dealers in investment securities. Tenders from others
must be accompanied by a 10 per cent payment of the face amount of
the Treasury bills applied for; provided, however, that such deposit
will not be required if the tender is accompanied by an express guaranty of payment in full by an incorporated bank or trust company.
The forfeiture of the 10 per cent cash deposit may be declared by the




312

REPORT ON THE FINANCES

Secretary of the Treasury if payment in full is not made, in the case
of accepted tenders, on the prescribed date.
9. The time of closing will be specified in the public notice. At the
time fixed for closing, all tenders received by the Federal reserve
banks, or branches, will be opened. The Secretary of the Treasury
will determine the acceptable prices offered and will make public
announcement thereof as soon as possible after the opening of bids,
probably on the following morning. Those submitting tenders will
be advised by the Federal reserve banks of the acceptance or rejection thereof, and payment on accepted tenders must be made on the
date specified in the public notice.
10. In considering the acceptance of tenders, the highest prices
offered will be accepted in full down to the amount required, and if
the same price appears in two or more tenders and it is necessary to
accept only a part of the amount offered at such price, the amount
accepted at such price will be prorated in accordance with the respective amounts applied for. However, the Secretary of the Treasury
expressly reserves the right on any occasion to reject any or all
tenders or parts of tenders; and to award less than the amount
applied for; and any action he may take in any feuch respect or
respects shall be final.
11. Any payments which may be due on account of accepted tenders must be made to the appropriate Federal reserve bank in cash
or other funds that will be immediately available on the due date
specified. Following any such payment, delivery of definitive Treasury bills (or interim receipts) will be made without cost to the
subscriber.
12. Federal reserve banks as fiscal agents of the United States are
authorized to perform such acts as may be necessary to carry out the
provisions of this circular and of the public notice or notices issued in
connection with any offering of Treasury bills.
DESTROYED, MUTILATED, OR DEFACED TREASURY BILLS

13. No relief will be granted on account of the loss or theft of
Treasury bills issued hereunder. Relief will be granted on account
of the destruction, mutilation, or defacement thereof under the conditions and in accordance with the procedure prescribed in paragraphs 80 and 81 of Treasury Department Circular No. 300, dated
July 31, 1923, so far as applicable.
GENERAL

14. The Secretary of the Treasury reserves the right to, withdraw,
amend, or supplement this circular at any time, or from time to time.




,

A. W.

MELLON,

Secretary of the Treasury

SECRETARY OF THE TREASURY

313

(T. D . 4292)
Income tax—Exemption of Treasury bills
TREA-SURY DEPARTMENT,
OFFICE OF COMMISSIONER OF INTERNAL R E V E N U E ,

Washington, D. C
To Collectors of Internal Revenue and others concerned:
Attention is invited to the act entitled '^An act providing certain
exemptions from taxation for Treasury bills," approved June 17, 1930
(Pub. No. 376, 71st Cong., H . R.. 12440), which amends section 5 of
the second Liberty bond act, as amended (Pub. No. 11, 71st Cong.,
June 17, 1929), by adding at the end thereof a new subdivision known
as subdivision (d). This new subdivision provides that any gain from
the sale or other disposition of Treasury bills issued after the enactment of the act approved June 17, 1930, shall be exempt from all
Federal, State, and local taxation (except estate or inheritance taxes),
and that no loss from the sale or other disposition of such Treasury
bills shall be allowed as a deduction, or otherwise recognized, for the
purposes of any tax imposed by the United States or any of its possessions. Section 5 of the second Liberty bond act, as so amended,
reads as follows, the tax exemption provisions being contained in
subdivisions (b) and (d) thereof:
SEC. 5. (a) That in addition to the bonds and notes authorized by sections 1
and 18 of this act, as amended, the Secretary of the Treasury is authorized to
borrow from time to time, on the credit of the United States, for the purposes
of this act, to provide for the purchase or redemption before maturity of any
certificates of indebtedness or Treasury bills issued hereunder, and to meet
pubh'c expenditures authorized by law, such sum or sums as in his judgment may
be necessary, and to issue therefor (1) certificates of indebtedness of the United
States at not less than par and at such rate or rates of interest, payable at such
time or times as he may prescribe; or (2) Treasury bills on a discount basis and
payable at maturity wii.hout interest. Treasury bills to be issued hereunder
shall be offered for sale on a competitive basis, under such regulations and upon
such terms and conditions as the Secretary of the Treasury may prescribe, and
the decisions of the Secrejtary in respect of any issue shall be final. Certificates
, of indebtedness'and Treasury bills issued hereunder shall be in such form or
forms and subject to such terms and conditions, shall be payable at such time,
not exceeding one year Irom the date of issue, and may be redeemable before
maturity upon such terms and conditions as the Secretary of the Treasury may
prescribe. Treasury bills issued hereunder shall not be acceptable before maturity
in payment of interest or of principal on account of obligations of foreign governments held by the United States of America. The sum of the par value of
such certificates and Treasury bills outstanding hereunder and under section 6
of the first Liberty bond act shall not at any one time exceed in the aggregate
$10,000,000,000.
(6) All certificates of indebtedness and Treasuiy bills issued hereunder (after
the date upon which this; subdivision becomes law) shall be exempt, both as to
principal and interest, from all taxation (except estate and 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; and the amount
of discount at which Trefisury bills are originally sold by the United States shall
be considered to be interesst within the meaning of this subdivision.
(c) Wherever the words "bonds and notes of the United States," or "bonds
and notes of the Government of the United States," or "bonds or notes of the
United States" are used in the Federal reserve act, as-amended, they shall be
held to include certificate's of indebtedness and Treasury bills issued hereunder.
{d) Any gain from the sale or other disposition of Treasury bills issued hereunder
(after the date upon which this subdivision becomes law) shall be exempt from
all taxation (except estat(3 or inheritance taxes) now or hereafter imposed by the




314

REPORT ON THE FINANCES

United States, any State, or any of the possessions of the United States, cr by
any local taxing authority; and no loss from the sale or other disposition of such
Treasury bills shall be allowed as a deduction, or otherwise recognized, for the
purposes of any tax now or hereafter imposed by the United States or any of
its possessions.

The report of the Committee*on Ways and Means (Rept. No. 1759,
accompanying H. R. 12440) shows that it is the purpose of the act
approved June 17, 1930, to obviate the necessity, which existed
under the law prior to its amendment by such act, of keeping a complicated system of bookkeeping records in order to ascertain gain or
loss from the sale or other disposition of Treasury biUs as differentiated
from the discount received on such bUls.
Attention is also invited to section 22 (b) (4) of the revenue act of
1928, which provides in part as follows:
SEC. 22. * * * ( & ) Exclusions from gross income * * *. The following
items shall not be included in gross income and shall be exempt from taxation
under this title: * * * (4) '^ * *. Interest upon (A) the obligations of a
State, Territory, or any political subdivision thereof, or the District of Columbia;
or (B) securities issued under the provisions of the Federal farm loan act, or under
the provisions of such act as amended; or (C) the obligations of the United
States or its possessions. Every person owning any of the obligations or securifies
enumerated in clause (A), (B), or (C) shall, in the return required by this title,
submit a statement showing the number and amount of such obligations and
securities owned by him and the income received therefrom, in such form and
with such information as the commissioner may require. In the case of obligations of the United States issued after September 1, 1917 (other than postal
savings certificates of deposit), the interest shall be exemp.t only if and to the
extent provided in the respective acts authorizing the issue thereof as amended
and supplemented, and shall be excluded from gross income only if and to the
extent it is wholly exempt to the taxpayer from income taxes.

Article 81 of Regulations 74 promulgated under the revenue act
of 1928 provides that ^^Every person owming obligations of a State,
Territory, any political subdivision thereof, or the District of Columbia; securities issued under the provisions of the Federal farm loan
act or of such act as amended; or obligations of the United States
or its possessions, must, however, submit in his income tax return
a statement showing the number and amount of such obligations and
securities owned and the income received therefrom." '
Under the above-quoted provisions of the revenue act of 1928 and
Regulations 74, in the case of Treasury bUls issued after June 17,
1930, (1) the '^amount of such obligations and securities" is their
par (maturity) value, and (2) the ^^income received therefrom" is
the net excess of the amount realized during the taxable year from
the sale or other disposition of the bills over the cost or other basis
thereof, no separate computation of discount being necessary. In
such cases, and pending revision of the income tax forms, taxpayers
making income tax returns shall submit the statement required by
section 22 (b) (4) and article 81 in the form of a rider attached to the
return.
R O B T . H . LUCAS,

Commissioner of Internal Revenue.
Approved: June 25, 1930.
A. W.

MELLON,

Secretary of the Ireasury,




SECK.ETARY OF THE TREASURY

315

Miscellaneous
EXHIBIT

26

Announcement that Consols of 1930 will not be called for redemptiori on
April 2, 1930 {press release, December 12, 1929)
In view of the many inquiries received at the Treasury with respect
to the 2 per cent Consols of 1930 which, by their terms, are redeemable at the pleasure of the United States after April 1, 1930, Secretary
Mellon to-day announced that these bonds would not be called for
redemption on April 2, 1930, which is the earliest date the option reserved to the United States may be exercised

EXHIBIT

27

Notice of call for redemption of Treasury notes of Series A-1930-32 and
B-1930-32 {press release, September 10, 1930, with Department Circular No. 428)
The Secretary of the Treasury announces that all 3}^ per cent
Treasury notes of Series A-1930-32 and Series B-1930-32 have been
called for redemption on March 15, 1931, on which date the principal
of any such notes then outstanding will be payable, together with
interest then accrued thereon. Accordingly, interest on all 3K per
cent Treasury notes of Series A-1930-32 and Series B-1930-32 wiU
cease on said redemption date, March 15, 1931.
The Series A-1930-32 3}2 per cent notes were issued on March
15, 1927, and were made redeemable on six months' notice on any
interest payment date on and after March 15, 1930. Of the $1,360,456,450 originally issued, there were outstanding as of September 1,
$649,076,350. The Series B-1930-32 notes were issued on September 15, 1927, and were made redeemable on six months' notice on
any interest payment date on and after September 15, 1930. Of the
$619,495,700 originally issued, there were outstanding as of September 1, $500,303,700.
Particular attention is invited to the fact that the 3K per cent
Treasury notes of Series C-1930-32 are not included in this call for
redemption and to the further fact that the notes which have been
called for redemption should not be presented for redemption until
March 15, 1931, or shortly prior thereto.
The text of the ofiicial circular calling the notes for redemption
follows:
[Department Circular No. 428]
TREASURY DEPARTMENT,
O F F I C E OF THE SECRETARY,

Washington, September 10, 1930.
To holders of 3% % Treasury notes of Series A-1930-32 and B-1930-32:
1. Call for redemption.—Public notice is hereby given that, in accordance with the terms of their issue and pursuant to the provisions
of Treasury Department Circulars Nos. 379 and 387, dated March 8,
1927, .and September 6, 1927, respectively, all of the 3K per cent
Treasury notes of Series A-1930-32, which by their terms were made



316

REPORT ON THE FINANCES

redeemable on and after March 15, 1930, and all of the 3K per cent
Treasury notes of Series B-1930-32, which by their teims were made
redeemable on and after September 15, 1930, are called for redemption on March 15, 1931, on which date the principal of any such notes
then outstanding will be payable, together with the interest then accrued thereon. Interest on all 3K per cent Treasury notes of Series
A-1930-32 and Series B-1930-32 will cease on said redemption date,
March 15, 1931.
2. Presentation for redemption at or after March 15, 1931.—All
3K per cent Treasury notes of Series A-I93O732 and Series B-1930-32
should be presented and surrendered for redemption to any Federal
reserve bank or branch, or to the Treasurer of the United States at
Washington, D. C. The notes must be delivered in every case at
the expense and risk of the holder, and should be accompanied by
appropriate written advice.
Facilities for transportation of the notes by registered mail insured
may be arranged between incorporated banks and trust companies
and the Federal reserve banks, and holders may take advantage of
such arrangements, when available, utilizing such incorporated banks
and trust companies as tneir own agents. Incorporated banks and
trust companies are not agents of tne United'States under this circular.
3. Interest coupons.—Interest coupons dated Marcn 15, 1931,
should be detached and collected in regular course when due. Coupons dated September 15, 1931, and all coupons bearing dates subsequent thereto, must be attached to the notes w^hen presented. In
the event that any notes are presented for redemption with the
September 15, 1931, or any subsequently dated coupons detached,
the notes will nevertheless be redeemed, but the full face amount of
any such missing coupons will be deducted.
4. Any further information which may be desired as to redemption
of Treasury notes of Series A-1930-32 and B-1930-32 may be obtained from the Treasury Department, Division of Loans and Currency, Washington, D. C , or from any Federal reserve bank or
branch. The Secietary of the Treasury ma}^ at any time or from time
to time prescribe supplemental or amendatory rules and regulations
governing the matters covered by this circular.
A. W.

MELLON,

Secretary of the Treasury.
OBLIGATIONS OF FOREIGN GOVERNMENTS
AUSTRIA .
E X H I B I T 28

Agreement for the funding of the indebtedness of Austria to the United
States
AGREEMENT

Made the 8th day of May, 1930, at the city of Washington, District
of Columbia, between the Federal Government of the Republic of
Austria, hereinafter called Austria, party of the first part, and the
Government of the United States of America, hereinafter called
the United States, party of the second part



317

SECRETARY OF THE TREASURY

Whereas Austria is indebted to the United States as of Janaury 1,
1928, upon an obligation designated as bond No. 1, Relief series B of
1920 in the principal amount of $24,055,708.92, together with interest
accrued and unpaid thereon; and
Whereas Austria desires to liquidate said indebtedness to the United
States, both interest and principal, through the issue of bonds to the
United States, and the United States is prepared to accept bonds from
Austria upon the terms hereinafter set forth:
Now, therefore, in consideration of the premises and of the mutual
covenants herein contained, it is agreed as follows:.
1. Amount of indebtedness.—The amount of indebtedness to be
liquidated is $34,630,968.68, which has been computed as follows:
Principal of relief obligations$24,055,708. 92
Accrued and unpaid interest from September 4, 1920, to
January 1, 1928, at 6 per cent per annum
10, 575, 259. 76
Total indebtedness as of January 1, 1928.----

34, 630, 968. 68

2. Payment.—In order to provide for the liquidation of the indebtedness, Austria agrees to pay and the United States to accept the sum
of $33,428,500, to be paid in twenty-five equal annual installments of
$1,337,140 each, on the first day of January, 1943, and on the first day
of January of each of the subsequent years to 1967, inclusive. In lieu
of these twenty-five payments Austria may, at its option, issue to the
United States, at par, bonds of Austria in the aggregate principal
amount of $24,614,885, dated January 1, 1928, and maturing serially
on the several dates and in the amounts fixed in the following schedule:
January 1:
1929
1930
1931
1932
1933
1934
1935
1936
1937
1938
1939-_-"_
1940__
1941
1942
1943
1944
1945
1946
1947
1948
1949
1950

-

--

$287,556
287,556
287,556
287,556
287, 556
460, 093
460, 093
460, 093
460,093
460, 093
460, 093
460, 093
460,093
460, 093
460, 093
743, 047
743, 047
743, 047
743,047
743,047
743,047
743, 047

January 1:
1951-1952_.
1953_1954
1955
1956_.
1957_1958_1959_1960
1961
1962
1963__
1964_.
1965
1966
1967
1968

._

.__

$743, 047
743,047
743,047
743,047
743,047
743,047
743, 047
743, 047
743, 047
743, 047
743, 047
743, 047
743, 047
743, 047
743, 047
743, 047
743, 047
743,047
24,614,885

