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ANNUAL REPORT OF THE
SECRETARY OF THE TREASURY
ONIE STATE OF THE FINANCES
FORHSCAL YEAR ENDED JUNE 30,1936

V







J-

ANNUAL REPORT OF THE
SECRETARY OF THE TREASURY
ON

THE STATE OF THE
FINANCES
FOR THE FISCAL YEAR
ENDED JUNE 30

1936

UNITED STATES
GOVERNMENT PRINTING OFFICE
WASHINGTON : 1937

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




Price 55 cents




TREASURY DEPARTMENT
DOCUMENT N O .

Secretary

3079

CONTENTS
Page

Budget results
Receipts
Income taxes
Miscellaneous internal revenue taxes
.
Agricultural adjustment and related taxes
Customs
Miscellaneous receipts
Expenditures
Deficit
The public debt
Treasury bonds, notes, and bills issued during the year
Refunding of the Fourth Liberty Loan
Redemption of the 2 percent bonds
Postal savings bonds
United States savings bonds-_
Adjusted service bonds
Cumulative sinking fund
General Fund of the Treasury
Emergency legislation
Revenue legislation
Agricultural adjustment taxes
Estimates of receipts and expenditures
Fiscal year 1937
Total receipts
Income tax
Miscellaneous internal revenue taxes
Social security and other internal revenue taxes
Customs
Miscellaneous receipts
Fiscal year 1938
Total receipts
Income tax
•
Miscellaneous internal revenue taxes
.:
Social security taxes
Customs
Miscellaneous receipts
Monetary developments
Gold
Silver
.
Silver certificates
National bank notes
Bureau of Internal Revenue
Back taxes on income
Alcohol tax administration
Construction activities of the Treasury
The original public building program
Building program in the District of Columbia
Program under the Public Works Administration
Program under the Emergency Appropriation Acts
Program for other departments
Treasury activities under the provisions of the Social Security Act
Grants to States
...
Old-age reserve account
Unemployment trust fund
Collection of taxes
Public health work




__
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III •

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lY

CONTENTS
Page

Treasury activities under t h e Emergency Relief Appropriation Act of
1935
Administrative expenses
Work relief supply fund
Work relief projects
Public H e a l t h Service
Coast Guard
Bureau of Internal Revenue
Division of Research and Statistics
Procurement Division
Bureau of Customs
Nonfiscal activities
Coast Guard
Public H e a l t h Service
Bureau of Narcotics
Organization changes and procedure

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55
55
56
56
57
60
61

A D M I N I S T R A T I V E R E P O R T S OF B U R E A U S AND D I V I S I O N S
Accounts and Deposits, Office of t h e Commissioner of
Combined s t a t e m e n t of assets and liabilities of governmental corporations a n d credit agencies
Securities owned by t h e United States Government
Contingent liabilities of t h e United States
Federal savings and loan associations
Federal home loan banks
Federal land banks
Capital stock
Subscriptions to paid-in surplus and p a y m e n t s on account of
reduction in interest rates on mortgages
Advances to Federal Reserve banks for industrial loans, etc
Accounting a n d disbursing of emergenc}^ relief funds appropriated
under t h e Emergency Relief Appropriation Acts of 1935 a n d 1936__
Agricultural Adjustment Act
Appropriations authorized under Social Security Act
Obligations of foreign governments
,_
Receipts from Germany
Army costs
Mixed claims, United States and Germany
Annuities under moratorium agreement
Treasury, administration of alien and mixed claims
Mixed Claims Commission: 'Claims against Germany
War Claims Arbiter
Claims of German nationals
Claims.of Hungarian nationals
German special deposit account
Tripartite Claims Commission
Claims against Austria
Claims against H u n g a r y
Railroad obligations
Section 204
.
Section 207
Sections 209 a n d 212
Section 210
T r u s t a n d special funds invested b y t h e Treasury
Adjusted service certificate fund
Civil service retirement and disability fund
Foreign service retirement a n d disability fund
Canal Zone retirement and disability fund
District of Columbia teachers' retirement fund
Longshoremen's and harbor workers' compensation fund
District of Columbia workers' compensation fund
Unemployment t r u s t fund
United States Government life insurance fund
Library of Congress t r u s t fund
National I n s t i t u t e of Health gift fund




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CONTENTS
Accounts a n d Deposits, Office of the Commissioner of—Continued.
T r u s t a n d special funds invested by t h e T r e a s u r y — C o n t i n u e d .
National park t r u s t fund
Alien property t r u s t fund
General railroad contingent fund
Pershing Hall Memorial fund
.
Special funds
Colorado River D a m fund
Advances to reclamation fund
Division of Deposits
Section of Surety Bonds
Division of Bookkeeping a n d W a r r a n t s
Division of Disbursement
Appointments, Division of
N u m b e r of employees
Retirement of employees
Budget and I m p r o v e m e n t C o m m m i t t e e
Coast Guard
Protection t o navigation
Enforcement of customs and other laws
Communications
Equipment
T h e academy, stations, bases, repair depot, engine school, repair base,
etc
Engineering competition
'
Personnel
'
Awards of life-saving medals
Legislation
F u n d s available for t h e Coast Guard
Comptroller of t h e Currency
Changes in t h e condition of active national banks
S u m m a r y of changes in membership in t h e national banking s y s t e m . _
Reorganized national banks
Customs, Bureau of
Collections
Volume of business
Law enforcement activities
'_
Smuggling
Miscellaneoiis
Investigative Unit
.
Engraving a n d Printing, Bureau of
Enrollment a n d Disbarment, Committee on
Federal Alcohol Administration
i
Permit Division
Label Examination Section
Enforcement Division
I n t e r n a l Revenue, Bureau of
General
I n t e r n a l revenue collections
Refunds
Additional assessm^ents
Cost of administration
Income Tax Unit
.
Additional revenue
Final notices of deficiency (90-day letters)
Claims and overassessments
Returns on hand
Audit in Washington
Audit in the
field
The Technical Staff
Miscellaneous Tax Unit
E s t a t e Tax Division
L
Tobacco Division
Sales Tax Division
^ Processing Tax Division
Capital Stock Tax Division
Bituminous Coal a n d Silver Tax Division
Social Security Division



V

I*age
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VI

CONTENTS

Internal Revenue, Bureau of—Continued.
Alcohol Tax Unit
Enforcement Division
Audit Division
Laboratory Division
Field Inspection Division
Accounts and Collections Unit
Collection Accounting Division
^
Collectors' Personnel, Equipment, and Space Division
Disbursement Accounting Division
Office of the Assistant General Counsel
_'
Assistant General Counsel's Committee
Reorganization Section
Appeals Division
.
Civil Division
Compromise Section
Interpretative Division
Penal Division
1
. Review Division
Legislative and Regulations Division
Intelligence Unit
Work relief projects
^
Legal Division
Mint, Bureau of the
1
Institutions of the Mint Service
Coinage
Bullion deposit transactions
Gold operations
Silver operations
Refineries
Commemorative coins
Stock of coin and monetary bullion in the United States
Production of gold and silver
'
Industrial consumption of gold and silver
Housing1
Appropriations, expenses, and income
Narcotics, Bureau of
Enforcement activities
^
Extent and trend of narcotic traflfic
J
'
Printing, Division of
Printing and binding
Stationery supplies
Department advertising
Engraving work
Procurement Division
Branch of Supply
Public Buildings Branch
Office of the Supervising Architect
Office of the Supervising Engineer.^
Original public building program
:
Building program in the District of Columbia
Program under the Public Works Administration
.
Emergency construction program
Program for other departments
Section of Space Control
Section of Painting and Sculpture
Treasury Relief Art Project
Administration and cost of Federal buildings under the control
of the Treasury Department.
'
Expenditures
Public Debt Service
Division of Loans and Currency
Register of the Treasury
Division of Public Debt Accounts and Audit
Division of Paper Custody
^
Destruction Committee




Page
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CONTENTS

VII
Page

Public H e a l t h Service
Division of Sanitary Reports and Statistics
Division of Foreign a n d Insular Quarantine
Division of Scientific Research
Public health work under the Social Security Act
Domestic Quarantine Division
Division of Marine Hospitals and Relief
Division of Venereal Diseases
Division of M e n t a l Hygiene
Division of Personnel and Accounts
Research and Statistics, Division of
Taxation
Federal
financing
M o n e t a r y problems
Actuarial analysis
Savings Bonds, Division of
Secret Service Division
Treasurer of t h e United States
War Finance Corporation

J

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206
206
207
212

EXHIBITS
THE PUBLIC DEBT

Public issues of Treasury bonds. Treasury notes, and Treasury bills
Exhibit 1. Offering of 1% percent Treasury notes of series B-1939
Exhibit 2. Subscriptions and allotments, Treasury notes of series B-1939_
Exhibit 3. Inviting tenders for 2J^ percent Treasury bonds of 1955-60
(additional)
Exhibit 4. Acceptance of tenders for Treasury bonds of 1955-60
Exhibit 5. Inviting tenders for 2}^ percent Treasury bonds of 1955-60
(additional)
Exhibit 6. Acceptance of tenders for Treasury bonds of 1955-60
Exhibit 7. Inviting tenders for 2}^ percent Treasury bonds of 1955-60
(additional)
Exhibit 8. Acceptance of tenders for Treasury bonds of 1955-60
'
Exhibit 9. Offering of 2 ^ percent Treasury bonds of 1945-47 and I j i percent Treasury notes of series C-1939
^
Exhibit 10. Subscriptions and allotments, Treasury bonds of 1945-47 a n d
Treasury notes of series C-1939
Exhibit 11. Offering of 2% percent Treasury bonds of 1945-47 (additional)
and l}i percent Treasury notes of series C-1940
Exhibit 12. Subscriptions and allotments, Treasury bonds of 1945-47
(additional) and Treasury notes of series C-1940
Exhibit 13. Offering of 2}i percent Treasury bonds of 1948-51 a n d lYz
percent Treasury notes of series A-1941
.
Exhibit 14. Subscriptions and allotments. Treasury bonds of 1948-51 and
Treasury notes of series A-1941
Exhibit 15. Offering of 2 ^ percent Treasury bonds of 1951-54 a n d V/s
percent Treasury notes of series B-1941
Exhibit 16. Subscriptions and allotments. Treasury bonds of 1951-54 a n d
Treasury notes of series B-1941

215
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217
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219
220
220
221
221
226
227
230
231
233
234
237

Issues of Treasury bills
Exhibit 17. Inviting tenders for two issues of Treasury bills dated July 3,
1935
Exhibit 18. Acceptance of tenders for two issues of Treasury bills dated.
July 3, 1935
Exhibit 19. Summary, of information contained in press releases issued in
connection with Treasury bills offered during t h e fiscal year 1936




238
239
239

VIII

CONTENTS
United States savings bonds
Page

Exhibit 20. Offering of United States savings bonds, series B
Exhibit 21. Sales of United States savings bonds from March 1, 1935, to
June 30, 1936
Exhibit 22. Supplement, September 17, 1935, to Department Circular No.
529, offering for sale United States savings bonds, series A
Exhibit 23. Regulations governing United States savings bonds, December 2, 1935
---

242
245
246
247

Adjusted service bonds
Exhibit 24. Issue of adjusted service bonds of 1945, June 15, 1936
Exhibit 25. An act to provide for the immediate payment of World War
adjusted service certificates, for the cancelation of unpaid interest
accrued on loans secureii by such certificates, and for other purposes,
January 27, 1936
Exhibit 26. An act to protect the United States against loss in the delivery
.cks in payment of benefits provided for by laws
brans' Administration, June 3, 1936_
Exhibit 27. An act to eliminate unnecessary expense in the administration
of estates of deceased and incompetent veterans, and for other purposes,
June 26, 1936.
Exhibit 28. Regulations golverning adjusted service bonds of 1945, Juiie 6,
1936.
Exhibit 29. Supplement, Jbne '26, 1936, to Departm.ent Circular No. 560,
prescribing regulations g|overning adjusted service bonds of 1945
Exhibit 30. Order of the Ajcting_ Secretary of the Treasury, June 10, 1936,
authorizing officers of the Treasury Department to witness and certify
requests for payment of ladjusted service bonds

253

253
256
257
257
260
261

Issue of Federal Faihn Mortgage Corporation bonds guaranteed as to
interest and principal by the United States
Exhibit 31. Inviting tendjers for Federal Farm Mortgage Corporation
iy2 percent bonds of
Exhibit 32. Acceptance of \jienders for Federal Farm Mortgage Corporation
bonds of 1939 (from press irelease, Aug. 29, 1935)

261
263

Miscellaneous
Exhibit 33. Receipt of Treasury bonds and Treasury notes for Federal
estate or inheritance taxfes
Exhibit 34. Letter of the S ecretary of the Treasury, May 27, 1936, to the
presidents of the Federa] Reserve banks, relative to the announcements
of offerings of and the s libmission of subscriptions for obligations of the
United States
Exhibit 35. Order of the A|cting_ Secretary of the Treasury, June 10, 1936,
authorizing officers of
Treasury Department to witness assignments
of registered issues of United' States bonds and notes

263

264
265

MONEY

Exhibit 36. Joint resolutidn authorizing exchange of coins and currencies
and immediate payment of gold clause securities by the United States;
withdrawing the right td sue the United States thereon; limiting the use
of certain appropriation^ ; and for other purposes, August 27, 1935
Exhibit 37. Regulations g(j)verning the immediate payment of gold clause
securities
Exhibit 38. Regulations gcjverning the exchange of coins and currencies of
the United States
Exhibit 39. Proclamation, January 10, 1936, extending powers conferred
by section 10 of the Gol^ Reserve Act of 1934 and section 43 of the act
approved May 12, 193$
Exhibit 40. Statement b}^ the Treasury Department, August 15, 1935,
relative to the new $1 silver certificate
Exhibit 41. Issue, exchange.i, and redemption of paper currency and coin.




266
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269
269
270
272

CONTENTS

IX

TAXATION
Page

Exhibit 42. Titles VIII and IX of the Social Security Act (Pubhc No.
271, Aug. 14, 1935) relative to the taxes on employers and employees. _
Exhibit 43. An act to levy an excise tax upon carriers and an income tax
upon their employees, and for other purposes, August 29, 1935
Exhibit 44. Major tax rate changes made by the Revenue Acts of 1935
and 1936, and the rates which they superseded, together with legal citations and effective dates
Exhibit 45. Processing tax rates under the Agricultural Adjustment Act,
and rates of tax on cotton ginning, tobacco sales, and potatoes, during
the fiscal year 1936, with effective dates
Exhibit 46. Executive order, August 29, 1935, requiring the preparation
and publicity of written decisions in respect of overassessments of income, profits, estate, and gift taxes allowed in excess of $20,000
Exhibit 47. An act relating to the filing of copies of income returns, and
for other purposes, April 10, 1936

272
279
281
285
287
287

OBLIGATIONS OF FOREIGN GOVERNMENTS

Exhibit 48. Correspondence exchanged between the Government of the
United States and various foreign governments and statements concerning foreign debts owing to the United States
.

288

ORGANIZATION AND PROCEDURE

Exhibit 49. Orders changing organization and procedure in the Treasury
Department
..
Exhibit 50. Regulations governing hours of employment and overtime
work
Exhibit 51. An act to amend section 304 of the Revised Statutes, as
amended, April 24, 1936
Exhibit 52. Offers of compromise under section 194, title 31, United
States Code
Exhibit 53. Title V of the act (Pubhc No. 724, June 20, 1936) to amend
certain acts relating to public printing and binding and the distribution
of public documents and acts amendatory thereof

298
299
304
305
306

MISCELLANEOUS

Exhibit 54. Amendment to Executive Order No. 6981, March 2, 1935, removing, in certain cases, restrictions imposed by Public Resolution 53,
of June 27, 1934, as to payments, transfers, and deliveries of property
under the Trading with the Enemy Act and the Settlement of War
Claims Act of 1928
Exhibit 55. 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 the Tripartite Claims Commission, and extending
until March 10, 1938, the time within which Hungarian claimants may
make application for payment, under the Settlement of War Claims
Act of 1928, of awards of the War Claims Arbiter, June 26, 1936
Exhibit 56. Section 201 of the Social Security Act creating an old-age
reserve account
Exhibit 57. Letter of the Acting Postmaster General to the Secretary of the
Treasury, dated November 10, 1936, certifying extraordinary expenditures contributing to the deficiency of postal revenues for the fiscal j^ear
1936




306

307
307

308

X

CONTENTS
TABLES
Page

E x p l a n a t i o n of bases used in tables

311

Description of accounts through which Treasury operations are effected. _

312

RECEIPTS AND EXPENDITURES

General tables
Table 1. Details of receipts, by sources and accounts, for the fiscal year
1936 (warrant and daily s t a t e m e n t bases)
Table 2. Details of expenditures, by organization units and accounts for
t h e fiscal year 1936 (checks issued a n d daily s t a t e m e n t bases)
Table 3. Classified receipts and expenditures, monthly July 1935 to J u n e
1936, and annually for t h e fiscal years 1932 to 1936 (daily s t a t e m e n t
basis)
Table 4. Public debt receipts and expenditures, monthly July 1935 to
J u n e 1936, and annuallv for t h e fiscal years 1932 to 1936 (daily s t a t e m e n t
basis)
".
Table 5. Receipts and expenditures for t h e fiscal years 1789 to 1936 (wara n t and daily statement bases)
Table 6. Expenditures for recovery and relief classified as to provisions for
r e p a y m e n t , fiscal years 1932 to 1936
.

314
321
337
352
"356
364

Specific receipts and expenditures
Table 7. Comparison of detailed internal revenue collections for t h e fiscal
years 1935 and 1936 (collection basis)
Table 8. I n t e r n a l revenue receipts, by tax sources, for the fiscal years 1916
to 1936 (collection basis)
^.-._.
Table 9. Internal revenue receipts, by States and Territories, for the fiscal
year 1936 (collection basis)
Table 10. Expenses of t h e Internal Revenue Service for t h e fiscal year 1936
(checks-issued basis)
Table 11. 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 calendar years 1926-35 (on basis of reports of t h e
Bureau of Foreign and Domestic Commerce)
Table 12. Customs duties (estimated), value of dutiable imports, and
ratio of duties to value of dutiable imports, by tariff schedules, for the
years 1926-35 (on basis of reports of t h e Bureau of Foreign and-Domestic
Commerce)
•
Table 13. Customs receipts, expenditures, and entries, by districts, fiscal
year 1936 (collection basis)
.
.
Table 14. P a n a m a Canal receipts and expenditures for the fiscal years
1903 to 1936 (warrant basis)

366
368
370
372

378

379
381
382

Miscellaneous
Table 15. Actual receipts for t h e fiscal years 1935 a n d 1936 and estimated
receipts for t h e fiscal years 1937 and 1938, by sources
Table 16. Financial status of appropriations provided in t h e Emergency
Relief Appropriation Acts of 1935 and 1936, as of J u n e 30, 1936

383
390

PUBLIC DEBT

Public debt outstanding
Table 17. Public debt outstanding June 30, 1936, by issues (revised daily
s t a t e m e n t basis)
j
Table 18. Description of t h e public debt issues outstanding June 30, 1936
(revised daily statement basis)
Table 19. Interest-bearing debt outstanding J u n e 30, 1936, classified
according to kind of security and callable period or payable date (revised
daily statement basis)
Table 20. Principal of t h e pubhc debt outstanding a t t h e end of each fiscal
year from 1853 t o 1936 (revised daily s t a t e m e n t basis)
Table 21. Composition of t h e public debt, end of each m o n t h , J u n e 1916
t o 1936 (revised daily s t a t e m e n t basis)




396
400
410
411
413

CONTENTS

XI

Public debt operations
Page

Table 22. Public debt retirements chargeable against ordinary receipts during the fiscal year 1936, and cumulative totals from July 1, 1917, to June
30, 1935 and 1936, by sources and issues (revised daily statement basis).
Table 23. Summary of transactions in interest-bearing and noninterestbearing securities during the fiscal year 1936 (revised daily statement
basis)
.
Table 24. Summary of transactions in interest-bearing securities, by form
of issue, during the fiscal year. 1936 (revised daily statement basis)
Table 25. Changes in interest-bearing debt, by issues, during the fiscal
year 1936 (revised daily statement basis)
Table 26. Transactions in noninterest-bearing securities, by issues, during
the fiscal year 1936 (revised daily statement basis)
Table 27. Issues, maturities, and redemptions of interest-bearing securities,
exclusive of trust account and other special issues, July 1935 through
June 1936
Table 28. Sources of public debt increase or decrease for the fiscal years
1915 to 1936 (daily statement basis)
.
Table 29. Transactions on account of the cumulative sinking fund during
the fiscal year 1936 (revised daily statement basis)
Table 30. Transactions on account of the cumulative sinking fund for the
fiscal years 1921 to 1936 (revised daily statement basis)
Table 31. Securities retired through the cumulative sinking fund, par
amount and principal cost, to June 30, 1936 (revised daily statement
basis)
.

420
422
424
425
430
435
438
439
440
440

Interest on the public, debt
Table 32. Interest on the public debt, payable, paid, and outstanding unpaid for the fiscal year 1936 (revised daily statement basis)
Table 33. Interest paid on the public debt, by issues, for the fiscal years
1934 to 1936 (warrant basis)
Table 34. Amount of interest-bearing debt outstanding, the computed annual interest charge, and the computed rate of interest, for the fiscal
years 1916 to 1936, and by months from July 1929 to June 1936 (revised
daily statement basis)

441
441

442

Miscellaneous
Table 35. Contingent liabilities of the United States, June 30, 1936
Table 36. Average yield on United States Government bonds, by months,
January 1919 to June 1936

444
447

CONDITION OF THE TREASURY EXCLUSIVE OF PUBLIC DEBT LIABILITIES

Table 37. Current assets and liabilities of the Treasury at the close of the
fiscal years 1934, 1935, and 193.6 (revised daily statement basis)
Table 38. Net balance in the General Fund of the Treasury at the end of
each month, fiscal year 1936 (daily statement basis)
Table 39. Securities owned by the United States Government, June 30,
1936

448
449
450

ASSETS AND LIABILITIES OF GOVERNMENTAL CORPORATIONS AND
AGENCIE

Table 40. Combined statement of assets and liabilities of governmental
corporations and credit agencies of the United States, as of June 30,1936__
Table 41. Proprietary interest of the United States in governmental corporations and credit agencies, as of June 30, 1929 to 1936

453
460

STOCK AND CIRCULATION OF MONEY IN THE UNITED STATES

Table 42. Stock of money, money in the Treasury, in the Federal Reserve
banks, and in circulation, June 30, 1913 to 1936
Table 43. Stock of money, by kinds, at the end of each fiscal year from
1913 to 1936
.
Table 44. Money in circulation, by kinds, at the end of each fiscal year
from 1913 to 1936
Table 45. Stock of money, money in the Treasury, in the Federal Reserve
banks, and in circulation, by kinds, June 30, 1936



461
462
463
464

XII

CONTENTS
TAX-EXEMPT SECURITIES
Page

Table 46. Estimated amount of securities outstanding, interest on which
is wholly or partially exempt from the Federal income tax, June 30, 1913
tol936, by type of obligor
Table 47. Estimated amount of securities outstanding, interest on which
is wholly exempt from normal income tax and surtax of the Federal
Government, June 30, 1913 to 1936, by type of obligor
Table 48. Amount of securities outstanding, interest on which is exempt
from normal income tax, but not surtax, of the Federal Government,
June 30, 1918 to 1936, by direct obligor
Table 49. United States (Government direct obligations held b}^ Federal
Reserve banks, classified by the degree of exemption of the interest
thereon from the Federal income tax, June 30, 1915 to 1936

465
466
468
469

MISCELLANEOUS

Table 50. 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, 1936
Table 51. Net expenditures for Federal aid to States, fiscal years 1920,
1935, and 1936, and amounts appropriated for 1937, by appropriations..
Table 52. Expenditures made by the Government as direct payments to
States, etc., under cooperative arrangements during the fiscal year 1936.

470
471
474

PERSONNEL

Table 53. Number of employees in the departmental service of the Treasury in Washington, by months, from June 30, 1935, to June 30, 1936..
Table 54. Number of employees in the departmental and field services of
the Treasury on June 30, 1935, and June 30, 1936
Table 55. Number of persons retired, and number of persons eligible for
retirement retained, departmental and field services of the Treasury,
August 20, 1920, to June 30, 1936

479

Index

481




478

479

SECRETARIES, UNDER SECRETARIES, AND ASSISTANT SECRETARIES
OF THE TREASURY DEPARTMENT DURING THE FISCAL YEARS
1934, 1935, AND 1936,i AND THE PRESIDENT UNDER WHOM THEY
SERVED
Term of service
Official
From—

Secretary of the Treasury

President

To—
Secretaries of the Treasury

Mar. 4,1933 Dec. 31,1933
Jan. 1,1934

William H. Woodin, New York
Henry Morgenthau, Jr., New York.

Roosevelt.
Roosevelt.

Under Secretaries
May 19,1933
Nov. 17,1933
May 2,1934

Nov. 16,1933
Dec. 31,1933
Feb. 15,1936

Woodin.
Dean G. Acheson, Maryland
Henry Morgenthau, Jr., New York. Woodin
Thomas Jefferson Coolidge, Mas- Morgenthausachusetts.

Apr.
June
June
Dec.
Feb.

Feb. 15,1936

Lawrence W. Robert, Jr., Georgia.
Stephen B. Gibbons, New York...
Thomas Hewes, Connecticut
Josephine Roche, Colorado
Wayne C. Taylor, Illinois..-

Roosevelt.
Roosevelt.
Roosevelt.

Assistant Secretaries
18,1933
6,1933
12,1933
1,1934
19,1936

Dec. 12,1933

Woodin, Morgenthau.__
Woodin, Morgenthau-__
Woodin
. . .
Morgenthau.
Morgenthau

Roosevelt.
Roosevelt".
Roosevelt.
Roosevelt.
Roosevelt.

1 For officials since 1789 see Annual Report for 1932, pp. xvii to xxj, and corresponding table in Annual
Report for 1933.




PRINCIPAL ADMINISTRATIVE AND STAFF OFFICERS OF THE
TREASURY DEPARTMENT AS OF NOVEMBER 15, 1936
OFFICE OF T H E SECRETARY
Henry Morgenthau, J r . . .
[Vacant]
Wayne C. Taylor
Stephen B. Gibbons
Josephine Roche...
Herbert E. Gaston
Daniel W. Bell
LeRoy Barton...
Harold N. Graves
Cyril B. Upham
Henrietta S. Klotz
John Kieley
Archie Lochhead
Beriah M. Thompson..
Edwin B. Fussell
William H. McReynolds
W. N. Thompson
Charles R. Schoeneman
Edwin R. Ballinger
Eugene Sloan
James W. Bryan
Herbert J. Wollner
H. R. Sheppard
_.
Francis C. Rose...
Mary E. Switzer
F. A. Birgfeld
W. H. Moran
_
L. C. Spangler
James E. Harper
Gabrielle E. Forbush

_

__ Secretary of the Treasury.
Under Secretary of the Treasury.
Assistant Secretary of the Treasury.
_ Assistant Secretary of the Treasury.
Assistant Secretary oi the Treasury.
Assistant to the Secretary.
Assistant to the Secretary.
__ Assistant to the Secretary.
Assistant to the Secretary,
Assistant to the Secretary.
Assistant to the Secretary.
Assistant to the Secretary.
Technical Assistant to the Secretary.
__ Special Assistant to the Secretary.
Consulting Expert.
Administrative Assistant to the Secretary.
Assistant Administrative Assistant to the Secretary.
Special Stafl; Assistant.
Technical Assistant.
Chief, Division of Savings Bonds.
_ Chief, Information Section, Division of Savings Bonds.
Consulting Chemist.
Assistant to Assistant Secretary.
Assistant to Assistant Secretary.
Assistant to Assistant Secretary.
Chief Clerk and Superintendent.
Chief, Secret Service Division.
Chief, Division of Printing.
_ Chief, Division of Appointments.
Chief, Correspondence Division.

OFFICE OF T H E GENERAL COUNSEL
Herman Oliphant
John G. Harlan...
Clarence V. Opper
Clinton M. Hester
W. R. Johnson
Arthur H. Kent

General Counsel.
Assistant to the General Counsel.
Assistant General Counsel.
Assistant General Counsel.
Chief Counsel, Bureau of Customs.
Acting Chief Counsel, Bureau of Internal Revenue.

_
_

OFFICE OF T H E D I R E C T O R OF RESEARCH AND STATISTICS
George C. Haas
A. S. McLeod
Russell R. Reagh
Lawrence H. Seltzer
Harry D.White
Joseph S. Zucker
Anna M. Michener
Charles S. Bell

Director of Research and Statistics.
_. Assistant Director.
Assistant Director (Government Actuary).
Assistant Director.
Assistant Director.
Assistant Director.
Assistant to the Director.
Administrative Assistant to the Director.
PUBLIC D E B T SERVICE

William S. Broughton
Edwin L. Kilby
Rene W. Barr
W. W. Durbin
Byrd Leavell..
Marvin Wesley
Melvin R. Loafman
Maurice A. Emerson

Commissioner of the Public Debt.
Assistant Commissioner of the Public Debt.
Deputy Commissioner of the 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.

_

_

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).

_

OFFICE OF T H E COMMISSIONER OF ACCOUNTS AND DEPOSITS
Edward F . Bartelt
Maurice Collins..
William T. Heffelfinger
Guy F. Allen
Joseph Greenberg
•_
Edward D. Batchelder
Harry R. Schwalm




^
_

Commissioner of Accounts and Deposits.
Assistant Commissioner of Accounts and Deposits.
Executive Assistant to the Commissioner.
Chief Disbursing Officer, Division of Disbursement.
Chief, Division of Bookkeeping and Warrants.
Chief, Division of Deposits.
Chief Examiner, Section of Surety Bonds.

XV
OFFICE OF THE COMPTROLLER OF THE CURRENCY
J. F. T. O'Connor
William Prentiss, Jr
Eugene H. Gough
Gibbs Lyons
W. P. Folger
George R. Marble

_

_

Comptroller of the Currency.
Deputy Comptroller.
Deputy Comptroller.
Deputy Comptroller.
Chief National Bank Examiner.
Chief Clerk.

OFFICE OF T H E TREASURER OF T H E U N I T E D STATES
William A. Julian
Marion Banister...
George 0. Barnes
M. E. Slindoe
Louis P. Allen

Treasurer of the United States.
Assistant Treasurer.
Executive Assistant to the Treasurer.
Administrative Assistant.
Chief Clerk.

_

BUREAU OF NARCOTICS
Harry J. Anslinger
Will S. Wood
Malachi L. Harney

Commissioner of Narcotics.
Deputy Commissioner of Narcotics.
Assistant to the Commissioner.

OFFICE OF T H E COMMISSIONER OF I N T E R N A L REVENUE
Guy T. Helvering
Milton E. Carter
Charles T. Russell
George J. Schoeneman...
D. Spencer Bliss
Stewart Berkshire
Eldon P. King
A. R. Marrs
Elmer L. Irey
Bertha Wetherton...-.

Commissioner of Internal Revenue.
Assistant to the Commissioner.
Deputy Commissioner.
Deputy Commissioner.
Deputy Commissioner.
Deputy Commissioner.
Special Deputy Commissioner.
Head, Technical Staff.
Chief, Intelligence Unit.
Special Assistant to the Commissioner.
F E D E R A L ALCOHOL ADMINISTRATION

Wilford S. Alexander
Harris E. Willingham
John L. Huntington
H. C. Flanery
Phillip E. Buck
John E. O'Neill

Federal Alcohol Administrator.
Associate Administrator.
Deputy Administrator.
Deputy Administrator.
General Counsel.
Assistant General Counsel.

_

BUREAU OF CUSTOMS
James H. Moyle..
Frank Dow
Thomas J. Gorman
Harvey A. Benner

Commissioner of Customs.
Assistant Commissioner of Customs.
Deputy Commissioner.
Deputy Commissioner.

Nellie Tayloe Ross
Mary M. O'Reilly

Director of the Mint.
Assistant Director.

M I N T BUREAU

PUBLIC H E A L T H SERVICE
Thomas Parran, Jr.
W. F. Draper...
Robert Olesen
L. R. Thompson
Walter L. Treadway
C. E. Waller
S. L. Christian
C. L. Williams
R. A. Vonderlehr
D. S. Masterson

Surgeon General.
Assistant Surgeon General.
Assistant Surgeon General.
Assistant Surgeon General.
Assistant Surgeon General.
Assistant Surgeon General.
Assistant Surgeon General.
. . . Assistant Surgeon General.
Assistant Surgeon General.
Chief Clerk and Administrative Officer.

_

U N I T E D STATES COAST GUARD
Rear Admiral Russell R. Waesche
Capt. Leon C. Covell
Capt. William H. M u n t e r . .
Capt. Philip W. Lauriat
Capt. Thaddeus G. Crapster
Capt. Lloyd T. Chalker
Capt. (E) Harvey F. Johnson
Commander William J. Keester
Commander Frederick A. Zeusler
Commander Joseph E. Stika
Commander Frank J. Gorman
Lt. Frank E. Pollio...




Commandant.
Assistant Commandant.
Chairman of Permanent Board.
Inspector-in-Chief.
Chief Personnel Officer.
Chief Aviation Officer.
Engineer-in-Chief.
Chief Supply Officer.
Chief Commuhications Officer.
Chief Ordnance Officer.
Chief Finance Officer.
Acting Chief Intelligence Officer.

XVI
P R O C U R E M E N T DIVISION
Rear Admiral C. J. Peoples
W. E. Reynolds
Harry E. Collins
.
Leo C. Martin
E. R. Witman
N. Max Dunning
Robert LeFevre
W. N. Rehlaender
Louis A. Simon
Neal A. Melick
Edward Bruce

Director of Procurement.
Assistant Director, Public Buildings Branch.
Assistant Director, Supply Branch.
Executive Officer.
Special Assistant to the Director.
Assistant to Assistant Director, Public Buildings Branch.
Assistant to Assistant Director, Supply Branch.
Administrative Assistant, Supply Branch,
.Supervising Architect.
Supervising Engineer.
Chief, Section of Painting and Sculpture.
ADVISORY COMMITTEE ON ARCHITECTURAL DESIGN

Charles Z. Klauder, Chairman.
Aymar Embury II.

Louis A. Simon,

Philip B. Maher,
Henry R. Shepley.

BOARD OF AWARDS

E. R. Witman, Chairman.
Breedlove Smith, Acting Chief Counsel, Legal
Neal A. Melick, Supervising Engineer.
Section.
W. C. Noll, Superintendent, Architectural Section. John H. Schaefer, Office Manager.
Nelson S. Thompson, Chief, Mechanical Engineer- John Weber, Secretary,
ing Section.
STANDING DEPARTMENTAL COMMITTEES
BUDGET AND I M P R O V E M E N T C O M M I T T E E
C. R. Schoeneman, Chairman.
F. A. Birgfeld, Vice Chairman.
W. N. Thompson.
D. S. Bliss.
L. C. Martin.
Edward F. Bartelt.
R. L. Harlow.

John H. Schaefer.
Arthur E. Wilson.
M. E. Slindee.
George 0 . Barnes.
Fred P. Trott.
Mary E. Switzer.
E. C. Nussear, Secretary.

C O M M I T T E E ON E N R O L L M E N T AND DISBARMENT
Guy C. Hanna, Chairman.
W.W.Cook.

Edwards H. Childs.
Charles C. G, Evans, Attorney for the Government,
C O M M I T T E E ON P E R S O N N E L

F. A. Birgfeld, Chairman.
James E. Harper.

(Vacant.)

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.
James E. Harper.




W. N, Thompson.
Frank Dow.

ANNUAL REPORT ON THE FINANCES
TREASURY DEPARTMENT,

WashingtoUj D. C.j January 5, 1937.
SIR: I have the honor to make the following report:
BUDGET RESULTS

Receipts
Total general and special account receipts amounted to $4,116,000,000 in the fiscal year 1936 as compared with $3,800,500,000 in
RECEIPTS (GENERAL AND SPECIAL ACCOUNTS). FISCAL YEARS 1927 TO 1936, BY
PRINCIPAL SOURCES
DOLLARS
[
_^
Billions
A// O t h e r
Foreign Obligations
Customs

1927

1928

1929

1930

1931

1932

1933 , 1934

1935

1936

CHART 1.

1935, an increase of $315,500,000. The invalidation of the processing
taxes on farm products by the United States Supreme Court decision
of January 6, 1936, and the subsequent repeal of the related cotton
ginning, tobacco sales, and potato stamp sales taxes resulted in a
decrease in revenue of $444,700,000 from these sources in the fiscal
year 1936. This loss in revenue, however, was more than offset
by increased receipts, aggregating $760,200,000, from all other
sources.
^
The trend in receipts by major sources for the fiscal years 1927 to
1936, inclusive, is shown in the chart above. A more detailed comparison of receipts for 1935 and 1936 is presented in the table on page 2.
93790—37

2




2

REPORT OF THE SECRETARY OF THE TREASURY
Receipts by major sources for the fiscal years 1935 and 1936
[In millions of dollars]

Internal revenue:
Income taxes:
Current corporation . .
Current individual
Back taxes
Excess-profits tax
.

_

1936

2 465. 4
448.2
185.6
6.6

2 610. 0
589.4
213. 5
14.5

+144. 6
+141.2
+27.9
+7.9

1,105.8
-.1

1,427. 4
-.8

+321. 6
-.7

_. 3 1,105.7

1, 426. 6

+320. 9

91.5
140.4
7L7
2 195. 4
2 215. 6
2 458. 8
43.1

94.9
218.8
160.1
2 256.1
2 249.1
2 500. 8
69.0.

+3.4
+78.4
+88.4
+60.7
+33.5
+42.0
+25.9

161.5
77.3
32.6
27.8
M2.8

177. 3
94.5
33.6
27.1
50.2

+15.8
+17.2
+1.0
—.7
+7.4

342.0

382.7

+40.7

19.7
9.5
15.4
27.3
a 39.4

2L1
9.8
17.1
2 11.7
8 13.3
2, 004. 5
+5.1

+1.4

_
_. .

Total income taxes (collection basis) _
. .
......
Adjustment to daily Treasury statement basis (unrevised)
Total income taxes
Miscellaneous internal revenue taxes:
Capital stock _
_
..
Estate
Gift
Distilled spirits and wines (including special taxes) .
Fermented malt liquors (including special taxes)
Tobacco
- .
Stamp
_

._

Manufacturers' excise taxes:
Gasoline
Automobiles, trucks, tires, tubes, and parts or accessories
Electrical energy
_
Lubricating oils -- Another
Total manufacturers' excise taxes
Telegraph, telephone, radio, and cable.
Transportation of oil by pipe line- . .
Admissions.
Coconut, etc., oils processed . . .
. .
All other miscellaneous
Total miscellaneous internal revenue taxes (collection basis)
Adjustment to daily Treasury statement basis (unrevised)
Total miscellaneous internal revenue taxes
Agricultural adjustment and related taxes
Other internal revenue
Total internal revenue
Custonos

-

_.
-_

.

Total internal revenue and customs
Miscellaneous receipts:
Proceeds of Government-owned securities:
Foreign obligations
Another
Seigniorage ^
All other miscellaneous receipts _ - - - _ .
Total miscellaneous receipts
Total receipts, general and special accounts. _

_.

-.

Increase
(+). decrease ( - )

1935

1, 649. 8

+.8

3 1, 650. 6 2,009.6

+354. 7
+4,3
+359. 0

76.7

-444. 7

3, 277. 7
343.4

3, 512. 9
386.8

+235. 2
+43.4

3, 621.1

3,899. 7

+278. 6

.7
38.1
58.0
82.6

.5
90.4
39.3
86.1

—.2
+52.3
-18.7
+3,5

521.4
. . .
---

+.3

+1.7
+4.4
-26.1

(0

179.4

216.3

+36.9

3,800. 5

4,116. 0

+315. 5

1 The detail of income taxes and miscellaneous internal revenue taxes is on the basis of internal revenue
conections, with totals adjusted to basis of daily Treasury statement (unrevised). Agricultural adjustment
and related taxes, customs, and miscellaneous receipts are shown on the basis of the daily Treasury statement (unrevised). General and special accounts are combined. For description of accounts and bases, see
p. 311.
2 Collections for credit to trust funds are not included.
3 Excess-profits tax cohections amounting to $6,560,483 have been excluded from miscellaneous internal
revenue collections and included instead with income taxes in order to place the 1935 figures on a comparaable basis with those for 1936.
4 Excludes $145,290 and $129,991 from excise taxes on candy and soft drinks, respectively, terminated
May 11, 1934, which are included in "All other miscellaneous."
5 Includes collections of $25,645,139 from the tax on checks, terminated Jan. 1, 1935.
8 Includes collections of $729,218 from the bituminous coal tax.
^ Taxes upon carriers and their employees, $48,279,
8 Exclusive of $140,111,441 in 1935 and $175,789,415 in 1936, representing seigniorage resulting from the
issuance of sHver certificates equal to the cost of silver acquired under the Silver Purchase Act of 1934 and
the amount returned for silver received under the President's proclamation dated Aug. 9,1934.




REPORT OF THE SECRETARY OF THE TREASURY

6

Income tax receipts constituted 35 percent of total receipts in 1936
as compared with 29 percent in 1935. Miscellaneous internal revenue
receipts increased from 43 percent of total receipts in 1935 to 49
percent in 1936. The increases in these ratios for 1936 were largely
the result of increased receipts from these sources, arid the decline in
receipts from the agricultural adjustment and related taxes which
constituted 14 percent of total receipts in 1935 andj only 2 percent
in 1936.
I
Income taxes.—Eeceipts from income taxes aggregated $1,426,600,000 in the fiscal year 1936 as compared with $1,105,700,000 in
1935, an increase of $320,900,000. This increase chiefiy reflected
higher levels of corporate and individual incomes and, for the first
time, the full effect of the Revenue Act of 1934.
1
Collections of current corporation income taxes increased $144,600,000 in 1936 over the preceding year. Approximately 55 percent
of this increase was collected in the first half of the fiscal year 1936,
reflecting the higher corporate incomes of the calendar year 1934 as
compared with 1933 and the effects of the Revenue Act of 1934.
The balance of the increase, resulting from collections in the last half
of the flscal year 1936, was due largely to the incre&.se in corporate
incomes in the calendar year 1935. Another factor| contributing to
increased current corporation income tax collections in the fiscal
year 1936 was the change in the Treasury's administration of depreciation allowances which then became fully effective. The latter
factor, together with the continued special efforts of the Bureau of
Internal Revenue to collect back taxes, resulted inj an increase in
collections from this source of $27,900,000 over the collections of 1935.
Current individual income tax collections were $141,200,000 greater
in the fiscal year 1936 than in 1935. A major portion of this increase
represented the rise in individual incomes in the calendar year 1935 as
compared with 1934.
|
Miscellaneous internal revenue taxes.—Receipts froin miscellaneous
internal revenue taxes amounted to $2,009,600,000 in the fiscal year
1936 as compared with $1,650,600,000 in 1935, an increase of $359,000,000. Collections from the leading revenue producing taxes of
this class are shown in the table on page 2. Approximately 93 percent of total miscellaneous internal revenue collections in 1936 came
from the following sources which are arranged in the order of their
revenue producing importance: Tobacco manufactures taxes, manufacturers' excise taxes, taxes on distilled spirits and I wines, taxes on
fermented malt liquors, the estate tax, the gift tax, j and the capital
stock tax. Collections from all of these taxes increased in the fiscal
year 1936 as compared with 1935.
j
Estate tax collections were $78,400,000 greater in 1936 than in
I935j reflecting the liigher value of taxable estates and the full effect



4

REPORT OF THE SECRETARY OF THE TREASURY

of the Revenue Act of 1934 which increased the rates of the additional
estate tax imposed by the Revenue Act of 1932. Collections from the
gift tax were more than twice as large in the flscal year 1936 as in
1935, due to an increase in the amount of taxable gifts and also to the
increased rates of tax under the Revenue Act of 1934.
Collections from the taxes on tobacco manufactures increased
$42,000,000 in the fiscal year 1936 to a new high level of $500,800,000.
This increase resulted chiefly from the continued upward trend of
consumption of small cigarettes.
Total collections from taxes on alcoholic beverages of $505,200,000
in the fiscal year 1936 exceeded the collections from this source for
any prior fiscal year. Taxes collected on distilled spirits and wines
and on fermented malt liquors increased $60,700,000 and $33,500,000,
respectively, over the comparable collections of the fiscal year 1935.
The manufacturers' excise taxes yielded $40,700,000 more revenue
in the fiscal year 1936 than in 1935. The greater portion of this
increase was due to larger collections from the taxes on gasoline,
automobiles, tires and tubes, and automobile accessories. Collections
from stamp taxes showed an increase of $25,900,000 in 1936 over the
preceding year, reflecting increases in refunding of security issues and
greater activity in trading on the stock exchanges. Moderate increases from other miscellaneous internal revenue taxes were more
than offset by the loss in revenue resulting from the repeal of the tax
on checks effective January 1, 1935, collections of which amounted
to $25,600,000 in the flscal year 1935.
The bituminous coal tax and the taxes upon carriers and their
employees were flrst effective in the flscal year 1936 and yielded
$729,218 and $48,279, respectively. The Bituminous Coal Conservation Act was declared unconstitutional by the United States
Supreme Court on May 18, 1936. On June 26, 1936, the District
Court of the United States for the District of Columbia declared
unconstitutional certain provisions of the Railroad Retirement Act
of 1935 and the taxes imposed upon carriers and their employees
under the act of August 29, 1935, and in a decree dated June 30, 1936,
enjoined the Commissioner of Internal Revenue from enforcing the
collection of these taxes, a 3-month payment of which was due prior
to June 30, 1936.
Agricultural adjustment and related taxes.—As the result of court
injunctions impounding these taxes, collections began to decline in
May 1935. On January 6, 1936, the United States Supreme Court
declared the Agricultural Adjustment Act unconstitutional. The act
of February 10, 1936, repealed the Kerr Tobacco Act, the Bankhead
Cotton Act of 1934 except section 24 thereof, and the Potato Act of
1935. Consequently, receipts from the agricultural adjustment and
related taxes show*ed a decline of $444,700,000 in the flscal year 1936.



REPORT OF THE SECRETARY OF THE TREASURY

0

I
Customs.—Customs receipts amounted to $386,800,000 in the flscal
year 1936, an increase of $43,400,000 over 1935. This increase was
chiefly due to larger collections on dutiable imports ofi wool, metals,
and agricultural products which more than offset the de|cline in collections on imports of sugar and of distilled spirits. jAlthough the
volume of imports of distilled spirits increased in the flscal year 1936,
the duties collected were less, owing to the reduction iii rates of duty
on rum, gin, and whisky under various reciprocal trade agreements.
Miscellaneous receipts.—Receipts from miscellaneous: sources were
$216,300,000 in 1936 as compared with $179,400,000 in 1935, an
increase of $36,900,000. These receipts include such items as proceeds from Government-owned securities, Panama; Canal tolls,
seigniorage, fees, flnes and penalties, rents and royalties, and sales
of Government property.
!
Expenditures
I
Total general and special account expenditures (including expenditures for recovery and relief) amounted to $8,879,800,000 for the flscal
year 1936, as compared with $7,375,800,000 in 1935, an increase of
$1,504,000,000. However, the figure for 1936 includes an expenditure of $1,673,500,000 for the veterans' adjusted jcompensation
payment made in accordance with the act of Janulary 27, 1936
(Public No. 425), directing the immediate payment of| the veterans'
adjusted service certificates, which under the original terms were not
due until 1945 and thereafter. If this payinent be deducted from
the expenditures for the fiscal year 1936, the total is $169,500,000 less
than total expenditures for the fiscal year 1935.
I
The trend in total expenditures and in the principal classes of
expenditures for the fiscal years 1927 to 1936 is shown in the chart on
page 8. A comparison of expenditures on a functional j basis for the
fiscal years 1935 and 1936 appears in the table beginning on page 6,
and another classification for the fiscal years 1932 to 1936, showing
recovery and relief expenditures classified as to provision for repayment is presented in the table beginning on page 364. !
Expenditures for 1932 and 1933 shown in the chart 'as ^'Recovery
and relief" include only those made from funds of the Reconstruction
Finance Corporation and subscription to stock of the I Federal land
banks. Other expenditures in 1932 and 1933 of an emergency nature
and all such expenditures in years prior to 1932 were made from
regular appropriations and general Treasury accounts. Therefore,
neither the totals of general expenditures nor the totals of recovery
and relief expenditures for the fiscal years 1934, 1935, |and 1936 are
comparable with the totals for prior fiscal years. General expenditures for years subsequent to 1933 follow the classification for those
years as carried in the daily Treasury statement of Julyj 15, 1936, and
include, in addition, recovery and relief expenditures for the Agricul


6

REPORT OF THE SECRETARY OF THE TREASURY

tural Adjustment Administration and for emergency conservation
work. This classification of expenditures is made to conform with
the classification shown in the most recent compilations of the
T^iireau of the Budget.
Expenditures by major functions, fiscal years 1935 and 1936 ^
[Adjusted to foHow Budget classification. In minions of dollars]

Class of expenditure

1936

Increase
(+)or
decrease

(-)
Regular departments and establishments: 2
Legislative and executive
Civil departments and agencies and the judiciary 3 *
Agricultural Adjustment Administration
Refunds of processing taxes
Emergency conservation work
Social Security Act, administrative expenses and grants..
Public buildings ^-_
Public highways ^
River and harbor work *
Postal deficiency
National defense <
.
Veterans' Administration *
•
Refunds of receipts, internal revenue and customs
Ah other <
Total regular departments and establishments-

20.1
348.9
711.8
31.2
435.5
25.3
55.1
64.0
533.6
605.6
45.2
34.3

2 2,910. 6 ! 3, 276. 9

Veterans' adjusted compensation payment
Public debt charges:
Interest
Retirements
Total public debt charges.
Recovery and relief:
Agricultural aid:
Commodity Credit Corporation
Farm Credit Administration (including Federal Farm Mortgage
Corporation)^
Federal land banks

Total relief..
Public Works:
Administrative expenses. Public Works Administration..
Boulder Canyon project
Loans and grants to States, municipalities, etc
Loans to raHroads
.
Pubhc highways
River and harbor work
Works Progress Administration
National defense
Other public works
Total public works..

+1.8
-f 105. 0
-179.3
-21.1
+50.8
+28.6
-10.2
+28.8
+16.3
+22.0
+230.8
+70.4
-1.0
+23.5
+366. 3

1, 673. 5 +1, 673. 5
820.9
573.6

749.4
403.2

1,394.5

1,152. 6

-71.5
-170.4

«60.1

129.7

+189. 8

141.4
48.0

6 33.2
60.5

-174.6
+12.5

157.0

+27. 7

^1,821.0
11.3
80.6

495.6
.6
2.9

-1,325.4
-10.7
• -77.7

1,912.9

499.1

-1,4.13.8

Total agricultural aid.
Relief:
Federal Emergency Relief Administration (including Federal
Surplus Relief Corporation)
Civn Works Administration...^..
_
_.
Drought-stricken areas (Department of Agriculture)

21.9
453.9
532.5
10.1
486.3
28.5
15.1
28.8
71.4
86.0
764.4
676.0
44.2
57.8

14.6
23.8
137.7
66.2
317.4
147.9
176.3
136. 5
1,020.4

25.3
+10. 7
10.0
-13.8
172.1
+34.4
6 127. 9
-194.1
215.1
-102. 3
+4.4
152.3
1, 263. 7 + 1 , 263. 7
147.3
-29.0
234.2
+97.7
2,092.1

+1,07L7

1 On basis of dany Treasury statements (unrevised), partly reclassified on the basis of compilations of
the Bureau of the Budget. See note 2.
2 Operation and maintenance expenditures only, exclusive of expenditures for public buOdings and
public works. Includes the following expenditures classified as "Recoverj'' and relief" in the daily Treasury statements: Expenditures for the Agricultural Adjustment Administration and for emergency conservation work.
3 Expenditures of the judiciary not available separately.
< Additional expenditures for these accounts included under "Recovery and relief."
6 Excess of credits, deduct.
6 Additional expenditures for Farm Credit Administration included under "CivH departments and
agencies and the judiciary", above.
1 Revised; includes transfer of $110,000 from the Farm Credit Administration and $6,542,000 from the
Reconstruction Finance Corporation.




REPORT OF THE SECRETARY OF THE TREASURY
Expenditures by major functions, fiscal years 1935 and 1936-—Continued
[Adjusted to follow Budget classification.

In millions of dollars]

1935

Class of expenditure

1936

Increase
(+)or
decrease

(-)
Recovery and relief—Continued.
Aid to home owners:
Home loan system
Emergency housing..
Federal Housing Administration
Resettlement Administration
Subsistence homesteads

75.7
6.5
15.9
1.7
3.7

_

Total aid to home owners.

Miscellaneous:
Export-Import Banks of Washington
Federal Deposit Insurance Corporation
Administration for Industrial Recovery . .

_.

Total miscehaneous
Total recovery and relief
Total expenditures

_

-38.3
+18.4
-1.4
+136. 2
-3.6

214.8

+111.3

5 238. 7

-96.8

36.1

27.8

-8.3

5 2.6
.5
12.5

19.6

+22. 2
—.5
-7.4

103.5

Reconstruction Finance Corporation, direct loans and expenditures.. 5 8 141. 9
Tennessee Valley Au thority

37.4
24.9
14.5
137.9
.1

5.1

10.4

24.7

+14.3

3,070. 7

2, 776. 8

-293.9

7, 375. 8

8.879.8

+1, 504. 0

« Excess of credits, deduct.
8 Revised; $6,542,000 transferred to the Federal Emergency Relief Administration.

Expenditures for the operation and maintenance of regular departments and establishments of the Government (exclusive of public
debt charges) amounted to $3,276,900,000 in the fiscal year 1936, an
increase of $366,300,000 over the preceding year. This increase was
principally accounted for by the following: $230,800,000 for national
defense—to construct naval vessels, aircraft, and subsidiary works in
order to meet provisions of the naval treaties of 1922 and 1930, for
additional naval personnel, and to provide replacement and improvement of equipment for the Army—including an adjustment of repayments deposited by Army disbursing officers amounting to $65,600,000
(see note 4, p. 38); $105,000,000 for civil departments and agencies and
the judiciary, to provide for increased personnel, money for the
restoration of the final 5 percent of the salary reduction, expenditures
from regular appropriations for the construction programs of the
Boulder Canyon project and the Tennessee Valley Authority; $70,400,000 for the Veterans' Administration, reflecting chiefly an increase of
$50,000,000 in the contribution to the veterans^ adjusted service certificate fund; $50,800,000 for emergency conservation work, to provide
for the additional personnel engaged in the work in 1936; $28,800,000
representing expenditures for public highways from regular appropriations; $28,500,000 under the Social Security Act for administrative
expenses and grants, which commenced late in the fiscal year;
$22,000,000 on account of the postal deficit; and $23,500,000 for all
other operation and maintenance expenditures, which includes an
increase of approximately $20,000,000 in the contribution to the



8

REPORT OF THE SECRETARY OF THE TREASURY

civil service retirement and disabiUty fund. These increases were, in
large part, offset by a decrease of $200,400,000 in expenditures for the
Agricultural Adjustment Administration and for refunds of processing
taxes due to the interruption of that program by the Supreme Court
decision and the consequent postponement of expenditures, and by a
decrease of $10,200,000 in expenditures for pubhc buildings because
of the practical completion of the regular public building program
under the act of May 26, 1926. Additional expenditures for some
EXPENDITURES (GENERAL AND SPECIAL ACCOUNTS, INCLUDING .RECOVERY AND
RELIEF), FISCAL YEARS 1927 TO 1936, BY PRINCIPAL CLASSES
DOLLARS.
Billions

.DOLLARS
Billions

5

of these purposes were made from recovery and relief funds and are
shown as such.
Public debt charges totaled $1,152,600,000 in 1936, as compared
with $1,394,500,000 in 1935, a decrease of $241,900,000, of which
$170,400,000 represented a smaller amount of debt retirement and
$71,500,000 a decrease in interest charges. A detailed discussion of
public debt operations and expenditures is presented on pages 10 to 23.
Total expenditures for recovery and relief amounted to
$2,776,800,000 in 1936, or $293,900,000 less than in 1935. This total



REl^ORT OF THE SECRETARY OF THE TREASURY

9

is a net figure after taking into consideration the earnings of certain
agencies of the Government and the repayments of loans to these
agencies.
Expenditures for agricultural aid aggregated $157,000,000 in 1936,
an increase of $27,700,000 over 1935. This was chiefly the result of
an increase in expenditures of $189,800,000 by the Commodity
Credit Corporation, representing in the most part the purchase of
producers' cotton loans held by commercial banks. On the other
hand, recovery and relief expenditures of the Farm Credit Administration (inciudiug the Federal Farm Mortgage Corporation) were
$174,600,000 less than in 1935, due in large part to lower expenditures for loans and relief in stricken agricultural areas. Expenditures for the Federal land banks increased $12,500,000 over 1935,
reflecting further payments to the Federal land banks for the reduction in interest rates on mortgages held by such banks.
Total expenditures for relief in 1936 amounted to $499,100,000, a
decrease of $1,413,800,000 as compared with 1935. This decrease
was almost entirely the result of the substitution in 1936 of work
relief under the Works Progress Administration for direct relief.
Expenditures of the Federal Emergency Relief Administration
(including the Federal Surplus Rehef Corporation) declined from
$1,821,000,000 in 1935 to $495,600,000 in 1936; expenditures of the
Civil Works Administration in 1936 were only $600,000, a decrease of
$10,700,000 from 1935; and expenditures of the Department of Agriculture for relief in drought-stricken areas amounted to $2,900,000,
a decrease of $77,700,000 from the amount expended in 1935, occasioned by severe drought conditions during the summer of 1934.
Expenditures for the emergency public works program increased
from $1,020,400,000 in 1935 to $2,092,100,000 in 1936. The Works
Progress Administration, which commenced operations in 1936,
expended $1,263,700,000 for work rehef. Public works expenditures for national defense decreased $29,000,000, while expenditures for other departments showed an increase of $97,700,000,
chiefly accounted for by the Labor, Agriculture, and Treasury
Departments. Small increases occurred in administrative expenditures of the Public Works Administration in loans and grants made
to States, municipalities, etc., and in expenditures for river and
harbor work. Substantial decreases appear in recovery and relief
expenditures for public highways and for loans to railroads, and a
small decrease occurred in expenditures for the Boulder Canyon
project. However, these decreases in expenditures for public highways and for the Boulder Canyon project were partially offset by
increases in the expenditure of regular funds for these purposes.
Total aid to home owners increased $111,300,000 in 1936, largely
the result of an increase of $136,200,000 in expenditures of the



10

REPORT OF THE SECRETARY OF THE TREASURY

Resettlement Administration which commenced operations April 30,
1935. Expenditures for emergency housing increased $18,400,000,
while those of the home loan system decreased $38,300,000 due
chiefly to the consummation in 1935 of the purchase by the Reconstruction Finance Corporation of the capital stock of the Home
Owners' Loan Corporation. Smaller decreases occurred in expenditures of the Federal Housing Administration and for subsistence
homesteads.
Earnings and repayment of loans received by the Reconstruction
Finance Corporation in 1936 exceeded direct loans and expenditures
of the Corporation as was also the case in the previous year; however,
the excess was $96,800,000 greater in 1936 than in 1935, resulting
in net receipts of $238,700,000 as compared with $141,900,000 in
1935. Expenditures of the Tennessee Valley Authority from recovery
funds decreased from $36,100,000 in' 1935 to $27,800,000 in 1936.
Additional expenditures during the fiscal year 1936 for the construction program of the Tennessee Valley Authority were included in
the general public works program and financed from regular appropriations.
Expenditures classified as ^'Miscellaneous" increased $14,300,000
in 1936 due chiefly to an increase in loans by the Export-Import
Bank of Washington.
Deficit
The deficit for the fiscal year 1936 amounted to $4,764,000,000,
which included $403,000,000. for statutory debt retirement. After
deducting this amount there was a net deficit of $4,361,000,000 as
compared with a net deficit in 1935 of $3,002,000,000. This increase
of $1,359,000,000 over the previous year was due largely to the noncollection of processing taxes and to the payment of the adjusted
service certificates.
THE PUBLIC DEBT

At the clc)se of the fiscal year 1936, the gross public debt outstanding
amounted to $33,778,543,494, as compared with $28,700,892,625 outstanding on June 30, 1935, an increase of $5,077,650,869. This
increase is partially due to the payment of adjusted service certificates
with adjusted service bonds, of which $944,516,650 were outstanding
on June 30, 1936, and to an increase of $840,164,664 in the balance in
the General Fund between June 30, 1935 and 1936. The net changes
brought about during the year in the various classes of securities
which make up the outstanding debt are shown in the two following
tables, the first presenting a comparison by classes of the amounts
outstanding at the. beginning and at the end of the year, and the
second showing, in summary form, the public, or open market, issues
and maturities or redemptions.



11

REPORT OF THE SECRETARY OF THE TREASURY
Changes in public debt outstanding June 30, 1935 and 1936, by classes
[On basis of daily Treasury statements (unrevised), see p. 311]
June 30, 1935
Interest-bearins: debt:
Public issues:
Pre-war and postal savings bonds...
Liberty bonds
Treasury bonds
._
United States savings bonds
__.
Treasury notes
Treasury bills
Total public issues...
Restricted issue: A d j u s t e d
bonds 3

service

Special issues for investment of trust
funds, etc.:
Treasury notes
•
Certificates of indebtedness
Total special issues

Increase (+) or
decrease (—)

June 30, 1936

$199, 575, 520. 00 -$655,687,950.00
$855, 263,470. 00
-1,246,230,750.00
1 1, 246, 230, 750. 00
12, 683, 570, 300. 00 17,167,930,100.00 +4, 484, 359, 800. 00
2 62, 047, 818. 75
2 316,124, 814. 50
+254, 076,995. 75
14, 847,112, 338. 75
10,023, 251, 900. 00
2,052,898,000.00

17, 683, 630, 434. 50 4-2, 836, 518,095. 75
11, 380,985, 050. 00 +1, 357, 733,150. 00
2, 353, 516, 000. 00
+300,618,000.00

26,923, 262, 238.75

31,418,131,484. 50

+4, 494, 869, 245. 75

944, 516, 650. 00

+944, 516, 650. 00

477, 742, 000.00
155, 500, 000. 00

480, 433, 000. 00
145, 709, 000. 00

+2, 691, 000. 00
- 9 , 791, 000. 00

633, 242, 000. 00

626,142, 000. 00

-7,100,000.00

Total interest-bearing debt
...
Matured debt on which interest has ceased...
Debt bearing no interest

32,988,790,134.50 +5, 432, 285, 895. 75
27, 556, 504, 238.75
-150.035,610.00
169, 363, 395. 26
4 319, 399, 005. 26
620, 389,963. 97
-204,599,416.55
824,989, 380. 52

Total gross debt
Net balance in General Fund

28, 700, 892, 624. 53
1, 841, 345, 539. 47

33, 778, 543, 493. 73 +5, 077, 650, 869. 20
2,681,510,203.96
+840,164, 664. 49

26, 859, 547,085. 06

31, 097, 033,289.77

Gross debt less net balance in General
Fund
.

+4, 237,486, 204. 71

1 Excludes $88,736,850 estimated amount of called Fourth iU's on'which interest bad ceased.
2 Cash receipts transferred to the Treasurer of the United States, less redemptions. For full account
of sales, see p. 19.
3 Issued only in payment of adjusted service certificates. The corresponding figure on the revised daily
Treasury statement basis is $711,260,300. The difi'erence is due to the large amount of bonds in the process
of redemption OD June 30, 1936.
* Includes $88,736,850 referred to in note 1.

Public issues, maturities, and redemptions during the fiscal year 1936
[On basis of daily Treasury statements (unrevised), see p. 311]
Issued
Interest-bearing debt:
Public issues:
Pre-war and postal savings bonds..
Liberty bonds
Treasury bonds
United States savings bonds
Treasury notes..
Treasury bills...
Total.

$20, 744, 000
1 4,484, 361, 300
2 265, 239, 521

Maturities and
redemptions

$676, 431, 950. 00
1, 246, 230, 750. 00
1, 500. 00
11,162, 525. 25

4,770, 344,821 1,933, 826, 725. 25
3 3, 385, 783, 550 2, 028, 050, 400. 00
3, 556,159, 000 3, 255, 541, 000. 00
11, 712, 287, 371 7, 217, 418,125. 25

1 Includes $326,400 received in 1936 for 2li percent Treasury bonds of 1955-60 offered in prior year.
2 Gash receipts transferred to the Treasurer of the United States.
3 Includes $190,100 received in 1936 for Treasury notes offered in prior year.

The composition of the interest-bearing public debt outstanding, by
types of obligations, monthly, January 1927 to June 1936, in percent
of the total, is shown in chart 3 on page 13. The various maturities,
by calendar years, of the interest-bearing debt outstanding on June
30, 1933 to 1936, are shown in chart 4 on page 15.



12

REPORT OF THE SECRETARY OF THE TREASURY

On the basis of the interest-bearing debt outstanding at the beginning and at the end of the year, the computed annual interest charge
was increased from $750,677,802 ^ to $838,002,053, and the computed
average rate of interest was reduced from 2.716 to 2.559 percent.
Actual expenditures for interest during 1936 were $749,396,802.
The course of the interest-bearing debt outstanding and of the computed rate of interest thereon from January 1919 through June 1936,
is shown in chart 5 on page 16 and in table 34 on page 442.
Treasury bonds, notes, and bills issued during the year
Public issues during the year included eight issues of Treasury bonds,
in the total amount of $4,484,034,900,^ of which $2,301,699,900 was
for cash and $2,182,335,000 in exchange for maturing securities; and
five issues of Treasury notes in the total amount of $3,385,593,450,^ of
which $2,590,266,150 was for cash and $795,327,300 in exchange for
maturing securities. An account of these issues follows.
On June 24, 1935, the Treasury offered for cash on a bid basis, at
not less than par and accrued interest, an additional issue of $100,000,000, or thereabouts, of 3 percent Treasury bonds of 1946-48,
dated June 15, 1934, to be issued as of July 1, 1935. Tenders aggregating $461,341,000 face amount of the bonds were received, of which
$112,669,000 were accepted at an average price of about 103^?^2 and
accrued interest, with a total premium of $4,005,378.18 realized.
On July 8, 1935, the Treasury offered for cash subscription, at par
and accrued interest, $500,000,000, or thereabouts, of 1% percent
Treasury notes of series B-1939, dated July 15, 1935, and maturing
December 15, 1939. Subscriptions aggregating $2,970,169,700 were
received, of which $526,233,000 were accepted.
The Treasury offered for cash on a bid basis, at not less than par
and accrued interest, on July 15, July 29, and August 12, 1935, additional issues, each of $100,000,000, or thereabouts, of 2% percent
Treasury bonds of 1955-60, dated March 15, 1935. For the first
offering, with the bonds issued as of July 22, 1935, tenders aggregating $510,958,000 face amount of bonds were received, of which
$101,971,000 were accepted at an average price slightly above 10P%2
and accrued interest, with a premium of $1,631,979.42 realized. For
the second offering, with the bonds issued as of August 5,1935, tenders
aggregating $320,981,000 face amount of bonds were received, of
which $106,541,000 were accepted at an average price of about 10P%2
and accrued interest, with a premium of $1,664,723.18 realized. For
the third offering, with the bonds issued as of August 19, 1935, tenders
aggregating $147,264,000 face amount of bonds were received, of
1 Revised to include United States savings bonds.
2 Excludes $326,400 exchange subscriptions relating to the prior fiscal year, but settled for during the
fiscal year 1936.
3 Excludes $190,100 consisting of $155,100 exchange subscriptions and $35,000 cash subscriptions relating
to the prior fiscal year, but settled for during the fiscal year 1936.




REPORT OF THE SECRETARY OF THE TREASURY

13




14

REPORT OF THE SECRETARY OF THE TREASURY

which $98,215,000 were accepted at an average price of about 100^^2
and accrued interest, with a premium of $777,150.24 realized.
On September 3, 1935, as the final act in refunding the Fourth
Liberty Loan, the Treasury offered an issue of 2% percent Treasury
bonds of 1945-47, dated September 16, 1935, maturing September 15,
1947, but callable on and after September 15, 1945, and an issue of
1}^ percent Treasury notes of series C-1939, dated September 16,
1935, and maturing March 15, 1939, both in exchange for Fourth
Liberty Loan 4}^ percent bonds of 1933-38 called for redemption on
October 15, 1935, in an amount of about $1,246,000,000. At the
same time cash subscriptions at par and accrued interest were invited
for $500,000,000, or thereabouts, of the Treasury notes. A total of
$997,897,200 of the called Fourth Liberty Loan bonds was exchanged,
$568,717,800 for the bonds and $429,179,400 for the notes. Cash
subscriptions for the notes aggregated $1,274,565,350, of which $512,434,350 were accepted.
On December 2, 1935, there were offered for cash subscription, at
par and accrued interest from September 16 to December 16, 1935,
an additional issue of $450,000,000, or thereabouts, of 2% percent
Treasury bonds of 1945-47, and also for cash subscription, at par and
accrued interest, $450,000,000, or thereabouts, of IK percent Treasury
notes of series C-1940, dated December 16, 1935, and maturing
December 15, 1940. At the same time the holders of 2^ percent
Treasury notes of series D-1935, maturing December 15, 1935, in
the amount of $418,291,900, were offered the privilege of exchanging
such notes for either the Treasury bonds or the new Treasury notes.
Cash subscriptions aggregating $2,034,979,700 were received for the
bonds, of which $484,423,400 were accepted. For the notes, cash
subscriptions aggregating $2,487,264,900 were received, of which
$487,808,700 were accepted. The total issues for cash were $972,232,100. Of the maturing notes, a total of. $410,665,600 was exchanged,
$161,312,700 for the bonds and $249,352,900 for the notes. The
issue of the Treasury bonds for cash and exchange was $645,736,100
and of the Treasury notes, $737,161,600.
On March 2, 1936, there were offered for cash, at par and accrued
interest, $650,000,000, or thereabouts, of 2% percent Treasury bonds of
1948-51, dated March 16,1936, maturing March 15,1951, and callable
on and after March 15, 1948, and $600,000,000, or thereabouts, of IK
percent Treasury notes of series A-1941, dated March 16, 1936, and
maturing March 15, 1941. At the same time the holders of 2%
percent Treasury notes of series C-1936, maturing April 15, 1936,
in the amount of $558,819,200 were offered the privilege of exchanging
such notes either for the Treasury bonds or the Treasury notes at par
with an adjustment of accrued interest as of March 16. For the cash
offering of Treasury bonds, subscriptions received aggregated




15

REPORT OP THE SECRETARY OF THE TREASURY
MATURITY, BY CALENDAR YEARS. OF THE INTEREST-BEARING PUBLIC DEBT
OUTSTANDING i AS OF JUNE 30, 1933 TO 1936

DOLLARS
Billions

DOLLARS
Billions

As of June 30

1933

I I I I I I I I

1933

'35

'37

'39

'41

'43

'45

'47

'49

'51

'53

'55

'57

'59

'61

As of June 30

1934

1933

'35

-37

'39

'41

'43

'45

'47

'49

'51

'5 3

'5 5

'57

'59

'61

1933

'35

'37

'39

'41

"43

'45

'47

'49

'51

'53

'55

'57

"59

'61

'51

'5 3

'55

'57

'59

'61

As. of June 30

1936

1933

'35

'37

'39

-41

'43

45

47

49

CHART 4.

^.Exclusive of consols, postal savings bonds, United States savings bonds, adjusted service bonds, and
special obligations issued to governmental trust funds and agencies. Certificates of indebtedness are
included with Treasury notes.




16

REPORT OF THE SECRETARY OF THE TREASURY

$5,106,913,850, of which $727,033,950 were accepted; and for the
notes, subscriptions received aggregated $3,354,464,300, of which
$628,625,600 were accepted. Of the notes maturing April 15,
$496,462,900 were exchanged for the Treasury bonds and $48,082,000
were exchanged for the Treasury notes, making the total exchanges
$544,544,900. The issue of the Treasury bonds for cash and exchange
was $1,223,496,850 and of the Treasury notes, $676,707,600.
INTEREST-BEARING DEBT OUTSTANDING » AND COMPUTED RATE OF INTEREST
THEREON, BY MONTHS, JANUARY 1919 TO JUNE 1936
DOLLARS
B i l l i o n ss

DOLLARS
E
Billions

J

f

^

• ^ ^ ^

{-

-K^

/

7|

2rQSt - B e a i 'ing L'Xibt

/

-^

20

y
PER
CENT

PER
CENT

^••••**

..y-'

•%.
""--^..
r
•
1 '•\...
Computed Interest Rate /

\

.A

--i.^.

s...

3.0

3 0
) • :

\.

1925

1927

\

1929

CHART 5.

On June 1, 1936, the Treasury offered for cash, at par and accrued
interest, $600,000,000, or thereabouts, of 2^ percent Treasury bonds
of 1951-54, dated June 15, 1936, maturing June 15, 1954, and
callable on and after June 15, 1951, and $400,000,000, or thereabouts,
of 1% percent Treasury notes of series B-1941, dated June 15, 1936,
and maturing June 15, 1941. The holders of 1% percent Treasury
notes of series E-1936, maturing June 15, 1936, in the amount of
$686,616,400, and of 3^ percent Treasury notes of series A-1936,
1 On basis of daily Treasui-y statement (revised).




REPORT OF THE SECRETARY OF THE TREASURY

17

maturing August 1, 1936, in the amount of $364,138,000, were offered
the privilege of exchanging such notes either for the Treasury bonds
or for the Treasury notes, exchanges to be made at par with an adjustment of accrued interest as of June 15 on the notes maturing August 1.
For the Treasury bonds, cash subscriptions aggregating $4,281,967,000
were received, of which $670,846,550 were allotted. For the Treasury
notes, cash subscriptions aggregating $2,772,780,900 were received, of
which $435,164,500 were allotted. Of the two series of maturing
notes, $678,410,100 of those maturing June 15 were exchanged,
$619,910,100 for the Treasury bonds and $58,500,000 for the Treasury
notes, and of those maturing August 1, $346,144,500 were exchanged,
$335,931,500 for the bonds and $10,213,000 for the notes. The issue
of the Treasury bonds for cash and exchange was $1,626,688,150 and
of the Treasury notes, $503,877,500.
Weekly offerings for cash of moderate amounts of Treasury bills
on a bid basis continued throughout the year. Seventy-one series
were offered, for which tenders aggregating $10,758,090,000 were
received and $3,556,159,000 were accepted. The highest rate, computed on a bank discount basis, for any issue was 0.253 percent for
273-day bills issued October 2, 1935, and the lowest rate was 0.052
percent for 273-day bills issued July 17, 1935. During the year 61
series, aggregating $3,255,541,000, matured, and the amount outstanding at the beginning of the year, $2,052,898,000, increased by
$300,618,000 to $2,353,516,000 at the close of the year.
Further details concerning the public issues and the maturities
during the year are set forth in the statement appearing as table 27,
beginning on page 435. All official circulars and statements relating
to these transactions are included in the exhibits beginning on page 215.
Refunding of the Fourth Liberty Loan
The refunding of the Fourth Liberty Loan was begun in October
1933 and brought to a successful conclusion in October 1935. In
reports for the fiscal years 1934 and 1935, accounts were given of the
operations during those years, and elsewhere in this report there is
an account of the final action taken through the offering, on September
3, 1935, of 2% percent Treasury bonds of 1945-47 and 1^ percent
Treasury notes of series C-1939 in exchange for Fourth Liberty Loan
4K percent bonds included in the fourth and final call for redemption
on October 15,1935. A summary of the refunding operations follows:

93790—37-




18

REPORT OF THE SECRETARY OF THE TREASURY
Summary of refunding of the Fourth Liberty Loan

Original issue, Oct. 24,1918
Redeemed prior to first call
___.
Outstanding at date of first call, Oct. 12, 1933
Exchanged for:
Treasury bonds:
4H-3M's 1943-45, dated Oct. 15, 1933
.i
$900,716,550
3H's 1944-46, dated Apr. 16, 1934:
Apr. 16,1934
$827,496,200
Sept. 15, 1934
456,898,300
1,284, 394, 500
2Ji's 1955-60, dated Mar. 15, 1935
1,558, 022, 650
2M's 1945-47, dated Sept. 16, 1935
568,717,800
Total bonds issued on exchange...
Treasury notes:
2J^'s series D-1938, dated Sept. 15, 1934
IJ^'s series C-1939, dated Sept. 16, 1935

.:

$6,964,581,100
696,486,950
6,268,094,150

$4,311,851, 500
596,416,100
429,179,400

Total notes issued on exchange
Total exchanged
Redeemed for cash
Total exchanges and redemptions for cash.

,

'
•

Balance outstanding June 30,1936, on which interest has ceased

1,025,595,500
5,337,447,000
872,434,000
6,209,881,000
58,213,150

Of the Fourth Liberty Loan bonds outstanding on October 12,1933,
85 percent were exchanged for other issues, 14 percent were redeemed
for cash to June 30, 1936, and 1 percent remained outstanding on
the latter date. On the exchanged portion of the bonds the annual
interest charge was reduced $74,044,382.18, and the saving of interest
to the maturity date originally fixed for the bonds, October lo, 1938,
will be $267,049,219.27.
Redemption of the 2 percent bonds
In the report for 1935, an account was given of the calls for redemption on July 1 and August 1, 1935, respectively, of the outstanding
2 percent consols of 1930 and the 2 percent Panama Canal bonds,
and of the plans for the retirement of the bond-secured circulation of
national banks. Of the $599,724,050 of the consols outstanding on
their call date, $596,705,650 were redeemed during the year, and
$3,018,400 remained outstanding June 30,1936; and of the $74,901,580
of the Panamas, $74,687,260 were redeemed and $214,320 remained
outstanding June 30, 1936. For details as to the retirement of
national bank circulation secured in part by the 2 percent bonds, see
page 46.
Postal savings bonds
The act of June 25, 1910, establishing the Postal Savings System,
authorized the issue, against the surrender of postal savings deposits,
of 20-year 2}^ percent United States bonds, known as postal sa\^ings
bonds, redeemable after one year from date of issue. The act of
February 4, 1935, amending the Second Liberty Bond Act, authorized
the issue of United States savings bonds, against the surrender of
postal savings deposits, and directed that no further issues of postal
savings bonds should be made after July 1, 1935.



REPORT OF THE SECRETARY OF THE TREASURY

19

The first series of postal savings bonds was issued on July 1, 1911,
and subsequent series were issued at 6-month intervals, the last and
final series amounting to $20,744,000, being issued on July 1, 1935.
Altogether 49 series, aggregating $129,128,940, were issued. Ten
series matured prior to June 30, 1936, on which date 39 series, aggregating $120,881,020, were outstanding. A series matures each January 1 and July 1, the maturity of the final 49th series being July 1,
1955.
United States savings bonds
United States savings bonds of the initial issue, termed series A,
were first offered on March 1, 1935, and continued on sale until
December 31, 1935, when they were replaced with bonds of series B .
No change was made in the general terms of the bonds of the new
series.
These bonds are issued on a discount basis at a price of $75 for
each $100 maturity value, in denominations of $25, $50, $100, $500,
and $1,000 (maturity value), and only in fully registered and nontransferable form. A single ownership of bonds issued in any one
calendar year is limited to $10,000 (maturity value). These bonds
are dated on the first day of the month in which sold and mature
10 years from such date. After 60 days from the issue date (i. e.,
the first day of the month in which sold, not the actual date of sale)
and within 1 year, they are redeemable at the option of the owner
at the original sales price. After 1 year from the issue date and at
6-month intervals thereafter the redemption value is increased according to a fixed schedule, reaching maturity value 10 years from the
issue date. The Postal Service, through about 15,000 post offices,
continues as the chief agency for the sale of these bonds. In addition,
direct mail subscriptions have been received since the beginning of
the sale of the bonds by the Treasury Department, and toward the
close of the fiscal year the Federal Keserve banks also commenced
to receive such subscriptions.
During the fiscal year 1936, United States savings bonds in the
aggregate maturity value of $369,969,800 were sold, for which cash
aggregating $277,477,350 was received. Kedemptions during the
fiscal year, on the basis of daily Treasury statements (revised).




20

REPORT OF THE SECRETARY OF THE TREASURY

amounted to $11,252,714.75, or 4.06 percent of sales.
months and denominations follow:

Sales by

Sales of United States savings bonds, by months and denominations, July 1935 to
June 1936
$25

$50

$100

$500

$1,000

Total

Month
Maturity value
1935—July
August
September
October...
November.
December.
1936—January...
February..
March
April
May
June
-

$412,200
314,000
292, 650
510,850
512,100
680,975
738,475
547,975
608, 025
576,975
515,900
737,175
6,447,300

$653, 700 $3, 231, 200 $6, 018, 500 $17, 594, 000 $27,909, 600
478, 350 2, 227, 500 ' 3,575,500
9,498,000
16,093,350
435,800
1,812,900
7,190,000
12, 555, 350
2,824,0C0
3, 602, 900 6, 214, 500 15,379,000
831, 600
26,538, 850
807,150
3,381,900
5, 791, 500 14,535, 000 25, 027, 650
1,099, 600 3, 609, 500 7,951, 000 21, 587, 000 34,928, 075
1,145,450
5, 202,900 9,939, 500 43, 111, OCO 60,137, 325
938, 600
3, 629,300 5,979,000 19,795,000
30, 889,875
1, 017, 200 4, 037, 300 6,847, 500 23, 254, 000 35, 764, 025
953,450
3, 881, 600 6, 557, 500 22,807, 000 34, 776, 525
862, 650
3,493,900
5, 705,000 19,108, 000 29, 685,450
1, 396, 750 4, 791,800 7,064,000 21, 674,000
35, 663, 725
10, 620,300 42,902,700

369,969,800

Cash receipts

Total...
4,835,475

Total

74,467,500 235,532,000

7,965,225

32,177,025

55,850,625 176,649,000

277,477,350

The above table is compiled on the basis of the final Treasury audit
of sales by the Postal Service and the Federal Reserve banks during
the fiscal year 1936. These figures are not in agreement with those
presented elsewhere in this rej)ort, as receipts from sales through the
Postal Service, while deposited in the Treasury currently, are not
transferred from the account of the Postmaster General to that of the
Treasurer of the United States until after the receipt and audit of postmasters' accounts of sales, with the result that public debt receipts on
account of such sales are not shown as such in the Treasurer's books
until some time after the close of the month in which the sales were
made.
As set forth in the report for 1935, sales of savings bonds for the
period March 1 to June 30, 1935, aggregated $128,487,450 (maturity
value), for which cash receipts of $96,365,587.50 were received in
the Treasury. Accordingly, the total issues of these bonds from their
initial offering on March 1, 1935, to June 30, 1936, aggregated
$498,457,250 (maturity value) against cash receipts of $373,842,937.50.
Redemptions of these bonds, at the option of owners, during the same
period, aggregated $11,783,602.25 (redemption value) for bonds with
a maturity value of $15,679,050.
Department Circular No. 554, as amended, datedlDecember 16,
1935, offering United States savings bonds, series B, for sale, and
Department Circular No. 530, as amended, dated December 2, 1935,
prescribing regulations governing the bonds, will be found as exhibits
20 and 23 on pages 242 and 247 of this report.



REPORT OF THE SECRETARY OF THE TREASURY

21

Adjusted service bonds
The Adjusted Compensation Payment Act, 1936, enacted January
27, 1936, provided for the immediate payment of the face amount of
adjusted service certificates less outstanding loans and unpaid accrued
interest thereon to September 30, 1931. All unpaid loan interest
which accrued subsequent to September 30, 1931, was canceled insofar
as the veteran was concerned. The act provided for application by
the veteran for payment, certification by the Administrator of
Veterans' Affairs of the amount due, and payment by the Secretary
of the Treasury. Payment to the veteran was authorized to be
made on or after June 15, 1936, by the issuance of nonnegotiable but
immediately redeemable bonds in the denomination of $50 having a
total face value up to the highest multiple of $50 contained in the
^mount due, the odd amount to be paid by the issuance of a check.
"It was provided that the bonds be dated June 15, 1936, and mature on
June 15, 1945, but be subject to redemption at the option of the
veteran at any time and at such places, including post offices, as the
Secretary of the Treasury might designate. Interest on the bonds
accrues at the rate of 3 percent per annum from June 15, 1936,
to June 15, 1945, unless the veteran chooses to redeem them at an
earher date, in which event interest is payable to date of redemption,
but no interest is payable on any bond redeemed prior to June 15,1937. ^
Section 5 of the act provided for the redemption of adjusted service
certificates held by the United States Government life insurance fund
on account of loans made thereon by issuing to that fund bonds of the
United States bearing interest at the rate of 4^ percent per annum.
These bonds may not mature or be called until the expiration of at
least 10 years from the date of issue, except that any of these bonds
may be redeemed at any time upon the certification by the Administrator of Veterans' Affairs that the amount represented by the bond
is required to meet current habilities.
In the Independent Offices Appropriation Act, 1937, approved
March 19, 1936, there was appropriated to the adjusted service
certificate fund $1,730,000,000, and in addition such amount as
represents the face amount of the bonds required to be paid to the
United States Government hfe insurance fund pursuant to section 5
of the Adjusted Compensation Payment Act.
The Veterans' Administration designated a number of its field
stations to accept and act upon applications for payment of adjusted
service certificates under the Adjusted Compensation Payment Act.
To facilitate operations and in order to maintain close contact with
Veterans' Administration offices handling the applications, the
Treasury Department set up a disbursing unit in each of the Federal
Reserve banks with the exception of the Federal Reserve Bank of



22

REPORT OF THE SECRETARY OF THE TREASURY

Richmond, which was served from Washington. The procedure
established required the Veterans' Administration field offices to
certify to the Treasury disbursing unit for the district in which the
offices were located the amount due each veteran whose application
had been approved. The disbursiag officer then prepared a check for
the amount to be paid in cash and forwarded the Veterans' Administration certification and the check to the Federal Reserve bank for
the issuance of the proper number of $50 bonds in accordance with
the amount found due by the Veterans' Administration. In Washington, D. C , these matters were handled between the central office
of the Veterans' Administration and the Treasury Department. In
order to have deliveries made as promptly as possible after June 15,
1936, arrangements were made with the Post Office to turn over to
postmasters, several days in advance of the dehvery date, aU bonds
and checks that had been completed up to that time. The delivery
procedure required that personal delivery be effected and a receipt
obtained from the veteran.
At the close of business June 30, 1936, the Treasury disbursing
units had drawn, under the Adjusted Compensation Payment Act,
checks aggregating $1,745,184,345.98, of which $1,669,548,500 was in
payment of adjusted service bonds to be issued by the Public Debt
Service and the Federal Reserve banks as Treasury agents. On the
basis of the daily Treasury statement of June 30, 1936, there had
been issued for delivery to veterans adjusted service bonds amounting
to $1,668,752,150, of which amount $724,235,500 ^ had been redeemed.
The redemption procedure established for adjusted service bonds
was made as simple as possible, consistent with the proper protection
of the public interest. Two hundred and forty-three post offices
were designated as paying offices. Fifty-nine of these offices were
central accounting post offices which redeemed bonds forwarded by
postmasters in the area covered by the office. The remaining 184
post offices redeemed bonds presented directly to their offices. A
veteran desiring to redeem his bonds through the post office had
merely to present himself to his local post office, establish his identity
as the person whose name appeared on the face of the bonds to be
redeemed, and sign the request for payment on the back of the bonds.
The local postmaster then took charge of the bonds and transmitted
them by registered mail, without cost to the veteran, to a designated
paying post office, where a check was drawn for the amount due and
mailed to the veteran at the address requested by him in his application for payment. The veteran could, at his own risk and expense,
1 The corresponding figure on the revised daily Treasury statement basis is $957,491,850. The differ*
ence Is due to the large amount of bonds in the process of redemption on June 30, 1936.




REPORT OF THE SECRETARY OF THE TREASURY

23

send his bonds to the Treasury Department in Washington for payment. If he elected to follow the latter procedure, the request for
payment could be certified by any one of a number of designated
Government officials or by any executive officer of an incorporated
bank or trust company.
Settlement on account of the amount due the United States Government life insurance fund, pursuant to section 5 of the Adjusted
Compensation Payment Act, had not been effected by the close of
the fiscal year 1936.
In order to eliminate unnecessary expense in the administration of
estates of deceased and incompetent veterans, the act of June 26,
1936, authorized the Secretary of the Treasury to make payment of
amounts payable under the Adjusted Compensation Payment Act
to the person or persons determined by him to be lawfully entitled
thereto without the necessity of the appointment, by judicial proceedings or otherwise, of a legal representative of the estate of any
veteran or of any other persons or in compliance with State law with
respect to the administration of estates.
The Adjusted Compensation Payment Act, the act to eliminate
unnecessary expense in the administration of estates of deceased and
incompetent veterans, and Department Circular No. 560 and supplement prescribing regulations governing adjusted service bonds will
be found as exhibits beginning on page 253 of this report.
Cumulative sinking fund
The available appropriation for the cumulative sinking fund for
the fiscal year 1936, including an unexpended balance of $183,652
brought forward from the fiscal year 1935, was $553,224,373. Redemptions aggregating $403,340,750, all at par, were made for account
of the fund as follows: First Liberty Loan bonds called for redemption,
$100,913,900; Fourth Liberty Loan bonds called for redemption,
$278,857,450; Treasury notes of series D-1935, C-1936, and E-1936,
all matured, $23,569,400. An unexpended balance of $149,883,623
remained at the close of the year, and was carried forward to 1937.
Tables covering transactions on account of the fund for 1936, and
since its inception on July 1, 1920, will be found on pages 439 and
440 of this report.
GENERAL FUND OF THE TREASURY

All cash receipts of the Government are deposited in the General
Fund of the Treasury and all expenditures are made from it. The
balance in this fund represents the cash balance of the Government.




24

REPORT OF THE SECRETARY OF THE TREASURY

The net change in this balance from the close of the previous fiscal
year is accounted for as follows:
Analysis of the change in the General Fund balance between June 30, 1935, and
June 30, 1936
[On basis of daily Treasury statements (unrevised), see p. 311. For a description of accounts through which
Treasury transactions are efi;ected, see p. 312]
Balance, June 30, 1935
$1,841,345, 539.47
Ordinary receipts:
General and special funds
4,115,956,615.13
Trust funds, increment on gold, etc
434, 351, 237. 03
Net increase in gross public debt
5,077,650,869.20
Total funds available
Expenditures chargeable against ordinary receipts:
General and special accounts
Less public debt retirements
Trust funds, increment on gold, etc
Less national bank note retirements

11,469,304, 260.83
$8,879, 798,257.61
403,240,150.00
708,658,429.26
397,422,480.00

$8,476, 558,107.61
311,235,949.26

Total expenditures (excluding retirements of public debt and national bank notes). 8,787,794,056.87
Balance, June 30, 1936.

2,681,510,203.96

The composition of the General Fund of the Treasury, existing
liabilities against the assets in the fund, and the balances in excess
of such liabilities are shown for June 30, 1935 and 1936, in the table
following. Similar information is presented in somewhat greater
detail, on the basis of the daily Treasury statements (revised), in
the table on page 448 of this report.
Current cash assets and liabilities of the Treasury, J u n e 30, 1935 and 1936, and
changes during the year
[On basis of daily Treasury statements (unrevised), see p. 311]
June 30,1935

June 30,1936

Increase (+),
decrease (—)

$9,115,380,809.40

$10,608,304,157. 23

+$1,492,923,347.83

GOLD

Assets:-Gold

:

__ _

Liabilities:
Gold certificates outstanding (outside
of Treasury)
Gold certificate fund, Board of Governors, Federal Reserve System
Redemption, fund, Federal Reserve
notes
Gold reserve ^
Exchange stabilization fund
Total
Gold in General Fund

787,745,989.00

2,916,285,859.00

+2,128,539,870.00

5,509,710,115.48

5,291,078.912.60

-218,631,202.88

22,879,855. 28
156, 039, 430. 93
1,800,000, 000: 00
8, 276, 375, 390. 69

12,948,478. 00
156,039,430. 93
1,800, 000,000. 00
10,176, 352, 680. 53

—9,931, 377.28
+1,899,977,289.84

839, 005,418. 71

431,951,476. 70

—407,053, 942. 01

313,308,863.15
510, 024,945. 00
823, 333,808.15

708,210,842. 21
508,582, 714. 00
1, 216, 793, 556. 21

-f 394,901,979.06
-1,442,231.00
+393,459, 748. 06

810,040,419.00

1,133,777, 786.00

+323,737,367.00

1,181, 574. 00
811,221.993.00

1,176, 622. 00
1,134,954, 408.00

-4,952.00
+323, 732. 415. 00

SILVER

Assets:
Silver
Silver dollars
Total...

_.

Liabilities:
Silver certificates outstanding (outside
of Treasury)
Treasury notes of 1890 outstanding (outside of Treasury)
Total.Silver in General Fund

12,111,815.15

81,839,148. 21 .

+69, 727, 333. 06

I Reserve against $346,681,016 of United States notes and against Treasury notes of 1890 outstanding in
the amount of $1,181,574 in 1935 and $1,176,622 in 1936. Treasury notes of 1890 are also secured by silver
dollars in the Treasury.




REPORT OF THE SECRETARY OF THE TREASURY

25

Current cash assets and liabilities of the Treasury, June 30, 1935 and 1936, and
changes during the year—Continued
June 30,1935'

June 30,1936

Iiicrease (+),
decrease (—)

$839.005,418. 71
12,111,815.15
192,906, 203.17

$431,951,476. 70
81,839.148. 21
351,429,84L12

—$407,053,942 01
+69, 727,333. 06
+158,623, 637. 95

958,480,491.77
13, 565,097. 25

2, 068, 087,034. 35
2,427,943. 58

+1,109,606, 542.58
— 11,137,153.67

2,016, 069, 026. 05

2,935, 735,443. 96

+919, 666,417. 91

174, 723,486. 58

254, 225,240. 00

+79,501, 753. 42

Balance in the General Fund

1,841,345, 539.47

2,681,510,203. 96

+840,164, 664. 49

Balance of increment resulting from reduction in weight of the gold dollar..
Seigniorage 2
Working balance

700,091,147.08
140,111,441.47
1,001,142,950.92

140,496,996. 73
315, 900,856. 96
2, 225,112,350. 27

-559,594,150.35
+175,789,415.49
+1,223,969,399. 35

1,841,345, 539.47

2, 681,510,203. 96

+840,164, 664.49

GENERAL F U N D

Assets:
In Treasury offices:
Gold (as above) .
- Silver (as above)
Other coin, currency, and bullion..
In depositary banks, reserve banks,
and treasury of Philippine Islands....
Unclassified, collections, etc
.
. Total
Liabilities.-

-. -

B alance in the General Fund

3 This item represents seigniorage resulting from the issuance of silver certificates equal to the cost of the
silver acquired under the Silver Purchase Act of 1934 and the amount returned for the silver received under
the President's proclamation dated Aug. 9,1934.

EMERGENCY LEGISLATION

During the fiscal year 1936, further appropriations and allocations of funds were made for the purpose of continuing the Federal
program to furnish relief and to aid recovery.
The capital stock of the Commodity Credit Corporation was increased from $3,000,000 to $100,000,000 by an act approved April
10, 1936, and the Reconstruction Finance Corporation was authorized
and directed to acquire the additional nonassessable stock of that
agency. The act of May 20, 1936, authorized and directed the Reconstruction Finance Corporation to make loans, not exceeding
$50,000,000 for the fiscal year 1937, to the Rural Electrification Administration upon request of the Administrator, approved by the
President.
On June 30, 1936, the amount of capital stock and obhgations that
the Reconstruction Finance Corporation was authorized to have outstanding at any one time was $6,050,000,000, exclusive of indefinite
authorizations for which there is no statutory limitation. During
the year the Reconstruction Finance Corporation made further sales
of its notes to the Secretary of the Treasury in the net amount of
$375,000,000. As of June 30, 1936, the total sold to the Treasury
amounted to $4,030,000,000, excluding the original $500,000,000 of
the corporation's capital stock purchased by the Treasury. Notes
originally issued by the corporation directly to banks and other institutions increased by $1,858,000 to $251,629,667 during the fiscal year.
The Emergency Relief Appropriation Act of 1936, approved June
22, 1936, provided a direct appropriation of $1,425,000,000 for relief



26

REPORT OF THE SECRETARY OF THE TREASURY

and for work relief on useful projects. In addition, such unexpended
balances of funds appropriated and made available by the Emergency
Relief Appropriation Act of .1935 as the President determined were
reappropriated for these purposes. These funds are to remain available until June 30, 1937. The direct appropriation was made available for the following classes of projects in the amounts indicated:
Highways, roads, and streets
Public buildings
Parks and other recreational facilities, including buildings therein..
Public utihties, including sewer systems, water supply, airports, etc
Flood control and other conservation
Assistance for educational, professional, and clerical persons
Women's projects.Miscellaneous work projects
National Youth Administration
Rural rehabilitation, loans and relief to farmers and livestock growers
Total

.

$413,250,000
156,750,000
156,750,000
171,000,000
128,250,000
85,500, OOC
85,500,000
71,250,000
71,250,000
85,500,000
1,425,000,000

The amount specified for any of the foregoing classes may be in-^
creased proportionately in accordance with the amount of unexpended
balances that may be transferred from the Emergency Relief Appropriation Act of 1935, and may be increased 15 percent by transfer of
amounts from other classes.
In order to increase employment, the act also provided that the
Federal Emergency Administrator of Public Works may use $300,000,000 from funds on hand or to be received from the sale of securities
for the making of grants to aid in the financing of useful pubhc works
projects, which can be substantially completed prior* to July 1, 1938.
The grant in each case may not exceed 45 percent of the cost of the
project.
The following table summarizes ah funds appropriated and allocated for recovery and relief, expenditures therefrom, and unexpended
balances on June 30, 1936. As shown in the table, $1,082,000,000 of
the $6,104,000,000 appropriated under the Emergency Relief Appropriation Acts of 1935 and 1936 remained unallocated on June 30,
1936. A subsidiary table shows the details of revolving funds in
which repayments and collections from previous loans are offset .
against payments for current loans made by Federal lending agencies.




27

REPORT OF THE SECRETARY OF THE TREASURY

Funds appropriated and allocated for recovery and relieff expenditures therefrom,
and unexpended balances, as of June SO, 1936
[In millions of dollars]
Expenditures 1

Sources of funds ^
Appropriations
Statutory and executive allocations

Organization
cific

Agricultural aid:
Agricultural Adjustment Administration
Commodity Credit Corporation 1
Farm Credit Administration«.
Federal Farm Mortgage Corporation
Federal land banks:
Capital stock
Paid-in surplus
Reduction in interest rates
on mortgages
Relief:
Federal Emergency Relief Administration
Federal Surplus Commodities
Corporation
Civil Works Administration..
Emergency conservation workDepartment of Agriculture,
relief
Public Works (including work
relief):
Boulder Canyon project
Loans and grants to States,
municipalities, etc.*
Loans to railroads *
Public highways
River and harbor work..
Rural Electrification Administration
Works Progress Administration
All other
Aid to home owners:
Home loan system:
Home loan bank stock
Home Owners' Loan Corporation
Federal savings and loan
associations
Emergency housing
Federal Housing Administration
Resettlement Administration.
Subsistence homesteads
Miscellaneous:
Export-Import Banks of Washington *_.
Federal Deposit Insurance
Corporation...
Administration for Industrial
Recovery. _
Reconstruction Finance Corporation—direct loans and
expenditures*
Tennessee Valley Authority...
Total-.
Unallocated funds
Grand total.
F o o t n o t e s on following page.