Provided, however, That if Austria shall exercise this option, the
obligation of Austria to pay annuities during the years 1929 to 1943
will in the case of each annuity not arise if the trustees of the reconstruction loan of 1923 prior to the preceding December first have raised
objection to the pa37^ment of the annuity in question on the due date.
To the extent, if any, that any such annuity is not paid by reason of
such objection on the part of the trustees, the amount thereof together
with interest at 5 per cent per annum compounded annually to December 31, 1943, shall be repaid together with further interest at 5




318

REPORT ON T H E FINANCES

•

per cent per annum by twenty-five equal annuities on January 1 of
each of the years 1944 to 1968, inclusive. Austria shall issue its bond
to the United States for each of the twenty-five annuities simUar in
form to the bonds first to be issued hereunder, but bearing interest at
the rate of 5 per cent per annum, and maturing serially on January 1st
of each of the years 1944 to 1968, inclusive.
Austria agrees that no payment shall be made upon or in respect
of any of its obligations issued to the relief creditor nations, to wit,
Denmark, France, Great Britain, Holland, Italy, Norway, Sweden,
and Switzerland, before , at, or after maturity, whether for principal
or for interest, unless a similar and proportionate payment shall
simultaneously be made upon the relief indebtedness of Austria to
the United States as set forth above.
3. Form of bond.—All bonds issued or to be issued hereunder to
the United States shall be payable to the Government of the United
States of America, or order, and shall be signed for Austria by its
duly authorized representatives. The, bonds to be dated January
1, 1928, and maturing January 1, 1929, and annually thereafter to
January 1, 1943, inclusive, shall be substantially in the form set forth
in the exhibit hereto annexed and marked ^'Exhibit A," and shall
be issued in fifteen pieces with maturities and in denominations as
here nabove set forth and shall bear no interest except that in the
event that any bond is not paid on the date of its maturity, interest
shall be paid as specified in paragraph 2 above. The bonds to be
dated January 1, 1928, and maturing January 1, 1944, and annually
thereafter to January 1, 1968, inclusive, shall be substantially in the
form set forth in the exhibit hereto annexed and marked ^^Exhibit B , "
and shall be issued in twenty-five pieces with maturities and in
denominations as hereinabove set forth and shall bear no interest.
4. Method of payment.—All bonds issued or to be issued hereunder
shall be payable, as to both principal and interest, in.United States
gold coin of the present standard of value, or, at the option of Austria,
upon not less than thirty days' advance notice to the United States,
in any obligations of the United States issued after April 6, 1917,
to be taken at par and accrued interest to the date of payment hereunder.
All payments, whether in cash or* in obligations of the United
States, to be made by Austria on account of the principal of or interest on any bonds issued or to be issued hereunder and held by the
United States, shall be made at the Treasury of the United States in
Washington, or, at the option of the Secretary of the Trasury of
the United States, at the Federal Reserve Bank of New York, and if
in cash shall be made in funds immediately available on the date of
maturit}^, or if in obligations of the United States shall be in form
acceptable to the Secretary of the Treasury of the United States
under the general regulations of the Treasury Department governing transactions in United States obligations.
5. Exemption from taxation.—The principal and interest of all
bonds issued or to be issued hereunder shall be paid without deduction for, and shall be exempt from, any and all taxes or other public
dues, present or future, imposed by or under authority of Austria
or any political or local taxing authority within Austria.
6. Security.—Austria represents that the Reparation Commission,
pursuant to the powers conferred upon it, has recognized that the




SECRETARY OF THE TREASURY

319

bonds to be issued under this agreement shall enjoy the same security
as the bonds of relief series B of 1920, and shall be a first charge
upon all the assets and revenues of Austria, and shall have priority
over costs of reparation under the treaty of Saint-Germain, or under
any treaty or agreement supplementary thereto, or under any
arrangements concluded between Austria and the Allied and Associated Powers during the armistice signed on November 3, 1918, and
the Austrian Government agrees that nothing in this agreement
shall prejudice or afl'isct the provisions contained in the bonds of relief
series B of 1920 constituting such bonds a first charge upon all the
assets and revenues of Austria (without prejudice, however, to the
lien enjoyed by the reconstruction loan of 1923), so that if the Government of Austria should at any time without the assent of the United
States pay or attempt to pay any sum whether in respect of reparation or by way of compensation for any non-fulfilment of the obligations of Austria under article 184 of the said treaty, the amount
owing under the terms of bonds No. 1, relief series B of 1920 for principal moneys and for any arrears of interest thereon at 6 per cent per
annum, compounded semi-annually from September 4, 1920, to January 1, 1925, and thereafter at 5 per cent per annum, compounded
annually shall forthwith be paid in cash by the Austrian Government in priority to any such payments under the said treaty.
7. Compliance with legal requirements.-^Austrisi represents and
agrees that the execution and delivery of this agreement have in
. all respects been duly authorized, and that all acts, conditions, and
legal formalities which should have been completed prior to the making of this agreement have been completed as required by the laws
of Austria and in conformity therewith.
8. Cancellation and surrender of obligations.—Upon the execution
of this agreement, the delivery to the United States of the principal
amount of bonds of Austria to be issued hereunder, together with
satisfactory evidence of authority for the execution of this agreement
by the representative of Austria and for the execution of the bonds to
be issued hereunder by the representatives of Austria, the United
States wUl cancel and surrender to Austria at the Treasury of the
United States in Washington, the relief obligation of Austria now held
by the United States.
9. Notices.—Any notice, request, or consent under the hand of the
Secretary of the Treasury of the United States, shall be deemed and
taken as the notice, request, or consent of the United States, and
shall be sufficient if delivered at the Legation of Austria in Washington
or at the office of the Ministry of Finance in Vienna; and any notice,
request, or election from or by Austria shall be sufficient if delivered
to the American Legation in Vienna or to the Secretary of the
Treasury at the Treasury of the United States in Washington. The
United States in its discretion may waive any notice required hereunder, but any such waiver shall be in writing and shall not extend
to or affect any subsequent notice or impair any right of the United
States to require notice hereunder.
10. Counterparts.—This agreement shall be executed in two counterparts, each of which shall have the force and effect of an original.
In witness whereof Austria has caused this agreement to be executed on its behalf by its duly authorized representative at Wash12101—31

23




320

REPORT ON THE FINANCES

ington, and the United States has likewise caused this agreement to
be executed on its behalf by the Secretary of the Treasury, with the
approval of the President, pursuant to the act of Congress approved
February 4, 1929, all on the day and year first above written.
T H E FEDERAL GOVERNMENT OF T H E
R E P U B L I C OF AUSTRIA,
By EDGAR PROCHNIK,

Envoy Extraordinary and Minister Plenipotentiary.
T H E GOVERNMENT OF T H E
U N I T E D STATES OF AMERICA,
By A. W. M E L L O N ,

Secretary of the Treasury.
Approved:
H E R B E R T HOOVER,

^

President.

EXHIBIT

A

(Form of bond 1929-1943)
The Republic of Austria gold bond
Relief series B, 1920, No.

, January 1, 1928. (Renewal bond) due
January 1, 19—

The Republic of Austria, hereinafter called Austria, for value
received, promises to pay to the Government of the United States of
America, hereinafter called the United States, or order, on January
1,
, the sum of
dollars ($
). This bond is payable
as to both principal and interest in gold coin of the United States of
America of the present standard of value, or, at the option of Austria,
upon not less than thirty days advance notice of the United States,
in any obligations of the United States issued after April 6, 1917, to
be taken at par and accrued interest to the date of payment hereunder. Nevertheless, the obligation of Austria to pay this bond shall
not arise if the trustees of the reconstruction loan of 1923 have, prior
to the first day of December preceding the maturity date of this bond,
raised objection to the payment of this bond on the due date. If
this bond is not paid on its due date by reason of such objection on
the part of the trustees, the amount thereof, together with interest
at 5 per cent compounded annually to December 31, 1943, shall be
repaid, together with further interest at 5 per cent per annum in
twenty-five equal annual installments on the first of January of each
of the years 1944 to 1968, inclusive.
This bond is payable as to both principal and interest without
deduction for, and is exempt from, any and all taxes and other charges,
present or future, imposed by or under authority of Austria or its
possessions or any political or local taxing authority within Austria.
This bond is payable as to both principal and interest at the Treasury
of the United States in Washington, D. C , or at the option of the
Secretary of the Treasury of the United States at the Federal Reserve
Bank of New York.



SECRETARY OF T H E TREASURY

321

This obligation is one of a series of obligations of simUar tenor but
in different amounts and payable in different currencies, designated
as ^'Relief series B of 1920 (renewal bonds)."
Austria agrees that no payment wUl be made upon or in respect of
any of the obligations of the '^Relief bond series B-1920 " due on January 1, 1925, or upon or in respect of any of the obligations '^Relief
series B of 1920 (renewal bonds)" or of any other obligations issued
by Austria in renewal of the said '^Relief bonds series B-1920"
before, at, or after maturity, whether for principal or for interest,
unless a simUar payment shall simultaneously be made upon all the
obligations of '^Relief series B of 1920 (renewal bonds)" issued by
Austria in proportion to the respective obligations of said series.
The payment of this obligation is secured in the same manner and
to the same extent as the obligation of Austria in the principal
amount of $24,055,708.92, designated as bond No. 1, relief series B
of 1920.
.
Austria agrees that if at any time it should pay or attempt to pay
any sum whether in respect of reparation or by way of compensation
for any non-fulfilment of the obligations of Austria under Article 184
of the treaty of Saint-Germain, the amount owing under the terms of
bond No. 1, relief series B of 1920 for principal moneys and for any
arrears of interest thereon at 6 per cent per annum, compounded
semiannually, from September 4, 1920, to January 1, 1925, and
thereafter at 5 per cent per annum, compounded annually, shall
forthwith be paid in cash by the Austrian Government in priority to
any such payments under the said treaty.
This bond is issued under an agreement dated May 8, 1930, between
Austria and the United States, to which this bond is subject and to
which reference is made for a further statement of its terms and
conditions.
In witness whereof Austria has caused this bond to be executed on
its behalf by its duly authorized representatives at the city of Vienna,
as of January 1, 1928.
T H E FEDERAL GOVERNMENT OF THE
R E P U B L I C OF AUSTRIA,

By

.
EXHIBIT

B

(Form of bond 1944-1968)
The Republic of Austria gold bond
Rehef series B-1920, No.
, January 1, 1.928.
Due January 1, 19-^

(Renewal bond),

The Republic of Austria, hereinafter called Austria, for value
received, promises to pay to the Government of the United States
of America, hereinafter called the United States, or order, on January 1,
, the sum of
dollars ($). This bond is
payable as to both principal and interest in gold coin of the United
States of America of the present standard of value, or, at the option
of Austria, upon not less than thirty days' advance notice to the
United States, in any obhgations of the United States issued after



322

REPORT ON T H E FINANCES

April 6, 1917, to be taken at par and accrued interest to the date of
payment hereunder.
This bond is payable without deduction for, and is exempt from,
any and all taxes and other charges, present or future, imposed by
or under authority of Austria or its possessions or any political or
local taxing authority within Austria. This bond is payable as to
both principal and interest at the Treasury of the United States in
Washington, D. C , or at the option of the Secretary of the Treasury
of the United States at the Federal Reserve Bank of New York.
This obligation is one of a series of obhgations of similar tenor but
in dift'erent amounts and payable in dift'erent currencies, designated
as ^^Relief series B of 1920 (renewal bonds)."
Austria agrees that no payment will be made upon or in respect of
any of the obligations of the ''Rehef bond series B-1920" due on
January 1, 1925, or upon or in respect of any of the obligations
''Relief series B of 1920 (renewal bonds)," or of any other obligations
issued by Austria in renewal of the said "Relief bonds series B-1920 "
before, at, or after maturity, whether for principal or for interest,
unless a similar payment shall simultaneously be made upon all the
obligations of "Relief series B of 1920 (renewal bonds)" issued by
Austria in proportion to the respectiye obligations of said series.
The payment of this obligation is secured in the same manner
and to the same extent as the obligation of Austria in the principal
amount of $24,055,708.92, designated as bond No. 1 relief series B
of 1920.
'
Austria agrees that if at any time it should pay or attempt to
pay any sum whether in respect of reparation or by w^ay of compensation for any nonfulfilment of the obligations of Austria under
Article 184 of the treaty of Saint-Germain, the amount owing under
the terms of bond No. 1, relief series B of 1920 for principal moneys
and for any arrears of interest thereon at 6 per cent per annum,
compounded semiannually, from September 4, 1920, to January 1,
1925, and thereafter at 5 per cent per annum, compounded annually,
shall forthwith be paid in cash by the Austrian Government in
priority to any such payments under the said treaty.
This bond is issued under an agreement dated May 8, 1930, between Austria and the United States, to which this bond is subject
and to which reference is made for a further statement of its terms
and conditions.
In witness whereof Austria has caused this bond to be executed
on its behalf by its duly authorized representatives at the City, of
Vienna, as of January 1, 1928.
T H E FEDERAL GOVERNMENT OF THE
R E P U B L I C OF AUSTRIA,

By

.
EXHIBIT

29

Statement of Secretary of the Treasury Mellon concerning the agreement
for the settlement of the relief indebtedness of Austria to the United
States {press release. May 8, 1930)
An agreement for the settlement of the relief indebtedness of the
Government of Austria to the United States was executed to-day by
the Austrian minister to the United States on behalf of his Govern


SECRETARY OF T H E TREASURY

323

ment and by the Secretary of the Treasury with the approval of the
President on behalf of the United States.
The United States holds an obligation of the Government of
Austria designated as Bond No. 1, Relief Series B of 1920, in the
principal amount of $24,055,708.92. The agreement provides that
Austria will pay to the United States in liquidation of this indebtedness the sum of $33,428,500 in 25 equal annual installments of
$1,337,140 each, beginning on the 1st day of January in each of the
years 1943 to 1967, inclusive. The date of the initial payment is
explained by the fact that the time of payment of the principal and
interest of the original obligation of Austria was extended to 1943
under the authority of the Lodge resolution of April 6,1922, in order to
provide for our cooperation with the other relief creditor governments
in permitting the flotation of the Austrian reconstruction loan of 1923.
Subject to the right of the trustees of the reconstruction loan to
object, Austria is given the option of liquidating her relief indebtedness by the following payments beginning January 1, .1929: Five
installments of $287,556 each; 10 installments of $460,093 each; and
25 installments of $743,047 each, or a total over the 40 years of
$24,614,885. The present value on a basis of 5 per cent per annum of
the 25 payments of $1,337,140 each, beginning January 1, 1943, is
practically the same as the present value on the same basis of the
payments provided for under the option. Austria has advised the
United States that it intends to exercise the option and has already
made payments due under the agreement for January 1, 1929, and
January 1, 1930, of $287,556 each.
The settlement compares favorably with the settlements made b}^
the United States with the Governments ^ of Greece, Italy, and
Yugoslavia.
The terms of settlement agreed upon with the United States are
the same as those offered by Austria and accepted by all of its other
relief creditors, viz.: Denmark, France, Great Britain, Italy, The
Netherlands, Norway, Sweden, and Switzerland.

EXHIBIT

30

Expression of appreciation of Austria in concluding the funding agreement between Austria and the United States {press release. May 8,
1930)
Upon the execution to-day of the debt funding agreement between
Austria and the United States, the Austrian minister on behalf of his
Government expressed to the United States through the Secretary of
the Treasury the sincere appreciation of Austria for the friendly spirit
of helpfulness shown by the^ United States in concluding this arrangement which will make a most favorable impression upon the public
opinion of Austria. The Austrian minister further said:
It is one of the most important steps in the long process of my country's
financial and economic reconstruction. Without the sympathetic understanding,
of Austria's intricate problems and the readiness to assist, which were found in
the United States, our efforts in rebuilding our heavily damaged country would
have been futile. The agreement just signed paves the way for my Government
to proceed toward its goal of full rehabilitation and the reestablishment of normal
conditions in our country's national life.



324

REPORT ON THE FINANCES

Austria sincerely appreciates the helping hand stretched out by its sister
republic over the sea and this feeling of gratitude cannot fail to strengthen the
most friendly relations happily existing between our two countries.
France
EXHIBIT

31

Statement by Undersecretary of the Treasury Mills before the Committee
on Ways and Means, December 10, 1929, relative to the bill providing
for the settlement of the indebtedness of France to the United States
The bill now before you for consideration provides for the approval
of the agreement for the settlement of the iadebtedness of the French
Government to the United States arising during the World War and
the years immediately succeeding its termination, made by the duly
authorized representatives of the French Republic, on the one hand,
and by the World War Foreign Debt Commission, on the other, and
approved by the President.of the United States. The agreement was
signed on April 29, 1926, and is set forth in Senate Document No. 102,
Sixty-ninth Congress, first session. The bill was reported by the
Ways and Means Committee on May 29, 1926, and passed the House
of Representatives on June 2, 1926. I t was not acted on by the
Senate of the United States.
Under date of July 27, 1929, the French ambassador officially notified the Secretary of State that the debt funding agreement with the
United States had been ratified by France. I t remains, therefore,
but for the Congress of the United States to give its approval for this
agreement to become effective.
Under the authority of the Liberty bond acts and the act of July 9,
1918, the Government of the United States extended loans and credits
to the Government of the French Republic, the principal amount of
which, together with the accrued and unpaid interest thereon, totaled
approximately $4,230,000,000 as of June 15, 1925, the date as of
which the debt is to be funded under the terms of the agreement
signed AprU 29, 1926. Of this total $2,933,000,000 represents the
principal of the obligations acquired for cash advanced, less any repayments made on account; $890,000,000 represents accrued and unpaid
interest at 5 per cent, the rate borne by the obligations prior to funding, up to June 15, 1925; and $407,000,000 represents the principal
amount of obligations acquhed in connection with the sale on credit
of surplus war material. On this last-mentioned principal amount
interest has been paid currently up to the present time.
The basis of the proposed settlement is as follows: All unpaid and
accrued interest on obligations other than those given for the war
supplies purchase was figured at 4 J^ per cent up to December 15, 1922,
and at 3 per cent from that date until June 15,1925. The 43^ per cent
rate is the rate applied in our settlement with Great Britain to the
indebtedness of Great Britain up to the date of settlement. The
3 per cent rate is the rate applied to the indebtedness of the Belgian
Government from December 15,' 1922 (up to which point in that case
hkewise a 43^ per cent rate had been applied) to the date of settlement.
I t may be added that the 3 per cent rate is the rate paid by the British




SECRETARY OF THE TREASURY

325

on its funded debt for the first 10 years, which furnishes an additional
reason for fixing this rate on the unfunded indebtedness of other
countries during this interim period.
In so far as the obligations given for surplus war supplies are concerned, it is provided that interest thereon shall be fixed at the rate
of 3 per cent from December 15, 1922, to June 15, 1925, with the
proviso, however, that any interest actually paid during that period
in excess of the 3 per cent rate should be applied on account of the
total sum owed, principal and interest, as of June 15, 1925.
The above-described terms of settlement result in fixing the net
indebtedness as of June 15, .1925, at $4,025,386,686.89, made up as
follows:
Principal of obligations held for cash
advanced under Liberty bond acts
$2, 933, 405, 070. 15
Accrued and unpaid interest at 4J^ per
cent to Dec. 15, 1922
445, 066, 027. 49
Principal of obligations given for surplus war supplies purchased on credit.
Interest at 43^ per cent from the last
- interest payment date prior to Dec.
15,1922, to Dec. 15, 1922

$3, 378, 471, 097, 64

407, 341, 145. 01
6, 324, 940. 79

Total indebtedness as of Dec. 15, 1922
Accrued and unpaid interest at 3 per cent per annum on this
amount from Dec. 15, 1922, to June 15, 1925
Total indebtedness as of June 15, 1925

413, 666, 085. 80
3, 792, 137, 183. 44
284, 410, 288. 75
4, 076, 547, 472. 19

CREDITS

Payments received on account of interest between Dec. 15, 1922, and June
15, 1925
Payments on account of principal since
Dec. 15, 1922
Interest pn principal payments at 3 per
cent per annum from date of payment
to June 15, 1925

$50, 917, 643. 13
230,171.44

:

12, 970. 73
:

Net indebtedness as of June 15, 1925
Paid in cash upon execution of agreement
Total indebtedness to be funded into bonds _ _

51, 160, 785. 30
4, 025, 386, 686. 89
. 386, 686. 89
4, 025, 000, 000. 00

The agreement provides that there is to be paid in cash upon its
execution the sum of $386,686.89, which was actually paid, leaving a
total indebtedness to be funded of $4,025,000,000, which wiU be funded
into bonds under the terms of this agreement.
There is attached to this statement a schedule showing the total
annual payments to be made by France. Generally speaking,
France pays $30,000,000 a year the first two years, $32,500,000 a
year the third and fourth years, and $35,000,000 the fifth year.
The annuities increase each year, reaching $125,000,000 in the
seventeenth year, thereafter continuing at that figure, except for the
sixty-second year, when the payment is approximately $118,000,000.
Thus under the agreement the total principal of the funded debt—
includuig $685,000,000 accrued interest—will be repaid in full, with




326

REPORT ON T H E FINANCES

interest on the funded principal, as follows: After the first 5 years
and for the next 10 years, 1 per cent per annum; for the succeeding
10 years, 2 per cent per annum; for the succeeding 8 years, 2K per
cent per annum; for the succeeding 7 years, 3 per cent per annum;
and for the remaining 22 years, 3K per cent per annum.
The total payments to be received from France on account of the
$3,340,000,000 originally loaned are $6,847,674,104.17. The presentday value of these payments on a 4K per cent basis is $1,996,509,000,
or practically 50 per cent of the debt funded and something over
47 per cent of the total amount due as of June 15, 1925.
During the 4-year period from June 15, 1925, to June 15, 1929,
the French Government has paid us $102,748,536.74, as compared
with the sum of $125,000,000 which would have been payable under
the terms of the funding agreement. The sum paid is largely accounted for by payments of approximately $20,000,000 a year due
in interest on the war supplies obligations, but in the fiscal years
1927 and 1928 the French Government paid us additional sums
which bring the total amount paid during these fiscal years up to
approximately the amount due for those years under the terms of
the settlement. Such a procedure would unquestionably, I believe,
have been followed last June had it not been.for the fact that the
proposed agreement was coming up in the French Parliament for
final disposition one way or the other in July. The payments so
made since June 15, 1925, are to be applied towards the annuities
first due under the funding agreement when ratified.
Since June 15 the French Government has paid us $10,183,528.63,
leaving $12,067,934.63 still due under the terms of the agreement,
which will become immediately payable as soon as the Congress has
given its approval to the agreement. I mention this fact so that the
Congress will appreciate that if the agreement is to receive its
approval, and if other public business permits, prompt action is
desirable with a view to saving the interest on the sum of $12,000,000.
This committee has devoted so much thought and study to this
particular problem and is so thoroughly familiar with all of its
phases, and with the protracted negotiations that finally led to an
agreement and ultimately to ratification by the representatives of
the French people by a narrow margin, that I deem it unnecessary
to enter upon a discussion of the reasons which led the members
of the World War Debt Commission to fix these terms of settlement,
and two Presidents of the United States and the House of Representatives to give them their approval other than to say that the
terms, in my judgment, while generous to the French people, give
due consideration to the rights of our own. citizens. The Treasur}^
Department indorses the pending bill and recommends its adoption.




327

SECRETARY OF T H E TREASTJRY

Statement of amounts payable to the United States on account of the proposed
refunding bonds to be issued by France
TO.'iryni-nrti

X6r

Jrrincipai

cent

A n n u a l interest
payments

$4,025,000,000.00
3,995,000,000. 00
3,965,000,000.00
3, 932, 500,000. 00
3,900,000,000.00
3,865,000,000.00
f
3,863, 650,000. 00
3,852, 286, 500. 00
3, 830,809,365. 00
3,794,117,458.65
1
. 3,752,058, 633. 24
3, 699,579, 2l9. 57
3,636,575,011.77
3, 567, 940,761. 89
3,493,620,169.51
3,413.556,371.21
f
3,361', 827,498. 63
3,304,064,048.61
3,245,14.5,329. 58
3,185,048,236.17
J
3,123, 749, 200. 89 1 ^ 1
(
3,061, 224,184. 91
2, 997,448, 668. 61
2,932,397,641.98
2, 866, 045, 594. 82
I
2,798,366, 506. 72
f
2, 743, 325, 669. 39
2, 686, 908, 811.12
2, 629, 081, 531. 41
1
2, 569,808, 569. 70
1
2, 509, 053, 783. 94 I
2, 446,780,128. 54
2,382,949,631.75
I
2, 317, 523,372. 54
r
2, 262,049,073. 72
2,204,910,545.93
2,146.057,862. 31
2,085, 439, 698.18 1 ^
2,023, 002. 786.13
1,958, 692, 869. 71
I
1,892,453,655.80
f
1, 833, 689, 533. 75
1, 772. 868, 667.43
1, 709,919, 070. 79
1, 644,766, 238. 27 1
1, 577,333, 056. 61
1, 507, 539, 713. 59
1,435,303, 603. 57
1, 360, 539, 229. 69
1, 283,158,102. 73
1, 203,068, 636.33
I
1,120,176.038. 60 3 H \
1, 034, 382,199. 95
945, 585, 576.95
853, 681,072.14
758, 559,909. 66
660,109, 506. 50
558, 213, 339. 23
452, 750,806.10
343, 597,084. 31
230,622,982.26
113, 694, 786. 64
i

M

'




$38,"650,'000.'00 1
38, 636, 500. 00
38,522,865.00
38, 308,093. 65
37, 941,174. 59
37, 520,586. 33
36,995,792. 20
36,365.750.12
35, 679,407. 62
34,936,201. "0
68,271,127. 42
67,236, 549.-98
66,081,280.97
64,902,906. 59
63, 700,964. 72
62,474,984.02
61,224,483.70
69,948,973.37
58,647,952.84
57,320,911.90
69,959,162. 67
68, 583,141.73
67,172, 720. 29
65,727,038.29
64,245,214. 24
62,726,344. GO
. 61,169, .503. 21
59, 673,740. "9
69, 525, 701.18
67,861,472. 21
66,147.316.38
64, 381, 735. 87
62, 563,187. 95
60, 690,083. 58
58,760, 786. 09
66, 235, 877.95
64-, 179,133. 68
62,050,403. 36
59, 847,167.48
57, 566,818. 34
55, 206, 656. 98
52, 763,889.98
50, 235, 626.12
47, 618, 873. 04
44,910, 633. 60
42,107,402. 27
39, 206,161. 35
36, 203, 377. 00
33, 095, 495.19
29, 878,837.52
26, 549, 596. 84
23,103, 832. 73
19, 637,466. 87
15,846, 278. 21
12,025,897.95
8, 071, 804. 38
3,979, 317. 63
2, 822, 674,104.17

Annual principal
payments
$30,000,000.00
30,000,000.00
32,500,000.00
32,500,000.00
35,000,000.00
1,350,000. 00
11,363,600.00
21,477,135.00
36,691,906.35
42,058,825.41
62,479,413.67
63,004,207. 80
68, 634,249. 88
74, 320,692. 38
80,063,798.30 1
51,728,872. 58 1
57,763,460.02
68,918,719.03
60,097,093.41
61, 299,036. 28
62, 625,015. 98
63,775, 516. 30
65,051,026. 63
66,352,047.16
67, 679,088.10
65,040,837.33
66,416,858.27
57,827,279.71
59,272,961.71
60, 754,785. 76
62, 273, 656. 40
63,830,496.79
65, 426,259. 21
65,474, 298. 82
67,138, 627.79
58,852, 683. 62
60, 618, 264.13
62,436,812. 05
64, 309,916. 42
66, 239, 213.91
58,764,122.05
60,820,866. 32
62, 949, 696. 64
66,152,832. 62
67,433,181. 66
69,793, 343. 02
72,236,110.02
74,764, 373. 88
77, 381,126.96
80i 089,466. 40
82, 892, 597. "3
86, 793, 838. 65
88, 796, 623. 00
91, 904,504. 81
95,121,162. 48
98,450,403.16
101,896,167. 27
105,462, 533.13
109,153,721.79
112,974,102. 05
116,928,196. 62
113,694,786, 64
4,025,000,000.00

Total annua,!
payments

Fiscal
years

$30,000,000.00
30,000,000.00
32,500,000.00
32,500,000.00
35,000,000.00
40,000,000. 00
50,000,000.00
60,000,000.00
75,000,000.00
80,000,000.00
90,000,000.00
100,000,000.00
105,000,000.00
n o , 000,000.00
116,000,000.00
120.000,000.00
125,000,000.00
125,000,000.00 1
125,000,000.00
126,000,000.00
125,000,000. 00
125,000,000. 00
126,000,000. 00
125,000,000. 00
125,000, 000. 00
125,000, 000.00
125,000,000.00
125,000,000. 00
126,000,000. 00
125,000,000. 00
125,000,000. 00
125,000,000. 00
125,000,000. 00
125,000,000. 00
125,000,000. 00
125,000,000. 00
126, 000, 000. 00
125, 000,000. 00 '
125,000, 000. 00
125,000,000.00
125,000,000. 00
126,000,000. 00
125, 000, 000. 00
125,000,000. 00
125,000, 000. 00
125,000,000. 00
125,000,000. 00
125, 000, 000. 00
125, 000,000. 00
125, 000, 000. 00
125,000,000.00
126,000, 000. 00
126, 000, 000. 00
125,000,000. 00
125,000,000. 00
125, 000,000. 00
126, 000,000. 00
126, 000, 000. 00
126,000, 000.00
126, 000,000. 00
126, 000,000. 00
117, 674,104.17
6,847,674,104.17

1926
1927
1928
1929
1930
1931
1932
1933
1934
1935
1936
1937
1938
1939
1940
1941
1942
1943
1944
1945
1946
1947
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
.1987

328

REPORT ON T H E FINANCES
EXHIBIT

32

[PUBLIC—No. 24—71ST CONGRESS—H. R . 6585]

An Act To authorize the settlement of the indebtedness of the French
Republic to the United States of America
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled. That the settlement
of the indebtedness of the French Republic to the United States of
America made by the World War Foreign Debt Commission and
approved by the President upon the terms and conditions as set
forth in Senate Document Numbered 102, Sixty-ninth Congress,
first session, is hereby approved in general terms as follows:
The amount of the indebtedness to be funded, after allowing for
certain cash payments made by France, is $4,025,000,000, whicii has
been computed as follows:
Principal of obligations held for cash
advanced under Liberty bond a c t s . . $2, 933, 405, 070. 15
Accrued and unpaid interest at 4J^ per
centum to December 15, 1922
445, 066, 027. 49
Principal of obligations given for surplus
war supplies purchased on credit
Interest at 43^ per centum from the last
interest payment date prior to December 15, 1922, to December 15, 1922..

$3, 378, 471, 097. 64

407, 341, 145. 01
6, 324, 940. 79
413, 666, 085. 80

Total indebtedness as of December 15, 1922
3, 792, 137, 183. 44
Accrued and unpaid interest at 3 per centum per annum on
this amount from December 15, 1922, to June 15, 1925. _
284, 410, 288. 75
Total indebtedness as of June 15, 1925..

4, 076, 547, 472. 19

CREDITS

Payments received on account of interest between December 15, 1922,
and June 15, 1925.-__Payments on account of principal since
December 15, 1922
Interest on principal payments at 3 per
centum per annum from date of payment to June 15, 1925
.