ReconstrucFiscal UnexEmer- tion
pended
Fiscal year
gency
NaFi1935
Relief nance Total year and
tional Emergency
1936 prior
Indus- Appro- Appro- Cortrial
pria- porayears 2
priaRetion
tion
tion
covery Act,
Acts,
Act,
1935
1935
1933
and

3 308

(0

346

28

160

168

"""85"

0 443
316

446
614

130
733

104
423

212
224

200

200

134

126
74

1
38

29

20

10

3,081

487
8

2,450
117

827
1,337

1
486

816
767

86

3

69
"605
8 338
93

400
318

481

932

320

'6O5'

911

85

72

3

10 255
(10)

436
192
438
255

133

(")

200
71
32

126
146

125
145

500
129

(«)
(«)

912
192
1,193
477

43
172
• 128
215
152

16
1072

758

74

"50

125

126

82

200

200

444
"225'

50
138

20
25

45
252
7

16
138

(13)

19

2,293 1* 3, 227 161,358 17 6,104

6,158 19,140 3,291

3,227

1,358

(11)

(11)

17

(10

24

5,023
1,082

2,293

16
113
1

160

* 3,795

50

16
668
345

106

150

3,795 7 239
28
75
6,158 18,058 3,291
1,082

(10)

524
183
393
105

(»)

(11)

20

36

(^0

"111

200
106

150

216
137
585
220

00

1,822 1,264
1, 211
405

1,822
307

10
83

2,270
47

(11)

1,763
4,939
1,082
6,021

28

REPORT OF THE SECRETARY OF THE TREASURY

NOTE.—Figures are rounded to nearest million and will not necessarily add to totals. For complete
figures see daily Treasury statement for June 30, 1936.
1 The following appropriations included in the 1936 Budget estimate of $300,000,000 for general public
works annual program and expenditures therefrom are not included: Boulder Canyon project, $14,000,000;
public highways, $40,000,000; river and harbor work, $10,000,000; other public works, $118,409,000; Tennessee
Valley Authority, $36,000,000; total, $218,409,000.
2 The emergency expenditures included in this statement for the period prior to the fiscal year 1934 include
only expenditures on account of the Reconstruction Finance Corporation and subscriptions to capital stock
of Federal land banks under authority of the act of Jan. 23,1932. Expenditures by the several departments
and establishments for public works under the Emergency Relief and Construction Act of 1932 were made
from general disbursing accounts, and, therefore, are not susceptible to segregation from the general expenditures of such departments and establishments on the basis of the daily Treasury statements.
3 The sum of $307,500,000 includes appropriations under the acts of May 12, 1933, May 25, 1934, June 19,
1934, and Aug. 24, 1935, totaling $360,000,000, less $52,500,000 carried to the surplus fund from the appropriation of $100,000,000 provided by the act of June 19, 1934.
* There are no statutory limitations on the amounts of funds which may be made available by the Reconstruction Finance Corporation for carrying out the purposes of sec. 5 of the Agricultural Adjustment Act,
and for the purchase by the Reconstruction Finance Corporation of preferred stock or capital notes of banks
and trust companies under the act of Mar. 9, 1933. The Reconstruction Finance Corporation is required
to make available to the Federal Housing Administrator such funds as he may deem necessary for the
purposes of carrying out the provisions of the National Housing Act. The amounts included in this column
for the purposes specified are based upon checks issued therefor from time to time by the Reconstruction
Finance Corporation. The authority of the Reconstruction Finance Corporation to issue its bonds, notes,
and debentures has been increased by such amounts as may be required to provide funds for such purposes.
6 Expenditures are stated on a net basis, i. e., gross expenditures less repayments and collections, the details
of which are set forth in the supplementary statement following.
6 Net, after deducting repayments to the Reconstruction Finance Corporation.
7 ExcGss of credits rdpdtict^

8 The appropriation of $950,000,000 provided in the act of Feb. 15, 1934, was allocated by the President
as follows: Federal Emergency Relief Administration, $605,000,000 and Civil Works Administration,
$345,000,000, of which amount $7,300,000 has been transferred to the Emergency Relief appropriation.
fl Under the provisions of the Emergency Appropriation Act, fiscal year 1935, the Reconstruction Finance
Corporation is authorized to purchase marketable securities acquired by the Federal Emergency Administration of Public Works, but the amount which the Reconstruction Finance Corporation may have invested
at any one time in such securities may not exceed $250,000,000. Moneys paid for such securities are available for loans (but not grants) under title II of the National Industrial Recovery Act. The amount of
obligations which the Reconstruction Finance Corporation is authorized to have outstanding at any one
time is increased by the sums necessary for such purchases, not to exceed $250,000,000. The purchase of
such securities by the Reconstruction Finance Corporation is reflected as expenditures of the Reconstruction Finance Corporation and as credits against expenditures of the Federal Emergency Administration of
Public Works. The amount by which the available funds on account of such transactions has been
increased is, therefore, included in the funds of the "Reconstruction Finance Corporation—direct loans
and expenditures."
10 See note 1 above.
11 Less than $500,000.
12 Includes $700,000 allocated for savings and loan promotion as authorized by sec. 11 of the act of Apr. 27,
1934.
13 Under sec. 3 of the act of June 16, 1934, the Reconstruction Finance Corporation is authorized to purchase at par obligations of the Federal Deposit Insurance Corporation in a face amount of not to exceed
$250,000,000, and the amount of obligations which the Reconstruction Finance Corporation is authorized
to have outstanding at any one time is increased by $250,000,000. The amount to be included in this column
will represent the proceeds deposited with the Treasurer of the United States on account of the sale of such
obligations by the Federal Deposit Insurance Corporation to the Reconstruction Finance Corporation.
i< The appropriation of $500,000,000 for subscription to capital stock is included in the figures shown in the
column for Reconstruction Finance Corporation.
15 Exclusive of the $72,638,000 transfer referred to in note 17.
16 Exclusive of the $26,455,000 and $42,193,500 transfers referred to in note 17.
17 Includes $4,000,000,000 specific appropriation under the act of Apr. 8,1935, $1,425,000,000 specific appropriation under the act of June 22, 1936, and transfers of unexpended balances as follows: From the Reconstruction Finance Corporation, $500,000,000; from the appropriation of $3,300,000,000 for National Industrial
Recovery, $72,638,000; from the appropriation of $525,000,000 for relief in stricken agricultural areas provided
in the Emergency Appropriation Act of 1935, approved June 19, 1934, $26,455,000; from the appropriation of
$899,675,000 for emergency relief and pubhc works provided in the Emergency Appropriation Act of 1935,
approved June 19, 1934, $42,193,500; from the appropriation of $950,000,000 for emergency rehef and civil
works provided in the act of Feb. 15,1934, $7,300,000; from unobligated moneys referred to in sec. 4 of act of
Mar. 31,1933, $17,965,140.54; and moneys transferred pursuant to sec. 15 (0 of the Agricultural Adjustment
Act, $12,921,502.64.

Details of revolving funds, fiscal year 1936, included in the table on page 27
[In millions of dollars]

Organization

C o m m o d i t y Credit Corporation
F a r m Credit A d m i n i s t r a t i o n
L o a n s a n d grants to States, municipalities, etc . .
L o a n s t o railroads
E x p o r t - I m p o r t B a n k s of W a s h i n g t o n .
Reconstruction F i n a n c e Corporation—direct loans a n d expenditures

J Excess of repayments and collections'(deduct).




Repayents
P a y m e n t s am
n d collections
220
70
360
26
25
925

90
103
188
154
6
1,164

N e t expenditures

130
1 33
172
» 128
20
1239

REPORT OF THE SECRETARY OF THE TREASURY

29

REVENUiS LEGISLATION

Revenue legislation during the fiscal year 1936 included two major
revisions of the Federal tax system: (1) the Revenue Act of 1935,
approved August 30, 1935, and (2) the Revenue Act of 1936, approved
June 22, 1936.
The Revenue Act of 1935 increased all the individual income surtax rates applicable to surtax net incomes over $50,000, raising the
maximum surtax rate from 59 percent applicable to surtax net incomes of over $1,000,000 to 75 percent applicable to surtax net
incomes of over $5,000,000. All the estate and gift tax rates were
increased by this act; the maximum estate tax rate was revised from
60 percent applicable to net estates of over $10,000,000 to 70 percent
applicable to net estates of over $50,000,000, and the maximum gift
tax rate was changed from 45 percent applicable to net gifts of
$10,000,000 to 52K percent applicable to net gifts of over $50,000,000.
The specific exemptions for both the estate and the gift taxes were
reduced from $50,000 to $40,000. The Revenue Act of 1935 also
introduced two new features into the corporation income tax: (1) I t
substituted a graduated tax for the single rate of tax which had been
imposed under all earlier acts; the rate scale was graduated from 12}^
percent upon the first $2,000 of net income to 15 percent upon net
incomes of over $40,000, as against the flat rate of 13% percent
imposed under the Revenue Act of 1934; (2) it subjected 10 percent
of the dividends received by corporations to the corporation income
tax whereas under earlier acts all dividends received by corporations
were exempt from tax. Under the graduated corporation income tax
the small corporate entities would receive more favorable treatment
than the large ones to the extent that the size of net income constitutes
a measure of corporate size. The major provisions of the 1935 act
relating to income taxes were to apply only in the case of taxable years
beginning after December 31, 1935.
The Revenue Act of 1936 did not change the surtax rates of the
individual income tax or the estate and gift tax rates which were
imposed by the Revenue Act of 1935; it did, however, change the
corporation income tax by superimposing upon a graduated normal
corporation income tax rate scale (somewhat lower than that imposed
by the 1935 act) a scale of surtaxes on undistributed profits graduated
from 7 percent to 27 percent.
Under the Revenue Acts of 1934 and 1935, railroad corporations
were permitted to file consolidated returns and a tax rate of 15%
percent was applicable. This privilege is continued under the
Revenue Act of 1936 but this %ct |does not distinguish between the
rates applicable to corporations permitted to file consolidated returns




30

REPORT OF THE SECRETARY OF THE TREASURY

and other corporations. The 1936 act increased the tax upon intercorporate dividends by subjecting 15 percent of the dividends received
by corporations to the corporation income taxes, instead of only 10
percent as in the 1935 act. The chief change in the individual income
tax made by the Revenue Act of 1936 was to subject dividends received
to the normal income tax for the first time in the history of Federal
income tax legislation. The above-mentioned provisions of the
1936 act apply to taxable years beginning after December 31, 1935.
Important changes were also effected in the taxation of nonresident
aliens and foreign corporations. Under the Revenue Act of 1934,
nonresident alien individuals were required to file returns on income
from sources within the United States and were subject to both normal tax and surtax. On annual or periodical gains, except dividends,
a tax of 4 percent was withheld at source to be credited against the
total amount of tax as determined on the return. Similarly, a tax
of 13% percent was withheld on the same items of income of foreign
corporations.
The 1936 act provides for a 10 percent withholding tax applicable
to nonresident aliens not engaged in trade or business in this country
on gross income from interest (except interest on deposits with persons carrying on the banking business), dividends, rents, royalties,
and other annual or periodical sources of income within the United
States. Such nonresident aliens are not subject to the tax on capital
gains. Similar items of income are taxable to nonresident foreign
corporations at a 15 percent rate, except dividends, which are subject to a tax of 10 percent. The 10 percent rate on dividends may
be reduced to not less than 5 percent if the recipient is from a contiguous country, and provision for such reduction has been effected
by treaty with such country.
Resident foreign corporations are subject to a flat tax of 22 percent
on income from sources within the United States. They are not
subject to the surtax on undistributed profits.
Nonresident alien individuals doing business in this country are
subject to normal tax and surtax on income from sources within the
United States.
A number of other changes were effected by the Revenue Acts of
1935 and 1936. Certain of the provisions in the 1935 act, however,
were superseded by the 1936 act before their first effective dates,
notably, those relating to the corporation income taxes. The more
important tax rate changes made by'^these acts and^^the rates which
they superseded, together with legal citations and effective dates, are
shown in exhibit 44, page 281. The following should be noted relative
to the data in this exhibit:
(1) Certain corporations are not subjected to the graduated normal
tax and to the graduated surtax rates on undistributed profits: Banks,



REPORT OF THE SECRETARY OF THE TREASURY

31

iDsurance companies, foreign corporations, and certain others are
required to pay various flat rates in lieu of the normal tax and surtaxes
imposed on other corporations.
(2) The 1935 act made no change in the tax on corporations
improperly accumulating surplus; the 1936 act decreased the rates
applicable to corporations subjected to the surtax on undistributed
profits, but made no change in the rates applicable to corporations not
subjected to such tax. The 1935 act increased the surtaxes on the
undistributed adjusted net income of personal holding companies;
the 1936 act decreased these rates.
(3) The capital stock tax rate was increased by the 1935 act and
reduced by the 1936 act so that it stands at the same level as in the
Revenue Act of 1934, namely, $1 per $1,000 of the adjusted declared
value of the capital stock. Corporations were permitted under the
1935 act to redeclare the value of their capital stock. The excessprofits tax was increased and graduated by the 1935 act as against a
flat rate in the 1934 act, and the excess in the 1935 act was to be measured from a lower level than in the 1934 act. No change in the
excess-profits tax rates was made by the 1936 act.
(4) The 1936 act imposed a tax on the unjust enrichment arising
from: (a) Federal excise taxes shifted to vendees but not paid;
(b) Federal excise taxes shifted by vendee for which he was reimbursed by the vendor; or (c) refunds or credits of such taxes shifted
to others.
(5) The 1935 act reduced the tax on producers of crude petroleum.
The 1936 act eliminated the jewelry tax; reduced the rate of tax on furs,
but eliminated the exemption from tax of articles made of fur which
sold for less than $75; and imposed a tax on the import of certain
additional types of oils and of certain seeds from which oils are
derived.
Important special taxes were imposed by legislation enacted during
the fiscal year 1936. The Social Security Act, approved August 14,
1935, imposed three taxes: (1) An income tax on employees, with
certain exceptions, based upon wages received not in excess of $3,000
per annum; (2) an excise tax on employers, with certain exceptions,
based upon wages paid not in excess of $3,000 per annum; and (3) an
excise tax on all employers of eight or more, based upon total wages
paid. An act approved August 29, 1935, imposed similar taxes
appHcable to carriers and their employees: (1) An income tax on
employees, based upon wages received not in excess of $300 per
month; (2) an excise tax on carriers, based upon wages paid not in
excess of $300 per month; and (3) an income tax on representatives of
employees of carriers.
The rates of tax effective under the Social Security Act are as follows: Under title VIII, the income tax on employees first applies



32

REPORT OF THE SECRETARY OF THE TREASURY

with respect to employment during the calendar year 1937 and the
rate imposed is 1 percent of the wages. This rate of tax is increased
by one-half of 1 percent every 3 years until it reaches 3 percent,
which is applicable with respect to employment after December 31,
1948. The excise tax on employers, also imposed under title VIII, is
at the same rates as the aforementioned income tax on employees.
The rates of tax on employers of eight or more, imposed under title
I X of the Social Security Act, start at 1 percent, applicable with
respect to employment during the calendar year 1936, and are increased by 1 percent each year until the maximum rate of 3 percent is
reached.
The excise tax upon carriers and the income tax upon their employees are effective with respect to employment after March 1, 1936,
and are levied at a rate of 3}^ percent. The rate of tax levied upon
wages of employees' representatives is 7 percent. The taxes imposed
by this act do not apply to any compensation received or paid after
February 28, 1937.
A copy of titles VIII and I X of the Social Security Act is shown as
exhibit 42, page 272, and a copy of an act to levy an excise tax upon
carriers and an income tax upon their employees, and for other purposes is shown as exhibit 43, page 279.
The Bituminous Coal Conservation Act of 1935, approved August
30, 1935, imposed an excise tax of 15 percent of the sale price of bituminous coal produced in the United States after November 1, 1935, to
be paid by producers of such coal. Producers who compUed with the
Bituminous Coal Code were entitled to a credit of 90 percent of the
amount of tax. This act was declared unconstitutional by the
United States Supreme Court on May 18, 1936.
The Federal Alcohol Administration Act, approved August 29,
1935, created the Federal Alcohol Administration and provided for
certain improvements in the administration of the liquor taxes without changing any of the rates imposed by the Liquor Taxing Act of
1934. The Liquor Tax Administration Act of 1936, approved June
26, 1936, made certain additional improvements in the administration
of the Federal liquor tax and reduced by 50 percent the rates of tax
on wines and liquors.
Agricultural adjustment taxes
At the beginning of the fiscal year 1936, processing taxes, floor
stock taxes, and import compensating taxes imposed under the Agricultural Adjustment Act, as amended, were in effect with respect to
the following basic agricultural commodities: Wheat, cotton, tobacco,
field corn, hogs, sugar beets, and sugarcane. Similar taxes had been
imposed upon certain paper products, jute fabric, and jute yarn,
which were found to be competing to the disadvantage of cotton



REPORT OF THE SECRETARY OF THE TREASURY

33

processors. Only processing taxes and import compensating taxes
were in effect with respect to peanuts and rice. In addition, taxes
were imposed upon the ginning, in excess of an allotment, of cotton
harvested during the crop year beginning June 1, 1935, and upon the
first bona fide sale of certain tobacco harvested during the crop year
beginning May 1, 1935, for which tax payment warrants to the
extent of an allotment had not been issued.
Processing and import compensating taxes on rye became effective
on September 1, 1935, as a result of the proclamation by the Secretary
of Agriculture of July 2, 1935, of rental and benefit payments with
respect to rye. A tax was imposed by the Potato Act of 1935 (Public
No. 320), effective December 1, 1935, upon either the first sale or first
change in form of potatoes.
Changes in rates of a number of agricultural adjustment taxes were
made during the year in accordance with the procedure provided for
in the acts imposing these taxes. A summary of the rates of processing
taxes and of cotton ginning, tobacco sales, and potato sales tax rates
in effect during the fiscal year 1936 appears as exhibit 45 on page 285.
On January 6, 1936, the taxes imposed by the Agricultural Adjustment Act, as amended, were held to be unconstitutional by the
United States Supreme Court {TJ. S, A. v. William M. Butler et al.,
receivers of the Hoosac Mills Corporation, No. 401 U. S.), Subsequently the taxes imposed upon the ginning of cotton, the sale of
tobacco, and the first sale or first change in form of potatoes were
repealed by the act of February 10, 1936 (Pubhc No. 433).
ESTIMATES OF RECEIPTS AND EXPENDITURES

Each November the Treasury Department is required to make
an estimate of the revenues of the Federal Government for the
balance of the current fiscal year and for the entire following fiscal
year, assuming the continuation of the existing tax structure.
The tax revenue from practically every major source is directly
dependent, although in varying degree, upon business conditions
during the period in respect of which the tax is levied. The Treasury Department in making estimates of future revenue is therefore
required to forecast the general business situation for a period ending 20 months later. Appraisals of future industrial production and
profits, security markets, commodity niarkets, and general business
activity are necessary for deternuning revenue estimates. These forecasts require analyses of a large variety of financial and economic data,
and they form the basis for estimates of the aggregate amounts of
taxable corporate and individual incomes as well as the distribution
of such incomes by major sources, such as corporate and individual

93790—37-




34

REPORT OF THE SECRETARY OF THE TREASURY

business profits, wages and salaries, rents, royalties, interest, dividends, and proceeds from the sale of assets.
In considering estimates of future revenue in connection with forecasts of business conditions, it is important to remember that changes
in business profits and individual incomes do not occur in mechanical
proportion to increases and decreases in the volume of business
activity and in the general price level. In periods of rising business,
for example, profits and incomes rise much more than proportionally
to the increase in the volume of business. Also, consideration must
be given to the fact that the amount of increased revenue which will
result from a given gain in individual incomes is influenced by the
distribution of this increase among the various income groups since a
change in the aggregate amount of individual incomes is attended by
marked shifts of income from one surtax bracket to another.
There is a definite lag between the time of collections of income taxes
and the time income is earned. Thus the improvement in earnings
in the calendar year 1936 will appear in income tax collections for the
first time when the income tax returns are filed on March 15, 1937.
Because of the privilege of making quarterly installment payments
of these tax liabilities the collections will be received throughout the
calendar year 1937, thus falling into the receipts of two different fiscal
years. Hence, the estimated income tax collections, both corporation and individual, for the fiscal year 1937, are made up partly from
payments on 1935 incomes and partly from payments on 1936|incomes. Similarly, fiscal year 1938 estimates of income tax receipts
involve payments on both 1936 and 1937 earnings. Because of the
Federal practices in the collection of taxes, collections from estate
and gift taxes and from the Social Security Act tax on employers of
eight or more persons also lag behind changes in general business
conditions. Most of the other sources of revenue reflect such business changes within 2 months.
Actual receipts and expenditures for the fiscal year 1936, and
estimates for the fiscal years 1937 and 1938 are shown in the table
following. More detailed revenue estimates are presented in table
15, on page 383, and a detailed description of the recent revenue
legislation which influences these estimates is presented in the article
beginning on page 29. The estimated expenditures are furnished
by the Bureau of the Budget and are based upon a careful survey of the needs of the various departments and bureaus of the
Government.




KEPORT OF THE SECRETARY OF THE TREAStTRY

35

Receipts and expenditures for the fiscal year 1936, on the basis of daily Treasury
statements {unrevised), and estimated receipts and expenditures for the fiscal years
1937 and 1938
1936, a c t u a l

1937, e s t i m a t e s

1938, estimates

G E N E R A L AND SPECIAL ACCOUNTS
EECEIPTS

Internal r e v e n u e :
I n c o m e tax
_
__ .
Miscellaneous internal r e v e n u e
_._
U n j u s t e n r i c h m e n t tax
_.
Taxes u n d e r Social Security A c t
Taxes u p o n carriers a n d their employees
Processing tax on farm p r o d u c t s
Customs
--Miscellaneous receipts:
Proceeds of G o v e r n m e n t - o w n e d securities:
Principal—foreign obligations
Interest—foreign obligations.
All other
P a n a m a C a n a l tolls, e t c . Seigniorage
.
--..
0 t h e r miscellaneous
Total

-

$1, 426, 575, 433. 84
2, 009, 578, 512.16

$2,372,900,000
2, 274,968, 000
82, 000, 000
324, 600, 000

48,278.74
76, 649,383. 41
386,811, 593. 69

134, 652, 000
446, 800, 000

1 463,000 000

69,897.91
477, 414. 59
90, 360, 932. 61
25, 899,995. 07
39, 266, 510.41
60, 218, 662. 70

72, 094
518,493
59,869, 088
25, 501, 400
39, 000, 000
67, 369, 644

74, 298
319,781
67, 892,108
26,351, 400
27, 000, 000
60, 537, 610

4,116,956, 615.13

5, 828,150. 719

7, 293, 607,197

21,516,234.43
425,401. 68
16,816, 356. 30
132, 289,463. 34
1,486,458. 78
37,842,352. 06
177,949.28

23, 673,450
511,100
20, 980, 700
150, 545, 200
1,463, 000
39„286, 000

23, 300,100
435, 700
20, 769, 800
149, 918, 300
1,698,400
38, 418, 500

13,889,113.53
66,080,926. 91
76,748,809. 25
35,133, 687.10
15, 254, 035. 42
n , 109, 468.01

14, 500, 000
105, 925, 702
101, 878, 285
38, 311,150
16, 065, 220
2,009, 200

7, 800, 000
123 196 600
105, 506, 200
39.556 400
17,123 000

8,188, 000

26, 000, 000

$3,365,300 000
1 2,508,332,000
774,800,000

EXPENDITURES

General:
Departmental: 2 3
Legislative e s t a b l i s h m e n t
Executive proper
State Department
.
Treasury Department
W a r D e p a r t m e n t (nonmilitary) ^ . .
D e p a r t m e n t of J u s t i c e
P o s t OflQce D e p a r t m e n t
D e p a r t m e n t of t h e Interior:
B o u l d e r C a n y o n project
Other
.._
D e p a r t m e n t of A g r i c u l t u r e
D e p a r t m e n t of C o m m e r c e
D e p a r t m e n t of L a b o r . .
Shipping Board
'
U n i t e d States M a r i t i m e C o m m i s sion
_.
R u r a l Electrification A d m i n i s t r a tion
I n d e p e n d e n t offices a n d commissions
Unclassified i t e m s
A d j u s t m e n t for disbursing officers' checks
outstanding
•
Total departmental 3
_
Public buildings 2
_
_
_
Public highways 2
River a n d harbor work 2
P a n a m a Canal 2 .
P o s t a l deficiency
R a i l r o a d R e t i r e m e n t Act:
A d m i n i s t r a t i v e expenses
Annuity payments
Social S e c u r i t y Act:
A d m i n i s t r a t i v e expenses:
Social S e c u r i t y B o a r d
D e p a r t m e n t of C o m m e r c e
D e p a r t m e n t of L a b o r
G r a n t s to S t a t e s :
Social S e c u r i t y B o a r d
D e p a r t m e n t of L a b o r
Treasury Department
Old-age reserve account
.
Unclassified
Retirement funds (United States share):
Alaska Railroad r e t i r e m e n t fund
Civil-service r e t i r e m e n t fund
Foreign service r e t i r e m e n t fund
C a n a l Zone r e t i r e m e n t fund
D i s t r i c t of C o l u m b i a ( U n i t e d States s h a r e ) .

Per footnotes, see p. 38.




970, 000

21, 475, 000

40,194, 688.86
2,067, 786.47

44,997, 400

38,149,100

447,457,895.84

565, 286, 067

613, 347,100

442, 994,432. 77
15,045, 264.70
28,799,817.06
71,398,632.02
11,447,778.98
86,038,861.60

565, 286, 067
31,108,900
97,813, 000
124,981,100
11, 281, 000
50, 293,181

613, 347,100
45, 799,963
155, 775, 000
163,129.800
10, 387,900
30, 769, 478

270,435.28

1,162, 500
7, 000, 000

2, 223, 000
25, 000, 000

601,288.08
46, 350.00
76, 936.38

20,505,000'
87, 500
295, 000

23,305, 000
24, 000
420, 000

23, 637, 015. 26
1, 800, 213. 94
2,386, 670. 54

139, 000, 000
6, 250, 000
8, 500, 000
225,000, 000

256,000, 000
8, 025, 000
8, 200, 000
540, 000, 000

- 4 , 4 6 3 , 4 6 3 . 07

2,181.70
40,000,000.00
162,400.00
500,000.00
6,707,600.00

46, 050, 000
185, 300
500,000
5,000,000

176, 000
72,392, 000
188, 000
500, 000

36

REPORT OF THE SECRETARY OF THE TREASURY

Receipts and expenditures for the fiscal year 1936, on the basis of daily Treasury
statements (unrevised), and estimated receipts and expenditures for the fiscal years
1937 and 1938—Continued
1930, actual

1937, estimates

1938, estimates

GENERAL AND SPECIAL ACCOUNTS—Con.

EXPENDITURES—continued
National defense: 2
Army *
_.
Navy
Veterans' pensions and benefits:
Veterans' Administration 2
Adjusted-service certificate fund
Agricultural Adjustment Administration 2.
Agricultural Adjustment Administration
(Act Aug. 24, 1935)
-..
Agricultural contract adjustments
Soil Conservation and Domestic Allotment Act
Emergency Conservation Work
Farm Credit Administration 2.__
Tennessee Valley Authority 2.
Debt charges:
Retirements:
Sinking fund
Estate taxes, forfeitures, gifts, etc...
Redemption of bonds, etc., from repayments to principal of loans to
States, municipalities, etc., Public Works Administration
Interest..
Refunds:
Customs
Internal revenue
Processing tax on farm products
Total, general
Recovery and relief:
Agricultural aid:
Agricultrual Adjustment Administration
Commodity Credit Corporation:
Reconstruction Finance Corporation funds
_._
Other
Farm Credit Administration:
Reconstruction Finance Corporation funds:
Crop production loans
Regional agricultural credit
corporations
Loans to joint stock land
banks
Farm mortgage relief
Farm Credit Administration
Unclassified
Other
Federal land banks:
Capital stock
Subscriptions to paid-in surplus.
Reduction in interest rates on
Relief: mortgages
Federal Emergency Relief Administration:*
Reconstruction Finance Corporation funds
Other..
Federal Surplus Commodities Corporation:fl
Reconstruction Finance Corporation funds
Other
Civil Works Administration
Emergency Conservation Work4...
Department of Agriculture, relief..
Public works:
Boulder Canyon project
Loans and grants to States, municipalities, etc
Loans to railroads
Public highways
River and harbor work
Rural Electrification Administration:
Reconstruction Finance Corporation funds.
_.
Other
For footnotes, see p.




$373,014, 977. 68
391, 424,149. 26

$377,601,000
510, 280, 080

$393, 460,400
587, 302, 600

575,982,094.01
1, 773,492, 531. 72
344, 737, 068. 35

588, 771, 465
563, 500, 000

587, 524,000

24,161, 602. 21
135,453, 092. 60

56, 500, 000
97, 960, 000

3,000,000
5,000, 000

322,037. 35

300, 000,000
308, 000, 000
2,141, 800
48, 000, 000

470, 000,000

11, 551, 343. 05
21, 016, 755. 48
403, 238, 650.00
1, 500. 00

400, 000, 000
25,000

400,000, 000
15, 000

4, 500,000
835, 000,000

1,500,000
860,000, 000

J

749, 396,801. 68

5, 658, 200
49,000, 000

14. 085,195. 44
30,100, 430. 34
10, 081, 744. 03
5,588,870,388.11

18, 000, 000
30, 203,100
22, 500, 000
5,498, 997, 393

5, 371,068, 341

27, 850, 207. 41

5, 650, 000

20, 900, 000

129,862, 736. 53
147, 714. 00

1,271,841.13

122,000,000
3,000, 000

16,800, 000
36,146, 900

SO, 000,000

606,000

600,000

6,000,000

5,000,000

93, 600

182, 687

445, 640. 62
107. 50
14,607,266.28

6,000,000

7,600,000

1,046,186. 00
32, 467, 994. 63

1,000,000
38,000,000

'24,"000,"000

17,779,645.80
110,249.64
21.36

29,064, 981. 00

328,018.92
487,099, 601. 71

36.10
8,164, 330.24
676,195. 79
486,281,193. 58
2,882,448.90
10,023,710. 53
172,116, Oil. 89
127,881,697.83
215, 095, 581. 31
152,318,737.09

1,402, 654.17

4,000,000
540, 000
60,000, 000
507, 300

230, 000

8,835, 000

5, 354,900

236,000,000
5,000,000
268,130, 000
105,961, 500

183, 000,000

6,000, 000
9,262,400

134, 544,000
15,195,700

REPORT OF THE SECRETARY OF THE TREASURY

37

Receipts and expenditures for the fiscal year 1936, on the basis of daily Treasury
statements (unrevised), and estimated receipts and expenditures for the fiscal years
1937 and 1938—Continued
1936, actual

1937, estimates

1938, estimates

G E N E R A L A N D SPECIAL A C C O U N T S — C o n .

EXPENDITURES—continued
R e c o v e r y a n d relief—Continued.
Public works—Continued.
W o r k s Progress A d m i n i s t r a t i o n
Other p u b l i c w o r k s :
A d m i n i s t r a t i v e expenses. P u b lic W o r k s A d m i n i s t r a t i o n
Legislative e s t a b l i s h m e n t
State D e p a r t m e n t
Treasury Department:
Public buildings
Other
War
Department
(nonmilit a r y ) *..
N a t i o n a l defense:
Army <
Navy
P a n a m a Canal
D e p a r t m e n t of J u s t i c e
D e p a r t m e n t of t h e I n t e r i o r
D e p a r t m e n t of A g r i c u l t u r e
D e p a r t m e n t of C o m m e r c e
D e p a r t m e n t of L a b o r
Veterans' Administration
I n d e p e n d e n t oflQces a n d commissions
D i s t r i c t of C o l u m b i a
Unclassified i t e m s
Aid to h o m e owners:
H o m e loan s y s t e m :
R e c o n s t r u c t i o n F i n a n c e Corp o r a t i o n funds:
H o m e loan b a n k stock
F e d e r a l savings a n d loan associations.
E m e r g e n c y housing
Federal Housing Administration:
R e c o n s t r u c t i o n F i n a n c e Corp o r a t i o n funds
Other
Resettlement Administration
Subsistence h o m e s t e a d s
Miscellaneous:
E x p o r t - I m p o r t B a n k s of W a s h i n g ton:
R e c o n s t r u c t i o n F i n a n c e Corporation funds
Other
A d m i n i s t r a t i o n for I n d u s t r i a l Recovery
R e c o n s t r u c t i o n F i n a n c e Corpora" tion—direct loans a n d expenditures
Tennessee Valley A u t h o r i t y
T o t a l , recovery a n d relief

$1, 263, 661,490. 21
25, 255,459.16
1, 603, 049.42
886, 636. 83

26, 000, 000
1, 057, 500
70, 500

52,942, 371. 69
35, 846, 747.42

53, 350, 000
27, 750, 000

391,632. 79

19, 500

9, 639,105.49
137, 607, 516. 68
4, 950. 30
781,695.11
55,128,930. 27
54,899, 540. 72
9, 581, 748.16
11,683,302.98
1,908,497.75

16, 494, 800
60, 472, 000

.

Excess of e x p e n d i t u r e s ( + ) or receipts (—)..

1, 065, 500
105, 710, 700
51, 387, 700
4, 674, 600
11, 822, 000
364, 500

8, 398,151.81
219,873. 53
642,825.90

11, 028,100
150, 000

17, 696, 300. 00

25, 399, 000

19,689,058. 26
24,906,423. 42

50, 000
49, 612, 600

14,727,039. 92
222,439.78
137,907, 723. 28
108, 264. 37

152, 940, 000
114, 500

19,495, 496. 91
85, 960. 85

3, 000,000
66, 000

5, 111, 371. 02

!0, 000

238, 722,416.78
27,814,668.09

G r a n d t o t a l e x p e n d i t u r e s , exclusive of s u p p l e m e n t a l i t e m s
Supplemental items
G r a n d total, expenditures, general
a n d special accounts

,, 400,000, 000

15, 000, 000

425, 000,000

$10,000,000

10, 250, 000
295, 000

10, 835, 000
28, 519, 000
3, 790, 000

5, 300, 000

31, 000, 000
16, 000, 000
'30,"900,'000

150,000,000

3, 290, 927,869. 50

2, 231, 807,100

336, 930, 913

8,879, 798, 257. 61

7, 730,804, 493
750, 000, 000

5, 707, 999, 254
450, 000, 000

8, 879, 798, 257. 61

8,480,804,493

6,157,999, 254

-f 4, 763, 841, 642.48

+ 2 , 652, 653, 774

+ 4 , 763,841, 642.4.8
403, 240,150. 00

+ 2 , 652,653, 774
404, 525, 000

+ 4 , 360, 601,492. 48

+ 2 , 248, 128, 774

-f 274, 307,192. 23
+ 4 , 634,908, 684. 71
397, 422, 480. 00

-flOl, 729, 632
+ 2 , 349,858, 406
100, 000, 000

-1,537,122,943
25, 000, 000

+ 4 , 237,486, 204. 71

+ 2 , 249, 858, 406

-1,562,122,943

+4,237,486,204.71

-f 2, 249,858, 406

-1,135,607,943

Summary
Excess of expenditures (-1-) or receipts (—).
Less p u b l i c d e b t r e t i r e m e n t s
Excess of e x p e n d i t u r e s ( + ) or receipts (—)
(excluding p u b h c d e b t retirements)
T r u s t accounts, i n c r e m e n t on gold, etc.,
excess of receipts (—) or e x p e n d i t u r e s (-f)
Less n a t i o n a l b a n k n o t e r e t i r e m e n t s
T o t a l excess of e x p e n d i t u r e s ( + ) or
receipts (—) (excluding p u b l i c d e b t
retirements)
A d d i t i o n a l a m o u n t for r e c o v e r y a n d relief
( c o n t i n g e n t u p o n a p p r o p r i a t i o n being
m a d e therefor—see; P r e s i d e n t ' s B u d g e t
Message)
F o r footnotes, see p . 38.




-1,135, 607, 943
401, 515, 000
-1,537,122,943

1, 537,122,943
-25, 000, 000

38

REPORT OF THE SECRETARY OF THE TREASURY

Receipts and expenditures for the fiscal year 1936, on the basis of daily Treasury
statements (unrevised), and estimated receipts and expenditures for the fiscal years
1937 and 1938—Continued
1936, actual

1937, estimates

1938, estimates

GENERAL AND SPECIAL ACCOUNTS—Con.

EXPENDITURES—continued
Summary—continued.
Increase (-f) or decrease ( - ) in General
Fund balance

4-$840,164, 664.49

Increase (+) or decrease (—) in the public
debt
Public debt at beginning of year
.

+6, 077, 650,869.20
28,700, 892, 624. 53

+1,248,000,000
33, 778, 543, 494

-$25,000,000
35, 026, 543,494

33, 778, 543, 493. 73

35, 026, 543, 494

35, 001, 543,494

Public debt at end of year.

._

-$1,001,868,406

TRUST ACCOUNTS, INCREMENT ON GOLD,
ETC
RECEIPTS

Trust accounts
Increment resulting from reduction in the
weiffht of the cold dollar
Seigniorage ^
Unemployment trust fund _
Total-.

238,827,935. 50

223,218,443

223, 867, 643

784,464. 60
175, 789, 415.49
18,949,421. 44

1,750,000
40, 000, 000
278,300,000

25, 000,000
576, 500, 000

434, 351, 237. 03

543,268,443

825,367, 543

205,131,966.43

264,948,075

265, 047, 510

EXPENDITURES

Trust accounts *
Transactions in checking accounts of governmental aizencies (net)
Chargeable against increment on gold:
Melting losses, etc
Payments to Federal Reserve banks
(sec. 13b, Federal Reserve Act, as
amended)
For retirement of national bank notes..
Unemployment trust fund investments... J
Total.Excess of expenditures over receipts

41,179,967

80,788,693.33
791,845.87

750,000

5,614,453.63
397, 422, 480. 00
18,909,000.00

1, 000, 000
100,000,000
278,300,000 1

25, 000, 000
576, 600, 000

708,658,429.26

644,998,075 |

825, 367, 543

274, 307,192. 23

101,729,632

1 Assuming extension of temporary taxes and duties in present form. See Table 15, p. 383 for estimates,
assuming temporary taxes are not extended.
2 Additional expenditures on these accounts are included under "Recovery and relief."
3 The Executive order of June 10, 1933, as amended, provides for the transfer of the function of disbursement of all moneys of the United States (except those relating to the Military and Naval establishments,
rivers and harbors, and Panama Canal) to the Division of Disbursement, Treasury Department. The
transfer of such functions in Washington, D. C., of the several departments and establishments subject
to the Executive order of June 10, 1933, was completed on July 1, 1934. Therefore, effective July 1, 1934,
in the interest of economy and efficiency, the disbursements by the Division of Disbursement, Treasury
Department, which appear in daily Treasury statements under the caption "Departmental expenditures"
are on the basis of checks issued. The totals shown, after making adjustment of outstanding checks of
the Division of Disbursement, relating to such "Departmental expenditures", are on the basis of checks
paid as published heretofore.
* The expenditures for the fiscal year 1936 include adjustments in the classification of repayments to
appropriations deposited by Army disbursing officers in the fiscal years 1934 and 1935, as follows:
Increase:
General expenditures: National defense—Army. ^
$66,581,618.38
Decrease:
General expenditures: War Department (nonmilitary)
606,962.63
Recovery and relief expenditures:
Emergency conservation work. _
60,789,926.21
Public works—other:
War Department (nonmilitary)
639,572.20
National defense—Army
13,071,778.73
Trust accounts—other...
473,379.61
65,681,618.38
8 Expenditures on account of "Federal Surplus Commodities Corporation" and "Federal Emergency
Relief Administration" are combined under the latter caption on p. 2 of the daily Treasury statement.
\ 8 This item represents seigniorage resulting from the issuance of silver certificates equal to the cost of the
silver acquired under the Silver Purchase Act of 1934 and the amount returned for the silver received under
the President's proclamation, dated Aug. 9, 1934.
1^ NOTE.—Excess credits a;nd adjustments in italics to be deducted.




REPORT OF THE SECRETARY OF THE TREASURY

39

Fiscal year 1937
Total receipts.—Total receipts (general and special accounts) for
the fiscal year 1937 are estimated at $5,828,000,000 (on daily Treasury
statement basis, unrevised), an increase of $1,712,000,000, or 41.6
percent, over the $4,116,000,000 receipts from these sources for the
fiscal year 1936.
Actual receipts from internal revenue taxes and customs duties
collections amounted to $3,900,000,000 in the fiscal year 1936 as
contrasted with estimates from these sources of $5,636,000,000 for
the fiscal year 1937. The figures are not strictly comparable, due
to the addition or elimination of taxes on certain items and to clianges
in the method of taxing other items. Certain taxes which were collected in the fiscal year 1936, such as processing taxes under the
Agricultural Adjustment Act and related taxes, the bituminous coal
tax, and the tax on jewelry, have now been eliminated from the tax
system. The revenue from other taxes, however, appears for the
first time in the estimated receipts for the fiscal year 1937. The
most important of these are the employment tax and the tax on
employers of eight or more persons, both levied under the Social
Security Act. The tax on unjust enrichment is nonrecurring and
will be collected only in the fiscal year 1937.
Collections of corporation taxes under the Revenue Act of 1936 will
reflect in the returns for 1937 the surtax on the undistributed profits
of corporations, unless within the tax year they have been distributed
as dividends taxable in the hands of the recipient during that same
tax year. This act also provides that taxable income in the form of
dividends shall be subject to the normal tax in the tax year in which
they are received.
The full effect of the Revenue Act of 1936 will not be reahzed in the
fiscal year 1937, since collections under the provisions of this act will
only include those tax payments made in the months of March, April,
May, and June 1937. Furthermore, many corporations whose fiscal
years began prior to December 31, 1935, will not be subject to the
provisions of the Revenue Act of 1936 in time to affect Federal
revenues in the fiscal year 1937.
The estimated increase of $1,736,000,000 in total internal revenue
and customs receipts (on daily Treasury statement basis, unrevised)
is in large measure a reflection of the Revenue Acts of 1935 and 1936,




40

REPORT OF THE SECRETARY OF THE TREASURY

and of improved' business conditions. These effects are not only
indicated by the increase in the estimated total of the income tax
collections but will also be reflected in most of the major items of
miscellaneous internal revenue.
Income tax.—It is estimated that income tax collections for the
fiscal year 1937 will amount to $2,373,000,000, or 66.3 percent more
than the comparable figure for 1936. This increase is due to the
improvement in business conditions and, in addition, to the fact that
collections in the last 4 months of the fiscal year will reflect provisions
of the Revenue Act of 1935 (continued in the Revenue Act of 1936)
which increase surtax rates above the $50,000 surtax net income class,
and of the Revenue Act of 1936 which make dividend receipts subject
to the normal tax, and impose a surtax on the undistributed profits
of corporations. A slight increase in back income tax collections is
estimated because of the increase in income tax liabihty and the continued intensive drive for collections by the Bureau of Internal
Revenue.
The excess-profits tax estimate of $14,500,000, despite better business conditions, is about the same as the collections for the fiscal
year 1936. The collections for the first half of the fiscal year 1937 are
expected to be very much larger than those for the corresponding
period of 1936, reflecting greatly increased corporate profits in the
calendar year 1935. This increase, however, is expected to be practically offset by the estimated decline in collections in the last half of
the fiscal year. This is due to the fact that corporations have already
availed themselves of the opportunity afforded by the Revenue Act
of 1935 for redeclaration of the value of their capital stock in order to
reduce their combined tax liability from the excess-profits and capital
stock taxes.
Miscellaneous internal revenue taxes.—Estimated collections under
the capital stock tax of $139,000,000,«show an increase of $4.4^000,000,
or 46.4 percent, over the comparable coUections for the fiscal year
1936. These collections directly reflect the revaluation mentioned
above which occurredln connection with the capital stock tax returns
flled June 30,1936, payment of which was received in the early months
of the fiscal year 1937.
Total estate tax collections for the fiscal year 1937 are estimated at
$305,000,000. The estimate of an increase of $86,000,000 in the
collections for the estate tax in the fiscal year 1937 is only a partial
refiection of the higher rates and lower exemptions contained in the
Revenue Act of 1935. Although the new rates became effective
at the time of the signing of the act by the President on August 30,
1935, the maximum time for filing final estate tax returns was extended
from the previously existing 12-month requirement to one of 15
months after the decedent^s death. Hence, the fiscal year 1937



REPORT OF THE SECRETARY OF THE TREASURY

41

estate tax estimates contain the first 2 months' collections chiefly
under the lower rates of 1934, followed b}'' relatively low collections
for the next 3 months due to the time extension. Beginning with
the December 1936 collections the new rates are effective with respect
to all returns filed in connection with the estate tax. The estimated
decrease of $50,000,000 in receipts from the gift tax for 1937 is in
large measure due to the removal of special incentives for gifts which
existed in the calendar year 1935.
Miscellaneous internal revenue tax collections (exclusive of taxes
upon carriers and their employees, Social Security Act taxes, and the
tax on unjust enrichment) are estimated at $2,275,000,000 for
the flscal year 1937, an increase of 13.2 percent over comparable
collections for the fiscal year 1936.
Each of the major classifications of miscellaneous internal revenue
has contributed to this increase. The revenue from alcoholic beverage taxes is estimated at $595,000,000, an $89,000,000 increase attributable mainly to expected larger sales of fermented malt liquors, and
to probable increased consumption of distilled spirits, as a result
of improving quality, more rigid enforcement activity, and increased
consumer incomes. Collections from tobacco taxes are estimated at
$542,000,000, an increase of $41,000,000 from 1936. The gain is
attributable principally to the estimated increase in the consumption
of small cigarettes. The estimated increase of $9,000,000 in stamp
tax collections reflects anticipated increases in the volume of trading
on the stock exchanges and in corporate flnancing.
Manufacturers' excise tax collections are estimated at $428,000,000,
an increase of $46,000,000 over the previous year. The gain is attributable in large measure to collections from the taxes on gasoline,
automobiles, and lubricating oils. MiscellaDcous taxes are expected
to increase $6,000,000 reflecting principally the normal concomitant
of returning prosperity in the increased use of telephone, telegraph,
and radio, as well as an increased number of admissions to theaters
and concerts.
Social security and other internal revenue taxes.—The United States
Supreme Court's decisions in 1936 invalidated the processing taxes
imposed by the Agricultural Adjustment Act, in addition to invalidating the taxes levied under the Bituminous Coal Conservation Act
of 1935 (collections from which were reported as miscellaneous taxes).
The act of February 10, 1936 (Public No. 433), repealed the Potato
Act of 1935, the Kerr Tobacco Act, and the Bankhead Cotton Act of
1934. Taxes imposed by these acts had yielded in the fiscal year
1936 revenue of over $77,000,000 from tax liabilities incurred up to
the time of their discontinuance.
Collection of taxes under the Social Security Act will begin in January 1937. Title VIII imposes an excise tax on ;employers and an



42

REPORT OF THE SECRETARY OF THE TREASURY

income tax on their employees applicable with respect to employment
after December 31, 1936. These taxes are expected to yield
$253,000,000 in the latter half of the fiscal year 1937. Title I X of
the act, providing for an excise tax on employers of eight or more
persons, became effective January 1, 1936; payments are due beginning January 1937, and are estimated at a total of $71,000,000 for
the payments to be made during the current fiscal year. For the
initial year, each of these taxes is imposed at one-third of the rate
which it will reach when the full rate is applied, beginning January
1, 1938, in the case of title IX, and January 1, 1949, in the case of
title VIII.
The act to levy an excise tax on carriers and an income tax upon
their employees became effective March 1, 1936, and terminates
February 28, 1937. The estimate for the collections of these taxes
in the fiscal year 1937 of $135,000,000 includes an estimate of
$33,000,000 back taxes from the liabilities incurred in the fiscal year
1936 but unpaid due to a court injunction issued by the District
Court of the United States for the District of Columbia on June 30,
1936, restraining the collection of these taxes.
Customs.—Customs receipts for the fiscal year 1937 are estimated at
$447,000,000, an increase of about $60,000,000 over the fiscal year
1936. Revenue from duties on distilled spirits and wines is expected
to decline by more than $2,000,000. In general, imports and duties
therefrom are expected to increase because of improved trade
conditions.
Miscellaneous receipts.—Revenues from miscellaneous receipts
for the fiscal year 1937 are estimated at $192,000,000, a decrease of
$24,000,000 from the comparable receipts for the preceding fiscal
year. This difference reflects a reduction of about $50,000,000 in
the 1937 estimate of interest on obligations of the Reconstruction
Finance Corporation. This decrease is due to the fact that certain
interest payments which normally would have been made in the
fiscal years 1935 and 1937 were made instead in the fiscal year 1936.
Offsetting items include increases of $14,000,000 and $10,000,000 in
the repayments of loans made by the Resettlement Administration
and the Farm Credit Administration, respectively.
Fiscal year 1938
Total receipts.—Total receipts (general and special accounts) for
the fiscal year 1938 are estimated at $7,294,000,000 (on daily Treasury
statement basis, unrevised), assuming that the temporary taxes
expiring June 30 and July 31, 1937, are extended. This represents an
increase of $1,465,000,000, or 25.1 percent, over the comparable
estimates for the fiscal year 1937, and is $3,178,000,000, or 77.2
percent, more than the actual receipts for the fiscal year 1936. If



REPORT OF THE SECRETARY OF THE TREASURY

43

the temporary taxes are not extended, the above estimates wiU be
reduced by $494,000,000.
Income tax.—Total income tax collections are estimated at $3,365,000,000, an increase of $992,000,000 over the estimated collections
for the fiscal year 1937. This increase represents the first full year of
collections under the Revenue Act of 1936, which made dividends
subject to the normal tax and imposed a surtax on the undistributed
profits of corporations, as well as put into effect the increased surtax rates on individual incomes, first imposed by the Revenue
Act of 1935. I t is also in part a reflection of the improvement in
business in 1936 and a partial reflection of the estimated business
recovery for 1937. The excess-profits tax collections are expected to
decline to $6,000,000 for the fiscal year 1938, as the corporations have
availed themselves of the opportunity afforded by the Revenue Act of
1935 to make a new declaration for the capital stock tax and so reduce
their excess-profits tax liabilities.
Miscellaneous internal revenue taxes:—The capital stock tax receipts are estimated at $142,000,000, an increase of $3,000,000 over
the estimate for the fiscal year 1937. The estate tax receipts are
estimated at $464,000,000, an increase of $159,000,000 over the estimate for the fiscal year 1937. This is not only a reflection of the
expected higher value of taxable estates but also of a full year of collections under the lower exemptions and higher rates imposed by the
Revenue Act of 1935. The gift tax receipts are estimated at
$75,000,000 for the fiscal year 1938.
Miscellaneous internal revenue tax collections for the fiscal year
1938 are estimated at $2,032,000,000, assuming that the temporary
taxes expiring on June 30, 1937, and July 31, 1937, are not extended.
This is $243,000,000 less than the $2,275,000,000 estimated receipts
from these sources for the fiscal year 1937. If the temporary taxes
are extended, the 1938 fiscal year estimate is $2,508,000,000. This
represents an increase of $233,000,000 over the comparable estimate
for the fiscal year 1937.
Each of the major classifications of miscellaneous internal revenue
is expected to contribute to this increase. The receipts from alcoholic
beverage taxes are estimated at $644,000,000, an increase of $49,000,000 over the estimate for the fiscal year 1937. This increase is
attributable mainly to the estimated increased receipts from the taxes
on fermented malt liquors and to the expectation of increased consumption of distilled spirits. Collections from tobacco taxes are estimated at $569,000,000, an increase of $28,000,000 over the comparable estimate for the fiscal year 1937. The gain is largely the result of
the estimated increase in the consumption of small cigarettes. The
estimated increase in stamp tax collections of $5,000,000 reflects estimates of a moderate increase in the volume of trading in securities on
stock exchanges and in new corporate financing. If certain of the



44

REPORT OF THE SECRETARY OF THE TREASURY

temporary documentar}^ stamp taxes are not extended, the estimate
for revenue from this source would be only $42,000,000, or $36,000,000
less than the $78,000,000 estimate for the fiscal year 1937.
Manufacturers' excise tax collections are estimated at $449,000,000,
an increase of $20,000,000 over the estimate for the fiscal year 1937.
The bulk of this estimated increase is due to the expected larger
volume of gasoline consumption. Most of the taxes which expire
on June 30 and July 31, 1937, are manufacturers' excise taxes. If
these taxes should not be extended, total manufacturers' excise
taxes are estimated at $43,000,000, representing largely a carry-over
of collections from tax liabilities incurred in the previous fiscal year.
This would amount to a decrease of $386,000,000 in the receipts
from this source as compared with the fiscal year 1937. Miscellaneous taxes are estimated to increase $4,000,000 over the $79,000,000
estimate for the fiscal year 1937, assuming that the temporary taxes
are extended. If they are not extended, miscellaneous taxes are
expected to yield only $33,000,000, or $46,000,000 less than the
estimate for the fiscal year 1937.
Social security taxes.—The fiscal year 1938 will be the first full year
of collections of the taxes imposed by the Social Security Act. I t is
estimated that the employment tax, imposed by title VIII of that
act as an excise tax on employers and an income tax on their employees, will yield $622,000,000 in the fiscal year 1938, an increase
of $369,000,000 over receipts from this source for the fiscal year
1937. The collections of the tax under title I X of the act, which is
an excise tax on employers of eight or more persons, are estimated
to yield $153,000,000 in the fiscal year 1938, an increase of $82,000,000
over the estimate for the fiscal year 1937. This is the result of collecting in the latter half of the fiscal year 1938 two quarterly payments
on the tax liabihties of the calendar year 1937 at double the rates
which apphed in 1936.
Customs.—Customs receipts for the fiscal year 1938 (on the assumption that temporary taxes on certain products, such as coal, petroleum,
copper, lumber, and certain animal and vegetable oils, are extended)
are estimated at $463,000,000, an increase of about $16,000,000 over
the fiscal year 1937. A decrease of $2,000,000 from the estimate for
the fiscal year 1937 is expected in revenue from wines and liquors,
chiefly as a result of a probable decline in whisky imports from
Canada. In the flscal year 1938, it is estimated that the revenue
from other classes of imports will continue to increase. Assuming that the temporary import taxes are not extended, customs
receipts of $445,000,000 are expected, a decrease of $18,000,000 from
the estimate assuming the continuation of these duties.
Miscellaneous receipts.—Miscellaneous receipts for the flscal year
1938 are estimated at $182,000,000, a decrease of $10,000,000 as
compared with the estimate for the fiscal year 1937.



REPORT OF THE SECRETARY OF THE TREASURY

45

MONETARY DEVELOPMENTS

Gold
Pubhc Resolution No. 63, approved August 27, 1935, entitles the
lawful holders of coius or currencies of the United States to exchange
them, dollar for dollar, for other coius or currencies which may be
lawfully acquired and are legal tender for public and private debts;
and, for a limited period, entitled the owners of the gold clause securities of the United States, including those not yet due, to receive immediate payment of the stated dollar amount thereof with interest to
the date of payment or to prior maturity or to prior redemption date,
whichever was earlier. Pursuant to the authority of this resolution,
regulations, approved by the President on September 14, 1935, were
issued governing the immediate payment of outstandiug gold clause
securities and the exchange of coins and currencies of the United
States.
The provisional regulations issued under the Gold Reserve Act of
1934 were further amended during the year. An amendment on
August 26, 1935, excepted United States gold coin from the gold that
may be acquired by the Federal Reserve banks under article IV of
such regulations and from the gold that may be purchased by the mints
and assay offices under article VI of such regulations. An amendment,
eft'ective January 1, 1936, removed some of the restrictions on dealings in gold for industrial, professional, and artistic purposes.
On January 10, 1936, the President signed a proclamation extending
for 1 year, until January 30, 1937, the powers conferred by section 10
(stabilization fund) of the Gold Reserve Act of 1934 and section 43
(b) (2) (fix the weight of gold and silver dollars, etc.) of title I I I of
the act approved May 12, 1933, as amended.
The public resolution, proclamation, and department circulars
issued during the fiscal year with respect to gold appear as exhibits
36 to 39, pages 266 to 270.
Silver
Acquisitions of silver by the Treasury from all sources during the
fiscal year were 609,613,258 ounces, at a cost of $395,313,736. Under
the proclamation of December 21, 1933, as amended, 48,784,455
ounces were received; 650,452 ounces were received under the proclamation of August 9, 1934; 558,639,669 ounces were purchased under
the authority of section 3 of the Silver Purchase Act of 1934; and
1,538,682 ounces were received in deposits of gold bullion and in exchange for Government-stamped bars.
Silver certificates
The issuance of a new series of $1 silver certificates, designated
series of 1935, was begun on December 18, 1935. The new $1 bill
presented for the first time on any money both the reverse of the



46

REPORT OF THE SECRETARY OF THE TREASURY

great seal of the United States and the famihar obverse of the great
seal. (See exhibit 40, p. 270.)
Since there was a considerable reserve stock of $1 silver certificates
of the series of 1934, their issuance was continued until the stock was
exhausted on June 22, 1936. The issuance of $5 and $10 silver certificates of the series of 1934 is contiuued.
On June 30, 1936, the amount of silver certificates outstandiug was
SI,133,785,172, representing an increase of $323,771,495 during the
fiscal year.
i
^^
National bank notes
National bank notes, which have been an important part of this
country's circulating medium since the establishment of the national
banking system in 1863, are now being gradually retired from circulation. Their eventual disappearance will constitute a step in the
simplification of our currency system.
The issuance of national bank notes by national banks has always
been contingent upon the deposit with the Treasurer-of the United
States of bonds of the United States bearing the circulation privilege.
For many years past the only issues outstanding which carried permanently the circulation privilege were the 2 percent consols of 1930 and 2
percent Panama Canal bonds of 1916-36 and 1918-38. Under the
Federal Home Loan Bank Act of July 22, 1932, all bonds of the
United States bearing an interest rate not exceeding 3% percent per
annum were given the circulation privilege for 3 years thereafter.
Both the consols and the Panama Canal bonds were called for redemption at the beginning of this fiscal year,^ while the temporary provision
of the Federal Home Loan Bank Act expired on July 22, 1935.
Part of the increment resulting from the reduction in the weight
of the gold dollar was made available for the retirement of the bonds
bearing the permanent circulation privilege. As explained on page
23 of last year's report, however, gold certificates issued against
gold representing this part of the increment are being deposited in
the Federal Reserve banks only as rapidly as approximately corresponding amounts of national bank notes are retired, in order to
avoid any temporary alteration in the aggregate supply of money
due to this operation.
By June 30, 1936, national banks had deposited lawful money
with the Treasurer of the United States to the amount of all but
$600,000 of their liability for these notes, thereby ending for the
national banks, and transferring to the United States, the liability
for the redemption of all but $600,000 of such notes.
On June 30, 1936, the amount of national bank notes still outstanding was $371,721,815. A year previous the amount outstanding was
$769,095,645, showing retirements of $397,373,830 in the intervening
12 months.
1 See p. 18 for an account of the redemption of these issues.




REPORT OF THE SECRETARY OF THE TREASURY

47

BUREAU OF INTERNAL REVENUE

During the fiscal year 1936 collections of internal revenue in the
amount of $3,448,000,000,^ exclusive of agricultural adjustment
taxes, exceeded collections in the preceding fiscal year by $675,000,000.
Agricultural adjustment taxes amounted to $72,000,000,^ a decrease
of $455,000,000.
Back taxes on income
The effort to obtain more prompt payment of back taxes on income was continued during the fiscal year 1936. The work of investigation in the field offices upon 1934 returns was practically
completed by June 30, 1935. I t is intended that the investigation
of returns for subsequent years shall be undertaken and completed
so far as practicable within 15 months following the final filing date.
Approximately 750 internal revenue agents were added to the field
force of the Income Tax Unit, the majority by appointment effective
July 1, 1935, ancj the increase in force made it possible to conduct
more than 125,000 examinations, which otherwise could not have
been undertaken. The total additional tax recommended for
assessment amounted to $355,000,000, exceeding the amount recommended for 1935 by $79,000,000. The amount of back income taxes
collected during the fiscal year 1936 was $213,557,591 as compared
with $185,641,137 during 1935, an increase of $27,916,454, or 15.0
percent.
The examination of depreciation deductions claimed by taxpayers
resulted in recommendations for the assessment of $29,238,951, of
which amount $21,851,292 was agreed to by taxpayers.
Additional taxes assessed in Washington (exclusive of jeopardy
assessments) and in the collectors' offices totaled $219,355,884. Of
this amount, taxpayers executed agreements, consenting to the
immediate assessment and collection of deficiencies aggregating
$140,046,254. In addition, deficiencies totaling $21,763,393 were
assessed by default in cases wherein taxpayers failed to avail themselves of their privilege of filing petitions with the United States
Board of Tax Appeals. The total of assessments, therefore, which
became collectible, and upon which litigation was avoided, was
$161,809,647 or 73.8 percent of the $219,355,884 assessed. During
the previous year the total assessments aggregated $178,152,259
with respect to which litigation was avoided upon $108,743,858, or
61.0 percent.
Alcohol tax administration
The program for the enforcement of raw materials control, authorized under the act of June 18, 1934, has been very effective during
the second year of the administration of the act. Close control of
1 On the basis of reports of collections, see p. 312.




48

REPORT OF THE SECRETARY OF THE TREASURY

blackstrap molasses and corn sugar has resulted in illicit distillers
resorting to the use of granulated cane sugar, which adds to the
expense of illicit distilling. Control over other commodities used in
the fermentation of mash, such as urea, ammonium phosphate, and
other yeast foods, has resulted in the seizure of illicit distilleries.
Regulations were promulgated permitting control over denatured
alcohol and manufactured products containing denatured alcohol,
making it possible to trace these products in illicit channels. As a
result, considerable success has been achieved in keeping to a minimum the amount of denatured alcohol and its products reaching
illicit trade. Smuggling has practically been eliminated on the
Atlantic Coast during the past year through a coordinated program
of the Enforcement Division, the Customs Service, and the Coast
Guard.
The measurement of beer at breweries by the use of meters for tax
payment purposes begun during the previous year, has proved
successful. A meter service plan was instituted, providing for
rebuilt meters to be supplied by the manufacturers in exchange for
old meters at approximately 25 percent of the original cost. Arrangements were also made with the meter manufacturers to provide small
parts necessary for frequent replacement. Under this arrangement,
minor replacements can be made promptly by inspectors in the field,
at a minimum cost to the brewers, without entailing delay in brewery
operations.
Research work in the laboratory of the Alcohol Tax Unit resulted
in developing three new formulas for completely denatured alcohol.
These new formulas will, it is believed, cut off one of the sources of
illicit beverage spirits. Progress was made on the problem of developing a satisfactory method for determining whether race horses have
been stimulated with narcotic or other drugs. Improved methods
for determining the tax classification of many products were developed.
The laboratories were also employed in bringing about better supervision over the operations of industrial alcohol plants, denaturing
plants, distilleries, rectifying plants, breweries, and bonded wineries.
A detailed description of the work of the Bureau of Internal Revenue
will be found on pages 136 to 162 of this report.
CONSTRUCTION ACTIVITIES OF THE TREASURY

The Department's building operations during the fiscal year 1936,
carried on under several different programs and appropriations, resulted in the completion or practical completion and occupancy during the year of 363 projects with a limit of cost of $47,126,351. In
addition, 416 projects with a limit of cost of $66,890,244 were placed
under contract, and 166 projects with a limit of cost of $26,863,600
were on the market for bids, or in the specification stage at the end



REPORT OF THE SECRETARY OF THE TREASURY

49

of the year. Plans were being prepared for 118 projects with a limit
of cost of $30,149,000, and land had been acquired for 7 additional
projects to cost approximately $602,000. Sites for 8 projects to cost
approximately $1,487,000 had been selected or were in process of
selection.
The original public building program
The Pubhc Building Act, approved May 25, 1926, and subsequent
acts enlarging the regular building program made general authorizations of $702,296,794 and specific authorizations for buildings and
land of $496,366,798. Of the 735 construction projects previously
under contract in this program, 706 with a limit of cost of $438,412,328
had been completed by June 30, 1936, leaving still under contract 29
projects with a hmit of cost of $57,954,470. Among these 29 projects
are included buildings which have been completed and occupied, but
on which certain minor work remains to be done.
Building program in the District oj Columbia.—The 1926 building
program for the District of Columbia has been practically completed,
except for certain items for the Archives Building and the South
Building, Department of Agriculture. The Archives Building and a
major part of the South Building were occupied during the year.
Under the present building program, which is chargeable to funds
allotted from emergency appropriations, the addition to the Internal
Revenue Building was completed and occupied during the year and
an extension to the Archives Building, to cost approximately $3,600,000, was in course of construction. Contracts for the new Interior
Department Building, to cost approximately $11,000,000, were
awarded in August 1935, and it is expected that this structure will
be ready for occupancy before the end of the calendar year 1936. A
contract for construction of an additional building for the Bureau of
Engraving and Printing and a building to be occupied by the Bureau
of Economics, Department of Agriculture, to cost approximately
$5,500,000, was awarded on June 5, 1936. Contracts, amounting to
$800,000, were also awarded for the construction of three animal
houses and a shop building for the National Zoological Park, and
work on these buildings is nearing completion. Specifications for an
addition to the Government Printing Office, to cost approximately
$6,000,000, are in course of preparation.
Program under the Public Works Administration
During the fiscal year 1936 the number of allotments for pubUc
buildings by the Public Works Administration under the National
Industrial Recovery Act, approved June 16, 1933, was reduced from
93790—37

5




50

REPORT OF THE SECRETARY OF THE TREASURY

442 to 434. Additional authorizations increased the total amount of
the allotments from $70,850,768 to $75,763,645. By June 30, 1936,
219 of these projects, with a limit of cost of $22,086,993, had been
completed; 213 were under contract with a hmit of cost of $49,921,652;
and 2 were in the drawing stage.
Program under the Emergency Appropriation Acts
The Emergency Appropriation Act, approved June 19, 1934, provided an appropriation of $65,000,000 for the emergency construction
of public buildings throughout the country, the projects to be selected
by the Secretary of the Treasury and the Postmaster General. This
act authorized the expenditure of $2,500,000 from Pubhc Works
Administration funds for increasing up to 10 percent the limits of
cost of both Public Works Administration and emergency construction projects when the bid of the lowest responsible bidder exceeds
the amount previously made available for any project. By June 30,
1936, 360 projects with a limit of cost of $65,946,944 were selected;
107 with a limit of cost of $8,695,978 were completed; 190 with a
limit of cost of $44,200,966 were under contract; and 63 were in the
prehminary stages.
Under dates of August 12, 1935, and June 22, 1936, additional
appropriations of $60,000,000 each were provided for public building
construction under practically the same conditions as those contained
in the act of June 19, 1934.
Under these appropriations 716 projects were authorized, to cost
approximately $115,099,468. By June 30, 1936, 132 projects, with
a hmit of cost of $14,522,368, were under contract and 584 projects
were in the preliminary stages.
Program for other departments
Funds to the amount of $32,258,946 were transferred to the Treasury Department by other departments for 41 projects involving the
rehabilitation, extension, and remodeling of old buildings, construction of new buildings, repairs, etc. Projects totaling $21,668,946
were under contract at the end of the fiscal year, the value of work
on the market or in the specification stage was $5,890,000, and drawings and specifications were being prepared for projects to cost approximately $4,700,000.
Detailed information with reference to all building programs and
appropriations will be found in the abstract of the report of the
Procurement Division on pages 174 to 184 of this report.




REPORT OF THE SECRETARY OF THE TREASURY

51

TREASURY ACTIVITIES UNDER TttE PROVISIONS OF THE SOCIAL
SECURITY ACT

The Social Security Act, approved August 14, 1935, provides for
grants to the States for^, old-age assistance, for unemployment compensation administration, for aid'to dependent children, for maternal
and child welfare, for public health work, and for aid to the dependent
blind.
Grants to States
The Secretary of the Treasury is required to make payments to the
States from sums appropriated for the various purposes. The
amounts of such payments are certified by the Social Security Board
or other governmental agency responsible for their determination
under the provisions of the act.
Old-age reserve account
Title I I of the act establishes a system of Federal old-age benefits
payable to employees who have attained the age of 65. Death benefits
are also payable.
Section 201 (a) of the act establishes an account in the Treasury to
be known as the '^Old-Age Reserve Account." The Secretary of the„
Treasury is required to submit annually to the Bureau of the Budget
estimates of the appropriations required to be made to this account.
These estimates are determined on a 3 percent reserve basis in accordance with accepted actuarial principles. Although the first appropriation to the account has already been made, in the amount of
$265,000,000, by the First Deficiency Appropriation Act, approved
June 22, 1936, it is not anticipated that this amount will be invested
until January 1, 1937, and thereafter. The first statement showing
the actuarial status of the account will appear in the Annual Report
of the Secretary of the Treasury for the fiscal year 1937.
I t is the duty of the Secretary of the Treasury to invest such portions of the amounts credited to the account as are not, in his judgment, required to meet current withdrawals. Such investments may
be made only in interest-bearing obligations of the United States or
in obligations guaranteed as to both principal and interest by the
United States. The purposes for which obligations of the United
States may be issued under the Second Liberty Bond Act, as amended,
are extended under the Social Security Act to authorize the issuance
to the account of special obligations bearing interest at the rate of 3
percent per annum. Obligations other than special obligations liiay
be acquired for the account only on such terms as to provide an investment yield of not less than 3 percent per .annum. All amounts
credited to the account are available for making payments required




52

REPORT OF THE SECRETARY OF THE TREASURY

under title II of the act. The Secretary of the Treasury makes all
benefit payments from the account in accordance with the certification
by the Social Security Board.
Unemployment trust jui!^
Section 904 (a) of the act establishes in the Treasury an unemployment trust fund. The receipts of State unemployment funds
are paid over to the Secretary of the Treasury for credit to the
unemployment trust fund. This fund is invested as a single fund,
but a separate book account is maintained for each State agency and
each account is credited quarterly with a proportionate share of earnings on the basis of average daily balances. The Secretary of the
Treasury is authorized and directed to pay out of the fund to any
State agency such amount as it may requisition, not exceeding the
amount standing to the account of such State agency at the time of
such payment.
Collection oj taxes
Titles VIII and IX of the act impose an income tax upon the
wages of employees and excise taxes on employers. The taxes are
collected by the Bureau of Internal Revenue under the direction of
the Secretary of the Treasury. The Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, makes
and publishes rules and regulations covering the collection of taxes.
Public health work
Title VI of the Social Security Act authorizes an appropriation for
assisting the States, counties, and other political subdivisions in maintaining adequate health services. A further appropriation was
made for expenditure by the Public Health Service for investigation
of disease and problems of sanitation. A report of the activities of
the Public Health Service under this title will be found on page 198
of this report.
TREASURY ACTIVITIES UNDER THE EMERGENCY RELIEF AFPRGPRIATION ACT OF 1935

Allocations from funds made available by the Emergency Relief
Appropriation Act of 1935 were received by several bureaus and
divisions of the Treasury Department for administrative expenses
incurred in connection with the act, for a revolving fund for the
purchase of supplies, and for projects designed to provide work for
the unemj^lbyed.




REPORT OF THE SECRETARY OF THE TREASURY

53

Administrative expenses
For handling the accounting, disbursing, and procurement activities imposed upon the Department by the Emergency Relief Appropriation Act of 1935, and for other administrative expenses, including
the payment and clearance of checks by the Treasurer of the United
States, $26,700,001 had been allocated to June 30, 1936. Obligations
incurred against this allocation totaled $23,989,928.91, and of this
amount $22,054,287.92 was expended. At the close of the fiscal year,
approximately 16,800 persons were employed on the work financed by
the allocation for administrative expenses, and in most cases these
employees received salaries at the standard Government rate paid for
similar work in the classified service.
Work relief supply fund
Executive Order 7151 of August 21, 1935, allocated to the Secretary
of the Treasury $3,000,000 to be set aside in the Treasury as a work
relief supply fund for use in the purchase and distribution of materials,
supplies, and equipment through the Procurement Division for the
work relief program. This fund is used to reimburse the general
supply fund of the Procurement Division for purchases made through
the latter fund, and is in turn reimbursed by the departments and
agencies receiving materials. Upon liquidation of the work relief
supply fund, the net assets, not in excess of the amount allocated, are
to be returned to the appropriation contained in the Emergency
Relief Appropriation Act of 1935; and the amount in excess of the
allocation is to be covered into the surplus fund of the Treasury.
Work relief projects
Public Health Service.—The Public Health Service received an
allocation of $2,721,750 to conduct a four-fold national health survey
under the direction of the Division of Scientific Research. The
chronic disease survey, covering 865,000 families, undertakes to throw
light on the nature and incidence of chronic and disabling diseases in
the country as a whole, and includes studies of diseases peculiar to
certain localities. The communicable disease survey, covering
214,000 families, will provide needed information of similar nature on
this type of illness. A detailed inventory of public health and medical facihties, including hospitals. State and local health departments,
nursing and tuberculosis facilities, etc., and dispensary or clinic services, is being prepared by the health facilities survey. Finally,
through the occupational morbidity and mortality study, invaluable
data are being gathered on the expectancy of industrial diseases at
given ages, according to sex and geographic areas. While none of the




54

REPORT OF THE SECRETARY OF THE TREASURY

surveys cover the entire country, urban and rural localities in 19
States have been included, constituting a representative sample of
the population of the Nation as a whole.
As of June 30, 1936, cumulative obligations amounted to $2,492,358.89, of which $2,412,320.56 represented actual expenditures.
Field work, employing a peak staff of 5,000 persons, more than 90
percent of whom were taken from relief rolls, was completed by the
end of June. The task of coding and tabulating began in January,
and will employ a staff of 1,000 relief workers for the remainder of the
calendar year 1936.
Coast Guard.—As of June 30, 1936, $4,850,950 had been allocated
to the Coast Guard for repair, renewal, and improvement of telephone
lines; reconditioning, modernizing, and construction of shore facilities
at various Coast Guard stations; construction of wooden boats; and
dredging at Government Island, Alameda, Calif. Obligations incurred to June 30, 1936, amounted to $3,178,677.86, of which $1,446,602.59 was disbursed. The number of workers provided with employment increased steadily from the time the program was begun,
and reached the fiscal year peak of 963 on June 27, 1936. Approximately three-fourths of the workers were taken from relief rolls.
Bureau of Internal Revenue.—Allocations were made to the Bureau
of Internal Revenue for a series of projects. About 3,400 persons
were regularly employed on these projects, more than 90 percent of
whom were taken from relief rolls.
A survey of miscellaneous taxes in 20 of the largest metropolitan
centers was designed to collect delinquent taxes, principally on sales
of sporting goods, cosmetics, radios, electric refrigerators, jewelry, and
furs, and on. admissions and dues. As of June 30, 1936, $1,937,500
had been allocated to this project; obligations amounted to $1,803,121.18, and of this amount $1,723,731.29 was expended. This investigation resulted in the collection of $3,411,476.72 and the assessment
of an additional amount of $10,500,330.54 as of June 30, 1936.
A second project involved the examination of income tax returns
which ordinarily would not receive an intensive examination. Allocations to this project amounted to $771,405 to June 30, 1936; obligations totaled $735,246.14, of which $689,815.91 was liquidated. As a
result of.the inspection of these returns, net deficiencies of $1,578,296.71 were disclosed to June 30, 1936, and taxpayers had agreed to
these deficiencies to the extent of $1,430,915.15.
A third project comprised a canvass to effect collection of delinquent
spirituous beverage taxes through an investigation in 91 metropolitan
centers. As of June 30, 1936,'allocations to this project amounted to
$917,683, of which $851,958.61 was obligated, and actual expenditures
amounted to $807,143.07. Under this project taxes and penalties
aggregating $993,924.93 were collected to June 30,1936.




REPORT OF TPIE SECRETARY OF THE TREASURY

55

Division of Research and Statistics.—The Division of Research and
Statistics received funds to carry out a statistical analysis of income
tax returns. The purpose of this study is to obtain more ample and
detailed information with respect to individual incomes, especially
from returns on incomes of less than $5,000. A complete tabulation
of all 1934 individual income tax returns will provide important
information relative to tax administration and tax legislation. This
tabulation includes classifications of incomes by geographic areas and
by small income groups, as well as tabulations of separate returns
filed by husbands and wives, returns having farm schedules, returns
showing capital gains or losses, and returns showdng ownership of
Government securities. In addition, separate ta,bulations are being
made of all partnership and fiduciary returns for the year 1934.
Work on this project commenced in September 1935, with headquarters at Washington, D. C , while field offices were established in
12 cities in the United States. The number employed increased
steadily to a maximum of 1,500 at the end of April 1936, and declined
to below 1,300 by June 30, 1936, over 90 percent of the workers being
drawn from relief rolls. I t is estimated that the entire study will be
ready for publication in June 1937. As of June 30, 1936, the amount
allocated to this project was $806,447, of which $780,923.67 was
obligated, and of this amount $694,689.94 was expended.
Procurement Division.—The Treasury relief art project, under the
supervision of the Procurement Division, received an allocation for
the employment of unemployed artists on the decoration of public
buildings. About 75 murals and 27 sculptures have been undertaken, as well as 76 projects involving the execution of more than
2,600 easel paintings and approximately 90 miscellaneous types of
artistic productions, resulting in the employment by June 1936, of
about 325 artists at widely scattered points in the United States.
As of June 30, 1936, the total amount allocated to this project was
$530,784, of which $235,407.98 was obligated, and of this amount
$224,883.47 was expended.
An allocation of $12,800 was made to the Procurement Division in
August 1935, for the razing of certain buildings on the post office site at
Des Moines, Iowa. At the request of the Procurement Division,
this work was undertaken by the Works Progress Administration.
BUREAU OF CUSTOMS

Total customs receipts amounted to $386,812,000 in the fiscal year
1936 as compared with $343,353,000 in 1935, an increase of
$43,459,000. This represented an increase of 12.7 percent over 1935
and 54.3 percent over 1933; in the latter year duties collected on
imports were at the lowest level since the close of the World War.




56

REPORT OF THE SECRETARY OF THE TREASURY

Almost half of the increase in receipts for the fiscal year 1936 was
due to larger dutiable imports of wool and wool manufactures. The
balance of the increase resulted from larger collections on dutiable
imports of metals and metal manufactures, agricultural products, and
various other commodities.
Although the volume of imports of distilled spirits and wines was
greater in the fiscal year 1936 than in 1935, duties collected on these
imports showed a moderate decline owing to the reduction in rates of
duty on rum, gin, and whisky under various reciprocal trade agreements. Collections of duties on imports of sugar also declined from
the previous year as the result of the concentration in the fiscal year
1935 of the greater part of the sugar imports permitted under the
quotas for both the calendar years 1934 and 1935.
The value of all dutiable imports entered for consumption in the
fiscal year 1936 was $921,498,000, an increase of 22.5 percent over the
preceding year. The value of imports entered free of duty constituted 58 percent of the total value of ill imports entered for consumption in each of the years 1935 and 1936.
Foreign trade results and customs receipts are summarized by
fiscal years in the following table:
Merchandise exports and imports and customs receipts, fiscal years 1931 to 1936
[In millions of dollars]

Fiscal year

1931
1932 _
1933
1934
1935
1936

Exports

_
--

-

-

General
imports

3,083
1,948
1,440
2,042
2,121
2,414

Excess of
exports over
imports

2,432
1,730
1,168
1,721
1,786
2,216

651
218
272
321
335
198

Customs
receipts i

378
328
251
313
343
387

1 On basis of daily Treasury statements (unrevised). Includes tonnage tax in 1931.

A more detailed statement of the activities of the Bureau of Customs is presented on pages 124 to 129 of this report.
NONFISCAL ACTIVITIES

Coast Guard
The Coast Guard's principal activities during the year included the
international service of ice observation and ice patrol to promote
safety at sea, in the vicinity of the Grand Banks of Newfoundland,
along the trans-Atlantic steamship lanes, and oceanographic cruises
and surveys; patrol of the coast—including aircraft patrol—to aid
vessels and persons in distress; patrol of the waters of the North
Pacific Ocean, Bering Sea, and southeastern Alaska, in the enforcement of laws and regulations for the protection of the fur seal and



REPORT OF THE SECRETARY OF THE TREASURY

57

sea otter, game, fisheries, and fur-bearing animals of Alaska, and of
other laws in Alaska; patrol in the enforcement of the Northern
Pacific Halibut Act and the convention for the preservation of the
halibut fisheries of the northern Pacffic Ocean and the Bering Sea;
supervision of the anchorage and movements of vessels at ports and
other places where Federal regulations are in force; cooperation in
the enforcement of regulations promulgated by the Interstate Commerce Commission governing the handling of explosives by vessels;
enforcement of the customs, navigation, motor boat, and other laws
of the United States; patrol and supervision of regattas and marine
parades; prevention of smuggling of liquor and other contraband;
removal of derelicts and other obstructions to navigation from the
paths of marine commerce; and the preservation of life and property
at sea and along the coasts.
In a number of particulars the performances of the service during
the year 1936 were marked by material increases over the preceding
year. The persons saved or rescued from peril numbered 7,510,
which exceeded by 1,685 last year's number, and by 1,018 the highest
record ever before attained by the Coast Guard in a single year in
this form of endeavor. The persons on board vessels assisted by the
Coast Guard numbered 37,553, an increase of 4,672 over the previous year. Assistance was rendered in 14,746 instances, 944 more
than during 1935.
A more detailed account of these and other operations of the Coast
Guard will be found on pages 111 to 120 of this report.
Public Health Service
Reports of the prevalence of diseases dangerous to the public
health were received from all available sources in the United States
and foreign countries, and the information was disseminated to State
and local health officers and others. The general death rate for the
calendar year 1935, based on preliminary reports, showed a slight
decrease from the rate for 1934. Record low death rates were established for diphtheria and typhoid fever, and the downward trend of
tuberculosis continued. However, more cases of poliomyelitis and
smallpox were reported in 1935 than in 1934.
The Public Health Service continued its cooperation with State
health agencies in providing technical supervision for community
sanitation, malaria control drainage, and mine sealing; gave assistance to other Federal bureaus and departments on problems of
environmental sanitation; and cooperated with the State and Territorial health authorities of California, Oregon, Washington, Montana,
and Hawaii on measures directed toward the control of bubonic
plague. Advisory service was extended to various agencies expend


58

REPORT OF THE SECRETARY OF THE TREASURY

ing Federal emergency relief funds for public health nursing, supervision of water supplies, elimination of faulty plumbing, and similar
activities.
The community sanitation projects, inaugurated by the Civil
Works Administration and continued by the Emergency Relief Administration and by the Works Progress Administration, are sponsored by the State health departments with technical supervisory
assistance from the Public Health Service. Since these projects were
initiated in 1933, 896,879 sanitary latrines have been constructed in
unsewered villages and in unsewered areas of cities, for the purpose
of preventing the spread of typhoid fever, hookworm disease, dysentery, and enteritis; and 340,000 acres of malaria-mosquito breeding
areas have been drained, involving the construction of 22,000 miles
of ditches for the prevention of malaria.
During the year a health inventory was conducted as a work relief
project under an allocation from the funds provided in the Emergency
Relief Appropriation Act of 1935. During a part of the year 5,000
persons, 90 percent from relief rolls, were engaged in collecting data
for the project. The inventory included a survey of disabling illnesses, physical impairments, and medical care among 865,000 families in 90 cities and 23 rural counties throughout the United States,
as well as a communicable disease survey, an occupational morbidity
and mortality study, and a health facilities study.
The cooperative public health administration program authorized
under sections 601. and 602, title VI, of the Social Security Act, approved August 14, 1935, was inaugurated. By the close of the year,
every State had submitted a plan for operation under the provisions
of this title and had been allotted funds from the appropriation made
available for 1936.
Authorization was given in the Social Security Act for the appropriation of $2,000,000 per annum chiefly for investigation of disease
and problems of sanitation. On February 11, under this authorization, $375,000 was appropriated for research and administrative expenses for the remainder of the fiscal year 1936. This supplemented
funds available to the Public Health Service under its regular appropriation for investigation of disease and problems of sanitation. A
full account of the public health work carried on under the provisions
of the Social Security Act is to be found on page 198 of this report.
The venereal disease control work of the Public Health Service
has been given a more important place than it has held for a number
of years. Through the Social Security Act, assistance was given to
a larger number of State health departments in the development of
their prograrns. I t also was possible to plan additional studies
which are of fundamental importance in this field of public health.




REPORT OF THE SECRETARY OF THE TREASURY

59

These include investigations dealing with both the clinical and
laboratory aspects of syphilis and gonorrhea, and other original
scientific studies.
At the National Institute of Health extensive experimental work
was continued in connection with the determination of the causation
and prevention of meningitis, typhus. Rocky Mountain spotted
fever, dysentery, and other diseases. The sum of $1,463,000 was
made available for the construction, on donated land in Bethesda,
Md., of buildings for the housing of the National Institute of Health.
The United States Narcotic Farm at Lexington, Ky., in operation
since May 1935, for the care and treatment of drug addicts, has
admitted 1,240 patients. The Public Health Service continued to
supervise and furnish the medical, psychiatric, and technical services
for the Federal penal and correctional institutions under the control
of the Department of Justice and, at the request of the Attorney
General, inaugurated a special study for providing psychiatric services for Federal district courts. Special studies concerning the
country's medical and scientific needs for narcotic drugs, the medicosocial problems of drug addiction, and the causes, prevalence, and
means for the prevention and treatment of nervous and mental
diseases were continued. Cooperation was continued with international, national, and local official and voluntary agencies interested
in various phases of mental hygiene.
The marine hospitals and other relief stations of the Public Health
Service continued to furnish hospital and out-patient care to American merchant seamen and other legal beneficiaries. By the act of
March 21, 1936, these benefits were extended to seamen employed on
vessels of the United States Government not in the military or naval
establishments, and on State school ships; also to cadets on State
school ships. Seamen comprised the largest class of patients, but
the customary medical services were furnished to other beneficiaries
as well.
The Public Health Service also cooperated with other Government
departments in Washington in furnishing emergency medical relief to
employees and in supervising 20 medical relief units.
The International Sanitary Convention for Aerial Navigation, concluded at The Hague in 1933, became effective with regard to the
United States on November 22, 1935. The provisions of the convention applicable to air commerce between foreign countries and the
United States have been placed in effect and facilitate the observation
of measures for protecting the United States against the introduction
of quarantinable disease.
The inauguration of aerial transport service across the Pacific
necessitated the issuance of special instructions to the quarantine
stations at San Francisco, Honolulu, and Manila in order to prevent



60

REPORT OF THE SECRETARY OF THE TREASURY

the introduction of quarantinable disease into the United States and
to prevent the introduction of mosquito carriers of malaria into the
Territory of Hawaii, where this disease does not now exist.
The Surgeon General has effected an informal agreement with the
Chief of the Quarantine Service of Cuba, providing for the reciprocal
recognition of international deratization exemption certificates issued
by the quarantine officers of either country to vessels which are
maintained in a rat-free condition.
The fiftieth annual volume of the weekly Public Health Reports
was completed with the issue of December 27, 1935. This pubhcation contains statistical and other reports and articles describing the
latest advances in scientific knowledge relating to public health.
The activities of the Public Health Service are more fully presented
on pages 194 to 204 of this report.
Bureau of Narcotics
The Bureau of Narcotics has continued to direct its principal
enforcement activities against the major narcotic law violators of
the internal traffic and toward stopping the smuggling of drugs into
the United States by active cooperation with customs authorities.
The Bureau has solicited the cooperation of State and municipal law
enforcement agencies in dealing with the addict and the peddler and
in the prosecution of minor infractions of the narcotic laws.
Diversion of drugs from legitimate to illicit channels through the
robberies of narcotic stocks, the forgery and false execution of narcotic
prescriptions, and the improper prescribing and dispensing of narcotics continued to increase in significance as enforcement problems.
The cases against registered persons were 41 percent of the total cases
reported during the year as compared with 33 percent the year before.
The Uniform State Narcotic Law was enacted during the fiscal year
by the States of Illinois and Wisconsin, making a total of 29 States in
which this law has been enacted with httle or no amendment. This
act complements the Federal narcotic laws and its adoption renders
more effective the cooperation of State and municipal law enforcement
agencies.
A more complete account of the activities of the Bureau will be
found on pages 169 to 171 of this report.




REPORT OF THE SECRETARY OF* THE TREASURY

61

ORGANIZATION CHANGES AND PROCEDURE

Under the provisions of the Federal Alcohol Administration Act of
August 29, 1935, the Federal Alcohol Administration was created as a
Division in the Treasury Department, headed by an Administrator to
be appointed by the President, by and with the advice and consent of
the Senate. This Division was assigned to the supervision of the Secretary of the Treasury by Treasury Department Circular No. 244 of
November 25, 1935. Detailed reference to the duties and operations
of the Federal Alcohol Administration will be found on page 133 of
this report. On June 26, 1936, the President approved the Liquor
Tax Administration Act, under the terms of which the Federal
Alcohol Administration is made an independent establishment of the
Government, the office of Administrator is abolished, and provision is
made for the Federal Alcohol Administration to be composed of three
members to be appointed by the President, by and with the advice and
consent of the Senate. This change in the status of the Federal Alcohol Administration becomes effective when a majority of the members
of the Administration first appointed qualify and take office.
During the fiscal year 1936, three Treasury Department orders were
issued. Orders Nos. 11 and 12 relate to matters of administration
and supervision. Order No. 13 created a Division of Savings Bonds
in the Office of the Fiscal Assistant Secretary. These orders are
printed as exhibit 49, page 298 of this report.
Attention is invited to the attached reports of bureaus and divisions
of the Treasury Department and to the exhibits and tables accompanying the report on the finances.
H E N R Y MORGENTHAU,

Jr.,

Secretary oj the Treasury.
To the SPEAKER OF THE H O U S E OF REPRESENTATIVES.







ADMINISTRATIVE REPORTS OF
BUREAUS AND DIVISIONS




63




REPORT OF THE SECRETARY OF THE TREASURY

65

OFFICE OF THE COMMISSIONER OF ACCOUNTS AND DEPOSITS

The Office of the Commissioner of Accounts and Deposits has
administrative supervision over the Division of Bookkeeping and
Warrants and its relations to the office of the Treasurer of the United
States, over the Division of Disbursement, the Division of Deposits,
and the Section of Surety Bonds. I t prepares periodic estimates of
the future cash position of the Treasury for use of the Department
in connection with its financing; prepares calls for the withdrawal of
funds from special depositaries to meet current expenditures; directs
the transfer of Government funds between Federal Reserve banks
when necessary; directs fiscal agency functions in general, including
deposits of gold certificates in the gold certificate fund for credit with
Federal Reserve banks; supervises collections of principal and interest
on foreign obligations; keeps the accounts, and handles generally
matters relating to the indebtedness of foreign governments to the
United States, including matters arising under funding agreements;
supervises collections of railroad obligations owned by the Government and keeps the accounts relating thereto; handles the collection
of other obligations owned by the United States which are turned
over to the Treasury by other departments for collection; makes
payments, keeps accounts, and handles matters generally relating to
awards under the Settlement of War Claims Act of 1928. The
Commissioner likewise has control of the investment accounts of the
Government and is responsible for the proper custody of investments and securities held by the Treasurer of the United States and
the Federal Reserve banks for which the Secretary is responsible,
other than those related to public debt operations. The Commissioner also has supervision over the procedure for the maintenance
of the system of accounts and disbursements under the Emergency
Relief Appropriation Acts of 1935 and 1936.
Combined statement oj assets and liabilities oj governmental corporations
and credit agencies
A combined statement of assets and liabilities of governmental
corporations and credit agencies as of June 30, 1936, will be found
as table 40 on page 453 of this report. This statement is published
monthly in the Daily Statement of the United States Treasury, as
required by Executive Order No. 6869 of October 10, 1934. This
Executive order also requires every executive department and independent establishment of the Government holding assets or incurring
liabilities and every corporation in which the Government of the
United States has a proprietary interest to furnish to the Secretary
of the Treasury nob later than the 15th day of each month, a statement of its assets, liabilities, and capital and surplus as of the close
of business on the last day of the preceding month. During the
year the Treasury prepared, from reports submitted by governmental corporations and credit agencies, a summary statement of
the proprietary interest of the United States in such corporations
and credit agencies as of June 30, 1929 to 1936, inclusive. This
statement appears as table 41 on page 460 of this report.
Securities owned by the United States Government
The aggregate amount of securities owned by the Government on
June 30, 1936, based upon the latest reports received, was $17,985,93790—37

6




66

REPORT OF THE SECRETARY OF THE TREASURY

665,696.40 as against $17,676,212,144.72 on June 30, 1935, an increase of $309,453,551.68. A summary comparison of the holdings
at the end of each fiscal year is shown below. A detailed statement
of the securities held on June 30, 1936, will be found as table 39 on
page 450.
Summary of securities owned h'y the United States on June 30, 1935 and 1936
J u n e 30, 1935

Foreign obligations:
Received u n d e r d e b t s e t t l e m e n t s . .
All o t h e r . . .

$11,155, 784, 298. 04 $11,155, 714, 400.13
859, 205,363. 64
859, 205, 363. 64

Total
C a p i t a l stock of war emergency corporations
C a p i t a l stock, etc. of other g o v e r n m e n t a l corporations a n d credit agencies:
C a p i t a l stock of P a n a m a R . R. Co
C a p i t a l stock of I n l a n d W a t e r w a y s Corporation
Reconstruction Finance Corporation...
(Capital stock a n d notes, less funds exp e n d e d for subscriptions to capital stock
of other governmental corporations a n d
funds disbursed to other g o v e r n m e n t a l
agencies for m a k i n g loans included below.)
C a p i t a l stock of H o m e O w n e r s ' L o a n Corporation
Capital stock of regional agricultural credit
corporations
C a p i t a l stock of Federal h o m e loan b a n k s
Capital stock of Federal F a r m Mortgage
Corporation
Capital stock of E x p o r t - I m p o r t B a n k of
Washington
C a p i t a l stock of Second E x p o r t - I m p o r t B a n k
of W a s h i n g t o n
__
Capital stock of R F C M o r t g a g e Co
C a p i t a l stock of production credit corporations
:.
C a p i t a l stock of C o m m o d i t y C r e d i t Corporation
C a p i t a l stock of Electric H o m e a n d F a r m
Authority, Inc
.-.
C a p i t a l stock of Federal Deposit I n s u r a n c e
Corporation
C a p i t a l stock (preferred a n d full-paid income shares) of Federal savings a n d loan
associations
Capital stock of Federal Subsistence H o m e steads Corporation
C a p i t a l stock a n d paid-in s u r p l u s of Federal
land banks
C a p i t a l stock a n d paid-in s u r p l u s of Federal
i n t e r m e d i a t e credit b a n k s . .
C a p i t a l stock of C e n t r a l B a n k for Cooperatives
C a p i t a l stock of b a n k s for cooperatives
O t h e r obligations a n d securities:
Railroad obligations
Obligations acquired b y Federal E m e r g e n c y
A d m i n i s t r a t i o n of P u b l i c W o r k s
N o t e s received b y F a r m Credit A d m i n i s t r a tion evidencing o u t s t a n d i n g advances m a d e
from t h e revolving fund created b y t h e
Agricultural M a r k e t i n g A c t . .
Securities received b y Secretary of W a r
Securities received b y Secretary of N a v y
Securities received b y U . S. Shipping B o a r d
Bureau
Obligations of farmers for seed, feed, d r o u g h t
relief, a n d crop-production loans
Obligations of joint stock l a n d b a n k s
Securities received b y R e s e t t l e m e n t A d m i n istration
Securities received b y R u r a l Electrification
Administration. _
Total

J u n e 30, 1936

-

-

12, 014,989, 661. 68
83, 683, 096. 22
7, 000, 000. 00
12, 000, 000. 00
3, 486, 215, 554. 93

> 200, 000, 000. 00
44, 500, 000. 00
81, 645, 700. 00

12, 014,919, 763. 77
83, 639, 510. 58

Increase ( + ) or
decrease (—)

-$69,897.91
-69,897.91
-43,585. 64

7, 000,000.00
12, 000, 000. 00
3, 762, 734,653.76 +276, 519, (

» 200,000,000. 00
25,I, COO, 000. 00 -19,500,000.00
», 342, 000. 00 +17,696,300.00

200, 000, 000. 00

200, 000, 000. 00

11,000, 000. 00

18, 000, 000. 00

2, 750, 000.00
10, 000, 000. 00

10, 000,000. 00

+7,000, 000.00
- 2 , 750, 000. 00

120, 000,000. 00

120, 000, 000. 00

3, 000, 000. 00

100, 000, 000.00

+ 9 7 , 000, 000. 00

1, 000, 000.00

850, 000. 00

-150,000.00

150,000,000.00

150, 000, 000.00

32, 464, 000. 00

49, 223, 000. 00

10, 000.00

10, 000.00

199, 452,477. 75

230,874, 287. 38

100, 000, 000. 00

100, 000, 000. 00

65, 000, 000. 00
60, 000, 000. 00

66, 000, 000. 00
79, 000, 000. 00

+16,759,000.00

+31,421,809.63

+ 1 , 000, 000. 00
+ 1 9 , 000, 000. 00

31,192,156. 36

30, 590, 232. 55

- 6 0 1 , 9 2 3 . 81

312,360, 510.09

146,949, 557. 39

-165,410,952.70

125, 211,123. 35
433, 000. 00
5, 086, 301.17

112, 605, 799. 81
383, 000. 00
5, 026,142. 24

-12,605,323.54
- 5 0 , 000. 00
-60,158.93

119, 719,682.87

105,183,152.88

-14,536,529.99

197,124,401.86
374, 478. 44

176, 233, 417.11
272, 686. 79

-20,890,984.75
-101,791.65

79, 005, 229.83

+ 7 9 , 005, 229. 83

823, 262. 31

+823, 262. 31

17,676,212,144.72

17, 985, 665,696. 40 +309, 453, 551.68

1 Includes $100,000,000 expended for subscription to capital stock of Federal Savings a n d L o a n I n s u r a n c e
Corporation.




REPORT OF THE SECRETARY OF THE TREASURY

67

Contingent liabilities oj the United States
A summary statement of the contingent liabilities of the United
States as of June 30, 1935 and 1936, and the change between the two
dates is shown below. A detailed statement of such liabilities of the
United States as of June 30, 1936, and a description of them appear
as table 35 on page 444.

Agency

Obligation

Total amount of contingent
liability
June 30, 1935

Federal Farm Mortgage
Corporation.
Home Owners' Loan Corporation.
Reconstruction Finance
Corporation.
Secretary of Agriculture
Postal Savings System
Federal Reserve System

Increase (+) or
decrease ( - )

June 30,1936

Bonds, various issues. $1, 233, 090, 547. 93$1,431,137, 489. 50 +$198,046,941. 57
do
Notes, various issues._

2,666, 576, 480. 21 3, 065,885, 426. 82 +399, 308, 946. 61
250,988,401.82

252,602, 042. 03

+1,613,640. 21

45, 095, 000. 00
-45, 095, 000. 00
Funds borrowed upon
cotton.
Funds due depositors. 1,230.976,844.57 1, 260, 787. 703.92 +29,810,859. 35
Federal Reserve notes. 3, 234, 959,135. 00 4. 021, 532,607. 00 +786, 573, 472. 00

Federal savings and loan associations
The Federal Home Loan Bank Board was authorized under the
Home Owners' Loan Act of 1933, approved June 13, 1933, to provide
for the organization, incorporation, examination, operation, and
regulation of Federal savings and loan associations, and to issue
charters therefor, in order to provide local mutual thrift institutions
in which people might invest their funds and in order to provide for
the financing of homes.
Under section 5 (g) of the act the Secretary of the Treasury was
authorized on behalf of the United States to subscribe for preferred
shares in such associations, upon request of the Federal Home Loan
Bank Board, but the subscription was not to exceed $100,000 in
shares of any one association. The Home Owners' Loan Act Of 1933,
as amended by an act approved April 27, 1934, provided under
section 5 (j) that, in addition to the authority to subscribe for preferred shares in these associations, the Secretary of the Treasury was
authorized, on behalf of the United States to subscribe for any amount
of full-paid income shares in such associations, upon request of the
Federal Home Loan Bank Board, but the amount paicl in by the
Secretary of the Treasury for full-paid income and preferred shares
together shall at no time exceed 75 percent of the total investment
in the shares of such association by the Secretary of the Treasury and
other shareholders.
An appropriation of $50,000,000 to enable the Secretary of the
Treasury to purchase preferred shares in Federal savings and loan
associations was provided by the Fourth Deficiency Act, fiscal year
1933, approved June 16, 1933. This appropriation was extended
by the act approved April 27, 1934, to cover the purchase of full-paid
income shares.
Pursuant to amendments in the acts of April 27, 1934, and May 28,
1935, $700,000 of the $50,000,000 appropriation was aUocated and
made available to the Federal Home Loan Bank Board to enable the
Board to encourage local thrift and local home financing and to



68

REPORT OF THE SECRETARY OF THE TREASURY

promote, organize, and develop these associations. The amount
available to the Secretary of the Treasury for subscription to shares
in Federal savings and loan associations was $49,300,000.
The Home Owners' Loan Corporation also was authorized to purchase full-paid income shares of Federal savings and loan associations
after the funds made available to the Secretary of the Treasury for the
purchase of such shares had been exhausted. The funds available to
the Secretary of the Treasury were exhausted on October 25, 1935.
The following statement shows a summary of the transactions in
connection with the subscriptions by the Secretary of the Treasury
to preferred and full-paid income shares in these associations:
Preferred and full-paid income shares of Federal savings and loan associations
subscribed by the Secretary of the Treasury to June 30, 1936, and dividends
received
[Par value of shares]
Preferred
shares
Shares subscribed and paid:
To June 30, 1935
July 1, 1935, to June 30, 1936 . .