$50, 917, 643. 13
230, 171. 44
, 12, 970. 73
51, 160, 785. 30

Net indebtedness as of June 15, 1925
Paid, in cash upon execution of agreement

4, 025, 386, 686. 89
386, 686. 89

Total indebtedness to be funded into bonds

. 4, 025, 000, 000. 00

The principal of the bonds shall be paid in annual installments on
June 15 of each year up to and including June 15, 1987, on a fixed
schedule. France will pay the following annual principal installments
during the first five years:
June
June
June
June
June

15,
15,
15,
15,
15,

1926
1927
1928
1929...
1930




,-.-

.

$30, 000, 000
30 000, 000
32, 500, 000
32, 500, 000
35, 000, 000

SECRETARY OF THE TREASURY

329

The amount of the principal installment due the sixth year shall
be $1,350,000, the subsequent annual principal installments increasing
until in the sixty-second year of the debt funding period the final
principal installment shall be $113,694,786.64, the aggregate principal installments being equal to the total principal indebtedness
to be funded into bonds. France,, at its option, upon not less than
ninety days' advance notice to the United States, may postpone so
much of any payment on account of principal and/or interest falling due in any one year after June 15, 1926, and prior to June 16,
1932, as shall be in excess of $20,000,000 in any one year, to any
subsequent June 15 or December 15 not more than three years
distant from its due date; and upon like notice France, at its option,
may postpone any payment on account of principal falling due after
June 15, 1932, to any subsequent June 15 or December 15 not more
than three years distant from its due date, but any such postponement shall be only on condition that in case France shall at any
time exercise this option as to any payment of principal and/or
interest, the payment falling due in the third succeeding year cannot be postponed at all unless and until the payment of principal
and/or interest due three years, two years, and one year previous
thereto shall actually have been made. All such postponed payments shall bear interest at the rate of 4}^ per centum per annum,
payable seminanually.
France shall have the right to pay off additional amounts of principal of the bonds on June 15 and December 15 of any year upon
ninety days' advance notice.
The bonds to be issued shall bear no interest until June 15, 1930,
and thereafter shall bear interest at the rate of 1 per centum per
annum from June 15, 1930, to June 15, 1940; at the rate of 2 per
centum per annum from June 15, 1940, to June 15, 1950; at the
rate of 2K per centum per annum from June 15, 1950, to June 15,
1958; at the rate of 3 per centum per annum from June 15, 1958,
to June 15, 1965; at the rate of 3K per centum per annum after
June 15, 1965, all payable semiannually on June 15 and December
15 of each year.
Any payment of interest or principal may be made at the option
of France in any United States Government obligations issued after
April 6, 1917, such obligations to be taken at par and accrued interest.
Approved, December 18, 1929.

EXHIBIT

33

Balance paid by France on account of the annuities under the funding
agreement of April 29, 1926 {jpress release, December 27, 1929)
The Treasury Department received yesterday from the Government of France the sum of $12,067,934.63, being the balance due on
account of the annuities under the funding agreement of April 29,
1926. As authorized by the terms of the agreement, the payment
was made in obligations of the United States which were accepted
at par and accrued interest to date. The obligations tendered in
payment of the amount due were $10,572,500 face amount 3}^ per cent
Treasury notes; $1,398,600 face amount first Liberty loan Z% per cent




330

REPORT ON T H E FINANCES

bonds, due in 1947; $96,820.96 accrued interest on the obligations;
and a cash adjustment of $13.67.
Under date of December 18, 1929, the President approved the bill
authorizing the settlement of the indebtedness of the Government of
France to the United States. The French Government having
ratified the settlement in July of this year, the Mellon-Berenger
agreement of April 29, 1926, has now been approved by both governments.
The Government of France since June 15, 1925, the date as of which
the debt is funded under the funding agreement, has paid on account
of the principal of the obligations given for cash advances and on
account of interest due on the obligations given for surplus war material purchased on credit, the sum of $112,932,065.37. I t has been
understood that upon ratification of the debt funding agreement by
both governments, any sums paid by France since June 15, 1925,
would be applied on account of the annuities first due under the funding agreement. The annuities due up to June 15, 1929, aggregated
$125,000,000, thus leaving a balance due of $12,067,934.63. The
amount which the Treasury received yesterday, therefore, places
the annuities on a current basis. The next annuity, amounting to
$35,000,000, wiU be due and payable on June 15, 1930.
The obligations of the United States accepted in connection with
the' payment have been cancelled and retired and the public debt
reduced accordingly.
EXHIBIT

34

Statement of Secretary of the Treasury Mellon concerning the funding of
the indebtedness of France to the United States {press release, April 15,
" 1930)
Final steps were taken to-day in connection with the funding of the
indebtedness of the French Republic to the United States. Mr. Paul
Claudel, ambassador extraordinary and plenipotentiary of France at
Washington, and Mr. Robert Lacour-Gayet, financial attache to the
French Embassy in Washington, delivered to the Treasury gold
bonds of the Government of the French Republic in the principal
amount of $4,025,000,000, receiving in exchange the original obligations given by their government in connection with cash advances
made by the Secretary of the Treasury and surplus war material sold
on credit by the United States Liquidation Commission (War Department) in the aggregate principal amount of $3,340,129,356.83.
Of the gold bonds dehvered to the Treasury, Nos. 1 to 4 in the aggregate principal amount of $125,000,000, having been paid by the
French Government, were marked / ' P a i d ' ' and returned to the
French ambassador.
The act approving the French settlement was signed by the
President on December 18, 1929. The debt settlement has likewise
been approved by the French Government.




SECRETARY OF

THE TREASURY

331

General
EXHIBIT

35

Statemerits of the Treasury covering payments received from the seve7'al
foreign governments on account of their indebtedness to the United
States {press releases, December 16, 1929, and June 16, 1930)
D E C E M B E R 16,

1929.

The Treasury to-day received payments amounting to $98,657,973.52 from, the following foreign governments on account of their
funded indebtedness to the United States, of which $97,819,750 was in
obligations of the United States, accrued interest thereon of $671,
880.28, and $166,343.24 in cash:
GREAT BRITAIN

The fourteenth semiannual payment of interest and the seventh
annual installment of principal on the funded indebtedness of Great
Britain to the United States under the terms of the debt settlement
approved by the act of February 28, 1923. The total payment
amounted to $93,795,000, of which $66,795,000 was for interest and
$27,000,000 for principal, and as authorized by the terms of the
settlement, v^as made in obligations of the United States which was
accepted at par and accrued interest. The obligations were $500,000
face amount 3K per cent First Liberty loan bonds due in 1947;
$18,282,500 face amount 3K per cent Treasury notes, Seiies.C-1930-32,
maturing December 15, 1932; $74,358,250 face amount 3K per cent
Treasury notes, Seiies B-1930-32, maturing September 15, 1932;
accrued interest thereon, $654,229.33, and cash adjustment of $20.67.
BELGIUM

The ninth semiannual payment of interest on the post-armistice
funded indebtedness of the Government of Belgium due the United
States under the terms of the debt settlement approved by the act of
April 30, 1926. The payment amounting to $1,375,000, as authorized
by the terms of the settlement, was made in obligations of the United
States, which were accepted at par and accrued interest. The obligations were $891,000 face amount of 3H per cent Treasury notes,
Series B-1930-32, maturing September 15,1932; $467,000 face amount
3}^ per cent Treasury notes. Series C-1930-32, maturing December 15,
1932; accrued interest thereon, $16,011.82, and cash adjustment of
$988.18.
CZECHOSLOVAKIA

The ninth semiannual installment of principal on the funded indebtedness of the Governm.ent° of Czechoslovakia due the United
States under the terms of the debt settlement approved by the act
of May 3, 1926. The payment amounting to $1,500,000, as authorized by the terms of the settlement, was rnade in obligations of the
United States, which were accepted at par. The obligations were
$1,500,000 face amount first Libert}^ loan bonds due 1947.




332

REP0.RT ON T H E FINANCES
ESTONIA

The eighth semiannual payment on account of the funded indebtedness of the Government of Estonia to the United States due
under the terms of the debt settlement approved by the act of April
30, 1926. The payment amounted to $125,000 and was made in
cash. The balance will be funded in accordance with the option
given the Government of Estonia in the debt settlement agreement.
FINLAND

The fourteenth semiannual payment of interest and the seventh
annual installment of principal on the funded indebtedness of the
Government of Finland due the United States under the terms of
the debt settlement approved by the act of March 12, 1924. The
total payment amounted to $183,680, of which $130,680 was for
interest and $53,000 for principal, and as authorized by the terms
of the settlement, was made in obligations of the United States, which
were accepted at par and accrued interest. The obligations were
$182,000 face amount 3}^ per cent Treasury notes. Series B-1930-32,
maturing September 15, 1932; accrued interest thereon of $1,601.30,
and cash adjustment of $78.70.
HUNGARY

.

The twelfth semiannual payment of interest and the sixth annual
installment of principal on the funded indebtedness of the Government of Hungary due the United States under the terms of the
debt settlement approved by the act of May 23, 1924. The total
payment amounted to $40,218.40,.of which $28,973.40 was for interest and $11,245 was for principal. The payment was made in
cash.
LATVIA

The eighth semiannual payment on account of the funded indebtedness of the Government of Latvia to the United States due
under the terms of the debt settlement approved by the act of April
30, 1926. The payment amounted to $45,000, and as authorized by
the terms of the settlement, was made in obligations of the United
States which were accepted at par. The obligations were $45,000
face amount of 3K per cent first Liberty loan bonds due in 1947.
The balance will be funded in accordance with the option given the
Government of Latvia in the debt settlement agreement.
LITHUANIA

The eleventh semiannual payment of interest on the funded indebtedness of the Government of Lithuania to the United States
under the terms of the debt settlement approved by the act of December 22, 1924. The payment amounted to $94,075.12, and as
authorized by the terms of the settlement, was made in obligations
of the United States, which were accepted at par. The obligations
were $94,050 face amount of 3K per cent first Liberty loan bonds due
In 1947, and a cash adjustment of $25.12.




333

SECRETARY OF T H E TREASURY
POLAND

The tenth semiannual payment on account of the funded indebtedness of the Government of Poland to the United States under the
terms of the debt settlement approved by the act of December 22,
1924. The payment amounted to $1,500,000, and as authorized b}^
the terms of the settlement, was made in obligations of the United
States, which were accepted at par and accrued interest. The
obligations were $1,495,650 face amount of 3K per cent first Liberty
loan bonds due in 1947; $4,300 face amount of 3K per cent Treasury
notes, Series B-1930-32, maturing September 15, 1932; $37.83 accrued interest on Treasury notes; and a.cash adjustment of $12.17.
The remainder due will be funded in accordance with the option
given the Government of Poland in the debt settlement agreement.
The obligations of the United States in the face amount of $97,819,750, accepted in connection with the payments, have been canceled
and retired and the public debt reduced accordingly.
J U N E 16,

1930.

The Treasury has received payments amounting to $117,141,598.24,
due June 15, 1930, from the following foreign governments on account
of their funded indebtedness to the United States, of which $45,786,467.50 was for account of principal and $71,355,130.74 for account
of interest. All payments were received in cash.
Principal
Belgium
Czechoslovakia._ __
Estonia
Finland
France
Hungary
Italy

Interest

$3,450,000. 00 $1,375,000.00
1, 500,000. 00
150,000.00
129,885.00
35,000,000.00
66,390,000. 00
28,804. 73
5.000,000.00

Principal
Latvia
Lithuania
Poland
Rumania
Yugoslavia

_.

$36,467.50
600,000.00
200,000. 00

Interest
$50,000.00
94,075.12
3,137,365.89

45, 786, 467. 50 71,355,130.74

I t will be noted that all payments were made in cash, as compared
with the practice which has prevailed for a number of years of making
payment of a greater part of the amount due in United States securities, as permitted by the debt funding agreements. In so far as
foreign interest payments are concerned, their payment on June 16
in cash rather than in United States securities will have the effect of
increasing the surplus for the current fiscal year. When the Budget
figures were made up it was thought that June foreign interest payments would be made in securities thus automatically reducing the
national debt by that amount. However, as surplus funds in any
given fiscal year are apphed to debt retirement in accordance with the
well-established practice of the Treasury, the payment of interest in
cash rather than in securities will not affect the total reduction of the
national debt as contemplated for the current fiscal year.
In so far as payments of principal are concerned, their payment in
cash or securities does not substantially aft'ect our budgetary position,
since under the terms of the Liberty bond acts all cash payments on
account of principal of obligations originally acquired under those
acts must be applied to debt retirement. On this occasion that portion of the principal payments on account of such obligations (which
represents approximately 90 per cent of the total principal payments




334

REPORT ON THE FINANCES

received) has already been applied to the retirement of Treasury
certificates maturing to-day.
MIXED CLAIMS
EXHIBIT

36

Statement of Acting Secretary of the Treasury Mills relative to a proposed
agreement covering payments by Germany to the United States on
account of army costs and mixed claims (^ress release, December 29,
1929)
The State Department and the Treasury Department have for
some weeks past conducted conversations with the German Government with a view to drafting a proposed agreement covering payments by Germany to the United States on account of army costs
and mixed claims in the annual amounts recommended by the Young
committee of experts. The two Governments are in accord as to the
form and terms of such an agreement, but it cannot be definitely
concluded until the executive branch of the Government has been so
authorized by the Congress. The purpose of the negotiations was
to enable the executive branch of the Government to submit to the
Congress in definite form an agreement acceptable to the German
Government so that the Congress before granting the necessary
authority would have before it the form of the agreement.
The schedule of payments conforms to the annuities proposed by
the Young committee for the United States. From each of the annuities to be received, 40,800,000 reichsmarks are to be allocated to the
satisfaction of mixed claims and the balance to the satisfaction of our
Government's claims on account of army costs. This is substantially
in accord with the program outlined at the White House conference
of May 19, 1929, which was attended by a number of the leaders of
both Houses of Congress.
The form of the agreement and the provisions in respect of postponement, generally speaking, follow the agreements heretofore
negotiated for the settlement of the debts owed the United States by
foreign governments. The execution of this agreement is contingent,
of course, upon the coming into effect of the Young plan. In the
meanwhile the United States retains all of its existing rights.

EXHIBIT

37

Statement of Undersecretary of the Treasury Mills before the Committee
on Ways and Means, March 10, 1930, i^elative to the bill to authorize the
settlement of the indehtedness of Germany to the United States on account
of the awards of the Mixed Claims Commission, United States and
Germany, and the costs ofthe United States army of occupation
The bill now before you for consideration authorizes the Secretary
of the Treasury, with the approval of the President, to enter into an
agreement with Germany as set out in general terms in the bill,
providing for the complete and final discharge of the obligations of
Germany to the United States in respect of the awards of the Mixed



SECRETARY OF THE TREASURY

335

Claims Commission, United States and Germany, and the costs of
the United States army of occupation.
Under the terms of the armistice convention signed November 11,
1918, and of the treaty restoring friendly relations signed at Berlin
August 25, 1921, which incorporated by reference certain provisions
of the Versailles treaty, Germany is obligated to pay tb the United
States the costs of the United States army of occupation and to satisfy
claims of the American Government or its nationals who have suffered
loss, damage, or injury to their persons or property, directly or
indirectly, since July 31, 1914, through the acts of the Imperial
German Government or its agents.
ARMY COSTS

The total costs of the United States army of occupation amount to
$292,663,435.79. Except for cash requisitions on the German Government for the use of the army of occupation aggregating $37,509,605.97
and certain other items, such as provost fines, abandoned enemy war
material, etc., amounting to $7,288,184.33, the United States Government received no payments on account of army costs up to May 25,
1923. On that date the United States and the principal allied powers
signed the so-caUed Wadsworth agreement which provided that our
army costs should be divided into 12 annual instalments, and should
be, during the first 4 of the 12 years, a first charge on cash payments
received from Germany after the expenses of the Reparation Commission and the current expenses of the allied armies of occupation,
but during the last eight years should be an absolute prior charge on all
cash payments, except for the costs of the Reparation Commission.
Ratifications of the Wadsworth agreement were never exchanged, but
we received a payment under it of $14,725,154.40 in January, 1925.
The agreement was superseded by the so-called Paris agreement of
January 14, 1925, which also covered awards of the Mixed Claims
Commission. This latter agreement was concluded at a meeting of
representatives of the creditor powders, including the United States,
called for the purpose of making distribution of the annuities provided
for under the terms of the Dawes plan, which had been adopted in
1924. Under the provisions of the Paris agreement the United States
was to receive on account of its army costs, beginning September 1,
1926, the sum of 55,000,000 gold marks, or about $13,100,000 per
annum, which payments were to constitute a first charge on cash made
available for transfer by the transfer committee out of the Dawes
annuities after the provision of the sums necessary for the service of
the 800,000,000 gold mark German external loan of 1924 and for the
costs of the reparation and other commissions. Under the provisions
of the Wadsworth agreement our army costs should have been
liquidated by the end of 1935. Under the Paris agreement the payments would extend over a period of about 18 years, beginning
September 1, 1926.
Up to the 1st of September, 1929, the United States had received
on army cost account $39,203,725.89 under the Paris agreement.
As oi' September 1, 1929, there was still due on accoimt of army
costs $193,936,765.20.
12101—31

24




336

REPORT ON THE FINANCES
MIXED CLAIMS

By virtue of an agreement entered into on August 10, 1922, by the
United States and Germany, there was set up a Mixed Claims Commission charged with the duty of passing upon the claims of American
citizens arising siuce July 31, 1914, in respect of damage to or seizure
of their propert}^, rights, and interests and upon any other claims for
loss or damage to which the United States or its nationals have beeii
subject with respect to injuries to persons or to property, rights, and
interests since July 31, 1914, as a consequence of the war, and including debts owing to American citizens by the German Government or
by German nationals.
The first meeting of the commission was held on October 9, 1922.
Up to August 31, 1929, awards had been certified to the Treasury for
payment which with iaterest to August 31,1929, aggregated $172,703,083.71. I t is estimated as of August 31, 1929, that the principal
amount of awards yet to be entered and certified, together with
interest to that date, amount to $53,000,000, and in addition awards
to the United States Government with interest to August 31, 1929,
amount to $64,934,794.41. In other words,^ as of August 31, 1929,
it is estimated that the total awards of the Mixed Claims Commission
made and to be made aggregated with interest $290,637,878.12.
'No provision for the payment of the awards of the Mixed Claims
Commission was made until the Paris agreement of January 14, 1925.
The Paris agreement provided that the United States should receive
2}^ per cent of all receipts from Germany on account of the Dawes
annuities available for distribution as reparations, provided that the
annuity resulting from this percentage should not in any year exceed
the sum of 45,000,000 gold marks. Up to September 1, 1929, the
United States had received from Germany under the Paris agreement
for account of mixed claims, $31,831,472.03, which with earnings and
profits on investments amounting to $2,149,692.70, made available
for distribution $33,981,164.73, and left $256,656,713.39 stiU to be
provided for. I t must be understood in this connection that the
figures relating to the total amount finally awarded by the Mixed
Claims Commission is necessarily only an estimate, since all of the
awards have not as yet been made.
In the meanwhile the Congress, in March, 1928, enacted what is
known as the ^^Settlement of war claims act of 1928." You gentlemen are too familiar with that act to make it necessary for me to
describe it in detail. Suffice it to say that it made provision for the
order of priority in which mixed claims should be paid, for the retention of part of the German property held by the Alien Property
Custodian ahd part of the funds to be received on account of awards
made by the arbiter to German nationals until a certain pei centage
of the American claims had been paid, and then for the ultimate
return of the German property and funds to their owners. The act
also covered the rate of interest to accrue on claims until their final
liquidation. Any estimate of the total amount due from Germany on
account of mixed claims must depend, therefore, not only on the
awards of the Mixed Claims Commission but on the terms of the
settlement of war claims act.
It will be observed that the amounts received up to the present
time, both on account of army costs and mixed claims, have been
paid, not by virtue of any agreement with Germany looking to the



SECRETARY OF THE TREASURY

337

liquidation of its treaty obligations, but by virtue of an agreement
with the creditor powers, under the terms of which they undertook
to assign to the satisfaction of our claims a portion of the payments
received through the agent general for reparation payments. This
is an anomalous situation. In view of the fact that the other creditor
powers have now reached an agreement with Germany for the final
liquidation of their claims, the time has come for the United States
to do likewise. Two courses were open to us. We could either join
with the other creditors in a general settlement or rely on a separate
agreement with Germany for the satisfaction of our claims. The
course of events which led to the necessity for such a decision on our
part was as follows:
THE YOUNG PLAN

In 1928 the principal creditor powers agreed to set up a committee
of independent financial experts to be intrusted with the task of drawing up proposals for the complete and final settlement of the reparation problem. The so-called Young plan is the report which this
committee rendered under date of June 7, 1929. As a result of the
Young committee's reappraisal of Germany's capacity to- pay, it
recommended annuities smaller than the standard annuity of 2,500,000,000 gold marks ($595,000,000) in force under the Dawes plan.
Beginning with 742,000,000 reichsmarks ($176,000,000) in the seven
months ending March 31,1930, which are considered as the first Young
plan year, the annuity is 1,707,900,000 reichsmarks ($406,000,000)
in the year ending March 31, 1931, and increases gradually to the
maximum of 2,428,800,000 reichsmarks ($578,000,000) in the year
ending March 31, 1966, or an average of 1,988,800,000 reichsmarks
($473,000,000) for 37 years, and continues at about 1,600,000,000
reichsmarks ($381,000,000) to 1,700,000,000 reichsmarks ($405,000,000) for an additional 22 years.
I t is obvious that the reduction in the annuities to be paid by
Germany necessitated a scaling-down of the amounts allocated to
each of the creditor powers under the Dawes plan and the Paris
agreement. The Young plan undertakes not only to fix the annuities
to be paid by Germany but to allocate those annuities among the
several creditor powers. The United States was allocated annuities
averaging 66,100,000 reichsmarks ($15,700,000) for the first 37 years
and a fixed annuity of 40,800,000 reichsmarks ($9,700,000) for 15
years thereafter.
The Young plan, with some modifications, which do not affect our
position, was formally adopted by representatives of all the interested
powers, with the exception of the United States, at The Hague in
January, 1930, and the settlement there reached is now awaiting
ratification by the governments and the enactment of certain necessary legislation by the German parliament.
Two questions present themselves for decision: First, are the annuities provided for the United States acceptable to us, and in the
second place, should we become parties to the Young plan agreement
and receive payments through the machinery provided therein, or
should we rely on a direct agreement with Germany for the satisfaction of our claims?
While it is true that under the so-called Dawes plan and the Paris
agreement we were to receive on both accounts ah annuity of 100,000,000 gold marks ($23,800,000) as contrasted with an average of



338

R^EPORT ON THE FINANCES

66,100,000 reichsmarks ($15,700,000) suggested under the Young
plan, it should be pointed out that the so-called Dawes plan was a
temporary measure and that no period was fixed during which the
aforesaid annuities were to be paid. In other words, there was no
assurance that we would continue to receive 100,000,000 gold marks
a year until the claims on account of army costs and mixed claims
had been completely discharged. Perhaps a better method of approach to the problem is to ascertain whether the proposed annuity
involves any essential sacrifice in the satisfaction of our outstanding
b
claims against Germany. In so far as mixed claims are concerned
if, as is provided in the bill now before you, 40,800,000 reichsmarks
per annum are assigned to their payment, it is estimated that that
amount will be adequate to discharge the mixed claims obligation in
full over the period of years provided for, with interest at 5 per cent on
unpaid amounts including the United States Government's claim.
Whatever sacrifice is involved as compared with the Dawes annuity
is in the time element. In other words, it is estimated that it will
require 52 years to pay all claims—about 35 years to pay all of the
private claims awarded to American citizens, including the return of
the unallocated interest fund belonging to the German claimants, and
about 17 years additional to liquidate the claims allowed the Government of the United States. On the basis of the 45,000,000 gold
marks received under the Paris agreement, it was estimated that it
would have required 30 years to pay off private claims and 14 years
additional to pay off the Government claims.
If an average annuity of 25,300,000 reichsmarks ($6,000,000) for
30 years be allocated to army costs, as the proposed agreement provides, it will liquidate that claim in 37 years, after reducing the amount
originally due on this account by 10 per cent, a sacrifice similar to
that being made by France and Great Britain under the Young plan..
The 55,000,000 marks received under the Paris agreement would have
discharged our army costs claim in about 15 years from September 1,
1929, whereas the annuities proposed under the Young plan will
liquidate the balance due after deducting the 10 per cent in 37 years
and allow interest on all deferred payments at a rate of about 3%
per cent. I t can fairly be said, therefore, that except for the time
element, w^hich is not of vital importance in view of the fact that
interest is to be paid, no sacrifice is demanded of us other than a
10 per cent reduction in our original claim for army costs, that is as
compared with the situation existing under the Paris agreement,which carried with it no assurance as to continuing payments.
The Treasury Department is of the opinion that the annuities
proposed are acceptable. In urging their acceptance, I think I
should point out to you that as a practical matter our refusal to
accept them would almost inevitably involve a readjustment of the
shares to be received by all other creditors, since the report of the
Young committee, which has now been formally accepted, definitely
fixed the limits of the total amounts to be paid by Germany and any
claim on our part to increase our share must occasion a readjustment
of the shares to be received by others.
This brings me to the second question of whether, as a matter of
policy, we should have joined the other creditor powers by becoming
parties to the Young plan and availing ourselves of its provisions and
machinery for the satisfactionjof our claims. The Executive branch
of the Government believed that it was wiser and more consistent



SECRETARY OF THE TREASURY

339

with our established policy for us to refrain from such a course and
to look to Germany directly for the payment of the amounts due us.
The United States has not participated in the determination of the
total reparations payable by Germany under the treaty of VersaUles
or in the collection or distribution of reparation payments heretofore
received. There appears to be no justification at this late date for
involving our country in the responsibilities for collecting, mobilizing,
and distributing reparation payments which the adoption of the
Young plan and participation in the organization and management
of the agency created under that plan would necessitate. Very
obviously we could not properly avail ourselves of the machinery
provided for by the Young plan and at the same time refuse to accept
any of the responsibilities. The course which we advocate is logical,
consistent, and sound, even apart from the question of linking
reparation and debt payments, which, as we have consistently maintained, have no relation in origin, principle, or in fact.
Moreover, without even suggesting the probability of such an
event taking place, suppose at some future date Germany finds itself
unable to continue the conditional payments. If at that time we are
officially represented on the board of the Bank for International
Settlements, or upon the so-called advisory committee to be appointed
by the governors of central banks of issue of the principal countries
concerned, we, because of our comparatively small interest in the
general settlement, might find ourselves in the position of an arbiter
called upon to settle and decide a controversial and difficult European
question.
It may be urged that our failure to become parties to the Young
plan involves an element of sacrifice on our part, since we thereby
forego the claim for a share in the so-called unconditional annuities
which we could very justly have advanced in view of the priority
enjoyed by army cost payments under the terms of the Paris agreement. But aside from the fact that the Young plan did not allocate
to the United States any share of the unconditional annuities and
that, judging by events, they could not have been obtained without
the most serious kind of controversy, it seems to me that the terms
of the agreement which we have submitted to you for approval
amply protect the interests of the United States and of its nationals.
Under its terms Germany makes an unqualified and unconditional
promise to pay. The only proviso which in any way limits that
obligation is the one which is found in all of our debt settlement
agreements and which permits the debtor to postpone payments
for a limited period of time, with interest on the postponed payments.
The Treasury Department, therefore, recommends the passage of
the bill under consideration granting to the Secretary of the Treasury,
with the approval of the President, the authority to enter into the
agreement the terms of which are set forth in Senate Document No.
95, Seventy-first Congress, second session.
In brief, the agreement provides that Germany agrees to pay
40,800,000 reichsmarks per annum for the period September 1, 1929,
to March 31, 1930, and the sum of 40,800,000 reichsmarks per annum
from AprU 1, 1930, to March 31, 1981, in satisfaction of mixed claims,
and beginning September 1, 1929, an average annuity of 25,300,000
reichsmarks for 37 years in full liquidation of our army costs. As
evidence of this indebtedness Germany is to issue to the United
States, at par, bonds' maturing semiannually. Germany, at its



340

REPORT ON THE FINANCES

option, upon not less than 90 days' advance notice, may postpone
any payment on account of principal falling due to any subsequent
September 30 and March 31 not more than 2K years distant from its
due date, but only on condition that if this option is exercised the
two payments falling due in the next succeeding 12 months can not
be postponed more than 2 years, and the two payments falling due
in the second succeeding 12 months can not be postponed more than
1 year unless the payments previously postponed have actually been
made. All postponed payments on account of mixed claims are to
bear interest, at 5 per cent, the rate provided in the settlement of
war claims act, and all payments postponed on account of army
costs are to bear interest at the rate of 3^^ per cent. While the annuities are stated in terms of reichsmarks, payments are to be made in
dollars, either at the Treasury or at the Federal Reserve Bank of
New York. The exchange value of the mark in relation to the dollar
shall be calculated at the average of the middle rates prevailing on the
Berlin bourse during the half monthly period preceding the date of
payment. The German Government undertakes that the reichsmark
shall have and shall retain its convertibility into gold or devisen as
contemplated in the present Reichsbank law and that the reichsmark
shall retain the mint parity defined in the German coinage law of
August 30, 1924. This provision corresponds to the provision in the
Young plan settlement accepted by all of the other creditor powers.
I t was not felt, that the United States was justified in demanding
preferential treatment in this respect.
The Secretary of the Treasury will not, of course, execute any such
agreement until the Young plan has formally come into effect, thus
giving assurance that the whole reparations question is, in all human
probabUity, finally liquidated. What the proposed agreement does
in so far as the United States is concerned is to provide for a final
liquidation of her claims against Germany. I feel confident that it
will commend itself to your judgment.