Full-paid
income shares

Total

$637,800

$31,826,200
16,836,000

$32,464,000
16,836,000

To June 30, 1936
Less shares repaid during fiscal year 1936

637,800
12 500

48, 662, 200
64, 500

49, 300,000
77, 000

Shares held on June 30,1936

625 300

48, 597, 700

49,223,000

. . .

Dividends received on preferred and full-paid income shares:
To June 30, 1935
July 1, 1935, to June 30, 1936
To June 30, 1936 -

-

76,808. 28
1,146, 226. 67
1, 223,034. 95

Federal home loan banks
Twelve Federal home loan banks were established pursuant to the
Federal Home Loan Bank Act, approved July 22, 1932. These banks
are supervised by the Federal Home Loan Bank Board. The act
provided that the Board, with the approval of the Secretary of the
Treasury, shall determine the minimum capital of each bank, which
shall be not less than $5,000,000. It further provided that the Secretary of the Treasury shall subscribe, on behalf of the United States,
for such part of the minimum capital of each Federal home loan bank
as is not subscribed for by members within 30 days after books had
been opened for stock subscriptions. Payments for stock subscriptions by the Secretary of the Treasury are subject to call in whole or
in part by the Board, with the approval of the Secretary of the
Treasury, at such time or times as may be deemed advisable.
To enable the Secretary of the Treasury to make payments upon
stock of Federal home loan banks subscribed for by him, the sum of
$125,000,000, or so much thereof as may be necessary for such purpose, was allocated and niade available to the Secretary of the Treasury out of the capital of the Reconstruction Finance Corporation and
the proceeds of notes, debentures, bonds, and other obligations issued
by the corporation.
The act of July 22, 1932, provided that the capital subscribed for
by the United States was entitled to receive dividends at a rate of
2 percent per annum cumulative from the date of investment, but
in any case in which the rate of dividend is in excess of 2 percent the



REPORT OF THE SECRETARY OF THE TREASURY

69

stock subscribed for by the United States shall be entitled to dividends
at a rate not in excess of that paid on other stock. The act of May 28,
1935, amending the act of July 22, 1932, provided, however, that all
stock of any Federal home loan bank shall share in dividend distributions without preference.
The following statement shows a summary of the transactions in
connection with the subscriptions by the Secretary of the Treasury
to stock of Federal home loan banks:
Subscriptions by the Secretary of the Treasury to stock of the Federal home loan banks
to June 30, 1936, and dividends received thereon
[Par value of shares]

Federal home loan bank

Boston..->.
New York
Pittsburgh
Winston-Salem.
Cincinnati
Indianapolis
Chicago
Des Moines
Little Rock
Topeka
Portland
Los Angeles
Total

Federal home loan bank
Boston
New York
Pittsburgh
Winston-Salem..
Cincinnati
Indianapolis
Chicago
Des Moines
Little Rock
Topeka...
Portland
Los Angeles
Total-

Total shares Shares held
subscribed June 30,1935

Shares paid
fiscal year

Shares held
June 30,1936

$12,467, 500
18,963, 200
11, 146, 300
9,208,200
12,775, 700
6,577,400
14, 173,900
7,394, 900
8,772,400
7,333, 600
5,960, 000
967, 900

$5,000,000
11,500,000
8,500,000
5, 700, 000
12, 776, 700
6,000,000
10,000,000
4, 500, 000
6,100,000
4, 700, 000
3, 310,000
3, 560,000

4,173,900
2,000,000
2, 672, 400
600,000
2,350,000
1, 700,000

$5,300,000
12,500,000
9, 600, 000
7, 500,000
12, 775, 700
6, 000,000
14,173,900
6, 500,000
8, 772,400
5,300,000
5,660,000
5,260,000

124, 741,000

81, 645, 700

17, 696, 300

99, 342,000

$300,000
1,000,000
1,100,000
1,800,000

Dividends
Dividends
Dividends
received to received fis- received to
June 30, 1935 cal year 1936 June 30,1936
$145, 715.11
286,915.07
243, 545. 21
184, 493.14
414, 743.85
196,164. 39
317, 994. 52
135, 682.19
196, 279.45
22, 575. 35
2,144,108. 28

$62, 672. 61
-233,369.87
174, 032.89
121, 649. 32
255, 514.00
89, 630. 75
212, 410.96
71,905. 48
92,932.88
108, 526.04
117, 623.13
71, 778. 08

$208,387. 72
520, 284.94
417, 578.10
306,142. 46
670,257.85
285, 795.14
630,405.48
207, 687. 67
289, 212. 33
108, 526. 04
117, 623.13
94,353.43

1, 612, 046. 01 3, 766,154. 29

Federal land banks
Capital stock.—The 12 Federal land banks were established under
the Federal Farm Loan Act approved July 17, 1916. The Farm Credit
Administration exercises general supervisory authority over these
banks.
Under the act of January 23, 1932, amending the Federal Farm
Loan Act, as amended, it is the duty of the Secretary of the Treasury
on behalf of the United States, upon the request of the board of
directors of any Federal land bank made with the approval of the
Farm Credit Administration, to subscribe from time to time for capital stock of such bank, such subscriptions to be subject to call, in
whole or in part, by the board of directors of said bank, upon 30 days'
notice, with the approval of the Farm Credit Administration. The
act further provided that such stock is to be nonvoting and may at
any time, in the discretion of the directors and with the approval of



70

REPORT OF THE SECRETARY OF THE TREASURY

the Farm Credit Administration, be paid off at par and retired in
whole or in part and that the Farm Credit Administration may at any
time recjuire such stock to be paid ofl' at par and retired in whole or in
part if in its opinion the bank has resources available for such purpose. The proceeds of all repayments on account of stock subscribed
for by the Secretary of the Treasury under the act of January 23,
1932, were authorized to be held in the Treasury and shall be available
for the purpose of paying for other stock thereafter issued pursuant
to said act.'
To enable the Secretary of the Treasury to pay for said stock, there
was appropriated under the act approved February 2, 1932, the sum
of $125,000,000. The following statement shows a summary of the
transactions in connection with the subscriptions by the Secretary of
the Treasury to stock of Federal land banks:
Subscriptions by the Secretary of the Treasury to stock of Federal land banks to
June 30, 1936
[ P a r v a l u e of shares]

Federal l a n d b a n k

Springfield
Baltimore
Columbia
Louisville
New Orleans.
St. L o u i s
St. P a u l
Wichita
Houston
Berkeley
Omaha
Spokane
_
Total

S h a r e s held
J u n e 30, 1935

$6, 397, 900
7, 443, 220
15, 733, 065
7, 030, 276
18, 727, 570
8, 643, 870
16,877, 995
6, 257,195
8, 581, 050
6, 419, 580
7, 327, 815
15, 519, 280

Shares s u b scribed
flscalyear
1936

$2, 000, 000

124,958,815 " 2,000,000

Shares repaid fiscal
year 1936

$82, 235
68,140
44, 770
213, 796
20, 780
451, 876
623, 785
363, 250
157, 640
163, 445
763, 745
92, 725
3,046,185

Shares held
J u n e 30,
1936

$6, 315, 665
7, 375, 080
15, 688, 295
6, 816, 480
18, 706, 790
8,191, 995
18, 254, 210
5, 893, 945
8, 423, 410
6, 256.136
6, 564, 070
. 15, 426, 555
123,912,630

Subscriptions to paid-in surplus and payments on account oj reduction in interest rates on mortgages.—Under the act approved January
23, 1932, amending the Federal Farm Loan Act, as amended. Federal
land banks were authorized to extend, in whole or in part, any obligation that may be or become unpaid under the terms of any mortgage, and to accept payment of any such obligation during a period
of 5 years or less from the date of its extension in such amounts as
may be agreed upon at the date of making the extension. This provision was amended by the act of May 12, 1933, which provided that
the terms of any extension shall be such as will not defer the
collection of any obligation which, after investigation by the bank of
the situation of the borrower, is shown to be within his capacity to
pay.
The amendment of May 12, 1933, to the Federal Farm Loan Act,
as amended, provided that the rate of interest on loans on mortgages
made through national farm loan associations or through Federal
land banks, or purchased from joint stock land banks by any Federal
land bank, outstanding on May 12, 1933, or made through national
farm loan associations within 2 years after such date, shall not
exceed 4}^ percent per annum for all interest payable on installment
dates occurring within a period of 5 years commencing 60 days
after May 12, 1933; and that no payment of the principal portion of



REPORT OF THE SECRETARY OF THE TREASURY

71

any installment of any such loan shall be required during such 5-year
period if the borrower shall not be in default with respect to any
other condition or covenant of his mortgage. These provisions also
apply to loans made by Federal land banks through branches, except
that the rate of interest on such loans for the 5-year period shallbe 5 percent in lieu of 4^ percent.
Under the Farm Creciit Act of 1935, approved June 3, 1935, as
amended by the act of June 24, 1936, these provisions were amended,
effective July 1, 1935, to provide that the rate of interest on such
loans after that date shall not exceed Sji percent per annum for all
interest payable on installment dates occurring within a period of 2
years commencing July 1, 1935, and that no payment of the principal
portion of any installment of any such loan outstanding on the date
of the enactment of the Farm Credit Act of 1935 shall be required
prior to July 11, 1938, if the borrower shall not be in default with respect to any other condition or covenant of his mortgage. The provision with respect to the rate of interest on loans made by Federal land
banks through branches was also amended, effective July 1, 1.935,
to provide that the rates of interest on such loans for the respective
periods above specified shall be one-half of 1 percent per annum in
excess of the rates paid during the corresponding periods by borrowers
on mortgage loans made through national farm loan associations.
An amendment of May 12, 1933, directed the Secretary of the
Treasury to pa}'^ each Federal land bank after October 1, 1933, the
amount accrued since July 1, 1933, and after the end of each quarter
thereafter to pay such amounts as the Lank Bank Commissioner
certifies to the Secretary of the Treasury is equal to the amount by
which interest payments on mortgages held by such bank have been
reduced, during the preceding quarter, by reason of the limitation
upon the interest rates provided in said amendment. But in any
case in which the Land Bank Commissioner finds that the amount of
interest payable by such bank during any quarter has been reduced
by reason of the refinancing of bonds, the amount of the reduction
so found shall be deducted from the amount payable to such bank.
No payments shall be made to a bank with respect to any period
after June 30, 1938.
I t was also provided that in the case of any such extension made
prior to the expiration of 5 years from May 12, 1933, or in case of any
deferment of principal, as provided above, it shall be the duty of the
Secretary of the Treasury, on behalf of the United States, upon the
request of the Federal land bank making the extension, and with the
approval of the Lank Bank Commissioner, to subscribe at such
periods as the Commissioner shall determine, to the paid-in surplus
of such bank an amount equal to the amount of all such extensions
and deferments made by the bank during the preceding period. Such
subscriptions shall be subject to call, in whole or in part, by the bank
with the approval of the Land Bank Commissioner upon 30 days'
notice and upon the payment to any Federal land bank of the amount
of any such subscription, such bank shall execute and deliver a
receipt therefor to the Secretary of the Treasury. The amount of
any subscriptions to paid-in surplus of any such bank may be repaid
in whole or in part at any time in the discretion of the bank and with
the approval of the Land Bank Commissioner, and the Commissioner
may at any time require such subscriptions to be repaid in whole or



72

REPORT OF THE SECRETARY OF THE TREASURY

in part if in his opinion the bank has resources available for such
purpose.
A statement as of June 30, 1936, of the amounts appropriated for
subscriptions to the paid-in surplus of Federal land banks on account
of extensions and deferments referred to above, and payments to
Federal land banks for this purpose, follows:
Appropriations for subscriptions to the paid-in surplus of Federal land banks on
account of extensions and deferments, and payments for this purpose to J u n e 30,
1936
1. Amounts appropriated:
Fourth Deficiency Act, June 16, 1933
$50,000,000.00
Emergency Appropriation Act, fiscal year 1935, June 19, 1934
75,000,000.00
Second Deficiency Appropriation Act, fiscal year 1935, Aug. 12, 1935
20,000,000.00
Treasury Department Appropriation Act, 1937, June 23, 1936
.-.
24, 000,000.00
Total to June 30, 1936

169,000,000.00

2. Payments to Federal land banks:
Federal land bank
6
Springfield _.
Baltimore
Columbia..
Louisville.
N e w Orleans _.
St. L o u i s
St. P a u l
Wichita
Houston
Berkeley
Omaha
.
Spokane

_.

Total

A m o u n t paid
to J u n e 30,
1935

A m o u n t paid
fiscal year
1936

$2, 400, 347.19
$3, 573, 548. 33
2, 389, 741. 62
447, 518. 06
3, 416, 537. 35 ' 1,036,203.03
1,727,470.31
4, 254,839. 81
1, 900, 527. 43
10, 778,117. 73
3, 038, 628. 66
5, 477, 095. 22
2, 411, 503. 54
10, 281, 465. 71
5, 588, 878. 39
3, 468,109. 07
5,179, 714. 00
1, 674, 800. 00
4, 729, 653. 92
6, 384, 246.88
6, 930,122. 41
7,867, 948. 51
9, 302, 529. 20
2, 703, 111. 01
74, 493, 662. 76

32,467,994.63

A m o u n t paid
to J u n e 30,
1936
$5, 973,895. 52
2,837, 259. 68
4, 451, 740. 38
5, 982, 310.12
12, 678, 645.16
8, 515, 723. 88
12, 692, 969. 25
9, 056, 987.'46
6, 854, 614. 00
11,113, 900.80
14, 798, 070. 92
12, 006, 640. 21
106, 961, 657. 38 106, 961, 657. 38

3. Amount available for expenditure, June 30, 1936

62,038,342.62'

A statement as of June 30, 1936, of the amounts appropriated on
account of reduction in interest rate on mortgages and payments to
Federal land banks for this purpose is as follows:
Appropriations on account of reduction i n interest rates on mortgages, and payments
to Federal land banks for this purpose to J u n e 30, 1936
1. Amounts appropriated.
Fourth Deficiency Act, fiscal year 1933, June 16, 1933
$15,000,000.00
Emergency Appropriation Act, fiscal year 1935, June 19, 1934
_
_ 7,950,000.00
Second Deficiency Appropriation Act, fiscal year 1935, Aug. 12, 1935
36,000,000.00
Treasury Department Appropriation Act, 1937, June 23, 19'36.
24, 000,000.00
Total to June 30, 1936

82,950,000.00

2. Payments to Federal land banks:
Federal land bank

Amount paid Amount paid Amount paid
to June 30,1935 fiscal year 1936 to June 30,1936

Springfield...
Baltimore
Columbia
Louisville
New Orleans.
St. Louis
St. Paul
Wichita
Houston
Berkeley
Omaha
Spokane

$766, 242. 34
1,114, 476. 36
903, 583. 95
1,993, 447.03
1, 770, 414. 31
1, 666,085. 83
2, 057, 560.86
1, 574,014. 92
2, 510,476. 39
993, 376.95
2, 667, 649. 76
1,699,613.06

$1, 018,104. 23
1, 277,506. 47
1, 298,740. 37
3.060, 939.34
1, 759,493. 97
2, 537,058.62
4.061, 223. 27
2, 323,604. 08
3, 295,729. 27
1, 714,735. 96
4,859, 887. 24
1,857, 958.18

$1, 784,346. 67
2, 391,982.83
2, 202,324.32
5,064, 386. 37
3, 529,908. 28
4,093. 144.46
6,118,774.13
3,897,619. 00
5, 806,205. 66
2, 708,112.91
7, 527,536. 99
3,467, 571. 23

Total..

19, 506,931. 74

29,064, 981.00

48, 571,912. 74 48, 671,912. 74

i. Amount available for expenditure June 30, 1936




34, 378,087. 26

REPORT OF THE SECRETARY OF THE TREASURY

73

Advances to Federal Reserve banks jor industrial loans, etc.
The act approved June 19, 1934, amending the Federal Reserve
Act, as amended, by adding section 13(b) which provides that in
exceptional circumstances, when it appears to the satisfaction of a
Federal Reserve bank that an established industrial or commercial
business located in its district is unable to obtain requisite financial
assistance on a reasonable basis from the usual sources, the Federal
Reserve bank, pursuant to authority granted by the Federal Reserve
Board, may make loans to, or purchase obhgations of, such business, or
make commitments with respect thereto, on a reasonable and sound
basis, for the purpose of providing it with working capital, but no obligation shall be acquired or commitment made with a maturity exceeding 5 years. Each Federal Reserve bank under certain conditions
shall also have power to discount for, or purchase from, any bank,
trust company, mortgage company, credit corporation for industry,
or other financing institution operating in its district, obligations
having maturities not exceeding 5 years, entered into for the purpose
of obtaining working capital for any such established industrial or
commercial business; to make loans or advances direct to any such
financing institution on the security of such obligations; and to make
commitments with regard to such discount or purchase of obligations
or with respect to such loans or advances on the security thereof,
including commitments made in advance of the actual undertaking
of such obligations.
In order to enable the "Federal Reserve banks to make such loans,
discounts, advances, purchases, and commitments, the Secretary of
the Treasury was authorized, under such rules and regulations as he
shall prescribe, to pay to each Federal Reserve bank not to exceed
such portion of the sum of $139,299,557 as may be represented by the
par value of the holdings of each Federal Reserve bank of Federal
Deposit Insurance Corporation stock, upon the execution by each
Federal Reserve bank of its agreement to hold such stock unencumbered and to pay to the United States all dividends, all payments on
liquidation, and all other proceeds of such stock, for which dividends,
payments, and proceeds the United States shall be secured by such
stock itself up to the total amount paid to the Federal Reserve bank
by the Secretary of the Treasury. Each Federal Reserve bank, in
addition, must agree that, in the event such dividends, payments,
and other proceeds in any calendar year do not aggregate 2 percent
of the total payment made by the Secretary of the Treasury, it will
pay to the United States in such year such further amount, if any, up
to 2 percent of the said total payment, as shall be covered by the net
earnings of the bank for that year derived from the use of the sum so
paid by the Secretary of the Treasury, and that for the amount so
due the United States shall have a first claim against such earnings
and stock, and further that it will continue such payments until the
final liquidation of said stock by the Federal Deposit Insurance
Corporation.
All amounts required to be expended by the Secretary of the Treasury in order to carry out the provisions of section 13 (b) of the Federal Reserve Act, as amended, were appropriated and authorized to
be paid out of the miscellaneous receipts of the Treasury created by
the increment resulting from the reduction of the weight of the gold
dollar under the President's proclamation of January 31, 1934.



74

REPORT OF THE SECRETARY OF THE TREASURY

The following statement is a summary of the transactions in connection with advances to Federal Reserve banks on account of industrial loans, etc., pursuant to section 13 (b) of the Federal Reserve
Act, as amended:
Advances to the Federal Reserve banks for industrial loans and payments received by
the Treasury to June 30, 1936
P a y m e n t s m a d e to Federal Reserve b a n k s
Federal Reserve b a n k "

Maximum
payments
authorized

Atlanta
_
Boston.Chicago
Cleveland
Dallas
Kansas City
Minneapolis
New York
Philadelphia
St. Louis
Richmond
San F r a n c i s c o . .

$6, 272,031. 65
10, 230, 236. 88
19, 748, 516. 70
14,146,863. 66
4, 369, 338.10
4,131, 276. 30
3, 509, 467. 66
*42, 629, 210. 66
14, 620,883. 52
5,093,112.26
5, 808, 291. 43
9, 850, 328. 30

Total

139, 299, 656. 99

T o J u n e 30,
1935
$756, 934.44
2,166, 637.83
1, 417, 701. 33
1,016, 571. 33
938, 841.06
778, 790.49
1, 007, 746. 96
6, 586, 057. 06
2,099, 200. 30
547, 832. 83
2,918, 748. 70
697, 795. 01
20,931,857.34

Fiscal year
1936

T o J u n e 30,
1936

Payments
received b y
t h e Treasu r y to J u n e
30, 1936
$9, 066. 91
49, Oil. 78
17, 636. 94
8, 734. 30
23, 428. 05

601, 913. 35
459,000. 00

$756,934.44
2,876,115. 98
1,417, 701. 33
1,016, 671. 33
1, 251, 788. 08
1,146,717.73
1, 007, 746. 96
7, 762,044. 63
4,198,400. 60
547,832. 83
3,420, 662. 05
1,166, 795. 01

6, 614,453. 63

26, 546, 310. 97

297, 667.19

$708,478.15
312, 947.02
366, 927. 24
1,166, 987. 67
2, 099, 200. 30

16, 863.49
64, 238. 45
41,984.01
66, 714. 26

Accounting and disbursing oj emergency reliej junds appropriated under
the Emergency Reliej Appropriation Acts oj 1935 and 1936
Section I I (A) of Executive Order No. 7034, dated May 6, 1935,
directs:
(A) The Secretary of the Treasury, (1) through the disbursing and accounting
facilities under the Commissioner of Accounts and Deposits of the Treasury
Department, to make provision for all disbursements from the funds appropriated by the Emergency Relief Appropriation Act of 1935, subject only to such
exceptions as the Secretary may authorize, and to maintain a system of accounts
necessary to enable the President (a) to exercise Executive control over such
funds, (b) to provide current financial and accounting information for governmental agencies concerned, and (c) to make a complete report to the Congress concerning expenditures made and obligations incurred, by classes and
amounts * * *.

Pursuant to the provisions of this order, the Secretary of the Treasury on June 18, 1935, issued Regulation No. 1 prescribing administrative procedure for the maintenance of a system of accounts and
disbursements under the Emergency Relief Appropriation Act of
1935. This regulation was approved by the President and issued as
Treasury Department Circular No. 543, a copy of which appears in
the annual report for the fiscal year 1935.
Executive Order No. 7396, dated June 22, 1936, directs that the
expenditure of funds appropriated by the Emergency Relief Appropriation Act of 1936, approved June 22, 1936, and the administration
thereof, shall be in accordance with the orders, rules, and regulations
theretofore issued by the President relating to the expenditure of
funds appropriated by the Emergency Relief Appropriation Act of
1935 and to the administration of that act, insofar as applicable.
With a view to providing effective accounting controls and in order
to facilitate disbursing operations, there were established in each State,
and in the District of Columbia, Alaska, Hawaii, Puerto Rico, and
the Virgin Islands, a Treasury accounts office and a Treasury dis


REPORT OF THE SECRETARY OF THE TREASURY

75

bursing office, the activities of which are coordinated and administratively controlled from central offices in the Treasury at Washington, D. C. To expedite the effective administration of the work
relief program, these offices are located in the same cities as the
Treasury procurement offices and the State headquarters of the
Works Progress Administration. During the fiscal year 59 branch
Treasury accounts and disbursing offices were established in 21 States
and Territories. Four of these branch offices were discontinued prior
to June 30, 1936.
In the Treasury accounts offices accounts are maintained showing
in detail the status of the funds allocated by the President for various
projects and purposes in the several States, Territories, and possessions. These accounts provide a control to keep expenditures within
the limitations set up by the Congress and the President. There is
in effect a system of reporting whereby financial information relating
to each project is provided currently to administrative officers for
operating purposes. Over 135,000 accounts for official projects were
on the records of the Treasury accounts offices on June 30, 1936.
The procedure adopted by the Treasury offices for accounting and
disbursing for emergency relief funds contains three features never
previously observed in accounting for public funds. The first feature is the practice of rendering to the General Accounting Office for
audit, as of the 10th, 20th, and last day of the month, a complete
accounting for disbursements handled by the Treasury, whereas under
the regular departmental procedure established pursuant to the act
of July 31, 1894, as amended, the accounting is made monthly or
quarterly. The second feature is that the administrative accounts
relating to allotments and obligations as maintained by the Treasury
accounts offices for appropriations and projects are correlated and
currently balanced with the disbursing accounts. The third feature
requires each of the Treasury accounts offices to submit, within 48
hours after the close of each accounting period, to the Commissioner
of Accounts and Deposits in Washington, D. C , a complete statement showing the financial status of the administrative accounts for
allotments, expenditure authorizations, obligations incurred, and
disbursements on the basis of checks issued. The data in these
reports are compiled in financial statements every 10 days and at
monthly intervals for the information of the President, the Secretary
of the Treasury, administrative agencies, and others concerned. A
summary of these figures as of the close of each month is released to
the public in the Daily Statement of the United States Treasury on
the 15th of the succeeding month.
Section 15 of the Emergency Relief Appropriation Act of 1935 provides that a report of operations under the act shall be submitted to
the Congress before the 10th day of January in each of the three next
regular sessions of Congress following the date of approval of the act.
A detailed financial report of the Secretary of the Treasury covering
financial transactions.through December 31, 1935, was available on
January 5, 1936. This financial report containing tables in summary
and detailed form, together with a statement prepared by the Director of the National Emergency Council, was submitted by the President to Congress on January 9, 1936. A complete financial report
also was made available for transactions through June 30, 1936.




76

REPORT OF THE SECRETARY OF THE TREASURY

A summary statement of the status of the funds under the Emergency Relief Appropriation Acts of 1935 and 1936, as of June 30,
1936, is contained in table 16, page 390.
Agricultural Adjustment Act
Under the Agricultural Adjustment Act, as amended, and related
legislation, there was established an agricultural program involving
the collection of processing taxes and expenditures for rental and
benefit payments and other purposes. The decision of the Supreme
Court on January 6, 1936, declared the processing taxes unconstitutional. Thereafter, the collection of such taxes and expenditures
based upon them were discontinued.
The following statement shows receipts of processing taxes and
expenditures to June 30, 1936, under the Agricultural Adjustment
Act, as amended, and related legislation:
Receipts: Processing taxes covered into the Treasury
$960,792,288.62
Expenditures payable from processing taxes:
, Under "Advances to Agricultural Adjustment Administration
under sec. 12 (b) of the Agricultural Adjustment Act":
Department of Agriculture
$1,117,383,659.19
Treasury Department
52,081,031.47
War Department
62,678,886.45
Department of Justice
-•.-.
3,664.84
Cotton Act of 1934, approved Apr. 21, 1934.
15,162,736.29
Under "Purchase of surplus sugar from processing taxes (act of
May 9, 1934)"
_
_
476,487.61
Under "Advances to Department of Agriculture under sec. 10 (a)
of Tobacco Act of June 28, 1934":
Department of Agriculture
-..
705,637.52
Treasury Department
318,693.89
1, 248, 810, 697.16
Excess of expenditures over processing taxes
_
Other expenditures on account of the program under the Agricultural Adjustment Act, as
amended, and related legislation, to June 30, 1936:
Under allocations from National Industrial Recovery appropriation
Under appropriation of $100,000,000 provided by sec. 12 (a) of the Agricultural Adjustment Act.
Under appropriation of $150,000,000 provided by the act of May 26, 1934
Under appropriation of $100,000,000 provided by the act of June 19,1934, less $52,600,000
reimbursements made to the Treasury
_
_..
Under appropriation of $10,000,000 provided by sec. 37 of the act of Aug. 24, 1935
Total expenditures under Agricultural Adjustment Act, to June 30,1936, in excess of
processing taxes

298,018,408. 54
37,490,397.76
14,174,752.73
113,679,706. 68
17,000,000.00
965,044.32
481,228,310.02

Appropriations authorized under Social Security Act
The Social Security Act, approved August 14, 1935, provided,
among other things, for the establishment of a system of Federal
old-age benefits, and for grants-in-aid to the several States to enable
them to make more adequate provision for aged persons, blind persons,
dependent and crippled children, maternal and child welfare, public
health, and the administration of their unemployment compensation
laws.
The amounts appropriated to June 30, 1936, for the fiscal years
1936 and 1937 under the various authorizations contained in the
Social Security Act, except amounts appropriated for administrative
expenses of the Federal Government, are shown in the following
statement:




77

REPORT OF THE SECRETARY OF THE TREASURY
I. Appropriations for grants to States:
Under Social Security Board:
For old-age assistance.
For unemployment compensation administration
For aid to dependent children
For aid to the blind-

Total amount
appropriated
^° *{"!if ^^'
^^^^
$109,660,000
31,250,000
40,000,000
10,000,000

-

190,910,000
Under Department of Labor:
For maternal and child health service
For services for crippled children
For child welfare services..

'...

4,400,000
3,337,000
1,825,000

-

9,562,000
Under Treasury Department: For public health work
Under Interior Department: For vocational rehabilitation of persons disabled in
industry
..Total grants to States

'.

11,333,000
» 2,261,000
214,066,000

II. Appropriations for other purposes:
Under Treasury Department:
For disease and sanitation investigations by Public Health Service
For old-age reserve account
--

i l , 695,000
2 265,000,000

Total for other purposes
266,695,000
1 Funds authorized to be appropriated under the Social Security Act augment existing appropriations for
fiscal years 1936 and 1937. Figures used in this statement represent total amounts appropriated for such
years.
2 See p. 51.

Obligations oj joreign governments
The United States received during the fiscal year 1936 payments
aggregating $547,312.50 on account of the indebtedness of foreign
governments, of which $65,000 was for account of principal, $444,251.50
was for account of interest, and $38,061 was for account of annuities
under the moratorium agreements.
The following statement shows the payments due during the period
July 1 to December 31,1935, and the amounts actually paid on account
by certain governments:
AMOUNTS DUE AND PAYABLE, JULY 1 TO D E C E M B E R 31, 1935
Funding agreements
Country
Principal
Belgium..^
Czechoslovakia...
Estonia
Finland
France
Great Britain..
Greece
Hungary
Italy
.
Latvia
Lithuania _ - - .
Poland
Rumania
_ _
Total

...
.

$1,600,000
122,000
65,000
32,000,000
406, 000
13, 310
60, 200
1,485,000

Interest
$4,168,000.00
286, 265.00
146,422. 50
19, 261,432. 50
75,960,000.00
217,920.00
33,186.08
1, 246,437. 60
119, 609.00
107, 783. 67
3, 582,810.00

.- 35, 641, 510 105,108,865. 25

Moratorium
agreements

$484,453.88
182,812. 78
36,585.29
19, 030. 60
3,046,879. 72
9, 720, 765. 05
67,137.38
4,225. 58
896,156.88
15, 274. 26
13,683. 26
456, 229. 71
48, 750. 08

$4,642,453.88
1, 682,812. 78
444,850.29
230,463.00
22,308,312.22
117, 670 765 05
691,057. 38
60, 720.66
2,141, 593 38
186, 083. 26
121,466 93
6, 524,039. 71
48 750.08

14, 991,983.37

155, 742, 358. 62

$19,030.50

$230,453. 00

AMOUNTS ACTUALLY PAID
Finland.

$65,000

$146,422.50

The following statement shows payments due during the period
January 1 to June 30,1936, and the amounts actually paid on account:



78

REPORT OF T H E SECRETARY OF T H E TREASURY
AMOUNTS D U E AND PAYABLE, JANUARY 1 TO J U N E 30, 1936
F u n d i n g agreements
Moratorium
agreements

Country
Principal
Austria
Belgium .
Czechoslovakia. . _ _ . _ .
Estonia
Finland
France
. .
Great B r i t a i n
Greece
Hungary
_
Italy
Latvia . .
Lithuania
_.
Poland
Rumania
Yugoslavia
^
Total....

. . ..

$460,093.00
4,500,000.00 .
1,500,000.00
52,479,413. 67
411, 000. 00

_ . ._
.

13, 500, 000. 00
44,976. 00

_.

.

$4,158,000.00
286, 265. 00
145,286.00
19, 261,432.50
76,950,000.00
217, 920. 00
33,185. 08
1, 246,437. 50
119, 609. 00
107, 783. 67
3, 582,810. 00

1, 600, 000. 00
350, 000. 00
.

-.

74,845,481. 67

Total

Interest

106,107,727.75

$34, 767. 23
484,453.88
182,812.78
36, 585. 29
19, 030. 50
3, 046,879. 72
9, 720, 765.05
67,137. 38
4, 225. 58
896,155.88
15, 274. 26
13,683. 26
456, 229. 71
48, 750. 08
16,026, 750. 60

$494,860.23
9,142,453.88
1, 682,812. 78
322,850. 29
164, 316. 50
74 787,725.89
85,670, 765.05
696,057. 38
37,410. 66
15, 641, 693.38
134,883 26
166,441.93
4,039,039. 71
1,648, 760.08
350, 000.00
194,979,960.02

AMOUNTS ACTUALLY PAID
Finland
Greece

,

-._.

Total

$145, 285.00
1 152,644.00

$19,030.50

$164, 315. 60
152, 544. 00

297,829.00

19, 030. 50

316,859.50

1 Represents payment of 35 percent of interest due on May 10,1935, and Nov. 10,1936, which was received
on Mar. 26, 1936.

Press releases of the Treasury Department and State Department
and correspondence exchanged between the Government of the United
States and various foreign governments regarding the amounts due
during the fiscal year will be found as exhibit 48 on page 288 of this
report.
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 payments on account of principal
and interest as of November 15, 1936, appears as table 50 on page 470.
The total amounts previously due from foreign governments on
account of their indebtedness to the United States under the funding
and moratorium agreements and not paid as of November 15, 1936,
according to contract terms, are shown in the following statement:
T O T A L A M O U N T S D U E A N D N O T P A I D , A S O F N O V E M B E R 15 , 1936
F u n d i n g agreements
Country
Principal
Austria
Belgium
Czechoslovakia
Estonia.
France
Great Britain
Greece
Hungary i
Italy.Latvia
Lithuania
Poland
Rumania
Yugoslavia
Total-.

_.

. _ _

"

.

-

-

$460,093. 00
17, 300,000. 00
10,170, 086. 83
466, 000. 00
152, 707, 280. 43
96, 000, 000. 00
3, 523, 000. 00
51,180. 00
51, 400,000. 00
183, 500. 00
.
169, 360. 00
. . .
5,687,000. 00
6, 200, 000. 00
1, 500,000. 00
344,817,499. 26

Interest
$22, 566, 000.00
2, 249, 225.00
164,091,460. 00
514,149, 481. 68
1,318,819.60
261, 258. 45
6, 718, 041. 74
• 821, 732.84
691, 302. 34
28,150, 650.00

731,007, 971. 45

Moratorium
agreements
$34, 767. 23
2,906, 723. 28
1,096,876. 68
219,511. 74
18, 281, 278. 32
58,324, 590. 30
469, 961. 66
25, 353.48
5, 376,935. 28
91, 645. 66
82,099. 66
2,737,378.26
292,500. 48

Total
$494,860. 23
42, 772, 723. 28
11, 266,962. 61
2,934, 736. 74
325, 080,018. 76
668,474, 071.88
5,311,781.16
327, 791. 93
63,494, 977.02
1,096,878. 40
942,761. 90
36, 676,028. 26
5,492,500. 48
1, 500,000. 00

89, 939, 621.83 1,165,765,092. 54

1 The Hungarian Government has deposited with the foreign creditors' account at the Hungarian National Bank the aggregate amount of 1,314,395.19 pengo. The debt-funding and moratorium agreements
with Hungary provide for payment in dollars in the United States.




REPORT OF THE SECRETARY OF THE TREASURY

79

Receipts jrom Germany
During the fiscal year 1936 the United States received no payments
from the Government of Germany under the debt-funding agreement
of June 23, 1930, covering the costs of the American army of occupation and the awards of the Mixed Claims Commission, United States
and Germany.
Army costs.—Payments of 9,300,000 reichsmarks were due on
September 30, 1935, and March 31, 1936, respectively, from the
Government of Germany on account of army costs under the provisions of the debt agreement of June 23, 1930. Interest amounting
to 2,434,187.50 reichsmarks was also due on those dates. There has
been no change in the army cost account from that shown in the
statement appearing on page 39 of the annual report for 1932.
Mixed claims. United States and Germany.—Payments of 20,400,000
reichsmarks were due on September 30, 1935, and March 31, 1936,
respectively, from the Government of Germany on account of mixed
claims awards under the provisions of the debt agreement of June 23,
1930. Interest amounting to 8,670,000 reichsmarks was also due on
those dates.
Annuities under moratorium agreement.—The semiannual installments, aggregating 3,058,098.90 reichsmarks, of the annuities under
the moratorium agreement with the Government of Germany dated
May 26, 1932, which were due during the fiscal year 1936, were not
paid by Germany.
The status of the indebtedness of Germany to the United States
as of June 30, 1936, under the funding and moratorium agreements
is summarized in the following tables:
AMOUNT OF I N D E B T E D N E S S
[In reichsmarks]
Total indebtedness
as of J u n e 30, 1936

Indebtedness
as funded

A r r a y costs
M i x e d claims
Total

1,004,371,861.11
2, 057,340, 000. 00

997, 600,000
2,040, 000,000

6,871,861.11
17,340, 000. 00

3.169, 700, 000

2 3,061,711,861.11

3. 037, 500, 000

24,211,861.11

P a y m e n t s of
principal

P a y m e n t s of
interest

RECEIVED
Total paym e n t s received
as of J u n e 30,
1936

A r m y costs (reichsmarks)
M i x e d claims (reichsmarks)
T o t a l (reichsmarks) . . . _ _

I n t e r e s t accrued a n d
unpaid i

1,048,100,000
2,121, 600, 000

PAYMENTS

A m o u n t s received (in dollars)

Principal

.-..
_
.

51,466, 406. 25
87,210,000.00

50,600.000.00
81,600,000.00

866,406. 25
5, 610,000.00

138, 666.406. 26

132, 200, 000. 00

6, 466, 406. 25

33, 587, 809. 69

31, 539, 595.84

2, 048, 213. 85

1 Includes interest accrued under unpaid moratorium agreement annuities.
2 Includes 4,027,611.95 reichsmarks deposited by German Government in the Konversionskasse fur
Deutsche Auslandsschulden and not paid to the United States in dollars as required by the debt and
moratorium agreements.




80

REPORT OF THE SECRETARY OF THE TREASURY
AMOUNTS NOT PAID ACCORDING TO CONTRACT T E R M S , JUNE 30, 1936
[In reichsmarks]
Funding agreement
Moratorium
agreement

Date due
Principal
Sept. 30,1933.
Mar. 31,1934.
Sept. 30,1934.
Mar. 31,1935.
Sept. 30,1935.
Mar. 31,1936.

122, 400, 000
20, 400. 000
82, 900, 000
29, 700, 000
29, 700, 000

Total..-

285,100, 000

Total

Interest
1, 529,049.45
1, 529, 049. 45
1,529, 049. 45
1, 529, 049.45
1, 629, 049.45
1, 529, 049. 45

2 4,027,611.95
123,929,049.45
25, 784,736.95
88,963, 299.45
36, 441,861. 95
37,120,424. 45

21, 992, 687. 50 9,174, 296. 70

316, 266, 984. 20

2, 498, 562.50
3, 865, 687. 50
4, 534, 250. 00
5, 212, 812. 50
5, 891, 375 00

2 Includes 4,027,611.95 reichsmarks deposited by German Government in the Konversionskasse fur
Deutsche Auslandsschulden and not paid to the United States in dollars as required by the debt and
moratorium agreements.

Treasury administration oj 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 War Claims Arbiter for claims of German, Austrian, and
Hungarian nationals against the Government of the United States;
and (3) awards of the Tripartite Claims Commission for claims of
American nationals against the Governments of Austria and Hungary.
The time within which claimants could file applications for payment
of awards from the Mixed Claims Commission, United States and
Germany, and the Tripartite Claims Commission, United States,
Austria, and Hungary, has been extended from time to time, and was
further extended until March 10, 1938, under the joint resolution of
Congress approved June 26, 1936, a copy of which will be found as
exhibit 55 on page 307 of this report.
Executive Order No. 6981, dated March 2, 1935 (a copy of which
will be found as exhibit 53 on p. 288 of the annual report for 1935),
under which the restrictions imposed by Public Kesolution No. 53 of
June 27, 1934, as to payments, transfers, and deliveries of property
under the Trading with the Enemy Act, as amended, and the Settlement of War Claims Act of 1928, as amended, were removed in certain
cases, was amended during the year by Executive Order No. 7111,
dated July 22, 1935. A copy of this order will be found as exhibit 54,
page 306 of this report.
Mixed Claims Commission: Claims against Germany.—During the
year the Treasury made payments amounting to $356,855.59 on
account of awards of the Mixed Claims Commission. The Treasury
made payments up to September 30, 1936, in the aggregate amount of
$135,736,070.52 on account of these awards, from which there has been
deducted $678,680.94, representing one-half of 1 percent authorized
by the Settlement of War Claims Act, maldng net payments to claimants of $135,057,389.58. Of the deductions so made, $651,809.90
has been covereci into the Treasury as miscellaneous receipts or
reserved for such purpose in accordance with the Settlement of War
Claims Act of 1928, as reimbursement to the United States for expenses
incurred, and $26,871.04 has been paid to the German Government




REPORT OF THE SECRETARY OF THE TREASURY

81

or reserved for payment to that Government in accordance with the
agreement of December 31, 1928, and the act of Congress approved
June 21, 1930, for defraying such expenses as were incurred by that
Government in connection with the adjudication of the late claims.
The following summary shows the awards certified to the Treasury
by the Secretary of State, by classes, number, and amount of the
awards, the amount paid on account, and the balance due thereon
as of September 30, 1936:

93790—37

7




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 classes, as of September 30, 1936
Class II

Class I
Total
number of
awards

Awards certified

Total amount
0

Class III

Awards on ac- Num- Other awards NumNum- count
of death ber of of $100,000 and ber of
ber of
personal awards
less
awards
awards andinjury

00

to

United States
Government

Other awards Number of
over $100,000 awards

.Amount

o
o

1. Amount due on account:
Principal of awards:
Agreement of Aug. 10, 1922
Agreement of Dec. 31, 1928.-

_

o

. ._

Less amounts paid by Alien Property Custodian
and others
Interest to Jan. 1, 1928, at rates specified in
awards:
Agreement of Aug. 10, 1922
Agreement of Dec. 31, 1928
Total payable to Jan. 1, 1928
.
Interest thereon to date of payment or, if unpaid
Sept. 30, 1936, at 5 percent per annum as specified in the Settlement of War Claims Act of 1928.
Total due claimants




4, 551 $156.685,145. 09
3, 695, 863. 20
2,290
160, 381, 008. 29

420
116

$3,489, 437. 75
556, 625.00
4,046,062. 75

187, 226. 85

3,829
2,169

$15,102,155.76
2, 447,803. 92

298
6

$96,058,757.17
691,434. 28

17, 549, 959.68

96,750,191.46

48,012. 50

139,214.35

4

$42,034, 794.41

H
W

42,034, 794.41

160,193, 781. 44

4,046, 062. 75

17, 501,947.18

96,010, 977.10

42,034, 794.41

O
SI

69, 755, 018. 74
1, 409, 240. 88

732,801. 61
115,976.22

6,851, 202.19
971,159.15

42,961, 689. 72
322,105. 51

19, 209, 325. 22

>

231, 358,041. 06

4,894,840. 58

25,324, 308. 52

139,894, 772.33

61, 244,119. 63

O

52, 361,458. 66

188,801. 74

1, 371,404.38

283, 719, 499. 72

6,083, 642. 32

26, 695, 712.90

24, 019, 500. 22
163,914,272.55

26, 781, 752. 32
88,026,871. 95

SI

w
H

>

2. P a y m e n t s m a d e o n a c c o u n t u p t o S e p t . 30, 1936:
P r i n c i p a l of a w a r d s :
A g r e e m e n t of A u g . 10, 1922
A g r e e m e n t of D e c . 31, 1928
I n t e r e s t t o J a n . 1,1928, a t r a t e s specified in a w a r d s :
A g r e e m e n t of A u g . 10, 1922
A g r e e m e n t of D e c . 31, 1928
I n t e r e s t a t 6 percent per a n n u m from J a n . 1,1928,
to d a t e of p a y m e n t as directed b y t h e Settlem e n t of W a r C l a i m s A c t of 1928
T o t a l p a y m e n t t o S e p t . 30, 1936
Less H of 1 percent d e d u c t i o n from each p a y ment:
A g r e e m e n t of A u g . 10, 1922
A g r e e m e n t of D e c . 31, 1928.
_-.
N e t payments made to claimants u p to
Sept. 30, 1936
3. B a l a n c e d u e on a c c o u n t :
P r i n c i p a l of a w a r d s :
A g r e e m e n t of A u g . 10, 1922
A g r e e m e n t of D e c . 31, 1928
I n t e r e s t t o J a n . 1, 1928, a t r a t e s specified in
awards:
A g r e e m e n t of A u g . 10, 1922
A g r e e m e n t of D e c . 31, 1 9 2 8 - .
.
Accrued interest a t 5 p e r c e n t p e r a n n u m from
J a n . 1, 1928, on total a m o u n t p a y a b l e as of
J a n . 1, 1928, t o S e p t . 30, 1936
B a l a n c e d u e claim.ants as of S e p t . 30, 1936

4,236
2,263

1121,740,195.22
3, 791, 791.80

420
115

3,489,437. 75
566,625.00

3, 816
2,148

1103,221,804.53
789, 280.11

15,028, 952. 94
2, 445,886. 69

7, 574, 058.17
1,086, 361. 01

732,801. 61
116, 976. 22

6, 841, 256. 56
970, 384. 79

1, 543, 664. 32
135,738, 070. 62

188,801. 74
6, 083,642. 32

1,354, 862. 58
26, 641, 343. 56

104, Oil,
(2) 084. 64

O

3 651,809. 90
i 26, 871. 04

21, 660. 20
3, 767. 97

114, 050. 28
19,156. 68

516,109. 42
3.946. 39

6

135,057, 389. 58

5, 058, 224.15

26, 508,136. 60

(2)

SJ

315
27

96,928, 737.96
226,176. 91

13
21

25,190. 32
1, 917. 23

9, 945. 64
774. 36

9, 945. 64
774. 35

50, 817, 794. 34
147,983,429.20

16, 541. 80
64, 369. 34

hj

103,491,028.83

298
6

35, 659, 428. 01
224,259. 68

24, 019, 500. 22
.59, 903,187. 91

w
4

61, 244,119. 63

26, 781,752. 32
88,025,871.95

1 Includes payments on account of interest to Jan. 1, 1928, on class I I I awards. 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 percent of the amount payable Jan. 1, 1928. Payment
of accrued interest since Jan. 1,1928, on this class of claims deferred in accordance with act.
* See above note.
3 Of this amount, $650,025.54 has been covered into the Treasury as miscellaneous receipts. A further sum of $1,784.36 will be covered into the Treasury'at a later date.
< Of this amount, $24,150.09 has been paid to the Government of Germany. A further sum of $2,720.95 is payable in connection with the adjudication of late claims under the
agreement of Dec. 31, 1928.




ZP

o

o

ZP

00
CO

84

REPORT OF THE SECRETARY OF THE TREASURY

War Claims Arbiter.—Under the Settlement of War Claims Act
of 1928, it was the duty of the War Claims Arbiter, within certain
limitations, to hear the claims of German, Austrian, and Hungarian
nationals and to determine the fair compensation to be paid by the
United States for ships seized, patents sold or used by the United
States, and a radio station sold to the United States.
War Claims Arbiter: Claims oj German nationals.—The Treasury
completed up to June 30, 1935, payment of 50 percent of the amount
of all awards made by the War Claims Arbiter in favor of German
nationals as required by paragraph 7 of section 4 (c) of the Settlement
of War Claims Act of 1928. No payments were made on these awards
during the fiscal year 1936.
The following summary shows the number and amount of awards
in favor of German nationals certified to the Treasury for payment,
the payments made on account, and the balance due thereon as of
September 30, 1936:
Awards of the War Claims Arbiter on account of claims of German nationals for
ships, patents, and radio station, amount paid, and balance due on each as of
September 30, 1936

1. A m o u n t d u e on a c c o u n t :
Principal of a w a r d s , i n c l u d i n g i n t e r e s t to J a n . 1,
1929
.
I n t e r e s t a t 5 percent per a n n u m from J a n . 1, 1929,
on total a m o u n t p a y a b l e as of J a n . 1,1929, or on
t h e principal a m o u n t r e m a i n i n g u n p a i d to Sept.
30,1936
Total due claimants .

_._

. _

2. P a y m e n t s m a d e on a c c o u n t to Sept. 30,1936:
P r i n c i p a l of a w a r d s
I n t e r e s t a t 5 percent per a n n u m from J a n . 1, 1929,
on total a m o u n t p a y a b l e as of J a n . 1, 1929, or on
t h e principal a m o u n t r e m a i n i n g u n p a i d to Sept.
30,1936
_
T o t a l p a y m e n t s t o Sept. 30,1936
3. Balance d u e on a c c o u n t :
P r i n c i p a l of a w a r d s
_. ._ .
I n t e r e s t accrued a t 5 percent per a n n u m from J a n .
1,1929, on total a m o u n t p a y a b l e as of J a n . 1,1929,
or on t h e principal a m o u n t r e m a i n i n g u n p a i d to
Sept. 30, 1936
_
Balance due claimants

_

Patents and
radio station,
a m o u n t (288
awards)

Total amount
(316 a w a r d s )

Ships, a m o u n t
(27 a w a r d s )

$86,738,320.83

1 $74,252,933 00 $12,485,387.83

21,489,409.65

18,246,316.19

3, 243,093. 46

108, 227,730.48

92,499,249 19

15,728,481.29

43,368,899. 24

37,126, 205 21

6,242,694.03

43,368,899. 24

37,126,205 21

6, 242,694.03

43,369,421. 69

1 37,126,727 79

6,242,693.80

21,489,409. 65

18,246,316 19

3, 243,093.46

64,858,831. 24

55,373,043 98

9,485,787.26

1 Includes awards amounting to $522.58 to members of former ruhng family of Germany (sec. 3 (j), Settlement of War Claims Act of 1928, as amended).

War Claims Arbiter: Claims of Hungarian nationals.—The awards
made by the Arbiter to Hungarian nationals in the sum of $39,125,
with interest at the rate of 5 percent per annum from July 2, 1921, to
December 31, 1928, amounting to $14,675, have been paid with the
exception of one award amounting to $137.51, together with interest
thereon at the rate of 5 percent per annum from December 31, 1928.
One award of $1,375.07 with interest amounting to $507.57, a total
of $1,882.64, was paid during the year.




REPORT OF THE SECRETARY OF THE TREASURY

85

German special deposit account.—The following statement shows
the total amounts deposited in the German special deposit account,
the amounts paid therefrom up to September 30,1936, and the balance
held in the account:
Funds deposited in the German special deposit account and payments made therefrom
up to September 30, 1936
RECEIPTS
From investments by Alien. Property Custodian under
Trading with the Enemy Act, as amended:
Unallocated interest fund
$25,000,000.00
Less refunds
4,000,000.00
20 percent German property retained

21,000,000.00
17,552,096.91

From Germany:
2H percent of Dawes' annuities available for reparations
(Paris agreement of Jan. 14, 1925)
32,183,060.87
Under German-American debt agreement, June 23,1930 19,469,964.00
Interest on payments postponed under terms of debt
agreement dated June 23,1930
1,743,738.70
Appropriation for ships, patents, and radio station
86,738,320.83
Expenses of administration. War Claims Arbiter, on account German nationals.
113,624.20

$38,652,096.91

53,396,763.57

86,851,945.03

Earnings and profits on investments made by Secretary of
the Treasury

4,636,075.25

Total receipts

$183,436,880. 76
PAYMENTS ON ACCOUNT

Awards of the Mixed Claims Commission:
Under agreement of Aug. 10, 1922
Under agreement of Dec. 31, 1928

$129,710,006.62
6,347,383.96

$135^ 057,389. 58
Awards of War Claims Arbiter:
For ships
37,126,206. 21
For patents and radio station
6,242,694.03 43,368,899. 24
>^ of 1 percent deducted from mixed claims payments covered into Treasury
($1,784.36 withheld but not paid)
650,025.64
H of 1 percent deducted from mixed claims payments on account of awards
entered under agreement of Dec. 31,1928 (act of June 21,1930), and paid to
Germany ($2,720.95 withheld but not paid)
24,150.09
Advances to special fund, expenses of administration of the Settlement of
War Claims Act of 1928 (oflace of the Secretary of the Treasury)
41,175.00
Expenses of administration, War Claims Arbiter account of German
nationals
113,624.20
Total payments on account
Balance (including investments)
Made up as follows:
$3,847,000 face amount 3 percent Treasury bonds of 1951-55
$110,000 face amount 3H percent Treasury notes, series A, due Sept. 15,1937.-.
Cash balance..-.
_

179,255,263.65
4,181,617.11
Principal cost
$3,828,053.51
110,103.13
243,460.47
4,181,617.11

Tripartite Claims Commission: Claims against^Austria.—The total
amount of awards, including interest, certified by the Tripartite
Claims Commission to the Treasury for payment was $370,032.14.
All of these awards against Austria have been paid, except one in
the amount of $135.06. Sufiicient funds have been retained in the
Austrian special deposit account to pay this award. No payments
were made on these awards during the fiscal year 1936.
Tripartite Claims Commission: Claims against Hungary.—The
awards entered by the Tripartite Claims Commission against Hungary, in favor of American nationals, amounted to $199,975.57. During the fiscal year 1936 the Treasury made payments to American
nationals on account of such awards amounting to $1,722.35. As of



86

REPORT OF THE SECRETARY OF THE TREASURY

June 30, 1936, awards aggregating $7,472.53 had not been paid
because claimants had not filed applications as required by law.
Railroad obligations
Total receipts during the fiscal year on account of railroad securities owned by the United States, which were acquired under the Federal Control Act, as amended, and the Transportation Act, 1920, as
amended, amounted to $986,195.17, classified as follows:
Interest

Principal
Collections by Treasury Department:
Sec. 210
Sec. 207
Total
Collections by Director General

_
_ __ _

Grand total

$601,923.81

Total

$369, 862.07 $971,785.88
12, 750. 00
12, 750. 00

_ _

601,923.81
1, 000. 00

382, 612. 07
659. 29

984, 535.88
1, 659. 29

.

602,923.81

383,271.36

986,196.17

.- . .

The following statement shows the total amount of railroad obligations, by classes, originally held by the United States Government
(exclusive of certain miscellaneous obligations held by the Director
General of Railroads), the amount held on June 30, 1936, and payments received on account:
Principal
Principal amount amount held
originally held on June 30,1936

Federal Control Act:
Equipment trust notes
Sec. 7
Sec. 12
Transportation Act:
Sec. 207
Sec. 210
Total

1,080, 575, 462. 64

Principal

Interest

$346, 556, 750.00
98,401, 755. 00
62,103,453.28

$45,338, 918. 25
23,100, 562. 27
4,248,171.96

277, 493,337.36
266,429,934. 45

54, 360,339. 70
90,656, 614.77

30, 590,232. 56 1,049,985,230.09

217,704,606.95

$346, 566,760. 00
98, 401,755. 00
62,103,453. 28
282, 712,837. 36
290,800, 667. 00

Total payments received

$5, 219, 500. 00
26,370, 732. 55

Section 204-—There have been no transactions under section 204
since June 30, 1931. Total payments under this section amounted
to $10,967,801.80.
Section k07.—The following statement shows the amount of obligations of carriers acquired under section 207 of the Transportation.
Act, 1920, as amended, and held on June 30, 1936.




87

KEPORT OF THE SECRETARY OF THE TREASURY

Obligations acquired under the provisions of sec. 207 of the Transportation Act, 1920,
and held as of June 30, 1936
•

Name of carrier

Principal
amount of
promisCollatsoiry note eral, face
or of diamount
rectly held
security

Chicago, Milwaukee, St. $3,207,000
Paul & Pacific R. R. Co.
Kansas, Oklahoma & Gulf
• 212, 500
Ry, Co.
Minneapolis & St. Louis
R. R. Co.
Washington, Brandywine &
Point Lookout R. R. Co.
Waterloo, Cedar Falls &
Northern Ry. Co.
Total

Class of collateral or of
directly held security

o
Principal
in default

Interest
in default

5 percent noncumulative
preferred stock of carrier.
6
percent cumulative pre0)
ferred stock, series A, of
carrier.
1, 250, 000 $1, 500,000 Refunding and extension $1, 250, 000 $975,000.00
mortgage, 5 percent
bonds of carrier.
13, 500.00
50,000
50, 000
75, 000 First mortgage, 6 percent
bonds of carrier.
500,000
416,301.37
625,000 Temporary general mort500, 000
gage, 7 percent bonds of
carrier.

(0

1,800,000 1,404,801.37

5, 219, 500

1 Securities directly held.

Sections 209 and ;^^^.-^Payments during the fiscal year under section 209 were made to the following carriers:
Buffalo Susquehanna R. R. Corporation
Texas State R. R
Total

_

$21,749.31
192.94
21,942.25

_

There have been no transactions under section 212 since June 30,
1934. Total payments to carriers under sections 209 and 212
amounted to $532,028,045.55 up to June 30, 1936.
Section 210.—This section established a revolving fund of $300,000,000 to be used for loans to railroads 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 Railroads. No new loans are
being made as the time for making application has expired. The net
expenditures by the Director General during the fiscal year under
this section, after deducting repayments, amounted to $4,053.29,
making net expenditures by him on this account of $33,640,740.24 to
June 30, 1936. ^
Total loans (including renewal loans and repayments thereof aggregating $59,800,000) to June 30, 1936, amounted to $350,600,667, repayments amounted to $325,229,934.45, and loans outstanding as of
that date amounted to $25,370,732.55. Repayments during the fiscal year 1936 were made by the following carriers:
Seaboard Air Line Ry. C o . . .
Fernwood, Columbia & Gulf R. R. Co.
Toledo, St. Louis & Western R. R. Co
National Railway Service Corporation account:
Minneapolis & St. Louis R. R. Co
Wheeling & Lake Erie Ry. C o . . .
Total

$3,309.96
10,000.00
_ 48,000.00
$56,730.79
483,883.06

540,613.85
601,923.81

The following statement shows the amount of obligations held on
June 30, 1936, on account of loans to carriers under section 210 of the
Transportation Act, 1920, as amended, and the amount of principal
and interest in default as of that date:



88

REPORT OF THE SECRETARY OF THE TREASURY

Obligations held on June 30, 1936, on account of loans to carriers under sec. 210 of
the Transportation Act, 1920, as amended, and the amount of principal and interest in default as of that date
N a m e of carrier

A l a b a m a , Tennessee & N o r t h e r n R . R . Corporation
Aransas Harbor Terminal R y
Charles C i t y W e s t e r n R y . Co
D e s M o i n e s & C e n t r a l I o w a R . R . Co. (formerly t h e Interu r b a n R y . Co.)
F o r t Dodge, D e s M o i n e s & S o u t h e r n R . R , Co
Gainesville & N o r t h w e s t e r n R . R . Co
Georgia & Florida R y . (receiver)
M i n n e a p o l i s & St. Louis R . R . Co
Missouri & N o r t h A r k a n s a s R y . Co
Salt L a k e & U t a h R . R . Co
Seaboard Air L i n e R y . Co
S e a b o a r d - B a y L i n e Co
::
Shearwood R y . Co
_.
Virginia B l u e R i d g e R y . C o . .
._..
Virginia S o u t h e r n R . R . C o .
Waterloo, C e d a r Falls & N o r t h e r n R y . Co
W i c h i t a , N o r t h w e s t e r n R y . Co
Wilmington, Brunswick & Southern R. R. C o . .
Total

L o a n s outstanding

Principal i n
default

Interest in
default

$151, 500.00
44,304.67
140,000. 00

$139,100. 00
44,304. 67
140, 000. 00

$22, 725. 00
9,382.73

633, 500. 00
200, 000.00
75, 000. 00
792, 000. 00
1,382, 000. 00
3, 500, 000. 00
872, 600. 00
14, 440, 677.88
1,256, 000.00
7, 500. 00
106, 000.00
38, 000. 00
1,260. 000. 00
381. 760.00
90, 000. 00

633, 500.00
200,000. 00
75, 000. 00
792,000. 00
1,382,000. 00
172, 600. 00
6,873. 577.88
1.256,000.00
7, 500. 00
106,000. 00
38, 000. 00
1, 260,000. 00
381. 760. 00
90, 000. 00

323, 758.49
77, 164.91
68, 352. 53
308, 880. 00
1,040, 609.73
2,453, 237.04
602. 038.80
4, 575, 701. 62
339, 120.00
450.00
63^ 471. 76
23, 187. 84
1,073, 689.71
286, 312. 60
32, 400. 00

26,370, 732. 55

13, 591,332. 55

11,290,482. 55

Trust and special funds invested by the Treasury
Adjusted service certijicatefund.—Investments for the account of the
adjusted service certificate fund, created by the act of May 19, 1924,
were made, during the fiscal year 1936, in special issues of Treasury
certificates of indebtedness bearing interest at the rate of 4 percent
per annum, in accordance with the procedure outlined in the annual
report of the Secretary of the Treasury for the fiscal year 1925.
The Adjusted Compensation Payment Act, 1936, enacted January
27, 1936, declared adjusted service certificates immediately payable,
and authorized the payment of such certificates on or after June 15,
1936, by the Secretary of the Treasury by the issuance of bonds of the
United States, registered in the name of the veteran only, in denominations of $50 having a total face value up to the highest multiple of
$50 in the amount certified as due the veteran, the difference between
the amount certified as due the veteran and the face amount of the
bonds so issued to be paid out of the adjusted service certificate
fund.
In order to provide additional funds in the adjusted service certificate fund for the payments authorized under the Adjusted Compensation Payment Act, 1936, $1,730,000,000 was appropriated to the fund
under the Independent Offices Appropriation Act, 1937, approved
March 19, 1936.
Investments made during the year amounted to $354,600,000, of
which $100,000,000 represented funds appropriated under the act
approved February 2, 1935; $246,800,000 represented the reinvestment of the principal proceeds of maturing certificates, and $7,800,000
was derived from interest on investments. During the year $383,300,000 face amount of certificates were redeemed (including $246,800,000 of maturing certificates and $136,500,000 of certificates redeemed to meet current payments from the fund) on account of the
adjusted service certificate fund, the proceeds of which, together with
interest thereon, were credited to the fund.



REPORT OF THE SECRETARY OF THE TREASURY

89

A statement of the fund as of June 30,1936 (exclusive of fund assets
held by the Veterans' Administration on account of bank loans on
adjusted service certificates redeemed) is as follows:
Adjusted service certificate fund, June 30, 1936
FUND ACCOUNT
Appropriations:
To June 30, 1935
Available July 1, 1935
Independent Oflices Appropriation Act, 1937.
Interest on investments:
To June 30, 1935
July 1, 1935, to June 30, 1936

$1,296,000,000.00
100,000,000.00
1,730,000,000.00
113,703,333.04
10,406,109.03

$3,126,000,000. 00

124,109,442.07

Total
--3,250,109,442.07
Payments under Adjusted Compensation Payment Act, 1936, enacted
Jan. 27, 1936:
Adjusted service bonds
^
1,669, 548, 500. 00
Checks for amounts less than $50.
75,635,845. 98
Total
Checks paid by Treasurer of the United States other than in final
settlement of certificates under the Adjusted Compensation Payment Act, 1936, less credits on account of repayments of loans and
interest thereon
Balance in fund June 30, 1936

1,746,184,346.98

1,312,371,219.64
-

3,057,555.565.62
192,653,876.55

FUND ASSETS i
^ Investments, 4 percent Treasury certificates of indebtedness
_
...*.
° Unexpended balances:
To credit of chief disbursing officer. Division of Disbursement, and disbursing officers
of the Veterans' Administration with the Treasurer of the United States
To credit of fund on books of the Division of Bookkeeping and Warrants
Total fund assets June 30, 1936
1 Exclusive of assets held by Veterans' Administration.

126,800,000.00
65,354,681.07
399,195.48
192,553,876.56

Civil service retirement and disability fund.—The civil service retirement and disability fund was created by the act of May 22, 1920.
During the fiscal year 1936 the Treasury continued to make investments for account of the fund in special issues of Treasury notes
bearing interest at the rate of 4 percent per annum, in accordance
with the procedure outhned in the annual report of the Secretary of
the Treasury for the fiscal year 1926. Total investments amounting
to $91,200,000 were made, of which^ $43,700,000 represented the
proceeds of maturing notes. Redemptions, in addition to the maturing notes, were made in the amount of $20,500,000 to meet current
payments from the fund.
Total credits to the fund during the year amounted to $84,268,048.20, of which $32,405,263.05 was on account of deductions from
basic compensation of employees and service-credit payments;
$11,712,785.15 represented interest on investments; $40,000,000 was
appropriated by Congress to fulfill the current liability of the United
States Government in connection with the fund; and $150,000 was
appropriated from the revenues of the District of Columbia to cover
its liability on account of the fund. The total earnings and profits
on investments to June 30, 1936, amounted to $82,284,665.18.
The following statement shows the status of the fund as of June
30, 1936:




90

REPORT OF THE SECRETARY OF THE TREASURY
Civil service retirement and disability fund, June 30, 1936

Credits:
On account of deductions from basic compensation of employees and
service-credit payments:
From Aug. 1, 1920, to June 30, 1935
...i$349, 653,095.98
July 1, 1935, to June 30, 1936
32,405,263.05
Appropriations:
To June 30, 1935.
Available July 1, 1935
Interest and profits on investments:
From Aug. 1, 1920, to June 30, 1935
July 1, 1935, to June 30, 1936

145,450,000. 00
2 40,150,000.00
70, 571,880. 03
11, 712,785.15

Total
Less checks paid by Treasurer of the United States on account of annuities and refunds, Aug. 1, 1920, to June 30, 1936

297,395,050
Unexpended balances June 30, 1936:
To credit of disbursing officers.
On books of Division of Bookkeeping and Warrants

185,600,000.00

82, 284,665.18
649,843,024.21
350,119,628.34

Total
Assets:
Face amount
$6,884,000 3H percent Treasury bonds, 1943-45.
4,621,650 3H percent Treasury bonds, 1944-46
6,810,700 2}i percent Treasury bonds, 1955-60.._
4,378,700 2H percent Treasury bonds, 1945-47
44,000,000 4 percent special Treasury notes payable June 30, 1937
72,100,000 4 percent special Treasury notes payable June 30, 1938
45,200,000 4 percent special Treasury notes payable June 30, 1939
59,200,000 4 percent special Treasury notes payable June 30, 1940
64,200,000 4 percent special Treasury notes payable June 30, 1941

$381, 958,369. 03

299,723.396.87
' Principal cost
$6, 794,338. 03
4,661,454. 45
6, 721,992. 74
4,321, 668.79
44, 000, 000. 00
72,100, 000. 00
45, 200,000. 00
59, 200. 000. 00
64, 200,000. 00

1,636, 732. 33
987,209.63

297,099,454.01

2, 623, 941. 86

Total fund assets June 30, 1936
299,723,395.87
1 Exclusive of $1,430,808.84 transferred to the Canal Zone retirement and disability fund pursuant to act
of May 2, 1931.
2 Includes $40,000,000 appropriated from the General Fund to cover the liability of the United States and
$160,000 appropriated from the revenues of the District of Columbia to cover its liability in connection with
the financing of the fund.

Foreign service retirement and disability fund.—The foreign service
retirement and disability fund w^as established by section 18 of the
act of May 24, 1924 (43 Stat. 144), and is under the administrative
supervision of the Secretary of State, but under the act the Secretary
of the Treasury is directed to make investments from time to time of
such portion of the fund as in his judgment may not be immediately
required for authorized payments, the income derived from such
investments to be credited to the fund as a part thereof.
Investments for account of the foreign service retirement and
disability fund were made during the fiscal year 1936 in special issues
of Treasury notes in the face amount of $631,000, bearing interest at
the rate of 4 percent per annum in accordance with the procedure
outlined in the annual report of the Secretary of the Treasury for the
fiscal year 1927. Redemptions during the year amounted to $440,000
face amount, including $186,000 maturing notes and $254,000 of notes
redeemed to meet current payments from the fund. The net investments amounted to $191,000.
Credits to the fund during the year aggregated $453,727.69, of
which $174,364.95 was on account of deductions from basic compensation of employees and service-credit payments, $116,962.74 represented
earnings on investments, and $162,400 was appropriated by Congress
to meet the current liability of the Government in connection with the
fund.




REPORT OF THE SECRETARY OF THE TREASURY

91

The following statement shows the status of the fund as of June
30, 1936:
Foreign service retirement and disability fund, June 30, 1936
Credits:
On account of deductions from basic compensation and service-credit payments:
From May 24, 1924, to June 30, 1935
$1,797,673.62
July 1, 1935, to June 30, 1936
174,364.96
Appropriations:
To June 30, 1935
Available July 1, 1936

-

Interest and profits on investments:
From May 24, 1924, to June 30, 1935
July 1, 1935, to June 30,1936

1,727,800.00
162,400.00
608,172.46
116,962.74

$1,972,038. 57

1,890,200.00

625,136.20

Total
4,487,373.77
Less checks paid by Treasurer of the United States on account of annuities and refunds.
May 24, 1924, to June 30, 1936
1,555,656.63
Balance in fund June 30, 1936
Assets:
Face amount
$654,000 4 percent special Treasury
514,000 4 percent special Treasury
657,000 4 percent special Treasury
763.000 4 percent special Treasury
296,000 4 percent special Treasury

2,931,717.14

notes due June
notes due June
notes due June
notes due June
notes due June

30, 1937
30, 1938
30, 1939
30, 1940
30, 1941

2,884,000
Unexpended balances June 30,1936:
Treasurer of the United States, disbursing account
On books of Division of Bookkeeping and Warrants..
Total fund assets June 30,1936

Principal cost
$654,000.00
614,000.00
._
657,000.00
763,000.00
296,000.00

43,793.09
3,924.05

2,884.000.00

47,717.14
2,931,717.14

Canal Zone retirement and disability jund.—The Canal Zone retirement and disability fund was created by section 9 of the act of March
2, 1931 (46 Stat. 1477), and under section 10 of the act the Secretary
of the Treasury is directed to make investments from time to time
of such portions of the fund as in his judgment may not be immediately required for the payment of the annuities, refunds, and
allowances authorized by the act, the income from such investments
to be credited to the fuijd.
During the fiscal year 1936 the Treasury continued to make investments for account of the fund in special issues of Treasury notes
bearing interest at the rate of 4 percent per annum in accordance
with the procedure outlined in the annual report of the Secretary of
the Treasury for the fiscal year 1931. Total investments amounting
to $2,378,000 were made, of which $1,709,000 represented the proceeds
of maturing notes. Redemptions, in addition to the maturing notes,
were made in the amount of $169,000 to meet current payments from
the fund. Credits to the fund during the year aggregated $1,085,919.18, of which $474,692.72 was on account of deductions from basic
compensation of employees and service-credit payments and $111,226.46 represented earnings on investments. During the year there
was available $500,000 appropriated by Congress to fulfill the current
liability of the United States in connection with the fund.
The following statement shows the status of the fund as of June
30, 1936:




92

REPORT OF THE SECRETARY OF THE TREASURY
Canal Zone retirement and disability fund, June 30, 1936

Credits:
Account of deductions from basic compensation of employees subject to
retirement act:
From July 1, 1931, to June 30, 1935
$3,649,148.40
July 1, 1936, to June 30, 1936
474,692. 72
Appropriations: To June 30, 1936
Interest and profits on investments:
From July 1, 1931, to June 30,1935
July 1, 1935, to June 30, 1936

$4,123,841.12
600,000.00

$331,297.01
Ill, 226.46
442,623.47

Total
— . 5,066,364.69
Less checks.paid by Treasurer of the United States, on account of annuities and refunds,
July 1, 1931, to June 30, 1936
2,167,837. 67
Balance in fund June 30,1936..'
Assets:
Face amount
$179,000 4 percent
93,000 4 percent
109,000 4 percent
651,000 4 percent
1,817,000 4 percent

special
special
special
special
special

Treasury
Treasury
Treasury
Treasury
Treasury

notes maturing
notes maturing
notes maturing
notes maturing
notes maturing

2,898,526.92

June
June
June
June
June

Principal cost
$179,000.00
93,000.00
109,000.00
651, COO. CO
1,817,000.00
• 2,849,000.00

30, 1937.
30, 1938
30, 1939
30, 1940
30, 1941.....

2,849,000
Unexpended balances June 30,1936:
Treasurer of the United States, disbursing account
On books of Division of Bookkeeping and Warrants..
Total fund assets June 30, 1936

.-

29, 246. 27
20,281.66
-

49, 526. 92
2,898,626.92

District oj Columbia teachers' retirement jund.—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 the funds are to be
held and invested by the Treasurer of the United States. A further
amendment of June 11, 1926, created a reserve fund, provided for
annual appropriations to this end, and provided that investments on
account of such fund shall be held by the Treasurer of the United
States separate from the investments on account of contributions of
teachers. During the fiscal year 1936, the Treasurer acquired by
purchase or exchange for account of the deductions fund (derived
from deductions from teachers^ compensation) $876,500 face amount
of United States, Federal land bank, and federal Farm Mortgage
Corporation bonds at a principal cost of $878,721.90, as follows:
Class of security
2J^ percent Treasury bonds of 1955-60
3 percent consolidated Federal land bank bonds of 1945-56
3 percent consolidated Federal land bank bonds of 1946-56
3M percent Federal Farm Mortgage Corporation bonds of 1944-64
Total

Face
amount

Principal
cost

$557,000
177,000
70,500
72,000

$561,681.90
173,460. 00
69,796. 00
73, 785. 00

876, 600

878, 721. 90

There was also purchased for account of the Government reserve
fund $214,000 face amount of United States and Federal Farm
Mortgage Corporation bonds at a principal cost of $215,130.95, as
follows:
Class of security
2J4 percent Treasury bonds of 1955-60
3M percent Federal Farm Mortgage Corporation bonds of 1944-64.
Total




Face
amount

Principal
cost .

$191,000
23,000

$191, 564. 70
23, 566. 25

214,000

216,130.95

REPORT OF THE SECRETARY OP THE TREASURY

93

The following statement shows the status of the combined funds
as of June 30, 1936:
District of Columbia teachers^ retirement fund, June SO, 1936
Credits:
On account of deductions from basic compensation of teachers:
From Jan. 15, 1920, to June 30, 1936.__
July 1, 1936, to June 30,-1936

_

Appropriations:
To June 30, 1935-__
Available July 1, 1936

$3,991,581.43
272,283.91

$4, 263,865.34

3,469,940.91
400,031.93

Interest on investments:
From Jan. 16, 1920, to June 30, 1936__
July 1, 1936, to June 30, 1936.

".

1,517, 678.13
249,364.60

Total
Balance in fund June 30, 1936.

55,320
1,358,880
385,400
177,000
70,500

215,640
819,600
52,100

3,087,028.28
6,813,852.53

DEDUCTIONS FUND
Principal cost
43^ percent Treasury bonds of 1947-52
$956,962.07
4 percent Treasury bonds of 1944-54
123,387.50
Z% percent Treasury bonds of 1946-56
87,437.81
3H percent Treasury bonds of 1943-47
49,500.00
3H percent Treasury bonds of 1941-43
_.
137,657.60
33^ percent Treasury bonds of 1943-45
232,000.00
2J4 percent Treasury bonds of 1955-60
765,248.14
4H percent Philippine Islands bonds
:
197,669.56
4H percent Puerto Rican bonds
15,962.57
3K percent Federal Farm Mortgage Corporation bonds of 194464
73,785.00
4 percent Federal land bank bonds
_
54,660.95
i H percent Federal land bank bonds
1,313,830.89
4 percent consolidated Federal land bank bonds of 1944^6
403,077.40
3 percent consolidated Federal land bank bonds of 1945-65
173,460.00
3 percent consolidated Federal land bank bonds of 1946-56
69,796.00
4,644,434.39

4,656,150
282,000
12,000
31,000
199,000
178,000
230,000
55,000
23,000

1,767,042.63
9,900,880.81

Less disbursements on account of annuities, refunds, etc., Jan. 15,1920, to June 30,1936
Assets:
Face
amount
$860,200
122,000
87,000
48,000
142,000
232,000
747,850
182,000
16,000
72,000

3,869,972.84

GOVERNMENT RESERVE FUND
4 ^ percent Treasury bonds of 1947-62
4 percent Treasury bonds of 1944-54
3M percent Treasury bonds of 1946-56
3H percent Treasury bonds of 1943-47
3 ^ percent Treasury bonds of 1941-43
2J^ percent Treasury bonds of 1965-60
43^ percent Puerto Rican bonds
3H percent Federal Farm Mortgage Corporation bonds of 194464
.
....
4 percent Federal land bank bonds
41^ percent consolidated Federal land bank bonds
4 percent consolidated Federal land bank bonds of 1944-46

313,717. 61
12,285.00
31,145.31
204,701.25
177,606.66
231,210.64
65,109.56
23,566.25
208,050.78
776,281.48
64,623.76 •

2,088,298.09
2,097,340
Total
6,732,732.48
Accrued interest paid in 1936 (on investment purchases), repayable in 1937
678.73
Unexpended balance June 30,1936, on books of Division of Bookkeeping and Warrants.. _
80,441.32
Total fund assets June 30,1936

6,813,852.53

Longshoremen's and harbor workers' compensation jund.—This fund
was established under the act of March 4, 1927^ (44 Stat. 1444, sec.
44), to provide for the payment of compensation for disability or
death resulting from injury to employees in certain maritime employments, and for the maintenance of employees undergoing vocational
rehabilitation. Each employer is required to pay into the fund the
sum of $1,000 as compensation for the death of an employee of such
employer resulting from injury where it is determined that there is no
person entitled under the act to receive compensation for such death.
Fifty percent of each such payment shall be available for the payments on account of injuries increasing previous disabilities, and 50
percent shall be available for the payments on account of maintenance
for employees undergoing vocational rehabihtation.



94

REPORT OF THE SECRETARY OF THE TREASURY

The fund is administered by the United States Employees^ Compensation Commission. Moneys not required for immediate disbursement are invested by the Treasurer of the United States. During the
fiscal year 1936, the Treasurer acquired by purchase or exchange for
account of the fimd $31,700 face amount of consolidated Federal land
bank and Federal Farm Mortgage Corporation, bonds at a principal
cost of $31,513.46 (excluding $9,700 face amount of consolidated
Federal land bank bonds acquired prior to July 1, 1935, but paid for
after that date).
The following statement shows the status of the fund as of June
30, 1936:
Longshoremen's and harbor luorkers' compensation fund, June SO, 1936
Credits:
On account of assessments:
To June 30, 1935
.
July 1, 1936, to June 30, 1936

_

Interest on investments:
To June 30, 1935
July 1, 1935, to June 30, 1936
Total

$142,000.00 '
20,000.00
$162,000.00
18,382.86
4,775. 20

'.

Less disbursements on account of current claims and expenses

34,929.58

Balance in fund June 30, 1936
Assets:
Face
amount
$15,600
34,600
11,550
10,000
9,700
11,000
9,700
22,000

ZU percent Treasury bonds of 1944-46
43^ percent Treasury bonds of 1947-52
3M percent Treasury bonds of 1943-45.
3 percent Treasury bonds of 1951-55
3}4 percent Federal Farm Mortgage Corporation bonds of 1944-64
4M percent Federal land bank bonds
3M percent consolidated Federal land bank bonds of 1945-66_
3 percent consolidated Federal land bank bonds of 1945-55

124,050
Unexpended balances:
Disbursing Officer (check book balances)..
Division of Bookkeeping and Warrants
Total fund assets June 30, 1936

23,158.06
185.168.06
150,228.48

Principal
cost
$15,600.00
38,646.56
11,660.00
9,959.38
9,953.46
9,680.48
9,901. 74
21,560.00

1,608.71
21,768.16

126,851.62

23,376.86
150,228.48

District oj Columbia workers' compensation jund.—This fund was
established under the act of May 17, 1928 (45 Stat. 600), which
extended the provisions of the act entitled ^'Longshoremen's and
Harbor Workers' Compensation Act'', approved March 4, 1927,
including all amendments thereto, to apply in respect to the injury
or death of an employee of an employer carrying on certain employments in the District of Columbia, irrespective of the place where the
injury or deat,h occurs. The fund is derived from collections of awards
against employers made by the United States Employees' Compensation Commission, as compensation for death of employees resulting
from injuries, in each case where no person is found to be entitled to
such compensation, under the Longshoremen's and Harbor Workers'
Compensation Act as extended to certain employments in the District of Columbia. Fines and penalties collected in connection therewith are also credited to the fund. One-half of each such collection
is available as compensation for injuries increasing previous disabilities,
the other half being available for maintenance of employees undergoing vocational rehabilitation. Any portion of the fund which, in
the opinion of the Commission, is not needed for current require


REPORT OF THE SECRETARY OF THE TREASURY

95

ments is invested by the Treasurer of the United States. No investments were made for this account during the year.
The following statement shows the status of the fund as of June
30, 1936:
District of Columbia workers' compensation fund, June 30, 1936
Credits:
On account of assessments:
To June 30, 1935....
July 1, 1935, to June 30, 1936

.

$35,460.00
10,000.00

Interest on investments:
To June 30, 1936
_
July 1, 1936, to June 30, 1936

2,466.10
734. 24

Total
Less disbursements on account of current claims and expenses
Balance in fund June 30, 1936

Total fund assets June 30, 1936

Principal
cost
$10,166.63
9, 360.43

.•...

3,190.34
48,650.34
13,454.94
36,195.40

Assets:
Face
amount
$10, 000 2li percent Treasury bonds of 1956-60
11,000 4H percent Federal land bank bonds of 1936-56
21,000
.Unexpended balances:
Disbursing officer (check-book balances)
Division of Bookkeeping and Warrants

$45,460.00

_._

2,027.27
13,652.07

19,616.06

15,679.34
35,195.40

Unemployment trust jund.—The unemployment trust fund was
established pursuant to the Social Security Act, approved August 14,
1935. The Secretary of the Treasury was authorized and directed to
receive and hold in the fund all moneys deposited therein by a State
agency from a State unemployment fund.
I t is the duty of the Secretary of the Treasury to invest such portion
of the fund as is not, in his judgment, required to meet current withdrawals. Such investments may be made only in interest-bearing
obligations of the United States or in obligations guaranteed as to
both principal and interest by the United States. The act provided
three methods for making these investments: (1) purchase of original
issues at par; (2) purchase of outstanding obligations at the market
price; and (3) the issuance at par of special public debt obligations
exclusively to the fund. Such special obligations shall bear interest
at a rate equal to the average rate of interest, computed as of the
end of the calendar month next preceding the date of such issue,
borne by all interest-bearing obligations of the United States then
forming part of the public debt; except that where such average rate
is not a multiple of one-eighth of 1 percent the rate of interest of
such special obligations shall be the multiple of one-eighth of 1 percent
next lower than such average rate. Obligations other than such
special obligations may be acquired for the fund only on such terms
as to provide an investment yield not less than the yield which would
be required in the case of special obligations if issued to the fund upon
the date of such acquisition.
The act provided that the fund shall be invested as a single fund,
but the Secretary of the Treasury shall maintain a separate book
account for each State agency and shall credit quarterly on March 31,
June 30, September 30, and December 31 of each year to each
account, on the basis of the average daily balance of such account, a



96

REPORT OF THE SECRETARY QF THE TREASURY

proportionate part of the earnings of the fund for the quarter ending
on such date.
The total credits to the fund during the fiscal year amounted to
$18,949,421.44, of which $18,857,720.50 was received from State
agencies and $91,700.94 represented interest on investments. No
payments were made during the year to State agencies for the purpose
of paying benefits. Investments were made during the year in
special Treasury certificates of indebtedness. Total investments
amounted to $37,070,000, of which $18,161,000' represented the
proceeds of certificates maturing June 30, 1936, making the net
investments for the year $18,909,000. The certificates of indebtedness which matured June 30, 1936, bore interest at 2){ percent per
annum, as required by law, and were reinvested in 2% percent special
Treasury certificates of indebtedness maturing June 30, 1937. The
total earnings on investments to June 30, 1936, amounted to
$91,700.94.
The following statement shows the status of the fund as of June
30, 1936:
Unemployment trust fund, June SO, 1936
Credits:
On account of deposits by State agencies
Earnings on investments

$18,857,720.60
91, 700. 94

Total

18,949,421.44

Assets:
$18,909,000 face amount oi2\i percent Treasury certificates of indebtedness, unemployment trust fijnd series, maturing June 30, 1937, principal cost
18, 909, 000.00
Cash balance with Treasurer of the United States
40,421.44
Total fund assets

_.

_.

18,949,421.44

The following statement shows the amount to the credit of State
agencies as of June 30, 1936:
state agency

District unemployment fund (District of Columbia)
Indiana unemployment trust fund..
Division of Placement and Unemployment Insurance, New
York
Industrial Commission of Wisconsin
Total

Balance to
credit of
State agency

Deposits

Earnings
collected

$602, 489.08
855, 231. 42

$1,383. 34
329. 03

$603,872. 42
865, 660. 45

6, 000,000.00
11, 400,000.00

7,838. 09
82,150:48

6,007,838. 09
11, 482,150. 48

18,857, 720. 50

91, 700. 94 18,949, 421. 44

United States Government lije insurance jund.—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. The act
approved March 3, 1927, as amended by the Emergency Adjusted
Compensation Act of February 27, 1931, authorized the Administrator of Veterans' Affairs to make loans to veterans upon their
adjusted service certificates out of the United States Government
life insurance fund. All of the funds available for investment during
the fiscal year 1936 were used to make loans to veterans or invested
in obhgations of the United States.




REPORT OF THE SECRETARY OF THE TREASURY

97

The Adjusted Compensation Payment Act, 1936, enacted January
27, 1936, authorizing the payment of adjusted service certificates on
June 15, 1936, also authorized and directed the Secretarjr of the Treasury to redeem from the United States Government life msurance fund
all adjusted service cei'tificates held by the fund on account of loans
made thereon, and to pay to the fund the amount of the hens against
such certificates, including all interest due or accrued, together with
such amounts as may be due under subdivision (m) of section 502
of the World War Adjusted Compensation Act, as amended. The
act further authorized and directed the Secretary of the Treasury to
make such payment by issuing to the fund bonds of the United States
which shall bear interest at the rate of 4% percent per annum and shall
not mature or be callable until the expiration of a period of at least
10 years from the date of issue, except that any such bond shall be
redeemed by the Secretary of the Treasury at any time upon certification by the Administrator of Veterans' Affairs that the amount
represented by such bond is required to meet current liabilities.
The Independent Offices Appropriation Act, 1937, directed that
such amount as represents the face value of the bonds required to be
paid to the United States Government life insurance fund be charged
to any moneys in the Treasury not otherwise appropriated for transfer
and deposit as a pubhc debt receipt. The amount payable to the
fund had not been determined and payment of such amount had not
been made prior to June 30, 1936.
On July 1, 1935, $49,480,000 face amount of 4K percent Federal land
bank bonds of various maturities were called, for redemption, of which
$30,200,000 face amount were redeemed for cash and $19,280,000
face amount were exchanged for a like face amount of 3 percent
consolidated Federal land bank bonds of 1945-55. On January 1,
1936, $19,720,000 face amount of 4K percent Federal land bank
bonds of 1926-36 were called for redemption, of which $10,000,000
face amount were redeemed for cash and $9,720,000 face amount
were exchanged for a like face amount of 3 percent consolidated Federal land bank bonds of 1946-56, and these bonds were subsequently
sold and the proceeds reinvested in Treasury bonds.
The Administrator of Veterans' Affairs reported outstanding
loans from this fund cn June 30, 1936, aggregating $128,723,390.98
to veterans on policies. The principal of outstanding loans on
June 30, 1936, upon adjusted service certificates amounted to
$493,011,234.54.
Monthly reports are made by the Treasury to the Veterans'
Administration 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 Administrator by the safekeeping offices. The investments as of June 30, 1936, were as follows:
93790—37

8




98

REPORT OF THE SECRETARY OF THE TREASURY
Government life insurance fundy June 30, 1936
Par value

m percent Treasury bonds of 1947-62
4 percent Treasury bonds of 1944-54
3% percent Treasury bonds of 1946-66
3>^ percent Treasury bonds of 1949-52
2% percent Treasury bonds of 1965-60
2% percent Treasury bonds of 1948-51.
3 percent consohdated Federal land bank bonds of 1945-55
4M percent Federal land bank bonds

...'

_.

o

Total investments made by the Secretary of the Treasury
Policy loans
Adjusted service certificate loans.
_
Total investment made by Administrator of Veterans' Administration
......
Total investments in fund

$41,272,000.00
14,106, 000.00
2, 200,000.00
300,000. 00
81,176, 250. 00
1, 300, 000. 00
19, 2S0, 000.00
32, 550, 000. 00

Principal cost
$42, 762.867.12
15,078, 333.48
2, 384. 625.00
311,906. 25
82,118, 438. 35
1, 300,000. 00
18, 894, 400. 00
32, 477, 590.04

192,184, 250. 00

196, 318,160. 24

128. 723, 390. 98
493, Oil, 234. 64

128, 723, 390.98
493,011,234.54

621, 734, 625. 52

621, 734, 626. 52

813,918,876. 62

817, 062, 785. 76

Library oj Congress trust jund.—Under the act of March 3, 1925,
as amended, the Library of Congress Trust Fund Board, consisting
of the Secretary of the Treasury, the chairman of the 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.
Section 2 of the act of March 3, 1925, as amended by the act
approved June 23, 1936, authorizes the Board in its discretion, in the
absence of any specification to the contrary, to deposit the principal
of any gift or bequest with this Treasurer of the United States as a
permanent loan to the United States Treasury, provided that the
total of such principal sums at any ti^le so held by the Treasurer
shall not exceed the sum of $5,000,000. The Treasurer shall thereafter credit such deposit with interest at the rate of 4 percent per
annum, payable semiannually, such interest, as income, being subject
to disbursement by the Librarian of Congress for the purposes
specified.
During the fiscal year the Board accepted a donation in the sum
of $100,000 from Gertrude Clarke Whittall, as an addition to its
endowment funds for the benefit of the Library, on condition that
the donation be deposited with the Treasurer of the United States
as provided in section 2 of the act of March 3, 1925, as amended,
referred to above. The income from this donation is to be applied
through the Music Division of the Library to the maintenance of
the collection of Stradivari instruments and Tourte bows given by
Mrs. Whittall to the Library, and to the program of music within
the Library in which those instruments will be used.
Under the joint resolution of Congress approved April 13, 1936,
the Librarian of Congress, with the advice and consent of the Library
of Congress Trust Fund Board and the Joint Committee of Congress
on the Library, is authorized to accept, on behalf of the United States,
the property devised and bequeathed to the United States by the
last will and testament of Joseph Pennell, deceased, upon the terms
and conditions set forth in the said will, if, in their judgment, such
acceptance would be to the best interests of the Library. I t is also
provided that the Librarian of Congress shall transfer the assets of



REPORT OF THE SECRETARY OF THE TREASURY

99

the ^Tennell fund" (as designated in the said will) to the Library of
Congress Trust Fund Board for administration by the Board.
Joseph PenneU died on April 23, 1926, and under his will his bequest
was subject to a life tenancy in Mrs. Pennell. On the death of Mrs.
Pennell on February 7, 1936, the United States became entitled to
the assets remaining in the estate. As most of the material described
in the will had already been released to the Library by Mrs. Pennell
during her lifetime, the principal assets remaining are securities and
a few parcels of real estate. The securities were reported to have,
as of February 7, 1936, a book value of $327,562.49, and the realty
an assessed value of $40,700. As of June 30, 1936, such funds had
not been transferred to the Library of Congress trust fund.
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. Investments and reinvestments of the trust funds
during the fiscal year were made in Government securities.
The following statem^ent shows the earnings collected on account
of each donation as of June 30, 1936:
Library of Congress trust fund earningiS io June 30, 1936
Income account

Donation

Babine
Beethoven
.-.
Benjamin
Bowker.
. . .
Carnegie
-._
Coolidge
Guggenheim
Huntington
Longworth
Wilbur-

.

Total

,

_

..
.

.

.

_
' .

.
-._
-

T o t a l collected to
J u n e 30,
1935

Collected
d u r i n g fiscal year
1936

$1,068.96
2, 742. 07
22, 704. 50
835. 39
27, 361. 76
68,006. 02
20,460. 60
43, 366.11
226. 94
72, 267. 75

$276. 91
504.00
1, 487. 20
81.25
3,483. 00
7, 361. 97
3, 778. 00
4,240. 00
236. 04
13, 898. 69

$1,345. 87
3, 246. 07
24,191. 70
916.64
30, 844. 76
75, 367. 99
24, 238. 60
47, 606.11
462. 98
86,166.44

269, 040.10

35, 347. 06

294,387.16

T o t a l collected to
J u n e 30,
1936

The following statement shows the principal cash account of each
donation:
Library of Congress trust fund—principal cash receipts, cost of investments, and
unexpended balances, fiscal year 1936
Principal cash account
Donation

Babine
Beethoven...
Benjamin
Bowker
Carnegie
Coolidge
Guggenheim
Huntington.
J^ongworth..
Wilbur
Total..




Unexpended
balance
June 30,
1935
$38.16
4.00
26.62
45.68
80.00
148. 38
79.60
33.75
37.77
638. 38
1,032. 34

• Receipts
during
year

Available
during
year

Cost of investments
charged to
principal
account
during year

Unexpended
balance
June 30,
1936

69.72
16, 669.80

$38.16
4.00
. 26.62
1, 045. 68
80.00
2, 766. 26
79.60
33.75
107. 49
17, 208.18

16, 600. 00

$38.16
4.00
26.62
96.27
80.00
16.26
79.60
33.76
107. 49
708.18

20, 357.40

21, 389. 74

20,199. 41

1,190. 33

$1,000. 00
2, 617. 88

$949.41
2, 750.00

100

REPORT OF THE SECRETARY OF THE TREASURY

A cash donation of $50 was received on account of the Longworth
Foundation. Receipts aggregating $20,307.40 were received from
maturing investments of various donations. Investments made
during the year were as follows:
Face
amount

Donation

Bowker .
Coolidge
Wilbur

..

Total-

Principal
cost charged
to principal
account

Securities

$950 2 ^ percent Treasury bonds of 1965^0
2,750
do.
16, 500
do--

..-

20,200

$949.41
2,760.00
16, 600.00
20,199.41

The following statement shows the securities held by the Board
for account of each donation as of June 30, 1936. The. securities are
held in safekeeping by the Treasurer of the United States and the
Federal Reserve Bank of New York, subject to the order of the
Secretary of the Treasury, for account of the Board.
Securities held by the Library of Congress Trust Fund Board, June 30, 1936
Face
amount
or par
value

Name of security

Alexis V. Babine donation
American Chain Co., Inc
Federal land bank bonds
L
U. S. Government .
_. . . . .
Do
Do
.
.
Tung-Sol Lamp Works, Inc., 6 shares
Tung-Sol Lamp Works, Inc., 5^4 shares

.

.

$600
3,800
500
1,000
500

(0
(0

Rate of
interest

Class of secm-ity

Percent
Preferred stock.
7
4M Farm loan bonds.
Treasury bonds of 1945-47.
Treasury bonds of 1943-45.
2ys Treasury bonds of 1956-60.
Preferred stock.
Common stock.

Beethoven Association donation
Canadian National Rys
Consolidated Federal land bank bonds

10,000
100

5
4

Guaranteed gold bonds.
Consolidated farm loan bonds.

William E. Benjamin donation
Standard Oil Co. of California

'.

33,800

U. S. Government
German Government
Japanese Government
American Telephone & Telegraph Co

950
2,000
2,000
4,800

Common stock.

R. R. Bowker donation 2

2K Treasury bonds of 1955-60.
7

German external loan.
Sinking fund gold bonds.

6H Common stock.

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

52,000
6,000
25,400

4^2 First mortgage bonds.

First and refunding mortgage bonds
6
First mortgage bonds.
4H

1 No par.
2 Life interest in ^ of income retained under terms of donation.




REPORT OF THE SECRETARY OF THE TREASURY

101

Securities held by the Library of Congress Trust Fund Board, June SO, 1936—Con.
Face
amount
or par
value

Name of security

Rate of
interest

Class of security

Elizabeth Sprague Coolidge donation
Canadian National Rys
.'...
Do
Chicago Rys. Co
Federal land bank bonds
-..
U. S. Government
Consolidated Federal land bank bonds
Great Northern Ry. Co
Missouri Pacific R. R. Co.
New England Telephone & Telegraph Co..
Public Service Co. of Northern Illinois
Rio Grande Southern R. R. Co
U. S. Government
Utah Power & Light Co
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
Mexican Northern Ry. Co
Public Service Co. of Northern Illinois

$7,000
10, 000
3,750
11, 640
2,750
900
10,000
2,000
16, 400
13, 000
1,000
300
10,000
6,000
17,100
2,500
700
12, 400
6,625
800
6,000

Percent
5
5
4M
2K
4
7
5
4M
5
4
3H
6

Guaranteed gold bonds.
Do.
First mortgage bonds.
Farm loan bonds.
Treasury bonds of 1965-60.
Consolidated farm loan bonds.
General mortgage bonds.
First and refunding mortgage bonds.
First mortgage bonds.
First and refunding mortgage bonds.
First mortgage bonds.
Treasury bonds of 1940-43.
First mortgage bonds.
Common stock.
Do.
Do.
Do.
Do.
Do.
Do.
Preferred stock.

Harry F. Guggenheim donation
Consolidated Federal land bank bonds..
Harbor Commissioners of Montreal

Consolidated farm loan bonds.
Guaranteed gold bonds.

700
76,000

Archer M . Huntington donation
Central Pacific Rys. Co
Consolidated Federal land bank bonds..
Missouri Pacific R. R. Co

First and refunding mortgage bonds.
Consolidated farm loan bonds.
First and refunding mortgage bonds.

105, 000
1,000
49, 600

Nicholas Longworth donation
U. S. Government
Do
Consolidated Federal land bank bonds..

Treasury bonds of 1944-54.
Treasury bonds of 1955-60.
Consolidated farm loan bonds.

4,100
600
2,200

James B. Wilbur donation
Canadian National Rys
U. S. Government
Consolidated Federal land bank bonds..
Public Service Co. of Northern Illinois..
U. S. Government
Do
Total.

44,000
16, 500
200
100, 000
3,000
100, 800

5
2^
4
7

Guaranteed gold bonds.
Treasury bonds of 1955-60.
Consolidated farm loan bonds.
Preferred stock.
Treasury bonds of 1940-43.
Treasury bonds of 1944-64.

783,815

The status of the permanent loan account as of June 30, 1936, is
as follows:
Library of Congress Trust Fund Board, permanent loan account, June SO, 1936
Donation
Gertrude Clarke Whittall.

Amount
$100,000

National Institute oj Health gijtjund.—By the act of May 26, 1930
(46 Stat. 379), the Secretary of the Treasury is authorized to accept
unconditional gifts for study, investigation, and research in the
fundamental problems of the diseases of man, and for other purposes.
It is also provided that he may accept conditional gifts, upon the




102

REPORT OF THE SECRETARY OF THE TREASURY

recommendation of the Surgeon General and the National Institute
of Health. Any such gifts are to be held in trusts and invested by the
Secretary of the Treasury in securities of the United States.
During the fiscal year the Secretary of the Treasury accepted an
unconditional gift of $296.78 from the National Merchant Marine
Association, bringing the total unconditional gifts to $1,258.78.
There was received from the Rockefeller Foundation an additional
conditional gift of $2,000 to be used for the publication of a history
of county health work.
In order to meet expenditures of the institute for the account of the
Chemical Foundation donation, $1,000 face amount of 4}^ percent
Treasury bonds of 1947-52 were sold. The receipts and expenditures
of the conditional gift fund during the year were as follows:
National Institute of Health conditional gift fund, receipts and expenditures, fiscal
year 1936
Unexpended balance June 30, 1935
._
Receipts:
Cash donation, Rockefeller Foundation, county health work
Net earnings collected on investment account of Chemical Foundation
Principal cost of security sold during year. Chemical Foundation account
Total
Expenditures, advances to institute:
Chemical Foundation donation
Rockefeller Foundation donation, dental survey (net)

$9,80L46
2,000.00
3,721. 55
1,115. 68
16,638.69
._ $4,944.37
709.89

Unexpended balance June 30, 1936....

6,654.26
10,984.43

The following statement shows the status of the fund as of June
30, 1936:
National Institute of Health conditional gift fund, June 30, 1936
Credits:
Donations:
Chemical Foundation
Rockefeller Foundation--

-

$100.000.00
22,000.00

Net earnings on investments. Chemical Foundation
Total
Less advances to meet expenditures on account of the institute:
Chemical Foundation
Rockefeller Foundation, dental survey
Balance in fund June 30, 1936

142,360.26
24,169.63
11,258.05

-

Assets:
$86,000 face amount 4 ^ percent Treasury bonds of 1947-52, principal cost
-..—._
Unexpended balance to credit of the fund on the books of Division of Bookkeeping and
Warrants
Total fund assets June 30, 1936

-.

$122,000.00
20,360.26

36,427.58
106,932. 68
95,948.26
10,984.43
106,932 68

National 'park trust jund.—Under the act of July 10, 1935 (49
Stat, 477), the National Park Trust Fund Board, consisting of the
Secretary of the Treasury, the Secretary of the Interior, the Director
of the National Park Service, and two persons appointed by the
President, was created and established and is authorized to accept,
receive, hold, and administer such gifts or bequests of personal
property for the benefit of, or in connection with, the National Park
Service, its activities, or its service, as may be approved by the Board,
but no such gift or bequest which entails any expenditure not to be
met out of the gift, bequest, or the income thereof shall be accepted
without the consent of Congress. The moneys or securities given
or bequeathed|to the Board are required to be receipted for by the



REPORT OF THE SECRETARY OF THE TREASURY

103

Secretary of the Treasury, who is authorized to invest, reinvest, or
retain investments as the Board may determine. Income from
investments shall be covered into the national park trust fund.
The Board accepted during the fiscal year a donation of $5,000
from the Metro-Goldwyn-Mayer Distributing Corporation in appreciation of the facilities accorded that corporation in filming a motion
picture in a national park. There was purchased for account of the
fund $4,850 face amount of 2% percent Treasury bonds of 1955-60,
for which charges against the fund were made subsequent to June
30, 1936.
There was also received, subject to acceptance by the Board and
deposit in the fund, a donation of $3,000 from the Universal Pictures
Corporation in appreciation of the privileges accorded that corporation in filming a motion picture in a national park.
The following statement shows the status of the fund as of June
30, 1936:
National park trust fund, June 30, 1936

Credits:
Donation:
Metro-Goldwyn-Mayer Distributing Corporation

_

_.

$5,000.00

,\ssets:
$4,850 face amount of 2 ^ percent Treasury bonds of 1965-60, principal cost
Accrued interest paid at time of purchase
Balance to credit of fund on bocks of Division of Bookkeeping and Warrants
Less amount obligated to pay for securities purchased
Total

-

-

$5,000.00
4,983.06
-.

4,945. 48
37.57
16.96
5,000.00

Alien property trust jund.—Under the act of October 6, 1917, as
amended, and the Settlement of War Claims Act of 1928, approved
March 10, 1928 (44 Stat. 254), as amended, the Secretary of the
Treasury held on June 30, 1936, Government securities in the face
amount of $29,310,200 for account of the Attorney General, Alien
Property Bureau, of which $1,600,000 constituted additional purchases
during the fiscal year 1936. A statem.ent of the alien proper.ty trust
fund as of September 15, 1936, follows:
Alien property trust fund, Sept. 15, 1936
CreditsTrusts
Earnings on investments, etc
Total

•..
_.
-

$37,289,397.46
31,778,753.90

-

Assets:
Face amount
$9,800,000 4 percent Treasury bends of 1944-54
5,100.000 3M percent Treasury bonds of 1943-45
200,000 3U percent Treasury notes maturing Sept. 15, 1937
10, 200 23^ percent Treasury notes maturing June 15, 1939
, 1,100,000 3 percent Treasury bonds of 1951-56.
500,000 3H percent Treasury bonds of 1949-52...
3, 220,000 2\i percent Treasury notes maturing Sept. 16, 1938
5,730,000 2li percent Treasury bonds of 1956-60
3.300,ou0 2^4 percent Treasury bonds of 1945-47
350,000 2?4 percent Treasury bonds of 1961-64.

69,068,161.36
Principal at
amortized cost
$10,324,883.90
5,100,000.00
203,000.00
10,413. 56
1,138,382.19
519,759.31
3,220,000.00
5,742,369.74
3,300,000.00
350,000.00

29, 310,200
Accrued interest receivable
Participating certificates issued under sec. 25 (e) of the Trading With the
Enemy Act:
Noninterest-bearing
21,000,000.00
6 percent interest-bearing
17,552,096.91
Cash with Treasurer of the United States
Total fund assets, Sept. 16,1936




29,908.808.70
174,225.93

38,562,096.9b
433,019.82
69,068,161.36

104

REPORT OF THE SECRETARY OF THE TREASURY

Checks issued by the Treasury Department during the fiscal year
on account of the alien property trust fund were as follows:
To the Attorney General, Alien Property Bureau, for—
Distribution of income..-'
Distribution of Government earnings
_
Administrative expenses
.,
Total

-

-

--

-

- . . $10,000
135,000
226,000
.

, 370,000

General railroad contingent jund.—^The general railroad contingent
fund was created by paragraph 6 of section 15 (a) of the Interstate
Commerce Act, approved June 18, 1910, as amended by the act of
February 28, 1920 (41 Stat. 489). Under the provisions of this section
any carrier which received for any year a net railway operating income
in excess of 6 percent of the value of the railway's property held for
and used by it in the service of transportation was required to place
one-half of such excess in a reserve fund established and maintained
by and for use of the carrier, the other half to be paid to the Government for deposit in the general railroad contingent fund.
Under the provisions of section 15 (a) of the Interstate Commerce
Act, as amended by section 206 (a) of the Emergency Railroad Transportation Act, approved June 16, 1933, the Secretary of the Treasury
is directed to liquidate the general railroad contingent fund and to
distribute the fund among the carriers which have made payments
under that section.
During the fiscal year 1936 the Treasury made no payments out
of the fuhd and there has been no change in the fund from that shown
in the statement appearing in the annual report for 1935.
The balance of $2,388.61 m the fund as of June 30, 1936, is due the
Central Railway Co. of Arkansas. Payment of this refund has been
delayed pending a determination of the party entitled to receive payment, inasmuch as the existence of the corporation has terminated.
The Chancery Court of Sebastian County, Ark., Fort Smith district,
under date of April 3, 1936, issued a decree holding that the title to
the amount due the Central Railway Co. of Arkansas under section
206 (a) of the Emergency Railroad Transportation Act is vested in
the Fort Smith Lumber Co., Fort Smith, Ark. Pursuant to this
decree an apph cation was received during the year from the Fort
Smith Lumber Co. Payment of the amount due was made subsequent
to June 30, 1936.
Pershing Hall Memorial jund.—The act of June 28, 1935 (49 Stat.
426), authorized the appropriation of $482,032.92 of the recreation
fund—Army, created by the War Department Appropriation Act,
approved March 4, 1933, for efl'ecting a settlement of any indebtedness connected with Pershing Hall, a memorial already erected in
Paris, France, under the auspices of the American Legion, Inc., to
the commander-in-chief, oflBicers, men, and auxiliary services of the
American Expeditionary Forces. I t provided that this amount would
not be used for the purposes set forth in the act until legal title to
Pershing Hall had been vested in the United States Government for
the use and benefit of all American officers and enlisted men of the
World War. I t further provided that the balance remaining after
^settlement of the indebtedness would be retained in a special fund to
be known as the Pershing HaU Memorial fund. Under the terms
of the act, the Secretary of the Treasury is authorized (a) to invest
and reinvest the corpus of this fund in interest-bearing United States



REPORT OF THE SECRETARY OF THE TREASURY

105

Government bonds, and (b) upon request of the American Legion,
Inc., to pay to the national treasurer of the Legion any part of the
earnings upon the fund for use in the maintenance and/or perpetuation
of Pershing Hall. An appropriation for these purposes was provided
by the act of August 12, 1935 (49 Stat. 594), and pursuant thereto
$482,032.92 was transferred from recreation fund—Army to the Pershing Hall Memorial fund on January 8, 1936. No expenditures were
made from the fund prior to June 30, 1936.
At the close of the fiscal year arrangements were being made for
the acquisition by the United States of legal title to Pershing Hall.
Special junds
Colorado River Dam jund.—This fund was established under the act
of December 21, 1928, to provide for the construction of works commonly referred to as the Boulder Canyon project. All revenues received in carrying out the provisions of the act are payable into the
fund and expenditures are made out of the fund, under the direction
of the Secretary of the Interior.
The Secretary of the Treasury is authorized to advance to the fund,
from time to time, within the appropriations therefor, such amounts
as the Secretary of the Interior deems necessary for carrying out the
provisions of the act, except that the aggregate amount of such advances shall not exceed $165,000,000.
The Secretary of the Treasury is required to charge the. fund, as
of June 30 each year, with such amount as may be necessary for the
payment of interest at the rate of 4 percent per annum accrued during
the year upon all amounts advanced from the General Fund of the
Treasury and remaining unpaid, except money advanced for construction costs of the Ail-American Canal, and if the fund is insufficient to meet the payment of interest the Secretary of the Treasury
may, in his discretion, defer any part of such payment, and the amount
so deferred shall bear interest at the rate of 4 percent per annum
until paid.
Of the $165,000,000, an allocation of $25,000,000 was made to
flood control, to be repaid with interest to the United States out of
62}^ percent of revenues, if any, in excess of the amount necessary to
meet periodical payments during the period of amortization, as provided in section 4 of the act. If the $25,000,000 is not repaid in full
during the period of amortization, then 62}^ percent of all net revenues
shall be applied to payment of the remainder. No portion of this
allocation had been advanced to June 30, 1936.
Under an opinion of the Attorney General of the United States,
dated December 26, 1929, funds advanced from the General Fund of
the Treasury for the construction costs of the All-American Canal are
not subject to the interest charge. To date, funds aggregating
$6,764,740.72 have been expended (warrants-issued basis) from funds
amounting to $9,000,000 allocated from the appropriations made in
the National Industrial Recovery Act, approved June 16, 1933, and
the Emergency Appropriation Act of 1935, approved June 19, 1934,
for the construction of the Ail-American Canal. In addition, $3,500,276.64 was expended (warrants-issued basis) from funds amounting
to $11,500,000 allocated out of the appropriation provided by the
Emergency Relief Appropriation Act, approved April 8,_:1935. The



106

REPORT OF THE SECRETARY OF THE TREASURY

act of June 22, 1936 (49 Stat. 1785), appropriated the sum of $6,500,000 from the General Fund for the same purpose, none of which has
been expended.
The Boulder Canyon Project Act provides for the repayment of
these advances, and the Secretary of the Interior has made provision
for such repayment to begin upon the completion of the canal.
On June 30, 1936, the hability of the Colorado River Dam fund to
the General Fund of the Treasury amounted to $109,436,983.66, representing advances in the sum of $99,124,093.21 and interest in the
amount of $10,312,890.45. Upon recommendation of the Secretary
of the Interior and in .accordance with the authority contained in
section 2 (d) of the act of December 21, 1928, and in section 2 of the
act of March 3, 1933, the Secretary of the Treasury deferred for 1 year
the payment of the $10,312,890.45 of interest due on June 30, 1936.
The status of the advances made to the fund as of June 30, 1936,
was as follows:
Advances to Colorado River Dam fund, June 30, 1936
Advances from
Fiscal year
Fiscal year
Fiscal year
Fiscal year
Fiscal year
Fiscal year

General Fund:
1931
1932
1933
1934
1935
1936

Interest*
Fiscal
Fiscal
Fiscal
Fiscal
Fiscal
Fiscal

3931
1932
1933
1934
1936..
1936

year
year
year
year
year
year

-

--

-

-

-...
-

-

-

—

Total..!
Less amount covered into Treasury as miscellaneous receipts
Total liability to General Fund

-

$1,746,866.46
17,018,608.34
19,709,297.48
19,684,789.68
22,299,521.44
18,766,009.81

$99,124,093.21

26,631.58
•365,029.92
1,161,488.18
1,933,449.68
2,958,905.67
3,904,017.10
10,338,522.03
25,631.68

1 10, 312,890.45
109,436,983.66

1 Payment of interest due June 30, 1936, $10,312,890.45, deferred for 1 year under sec. 2 (d) of the act of
Dec. 21, 1928," and sec. 2 of the act of Mar. 3, 1933.

Advances to reclamation fund.—Under the act of Congress approved
June 17, 1902 (32 Stat. 388), there was established in the Treasury a
special fund known as the reclamation fund, representing receipts
from the sale of pubhc lands in certain States and Territories to be
used for the construction of irrigation works for the reclamation of
arid lands. Pursuant to the act of June 25, 1910 (36 Stat. 835), the
Secretary of the Treasury advanced to the reclamation fund from the
General Fund of the Treasury $20,000,000. The act of June 12, 1917
(40 Stat. 149), provides for the reimbursement of the money so
advanced through the transfer of $1,000,000 annually from the reclamation fund to the General Fund of the Treasury beginning July 1,
1920, and continuing until full reimbursement is made. Beginning
with the fiscal year 1921 there has been returned to the General Fund
$1,000,000 annually, making a total of $10,000,000 for the 10 years
ended with the fiscal year 1930. The Deficiency Act of February 6,
1931, provided for a suspension of the annual payments for a period
of 2 years and the act. of April 1, 1932, as amended by the act of
March 3, 1933, provided a further extension until the fiscal year
beginning July 1, 1936.
The Deficiency Act approved March 4, 1931, appropriated an
additional advance of $5,000,000 to the reclamation fund from the



107

REPORT OF THE SECRETARY OF THE TREASURY

General Fund, all of which was advanced between April 28, 1931, and
November 30, 1931.
The following statement shows the status of the account as of
June 30, 1936:
Charges:
Advances from the General Fund:
Under act of June 25, 1910
Under act of March 4,1931

$20,000;000
5,000,000

Total.

25,000.000

Less repayment of advances to June 30,1930 i

10,000,000

Unreimbursed balance

15,000,000

1 Installments for 1931-36 suspended.

Division oj Deposits
The Division of Deposits is charged with the administration of
matters pertaining to the designation and supervision of Government
depositaries and the deposit of Government funds in such depositaries.
The regulations of the Treasury governing the deposit of public funds
in depositaries are incorporated in Department Circulars Nos. 92 and
176, as amended.
The following statement shows the number and classes of depositaries maintained by the Treasury and the Government deposits held
by such depositaries on June 30, 1936:
Number of depositaries and amount of Government deposits held on June SO, 1936,
by class of depositaries
Depositaries

Amount

Federal Reserve banks (including branches)
Federal Reserve member bank depositaries:
To credit of Treasurer of the United States
To credit of other Government oflQcers
Insular depositaries (including Philippine treasury):
To credit of Treasurer of the United States
To credit of other Government officers
Foreign depositaries:
To credit of Treasurer of the United States
To credit of other Government oflQcers.-Special depositaries
Total

$690,103,434.19
7, 768,155. 73
41, 781,322.11
4, 868, 695. 23
1, 536,429.33
969. 259. 92
1, 900,919. 69
150, 331, 350. 43

-

899, 259,466. 63

1 In addition, 280 branch banks are carried on the depositary list of the Treasury under the designation
of the parent banks.
2 Includes 1,887 national banks and 1,234 State banks and trust companies, of which 1,933 held deposits
on June 30,1936.

Approximately 1,800 changes and adjustments were effected within
the depositary system during the fiscal year 1936. These adjustments
are summarized in the followiuG: table:

Designated
Discontinued
Amounts for which qualified increased.
Amounts for which qualified decreased




Member
bank depositaries

Special depositaries

77
82
846
178

183
288
130
12

108

REPORT OF THE SECRETARY OF THE TREASURY

During the year the Treasury initiated a general survey covering
all Government departments and agencies to determine the possibility of improving the procedure of collecting the revenues of the
Government, principally with respect to speeding up check collections
which comprise a very large percentage of such revenues. Many
changes were inaugurated tentatively, and while the full effect could
not be determined during the current fiscal year, prehminary reports
clearly demonstrate the possibility of very substantial benefits and
economies to the Treasury and other Government estabhshments.
This new procedure has resulted in the Treasury receiving earlier
credit in the Treasurer's general account at Federal Reserve bank
points, through the wider use of member bank depositaries in the collection of checks, and has eliminated the indirect routing of checks
and the duplication of handling by collecting officers who deposit
direct where depositary facilities are available. This procedure also
reduces the number of mail shipments and eliminates a large amount
of unnecessary paper work involved in the previous procedure.
Section oj Surety Bonds
On June 30, 1936, there were 65 domestic companies holding certificates of authority from the Secretary of the Treasury under the
act of Congress approved August 13, 1894, as amended by the act
approved March 23, 1910, qualifying them 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.
There were also 5 branches of foreign companies holding certificates
of authority authorizing them to act only as reinsurers on bonds in
favor of the United States. During the year one domestic company
which previously held a certificate of authority to act as a reinsurer
on Federal bonds was authorized to qualify as a sole surety on such
bonds.
Division oj Bookkeeping and Warrants
The Division of Bookkeeping and Warrants, in the name of the
Secretary of the Treasury, issues all warrants on the Treasurer of the
United States, and under section 10 of the act of July 31,1894 (U. S. C ,
title 5, sec. 255), keeps the official accounts relating to the receipt,
appropriation, and expenditure of the public moneys, covering all
departments and establishments of the Government. Other duties
of the Division include the preparation of the annual digest of appropriations and the combined statement of receipts and expenditures,
and the handling of duplicate checks, outstanding liability claims,
budget matters, special deposit accounts, etc. The Division also
maintains budgetary accounts relating to the apportionment and
obligation of public funds covering all executive departments and
independent establishments.
Statements of the receipts and expenditures of the Government
for the fiscal year 1936, compiled by this Division, are shown as
tables 1 and 2, pages 314 to 336 of this report.
Division oj Disbursement
The Division of Disbursement, organized December 16, 1933, under
the provisions of section 4 of Executive Order No. 6166, has absorbed
the disbursing functions formerly exercised by the denartments and



REPORT OF THE SECRETARY OF THE TREASURY

109

establishments of the Government located in Washington, D . C ,
including the emergency as well as the regular Government activities,
with the exception of the Post Office Department, the Panama Canal,
and that portion of the War and Navy Departments relating to
national defense.
On June 30, 1935, the disbursing functions of 298 field offices had
been transferred to the 19 regional offices of the Division which had
been established to that date, and on June 30, 1936, the disbursing
functions of 534 field offices had been transferred to the regional
offices. During the year 4 additional regional offices were established
in Puerto Rico, Hawaii, the Virgin Islands, and Alaska.
To handle disbursements under the emergency relief program, the
Division of Disbursement established, during the year, 55 additional
offices known as United States Treasury-State disbursing offices.
Branches of these State disbursing offices were opened at 56 points.
Offices were also established in 10 States as adjuncts to the regional
disbursing offices, to handle disbursements under the cotton price
adjustment program.
In addition to the handling of routine disbursements, the Washington office of the Division and 11 regional offices made 3,195,590 payments under the Adjusted Compensation Payment Act of 1936.
There were 652 additional temporary employees appointed for this
work, 371 of whom were actively engaged on such work at the close
of the fiscal year.
On June 30, 1936, the total personnel of the Division, including
regular, temporary, and emergency employees, was 4,466. In addition
there were 298 employees of the Agricultural Adjustment Administration detailed to offices of the Division to assist in the handling of
disbursements for that agency.
During the fiscal year the offices of the Division issued 102,145,441
checks and made cash payments in 1,758,964 instances. These check
and cash payments were supported in the disbursing accounts by
8,587,813 vouchers. The Division also received, deposited, and
accounted for 2,642,516 collection items.
DIVISION OF APPOINTMENTS

Number oj employees
There were 21,077 employees in the departmental service of the
Treasury on June 30, 1936, a net increase of 4,119 for the fiscal year.
The principal increases occurred in connection with the emergency
relief program and in the Division of Loans and Currency and the
Bureau of Engraving and Printing as a result of the issuance of
adjusted service bonds.
In the field service there were 60,378 employees on June 30, 1936,
an increase of 11,470 as compared with the number on June 30, 1935.
The largest increases were in connection with the emergency relief
program and in the Division of Disbursement and the Procurement
Division.
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 30, 1935, through June 30, 1936, is shown in
table 53, page 478 of this report. A comparison of the number of
employees in the departmental and field services of the Treasury on
June 30, 1935, and June 30,1936, is contained in table 54, page 479.



110

REPORT OF THE SECRETARY OF THE TREASURY
Retirement oj employees '

During the fiscal year 1936, there were 499 persons retired from the
departmental and field services of the Treasury Department. Under
the provisions of the Civil Service Retirement Act, as amended, and
of section 204 of the Economy Act of June 30, 1932, 222 persons were
retired from the departmental service of the Treasury Department,
13 of whom were retired at their own option before the compulsory
retirement age; and 277 were retired from the field service, 14 at
their own option.
As of June 30, 1936, nine employees in the departmental service
and six in the field service, who had reached the retirement age,
were retained under the authority of the President provided in section 204 of the Economy Act.
Table 55, page 479, shows the number of persons retired and the
number who have passed the compulsory retirement age retained in
the departmental and field services of the Treasury from August 20,
1920, to June 30, 1936.
BUDGET AND IMPROVEMENT COMMITTEE

The Budget and Improvement Committee is responsible, under the
direction of the Budget officer, for the preparation and examination
of estimates of Treasury 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.
Subsequent to the submission of the regular estimates of appropriations for the fiscal year 1937, supplemental and deficiency estimates aggregating $286,159,277 were received. After examination
by the Budget officer, with the assistance of the committee, these
estimates were reduced to $286,038,833 and submitted to the Acting
Director of the Bureau of the Budget.
Reserves amounting to $225,350 had been set aside from ordinary
appropriations for the fiscal year 1936 by the Acting Director of the
Bureau of the Budget. During the year, reserves amounting to
$10,900 were released by the Acting Director, after approval of the
committee, and additional reserves of $15,518 were set up, leaving
$229,968 in reserve at the end of the year. Of the appropriations
made to the Treasury Department for the fiscal year 1937, the Acting Director set aside $1,684,480 in reserve.
For the fiscal, year 1938, heads of Treasury bureaus and offices
submitted estimates for annual, permanent, and indefinite appropriations aggregating $2,335,867,770. After examination by the
Budget and Improvement Committee, items aggregating $11,548,253
were disapproved in estimates for annual appropriations. There was
approved and submitted to the Acting Director of the Bureau of the
Budget for annual appropriations, $849,550,047, including $540,000,000 for the old-age reserve account; for permanent and indefinite
appropriations and special funds, $4,087,470; trust funds, $17,167,000; interest on the public debt, $871,000,000; and public debt retirements chargeable against ordinary receipts, $582,515,000, making a grand total of $2,324,319,517.



REPORT OF THE SECRETARY OF THE TREASURY

111

COAST GUARD
The following is a summary of the principal operations of the
Coast Guard for the fiscal year 1936, including comparisons with the
preceding year:

1935

Lives saved or persons rescued from peril
.
_
__
6,825
Persons on board vessels assisted.
__
32,881
Persons in distress cared for
.
._
927
Vessels boarded a n d p a p e r s examined
27, 671
Vessels seized, reported, or w a r n e d for violations of law
1,299
F i n e s a n d penalties incurred b y vessels reported
_.
$149,720
R e g a t t a s a n d m a r i n e parades p a t r o l l e d . . :
276
Instances of lives saved a n d vessels assisted
6,777
7,025
I n s t a n c e s of miscellaneous assistance
-.
Derelicts a n d other o b s t r u c t i o n s to n a v i g a t i o n r e m o v e d or de191
stroyed
-.
$19, 296
Value of derelicts a n d other obstructions recovered
Value of vessels assisted (including cargoes)
$68, 703,579
Persons e x a m i n e d for certificates as lifeboat m e n
9,811

1936

Increase ( + )
or
decrease ( - )

7.510
37, 553
1,439
35, 600
1,824
$209, 356
290
8,138
6,^608

+1,685
+ 4 , 672
+612
+7,829
+525
+$59, 636
+14
+ 1 , 361
-417

263
$67, 410
$65,425, 470
2,341

+72
+$48,115
+ $ 6 , 721,891
- 7 , 470

In the winter of 1935-36, 29 vessels of the Coast Guard engaged
for periods of from 1 to 35 days in breaking ice in various localities
to free shipping and open the channels of marine traffic. These
vessels were so engaged for 405 days.
In cooperation with the American Red Cross, the Coast Guard
dispatched 200 men, 45 boats, 6 airplanes, and 4 communication
trucks into the flooded areas of New England, Pennsylvania, and the
Ohio Valley, to afford relief to the stricken population.
Following the disastrous hurricanes which swept Florida in September and November 1935, 20 Coast Guard vessels and 6 airplanes
carried relief supplies to survivors, conducted surveys of stricken
areas, and assisted the Red Cross and local and Federal agencies in
their relief work. Coast Guard planes also distributed hurricane
warnings to small craft and isolated communities.
An allocation of $4,850,950 from funds provided in the Emergency
Relief Appropriation Act of 1935 was made to the Coast Guard for
work relief projects. These comprised the repairing, renewal, and
improvement of telephone lines; the reconditioning, modernizing, and
construction of shore facilities at various Coast Guard stations; the
construction of wooden boats; and dredging at Government Island,
Alameda, Calif. The number of workers provided with employment
increased steadily from the time the program was begun, and reached
the fiscal year peak of 963 on June 27, 1936. Approximately threefourths of these workers were taken from relief rolls. The various
projects were well under way on June 30, 1936, and will be completed
during the fiscal year 1937.
Protection to navigation
International service oj ice observation and ice patrol.—The international service of ice observation and ice patrol in the North Atlantic
Ocean, provided for under the provisions of the International Convention on Safety of Life at Sea, 1929, was conducted during the
season of 1936 by two cutters and one 125-foot patrol boat used as an
oceanographic observation vessel. One of the cutters sailed from



112

REPORT OF THE SECRETARY OF THE TREASURY

Boston, Mass., on March 23 for the Grand Banks region to determine
the location of the southernmost ice and its progress toward the
North Atlantic steamship lanes. The patrol boat sailed from Boston
on March 31, proceeding to St. John's, Newfoundland, from which
place she sailed April 8 on an oceanographic cruise to determine the
rate of drift and direction of the currents prevailing in the Grand
Banks region. The other cutter sailed from New York, N. Y., on
April 2 and, relieving the first cutter on April 5, entered upon the ice
observation duty.
^
•
The season of 1936 was unique in that no icebiBrgs were sighted south
of the forty-fourth parallel. No icebergs menaced the EuropeanUnited States steamship tracks throughout the, season. While it was
not necessary to establish the customary ice patrol, the two cutters
basing at Halifax, Nova Scotia, made six cruises in the ice patrol
area, maintaining a continuous observation of conditions and keeping
shipping advised as to the location of icebergs sighted or reported.
During the period of ice observation service, 21 icebergs were reported south of the forty-eighth parallel, 9 of which were reported
during the cruise from May 5 to 18.
; ^
In furtherance of the studies carried on by the international service
of ice observation and ice patrol, the patrol boat sailed from St.
John's on June 18, and made a survey of oceanographic and ice conditions in the waters between Newfoundland and southwestern Greenland. The vessel called at Ivigtut, Greenland, and observations were
made of the glaciers in that region. She arrived at St. John's on June
30, after a cruise of approximately 3,000 miles.
Winter cruising.—The President, on November 1, 1935, on the
recommendation of the Secretary of the Treasury, designated 14
Coast Guard vessels to perform special winter cruises along the coast
for the season of 1935-36 to aid distressed vessels. The vessels
engaged on this duty cruised 113,229 miles, and afforded assistance to
337 vessels, whose values, including cargoes, amounted to $22,618,450.
There were 690 persons on board the vessels assisted. In the interest
of United States laws, 208 vessels were boarded.
Anchorage and movements oj vessels.—The Coast Guard continued
to maintain supervision over the enforcement of the rules and regulations promulgated by the Secretary of War and the Secretary of Commerce governing the anchorage and movemejuts of vessels in ports
and in localities where Federal regulations are in force. At ports
having Federal regulations. Coast Guard officers, designated as *'captains of the port", perform this duty, and also cooperate in the enforcement of the regulations of the Interstate Commerce Commission
governing the handling of explosives by vessels. In localities where
the continual presence of an enforcement officer is not necessary,
periodic inspections are made and a surveillance is maintained to
msure compliance with the published regulations.
Enjorcement oj customs and other laws
^ The Coast Guard continued during the year its duties in connection with the enforcement of the customs laws land the navigation and
motorboat laws of the United States, and the customary assignment
of Coast Guard vessels at the principal ports of the country to assist
the customs authorities in boarding incoming vessels and in performing




REPORT OF THE SECRETARY OF THE TREASURY

113

other customs duties. Assistance was also afforded other branches of
the Government in the enforcement of Federal laws.
Smuggling.—The vigorous antismuggling campaign by the coordinated law-enforcement agencies of the Treasury Department, which
was in progress during the year, resulted in the complete dispersal
of the foreign hovering fleet which, since April 1934, had operated
off the coasts of the United States. The Coast Guard, through its
offshore and inshore patrol and its Intelligence Organization, contributed substantially to this dispersal.
A summary of seizures during the year is presented in the following
table:
Summary of Coast Guard seizures and joint seizures by Coast Guard and other law
enforcement agencies during the fiscal year 1936

Coast
Guard

Joint
seizures
(Coast
Guard
and other
agencies)

Total

4
41

Foreign vessels seized...
Domestic vessels seized..
Total

45

Arrests
._.
Aliens seized
Vehicles seized
stills and equipment seized.

103
1
29
140

161
36
161

Tax-free value of alcoholic beverages seized.
Internal Revenue tax on above
Stale tax on above

$15,902.58
138, 635. 00
22, 352. 20

$5, 713. 28
22, 256. 00
2,613.20

$21, 615.86
160,891.00
24,966.40

Total domestic tax-paid value of alcoholic beverages seized.
Appraised value of seized vessels
Appraised value of seized vehicles
Appraised value of seized stills and equipment

176, 889. 78
103. 566. 00
1, 726. 00

30, 582. 48
10. 805. 00
6, 707. 00
11, 031. 00

207,472. 26
114, 371. 00
7,432. 00
11, 031. 00

282,180.78

58,125. 48

340, 306. 26

Total-

Patrol in northern waters.—The regular annual patrol of the waters
of the North Pacific Ocean, Bering Sea, and southeastern Alaska
for the season of 1935, in progress at the beginning of the fiscal year
1936, was conducted by six Coast Guard vessels. These vessels in
the performance of their duties cruised 41,978 miles, assisted 7 vessels,
boarded 30 vessels, afforded medical and dental aid to 351 persons,
and transported 54 persons. The patrol for the season of 1936 was
in progress at the close of the fiscal year.
Northern Pacijic halibut jishery.—In pursuance of an Executive
order of the President of October 24, 1935, the Commandant of the
Coast Guard assigned five Coast Guard cutters and five Coast Guard
patrol boats to patrol the territorial waters of the United States for
the enforcement of the Northern Pacific Halibut Act and the Convention for the Preservation of the Halibut Fisheries of the Northern
Pacific Ocean and Bering Sea. In this duty these vessels cruised
5,208 miles between December 16, 1935, and March 31, 1936. This
activity is carried on annually for the Bureau of Fisheries, Department
of Commerce,
93790—37


114

REPORT OF THE SECRETARY OF THE TREASURY
Communications

Telephone and telegraph lines and cables.—The Coast Guard owns
and operates a coastal telephone system consisting of 1,602 miles of
pole line, 3,000 miles of open aerial circuits, 50 miles of aerial and
underground cables, and 642 miles of submarine cables. A number
of these lines are connected with central offices of commerical telephone systems, thus affording telephone and telegraph service to all
units of the Coast Guard, to navy radio compass stations, weather
bureau offices, and lighthouses in various locations along the coastal
waters of the United States.
Investigation and research during recent years have resulted in a
decided improvement in the manufacture of telephone wire and submarine cable. A scientific study to determine the type of wood most
suitable for telephone poles, and a preservative that would protect
them against termites and the elements has resulted in adding
materially to the life of Coast Guard pole lines and in increased efficiency in service and operation.
In addition to the reconstruction, routine overhauling, and repair
work on lines in all divisions during the year, construction of six new
lines was begun in the Chicago division, which will be completed in
the near future; approximately 30 miles of new line have been constructed between Lompoc and Point Arguello, Calif.; 20 miles of line
between Forks and Lapush, Wash.; and a new line was built between
Golden Meadow and Grand Isle, La.
Cable replacements were made as needed during the year at several
places on the coast, and much was accomplished in research activities
toward improving the physical and electrical characteristics of Coast
Guard submarine cable.
Radio.—A new standard communications plan has been completed
which classifies all radio-equipped units and outlines the type of
radio equipment to be provided for each class. This plan includes
not only ships and shore stations but aircraft of various types, radioequipped emergency trucks, and portable emergency stations.
The installation of radio transmitting and receiving equipment at
Coast Guard (life-saving) stations and receiving equipment in motor
lifeboats is progressing as equipment becomes available. The initial
installations at a few stations have demonstrated the need at many
other stations for such installation as specified in the standard communication plan.
Equipment has been provided at the Coast Guard Radio Laboratory, at Fort Hunt, Va., to test, in accordance with Coast Guard
specifications for such equipment, samples of radio equipment submitted for test. The facilities of the Coast Guard Radio Monitoring
Station, at Fort Hunt, have been extended by providing additional
receiving and transmitting equipment to handle traffic with aircraft
and with the cadet practice ship in European waters. The Coast
Guard laboratory has carried on extensive tests with ultra high
frequency radio equipment. These tests have been confined mostly
to two-way communications between moving automobiles.
Several new vessels built or under construction have been equipped
\vith radio. Included in this list are seven new 327-foot cutters on
which automatic high frequency radio transmitters have been
installed.




REPORT OF THE SI2CRE1TARY OB' THE TREASURY

115

The Coast Guard communications service has cooperated with
other branches of the Treasury Department, particularly the Bureau
of Customs and the Alcohol Tax Unit, in connection with their radio
problems.
A light weight and efficient public address sytem has been developed for use on planes to warn fishermen, yachtsmen, inhabitants of
sparsely settled communities, and others, of the approach of hurricanes. An improved visual type direction finder for use on aircraft
has been developed and flight-tested with satisfactory results.
An officer of the Coast Guard continued to represent the Treasury
Department on the Interdepartmental Radio Advisory Committee.
Equipment
Floating equipment.—On June 30, 1936, there were in commission
in the Coast Guard, 32 cruising cutters, seventeen 165-foot patrol
boats, twenty-five 125-foot patrol boats, four 100-foot patrol boats,
six 78-foot patrol boats, fifty-three 75-foot patrol boats, 41 harbor
craft, 6 special craft, 79 picket boats, and 32 miscellaneous patrol
boats exceeding 40 feet in length. This floating equipment does not
include the primarily life-saving boat equipment attached to Coast
Guard vessels and stations.
A number of cutters and boats, and various small patrol boats and
harbor boats were disposed of during the year by sale, or transfer to
other. Government departments.
One of the seven 327-foot cruising cutters under construction last
year was placed in commission during the year. The remainuig 6
are in various stages of completion. A program for the construction
of wooden patrol boats, harbor craft, and miscellaneous boats was
initiated during the year, and the work is progressing satisfactorily.
In addition to the work performed during the year by the repair
depot on vessels of the service, routine and major repairs to vessels
were made under contract with private shipyards and various navy
yards.
Small boats.-—The second 52-foot motor lifeboat was completed at
the Coast Guard depot during the year and assigned to the Point
Adams Coast Guard station, Oreg. Preliminary design work has
been started on a new light weight motor surfboat which is intended
for use in special localities. The construction details will include light
weight woods and metals and reduced power plant weights. A final
design has been evolved for the construction of 26-foot 6-inch motor
launches for use on the new cutters and regular cruising cutters.
The field installation of spray hoods for motor surfboats now in
service has been completed, and in view of the adoption of shielded
power plants, it has been decided to discontinue the fitting of these
hoods on future boats as the protective features of the hood for engine
operation are no longer required.
Experimental investigations and tests of special metals, woods, marine equipment, fittings, outfit, etc., were continued during the year in
the interests of new construction and maintenance of boats.
Aviation.—During the year air stations were in commission at
Salem, Mass.; Cape May, N. J.; Miami, Fla.; St. Petersburg, Fla.;
Biloxi, Miss.; and Port Angeles, Wash. Air patrol detachments were
in commission at Charleston, S. C ; San Antonio, Tex., and San



116

REPORT OF THE SECRETARY OF THE TREASURY

Diego, Calif. Detachments of airplanes were also located at strategic
operation points from time to time.
Construction of air stations at Charleston,^S. C.,^and'San'Diego,
Calif., has been in progress and funds were allocated for the construction of an air station at New York, N . Y. The six Grumman amphibian airplanes, contracted for in the preceding fiscal year, were
received and placed in service.
The duties falling to Coast Guard aircraft during the year were
many and varied. In addition to rendering aid to persons and vessels in distress at sea and to enforcing customs regulations. Coast
Guard aircraft assisted in the enforcement of the internal revenue
regulations and conducted surveys of migratory waterfowl along all
the coasts in conjunction with the Biological Survey. The use of
aircraft in locating illicit distilleries, which were subsequently seized
and destroyed, has indicated the value of this type of equipment for
this work. Coast Guard aircraft was also used in locating livestock
being smuggled into the United States.
The value of aircraft in warning commercial and pleasure vessels,
lacking radio facilities, of approaching hurricanes was manifested
during the year, especially in the instances of the hurricanes along
the Florida coast. This work contributed to the safety of many
persons and vessels.
The following summary is indicative of the operations of service
aircraft during the yeaf:
Miles cruised
Area searched (square miles)
Time in flights (hours)
Vessels identified
Plane? identified
Requests for aircraft to engage in search
Persons assisted
Vessels assisted
Emergency medical cases transported
Instances of assistance rendered other Government departments
Miscellaneous cases of assistance
Foreign smuggling vessels located
American smuggling vessels located
Suspicious planes sighted
Smuggling landing fields located
Stills located and reported (subsequently seized and destroyed)

_.

.837,696
.-- 8,371,212
8,959
61,694
6,836
118
1,013
430
85
233
40
70
34
7
8
402

Ordnance.—During the year small arms target practice and gunnery
exercises were conducted as usual. In addition, selected personnel
entered national small arms competitions and made a creditable
record. The instruction of approximately 6,000 civilian employees
of the Treasury Department in the use of small arms was continued.
The replacement of Z"jbO cahber antiaircraft guns with b " j b l
caliber guns was authorized for nine vessels and it is contemplated
that installation will be completed by the end of 1937. Five hundred
sets of the recently developed shoulder line-throwing equipment,
consisting of a .30 caliber gun, projectile, shot line canister, shot line,
rewinding machine, and case, were distributed to active units. Reports from the field indicate conclusively that this new shoulder
line-throwing equipment is far more effective than that heretofore
used. A .32 caliber blank cartridge firing mechanism has been developed for use with the Lyle line-throwing gun. I t will materially
reduce costs, eliminate misfires, and improve accuracy of fire.
Other developments carried on during the year were a shot line
canister and rewinding machine to replace the faking box now used
with the Lyle and 6-pounder line-throwing equipment, also a nontumbhng line carrying projectile for the Lyle gun and a similar one



REPORT OF THE SECRETARY OF THE TREASURY

117

for the 1-pounder. Tests which have been conducted indicate the
possibihty of further improvement. Lyle gun equipment throughout
the service has been checked and more than 140 of the 500 guns were
found to be materially over the original 2}^-inch caliber. Therefore,
arrangements have been made for relining these guns at a considerable
saving as compared with the cost of purchasing new guns. About
50 percent of the Lyle projectiles were found to be undersized and
replacement is planned.
The use of the demohtion equipment developed by the Coast
Guard has proved most effective. An interesting example of its use
was the blasting of a channel through Cape Cod ice during the rescue
of 7 men who were being carried out to sea.
Air stations have been supphed with standard pyrotechnic equipment for aircraft, and a contract has been awarded for the overhaul
of the Coast Guard flare-kit-parachute flares which are in general
use throughout the service.
A class of 12 men completed the 3 months' course for armorers at
the small arms repair and supply base of the Coast Guard Depot,
where the overhaul of small "arms and the assembly of equipment
for issue to the service constituted a part of their training.
Acknowledgment is made of the continued cooperation and
assistance afforded the Coast Guard by the Army, Navy, and Marine
Corps.
The academyy stations^ baseSj repair depots engine school^ repair
base, etc.
Coast Guard Academy.—During the flscal year 74 cadets were
appointed to the academy, 48 resigned, 1 died, and 30 were graduated from the academy. All of the graduates received permanent
commissions as ensigns. There were 79 cadets under instruction at
the end of the fiscal year 1936. The 1936 practice cruise left New
London, Conn., on June 11, 1936. The itinerary included United
States and foreign ports.
Stations and bases.—On June 30, 1936, 241 Coast Guard (lifesaving) stations were in an active status, and 3 shore bases were in commission. Rebuilding, repairs, alterations, additions, and improvements were completed or undertaken during the year at a large
number of shore units, and at a number of other shore units contracts were awarded or work was begun on major projects.
Repair depot.—During the year 11 Coast Guard vessels were overhauled, reconditioued, repaired, or improved at the repair depot,
Curtis Bay, Md. The boat building shop at the depot constructed,
or had in course of construction, a large number of small boats of
various types, repaired and reconditioned other boats, and manufactured launching carriages for lifeboats and surfboats.
Engine school and repair base.—Facilities are available for 32
students at the engine school and repair base, Norfolk, Va. During
the year the general course was extended to 6 months, and 94 students
were graduated from the school. Forty-one marine gasoline engines
were reconditioned, 14 of which were installed in Coast Guard patrol
craft by the school; 102 starter motors and generators, 60 magnetos,
and many minor pieces of electrical machinery were completely
rebuilt, practically all of the work being done by the students.



118

REPORT OF THE SECRETARY OF THE TREASURY
. Engineering competition

The engineering competition acts as a stimulus to the personnel,
promotes a spirit of friendly rivalry, and tends to maintain the
personnel and material in a high state of efficiency and readiness.
Thirty cruising cutters and 46 patrol boats took part in this competition
during the year.
Personnel
On June 30, 1936, there were on the active list of the Coast Guard
477 regular and 5 temporary commissioned officers, 79 cadets, 159
chief warrant officers, 425 regular warrant officers, 146 temporary
warrant officers (of whom 144 were on duty with the War Department
under orders contained in Executive Order 6169), 8,331 enlisted men,
and 361 civilian employees in the field,^of whom 264 were per diem
civilian employees at the Coast Guard Depot, Curtis Bay, Md.
An officer of the Coast Guard has acted during the year as a member
of the Senate Technical Advisory Committee on Safety of Life at Sea.
Recruiting.—Eight main recruiting stations were in operation
during the fiscal year. Because of the limited appropriation, recruiting was suspended in November 1935 and not resumed until the latter
part of June 1936. Of the 9,216 applicants for enlistment during the
year, 134 were enlisted, 816 rejected for physical disability, and 8,266
rejected for other causes. Loss in personnel, other than through
expiration of enlistments, was low, and 85 percent of the naen eligible
to reenhst did so upon the expiration of enlistments.
Training.—The Coast Guard Institute at New London, Conn., has
continued to provide study courses for enlisted men of the Coast
Guard in order to fit them for advancement, and 1,131 certificates
were issued by the institute during the year. Educational courses of
the International Correspondence Schools were used by the institute,
and 116 diplomas were issued in connection with these courses. Navy
rating courses and specially prepared courses for Coast Guard needs
were given, and 17 certificates of the Capitol Radio Engineering
Institute were awarded. Two men were graduated from the Navy
Radio Materiel School, Bellevue, D. C , Training in radio is carried
on at the Fort Trumbull Training Station, New London, and a school
for yeomen has also been established at this unit. The course offered
at the Engine School and Repair Base, Norfolk, Va., has been enlarged
to include training in Liberty and aviation engines.
Awards of lije-saving medals
The Secretary of the Treasury, under the provisions of law, awarded
duriQg the year 4 gold and 51 silver life-saving medals of honor 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.
Legislation
Among the legislative enactments of the Seventy-fourth Congress
affecting the duties of the Coast Guard are the following:
The act of August 5, 1935 (Public No. 238), is designed to protect
the revenue of the United States and provide measures for the more



REPORT OF THE SECRETARY OF THE TREASURY

119

effective enforcement of the laws respecting the revenue, to prevent
smuggling, to authorize customs-enforcement areas, and for other
purposes.
The act of May 1, 1936 (Public No. 535), gives effect to the convention between the United States and certain other countries for the
regulation of whaling. The provisions of the act are enforced
primarily by the Coast Guard and the Bureau of Customs.
The act of May 27,1936 (Public No. 622), creates a marine casualty
investigation board consisting of three members, one of whom shall
be an officer of the Coast Guard designated by the Secretary of the
Treasury.
The act of June 22, 1936 (Public No. 755), to define the jurisdiction
of the Coast Guard, empowers commissioned, warrant, and petty
officers of the Coast Guard to make inquiries, examinations, inspections, searches, seizures, and arrests upon the high seas, etc., for the
prevention, detection, and suppression of violations of laws of the
United States, under certain limitations. This law clarifies the authority of the Coast Guard to enforce certain laws of the United
States.
The act of June 25, 1936 (Public No. 799), to promote safety at sea
in the neighborhood of ice and derelicts, and for other purposes,
authorizes the Commandant of the Coast Guard, under the direction
of the Secretary of the Treasury, to administer the services provided
for in the act.
The act of June 25, 1936 (Public No. 808), to amend section 13 of.
the act of March 4, 1915, entitled ^^An act to promote the welfare of
American seamen in the merchant marine of the United States;
* * *j?^ requires, among other things, all certificates as lifeboatman,
issued prior to the passage of the act, to be surrendered for cancelation
and new certificates, stamped with the seal of the board of local
inspectors, etc., to be issued in lieu thereof.
The act of June 29, 1936 (Pubhc No. 835), to further the development and maintenance of an adequate and well-balanced American
merchant marine, etc., authorizes licensed or unlicensed members of
the crew of any subsidized vessel to make complaints or recommendations to the Coast Guard.
Funds available jor the Coast Guard
The following table shows the amounts appropriated for the Coast
Guard for the fiscal year 1936, including certain items in the First
Deficiency Act, 1936, which are available for expenditure in 1937,
and additional funds made available from funds appropriated under
the National Industrial Recovery Act and the Emergency Relief
Appropriation Act of 1935. The amounts of obligations and unobligated balances are also shown.




120

REPORT OF THE SECRETARY OF THE TREASURY

Available funds, obligations, and unobligated balances for the fiscal year 1936
Amount
available
Appropriation:
Salaries, OflQce of Coast Guard, 1936
Pay and allowances, Coast Guard, 1936
Fuel and water, Coast Guard, 1936
Outfits, Coast Guard, 1936
-..
_
Rebuilding and repairing stations, etc.. Coast Guard,
1936
Communication lines, Coast Guard, 1936
Civilian employees, Coast Guard, 1936
-- .
Contingent expenses, Coast Guard, 1936
Repairs to Coast Guard vessels, 1936
Additional vessels, Coast Guard, 1936 _.
.-.
Outfits, Coast Guard, 1936 and 1937
Repairs to Coast Guard vessels, 1936 and 1937
Rebuilding and repairing stations, etc.. Coast Guard,
1936 and 1937
„
Total

292, 500
170,120
245, 080
175,000
1, 713,890
117, 526
70,000
175,000

$1,935
63,813
14,950
13,473

286,979
165, 267
205. 229
179,701
1, 700,354

-34,890
+10,000

23, 677, 541 22, 779, 074

-6,890

5,521
4,863
4,961
5,299
13, 536
117, 526
70. 000
175, 000
310,700

310, 700

Other available funds:
National Industrial Recovery, Treasury, Coast
Guard, 1933-37
.-.
Public Works Administration, Treasury, Coast
Guard, 1935-37
Emergency Relief, Treasury, Coast Guard, 1935-37

791, 577

942,882

932,361

10, 621

3,496,000
4,860,950

3,496.000
3,178,678

i, 672, 272

9, 289,832

7,607, 039

32,867,373

30,386,113

Total . .

* Transfers:
From:
y Fuel and water
..,
p Civilian employees.
To:
Pay and allowances
--.
Contingent expenses
From:
Pay and allowances
Civilian employees
_
To Division of Disbursement

Unobligated
balance

- Trarisferred i

$369. 620
$367,685
17 000,000 17,004,187 If +$60,000
-2,000 }
1, 532, 650 1, 477, 700
-40,000
1,416,455
1,401, 982

-

Grand total. _

Amount
obligated

1, 682, 793
-6,890

2,474,370

$40,000
30,000

_._
.
_

$60,000
10,000

_
2,000
4,890
.-.

6,890

COMPTROLLER OF THE CURRENCY

Changes in the condition oj active national banks
The total assets of the 5,374 active national banks on June 30, 1936,
amounted to $29,702,839,000, in comparison with assets of $26,061,065,000 reported by 5,431 active banks on June 29 of the previous
year. The deposits of the active banks in 1936 totaled $26,200,453,000,
the largest amount ever reported in the history of the national hanking
system, exceeding by $3,682,207,000 the amount reported for active
banks a year previous. The loans and investments totaled $20,245,967,000, or $2,160,864,000 more than on June 29, 1935.
The assets and liabilities of active national banks on the date of
each report from June 29, 1935, to June 30, 1936, are shown in the
following statement:




REPORT OF THE SECRETARY OF THE TREASURY

121

Abstract of reports of condition of active national banks on the date of each report
from June 29, 1935, to June SO, 1936
[In thousands of dollars]
June 29,
1936 (5,431
banks)

Nov. 1,
1936 (,5,4.09
banks)

Dec. 31,
1935 (5,392
banks)

Mar. 4,
1936 (6,381
banks)

June 30,
1935 (5,374
banks)

ASSETS

Loans and discounts (including redis7, 606,321 7,430, 864
counts)
7,366,226
7,301,371
4,235
3,463
Overdrafts
^
3,491
5,190
U. S. Government securities, direct obliga6,564,770
6,480,438
6,233,061
tions
6,077,724
Securities guaranteed by U. S. Govern1, 305, 641
1,260, 635 1,257,342
ment as to interest and principal
1,096,283
3,803,037
3, 666,424
Other bonds, stocks, securities, etc
1 3, 543,379 3, 684,778
Customers' liabilit'y account of accept85, 774
89,101
86,753
80, 906
ances
,
647,194
660, 478
647, 677
661,463
Banking house, furniture and fixtures
180, 629
184, 211
183, 242
171, 465
Other real estate owned—
_
3,453, 672
3, 637,060
3, 436,909
3,092,178
Reserve with Federal Reserve banks.
404, 379
469,042
493, 839
406, 513
Cash in vault
Balances with other banks and cash items
2 3, 370,530 ! 4,007,999 4,209, 574 4,092, 344
in process of collection
7,689
12,068
Cash items not in process of collection
Redemption fund and due from United
States Treasurer
12,060
Acceptances of other banks and bills of
exchange or drafts sold with endorse4,647
4,692
7,136
8,666
ment
647
647
795
537
Securities borrowed
140,396
158,630
158, 298
180, 623
Other assets
Total..
26,061,066 27,430, 730 28,224, 701 28,293,019

7,759,149
4,193
7,072,979
1,374,385
4,036,261
81, 395
641, 550
184,123
3, 620,901
531,694
4,328, 831
7,501

154, 406
29,702,839

LUBILITIES

Demand deposits of individuals, partnerships, and corporations
9,674,923 10,549,984
Time deposits of individuals, partnerships,
6, 646, 982 6,761,989
and corporations
1,924,867
1,846,315
State, county, and municipal deposits
U. S. Government and postal savings de632,467
679,655
posits
Deposits of other banks, certified and
cashiers' checks, and cash letters of
credit, and travelers' checks outstand4,163,929
ing
— : —
3,671,371
Total deposits
22,618,H6 24, OSS, 2S6
Secured by pledge of loans
and/or investments
^
2,121,816
2,115,605
Not secured by pledge of loans
andfor investments
21,911,420
20,402,6il
Circulating notes outstanding
222,095
Agreements to repurchase U. S. Govern4,194
2,251
ment and other securities sold
3,833
3,989
Bills payable
1,174
664
Rediscounts
Obligations on industrial advances trans37
ferred to the Federal Reserve bank
Acceptances of other banks and bills of
exchange or drafts sold with endorse4,692
8,666
ment..
86, 599
75,193
Acceptances executed for customers
Acceptances executed by other banks for
8,171
11,963
account of reporting banks
795
637
Securities borrowed
Interest, taxes, and other expenses accrued
42,336
68,938
and unpaid
Dividends declared but not yet payable
and amounts set aside for dividends not
6,910
21,004
declared
98,152
62, 936
Other liabilities
Capital stock (see memorandum below).-. 1,809, 503 1,776, 691
865, 965
831, 846
Surplus
•
337, 452
297, 967
Undivided profits, net
147,282
143,951
Reserves for contingencies
2,664
3,161
Preferred stock retirement fund...
26,061,065 27,430, 730
Total.

10,911,717
6,816,676
1,979,040
772,683

4,367,617

10,863,696
6,878,346
1, 953, 679
686,905

4, 576, 829

24,847,7S3

24,859,455

2, S66,543

11,665,872
7,074,644
2,108,486
829,903

4, 621,648

26,200,458

2,122,628

2,6O4,698

22,481,190

22,7S6,827

23,596, 855

2,301
2,233
769

1,585
4,330
843

2,425
447

38

7,136
84, 627

4,647
84,289

6,083
81,866

13,066

10, 282
647

13, 794

647
42, 744

50, 343

47,316

26,686
92, 657
1, 758,450
887,934
302, 396
161, 381
6,001
28,224,701

137,460
., 750, 246
896, 242
327,782
161,066
6,889

28,293,019

28,043
156,449
1, 691,375
973, 393
346,039
147, 219
7,702
29, 702,839

»Includes Home Owners' Loan Corporation 4 percent bonds, which are guaranteed by the United States
as to interest only.
2 Includes cash items not in process of collection, the amount of which was not called for separately prior to
Dec. 31,1935.




122

REPORT OF THE SECRETARY OF THE TREASURY

Abstract of reports of condition of active national banks on the date of each repor
from June 29, 1935, to June SO, 1936—Conimwed
[In thousands of dollars]
June 29,
1935 (5,431
banks)

Nov. 1,
1936 (5,409
banks)

Dec. 31,
1935 (5,392
banks)

Mar. 4,
1936 (5,381
banks)

503,914
21,208
1,288,848

603, 629
21,198
1, 257, 686

487,683
21, 021
1,267, 034

481, 708
21, 021
1, 254,.381

423, 228
20, 261
1, 254, 762

1,813,970

1,782, 313

1, 766, 738

1,757,110

1, 698, 251

2,004,611
720, 798

1,847, 622
680,056

2, 058, 526
686,274

1,871, 796
638, 774

2,362, 684
611,070

June 30,
1936 (5,374
banks)

LIABILITIES—continued
Memorandum:
Par value of capital stock:
Class A preferred stock
Glass B preferred stock
Common stock...
Total....
Loans and investments pledged to secure
liabilities:
U. S. Government obligations, direct
and/or fully guaranteed
Other bonds, stocks, and securities...
Loans and discounts (excluding rediscounts)
Total
Pledged:
Against circulating notes outstanding
Against U. S. Government and
postal savings deposits
Against State, county, and municipal deposits
Against deposits of trust department
Against other deposits
Against borrowings
With State authorities to qualify
for the exercise of fiduciary
powers
For other purposes
TotaL...

52, 627

31,162

31,894

26, 061

29, 960

2, 778, 036

2, 568, 730

2, 773, 694

2, 536, 631

2,993, 604

225,444
805, 797

752, 252

858,188

705,160

888,956

1,067,782

1,069, 257

1,188,516

1,166,324

1,247,125

411,138
157, 686
6,358

470, 989
155,212
6,673

447, 324
171,022
4,490

393, 639
169,676
6,680

596,785
162, 612
3,347

86,722
17,110

86, 944
17,403

87,393
16, 762

87, 871
17, 281

87,838
16,941

2, 778,036

2, 568, 730

2,773,694

2, 536, 631

Summary oj changes in membership in the national banking system
The authorized capital stock of the 5,388 national banks in existence
on June 30, 1936, consisted of common capital stock in the amount of
$1,255,924,926, a decrease during the year of $36,929,955, and preferred capital stock in the amount of $493,251,922, a decrease during
the year of $32,783,365. During the year charters were issued to 19
national banldng associations, with common capital stock aggregating
$1,895,000 and preferred capital stock aggregating $355,000.
During the year only 69 existing national banks took advantage of
the provisions of the act of March 9, 1933, and increased their capital
by the issuance of preferred capital stock of an aggregate par value of
$21,256,000, while 461 banks reduced their capital by retiring or
decreasing their preferred capital stock by $53,956,865.
There was a net decrease of 75 in the number of banks, that is,
from 5,463 to 5,388, by reason of voluntary liquidations, receiverships,
and consolidations.
Changes in the number and capital stock of national banks during
the fiscal year 1936 are shown in the foUowing summary:




123

REPORT OP THE SECRETARY OP THE TREASURY

Organization, capital stock changes, and liquidations of national banks during the
fiscal year 1936
Capital stock
Number
of banks
Common
$1,520,000
375,000

Charters granted
Issues of preferred capital stock, 69 banksi__
Increases of common capital stock:
28 banks, by regular increases
217 banks, by common capital stock dividends
2 banks, by consolidation under act of Nov. 7, 1918..
2 banks, by conversion of preferred capital stock

Preferred

$366,000
21,256,000

2,177,140
6,492, 225
200,000
116.660

Total increases..

10,881,025
7,166,000

Voluntary liquidations.
Receiverships...
Decreases of capital stock:
92 banks, by reduction of common capital stock...
452 banks, by retirements of preferred capital stock
8 banks, by decreases of par value of preferred capital stock..
1 bank, by reduction of preferred capital stock
Closed under consolidation (act of Nov. 7,1918) and capital stock
decreases incident thereto
_

10,375,000
355,000
40,226,980

75,000

Total decreases..

68,185,980

21,611, GOO
397,500
"'25,'005
49,106,115
4,824,760
26,000
15,000
64. 394, 365

Net decrease in preferred capital stock
Net decrease in number of banks and common capital stock
Charters in force June 30, 1936, and authorized capital stock

3 76
6,463

32, 783,366
36,929,955
1, 292,854, 881 626, 036, 287

Charters in force June 30, 1936, and authorized capital stock...

6,388

1, 256,924,926

493, 251,922

1 Includes 1 increase of $200,000, effected in connection with a consolidation under the act of Nov. 7,1918.
2 Previously reported in voluntary liquidation. See note 3.
8 Net decrease in tbe number of banks in existence after adjustment of the number of receiverships for
8 banks previously reported in voluntary liquidation.
NOTE.—The number of banks and the total amount of capital stock as shown in this summary differ
from the figures in the table on p. 121, because the figures above include all banks not in formal liquidation,
and give effect to only those adjustments in capital reported prior to June 30, 1936. Some adjustments
prior to June 30 had not been reported. The table on p. 121 includes all national banks from which reports were required on June 30. Banks that have discontinued business, although not in formal liquidation, do not submit reports of condition.

Reorganized national banks
The program with respect to the reorganization of national banks,
and banks other than national in the District of Columbia, which were
unlicensed at the close of the banking holiday, March 16, 1933, was
completed on February 6,1935. Of the 1,417 unhcensed banks, with
$1,922,699,000 of imsecured deposits, 1,096, with deposits of $1,772,977,000, were reorganized under old or new charters or absorbed by
other national banks; 31, with deposits of $11,513,000, were placed in
voluntary liquidation and left the national system; and 290, with
deposits of $138,209,000, were placed in receivership for liquidation
under the supervision of the Comptroller of the Currency.
During the fiscal year 1936 liquidating dividends amounting to
$80,093,000 were paici by trustees for waiving creditors and receivers
of banks unlicensed on March 16, 1933.
Up to June 30,1936, unsecured liabilities aggregating $1,508,894,000
were released, which represents 78.48 percent of the total unsecured
Uabihties on March 16,1933. Of the 1,417 banks, 554 released 100 percent of unsecured habilities at or subsequent to reorganization.




124

REPORT OF THE SECRETARY OF THE TREASURY
BUREAU OF CUSTOMS

Collections
For the third consecutive year, customs collections increased over
those fbr the preceding year. Total coUections of $388,784,948 in
1936 represented an increase of 12.2 percent over 1935 and 23.6 percent over 1934. The increase in 1936 over 1935 was largely the result
of increased collections on dutiable imports of wool, metals, and
agricultural products, which more than offset the moderate decline in
collections on imports of sugar, distilled spirits, and certain other
commodities. The volume of imports of distilled spirits increased in
1936 but collections of duties declined owing to the reduction in rates
of duty on rum, gin, and whisky under various reciprocal trade
agreements.
Customs collections and refunds for the fiscal years 19S5 and 1936
[On basis of accounts of Bureau of Customs]
19361

1936

Collections:
$344,941,758
Duties
Miscellaneous:
$1,036.979
Fines and forfeitures
Liquidated damages
239,124
Sale of seizures
170,264
Sale of unclaimed and abandoned merchandise.
85,974
All other customs receipts
48,012
Total miscellaneous
Total collections

Refunds:
Excessive duties
Drawback payments
Total refunds. -

1, 580,363

1,843,613

346, 522, 111

388,784,948

7,062, 345
13, 727,160
.

„ .

» Revised.

..., „

$386,941,335
$1,436,135
286,368
43, 262
32, 971
45,877

6, 718,328
10,022, 656
16,740,884

20, 789, 506

Volume oj business

Entries oj merchandise.—The number of entries of merchandise
increased 13.4 percent, from 2,393,049 in 1935 to 2,712,954 in 1936.
All types of entries contributed to this increase as shown in the foUowing table:
Entries of merchandise, fiscal years 1935 and 1936

Consumption entries
Warehouse and rewarehouse entries.
Warehouse withdrawals
Mail entries
Baggage entries
Informal entries.
Another
Total

19351

1936

Increase

449,065
65, 765
323, 473
475, 445
418,403
188,135
482, 763

507,431
68,929
379,124
527, 261
480,048
206, 436
643, 726

Percent
13.0
23 6
17.2
10 9
14.7
9.7
12.6

2,393,049

2, 712,954

13.4

1 Revised.

Vessely airplane, and highway traffic.—The number of vehicles and
passengers entering the United States from abroad increased in practicaUy aU cases during the fiscal year 1936 as compared with the preceding year, as shown in the foUowing statement:



REPORT OF THE SECRETARY OF THE TREASURY

125

Number of vehicles and persons entering the United States from abroad, fiscal years
1935 and 1936
1935
Vehicles:
Automobiles and busses
Documented vessels
Ferries and other vessels
Passenger trains
Airplanes
Other vehicles

._

Passengers by:
Automobiles and busses
Documented vessels
Ferries and other vessels
Passenger trains
Airplanes
Other vehicles
Pedestrians
Total passengers and pedestrians

1936

Increase (+),

(-)

9,293, 535
1 28,524
1 189,918
35,836
4,816
323,952

9,992,312
29, 601
191, 648
34,086
4,588
328, 762

Percent
+7.5
+3.8
+0.9
-4.9
-4.7
+1.5

25,604,405
' 811,547
1 2, 627. 032
936, 538
27, 001
1, 548, 857
10,174,956

209, 538
898. 267
686, 796
991,351
27,111
874, 050
601,967

+6.3
+10.7
+2.2
+5.9
+0.4
+21.0
+4.2

» 41, 730,336

44, 288,079

+6.1

1 Revised.

Drawback transactions.—The number of drawback entries increased
from 18,455 in 1935 to 19,443 in 1936, or 5.4 percent. Drawback payments, on the other hand, as a result of the reduction in rates of duty
on sugar, declined from $13,727,160 in^ 1935 to $10,022,556 in 1936.
Of the notices of intent to export with the benefit of drawback,
177,812 original notices were filed in 1935 and 202,728 m 1936, of
which 68,588 in 1935 and 80,386 in 1936 were forwarded to other
districts for final disposition.
Under authority of section 318 of the Tariff Act of 1930, the President, by proclamation, authorized the Secretary of the Treasury to
extend, for a further period of not more than one year, the time during
which (1) merchandise imported durmg 1930, 1931, 1932, and 1933
may remain in warehouse, (2) proof of use may be furnished that
wool or camel's hair imported or withdrawn from warehouse, under
bond, during 1930, 1931, 1932, and 1933, has been used in prescribed
manufacture, and (3) articles manufactured in the United States may
be exported with benefit of drawback where the merchandise concerned was imported during certain periods of 1930, 1931, 1932, and
1933. Such extensions were granted by the Secretary of the Treasury
during 1936 under Treasury Decisions 48118, 48148, and 48159,
respectively.
Law enjorcement activities
Seizures.—The number of seizures made for violations of customs
Faws continued to dechne, totaling only 14,641 during 1936, a decrease
of 6,258 from the previous year. This decrease, as in the case of that
of the previous year, was due to a further decline in the number of
lottery and liquor seizures. The lottery seizures decreased from
9,313 in 1935 to 3,953 in 1936, since most lottery cases are now
handled by the Post Office authorities. Liquor seizures declined
from 5,226 in 1935 to 3,252 m 1936, due to the further extension of
'Vet'/ States along the border.
The value of seizures declined from $2,403,718 in 1935 to $1,590,968
in 1936, a difference of $812,750, Seizures of alcohol in 1936 aggregated 101,604 gallons valued at $426,326 as compared with 138,040



126

REPORT OF THE SECRETARY OF THE TREASURY

gallons valued at $1,417,973 during the previous year. A small
decrease in the quantity and value of wine and malt liquor seizures
was more than offset by an increase in the quantity and value of
distiUed liquor seizures.
The value of merchandise seizures in the fiscal year 1936 aggregated $451,442, an increase of $145,229 over the previous year. The
seizures in 1936 include watch movements to the value of $74,696;
chinaware, $64,066; jewelry, $54,930; electric light bulbs, $36,567;
and wearing apparel, $27,979. In addition to the goods which were
seized, claims were initiated against importers in connection with
various irregularities and frauds discovered after the goods had gone
into consumption. These claims amounted to $5,035,269 and showed
a slight decrease under the amount involved in similar cases initiated
during the previous year.
The efforts of customs officers to suppress the smuggling of narcotics resulted in 202 seizures'of narcotic drugs valued at $110,129
in 1936 as compared with 158 seizures valued at $65,663 during the
previous year. The quantity of narcotic drugs seized during the past
year aggregated 15,279 ounces. A single seizure at Los Angeles consisted of 3,393 ounces of smoking opium; another at San Francisco,
3,200 ounces of the same drug; and a third at Seattle, 288 ounces of
morphine.
In connection with the violation of customs laws 623 automobiles,
74 boats, and 3 airplanes, with an aggregate value of $376,134, were
seized, a decrease of 92 automobiles, 25 boats, and 3 airplanes from
1935. Customs officers also effected 7,296 seizures for other agencies
of the Government and detained 728 persons for the violation of
immigration, narcotic, and other laws.
Fines J penalties, etc.—The total collections of fines, penalties, etc.,
because of violations of laws pertaining to the Customs Service aggregated $1,764,765 in 1936 as compared with $1,446,367 m 1935.
Almost half of the total collected in 1936, or $857,542, represented
liquor fines, of which $843,413 consisted of penalties assessed in cases
which originated prior to the repeal of the eighteenth amendment.
In addition, six major cases involving the smuggling of liquors during
the prohibition period were settled during the past year. The
aggregate recoveries by the Government in these cases will amount
to $3,500,000.
Penalties collected for undervaluations and false invoicing aggregated $207,085 in 1936 as compared with $334,221 in 1935. Penalties
for failure to declare foreign merchandise, which during 1933 and prior
years constituted a substantial portion of the total collection of fines
and forfeitures, declined to $49,445 in 1936.
The net proceeds from the sale of seized articles by collectors of
customs declined from $170,264 m 1935 to $43,262 in 1936, and the
proceeds from sales by court order decreased from $274,961 to
$127,067 in 1936. These decreases in 1936 were chiefly due to the
large decline in sales of forfeited liquor in 1936 as compared with 1935.
. Coordination with other agencies.—The coordination plan adopted
during August 1934, which brought about close cooperation between
the Coast Guard, Alcohol Tax Unit, Bureau of Narcotics, Secret
Service, and Customs Service, remained in operation during the past
year. The increased effectiveness of the law enforcement branches
of these agencies as a result of this coordination has been most
gratifymg.



REPORT OP THE SECRETARY OF THE TREASURY

127

Smuggling
Three attempts of major importance to smuggle watch movements
into the United States were frustrated during the year by the vigUance
of customs field officers. In two of these cases '^carriers" were
employed in an attempt to evade the payment of duty; the arrest of
both carriers and their subsequent confessions resulted not only in
seizures of considerable magnitude but also in the arrest and indictment of the principals.
In another case the watch movements were sent by first-class mail,
concealed in toy roulette wheels, to the employee of a watch company
in care of hotels in various cities in the United States. Subsequent
investigations, both in this country and abroad, proved a conspiracy
to exist among the officers and owners of the company, whereby the
Government had been defrauded of approximately $19,000 in duties
during the period of about 1 year. Two of the principals pleaded
guUty and each was sentenced to the penitentiary and fined $10,000.
As a result of the prosecution of certain elevator companies in
North Dakota, which during the fiscal year 1935 knowingly received
smuggled grain, the United States District Court rendered a decision
during the past year on behalf of the Government for the recovery of
the forfeiture value of the smuggled grain under the provisions of
section 592 of the Tariff Act of 1930. This decision constitutes, it is
believed, a precedent for a recovery under this statute, and wUl
undoubtedly operate as a deterrent to individuals and concerns in
business dealings with smugglers of products from Canada.
In April 1936, customs officers discovered a small tanker from which
alcohol was being pumped through a pipe line to storage tanks
located approximately 1,000 feet from the water front. As a result
about 50,000 gallons of Belgian alcohol were seized and the tanker
forfeited to the United States. This seizure prevented the discharge
of the balance of the cargo of alcohol, 135,000 gallons, on board a
foreign vessel off shore, which returned immediately to Europe.
Two groups of fur smugglers were broken up during the past year,
one through the apprehension of a customs border patrolman who was
aiding the operators, and the other through the seizure in Vermont of
$12,000 worth of sUver fox skins and the arrest and subsequent conviction in the Federal courts of seven members of the ring.
These cases are illustrative of the many that might be cited as
evidence of the activity and vigilance of customs field officers in the
detection and suppression of smuggling.
Miscellaneous
The Bureau of Customs, through its legal divisions, has participated actively in the consideration of the many legal questions
arising in the administration's reciprocal tariff bargaining program.
I t has likewise participated in the examination of several applications
for licenses for foreign trade zones, as authorized by the act of June
18, 1934 (U. S. C , title 19, sec. 81a-u), and in the granting of a license
for such a zone in the Port of New York. The Bureau has devoted
considerable attention to the questions involved in the application
of countervaUing duties under section 303, Tariff Act of 1930 (U. S. C ,
title 19, sec. 1303), upon the importation of articles in connection



128

REPORT OF THE SECRETARY OF THE TREASURY

with the production or exportation of which a bounty or grant was
paid or bestowed in a foreign country by means of currency manipulation and other procedures.
During 1936, new compensatory taxes were assessed on the importation of various products and certain changes in duties were made
under the fiexible tariff provisions, which necessitated additional
administrative and interpretative work. Changing conditions and
processes of manufacture created new problems under the general
tariff* laws, which called for the formulation of many decisions.
During the year a ^'Digest of Customs and Kelated Laws and of
Decisions Thereunder" was completed, which presents a compUation
of the laws under which the Customs Service operates and a digest of
the decisions which interpret and define the statutory provisions.
This should be of invaluable service both to importers and to customs
officers in the proper classifications of merchandise for the imposition
of duties and in reaching decisions regarding the scope and application
of the general provisions of customs laws in specific cases.
Correspondence School oj Instruction.—As an aid to a more thorough
knowledge of all branches of the service, a Correspondence School of
Instruction was established during the early part of the fiscal year.
The course of instruction, which embraces about 40 major customs
subjects, has been made avaUable to all officers and employees of the
Customs Service and to the personnel of those departments and
branches which cooperate with the Customs Service in the discharge
of duties in which there is a mutual interest. WhUe it is compulsory
only that a customs officer or employee shall enroll for those subjects
covering the work he is actuaUy performing, more than one-third of
the employees are enrolled for the entire course. Such instruction is
designed to raise the morale and spirit of the personnel, thereby
mcreasing the efficiency of administration.
Division oj Laboratories.—A Division of Laboratories was estabhshed on AprU 1, 1936, by Treasury Decision 48228, with headquarters in Washington, to provide a uniform and more efficient
laboratory service. All of the field laboratories, which were formerly
under the supervision of the collectors of customs, were placed under
the technical and administrative supervision of the chief of this
division.
Investigative Unit
Port examinations.—During the fiscal year the Port Examination
Commission of the Customs Agency Service examined the accounts
and procedure in 16 customs collection districts. The purpose of these
examinations is to secure uniformity and greater efficiency in the
conduct of the customs business throughout the country. In addition, customs agents conducted 249 examinations of the financial
accounts of collectors of customs. .
Civil and criminal cases.-—All important criminal cases incident to
seizure or cases involving civU liabilities for the violation of customs
laws are investigated, reported, and followed through the courts by
customs agents, who collaborate with the United States attorneys in
the actual presentation of testimony during trials. These agents
made, or assisted in making, 759 arrests during the past fiscal year and
aided in securing 416 convictions as compared with 31 acquittals and
155 faUures to indict.



REPORT OP THE SECRETARY OF THE TREASURY

129

Customs joreign service.—Customs officers in the foreign service
continued their investigations of foreign or export values of merchandise exported to the United States so as to provide for the appraisal
of imported merchandise at its proper value and to prevent dumping.
In addition, they reridered valuable service in the detection of smuggling of narcotics, jewelry, watch movements, and other merchandise.
Customs injormation exchange.—This branch of the service disseminates information with respect to foreign market values, classification
of imported merchandise, and simUar data. It is a clearing house
for requests by appraising officers for foreign investigations and an
archive for reports submitted by Treasury attaches in response to
these requests. The following statement summarizes the activities
of the exchange during the past fiscal year:
Number
Appraisers' reports of values received
13,463
Appraisement appeal reports received..
3,247
Changes in value circulated
2,416
Requests for investigations abroad
1,946
Reports received in response to requests for investigations abroad.
..1
,.... 2,678
Reports received of original investigations by Treasury attaches, and price lists received from
American consuls..
5,667
Differences in classification reported between field ports and classification at port of New York...
586

Summary.—The following statement, compiled from the records
of the Investigative Unit, shows the results achieved through the
activities of the Customs Agency Service during the fiscal year,
insofar as direct results can be measured by a summation of individual
cases:
Examination of financial accounts of collectors of customs
Drawback investigations
Foreign investigations conducted by members of the domestic service
Arrests
Convictions
_.
Acquittals
Failures to indict
Indictment cases pending
Seizures made
Seizures appraised
Seizures released or pending
_
Appraised value of seized merchandise
Merchandise entered free but found dutiable
Fines, penalties, and forfeitures incurred, exclusive of court
Bail forfeitures
.
Fines imposed by United States courts
Increased and additional duties collected
Deposits as offers in compromise
Proceeds of sale of seized merchandise
Drawback payments refunded

_

fines
_

Number
249
1,634
787
759
416
31
165
198
1,916
1,882
272
Amount
$1,186,370
42,003
496,473
8,260
131,389
202,992
1,256,069
36,183
36,396

BUREAU OF ENGRAVING AND PRINTING

The deliveries of currency, securities, stamps, and misceUaneous
work by the Bureau during the year amounted to 401,216,667 sheets,
as compared with 366,380,624 for the previous year, an increase of
34,836,043 sheets.
A comparative statement of deliveries of finished work follows:
93790—37

10




130

REPORT OF THE SECRETARY OF THE TREASURY
Deliveries of finished work in the fiscal years 1935 and 1936
Sheets
Face value.
1936
1935

Currency:
U n i t e d States notes
Silver certificates
Gold certificates.
National bank currency. _
Federal Reserve notes

_
. . .

Total
B o n d s , notes, certificates, a n d bills:
Pre-war b o n d s
Liberty b o n d s . .
_
Treasury bonds
U n i t e d States savings b o n d s
Adjusted service b o n d s
Treasury notes.
T r e a s u r y bills
Certificates of i n d e b t e d n e s s
Insular bonds:
Philippine Islands
_
Puerto Rican
F a r m loan b o n d s
Consolidated farm loan b o n d s
Collateral t r u s t d e b e n t u r e s
Consolidated collateral t r u s t d e b e n t u r e s
Federal F a r m Mortgage Corporation b o n d s .
H o m e O w n e r s ' L o a n Corporation b o n d s . . .
Reconstruction Finance Corporation n o t e s .
C u b a n silver certificates, including in t h e
fiscal year 1936 certificates for t h e Secret a r y of t h e T r e a s u r y of t h e R e p u b l i c of
Cuba
P h i l i p p i n e t r e a s u r y certificates
N o t e s for t h e B a n k of t h e P h i l i p p i n e Islands
I n t e r i m certificates for Federal H o u s i n g
A d m i n i s t r a t i o n m u t u a l mortgage insurance fund d e b e n t u r e s
• I n t e r i m certificates for P u e r t o R i c a n b o n d s
I n t e r i m transfer certificates for postal savings b o n d s
Specimens:
Treasury bonds
U n i t e d States savings b o n d s
Adjusted service b o n d s .
T r e a s u r y notes
Certificates of i n d e b t e d n e s s
Insular bonds:
P h i l i p p i n e Islands
Puerto Rican
- F a r m loan b o n d s
Consolidated farm loan b o n d s
Consolidated collateral t r u s t d e b e n t u r e s F e d e r a l F a r m M o r t g a g e Corporation
bonds .
H o m e O w n e r s ' L o a n Corporation b o n d s .
Reconstruction F i n a n c e C o r p o r a t i o n
notes
I n t e r i m certificates for Federal H o u s i n g
m u t u a l mortgage insurance fund debentures
Total
Stamps:
Customs
Internal revenue:
U n i t e d States
P h i l i p p i n e Islands
Puerto Rican
Virgin I s l a n d s . .
D i s t r i c t of C o l u m b i a
Federal m i g r a t o r y bird h u n t i n g s t a m p s .
Tax-exempt potato stamps
F o r experimental purposes
Specimens, U n i t e d States
Postage:
U n i t e d States
C a n a l Zone
Philippine Islands..^
Specimens, U n i t e d S t a t e s




'

1936

960.000
44,467,000
3,600
1,909,959
7,644,160

4,250,000
67,009,000

$203,520,000
1,161,748,000

16,272,400

2,624,460,000

54,974, 609

77,531,400

3, 979, 728,000

67,860
i4i; s m i
1, 988,162
2,920,000
505,450^2
14,110
760
10,810
1,2621^
28.246
801,809
10,402
3,847,037
7,030,900
3,850

473, 756
1,417, 500
129,900

31,875

9,376, 778,400
693, 750,000
1,857,100,000
10.698,040, 000
4, 731,810,000

510
12,05m
20,483Ho
319,430
935
12,950
92, 600
1,066,000
3,800

510,000
27,335,000
11,701,460
603,950,000
10,000,000
361, 500,000
769,460, 000
1, 278,175,000
364,260,000

374,166^
2,184,000

75

500
3,973

3,000

2,000

21^
1
41.^
2
6
4
16

26,663,000

1,340,48m
2,487, 600
9,286.600
353,7371.^
19,142
600

10, 000,000
10, 269,000

m
5
21^
1
35
4
22
22

14
14

6
4

2

9
1

19,386,783H

160, 600
127,956,4823^04
11,000
856,279
260
97,146H
30,887
12
2,09416^04
140,642,8261^7
52,470
892,620
1736J^a

17,601,253^0

258,000
130,711,'73212^04
13,825
860,600
60
111, 295
18, 350
7,637H
20
137,265, 788
96,022
439,116^
1416Ji6

30,830,271,860
Subjects, 1936
7,890,000
11,112,490, 395
1, 915, 300
59,481,000
6,000
22, 259,000
2,055, 200
2, 749,440
1,856
13,963,999,957
8, 569,600
36,924,600
17,640

REPORT OF THE SECRETARY OF THE TREASURY

131

Deliveries of finished work in the fiscal years 1935 and 1936—Continued
Sheets
1935
stamps—Continued.
Postal savings..

6,582

Total

270,709,323127^700

Miscellaneous:
Checks
Drafts
Warrants
Commissions
Certificates
Transportation requests..
Circular letters
Other miscellaneous
Blank paper
Specimens
For experimental purposes
For exhibition purposes:
Postal savings certificates of deposit
Special stamps on United States postage stamp paper
Total.
Grand total-.

15, 713, 669
49,000
27, 0801^
4,460,766
323, 600
474, 960
258, 612
2,381
60

1936

23,814
269,806,2927^^55
31,368,322H
500
48,410
142,179^
4,120,894^^
417, 320
160,121
1,701
100
2,100

IH
21, 309,9083^
366,380,62442^700

Subjects,
1936

2, 381,400
25, 220, 740,187
166,866,050
2,000
227, 706
89, 280
18,061,672
2,086, 600
4, 660,479
500
26,200
9

16,07023/g,

4, 338,160

36,277,72097^1530

186, 356, 656

401,216,66664J^65

The following dies for new postage stamps were engraved during
the year:
Issue
Boulder Dam
Michigan Centennial
Trans-Pacific Air Mail
Texas Centennial

Denomination, cents
3
3
26
3

Issue
Rhode Island Tercentenary
Arkansas Centennial.
Oregon Territory Centennial..
Special delivery air mail (bi-color)

Denomination, cents
3
3
3
16

One of the major tasks during the year was the printing of the
new $1 silver certificates. These certificates, series 1935, have an
entirely new design on the back which presents the obverse and
reverse of the great seal of the United States. The face of the certificate shows only minor changes, but its production embodies a
new process whereby the signatures of certifying officers are overprinted from steel dies when the bUls are numbered and sealed. This
mechanical improvement makes it possible to have new signatures
on currency within a short period after a change in certifying officers.
Another major task was the printing of the adjusted service bonds
which had to be available for delivery to veterans on June 15, 1936.
Inasmuch as this work had to be accomplished within a period of 3
months, the temporary employment of about 700 persons was required. About 37,000,000 bonds were delivered to the Division of
Loans and Currency by June 15.
The Bureau continued the exhibit of printing at the CaliforniaPacific International Exposition in San Diego, and sponsored a similar exhibit at the Texas Centennial Exposition in Dallas.
On August 12, 1935, Congress authorized the construction of a new
annex to the Bureau of Engraving and Printing to be located on a
site opposite the present building, on the east side of 14th Street,
between C and D Streets SW. Plans for this building have been
completed by the Procurement Division and a contract for its erection^ at a cost of approximately $6,300,000, has been awarded. The



132

REPORT OF THE SECRETARY OF THE TREASURY

annex will be connected with the main building by a tunnel under
14th Street and with the freight yards for the handling of carload
shipments by a tunnel under^ D Street. The work of clearing the
site preliminary to the erection of the buUding has already been
started.
There was expended during the year for salaries and expenses
$9,658,546, as compared with $8,760,831 for the previous year, or an
increase of $897,715. The following statement shows the appropriations, reimbursements, and expenditures for the fiscal years
1935 and 1936:
Appropriations, reimbursements, and expenditures for the fiscal years 1935 and 1936
1936
Appropriated by Congress, salaries and expenses
1 $4,668,060.00
Appropriation warrant no. 175, June 21,1935, for restoration of 5 percent salary reduction and amount to
cover 40-hour week .
406.000.00
Transfer appropriation warrant no. 180, June 26, 1935,
400,000.00
"Collecting the internal revenue"
Appropriation warrant no. 12, Aug. 12, 1935, "Second
Deficiency Appropriation Act, fiscal year 1935"
491,780.00
Reimbursements from other bureaus for work completed 2
_
3,649, 252. 77
Total-Expended, salaries and expenses 3

_ __ __

Unexpended balance (including compensation deductions for 9 months in the fiscal year 1935)

1936

Increase (-f),
decrease (—)

$6,988,247.00

-f $1,420,187.00
—405,000.00
-400,000.00
-491.780. 00

4,351,800.99

-f702, 648. 22

9, 514,092. 77

10, 340,047. 99

4-826, 965. 22

• 8,760,830.88

9, 658, 645. 45

+897,714. 67

763,261.89

681, 502. 54

-71,759.35

1 Includes $10,994 for salaries of employees transferred to the Procurement Division and the Division of
Disbursement, Treasury Department.
2 An additional amount of $8,803.60, received from sale of by-products and useless property, was deposited
to the credit of the Treasurer of the United States as miscellaneous receipts.
8 Includes $8,000 transferred to Bureau of Standards for research work in each of the fiscal years 1935 and
1936, and $263,829.22 and $301,156.25 transferred to retirement fund in the fiscal years 1935 and 1936, respectively.
* Exclusive of $288,024.80, the amount for 6 percent compensation deductions for 9 months in the fiscal
• year 1936.

COMMITTEE ON ENROLLMENT AND DISBARMENT

^ The Committee on EnroUment and Disbarment is an administrative and judicial body. I t has charge of the enrollment of attorneys
and agents for practice before the Treasury Department and conducts
hearings in disbarment proceedings. An attorney, not a member of
the committee, represents the Government before the committee.
All complaints are filed with the attorney for the Government, who
institutes proceedings in disbarment or suspension if the charges
warrant such action.
Department Circular No. 559, issued May 16, 1936, makes it the
duty of the committee to issue licenses to customhouse brokers and to
make findings of fact and recommendations to the Secretary in proceedings for the revocation or suspension of such licenses.




REPORT OF THE SECRETARY OF THE TREASURY

133

The following statement summarizes the work of the committee for
the year 1936, including the licensing of customhouse brokers from
May 16, 1936:
Attorneys and agents:
Applications for enrollment approved
Applications for enrollment disapproved.
Complaints against enrolled persons:
Pending July 1, 1936-_.
Filed during the year

Number
4,619
34
72
33

•.

Disposed of:
Dismissed
Dismissed upon disciplinary action on another complaint-Disbarments
Stricken from the rolls in the course of disbarment proceedings
Suspensions
Reprimands and admonitions
Dismissed subject to reinstatement

20
3
11
16
6
5
3

Pending June 30, 1936...^

63
42

Charges made, names stricken from the rolls.
Disbarments vacated and names stricken from the rolls
.
_
Cases of minor infractions of the regulations disposed of, where enrollees are given an opportunity to show cause why proceedings should not be instituted...
Customhouse brokers:
Applications for licenses approved
Applications for licenses denied
Licenses revoked
Licenses canceled.J
Complaints dismissed

106

-

19
2
32
12
3
6
5
6

Since the organization in 1921 of the Committee on Enrollment and
Disbarment, 43,682 applications for enroUment have been approved
and 574 disapproved. One hundred and eighty-five practitioners
have been disbarred from further practice before the Treasury
Department, 128 have been suspended from practice for various periods, and 167 have been reprimanded. In 16 cases the order of disbarment has been vacated and in 14 of these cases the practitioners
have been restored to practice before the Department.
FEDERAL ALCOHOL ADMINISTRATION

The act approved August 29, 1935, abolished the Federal Alcohol
Control Administration, established by Executive order under the
provisions of title I of the National Industrial Recovery Act, and
created the Federal Alcohol Administration as a division in the
Treasury Department. Under the Liquor Tax Administration Act
of June 26, 1936, the Federal Alcohol Administration was made an independent establishment of the Government, the office of Administrator of the Federal AlcohoL Administration was abolished, and the
Federal Alcohol Administration is to be composed of three members
appointed by the President, with the consent of the Senate. The
provisions relative to the establishment of an independent agency wiU
become effective when a majority of the members of the Federal
Alcohol Administration take office. This requirement had not been
complied with on June 30, 1936.
The provisions of the act of August 29, 1935, became effective on
September 24, 1935, the date the Federal Alcohol Administrator took
office. Under the terms of this act the Federal Alcohol Administration is charged with regulating the fair trade practices of alcoholic
beverage producers, importers, and distributors, with a view to the
elimination of tied-house relationships, commercial bribery, consign


134

REPORT O^ THE SECRETARY OF THE TREASURY

ment sales, bulk distribution of distilled spirits, and false or deceptive
labeling and advertising practices.
During the year, following extensive public hearings, the Departnient issued regulations governing the labeling and advertising of
distilled spirits and wine, the issuance and revocation of permits,
the nonindustrial use of distilled spirits and wine, the bulk sale and
bottling of distUled spirits, and the furnishing of equipment and other
things of value to retail outlets. All regulations required to be issued
were promulgated during the year except those regulations relating
to the establishment of periods of credit and to the labeling and advertising of malt beverages.
Permit Division
The permit requirements of the Federal Alcoholic Administration
Act with respect to distillers, rectifiers, wine producers and blenders,
and importers became effective 60 days after the date on which the
Administrator first appointed under the act took office, or on November 23, 1935. The effective date of the wholesalers' permit requirements, originally fixed as March 1, 1936, was extended to July 1, 1936,
by the public resolution approved February 29, 1936.
The ^ following statement embodies the permit activities of the
Administration up to June 30, 1936:
Permit activities, November 23, 19S5, to June SO, 19S6

Applications for p e r m i t s :
Received.....
Withdrawn
_
Incomplete
P e n d i n g , complete
Notices of c o n t e m p l a t e d d e n i a l ,
(a) F i n a l denial after hearing
• (6) F i n a l denial in default
of r e q u e s t for hearing,
(c) P e r m i t s issued after
hearing
Permits:
Issued
Canceled
I n effect J u n e 30,1936

Distillers Rectifiers

Importers

Wine
producers a n d
blenders

Warehousing
a n d bottling 1

Wholesalers 2

619
9
2
17
6

502
7
0
15
1

1,111
34
17
40
10

1,436
25
7
33

67
1
0
3
0

9,796
87
146
129
128

13,421
163
172
237
147

0

0

0

0

1

2

0

30

33

0

11

12

3
1

Total

1

0

2

'0

1

0

487
23

474
39

1,023
36

1,368
36

53
8

9,321
63

12, 726
195

3 464

435

987

1,332

45

9,268

12, 531

0
0

1 Warehousing and bottling permits issued to proprietors of bonded warehouses only. Such permits
are held also by all distillers and rectifiers.
2 Wholesalers' permit requirements became effective July 1, 1936.
3 Of the 464 distillers' basic permits, 88 merely authorize the operation under lease of existing distilleries,
and the remaining 376 permits cover actual authorized distilling plants.

Label Examination Section
Under the terms of the Federal Alcohol Administration Act and
regulations promulgated thereunder, no bottler or importer may bottle
or remove from customs custody for consumption distilled spirits,
wine, and malt beverages, unless the bottler or importer, upon application to the Administration, has obtained and has in his possession a
certificate of label approval or a certificate of exemption if these
beverages are not to be sold, offered for sale, or shipped or delivered
for shipment, or otherwise introduced, in interstate or foreign
commerce.



135

REPORT OF THE SECRETARY OF THE TREASURY

The act was amended on February 29, 1936, by extending the
limit of time within which the Administrator can fix the effective
date of the provisions respecting labels from March 1, 1936, to
August 15, 1936, for distUled spirits, and to December 15, 1936, for
wine and malt beverages.
During the year there were filed with the Administration 4,981
applications for approval of labels for distUled spirits imported in
bottles, 39,470 applications for approval of labels for domestically
bottled distiUed spirits, and 1,898 applications for exemption from
label approvals for distUled spirits. At the end of the fiscal year,
the Administration had acted upon 3,871 applications for approval
of distUled spirits imported in bottles. Of this number, 1,465 were
issued unlimited general approvals, 1,268 limited approvals, and 1,138
disapprovals. Action on 25,234 applications for approval of labels
for domestically bottled distilled spirits resulted in the approval of
11,065, and the disapproval of 14,169.
No action was taken on 16,543 applications for certificates of label
approvals received for wine, preference being given to the applications
covering distilled spirits because of the earlier eftective date of the
latter.
Enjorcement Division
The Enforcement Division conducted 953 field investigations. The
large majority of these investigations were made at the request of
the Permit Division and related to permit applicants, although several
were based on alleged violations of the restrictive provisions of the
act of August 29, 1935. In 93 of the permit investigations, evidence
was secured establishing illegal, sales into dry or monopoly States,
in violation of the twenty-first amendment. Following is a tabulation of the two groups of investigations, classified by industries:
Investiga- Investigations of
tions of
permit
alleged
appli- violations
cants
Brewers
Wine producers and blenders.
Distillers
Rectifiers-_

167
241
27
14

41
3
7
45
9

Investiga- Investigations of
tions of
permit
alleged
appli- violations
cants
Wholesalers - _
General
.»
Total

326

53
21

774

179

Since May 1, 1936, the effective date of most of the regulations
relating to the advertising of distilled spirits and wine, liquor advertisements in prominent newspapers and magazines have been examined, and up to June 30, 1936, 178 cases involving one or more violations of these regulations were handled. The violations involved in
these cases were practically all of a somewhat minor, technical nature,
and the irregularities were corrected in all instances.
Two offers in compromise were secured by the Enforcement Division, in connection with alleged violations of section 5 (b) (3) of the
act. Seven cases were forwarded to the Legal Division recommending
the institution of permit proceedings on the basis of various violations
established through field investigations. A large number of cases
which had been investigated, and were pending as of June 30, 1936,
wiU doubtless result in the securing of compromise offers or the recommendation of permit proceedings or prosecution.



136

REPORT OF THE SECRETARY OF THE TREASURY
BUREAU OF INTERNAL REVENUE

General

Internal revenue collections.—Collections from internal revenue and
agricultural adjustment taxes during the fiscal years 1935 and 1936
are shown in the following summary, classified according to the
administrative organization responsible for the audit of returns. A
detaUed statement of collections appears in table 7, page 366, of this
report.
Summary of internal revenue collections for the fiscal years 1935 and 1936
[On basis of reports of collections, see p . 312],
Source
Income Tax Unit:
Corporation income tax
Individual income tax
Totalincoru'e tax
Excess-profits tax . . . .
Dividend t a x . -

._ _ .

__.

Total.
Alcohol Tax Unit:
Distilled spiiits, imported, excise tax
Distilled spirits, domestic, excise tax
Distilled spirits rectification tax
Bottle, container and case stamps.
_
Wines, imported, excise tax
Wines, domestic, excise tax
Brandy for fortifying wines
Floor taxes, spirits and wines
Fermented malt liquors, excise tax
Special, or occupational, taxes
Total
Miscellaneous Tax Unit:
Capital stock tax
Estate and gift taxes
Tobacco manufactures tax
Sales taxes (stamp, manufacturers' excise,
admissions, communications, oleomargarine, etc.)
.- -- _. .
Silver bullion transfer tax
Bituminous coal tax
Railroad carriers and employees taxes
Agricultural adjustment taxes
Total
Other miscellaneous collections __ .
Total collections. _

Increase or
decrease ( - )

1936

1936

$672,117,876. 28
627,112,606.42

$738,622, 229. 75
674, 416,074.14

$166,404,353. 47
147, 303,667.72

1,099, 230,382. 70 1,412,938,303.89
6, 660,482. 64
14,609, 290.47
398, 790. 27
961,479.73

313,707,921.19
7,948,807.83
—562, 689.46

1,106, 752, 345.07

1,427,846,384. 63

321,094,039. 66

16,107,926.36
160, 525,646.92
6,381,567. 64
6,179, 614.12
666,896. 68
6,113,920.11
662,398.16
3, 021, 646. 76
211, 215,057. 05
11, 248,310. 76

19,658,166.96
202,872, 340. 44
7,881,202.76
8,662,129.03
654,727. 50
8,313, 605.17
1,410, 745.04
66,941. 68
244, 581, 330.96
11,462,948. 66

4,460,239.60
62, 346,693. 62
1,499,646.22
2,482,614.91
—11,168.08
2,199, 585,06
848,346.89
- 2 , 954, 604. 08
33, 366, 273. 91
214, 637.80

411, 021, 772. 36

605, 464,037.10

94,442, 264. 75

91, 508,121. 29
212, 111, 959. 23
459,178, 625.46

94,942,751. 74
378,839,515.00
601,165, 728. 39

3,434, 630. 45
166, 727,566. 77
41,987,102. 93

491,477,138.80
1,149,390. 48

538,835.340.64
686,188. 23
729, 217. 68
48, 278. 74
71,637,206.70

47,368,201. 74
—464, 202. 26
729, 217. 68
48,278. 74
-464, 585,161.54

526, 222,368. 24

1, 781,647, 593. 60 1,686,883,227.02
13, 861. 26
3,299,435,672.18

14, 732. 34
3,520,208,381.09

—194,764,366.48
871.08
220,772,808.91

Rejunds.—No deductions were made on account of refunds in the
foregoing statement. Refunds were paid from the several appropriations during the fiscal year 1936, as follows:
Refunding taxes illegally collected, 1935 and prior years.$22,974,319.23
Refunding internal revenue collections, 1936 and prior years
6,663,645.19
Advances to Agricultural Adjustment Administration (transfer to Internal Revenue for
refunding processing taxes).
9,056,119.27
Administration of Cotton Act of 1934 (transfer to Internal Revenue for refunding cotton
^ taxes, 1934-36)
1.
1,808.97
Advances to Department of Agriculture under Tobacco Act of 1934 (transfer to Internal
Revenue for refunding tobacco taxes, 1934-36)
6,928.33
Total, interest included




.'

38,701,820.99

REPORT OF THE SECRETARY OF THE TREASURY

137

The refunds, showing the number of claims, the amount of refunds
and repayments, and the total refunds, repayments, and interest on
each class of tax during the fiscal year 1936, and a comparison of the
total for the fiscal year 1935, are shown in the foUowing summary:
Number of claims, amount of refunds and repayments, and total refunds, repayments, and interest, by class of tax, during the fiscal year 1936, and totals for
the fiscal year 1935

Bituminous coal
Capital stock
Distilled spirits
Distilled spirits stamps redeemed
Distilled spirits drawbacks
Estate
Gift
Income
Miscellaneous...
Miscellaneous stamps redeemed
Narcotics
Narcotic stamps redeemed
Sales
Silver
Silver stamps redeemed
Tobacco
.
Tobacco stamps redeemed
Tobacco drawbacks
Total
Agricultural adjustment taxes...
Cotton ginning taxes
Tobacco sales tax

...