EXHIBIT

38

[PUBLIC—No. 307—71ST CONGRESS—H. R . 10480]

An Act To authorize the settlement of the indebtedness of the German
Reich to the United States, on account of the awards of the Mixed
Claims Commission, United States and Germany, and the costs o-f
the United States army of occupation
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled. That the Secretary
of the Treasury, with the approval of the President, is hereby authorized to conclude an agreement for the settlement of the indebtedness
of the German Reich (hereinafter referred to as Germany) to the
United States of America under the terms and condition set forth
in Senate Document Numbered 95, Seventy-first Congress, second
session. The general terms of the agreement shall be as follows:
(1) M I X E D CLAIMS.—Germany shall pay in full satisfaction of its
obligations remaining unpaid on account of awards, including interest thereon, entered and to be entered by the Mixed Claims Commission, United States and Germany, an aggregate amount of 2,121,


SECRETARY OF THE TREASURY

341

600,000 reichsmarks to be evidenced by bonds of Germany which
shall be dated September 1, 1929, and except for the first which shall
mature March 31, 1930, shall be paid in semiannual installments
beginning September 30, 1930, and continuing up to and including
March 31, 1981, subject, however, to the right of Germany to make
such payments in three-year periods, any postponed payments, to
bear interest at 5 per centum per annum, payable semiannually.
The obligations of Germany hereinabove set forth in this paragraph
shall cease as soon as all the. payments contemplated by the settlement of war claims act of 1928 have been completed and the bonds
not then matured evidencing such obligations shall be canceled and
returned to Germany.
(2) ARMY COSTS ARREARS.—Germany shall pay in full reimbursement of the amounts remaining due on account of the costs of the
United States army of occupation an aggregate amount of 1,048,100,000 reichsmarks to be evidenced by bonds of Germany which
shall be dated September 1, 1929, and, except for the first, which shall
mature March 31, 1930, shaU be paid in semiannual installments
beginning September 30, 1930, and continuing up to and including
March 31, 1966, subject, however, to the right of Germany to make
such payments in three-year periods, any postponed payments to
bear interest at 3% per centum per annum, payable semiannually.
(3) In addition to the payment of the bonds maturing on March
31 or September 30 of any year Germany shall have the right on such
dates to make payments on account of any unmatured bonds of
either series under such conditions as to notice or otherwise as the
Secretary of the Treasury may prescribe.
(4) All bonds issued hereunder shall be payable in United States
gold coin in an amount in dollars equivalent to the amount due in
reichsmarks. Germany shall undertake for the purposes of the
agreement that the reichsmark shall have and shall retain a mint
parity of 1/2790 kilogram of fine gold.
Approved, June 5, 1930.
EXHIBIT

39

Agreement between Germany and the United States, signed June 23,
1930, providing for the final discharge of obligations of Germany to the
United States in respect ofthe awards of the Mixed Claims Commission,
United States and Germany, and the costs of the United States army
of occupation
AGREEMENT MADE THE 23D DAY OF JUNE, 1930, AT THE CITY OF
WASHINGTON, DISTRICT OF COLUMBIA, BETWEEN THE GOVERNMENT
OF THE GERMAN REICH, HEREINAFTER CALLED GERMANY, PARTY OF
THE FIRST PART, AND THE GOVERNMENT OF THE UNITED STATES OF
AMERICA, HEREINAFTER CALLED THE UNITED STATES, PARTY OF THE
SECOND PART.

Whereas Germany is obligated under the provisions of the armistice convention signed November 11, 1918, and of the treaty signed
at Berlin, August 25, 1921, to pay to the United States the awards,
and interest thereon, entered and to be entered in favor of the United
States Government and its nationals by the Mixed Claims Commission, United States and Germany, established in pursuance of the
agreement of August 10, 1922; and



342

REPORT ON T H E FINANCES

Whereas the United States is also entitled to be reimbursed for the
costs of its army of occupation; and
Whereas Germany having made and the United States having
received payments in part satisfaction on account of these two
obligations desire to make arrangements for the complete' and final
discharge of said obligations;
Now, therefore, in consideration of the premises and the mutual
covenants herein contained, it is agreed as follows:
1. Amounts to be paid.—{a) Germany shall pay and the United
States shall accept in full satisfaction of all of Germany's obligations
remaining on account of awards, including interest thereon, entered
and to be entered by the Mixed Claims Commission, United States
and Germany, the sum of 40,800,000 reichsmarks for the period of
September 1, 1929, to March 31, 1930, and the sum of 40,800,000
reichsmarks per annum from April 1, 1930, to March 31, 1981. As
evidence of this indebtedness, Germany shall issue to the United
States at par, as of September 1, 1929, bonds of Germany, the first
of which shall be in the principal amount of 40,800,000 reichsmarks,
dated September 1, 1929, and maturing March 31, 1930, and each
of the others of which shall be in the principal amount of 20,400,000
reichsmarks, dated September 1, 1929, and maturing serially on September 30, 1930, and on each succeeding March 31 and September
30 up to and including March 31, 1981. The obligations of Germany
hereinabove set forth in this paragraph shall cease as soon as all of
the payments contemplated by the settlement of war claims act of
1928 have been completed and the bonds not then matured evidencing such obligations shall be canceled and returned to Germany.
(6) Germany shall pay and the United States shall accept in fuU
reimbursement of the amounts remaining due on account of the
costs of the United States army of occupation, the amounts set forth
on the several dates fixed in the following schedule:
March 3 1 —
1930
1931
1932
1933-1934
1935
1936
1937
1938
1939
1940
1941
1942
1943
1944
1945
. 1946
1947
1948
1949--

-

:

1950
1951
1952
1953
1954
1955
1956
1957



Reichsmark
25,100,000
12,750,000
12,650,000
12,650,000
9, 300, 000
9, 300, 000
9, 300, 000
9, 300, 000
8, 200, 000
8, 200, 000
9,300,000
9, 300, 000
12,650,000
12,650,000
- 12,650,000
12,650,000
12,650,000
12,650,000
12,650,000
12,650,000

17,650,000
17,650,000
17,650,000
_-- 17,650,000
17,650,000
17,650,000
17,650,000
17,650,000

March 31—Continued.

1958
1959
1960
1961
1962
1963
1964
1965-1966
September 3 0 —
1930____
1931-_.
1932
1933
S.
1934
1935
1936
1937
> 1938
1939
1940
1941
1942.
1943___
1944
1945
1946
1947.-.-.

Reichsmark

17,650,000
17,650,000
17,650,000
17,650,000
17,650,000
17,650,000
17, 650, 000
17,650,000
17,650,000
12,750,000
12,650,000
12,650,000
9,300,000
_. 9, 300, 000
9, 300, 000
___- 9, 300, 000
8, 200, 000
8, 200, 000
9, 300, 000
9, 300, 000
12,650,000
12,650,000
12,650,000
12,650,000
--- 12,650,000
12,650,000
..

12,650,000

SECRETARY OF THE TREASURY
September 30—Contd.
1948
1949
1950
1951
1952
1953
1954
1955
1956

Reichsmark
12,650,000
17,650,000
17,650,000
17,650,000
17,650,000
17,650,000
17,650,000
17,650,000
17,650,000

September 30—Contd.
1957.
1958
1959
_.
1960
1961
1962
1963
1964
1965

343
Reichsmark
17,650,000
17,650,000
17,650,000
17,650,000
17,650,000
17,650,000
17,650,000
17,650,000
17,650,000

As evidence of this indebtedness, Germany shall issue to the United
States at par, as of September 1, 1929, bonds of Germany, dated
September 1, 1929, and maturing on March 31, 1930, and on each
succeeding September 30 and March 31 in the amounts and on the
several dates fixed in the preceding schedule.
2. Form of bonds.—All bonds issued hereunder to the United States
shall be payable to the Government of the United States of America
and shall be signed for Germany by the Reichsschuldenverwaltung.
The bonds issued for the amounts to be paid under paragraph No. 1 {a)
of this agreement shall be issued in 103 pieces with maturities and in
denominations corresponding to the payments therein set forth and
shall be substantially in the form set forth in Exhibit A hereto annexed
and shall bear no interest, unless paj^ment thereof is postponed pursuant to paragraph No. 5 of this agreement. The bonds issued for
the amounts to be paid under paragraph No. 1 {b) of this agreement
shall be issued in 73 pieces with maturities and in denominations corresponding to the payments therein set forth, and shall be substantially
in the form set forth in Exhibit B hereto annexed and shall bear no
interest unless payment thereof is postponed pursuant to paragraph
No. 5 of this agreement.
3. Method of payment.—All bonds issued hereunder shall be payable
both principal and interest, if any, at the Federal Reserve Bank of
New York for credit in the general account of the Treasurer of the
United States in funds immediately available on the date when payment is due in United States gold coin in an amount in dollars equivalent to the amount due in reichsmarks, at the average of the middle
rates prevaUing on the Berlin Bourse, during the half monthly period
preceding the date of payment. Germany undertakes to have the
Reichsbank certify to the Federal Reserve Bank of New York on the
date of payment the rate of exchange at which the transfer shall be
made. Germany undertakes for the purposes of this agreement that
the reichsmark shall have and shall retain its convertibility into gold
or devisen as contemplated in section 31 of the present Reichsbank
law and that for these purposes the reichsmark shall have and shall
retain a mint parity of 1/2790 kilogram of fine gold as defined in the
German coinage law of August 30, 1924.
4. Security.—The United States hereby agrees to accept the full
faith and credit of Germany as the only security and guaranty for
the fulfillment of Germany's obligations hereunder.
5. Postponement of payment.—Germany, at its option, upon not
less than 90 days' advance notice in writing to the United States,
may postpone any payment on account of principal falling due as
hereinabove provided, to any subsequent September 30 or March 31
not more than two and one-half years distant from its due date, but
only on condition that in case Germany shall at any time exercise
this option as to any payment of principal, the two payments falling



344

REPORT ON THE FINANCES

due in the next succeeding twelve months can not be postponed to
any date more than two years distant from the date when the first
payment therein becomes due unless and untU the payments previously postponed shall actually have been made, and the two payments falling due in the second succeeding twelve months can not
be postponed to any date more than one year distant from the date
when the first payment therein becomes due unless and until the
payments previously postponed shall actually have been made, and
further payments can not be postponed at all unless and until all
payments of principal previously postponed shall actually have been
made. All payments provided for under paragraph No. 1 (a) of
this agreement so postponed shall bear interest at the rate of 5 per.
cent per annum, payable semiannuaUy, and all payments provided
for under paragraph No. 1 (b) of this agreement so postponed shall
bear interest at the rate of S% per cent per annum, payable
semiannually.
6. Payments before maturity.—Upon not less than 90 days' advance
notice in writing to the United States and the approval of the Secretary of the Treasury of the United States, Germany may, on March
31 or September 30 of any year, make advance payments on account
of any bonds issued under this agreement and held by the United
States. Any such advance payments shall be applied to the principal
of such bonds as may be indicated by Germany at the time of the
payment.
7. Exemption from taxation.—The principal and interest, if any,
of all bonds issued hereunder shall be paid without deduction for,
and shaU be exempt from, any and all taxes or other public dues,
present or future, imposed by or under authority of Germany or any
political or local taxing authority within Germany.
,
8. Notices.—Any notice from or by Germany shall be sufficient if
delivered to the American Embassy at Berlin or to the Secretary of
the Treasury at the Treasury of the United States in Washington.
Any notice, request, or consent under the hand of the Secretary of
the Treasury of the United States shall be deemed and taken as the
notice, request, or consent of the United States and shall be sufficient
if delivered at the German Embassy at Washington or at the office
of the German Ministry of Finance at Berlin. The United States in
its discretion may waive any notice required hereunder, but any
such waiver shall be in writing and shall not extend to or affect any
subsequent notice or impair any right of the United States to require
notice hereunder.
9. Compliance with legal requirements.—Germany and the United
States, each for itself, represents and agrees that» the execution and
delivery of this agreement have in all respects been duly authorized,
and that all acts, conditions, and legal formalities which should have
been completed prior to the making of this agreement have been
completed as required by the laws of Germany and of the United
States respectively and in conformity therewith.
. 10. Counterparts.—This agreement shall be executed in two
counterparts, each of which shall be in the English and German
languages, both texts having equal force and each counterpart having
the force and effect of an original.
In witness' whereof, Germany has caused this agreement to bt
executed on its behalf by its ambassador extraordinary and plenipotentiary at Washington thereunto duly authorized, and the United



SECRETARY OF THE TREASURY

345

States has hkewise caused this agreement to be executed on its behalf
by the Secretary of the Treasury, with the approval of the President,
pursuant to the act of Congress approved June 5, 1930, all on the
day and year first above written.
T H E GERMAN R E I C H ,
By F . VON PRITTWITZ UND GAFFRON,

Ambassador Extraordinary and Plenipotentiary.
T H E U N I T E D STATES OF AMERICA,
A. W. M E L L O N ,

By

Secretary of the Treasury.
Approved.
H E R B E R T HOOVER,

President.
EXHIBIT A

(Form of bond)
T H E GERMAN REICH

R. M.

• •

'

No.

—

The German Reich, hereinafter called Germany, in consideration
of the premises and the mutual covenants contained in an agreement
dated June 23, 1930, between it and the United States of America,
hereby promises to pay to the Government of the United States of
America, hereinafter called the United States, on
, the sum of
Reichsmarks (R. M.
). This bond is payable at the
Federal Reserve Bank of New York in gold coin of the United
States of America in an amount in dollars equivalent to the amount
due in reichsmarks at the average of the middle rates prevailing on
the Berlin Bourse during the half monthly period preceding the. date
of payment.
This bond is payable without deduction for, and is exempt from,
any and all taxes and other public dues, present or future, imposed by
or under authority of Germxany or any political or local taxing authority within Germany.
This bond is issued pursuant to the provisions of paragraph numbered 1 (a) of an agreement dated June 23, 1930, between Germany
and the United States, to which agreement this bond is subject and
to which reference is hereby made.
In witness whereof Germany has caused this bond to be executed
on its behalf by the Reichsschuldenverwaltung and delivered at the
city of Washington, District of Columbia, by its ambassador extraordinary and plenipotentiary at Washington, thereunto duly authorized,
as of September 1, 1929.




T H E REICHSSCHULDENVERWALTUNG, .

By

, President.
^ Member.
(For the German Reich.)

346

REPORT ON T H E FINANCES
EXHIBIT

B

(Form of bond)
THE GERMAN REICH

R. M.

No.

The German Reich, hereinafter called Germany, in consideration of
the premises and the mutual covenants contained in an agreement
dated June 23, 1930, between it and the United States of America,
hereby promises to pay to the Government of the United States of
America, hereinafter called the United States, on
, the sum of
reichsmarks (R. M.
—). This bond is payable at the
Federal Reserve Bank of New York in gold coin of the United States
of America in an amount in dollars equivalent to the amount due in
reichsmarks at the average of the middle rates prevailing on the Berlin
Bourse during the half monthly period preceding the date of payment.
This bond is payable without deduction for, and is exempt from,
any and all taxes and other public dues, present or future, imposed by
or under authority of Germany or any political or local taxing authority within Germany.
This bond is issued pursuant to the provisions of paragraph numbered 1 {b) of an agreement dated June 23, 1930, between Germany
and the United States, to which agreement this' bond is subject and
to which reference is hereby made.
In witness whereof Germany has caused this bond to be executed on
its behalf by the Reichsschuldenverwaltung and delivered at the city
of Washington, District of Columbia, by its ambassador extraordinary
and plenipotentiary at Washington, thereunto duly authorized, as of
September 1, 1929.
THE

By

REICHSSCHULDENVERWALTUNG,

— , President.
, Member.
(For the German Reich.).

Notes exchanged between Germany and the United States simultaneously
with the execution ofthe agreement for the complete and final discharge
of the obligations of Germany to the United States with respect to the
awards made by the Mixed Claims Commission, United States and
Germany, and for the costs of this Government's army of occupation
The German Government (the Government of the United States)
has the honor to set forth its understanding of paragraph No. 4 of
the agreement executed this day between the United States and
Germany in the following sense:
{a) In respect of the acceptance by the United States of the full
faith and credit of Germany as the only security and guaranty for the
fulfillment of Germany's obligations under the agreement, Germany
will be in the same position as the principal debtors of the United
States under the debt funding agreements which exist between them
and the United States.
(6) Nothing contained therein shall be construed as requiring the
United States to release any German property which it now holds
other than as heretofore or hereafter authorized by the Congress of
the United States..