Grand total, fiscal year 1936
Fiscal year 1935:
Income and miscellaneous internal revenue.
Agricultural adjustment taxes
Grand total, fiscal year 1936

Refunds and
repayments

Total refunds, repayments, and
interest

102
6,858
6,467
3,308
106
1,103
230
179. 720
135
2,212
141
126
1,775
6
26
14
1,500
38

$75, 244.46
640, 331.89
436, 392. 04
161, 031. 01
127, 601. 01
2, 275,174. 06
67, 821.12
15, 633,270. 40
101, 399.96
131, 386. 07
363.83
389. 20
1, 273,104. 66
1, 248.87
10, 334. 76
699.70
1,625, 429.17
24, 648. 74

$76, 756.48
680, 447.93
443, 977.84
151, 243. 69
127. 601. 01
2,868, 692.89
73, 094.89
21,397, 877.81
127, 401.93
135, 094. 25
366. 38
390.97
1,902, 634.17
1,248.87
10, 334. 76
722. 64
1,625, 429.17
24, 648. 74

201,865
45, 216
69
21

22, 375,870.84 29, 637,964.42
9,049, 726.85 9,066,119. 27
1,748. 20
1,808.97
6,928. 33
6,928.33

247,161

31,434, 274. 22 38, 701,820.99

77,771
78,080

19,611,842.41 26,483, 697.64
32,044,019. 72 32, 064,606. 33

Number
of claims

Class of tax

165,851

51, 555,862.13

67,548,202.97

If the tax refunds made during the fiscal year 1936 on account of
erroneous or Ulegal collections of internal revenue and agricultural
adjustment taxes and payments for drawbacks and redemption of
stamps, amounting to a total of $38,701,820.99 were deducted from
the gross coUections of $3,520,208,381.09, the net coUection for the
fiscal year 1936 would be $3,481,506,560.10. The gross collections,
however, are used for comparative purposes in these reports.
Additional assessments.—The additional assessments resulting from
office audits and field investigations during the fiscal years 1935 and
1936 were as follows:




138

REPORT OF THE SECRETARY OF THE TREASURY

Additional assessments during the fiscal years 1935 and 1936, by class of tax
Class of t a x
I n c o m e taxes i
Miscellaneous i n t e r n a l r e v e n u e :
Estate
Gift
Tobacco
Sales
C a p i t a l stock
Liquors.
Miscellaneous
B i t u m i n o u s coal
. . . . . .

_

1936

1935
$240, 634,483. 26

$351,703,039. 66

21, 219,891. 42
390, 362. 44
41, 678.04
6,152,649.93
1,071,196. 25
18, 787,032.85
25,112,483. 98

30,049,823.33
3,812,127. 06
26, 281. 37
9,871,695.82
1, 299,424.99
13.000,116.17
32, 562,938. 90
1,183,928.03

72, 776, 294. 91
18, 696,132. 27

91, 806,336. 67
10, 706, 696.19

. . . .

T o t a l miscellaneous i n t e r n a l r e v e n u e ^
Agricultural a d j u s t m e n t taxes ^

._

G r a n d total

332.105,910.44

454, 216,071.41

1 Includes $232,511,940.26 for 1935 and $343,165,249.65 for 1936 from the Income Tax Unit; and $8,122,543
for 1935 and $8,547,790 for 1936 from the Accounts and Collections Unit. The assessments of the Income
Tax Unit include $53,472,371.77 for 1935 and $121,056,934.91 for 1936 made under the jeopardy provisions
of sec. 279 of the Revenue Act of 1926 and sec. 273 of the Revenue Acts of 1928,1932, and 1934.
2 Includes $29,847,939.06 for 1935 and $49,088,780.60 for 1936 from the Miscellaneous Tax Unit; $24,140,323
for 1935 and $29,717,439 for 1936 from the Accounts and Collections Unit; and $18,787,032.85 for 1936 and
$13,000,116.17 for 1936 from the Alcohol Tax Unit.
3 Includes $4,898,617.27 for 1935 and $4,246,890.19 for 1936 from the Processing Tax Division; and $13,797,615
for 1936 and $6,459,806 for 1936 from the Accounts and Collections Unit.

Cost oj administration.—The amount expended and obligated in
administering the internal revenue laws for the fiscal year 1936 was
$48,065,039. This does not include $3,718,346 expended in administering the Agricultural Adjustment Act and the Cotton, Potato, and
Tobacco Acts. Also, it does not include expenses which are not
administrative, such as the amounts expended for refunding taxes
illegally or erroneously collected and for redemption of stamps. A
comparison for the fiscal years 1935 and 1936 of the amounts expended
and obligated for administrative expenses, the taxes collected, and the
cost of collecting each $100 of revenue under the various appropriations is as follows:
Amounts expended and obligated for administrative expenses, taxes collected, and
the cost of collecting each $100 of revenue, fiscal years 1935 and 1936

E x p e n d e d a n d obligated

Cost of collecting each
$100 of
revenue

Collected

Appropriation
1935

1936

1936

1936

1935

1936

Collecting t h e i n t e r n a l revenue
$42, 719, ZZi $48, 065, 039. 27 $2, 773, 213, 213.9f $3,448, 671,174. 3^ $1.5^ $1.39
Advances t o A g r i c u l t u r a l A d j u s t m e n t Administration
a n d salaries a n d expenses.
Agricultural A d j u s t m e n t
A d m i n i s t r a t i o n (transferred
to I n t e r n a l R e v e n u e )
3,746, 602 3, 258, 716. 21
621,880,108. 61
69,927,202.39
.72 4.66
A d m i n i s t r a t i o n of C o t t o n A c t
of 1934, a d v a n c e s t o D e p a r t m e n t of A g r i c u l t u r e u n d e r
Tobacco A c t of 1934, a n d
p a y m e n t s for agricultural adjustment u n d e r C o t t o n ,
Tobacco, a n d P o t a t o Acts
(transferred to I n t e r n a l R e v enue for a d m i n i s t r a t i v e ex1,105,172
459, 630. 28
4, 342, 249. 63
1, 710, 004. 31 25.46 26.84
penses) - .
. . .
Total




47, 571. 012 61,783,385.76 3,299,436, 672.18 3,620,208,381.09

1.44

1.47

139

REPORT OF THE SECRETARY OF THE TREASURY
Income Tax Unit

The Income Tax Unit is charged with the duty of auditing and
closing all income tax returns except those filed on form 1040A.
Returns filed on form 1040A (returns of individuals reporting income,
chiefly from salaries and wages, of less than $5,000) are audited in the
collectors' offices under the supervision of the Accounts and Collections
Unit.
Summary of work of the Income Tax Unit for the fiscal years 1935 and 1936
Number
Returns
1935

1936

363,670

402, 394

126,833
1,864, 671

94,942
2, 668,073

Total

1,991,604

2, 763,015

T o t a l t o b e disposed of

2,356,174

3,165,409

120,809

162,389

3,048
7,405

3,862
9,062

131, 262
1,769
27,868
1, 784, 428

175,313
1,778
35, 393
2, 594, 689

1,945,327

2,807,173

402,394
2,913

350,097
2,842

On h a n d in W a s h i n g t o n a n d i n t h e field a t beginning of year i

._ .

..

Received d u r i n g year:
Reopened a n d amended
Original

Closed d u r i n g year:^
A d d i t i o n a l assessments except j e o p a r d y :
Before final notice of deficiency
After final notice of deficiency:3
Agreement
Default . . .
.

. . . . . .

.

Total
.
J e o p a r d y assessments (subject t o appeal)
Certificates of overassessment
N o change
T o t a l closed
N o t closed d u r i n g year:
On h a n d for a u d i t i n W a s h i n g t o n a n d i n t h e field a t e n d of year <
.'.
A w a i t i n g action of t a x p a y e r after mailing final notice of deficiency
I n v o l v e d i n appeals t o B o a r d on final 90-day notice of deficiency m a i l e d d u r ing y e a r
T o t a l n o t closed

4,540

6,297

409, 847

368,236

1 Excludes returns with respect to which final notices of deficiency (90-day letters) were mailed prior to
the beginning of the year.
8 Excludes returns closed through decisions of Board of Tax Appeals.
3 Includes some returns with respect to which final notices of deficiency (90-day letters) were mailed
prior to the beginning of the year.
< Excludes returns in transit.

Additional revenue.—The additional revenue made avaUable for
collection (exclusive,of jeopardy assessments) was $222,099,314.64 as
compared with $179,039,568.49 the previous fiscal year. The field
forces of the Income Tax Unit secured agreements to the assessment
and collection of $77,367,187.18 of which $49,179,528.06 was imrfie•diately assessed under the provisions of mimeograph 3552, while
$172,919,786.58 was assessed after consideration in Washington.
The additional revenues are classified in the following table to show
the amounts involved as additional tax, interest, and penalty, and the
procedure involved in reaching a settlement with the taxpayers.




140

REPORT OF THE SECRETARY OF THE TREASURY

Additional revenue made available for coUection during the fiscal years 1935 and
1936, classified according to tax, interest, and penalty, and the procedure involved
1936
Amount
Tax
Interest
Penalty

-

Total
Rejected claims for abatement and credit
Total additional revenue. _ ._
Procedure involved in settlement:
Mim. 3652»
Regular procedure:
Agreements executed by taxpayer without
90-day letters
Agreements executed by taxpayer subsequent to 90-day letters
Appeals not filed within 90-day period
Assessments listed in appealed cases after
trial on the merits and decision by Board
of Tax Appeals, or upon stipulation before the Board of cases settled by technical staff and/or General Counsel
Total

$141,870,869.40
33,232,014.07
3,049,375.29

1936
Percent

Percent

Amount

79.2 $177,171,101.90
18.6
38,722,883.70
1.7
3,461,898.29

79.8
17.4
1.6

178,162,268.76
887,309.73

99.5
.5

219,355,883.89
2,743,430.75

98.8
1.2

179,039,568.49

100.0

222.099,314.64

100.0

23,797,641.60

13.4

49,179,528.06

22.4

66,846,866.68

37.6

85,454,761.90

39.0

4,312,969.06
13,786,480.88

2.4
7.7

5,411,974.49
21,763,393.05

2.6
9.9

69,408,400.76

39.0

57,546,236.39

26.2

100.0

219,356,883.89

100.0

178,162,258.76

1 The efltect of mimeograph 3652 is to shorten the interest period when the additional tax is agreed to by the
taxpayer and field force. The above figures cover assessments made during periods June 1,1934, to May 31,
1936, and June 1, 1936, to May 31, 1936.

Additional taxes were also assessed under the jeopardy provisions
of the several revenue acts, as follows:
Additional taxes assessed under the jeopardy provisions of revenue acts during the
fiscal years 1935 and 1936 ^
1936
Under bankruptcy and dissolution procedure
Other jeopardy assessipents
Total assessed
Interest
Penalties.
Grand total

_ .

1936

$30,948,136. 24
. 7,233, 666.13

$24, 204,941.34
61, 779, 600.11

38,181,701.37
11, 326,177. 44
3,966, 492. 96

86,984,441.45
22,068,820,42
13,002,673, 04

53, 472,371. 77

121,0.55,934.91

1 The amounts shown may or may not represent taxes upon which collectors can proceed to immediate
collection since the majority of jeopardy assessments are appealed to the Board of Tax Appeals.

Final notices oj deficiency (90-day letters).—During the year 17,212
final notices of deficiency (90-day letters) were mailed by the Income
Tax Unit, as compared with 14,529 for the previous fiscal year.
Petitions were filed with the Board of Tax Appeals involving. 31
percent of the returns with respect to which 90-day letters had been
issued, the same percentage as during the fiscal year 1935.
The following table shows the tax years involved in petitions
filed with the Board of Tax Appeals during the fiscal years 1933 to
1936, inclusive.




141

REPORT OP THE SECRETARY OF THE TREASURY

Tax years involved in petitions filed with the Board of Tax Appeals during the
fiscal years 1933 to 1936, by tax years
Tax year.

1933

1917
1918
1919
1920
1921
1922
1923
1924
1925
1926

9
36
32
64
37
35
37
52
66
113

1934
24
21
18
37
68
33
60
76
96
128

1936

1936

8
11
12
16
20
39
62
47
92
98

8
7
7
13
16
33
37
65
56
69

Tax year
1927
1928
1929
1930
1931
1932
1933
1934
1935
Total

1936

1933

1934

1935

176
298
1,827
3,576
236
6
1

172
223
689
1,632
2,023
156
2

143
169
282
442
1,002
2,001
104
3

96
180
209
272
630
1,369
2,213
126
2

6,598

6,347

4,540

5,297

Claims and overassessments.—The following table shows the number of refund claims adjusted and the certificates of overassessment
issued, together with the amounts of overassessments involved, during the fiscal years 1935 and 1936.
Refund claims adjusted and overassessments determined during the fiscal years
1935 and 1936
1935
Claims:
Pending at beginning of year
Filed during year
Received from other sources
Total to be adjusted
Allowed in full or in p a r t . .
Rejected
Total adjusted

.

Pending at end of year
Certificates of overassessment issued when no claims had been filed.
Overassessments settled by:
Abatement
Credit
Refund
Total
Interest—

-.._

Grand total.

_.

1936

Number
20, 732
33,844
5,214

Number
22,838
42,406
472

59, 790

65,716

25,052
11,900

28, 497
10, 614

36, 952

39,111

22, 838

26, 605

18, 779

24,973

Amount
$59,938, 289. 64
27, 226, 775. 32
16,621, 703. 04

Amount
$70,145, 657. 29
10, 777,096.33
15, 633, 270.40

102, 786,768.00
5, 511,960.19

96,466,924.02
6,864, 607.41

108, 298, 728.19

102,320,631.43

NOTE.—The amount involved in claims filed during the year was $107,916,884.62 as compared with $99,952,466.13 the precediag year. Of the claims adjusted during the year the amount rejected totaled $102,497,803.47 as compared with $104,526,409.83 the preceding year.

There were also allowed during the year 12,943 collectors' claims,
of which 10,831 recommended abatements or credits and 2,112
recommended refunds. A collector's claim usually lists a number of
items in favor of different taxpayers, and those settled during the
year covered 37,052 items for abatement or credit and 154,737 for
refund.
Returns on hand.—A comparative table of the number of returns for
all tax years on hand at the close of each of the past 4 years follows:




142

REPbRT O^ THE SECRETARY OE THE TREASURY

Returns on hand in the Income Tax Unit on June SO, 19SS to 1936, by tax years
T a x year
1917
1918.__
1919._.
1920
1921.
1922
•.
1923.__
1924
1926
1926
1927

1933

.

1934

293
248
267
240
239,
245
315
536
1,028
1,265
2,939

1935
167
119
126
163
146
209
232
281
362
435
607

116
85
118
116
98
146
157
212
277
388
634

80
69
84
116
105
130
149
167
204
226
336

1933

1934

1936

1936

2,632
6,236
9,929
208, 111
1 92, 211

1,033
3,246
4,298
9,622
297,803
1 46,421

823
2,214
2,993
4,562
13, 643
339, 235
1 36,188

617
1,162
1,539
2,096
4,229
14,996
123, 752
1 200,151

326,734

363, 670

402,394

1 350,097

T a x year

1936

1928
1929._..
1930
1931
1932
19331934
1935
Total

1 Figures are incomplete, since the preliminary work against the returns for the year just previous to the
end of thefiscalyear cannot be completed within thatfiscalyear.

Audit in Washington.—The following table presents an analysis of
the returns, original and reopened, pending in the several divisions
and sections of the Wasliington office:
Number of original and reopened returns under consideration in Washington,
June SO, 1936, by tax years
Audit Review Division

Individual
returns

Corporation
returns

'ca
PI

o
1917
1918
1919
1920
1921
Total
1922
1923
1924
1926
1926
1927
1928
1929
1930
1931
1932
1933
Total.

i

d

P.

1.1

PI
p.

8

o

8

1
bJO

o

7
7
6
8
6

27
8
9
11
12

3
3
3
6
2

63

34

67

17

3,008 3,896 1,203

903 1,011

767 1,751

844 3,841
42
172

250 3,992
14
94

64

149
2

10,331 , 886 4,013

264 4,086

.54

151

18 2,851

888 1,902

402 4,039

......

7
6
4
10
12
14
18
54
80
107
217
375

G r a n d t o t a l . 13, 339 4,846 6,216 1,201

......

5,097

Tot al

1

.2

o

o

7
16
18
13
9

8
8
12
17
26
39
64
120
9
206
20
315
105
889
2,193 1,067

Special
Adjustment
Section

o

2

5
6
9
15
32
48
89
206
600

10,061
280
Total

^-«
o

'2

T3

Conference
Section

15
1
23
25
26
3
34
10
42
9
63
8
67
40
94
57
106
150
126
466
147 1,006

7
26
61
388
2,526

1934
1935

1

a

Consolidated
returns

Engiutjtjring a n d
Valuation
Division

2
2
7
7
16
16
29
44
49
70
67
69

2
2
8'
12
14
23
32
59
90
149
284
613

367 1,188
14 2,846
6
4

1

3
3
5
. 6
8

22
19
22
63
60

25

166

6
8
12
7
13
14
16
56
83
111
36
70

63
67
64
71
46
103
159
356
399
433
692
791

3
2
11
20
30
41
66
140
230
469
1,448
5,712

100
113
114
138
147
227
349
697
910
1,141
1,927
3,635

431 3,134

69
56
63
97
87
372

8,161

9,498

22

391 20, 879
34
653

1,575
94

22

425 21, 432

1,669

478 3,725 29, 593 11, 639

Audit in the field.—On June 30, 1936, there were 387,762 returns for
all years pending for verification in the offices of the 38 field divisions
of the Income Tax Unit, compared with 356,906 returns on hand June
30, 1935.



REPORT OF THE SECRETARY OF THE TREASURY

143

Changes in tax liability were recommended by the field forces in
238,912 returns, or in 27 percent of the 885,944 returns disposed of
by the field forces during the year. In 203,830 returns, or 85 percent
of those changed, taxpayers agreed with the conclusions of revenue
agents. The total additional tax recommended by revenue agents
during the year was $355,076,147.98, as compared with $276,008,250.07
the preceding year.
The Technical Stajf
The Technical Staff considers {a) proposals for the settlement without further litigation of income, profits, estate, and gift taxes asserted
in deficiency notices mailed under the various revenue acts, and (6)
questions involving determinations of Bureau policy, specific cases,
and other matters assigned or submitted to it by the Commissioner
of Internal Revenue. In addition to its regular settlement work, the
jurisdiction of the Staff has been enlarged to include certain classes
of compromise of income tax cases (excluding cases involving fraud
or cases under the supervision of a court), applications for extension
of time within which to pay income taxes under sections 56 (c) and
272 (j) of the Revenue Act of 1934 and the corresponding provisions
of prior revenue acts, and the review in behalf of the Commissioner
of Internal Revenue of final closing agreements executed pursuant to
section 606 of the Revenue Act of 1928.
On July 1, 1935, the Technical Staff had on hand 3,161 docketed
income and estate tax cases pending before the Board of Tax Appeals. During the year the Staff received 4,904 Board dockets, considered to a conclusion 2,598 Board cases, and settled 1,726 cases.
The deficiencies proposed on cases recommended for settlement by
the Staff totaled $32,429,337.71; the recomputed deficiencies were
$15,077,514.81, making a settlement effectiveness of 47 percent.
These figures are on pending Board cases considered to a conclusion
by the Staff on its own responsibUity, and do not reflect the results
of the circuit settlement groups' cases which are acted on jointly with
attorneys from the Assistant General CounsePs Office. During the
fiscal year the Staff considered 1,795 so-called 90-day status cases,
of which 1,204 were disposed of without petitions being filed with
the United States Board of Tax Appeals. These cases involved
proposed deficiencies of $8,194,072.28 and recomputed deficiencies of
$4,125,550.67.
On July 1, 1935, the Staff had on hand 687 compromise cases; 1,349
cases were received during the year and 1,354 cases were disposed of,
leaving a balance of 682 cases on June 30, 1936.
There were 184 extension of time cases on hand July 1, 1935; 385
cases were received during the year and 562 cases disposed of, leaving
7 cases on hand June 30, 1936.
In addition, 125 final closing agreements submitted pursuant to
section 606 of the Revenue Act of 1928 were reviewed by the Staff
for the Commissioner of Internal Revenue.
Miscellaneous Tax Unit
The Miscellaneous Tax Unit administers all taxes other than the
income and excess-profits taxes, the taxes applicable to alcoholic
beverages, and those imposed under title I X of the Social Security
Act. The Unit consists of seven divisions, the titles of which are
indicative of the general type of taxes administered. The Social



144

REPORT OF THE SECRETARY OF THE TREASURY

Security Division was organized during the year to administer the
taxes imposed under title VIII of the Social Security Act and under
the Carriers Taxing Act.
The total collections of miscellaneous taxes for the fiscal year 1936
amounted to $1,586,883,227 as compared with $1,781,647,593 for
1935, a decrease of $194,764,366. There was a considerable increase
in the collections of substantially all miscellaneous taxes except the
taxes imposed under the Agricultural Adjustment Act and related
measures.. The taxing provisions of the Agricultural Adjustment
Act were declared to be invalid in a decision of the United States
Supreme Court on January 6, 1936, and the related measures were
repealed February 10, 1936.
Estate Tax Division.—Estate tax collections for the year amounted
to $218,780,753.53, the largest amount collected from that source
since the enactment of the estate tax law in 1916. The collections
show an increase of $78,340,071.19 over the previous year and
$64,737,493.14 over the previous high coUections in 1921. Gift tax
collections amounted to $160,058,761.47, the highest on record, and
show an increase of $88,387,484.58 over the collections for 1935. In
addition to estate and gift taxes actually collected, deficiencies amounting to approximately $20,000,000 were asserted in 36T cases upon
which collection was withheld pending a review of appeals filed with
the United States Board of Tax Appeals.
Deficiencies in estate tax amounting to $27,311,415.50 were assessed
in 57.1 percent of the cases closed. Deficiencies in gift tax amounting
to $3,535,513.38 were assessed in 11.2 percent of the cases closed.
The administrative work in connection with estate tax and gift tax
returns is summarized in the following table:
Number of estate tax and gift tax returns investigated and audited during the fiscal
years 1935 and 1936
Estate tax

Returns in field:
On hand at beginning of year
Received for investigation

. ..

Total to be disposed of
Major reports submitted by field force
On hand at end of year

. .
.

..

.

.

. _
.

. .

..

Gift tax

1935

1936

1935

3,449
11,137

3,635
11,967

673
2,162

902
1,373

14,586
10,951

15,592
11,138

2,826
1,923

2,275
2,003

3,635

4,464

902

272

1936

Returns in Bureau:
On hand at beginning of year
Received
Reopened..

6,488
13,133
177

9,693
3,291
13, 252 11,410
18
227

2,930
22,590
452

Total to be disposed of
Disposed of

19,798
10,106

23,172
13,882

14,719
11,789

25,972
13, 240

9,693

9,290

2,930

12,732

236
1,374
1,610
1,124

486
2,316

16
107

82
436

2,801
2,380

123
41

618
369

486
1147

421
U77

82

149
»7

On hand at end of year

_

Protest letters of taxpayers as a result of tax determined by audit:
On hand at beginning of year
Received.
>
Total to be disposed of .._
Disposed of

.__

On hand at end of year
Cases adjudicated by the Board of Tax Appeals
1 Included in returns disposed of.




145

REPORT OF THE SECRETARY OF THE TREASURY

Refunds of estate and gift taxes aUowed with accrued interest,
totaled $2,931,787.78. Tax amounting to $807,763.07, mcluding
interest of $393,925.57, was refunded as a result of judgment estate
tax claims filed in 30 cases.
Estate tax and gift tax claims for refund and abatement on hand
at the beginning of the year and the claims disposed of during the
year are shown in the following table:
Estate tax and gift tax claims on hand, received, and disposed of during the fiscal
year 1936
Gift t a x claims

E s t a t e t a x claims
Refund
Number

Claims filed:
On h a n d J u l y 1,
1936
Received .
Reopened
T o t a l t o b e disposed of
Allowed
Rejected.T o t a l disposed of.
On h a n d J u n e 30,
1936
N o claims filed, overassessments a l l o w e d . .
I n t e r e s t allowed
Total
allowed,
including interest

Amount

Abatement
Number

Amount

Refund
Number

Amount

Abatement
Number

Amount

189 $2,009,761. 60
511 2,892,897.89
41
483, 485. 42

$9,420. 61 .
7
217 8,974, 876. 62

19 $3,566,019.21
618,837.86
123
2, 760. 00
1

19 $5, 795.38

143 4,187,617. 07

741 5, 386,144.91

224 8,984, 297. 23

19

5,795.38

492 1,833, 593. 60
98 1,878, Oil. 71

214 8,944,310.37
1
472. 50

49
30

27, 568. 54
437, 088. 01

19

5, 795. 38

690 3, 711, 605. 31

215 8, 944, 782. 87

79

464, 666. 65

19

5,795. 38

151 1, 674, 639. 60
611

1,103

441, 680. 46
683, 518. 83

2,858,692.89

9

39, 614. 36

64 3,722,960. 52

214 2, 612, 254. 89

181

40, 252. 68
6,273. 77

9 40,938.40

428 11,456, 665. 26

230

73,094. 89

28 46,733.78

NOTE.—In addition to the above, $3,054,629.99 was abated as uncollectible in 13 estate tax cases, and
$3,076,269.60 was abated as uncollectible in 1 gift tax case. One additional estate tax refund, not reflected in
the above table, was allowed in the sum of $18,704,89 by Private Act No. 368, 74th Cong.

Tobacco Division.—Collections of tobacco taxes amounted to
$501,165,728.39 for the year, which represents the largest annual
collection from this source since these taxes were first imposed. A
detailed comparison of the tobacco taxes collected during the last 2
fiscal years follows:
9,3790—37-

-11




146

REPORT OF THE SECRETARY OF THE TREASURY
Tobacco taxes collected during the fiscal years 1935 and 1936
Increase (+) or
decrease ( - )
1935

Source

1936
Amount

Cigars (large):
Class A
Class B _ .
Class C
Class D
Class E

.

.

Total
Cigars (small)
_
Cigarettes (large)
Cigarettes (small)

.

Percent

+$555, 686. 40
-19,662.74
-10, 471.10
+4, 843. 67
+4,496. 22

+6.66
-9.83
-.41
+L19
+8.16

+534, 892.46
12,227,761.69
11,692,859.14
-10, 494. 82
143, 738. 75
133, 243. 93
+ 1 , 466.89
17,317.56
18, 784. 46
385, 459, 570. 66 425,486,470. 87 +40,026, 900. 21

+4.67
-7.30
+8.47
+10. 38

$8,485, 474.10
200,030.28
2, 546, 266. 63
406, 023. 39
66,074. 74

$9,041,160.60
180,367. 64
2, 635, 785. 63
410, 867. 06
69, 670. 96

Tobacco, manufactured-Snuff

54, 372,414. 27
6,511,662.53

66, 412, 759. 68 +1,040,346. 41
+91,376.79
6,603,039. 32

+1.91
+L40

TotaL
Leaf tobacco sold...
Cigarette papers
Cigarette tubes...
Grand total

60, 884,076.80
4, 994. 39
963, 758.16
12, 310.00

62, 015, 799. 00 +1,131, 722. 20
1,654. 71
-•3, 339. 68
1, 268,960. 98
+305,192. 82
13,072. 86
+762. 86

+1.86
-66. 87
+31. 67
+6.20

601,166, 728. 39 +41,987,102. 93

+9.14

459,178, 625.46

Sales Tax Division.—The yield from the taxes administered by the
Sales Tax Division was $538,835,340.54, an increase of $47,358,201.74
over the previous year. The major increases in collections were from
stamp taxes, the manufacturers^ excise taxes, admissions taxes, and
the taxes on the processing of coconut and other oils.
A comparison of the taxes collected during the fiscal years 1935
and 1936 is shown in the following table:
Collections of taxes administered by the Sales Tax Division during the fiscal years
1935 and 1936
Source
Btamps:
Bonds of indebtedness, capital stock issues, etc
Capital stock sales or transfers.-.
J
Sales of produce (future delivery)
Playing cards
Total-.
Oleomargarine:
Colored
Uncolored-Special taxes
Total.A.dulterated butter
Renovated butter
Mixed flour
Filled cheese
Total...

Increase (+) or
decrease (—)

1935

:=

$17,934, 776.98 $28,162,668.42 +$10, 227,881.44
16, 747, 362. 59 33,054,798.14 +17, 307,435.55
2,943, 542. 37 -1,007,00L63
3, 950, 544. 00
4,143, 698. 44
4,361,299. 40
-207, 600.96
41,983, 982. 97

68,304,697.37

+26,320,714.40

84,800.77
898,121.82
1,066,063.91

66,307.20
915,690.68
1, 231,806.13

-28,493.57
+17, 568.86
+165, 762. 22

2,048,976.60

2,203,804.01

+154,827. 61

3,992. 66
4,928. 34
4, 626.93
1,003. 68

4,664.11
5,973.51
5, 682. 69
148.40

+671. 66
+1,046.17
+1,056. 66
-865.18

14,450.40

16, 368. 61

+1,918.21

Manufacturers' excise taxes (title IV, Revenue Act of
309,256,051. 69 349,080,335..31 +39,825,283. 72
1932, as amended)
9, 793,996. 42
9.479,721.47
+314, 273.95
Transportation of oil by pipeline
32,577, 256. 30 33, 575,179. 25
+997,922.96
Electrical energy..
Telegraph, telephone, cable, and radio messages, etc.-. 18,411,925. 22 19,805, 609. 38 +1, 393,684.16
1,292,738.27
1,329,608.88
Leased wires, etc. (telegraph and telephone)
-36, 770. 61
1,997,409. 57
2,317,619.30
Safe deposit boxes
-320, 209. 73
Total




373,371,082.76

415, 645,267. 20 +42,174,184.44

REPORT OP THE SECRETARY OP THE TREASURY

147

Collections of taxes administered by the Sales Tax Division during the fiscal years
1935 and 1936—Continued
Source

1935

Admissions. _
Dues and initiation fees

$15, 379, 397.16 $17,112,175.46 +$1,732, 778.30
6, 784,494. 99
6,090,923. 21
+306, 428. 22

_

Total

21,163,892.15

Checks, drafts, or orders for payment of money (repealed
Dec. 31, 1934)
Pistols and revolvers
Narcotics _
Delinquent under repealed laws^...
^ ...

25,646,138.70
60, 237.83
680,613.00
»383.868. 24

Total

26, 669,857. 77

Coconut, etc., oils processed-^
Crude petroleum processed, refined, etc
National Firearms Act _.
...

24, 457,091. 26
1,759, 789. 67
8, 015. 33

Total-Grand total..

Increase (+) or
decrease ( - )

1936

_

23,203,098.67

+2,039, 206.52

60, 627. 64
564,028. 39
2 87, 271.67

—25,646,138. 70
+389.81
—26, 584. 61
—296, 596. 67

701,927.60

—26,967,930.17

27, 691, 080. 79
1,163, 754. 67
5, 341. 72

+3, 233,989. 54
-696,036.10
—2, 673. 61

26, 224,896. 26

28,860,177. 08

+2,635, 280.83

491,477,138.80

538,835,340.64

+47,358,201.74

1 Includes tto of $129,991.22 on soft drinks, $1,736.82 on use of yachts and boats, and $252,140.20 on candy.
2 Includes tax of $60,028.56 on soft drinks, $25,655.73 on checks, and $1,687.28 on use of yachts and boats.

The claims for refund and abatement of taxes and redemption of
stamps received and adjusted in the Sales Tax Division during 1935
and 1936 are shown in the following table:
Claims for refund and abatement received and disposed of during the fiscal years
1935 and 1936
Claims

1935

1936

Number
7,117
13,713

Number
6,296
13,969

Total
Transferred to Capital Stock Tax Division, Jan. 1,1935

20,830
1,600

19,265

Total to be disposed of.
Adjusted. _

19,330
14,034

19,265
12,236

On hand at beginning of year
Received or reopened

On hand at end of year

.

Allowed

.

. . .

,_ -

_
..

>_
_

-

_. - -

...

6,296
Amount
$3,479,098.19

7,019
Amount
$7, 396, 766. 72

A total of $1,019,418,455.76, representing 1,140,499 items, was
approved by the Commissioner on misceUaneous assessment lists.
There was mcluded m the lists $49,088,780.50 representing 49,409
additional assessments resulting from office audit and field investigation. The interest paid and assessed amounted to $6,809,719.20.
The miscellaneous lists do not include the processing and related
taxes or the tax on the transfer of interest in silver bullion.
During the year there were received and examined 533,938 returns
filed by taxpayers in connection with taxes administered by the
Sales Tax Division.
The number of offers in compromise submitted in settlement of
liabUities incurred in connection with sales, tobacco, estate, gift,
narcotics, capital stock, and miscellaneous stamp and special taxes,
and the aggregate amounts thereof, received and disposed of, are
shown in the following table:



148

REPORT OF THE SECRETARY OF THE TREASURY

Offers in compromise received and disposed of during the fiscal years 1935 and 1936
1936

1936
Offers in compromise
Number

Number

Amount

Amount

On hand at beginning of year
Received during year

4,866
9,489

$465,170.90
474,817. 67

6,837
12,755

$640, 782. 65
440,976.00

Total to be disposed of

14,354

939,988. 57

18, 592

1,081, 758.65

6,990
1,618
9

115,890. 43
182,870.49
445.00

11, 541
3,029
49

204, 690.16
373,107. 94
27, 277.95

Total disposed of

8,617

299, 206. 92

14,619

606,076.04

On hand at end of year

5,837

640,782. 66

3,973

476,682.61

Accepted
Rejected . . .
Withdrawn

Processing Tax Division.—A total of $71,637,206.70 was collected
during the year from taxes administered by this Division, of which
amount $69,927,202.39 represented processing, floor stocks, and compensating taxes imposed under the Agricultural Adjustment Act, as
amended; $451,223.03 represented taxes imposed under the provisions
of the Cotton Act, approved April 21, 1934; $1,214,880.64 represented
taxes imposed under the provisions of the Tobacco Act, approved
June 28, 1934; and $43,900.64 represented taxes imposed under the
Potato Act of 1935, approved August 24, 1935.
On January 6, 1936, the Supreme Court of the United States held
the taxing provisions of the Agricultural Adjustment Act to be
invalid. The collection of taxes under the act was immediately
suspended. Acts of Congress, approved February 10, 1936, and
March 2, 1936, repealed the Cotton, Tobacco, and Potato Acts and
extinguished any outstanding tax liability under these acts. The
Revenue Act of 1936 authorized consideration of claims for refund
of the taxes collected under the Agricultural Adjustment Act and
claims for payments with respect to certain floor stocks held on
January 6, 1936.
CoUections of taxes administered by the Processing Tax Division
are summarized as follows:
Collections of processing and related taxes during the fiscal years 1935 and 1936, by
commodities
Commodity and tax
Wheat:
Processing.-.
Compensating
Floor (other than retail)
Floor (retail)
Total.
Cotton:
Processing
Compensating
Floor (other than retail)
Floor (retail)
....
Total




1935

1936

$123,564,486. 59
27, 744. 27
249,622. 94
19,078. 43

,9, 294,384.08
71,479.00
69,179. 23
6,474.13

123, 860,932. 23

9, 441, 516.44

93, 253,443.98
1, 799,354.68
771,125.07
102,377.98

3,966,005.31
1,246, 364. 29
176, 238.65
9,931.05

96,926, 301. 71

5,387, 639. 30

REPORT OF THE SECRETARY OP THE TREASURY

149

Collections of processing and related taxes during the fiscal years 1935 and 19S6, by
commodities—Continued
Commodity and tax
Tobacco:
Processing.-..
Compensating
Floor (other than retail).
Floor (retail)
Total.
Field corn:
Processing
Compensating
Floor (other than retail).
Floor (retail)
Total.
Hogs:
Processing...
Compensating
Floor (other than retail).
Floor (retail)
Total.
Paper and jute:
Processing.
Compensating
Floor (other than retail).
Floor (retail)
TotalSugarcane and sugar beets:
Processing..
Compensating
Floor (other than retail).
Floor (retail)
Total.

1935

1936

$32,161,943.21
236,479.62
311,083.18
15,995.53

$13,156, 764.69
65,652.36
12,990.88
819.48

32,726,601.44

13, 226,127.31

6,760,471.66
48,663. 08
38,843. 65
1, 651.49

889,175.49
32,389.99
3,200. 99
66.84

6,849,629.87

924,823.31

184,380,029.76
186,591.68
32,766.28
1, 621. 74

1,640,942. 39
330,012. 95
2,035. 60
92.32

184, 601,009.46

8, 973,083.16

2,855, 600. 01
131,697.10
222,996. 64
11, 613.62

603,465. 70
12, 458. 69
21,181.89
169. 67

3,221,707.27

637, 265.86

65, 599, 671.49
3, 809, 686. 71
11,314,081.05
370,731.40

27, 903, 213. 50
2,120, 621. 63
331,962.85
1,811.18

71,093,970.66

30, 357, 699. 06

Peanuts:
Processing.:....
Compensating.

3,569,523.39
2,412. 62

135,606.46
2, 644.68

Total.

3,571,936.01

138,051.04

Rice:
Processing
Compensating.
Total

1,682.66
27,537.42

610,792. 23
154,928.81

29,119.97

6, 721.04

Rye:
Processing
Compensating.
Total
Cotton ginning.
Tobacco sales...
Potato sales
Grand total..

139,130. 71
36,345.17
175,475.!
1,110,874.86
3,231,374.77

461, 223.03
1, 214, 880. 64
43,900.64

626, 222, 358. 24

71, 637, 206. 70

Returns flled during the year under the provisions of the Agricultural Adjustment Act, as amended, the Cotton Act, and the Tobacco
Act are shown in the following table:




150

REPORT OP THE SECRETARY OP THE TREASURY
Number of returns filed during the fiscal year 1936, by commodities
Floor tax
Import
compensat- (other t h a n
ing tax
retail)

Processing
tax
Agricultural Adjustment Act:
Wheat
-Cotton
Field corn
. .
Hogs.
Tobacco..
.
Paper and j u t e
Sugarcane a n d s u g a r beets
Peanuts
Rice
Rye
Total
Cotton Ginning Act
Tobacco A c t

. . .

Floor tax
(retail)

Total

28,328
6,791
55,477
79,633
35,589
1,479
6,968
664
2,398
846

744
2,223
227
232
234
140
1,583
117
564
78

469
371
146
57
8,348
136
3,184

257
820
147
44
327
18
1,281

29,798
10,205
55,997
79,966
44,498
1,773
13,016
671
2,962
923

218,062

6,142

12,711

2,894

239,809
79,090
4,873

A. summary of the number and amount of all claims for refund,
credit, and abatement received and adjusted in the Division during
the flscal year foUows:
Claims for refund, credit, and abatement received and disposed of during the fiscal
year 1936
Number
Agricultural A d j u s t m e n t A c t , as a m e n d e d :
E x p o r t refunds:
On h a n d J u l y 1, 1935..
Received
.
Reopened
Allowed..
. . . . .
Rejected
On h a n d J u n e 30, 1936
.
. .
C h a r i t a b l e a n d o t h e r refunds:
On h a n d J u l y 1, 1935 .
Received
_.__
Reopened
Allowed
,._.
Rejected . .
. .
On h a n d J u n e 30, 1936
Credit:
On h a n d J u l y 1, 1935
Received.. . .
Reopened
Allowed
Rejected_
On h a n d J u n e 30, 1936
Abatement:
On h a n d J u l y 1, 1935...
^
Received. . . .
._
_ .
Reopened.
Allowed.
Rejected
On h a n d J u n e 30, 1936
Uncollectible:
On h a n d J u l y 1, 1935—
Received .
.
. . .
Reopened
.
Allowed
.
Rejected
On h a n d J u n e 30, 1936
Tobacco Act:
On h a n d J u l y 1, 1935
Received
.. ..
. . .
Reopened
Allowed
. . •
.
Rejected
•
On h a n d J u n e 30, 1936
C o t t o n G i n n i n g Act:
O n h a n d J u l y 1, 1935 .
.
.
Received
Reopened
.
Allowed
.
.
Rejected
. . .
O n h a n d J u n e 30, 1936
T o t a l claims:
On h a n d J u l y 1, 1936
Received
Reopened
. _ .
Allowed
. . .'
.
Rejected
On h a n d J u n e 30, 19"3"6"




..^
. . . .

.
. .

...
-

_
. .
'.-

.

.

. . . .

.:
. . . . .

.

.. .
. .

. .

.

. .
. .
.

.

Amount

7,697
26,979
6,027
25,131
2,397
12;175

$1,591,320. 24
5, 554, 812. 50
1,407,383.45
4, 988,676. 31
1,197, 716. 47
2,367,126.41

10,819
67,051
7,390
26,118
10,411
38, 731

75, 416, 289.44
744,013,650.14
72, 214, 940. 21
6,177, 602. 66
647,170, 254.08
339,297,023.06

6,613
11, 641
118
14, 647
2,726
0

4,684.067.65
7,157, 264.12
111, 852. 69
9,404, 285. 33
2, 648,889.03
0

1,178
3,434
17
2,415
2,185
29

4,113,102. 58
276, 616, 791. 80
18,405.96
267,893,099. 39
22, 660,890. 99
104,309.96

189
2,309
1
2,399
100
0

103, 667. 96
114,410.87
6.81
159, 904. 57
58,080.07
0

7.828
20,823
26
54
27,491
1,132

427,430. 90
1,131, 287. 99
731.44
6,176. 22
- 1,499,624.18
64,650.93

101
168
0
137
78
44

64.246.85
40, 744. 54
0
6, 209.48
61, 063. 99
48,117. 92

33,425
122, 395
12, 579
70,901
46,387
52, 111

86, 400,025. 52
1,034, 628,951. 96
73,763,319.56
277, 633,951. 96
575,177,117.81
341,871,227. 27

REPORT OF THE SECRETARY OF THE TREASURY

151

There were considered during the year 615 offers in compromise
amounting to $110,284.45.
A total of $306,291,343.49, representing 277,146 items, was approved
by the Commissioner on the processing tax lists. This amount
includes $4,246,890.19, representing 6,829 additional assessments
resulting from office audit and fleld investigation.
Capital Stock Tax Division.—Collections of capital stock tax during
the year amounted to $94,942,751.74, an increase of $3,434,630.45, or
approximately 4 percent over the collections for the preceding year.
As a result of the audit of the returns in the Bureau 5,908 assessments involving $1,101,721.01 were made.
The claims for refund and abatement of capital stock taxes, penalties, and interest received and adjusted in the Capital Stock Tax
Division are shown in the following table:
Claims for refund and abatement received and disposed of during the fiscal years
1935 and 1936
Claims

On hand at beginning of year
Received or reopened.. . .
Total .
Adjusted--.

.__

_

__

On hand at end of y e a r . . . .
Allowed

1936

1936

.-

_

_ -_.

Number
1,600
3,800

Number
890
9,461

5,300
4,410

10,351
9,391

890

960

Amount
. $390,348.43

Amount
$782,850.84

Bituminous Coal and Silver Tax Division.—The Bituminous Coal
and SUver Tax Division is concerned with the administration of the
taxes imposed under the Bituminous Coal Conservation Act of 1935
and the SUver Purchase Act of 1934.
The coal act, approved August 30, 1935, imposed upon the sale or
other disposal of all bituminous coal produced within the United
States, effecjtive November 1, 1935, an excise tax of 15 percent on the
sale price at the mine, payable monthly by the producer. Membership in the coal code, however, as provided for in the act, entitled
such producers to a right of a drawback equal to 90 percent of the
tax payable.
The flrst payment of the coal tax was due and payable January 2,
1936. Many large producers, however, flled suits contesting the
constitutionality of the act anci obtained orders restraining collection
of the tax. On May 18, 1936, the Supreme Court of the United
States declared the act to be invalid. During the life of the tax the
Division certifled 435 coal assessment lists carrying 13,425 items for
a total of $11,079,432. Collections amounted to $729,217.68.
Since the act was invalidated, 409 claims for tax refunds amounting
to $412,066.82, were received, of which 354, amounting to $370,171.29,
have been allowed to June 30, 1936. In addition to these refund
claims, 213 collectors' blanket office claims for abatement of outstanding assessments, amounting to approximately $8,000,000, have been
allowed.
The SUver Purchase Act of 1934, approved June 19, 1934, provided
for the imposition of a tax equal to 50 percent of the net profit realized



152

REPORT OF THE SECRETARY OF THE TREASURY

on the transfer of an interest in silver bullion, with certain exemptions
and rights of abatement applicable to certain transfers to the United
States Government and to transfers by persons regularly engaged in
the business of furnishing sUver for industrial, professional, or artistic
use. The silver tax collections for the flscal year 1936 amounted to
$685,188.23, as compared with $1,149,390.48 for 1935.^
Social Security Division.—The Social Security Division was created
on October 1, 1935, for the purpose of administering the taxes imposed
under the Carriers Taxing Act, approved August 29, 1935, and the
taxes imposed under title VIII of the Social Security Act, approved
August 14, 1935.
Under the Carriers Taxing Act an excise tax is imposed upon
'^carriers'^ as that term is defined in section 1 (a) of the act, and an
income tax is imposed upon their employees and employees' representatives. These taxes became effective March 1, 1936, and are
required to be reported and collected quarterly.
There are imposed under title VIII of the Social Security Act an
excise tax upon employers and an income tax upon their employees,
effective January 1, 1937. It is estimated that there will be approximately two an(i one-half million employers who will be required
to withhold the employees' tax from approximately 25,000,000
employees.
Alcohol Tax Unit
On June 30, 1936, the following producers or distributors of alcohol
and alcoholic beverages, or users of tax-free alcohol, were under the
supervision of the Alcohol Tax Unit:
Distilleries:
Alcohol
Brandy
1
1
Another.
Bonded warehouses:
Alcohol
Internal revenue
Wineries
Bonded wine storerooms......
Breweries...
Rectifying plants
Wholesale liquor dealers
_
Wholesale malt liquor dealers
Denaturing plants
_.
_
Bonded dealers in specially denatured alcohol
Bonded manufacturers using specially denatured alcohol
.
Hospitals, laboratories, and educational institutions using tax-free alcohol

Number
39
" 160
126
-.

i

70
263
1,145
107
711
363
5, 242
12,413
41
66
4,202
(>, 038

Enjorcement Division.-^The Enforcement Division is responsible for
the investigation, detection, and prevention of willful and fraudulent
violations of the internal revenue laws relating to distilled spirits,
wines, and fermented malt liquors. The Division plans and coordinates the enforcement functions of the 15 administrative districts,
supervises the activities of the investigators, and provides for their
general instruction.
During the year 15,629 stills were seized, having an aggregate mash
capacity of 2,576,064 gallons, and in connection therewith 14,671,146
gallons of mash were seized and destroyed. The investigators also
seized 730,646 gallons of spirits and 5,111 automobiles and trucks.
The total appraised value of the property seized amounted to
$4,201,485. A total of 31,504 persons were arrested for Federal
liquor law violations.




REPORT OF' THE SECRETARY OF. THE TREASURY

153

During the year 353 applications for pardon and 3,978 applications
for parole were examined and reports submitted, and 347 applications
for pardon and 4,158 applications for parole were received.
Audit Division.—During the year 15,195 reports of violations of the
internal revenue laws pertaining to alcoholic liquors by Ulicit operators, and 752 reports of violations by established plants and qualified
dealers, were received from the field offices and audited, and the tax
liabUities disclosed thereby were assessed, including ad valorem
penalties. There were also certified to the Commissioner 807 assessment lists, which carried 23,377 items, totaling $13,000,116.17, listed
in the Bureau, and 271,425 items, aggregating $36,701,484.17, listed
by collectors.
There were on hand at the beginning of the year 5,308 claims for
refund, redemption, abatement, and uncollectible claims, aggregating
$3,492,256.19. Durmg the year 36,584 claims, aggregating $19,229,031.50, were received; 34,242 claims, aggregating $14,147,944.57, were
allowed; and 1,737 claims, aggregating $1,660,718.69, were rejected.
There was a total of 5,913 claims on hand at the end of the year.
At the beginning of the year, 9,449 offers in compromise, aggregating $320,073.40, were on hand. During the year 104,845 offers,
amounting to $1,438,098.65, were received, of which 503 were forwarded to the Department of Justice and 1,163 were returned to the
field offices. During the year 106,141 offers, aggregating $1,335,293.19, were accepted, and 3,763, totaling $123,700.81, were rejected,
leaving 2,724 offers on hand at the end of the year.
Laboratory Division.—The Laboratory Division comprises a chemical laboratory in Washington, D. C , and 14 branch laboratories
located throughout the country. These laboratories perform aU the
chemical work for the Bureau of Internal Revenue and Bureau of
Narcotics. During the past year chemical work was also performed
for the Federal Alcohol Administration and Bureau of Customs.
Field Inspection Division.—An extensive program of retaU liquor
dealer inspections was inaugurated. This program necessitated
setting up a field organization and training retail inspectors to provide
for inspection of the premises of all retaU liquor dealers and retaU malt
liquor dealers in 91 project cities throughout the United States.
Accounts and Collections Unit
The Accounts and Collections Unit, which is the central administrative organization for the 64 collection districts, is divided into 3
divisions: The Collection Accounting Division; the Collectors' Personnel, Equipment, and Space Division; and the Disbursement
Accounting • Division.
Collection Accounting Division.—There were filed in collectors'
offices during the year 8,429,852 tax returns, as compared with
8,313,342 for the previous year, an increase of 116,510. Of the total
tax returns filed in 1936, there were 5,813,499 income tax returns,
compared with 5,295,352 filed during the previous year, an increase of
518,147.
Approximately 2,849,000 individual income tax returns, filed on
form 1040-A, were audited and closed in coUectors' offices, and
5,828,893 information returns were verified. In connection with this
audit work, 74,953 income tax returns were investigated by field
deputy coUectors.



154

REPORT OF THE SECRETARY OF THE TREASURY

A total of .11,144,798,920 revenue stamps, valued at $1,050,861,227.34, was issued to collectors of internal revenue and the Postmaster
General, as compared with 10,432,005,552 stamps, valued at
$941,713,682.42, issued during 1935. Stamps returned by coUectors
and by the Postmaster General amounted in face value to $41,991,554.73, as compared with $45,068,828.09 for 1935.
After the appropriate administrative procisdure, collectors of internal revenue transmitted to the Bureau, or otherwise disposed of,
393,836 claims, as compared with 238,251 during 1935, an increase of
155,585. The number of claims on hand at the close of the fiscal year
1936 was 18,400, as compared with 7,481 at the close of the previous
fiscal year. The increase in the number of claims on hand at the end
of the year was principally due to the increase in the number of claims
filed during the year and to the necessity of retaining certain claims
relating to agricultural adjustment taxes in collectors' offices pending
enactment of new legislation before the claims could be forwarded to
the Bureau.
During the year an average of 1,970 field deputy coUectors made
462,743 revenue-producing investigations in connection with the verification of tax returns, the securing of delinquent returns, and the
serving of warrants for distraint. The amount of tax involved in these
investigations was $79,066,410, including $47,878,361 coUected and
$31,188,049 recommended for assessment. The average number of
investigations made per deputy was 235, and the average amount of
tax collected and recommended for assessment was $40,135. The average salary of the deputy collectors during the year was $1,983, and
the average travel expense, $470. It will be seen that for every
$2,453 invested in the services of a deputy collector $40,135 was
returned to the Government in collections and amounts recommended for assessnient. The amounts involved for the various types
of work were:

Delinquent taxpayers.
Verification of tax returns..
Warrants for distraint
Total...

•

.

.

.

Collected"

Taxes recommended for
assessment

$10,434,771
3,102, 215
34,341,375

$18, 375, 369
12,812, 680

47,878,301

31,188, 049

There were 117,841 warrants for distraint served by deputy collectors during the year, and on June 30, 1936, there were 57,380
warrants in the hands of the field forces for coUection as compared
with 62,132 on June 30, 1935.
Special attention has been given to the discovery of the various
classes of dehnquent taxes and to the collection of back taxes. That
these efforts have been successful is evidenced by the fact that the
total coUections. of back income taxes amounted to $213,557,591,
which is $23,557,591 in excess of the estimates for the year.
The supervisors of accounts and collections submitted 102 reports
covering their examinations of the accounts of the various'collectors'
offices as compared with 105 reports submitted during the fiscal year
1935. Every collector's office was examined at least once and most of
them twice during the year. The supervisors installed in office
eight new coUectors of internal revenue and three acting collectors.



REPORT OF THE SECRETARY OF THE TREASURY

155

Collectors^ Personnel, Equipment, and Space Division.—Since the
repeal of the eighteenth amendment the number of special taxpayers,
consisting of retaU liquor dealers, dealers in fermented malt liquor,
etc., has increased greatly. The provision of law imposing the
capital stock tax on corporations also added very considerably to
the work of collectors' offices. During the year additional stamp
offices were established in a number of the districts to serve more
adequately distilleries and breweries located some distance from the
collectors' offices. There was also a material increase in the number
of income tax returns filed during the year as a result of improved
business conditions, wider employment, and increased earnings.
The provision of law which requires the filing of duplicate returns by
income tax payers also added to the duties of the collectors' offices,
inasmuch as the regulations require that such duphcate returns shall
be retained in the collectors' offices and so arranged as to be readily
available for inspection by representatives of the governors of the
various States.
The sum of $1,914,437 was expended for salaries of office and field
employees engaged ui the collection of processing, import compensating, and floor taxes imposed upon various agricultural commodities
under the Agricultural Adjustment Act. On January 6, 1936, the
date the taxing provisions of the act were declared unconstitutional
by the United States Supreme Court, there were 1,516 office and
fleld employees assigned to the several districts. On February 1,
1936, collectors were authorized to retain the services of 410 of these
employees to render needed assistance incident to the liquidation of
processing tax affairs, and 1,106 of the employees were placed on
indeflnite leave without pay, pending developments with respect to
any new legislation that might be enacted which would make their
reemployment necessary.
During the year $224,341 was expended for salaries of office and
fleld employees assigned to the cotton producing districts to admuiister the tax collection provisions of the Bankhead Cotton Control
Act. On February 10, 1936, the date the Cotton Control Act was
repealed, there were employed in the various cotton districts 252
office and fleld employees on the cotton tax roU. On AprU 1, 1936,
coUectors were authorized to retain the services of 47 pf these
employees to assist in liquidating the cotton tax work, and 205 of
the employees were placed on indeflnite leave without pay.
In administering the tax provisions of the Kerr-Smith Tobacco
Control Act, $35,698 was expended for salaries of office and fleld
employees assigned to the tobacco producing districts. On February
10, 1936, the date the Tobacco Control Act was repealed, there were
employed in the tobacco producing districts 48 office and fleld employees. On AprU 1, 1936, collectors were authorized to retain the
services of 7 of these employees to assist in the liquidation of the
tobacco tax work and 41 of the employees were placed on indeflnite
leave without pay.
In administering the personnel of the several coUection districts the
provisions of the Classification Act of 1932 and amendatory acts, and
decisions of the Comptroller General relating thereto, have been
closely adhered to. The policy has been continued of making such
appointinents as have been authorized in the field collection service
at the minimum salary rate of the appropriate grade and aU applica


156

REPORT OF THE SECRETARY OF THE TREASURY

tions for positions have been carefully scrutinized and investigated
with a view to maintaining the high standard of requirement for
employment.
Disbursement Accounting Division.—The Disbursement Accounting
Division is charged with keeping the internal revenue appropriation
accounts and expenditures, and is responsible for the audit of miscellaneous vouchers originathig in the Bureau at Washington which are
paid by the Chief Disbursing Officer; and for the administrative
examination required by law of the accounts of 64 collectors of internal
revenue, 38 internal revenue agents in charge of divisions, and 15
supervisors in charge of alcohol tax districts, paid by the 21 regional
disbursing officers located outside of Washington, including Puerto
Rico and Hawau.
The Disbursement Accountuig Division admuiistratively examuied
and recorded 1,425 monthly accounts of collectors of internal revenue,
uiternal revenue agents in charge, district supervisors, includuig the
PhUippuie branch of the district of Maryland, and the uiternal revenue salary payments made by the collector of customs and the regional
disbursing clerk, San Juan, Puerto Rico, comprising a total of 120,393
vouchers. . In addition, 4,107 expense vouchers of employees and
12,717 vouchers covering passenger and freight transportation, and
miscellaneous expenses were audited and passed to the Chief Disbursing Officer, Treasury Department, or General Accountuig Office for
payment. The monthly pay rolls of the Bureau were examined and
recorded currently.
Office oj the Assistant General Counsel
The activities of the office of the Assistant General Counsel for the
Bureau of Internal Revenue embrace the whole field of Federal taxation in connection with the preparation and presentation to the United
States Board of Tax Appeals of defense in all appeals; the review of
refunds, credits, and abatements, in excess of $20,000; decisions and
advice in various administrative and internal revenue tax matters
referred by the Secretary of the Treasury, the Under Secretary, or an
Assistant Secretary, by the General Counsel of the Treasury, by the
Commissioner or the Assistant to the Commissioner, by the heads of
the administrative units of the Bureau, by collectors of internal revenue, by other branches of the Government, and by individual correspondence; the preparation at the request of the Department of
Justice or of United States attorneys, of data for use in the prosecution or defense of tax cases (civU and criminal) in suit, and otherwise
complying with their requests for assistance in such cases; and the
preparation, revision, and publication of regulations. Treasury decisions,
mimeographs, and rulings, for the guidance of the officers and employees of the Bureau of Internal Revenue and others interested. The
office is divided into six divisions, viz: Appeals, Civil, Interpretative,
Penal, Review, and Legislation and Regulations.
Assistant General Counsels Committee.—The Assistant General
Counsel's Committee, consisting at the present time of four members,
serves in an advisory capacity to the Assistant General Counsel, the
general assistants, and the special assistants, who refer to the committee cases from all divisions of the office. The committee considers
the?e cases and makes written recommendations as to their proper



157

REPORT OF THE SECRETARY OF THE TREASURY

disposition. At the beginning of the fiscal year 1936, the committee
had on hand 19 cases; during the year it received 202 and closed 204,
leaving 17 cases pending at the close of the fiscal year.
Reorganization Section.—The Bankruptcy, Receivership, and Reorganization Section received 1,844 reorganization cases during the year
and closed 556 cases involving claims of $10,273,992.60, which were
settled for $3,895,793.82. A total of 1,020 bankruptcy and receivership cases were closed involving claims of $6,144,856.51, of which
$1,319,051.36 was collected.-^
Appeals Division.—Cases involviag income, estate, and gift taxes
filed with the Board of Tax Appeals are in the immediate charge of
this Division. During the fiscal year 5,052 cases were closed whUe
4,731 new cases were filed. At the end of the year there were pending
64 gift tax cases involving $2,032,114, 560 estate tax cases involving
$73,188,205, and 9,478 mcome tax cases involving $445,090,306, or
a total of 10,102 cases involviag $520,310,625. ^ Of this number,
9,478 were pending before the Board and 624 were in appellate courts
on appeal fromjBoard decisions.
Cases filed with and closed before the Board of Tax Appeals and appellate courts
during the fiscal years 1935 and 1936
1936

1935
Cases
Number
Pending at beginning of year
Filed during the year
Total
Closed during the year:
By default
By decision on merits
By agreed settlement

'.

. .

Total

Number

Amount

12,474
3,816

$448, 493,080
184,819,113

10,423
4,731

$493,648,417
166,625,983

16,290

633, 312,193

16,164

659,174,400

500
1,615
3,762

4,908,068
32, 289,161
102, 466, 647

313
1,519
3,220

6,018,381
32,677,797
101,167,597

6,867.

Pending at close of year

Amount

10,423

139,663, 776
493,648,417 '

6,062

138,863,775

10,102

520,310,625

Disposition of cases by Board of Tax Appeals during the fiscal year 1936
Amount approved
Class

Default
Decision on merits
Agreed settlement i
Total

Deficiency

Overpayment

Percentage of net
result to
amount
Net result in dispute

$6,018,381
32, 677,797
101,167,697

$4, 735, 636
12,921, 603
36,366,764

$300,152
1,279,592
1,264,856

$4,435,484
11,642,011
34,091,908

88.38
35.62
33.70

138,863, 776

63,014,003

2,844,600

50,169,403

36.13

Number
of cases

Amount in
dispute

313
1,519
3,220
6,052

1 Includes not only the cases recommended for settlement by the Technical Staff, but all cases settled by
the Appeals Division, whether by compromise or after conference.

As a result of circuit and special trips, 1,184 cases iavolving $27,749,720.63 in dispute were settled by agreement in the amount of
$14,813,290,92.




158

REPORT OF THE SECRETARY OF THE TREASURY

Civil Division.—The Civil Division, in cooperation with, and at the
request of, the Department of Justice, assists in the handling and preparation for trial of civU internal revenue cases arising hi the Federal
district courts, tbe 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. The trials of such cases and arguments upon appeals are conducted by the Department of Justice,
with the assistance of this Division, pursuant to the President's
Executive order of June 10, 1933.
.
The Division's major activities during the fiscal year are shown in
the foUowing tables:
Civil cases received and disposed of during the fiscal year 1936 i

P e n d i n g J u l y 1,1936:
I n court
. '•
For suit b y t h e United states -

-- --

Total
L i e n cases i n c o u r t -

-

.

Total
S u i t s i n v o l v i n g liens
L i e n cases n o t i n s u i t
T o t a l , i n c l u d i n g lien cases
-.

2,580
267

$183,946, 649. 03
6,670,816. 39

2,847
1,436

190, 617, 465. 42

4,282

T o t a l , i n c l u d i n g lien cases
Received d u r i n g year:
Suits b y taxpayers
For suit b y t h e United States

Closed d u r i n g year:
Exclusive of lien cases
L i e n cases

A m o u n t involved

Number

Cases

2,888
278

154,885, 369.41
65, 649,669.89

3,166
1,281
161

220, 635,029. 30

4,608
.

..

2,080
1,669

..

Total

89,744,164.51

3,649

1

P e n d i n g J u n e 30,1936, exclusive of lien c a s e s . .
P e n d i n g J u n e 30,1936, i n c l u d i n g lien cases

3,933
6,241

321, 308,330.21

I Excludes bankruptcy, receivership, insolvency, compromise, and liquor cases.

Results obtained in cases closed during the fiscal year 1936 i
Number

Cases

Suits i n s t i t u t e d b y t a x p a y e r s
Suits a n d claims b y t h e U n i t e d S t a t e s . .
Injunctions, processing taxes
•Total

Amount
claimed

Recovered
from taxpayers

696
262
1,132

$41, 224, 789. 91
8,092,499. 95
40,426,874. 65

$809,756.10

2,080

89, 744,164. 51

809,756.10

A m o u n t refunded

$7,802,100.36

7,802,100.36

1 Excludes bankruptcy, receivership, insolvency, compromise, lien, and liquor cases.

Results obtained in lien cases closed during the fiscal year 1936
Cases
Pending in court
Not pending in court.
Total.

Number

1,445
124

Amount
collected
$318,226. 69
1 62,973.66
381,200.34

> Amount collected since Apr. 8,1936, the date these cases were transferred to the Civil Division from the
Interpretative Division.




159

REPORT OF THE SECRETARY OF THE TREASURY
Civil cases pending in courts July 1, 1935 and 19S6 i
July 1,
1935
District courts. . . . .
Circuit courts of appeals
Court of Claims
Supreme Court
State courts and miscellaneous.*
Pending payment of judgment claims
Total

l

-

July 1,
1936

1,813
117
648
4
21
O
77

2,938
125
475
2
30
74

2, 680

3,644

L

1 Excludes bankruptcy, receivership, insolvency, compromise, lien, and liquor cases.

The number of cases of the Civil Division tried by the Department
of Justice and also the number decided by the courts during the fiscal
year are shown in the following table:
Tax cases tried and decided by the Federal courts during the fiscal year 1936
Cases decided
Cases
tried

Courts

District courts
Circuit courts of appeals.
Court of Claims.Supreme Court
Total

.

.

-

-

For the
Government

Against
the Government

Partly for
and partly
against the
Government

Total

235
106
65
23

144
60
47

1460
40
16
17

34
5
6
0

638
105.
67
23

428

257

532

44

833

1 Includes 398 permanent injunctions entered in district courts on basis of the Supreme Court decision in
the case of Rickert Rice Mills, Inc., v. Fontenot, Collector.

Compromise Section.—The Section is charged with the responsibility
of considering and passing upon offers submitted in compromise of tax
liability arising in the Miscellaneous Tax Unit of the Bureau, except
those offers involving criminal prosecution, fraud penalties, or specific
penalties. It is also charged with the solution of legal problems arising in the collection of taxes from banks in liquidation, from taxpayers
who have made assignments of assets for the benefit of creditors, and
from estates of deceased taxpayers.
During the fiscal year, 583 cases handled in this section were closed
by acceptance of offers in compromise and the collection of filed claims
in the aggregate amount of $1,716,215. The followuig table shows
the volume of cases handled by this section:
Pending at beginning of year
Received during year
Total to be disposed of
"Closed or in process of closing
Pending at end of year

.

Number
1,528
1,806
-- 3,333
1,652
1,681

The number of cases pending June 30, 1936, and the tax liabUity
involved are as follows:




160

EEPORT OF THE SECRETARY OF THE TREASURY
Pending
Number

Cash offers in compromise
Installment offers in compromise
Decedent estates
Insolvent banks
Miscellaneous cases
. .

_

Total '..

In process of closing

Liability

Number

Liability

266
72
1,096
68
190

$1, 370, 270
1,030,448
21, 679,830
102,042
1, 425, 766

183
32

$1, 206,117
. 2,969,801

1,681

26, 608, 345

216

4,175,918

Interpretative Division.—This Division is charged with the preparation of opuiions relating to the administrative construction of internal revenue laws and the editing of material for publication in the
Internal Revenue Bulletin. During the year, it disposed of 2,416
jacketed cases.
Penal Division,—The Penal Division, in cooperation with the Department of Justice and the various United States attorneys, passes
upon criminal internal revenue cases; prepares opinions on liability
for percentage penalties for fraud (occasionally for negligence or delinquency), and on acceptance or rejection of offers in compromise of
tax cases in which such questions are involved. The Division also
prepares opinions interpreting or construing percentage penalty and
criminal statutes, and opinions on all questions of law involved in a
case where there is also a question of percentage penalty or crime. I t
decides upon questions as to whether cases that have been closed by
agreement under section 606 of the Revenue Act of 1928, and similar
provisions of the other revenue acts, should be reopened, because of
^'fraud or malfeasance, or misrepresentation of a material fact'', and
upon informers' reward claims under section 3463 of the Revised
Statutes.
The following table summarizes the work of the Division during
the last 2 fiscal years:
Cases received and disposed of by the Penal Division during the fiscal years 1935 and
1936
Cases
Pending at beginning of year
Received during year
Total to be disposed of
Disposed of
Pending at end of year

1935

. . . _ . .
__
_
_.^ ^^
_____

...

._

_.

_ _ __.

1936

1,524
1,266

1, 202
1,264

2.790
1,588
1,202

2,466
1,241
1, 225

Review Division.—Tlds Division reviews cases involving refunds,
credits, arid abatements of internal revenue taxes. I t prepares
public decisions in accordance with Treasury Decisions 4264 and
4583 in all cases where the overassessments exceed $20,000; prepares'
reports to the Joint Committee on Internal Revenue Taxation in
cases involving credits or refunds in excess of $75,000, as required by
section 710 of the Revenue Act of 1928; and also participates in conferences and negotiations in other Bureau agencies on cases involving
proposed overpayments.




REPORT OF THE SECRETARY OF THE TREASURY

161

There were 287 cases disposed of during the year involving proposed
overassessments of tax aggregating $48,454,580.01. As a result of
adjustments recommended by this Division, the proposed overassessments were reduced by $7,006,762.29. Some of the principles
involved in these adjustments also affected the disposition of other
cases pending in the Bureau. Public decisions were promulgated in
126 cases and memoranda were submitted to the joint committee in
18 cases.
Legislation and Regulations Division.—The function of this Division
is to prepare or review regulations issued under the internal revenue
laws; make reports on suggested changes in the internal revenue laws
and the existing regulations thereunder, and, if change is found desirable, to explain in detail the reasons therefor and the form to be
followed; and consider and prepare reports on legislation introduced
in Congress relating to internal revenue matters.
During the year the Division received 912 cases, which with those
on hand totaled 1,203 cases to be disposed of. Of this number, 927
cases were disposed of, leaving 276 cases on hand on June 30, 1936.
Intelligence Unit
The principal work of the Intelligence Unit consists in the investigation of tax fraud cases in cooperation with internal revenue agents
and deputy collectors. During the year there were 801 investigations of alleged evasion of income tax, and of this number 200 cases,
involving 293 individuals, were recommended for prosecution. On
this charge there were convictions in 43 cases, involving 55 individuals,
and there were acquittals in 9 cases, involving 10 individuals. Investigation of these cases resulted in recommendation for assessment
of additional taxes and penalties aggregating $31,033,499.
In addition to the collections by the Bureau of Internal Revenue of
taxes, penalties, and interest, amounts are covered into the Treasury
by way of fines imposed in criminal cases; in some jurisdictions the
courts have imposed an additional penalty by requiring the defendants to pay the costs of the investigations—that is, the salaries
and expenses of the agents during investigations.
There were also investigated during the fiscal year 175 cases of
charges against employees in the Internal Revenue Service, resulting
in the separation from the service of 103 employees and the prosecution of 14, of which number 7 have been convicted, 3 acquitted, and
2 indictments dismissed. The other two cases have not been tried.
There were 4,781 investigations of apphcations of attorneys and
agents to practice before the Treasury Department and 97 investigations of charges against enrolled agents and attorneys, resulting in
the disbarment of 11, the suspension of 6, the reprimand of 5, and
rejection of applications of 34.
There were investigated 4,546 cases of miscellaneous character,
which included investigations of a number of cases for the Bureau of
Narcotics, the Customs Service, national bank examiners, and of
persons under consideration for appointment to various positions in
the Treasury Department, including officials of branches other than
the Bureau of Internal Revenue.
93790—37

-12




.

162

REPORT OF THE SECRETARY OF THE TREASURY
Work reliej projects

The Bureau of Internal Revenue received allocations for three
projects from funds made avaUable by the Emergency Relief Appropriation Act of 1935. Some 3,400 persons have been regularly
employed on these projects, more than 90 percent of whom were taken
from relief rolls. All workers were paid the security wage rates as
stipulated in the Executive order of May 20, 1935, and its amendments, and were recruited and employed in accordance with the
regulations of the Works Progress Administration and of the United
States Employment Service of the Department of Labor.
A survey of miscellaneous taxes in 20 of the largest metropolitan
centers in the United States was designed to collect delinquent and
deficient taxes, principally on sales of sporting goods, cosmetics, radios,
electric refrigerators, jewelry, furs, and on documentary stamps,
admissions, and dues. As of June 30, 1936, $1,937,500 had been
allocated to this project; obligations amounted to $1,803,121.18 and
expenditures $1,723,731.29. As of the same date, this investigation
resulted in the collection of $3,411,476.72 and the assessment of an
additional amount of $10,500,330.54.
A second project, conducted in 28 revenue agents' divisions,
involved the examination of income tax returns which ordinarUy
would not receive an intensive examination. Allocations to this
project amounted to $771,405 up to June 30, 1936; obligations
totaled $735,246.14, of which $689,815.91 represented expenditures.
As a result of the inspection of these returns, net deficiencies of
$1,578,296.71 were disclosed up to June 30, and taxpayers had agreed
to these deficiencies to the extent of $1,430,915.15.
A third project comprised the inspection of retail liquor stores in
91 metropolitan centers for the detection of noncompliance with the
internal revenue laws. The workers on this project were commissioned as deputy collectors of internal revenue to permit them to
make collection of any taxes and ad valorem penalties due at the time
of inspection, and to receive offers in compromise tendered by taxpayers in settlement of all liability incurred for nonwillful violation
of the laws applying to the sale and handling of liquors. A printed
notice, covering all of the pertinent requirements of governing laws,
was forwarded to each retail liquor dealer prior to actual inspection
of his premises. As of June 30, 1936, allocations to this project
amounted to $917,683, of which $851,958.61 had been obligated, and
actual expenditures amounted to $807,143.07. This investigation
disclosed deficiencies of $1,004,707.78, of which $993,924.93 had been
collected by June 30, 1936.
LEGAL DIVISION

During the fiscal year 1936 the Legal Division prepared 81 formal
legal opinions and numerous informal opinions for the information
and guidance of the administrative officers of the Department, and
steps were taken toward publication of selected opinions. The
Division collaborated with legislative counsel of both Houses of Congress in legislative matters affecting the Department, furnished technical assistance to 60 committees of the Senate and House of Representatives, and made investigations, analyses, and recommendations
with respect to approximately 725 congressional bills affecting the
Department. There were prepared or revised approximately 30



REPORT OF THE SECRETARY OF THE TREASURY

163

important bUls deemed necessary or desirable for the more efficient
operation of the Department, for the collection of the revenue, and
for the safeguarding of national credit.
With respect to monetary and public debt matters, in addition to
preparing drafts of legislation, the Division drafted proclamations
and amendments to regulations relating principally to the payment
of gold clause securities, their acceptance in payment of income and
profits taxes, the exchange of coins and currencies of the United
States, the use of scrap gold in industry and the arts, and the issue,
exchange, and redemption of paper currency and coin. Active assistance was rendered in 13 pending cases involving gold coin, bullion,
and newly mined gold, in 41 pending cases involving ''gold clause^'
obligations, and in numerous suits for penalties under the Emergency
Banking Act of 1933 and the Gold Reserve Act of 1934. The Division prepared the text of the adjusted service bonds, the necessary
forms in connection with their issue and redemption, two amendments
to the Adjusted Compensation Payment Act, and regiUations covering
the redemption of the bonds. An annotated compilation of all
Federal statutes relating to the public debt of the United States
was undertaken and satisfactory progress was made.
New research projects commenced by the Division during the year
included an analysis of the decentralization plan being tried as an
innovation by the Bureau of Internal Revenue in the Cleveland
district, and a study of income tax cases in which offers in compromise
are made. In a pamphlet prepared by the Division, the practices of
sentencing alcohol tax offenders were discussed analytically. Regulations were drafted relating to customhouse brokers under the act
approved August 26, 1935, the excise tax on employers under title I X
of the Social Security Act, and the administration of the alcohol tax
laws under the Liquor Law Repeal and Enforcement Act approved
August 27, 1935, and the Liquor Tax Administration Act of 1936,
approved June 26, 1936.
More than 100,000 compromise cases and petitions for remission
were considered during . the year in connection with liability for
violations of alcohol tax laws, and numerous claims were reviewed
involving all enforcement units of the Department.
With respect to the Coast Guard, in addition to reviewing the
proceedings in 114 retiring board cases, the Division reviewed the
record and prepared the action of the reviewing authority in 74 general
court cases, 136 summary court cases, 301 deck court cases, and 209
boards of inquiry, inquest, and investigation. Sixty-five cases were
examined for award of life saving medals of honor, and the action
necessary for awards was prepared in 55 of such cases.
In the field of narcotic drugs, the Division rendered cooperation
and assistance to State authorities in connection with the adoption
and enforcement of the uniform State narcotic law; regulations were
drafted improving the care of prisoners at a United States narcotic
farm; and progress was made in a compilation of State laws relating
to drug addiction and human sterilization.
In the administration of the customs laws, the Division gave
consideration to the many legal questions arising from the reciprocal
tariff bargaining program. In addition to the examination of several
applications for licenses for foreign trade zones, the Division participated in the granting of a license for such a zone in the port of New
York. Considerable attention was given to the legal questions



164

REPORT OF THE SECRETARY OF THE TREASURY

involved in the application of countervailing duties upon the importation of articles in connection with the production or exportation
of which a bounty or grant was paid.
The Division considered during the year the legal aspects of the
acquisition of 304 sites for construction purposes and 16 additions to
sites for extension and remodeling purposes. A total of 847 contracts
covering construction and related work was prepared, and more
than 2,000 contracts prepared by the Branch of Supply and by other
agencies of the Department were examined for legal sufficiency.
In the field of taxation the Division handled and prepared the
necessary action in aU income, estate, and gift tax appeals; 5,052
appeals, involving $138,863,775, were finally closed during the year,
whereas 4,731 new appeals, iavolving $165,525,983, were filed during
the same period. At the end of the year 9,478 cases were pending
before the Board of Tax Appeals and 624 before the appellate courts.
The Division prepares and reviews all cases involving overassessments where the amount proposed for allowance exceeds $20,000; 287
of such cases were disposed of, resiUting in refunds, credits, and
abatements amounting to $46,718,653. In the review of these cases
reductions in the amounts proposed for refund, and deficiencies in
tax discovered and proposed for assessments amounted, in the aggregate, to $7,006,762. The Division prepared data for use by the
Department of Justice in the prosecution or defense of 4,890 tax cases
(civil and criminal); handled the preparation and publication of more
than 900 regiUations, Treasury decisions, and rulings for the guidance
of oflacers and employees of the Bureau of Internal Revenue and others
concerned; and reviewed more than 1,600 cases involving offers in
compromise and extensions of time to pay tax, in addition to a large
number of closing agreements prior to transmission from the Commissioner of Internal Revenue to the Secretary of the Treasury for
approval.
Included in the various Internal Revenue matters, the Division
received 1,760 reorganization cases, arising under section 77 B of the
Bankruptcy Act, and closed 566 cases involving claims of $10,273,993,
which were settled for $3,895,794. A totalof 1,020 bankruptcy and
receivership cases was closed involving claims of $6,144,857, and
$1,319,051 was coUected.
BUREAU OF THE MINT

Institutions oj the Mint Service
During the fiscal year 1936, six Mint Service institutions were in
operation: The coinage mints at Philadelphia, San Francisco, and
Denver; the assay office at New York, which handles much importexport gold; the mint at New Orleans, conducted as an assay office;
and the assay office at Seattle. The two last-named institutions are,
in effect, bullion-purchasing agencies for the large institutions and
also serve the public by making assays of ores a r d bullion. The
electrolytic refineries at the New York and San Francisco institutions
were in operation.
Coinage
The total number of domestic coins made during the fiscal year
1936 was 471,040,986, which consisted of 1,439,000 standard sUver
dollars, 128,876,658 subsidiary (fractional) sUver coins, 88,502,614



REPORT OF THE SECRETARY OF THE TREASURY

165

nickel coins, and 252,222,714 bronze coins. The total value of the
domestic coinage was $34,539,163.34. During the prior year the
total number of coins made was 608,414,207, with a value of
$39,131,127.65.
The output of foreign coin by United States mints during the
fiscal year 1936 was again extraordinarUy large, the total being
72,180,449 pieces, as compared with the 1935^ total of 68,500,401.
Each of the three coinage mints made sUver coins for Mexico, whUe
the Philadelphia mint also made sUver, nickel, or bronze coins for
Colombia, Costa Rica, Cuba, Honduras, Nicaragua, San Salvador,
and Venezuela.
The grand total of domestic and foreign pieces coined during the
year was 543,221,435, as compared with 676,914,608 during the prior
year.
The making of proof coins (with highly polished surfaces) which
was discontinued some years ago was resumed during the year.
These coins are sold to the public at a premium over face value to
cover the extra cost of manufacture.
Bullion deposit transactions
Bullion deposits continued to reach the mints and assay offices in
large numbers during the year. The number of deposits totaled
195,279 as compared with 226,701 m 1935, 115,870 in 1934, and
36,098 m 1931. The 1936 total is more than five times that of 1931.
Gold operations °
Gold acquired by the mints and assay offices during the year
amounted to $1,451,011,081.22; gold transfers to the mints and assay
offices consisted of $58,536,481.98 of bullion from Federal Reserve
banks, and $1,003,813,951.78 of domestic coin from other Treasury
offices. Intermint-service institution transfers amounted to $35,810,301.53. These items total $2,549,171,816.51, as compared with
$4,942,920,241.18 for the prior year.
The acquisitions include $27,495.18 of gold received at $20.67 +
per fine ounce, which had not been previously surrendered under
the nationalization orders; on this gold the increment to $35 per
fine ounce amounted to $19,081.90.
Silver operations
The Government's acquisitions of sUver during the fiscal year
totaled 609,613,258 fine ounces, at an average cost of 64.8+ cents per
fine ounce, and a total cost of $395,313,736. The acquisitions consist
of the following:
Amount
(fine ounces)

Item
Newly mined domestic silver
...:
Nationalized silver
Purchase Act silver.. ......
Silver contained in gold bullion deposits, etc
Silver received in exchange for Government stamped bars
Total

.1




_. .

Cost

48,784,456
650,462
668,639,669
411,926
1,126, 757

$37,642,417
326,294
366,540,620
222, 207
683,198

609,613,258

395,313,736'

166

REPORT OF THE SECRETARY OF THE TREASURY

United States coin received for recoinage totaled 4,762,051 fine
ounces, with a recoinage value of $6,583,102. SUver deposited in
trust by other governments totaled 11,706,709 fine ounces. SUver
transfers between Mint Service institutions totaled 406,579 fine
ounces. These items plus the sUver acquired during the year
amounted to 626,488,597 fine ounces, as compared with the prior
year's total of 461,860,976 fine ounces.
During the year 305,432,000 fine ounces of sUver were revalued to
$1.29+ per fine ounce, the statutory monetary value defined by the
act of June 19, 1934, and the silver was set up as security against
sUver certificates.
The open market price of sUver in New York (mean of bid and
asked) during the fiscal year 1936 averaged $0.55341. The highest
pomt was $0.70062, on July 1, 1935, and the lowest was $0.45062,
first reached on January 20, 1936.
For newly mined domestic sUver the price of $0.7757+ per fine
ounce, established by the President's proclamation of April 24, 1935,
prevailed throughout the fiscal year.
Rejineries
The refineries at New York and San Francisco produced during the
year 6,842,651 fine ounces (234.6 tons) of electrolytically refined
gold bullion and 4,555,602 fine ounces (156.2 tons) of silver bullion.
During the prior year the quantities were 2,388,328 fine ounces (81.9
tons) of gold and 1,336,572 fine ounces (45.8 tons) of sUver. The
capacity of the New York refinery has been materially increased.
The electrolytic refinery at the Denver Mint remained closed, as in
the previous year, because of building construction and other more
urgent activities.
The stock of gold and sUver in unrefined bullion on hand increased
during the fiscal year 1936, by about 56 tons, to a total of 1,065 tons;
the prior year's increase was about 80 tons..
Commemorative coins
The following silver half-dollar coins of special design were issued
during the year:
Event
Providence, R T., tercentennial of founding. . .
California-Pacific International Exposition at San Diego, Calif
Old Spanish Trail, four hundredth anniversary of opening




Date of law

_

May 2,1935
May 3,1935
June 5,1935

Pieces
60,000
250,000
10,000

REPORT OF THE SECRETARY OF THE TREASURY

167

Commemorative half dollars which have been authorized but not
yet issued are as follows:
Event
Columbia, S. C , sesquicentennial anniversary of the founding of the capital of
South Carolina
Cincinnati, Ohio, fiftieth anniversary as a center of music
Long Island, N. Y., three hundredth anniversary of first settlement
Great Lakes Exposition, centennial celebration of Cleveland, Ohio
New Rochelle, N. Y., two hundred and fiftieth anniversary of founding.
Bridgeport, Conn., one hundredth anniversary of incorporation
Swedes, three hundredth anniversary of landing in Delaware
Wisconsin, one hundredth anniversary of establishment of territorial government.
Lynchburg, Va., one hundred and fiftieth anniversary of founding
Albany, N. Y,, two hundred and fiftieth anniversary of founding
Battle of Gettysburg, seventy-fifth anniversary
Elgin, 111., one hundredth anniversary of founding
Lost Colony, Virginia Dare, three hundred and fiftieth anniversary of Sir Walter
Raleigh's colony on Roanoke Island, N. C
San Francisco-Oakland Bay Bridge, celebration of opening
York County, Maine, three hundredth anniversary of founding

Date of law

Pieces

Mar. 18,1936
Mar. 31,1936
Apr. 13,1936
May 5,1936
.....do
May 15,1936
do.
. ...do
May 28,1936
June 16,1936
do
do

25,000
16,000
100,000
60,000
25,000
26,000
26,000
26, 000
20,000
26, 000
50,000
25,000

June 24,1936
June 26,1936
do

25, 000
200,000
30,000

Stock oj coin and monetary bullion in the United States
On June 30, 1936, the estimated stock of domestic coin in the
United States was $1,017,853,376, of which $547,080,164 was standard
silver dollars, $331,716,093 subsidiary silver coin, and $139,057,119
minor coin.
The stock of gold bulUon, including coin, held in the Treasury on
the same date was valued at $10,608,416,678, an increase of $1,493,035,869; and the stock of silver bullion was 1,076,865,202 fine ounces,
an increase of 593,875,690 fine ounces.
Production oj gold and silver
Domestic gold production during the calendar year 1935 was
3,609,283 fine ounces with a value of $126,324,900, as compared with
3,091,183 fine ounces with a value of $108,191,400 in 1934. The
quantity output for 1935 was about 74 percent of that for the record
year 1915, when the total was 4,887,604 fine ounces.
Domestic silver production during 1935 totaled 45,924,454 ounces,
valued.at $33,008,201 on the basis of the average price of $0.71875 per
fine ounce for newly mined domestic silver received by the Treasury.
The quantity compares with 32,725,353 ounces for 1934 and with the
record production of 74,961,075 fine ounces for 1915.
Industrial consumption oj gold and silver
Gold consumption in the industrial arts during the calendar year
1935 is estimated at $25,929,497. Gold returned from industrial use
exceeded the total used by industry by $32,461,178, as compared with
an excess of $61,694,490 during the previous year.
Silver used in the arts is estimated at 41,192,023 fuie ounces, of
which 5,288,916 fine ounces was new material.
As compared with the prior year, silver consumption increased about
1,513,000 ounces and gold consumption increased about 334,000
ounces.




168

REPORT OF THE SECRETARY OF THE TREASURY

Housing
The bullion depository at Fort Knox, Ky., is-nearing completion
and will be occupied as a depository for refined gold bullion during the
fiscal year 1937. Funds were allotted under the Public Works Administration for the construction of this depository and an appropriation was made in the Deficiency Act of June 22, 1936, for its initial
operation. The transfer to the depository of gold now stored at the
Philadelphia Mint and the New York assay oflSice will provide additional working'^acUities at these institutions.
The addition to the Denver Mint has been partially occupied, and
the new mint building at San Francisco is to be occupied soon.
Appropriations J expenses j and income
Regular appropriations avaUable for the Mint Service during the
fiscal year 1936 totaled $1,256,600; the Second Deficiency Act provided $150,000; allotments for meeting emergency expenses amounted
to $1,179,098; and reimbursements to appropriations for services
rendered amounted to $513,231, making a grand total of $3,098,929.
Expenses amounted to $3,134,432, of which $3,022,797 was chargeable to appropriations and $111,635 chargeable to income.
The regular income realized by the Treasury from the Mint Service
aggregated $19,190,279, of which $13,996,324 was seigniorage. The
seigniorage on silver-dollar coin was $578,941; on subsidiary sUver coin,
$9,150,865; and on minor coin, $4,266,518. Extraordinary income
aggregated $201,437,324, of which $201,418,242 was seigniorage on
silver bullion revalued to $1.29+ per ounce, and $19,082 was the increment to $35 per ounce on revalued gold.
The number and value of deposits, transfers, gross income, and
expenses for the fiscal year 1936 and the number of employees on
June 30, 1936, at each institution are shown in the following table:
Gold and silver deposits and transfers, income, expenses, and employees, by
institutions, fiscal year 1936
Number of
deposits of
gold
and silver

Monetary
Number of value of gold
and silver
Mintreceipts,
Service
Including
transtransfers»
fers

Philadelphia. _
San Francisco...
Denver
New York
__
Niew Orleans
Seattle

26,059
94,363
15,892
45, 201
4,020
5,431

794 $666,163,440
30 208,817,922
320, 770,450
1,123
2,376 2, 228, 826,481
2,051,392
i 18,837,747

Total-..
Bureau of the Mint

Institution

• Grand total
Prior fiscal year

EmExcess of
Gross
income (+) ployees,
Gross
June
regular expenses«
or of ex30,
income ^
penses ( - )
1936

+$7,619,097
-f 3,482, 264
-f 2,122, 568
+3,024,113
-29, 748
+20, 676

419
193
171
279
18
16

190,966

4,323 3, 344,467,432 19,219, 648 2,980, 679 +16,238,969
183,122
-183,122

1,096
66

190.966

4,323 3,344,467,432 19,219,648

3,163,801 +16,055,847

1,152

220,622

6,179 6,517,089,315 13,899,655

3,598.865 +10,300,790

1,853

$8,814,634 $1,196, 637
4,025,733
543,469
466,888
2, 589,466
695,881
3, 719,994
40,130
10,382
38, 774
69,449

1 Includes interinstitution transactions amounting to $36,017,015.
2 Includes interinstitution transactions amounting to $29,369.




REPORT OF THE SECRETARY OF THE TREASURY

169

BUREAU OF NARCOTICS

Enjorcement activities
The Bureau's policy of directing its principal enforcement activities
against major narcotic law violators has resulted in a progressive
reduction from year to year in the supply of narcotics available to
the domestic illicit traffic. Accordingly, the prices of drugs in the
illicit market have continued high during the fiscal year 1936, further
increases being in evidence in several localities. The high degree of
adulteration previously found in drugs seized in the illicit traffic also
was apparent during the year, especially in the case of heroin, which
upon analysis was found to contain an average adulteration of 81
percent.
The decreased supplies of smuggled narcotics, which forced peddlers
and addicts to turn to the channels of legitimate distribution for their
supply, continued to be reflected in the robberies of wholesale and
retail stocks, the forgery and false execution of narcotic prescriptions,
and the improper prescribing and dispensing of narcotics. Of the
total violations reported during the year, 41 percent involved persons
registered under the law, as compared with 33 percent which involved
such persons during the fiscal year 1935, 30 percent during 1934, 18
percent during 1933, and 14 percent during 1932. However, the
measures previously initiated by the Bureau, to provide increased
safeguards and more secure places of storage for narcotic stocks in
the hands of registrants, resulted during the year in a further decrease
in the number of thefts reported.
The Bureau continues to solicit and receive the active cooperation
of State and municipal enforcement agencies. Such cooperation
increases in effectiveness with the adoption and enforcement of the
Uniform State Narcotic Law in the several States. This law, which
was approved by the Conference of Commissioners on Uniform State
Laws and by the American Bar Association nearly 4 years ago, and
which the Bureau has been urging every State to enact, was adopted
with little or no amendment during the fiscal year 1936 in two States—
Illinois and Wisconsin. This makes a total of 29 States which had
adopted this model legislation before the close of the fiscal year. I t
had been previously adopted by Alabama, Arizona, Colorado, Connecticut, Delaware, Florida, Georgia, Indiana, Kentucky, Louisiana,
Maryland, Massachusetts, Nebraska, Nevada, New Jersey, New
Mexico, New York, North Carolina, Ohio, Oklahoma, Oregon,
Rhode Island, South Carolina, South Dakota, Utah, Virginia, and
West Virginia.
The following table shows the number of cases of violation, by
registered and nonregistered persons, of the narcotic laws and the
cases disposed of during the fiscal year as reported by Federal narcotic
enforcement officers:




170

REPORT OF THE SECRETARY OF THE TREASURY

Violations of the narcotic laws and the cases disposed of during the fiscal year 1936
Nonregistered persons

Registered persons
Federal court

State court

1

1

Pending July 1, 1935
Reported during 1936:
Federal
Joint
Total to be disposed
of

State court

Federal court

1,070

1 1,459

2,367
57

2,676
860

3,494'

4,894

=

Convicted:
Federal
Joint.
Acquitted:
Federal
Joint
Dropped:
Federal .
Joint
Compromised:^
Federal
Joint

134
8

6
2

1,782
606

330
91

17
2

1
1

81
33

21
10

1,621
22

18
8

660
194

40
17

.

9

4
0

2,601

3,769

893

1,135

752

Total disposed of...
Pending June 30, 1936

i

5a

1 s 1
P

1

o

1

1d
o

1

P

2

1

1

&
P

Sentences imposed:
Federal
Joint

244
9

10
0

25
0

6
1

7
0

0 3,656
0 1,029

6
6

6
23

206
61

4
9

8
0

Total -

263

10

26

7

7

0 4,686

0

29

267

1

8

Fines imposed:
Federal
Joint
Total--

$21,063. 76
451. 00

$260.00
600.07

$124,195. 75
17,650.03

21, 614. 76

750.07

141.845.78

$6,364.60 .
3,114.00
9.478. 60

1 Revised.
2 Represents 344 cases involving tax liability which were closed on payment of taxes and penalties in the
sum of $1,682.77; and 421 cases which were compromised jn the sum of $36,228.05.
NOTE.—Federal cases are made by Federal oflBcers working independently, while joint cases are made
by Federal and State officers working in cooperation with each other.

Extent and trend oj narcotic traffic
On June 30, 1936, there were 333,081 registrants under the Harrison
narcotic law, as amended, 192 as importers and manufacturers,
1,356 as wholesale dealers, 51,481 as retail dealers, 152,421 as practitioners, and 127,631 as dealers in and manufacturers of untaxed
narcotic preparations, the latter number including registrants not
required to pay occupational tax under the act.
During the year 153,141 pounds of opium were imported as compared with importations of 120,490 pounds during the previous year,
or an increase of 32,651 pounds. Of the quantity imported, however,
42,151 pounds were retained in customs bond and were not released
to manufacturers. The net quantity made available.to manufacturers showed a decrease of 9,500 pounds as compared with 1935.
Coca leaves were imported both for medicinal purposes and for the
manufacture of nonnarcotic flavoring extracts. Imports of coca



REPORT OF THE SECRETARY OF THE TREASURY

171

leaves for medicinal purposes amounted to 243,089 pounds in 1936
as compared with 194,132 pounds during the previous year, or an
increase of 48,957 pounds. ° Imports of coca leaves for the manufacture of nonnarcotic flavoring extracts amounted to 34,969 pounds,,
Exports of narcotic drugs of all kinds amounted to 1,579 ounces
in 1935 and 1,237 ounces in 1936, or a decrease of 342 ounces,,
Total drugs exported during 1936 involved 34,337 taxable ounces of
products.
The net quantity of pure drugs of all kinds sold to domestic purchasers by manufacturers amounted to 396,317 ounces as compared,
with 375,248 ounces during the previous year.
DIVISION OF PRINTING

The Division of Printing transacts all of the Treasury Department's
printing and binding business with the Government Printing Office.
This involves the placing of all orders, the handhng of all inquiriesi
regarding deliveries, estimates of cost, copy, proof, instructions, and
the auditing of vouchers covering payments in connection therewith.
The Division is charged with editing and preparing weekly ^ ^Treasury
Decisions'' under customs, internal revenue, narcotics, and other laws:;
and preparing semiannual bound volumes thereof, and maintaining a
maihng list for their distribution. I t is also charged with the responsibility of authorizing engraving work to be done by the Bureau of
Engraving and Printing for all Government departments and establishments unless money, bonds,cor postage stamps are involved; control
over newspaper and periodical advertising for the Treasury Department; binding of confidential Department records; and the warehousing and distribution of blank books and forms for Washington and field
offices of the Department. Appropriations to the Department for
printing and binding and for purchases of stationery supplies are under
the administrative control of the Division.
The total expenditures of the Division during each of the past two
fiscal years are shown in the following table:
Expenditures for the fiscal years 1935 and 1936, by appropriations
Appropriation

1935

1 $672, 639. 00
Printing and binding, Treasury Department
6, 500.00
Printing and binding. Treasury Department, 1935-36 (second deficiency)...
333, 224.32
Printing and binding, other appropriations, w
464, 699.80
Stationery, Treasury Department..
Total

1,465,963.12

1936
1 $840, 697.43
43, 260. 00
956, 233. 00
2 456,880. 00
2.295, 070.43

1 Includes receipts from sales of customs forms (reimbursed to the appropriation).
2 Includes reimbursement for stationery furnished other offices. .

Printing and binding
The appropriation for printing and binding for the fiscal year 1936
was $630,000. Due to the heavy demands made on the Department,
it was necessary to obtain $188,000 in the First Deficiency Act.
These sums were augmented by $43,260 from the Second Deficiency
Act of 1935-36, making a total of $861,260 available from appropriations for printing and binding for the Treasury Department in the
fiscal year 1936.



172

REPORT OF THE SECRETARY OF THE TREASURY

Eeimbursements of $29,500 from sales of customs forms increased
the total available amount to $890,760. Of this sum, $883,957 was
expended, leaving an unobligated balance of $6,803. In addition,
$955,233 was expended from appropriations other than the printing and binding appropriation, bringing the total expenditure to
$1,839,190.
Appropriations, expenditures, and reimbursements for printing and binding for the
fiscal years 1935 and 1936 ^
SUMMARY
1936

1935
Appropriation, printing and binding, Treasury Department
Printing and binding, Treasury Department, 1936-36 (second deficiency)...
Reimbursements from sales of customs forms
Expended from other appropriations^
Total available
Total expenditures
Balance..:

..

$646,000.00
6. 600.00
26,839. 00
333, 224.32

$818,000.00
43,260.00
29, 500. 00
965, 233. 00

1,011,663.32
1,010,863.32

1,845,993.00
1,839,190.43

700.00

6,802.67

1 Figures subject to slight variations, 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.
E X P E N D I T U R E S FROM APPROPRIATIONS FOR P R I N T I N G AND BINDING, BY
BUREAUS, OFFICES, AND DIVISIONS
Secretary, Under Secretary, and Assistant Secretaries..
Appointments Division
Bookkeeping and Warrants Division
Bureau of Engraving and Printing
Division of Research and Statistics
Bureau of Narcotics
Chief Clerk and Superintendent..
Coast Guard
Commissioner of Accounts and Deposits
Comptroller of the Currency
Customs.
Division of Disbursement.
Division of Printing
Federal Alcohol Administration._
Procurement Division, Branch of Supply
Procurement Division, Public Buildings Branch
Government Actuary
Internal Revenue
Mint.
National bank depositaries.—
Public Debt Service...
Public Health Service
Secret Service
Treasurer of the United States
Miscellaneous and department stock.
Total

874.72
495. 02
290. 86
976. 63
840. 71
638. 40
080.16
882. 61
101.29
701.12
642. 77
139.43

44, 796. 77
6, 571.34
1, 782.10
292, 267.38
6, 923. 28
1, 602. 77
12. 688. 20
64, 747. 39
696.97
12, 196. 62
65, 064.66
650,800. 00

$11, 737.15
476. 40
31, 094.97
6, 056. 35
2,384.61
3,188. 05
250.24
33,290. 73
1,178.30
26, 002. 73
67,269.38
6,679.91
1, 087.14
2,432.66
41,472. 86
6, 609.90

0)

443, 687.60
3,767.44
56.46
10,971.40
69,121.37
1, 074.68
14, 744. 43
81, 022. 77
854,457.43

R E I M B U R S E D AND E X P E N D E D FROM OTHER APPROPRIATIONS
Administration of the Cotton Act (transferred to Internal Revenue, administrative expenses)
Administration of the Tobacco Act (transferred to Internal Revenue, administrative expenses).
Advances to Agricultural Adjustment Administration:
Division of Disbursement
Bureau of Internal Revenue...
.-.
Treasurer of the United States.
1
General expenses. Agricultural Adjustment Administration (transferred to
Division of Disbursement)
Payments for Agricultural Adjustment, Department of Agriculture:
Transferred to Internal Revenue, administrative expenses
Transferred to Treasurer of the United States, administrative expenses.
Salaries and expenses. Bureau of Engraving and Printing
Contingent expenses, national currency:
Comptroller of the Currency
Currency Redemption Division
1 Included in Division of Research and Statistics.




$972. 00
2, 202. 00
12, 565. 00
26, 946. 00
942. 00
2,105.00
1,607.00
6.00
954.00
80.00
1,536.00

REPOET OP THE SECRETARY OF THE TREASURY

173

Appropriations, expenditures, and reimbursements for printing and binding for the
fiscal years 1935 and 1936—Continued
R E I M B U R S E D A N D E X P E N D E D FROM OTHER APPROPRIATIONS-Continued
1935
C u s t o m s Service, P u e r t o Rico tariff fund
A d m i n i s t r a t i v e expenses. A d j u s t e d C o m p e n s a t i o n A c t , 1936-37:
D i v i s i o n of D i s b u r s e m e n t
.
.
P u b l i c D e b t Service
T r e a s u r e r of t h e U n i t e d S t a t e s
Diseases arnd S a n i t a t i o n I n v e s t i g a t i o n s , Social Security Act, P u b l i c H e a l t h
Service, 1936
. ...
..
E m e r g e n c y Relief, a d m i n i s t r a t i v e expenses:
Accounts and D e p o s i t s . .
Appointments Division.. . . .
Bookkeeping and Warrants
Chief Clerk, T r e a s u r y .
...
...
Coast G u a r d
Division of D i s b u r s e m e n t
P r o c u r e m e n t Division, B r a n c h of S u p p l y . . .
P u b l i c H e a l t h Service
..
Division of Research a n d Statistics
Secret Service Division
T r e a s u r e r of t h e U n i t e d States
E m e r g e n c y Relief, Office of t h e Secretary:
B u r e a u of I n t e r n a l R e v e n u e
Division of Research a n d Statistics
E x c h a n g e stabilization fund, T r e a s u r y D e p a r t m e n t , 1936:
A c c o u n t s a n d deposits
Division of Research a n d Statistics
..
. .
E x p o r t a t i o n a n d D o m e s t i c C o n s u m p t i o n of Agricultural C o m m o d i t i e s ,
D e p a r t m e n t of A g r i c u l t u r e (cotton price a d j u s t m e n t , transferred t o T r e a s ury):
D i v i s i o n of D i s b u r s e m e n t
.
. . . . . .
T r e a s u r e r of t h e U n i t e d States
. . -.
N a t i o n a l b a n k examiners
._
Insolvent national banks
. . . .
Expenses of loans (act of Sept. 24, 1917, as a m e n d e d a n d extended)
E x p e n s e s , E m e r g e n c y B a n k i n g , Gold Reserve a n d Silver P u r c h a s e Acts
P r o c u r e m e n t Division:
General a d m i n i s t r a t i v e expenses, P u b l i c W o r k s
General s u p p l y fund_.
Expenses, S e t t l e m e n t of W a r Claims A c t of 1928
Civil W o r k s A d m i n i s t r a t i o n
_
.
..
..
N a t i o n a l I n s t i t u t e of H e a l t h , conditional gift fund
Texas C e n t e n n i a l Exposition (transferred to T r e a s u r y , P u b l i c H e a l t h , act of
Aug 12, 1935)
W o r k i n g fund (Treasurer of t h e U n i t e d S t a t e s ) :
Civil W^orks A d m i n i s t r a t i o n
F e d e r a l E m e r g e n c y Relief A d m i n i s t r a t i o n
. .
. .
F a r m Credit A d m i n i s t r a t i o n . .
Federal F a r m Corporation
H o m e Owners* L o a n C o r p o r a t i o n
Reconstruction Finance Corporation
Tennessee Valley A u t h o r i t y
P u b l i c H e a l t h Service
T r e a s u r e r of t h e U n i t e d States
.. .
..
W o r k i n g fund (Division of D i s b u r s e m e n t ) :
Interior, Virgin Islands, N a t i o n a l I n d u s t r i a l R e c o v e r y .
W o r k i n g fund. T r e a s u r y , N a t i o n a l I n d u s t r i a l Recovery:
Division of D i s b u r s e m e n t
.
.
-N a t i o n a l I n d u s t r i a l R e c o v e r y , 1933-37:
Coast G u a r d
-Salaries a n d expenses, Division of D i s b u r s e m e n t - .
C u s t o m s Service, b l a n k f o r m s . .
Total

-

-

..-

----

1936

$12. 76
$1, 266. 00
26,866. 00
20, 289.00
13,980. 00
28, 038. 27

278, 076. 00
337. 00
37.00
879. 00
801. 00
118, 810. 00
179,120. 00
24, 763. 00
1, 603. 00
8.00
6, 521. 00
15,961. 00
2, 639. 00
11.00
8.00

10, 639. 66
648. 97.
126, 589. 75
12, 920. 64
1, 023. 26
27.21
2, 262. 06

177. 00
5.00
8, 925. 00
112. 00
168, 314. 00
9, 337. 00
918. 00
2, 706. 00
10, 500. 00
161. 00
270. 00
813.. 00
118. 00
192. 00
69.00
61.00
594. 00

83.10
2, 713.11
27.00
15, 431. 07

2, 650. 00

122. 63
20, 792.18

221. 00
7,303. 00

333, 224. 32
26, 839. 00

966, 233. 00
29, 500. 00

360, 063. 32

984,733.00

Stationery supplies
The appropriations, reimbursements, and expenditures for articles
of stationery for the past 2 years are summarized in the following
table:




174

REPORT OF THE SECRETARY OF THE TREASURY

Appropriations, reimbursements, and expenditures for stationery for the fiscal years
1935 and 1936
1935
Appropriations
Reimbursements.
Available credits...
Total expenditures

.

.

..

.

Balance

..

1936

$413,000.00
42,100. 00

$450,000. 00
6, 000. 00

456,100. 00
464, 699. 80

456,000. 00
465, 880. 00

600. 20

120. 00

Department advertising
Authorizations to publish advertising were issued to 5,806 newspapers and periodicals in the fiscal year 1936, compared with 4,604
in 1935, an increase of 1,202. The expenditures authorized were
$57,060.42 in 1935 and $68,304.70 in 1936, an increase of $11,244.28.
Engraving work
A total of 177,332,308 certificates, checks, commissions, drafts,
transportation requests, and warrants was approved by the division
for execution by the Bureau of Engraving and Printing for the several
departments and establishments of the Government during the fiscal
year 1936, compared with 99,756,992 in the preceding year.
PROCUREMENT DIVISION

The functions of all agencies pertaining to policies and methods
of procurement, warehousing and distribution of property, facilities,
structures, improvements, equipment, and supplies are consolidated
in the Procurement Division, which comprises two main branches,
the Branch of Supply and the Public Buildings Branch.
.The Federal Alcohol Administration Act, approved August 29,
1935, and the Liquor Law Repeal and Enforcement Act, approved
August 27, 1935, augmented the authority held by the Procurement
Division under Executive Order No. 6166, June 10, 1933, to control
all property, facilities, structures, machinery, equipment, stores, and
supplies not necessary to the work of any agency, by authorizing it
to dispose of forfeited distUled spirits and all property forfeited to
the United States by court decree. Two other acts of Congress,
namely. Public No. 330, approved August 26, 1935, and Public No.
351, approved August 27, 1935, provide for the disposition, through
the Procurement Division, of surplus real property acquired by Federal
agencies. The Procurement Division purchased material, supplies,
and equipment for use in activities financed by funds provided in the
Emergency Relief Appropriation Act of 1935.
Branch oj Supply
The Branch of Supply is charged with the determination of policies
and methods of procurement, warehousing, and distribution of Government property, facilities, improvements, machinery, equipment,
stores, and supplies; and with the determination of policies and
methods of coordination and consolidation of the purchasing activities of the various departments and independent estabhshments. I t



REPORT OF THE SECRETARY- OF THE TREASURY

175

performs all activities incident to the purchase in definite quantities
of those supphes for which requirements can be anticipated and consolidated; contracts for those supplies of the departments and establishments for which requirements cannot be consolidated in definite
quantity purchase but for which common contracts can be made with
advantage to the Government; and receives, warehouses, and distributes to the departments and establishments supplies maintained
as stock items in the Federal warehouse.
In connection with purchases made during the fiscal year 1936,
37,846 bids were received and 17,508 contracts were awarded; the
total purchases by the departments and establishments therefrom
amounted to $45,343,990.
Consolidated contracts were executed during the year covering tank
car, tank wagon, and steel drum deliveries of motor gasoline and fuel
oil for all Federal activities in the 48 States, their requirements totaling approximately 28,500,000 gallons of gasoline and oil. Consolidated contracts were effected covering drayage service for all Federal
activities in 57 cities.
Materials, supplies, and equipment received at the Federal warehouse amounted to 34,306,294 pounds, and deliveries to the departments and establishments aggregated 39,506,923 pounds. The number of items stored in the warehouse was increased from 1,925 on July
1, 1935, to 2,233 on June 30, 1936.
The typewriter repair shop completed 18,427 overhauls and adjustments of typewriting machines for the departments and establishments in Washington, representing charges of $33,573.
A 188-page Directory of Inspection Services and Testing Laboratories of the Federal Government, detailing various facilities of this
character as an aid to the departments and establishments in inspection, was prepared in collaboration with the Bureau of Standards and
distributed to all Federal activities.
The Motor Equipment Section regularly serviced 449 passenger
cars and trucks, completing 3,173 repair jobs and dispensing 227,583
gallons of gasoline and 6,052 gallons of oU.
The Federal Catalog Section revised various sections of the Federal
Standard Stock Catalog, and checked and arranged stock lists of the
departments and establishments.
The Federal Traffic Section issued 4,386 routing orders covering
53,298 cars, in addition to routing 30,934 less-than-carload shipments, and furnished 230,273 rate quotations to the departments
and establishments.
Under regiUations approved by the Secretary of the Treasury on
•January 15, 1936, the Director of Procurement is charged with the
disposition of all distilled spirits, including alcohol, wine, and malt
beverages forfeited and delivered to the Secretary of the Treasury as
provided in section 9 of the Federal Alcohol Administration Act,
approved August 29, 1935. Title I I I of the Liquor Law Repeal and
Enforcement Act, approved August 27, 1935, provides that all
property forfeited to the United States by court decree shall be
reported to the Director of Procurement for disposition.
The Federal Surplus Property Section handled 3,765 lists of surplus
property in the field, effected 3,024 transfers to Federal activities,
and granted 2,027 clearances for disposition. There were transferred to Federal activities 243,964 gallons of forfeited alcohol and



176

REPORT OF THE SECRETARY OF THE TREASURY

liquor. Surplus property transferred to the various Federal activities
in the field during the fiscal year 1936 was valued at $6,703,300.
Proceeds from the sale of surplus property at auction and of waste
material in the District of Columbia were deposited as miscellaneous
receipts in the Treasury in the amount of $113,198.
The Federal Specifications Section promulgated 153 new specifications, revisions, and amendments to Federal specifications, bringing
the total specifications in effect to 1,088.
The 135 Federal business associations, functioning in the field as
agencies of the Director of Procurement, performed excellent work
such as obtaining bids leading to consolidated drayage contracts,
making surveys of Government-owned and-rented space, and supervising the loan of property to the field activities of the Government.
As a result of the efforts of these associations, trucks were loaned by
the various activities to the Post Office Department for handling
mail during the Christmas period of 1935, effecting thereby a saving of
$83,338.
Special furniture and furnishings, including fioor coverings, window
hangings, etc., were designed, and their execution and installation
supervised, for offices of Government officials, for courtrooms, libraries,
and other rooms requiring special architectural treatment. Among
the buildings so furnished are those of the triangle group in Washington and the United States Courthouse in New York City. At
the request of the Department of State, drawings and specifications
were also prepared for the furnishing of United States legation buildings located in various foreign capitals.
Executive Order No. 7034, dated May 6, 1935, directed the Secretary of the Treasury, through the Director of Procurement, to purchase or to provide a system for the purchase of all materials, supplies, and equipment to be procured with funds appropriated under
the Emergency Relief Appropriation Act of 1935. In accordance
with this order, there was established in each of the 48 States, Hawaii,
Puerto Rico, and the Virgin Islands, a State procurement office,
operating in cooperation with the State Works Progress Administration Administrator, as well as the Treasury State accounts and disbursing offices. The State procurement officers, under the direct
supervision of the Director of Procurement, made practically all purchases of materials used in connection with the work relief program
in the several States.
Where conditions have warranted, deputy procurement officers
have been appointed in the several States to expedite the procurement of materials. Advantage was taken of organized Government
procurement facilities, where they^ could be utilized without a d d i tional administrative expense, particularly those of the Army, Navy,
the Reclamation Service at Denver, the Veterans' Administration,
and certain activities within the Department of Agriculture.
State procurement officers purchase materials, supplies, and equipment called for by requisitioning agencies either by selection from
the General Schedule of Supplies or through competition and award
as prescribed by law. Purchases range from minor items of office
supplies to heavy machinery. One of the largest items of purchase
was that of textiles, amounting to 142,802,795 yards, valued at $15,168,950, with delivery points ranging between 100 and 200 locations.
During the fiscal year 1936, the procurement offices received 768,532



REPORT OF THE SECRETARY OF THE TREASURY

177

requisitions, which resulted in the issuance of 985,181 purchase
orders. Total expenditures thereunder amounted to $291,970,519.68.
Approximately 4,000 leases covering office and storage space were
executed by the State procurement officers, and over 1,000 agreements were consummated covering the use of space at nominal rentals.
By an Executive order of August 21, 1935, $3,000,000 was allocated
to the Secretary of the Treasury from the appropriation provided in
the Emergency Relief Appropriation Act of 1935, to be set aside in
the Treasury Department in a special fund known as the work
relief supply fund for use in the purchase of materials, supplies,
and equipment by the Secretary of the Treasury, through the Procurement Division, pursuant to section I I (A) (2) of Executive
Order No. 7034, dated May 6, 1935. To carry out the provisions of
this order, °the Emergency Relief Accounts Section was established
in the Branch of Supply of the Procurement Division to control,
audit, and record financial transactions involving purchases under
emergency relief funds.
Public Buildings Branch
The functions of the Public Buildings Branch are to collect and
repare for submission to Congress data and estimates for publico
uilding projects; to acquire land for public buUding sites; to prepare- plans,, specifications, and estimates for public building construction and to take bids and award contracts therefor; to supervisee
the construction, remodeling, extension, etc., of public buUdings; to
repair all public buUdings formerly under control of the Treasury
Department which were transferred to the custody of the Post Offic(5
and Interior Departments under Executive Order No. 6166; and to
operate, repair, equip, and maintain all public buUdings in the
custody of the Treasury Department outside of the District of
Columbia.
During the fiscal year 1936 the building operations carried on
under several different programs and appropriations resulted in th(i
completion or practical completion and occupancy during the year of
363 projects with a limit of cost of $47,126,351; 416 projects with a
limit of cost of $66,890,244 were placed under contract; and 166
projects with a limit of cost of $26,863,600 were on the market for
bids, or in the specification stage, at the end of the year. Plans wem
being prepared for 118 projects with a limit of cost of $30,149,000.
Land had been acquired for 7 additional projects to cost approximately $602,000, and sites for 8 projects to cost approximately
$1,487,000 had been selected or were in process of selection.
Office oj the Supervising Architect.—During the year the Office of
the Supervising Architect continued the improvement in practices
and procedure in the design and construction of buildings, workuig
in. close relationship with the advisory committees on engineering,
mechanical, and structural problems.
The directive board, established last year, is continuing the study
of each project in its preliminary stage in order that the requirements may be properly related to site and surroundings, and that an
equitable balance may be developed in the use of materials that will
spread the benefits of the public building programs as much as possible among all producing industries.

E

93790—37

13




178

REPORT OF THE SECRETARY OF THE TREASURY

Office oj the Supervising Engineer.—During the fiscal year the
Office of the Supervising Engineer, through its field service, governed
the execution of over 2,000 contracts, ranging in value from $500 to
$10,000,000; made property surveys aind soil investigations of 320
sites; assisted the Department.of Labor in establishing facts on which
to base predetermination of wage rates; and conducted investigations
for many purposes for the Treasury and other.departments. A large
quantity of information was accumulated from which it is proposed
to establish a new method for appropriation of funds for handling
the repair work of public buildings. This method, when fully established, will furnish a budget for the definite allocation of funds to
known purposes in selected buildings.
The independent corps of special inspection engineers continues to
furnish suggestions of value that are. reflected in the character!,
design, nature of materials, and methods of construction used in
public buildings.
The original public building program.—The Public Building Act,
approved May 25, 1926, and subsequent acts enlarging the regular
building program, made general authorizations of $702,296,794 and
specific authorizations for buildings and land of $496,366,798. During the year 4 projects with a limit of cost of $7,268,500 were completed under this program, bringing the total on June 30, 1936, to
706 projects with a limit of cost of $438,412,328. Twenty-nine
projects with a limit of cost of $57,954,470 remained under contract
at the end of the year. Amoiig these 29 projects are included
buildings which are substantially completed and occupied, but on
which certain minor work remains to be doiie.
Building program in the District oj Columbia.—The 1926 program
for Federal buildings in the District of Columbia has been practically
completed, except for certain items for. the Archives Building and
the South Building, Department of Agriculture. The Archives
Building and a major part of the South Building were occupied
during the year.
Under the present program for the District of Columbia, which is
financed from funds allotted from emergency appropriations, the
addition to the Internal Revenue-Building was completed and occupied during the year and work is proceeding on an extension to the
Archives Building, the extension to cost approximately $3,600,000.
Contracts for the new Interior Department Building, to cost approximately $11,000,000, were awarded in August 1935, and it is expected
that this structure will be ready for occupancy before the end of the
calendar year. A contract *for the construction of an additional
building for the Bureau of Engraving and Printing and a building to
be occupied by the Bureau of Economics, Department of Agriculture,
to cost approximately $5,500,000, was awarded on June 5, 1936.
Contracts for the construction of three animal houses and a shop
building for the National Zoological Park, to cost approximately
$800,000, were also awarded during the year, and work on these
buildings is nearing completion. Specifications for an addition to
the Government Printing Office, to cost approximately $6,000,000,
are being prepared. In addition to these projects, numerous minor
contracts for additional work and improvements to the various
buildings in the triangle group have been completed, or are being
performed under the original District building program.



REPORT OF THE SECRETARY OF THE TREASURY

179

Program under the Public Works Administration.—The number of
allotments for public buildings by the Public Works Administration
under the National Industrial Recovery Act, approved June 16, 1933,
was reduced during the year from 442 to 434. Additional authorizations have increased the total of the allotments during the year
from $70,850,768 to $75,763,645.
The status of work under this program on June 30, 1936, is shown
in the following table:
status

Number of
projects

Authorized by the Public Works Administration
Completed
Under contract
In drawing stage
Total

-

Limit of
cost 1
$75, 763, 646

219
213
2

22, 086, 993
49,921, 6.32
3, 755,000

434

75,763,645

• 1 Includes augmentations from the $2,500,000 fund provided by the Emergency Appropriation Act of
June 19, 1934.

Emergency construction program.—In the Emergency Appropriation
Act, approved June 19, 1934, Congress appropriated $65,000,000 fox
the emergency construction of public buildings throughout the
country, to be selected by the Secretary of the Treasury and the
Postmaster General from public building projects specified in statements 2 and 3 in House Report 1879, Seventy-third Congress; and
also authorized the expenditure of $2,500,000 from Public Works
Administration funds for increasing up to 10 percent the limits of
cost of both Public Works Administration and emergency construction projects when the bid of the lowest responsible bidder exceeds
the amount previously made available for any project.
Under dates of August 12, 1935, and June 22, 1-936, additional
appropriations of $60,000,000 each were provided by Congress for
public buUding construction under practically the same conditions as
those contained in the act of June 19, 1934.
Under the 1934 act, the projects selected were increased, during the
fiscal year 1936, from 355 with a limit of cost of $65,166',945 to 360
with a limit of cost of $65,946,944. The status of the work on June
30, 1936, under this program follows:
Status

Number of
projects

Limit of
cost J

Authorized...

360 $65,946,944

Completed
Under contract
Bids in, on market, or in specification stage
In drawing stage...1
Sites selected and surveys ordered.

107
190
30
31
2

8, 696,978
44, 200,906
4, 679, 500
8,107, 5(K>
263,0(10

360

65,946,944

Total

:..

1 Includes augmentations from the $2,500,000 fund provided by the Emergency Appropriation Act of
June 19, 1934.

Under the act of August 12, 1935, 365 projects were allocated at a
limit of cost of $59,789,468. Included in this number are 12 projects
which were authorized under the act of 1934, the limit of cost having
been increased. The status of this work on June 30, 1936, follows:



180

KEPORT OF THE SECRETARY OF THE TREASURY
Number of
projects

status
Authorized
Under contract
Bids in, on market, or in specification stage
In drawing stage
In site and survey stage.

.

Total

Limit of
cost

365

$59, 789, 468

126
136
, 90
13

13, 601,368
22, 208, 600
22,153, 500
1, 826, 000

365

59, 789,468

Under the act of June 22, 1936, 351 projects were allocated at a
limit of cost of $55,310,000. This number includes 29 projects which
were authorized under the acts of 1934 and 1935, for which the limit
of cost has been increased. The status of this work on June 30, 1936,
follows:
Number of
projects

status

Limit of
cost
$55,310,000

Authorized

351

Under contract
On market or in specification stage . . .
In drawing stage
..J
In site and survey stage

6
6
22
318

921,000
874, 000
6, 720, 000
46, 795, 000

351

55,310,000

Total

_.

. . .

....

_

.
-

-

Program jor other departments.—Funds to the amount of $32,258,946
were transferred to the Treasury Department by other departments
for the rehabUitation, extension, and remodeling of old buildings,
construction of new buildings, repairs, etc., 41 projects being involved.
Projects totaling $21,668,946 were under contract at the end of the
fiscal year, the value of work on the market or in the specification
stage was $5,890,000, and drawings or specifications were being prepared for projects to cost approximately $4,700,000.
Section'oj Space Control.—Procurement Division Order No. 11,dated
September 21, 1935, created the Section of Space Control, which
consists of the Space Allotment Unit, Space Assignment Unit, Real
Estate Unit, and Advance Construction Programs Unit.
The Space Allotment Unit contacts the various Federal agencies
relative to their space requirements in contemplated or authorized
new building construction, obtains basic data, and allocates the necessary space to meet these requirements. Considerable information is
furnished the Supervising Architect of the Procurement Division
with definite recommendations of the Unit. The size of all new
buildings and extensions is determined from this procedure.
From October 1, 1935, to June 30, 1936, the Unit submitted recommendations for 260 buildings, all of which are now either under construction or in the drawing stage. Exclusive of post offices, the unit
is responsible for the actual assignment during the last 9 months of
the fiscal year of 718,000 square feet of space as against 968,000
square feet requested. Specialization in space requirements has
enabled a saving of $1,376,000 during this period.
A secondary function of the Space Allotment Unit is the reassignment of space in existing buildings devoted to governmental activities.
A saving of rent of more than $123,000 was effected in New York
Cit}^- alone as a result of the reassignment of space. This fact was
responsible for an allocation of funds for six additional floors to the



REPORT OF THE SECRETARY OF THE TREASURY

181

Federal Building. Upon completion of this extension, the Government will be enabled to sell 4 of the 17 buildings in the downtown
New York area for approximately $15,000,000.
Through the Space Allotment Unit, increased efficiency has resulted
from the consolidation of governmental activities, as well as substantial savings in operation and maintenance costs.
The Space Assignment Unit initiates the actual assignment of
governmental activities into the space provided in Government-owned
structures. The Unit likewise makes assignments in rented buildings.
Chief among its duties are the clearance.of Government leases; determination of further need for Federal supplanted buildings, recommissioning of such buildings and recommending their disposal as
surplus property in accordance with law; and consolidation of governmental activities in rented quarters. The Unit is also a clearing
house of information relative to space leased from the Government.
During the fiscal year 1936, 10,670 leases for rented quarters were
cleared through the Space Assignment Unit. In Treasury-owned
buildings more than 68,000 square feet were assigned to the various
Federal agencies. Approximately $210,000 in rental was saved
through the utilization for governmental activities of supplanted and
old Federal buildings. Through the cancelation of leased premises
in Atlanta, Ga., and a consolidation of governmental agencies into
one structure, a saving in excess of $47,000 was accomplished. Large
savings in other localities have been efl^ected in a similar manner.
The Space Assignment Unit prepared an analysis and compilation
of the square feet of space, and the amount paid therefor, released
during the period March 1933 to January 1, 1936, due to construction of new Federal buildings and extensions. Space released in
commercial buildings, including post offices, amounted to 4,126,400
square feet, with a rental of $2,884,306.
The Real Estate Unit supplants the Federal Real Estate Board of
the Coordinator's Office and is primarily designed to dispose of
surplus real estate by sale or lease. Public No. 251 of the Sixtyninth Congress and Public Nos. 330 and 351 of the Seventy-fourth
Congress have enabled the Unit to dispose of Federal properties to
the extent of $490,000. In addition, under this special legislation,
negotiations are in process for the sale of 12 Federal properties with
an estimated return to the Government of $5,500,000. The Unit
is obtaining appraisals and estimated values of 63 old Federal buildings which eventually will be sold; it is estimated that the return on
these alone will approximate $7,300,000.
The Advance Construction Programs Unit continues the purposes
and functions as set forth in the Employment Stabilization Act of
1931, which established the Federal Employment Stabilization
Board. Later, by Executive order, the Board was changed to the
Federal Employment Stabilization Office of the Department of
Commerce, and subsequently its activities and personnel were transferred to the Division of Procurement of the Treasury Department.
The activities of this Unit include the 6-year advance planning of
public works by the Federal construction agencies and the District
of Columbia, the preparation of emergency programs of Federal
construction, and of estimates of expenditures for construction for
which appropriations have been made or authorized, the development of trends of employment and business activity, the collection
and dissemination of information concerning advance construction



182

REPORT OF THE SECRETARY OF THE TREASURY

plans of States and other public and private agencies, and the making
=of progress reports oh expenditures and employment, together with
:such other duties as may be assigned to it by the Director of Procurement.
Since 1932, advance construction programs have been received
:from over 100 Federal agencies, including the District of Columbia,'
•covering their requirements over a 6-year period. There is now available in the Unit the 1935 plan, which covers the period 1936-42.
The Advance Construction Programs Unit is conducting a Nationwide' inventory of all Government-owned real property, to elicit
information for the Bureau of the Budget and Congress in drafting
tax legislation. This information will also be used in providing for
the disposal, through the Section of Space Control, of large amounts
of surplus Federal property which are no longer of service to the
Government.
With a total personnel of 37 and an annual pay roll of $92,400, the
Section of Space Control in its 9 months' operation has effected
savings of more than $1,750,000 through its various activities.
Section oj Painting and Sculpture..—The Section of Painting and
Sculpture has to date.held 53 competitions, in which 1,852 painters
and sculptors have competed, submitting 3,147- sketches and models;
and 113 contracts were awarded. Of the competitions, 6 were national, 3 for painting and 3 for sculpture, with 62 contracts awarded.
During the year the Section studied. 700 buildings in connection
with possible mural or sculpture decoration. Of these 700 buildings,
139 have had definite allotments reserved for decorations. Since
organization of the Section, reservations, have been made for. mural
and sculpture decorations on 389 buildings; 24 contracts have been
completed with an expenditure amounting to $35,140; and there are
89 existing contracts involving an obligation of $269,088.
In cooperation with the emergency conservation work, the Section
is authorized to recommend 100 artists to Civilian Conservation
Camps each enrollee period. Their paintings of the life and achievements of the camp have been allocated to public buildings. In addition they have.made safety posters, signs, and illustrations for camp
papers, decorated camp hospitals and recreation rooms with marals,
and assisted in the general education programs of the camps. At
the end of the fiscal year, 53 artists were enrolled. Up to June 30,
1936, 29 exhibitions of the work of the artists have been held, including 294 items, and other exhibitions are scheduled.
At the beginning of the fiscal year 1936 the Section was supplemented by the Treasury Relief Art Project which is covered ia the
section following. The combined work of the Section and Treasury
Relief Art Project, for the convenience of the public, is referred to
as the Treasury Department Art Projects. The Bulletin of the Treasury Department Art Projects contains iaformation relative to the
activities of the two programs. There have been nine issues up to
June 30, 1936, with a circulation of 5,300. A photographic record
of painting and sculpture on file represents the work of 3,200 American
artists.
Treasury Reliej Art Project.—The Treasury Relief Art Project, set
up by an allocation of funds made by the President to the Director
of Procurement in August 1935, for assistance to educational, professional, and clerical persons, has operated with the Section of



183

REPORT OF THE SECRETARY OF THE TREASURY

Painting and Sculpture. The total allocation for the decoration of
Federal buildings was $530,784.
Up to June 30, 1936, 3 mural projects were completed and 72 were
under way, 2,664 easel paintings were produce'd for allocation to
Federal buildings, and 27 sculpture projects were in progress.
About 325 persons have been employed, of whom more than 75
percent have been taken froni relief rolls. As of June 30, 1936,
cumulative obligations amounted to $235,408, of which expenditures
constituted $224,883, leaving an unobhgated balance of $295,376.
Administration and cost oj Federal buildings under the control oj the
Treasury Department.—The administration, number, and cost of
completed buildings under the control of the Treasury Department
(exclusive of land) as of June 30, 1936, are shown in the follo\^ing
table. The control of these buildings is charged to the Procurement
Division, and repairs thereto are: payable from annual appropriations
for repairs to public buildings.
Buildings administered b y -

Cost
$413,919, 059. 59
12, 309, 085. 93
65, 382, 393. 81

Posr^Office Department
Interior Department.,.„_
.
_
Procurement Division
]
Procurement Division, Federal buildings (old), abandoned or reverted to
custody of the Treasury Department
..
Bureau of the Mint
'
Chief Clerk, Treasury Departinent
_
Public Health Service, marine hospitals
Public Health Service, quarantine stations
._•._.
_..
Total
.

23, 781, 262. 35
8, 562, 777. 72
12,027, 875. 24
26,800, 924. 66
6, 925, 983.31
559, 709,362. 60

1 Includes 25 vacant buildings, 24 old buildings used by emergency relief agencies, 33 old buildings used
by other Government agencies, and 4 old buildings rented for commercial purposes.
2 Includes Public Health Building, Cincinnati, Ohio; Public Health Laboratory, Hamilton, Mont.;
NFarcotic Farm, Lexington, Ky.;-Public Health Building, Philadelphia, Pa.; and National Institute of
Health, Washington, D. C .

Expenditures.—Expenditures for all purposes by the Public Buildings Branch during the fiscal year 1936, together with outstanding
contract liabilities and unencumbered balances of appropriations, are'
shown in the following statement:
Expenditures and contract liabilities charged against appropriations for the fiscal
year 1936, and unencumbered balances as of June 30, 1936 . .
Expenditures

Sites and additional land...'
Construction of new buildings
Extension to buildings.......
Miscellaneous special items..^
Emergency repairs to public buildings, etc
Administrative expenses:.
Public Works Administration projects
Working fund projects..
Emergency construction projects
Emergency repairs projects
Unallotted appropriations.
Furniture for triangle buildings
Outside professional services
Repairs, preservation, and equipment, public buildmgs.
Furniture and repairs of same for public buildings..
Operating supplies for public buildings
General administrative expenses
Operating force for public buildings
Total




Contract liabilities charged Unencumbered
June
against appro- balances,
30,1936
priations

$6, 226,948. 58 $10,410,945. 96
46, 762, 074.11 51, 866, 883. 36
6,165, 219. 59 10, 779,088. .54
819, 702.17
251,780. 98
411, 965. 67
475, 480. 77

• $32,963. 34
36,312,495.98
11, 284, 341. 97,
515,062. 97
• 648,152.78

2, 64^4, 886.11
277,482. 04
4,407, 708. 93
60, 375. 92

652, 924. 60
25,106. 63
1, 037, 765.16

100,084.13
248,360. 77

16,432. 03
248,391. 49

1,071,469. 64
321,095. 49
7, 284, 227. 86
72, 253. 46
4, 233, 345. 36
75,864. 89
190, 991. 66

1, 564, 665. 21
90, 987. 60
429,125. 52
963,498. 04
1, 302, 421. 64
72, 519, Oil. 13

339,693. 04
9, 200. 63
37, 638.11
68, 976. 50
76,146, 692. 50

41, 491. 93
11, 671. 91
37,805. 40
3, 690. 84
88, 421. 98
62, 225,337. 46

184

REPORT OF THE SECRETARY OF THE TREASURY

The following table, pursuant to the act approved June 6, 1900
(31 Stat. 592), shows the total expenditures to June 30, 1936, for all
purposes for buildings constructed by the Treasury Department:
Cumulative expenditures, by types, on each class of public buildings constructed by
the Treasury Department to June 30, 1936
Extension,
alterations,
a n d special
items

Construction

Post-office, courthouse, c u s t o m h o u s e
$170, 504, 360. 43
buildings, etc
C o u r t h o u s e buildings
13, 707, 742. 76
C u s t o m h o u s e buildings
24,049, 856. 66
M a r i n e hospital buildings
14, 458, 818. 62
Post-office buildings
209, 738,110. 71
Q u a r a n t i n e station buildings
4, 007, 029. 31
Miscellaneous buildings
143, 322, 774. 42
Total

$396, 959. 38
14, 944. 43
50, 615. 65
169, 821. 42
732,191. 49
32, 655. 85
167, 466. 99

$204, 982, 677. 08
14, 655, 990. 46
27, 844, 688. 49
22, 657, 418. 57
226, 767, 981. 86
7, 371, 434. 52
156,127,559.11

79, 054, 401. 97

1. 564, 655. 21

600, 407, 750. 09

Cost of sites

T o t a l 1.

T o t a l expenditures, J u n e
30, 1936

$34, 081, 357. 27
933, 303. 27
3,744,216. IS
8, 028, 778. 53
16, 297, 679. 66
3, 331, 749. 36
12, 637, 317. 70

579, 788, 692. 91

Post-ofEce, courthouse, c u s t o m h o u s e buildings, etc
C o u r t h o u s e buildings
C u s t o m h o u s e buildings
M a r i n e hospital buildings
Post-office buildings
Q u a r a n t i n e station buildings
Miscellaneous buildings
.._.
A d m i n i s t r a t i v e expenses, working fund
projects 1
A d m i n i s t r a t i v e expenses, P u b l i c W o r k s
A d m i n i s t r a t i o n projects ' . . .
A d m i n i s t r a t i v e expenses, e m e r g e n c y cons t r u c t i o n projects 1
A d m i n i s t r a t i v e expenses, emergency repairs
'.
•
Unallotted appropriations
.

A n n u a l repairs

$47, 373, 795. 87
5. 339, 034. 69
3,886,922.33
892,172.53
79, 402, 54.3:12
339, 587. 60
58, 663, 723.17

O u t s t a n d i n g liabilities charge- U n e n c u m able against a p p r o p r i a t i o n s ' bered balance
ofappropriatioiis. J u n e
30, 1936
Buildings
Sites

$164,195. 00

9, 822, 361. 46
15,000. 00
409, 389. 50

$6, 995, 233. 01 $14,663,945.12
1, 262, 984.17
6, 339, 776. 27
519, 734. 41
281,188. 57
727, 795. 83
683, 872. 27
27,570,518.50 10, 277. 518. 47
248,167. 69
420,123.12
25, 573, 319. 21
6,058, 231. 74
321.095. 49
1,071,469. 64
7, 2S4, 227. 86
72, 253. 46
4, 233, 345. 36

195, 897, 779. 31

10,410,-945.96

62,897,752.88

57, 707,047. 37

1 A d m i n i s t r a t i v e expenses, totaling $1,715,796.29, included $25,106.63 for working fund projects, $652,924.50
for P u b l i c W o r k s A d m i n i s t r a t i o n projects, a n d $1,037,765.16 for emergency construction projects.

PUBLIC DEBT SERVICE

Division oj Loans and Currency
This Division is the active agent of the Secretary of the Treasury
for the issue of all public debt obligations of the United vStates and for
conducting transactions in such obligations after issue. I t is also
responsible for the issue of bonds or other obligations of Puerto Rico
and the Philippine Islands, -for which the Treasury Department acts
as fiscal agent, and of the securities of various Government corporations and credit agencies. The Division undertakes the safekeeping
of these securities for certain Government ofiices. I t also counts and
delivers to the Destruction Committee the 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 issues and retirements of securities conducted through this



185

REPORT OF THE SECRETARY OF THE TREASURY

Division during the fiscal year 1936. Detailed accounts of all transactions in public debt securities of the United States are presented in
formal statements elsewhere in the report.
Transactions in United States and insular securities, and in securities of various
Government corporations and credit agencies during the fiscal year 1936
[Par value]
Registered

Bearer

Total

Public debt securities:
$3,669, 387,110.00 $12, 061,039, 640. 00 $15,730,426, 750. 00
Balance on hand June 30, 1935
Stock returned to the Division unissued
80,004,500. 00
80,004, 600. 00
Received from Bureau of Engraving and
Printing..
4,537, 278, 920. 00 23, 703, 355,000. 00 28, 240, 633,920. 00
Total to be disposed of
Stock shipments to Federal Reserve banks
and post offices
Issued by the Division..
Unissued stock delivered to Register of the
Treasury.
Total disposed of
Balance on hand June 30, 1936
Retired and redeemed.
_
Insular securities:
Balance on hand June 30, 1935
Received from Bureau of Engraving and
Printing..

8, 286, 670, 530. 00 35,764,394,640.00

44,051,065,170. 00

1,846,425,000.00 20, 364, 252,150. 00 22, 210, 677,160. 00
1, 934, 615, 635. 00
56,189,810. 00 1,990,805, 445. 00
1, 396, 740, 250. 00

1,033, 371, 500. 00

2,430,111,750.00

5,177, 780,885. 00 21,453,813, 460. 00 26,631, 694, 345. 00
3,108,889, 645.00 14,310, 581,180. 00 17,419, 470,825. 00
433, 694, 727. 25 2,511,393,997.25
2,077, 699. 270. 00
121, 391, 500. 00

86,000. 00

23, 510, 000. 00

7,871,000.00

31, 381, 000. 00

Total to be disposed of
Issued by the Division

144,901, 500.00
2, 676,000. 00

7,956, 000. 00
7, 388,000.00

152,857, 500. 00
10,064,000.00

Balance on hand June 30, 1936
Retired and redeemed

142, 225, 600. 00
6, 599,000. 00

568,000. 00
6,144,000.00

142. 793, 500. 00
11,743,000.00

1, 385, 661, 400. 00

5, 524,495,825. 00
19, 222,000. 00

6,910,157, 225. 00
19, 222, 000. 00

Government corporations and credit agencies:
Balance on hand June 30, 1935
Stock returned to the Division unissued
Received from Bureau of Engraving and
Printing. . .
Total to be disposed o f .
Issued by the Division
^
Canceled and delivered to .Register of the
Treasury
.
Total-disposed of:.
Balance on hand June 30, 1936
Retired and redeemed

121, 476, 500. 00

182, 555,909.94

2,789, 525,000.00

2,972,080,909. 94

1,568,217,309.94

8, 333, 242,825. 00

9,901,460.134.94

92,113,109. 94

2,047,840,850.^00

2,139,953,959.94

620,900.00

663, 575. 00

1,184, 475. 00

92, 634,009. 94

2,048,604,425. 00

2,141,138,434. 94

1, 475, 583,300. 00
26,029,350. 00

6, 284, 738,400. 00
69, 337, 250. 00

7, 760, 321, 700. 00
85,366, 600. 00

Adjusted service bonds.—During the year the Division received from
the Bureau of Engraving and Printing 37,142,000 adjusted service
bonds in registered form, in the face amount of $1,857,100,000, of
which 26,367,000 bonds in the face amount of $1,318,350,000 were
shipped to Federal Reserve banks and 8,904,019 bonds in the face
amount of $445,200,9.50 were inscribed in the names of and issued to
836,915 individual veterans.
Individual registered accounts.—In connection with registered issues
of the United States and of securities of various Government instrumentalities, individual accounts are maintained; and on the interestbearing debt, interest is paid periodically in the form of checks. The
accounts open on June 30, 1936, were as follows:




186

REPORT OF THE SECRETARY. OF THE TREASURY
Num.ber of
accounts

Direct public debt issues:
Interest-bearing:.
, .,.,.' .
Pre-war and postal savings bonds
':.....
Treasury b o n d s . . . . . :
...
.....:!._
.
Treasury notes and certificates of indebtedness
Total....
Matured
Total open accounts

..1

Other issues:
Interest-bearing:
Home Owners' Loan Corporation bonds..._Federal Farm Mortgage Corporation bonds
Consolidated Federal farm loan bonds of the Federal land banks
Mutual mortgage insurance f u n d . . .
.
Total

....

.

:

Principal

38.415
448,901
20

$157, 482, 420.00
2.296,699,600.00
626,142, 000. 00

487, 336
31,867

3,080, 324, 020.00
20. 519, 610.00

519. 203

3,100,8.43,630.00

6, 655
18, 625
6,772
2

216, 926, OO'^. 00
. 236, 566, 600.00
32,262,800.00
5, 909.94

31,054

485, 761, 209. 94
• 13,000.00

Matured Homie Owners' Loan Corporation bonds. _
Total open accounts...

.^........

Grand total open accounts

31,063

485,774,209.94

650, 266

3, 686, 617,839.94

There were 269,494 individual accounts closed for registered
Liberty bonds. Victory notes, special Treasury notes, pre-w£tr and
postal savings issues, and Treasury bonds; 11,887 accounts were
increased; and 15,590 accounts were decreased, representing. the
retirement: of securities amounting to $1,316,146,300 par value.
New accounts numbering 100,296 and amounting to $743j844,860
principal were opened; and 24,733 changes of address for the mailing
of interest checks were made on the registered accounts during the
Interest on registered Liberty and Treasury bonds was paid on
due dates in the form of 865,427 checks amounting to $68,267,311.68;
on registered securities of the pre-war and postal savings loans,
77,614 checks for $4,158,375 were issued; and on registered Treasury
notes and certificates of indebtedness, interest payable by 4 checks
amounting to $22,554,904.41 was certified to the Treasurer. There
were received from the Bureau of Engraving and Printing 1,030,200
checks as stock, and there were canceled and delivered to the Destruction Committee 36,349 valid.checks and 3,520 void checks.
- Claims.—Clsiiins for relief on account of lost, stolen, destroyed, and
mutilated securities handled by the Division during the fiscal year were
as follows:
N u m b e r of Num.ber of
claims
securities'
On h a n d J u n e 30", i 9 3 5 . . . . . : . . . . . .
Received..
Total

...:.:..
.
:.

,...

Settled b y :
Reissue or r e d e m p t i o n of s e c u r i t i e s . .
R e c o v e r y of securities.
Disallowance of c l a i m s . . _
T o t a l settled
On h a n d J u n e 30, 1936




_

'•

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

'

^..

:..

Par amount
of securities

8, 395
1, 874

26,953
5,490

$3,935,901.00
1,007,811.00

10,269

31,443

4, 943, 712.00

1,211
854
123

2, 558
1,629
836

653,787.50
551,145. 00
5, 300.00

2,188

5,023

1,210,232.60;

8,081

26. 420

3, 733, 479. 50

187

REPORT OF THE SECRETARY OF THE TREASURY

Sajekeeping oj securities.^^Miing the fiscal year, transactions in
securities held in safekeeping were as follows:
Balance on
hand June
30, 1936
Direct public debt issues
Insular securities.
Home Owners' Loan Corporation bonds

Received
and receipts
issued

Released

Balance on
hand June
30, 1936

$454, 938. 250 $767, 697, 700 $749, 797, 700 $472,838,260
6, 762, 600
2, 604,500
6, 720, 500
2, 646, 500
20, 776
500,600
6,826
515, 550
461, 721, 525

Total

770, 702,800

752,859,760

479, 564, 675

Mutilated paper and redeemed currency.—Mutilated paper verified
and delivered to the Destruction Committee consisted of 68,205,286
sheets and coupons of which 68,204,587 sheets and coupons were
received from the Bureau of Engraving and Printing and 699 blank
sheets from the Division of Paper Custody.
Redeemed currency, unfit for circulation, counted and delivered
to the Destruction Committee during the year amounted to 694,159,763
pieces, representing $1,738,261,389.80, detailed as follows:
Nurriber of pieces and amount of redeemed currency delivered to the Destruction
Committee during the fiscal year 1936
Old series i
Curreno

United States notes
Silver certificates
Gold certificates
Treasury notes
Fractional currency..

Number of
pieces

.
..

Total

.
. .

.

New series
Number of
pieces

Face value

427,031 $1, 258, 993.00
962,199 1,167, 612.00
134,560 2, 917, 455.00
1,007
4, 352.00
6,860
1,597.80

55,378,692
616, 930, 354
20, 319,160

$229,003, 647
838, 246, 338
665, 661, 395

1, 531,657 5, 350,009.80

692, 628,106

1, 732, 911, 380

Face value

1 Large size currency in general circulation prior to 1929.

In addition to the securities which were delivered to the Register
of the Treasury, the Division canceled and delivered to the Register 3,292,661 coupons amounting to $261,600,673.67. Of these,
1,620,525 were public debt coupons amounting to $232,842,113.42,
and 1,672,136, amounting to $28,758,560.25, were coupons from
securities of Government corporations and credit agencies.
United States savings bonds.—On June 30, 1935, there were
1,576,250 United States savings bonds on hand with a maturity
value of $125,533,750. During the year the Division received from
the Bureau of Engraving. and Printing 2,487,500 bonds with a maturity value of $693,750,000 and 420,825 bonds with a maturity value
of $80,004,500 were restored to stock. Of these bonds, 1,879,233
with a maturity value of $529,275,925 were issued, leaving a balance
on hand of 2,605,342 bonds with a maturity value of $370,012,325.
Sales and redemptions of United States savings bonds, monthly,
during the fiscal year 1936, are shown in the, following table:




188

REPORT OF THE SECRETARY OF THE TREASURY

Sales and redemptions of United States savings bonds, monthly, fiscal year 1936
SALES 1
N u m b e r of pieces, b y d e n o m i n a t i o n
M o n t h of issue

Sale price

Maturity
value

$25

$50

$100

$500

$1,000

Total

16,488
12, 560
11, 706
20,434
20, 484
27, 239

13,074
9, 667
8,716
16, 632
16,143
21, 992

32, 312
22, 275
18,129
36, 029
33,819
36, 095

12, 037
7,151
5,648
12, 429
11, 583
15,902

17, 594
9.498
7,190
15, 379
14, 535
21, 587

91, 505 $20,932,200.00
61, 051 •12,070,012.50
9,416, 512. 60
. 51,389
100, 903 19,904.137. 60
96, 564 18, 770, 737. 50
122, 816 26,196, 056. 26

$27,909, 600
16, 093, 360
12, 555, 350
26, 538, 850
25, 027, 650
34,928, 075

86,124 178, 659

64, 750

86, 783

624,227 107, 289, 656. 25

143, 052,875

22,909
18,772
20, 344
19.069
17,253
27,936

52, 029
36, 293
40, 373
38,816
34, 939
47, 918

19,879
11,958
13,695
13,115
11,410
14,128

43,111
19,795
23, 254
22,807
19,108
21, 674

167,467
108, 737
121,987
116, 886
103,346
141,142

T o t a l , series B . 148,981 126, 282 250, 368

84,186

149, 749

Series A
1936—July
August
_.l
September
October
November.
December

T o t a l , series A . 108,911
Series B
1936—January.
. . . 29, 539
21,919
February..
March
. ._ 24, 321
23. 079
April
20,636
May
29, 487
June

T o t a l sales

45.102, 993. 75
23,167, 406. 26
26,823, 018. 75
26.082, 393. 75
22, 264,087. 50
26, 747, 793. 76

60.137. 325
30,889,876
36, 764, 025
34, 776, 626
29,685,450
35, 663, 726

759,565 170,187, 693. 75

226.916, 925

257,892 212, 406 429, 027 148, 935 235,532 1, 283, 792 277, 477, 350. 00

369, 969,800

R E D E M P T I O N S PRIOR TO MATURITY
N u m b e r of pieces, b y d e n o m i n a t i o n
Redemption
value

M o n t h redeemed

Maturity
value

Total

$25

$50

$100

$600

1,300
1,046
1,407
1,409
1,320
1,442
1,878
1,854'
2,300
2,321
2,034
1,912

627
610
880
864
642
821
1,122
1,139
1,661
1,757
1,320
1,267

1,287
1,031
1.594
1,753
1,451
1,511
1,962
1,835
2.802
2,882
2,633
2.287

331
283
426
497
416
362
639
. 445
774
834
738
767

222
261
412
•473
449
363
594
493
680
811
690
685

3,767
3,230
4,719
4,996
4,278
4,499
6,096
5,766
• 8,117
8,605
7,415
6,918

$435.037. 50
421, 668. 75
647, 681. 25
731,418.75
650,400. 00
579,150. 00
872,062. 50
751, 725:00
1,115,673.50
1, 253,132.50
1,085, 698. 50
1,064, 054. 00

$580,050
562, 225
863. 575
975, 226
867, 200
772, 200
1,162, 750
1,002,300
1, 482. 750
1,662,075
1, 439,150
1, 408, 350

T o t a l , series A . 20, 222

12, 610

23,028

6,412

6.133

68, 405

9. 607. 702. 25

12, 777,850

177
700
965
1,254

120
511
545
687

280
923
1, 001
1,249

72
252
323
304

83
284
376
459

732
2,670
3,210
3,953

118. 068. 75
409, 012. 50
616, 731. 25
601, 200. 00

157, 425
545,350
688,975
801, 600

T o t a l , series B .

3,096

1,863

3,453

951

1,202

10, 565

1, 645, 012. 60

2,193,350

Total redemptions

23, 318

14,473

26, 481

7,363

7,335

78,970

11, 252, 714. 76

14, 971, 200

$1,000

Series A
1935—July
August..
September
October
November
December
1936—January
February
March
April
May
June

/Series B
1936—March
April
May.June

I As indicated by stubs received after sale.

Publicity.—The Division maintains a mailing 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 2,985,942 printed circulars were
distributed to the public during the year.




189

REPORT OF THE SECRETARY OF THE TREASURY
Register oj the Treasury

The Register of the Treasury conducts the final audit and has
custody of-all retired public debt securities, including interest coupons
and checks, and performs a like function with respect to the securities
of the Home Owners' Loan Corporation, the Federal Farm Mortgage
Corporation, and the consolidated obligations of the Federal land
banks. The Register also retires bonds of the insular possessions
which are exchanged for other securities.
The Register renders monthly certification to the ComptroUer
General of aU public debt securities redeemed by the Treasurer of
the United States and establishes credits due the Federal Reserve
banks and the Division of Loans and Currency for securities forwarded
by them on account of exchanges, replacements, transfers of registration, etc.
The following statement sets forth, by class of security, the total!
number and face value of documents which were received by the=
Register's Office on account of transactions during the fiscal year
1936:
Su7nmary of securities received by the Register of the Treasury on account of transactions during the fiscal year 1936
Registered

Bearer

Security
Pieces

Amount

Pieces

Redeemed
U n i t e d States securities:
P r e - w a r a n d postal savings b o n d s
Liberty loans.. i
Treasury bonds
T r e a s u r y notes
U n i t e d States saving b o n d s
A d j u s t e d service b o n d s .
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
O t h e r securities:
H o r n e O w n e r s ' L o a n Corporation:
Bonds
Interest coupons.
I n t e r e s t checks
F e d e r a l F a r m M o r t g a g e Corporation:
Interest coupons...
I n t e r e s t checks
Consolidated F e d e r a l farm loans of
the Federal land banks:
Interest coupons.
I n t e r e s t checks

Total..
F o r footnotes, see p . IGO.




66,910
270,062
278
78,970
13, 018, 275
159
2,339

$673,171, 930. 00
202, 567, 500. 00
121, 518, 000. 00
11, 252, 714. 75
1 650, 913, 750. X)0
401,461, 000. 00
71, 950. 20

1,457

2, 037, 000. 00

10,055

5, 495, 440. 00

'H566"

"e," 650,'974." 75"

5,660
13,488, 725

228
1, 231, 322
81,968

$22, 230.00
1,176, 052,900. 00
l,-500. 00
2, 017,122,850.00

1,616
71, 269
85,120
11, 982, 373

4,158,400. 00
3, 283,135,000. 00
120,820.17
2 643, 229, 717. 38

236, 972
5,475,137

72, 739, 450. 00
2 75,092, 601. 60

1, 967,835

2 32, 212, 224. 36

503,459

2 13, 551, 233. 38

554, 747. (
2,075, 695,007. 31

21, 637, 307

7, 317,438,826. 88

190

REPORT OF THE SECRETARY OF T H E TREASURY

S u m m a r y of securities received by the Register of the Treasury on account of transactions during the fiscal year 1936-—Continued
^
.
Registered

Bearer

Security
Pieces

Amount

Pieces

Amount

Retired on account of exchanges for other securities, etc.
United States securities:
Pre-war and postal savings bonds
Liberty loans
Treasury bonds
Treasury notes...
United States savings bonds
• Certificates of indebtedness
'..
Treasury bills
•.:
Treasury (war) savings securities
First 3 4 percent Liberty Loan interim
certificates
:
Other securities:
Insular possessions loans
Home Owners' Loan Corporation
bonds
Federal Farm Mortgage Corporation
bonds
.-Consolidated Federal farm loans, of the|
Federal land banks, bonds
. Total
United States securities:
Pre-war and postal savings bonds
Liberty loans
Treasury bonds
Treasury notes
United States savings bonds
Adjusted service bonds
Treasury bills
_
Interest coupons
Treasury (war) savings securities
Other securities:
Home Owners' Loan Corporation:
Bonds
Interest ooupons
Federal Farm Mortgage Corporation:
Bonds
Interest coupons
Consolidated Federal farm loans of
the Federal land banks:
Bon^s
Interest coupons
i.
Total
'.

17,770
8,604
84,094
6
4,107
4

$10,102,440. 00
22,143, 360. 00
293,123,750. 00
81,840, 000. 00
1,028,200.00
255,600.000.00

-76

-380. 00

2,648
46, 241
408,103
311,424

$893,280.00
49, 765,450. 00
1, 774, 768, 600. 00
6,189,083, 600. 00
1,015,488,000.00

13

950.00'
3, 506,000. 00

2,685,000.00

3,506

2,334

5, 241, 650.00

1,112,998

710,948, 500. od'

8, 732

16,356, 600.00

279,955

205,907, 600.00 .

1,363

1,026
127,954 I

2,; 420,300. 00 . 40.850
690.440,710.00 | 2,214,631
Unissued stock retired

12,043
667,122

$66,900,450. 00
1, 327,086, 200. 00
2, 753, 600. 00

174,110
15, 697

31, 393, 975. 00
784, 850. 00

87

33

769,'824

124,900.00

602, 697
11, 003
304, 606

$513,149, 450. 00
14,711,000.00
1,084,178, 300. 00

20,089
3, 036, 283
76

1,089,427,000.00362, 217, 036. 74
380. 00

26,026
1, 808,127

115, 288,000.00=
36,960,461.34

6,893
306,608

7, 776,600. 00
13, 413,825. 27

6
156, 649
1, 429, 439, 975. 00 6, 278, 963
Recapitulation
75,000.00

56,045,000.00
9,006, 406,880.00

6,000. 00
4,378,450. 49
3, 241, 506, 493. 84-

United States securities:
$750,174,820. 00
2,776
96,723
Pre-war and postal savings bonds...
$915, 510. 00
1, 880,160
845, 788 1, 561, 797,050. 00
1, 738, 967,800.00>
Liberty loans
419,114
295, 877, 350. 00
84, 782
1, 789,481,100. 00
Treasury bonds
_
697, 998
284
203, 358,000. 00
8, 290,384, 750. 00
Treasury notes.._
43, 674, 889. 75
257,187
. United States savings bonds
13,033, 972 1 651, 698, 600. 00
.Adjusted.service bonds
1,616
163
657,061,000. 00
4,158, 400. 00'
Certificates of indebtedness
100,351
5, 388,050,000. 00Treasury bills
•...
71, 570. 20
85,196
. Treasury.(war) savings securities
121,200.17
2,263
16,018, 656
Interest coupons
2 1, 005, 446, 754. 12'
First Zhi percent Liberty Loan inter13
im certificates
950. 00
Other securities:
3,606
2, 685,000. 00
Insular possessions loans
3, 606,000. 00
1,353
Home Owners' Loan Corporation:
1,376, 996
7,. 599, 560. 00
898, 975, 950. 00
Bonds
3,835
7,283, 264
2 112,052, 952. 94
Interest coupons....'.
5,495, 440. 00
Interest checks
.:.
10,055
Federal Farm Mortgage Corporation:
16,481, 400.00
213, 684,100. 00
Bonds
8,819
2, 274, 443
2 46, 626, 049. 62
Interest coupons
"zWm "6," 650," 974'75'
Interest checks
Consolidated Federal farm loans of
the Federal land banks:
1,059
40,856
2,495,300. 00
56,051, 000. 00
Bonds
660,108
2 17,929, 683. 87
Interest coupons
:....
"5^660'
554, 747. 61
Interest checks
14,386, 503 4,195, 575, 692. 31 30,130, 901
19, 565, 352, 200. 72
Total
1 Does not include 6,131,562 pieces, aggregating $306,578,100, to be delivered by the Treasurer of the
United States, completing June 1936 settlement.
2 Includes June 1936 settlement not yet received from the Treasurer of the United States; settlements of
April, May, and June subject to audit.
NOTE.—All redemptions, except interest coupons and interest checks, subsequent to December 1935
settlement, are subject to audit.




REPORT OF THE SECRETARY OF THE TREASURY

191

Division oj Public Debt Accounts and Audit
This Division maintams administrative control accounts for all
official transactions in the public debt conducted by the various
Treasury offices and the Federal Reserve banks as fiscal agents of
the United States, and also for transactions involving paper used for
printing public debt and other securities. United States currency,
stamps, etc., and miscellaneous securities and documents in the
Bureau of Engraving and Printing. Transactions in bonds of the
Home Owners' Loan Corporation and the Federal Farm Mortgage
Corporation, and in consolidated Federal farm loan bonds of the
Federal land banks, conducted by the Treasury and Federal Reserve
banks, similar to those in public debt securities, are also included
in the administrative control accounts of this Division. Numerous
adrninistrative jaudit functions are performed in connection with the
foregoing. The Division also maintains control accounts for various
cl asses of unissued currency in reserve stocks of the Treasurer of the
United States, and conducts administrative examinations and
physical audits of such unissued stocks of currency and of cash
balances in custody, and of collateral securities held in trust in the
offices of the Treasurer of the United States.
During the fiscal year 140 physical audits were conducted, involving securities, currency, paper, interest checks, etc., amounting to
about $25,000,000,000 in face value^ and 128,000,000 in number of
pieces. Unissued currency in the reserve vaiUts of the Treasurer
of the United States was under the constant seal of this Division
throughout the year. At the beginning of the year this amount was
$6,900,192,400, during the year $1,356,288,000 was received and
$6,085,440,000 was released for issue or destruction, arid the balance
at the close of the fiscal year was $2,171,040,400.
The Division determined and certified credits to the. cumulative
sinking fund arid amounts in the sinking fund available for expenditure frpni time to time, interest'on all classes of public debt securities
which ;became due and payable on their respective interest-payment
dates, and the amount of each form of public debt securities and unpaid ihterest= outstanding each month. I t prepared estimates of
interest to become payable on public debt securities in future fiscal
years, and of expenditures to be made on account of retirements for
the sinking fund and other, special accounts, and prepared statements showing the accountability 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 compiled.
During the latter months of the fiscal year the activities of the
Division were greatly increased on account of audit and accounting
work in connection with the issue of adjusted service bonds, which
necessitated a considerable temporary increase in personnel. The
continued sale of United States savings bonds by the Post Office
Department and the extension of their sale to Federal Reserve
banks, involving the audit of all stubs of bonds sold, have also
increased the work of the [Division.




192

REPORT OF THE SECRETARY OF THE TREASURY

' Division oj Paper Custody
A summary of the operations of the Division of Paper Custody
during the fiscal year 1936 is presented in the following tables:
Receipts and issues of distinctive and nondistinctive paper during the fiscal year 1936
Sheets
Kind

D i s t i n c t i v e paper for U n i t e d States currency a n d Federal Reserve notes, 12 subjects
-.
D i s t i n c t i v e paper for U n i t e d States b o n d s
,
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....
_
Miscellaneous paper
D i s t i n c t i v e p a p e r for C u b a n c u r r e n c y
D i s t i n c t i v e paper for P h i l i p p i n e Islands currency
P o s t a l card for Philipp.ine I s l a n d s . .

On hand
J u n e 30,
1936

On h a n d
J u l y 1,1935

Receipts

Issues

20, 064, 248
5, 612, 745

64,800,062
13, 265,908

69,642, 821
14, 588, 752

15,221,489
4, 289,901

120,866
574, 959
239,434
176
19, 844

99,814
126, 240
205, 000
1,100, 000

146,164
297,151
410, 204
751, 019

74, 516
404,048
34, 230
349,157
19,844

79, 597, 024

85,836,111

20, 393,185

Total...

Federal Reserve notes, series 1928 and series 1934, received and issued during the
fiscal year 1936
[000 o m i t t e d ]
Federal Reserve notes, series 1928
F e d e r a l Reserve
'
bank.

Boston
N e w York
Philadelphia..
Cleveland
Richmond
Atlanta
Chicago..
S t . Louis
Minneapolis..
Kansas C i t y . .
Dallas
S a n Francisco.
Total...

On hand
J u l y 1, R e c e i v e d
1935$299,920
362, 680
387, 540
371, 380
186, 320
175.120
681. 380
105, 800
119,560
164i 520
160, 980
159, 460
3,174, 660

$8,160
12, 000
"8,'400'

4, 320
1,260
14, 220

Issued

On hand
J u n e 30,
1936

F e d e r a l Reserve notes, series 1934
On hand
J u l y 1, R e c e i v e d
1935

Issued

$50,840 $257, 240
355, 560
7,120
39, 880 347, 660
73, 080 310,300
26, 680 159, 640
38, 000 145, 520
37, 000 644, 380
87,080
18, 720
104,160
15, 400
152,030
16, 780
133, 240
29, 000
116,260
57, 420

$53, 760 $223, 560 $158, 760
1121, 600
589, 320 • 387,820
47, 520
215, 280 151, 480
197,100
8,040
165, 360
175, 440
45, 960
93, 080
148,920
65, 320
2,400
75, 060 375, 600 278, 000
133, 200
38,660
76, 740
73,500
27, 540
39, 900
123,000
60,520
6,000
116,760
56,920
204,420
118.140

409, 920 2, 813,100

426, 540 2, 576,100 1, 652,040

On hand
J u n e 30,
1936
$118, 560
323,100
111, 320
39, 780
128,320
86,000
172, 660
95.120
61,140
68,480
59, 840
86,280
1,350,600

There were no transactions in Federal Reserve bank notes, series
1929, during the year, the amourit on hand remaining at $450,800,000.
Destruction Commi^ee
The following table summarizes the number of pieces and the face
amount of securities received from the various offices and destroyed
by the Destruction Committee during the Ifiscal year 1936:




193

REPORT OF TH]S SECRETARY OF THE TREASURY

Number of pieces and face amount of securities destroyed by the Destruction Committee
during the fiscal year 1936
Pieces
Division of L o a n s a n d C u r r e n c y
T r e a s u r e r of t h e U n i t e d States:
U n i t e d States notes
Silver certificates
Gold certihcates
Treasury notes.
F r a c t i o n a l notes

Face value

and
$230, 969,140. 00
8.37. 770,-500. 00668; 578,-85b.'004, 352. 00
1, 597. 80

55, 950, 860
61,7, 725, 852
-• 20,^453/720
1, 007
6,860
694,138, 299

C o m p t r o l l e r of t h e C u r r e n c y a n d national
banks:
N a t i o n a l b a n k notes (retired)
Federal Reserve b a n k notes ( r e t i r e d ) . .
Emergency currency.
Unissued vault stock. _

40, 508, 088
39, S6eM
73
19, 694,19VA

$1, 737, 324, 4.39.80
400, 945, 730. 00
72, 662. 50
1,350.00
171, 201, 405. 00

60,242,219
C o m p t r o l l e r of t h e C u r r e n c y a n d Federal
Reserve agents:
122, 421, 662
Federal Reserve notes
2, 410, 576
Federal Reserve b a n k n o t e s . .

572, 221,147. 50
1, 345, 583, 960. 00
30, 981, 700. 00

124,832, 237
B u r e a u of I n t e r n a l R e v e n u e :
Miscellaneous s t a m p s from:
S t a m p Division
Tobacco Division
Sales T a x D i v i s i o n .
Alcohol' T a x Uiiif.
Silver T a x Division
Processing T a x D i v i s i o n .

1, 376, 665, 660.00
57, 789, 743. 99
975, 318. 00
92,103.35
11-422.04
521. 07
3, 345. 65
68,872, 454.10

Register of t h e T r e a s u r y :
11, 481,381
I n t e r e s t coupons, unissued
C o u p o n b o n d s a n d notes, lots ex7, 594, 377
changed
1, 223, 722
C o u p o n b o n d s a n d notes (redeemed.)'..
Nonregistered war-savings s t a m p s
342
(redeemed)
I n t e r e s t coupons, paid lots (redeemed). 336, 983, 498
Federal land b a n k s , consblidate'd
443, 623
b o n d s a n d coupons
P u b l i c D e b t Service, p h o t o s t a t s
Division of L o a n s a n d C u r r e n c y , Security
Section, interest checks
W a r D e p a r t m e n t , B u r e a u of I n s u l a r Affairs, P h i l i p p i n e railway b o n d s
F e d e r a l Reserve Board, checks a n d duplicates
—

413, 077, 903. 00
2,112, 660, 450. 00
347,84.3,600.00
1,420.46
1,123,876, 209.85
388, 080, 092. 21
357, 726,943
151

:

—

39,869

6,949,000.00

6,949
35,818
, 237, .022, 48.5

G r a n d total..

: 8, m , 472i 376. 92

Sheets
Division of 'Loans a n d C u r r e n c y ( 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 spoilage):
M o n e y of all k i n d s
Postage s t a m p s .
Internal revenue s t a m p s . .
B o n d s a n d certificates of i n d e b t e d n e s s
..
C u . s t o m s a n d miscellaneous s t a m p s . . .
Postal savings certificates
C u b a n currency
E x p e r i m e n t a l , security p a p e r
Void coupons
..
Total
Division of L o a n s a n d C u r r e n c y ( D i \ i s i o n of P a p e r Cust o d y ) : B o n d paper

Coupons

3,901, 680M
7,809, 27l3'5%80i
4, 628, 9513Hi
1, 376, 803%
8,972,701*H80
165, 915H
36, 220^^
4, 323
41, 248, 723
26, 955, 8674492%!200
699
26,956,5664492%i20o

G r a n d total..

4,385,539,675.52

41, 248, 723

A miscellaneous quantity of proof sheets, counterfeit notes, coins,
and counterfeiters^ tools and equipment was received from other
sources and was destroyed or disposed of as directed by the Secretary
of the Treasury.
93790—37

14




194

REPORT OF THE SECRETARY OF THE TREASURY
PUBLIC HEALTH SERVICE
Division oj Sanitary Reports and Statistics

The Public Health Service continued to act as a clearing house for
information concerning the prevalence of diseases dangerous to the
public health. Data were collected from States, counties, and cities
in the United States and from foreign countries. The information
was tabulated and made available to health officers throughout the
country by publication in the weekly Public Health Reports and by
special bulletins.
Preliminary reports for the calendar year 1935 from the health
officers of 25 States gave a death rate of 10.8 per 1,000 population,
as compared with 10.9 per 1,000 reported in 1934 for 28 States.
In May 1935, an outbreak of poliomyelitis (infantile paralysis)
occurred in the northern part of North Carolina, spreading into
Virginia in June. The peak was reached in North Carolina in July
and in Virginia in August. About August 1, 1935, unusual prevalence
of poliomyelitis was reported in the northeastern part of the country.
Division oj Foreign and Insular Quarantine
Quarantine transactions.—During the fiscal year, quarantine officers
of the Public Health Service inspected 15,981 vessels, carrying 733,495
passengers and 1,182,232 seamen. Of a total of 3,823 airplanes,
carrying 37,352 persons, which arrived :at airports of entry in the
United States from foreign countries and required quarantine inspection, only 2,281 airplanes, carrying 31,898 persons, of whom
5,537 were aliens, were inspected by medical officers of the Public
Health Service prior to entry, due to many arrivals at airports at
which medical officers are not available.
Fumigations were made of 1,193 vessels either for the destruction
of rats or because of the presence on board of some contagious disease.
Examinations for plague infection were made of 2,971 of the 4,585
rats retrieved following fumigation.
No importation of any of the quarantinable diseases into the United
States or its possessions occurred during the year.
The International Sanitary Convention for Aerial Navigation concluded at The Hague in 1933 became effective in regard to the United
States on November 22, 1935. The only noteworthy change in
existing procedures resulted from the provisions of article 9 which
substitute a journey log for the bill of health formerly required to be
carried by aircraft.
The increased hazards to public health resulting from the inauguration of trans-Pacific aircraft service required the issuance of special
instructions to the quarantine stations at San Francisco, Honolulu,
and Manila, in order to effect adequate quarantine inspection and
treatment of these aircraft in an effort to prevent the introduction of
quarantinable diseases into the United States and the introduction of
mosquito carriers of malaria into the Territory of Hawaii, where this
disease does not now exist.
Scientific experimental work conducted by the Public Health
Service has enhanced the efficiency and safety of ship fumigation.
Experimental work has also resulted in developing an effective nonflammable mosquitocide which is the best yet developed for use on



REPORT OF THE SECRETARY OF THE TREASURY

195

aircraft to prevent the transportation of mosquito carriers of human
disease.
Maritime commerce between the United States and Cuba has been
aided by the mutual agrec^ment between the chiefs of the respective
quarantine services providing for the recognition of deratization
exemption certificates issued by each country to vessels which are
maintained in a rat-free condition.
Steps have been taken, through recommendations to the International Office of Public Health aiid by cooperation with the Post
Office Department, to effect adequate sanitary supervision of infectious material and insect carriers of human disease in international
mail.
Medical examination oj aliens.—Medical officers at the various ports
of entry in the United States examined 824,401 alien passengers and
722,756 alien seamen. Of these numbers, 15,106 passengers and 1,119
seamen were certified to the proper immigration officials, in accordance
with the act of Congress approved Februiary 5, 1917, as being affiicted
with some mental or physical defect or disease.
'
A total of 38,619 applicants for immigration visas was examined
by medical officers of the Public Health Service stationed in American
Consulates in foreign countries, 26,103 having been examined in
American consulates in the Eastern Hemisphere and 12,516 in
American consulates in the Western Hemisphere. Of those examined,
545 in the Eastern Hemisphere and 75 in the Western Hemisphere
were reported by the medi(3al officers td the American consuls as being
afflicted with one or more of the defects or dised,ses requiring exclusion;
and 5,214 of those examined in the Eastern Hemisphere and 1,664
of those examined in the Western Hemisphere were reported as being
afflicted with a disease or condition which was likely to affect their
ability to earn a living. Only 4 of the aliens who had been given a
preliminary medical examination in American consulates in foreign
countries and to whom visas had been issued, were certified upon
arrival at a United States port as being afflicted with a condition'
requiring deportation.
Division oj Scientific Research
A survey of health arid, health facilities in the United States on
a Nation-wide scale was made possible by an allocation from funds
provided in the Emergency Relief Appropriation Act of 1935 early
in the fiscal year. Five thousand persons were engaged in collecting
data in 90 cities and 23 rural counties. A study of chronic diseases,
disabling illness, physical impairments, and medical care among
865,000 families constituted one phase of the study. The compiled
data will provide information on such problems of national interest
as illness as a cause of unemployment, illness and medical care among
certain groups of the population, crippled children, accidents as a
cause of disability, and the relationship of illness and housing. Another phase was the survey of 214,000 families in order to study the
incidence and fatality of 13 communicable diseases, chiefly among
persons under 25 years of age.
Studies based on records of the financial status of 6,000 families
and 5-year records of height and weight of children in these families
were completed during the year, .and a* report of the findings was



196

REPORT OF THE SECRETARY OF THE TREASURY

published, as part of the Health and Depression Studies, in the
Public Health Reports. Analyses of recent Census Bureau statistics
on accidental deaths of persons under 15 years of age directed attention to the great number of deaths due to fatal accidents among
children—more than twice as many being reported as from the combined causes of measles, scarlet fever, and diphtheria.
A new field laboratory for malaria research was set up at Savannah,
Ga.,for the purpose of studying the bionomics of Anopheles mosquitoes.
The artificial means of malaria control which are effective in urban
communities are expensive. I t is hoped that studies at this laboratory
will result in the discovery of some method of control by natural and
self-perpetuating means which will be applicable to rural communities.
Epidemiological investigations combined with laboratory studies
have shown that there are several previously unrecognized infections
likely to be confused with poliomyelitis and that comparisons of
epidemics. and of the regular occurrence of poliomyelitis should be
based on the number of frank paralytic cases. A side result of the
epidemiological studies on poliomyelitis has been the discovery that
vaccines against this disease might give rise, in rare cases, to the disease
itself.
The largest quantity of Rocky Mountain spotted fever vaccine
ever produced in a 12-month period was prepared during the fiscal
year at the Rocky Mountain Laboratory, Hamilton, Mont. Vaccine
was distributed to physicians in 23 States, the bulk of it being used in
the northern Rocky Mountain States. The Civilian Conservation
Corps obtained a supply sufficient to vaccinate the personnel in 48
camps in the most dangerous endemic areas. During the season of
1936, virulent strains of B. pestis were isolated from ground squirrels
in two counties of Montana, and ecological studies relating to sylvatic
plague in the northwestern part of the State were made from a
temporary field laboratory near Dillon. Construction of a new building for rearing experimental animals and for quarters was begun in
'April.
Studies during the past year at the Leprosy Investigation Station,
Honolulu, have dealt almost entirely with investigations concerning
the relation of the state of nutrition to the susceptibility to and the
progress of leprosy in laboratory animals. Animal experimentation
has demonstrated that the incubation period can be shortened by
depleting rats of vitamin Bi before inoculating them with the virus
of rat leprosy.
Tests for the pellagra-preventive value of foodstuffs were continued. Results indicate that canned mackerel is a good source of the
pellagra-preventive factor, and that certain liver extracts may be of
considerable value in the treatment of pellagra.
At the National Institute of Health special attention has been given
to two virus infections of the central nervous system, lymphocytic
choriomeningitis and epidemic encephalitis (St. Louis type). I t has
been found that sodium aluminum sulphate and picric acid, or a combination of the two, when instilled into the nostrils of experimental
animals before the introduction of the virus of epidemic encephalitis
or poliomyelitis have the property of preventing the development of
infection. Assistance was given to health officers and to practicing
physicians in the diagnosis^of typhus and spotted fever. The total
number of' reported cases*of both typhus and spotted fever was



REPORT OF THE SECRETARY OF THE TREASURY

197

approximately the same as in the preceding year, with both diseases
being reported from a somewhat increased area. Chemistry
researches have been continued. Study of the 7-carbon sugar,
d-mannoheptulose, from the avocado pear, yielded results interesting
not only from the purely chemical point of view, but also on account
of practical applications. Experiments on rabbits have shown that
this sugar is metabolized, its tolerance being very high. The first
experimental evidence of the significance of glutathione in causing
fairly rapid tumor growth in mice was obtained. The work of the
Division of Zoology has been reorganized and new investigations have
been undertaken, the most important among these being studies of
trichinosis and oxyuriasis.
Research on cancer problems was also continued by the Office of
Cancer Investigations located at the Harvard Medical School.
Biophysical, biological, and cytological aspects of the problem have
been studied, mice being used for the experimental work. Particular
attention was given to the study of the carcinogenic properties of
certain substances, among others the polycyclic hydrocarbons. In
addition, simpler benzene derivatives are being tested in an attempt
to discover which compounds are responsible for causing the so-called
aniline cancer of the dye industry. Studies on the chemical treatment
of mouse tumor cells were also continued.
Skin hazards in the mam:Lfacturing processes involved in 14 factories
were studied, while special investigations of outbreaks of dermatitis
were made in five plants upon request of the management, and
recommendations submitted for prevention of further occurrences.
In cooperation with operators and workers, studies of various dust
exposures affecting the health of workers in the hatters' fur cutting
industry were completed during the year. A bulletin on AnthracoSilicosis among Hard Coal Miners was published. A study of
occupational environment and sickness, as shown by the records of
sick-benefit associations covering more than 500,000 persons, was
made through funds made available under the Emergency Relief
Appropriation Act of 1935. In addition, a study along similar lines
covering approximately 100,000 automobile workers is being carried
on under the guidance of the Public Health Service. The intensity of
ultraviolet radiation in daylight was studied in 14 cities and a manuscript prepared for publication. A program of establishing active
industrial hygiene units in State health departments was inaugurated.
Some 24 million workers will be given service in this field by health
agencies.
One of the results of the year's work on stream pollution was the
development and practical application of a method of treatment for
sludge bulking by using smaU amounts of chlorine.
A study begun in the preceding year to determine whether or not
there is a quantitative relation between fluoride concentration of the
common water supply and the development of chronic endemic dental
fluorosis Xmottled enamel) was completed and the findings were
published. Examinations for mottled enamel were made on 3,136
children during the year. .At present there are about 335 reported or
surveyed endemic areas distributed among 25 States.
A survey by means of questionnaires was made of all State and local
health departments in order to compile information as to milk-borne
disease outbreaks during the ypar; 16 outbreaks of milk-borne typhoid



198

REPORT OF THE SECRETARY? OF THE TREASURY

fever, 2 of paratyphoid, 2 of scarlet fever, and 9 of septic sore throat
were reported. Studies have been pursued looking to the discovery of
a nonpathogenic organism for use in testing the efficiency of pasteurization machinery and the testing of processes for the bacterial
treatment of dairy and inilk plant containers and equipment.
Public health work under the Social Security Act
Title VI of the Social Securitj^ Act of August 14, 1935, authorized
the appropriation of funds for public health work. In section 601 an
appropriation of $8,000,000 was authorized for each fiscal year, beginning with the fiscal year 1936, for the purpose of assisting States
(including Alaska, Hawaii, and the District of Columbia), counties,
health districts, and other political subdivisions of the States in establishing and maintaining adequate public health services, including
the training of personnel for State and local health work. Under
section 602 allotments are to be made to the States by the Surgeon
General, with the approval of the Secretary of the Treasury, on the
basis of population, special health problems, and financial needs; and
the moneys so paid to the States are to be expended solely in carrying
out the purposes specified in section 601 and in accordance with plans
presented by the health, authorities of the respective States and approved by the Surgeon General of the Public Health Service.
The Supplemental Appropriation Act of February 11, 1936, appropriated $3,333,000 for the rerriainder of the fiscal year 1936 for
grants to States for public health work under the provisions of sections 601 and 602 of the Social Security Act. By the close of the
year, the full amount had been allotted and $2,451,140.79 was paid
out, leaving a balance of $881,859.21 to be carried over into the fiscal
year 1937, as provided in the Social Security Act. The table following shows the amount allotted to each State, Alaska, Hawaii, and the
District of Columbia:
Allotments to States from fiends appropriated under the provisions of sec. 601 of the
Social Security Act, for the fiscal year 1936
. Amount^

state
Alabama
•
Alaska
.'
Arizona
Arkansas
.
California . .
Colorado
Connecticut
Delaware...
District of Columbia
Florida..... i
...
.
Georgia
Hawaii
Idaho
Illinois.
Indiana
. . .
Iowa
Kansas.
Kentucky
._._
Louisiana. .
Maine
.
Maryland .
.
_
Massachusetts...
Michigan
Minnesota
Missouri
Montana...




_.

Amount

state

$96,824 48
Nebraska.
..1 •
14.115 49
Nevada
29, 450 07 N e w H a m p s h i r e . . . ' ._•
N e w Jersey
_
_.
69,020 90
114, 510 48 N e w Mexico . .
41, 272 80 N e w Y o r k
N o r t h Carolina
.
37, 007 98
10, 405 68
North Dakota
20,795 14
Ohio.- .
Oklahoma
47,999 24
104, 462 56
Oregon
._
22,888 39 . P e n n s y l v a n i a
24,711 31
Rhode Island
-.
148, 709 64
South Carolina.
South Dakota
.
. . . .
81,696 88
70, 330 24
Tennessee
48, 690 90 Texas . . .
. . .
Utah..
_.
89,293 40
62,399 22
Vermont
..
...
.
24, 512 57 Virginia!
42.116 90
Washington .
94,821 30
W e s t Virginia
97,425 14
Wisconsin
75, 875 90
Wyoming..
• 81," 344 22
• 84,881 74
Total...
21,993 06

..

$40,067. 06
13,992.98
16,490.90
78, 555. 48
34, 303. 40
255,861. 98
115, 686. 64
26, 080. 39
128,179. 39
70,490.90
33,954. 24
179, 266. 32
25, 680. 48
69, 500. 65
26, 518. 65
97,-881. 73
156,917. 98
21,076. 48
19,072. 56
80,345. 24
38,866.98
62, 511. 66
66,580.40
17, 671.90
3, 333,000.00

REPORT OF THE SECRETARY OF THE TREASURY

199

In addition to the $8,000,000 authorized annually, section 603 of
the Social Security Act authorized an annual appropriation of
$2,000,000 for expenditure by the Public Health Service for investigation of disease and problems of sanitation and for expenses incident
thereto, including those of commissioned officers of the Public Health
Service engaged in such investigations or detailed to cooperate with
the health authorities of any State in carrying out the purposes specified in section 601. The Supplemental Appropriation Act of February 11, 1936, made available $375,000 for the last 5 months of the
fiscal year 1936, for carrying out the provisions of section 603. This
made it possible to broaden the technical advisory service to State and
local health agencies, which formerly applied in the field of general
public health administration and public health engineeringy to include
public health nursing, maternal and child hygiene, dental hygiene,
industrial hygiene, and venereal disease control. To facilitate these
activities, five groups of regional consultants have been placed in
strategic centers where they are readily accessible to. the States.
Two officers of the Service were assigned to States for special administrative duties. One was detaUedto serve as State health officer
of Colorado during the'year in which the regular health officer was
taking a course in public health administration; the other was sent to
North Dakota to assist the State health officer in the organization of
local health activities. A third officer has been continued on duty as
acting State health officer of the State of Washington.
A program designed to,establish active industrial hygiene units in
the health departments of various States was inaugurated by the Public
Health Service in cooperation with the Industrial Hygiene Committee
of the State and Provincial Health Authorities. This program has
been and still is carried on with the assistance of the Office of Industrial
Hygiene and Sanitation of the Division of Scientific Research. Prior
to the passage of the Social Security. Act, $37,788 was being spent by
States annually for industrial hygiene activities. The new budgets for
industrial hygiene in the 17 States which have established industrial
hygiene units in their departments of health call for an expenditure
of approximately $330,357, which amounts to $0,014 per worker in
these States. With the inauguration of these activities in State departments, public health services wUl be available to some 24 million
employees.
.
.
The cooperative work of the Division of Venereal Diseases with
State and local health departments was expanded under the provisions
of the Social Security Act. Officers were assigned in an advisory capacity to State health departments in five States during the last few
months of the year.
,.
Domestic Quarantine Division
Cooperation with States.-—Under the provisions of the Social Security
Act, the Public Health Service cooperated with State and local health
departments, both for the purpose of strengthening existing health
services and for the extension of such assistance into fields not hitherto
included. Advisory service to the States was also expanded to embrace many new fields. For a detailed discussion of the cooperation
with States in public health work under the Social Security Act, see
page 198.



200

, REPORT OF THE SECRETARY OF THE TREASURY

Public health engineering activities.—With the cooperation of the
State health agencies, certification of sources of drinking and culinary
water used on all classes of common carriers was continued. Of the
2,150 supplies listed by the carriers in 1935, 89 percent were inspected
and certified, and 3,948 certificates were issued. Of the supplies
listed, 46 were prohibited for use and 296 provisionally certified.
Of 1,743 vessels actively engaged in interstate traffic during the
calendar year 1935, 46.8 percent were inspected and certified as complying with the regulations of Government- drinking and culinary
systems. Temporary certificates were issued to 651 vessels pending
inspection, and nonapproved certificates were issued to 2 vessels.
During the year, 25 cases of typhoid were reported among members
of crews of all vessels under United States registry, including Government-owned vessels. Of this number only 4 cases occurred among
crews subject to the interstate quarantine regulations. For the third
consecutive year there have been no cases of typhoid among members
of crews of Great Lakes vessels.
Routine surveys and inspections to determine the efficiency of State
control of shellfish areas and establishments were continued. Advice
was rendered to State health departments and Federal agencies
relative to stream pollution study programs.
Assistance to Federal agencies.—Public Health Service cooperation
with the Interior Department in the sanitary supervision of national
parks was continued, but on ajarger scale than previously, owing to
the fact that attendance at the national parks is increasing rapidly
year by year.
As in previous years, the Service has given sanitary engineering
advice to the Bureau of Indian Affairs in connection with the Indian
reservations, and to the Lighthouse Service and ,the Coast Guard
Service in connection with the water supply and sewage disposal
problem on ships and at stations, particularly in the region of the
Great Lakes.
I t has also given engineering assistance to the Forestry Service,
Bureau of Public Roads, Bureau of Prisons, Bureau of Entomology,
Arnay Engineers, National Resources Committee, and the District
of Columbia. The engineering field force of the Service devoted 33.2
percent of its time to 17 other Federal agencies.
In response to a request from the Resettlement Administration for
a public health officer to render advisory assistance in matters of
health and sanitation, an officer of the regular corps has been assigned to this duty. In like manner an officer of the regular corps
has been assigned to the Social Security Board to assist in the administration of the section of the Social Security Act which has to do
with aid to the blind.
Works Progress Administration projects.—In cooperation with the
Works Progress Administration, the Public Health Service has continued its work of supervising community sanitation, malaria control
drainage, and mine sealing projects. Tlirough these activities, 344,250
potential sources of typhoid fever were eliminated during the year by
the construction of sanitary latrines in 38 States; and 100,000 acres
of malaria-mosquito breeding areas were drained in 16 States, through
the construction of 6,000 miles of ditches.
Supervision of projects for sealing abandoned bituminous coal
mines in 7 States in order to prevent formation and discharge of acid



REPORT OF THE SECRETARY OF THE TREASURY

201

therefrom was assumed by the Public Health Service during the fiscal
year. This is a continuation of the work begun under the Civil Works
Administration. I t is estimated that over 28,000,000 pounds of
sulphuric acid are discharged from bituminous mines, both active
and abandoned, in the 7 States each day, and that of this amount
approximately 17,500,000 pounds per day are from abandoned and
unworked mines. To date the work has eliminated the discharge of
about 2,000,000 pounds of acid per day.
At the request of the Works Progress Administration, technical
advice and general supervision of projects for plumbing inspection in
Federal buildings in New York: and Detroit were also furnished by
the Public Health Service.
Suppression oj interstate transmission oj disease.—Foremost in this
category are the rodent plague control measures on the island of Maui,
Territory of Hawaii, under the direction of a Service engineer, and
the plague control activities on the western slope of the Rocky
Mountains under the direction of a medical officer. The work on
the island of Maui has demonstrated some fundamental principles in
rodent eradication, at least in tropical climates. For practical public
health purposes the control of ra.ts on this island may be considered
as almost complete.
The findings of the plague investigation in the States on the Pacific
slope of the United States are not at all encouraging. Plague-infected
ground squirrels and plague-infected fleas from ground squirrels have
been found rather extensively in northern California, eastern Oregon,
eastern Idaho, and southwestern Utah. The infection is very definitely advancing eastward, having been found only a few miles from
Yellowstone Park. In addition to the rodent infection, two positive
cases of human plague occurred in California. Of the 15 species of
ground squirrels encountered duruig the year, plague infection was
found in 4. Nineteen species of fleas have been found on 14 species
of ground squirrels.
One of the most significant results of the plague investigation studies
has been the practical demonstra-tion of the u«e of fleas to determine
plague foci in the absence of demonstrable rodent infection. In several
instances the finding of infected fleas has preceded the discovery of
infected animals. This demonstration should greatly facilitate the
determination of plague infection foci.
Insofar as is known, there was during the fiscal year only one
instance of disease traceable to shellfish. This was a small isolated
epidemic of typhoid fever which was quickly brought under control.
On the whole, the control of shellfish sanitation through certification
of shippers engaged in interstate traffic has accomplished the desired
results.
Measures for preventing the interstate spread of human psittacosis
continued to be effective. No human case of this disease was reported. This is thought to be an outstanding example of the results that
may be accomplished through a coordinated and cooperative program
for disease control in which the States and the Federal Government
assume their respective shares of the responsibility.
Division oj Marine Hospitals and Reliej
The marine hospitals and other relief stations treated a daily average of 5,203 in-patients and 3,529 out-patients. There were 54,208
patients who received hospital treatment during the year as compared



202

REPORT OF THE SECRETARY OF THE TREASURY

to 49,018 last year. Hospital and out-patient care was furnished at
marine hospitals and other relief stations to 331,215 beneficiaries.
The number of hospital days was 102,573 more than last year.
The ratio of personnel to patients in the average civilian hospital
as reported by the American Hospital Association is 1.25 to 1, whereas
in the United States Marine Hospitals it is only 0.6 to 1. Because,
of an increase in the number of old-line beneficiaries and Employees'
Compensation Commission patients, together with a steady rise in
the cost of hospital supplies, it was necessary to request a deficiency
appropriation of $159,000.
^
In the face of increased prices for supplies of all sorts, the per diem
cost was kept down to $3.39, but this was accomplished only by
keeping personnel at the lowest practicable number and foregoing
replacement and repair of equipment in normal amount.
Division oj Venereal Diseases
The projected and retrospective studies of syphilis, in cooperation
with five of the leading syphilis clinics of the United States, included,
various subjects related to the protean manifestations of syphilis.
The cooperative investigations which were completed during the year
dealt with cardiovascular syphilis and asymptomatic central nervous
system syphilis. Laboratory studies relating particularly to the.
diagnosis, prevention, and public health control of syphilis and gonorrhea were carried on. at the venereal disease research laboratory in
New York City., The evaluation of serodiagnostic tests for. syphilis
included a determination of the efficiency.of serologic test performance,
in State, municipal, and private laboratories. In the study of untreated syphilis in the Negro, the confirmation of the original clinical
findings, which were published during, the year, is making rapid
progress through necropsy studies of the individuals included in this
investigation. Because of the restricted appropriation available for
the Public Health Service Chnic, Hot Springs National Park, Ark.,
it was necessary to limit the new cases admitted. The cooperative
work with State and local health departments was expanded under
the provisions of the Social Security Act. The educational and
informative program of the Public Health Service in venereal disease
control work was continued.
Division oj Mental Hygiene
The activities of the Division of Mental Hygiene included studies
of the nature and treatment of drug addiction and dissemination of
information upon the subject; studies of the abusive uses of narcoticdrugs; administrative functions incident to, the estabhshment and
operation of narcotic farms; supervision and furnishing of medical
and psychiatric services for the Federal penal and correctional
system; studies on the causes, prevalence, and means for the prevention and treatment of nervous and mental diseases; and cooperation
with other agencies interested in the various phases of work with
which the Division is concerned.
Special studies of the nature of drug addiction were continued
during the year at the Public Health Service Hospital (Narcotic
Farm) at Lexington, Ky. Investigations were continued on the
value of certain substitutes for morphine, studies being completed



REPORT OF THE SECRETARY OF THE TREASURY

203

on dihydroheterocodeine and dihydroisocodeine. Both of these substitutes were found to have addictive properties similar to morphine.
Studies on the value of rossium in the treatment of drug addiction
indicate that this substance has no demonstrable beneficial effect on
the abstinence syndrome.
Studies were also inaugurated during the year, in cooperation with
the Division of Comparative Psychobiology of Yale University,
dealing with the behavior responses of the chimpanzee to certain
habit-forming drugs. Several publications were issued during the
year on the various phases of drug addiction. .
Since the opening of the Narcotic Farm at Lexington, in May
1935, 1,240 patients have been admitted. Of these, 960 were admitted
during the fiscal year 1936 and 479 were discharged, leaving 761
patients in the institution at the close of the year. Of the voluntary
patients discharged as cured, none is known to have relapsed, but
some of those discharged as having received maximum benefit have
relapsed, as well as some of the prisoners released conditionally-or
paroled.
Proposals were solicited for the construction of the initial buildings
for the United States Narcotic Farm at Fort Worth, Tex. I t is
anticipated that the contract will be awarded sometime during the
early part of the ensuing fiscal year.
The Service continued the work of supervising and furnishing the
medical and psychiatric services for the Federal penal and correctional
system. Plans were inaugurated to furnish psychiatric diagnostic
services to Federal courts for a period of 1 year as a research project
to determine the wisdom and feasibility of establishing such services
as a permanent activity of the Pubhc Health Service. The first
unit was organized in Boston, Mass., in May 1936, and similar units
will be established at other points throughout the country.
Division of Personnel and Accounts
Personnel.—On July 1, 1936, the regular commissioned corps of
the Public Health Service consisted of 366 commissioned officers and
51 reserve officers on active duty. Other personnel of the Service
totaled 6,957, not including 4,769 collaborating and assistant collaborating epidemiologists who served at nominal compensation and
who were for the most part officers or employees of State and local
health organizations.
Financial statement.—Following is a statement of funds made
available to the Public Health Service and the expenditures therefrom for the fiscal year 1936:
Appropriation
Emergency Relief, Treasury, Public Health Service, 1935-37 (health
survey)
Emergency Relief, Federal Emergency Relief Administration (grants to
states).Texas Centennial
.__
,
Veterans' Administration, working fund
Department of Justice:
Prison camps.
Medical and hospital service, penal institutions
Total

Available

$2, 721, 750. 00

$2,412, 320. 56

238, 920. 00
32, 500. 00
1 313, 312. 50

238. 920. 23
24,344. 00
313, 312. 50

7, 600. 00
489, 600. 00

6, 306. 65
487,157. 00

3, 803, 682. 50

3, 482, 360. 94

1 This amount does not include $142,772.50 credited direct to appropriation.




Expended

204

REPORT OF THE SECRETARY OF THE TREASURY
Appropriated

Received
from other
sources

$304, 670
1, 728, 734
335, 000
1, 000, 000
25, 000
64, 000
450
6, 817, 460
322,150
253, 668

$1, 745
64, 733

Salaries, OflQce of Surgeon General
P a y . etc., commissioned ofl5cers
P a y of acting assistant surgeons
P a y of other employees
Freight, transportation, etc.
M a i n t e n a n c e , N a t i o n a l I n s t i t u t e of H e a l t h .
BooksP a y of personnel a n d m a i n t e n a n c e of hospitals
Q u a r a n t i n e service
_
P r e v e n t i n g t h e s p r e a d of epidemio.diseases
i.....
P r e v e n t i n g t h e ' s p r e a d of epidemic diseases, 1935-36
Field investigations of p u b l i c h e a l t h
Interstate quarantine service..._
....
s t u d i e s of r u r a l s a n i t a t i o n
C o n t r o l of biologic p r o d u c t s
Expenses:
Division of Venereal Diseases
,
D i v i s i o n of M e n t a l H y g i e n e
E d u c a t i o n a l exhibits
..
.
I n v e s t i g a t i o n of disease a n d p r o b l e m s of s a n i t a t i o n
Graiits to States 3
___._.
W o r k i n g capital f u n d .
P a y m e n t to officers a n d employees in foreign countries
d u e to a p p r e c i a t i o n of foreign c u r r e n c y
Total.

1,125, 582
775
6,485

240,
36,
25,
45,

000
535
000
000

"2,'282"

80, 000
650, 000
1,000
375, 000
3, 333, 000

5,920

49, 423

14, 636, 567

Total
available

Expended

$306,315
1, 793, 467
335, 000
1,000, 000
25, 000
64, 000
450
6, 943, 042
322, 925
253, •668
6,485
240, 000
38, 817
25, 000
45, 000

$306,114
1 1, 774, 658
307, 500^
2 995, 918.
24,711
62, 683
448:
6,915,182317,150'
243,5826, 469'
236, 059'
36, 956
24, 338;
44,112

80, 000
665, 920
1,000
375, 000
3, 333, 000
49, 423

77,781
648, 417
771
358, 575
2,451,141
39,377

46, 200

46, 200

42, 000^

1, 303,145

16, 939, 712

14,913,942;

1 I n c l u d e s $2,500 transferred to t h e Division of D i s b u r s e m e n t .
2 I n c l u d e s $1,500 transferred to t h e Division of D i s b u r s e m e n t .
3 Balance of $881,859 available in 1937.

The revenues derived from operations of the Public Health Service
during the year and covered into the Treasury as miscellaneous,
receipts were as follows:
Source
General fund receipts:
Q u a r a n t i n e charges
H o s p i t a l charges a n d expenses
Sale of subsistence
Sale of occupational t h e r a p y p r o d u c t s :
Sale of obsolete, c o n d e m n e d , a n d unserviceable e q u i p m e n t
Rents
R e i m b u r s e m e n t for G o v e r n m e n t p r o p e r t y lost or d a m a g e d
C o m m i s s i o n s on telephone p a y s t a t i o n s installed in service b u i l d i n g s
Sale of refuse, garbage, a n d other b y p r o d u c t s
Sale of livestock a n d livestock p r o d u c t s
O t h e r revenues
Total
T r u s t fund receipts:
Sale of effects of deceased p a t i e n t s
I n m a t e s ' funds
Grand t o t a l . .

:

$237, 847. 21
25,106.9211,843.09'
600.55
4, 868.14
3, 640. 50'
79. 901, 420.15
1, 050.83.
210. 88
1,159. oa
287, 827.17
2, 458. 47
25, 618.17

_
_

315, 903. 81

DIVISION OF RESEARCH AND STATISTICS

The Division of Research and Statistics in the Office of the Secretary
provides, for the use of the Secretary of the Treasury, information and
economic and financial analyses relating to Treasury operations in the
fields of taxation. Federal financing, and monetary problems. The
Director of Research and Statistics is responsible for the production,
analysis, and publication of statistics, and the conduct of economic
research in all branches of the Department.




REPORT OF THE SECRETARY OF THE TREASURY

205

Taxation
Estimates of Federal receipts from internal revenue taxes and customs duties are prepared for the Bureau of the Budget for use in all
regular and interim budget reports. In connection with proposed
revenue legislation, estimates are prepared of probable revenue under
various rate schedules. Economic analyses of the Federal tax structure are made covering both immediate and contemplated legislative
needs, and dealing with the efl^ectiveness and equitableness of the
Federal tax system as it exists and with proposed changes...in' the
system. Studies are undertaken pertaining to the extent and
character of conflicting and overlapping taxation by Federal, State,
and local Governments, and comparative studies are made of selected
taxes in foreign countries and of certain foreign tax systems as a whole.
Federal jinancing
The Division carries on research and security analysis in connection
with problems relating to Federal financing. Current and prospective
conditions in the money and capital markets are studied in relation to
both longer-term programs of Federal financing and to the types of
securities, the coupon rates, and maturities to be employed in particular financing operations. The investment portfolios of Government
trust funds and of governmental corporations and credit agencies are
analyzed for the purpose of recommending changes which may appear
advantageous. Studies are made of existing laws and of legislative
proposals in their relation to Treasury financing and Federal fiscal
policies.
Monetary problems
For the use of the Secretary in connection with stabilization fund
operations and the acts pertaining to the purchase of gold and silver,
analyses are made of international movements of gold and silver, the
'flow of capital funds into and out of the United States, the position of
the dollar in relation to foreign currencies, the monetary policies of
foreign countries, exchange and trade restrictions adopted abroad, and
similar problems affecting Treasury policy and operations. Under
Executive order of January 15, 1934, and Treasury Regulations of
November 12, 1934, detailed reports covering security and foreign
exchange transactions and changes in bank balances between the
United States and foreign countries are made weekly by banks, bankers, brokers, and dealers throughout the country who are engaged in
such operations. These reports provide data from which are prepared
current analyses and interpretations of international capital movements.
Actuarial analysis
Analyses and reports are made on actuarial matters pertaining to
Treasury operations, including reports on the actuarial status of the
old-age reserve account established under the Social Security Act and
of other pension and trust funds for which the Treasury is responsible.
In connection with retirement legislation, estimates are made of
probable cost of existing and proposed plans. The Government
Actuary is a member of the Board of Actuaries, established under the
Civil Service Retirement Act, and serves in a consulting capacity on
actuarial matters for governmental agencies outside the Treasury
Department.