SECRETARY OF THE TREASURY

347

The German Government (the Government of the United States)
also desires to expressly recognize, so far as the agreement executed
this day between the United States and Germany is concerned, the
prior rights of the holders of the bonds of the German external loan
as provided in the general bond securing the loan dated October 10,
1924.
Bonds No. 1 in the amounts of R. M. 40,800,000 and R. M.
25,100,000 to be delivered under paragraphs Nos. 1 {a) and 1 (6) respectively of the agreement executed this day between the United
States and Germany have been paid in full and when the bonds to be
delivered by Germany under this agreement are received by the
United States, bonds No. 1 wUl be canceled and marked ^^paid" and
returned to the German ambassador at Washington for delivery to
the German Government.
The United States has received the sum of R. M. 6,800,000 and the
sum of R. M. 4,250,000 on account of the bonds No. 2 to be delivered
under paragraphs Nos. 1 {a) and 1 (6) respec tively, of the agreement
executed this day between the United States and Germany. The
receipt of these amounts wUl be evidenced by an indorsement by the
United States on the bonds on account of which the sums were received.
The agreement executed this day between the United States and
Germany is substituted for the direct arrangement providing for the
realization by the United States of its 2)i per cent share in German
payments under the experts' plan of 1924.
EXHIBIT

40

Statement o^ Secretary of the Treasury Mellon, June 23, 1930, announcf
ing the signing of the agreement between Germany and the United
States providing for the final discharge of the obligations of Germany
to the United States in respect of the awards of the Mixed Claims
Commission, United States and Germany, and the costs of the United
States army of occupation {press release, June 23, 1930).
The Secretary of the Treasury announced the signing to-day of
the Agreement authorized by act of Congress approved June 5, 1930,
providing for the complete and final discharge of the obligations of
Germany to the United States in respect of the awards of the Mixed
Claims Commission, United States and Germany, and the costs of
the United States army of occupation.
In brief, the agreement provides that Germany agrees to pay
40,800,000 reichsmarks ($9,700,000) for the period September 1, 1929
to March 31, 1930, and the sum of 40,800,000 reichsmarks per annum
from AprU 1, 1930 to March 31, 1981, in satisfaction of mixed claims,
and for the period from September 1, 1929 to March 31, 1966, an
average ^ annuity of 25,300,000 reichsmarks ($6,000,000) in fuU
liquidation of our army costs. As evidence of this indebtedness
Germany is to issue to the United States, at par, bonds maturing
semiannually. Under the agreement the United States will receive
on account of army costs over a period of 37 years approximately
$250,000,000 and on account of mixed claims awards over a period
of 52 years, approximately $505,000,000. The payments to be
received on account of army costs include interest at the rate of aboii^t



348

REPORT ON T H E

FINANCES

3% per cent per annum on all payments deferred over a period longer
than would have been necessary to liquidate the army costs under
the Paris agreement. The mixed claims awards bear interest at the
rates specified in such awards up to January 1, 1928, and the settlement of war claims act specifies a rate of 5 per cent from that date
until paid.
.
The payinents to be received on this account include, therefore,
interest which will be paid on the awards. While the annuities are
stated in terms of reichsmarks, payments are to be made in dollars,
either at the Treasury or at the Federal Reserve Bank of New York.
The exchange value of the mark in relation to the dollar shall be
calculated at the average of the middle rates prevailing on the Berlin
bourse during the half monthly period preceding the date of payment.
The German Government undertakes that the reichsmark shall have
and shall retain its convertibility into gold or devisen as contemplated
in the present Reichsbank law and that the reichsmark shall retain the
mint parity defined in the German coinage law of August 30, 1924.

EXHIBIT

41

[ P U B L I C R E S O L U T I O N — N o . 4 8 — 7 1 S T C O N G R E S S — S . J. R E S . 109],

Joint Resolution Extending for two years the time within which American claimants may make applicatioiifor payment, under the settlement of
war claims act of 1928, of awards of ihe Mixed Claims Commission and of
the Tripartite Claims Commission, and for one year ihe time within
which claims may be filed wiih the Alien Property Custodian
Resolved by ihe Senate and House of Representatives of the United
States of America in Congress assembled. T h a t subsection (g) of section
2 and subsection (f) of section 5 of the settlement of war claims act of
1928 are amended, respectively, by striking out the words ^Hwo y e a r s "
wherever such words appear therein, and inserting in lieu thereof the
words''four years."
SEC. 2. Subsection (d) of section 25 of the trading with the enemy
act, as amended, is hereby amended by striking out the term ' ' t w o
years" in clause (1) of said subsection and inserting in lieu thereof the
term "three years.'*
Approved, March 10, 1930.
EXHIBIT

42

[ P U B L I C R E S O L U T I O N — N o . 77—71 ST C O N G R E S S — H . J. R E S . 328]

Joint Resolution Authorizing the immediate appropriation of certain
amounts authorized to be appropriated by the settlement of war claims
act of 1928
Resolved by the Senate and House of Representatives of the United
States of America in Congress assembled. T h a t the sums authorized by
subsection (p) of section 3 of the settlement of war claims act of 1928
to be appropriated after the date on which the awards of the war
claims arbiter under section 3 of such act are certified to the Secretary
of the Treasury, are hereby authorized to be appropriated at any
time, b u t shall not be available until after such date.
^ Approved, May 29, 1930.



SECRETARY OF THE TREASURY
EXHIBIT'

349

43

[PUBLIC—NO. 411—71ST CONGRESS—H. R . 8881]

An Act To carry out the recommendation of the President in connection
with the late-claims agreement entered into pursuant to the settlement
of war claims act of 1928
Be it enacted by the Senate and House oi Representatives of the United
States of America in Congress assembled, T h a t section 2 of the settlement of war claims act of 1928 is amended by adding at the end thereof
the following new subsection:
" (k) The amounts deducted under subsection (e) of this section
from payments on account of the awards of the Mixed Claims Commission, United States and Germany, rendered under the agreement
between the United States and Germany of December 31, 1928
(entered into under the authority of subsection (j) of this section),
shall be avaUable for reimbursing the German Government on
account of the expenses incurred in connection with the adjudication
by the commission of claims under such agreement, and the Secretary
of the Treasury is authorized and directed to pay the amounts so
deducted to such representative of the German Government as the
Secretary of State may designate."
Approved, June 21, 1930.

EXHIBIT

44

Regulations No. 4-—Payments on account of the tentative awards of the
war claims arbiter on account of ships {Departrhent Circular No'.
425)
TREASURY DEPARTMENT,
O F F I C E OF THE SECRETARY,

Washington, D. C , June 23, 1930.
Pursuant tb the provisions of the settlement of war claims act
of 1928, approved March 10, 1928, as amended, the following regulations governing payments in respect of the tentative awards of the
war claims arbiter, on account of ships, are hereby prescribed:
APPLICATION

1. (a) General provisions.—No payment of the amount payable on
account of a tentative award will be made unless application therefor,
on and in accordance with the form provided for the purpose, is
received by the Secretary of the Treasury before the expiration of two
years from the date the award is certified. The application must be
executed by each person on behalf of whom the tentative award was
made. Each such person must sign the application and verify it by
affidavit sworn to in the United States before a notary public, or, if
executed abroad, before a diplomatic or consular officer of the United
States. In the case of a corporation, partnership, or association the
application must be signed and verified by the person or persons
having authority to do so, as evidenced in the Commercial Register,
a certified extract from which must be attached to the application.



350

REPORT ON THE FINANCES

(6) Partnerships, associations, and corporations the existence of
which has been terminated.—In the case of a partnership, association,
or corporation the existence of which has been terminated, the application must be executed by the person or persons thereunto duly
authorized, as designated in the Commercial Register, a certified
extract from which must be attached to the application.
(c) Receivers and trustees.—If a receiver or trustee for a person
on behalf of whom the tentative award was made has been duly
appointed by a court in the United States or Germany, the application
must be executed by such receiver or trustee, or by a person duly
authorized by an order of the court, except that in the case of an
assignment by any such receiver or trustee an application for payment of the amount due under such assignment must be made by the
assignee.
{d) Persons deceased or under legal disability.—If any person who is
required to execute the application is deceased or is under legal
disability, the application must be executed by his legal representative, except that if the payment to be made is not over $500 an
application may be executed by such person or persons as are able
to establish proper authority and interest.
. APPLICANTS OTHER THAN CLAIMANTS

PROOF OF INTEREST

2. {a) In any case in whicii the application is executed by any
person other than the person on behalf of whom the tentative award
was made, there must be submitted with the application evidence
sufficient to prove the authority of the applicant and his interest in
the tentative award. The following will generally be sufficient:
. (1) In any case in which a receiver or trustee has been appointed
for a person on behalf of whom the tentative award was made, and
if the application is executed by such receiver or trustee, then a copy
of the order of court appointing such receiver or trustee and a certificate of the clerk of such court to the eft'ect that such receiver or
trustee has not been discharged;
(2) In any case in which a receiver or trustee has been appointed
for a person on behalf of whom the tentative award was made, and if
the application is executed by a person other than such receiver or
trustee, then a copy of the order of the court appointing such receiver
or trustee and of all orders of court and documents necessary to
prove the authority and interest of the applicant;
(3) In the case of a partnership, association, or corporation the
existence of which has been terminated, then such documents as may
be sufficient to prove the authority and interest of the applicant.
(6) All copies of documents and all copies of or extracts from
records must be properly authenticated by a consular officer of the
United States.
PAYMENTS

3. Payment will be made by check drawn by the Secretary of the
Treasury on the Treasurer of the United States against the German
special deposit account created by the act, to the order of the person
entitled thereto. Checks wUl be mailed to the payee, with a statement of account in each case, at the address given in the application,
or in accordance with a notice of change of address subsequently
received by the Secretary of the Treasury.



SECRETARY OF THE TREASURY

351

POWERS OF ATTORNEY
4. In view of the provisions of the act to the effect that payments
shall, except in certain specified cases, be made only to the person on
behalf of whom the tentative award was made, no power of attorney
to sign an application or to receive payment will be recognized, except
that in any case where the applicant wishes the proceeds of the check,
which is issued in payment on account of the tentative award, deposited to his credit with a bank or banker in the United States, a special
power of attorney authorizing such bank or banker to indorse a check
and deposit it to the credit of the applicant with such bank or banker
will be recognized. Such power of attorney must be executed on
the form which wUl be supplied to the applicant upon his request
therefor to the Secretary of the Treasury.
.

ASSIGNMENTS

5. Under no circumstances will an assignment be recognized, other
than an assignment by a receiver or trustee.
ADDITIONAL INFORMATION

6. Additional information or evidence may be required from time
to time from any person applying for payment hereunder.
RESERVATION OF POWER TO AMEND

7. These regulations may be amended from time to time.
A. W.

MELLON,

Secretary of the Treasury.
INoTE.—These regulations cover only the payment of tentative
awards on account of ships. When other payments are to be made
these regulations will be amended.]

Application for payment on account of tentative awards
of the war claims arbiter
(See regulations on page 1.^ Care in the execution of the application will expedite
payment.)
, 193
To the SECRETARY

OF THE

TREASURY,

Washington, D. C.
Application is hereby made for payment, pursuant to the provisions
of the settlement of war claims act of 1928, as amended, and the
regulations thereunder, of the amount payable as determined by the
Secretary of the Treasury on account of the tentative award of the
war claims arbiter hereinafter described. Each applicant declares
that he is entitled to the payment hereby applied for and makes the
following additional statements:
1. Docket number (s)
1 See page 349 of this report.

12101—31—25



352

REPORT ON THE FINANCES

2. (a) The name(s) of the person (s) on behalf of whom the tentative award wias made:
{b) The name(s) of ship(s) specified in the tentative award:
3. Address to which the check is to be maUed (see the note immediately hereunder and paragraph 3 of the regulations):
(Street)

(^City)

(State)

~

""(^Country)

NOTE.—Statement 4 should be filled out in lieu of statement 3, if the applicant
wishes the proceeds of the check, which is issued in " payment on account of
the tentative award, deposited to his credit with a bank or banker in the
United States.

4. Forward check to applicant in care of -_^
(Bank or banker in the United States)

located at

^
(Street)

(City)

/

(State)

and authorized by special power of attorney to indorse and collect
the check and to deposit the proceeds thereof to the credit of the
applicant with said bank or banker.
NOTE.—If this application is made by any person(s) other than the person(s)
on behalf of whom the tentative award was made, statement 5 must be filled
in. See regulations on page 1 ^ for evidence required.

5. Capacity in which applicant(s) make(s) application (executor,
administrator, guardian, conservator, heir, legatee, liquidator,
receiver, trustee, assignee of receiver or trustee):
Name of applicant

Capacity in which applicant makes application

NOTE.—Statement 6 must be filled out in every case where a partnership,
association, or corporation is named in the tentative award.

6. The existence of the

^
(Partnership, association, or corporation)

named in the tentative award

been terminated.
("has" " h a s n o t " )

7. The applicant(s) undertake(s) that no amount wUl be accepted
Ul respect of such tentative award or claim, except in accordance
with the provisions of the regulations.
8. Each applicant (if an individual) executing this application is
of legal age and is under no legal disabUity.
NOTE.—Each applicant must sign both in the space provided for signatures in
paragraph 9, immediately hereunder, and also in the affidavit below.
9. Signatures of applicants
Business addresses of applicants
(See 1 (a) of the regulations)

13ee page 350 of this report^




SECRETARY OF THE T.REASURY

353

Affidavit for partnership, association, or corporation
State of
-_-___
:.
County or country of
! ss:
'
and
being severally duly sworn, each for himself on oath states that he is
duly authorized to sign for. and on behalf of the
(Partnership, association, or corporation)

described in and which executed the foregoing application, that he
has read the said application and knows the contents thereof, and
that the same are true.
(Name and capacity)
(Name and capacity)

Subscribed and sworn to before me this
day of
,
193--, by the said
and
i
., personally known to
me and known to me to be the same persons whose names are subscribed to the foregoing application on behalf of the
^

^

.

(Partnership, association, or corporation)

which executed said application.
(Diplomatic or consular oflBcer of the United States
administering oath or notary public if executed in
the United States)
[OFFICIAL

SEAL.l
(Title

(No fees to be charged by diplomatic or consular officer of the
United States.)
Affidavit for individual
(If more than one applicant, attach additional affidavits in similar form)

State of
County or country of

1
j *
_, being duly sworn, on oath states that
--he is (one of) the applicant(s) in the foregoing application by h
subscribed, that ..he has read such application and knows the contents thereof, and that the same are true.
(Applicant)

Subscribed and sworn to before me this
'. day of
, 193-_, by the said
, personally
known to me and known to me to be the same person whose name is
subscribed to the foregoing application.
(Diplomatic or consular oflScer of the United States
administering oath or notary public if executed in
the United States)
[OFFICIAL

SEAL.]
(Title)

(No fees to be charged by diplomatic or consular officer of the
United States.)