206

REPORT OF THE. SECRETARY OF THE TREASURY
DIVISION OF,SAVINGS BONDS

The Division of Savings Bonds in the Office of the Fiscal Assistant
Secretary of the Treasury and the position of Chief of the Division
were created by an order of the Secretary dated March 4, 1936,
under which the Chief of the Division is responsible to the Fiscal
Assistant Secretary for the promotion of the- sale of United States
savings bonds. This order also created an Information Section of
this Division, the function of which is to answer inquiries and disseminate information to promote the sale of savings bonds. The
creation of this Division consolidated under a single head the saJes
promotion work which had previously been performed by several
special assistants to the Secretary and the Under Secretary.
One of the important activities of this Division is the placing,
through advertising agencies, of full page advertisements in publications with national circulation, the advertisements being keyed in
such a manner as to enable the Division to measure the results of
each advertisement. The Division also distributes booklets, application forms, circulars, and other literature, such as posters and signs
for display in post offices and banks, on mail trucks, etc. Until recently most of this distribution was handled,by the companies printing the literature, but it was found possible to effect a very considerable saving in cost by uiidertaldng this work in the Division itself,
and accordingly a maiUng unit has been organized for this purpose.
A statistical section has recently been set up in the Division and
is engaged in compiling statistics of various kinds in connection with
the sale of United States savings bonds. Previously such statistics
as were available were obtained too late,to be of material value as a
guide for the advertising and other activities of the Division.
SECRET SERVICE DIVISION

During the fiscal year 1936, 3,153 persons were arrested by agents'
of the Service, or by their direction, on cjiarges involving, counterfeiting of the obligations and coins of the United States and forgery,
as well as miscellaneous offenses against the statutes relating to the
Treasury Department. Of this number, 937 were note counterfeiters and note passers, 28 were note raisers and passers.of altered
currencjT^, 651 were coin counterfeiters and coin passers, 880 were check
forgers, 5 were apprehended fpr negotiating stolen or forged bonds,
29 for presenting false claims against the Government, 36 for maldng
and possessing counterfeit strip stamps, 8 for violating the Gold
Reserve Act of .1934, 25 for violating the provisions of the Farm Loan
Acb, 34 for conspiracy, 6 for counterfeiting Government checks, and
61 for miscellaneous offenses.
Thirty-two counterfeit note issues were discovered, all photomechanical productions and, for the most part, deceptive and warranting distribution of descriptive warning circulars. In addition,
43 counterfeits of varying types of workmanship were discovered in
different sections of the country. These notes, some hand-drawn,
others photographic or transfer specimens of poor workmanship, were
generally crude and'were quickly suppressed.
Counterfeit notes aggregating $1,030,053.23 were captured or
seized during the year by operatives of the Service. This total includes altered currency aggregating $8,655, of which $5,940 was made
and passed in foreign countries, and fractional currency amounting



REPORT OF THE SECRETARY OF THE TREASURY

207

to $199.73. Counterfeit coins to the amount of $121,786.61 were
confiscated by agents in connection with raids and subsequent
arrests, and $497.30 in counterfeit foreign notes and coins were also
seized.
In connection with arrests and investigations, operatives captured
or seized 236 metal plates, 192 film and glass negatives for printing
counterfeit obligations and securities, 29K steel dies, 118.)^ metal
molds, 482 plaster molds, Sji plaster molds for counterfeiting coins of
foreign countries, and a large quantity of miscellaneous materials
and counterfeiting paraphernalia.
Of the counterfeit notes captured during the year, $292,850 were
used in evidence against the makers and passers, and $980 in altered
notes were likewise used in the prosecution of note raisers and passers
of altered currency. Counterfeit coins totaling $54,251.24 were also
used in evidence in cases of this character.
Of the cases brought to trial, 1;633 persons were convicted and
sentenced, 91 were acquitted, 745 are awaiting the action of the courts,
while others were variously disposed of, some being committed to
insane asylums and others delivered to the military and police authorities. Of the total number arrested, 453 persons were held for inves.tigation and subsequently dismissed.
Agpnts during the year conducted, investigations in 4,729 check
cases, 74 bond cases, and 4 war savings stamp cases. In check investigations, $7,127.30 was received in restitution and transmitted to
the Treasu^ry Department.
There were referred to the Service for investigation 18 cases from
the Veterans' Administration involving violation of the World War
Adjusted Compensation Act; 37 cases from the Farm Credit Administration involving violation of the Farm Loan Act; and 444 cases
involving offenses against the Gold Reserve Act of 1934. Inquiries
in 7 cases were received from the Procurement Division for information concerning prospective bidders on Government supplies
and 44 similar inquiries were received from the Works Progress
Administration.
TREASURER OF THE UNITED STATES

Public moneys are received and disbursed through the accounts of
the Treasurer of the United States. Deposit accounts are carried
with designated Government depositaries and the Treasury at Washington. Credit accounts with disbursing officers of the Government
are maintained on the books of the Treasurer. Funds appropriated
by Congress for the use of the various departments and establishments of the Government are advanced to disbursing officers as required through credits to their accounts with the Treasurer, and disbursements are made by checks drawn by disbursing officers on their
accounts with the Treasurer.
The following table presents a comparison of total receipts, exclusive of postal revenues, and total expenditures of the Government
in the fiscal years 1935 and 1936. The figures in this table, and
throughout the administrative report of the Treasurer (pp. 207 to 212,
inclusive), are on the basis of daily Treasury statements (revised).
(For a description of bases used in the tables in this report and of
accounts through which Treasury transactions are effected, see
pp. 311 and 312.)



208

REPORT OF THE SECRETARY OF THE TREASURY
1936

Receipts, exclusive of postal r e v e n u e s :
General a n d special accounts
$3, 800,972,151.02 $4,114,714, 278. 51
T r u s t accounts, etc.:
232,112,359: 51
237, 358, 693. 94
Trust accounts.
I n c r e m e n t resulting from reduction in t h e
1, 722,751.97
780, 443. 56
weight of t h e gold, dollar
175,789, 416. 49
140, 111, 441. 47
Seigniorage i
18, 949,421. 44
U n e m p l o y m e n t t r u s t fund
Total.
Expenditures:
T r a n s a c t i o n s in checking accounts of Governm e n t a l agencies (net)
C h a r g e a b l e against i n c r e m e n t on gold:
M e l t i n g losses, etc
P a y m e n t s to Federal Reserve b a n k s
(sec. 13b, F e d e r a l . Reserve Act, as
amended)
F o r r e t i r e m e n t of national b a n k notes
U n e m p l o y m e n t t r u s t fund
P u b l i c d e b t r e t i r e m e n t s chargeable against
o r d i n a r y rer-f-ipts
All other e x p e n d i t u r e s . . .
Total.
Excess of e x p e n d i t u r e s over receipts, including
t r u s t accounts, etc

Increase ( + ) or
decrease (—)

+$313,742,127.49
-6,246,334.43
-942,308. 41
+ 3 5 , 677,974.02
+18,949,421.44

4,180,165,038. 40

4, 542, 346,918. 61

+362,180,880.11

-437,074,669. 68

85, 530, 574.56

+522, 605, 244. 24

675,121. 93

791,845. 87

-+116, 723. 94

20,931, 857. 34
91, 415, 6.50. 00

5, 614, 453. 63
397, 422,480. 00
18,909,000. 00

-15,317,403.71
+306, OOn, 830.00
+ 1 8 , 909, 000. 00

573, 567, 250. 00
6, 984, 397, 309. 27

403, 342, 250. 00
-170,215,000.00
8,664, 608, 339. 38 +1,680,211,030.11

7, 233,902, 518.86

9, 576, 218, 943. 44 + 2 , 342,316, 424. 58

3,053, 737, 480. 46

5,033,873,024.93 +1,980,135, 644.47

> R e p r e s e n t s t h e seigniorage resulting from t h e issuance of silver certificates equal to t h e cost of t h e silver
acquired u n d e r t h e Silver P u r c h a s e Act of 1934 a n d t h e , a m o u n t r e t u r n e d for t h e silver received under, t h e
PreMdent's proclamation-dated'^Aug. 9, 1934'.
J Excess of credits. R e p r e s e n t s transfers aggregating $333,245,377.93 of balances in checking accounts
of special agencies of t h e G o v e r n m e n t as of M a y 31, 1935, a n d n e t transactions since t h a t d a t e to J u n e 30,
1935, of $103,829,291.75.

Receipts and expenditures on account of the principal of the
public debt during the fiscal year 1936 were as follows:
Class

Receipts

Expenditures

Public debt
increase ( + ) or
decrease (—)

$3, 556,159,000. 00 $3, 283,135,000.00 +$273,024,000.00
T r e a s u r y bills
4,158,400.00
-4,158,400.00
Certificates of i n d e b t e d n e s s .
Certificates of i n d e b t e d n e s s (adjusted service
383,300,000.00
-28,700,000.00
certificate fund series)
_.:.
354, 600,000.00
Certificates of i n d e b t e d n e s s
(unemployment
18,161,000.00
+18,909,000.00
37,070,000. 00
t r u s t fund series)
2,017,122,850. 00 +1,368,660, 700. 00
Treasury notes.
T r e a s u r y notes (civil service r e t i r e m e n t fund 3, 385, 783, 550.00
64, 200,000.00
+27,000,000.00
series)
91, 200,000. 00
T r e a s u r y notes (foreign service r e t i r e m e n t fund
440,000.00
+191,000.00
series)
'.
631,000.00
T r e a s u r y notes ( C a n a l Zone r e t i r e m e n t fund
2, 378, 000.00
1,878, 000.00
+500, 000.00
series)
65,000, 000. 00
30,000, 000. 00
T r e a s u r y notes (Postal Savings S y s t e m s e r i e s ) . _ .
- 2 5 , 000, 000.00
1, 500.00 + 4 , 484, 359, 800. 00
4, 484, 361, 300.00
Treasury bonds
_.
_
11, 252, 714. 75
265, 439, 358. 50
U n i t e d States savings b o n d s . .
+254,186, 643. 75
957,491, 850. 00
1, 668, 752,150. 00
+711, 260, 300.00
Adjusted service b o n d s . .
- 1 6 , 010. 00
W a r savings securities
•
16, 010.00
- 6 0 , 618.00
T r e a s u r y savings securities
60, 618. 00
101, 395, 400. 00
-101,395, 400. 00
First Liberty bonds
169, 000. 00
- 1 6 9 , 000. 00
Second L i b e r t y b o n d s
253, 300.00
- 2 5 3 , 300.00
Third Liberty bonds
1, 276, 754, 850. 00 -1,276,754, 850. 00
Fourth Liberty bonds
_
47, 850. 00
- 4 7 , 850. 00
Victory n o t e s _ .
1, 798, 160. 00
+ 1 8 , 945, 840. 00
20, 744,000. 00
P o s t a l savings b o n d s
- 5 9 6 , 705, 650.00
596, 705, 650. 00
Consols of 1930
74, 687, 260.00
- 7 4 , 687, 260.00
P a n a m a Canal bonds
4, 687. 80
Other debt items
.-.•...
- 4 , 687. 80
Deposits for, a n d r e t i r e m e n t of. national b a n k
428,476, 842. 50
- 2 0 4 , 866, 727. 50
223, 610,115. 00
notes a n d Federal Reserve b a n k notes
Total.




:.

14,120,728,473.50

9,276,510,943.05

+4,844,217,530.45

REPORT OF THE SECRETARY OF THE TREASURY

209

Public debt retirements chargeable against ordinary receipts,
included in the above public debt expenditures, were as follows:
Cumulative sinking fund
Forfeitures, gifts, etc
Total

$403, 340, 750
1,500
403,342,250

.°.

The number of pieces of public debt principal obligations examined,
verified, and redeemed during the year was 21,039,689 as compared
with 4,105,416 for the previous fiscal year.
Checks in payment of interest on the registered obligations of the
United States verified and paid numbered 977,335, and amounted to
$76,460,785.82. Interest coupons of Government obligations examined, verified, and paid numbered 11,982,427 and amounted to
$643,230,986.81.
The gold holdings of the Treasury as of June 30, 1935 and 1936,
valued at $35 an ounce, are shown in the following table:
Account

June 30, 1935

June 30, 1936

Increase (+) or
decrease (—)

Reserve against gold certificates outstanding... $787, 646, 039. 00 $2, 916, 234, 579. 00 +$2,128, 588, 540. 00
Gold certificate fund—Board of Governors,
Federal Reserve System
5, 509, 710,115. 48 5, 291, 078, 912. 60
-218, 631, 202. 88
Redemption fund. Federal Reserve notes
22,879,855. 28
12, 948, 478. 00
- 9 , 931, 377. 28
Reserve against United States notes and Treasury notes of 1890
156, 039,430. 93
156, 039, 430. 93
1,800, 000, 000. 00 1,800, 000, 000. 00
Exchange stabilization fund
839, 368, 051. 28
Gold in General Fund
,.
432,115, 277. 71
-407, 252, 773. 57
Total-

9,115, 643, 491. 97 10, 608, 416, 678. 24

+1, 492, 773,186. 27

The increase in the gold holdings was made up as follows:
Purchases by mints and assay offices on account of imports, etc., (valued at $35 an
ounce).
.-.$1,490,866,710.17
Received under the order of the Secretary of the Treasury of Dec. 28, 1933 (valued at
$20.67+ an ounce)...:
1,126,032.54
Increment resulting from reduction in the weight of the gold dollar...
._
780,443. 66
Total...

1,492,773,186.27

Paper currency of each class issued and redeemed during the fiscal
year 1936 and the amounts outstanding, including Treasury and
Federal Reserve bank holdings, on June 30, 1935 and 1936, were as
follows:
Outstanding
J u n e 30, 1935

Class

Gold certificates.
Silver certificates
U n i t e d States notes
..
T r e a s u r y notes of 1890
Federal R e s e r v e notes
F e d e r a l R e s e r v e b a n k notes
N a t i o n a l b a n k notes
Total...

Issued

$787, 772,849
815, 764,887
346, 681, 016
1,183, 350
3,492, 853, 620
84, 354, 373
773,116, 745

$2,800, 000, 000
1, 220, 276, 000
. 236, 884, 000

6, 301, 726, 840

Redeemed

Outstanding
J u n e 30, 1936

50, 000

$670, 932, 770
896, 402,400
236, 884, 000
5,502
1, 511,459, 060
31, 054, 363
400, 947, 080

$2, 916,840, 079
1,139, 638, 487
346, 681, 016
1,177, 848
4, 296, 309, 660
53, 300, 010
372, 219, 665

6, 572,125, 000

3,747,685,176

9,126,166, 665

2, 314, 915, 000

The paper currency held by Treasury offices and Federal Reserve
banks on June 30, 1936, was as follows:

93790—37-

-15




210

EEPORT OF THE SECRETARY OF THE TREASURY
H e l d in Treasu r y offices a n d
b y Federal
Reserve-banks
a n d agents in
c u s t o d y for t h e
Treasurer

Glass

Gold certificates
Silver certificates
United States n o t e s . .
i
T r e a s u r y notes of 1890
F e d e r a l Reserve notes
F e d e r a l R e s e r v e - b a n k notes
N a t i o n a l b a n k notes
..
Total--

„

.
•

. . . .

Held b y Federal R e s e r v e
banks

Total

$605, 500
5,853,315
2, 618, 582
1,226
13,856, 785
821, 631
1 2,988,092

$2,815,463, 500
179,193,353
65,872, 253
280, 237, 000
524,850
3,126, 320

$2,816, 069, 000
185, 046, 668
68, 490,835
1,226
294, 093, 785
1, 346,481
6,114,412

26, 745,131

3, 344,417, 276

3, 371,162,407

1 Includes $497,850 held by the Comptroller of the Currency for destruction.

The amount of United States paper currency shipped during the
fiscal year 1936 from the Treasury in Washington to Treasury offices.
Federal Reserve banks and branches, and others amounted to
$4,207,606,188, an increase of $3,067,700,730 as compared with the
previous year. Of this increase, $2,815,455,600 was on account of the
shipment of gold certificates, series of 1934, to the Federal Reserve
banks, which certificates are held by the Federal Reserve banks and
Federal Reserve agents.
During the year the Treasurer's office directed shipments of current
silver and minor coins between the United States Treasury, the United
States mints, and the Federal Reserve banks and branches for use in
public disbursements, etc., as follows:

Kind

Silver:
S t a n d a r d dollars
Half d o l l a r s . . .
Q u a r t e r dollars
Dimes
Minor:
Nickels
Cents

Shipments
from T r e a s u r y
t o F e d e r a l Reserve b a n k s
and branches

$28,702,695. 00
8,130,500.00
10,397, 200. 00
7, 643,900.00

.

Total

Shipments
from m i n t s t o
Treasury and
Federal Reserve b a n k s
and branches

$11«, 000

5,222,499.90
2,789, 869.00

110,000

62.886, 663.90

Shipments
between
Federal
Reserve
banks and
branches

$1,495,000
1,310,000
50,000
327,000

3,182,000

Shipments and transfers of gold coin and bullion and of uncurrent
silver and minor coins to the mints from the Treasury and the Federal
Reserve banks and branches were authorized in the amounts of
$512,926,672.03 and $9,046,103.74, respectively.
The proceeds of currency counted into the Treasurer's cash by the
Currency Redemption Division (a consolidation of the National Bank
Redemption Agency and the Redemption Division) during the year
amounted to $488,901,677.63, of which $373,003,838.50 was in national
bank notes, $30,595,854 in Federal Reserve bank notes, $65,431,335
in Federal Reserve notes, and $19,870,650.13 in United States
currency.
Canceled Federal Reserve notes, amounting to $1,316,264,710,
were received from Federal Reserve banks and branches for credit of
Federal Reserve agents during the year.



211

EEPORT OF THE SECRETARY OF THE TREASURY

Public nioneys on deposit in designated Government depositaries
on June 30, 1936, exclusive of items in transit on that date, amounted
to $1,899,259,466.63 and were distributed as follows:
Class of depositary

To credit of
Treasurer

To credit of
other Government officers

$690,103,434.19
Federal Reserve banks and branches
Special depositary banks (account of sales of Gov1,150,331,350.43
ernment, securities)
10, 669, 664. 61 $15,936,356.61
General depositary banks
.-..
27, 381,394.83
Limited depositary banks^
969,269.92
1,900,919.69
Foreign depositary banks.
_.
2, 067,086.36
Treasury of the Philippine Islands
1.
1,854,040,795.50

Total.

45, 218,671.13

Total

$690,103,434.19
1,160,331,350.43
26,606,021.22
' 27,381,394.83
' 2,870,179.61
2,067,086.35
1,899,259,466.63

Securities held in custody by the Treasurer on June 30, 1936,
amounted to $19,804,437,592, an increase of $320,271,448 over the
previous year. The following table shows the amounts of securities
held in custody on June 30, 1935 and 1936, classified according to
purpose for which held:
Purpose for which held
To secure national bank note circulation
. To secure deposits of public moneys in depositary banks.
To secure postal savings funds
For special trust accounts
For'District of Colurhbia teachers' retirement fund
For longshoremen's and harbor workers' fund
For District of Columbia workmen's compensation fund.
Total

June 30,1936

June 30,1936

$143, 743,910
50,646,700
408, 308,238
18,875,310,556
6,022,390
114,350
21,000

$600,000
55, 618,025
206,117,048
19, 635,3'()3,^97d
6, 663,490
124,050
21,000

19,484,166,144

19,804,437,592

The checks issued by the Treasurer of the United States in payment
of interest on the registered obligations of governmental agencies and
insulargovernmentsnumbered 54,977, and amounted to $13,591,635.30.
Interest coupons of obligations of governmental agencies and insular governments paid numbered 8,086,156 and amounted to
$124,077,615.47.
Funds were advanced to United States disbursing officers by.
accountable warrants issued in an aggregate amount of $9,757,443,701.81. Warrants aggregating $10,905,690,472.97 were also issued
covering public debt principal and interest payments by the Treasurer.
Treasurer's checks aggregating $78,972,167.43 were issued on settlement warrants in payment of claims settled by the Comptroller
General.
Checks drawn on the Treasurer of the United States by Government disbursing officers and agencies and paid during the year numbered 128,315,503. Of this number 62,092,004 were for work relief
payments and were paid by the Federal Reserve banks acting as agents
for the Treasurer. The total number of checks paid during the fiscal
year 1935 was 71,340,442, or 56,975,061 less than the number paid
during the current fiscal year. The checks issued under authority of
the Adjusted Compensation Payment Act and paid during the fiscal
year numbered 4,056,858.




212

REPORT OF THE SECRETARY OF THE TREASURY

The balances to the credit of disbursing officers and agencies on
June 30, 1936, amounted to $2,003,119,811.08 in 5,781 accounts, as
compared with the balances of $1,277,067,364.17 in 4,690 accounts on
June 30, 1935, an increase of $726,052,446.91 in balances and an increase of 1,091 in the number of accounts.
Drafts in 69 different kinds of foreign currencies, aggregating 2,628
in number, were purchased during the year by the Treasurer of the
United States for the Comptroller General and for other departments
and bureaus of the Government at a total cost of $200,411.53.
Personal checks, drafts, and postal and express money orders, aggregating 1,785,815 items and amounting to $53,696,507.04, were deposited with the Treasurer of the United States for collection by Gov^
ernment officers during the fiscal year 1936.
WAR FINANCE CORPORATION
(In liquidation)

Under authority of the act approved March 1, 1929, the liquidation
of the assets of the War Finance Corporation and the winding up of
its affairs were continued during the year.
Only $10,000 of the Corporation's original capital stock of $500,.000,000 is outstanding, $499,990,000 of capital stock having been
retired at par. The Corporation made two payments into the Treasury of'$50,000 and $40,000, on March 13, 1936, and June 17, 1936,
respectively, increasing to $64,821,271.70 the amount paid into the
Treasury on account of earnings.
The total amount of advances made by the Corporation, from> its
creation, not including such part of new applications as represented
proceeds used to retire other advances, aggregated $690,431,100, of
which amount $688,606,559 has been repaid. The total receipts
during the year amounted to $2,509.21, and the expenditures, excluding $90,000 paid into the Treasury, amounted to $609.86.
The remaining assets still carried on the books of the Corporation
as of Jime 30, 1936, amounted to $40,745.86, consisting of cash of
$34,119.50, furniture and .fixtures of $1, and agricultural and livestock loans (including expense advances of $372.22) of $6,625.36.







EXHIBITS

213




THE PUBLIC DEBT
Public issues of Treasury bonds, Treasury notes, and Treasury bills
Exhibit 1
^

Offering of lYs percent Treasury notes of series B-1939
On July 8, 1935, Secretary of the Treasury Morgenthau offered for subscription
V/s percent Treasury notes of series B-1939, as described in the following circular:
[Department Circular No. 545. Public Debt]
TREASURY DEPARTMENT,

Washington, July 8, 1935.
The Secretary of the Treasury, pursuant to the authority of the Second Liberty
Bond Act, approved September 24, 1917, as amended, invites subscriptions,
at par and accrued interest, from the people of the United States, for 1%, percent
notes of the United States, designated Treasury notes of series B-1939. The
amount of the offering is $500,000,000, or thereabouts.
DESCRIPTION OF NOTES

The notes will be dated July 15, 1935,.and will bear interest from that date at
the rate of iy% percent per annum, payable on a semiannual basis on December
15, 1935, and thereafter on June 15 and December 15 in each year. They will
mature December 15, 1939, and will not be subject to call for redemption prior to
maturity.
The notes shall be exempt, both as to principal and interest, from all taxation
(except estate or inheritance taxes 0 now or hereafter imposed by the United
States, any State, or any of the possessions of the United States, or by any local
taxing authority.
The notes 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 notes.
The notes will be acceptable to secure deposits of public moneys, but will not
bear the circulation privilege.
Bearer notes with interest coupons attached will be issued in denominations of
$100, $500, $1,000, $5,000, $10,000, and $100,000. The notes will not be issued
in registered form.
SUBSCRIPTION AND ALLOTMENT

Subscriptions will be received at the Federal Reserve banks and branches and
at the Treasury Department, Washington. Banking institutions generally will
handle applications for subscribers, but only the Federal Reserve banks and the
Treasury Department are authorized to act as official agencies. Applications
from incorporated banks and trust companies for their own account will be
received without deposit but will be restricted in each case to an amount not
exceeding one-half of the combined capital and surplus of the subscribing bank or
trust company. Applications from all others must be accompanied, if for more
than $5,000, by payment of $5,000 or 5 percent of the amount of notes applied for,
whichever is the greater; and, if for $5,000 or less, by payment in full. The
Secretary of the Treasury reserves the right to close the books as to any or all
subscriptions or classes of subscriptions at any time without notice.
The Secretary of the Treasury reserves the right to reject any subscription, in
whole or in part, to allot less than the amount of notes applied for, to make allotments in full upon applications for smaller amounts and to make reduced allot1 Similarly, the exemEi\tion does not apply to the gift tax, see Treasury Decision 4560.




215

216

REPORT OF THE SECRETARY OF THE TREASURY

ments upon, or to reject, applications for larger amounts, to make classified allotments or to make allotments upon a graduated scale, or to adopt any or all of said
methods or such other methods of allotment and classification of allotments as
shall be deemed by him to be in the public interest; and his action in any or all of
these respects shall be final. Subject to these reservations, subscriptions for
amounts up to and including $5,000 will be given preferred allotment, and subscriptions for amounts over $5,000 will be allotted on an equal percentage basis,
but not less than the maximum preferred allotment. Allotment notices will be
sent out promptly upon allotment, and the basis of the allotment will be publicly
announced.
PAYMENT

Paj^ment at par and accrued interest, if smj, for notes allotted hereunder mu^t
be made or completed on or before July 15, 1935, or on later allotment. In
every case where pa3^ment is not so completed, the payment with application up
to 5 percent of the amount of notes applied for shall, upon declaration made by
the Secretary of the Treasury in his discretion, be forfeited to the United States.
Any qualified depositary will be permitted to make payment by credit for notes
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.
GENERAL

PROVISIONS

As fiscal agents of the United States, Federal Reserve banks are authorized and
requested to receive subscriptions, 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, to issue allotment notices, to receive payment for notes
allotted, to make delivery of notes on full-paid subscriptions allotted, and they
may issue interim receipts pending delivery of the definitive notes
The Secretary of the Treasury may at any time, or from time to time, prescribe
supplemental or amendatory rules and regulations governing the offering, which
will be communicated promptly to the Federal .Reserve banks.
HENRY MORGENTHAU,

Jr.,

Secretary of the Treasury,
Exhibit 2
Subscriptions and allotments. Treasury notes of series. B-1939 {from press releases,
July 9, 11, and IS, 1935)
On July 9, 1935, Secretary of the Treasury Morgenthau announced that the
subscription books for the offering of 1^ percent Treasury notes of series B-1939
closed at the close of business, July 8, 1935.
Reports received from the Federal Reserve banks show that subscriptions
aggregated $2,970,169,700. Subscriptions in amounts up to and including
$5,000 were allotted in full, and those in amounts over $5,000 were allotted 17
percent, but not less than $5,000 oh any one subscription.
Subscriptions and allotments were divided among the several Federal Reserve
districts and the Treasury as follows:
Federal Reserve district

Total subscriptions
received

Boston
N e w York
Philadelphia _ _ _ _
Cleveland
Richmond.Atlanffl
Chicago _- - St. Louis

$230, 368,800
1,603,005,500
142,897,100
154,429, 700
68, 912, 500
81, 439,800"
303,853, 200
72, 061, 500 •




Total subscriptions
allotted
$40,294,300
275,007,400
24,925,700
27,666,000
12,642,500
14,710,300
57,032,100
14, 225, .800

Total subscriptions
allotted

Federal Reserve district

Total subscriptions
received

Minneapolis
Kansas City
Dallas
San Francisco
Treasury

$30,866,200
64,103,300
50, 641, 600
177,065, 500
525,000

$6, 335,000
10,840,200
11, 587, 200
30,876, 600
90,000

2,970,169, 700

626, 233,000

Total...

REPORT OF THE SECRETARY OF THE TREASURY

217

Exhibit 3
Inviting tenders for ;?% percent Treasury bonds of 1955-60 {additional)
On July 15, 1935, Secretary of the Treasury Morgenthau invited tenders for
a second additional issue of 2J^ percent Treasury bonds of 1955-60, as described
in the following circular:
[Department Circular No. 546. Public Debt]
TREASURY DEPARTMENT,

Washington, July 15, 1935.
The Secretary of the Treasury, pursuant to the authority of the Second Liberty
Bond Act, approved September 24, 1917, as amended, offers to the people of
the United States $100,000,000, or thereabouts, 2% percent Treasury bonds of
1955-60, and invites tenders therefor at not less than par and accrued interest
from March 15, 1935, to July 22, 1935.
DESCRIPTION OF BONDS

The bonds now offered will be an addition to and will form a part of the series
of 2% percent Treasury bonds of 1955-60 issued pursuant to Department Circulars No. 531, dated March 4, 1935, and No. 536, dated April 22, 1935, will be
freely interchangeable therewith, are identical in all respects therewith, and are
described in the following quotation from Department Circular No. 531:
''The bonds will be dated March 15, 1935, and will bear interest from that date
at the rate of 2% percent per annum, payable semiannually, on September 15,
1935, and thereafter on March 15 and September 15 in each year until the
principal amount becomes payable. They will mature March 15, 1960, but
may be redeemed at the option of the United States on and after March 15,
1955, in whole or in part, at par and accrued interest, on any interest day or
days, on 4 months' notice of redemption given in such manner as the Secretary of the Treasury shall prescribe. In case of partial redemption the bonds
to be redeemed will be determined by such method as may be prescribed
by the Secretary of the Treasury. From the date of redemption designated in
any such notice, interest on the bonds called for redemption shall cease.
''The bonds shall be exempt, both as to principal and interest, from all taxation
now or hereafter imposed by the United States, any State, or any of the possessions
of the United States, or by any local taxing authority, except (a) estate or inheritance taxes,1 and (b) graduated additional income taxes, commonly known as
surtaxes, and excess-profits and war-profits taxes, now or hereafter imposed by
the United States, upon the income or profits of individuals, partnerships, associations, or corporations. The interest on an amount of bonds authorized by
the Second Liberty Bond Act, approved September 24, 1917, as amended j the
principal of which does not exceed in the aggregate $5,000, owned by any individual, partnership, association, or corporation, shall be exempt from the taxes
provided for in clause (b) above.
"The bonds will be acceptable to secure deposits of public moneys, and will
bear the circulation privilege only to the extent provided in the act approved July
22, 1932, as amended. They will not be entitled to any privilege of conversion.
"Bearer bonds with interest coupons attached, and bonds registered as to
principal and interest, will be issued in denominations of $50, $100, $500, $1,000,
$5,000, $10,000, and $100,000. Provision will be made for the interchange of
bonds of different denominations and of coupon and registered bonds, and for the
transfer of registered bonds under rules and regulations prescribed by the Secretary of the Treasury.
"The bonds will be subject to the general regulations of the Treasury Department, now or hereafter prescribed, governing United States bonds.''
TENDERS AND ALLOTMENTS

Tenders will be received at the Federal Reserve banks and branches thereof up
to 12 o'clock noon, eastern standard time, Wednesday, July 17, 1935, and unless
received by that time will be disregarded. Tenders will not be received at the
Treasury Department, Washington. Each tender must state the face amount
of bonds bid for, which must be $1,000 or any even multiple thereof, and the price
offered. The price offered must be stated exclusive of accrued interest from
1 Similarly, the exemption does not apply to the gift tax, see Treasury Decision 4550.



218

REPORT OF THE SECRETARY OF THE TREASURY

March 15, 1935, to July 22, 1935; and must be expressed on the basis of 100,
with fractions expressed as 32ds of 1 percent, in accordance with usuafc practice,
e. g., 1011^^2. Tenders at less than par will not be considered.
Tenders will be received without deposit from incorporated banks and trust
companies and from responsible and recognized dealers in investment securities.
Tenders from others must be accompanied in every case by a deposit of 5 percent
of the face amount of bonds bid for, except where the tender is accompanied by
an express guaranty of payment by an incorporated bank or trust company. If
the tender is accepted, in whole or in part, the deposit will be applied toward
payment for the bonds, the balance to be paid as hereinafter provided. If the
tender is rejected, the deposit will be returned to the bidder.
Tenders must be enclosed in envelopes, securely sealed, addressed to the Federal Reserve bank, or branch, of the district, and plainly marked "Tender for
2% percent Treasury Bonds of 1955-60." The Federal Reserve banks will supply
printed forms and special envelopes for submitting tenders. Incorporated banks
and trust companies not located in a city where a Federal Reserve bank or branch
is located may, in their discretion, submit tenders by telegram, but such telegrams must be received at the Federal Reserve bank or branch before the time
fixed for closing.
Immediately after the closing hour for the receipt of tenders on July 17, 1935,
all tenders received in writing or by telegraph at the Federal Reserve banks or
branches thereof up to the closing hour (12 o'clock noon, eastern standard time)
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 tenders. 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 as hereinafter provided. 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, tenders for smaller
amounts may be accorded preference and tenders for larger amounts prorated to
the extent necessary in accordance with the respective amounts bid for. The
Secretary of the Treasury expressly reserves the right, however, to reject any or
aU tenders or parts of tenders, and to award less than the amount bid for, and
any action he may take in any such respect or respects shall be final.
PAYMENT

Payment for any bonds allotted on accepted tenders must be made or completed
on or before July 22, 1935, in cash or other immediately available funds, and must
include the face amount, and the premium which the bidder has agreed to pay,
together with accrued interest on the face amount from March 15, 1935, to July
22, 1935.1 In every case where payment is not so completed, the 5 percent deposit
with application shall, upon declaration made by the Secretary of the Treasury
in his discretion, be forfeited to the United States.
GENERAL PROVISIONS

Federal Reserve banks, as fiscal agents of the United States, are authorized
and requested to receive tenders, to make allotments as indicated by the Secretary of the Treasury to the Federal Reserve banks of the respective districts, to
issue allotment notices, to receive payment for bonds allotted, to make delivery
of bonds on full-paid allotments, and to perform such other acts as may be necessary to carry out the provisions of this circular. Pending delivery of the definitive
bonds, Federal Reserve banks may issue interim receipts.
The Secretary of the Treasury may at any time, or from time to time, prescribe
supplemental or amendatory rules and regulations governing the receipt of tenders and the sale of bonds under this circular, which will be communicated
promptly to the Federal Reserve banks.
HENRY MORGENTHAU,

Jr.,

Secretary of the Treasury.
1 Accrued interest from March 15, 1936, to July 22, 1935, on $1,000 face amount is $10.078125.




REPORT OF THE SECRETARY OF THE TREASURY

,219

Exhibit 4
Acceptance of tenders for Treasury bonds of 1955-60 {from press release, July
18,1935')
On July 18, 1935, Secretary of the Treasury Morgenthau announced the result
of the offering by the Treasury of $100,000,000, or thereabouts, of 2% percent
Treasury bonds of 1955-60, tenders for which were received at the Federal
Reserve banks up to 12 o'clock noon on July 17.
Tenders for $510,958,000 face amount of bonds were received, of which
$101,971,000 was accepted at prices ranging from 1012J^2 down to 101i?^2, and
accrued interest from March 15, 1935, to July 22, 1935. The average price of
the bonds issued w^as slightly above 101i%2, and a total premium of $1,631,979
was received. Based on the average price at which the bonds were issued on
July 22, 1935, the yield was about 2.77 percent to the earliest call date, March
15, 1955, and about 2.78 percent to maturity, March 15, 1960.

Exhibit 5
Inviting tenders for 2% percent Treasury bonds of 1955-60 (additional)
On July 29, 1935, Secretary of the Treasury Morgenthau invited tenders for
a third additional issue of 2% percent Treasury bonds of 1955-60, as described in
the following circular:
[Department Circular No. 647. Public Debt]
TREASURY

DEPARTMENT,

Washington, July 29, 1935.
The Secretary of the Treasury, pursuant to the authority of the Second Liberty
Bond Act, approved September 24, 1917, as amended, offers to the people of the
United States $100,000,000, or thereabouts, 2% percent Treasury bonds of
1955-60, and invites tenders therefor^ at not less than par and accrued interest
from March 15, 1935, to August 5, 1935.
DESCRIPTION OF BONDS

The bonds now offered will be an addition to and will form a part of the series
of 2% percent Treasury bonds of 1955-60 issued pursuant to Department Circulars No. 531, dated March 4, 1935, No. 536, dated April 22, 1935, and No. 546,
da;ted.July 15, 1935, will be freely interchangeable therewith, are identical in all
respects therewith,-,and are described in the following quotation from Department
Circular No. 53.1:2 * * *
"The bonds will be acceptable to-secure deposits.of public moneys,^ * * *.
They will not be entitled to any privilege of conversion.2 * * *'*
TENDERS AND ALLOTMENTS

Tenders will be received at the Federal Reserve banks and branches thereof
up to 12 o'clock noon, eastern standard time, Wednesday, July 31, 1935, and
unless received by that time will be disregarded. Tenders will not be received
at the Treasury Department, Washington. Each tender must state the face
amount of bonds bid for, which must be $1,000 or an^r even multiple thereof, and
the price offered. The price offered must be stated exclusive of accrued interest
from March 15, 1935, to August 5, 1935; and must be expressed on the basis of
100, with fractions expressed as 32ds of 1 percent, in accordance with usual
practice, e. g., 101^^2. Tenders at less than par will not be considered.^ * * *
Immediately after the closing hour for the receipt of tenders on July 31, 1935,
all tenders received in writing or by telegraph at the Federal Reserve banks or
branches thereof up to the closing hour (12 o'clock noon, eastern.standard time)
will be opened. 2 * * *
1 Revised July 22, 1935.
8 Omitted portions similar to corresponding sections of Department Circular No. 646, p. 217.
3 The original circular contained the following further language at this point: "and will bear the circulation privilege only to the extent provided in the act approved July 22,1932, as amended." This provision
is now inapplicable since the circulation privilege referred to expired July 22, 1935.




220

REPORT OF THE SECRETARY OF THE TREASURY
PAYMENT

Payment for any bonds allotted on accepted tenders must be made or completed on or before August 5, 1935, in cash or other immediately available funds,
and must include the face amount, and the premium which the bidder has agreed
to pay, together with accrued interest on the face amount from March 15, 1935,
to August 5, 1935.1 In every case where payment is not so completed, the 5
percent deposit with application shall, upon declaration made by the Secretary
of the Treasury in his discretion, be forfeited to the United States.^ * * *
HENRY MORGENTHAU, JR.,

Secretary of the Treasury.
Exhibit 6
Acceptance of tender^ for Treasury bonds of 1955-60 {from press release, Aug. 1,
1935^)
On August 1, 1935, Secretary of the Treasury Morgenthau announced the
result of the offering by the Treasury of $100,000,000, or thereabouts, of 2J^
percent Treasury bond^ of 1955-60, tenders for which were received at the
Federal Reserve banks up to 12 o'clock noon on July 31.
Tenders for $320,981,000 face amount of bonds were received, of which $106,541,000 was accepted at prices ranging from 1012)^2 down to 101^)^2, and accrued interest from March 15, 1935, to August 5, 1935. Only part of the amount
bid for at the latter price was accepted, tenders for amounts up to and including
$10,000 being accepted in full, and 25 percent of tenders for larger amounts being
accepted, but not less than $10,000 on any such tender. The average price of
the bonds issued was about 1011^^2, and a total premium of $1,664,723 was
received. Based on the average price at which the bonds were issued on August
5, 1935, the yield was about 2.771 percent to the earliest call date, March 15,
1955, and about 2.787 percent to maturity, March 15, 1960.

Exhibit 7
Inviting tenders for 2}i percent Treasury bonds of 1955-60 {additional)
On August 12, 1935, Secretary of the Treasury Morgenthau invited tenders
for a fourth additional issue of 2% percent Treasury bonds of 1955-60, as. described in the following circular:
[Department Circular No. 648. Public Debtl
TREASURY

DEPARTMENT,

Washington, August 12, 1935.
The Secretary of the Treasury, pursuant to the authority of the Second
Liberty Bond Act, approved September 24, 1917, as amended, offers to the
people of the United States $100,000,000, or thereabouts, 2% percent Treasury
bonds of 1955-60, and invites tenders therefor at not less than par and accrued
interest, from March 15, 1935, to August 19, 1935.
DESCRIPTION OF BONDS

The bonds now offered will be an addition to and will form a part of the series
of 2% percent Treasury bonds of 1955-60 issued pursuant to Department Circulars No. 531, dated March 4, 1935, No. 536, dated April 22, 1935, No. 546, dated
July 15, 1935, and No. 547, dated July 29, 1935, will be freely interchangeable
therewith, are identical in all respects therewith, and are described in the following quotation from Department Circular No. 531:2 * * *
"The.bonds will be acceptable to secure deposits of public moneys,^ * * *
They will not be entitled to any privilege of conversion.2 * * *"
1 Accrued interest from Mar. 15, 1935, to Aug. 5, 1935, on $1,000 face amount is $11.171875.
2 Omitted portions similar to corresponding sections of Department Circular No. 546, p. 217.
3, Revised Aug. 8, 1935.
4 The original circular contained the following further language at this point: "and will bear the circulation privilege only to the extent provided in the act approved July 22,1932, as amended". This provision
is now inapplicable since the circulation privilege referred to expired July 22,1936.




REPORT OF THE SECRETARY OF THE TREASURY

221

TENDERS AND ALLOTMENTS

Tenders will be received at the Federal Reserve banks and branches thereof
up to 12 o'clock noon, eastern standard time, Wednesday, August 14, ,1935,
and unless received by that time will be disregarded. Tenders will not be received at the Treasury Department, Washington. Each tender must state the
face amount of bonds bid for, which must be $1,000 or any even multiple thereof,
and the price offered. The price offered must be stated exclusive of accrued
interest from March 15, 1935, to August 19, 1935; and must be expressed
on the basis of 100, with fractions expressed as 32ds of 1 percent, in accordance
with usual practice, e. g., iOV%2. Tenders at less than par will not be
considered.^ * * *
. Immediately after the closing hour for the receipt of tenders oh August 14,
1935, all tenders received in writing or by telegraph at the Federal Reserve banks
or branches thereof up to the closing hour (12 o'clock noon, eastern standard
time) will be opened. * * *
PAYMENT

Payment for any bonds allotted on accepted tenders must be made or completed
on or before August 19, 1935, in cash or other immediately, available funds, and
must include the face amount, and the premium which the bidder has agreed to
pay, together with accrued interest on the face amount from March 15, 1935,
to August 19, 1935.2 In every case where payment is not so completed, the
• 5 percent deposit with application shall, upon declaration made by the Secretary
of the Treasury in his discretion, be forfeited to the United States. * * *
HENRY MORGENTHAU, JR.,

Secretary of the Treasury.
Exhibit 8
Acceptance of tenders for Treasury bonds of 1955-60 (from press release, Aug. 15,
1935^)
On August 15, 1935, Secretary of the Treasury Morgenthau announced the
result of the offering by the Treasury of $100,000,000, or thereabouts, of 2y% percent Treasury bonds of 1955-60, tenders for which were received at the Federal
• Reserve banks up to 12 o'clock noon on August 14.
Tenders for $147,-264,000 face amount of bonds were received, of which
$98,215,000 was accepted at prices ranging from 101^^2 down to 1002J^2, and
accrued interest from March 15, 1935. to August 19, 1935. The average price
of the bonds issued was about 1002^2, and a total premium of $777,150 was
received. Based on the average price at which the bonds were issued on August
19, 1935, the yield was about 2.822 percent to the earliest call date, March 15,
1955, and about 2.829 percent to maturity, March 15, 1.9.60.

Exhibit 9
Offering of 2%, percent Treasury bonds of 191^5-If.! and lYi percent Treasury notes of
series C-1939
On September 3, 1935, Secretary of the Treasury Morgenthau offered for subscription 2% percent Treasury bonds of 1945-47.and IH percent Treasury notes
of series C-1939, both in exchange for Fourth Liberty Loan 4J4 percent bonds of
1933-38 caUed for redemption on October 15, 1935, and at the same time invited
cash subscriptions for $500,000,000, or thereabouts, of the Treasury notes. In
the related press release it was stated that about $1,250,000,000 of the Fourth
Liberty Loan bonds were included in the fourth and final call for redemption on
October 15, 1935.
1 Omitted portions similar to corresponding sections of Department Circular No. 646, p. 217.
2 Accrued interest from Mar. 15, 1936, to Aug. 19, 1936, on $1,000 face amount is $12.265626.
3 Revised Aug. 26, 1935.




222

REPORT OF THE SECRETARY OF THE TREASURY
[Treasury bonds of 1946-47. Department Circular No. 650. Public Debt]
TREASURY

DEPARTMENT,

Washington, September 3, 1935.
EXCHANGE OFFERING OF BONDS

The Secretary of the Treasury, pursuant to the authority of the Second Liberty
Bond Act, approved September 24, 1917, as amended, for refunding purposes,
invites subscriptions from the people of the United States for 2% percent bonds
of the United States, designated Treasury bonds of 1945-47, in payment of which
only Fourth Liberty Loan 4)^ percent bonds of 1933-38 included in the fourth and
final call for redemption on October 15, 1935 (hereinafter referred to. as fourthcalled. Fourth 4>i's) may be tendered.^ The amount of the offering will be limited
to the^ iamount of fourth-called Fourth 4^'s tendered and accepted. /, Fourth
Liberty Loan bonds not included in the fourth and final call for redemption on
October 15, 1935, all of which have previously been called for redemption and on
which interest has ceased, will not be accepted for exchange under this circular
Fourth-called Fourth 4J4's will be received on exchange at par, and 2% percent
Treasury bonds of 1945-47 will be issued at par, with the right reserved by the
Secretary of the Treasury to. increase the issue price by public announcement
effective as to subscriptions tendered after the time, not earlier than September 10,
1935, fixed in the announcement.
In ad<iition to the exchange offering under this circular, holders of fourth-called
Fourth 4>i's are offered the privilege of exchanging all or any part of such called
bonds for 3J^ year IJ/2 percent Treasury notes of series C-1939, which offering is
set forth in Department Circular No. 551, issued simultaneously with this
circular.
DESCRIPTION OF BONDS

^, The bonds will be dated September 16, 1935, and will bear interest from that
date at the rate of 2% percent per annum, payable on a semiannual basis on
March 15 and September 15 in each year until the principal amount becomes
payable. They will mature September 15, 1947, but may be redeemed at the
option of the United States on and after September 15, 1945, in whole or in part,
at par and accrued interest, on any interest day or days, on 4 months' notice of
redemption given in such manner as the Secretary of the Treasury shall prescribe.
In case of partial redemption the bonds to be redeemed will be determined by such
method as may be prescribed by the Secretary of the Treasury. From the date
of red'einption designated in any such notice, interest on the bonds called for
redemption shall cease.
The bonds shall be exempt, both as to principal and interest, from all taxation
now or herafter imposed by the United States, any State, or any of the possessions
of the United States, or by any local taxing authority, except (a) estate or inheritance taxes, or gift taxes, and (b) graduated additional income taxes, commonly
known as surtaxes, and excess-profits and war-profits taxes, now or herafter
imposed by the United States, upon the income or profits of individuals, partnerships,, associations, or corporations. The interest on an amount of bonds authorized'by the Second Liberty Bond Act, approved September 24, 1917, as amended,
the principal of which does not exceed in the aggregate $5,000, owned by any
individual, partnership, association, or corporation, shall be exempt from the
taxes provided for in clause (b) above.
The bonds will be acceptable to secure deposits of public moneys^ but will not
bear the circulation privilege and will not be entitled to any privilege of conversion.
Bearer bonds with interest coupons attached, and bonds registered as to principal and interest, will be issued in denominations of $50, $100, $500, $1,000,
. $5,000, $10,000, and $100,000. Provision will be made for the interchange of
bonds of different denominations and of coupon and registered bonds, and for
the transfer of registered bonds, under rules and regulations prescribed by the
Secretary of the Treasury.
The bonds will be subject to the general regulations of the Treasury Department, now or hereafter prescribed, governing United States bonds.
I Pursuant to the fourth and final callfor redemption (see Department Circular No. 539, dated May 13,
1935) all outstanding Fourth Liberty Loan 434 percent bonds of 1933-38 bearing serial numbers ending in
3 or 4 (in the case of permanent coupon bonds preceded by the distinguishing letter C or D, respectively)
have been called for redemption on October 15, 1935, on which date interest on such bonds will cease.




REPORT OF THE SECRETARY OF THE TREASURY

223

SUBSCRIPTION AND ALLOTMENT

Subscriptions will be received at the Federal Reserve banks and branches
and at the Treasury Department, Washington. Banking institutions generally
will handle applications for subscribers, but only the Federal Reserve banks and
the Treasury Department are authorized to act as official agencies.
The Secretary of the Treasury reserves the right to reject any subscription, in
whole or in part, and to close the books as to any or all subscriptions at any
time without notice; and any action he may take in these respects shall be final.
Subject to these reservations, all subscriptions will be allotted in full. Allotment
notices will be sent out promptly upon allotment.
TERMS OF PAYMENT AND ISSUE

Treasury bonds offered under this circular will be issued at par, or at such
increased issue price as may be fixed by public announcement in the case of
bonds issued upon subscriptions tendered to a Federal Reserve bank or branch
or to the Treasury Department after the time stated in the announcement. The
effective time for any increase which may be made in the issue price will be
after the date of the announcement and in no event earlier than September 10,
1935. Any such announcement fixing an increase in the issue price and the
time when such increase becomes effective will be communicated promptly to
the Federal Reserve banks. Payment for any bonds allotted under this circular
may be made only in fourth-called Fourth 4}^'s, which will be accepted at par,
provided that payment of the premium by reason of any increase in the issue price
shall be made incash oi* other immediately available funds. The bonds tendered
in payment, and the premium, if any, should accompany the subscription. •
On all exchanges, interest on fourth-called Fourth 4>^'s will be paid in full
to October 15, 1935, on which date interest on all fourth-called Fourth 4:}i's
will cease. Such payments will be made, in the case of coupon bonds, through
payment of coupons dated October 15, 1935, when due, which coupons should
be detached by holders before presentation of the bonds for exchange, and,
in the case of registered bonds, through the issue of interest checks for final
interest due October 15, 1935, in accordance with the assignments on the bonds
surrendered.
SURRENDER OF FOURTH-CALLED FOURTH 4j4's ON EXCHANGE

Coupon bonds.—Fourth-called Fourth 4}^'s in coupon form tendered in exchange
for Treasury bonds offered hereunder, should be presented and surrendered with
the subscription to a Federal Reserve bank or to the Treasurer of the United
States. Coupons dated April 15, 1936, and all coupons bearing dates subsequent
to April 15, 1936, should be attached to such coupon bonds when surrendered,
and if any such coupons are missing, the subscription must be accompanied by
cash payment equal to the face amount of the missing coupons.^ The bonds
must be delivered at the expense and risk of the holder. Facilities for transportation of bonds 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 their agents. Incorporated banks and trust
companies are not agents of the United States under this circular.
Registered feonrfs.;;—Fourth-called Fourth 4>fs in registered form tendered in
exchange for Treasury bonds offered hereunder should be assigned by the registered payee or the assignee thereof, in accordance with the general regulations
of the Treasury Department governing assignments for transfer or exchange,
in one of the forms hereafter set forth, and thereafter should be presented and
surrendered with the subscription to a Federal Reserve bank or to the Treasury
Department, Division of Loans and Currency, Washington. The bonds must
be delivered at the expense and risk of the holder. If Treasury bonds are desired
registered in the same name as the fourth-called Fourth 4^'s surrendered, the
assignment should be to ''The Secretary of the Treasury for exchange for
Treasury bonds of 1945-47"; if Treasury bonds are desired registered in another
name, the assignment should be to ''The Secretary of the Treasury for exchange
for Treasury bonds of 1945-47 in the name of
"; if
1 The final coupon attached to temporary coupon bonds became due on Oct. 15, 1920. The holders
of any such temporary bonds which are included in the fourth and final call for redemption on Oct. 15,
1935, will receive the past due interest from Oct. 15, 1920, if such bonds are tendered for exchange under
this circular.




224

REPORT OF THE SECRETARY OF THE TREASURY

Treasury bonds in coupon form are desired, t h e assignment should be to " T h e
Secretary of t h e Treasury for exchange for Treasury bonds of 1945-47 in coupon
form to be delivered to
".
GENERAL

PROVISIONS

As fiscal agents of t h e United States, Federal Reserve b a n k s are authorized
and requested to receive subscriptions, to m a k e allotments on t h e basis a n d up
to t h e a m o u n t s indicated by t h e Secretary of t h e Treasury to t h e Federal Reserve
b a n k s of t h e respective districts, to issue allotment notices, to receive p a y m e n t
for bonds allotted, to m a k e delivery of bonds on full-paid subscriptions allotted,
and they m a y issue interim receipts pending delivery of t h e definitive bonds.
T h e Secretary of t h e Treasury m a y a t any time, or from time to time, prescribe
supplemental or a m e n d a t o r y rules and regulations governing t h e offering which
will be communicated p r o m p t l y to t h e Federal Reserve banks.
HENRY

MORGENTHAU

Jr.,

Secretary of the Treasury.

[Treasury notes, series C-1939.

Department Circular No. 551. Public Debt]
TREASURY

DEPARTMENT,

Washington, September 3, 1935.
O F F E R I N G OF NOTES

T h e Secretary of t h e Treasury, p u r s u a n t t o t h e a u t h o r i t y of t h e Second Liberty
Bond Act, approved September 24, 1917, as amended, invites subscriptions from
the people of the United States for I H percent notes of t h e United States,
designated Treasury notes of series C-1939.
Cash subscriptions are invited a t p a r a n d accrued interest. T h e a m o u n t of t h e
issue for cash will be $500,000,000, or thereabouts.
Exchange subscriptions, in paym.ent of which only F o u r t h Liberty Loan 4>4 percent bonds of 1933-38 included in t h e fourth a n d final call for redemption on October 15,1935 (hereinafter referred t o as fourth-called F o u r t h 4)^'s) m a y be tendered,
are invited a t par.i T h e a m o u n t of t h e issue upon exchange subscriptions will be
limited to t h e a m o u n t of fourth-called F o u r t h 4)4's tendered and accepted.
F o u r t h Liberty Loan bonds n o t included in t h e fourth a n d final call for redemption on October 15, 1935, all of which have previously been called for redemption
a n d on which interest has ceased, will not be accepted for exchange under this
circular.
I n addition to t h e exchange offering under this circular, holders of fourth-called
F o u r t h 4>^'s are offered t h e privilege of exchanging all or any p a r t of such called
bonds for 10-12 year 2% percent Treasury bonds of 1945-47, which offering is set
forth in D e p a r t m e n t Circular No. 550, issued simultaneously with this circular.
DESCRIPTION OF NOTES

T h e notes will be d a t e d September 16, 1935, a n d will bear interest from t h a t
d a t e a t t h e r a t e of 1}^ percent per a n n u m , payable on a semiannual basis on
M a r c h 15 a n d September 15 in each year. T h e y will m a t u r e M a r c h 15, 1939,
a n d will n o t be subject t o call for redemption prior t o m a t u r i t j ^
T h e notes shall be exempt, b o t h a s t o principal a n d interest, from all t a x a t i o n
(except estate or inheritance taxes, or gift taxes) now or hereafter imposed by t h e
United States, any State, or any of t h e possessions of t h e United States, or by
any local taxing authority.
T h e notes will be accepted a t p a r during such time a n d under such rules a n d
regulations as shall be prescribed or approved by t h e Secretary of t h e Treasury
in p a y m e n t of income a n d profits taxes payable a t t h e m a t u r i t y of t h e notes.
1 Pursuant to the fourth.and final call for redemption (see Department Circular No. 539, dated May 13,
1935) all outstanding Fourth Liberty Loan 4H percent bonds of 1933-38 bearing serial numbers ending in
3 or 4 (in the case of permanent coupon bonds preceded by the distinguishing letter C or D, respectively) •
have been called for redemption on October 15, 1935, on which date interest on such bonds will cease.




REPORT OF THE SECRETARY OF THE TREASURY

225

The notes willbe acceptable to secure deposits of public moneys, but will not
bear the circulation privilege.
Bearer notes with interest coupons attached will be issued in denominations of
$50, $100, $500, $1,000, $5,000, $10,000, and $100,000. The notes will not be
issued in registered form.
SUBSCRIPTION AND ALLOTMENT

Subscriptions will be received at the Federal Reserve banks and branches and
at the Treasury Department, Washington. Banking institutions generally will
handle applications for subscribers, but only the Federal Reserve banks and the
Treasury Department are authorized to act as official- agencies. Cash subscriptions from incorporated banks and trust companies for their own account
will be. received without deposit but will be restricted in each case to an amount
not exceeding one-half of the combined capital and surplus of the subscribing
bank or trust company. Cash subscriptions from all others must be accompanied, if for more than $5,000, by payment of $5,000 or 5 percent of the amount
of notes applied for, whichever is the greater; and, if for $5,000 or less, by payment
in full. The Secretary of the Treasury reserves the right to close the books as
to any or all subscriptions or classes of subscriptions at any time without notice.
The Secretary of the Treasury reserves the right to reject any subscription, in
whole or in part, to allot less than the amount of notes applied for, to make
allotments in full upon applications for smaller amounts and to make reduced
allotments upon, or to reject, applications for larger amounts, or to adopt any
or all of said methods or such other methods of allotment and classification of
allotments as shall be deemed b}^ him to be in the public interest; and his action
in any or all of these respects shall be final. Subject to these reservations, cash
subscriptions for amounts up to and including $5,000 will be given preferred
allotment, and cash subscriptions for amounts over $5,000 will be allotted on an
equal percentage basis, but not less than the maximum preferred allotment; and
exchange subscriptions will be allotted in full. Allotment notices will be sent
out promptly upon allotment, and the basis of the allotment will be publicly
announced.
. TERMS OF PAYMENT AND ISSUE

Cash subscriptions.—Paym.ent at par and accrued interest, if any, for notes
allotted on cash subscriptions must be made or completed on or before September
16, 1935, or on later allotment. In every case where payment is not so completed,
the payment with application up to 5 percent of the amount of notes applied for
shall, upon declaration made by the Secretary of the Treasury in his discretion,
be forfeited to the United States. Any qualified depositary will be permitted to
make payment by credit for notes 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.
Exchange subscriptions.—-Paym.ent for notes allotted on exchange subscriptions
may be m.ade only in fourth-called Fourth 4J4's, which will be accepted at par,
and should accompany the subscription. On all exchanges, interest on fourthcalled Fourth 4>^'s will be paid in full to October 15, 1935, on which date interest
on all fourth-called Fourth 4}^'s will cease. Such payments will be made, in the
case of coupon bonds, through payment of coupons dated October 15, 1935, when
due, which coupons should be detached by holders before presentation of the
bonds for exchange, and, in the case of registered bonds, through the issue of
interest checks for final interest due October 15, 1935, in accordance with the
assignments on the bonds surrendered.
S U R R E N D E R OF FOURTH-CALLED F O U R T H iH'S O N E X C H A N G E

Coupon bonds.—Fourth-called Fourth 4}i's in coupon form tendered in exchange for Treasury notes offered hereunder, should be presented and surrendered
with the subscription to a Federal Reserve bank or to the Treasurer of the United
States. Coupons dated April 15, 1936, and all coupons bearing dates subsequent
to April 15, 1936, should be attached to such coupon bonds when surrendered,
and if any such coupons are missing, the subscription must be accompanied by
cash payment equal to the face amount of the missing coupons.^ The bonds must
1 The final coupon attached to temporary coupon bonds became due on Oct. 15, 1920. The holders of
any such temporary bonds which are included in the fourth and final call for redemption on Oct. 15, 1935,
will receive the past due interest from Oct. 15, 1920, if such bonds are tendered for exchange under this
circular.
93790—37

16




226

REPORT OF THE SECRETARY OF THE-TREASURY

be delivered at the expense and risk of the holder. Facilities for transportation
of bonds 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 their agents. Incorporated banks and trust companies are
not agents of the United States under this circular.
Registered bonds.—Fourth-called Fourth 4>^'s in registered form tendered in
exchange for Treasury notes offered hereunder should be assigned by the registered payee or the assignee thereof to "The Secretary of the Treasury for exchange
for Treasury notes of series C-1939", in accordance with the general regulations
of the Treasury Department governing assignments for transfer or exchange, and
thereafter should be presented and surrendered with the subscription to a Federal
Reserve bank,or to the Treasury Department, Division of Loans and Currency,
Washington. If the Treasury notes are to be delivered for the account of other
than the registered payee or the assignee thereof, the assignment should be to
"The Secretary of the Treasury for exchange for Treasury notes of series C-1939
to be delivered to
". The bonds must be delivered
at the expense and risk of the holder.
GENERAL PROVISIONS

As fiscal agents of the United States, Federal Reserve banks are authorized
and requested to receive subscriptions, 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, to issue allotment notices, to receive payment
for notes allotted, to make delivery of notes on full-paid subscriptions allotted,
and they may issue interim receipts pending delivery of the definitive notes.
The Secretary of the Treasury may at any time, or from time to time, prescribe
supplemental or amendatory rules and regulations governing the offering, which
will be communicated promptly to the Federal Reserve banks.
HENRY MORGENTHAU,

Jr.,

Secretary of the Treasury.
Exhibit 10
Subscriptions and allotments. Treasury bonds of 1945-47 and Treasury notes of
series C-1939 {from^press releases, Sept. 4) 6, 10, 12, 17, and 24i and Oct. 1, 8,
and 17, 1935 i)
On September 4, 1935, Secretary of the Treasury Morgenthau announced that
the subscription books for the cash offering of V/2 percent Treasury notes of
series C-1939 closed at the close of business September 3, 1935. Reports received
from the Federal Reserve banks show that for this offering, which was for
$500,000,000, or thereabouts, total subscriptions aggregated $1,274,565,350, of
which $512,434,350 was allotted. Subscriptions in amounts up to and including
$5,000 wereallotted in full, and those in amounts over $5,000 were allotted 40
percent, but not less,than $5,000 on any one subscription.
The subscription books for the offering of Treasury notes of series C-1.939 for
which fourth-called Fourth,Liberty Loan bonds were tendered in payment were
closed at the close of business September 14, 1935. These exchange subscriptions,
amounting to $429,179,400, were allotted in full.
The subscription books for the offering of Treasury bonds of 1945-47 in
exchange for fourth-called Fourth Liberty Loan bonds were closed at the close of
business October 11, 1935. Total subscriptions amounted to $568,717,800 and
were allotted in full.
Subscriptions and allotments for the two issues were divided among the several
Federal Reserve districts and the Treasury as follows:
1 Revised Dec. 4,1935, and Jan. 3,1936.




°

227

REPORT OF THE SECRETARY OF THE TREAStTRY

T r e a s u r y notes of series C-1939

F e d e r a l Reserve
district

Boston
N e w York
Philadelphia
Cleveland
Richniorid
Atlanta
Chicago S t . Louis
Minneapolis
Kansas City
Dallas
S a n Francisco
Treasury
Total

_.
....

Treasury
b o n d s of
1946-47,
exchange
subscriptions received a n d
allotted

Cash s u b scriptions
received

Exchange
subscriptions received a n d
allotted

Total subscriptions
received

Cash s u b scriptions
allotted

$79,385,100
696, 757, 250
35; 419, 500
51,603,500
26, 080, 900'
42,037,350
164, 002,350
18, 639, 900
9, 082,000
8, 299,000
19,828, 500
123,430, 000

$26, 859, 950
286, 291,350
• 7,047, 650
16, 667, 050
5,460,400'
2, 312,850
53, 295, 400
8, 687,000
9, 053,150
6, 779,150
272, 750
6, 294,150
2, 258, 550

$106,245,050
983,048, 600
42,467,150
68,270,556..
31,541,300
44, 350, 200
217, 297, 750
27, 226, 900
18,135,150
14, 078,150
20,101, 250
128, 724,150
2, 268, 550

$31,964,850
278,986,750
14, 302,000
20,768, 500
10, 580,400
17,169, 500
66,145, 750
7, 547,400
3, 796,000
3,447,200
8,.219, 000
49, 608, 000

$58,824, 800
$19,829,360
665,278,100
276,446,000
21,349, 650
27, 417, 750
.37,435,550. • 61,985,' 300
16,040,800
13, 258,350
19,482,350
9, 301,300
119,441,150
66,089, 450
16,134,400
27,389,400
12, 848,150
7, 658,800
9, 226,350
21, 214,400
8, 491, 750
8, 731,300
54,802,150
25,104,100
2,258,550
15, 392, 300

429,179, 400 1, 703, 744, 750

512,434,350

941,613, 750

1, 274, 565,350

Total subscriptions
allotted

568, 717,800

Exhibit 11
Offering of 2%. percent Treasury bonds of 1945-47 {additional) and lYi percent
Treasury notes of series C-1940
On December 2, 1935, Secretary of the Treasury Morgenthau offered for cash
subscription 2% percent Treasury bonds of 1945-47 and 1}^ percent Treasury
notes of series C-1940. At the same time holders of 2}^ percent Treasury notes
of series D-1935, maturing December 15, 1935, were offered the privilege of
exchanging their maturing notes either for the Treasury bonds or the Treasury
notes. In the related press release it was stated that $418,291,900 of Treasury
notes of series D-1935 would mature on December 15, 1935.
[Treasury bonds of 1945-47. Department Curcular No. 655. Public Debt]
TREASURY

DEPARTMENT,

Washington, December 2, 1935,
OFFERING OF BONDS

The Secretary of the Treasury, pursuant to the authority of the Second Liberty
Bond Act, approved September 24, 1917, as amended, invites subscriptions, at
par and. accrued interest from September 16, 1935; from the people of the United
States for 2% percent bonds of the United States designated Treasury bonds of
1945-47. The amount of the offering is $450,000,000, or thereabouts, with the
right reserved to the Secretary of the Treasury to increase'the offering by an
amount sufficient to accept all subscriptions for which Treasury notes of series
D-1935, maturing December 15, 1935, are tendered in payment and accepted.
DESCRIPTION OF BONDS

The bonds now offered will be an addition to and will form a part of the series
of 2% percent Treasury bonds of 1945-47 issued pursuant to Department Circular No. 550, dated September 3, 1935, will be freely interchangeable therewith,
are identical in all respects therewith, and are described in the following quotation
from Department Circular No. 550:^ * * * .
SUBSCRIPTION AND ALLOTMENT

Subscriptions will be received at the Federal Reserve banks and branches and
at the Treasury Department, Washington. Banking institutions generally will
handle applications for subscribers, but only the Federal Reserve banks and the
1 Omitted portions similar to corresponding sections of Department Circular No. 650, p. 222,




228

REPORT OF THE SECRETARY OF THE TREASURY

Treasury Department are authorized to act as official agencies. Cash subscriptions from incorporated banks and trust companies for their own account will
be received without deposit but will be restricted in each case to an amount not
exceeding one-half of the combined capital and surplus of the subscribing bank
or trust company. Cash subscriptions from all others must be accompanied,
if for more than $5,000, by payment of $5,000 or 5 pereent of the amount of bonds
applied for, whichever is the greater; and, if for $5,000 or less, by payment in
full including accrued interest from September 16 to December 16, 1935, On the
bonds applie;d for. The Secretary of the Treasury reserves the right to close the
books as to any or all subscriptions or classes of subscriptions at any time without
notice.
The Secretary of the Treasury reserves the right to reject any subscription, in
whole or in part, to allot less than the amount of bonds applied for, to make
allotments in full upon applications for smaller amounts and to make reduced
allotments upon, or to reject, applications for larger amounts, or to adopt any or
all of said methods or such other methods of allotment and classification of allotments as shall be deemed by him to be in the public interest; and his action in any
or all of these respects shall be final. Subject to these reservations, cash subscriptions for amounts up,to and including $5,000 will be given preferred allotment, and cash subscriptions for amounts over $5,000 will be allotted on an equal
percentage basis, but not less than the maximum preferred allotment; and
subscriptions in payment of which Treasury notes of ser.ies D-1935 are tendered
will be allotted in full. Allotment notices will be sent out promptly upon allotment, and the basis of the allotment will be publicly announced. •
PAYMENT

Payment at par and accrued interest from September 16, 1935, for bonds
allotted on cash subscriptions must be made or completed on or before December
16, 1935, or on later allotment. In every case where payment is not so completed,
the payment with application up to 5 percent of the amount of bonds applied
for shall, upon declaration made by the Secretary of the Treasury in his discretion, be forfeited to the United States. Any qualified depositary will be
permitted to make payment by credit for bonds 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. If payment
is to be made in Treasury notes of series D-1935, maturing December 15, 1935,
the notes will be accepted at part and should accompany the subscription, and
accrued interest from September 16 to December 16, 1935, on the bonds allotted
should be paid in cash on or before December 16, 1935. Accrued interest at
2% percent from September 16, 1935, to December 16, 1935, on $1,000 face
amount is $6,875.
GENERAL PROVISIONS

As fiscal agents of the United States, Federal Reserve banks are authorized
and requested to receive subscriptions. * * *
HENRY MORGENTHAU,

Jr.,

Secretary of the Treasury.
[Treasury notes, series C-1940. Department Circular No. 556. Public Debtl
TREASURY

DEPARTMENT,

Washington, December 2, 1935.
OFFERING OF NOTES ,

The Secretary of the Treasury, pursuant to the authority of the Second Liberty
Bond Act, approved September 24, 1917, as amended, invites subscriptions, at par
and accrued interest, from the people of the United States for IJ^ percent notes of
the United States, designated Treasury notes of series C-1940. The amount of
the offering is $450,000,000, or thereabouts, with the right reserved to the Secretary of the Treasury to increase the offering by an amount sufficient to accept
all subscriptions for which Treasury notes of series D-1935, maturing December
15, 1935, are tendered in payment and accepted.




REPORT OF THE SECRETARY OF THE TREASURY

229

DESCRIPTION OF NOTES

The notes will be dated December 16, 1935, and will bear interest.from that
date at the rate of 1)4 percent per annum, payable on a semiannual basis on June
15 and December 15 in each year. They will mature December 15, 1940, and
will not be subject to call for redemption prior to maturity.
The notes shall be exempt, both as to principal and interest, from all taxation
(except estate or inheritance taxes, or gift 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.^ * * *
SUBSCRIPTION AND ALLOTMENT

Subscriptions will be received at the Federal Reserve banks and branches
and at the Treasury Department, Washington. Banking institutions generally
will handle applications for subscribers, but only the Federal Reserve banks and
the Treasury Department are authorized, to act as official agencies. Cash subscriptions from incorporated banks and trust companies for their own account
will be received without deposit but will be restricted in each case to an amount
not exceeding one-half of the combined capital and surplus of the subscribing
bank or trust company. Cash subscriptions from all others must be accompanied, if for more than $5,000, by payment of $5,000 or 5 percent of the amount
of notes applied for, whichever is the greater; and, if for $5,000 or less, by payment in full. The Secretary of the- Treasury reserves the right to, close the books
as to any or all subscriptions or classes of subscriptions at any time without
notice.
The Secretary of the Treasury reserves the right to reject any subscription,
in whole or in part, to allot less than the amount of notes applied for, to make
allotments in full upon applications for smaller amounts and to make reduced
allotments upon, or to reject, applications for larger amounts, or to adopt any or
all of said rnethods or such other methods of allotment and classification of allotments as shall be deemed h j him to be in the public interest; and his action in
any or all of these respects shall be final. Subject to these reservations, cash
subscriptions for amounts up to and including $5,000 will be given preferred
allotment, and cash subscriptions for amounts over $5,000 will be allotted on an
equal percentage basis, but not less than the maximum preferred allotment; and
subscriptions in payment of which Treasury notes of series D-1935 are tendered
will be allotted in full. Allotment notices will be sent out promptly upon
allotment, and the basis of the allotment will be publicly announced.
PAYMENT

Payment at par and accrued interest, if any, for notes allotted on cash subscriptions must be made or completed on or before December 16, 1935, or on
later allotment. In every case where payment is hot so completed, the payment
with application up to 5 percent of the amount of notes applied for shall, upon
declaration made by the Secretary of the Treasury in his discretion, be forfeited
to the United States. Any qualified depositary will be permitted to make payment by credit for notes 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 notes of series
D-1935, maturing December 15, 1935, will be accepted at par in payment for
any notes subscribed for and allotted and such payment should be made when
the subscription is tendered.
GENERAL PROVISIONS

As fiscal agents of the United States, Federal Reserve banks are authorized and
requested to receive subscriptions. * * *
HENRY MORGENTHAU,

Jr.,

Secretary of the Treasury.
1 Omitted portions similar to corresponding sections of Department Circular No. 645, p. 215.




230

REPORT OF THE SECRETARY OF THE TREASURY
Exhibit 12

Subscriptions and allotments, Treasury bonds of 1945-47 {additional) and Treasury
notes of series C-1940 {from press releases, Dec. 3, 4, 5, and 10, 1935')
On December 2, 1935, Secretary of t h e Treasury Morgenthau announced t h a t
t h e subscription books for t h e cash offering of 2% percent Treasury bonds of
1945-47 and 1}^ percent Treasury notes of series C-1940 closed a t t h e close of
business December 2, 1935. Reports received from Federal Reserve banks show
t h a t for t h e offering of bonds, which was for $450,000,000, or thereabouts, cash
subscriptions aggregated $2,034,979,700, of which $484,423,400 was allotted.
Subscriptions in a m o u n t s up to and including $5,000 were allotted in full a n d
those in a m o u n t s over $5,000 were allotted 23 percent, b u t not less t h a n $5,000
on any one subscription.
For t h e cash offering of Treasury notes, which was for $450,000,000, or thereabouts, subscriptions aggregated $2,487,264,900, of which $487,808,700 was
allotted. Cash subscriptions in a m o u n t s up to a n d incuding $5,000 were allotted
in full a n d those in a m o u n t s over $5,000 were allotted 19 percent, b u t not less
t h a n $5,000 on any one subscription.
T h e subscription books for t h e offering of Treasury bonds of 1945-47 a n d of
Treasury notes of series C-1940 for w h i c h ' T r e a s u r y , notes of series D - 1 9 3 5 ,
m a t u r i n g December 15, 1935, were tendered in p a y m e n t , closed a t t h e close of
business December 5, 1935. Total exchange subscriptions for Treasury bonds of
1945-47 a m o u n t e d to $161,312,700, a n d for Treasury notes of series C-1940
a m o u n t e d to $249,352,900. T h e exchange subscriptions were allotted in full.
Subscriptions a n d allotments for t h e two issues were divided a m o n g t h e several
Federal Reserve districts a n d t h e Treasury as follows:
Treasury bonds of 1945-47
Federal Reserve district

Cash subscriptions
received

Exchange
subscriptions received and
allotted

Total subscriptions
received

Cash subscriptions
allotted

Total subscriptions
allotted

Boston
New York
PhiladelphiaCleveland
Richmond
Atlanta
Chicago
-.
St. Louis
Minneapolis..
Kansas City..
Dallas
San Francisco.
Treasury

$141,755,900
999,987,850
96,168, 300
86, 357, 650
69, 342,900
82,728, 500
198,787,550
57, 280, 000
19,424, 900
43,161,150
56,867, 900
182, 434,100
683, 000

$5, 047, 600
100, 657, 300
2, 565, 500
1, 509, 000
3,062, 400
762, 500
39, 950,100
1,962, 300
950, 000
3, 327, 500
744, 500
656,000
118,000

$146,803, 500
1,100, 645,150
98, 733,800
87, 866, 650
72, 405,300
83,491, 000
238, 737, 650
69,,242, 300
20, 374, 900
46,488, 650
57, 612, 400
183. 090,100
801,000

$33, 680, 400
231, 244, 600
22,497,950
21,410, 350
17, 239,400
20,170, 600
48,'303,950
14, 308,450
5, 240,900
11, 614, 650
15, 790,150
42,754, 600
167, 600

$38,728,000
331,901,900
25,063,450
22, 919,350
20,301,800
20, 933,000
88,254,'050
16, 270,750
6,190,900'
14,942,150
16, 534, 650
43, 410, 600
285, 600

Total...

2, 034,979, 700

161,312, 700

2,196,292,400

484, 423,400

646,736,100

T r e a s u r y notes of series C-1940

Boston
New York
Philadelphia...
Cleveland.....
Richmond
Atlanta
Chicago
St. Louis
Minneapolis...
Kansas City...
Dallas
San.Francisco..
Treasury
Total

1 Revised Jan. 6, 1936.




$163, 185, 200
1,308, 829, 200
128, 222, 700
155, 714,400
70, 473,800
71, 661,300
251, 243,100
54, 440,100
23, 569, 500
41, 601,400
50, 323, 200
167, 491,000
610, 000

$174, 392, 600
$11,207,400
138,324, 600 1,447, 153,700
3, 708, 000
131, 930,700
5, 793, 500
161, 507,900
23,162,000
93, 635,800
6,830,000
77, 491,300
31, 094,800
282, 337,900
7, 612,800
61, 962,900
6,186,000
28, 756, 500
50, 034,800
8, 433,400
52, 585,700
2, 262, 500
• 6, 677,'000
174, 168,000
671,000
161,000

$32, 677, 200 $43, 784, 600
249, 682,900 388, 007, 400
24, 703, 400 28,411,400
30, 631, 200 36,424,700
38,242,800
15,080,800
14, 573, 500 20,403, 500
81, 617, 700
50, 422,900
18,866,900
11,354,100
10,383, 000
6,197, 000
17,454,100
9,020, 700
14, 582, 500
12,320,000
38,822,.000
32,145,000
261,000
100,000

2,487,264,900

249, 352, 900 2,736, 617,800 487,808, 700

737,161, 600

REPORT OF THE SECRETARY OF THE TREASURY

231

Exhibit 13
Offering of 2yi percent Treasury bonds of 1948-51 and iy2 percent Treasury notes of
series A-1941
On March 2, 1936, Secretary of the Treasury Morgenthau offered for cash subscription 2% percent Treasury bonds of 1948-51 and IJ^ percent Treasury notes
of series A-1941. At the same time the holders of 2J^ percent Treasury notes
of series C-1936, maturing April 15, 1936, were offered the privilege of exchanging
their maturing notes either for the Treasury bonds or the Tr,easury notes. In
the related press release it was stated that aibout $133,000,000 of interest on the
public debt and $452,000,000 of Treasury bills would be payable on March 16,
1936, and that $558,819,000 of Treasury notes of series C-1936 would mature on
April 15, 1936.
[Treasury bonds of 1948-61. Department Circular No. 667. Public Debtl
TREASURY

DEPARTMENT,

Washington, March 2, 1936.
OFFERING OF BONDS

The Secretary of the Treasury, pursuant to the authority of the Second Liberty
Bond Act, approved September 24, 1917, as amended, invites subscriptions, at
par and accrued interest, from the people of the United States for 2% percent
bonds of the United States, designated Treasury bonds of 1948-51. The amount
of the offering is $650,000,000, or thereabouts, with the right reserved to the
Secretary of the Treasury to increase the offering by an amount sufficient to
accept all subscriptions for which Treasury notes of series C-1936, maturing
April 15, 1936, are tendered in payment and accepted.
D E S C R I P T I O N O F BONDS

The bonds will be dated March 16, 1936, and will bear interest from that
date at the rate of 2% percent per annum, payable on a semiannual basis on
September 15, 1936, and thereafter on March 15 and September 15 in each year
until the principal amount becomes payable. They will mature March 15, 1951,
but may be redeemed at the option of the United States on and after March
15, 1948, in whole or in part, at par and accrued interest, on any interest day
or days, on 4 months' notice of redemption given in such manner as the Secretary
of the Treasury shall prescribe. In case of partial redemption the bonds to be
redeemed will be determined by such method as may be prescribed by the Secretary of the Treasury. From the date of redemption designated in any such
notice, interest on the bonds called for redemption shall cease.^ * :i« *
SUBSCRIPTION AND ALLOTMENT

Subscriptions will be received at the Federal Reserve banks and branches and
at the. Treasury Dlepartment, Washington. Banking, institutions generally will
handle applications for subscribers, but only the Federal Reserve banks and the
Treasurj^ Department are authorized to act as official agencies. Cash subscriptions from incorporated banks and trust companies for their own account
will be received without deposit but will be restricted in each case to an amount
not exceeding one-half of the combined capital and surplus of the subscribing
bank or trust compan}^ Cash subscriptions from all others must be accompanied, if for more than $5,000, by payment of $5,000 or 5 percent of the amount
of bonds applied for, whichever is the greater; and, if for $5,000 or less, by payment in'full. The Secretary of the Treasury reserves the right to close the
books as to any or all subscriptions or classes of subscriptions at any time without
notice.
The Secretary of the Treasury reserves the right to reject any subscription,
in whole or in part, to allot less than the amount of bonds applied for, to make
allotments in full upon applications for smaller amounts and to make reduced
allotments upon, or to reject, 'applications for larger amounts, or to adopt any
or all of said methods or such other methods of allotment and classification of
allotments as shall be deemed by him to be in the public interest; and his action
1 Omitted portions similar to corresponding sections of Department Circular No. 560, p. 222.




232

REPORT OF THE SECRETARY OF THE TREASURY

in any or all of these respects shall be final. Subject to these reservations,
cash subscriptions for amounts up to and including $5,000 will be given preferred allotment, and cash subscriptions for amounts over $5,000 will be allotted
on an equal percentage basis, but not less than the maximum preferred allotment; and subscriptions in payment of which Treasury notes of series C-1936
are tendered will be allotted in full. Allotment notices will be sent out promptly
upon allotment, and the basis of the allotment will be publicly announced.

Payment at par and acrued interest, if any, for bonds allotted on cash subscriptions must be made or completed on or before March 16, 1936, or on later
allotment. In every case where payment is not so completed, the payment
with application up to 5 percent of the amount of bonds applied for shall, upon
declaration made by the Secretary of the Treasury in his discretion, be forfeited
to the United States. Any qualified depositary will be permitted to make payment by credit for bonds 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 notes of series
C-1936, maturing April 15, 1936, will be accepted at par in payment for any
bonds subscribed for and allotted and such payment should be made when
the subscription is tendered. Coupons dated April 15, 1936, must be attached
to the notes when surrendered, and accrued interest from October 15, 1935, to
March 16, 1936 ($12.01844 per $1,000), will be paid following acceptance of the
notes.
GENERAL PROVISIONS .

As fiscal agents of the United States, Federal Reserve banks are authorized
and requested to receive subscriptions.1 * * *
HENRY MORGENTHAU,

Jr.,

Secretary of the Treasury.
[Treasury notes, series A-1941. Department Circular No. 568. Public Debt]
TREASURY

DEPARTMENT,

Washington, March 2, 1936.
OFFERING OF NOTES

The Secretary of the Treasury, pursuant to the authority of the Second Liberty
Bond Act, approved September 24, 1917, as amended, invites subscriptions, at
par and accrued interest, from the people of the United States for 1% percent
notes of the United States, designated Treasury notes of series A-1941. The
amount of the offering is $600,000,000, or thereabouts, with the right reserved
to the Secretary of the Treasury to increase the offering by an amount sufficient
to accept all subscriptions for which Treasury notes of series C-1936, maturing
April 15, 1936, are tendered in payment and accepted.
DESCRIPTION OF NOTES

The notes will be dated March 16, 1936, and will bear interest from that date
at the rate of 1}^ percent per annum, payable on a semiannual basis on September
15, 1936, and thereafter on March 15 and September 15 in each year. They
will mature March 15, 1941, and will not be subject to call for redemption
prior to maturity.
The notes shall be exempt, both as to principal and interest, from all. taxation
(except estate or inheritance taxes, or gift taxes) now or hereafter imposed by
the United States, any State, or any of the possessions of the United States,
or by any local taxing authority.2 * * *
SUBSCRIPTION AND ALLOTMENT „

Subscriptions will be received at the Federal" Reserve banks and branches
and at the Treasury Department, Washington. Banking institutions generally
will handle applications for subscribers, but only the Federal Reserve banks
and the Treasury Department are authorized to act as official agencies. Cash
1 Omitted portions similar to corresponding sections of Department Circular No. 650, p. 222.
2 Omitted portions similar to corresponding sections of Department Circular No. 646, p. 216.




REPORT OF THE SECRETARY OF THE TREASURY .

233

subscriptions from incorporated banks and trust companies for their own account
will be received without deposit but will be restricted in each case to an amount
not exceeding one-half of the combined capital and surplus of the subscribing
bank' or trust company. Cash subscriptions from all others must be accompanied, if for more than $5,000, by payment of $5,000 or 5 percent of the amount
of notes applied for, whichever is the greater; and, if for $5,000 or less, by payment in full. The Secretary of the Treasury reserves the right to close the
books as to any or all subscriptions or classes of subscriptions at any time without
notice.
The Secretary of the Treasury reserves tbe right to reject any subscription,
in whole or in part, to allot less than the amount of notes applied for, to make
allotments in full upon applications for smaller amounts and to make reduced
allotments upon, or to reject, applications for larger amounts, or to adopt
any or all of said methods or such other methods of allotment and classification
of allotments as shall be deemed by him to be in the public interest; and his
action in any or all of these respects shall be final. Subject to these reservations,
cash subscriptions for amounts up to and including $5,000 will be given preferred
allotment, and cash subscriptions for amounts over $5,000 will be allotted oh
an equal percentage basis, but not less than the maximum preferred allotment;
and subscriptions in payment of which Treasury notes of series C-1936 are tendered will be allotted in full. Allotment notices will be sent out promptly upon
allotment, and the basis of the allotment will be publicly announced.
PAYMENT

Payment at par and accrued interest, if any, for notes allotted on cash subscriptions must be made or completed on or before March 16, 1936, or on later
allotment. In every case where payment is not so completed, the payrhent with
application up to 5 percent of the amount of notes applied for shall, upon declaration made by the Secretary of the Treasury in his discretion, be forfeited to the
United States. Any qualified depositary will be permitted to make payment
by credit for notes 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 notes of series C-1936,
maturing April 15, 1936, will be accepted at par in payment for any notes subscribed for and allotted and such payment should be made when the subscription
is tendered. Coupons dated April 15, 1936, must be attached to the notes when
surrendered, and accrued interest from October 15, 1935, to March 16, 1936
($12.01844 per $1,000), will be paid following acceptance of the notes.
GENERAL PROVISIONS

As fiscal agents of the United States, Federal Reserve banks are authorized
and requested to receive subscriptions. * * *
HENRY MORGENTHAU,

Jr.,

Secretary of the Treasury.
Exhibit 14
Subscriptions and allotments. Treasury bonds of 1948-51 and Treasury notes of
series A-1941 {from press releases. Mar. 3, 4, 6, and 12, 1936 ')
On March 3, 1936, Secretary of the Treasury Morgenthau announced that the
subscription books for the cash offering ot 2% percent Treasury bonds of 1948-51
and iy2 percent Treasury notes of series A-1941 closed at the close of business
March 2, 1936. Reports received from the Federal Reserve banks show that for
the offering of bonds, which was for $650,000,000,. or thereabouts," the cash subscriptions aggregated $5,106,913,850, of which $727,033,950 was allotted. Subscriptions in amounts up to and including $5,000 were allotted in full and those
in amounts over $5,000 were allotted 13 percent, but not less than $5,000 on
any one subscription.
For the cash offering of Treasury notes which was for $600,000,000, or thereabouts, subscriptions aggregated $3,354,464,300, of which $628,625,600 was
allotted. Cash subscriptions up to and including $5,000 were allotted in full,
and those in amounts over $5,000 were allotted 18 percent, but not less than
$5,000 on any one subscription.
1 Revised Apr. 3,1936.




234

REPORT OF THE SECRETARY OF THE TREASURY

The subscription books for the offering of Treasury bonds of 1948-51 and
Treasury notes of series A-1941, for which Treasury notes of series C-1936,
maturing April 15, 1936, were tendered, closed at the close of business March 5,
1936. The total exchange subscriptions which comprised $496,462,900 for the
bonds and $48,082,000 for the Treasury notes, were allotted in full.
Subscriptions and allotments for the two issues were divided among the
Federal Reserve districts and the Treasury as follows:
Treasury bonds of 1948-51
Federal Reserve district

Exchange
Cash
Total
Cash
Total
subscriptions subscriptions subscriptions subscriptions jsubscriptions
received
and
allotted
received
allotted
received
allotted

Boston
New York
Philadelphia..
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis..
Kansas C i t y . .
Dallas
San Francisco.
Treasury

$455, 436,100
2, 730,256,800
257, 631,900
235, 022, 750
123, 417,050
221, 608, 550
429, 927,450
112, 796, 750
53, 345, 500
79, 313, 050
85, 636,000
320, 596, 960
2, 025, 000

$462, 086, 200
$6,650,100
379, 581,000 3,109, 837,800
6, 760,100
264, 382,000
6, 5S7,300
240, 610,050
6,325,800
128, 742,850
2,874,700
224, 483, 250
481, 203, 450
61, 276, 000
117, 269,450
4,472, 700
61, 608, 000
8, 262, 500
83, 293,450
3,980,400
86i 367, 700
831,700
332, 625,450
11, 928, 600
8,942,100
10, 967,100

Total:..

5,106,913,850

496,462,900

$64,830, 260 $71,480,350
361, 916,450 741,497, 450
43, 223,050
36,472,950
42, 228, 450
36, 641,150
26, 660,900
21, 335,100
35,661, 300
32,786,600
65, 795,160 117, 071,150
24,801,750
20, 329,050
9, 316, 200 17, 678,700
19,468, 500
15,488,100
17, 615, 000 18,446, 700
44, 226, 960 56,154,450
9, 224,100
282, 000

5, 603, 376, 760 727, 033, 950 1,223,496,850

Treasury notes of series A-1941
Boston
New York
PhiladelphiaCleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis..
Kansas C i t y . .
Dallas.-_
San Francisco.
Treasury

$268, 078,400
1, 652,370, 300
175, 841,700
219, 259, 600
106, 698,600
103, 736, 600
319, 126, 600
90, 314,300
40, 585, 600
63, 556,800
64, 123,300
260, 272,500
600,000

$1, 541, 000 $259, 619,400
36, 436, 800 1, 688,807,100
1, 609, 200
177, 450,900
222, 734, 600
3,475, 000
106, 850,100
151, 500
103, 857, 900
121,300
321, 561, 200
2,434, 600
90, 697, 200
382, 900
40, 746, 600
161,000
63, 712, 600
155, 700
64, 141,300
18, 000
261, 782, 500
1, 510,000
586,000
85,000

$49,115, 500 $50, 656, 500
299,383, 200 335,820,000
34, 008, 800
32,399, 600
41, 020, 300 44, 495, 300
20,897, 600
20, 746,100
20, 678, 600 20, 799, 900
63,871,400
61,436,800
19,134,300
18,761,400
8, 529,400
8,368,400
13, 622, 700 13, 778,400
15,325,000
15,307, 000
49, 216,000
47, 706,000
175, 000
90,000

Total...

3,354, 464,300

48,082,000

628,625,600

3,402,646,300

676,707,600

Exhibit 15
Offering of 2% percent Treasury bonds of 1951-54 dnd P/s percent Treasury notes of
series B-1941
On June 1, 1936, Secretary of the Treasury Morgenthau offered for cash subscription 2y4 percent Treasury bonds of 1951-54 and 1^^ percent Treasury notes
of series B-1941. At the same time holders of 1}^ percent Treasury notes of
series E-1936, maturing June 15, 1936, and 3K percent Treasury notes of series
A-1936, maturing August 1, 1936, were offered the privilege of exchanging such
notes either for the Treasury bonds or the Treasury notes. In the related press
release it was stated that about $116,000,000 of interest on the public debt and
$686,616,400 of maturing Treasury notes of series E-1936 would be payable on
June 15, 1936, and $364,138,000 of Treasury notes of series A-1936 would mature
on August 1, 1936.




REPORT OF THE SECRETARY OF THE TREASURY

235

[Treasury bonds of 1951-64. Department Circular No. 661. Public Debtl
TREASURY

DEPARTMENT,

Washington, June 1, 1936.
OFFERING OF BONDS

The Secretary of-the Treasury,- pursuant to the authority of the Second Liberty
Bond Act, approved September 24, 1917, as amended, invites subscriptions, at
par and accrued interest, from the people of the United States for 2% percent
bonds of the United States, designated Treasury bonds of 1951-54. The amount
of the offering is $600,000,000, or thereabouts, with the right reserved to the
Secretary of the Treasury to increase the offering by an amount sufficient to
accept all subcriptions for which Treasury notes of series E-1936, maturing June
15, 1936, or Treasury notes of series A-1936, maturing August 1, 1936, are tendered in payment and accepted.
DESCRIPTION OF BONDS

The bonds will be dated June 15, 1936, and will bear interest from that date at
the rate of 2% percent per annum, payable semiannually, on December 15, 1936,
and thereafter on June 15 and December 15 in each year until the principal amount
becomes payable. They will mature June 15, 1954, but may be redeemed at the
option of the United States on and after June 15, 1951, in whole or in part, at par
and accrued interest, on any interest day or days, on 4 months' notice of redemption given in such manner as the Secretary of the Treasury shall prescribe. In
case of partial redemption the bonds to be redeemed will be determined by such
method as may be prescribed by the Secretary of the Treasury. From the date
of redemption designated in any such notice, interest on the bonds called for
redemption shall cease.^ * * *
SUBSCRIPTION AND ALLOTMENT

Subscriptions will be received at the Federal Reserve banks and branches and
at the Treasury Department, Washington. Banking institutions generally may
submit subscriptions for account of customers, but only the Federal Reserve banks
and the Treasury Department are authorized to act as official agencies. Others
than banking institutions will not be permitted to enter subscriptions except
for their own account. Cash subscriptions from banks and trust companies for
their own account will be received without deposit but will be restricted in each
case to an amount not exceeding one-half of the combined capital and surplus of
the subscribing bank or trust company. Cash subscriptions from all others must
be accompanied, if for $5,000 or less, by payment in full; and, if for more than
$5,000, by payment of 10 percent of the amount of bonds applied for, but not less
than $5,000. The Secretary of the Treasury reserves the right to close the books
as to any or all subscriptions or classes of subscriptions at any time without notice.
The Secretary of the Treasury reserves the right to reject any subscription, in
whole or in part, to allot less than the amount of bonds applied for, to make allothients in full upon applications for smaller amounts, and to make reduced allotments upon, or to reject, applications for larger amounts, or to adopt any or all
of said methods or such other methods of allotment and classification of allotments as shall be deemed by him to be in the public interest; and his action in any
or all of these respects shall be final. Subject to these reservations, cash subscriptions for amounts up to and including $5,000 will be given preferred allotment; cash subscriptions for amounts over $5,000 will be allotted on an equal
percentage basis, but not less than the maximum preferred allotment; and subscriptions in payment of which Treasury notes of series E-1936 or Treasury notes
of series A-1936 are tendered will be allotted in full. Allotment notices will be
sent out promptly upon allotment, and the basis of the allotment will be publicly
announced.
PAYMENT

Payment at par and accrued interest, if any, for bonds allotted on cash subscriptions must be made or completed on or before June 15, 1936, or on later allotment. In every case where payment is not so completed, the payment with
application up to 10 percent of the amount of bonds applied for shall, upon declaration made by the Secretary of the Treasury in his discretion, be forfeited to the
1 Omitted portions similar to corresponding sections of Department Circular No. 550, p. 222.




236

REPORT OF THE SECRETARY OF THE TREASURY

United States. Any qualified depositary will be permitted to make payment by
credit for bonds 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 notes of series E-1936, maturing
June 15, 1936, will be accepted at par in payment for any bonds subscribed for
and allotted. Treasury notes of series A-1936, maturing August 1, 1936, with
coupon dated August 1, 1936, attached, will be accepted at par with an adjustment of accrued interest as of June 15, 1936, in payment for any bonds subscribed
for and allotted. Payment through surrender of Treasury notes of series E-1936
or of series A-1936 should be. made when the subscription is tendered.
GENERAL PROVISIONS

As fiscal agents of the United States, Federal Reserve banks are authorized and
requested to receive subscriptions.^ * * *
HENRY MORGENTHAU,

Jr.,

Secretary of the Treasury.
[Treasury notes, series B-1941. Department Circular No. 562. Public Debt]
TREASURY

DEPARTMENT,

Washington, June U 1936.
OFFERING OF NOTES

The Secretary of the Treasury, pursuant to the authority of the Second Liberty
Bond Act, approved September 24, 1917, as amended, invites subscriptions, at
par and accrued interest, from the people of the United States for 1% percent
notes of the United States, designated Treasury notes of series B-1941. The
amount of the offering is $400,000,000, or thereabouts, with the right reserved
to the Secretary of the Treasury to increase the offering by an amount sufficient
to accept all subscriptions for which Treasury notes of series E-1936, maturing
June 15, 1936, or Treasury notes of series A-1936, maturing August 1, 1936, are
tendered in payment and accepted.
DESCRIPTION OF NOTES

The notes will be dated June 15, 1936, and will bear interest from that date
at the rate of 1^^ percent per annum, payable semiannually, on December 15,
1936, and thereafter on June 15 and December 15 in each year. They will
mature June 15, 1941, and will' not be subject to call for redemption prior to
maturity .2 * * *
Bearer notes with interest coupons attached will be issued in denominations
of $100, $500, $1,000, $5,000, $10,000 and $100,000. The notes will not be issued
in registered form.
SUBSCRIPTION AND ALLOTMENT

Subscriptions will be received at the Federal Reserve banks and branches and
at the Treasury Department, Washington. Banking institutions generally may
submit subscriptions for account of customers, but only the Federal Reserve
banks and the Treasury Department are authorized to act as official agencies.
Others than banking institutions will not be permitted to enter subscriptions
except for their own account. Cash subscriptions from banks and trust companies for their own account will be received without deposit but will be restricted
in each case to an amount not exceeding one-half of the combined capital and
surplus of the subscribing bank or trust company. Cash subscriptions from
all others must be accompanied, if for $5,000 or less by payment in full; and, if
for more than $5,000, by payment of 10 percent of the amount of notes applied
for, but not less than $5,000. The Secretary of the Treasury reserves the right
to close the books as to any or all subscriptions or classes of subscriptions at any
time without notice.
The Secretary of the Treasury reserves the right to reject any subscription, in
whole or in part, to allot less than the amount of notes applied for, to make
allotments in full upon applications for smaller amounts and to make reduced
allotments upon, or to reject, applications for larger amounts, or to adopt any
* Omitted portions similar to corresponding sections of Departrnent Circular No. 550, p. 222.
2 Omitted portions similar to corresponding sections of Departmental Circular No. 551, p. 224.