354

REPORT ON T H E FINANCES
EXHIBIT

45

Statement of Secretary of the Treasury Mellon concerning the funding
of the indebtedness of Germany to the United States on account of the
awards of the Mixed Claims Commission and the costs of the United
States army of occupation {press release, November 7, 1930)
Final steps were taken to-day in connection with the funding of
the indebtedness of the German Reich to the United States on account of the awards of the Mixed Claims Commission and the costs
of the American army of occupation pursuant to the terms of the
agreement executed June 23, 1930. Mr. Rudolph Leitner, . first
secretary of the German Embassy at Washington, delivered to the
Treasury, bonds of the Government of the German Reich in the principal amount of Rm. 3,169,700,000, of which Rm. 2,121,600,000 was
on account of the awards of the Mixed Claims Commission and
Rm. 1,048,100,000 was on account of the costs of the American
army of occupation. Of the bonds so delivered to the Treasury,
Nos. 1 and 2 of the mixed claims series in the aggregate principal
amount of Rm. 61,200,000, and Nos. 1 and 2 of the Army costs series
in the aggregate principal amount of Rm. 37,850,000 having been
paid, were returned to the German Government.
The act approving the settlement was signed by the President
on June 5, 1930. The settlement has likewise been approved by the
German Government.
E X H I B I T 46

America's Separate Agreement with Germany, an address by Undersecretary of the Treasury Mills at the meeting of the Academy of
Political Science, New York City, November 14, 1930
On June 23, 1930, the United States and Germany executed an
agreement providing for the settlement of the claims of the United
States and its citizens against the German Government. The agreement may be briefiy summarized as follows:
I t provides that Germany is to pay 40,800,000 reichsmarks for the
period September 1, 1929, to March 31, 1930, and the sum of 4.0,800,000 reichsmarks per annum from April 1, 1930, to March 31, 1981, in
satisfaction of mixed claims, and beginning September 1, 1929, an
average annuity of 25,300,000 reichsmarks for 37 years in full liquidation of our Army costs. The combined annuities equal the annuity
allocated to the United States under the terms of the Young plan.
Germany at its- option, upon not less than 90 days' advance notice,
may postpone any payment on account of the principal falling due
to any subsequent September 30 and March 31 not more than two
and one-half years distant from its due date, a provision that accords,
generally speaking, with provisions relating to postponement to be
found in our other debt settlements. All postponed payments on
account of mixed claims are to bear interest at 5 per cent, the rate
provided for in the settlement of war claims act of 1928, and all payments postponed on account of Army costs are to bear interest at
the rate of 3^^ per cent. While the annuities are stated in terms of




SECRETARY OF T H E TREASURY

355

reichsmarks, payments are to be made in dollars, either at the Treasury
or at the Federal Reserve Bank of New York.
If we would understand the reasons which led up to the making of
a separate agreement with Germany, it is necessary to consider the
situation of the United States as compared with that of the other
creditor powers. At the time the Young plan came into existence,
the claims of the United States against Germany fell into two hmited
classes: First, those covering the reimbursement of our Government
for costs of our army of occupation; and, secondly, those relating to
the compensation of our citizens for damages sustained from acts of
war, as adjudicated by a joint tribunal set up by agreement with
Germany and popularly known as "mixed claims." On the other
hand, our Government had recognized two classes of claims by
German citizens against it, the first comprising the return in cash or
in kind of property of private persons seized by the Alien Property
Custodian; and the second covering compensation for ships, radios,
and patents seized by the United States Government for its own use.
The history of the Army costs and mixed claims items is as follows:
ARMY COSTS

The total costs of the United States army of occupation amounted
to $292,663,435.79. Except for cash requisitions on the German
Government for the use of the army of occupation aggregating
$37,509,605.97 and certain other items, such as provost fines, abandoned enemy war material, etc., amounting to $7,288,184.33, the
United States Government received no payments on account of Army
costs up to May 25, 1923. On that date the United States and the
principal allied powers signed the so-called Wadsworth agreement,
which provided that our Army costs should be divided into 12 annual
installments, and should be, during the first four of the 12 years, a
first charge on cash payments received from Germany after the
expenses of the Reparation Commission and the current expe ses of
the allied armies of occupation, but during the last eight years hould
be an absolute prior charge on all cash payments, except for the costs
of the Reparation Commission. Ratifications of the Wadsworth
agreement were never exchanged, but we received a payment under
it of $14,725,154.40 in January, 1925. The agreement was superseded by the so-called Paris agreement of January 14, 1925, which
also covered awards of the Mixed Claims Commission. This ] atter
agreement was concluded at a meeting of representatives of the
creditor powers, including the United States, called for the purpose
of making distribution of the annuities provided for under th e terms
of the Dawes plan, which had been adopted in 1924. Under the
provisions of the Paris agreement, the United States was to receive
on account of its Army costs, beginning September 1, 1926, t h e sum
of 55,000,000 gold marks or about $13,100,000 per annum, which
payments were to constitute a first charge on cash made available
for transfer by the transfer committee out of the Dawes annuities
after the provision of the sums necessary for the service of the
800,000,000 gold mark German external loan of 1924 and for the
costs of the reparation and other commissions. Under the provisions
of the Wadsworth agreement, our Army costs should have been




356

REPORT ON THE FINANCES

liquidated by the end of 1935. Under the Paris agreement, the
payments would extend over a period of about 18 years, beginning
September 1, 1926.
Up to the 1st of September, 1929, the United States had received
on Army costs account, $39,203,725.89 under the Paris agreement.
As of September 1, 1929, there was still due on account of Army
costs $193,936,765.20.
MIXED CLAIMS

By virtue of an agreement entered into on August 10, 1922, by the
United States and Germany, there was set up a Mixed Claims Commission, charged with the duty of passing upon the claims of American
citizens arising since July 31, 1914, in respect of damage to or seizure
of their property, rights and interests, and upon any other claims for
loss or damage to which the United States or its nationals had been
subject with respect to injuries to persons or to property, rights and
interests since July 31, 1914, as a consequence of the war, and including debts owing to American citizens by the German Government or
by German nationals.
The first meeting of the commission was held on October 9, 1922.
Up to August 31, 1929, awards had been certified to the Treasury for
payment which, with interest to August 31, 1929, aggregated $172,703,083.71. I t was estimated as of August 31, 1929, that the principal
amount of awards yet to be entered and certified, together with interest to that date, amounted to $53,000,000, and in addition awards to
the United States Government, with interest to August 31, 1929,
amounted to $64,934,794.41. In other words, as of August 31, 1929, it
was estimated that the total awards of the Mixed Claims Commission, made and to be made, aggregated with interest $290,637,878.12.
No provision for the payment of the awards of the Mixed Claims
Commission was made until the Paris agreement of January 14, 1925.
The Paris agreement provided that the United States should receive
2}i per cent of all receipts from Germany on account of the Dawes,
annuities available for distribution as reparations, provided that the
annuity resulting from this percentage should not in any year exceed
the sum of 45,000,000 gold marks. Up to September 1, 1929, the
United States had received from Germany under the Paris agreement
for account of mixed claims $31,831,472.03, which, with earnings
and profits on investments amounting to $2,149,692.70, made available for distribution $33,981,164.73, and left $256,656,713.39 stiU to
be provided for. I t must be understood in this connection that the
figures relating to the total amount finally awarded by the Mixed
Claims Commission were necessarily only an estimate, since all of
the awards had not as yet been made.
Turning, now, to Germany's claims against the United States, our
Government, in common with other nations engaged in the Great
War, had sequestered or seized for its own use the property of German
citizens. Once the war was over, it could have elected, as others did,
to retain that property and apply it to the satisfaction of its own claims
and those of its citizens, leaving the German owners to seek compensation from their own Government. Had the United States followed
this course in the first instance, it seems probable that at the time of
the adoption of the Young plan we would have been completely




SECRETARY OF THE TREASURY

357

out of the picture, and there would have been no occasion for either
a joint or a separate agreement.
However, in accordance with a time-honored tradition and what
we conceived to be sound public policy, we elected either to return
the property or to compensate the ovmers, the payments to extend
over a number of years, the total period for final liquidation corresponding in a general way to that required to discharge the obligations of our own citizens. This is a noteworthy fact, for it results in
the transfer of important sums to Germany during the period of payment to us. And what is even more significant, in the earlier years
dollar payments to Germany wiU exceed mark payments to the United
States. During the first three years of the life of the separate agreement we will receive some 198,000,000 reichsmarks, or about
$47,000,000; whereas we will place at the disposal of German citizens—I can give you but approximate figures—about $148,000,000 in
cash or property. This, as I understand it, is not true of other
creditor countries.
Moreover, it must be remembered that, in accordance with the
policy established by President Wilson, who as early as 1919 had said
that in his opinion we should claim nothing under the general reparation clauses, we had never presented a claim for general reparations;
we had not participated in the fixing of the sums to be paid by Germany or in the apportioning of those sums among the creditor powers;
we had never joined others in the collection of payments, and we had
never been represented on the Reparation Commission, which, after
all, came into existence to deal with an almost strictly European
problem.
I t appears,.then, that at the time the question arose as to whether
we should become parties to the Young plan, or rely on a separate
agreement with Germany, the position of the United States differed
in several important particulars from that of the other principal
creditors: First, our claims were of a limited character and, compared
with the total reparation bill, were comparatively small. We will
receive less than 3 per cent of the total Young payments. Second,
by reason of our policy of nonconfiscation and compensation of German citizens, mark payments to the United States will be offset to
some extent throughout the period of payment, and in the earlier
years more than offset by dollar payments to Germany, which
obviously facilitates bUateral transfers; and, third, we had never
joined our war associates in the assessments, collection, and distribution of general reparation payments.
The adoption^ of the Young plan, by our becoming a party to The
Hague conventions, would have involved official approval on our
part, not only of the total reparation bill presented to Germany, a
question in which we had no primary interest, but of the fairness of
the distribution of the amounts to be paid as between European
creditors, as to which we had no knowledge and no interest whatsoever. In addition, we would have had to assume in the future a share
of the responsibUity of collecting and distributing payments, for we
could not have accepted the benefits afforded by the Young-plan
machinery and have declined to bear any part of the burdens.
Clearly, our interests were not sufficiently important to justify our
plunging headlong into this troublesome European problem, and




358

REPORT ON THE FINANCES

reversing the policy laid down by President Wilson, and followed
since his day, particularly since, had we participated, it is probable,
should any difficulties arise in the future, that we, as a comparatively
disinterested party, would find ourselves in the position of arbiter,
called upon to settle and decide a controversial and difficult European
question.
But there is another controlling reason which made it inadvisable
and inconsistent for us to accept and become a party to the Young
plan. The plan apparently seeks to link and merge reparation payments by Germany with allied debt payments to the United States.
Here again President Wilson, on the very first occasion that this
attempt was made, took the position that the settlement and payment of the obligations to us, incurred by our associates, w^ere entirely
independent and unrelated to the reparation claims made against
Germany. He said the United States Government "fails to perceive the logic in a suggestion in effect either that the United States
shall pay part of Germany's reparation obligation or that it shall
make a gratuity to the allied governments to induce them to fix such
obligation at an amount within Germany's capacity to pay. This
Government has endeavored heretofore in a most friendly spirit to
make it clear that it can not consent to connect the reparation question with that of intergovernmental indebtedness," That policy has
been consistently adhered to by our Government.
I n short, when the question arose as to whether we should make a
separate agreement with Germany for the satisfaction of our relatively modest claims, or decide to pool them with the infinitely larger
claims of the European creditors, all of the arguments appeared to be
in favor of the first course. I t was simple, direct, entirely adequate
to protect American interests, and in accordance with estabhshed
policy; whereas the alternative involved not only abandonment of
the attitude steadfastly maintained toward both war debts and
reparation problems, but the assumption of responsibihties on our
part wholly disproportionate to the magnitude of our claims and relating to problems almost strictly European in character. While,
therefore, we were quite ready to accept the annuities allocated to us
by the Young plan, which involved some sacrifice on our part, it seems
to me that we would not have been justified in becoming participants,
and that we followed a wise and proper course in providing for the
satisfaction of our claims against Germany in a separate agreement.
TAXATION
EXHIBIT

47

Statement of Undersecretary of the Treasury Mills before the Committee
on Ways and Means, December 4, 1929, relative to the joint resolution to reduce rates of income tax for the calendar year 1929
The revenue bill introduced by Chairman Hawley and now before
this Committee for consideration has the approval of the Treasury
Department.
Its terms are so simple as to require no explanation. I t provides
that the normal tax on the taxable iucomes of individuals for the




SECRETARY OF THE TREASURY

359

calendar year 1929 shall be reduced from IK per cent to one-half of
1 per cent on the first $4,000 of taxable income, from 3 per cent to
2 per cent on the second $4,000 of taxable income, and from 5 per cent
to 4 per cent on the balance of taxable income; and that the tax on
the taxable incomes of corporations for the calendar year 1929 shall
be reduced from 12 per cent to 11 per cent.
The outstanding features of this measure are, first, that it limits
the new rates to the calendar year in question, which is a novelty in
the history of income tax legislation in this country; and in the second
place, that it gives some measure of relief to the maximum number of
income taxpayers, with relatively larger benefits to those with the
smaller incomes.
The reasons for the limited revision are not far to seek: The estimated surplus for the fiscal year 1930 is approximately $226,000,000,
and the estimated surplus for the fiscal year 1931 approximately
$123,000,000. These figures, to be sure, do. not indicate a very large
margin of safety in budgets of over $4,000,000,000, but the tax reduction of $160,000,000 which wUl result from the enactment of this bUl
is divided approximately equally between the two fiscal years. Looked
at from this standpoint, the margin of safety is reasonably adequate.
The Treasury Department feels, therefore, that the taxpayers should
receive the benefit of these prospective surpluses in the form of tax
reduction. This is all the more desirable since both budgets make
ample provision for retirement of our national debt in accordance
with our well-established policy. The estimated expenditures for
1930 and 1931 include, respectively, $630,000,000 and $635,000,000
for debt retirement chargeable against ordinary receipts.
A surplus may be recurring or temporary. In the one case, either
through expanding revenue or reduced expenditures, assured receipts
may have reached the point where they so exceed normal expenditures
as to create recurring surpluses. Such a situation justifies a more or
less permanent revision of our tax laws with a view to modifying tax
rates downward.
In the second case, the surplus may be of temporary character,
arising from an unusual increase in receipts or decrease in expenditures, or from conditions not extraordinary which may not have
existed for a sufficient period of time to permit a definite conclusion
as to their permanency. Such surpluses obviously call for different
treatment. This is particularly true of a revenue system which
places its chief reliance on one form of taxation, as we now do on the
income tax, which is subject to sweeping variations depending on a
variety of circumstances but principally on the upward and downward fluctuations of business. Under these circumstances, whUe a
surplus justifies some measure of tax relief and while the taxpayer
should receive the fullest possible benefits from the prosperous condition of the Treasury during the given fiscal year, it is impossible to
assure the permanency of the reduced rates.
The estimated surpluses for the fiscal years 1930 and 1931 seem to
fall into the second class.
Moreover, the problem of estimating future revenue is attended by
extraordinary difficulties at the present time due to the existence of
a number of factors the effect of which it is almost impossible to
foresee. The surplus of the fiscal year ending June 30 last and the




360

REPORT ON T H E FINANCES

current year's probable surplus was and wUl be due, to a very large
extent, to the unusual increase in taxable incomes reported by individuals, although corporations enjoyed a very prosperous year in
1928, and all reports indicate that their 1929 income wUl exceed that
of 1928. The income tax returned by individuals for the calendar
year 1927 was $830,000,000, and for the calendar year 1928 approximately $1,150,000,000. While • wages, salaries, dividends, etc.,
showed a substantial increase, the outstanding item in the increased
income returned was a gain of approximately $2,000,000,000 in profits
from the sale of capital assets, both within and without the 2-year
period. I t is the unusual increase in this one item and the impossibility of determining under existing circumstances what income wUl
be returned from this source for the calendar years 1929 and 1930,
that make estimating at this time so uncertain a proposition.
We are not only faced with the usual problem of determining the
business trend during the current calendar year and of forecasting
the business trend during the coming calendar year, but we are confronted with tlie difficult problem of determining what effect the
precipitous decline of security values recently witnessed will have on
the profits from security transactions, wmich unquestionably yielded a
very large income in 1928 and for the first eight months of the calendar
year 1929.
The pending measure solves the problem of giving to the taxpayer
tne benefit of tne surplus w^hich seems reasonably certain in the
fiscal year 1930 without running too great a risk of incurring a deficit
during the fiscal year 1931.
I t is estimated that the reduced rates will result in reducing income
taxes to be collected during tbe calendar year 1930 by $160,000,000,
of which approximately $90,000,000 represents the reduction in corporation taxes, and approximately $70,000,000 the reduction in individual income taxes.
Since all individual uicome taxpayers pay the normal tax, with
tne exception of those wnose entire taxable income is derived from
dividends, and since millions of stockholders in our corporations
indirectly contribute to the corporation tax, a reduction in the normal
rate applicable to individual incomes and a reduction of t