REPORT OF THE SECRETARY OF THE TREASURY

237

or all of said methods or such other methods of allotment and classification of
allotments as shall be deemed by him to be in the public interest; and his action
in any or all of these respects shall be final. Subject to these reservations, cash
subscriptions for amounts up to and including $5,000 will be given preferred
allotment; cash subscriptions for amounts over $5,000 will be allotted on an
equal percentage basis, but not less than the maximum preferred allotment; and
subscriptions in payment of which Treasury notes of series E-1936 or Treasury
notes of series A-1936 are tendered will be allotted in full. Allotment notices will
be sent out promptly upon allotment, and the basis of the allotment will be
publicly announced.
PAYMENT

Payment at par and accrued interest, if any, for notes allotted on cash subscriptions must be made or completed on or before June 15, 1936, or on later
allotment. In every case where payment is not so completed, the payment with
application up to 10 percent of the amount of notes applied for shall, upon declaration made by the Secretary of the Treasury in his discretion, be forfeited to the
United States. Any qualified depositary will be. permitted to make payment by
credit for notes 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 notes of series E-1936, maturing
June 15, 1936, will be accepted at par in payment for any notes subscribed for
and allotted. Treasury notes of series A-1936, maturing August 1, 1936, with
coupon dated August 1, 1936, attached, will be accepted at par with an adjustment
of accrued interest as of June 15, 1936, in payment for any notes subscribed for
and allotted. Payment through surrender of Treasury notes of series E-1936
or of series A-1936 should be made when the subscription is tendered.
GENERAL

PROVISIONS

As fiscal agents of the United States, Federal Reserve banks are authorized
and requested to receive subscriptions. * * *
HENRY MORGENTHAU,

Jr.,

Secretary of the Treasury.
Exhibit 16
Subscriptions and allotments, Treasury bonds of 1961-54 and Treasury notes of
series B-1941 (from press releases, June 2, 5, and 10, 1936 ')
On June 2, 1936, Secretary of the Treasury Morgenthau announced that the
subscription books for the cash offering of 2% percent Treasury bonds of 1951-54
and V/s percent Treasury notes of series B-1941 closed at the close of business
June 1, 1936. Reports received from the Federal Reserve banks show that subscriptions for the cash offering of Treasury bonds, which was for $600,000,000, .or
thereabouts, aggregated $4,281,967,000, of which $670,846,550 was allotted.
Subscriptions in amounts up to and including $5,00,0 were allotted.in full and those
in amounts over $5,000 were allotted 14 percent, but not less than $5,000 on any
one subscription.
For the cash offering of Treasury notes, which was for $400,000,000, or thereabouts, subscriptions aggregated $2,772,780,900, of which $435,164,500 was
allotted. Subscriptions in amounts up to and including $5,000 were allotted in
full and those in amounts over $5,000 were allotted 15 percent, but not less than
$5,000 on any one subscription.
The subscription books for both issues for which payment was tendered in
Treasury notes of series E-1936, maturing June 15, 1936, or Treasury notes of
series A-1936, maturing August 1, 1936, closed at the close of business June 3,
1936. The exchange subscriptions were allotted in full. The exchange subscriptions for the Treasury bonds amounted to $955,841,600, which inchided
$619,910,100 of the notes of series E-1936 and $335,931,500 of the notes of series
A-1936. For the Treasury notes of series B-1941, the exchange subscriptions
amounted to $68,713,000, which included $58,500,000 of the notes of series E-1936,
and $10,213,000 of the notes pf series A-1936.
» R e v i s e d J u l y 2, 1936.




238

REPORT OF THE SECRETARY OF THE TREASURY

Subscriptions a n d allotments for t h e two issues were divided among t h e Federal
Reserve districts a n d t h e Treasury as follows:
Treasury, b o n d s of 1951-54

Federal Reserve
district

Boston
New York
Philadelphia
Cleveland-Richmond
Atlanta
Chicago
St. L o u i s
Minneapolis
Kansas City
Dallas
San Francisco
Treasury.-

Exchange subscriptions
received a n d allotted
Cash subscriptions received

Treasury
Treasury
notes, series notes, series
E-1936
A-1936

•$404,-340,^200- .$12,.673„800, $12,327,400
_. 2,234,791,300 335,080,000 263, 742, 200
239,148,300
7, 262, 500
4, 904,-600
244, 664,460
10,144, 500
1, 701, 900
140, 575,100
34,378, 500
4, 568,100
108,040, 000
9, 716,000
451, 900
376,426, 700 123, 608,300
34, 300,100
112, 264,300
13,188,700
6,351, 700
60, 206,350
26, 332,400
1, 224, 200
77,851,550
30, 790,300
3, 910, 200
83, 606. 950
6, 653, 000
487,100
198, 264,100
'9, 025, 600
9,176, 900
1, 787, 700
1,066, 600
2, 796, 300

Total

4, 281,967,000

619, 910,100

335, 931, 500

T o t a l subscriptions received

Cash subscriptions
allotted

..$429,341,400 $60, 519,300
2, 823, 613,500 320, 938,150
37,705,200
251, 315,300
40, 664,200
256, 610,860
24, 021,800
179, 511, 700
20,334,950
118, 207, 900
65,039, 660
534, 335,100
22, 936,000
131,804, 700
LI, 701,160
87, 762,950
17,118,100
112, 562, 050
18, 664,150
90, 747,050
216, 466, 500 ' 30, 988,100
316, 800
5, 639, 600
5, 237, 808, 600

Total subscriptions
allotted

. $85, 520„;600'
909,760,360
49,872, 200
62,410, 600
62, 968,400
30, 502,860
222, 948,060
42,476,400
39,257,750
61,818, 600
25, 804, 260
49,190,600
4,167, 700

670,846, 560

1,626, 688,150

T r e a s u r y notes of series B-1941
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago...
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Treasury
Total

.

$200,309,800
1, 440, 353, 800
146, 006, 000
198, 529, 500
94, 809, 300
7,2,664,-500
252,356,200
76,270,600
40, 824, 200
57,140. 500
54, 669, 800
138,446, 700
1, 500, 000

$2,409,600
42, 662,100
1, 816, 200
1, 268, 000
422, 500
424, 500
4, 040,100
588, 800
2, 277, 000
1,191, 300
362,000
1,018, 000
20,000

$2,116,300
3, 272,400
143, 500
81, 500
. 380,800
140, 700
652,900
113, 300
539,000
720, 000
20,000
2,033, 600

$204, 834, 600
1,486, 288, 300
146, 965, 700
199, 879,000
95, 612, 600
73, 229, 700
257,049, 200
76,972,700
43, 640, 200
59, 051, 800
64, 961, 800
141,498, 300
1, 520,000

$31,169,100
217, 663,300
22, 264, 600
30, 810, 200
15,199,300
12,437,400
42,066,000
14,188,900
7,167,000
10, 507,200
9,985, 500
21,481,000
225,000

$35, 693, 900
263, 697, 800
24,224, 300
32,159, 700
16,002, 600
13,002,,600
• 46,769,000
14,891,000
9, 983, OOO
12,418, 500
10,367, 500
24, 532, 600
245,000

2, 772, 780, 900

58, 500; 000

10, 213, 000

2, 841,493, 900

435,164, 500

603, 877, 600

I s s u e s of Treasury bills
Exhibit 17
Inviting tenders for two issues of Treasury bills dated J u l y 3, 1935 {press release,
J u n e 28, 1935)
TREASURY

DEPARTMENT,

Washington, J u n e 28, 1935.
T h e Secretary of t h e Treasury gives notice t h a t tenders are invited for two
series of Treasur}^ bills to t h e aggregate a m o u n t of $100,000,000, or thereabouts.
One series will be 133-day bills and t h e other series will be 273-day bills. Both
series w411 be sold on a discount basis to the highest bidders. Tenders will be
received a t t h e Federal Reserve banks, or t h e branches thereof, up to 2 o'clock
p. m., eastern s t a n d a r d time, on Monday, July 1, 1935. Tenders will not be
received a t t h e Treasury D e p a r t m e n t , Washington.
T h e Treasury bills will, as stated, be issued in two series, $50,000,000, or thereabouts, m a t u r i n g on November 13, 1935, and $50,000,000, or thereabouts,
m a t u r i n g on April 1, 1936; both series to be dated July 3, 1935. Bidders will be
required to specify the particular series for which .each tender is m a d e . T h e face,
a m o u n t of t h e bills of each series will be payable without interest on their respective m a t u r i t y dates. T h e bills will be issued in bearer form only, a n d in a m o u n t s
or denominations of $1,000, $10,000, $100,000, $500,000, and $1,000,000 (maturity
value).
I t is urged t h a t tenders be m a d e on t h e printed forms and forwarded in t h e
special envelopes which will be supplied by the Federal Reserve banks or branches
upon application therefor.




REPORT OF THE SECRETARY OF THE TREASURY

239

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 percent 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 1, 1935, 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 for each
series 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. Any tender which does not specifically
refer to a particular series will be subject to rejection. 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 iramediately available funds on July 3, 1935.
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, from all taxation,
except estate and inheritence taxes. (Attention is invited to Treasury Decision
4550, ruling that Treasury bills are not exempt from the gift tax.) 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 any tax now or hereafter imposed by
the United States or any of its possessions.
Treasury Department Circular No. 418, as amended, and this notice 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 two issues of Treasury bills dated July S, 1935 {press release,
July 2, 1935)
TREASURY DEPARTMENT,

Washington, July 2^ 1935.
Secretary of the Treasury Morgenthau announced last evening that the tenders
for two -series of Treasury bills, to be dated July 3, 1935, which were offered on
June 28, were opened at the Federal Preserve banks on July 1, 1935.
Tenders were invited for the two series to the aggregate amount of $100,000,000,
or thereabouts, and $246,571,000 was applied for, of which $100,007,000 was
accepted. The details of the two series are as follows:
133-DAY T R E A S U R Y

BILLS, MATURING NOVEMBER

13, 1935

For this series, which was for $50,000,000, or thereabouts, the total amount
apphed for was $88,147,000, of which $50,007,000 was accepted. The accepted
bids ranged in price from 99.978, equivalent to a rate of about 0.060 percent per
annum, to 99.970, equivalent to a rate of about 0.081 percent per annum, on a
bank discount basis. Only part of the amount bid for at the latter price was
accepted. The average price of Treasury bills of this series to be issued is 99.973
and the average rate is about 0.072 percent per annum on a bank discount basis.
273-DAY T R E A S U R Y

B I L L S , M A T U R I N G A P R I L 1, 1936

For this series, which was for $50,000,000, or thereabouts, the total amount
apphed for was $158,424,000, of which $50,000,000 was accepted. The accepted
bids ranged in price from 99.926, equivalent to a rate of about 0.098 percent per
annum, to 99.917, equivalent to a rate of about 0.109 percent per annum, on
a bank discount basis. Only part of the amount bid for at the latter price was
accepted. The average price of Treasury bills of this series to be issued is 99.919
and the average rate is about 0.107 percent per annum on a bank discount basis.
Exhibit 19
Press releases pertaining to Treasury bill issues during the fiscal year 1936 were
similar in form to the foregoing and are, therefore, not here reproduced. The
essential details regarding each issue are summarized in the following table:



Summary of information contained in press releases issued in connection with Treasury bills offered during the fiscal year 1936
B i d s accepted
Total
ount
D a y s " aa m
pplied
to m a for (in
turity
thousands)

D a t e of issue

D a t e of m a t u r i t y

1935

1935 a n d 1936
N o v . 13, 1935
A p r . 1,1936
_.
N o v . 20, 1935.

July3
T 1 O
July 3
J u l y 10
JulylO__
J u l y 17
J u l y 24
J u l y 31
Aug. 7
A u g . 14
A u g . 21 _ .
A u g . 28
Sept. 4
Sept. 11
Sept. 18
S e p t . 25
Oct. 2
Oct. 2
Oct. 9
Oct. 9
Oct. 16
Oct. 16
Oct. 23 - .
Oct. 23
Oct. 30
Oct. 30
Nov. 6
N o v . 6N o v . 13
N o v . 13
N o v . 20
N o v . 20
N o v . 27
N o v . 27

1936
Apr. 8
A p r . 15 A p r . 22
A p r . 29
May 6
M a y 13
M a y 20
M a y 27
June 3
J u n e 10
J u n e 17
J u n e 24
M a r . 16
July 1
M a r . 16
July 8
M a r . 16
J u l y 15
- _ M a r . 16 .
J u l y 22
M a r . 16 . .
_. J u l y 29.
Mar. 16...
_-- A u g . 5
M a r . 16
A u g . 12
M a r . 16
A u g . 19
_
M a r . 16
A u g . 26




-. .

-.

,.
..
_ __.

-

Average
Amount
E q u i v a - (in t h o u EquivaEquivaPrice
Price
Price
sands)
(per h u n - lent r a t e i
(per h u n - lent r a t e i (per h u n - lent r a t e '
(percent)
dred)
(percent)
dred)
dred)
(percent)
Lowest

Highest

133
273
133

$88,147
168,424
124,306

$99.978
99.926
99. 977

0.060
.098
.062

273
273
273
273
273
273
273
273
273
273
273
273
166
273
169
273
152
273
145
273
138
273
131
273
124
273
117
273
110
273

197, 310
223,998
160, 295
158,852
150,119
139,638
123,036
84,157
163,683
158,.384
149,236
114,836
108,794
161,318
170,699
145,025
193,039
193,452
288,950
186,248
189,802
142, 391
145, 210
166, 236
192, 570
160, 648
112,392
160,918
124,026
166,467

99. 955
99.980
99. 963
99. 963
99. 962
2 99. 960
99.960
99.942
99.909
99. 902
99.909
99. 856
99. 991
99. 840
99. 934
3 99. 841
99. 945
99.867
99.960
99.900
99. 969
99. 901
99.972
99. 887
99. 975
99. 897
99. 980
99.900
2 99. 991
99.905

.069
.026
.049
.049
.'050
.053
.053
.076
.120
.129
.120
.190
.020
.211
.149
.210
.130
.189
.099
.132
.081
.131
.077
• .149
.073
.136
.062
.132
.029
.125

$99.970
99.917
99.973
99.936
99. 955
99. 953
99.941
99. 942
99.941
99.934
99.885
99.870
99. 861
99.833
99. 811
99. 901
99. 797
99. 921
99. 813
99. 937
99. 841
^9.953
99.863
99.959
99.866
99. 964
99. 874
99.972
99.887
99.975
99.890
99.980
99.898

0.081
.109
.073
.084
.069
.062
.078
.076
.078
.087
.152
.171
.196
.220
.249
.215
.268
.179
.247
.149
.210
.117
.181
.107
.177
.099
.166
.081
.149
.077
.145
.065
.135

$50,007 •
50,000
50,045
50,100
50,062
50,015
50, 050
60,102
£0,072
50.045
50,000
50, 046
60,031
50,.015
50,040
50,107
60,003
50,006
50,025
50,205
50,111
50,830
50,030
50, 325
50.046
£0,143
50,102
60,132
60,017
50,015
50,003
50, 2£0
60, 050

$99.973
99. 919
99. 976
99.939
99. 961
99. 957
99.946
99. 947
99. 945
99. 938
99.904
99.885
99. 866
99. 850
99.827
89. 912
99.808
S9. 924
99. 823
99. 939
99.845
99. 956
99. 865
99. 961
99.872
99.966
99.878
99. 973
99.892
99. 977
99. 893
99. 981
99.901

D a t e of press releases

1936

1935
.0.072 j j u n e 28 a n d J u l y - 2 .
.107
.068
[july 5 and 9
.080
.052
.057
.071
.070
.073
. 082
.127
.161
.176
.198
. 228
.191
.253
.171
.233
.144
.205
.109
.177
.101
.169
.095
.161
.079
.143
.071
.142
.063
.131

D a t e of
closing

J u l y 1.
J u l y 8.

J u l y 12 a n d 16
J u l y 19 a n d 23.
J u l y 26 a n d 30
Aug. 2 and 6
A u g . 9 a n d 13
A u g . 16 a n d 20
A u g . 23 a n d 27
_
A u g . 28 a n d 31
Sept. 6 a n d 10 _ . . _ .
Sept. 13 a n d 17
S e p t . 20 a n d 24.

J u l y 16.
J u l y 22.
J u l y 29.
A u g . 5.
A u g . 12.
A u g . 19.
_._ _ A u g . 26.
A u g . 30.
__. . . S e p t . 9.
S e p t . 16.
S e p t . 23.
S e p t . 30.
Oct. 7.
Oct. 14.
Oct. 21.

j o c t . 18 a n d 22
j o c t . 26 a n d 29
j O c t . 30 a n d N o v . 2

.

: . . O c t . 28.
N o v . 1.
N o v . 8.

"NTn-jr 1 "^ « n H 1Q
INHV

99 nnri 9fi

N o v . 18.
N o v . 26.

i3ec.
Dec.
Dec.
Dec.
«e D e c .

4 11
18
24
31

-

o
1936
9 Jan. 8
1 J a n . 16
^ Jan. 22..
J a n . 29
Feb. 5
F e b . 11
t i F e b . 19.
F e b . 26
Mar. 4
M a r . 11
Mar. 18.. .
M a r 25
Apr. 1..
Apr.
Apr.
Apr
Apr.
May
May
May

8
15
22
29
6
6
13-

May
May
May
May
June
June
June
June
June
June
June
June

20._
20 .
2727
3.
3
1010...
17
17_..
24...
24...

^^^ept.
Sept.
Sept.
Sept.
Sept.

2 9
16
23
30

-.
_.
:

Oct. 7 .
Oct. 14
Oct: 21
Oct. 28
Nov. 4
___i_
N o v . 10
N o v . 18
N o v . 25 .
Dec. 2
-..
Dec. 9
Dec; 16
' . •
D e c . 23'
D e c . 30 _.
_
1936 a n d 1937
J a n . 6, 1 9 3 7 - — ' . . .
J a n . 13, 1937.
J a n . 20; 1 9 3 7 - - . . . . :
J a n . 27, 1937—
D e c . 16, 1 9 3 6 . . . — F e b . 3, 1937D e c . 16,, 1936--"
F e b . 10, 1 9 3 7 - . , . : D e c . 16, 1 9 3 6 . . . . . . .
F e b . 17, 1937
,
D e c . 15, 1936
F e b . 24, 1937
D e c . 15, 1936
M a r . 3, 1937.
D e c . 15, 1936
..
M a r . 10, 1 9 3 7 — —
Dec. 15, 1936
M a r . 17, 1937
D e c . 15, 1936
M a r . 24, 1937

273
273
273
274
274

9U. 917
99.920
99. 947
2 99.950
99.950

132.204
99. 940
273
99.940
190i 515
273
99.932
273. 212,610
273. • 170,307
99.934
273
99.932
192,133
273
99.936
.184, 669
273
99.942
143,432
273
99. 950
98,970
273
99.950
109,838
'273
99.962
123,071
273
99.950
'129, 256
273 • 147.495
99. 930
273
137, 648 , ^99.930
273
273
273
273.
223
. • 273
216
273
209
273
•202
273
196'
273'
188
273
181
273
174
273

J Bank discount basis.
2 Except for 1 bid of $60,000 at 100..




144,^70.
239, 296
200,906..
-138,166
79,312

201,806;
150,991
146,908
117,748
94,59993,918
187,9.41,
125, 607
140,736
161, 330 •
131,665
148,465 .
146,415.
134,960
152, 610
113,830
133,883 .
116,172
135,202
146.116

.. 99.926
99.932
99. 934
fi 99. 940 .
99.950
99. 940
99.930
99.939
99. 936
99. 888 •
99.916
99. 871
.: 99.916
99.864
99.9i6
99.900
99. 916
• 99.900
99. 935
6 99. 830

-

.133
.113
.099
.085
.086

60,045
60,000
60, 216
£0,070
60,000

99. 906
99.918
99. 934
. 99.939
99.939

.124
.108
.087
.080
.080

Nov
Dec,
Dec.
Dec.
Dec.

.119
.107
.096
.100
.095
.088
.080
.080
. .096
.115
.111
.124
.136

60,060
60.050
50,130
50,074
50, 296
50,546
50,100
50; 000
50,010
60,000
50,025
50,085
.60,028

99. 919
99. 924
99. 929
99. 926
99:928
99. 934
99. 941
99. 944
99.937
99. 921
99.921
99.;911
99.904

.107
.100
.093
.098
.095
.087
.078
.074
.084
.104
.104
.118
.126

1936
Jan. 3 and 7
.
J a n . 10 a n d 14
J a n . 17 a n d 21
J a n . 24 a n d 28
J a n . 31 a n d F e b . 4
Feb. 5 and 8
F e b . 14 a n d 18.
F e b . 21 a n d 25 . .
F e b . 28 a n d M a r . 3
M a r . 6 a n d 10
M a r . 13 a n d 1 7 . . .
M a r . 20 a n d 24
M a r . 27 a n d 31

.109
.106
.070
.066
.066

99.899
99.914
99.925
99.935
99.935

.079
.079
.090
.087
.090
.084
.076
.066
.066
.050
.066
.092
.092

99. 910
99.919
99.927
99.924
99.928
99.933
99.939
99.939
99. 928
99.913
99.916
99.906
99.897

.

.098
.090
.087
.079
.081
.079
.117
.080
.110. 148
:150
.170
• .155
.179
.161
.132
.167
.132
.134
.224

99.910
99. 920
99.928
99.929
99.913
99.895
99.901
99.843
99. £98
99.849
99. S93
99. 838
99. £93
99.827
99.£96
99. 815
99. £97
99. 807
99.908.
99.811

. .119
.106
.096
.094
.140
.138
' .165
.207
.176
.199"
.191
. .214
.198
.228
.199
.244
.205
.255
.190
. 249

» Except for 1 bid of $10,000 at 99.910.
« Except for 1 bid of $6,000 at 99.950.

99.914
50,196
99. 924
50,008
99. 929
50,077
99. 933
50,110
99.924
£0,024
99. 905
60,102
99. 909
60,005
99.868
£0,111
99.910
60,000.
60,005 • 99.863
99.902
50, 060
50,060 • 99.848
•99.600
60, OSO
'99.836
50, 295
£0,140 • 99.902
99. 826
50;035
99.904
50,018
99.816
60. 012
99.912
60; 050
99.818
50, 008

.113
.100
.093
.089
.123
.125
.151
• . 188
.156:
.181
.175
.200
.184
.218
.187
.230
.191
.242
.183
.240

Apr.
Apr.
Apr.
Apr.

2S a n d D e c 3
6 a n d 10
13 a n d 17
18 a n d 21
24 a n d 28

t)ec
Dec.
Dec.
.._.;
Dec.
-•— D e c .

3 and 7
10 a n d 14
17 a n d 21
24 a n d 28

[ M a y 8 a n d 12
>Mfl.v 15 a n d IQ

2
9
16.
20.
27.

1936
J a n . 6.
._ J a n . 13.
;
J a n . 20.
J a n . 27.
F e b . 3.
F e b . 7.
F e b . 17.
F e b . 24.
M a r . 2.
. . M a r . 9.
M a r . 16.
. . M a r . 23.
^ . . . r . M a r . 30.
•.. A p r .
Apr.
._ A p r .
Apr.
May

6.
13.
20.
27.
4.

O

n
o

xn
o

. . . . M a y 11.
M a y 18.

O

M a y 26.
J u n e 1.
June 8

J u n e 22

W
H
>
xn

«Except for 1 bid of $15,000 at 99.975.
6 Except for 1 bid of $225,000 at 99.871.

to

242

REPORT OF THE SECRETARY OF THE TREASURY
United States savings b o n d s
Exhibit 20
Offering of United States savings bonds, series B

On J a n u a r y 1, 1936, Secretary of t h e Treasury Morgenthau offered for sale,
through t h e Postal Service, United States savings bonds, series B, as described
in t h e following circular:
[Department Circular No. 554, as amended.i

Public Debt]

TREASURY

DEPARTMENT,

Washington, December 16, 1935.
OFFERING OF UNITED STATES SAVINGS BONDS, SERIES B

1. T h e Secretary of t h e Treasury, p u r s u a n t to t h e a u t h o r i t y of t h e Second
Liberty Bond Act, approved September 24, 1917, as amended, offers for sale, to
t h e people of the United States, t h r o u g h t h e Postal Service, an issue of bonds of
t h e United States, designated United States savings bonds, series B, which will
be issued on a discount basis, will m a t u r e in 10 years, b u t will be redeemable
before m a t u r i t y a t t h e option of owners. Beginning J a n u a r y 1, 1936, these
bonds will be on sale a t post offices of t h e first, second, a n d t h i r d classes and at.
selected post offices of t h e fourth class, in a m o u n t s of $25 (maturity value) and
multiples thereof; a n d m a y also be purchased by mail upon application to t h e
Treasurer of t h e United States, Washington, D . C , or to any Federal Reserve
bank,^ accompanied by a remittance to cover t h e issue price. United States
savings bonds, series B, will continue to be on sale until this offering is t e r m i n a t e d
by notice given by t h e Secretary of t h e Treasury to t h e Postmaster General.
2. By notice heretofore given to t h e Postmaster General, t h e sale of United
States savings bonds of series A p u r s u a n t to D e p a r t m e n t Circular No. 529, dated
F e b r u a r y 25, 1935, will t e r m i n a t e on December 31, 1935. All applications for
United States savings bonds received by mail by t h e Treasury D e p a r t m e n t subsequent to December 31, 1935, will be t r e a t e d as applications for series B bonds.
T h e bonds of series B now offered for sale beginning J a n u a r y 1, 1936, have terms
and conditions of issue substantially identical with the savings bonds' of series A
DESCRIPTION OF BONDS OFFERED

3. United States savings bonds, series B, will be issued only in registered form,
in denominations of $25, $50, $100, $500, and $1,000 (maturity value), a t prices
hereinafter set forth, and will bear t h e n a m e a n d address of t h e owner, t h e date
as of which issued, and t h e date of m a t u r i t y , which on original issue shall be
inscribed thereon by t h e authorized postmaster (or other agent) a t t h e time of
issue. All such savings bonds are to be d a t e d as of t h e first day of t h e m o n t h in
which t h e issue price is received, a n d will m a t u r e and be payable 10 years from
such issue date. T h e y m a y be redeemed prior to m a t u r i t y (but n o t within 60
days after t h e issue date), a t t h e owner's option, in accordance with t h e table of
redemption values appearing a t t h e end of this circular. A table of redemption
values for each bond appears on t h e face thereof. Partial p a y m e n t of savings
bonds of denominations larger t h a n $25 (maturity value) will be p e r m i t t e d in
accordance with Treasury D e p a r t m e n t Circular No. 530, as amended.
No
interest will be paid on savings bonds, b u t t h e purchase price has been fixed so
as to afford an investment yield of a b o u t 2.9 percent per a n n u m compounded
semiannually if t h e bonds are held to m a t u r i t y . If t h e owner exercises his option
to redeem his bond prior to m a t u r i t y t h e yield will be less, varying with t h e
respective redemption values.
4. T h e savings bonds will n o t be transferable, a n d will be payable only to t h e
owner n a m e d thereon, except in case of d e a t h or disability of t h e owner or as a<^
1 Amendment of Mar. 18, 1936, in italics.




REPORT OF THE SECRETARY OF THE TREASURY

243

result'of judicial proceedings, and then only in accordance with regulations
Lpj^gs.cribed^from time to time by the-Secretary of the Treasury. (See Treasury
Department Circular No. 530, as amended.) "Savings bonds issued through a
post office shall be valid only if inscribed with the owner's name and address,
dated the first day of the month in which the issue price is received, and duly
delivered by an authorized postmaster; th-ey will bear the facsimile signature of
the Secretary of the Treasury, the seal of the Treasury Department will be
impressed thereon, and they will bear the post-office dating (money order)
stamp. 1
5. The savings bonds shall be exempt, both as to principal and interest, from
all taxation now or hereafter im.posed by the United States, an}^ State, or any
of the possessions of the United States, or by any local taxing authority, except
(a) estate or inheritance taxes, or gift taxes, and (6) graduated additional income
taxes, comir.only known as surtaxes, and excess-profits and war-profits taxes,
now or hereafter imposed by the United States, upon the income or profits of
individuals, partnerships, associations, or corporations. The interest on an
am,ount of bonds authorized by the Second Liberty Bond Act, approved Septem.ber 24, 1917, as am.ended, the principal of which does not exceed in the
aggregate $5,000,. own^d by any individual, pai-tnership, association, or corporation, shall be exemp;t from the taxes provided for in clause {b) above. For the
purposes of detern^iiiing taxes and tax exemptions, the increment in value of
savings bonds represented by the difference between the price paid and t h e
redemption value riceived (whether at or before m-aturity) shall be considered
as interest.
PURCHASE

6. Savings bonds of series B may be purchased for cash, at post offices of the
first, second, and third classes, and at selected post offices of the fourth class,
at any time while this offer is in effect; and, subject to regulations prescribed by
the Board of Trustees of the Postal Savings System, the Mdthdrawal of postal
savings deposits will be permitted for the purpose of acquiring savings bonds.
Savings bonds may also be purchased by mail upon application to the Treasurer
of the United States, Washington, D. C , or to any Federal Reserve bank,^ accom.panied by a remittance to cover the issue price. The issue prices of the various
denominations of savings bonds of series B follow:
Issue {purDenom.ination (maturity value):'
.chase)mice
$25
$18. 75
50..
37. 50
100
:J__.
7km
500
375.00
1,000
750.00
7. It shall not be lawful for any one person at any one time to hold savings
bonds issued during any one calendar year in an aggregate amount exceeding
$10,000 (maturity value).
AUTHORIZED FORMS OF REGISTRATION

. .8. Full information as to the,authorized fqrms of registration for United States
savings bonds is given in section I of Department Circular No; 5B0; as amendeii'i
copies of which circular may be seen at any post office and m.ay be obtained
from the Treasury Departm.ent, Division of Loans and Currency, Washington,
D. C , or from any Federal Reserve bank.
1 If savings bonds are issued or reissued at the Treasury Department under the provisions of Department
Circular No. 530, as amended, they will bear the dating stamp of the Division of Loans and Currency,
Treasury Department; if issued by a Federal Reserve bank they will bear the dating stamp of that bank. See
note 2.
2 Amendment of Mar. 18, 1936, in itahcs.




244

REPORT OF THE SECRETARY OF THE TREASURY
DELIVERY. AND SAFEKEEPING OF BONDS

9. Postmasters from whom, savings bonds may be purchased are authorized
to deliver such bonds duly inscribed and dated upon receipt of the issue price.
Delivery should not be accepted by iany. purchaser until he has verified that his
name and address are duly and :correctly inscribed on the face of the bond and
that the bond is duly dated the first day of the month in which payment of the
issue price was received, .
.
^ 10. Any savings bond will be held in safekeeping by the Secretary of the
Treasury if the purchaser so desires, and in this connection the Secretary will
utilize the facilities of the.Federal Reserve banks as fiscal agents of the United
States. ^ The purchaser, may arrange for such safekeeping as provided in Department Circular No.. 530, as amended, at the time he purchases his bond or subsequently. Postmasters generally will assist owners in arranging for safekeeping,
but will not act as safekeeping agents.
PAYMENT AT MATURITY OR ON REDEMPTION PRIOR TO MATURITY

11. Payment, including partial payment, of any savings bond in accordance
with its terms, at maturity or at the . appropriate redemptmn value prior to
maturity (but not within 60 days after the issue date), will be^piade, as provided
in Department Circular No. 530, as amended, following pres&itation and surrender of the bond, by registered mail or otherwise, at the expense and risk of
the owner, to the Treasury Department, Division of Loans and Currency,
Washington, D. C , either direct or through any Federal Reserve bank, with the
request for payment appearing on the back of the bond duly executed by the
owner and certified (1) by any United States postmaster from whom United
States savings bonds may be purchased, or by any other post office official
authorized for that purpose (see Department Circular No. 530, as amended),
whose signature must be authenticated by the imprint of his post-office dating
stamp, (2) by an executive officer of an incorporated bank or trust company
(.authenticated by the impress of the corporate seal of the bank or trust company),
•or (3) by any other person duly designated by the Secretary ot the Treasury for
the purpose. Payment will be made by check drawn to the order of the owner,
promptly after discharge of registration at the Treasury Department. In case
of the death or disability of the registered owner, instructions should be obtained
from the Treasury Department, Division of Loans and Currency, Washington,
D. C , before the request for payment is executed. Postmasters generally will
assist owners in securing payment at or before maturity, but they will not make
payment of savings bonds.
GENERAL PROVISIONS

12. All savings bonds issued pursuant to this circular shall be subject to
regulations prescribed from time to time by the Secretary of the Treasury.
Such regulations may require, among other things, reasonable notice in case of
presentation of savings bonds for redemption prior to maturity. The regulations
noAV in effect governing sayings bonds are contained in Treasury Department
Circular No. 530, as amended.
13. The Secretary of the Treasury may designate agencies other than post
•dffices for the sale of savings bonds of this series, and he reserves the right to
refuse to issue or permit to be issued hereunder any such savings bonds in any
..case or class of cases if he deems such action to be in the public interest. The
Secretary of the Treasury further reserves the right to terminate this offer a t
any time, on notice to the Postmaster General.




245

REPORT OF THE SECRETARY OF THE TREASURY

14. Postmasters of the first, second, and third classes, and selected postmasters
of the fourth class, under regulations promulgated by the Postmaster General,
arid FederarR'eserve banks', as fiscal agents of the Uriited'^ States,' are" authorized
to perform such fiscal agency services as may be requested of them in connection
with the, issue, delivery, safekeeping, redemption, and payment of savings bonds.
15. The Secretary, of the Treasury m.ay at any tim,e or from time to time
supplement or amend the terms of this circular, inform.ation as to which will be
promptly furnished to the Postmaster General and to Federal Reserve banks.
HENRY MORGENTHAU,

Jr.,

Secretary of the Treasury.
Table showing how United States savings bonds of series B increase in value
during successive hialf-years following issue: ^
Maturity value..
Issue price.--—-

$26.00
18.76

$60. 00
37. 50

$100. 00
75.00

$500. 00 $1,000. 00
750. OD
375. 00

Redemption values after the issue date
First year
1 to IK years.-.
IH to 2 years-..
2 to 23^ years-_.
2K to 3 years-..
3 to3H years. _.
33^ to 4 years...
4 to 43^ years.-.
4M to 5 years.-.
6 to 6K years-_.
6K to 6 years--.
6 to 63/^ years--.
63^ to 7 years--.
7 to 7H years...
7M to 8 years.-.
8 to 83^ years...
8>^ to 9 years.-.
9 to 93^ years...
93^ to 10 years..
Maturity value.

18.75
19.00
19.25
19.50
19.75
20.00
20.25
20.50
20.75
21.00
21.25
21.50
21.76
22.00
22.50
23.00
23.50
24.00
24.50
26.00

37.50
38.00
38.50
39.00
39.50
40.00
40.50
4L00
41.60
42.00
42.50
43.00
43.50
44.00
45.00
46.00
47.00
48.00
49.00
50.00

375.00
75.0076.00
380.00
77.00
385.00
78.00
390.00
79.00
395.00
80.00
400.00
81.00
405.00
82.00
410.00
.415.00
83.00
84.00
420.00
425.00
86.00
86.00
430.00
87.00
435.0088.00
440.00
90.00
.450.00
92.00
460.00
94.00
470.00
- 96.00 . 480.00
98.00
490.00
100.00
500.00

750.00
760.00
770.00
780.00
790.00
800.00
810.00
820.00
830.00
840.00
850.00
860.00
870.00
880.00
900.00
920.00
940.00
960.00
980.00
1,000.00

Exhibit 21
Sales of United States savings bonds from March 1, 1935, to June SO, 1936
United States savings bonds are sold direct to purchasers at post offices, and
receipts from such sales are deposited in Government depositaries to the credit
of the Postmaster General. Daily reports of such receipts by depositaries are
made to the Treasurer of the United States, but these receipts are not actually
transferred to the credit of the Treasurer as public debt receipts until after audit
of the postmasters' accounts for the month in which the sales were made. I t
follows that receipts of sales by postmasters are not reflected in public debt
accounts and statements until some time after the close of the month in which
the sales were made. Sales on application by mail to the Treasurer of the United
States and the Federal Reserve banks are credited currently as public debt
receipts. The following table shows the cash receipts from sales on the basis of
reports by depositaries; the actual receipts determined by audited reports; and
the public debt receipts, as shown on the daily statements of the Treasury.
1 This table also applies to United States savings bonds of series A (issued between Mar. 1 and Dec. 3U
1936).




246

REPORT OF THE SECRETARY OF THE TREASURY

Sales of United States savings bonds, by months, from M a r . 1,1935, to J u n e 30,1936
Receipts on basis
of d e p o s i t a r y
A u d i t e d receipts
reports

March
April
May
June

Public debt
receipts (daily
Treasury
statements)

1935
-

-

.
. ..

T o t a l fiscal year 1935
JulyAugust
September
October
November
December .

._.

._
. .

i
..

$32, 639,948. 97
24, 576,'826. 52
19, 823,836. 54
15, 664, 797. 43

$38, 813, 643. 75
23, 786,156. 25
17, 847, 393. 75
15, 918, 393. 75

$38, 799, 750.00
23, 767, 293. 76

92, 705, 409. 46

96, 365, 587. 50

62, 567, 043. 75

21, 600,112. 68
13, 057, 330. 89
9,129, 263. 88
17, 326, 225. 43
19, 802, 205. 52
20, 630,070. 72

20,932, 200. 00
12, 070, 012. 50
9, 416, 612. 50
19,904,137. 50
18, 770, 737. 50
26,196, 056. 25

17, 837, 756. 25
15, 960, 787. 50
20, 715, 356. 26
12,423,187. 50
9, 352, 068. 75
18, 592,156. 26

46, 398,'700.19
25, 363,053. 73
26, 347,426. 26
26,891,976.-. 07
. 22,'78l,062.26
25, 391,128. 80

46,102,993. 75
23,167, 406. 25
26, 823, 018. 75
26,082,-393. 75.
22,264,087.50
26, 747, 793. 75

18, 262,162. 50
26,055, 225. 00
45, 382, 676. 00
25,905,176.26
26, 350,058!'25
28, 401,910. 50

1936
January..
February
March,. _
April..
May.
June

...

. .

_.
_

T o t a l fiscal year 1936
T o t a l 1935 a n d 1936

:

274, 718, 556. 43

277, 477, 350. 00

367, 423, 965. 89

373,842, 937." 50

Series A b o n d s :
Fiscal year 1935
Fiscal year 1936

327, 806, 564. 75

96, 365, 587. 50
107, 289, 656. 25

Total
Series B b o n d s : Fiscal year 1936
Total-

265, 239, 521.00
•

:...

203, 655, 243. 75
170,187, 693. 75
373,842, 937. 50

-"

Exhibit 22
Supplement, September 17, 1935, to Department Circular No. 529, offering for sale
United States savings bonds, series A
TREASURY

DEPARTMENT,

Washington, September. 17, 1935.
I n view of t h e provisions of section 341 of Title I I I of t h e Banking Act of 1935,
approved August 23, 1935, D e p a r t m e n t Circular No. 529, d a t e d F e b r u a r y 25,
1935, is hereby amended so t h a t t h e first sentence under t h e heading ' ' P u r c h a s e "
shall r e a d as follow^s:
Savings bonds of series A m a y be purchased for cash, a t post offices of t h e first,
second, and third classes, a n d a t selected post offices of t h e fourth class, a t any
t i m e while this offer is in effect; and, subject to regulations prescribed by t h e
Board of Trustees of t h e Postal Savings System, t h e withdrawal of postal savings
deposits will be p e r m i t t e d for t h e purpose of acquiring savings bonds.




T. J.

COOLIDGE,

Acting Secretary of the Treasury.

REPORT OF THE SECRETARY OF T H E TREASURY

247

0

Exhibit 23
Regulations governing United States savings bonds, December 2, 1935
[Department Circular No. 530, as amended.^ Public Debt]
TREASURY

DEPARTMENT,

Washington, December 2, 1935.
To Owners of United States Savings Bonds, and Others Concerned:
T h e following regulations governing United States savings bonds are published
for t h e information a n d guidance of all concerned:
I. REGISTRATION

1. United States savings bonds will be issued only in registered form. Except
as otherwise specifically provided in these regulations, t h e Treasury D e p a r t m e n t
reserves t h e right to t r e a t as conclusive t h e ownership and interest in t h e bond
as stated in t h e registration.
2. T h e following forms of registration are authorized:
(a) I n t h e n a m e of any individual, including minors. No designation of an
agent or a t t o r n e y to receive p a y m e n t on behalf of t h e owner m a y be m a d e in
the registration.
(6) In t h e names of two {but not more than two) n a t u r a l persons in t h e alternative, as, for example, ' ' M r . John Jones or Mrs. M a r y J o n e s . " T h e addresses of
both persons should be inscribed on t h e savings bond. No other form of registration in two names is authorized except as provided in subparagraphs (c) and
y ) ' hereof.
(c) I n t h e name of one individual and a single designated beneficiary in case
of death, as, for example, " M r . J o h n Smith, payable on d e a t h to Mrs. M a r y
Smith", in which case t h e address of the registered owner a n d t h e address of
the beneficiary should be inscribed on t h e face of t h e savings bond.
{d) "In t h e name of one or more guardians, executors, administrators, trustees,
or other fiduciaries of a single estate, trust, etc. (but not agents or a t t o r n e y s ) .
(1) In t h e case of guardians, executors, administrators, or any fiduciaries other
t h a n trustees t h e name a n d capacity of all such fiduciaries should be inscribed
on t h e savings bond, as, for example, "A, guardian of B " ; "A a n d B, executors
under t h e will of X " ; or "A, administrator of t h e estate of X . "
(2) In the case of trustees t h e names of all such trustees should be inscribed
on t h e savings bond, followed by a reference to t h e t r u s t instrument, if any, or
' by other words clearly identifying t h e trust, a n d t h e names of t h e organization
or t h e persons for whose benefit the t r u s t exists; provided t h a t t h e names of t h e
individual trustees need not be given in the case of trustees of unincorporated
lodges, churches, societies, schools, or similar institutions (for example, "A a n d
B, trustees under t h e will of C, for t h e benefit of X, Y, a n d Z " ; " T h e X Corporation, trustee under an agreement of t r u s t executed by Y, dated J a n u a r y 1, 1935,
for the benefit of Y and Z", or "Trustees of t h e First Baptist Church, Clarendon,
V a . " ) . In a n y case where t h e names of all t h e persons for whose benefit t h e
t r u s t exists cannot conveniently be given the. Treasury D e p a r t m e n t m a y require
a copy of the t r u s t instrument.
(3) Registration will not be p e r m i t t e d in a form indicating t h a t t h e persons
whose names appear on t h e bonds m a y not hold full legal title to, a n d t h e right
to receive p a y m e n t of, t h e savings bonds, as, for example, "A, under article 10
of t h e will of X " , or "A, guardian of B, subject to t h e order of t h e p r o b a t e court
of X count3^"
(e) I n t h e n a m e of a n y corporation, unincorporated association, partnership,
or joint stock company. T h e n a m e of t h e owner should be followed by t h e word
or words "corporation", "unincorporated association", " p a r t n e r s h i p " , or "joint
stock company", as the case m a y be, and no designation of an officer or agent to
receive p a y m e n t in behalf of t h e corporation, unincorporated association, p a r t n e r ship, or joint stock company m a y be m a d e in t h e registration; provided, however,
t h a t bonds m a y be registered in t h e title, omitting t h e name, of an officer of a
State, county, city, town, or other political or municipal body corporate, entrusted
with public funds, followed by t h e designation of a particular fund, if any, as,
for.exarnple, "Treasurer, State of Colorado (Employees' Retirement F u n d ) . "
1 Originally issued Feb. 25, 1935.




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REPORT OF THE SECRETARY OF THE TREASURY
II. BONDS NOT TRANSFERABLE

United States savings bonds are not transferable and are payable only to theowner named thereon except in the case of the disability or death of the owner
or as the result of judicial proceedings,.and. then only to the extent specifically
provided in sections VIII, IX, XIV, and XV hereof.
III. LIMITATION ON HOLDINGS

1. Under the provisions of section 22 of the Second Liberty Bond Act, approved
September 24, 1917, as amended, it is not law^ful for. any one person at any one
time to hold savings bonds issued during any one cale^idar year in an aggregate
amount exceeding $10,000 (maturity value). In determining whether the
$10,000 limitation on the holdings of any one person has been exceeded, the full
maturity value of savings bonds issued in any one calendar year held fbr the
benefit of such person in the name of a fiduciary or fiduciaries, or held by such
person as coowner with any other person (but not of bonds of which such person
is merely the de'sigriated beneficiary in case of the death of the owner), shall beadded to the full maturity value of such bonds held by such person in his or
her own name alone, arid'the sum miist not exceed $10,000 (maturity value).
If any person should in any way become such holder of savings bonds in an amount
in excess of the lawful limit, he should immediately surrender the excess amount
of bonds held by him, which will be paid at their redemption value O'n; the dateon which the excess holding was acquired.
IV. LOST, STOLEN, OR DESTROYED BONDS

1. Under the provisions of the Revised Statutes, duplicates may be issued or
payment inade upon proof of the loss, theft, or destruction of savings bonds.
Application for relief in such cases will be governed by the regulations found in
Department Circular No. 300. Full information as to the requirements, as well
as appropriate forms, may be secured from the Treasury Department, Division:
of Loans and Currency, Washington, D. C.
2. The Treasury Department, Division of Loans and Currency, should ba
notified immediately of any such loss, theft, or destruction.
V. SAFEKEEPING FACILITIES

1. Any savings bond will be held in safekeeping by the Secretar}?- of the Treasury
if the purchaser so desires, and in this connection the Secretary will utilize the
facilities of the Federal Reserve banks as fiscal agents of the United States. The
purchaser may arrange for such safekeeping at the time he purchases his bond or
subsequently. If the owner desires his savings bond held in safekeeping, he may
obtain from the postmaster an appropriate envelope, and an application blank
which he should fill out, address to the appropriate Federal Reserve bank, sign
and enclose with the savings bond in the envelope, which should be addressed
to the appropriate Federal Reserve bank. The postmaster will then register the
envelope, at the owner's expense, and the registry receipt will serve as the owner's;
temporary receipt.
2. Upon receipt of the savings bond the Federal Reserve bank will place it in
safekeeping and issue a receipt which will be.mailed to the owner at the address
given in the application. The Federal Reserve bank will, at any time deliver
the bond to the owner upon his application and upon such identification as the
bank may require.
3. Postmasters generally will assist owners in arranging for safekeeping, but.
will not act as safekeeping agents.
VI. GENERAL PAYMENT PROVISIONS

1. Savings bonds will be payable at or after maturity at their full value, or, a t
the option of the owner, prior to maturity (but not within 60 days after the issue
date) at the appropriate redemption value as shown on the face of each bond. In
order to secure payment the owner should present and surrender the bond to the
Treasury Department, Division of Loans and Currency, Washington, D. C , or
to any Federal Reserve bank, with the request for payment appearing on the
back of the bond properly executed in accordance with the succeeding paragraphs. Such presentation will be at the expense and risk of the owner and, for
his protection, the bond should be forwarded by registered mail if not presented
in person.




REPORT OP THE SECRETARY OF THE TREASURY

249

2. The request for payment must be signed in ink or indelible pencil by the
person in whose name the savings bond is inscribed, or by the person entitled to
receive payment under the provisions hereof. No request signed in behalf of the
• owner by an agent or person acting under a power of attorney will be recognized
by the Treasury Department. The request must be signed in the presence of,
and be certified by, one of the following officers:
(a) Any United States postmaster, acting postmaster, or inspector in charge
of a post office authorized to sell United States savings bonds, or—
(1) At any post office of the first class, the assistant postmaster, the postal
•cashier, the superintendent of money orders, the money order cashier, or the superintendent or assistant superintendent of a classified station or branch, or, in the
•abi^ence of the superintendent and assistant superintendent, the clerk in actual
charge of such station or branch;
(2) At any post office of the second class, the assistant postmaster, or, if there
is none, the clerk in actual charge.
If any of the above designated officials other than a postmaster, acting postmaster, or inspector in charge of an office certifies to a request for payment, he
should certify in the name of the postmaster, acting postmaster, or inspector in
•charge, followed b> his own signature and official title, as, for example, "John
Doe, postmaster, by Richard Roe, postal cashier." The certification of any postoffice official must be authenticated by a legible imprint of a dating stamp of his
post office.
(6) Any executive officer oi an incorporated bank or trust company, whose
signature must be authenticated by the impression of the corporate seal of the
bank or trust company.
(c) Any officer authorized generally to witness assignments of United States
registered bonds. (See pars. 33-35 Department Circular 300, as amended.)
3. No person authorized to certify req^ its for payment may certify a request
signed by himself, either in his own right or in any representative capacity.
4. Certifying officers should require positive identification of the person executing the request for payment as the person whose name appears on the face of
the bond, or the person entitled to request payment under the provisions of
these regulations, and will be held fully responsible therefor.
Vll. PARTIAL

PAYMENT

1. A savings bond in a denomination larger than $25 may be paid in part at
the appropriate redemption value corresponding to any authorized denomination or denominations, upon presentation and surrender of the bond in accordance with the provisions of section VI hereof, except that before the request for
payment is executed it should be amended with pen and ink or typewriter by
inserting at the end of the first sentence the words "to the extent of $
"
(this amount must correspond to the redemption value at that time of an authorized denomination or denominations), so as to make the entire sentence read as
follows: "I am the registered owner of the within savings bond, and hereby make
request for the payment thereof to the extent of $
__." Upon payment in
part, a savings bond or bonds for the remainder.will be issued in the same name
subject to the provisions of section XVI hereof.
VIII.

MINORS

1. If a savings bond is registered in the name of a minor and the Treasury
Department has notice that a guardian of the estate of such minor has been appointed by a court of competent jurisdiction, payment will be made only to such
•guardian. In this case the request for payment appearing on the back of the
bond should be signed: "A, minor, by B, guardian" and must be supported by
a certificate from the proper court, or by a certified copy of the order appointing
the guardian, showing his appointment and qualification. The certificate, or certified copy, must, be under the seal of the court and should be dated not more
than 1 year prior'to the presentation of the bond.
2. If the Treasury Department has no notice that a guardian of the estate of
a minor owner of a savings bond has been appointed or is otherwise legally qualified, payment will be made direct to such minor owner, provided such minor is
a t the time payment is requested, of sufficient competency and understanding to
sign his name to the request and to comprehend the nature thereof. In general,
the fact that the request for payment has been signed by the minor and duly
•certified in accordance with section VI hereof will be accepted as sufficient proof
of such competency and understanding. If the Treasury Department is prop-




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REPORT OF THE SECRETARY OF THE TREASURY

erly advised in the request for payment that such minor owner is not of sufficient competency and understanding to execute the request for payment, payment will be made to either parent of the minor with whom he resides, or in the
event that such minor resides with neither parent, then to the person with whom
he does reside. In executing the request for payment the parent or other person shall sign the minor's name as well as his own name, and state his relationship to the minor, and there shall be inserted above the space for signature in
the request for payment a statement showing that the owner is a minor, that he
is not of sufficient competency and understanding to execute the request for payment, and that the person signing the request is the person with whom the minor
resides. An appropriate form is as follows:
"I am the
of John Jones and the person with
(State relationship)

whom he resides. He is
years of age and is not of sufficient
competency and understanding to sign this request.
Mary Jones, on behalf of John Jones."
IX. DISABILITY OF OWNERS

1. If the owner of a savings bond has been legally declared-to be incompetent
to manage his affairs and the Treasury Department has notice that a conservator
or other legally constituted representative of his estate has been appointed by a
court of competent jurisdiction, payment will be made only to such conservator
or other legal representative. In this case the request for payment should be
signed: "A, incompetent, by B, conservator (guardian or committee as the case
may be)", and must be supported by a certificate from the proper court or a
certified copy of the order of the court appointing such conservator or other legal
representative showing his appointment and qualification. The certificate, or
certified copy, should be under the seal of the court and dated not more than one
year prior to the date of the presentation of the savings bond for payment.
2. In cases where the owner of a savings bond has been judicially declared incompetent, or his incompetency, in the opinion of the Secretary of the Treasury,
is otherwise established and no guardian or other legal representative of his
estate has been appointed or is otherwise legally qualified, and the entire gross
value of his estate, both real and personal, does not exceed $500, payment will
be made to a member of his family standing in the position of voluntary guardian
upon presentation of proof satisfactory to the Secretary of the Treasury that the
proceeds of the bonds are required, and are to be used for the purchase of necessaries for the incompetent or for his wife or minor children or other persons
dependent upon him for support. In all such cases instructions should be
requested of the Treasury Department, Division of Loans and Currency,
Washington, D. C , or of any Federal Reserve bank, before executing the request
for payment or submitting any evidence.
X. COOWNERS

A savings bond registered in the names of two persons in the alternative, as,
for example, "Mr. John Jones or Mrs. Mary Jones" will be paid to either coowner
upon request duly executed by him, without requiring the signature of the other
person named on the bond; and upon such payment to either coowner the other
person shall cease to have any interest in the bond. Upon the death of one coowner and proof of the survivorship of the other coowner, even though the latter
should thereafter die, the savings bond will be paid or reissued as though the
survivor had been the sole owner.
XI. BENEFICIARIES

1. A savings bond registered in the form "A, payable on death to B" will be
payable to the registered owner, until the Treasury Department has received
notice of his death, upon the execution by him alone of the request for payment,
as if the beneficiary were not named on the savings bond. If the beneficiary
should predecease the registered owner the savings bond will be paid as though
such beneficial registration had not been made. Registration naming beneficiaries at the death of the registered owner cannot be changed so as to add,
eliminate, or substitute beneficiaries.
2. Upon proof of the death of the registered owner and proof of the survivorship
of the beneficiary, even though the beneficiary should thereafter die, the savings
bond will be paid or reissued as though the beneficiary had been the registered
owner.




REPORT OF THE SECRETARY OF THE TREASURY

251

XII. FIDUCIARIES

1. A savings bond registered in the name of a fiduciary will be paid to such
fiduciary without proof of his authority upon presentation of the savings bond
with the request for payment duly signed by him and certified in accordance
with section VI hereof; provided, that a request for payment before maturity executed on behalf of a corporate fiduciary must be authorized by a resolution of the
governing body of the corporation or by a standing bylaw, a certified copy of
which must be filed with the Treasury Department. The request for payment
should be signed by the fiduciary in exactly the same manner as his name and
designation as fiduciary appear on the face of the savings bond.
2. In the event of the death or disqualification of a fiduciary in whose name a
savings bond is registered, such savings bond will be paid to, or, if desired, reissued
in the name of, his successor upon satisfactory proof of the appointment and
qualification of such successor.
3. Reissue of a savings bond registered in the name of a fiduciary may be made,
in authorized denominations only and subject to the provisions of section XVI
hereof, in the name of a person beneficially entitled to such savings bond, or to
a fractional interest therein to the extent of such interest, upon the request of the
fiduciary and his certification that the person in whose name reissue is requested
is entitled thereto and has agreed to such reissue.
4. Payment, or reissue in authorized denominations only and subject to the
provisions of section XVI hereof, of a savings bond registered in the name of a
fiduciary may be made to a person beneficially entitled to such savings bond, or to
a fractional interest therein to the extent of such interest, as though such person
were the registered owner thereof, upon his request accompanied by satisfactory
proof that the trust has terminated, that there is no person qualified to make
distribution of the trust fund, and that he is entitled to the payment or reissue
requested.
XIII. CORPORATIONS, ASSOCIATIONS, PARTNERSHIPS, ETC.

1. A savings bond registered in the name of a corporation, unincorporated
association, or joint stock company will be paid upon a request for payment
signed by a duly authorized officer of such organization. The signature to the
request should be in the form, "The
.
Company, by
John Jones, President." The fact that the request for payment is signed and
duly certified in accordance with section VI hereof may be accepted as sufficient
proof of the officer's authority.
2. A savings bond registered in the name of a partnership will be paid upon a
request for payment signed by any general partner. The signature to the request should be in the form "Smith and Jones, a partnership,, by John Jones, a
general partner." The fact that the request for payment is signed and duly
certified in accordance with section VI hereof may be accepted as sufficient proof
that the person signing the request is a general partner.
XIV. DECEASED OWNERS

1. With administration.—If the owner of a savings bond dies leaving a will
which is duly admitted to probate and on which letters testamentary are issued,
or dies intestate and the estate is administered in a court of competent jurisdiction, payment wiU be made to the duly appointed representative of the estate.
The request for payment should be signed in the form, "A, executor (administrator) of the estate of B, deceased", a^d must be supported by a certificate
under the seal of the court appointing such representative, dated not more than
6 months prior to the presentation of the savings bond for payment, showing
the appointment and qualification of such representative and stating that the
appointment is still in force; or, in the absence of such a certificate, by a duly
certified copy of the representative's letter of appointment, the certification of
which must be dated not more than 6 months prior to the presentation of the
bond for payment, and must state that the appointment is still in force. Reissue
of a savings bond registered in the name of a deceased owner will be made in the
name of the heir or legatee entitled thereto, or of an heir or legatee entitled to a
fractional interest therein to the extent of such interest, in authorized denominations only and subject to the provisions of section XVI hereof, upon the
request of the representative and his certification that the heir or legatee in
whose name reissue is requested is entitled thereto and has agreed to such reissue
(use' form P. D. 1455); provided, that if the representative is himself the heir or
legatee entitled to the savings bond, or to a fractional interest therein, and




252

REPORT OF THE SECRETARY OF THE TREASURY

desires reissue in his own name, a special order of the court authorizing such
reissue must be submitted.
2. Without administration.—(a) If the owner of a savings bond dies and no
legal representative of his estate is to be ajDpointed and it is established to the
satisfaction of the Secretary of the Treasury, either that the gross value of the
personal estate does not exceed $500, or that administration of the estate is not
required in the State of the decedent's domicile, payment, or reissue in authorized
denominations only and subject to the provisions of section XVI hereof, of the
savings bond will be made to a person entitled to such savings bond, or to a
fractional interest therein to the extent of such interest, without requiring
administration of the estate. Affidavits will be required of all persons entitled
to any share in the estate setting forth the facts in detail, and requesting and
agreeing to the payment or reissue in question, supported by proof that the debts
of the decedent and of his estate have been paid or provided for, affidavits by
two disinterested persons having personal knowledge of the decedent and his
,family, and a death certificate or other proof of the death of the owner (use
form L. & C.° 285, copies of which may be procured from the Treasury
Department, Division of Loans and Currency, Washington, D. C , or from any
Federal Reserve bank). If the gross value of the personal estate exceeds $500
the Secretary of the Treasury may further require an affidavit or a certificate
from a practicing attorney or judicial officer of the State of the decedent's domicile
showing that administration of the estate is not required in such State and referring specifically.to the statutes or the decisions of the courts of such State under
which exemption from administration is claimed, or showing that it is a general
and well recognized practice in that State to settle such estates without administration.
(6) No payment or reissue without administration will be permitted in a
case where any of the persons entitled are minors or under disability, except to
them or in their names or upon compliance with the provisions of sections VIII
and IX hereof governing the payment of savings bonds in the names of such
persons.
XV. CREDITORS' RIGHTS

1. Payment of a savings bond will be made in accordance with a judgment or
decree of a court of competent jurisdiction, or proceedings pursuant to such judgment or decree, except in cases where the action is instituted for the purpose of
giving effect to an attempted transfer by the owner contrary to section II hereof.
In appropriate cases the Treasury Department will require proof that the court
acting had jurisdiction over the parties and subject matter, and proceeded in due
course of its jurisdiction, and that the judgment or decree is final and conclusive,
that it has fully and effectually transferred the title of the owner, and that it is
not open to attack in any jurisdiction whatever. For this purpose duly authenticated copies of the complaint, order of service, return of service, answer, or
other pleading, the final judgment or order of the court and any further proceedings thereunder, must be furnished, together with a certificate, under seal, from
the clerk of the court showing that no appeal, motion for new trial, or other
proceeding which may result in modifying the judgment has been taken, made, or
applied for; that the time for such action has expired (or if any such proceedings
have been had they have been terminated), and that the judgment is in full force
and effect and has become final under the laws of the jurisdiction. The Secretary
of the Treasury in any case may require such further information, documents,
arid security as he deems necessary.
• .
.
•
j
XVI. R E I S S U E AND DENOMINATIONAL EXCHANGE

1. Reissue of a savings bond in a different form of registration will be made
only in the following instances:
(a) To correct an established error in the original issue;
(6) To show a change in the name of the owner whether by marriage or in
any other legal manner;
^ (c) As specifically provided in sections XI, XII, and XIV hereof.
Reissues pursuant to (6) and (c) above will be made only at the Treasury Department, Division of Loans and Currency, Washington, D. C , and requests therefor
should be made on appropriate forms, copies of which may be obtained from
that division or from any Federal Reserve bank.
2. Exchange as between authorized denominations of savings bonds will not ,
be permitted except in cases of partial redemption or as necessarily incident to
authorized cases of reissue.




REPORT OF THE SECRETARY OF THE TREASURY

253

3. In all cases of reissue the savings bonds issue will bear the same issue and
maturity dates as the savings bonds surrendered, and will be issued in the largest
available authorized denominations.
XVII. FURTHER PROVISIONS

1. These regulations are prescribed by the Secretary of the Treasury as
governing United States savings bonds issued under the authority of the Second
Liberty Bond Act, approved September 24, 1917, as amended, and the provisions
of Treasury Department Circular No. 300, as amended, have no application to
such savings bonds except as hereinbefore specifically provided.
2. The Secretary of the Treasury may at any time, or from time to time
prescribe supplemental or amendatory rules and regulations governing United
States savings bonds.
HENRY MORGENTHAU,

Jr.

Secretary of the Treasury.

— _ _ _ ^ — — — _ _

i>

Adjusted service bonds
Exhibit 24
Issue of adjusted service bonds of 1945, June 15, 1936 {from press releases, June -7
and 17, 1936)
J
On June 6, 1936, Secretary of the Treasury Morgenthau announced the issuance
of Treasury Department Circular No. 560, prescribing regulations governing
adjusted service bonds issued on and after Jiine 15, pursuant to the Adjusted
Compensation Payment Act, 1936, in payment of amounts due veterans on
adjusted service certificates. The bonds are dated June 15, 1936, and will mature
on June 15, 1945, but will be redeemable at the option and request of the veteran '.
at any time before maturity. The bonds bear interest at the rate of 3 percent
per annum from June 15, 1936, to the date of maturity, June 15, 1945, or to the
date of redemption before maturity, whichever is earlier, and such interest will
be paid with the principal sum, provided that no interest will be paid on any
bond redeemed prior to June 15, 1937. The first mailing of bonds to veterans
was on June 15, 1936, and each shipment consisted of the full complement of
$50 .bonds due the veteran and a, check for any fractional amount.
On June 17, 1936, the Secretary announced that up to the close of business
June 13, the Treasury had received certifications from the Administrator of
Veterans' Affairs of the amounts due 3,004,782 veterans In payment of adjusted
service certificates. Shipments for 2,923,760 veterans were delivered to the
Postal Service for dispatch by registered mail up to midnight June 15. Included
in the shipments were 30,636,089 adjusted service bonds, each for $50, in the
total amount of $1,531,804,450, and checks totahng $68,950,508, making an
aggregate total value of bonds and notes of $1,600,754,958.
Additional shipments were made in accordance with the balance of the above,
certifications and subsequent certifications received from the Administrator of
Veterans' Affairs.
Exhibit 25
An act to provide for the immediate payment of World War adjusted service certificates,,
for the cancelation of unpaid interest accrued on loans secured by such certificates j,
and for other purposes
[Public No. 426, 74th Cong., H. R. 98701

Be it enacted by the Senate and House of Representatives of the United States of
America in Congress assembled, That notwithstanding the provisions of the World
War Adjusted Compensation Act, as amended (U. S. C , 1934 edition, title 38j,
ch. 11), the adjusted service certificates issued under the authority of such act
are hereby declared to be immediately payable. Payments on account of such
certificates shall be made in the manner hereinafter provided, upon application
therefor to the Administrator of Veterans' Affairs, under such rules and regulations as he may prescribe, and upon surrender of the certificates and all rights
thereunder (with or without the consent of the beneficiaries thereof). The pay-




254

REPORT OF THE SECRETARY OF THE TREASURY

m e n t in each case shall be in an a m o u n t equal to t h e face value of t h e certificate,
except t h a t if, a t t h e time of application for p a y m e n t under this act, t h e principal a n d unpaid interest accrued prior to October 1, 1931, with respect to a n y
loan upon any such certificate has not been paid in full by the veteran (whether
or n o t t h e loan has m a t u r e d ) , then the- Administrator shall (1) p a y or discharge
such unpaid principal and interest as is necessary to m a k e t h e certificate available
for p a y m e n t under this act, (2) deduct such unpaid principal a n d so m u c h of such
u n p a i d interest as accrued prior to October 1, 1931, from t h e a m o u n t of t h e face
value of t h e certificate, and (3) certify to t h e Secretary of t h e Treasury as payable
a n a m o u n t equal to t h e diffierence between t h e face value of t h e certificate and
t h e a m o u n t so deducted.
S E C . 2. I n t h e case of each loan heretofore m a d e p u r s u a n t to law by t h e Administrator of Veterans' Aft'airs and/or by any national bank, or any b a n k or t r u s t
c o m p a n y incorporated under t h e laws of any State, Territory, possession, or t h e
District of Columbia, upon t h e security of an adjusted service certificate, any
interest unpaid accrued subsequent to September 30, .1931, t h a t has been, or, in.
consequence of existing law, would be charged against t h e face value of such
certificate shall be canceled insofar as t h e veteran is concerned, n o t w i t h s t a n d i n g
a n y provision of law to t h e contrar}^ Any interest on any such loan payable t o
a n y such b a n k or t r u s t companj^ shall be paid by t h e Administrator of Veterans'
Affairs.
I n t h e case of smy such loan which is unpaid and held by a bank or t r u s t com- .
p a n y a t t h e time of filing an application under this act, the b a n k or t r u s t company
holding t h e note and certificate shall, upon notice from t h e Administrator of
Veterans' Affairs, present t h e m to t h e Administrator for p a y m e n t to t h e b a n k or
t r u s t company in full satisfaction of its claim for t h e a m o u n t of unpaid principal
a n d unpaid interest, except t h a t if t h e b a n k or t r u s t company, after such notice,
fails to present t h e certificate and note to t h e Administrator within fifteen days
after t h e mailing of t h e notice, such interest shall be paid only up to t h e fifteenth
d a y after the mailing of such notice.
S E C . 3. (a) An application under this act for p a y m e n t of a certificate m a y be
m a d e a n d filed a t any time before the m a t u r i t y of t h e certificate (1) personally by
t h e veteran, or (2) in case physical or m e n t a l incapacity prevents t h e making or
filing of a personal application, then by such representative of the veteran and in
such m a n n e r as m a y be b y regulations prescribed. An application m a d e by a
person other t h a n a representative authorized by such regulations shall be held
void.
(b) If t h e veteran dies after t h e application is m a d e and before it is filed it m a y
be filed by any person. If t h e veteran dies after t h e application is made it shall
be valid if t h e Administrator of Veterans' Affairs finds t h a t it bears the bona-fide
signature of t h e applicant, discloses an intention to claim the benefits of this act,
a n d is filed before p a y m e n t is m a d e to t h e beneficiary. If t h e d e a t h occurs after
t h e application is filed b u t before the receipt of the p a y m e n t under this act, or if
t h e application is filed after the; d e a t h occurs b u t before mailing of t h e check in
p a y m e n t to t h e beneficiary under section 501 of t h e World War Adjusted Compensation Act, as amended, p a y m e n t under this act shall be m a d e to t h e estate of
t h e veteran irrespective of any beneficiary designation. If the veteran dies witho u t making a valid application under this act no p a y m e n t under this act shall be
made. If the veteran dies on or after the passage of this act without having filed
an application under section 1, in making any settlement there shall be deducted
on account of any loan m a d e on an adjusted service certificate only interest
accruing prior to October 1, 1931.
(c) Where t h e records of t h e Veterans' Administration show t h a t an application, disclosing an intention to claim t h e benefits of this act, has been filed and t h e
application cannot be found, such application shall, be presumed, in the absence
of affirmative evidence to the contrary, to have been valid when originally filed.
(d) If a t t h e time this act takes effect a veteran entitled to receive an adjusted
service certificate has not m a d e application therefor he shall be.entitled, upon
application m a d e under section 302 of t h e World W^ar Adjusted Compensation
Act, as amended, to receive, a t his option, under such rules and regulations-as-the
Adniinistrator m a y prescribe, either t h e certificate under-section 501 of such act,
as amended, or p a y m e n t under this act.
S E C . 4. T h e aniount certified p u r s u a n t to section 1 of this act shall be paid t o
t h e veteran or his estate on or after June 15, 1936, by the Secretary of the Treasury by t h e issuance of bonds of t h e United States, registered in the name of t h e
veteran only, in denominations of $50 having a total face value up to the highest
multiple of $50 in t h e aniount certified as due t h e veteran, and the difference



REPORT OF THE SECRETARY OF THE TREASURY

255

between t h e a m o u n t certified as due t h e veteran and the face a m o u n t of the
bonds so issued shall be paid to the veteran or his estate by the Secretary of .the
Treasury out of t h e fund created by section 505 of t h e World W a r Adjusted Compensation Act, as amended. The bonds shall be dated June 15, 1936, and shall
m a t u r e on June 15, 1945, b u t shall be redeemable a t the option of the veteran or
his estate at any time, a t such places, including post offices, as the Secretary of
the Treasury m a y designate. Such bonds shall be issued under the a u t h o r i t y
and subject to the provisions of the Second Liberty Bond Act, as amended, and
shall not be transferable, assignable, subject to a t t a c h m e n t , levy, or seizure under
any legal or equitable process and shall be paj^able only to the veteran or, in case
of d e a t h or incompetence of the veteran, to the representative of ^his estate.
Interest on each bond issued hereunder shall accrue a t the rate of 3 per centum
per a n n u m from June 15, 1936, to date of m a t u r i t y or p a y m e n t of the principal
of t h e bond, whichever is earlier, and will be paid with such principal: Provided,
however, T h a t no interest will be paid on any bond redeemed prior to June 15,
1937. The provisions of this section shall be carried out subject to regulations of
t h e Secretary of the Treasury to be issued from time to time to effectuate the
purposes of this act.
SEC. 5. The Secretary of t h e Treasury is authorized and directed to redeem, from
t h e United States Government life insurance fund all adjusted service certificates
held by t h a t fund on account of loans made thereon, and to pay to the United
States Government life insurance fund t h e a m o u n t of t h e outstanding liens against
such certificates, including all interest due or accrued, together with such a m o u n t s
as m a y be due under subdivision (m) of section 502 of t h e World War Adjusted
Compensation Act, as amended. T h e Secretary of t h e Treasury is authorized
and directed to make such p a y m e n t by issuing, to the United States Government
life insurance fund, bonds of t h e United States which shall bear interest at. t h e
r a t e of 4}^ per centum per a n n u m . No such bonds shall m a t u r e or be callable
until t h e expiration of a period of a t least, ten years from date of issue, except t h a t
any such bond shall be redeemed by the Secretary of t h e Treasury and the principal and accrued interest thereon paid to t h e United States Government life
insurance fund a t any time upon certification by the Administrator of Veterans'
Affairs t h a t the a m o u n t represented by such bond is required to meet current
liabilities. Bonds issued for the purposes of this section shall be issued under t h e
Second Liberty Bond Act, as amended, subject to the provisions of this section.
SEC. 6. The,adjusted service certificate fund is hereby made available for p a y m e n t s authorized by this act.
SEC. 7. Notwithstanding the provisions of Public Law Numbered 262; S e v e n t y fourth Congress, approved August 12, 1935, no deductions on account of any
indebtedness of t h e veteran to the United States, except on account of any lien
against the adjusted service certificate authorized by law, shall be made from t h e
adjusted service credit or from any a m o u n t s due under t h e World War Adjusted
Compensation Act, as amended, or this act.
SEC. 8. There is hereb}^ authorized to be appropriated such sums as m a y be
necessary to carry out the provisions of this act.
SEC. 9. If any provision of this act, or t h e application thereof to any person or
circumstance is held invalid, t h e remainder of the act, a n d the application of such
provision to other persons or circumstances, shall not be affected thereby.
SEC. 10. Whoever knowingly makes a n y false or fraudulent s t a t e m e n t of a
material fact in any application, certificate, or document m a d e under t h e provisions of this act, shall, upon conviction thereof, be fined not more than $1,000, or
imprisoned not more t h a n five years, or both.
SEC. 11. This act m a v be cited as t h e Adjusted Compensation P a y m e n t Act,
1936.
JOSEPH W .

BYRNS,

Speaker of the House of Representatives.
JNO. N .

GARNER,

Vice President of the United States
and President of the Senate.
I N T H E H O U S E OF R E P R E S E N T A T I V E S of

THE UNITED

STATES,

J a n u a r y 24, 1936.
T h e House of Representatives having proceeded to reconsider t h e bill (H. R.
"9870) entitled "An Act to provide for the immediate p a y m e n t of World War
adjusted service certificates, for t h e cancelation of unpaid interest accrued on
loans secured by such certificates, and for other purposes", returned by t h e Presi-




256

REPORT OF THE SECRETARY OF THE TREASURY

d e n t of t h e United States with his objections, t o t h e House of Representatives^
in which it originated, it was
Resolved, T h a t t h e said bill pass, two-thirds of t h e House of Representatives
agreeing t o pass t h e same.
Attest:
S O U T H T R I M B L E , Clerk.

1 certify t h a t this a c t originated in t h e House of Representatives.
SOUTH TRIMBLE,

Clerk.

I N T H E SENATE OF T H E U N I T E D STATES,

J a n u a r y 16 {calendar day J a n u a r y 27), 1936.
T h e Senate having proceeded t o reconsider t h e bill ( H . R. 9870) entitled " A n
Act t o provide for t h e immediate p a y m e n t of World War adjusted service certificates, for t h e cancelation of unpaid interest accrued on loans secured by such certificates, a n d for other purposes", returned by t h e President of t h e United States,
t o t h e House of Representatives, in w^hich it originated, with his o.bjections, a n d
passed b y t h e House on a reconsideration of t h e same, it was
Resolved, T h a t t h e said bill do pass, two-thirds of the-Senators present h a v i n g
voted in t h e affirmative.
Attest:
E D W I N A. H A L S E Y , Secretary.

Exhibit 28
A n act to protect the United States against loss in,the delivery through the mails of
^ checks i n payment of benefits provided for by laws.administered by the Veterans^
Administration
[Public No. 634, 74th Cong., H. R. 94961

Be it enacted by the Senate and House of Representatives of the United States
of America i n Congress assembled. T h a t section 3 of t h e a c t entitled " A n Act
making appropriations for t h e p a y m e n t of invalid a n d other pensions.of t h e
United States for t h e fiscal year ending June thirtieth, nineteen hundred and'
thirteen, a n d for other purposes", approved August 17, 1912 (37 Stat. 312*
38 U. S. C., sec. 50), is hereby amended t o read as follows:
" S E C . 3. Pensions, compensation, insurance, or othisr allowances or benefits
provided for by laws administered by t h e Veterans' Administration shall be paid
by checks drawn, p u r s u a n t t o certification by t h e Administrator of Veterans'
Affairs, b y t h e Division of Disbursement of t h e Treasury D e p a r t m e n t in such
form.as t o protect t h e United States against loss, without separate vouchers o r
receipts, a n d payable by t h e Treasurer of t h e United States, except in any case
in which t h e Administrator of Veterans' Affairs may consider a voucher necessary
for t h e protection of t h e Government. Such checks shall be transmitted b y
mail t o t h e payee thereof a t his last-known address, a n d t h e envelope or cover
thereof m a y bear a n appropriate notice of t h e prohibition hereafter set forth in
this section.
" P o s t m a s t e r s , delivery clerks, letter carriers, a n d all other postal employees
are prohibited from delivering a n y mail addressed by t h e United States bearing
such notice a n d containing a n y such check (except t h a t in t h e case of checks in
p a y m e n t of allowances a n d benefits other t h a n pensions, compensation, or insurance, t h e prohibition shall apply only insofar as t h e Administrator of Veterans'
Affairs deems i t necessary t o protect t h e United States against loss), t o any.
person whomsoever, if t h e addressee h a s died or removed, or in t h e case of a
widow believed by t h e postal employee intrusted with t h e delivery of such mail
to have remarried (unless such mail is addressed by t h e United States in t h e n a m e
which t h e widow shall have acquired b y remarriage); a n d t h e postmaster in
every such case shall forthwith return such mail with a s t a t e m e n t of t h e reason
for so doing, a n d if because of death or remarriage, t h e date thereof, if known.
Checks r e t u r n e d as herein provided on account of d e a t h or remarriage shaU b e
canceled."
S E C . 2. Section 4 of t h e Adjusted Compensation P a y m e n t Act, 1936, is hereby
amended b y adding a t t h e end thereol t h e following paragraphs:
" A t t h e request of t h e Secretary of t h e Treasury, t h e Postmaster General,
under such regulations as he m a y prescribe, shall designate postmasters a n d o t h e r
employees of t h e Post Office D e p a r t m e n t a n d of t h e Postal Service t o perform,
without extra compensation, such fiscal-agency services as m a y be desirable



REPORT OF THE SECRETARY OF THE TREASURY

257

and practicable in connection with the redemption and payment of the bonds
issued under this section; and the Postmaster General may require each such
employee to furnish such bond as he may determine for the faithful performance
of such fiscal-agency duties.
"The Secretary of the Treasury is authorized to advance, from time to time,
to the Postmaster General, from the appropriation contained in the Supplemental Appropriation Act, fiscal year 1936, approved February 11, 1936, for
^Administrative expenses. Adjusted Compensation Payment Act, 1936, Treasury Department, 1936 and 1937,' such sums as are certified by the Postmaster
General to be required for the expenses of the Post Office Department in connection with the handling of the bonds issued hereunder. Such bonds, when received
by the postmasters for purposes of redemption and payment, shall be handled
by the postmasters under such special regulations as may be promulgated by the
Postmaster General. They shall be transmitted between post offices or from any
post office to the Treasury Department, or fiscal agent thereof, without advance
payment of any required postage. The Secretary of the Treasury shall reimburse the Postmaster General, from the aforesaid appropriation contained in
said Supplemental Appropriation Act, for such postage and registry fees as may
be required in connection with such transmittal. Whenever it is proved to the
Secretary of the Treasury, by clear and satisfactory evidence, that any such
bond is lost, stolen, or destroyed while being so transmitted, the Secretary of the
Treasury may, in accordance with such rules and regulations as he may prescribe,
issue a duplicate thereof without requiring the furnishing of an indemnity bond.'^
Approved, June 3, 1936.
Exhibit 27
An act to eliminate unnecessary expense in the administration of estates of deceased
and incompetent veterans, and for other purposes
[Public No. 833, 74th Cong., H. R. 13001]

Be it enacted by the Senate and House of Representatives of the United States of
America in Congress assembled. That section 4 of the Adjusted Compensation
Payment Act, 1936, as amended, is hereby further amended by striking out the
last sentence of the first paragraph thereof and inserting in lieu thereof the following sentences: "In cases of deceased or incompetent veterans, the payments
provided by this paragraph, whether of the amoun-t certified, by issuance of bonds
and by checks payable out of the fund created by section 505 of the World War
Adjusted Compensation Act, as amended, or whether of such bonds on redemption
thereof, shall be made to the person or persons determined by the Secretary of the
Treasury to be lawfully entitled thereto, without the necessity of the appointment by judicial proceedings or otherwise of a legal representative of the estate
of any veteran or of any other persons, or of compliance with State law in respect
of the administration of estates. . Such checks may be endorsed on behalf of the
Secretary of the Treasury in the name of the veteran, if that is determined by the
Secretary to be appropriate for the effectuation hereof. All determinations by
the Secretary of the Treasur}^ under this paragraph shall be final and conclusive
and neither any other official of the Urxited States nor, except in the case of prior
judicial determination, any State or Federal court, shall have jurisdiction to'
review any such determination. The provisions of this paragraph shall be
carried out subject to regulations of the Secretary of the Treasury to be issued
from time to time to effectuate the purposes of this Act."
Approved, June 26, 1936.
Exhibit 2S
Regulations governing adjusted service bonds of 1945 ,^ June 6, 1936
[Department Circular No. 560. Public Debt]
TREASURY

DEPARTMENT,

Washington, June 6, 1936.
To Owners of Adjusted Service Bonds, and Others Concerned:
The following regulations are prescribed, effective on June 15, 1936, to govern
bonds of the United States, designated "Adjusted service bonds of 1945", issued
» Supplemented and amended, see p. 260.
93790—37
18



258

REPORT OF THE SECRETARY OF THE TREASURY

to veterans in p a y m e n t of a m o u n t s due on adjusted service certificates. T h e
bonds are issued under t h e a u t h o r i t y and subject to t h e provisions of t h e Second
Liberty Bond Act, as amended, a n d t h e Adjusted Compensation P a y m e n t Act,
1936.
PAYMENT TO A REGISTERED OWNER

1. I n order for a registered owner to obtain p a y m e n t of a bond, t h e bond m u s t
be presented a t any United States post office, or t r a n s m i t t e d to t h e Treasurer of
t h e United States, Washington, D. C , in either case with t h e request for paym e n t on t h e back of the bond properly executed. All signatures m u s t be made
in ink or indelible pencil.
2. Postmasters a t a n u m b e r of post offices (hereinafter referred to as paying
offices) t h r o u g h o u t t h e country have been authorized to receive bonds presented
for p a y m e n t and to issue checks in p a y m e n t therefor. All other postmasters are
authorized to receive bonds presented for payment, a n d forward them, a t t h e
risk a n d expense of t h e United States, to a paying office. The Treasurer of t h e
United. Sta.tes. is authorized to issue checks in pajanent of bonds t r a n s m i t t e d
to him.
3. If a bond is to be presented at a paying office, or at any other post office for
transmittal to a pa,ying office, the request for payinent must be signed by the registered
owner in the presence of and must be certified by the postm.aster or other authorized
post office official at such office, who will receive the bond and issue a receipt therefor.
4. if a bond is to be t r a n s m i t t e d to t h e Treasurer of t h e United States for
p a y m e n t , t h e request for p a y m e n t m u s t be signed by t h e registered owner in t h e
presence of a n d m u s t be certified by one of t h e officers authorized in p a r a g r a p h
11, a n d thereafter the bond m u s t be t r a n s m i t t e d to t h e Treasurer of the United
States, Washington, D . C. In a foreign country, request for p a y m e n t should
be executed as provided in p a r a g r a p h 11. (e) a n d t h e bond forwarded to the
Treasurer of t h e United States.
5. Special arrangements for execution of request for p a y m e n t will be provided
for registered owners who m.ay be inmates of any institution, information concerning which m a y be obtained from t h e Treasury D e p a r t m e n t by the head of
the institution.
6. P a y m e n t in all cases will be made by check drawn to the order of the registered owner, and mailed to him a t the address stated in his request for p a y m e n t .
PAYMENT I N CASE OF DEATH OR INCOMPETENCE OF REGISTERED OWNER

7. I n cases of d e a t h or incompetence of the registered owner, if p a y m e n t is
desired, it will be m a d e as hereinafter provided. T h e provisions of D e p a r t m e n t
Circular 3,00, as amended, will, so far as applicable, apply to such cases, all of
which will be handled oi^ly by t h e Treasury D e p a r t m e n t , Division of Loans
and Currency, Washington, D. C.
8. With administration.—When a legal representative of the estate of a deceased
bond owner has been duly appointed, p a y m e n t will be m a d e only to him. The
request for paym.ent should be signed, " E s t a t e of A, deceased, b}^ B, executor
(administrator)", m u s t state the address of the representative, and m u s t be
signed in t h e presence of and m u s t be certified by one of the officers authorized
in paragraph 11. T h e bond m u s t t h e n be t r a n s m i t t e d to the Treasury Department, Division of Loans and Currency, Washington, D. C. Unless satisfactory
evidence of qualification of the representative is already on file with t h e Treasury
D e p a r t m e n t , t h e bond m u s t be accompanied by a certificate (which m a y be a
certified copy of t h e representative's letter of appointment) under the seal of the
court appointing such representative, dated not more t h a n 6 m o n t h s before
presentation of t h e bond for paj'-ment, showing t h e a p p o i n t m e n t and qualification
of such representative and stating t h a t the a p p o i n t m e n t is still in force.
9.' Legal guardianship.—When t h e Treasury D e p a r t m e n t has notice t h a t a
legal representative of the estate of an incompetent bond owner has been duly
appointed, p a y m e n t will be m.ade only to such representative. If p a y m e n t is
desired, t h e request for p a y m e n t should be signed "A, incompetent, by B, guardian (conservator or c o m m i t t e e ) " and m u s t state the representative's address.
I t m u s t be signed in the presence of and m u s t be certified by one of the officers
authorized in p a r a g r a p h 11. T h e bond m u s t then be t r a n s m i t t e d to the Treasury
D e p a r t m e n t , Division of Loans and Currency, Washington, D. C. Unless
satisfactory evidence of qualification of t h e representative is already on file with
the Treasury D e p a r t m e n t , the bond m u s t be accompanied by a certificate (which




REPORT OF THE SECRETARY OF THE TREASURY

259

m a y be a certified copy of t h e court order appointing such representative) under the
seal of t h e court, dated not more t h a n 1 year before presentation of the bond for
p a y m e n t , and showing the a p p o i n t m e n t and qualification of such representative.
10. Without administration or legal guardianship.—When no legal representative of the estate of a deceased or of an incompetent registered owner has been, or
is to be appointed, and p a y m e n t is desired, and it is established to the satisfaction
of t h e Secretary of t h e Treasury: (1) I n t h e case of a deceased owner either t h a t
t h e value of the gross personal estate does not exceed $2,000, or t h a t administration of the estate is not required in t h e State of the decedent's dom.icile; or (2)
in the case of an incompetent owner t h a t the value of the gross personal estate
does not exceed $2,000, and t h a t p a y m e n t is necessary for the support of the
incompetent or his dependents, p a y m e n t will be m a d e to such representative
of the estate as m a y be recognized by the Secretary of the Treasury. All such
p a y m e n t s will be m a d e in accordance with the provisions of D e p a r t m e n t Circular
300, a s amended, insofar as applicable, such provisions to be construed in a
m a n n e r consistent with, the provisions of the Adjusted Compensation P a y m e n t
Act, 1936, and t h e provisions of these regulations. Special forms, for use in such
cases have been prepared and will be furnished upon request. I n all such cases
instructions should be requested of the Treasury Department, Division of Loans and
Currency, Washington, D. C , before a request for payment is executed or a bond
submitted.
OFFICERS AUTHORIZED TO CERTIFY REQUESTS FOR PAYMENT

11. T h e following officers are authorized to witness requests for p a y m e n t and
certify thereto:
{a) Any United States postmaster, acting postmaster, inspector in charge of
a post office, or other post-office employee designated by the postmaster under
authority of the Postmaster General, under a legible imprint of a dating s t a m p
of his post office;
(6) The officer in charge of any home, hospital, or other facihty of the Veterans'
Administration, b u t only as to patients a n d members actually domiciled a t t h e
station over which t h e certifying officer exercises jurisdiction;
(c) Any executive officer of a bank or t r u s t company (Or branch thereof)
incorporated in the United States, its organized Territories or insular possessions,
under the corporate seal of the bank or t r u s t company;
{d) Judges a n d clerks of United States courts, under t h e seal of t h e c o u r t ;
United States Collectors of Customs and Internal Revenue; commanding officers
of t h e Army, N a v y , Marine Corps, and Coast Guard of the United States for
members of their respective establishments; officials of the Treasury D e p a r t m e n t ,
who m a y be designated from time to time by t h e Secretary of the Treasury;.
(e) In a foreign country: United States diplomatic and consular representatives
and attach6s, under their respective seals; managers and executive officers of
foreign branches of banks or t r u s t companies incorporated in the United States.
12. No person authorized to certify requests for p a y m e n t m a y certify a request
signed by himself, either in his own right or in any representative capacity.
13. Certifying officers will be held responsible for positive identification of t h e
person requesting p a y m e n t as t h e person whose name appears on the face of t h e
bond, or the person entitled to request p a y m e n t under these regulations, a n d ,
if necessary, should require witnesses to identify t h a t person. Provision for
signatures and addresses of witnesses, a n d for fingerprints in exceptional cases,
is made on t h e back of t h e bond.
GENERAL PROVISIONS

14. No request for p a y m e n t signed by an agent or person acting under a power
of attorney, in behalf of t h e registered owner or t h e representative of his estate,
will be recognized by the Treasury D e p a r t m e n t . I n no case will any p a y m e n t be
made other t h a n to t h e registered owner or t h e reprsentative of his estate.
15. I n cases where documents are required to support a request for p a y m e n t
a n d two or more bonds are presented a t the same time, only one set of documents
will be required.
TRANSMISSION OF BONDS

16. Any transmission of a bond to t h e Treasury D e p a r t m e n t will be a t t h e
risk and expense of the owner. T h e use of registered mail is suggested.




260

REPORT OF THE SECRETARY OF THE TREASURY
L O S T , S T O L E N , OR D E S T R O Y E D B O N D S

17. I n case of loss, theft, or destruction of a bond, t h e Treasury Department,^
Division of Loans and Currency, Washington, D. C , should be notified immediately of the serial number of the bond and the name a n d address of the registered
owner. Upon receipt of such notice full information as to requirements for
issuance of a duphcate will be provided. Apphcation for relief in such cases will
be governed in general by the regulations found in D e p a r t m e n t Circular 300, a s
amended. T h e Treasury D e p a r t m e n t should likewise be notified of t h e recovery
of any bond reported lost, stolen, or destroyed.
TAXATION

18. I n accordance with applicable law, t h e bonds are exempt, b o t h as t o
principal and interest, from all taxation, except estate, inheritance, or gift taxes,
now or hereafter imposed by t h e United States, any State, or any of t h e possessions of t h e United States, or by any local taxing a u t h o r i t y .
AMENDMENTS

19. T h e Secretary of t h e Treasury reserves t h e right a t any time, or from t i m e
to time, t o revoke, or amend these regulations, or to prescribe and issue supplem e n t a l or a m e n d a t o r y rules a n d regulations governing adjusted service bonds.
HENRY

MORGENTHAU,

Jr.,

Secretary of the Treasury.

Exhibit 29
Supplement, J u n e 26, 1936, to Department Circular No. 560, prescribing regulations governing adjusted service bonds of 1945
TREASURY

DEPARTMENT^

Washington, J u n e 26, 1936.
T O O W N E R S OF A D J U S T E D S E R V I C E B O N D S , AND O T H E R S C O N C E R N E D :

D e p a r t m e n t Circular No. 560, d a t e d J u n e 6, 1936, is hereby supplemented by
t h e following additional regulations:
1. Disposition luithout administration or legal guardianship.—When no legal
representative of t h e estate of a deceased or of an incompetent veteran has been
or is to be appointed and p a y m e n t of t h e a m o u n t certified as due upon his adjusted service certificate through t h e issuance and delivery of bonds (and check
if any) has n o t been accomplished, and it is established to t h e satisfaction of t h e
Secretary of t h e Treasury:. (1) in t h e case of a deceased payee either t h a t t h e
value of t h e gross personal estate does not exceed $2,000, or t h a t administration
of t h e estate is not required in t h e S t a t e of t h e decedent's domicile; or (2) in
t h e case of an incompetent payee t h a t t h e value of t h e gross personal estate
does n o t exceed $2,000, such p a y m e n t will be m a d e to t h e person or persons
determined by t h e Secretary of t h e Treasury to be lawfully entitled thereto.
Such p a y m e n t will be m a d e in accordance with t h e provisions of D e p a r t m e n t
Circular No. 300, as amended, and t h e provisions of D e p a r t i n e n t Circular No.
560, insofar as each is applicable, all such provisions to be construed in a m a n n e r
consistent with t h e provisions of t h e Second Liberty Bond Act, as amended,
and t h e Adjusted Compensation P a y m e n t Act, 1936, as amended. Special
forms for use in such cases h a v e been prepared a n d m u s t be complete.d a n d
executed in compliance with accompanying instructions. These forms m a y
be obtained from t h e Treasury D e p a r t m e n t , Division of Loans a n d Currency,
Washington, D . C.
2. T h e Secretary of t h e T r e a s u r y reserves t h e right a t a n y time, or from t i m e
to time, to revoke, or a m e n d these regulations, or to prescribe a n d issue supplem e n t a l or a m e n d a t o r y rules a n d regulations governing adjusted service b o n d s .




JOSEPHINE

ROCHE,

Acting Secretary of the Treasury,

REPORT OF THE SECRETARY OF THE TREASURY

261

Exhibit 30
Order of the Acting Secretary of the Treasury, June 10, 1936, authorizing officers
of the Treasury Department to witness and certify requests for payment of adjusted
service bonds
Pursuant to the provisions of Department Circular No. 560, dated June^ 6»
1936, establishing regulations governing adjusted service bonds, the following
'Officers of the Treasury Department in Washington are hereby authorized to
witness and certify requests for payment by the Treasurer of the United States
of adjusted service bonds:
I. The officers authorized to witness assignments of United States registered
issues under Department Circular No. 300, as amended, are as follows:
Secretary of the Treasury.
Under Secretary of the Treasury.
The several Assistant Secretaries of the Treasury.
Commissioner of the Public Debt.
Assistant Commissioner of the Public Debt.
Deputy Commissioner of the Public Debt.
Chief of the Division of Loans and Currenc}^
Assistant Chief of the Division of Loans and Currency.
Treasurer of the United States.
Assistant Treasurer of the United States.
Executive Assistant to the Treasurer of the United States.
II. In addition, the following officers are authorized to witness and certify
requests for payment by the Treasurer of the United States made by veterans
•employed in the respective services specified:
For the Department generally. Chief Clerk and Superintendent.
For the Bureau of Internal Revenue, head, or acting head, Personnel Division.
For the Bureau of Engraving and Printing, chief accountant and assistant
•chief accountant.
For the Procurement Division, administrative assistant. Branch of Supply.
The attention of all officers authorized to witness and certify requests for
payment of adjusted service bonds is called to the requirement of Department
'Circular No. 560 that the witnessing officer must make certification that the
person signing the request for payment appeared personally before him, and
that such person was known or proved to him to be the payee of the particular
bond. Certifying officers will be held to strict accountability in these respects,
.and will be expected to respond in respect to any losses resulting from want of
•care on their part. The witnessing officer must affix to the certification of the
request for payment his official signature, title, and address, and the date of
certification.
WAYNE C .

TAYLOR,

Acting Secretary,
Issue of Federal Farm Mortgage Corporation bonds guaranteed as to interest
and principal by the United States
Exhibit 31
inviting tenders for Federal Farm Mortgage Corporation l}i percent bonds of 1939
On August 26, 1935, the Secretary of the Treasury, on behalf of the Federal
Farm Mortgage Corporation, invited tenders for bonds of the Corporation, as
•described in the following circular:
[Department Circular No. 549. Public Debt]
TREASURY DEPARTMENT,

Washington, August 26, 1935.
The Secretary of the Treasury, on behalf of the Federal Farm Mortgage Corporation, offers to the people of the United States $100,000,000, or thereabouts,
1J4 percent bonds of 1939 of the Federal Farm Mortgage Corporation, and
invites tenders therefor, through the Federal Reserve banks.




262

REPORT OF THE SECRETARY OF THE TREASURY
DESCRIPTION OF BONDS

T h e bonds will be dated September 3, 1935^ a n d will bear interest from t h a t
date a t t h e r a t e of one a n d one-half percent per a n n u m , payable on a s e m i a n n u a l
basis on M a r c h 1, 1936, a n d thereafter semi-annually on September 1 a n d M a r c h
1 in each year until t h e principal a m o u n t becomes paj^able. T h e y will m a t u r e
September 1, 1939, and will not be subject to call for redemption prior to m a t u r i t y .
Bearer bonds with interest coupons a t t a c h e d will be issued in denominations of
$100, $500, $1,000, $5,000, $10,000, a n d $100,000. T h e bonds will n o t be issued in
registered form. Provision will be made for the interchange of bonds of different
denominations a t any Federal Reserve b a n k or a t t h e Division of Loans and
Currency of t h e United States 'Treasury, Washington, D. C , and through any
other agency designated for t h e purpose by the Federal F a r m Mortgage Corporation.
These bonds are issued under the authority of t h e Federal F a r m M o r t g a g e
Corporation Act, approved J a n u a r y 31, 1934, as amended, which provides t h a t
these bonds and the income derived therefrom shall be exempt from Federal,.
State, municipal, and local taxation (except surtaxes, estate, inheritance, a n d
gift taxes).
Section 16 {a) of t h a t act contains the following provisions: " T h e first sentence
of t h e eighth paragraph of section 13 of the Federal Reserve Act, as amended, isfurther amended b}^ inserting before t h e semicolon after t h e words 'Section 13 (a)
of this Act' a comma and t h e following: 'or by the deposit or pledge of Federal
F a r m Mortgage Corporation bonds issued under t h e Federal F a r m Mortgage
Corporation Act'." Thus, t h e bonds are legally acceptable to secure 15-day
borrowings from t h e Federal Reserve banks.
Section 4 of the Federal F a r m Mortgage Corporation Act, as amended, alsoprovides as follows: ''* * * Such bonds shall be fully and unconditionally
guaranteed both as to interest and principal by the United States and such,
g u a r a n t y shall be expressed on t h e face thereof, and such bonds shall be lawful,
investments, and m a y be accepted as security, for all fiduciary, trust, and public
funds t h e investment or deposit of which shall be under t h e authority or control
of t h e United States or any officer or officers thereof. I n t h e event t h a t t h e
Corporation shall be unable to pay upon demand, when due, t h e principal of^
or interest on, sugh bonds, t h e Secretary of t h e Treasury shall pay to t h e holder
t h e a m o u n t thereof which is hereby authorized to be appropriated, out of any
moneys in t h e Treasury not otherwise appropriated a n d thereupon to t h e e x t e n t
of t h e a m o u n t so paid t h e Secretary of t h e Treasury shall succeed to all t h e
rights of t h e holders of such bonds. * * *"
T E N D E R S AND ALLOTMENTS

Tenders will be received a t t h e Federal Reserve b a n k s and branches thereof
up to 12 o'clock noon, eastern s t a n d a r d time, Wednesday, August 28, 1935,.
and unless received by t h a t time will be disregarded. Tenders will not be received
a t t h e Treasury D e p a r t m e n t , Washington. E a c h tender m u s t state the face
a m o u n t of bonds bid for, which m u s t be $1,000 or any even multiple thereof,
a n d the price offered. T h e price offered m u s t be expressed on the basis of 100,
with fractions expressed as 32ds of 1 percent, in accordance with usual practice,
e. g., 10016/32.
Tenders will be received without deposit from incorporated b a n k s and t r u s t
companies a n d from responsible a n d recognized dealers in investment securities.
Tenders from others m u s t be accompanied in every case by a deposit of 5 percent
of the face a m o u n t of bonds bid for, except where t h e tender is accompanied by
an express g u a r a n t y of p a y m e n t by an incorporated b a n k or t r u s t company. If
t h e tender is accepted, in whole or in p a r t , t h e deposit will be applied toward
p a y m e n t for t h e bonds, t h e balance to be paid as hereinafter provided. If t h e
tender is rejected, t h e deposit will be returned to t h e bidder.
Tenders m u s t be enclosed in envelopes, securely sealed, addressed to t h e
Federal Reserve bank, or branch, of the district, a n d plainly marked ''Tender
for IH percent bonds of 1939 of the Federal F a r m Mortgage Corporation."
T h e Federal Reserve b a n k s will supply printed forms a n d special.envelopes
for submitting tenders. Incorporated banks and t r u s t companies not located
in a city where a Federal Reserve b a n k or branch is located may, in their discretion, submit tenders by telegram, b u t such telegrams m u s t be received a t
t h e Federal Reserve b a n k or branch before t h e time fixed for closing.
Immediately after t h e closing hour for the receipt of tenders on August 28,
1935, all tenders received in writing or by telegraph a t t h e Federal Reserve banks
or branches thereof up to t h e closing hour (12 o'clock noon, eastern s t a n d a r d



REPORT OF THE SECRETARY OF THE TREASURY

263

time) will be opened. T h e Secretary of t h e Treasury will determine the acceptable prices offered and will make public announcement thereof as soon as possible
after the opening of tenders. Those submitting tenders "will be advised by t h e
Federal Reserve banks of t h e acceptance or rejection thereof, and p a y m e n t on
accepted tenders m u s t be made as hereinafter provided. I n considering t h e
acceptance of tenders, the highest jprices oft'ered will be accepted in full down to
the a m o u n t required; a n d if t h e same price api^ears in two or more tenders and
it is necessary to accept only a p a r t of t h e a m o u n t offered a t such price, tenders
for smaller a m o u n t s m a y be accorded preference and tenders for larger a m o u n t s
prorated to the extent necessary in accordance with the respective a m o u n t s bid
for. T h e Secretary of t h e Treasury expressly reserves t h e right, however, t o
reject any or all tenders or p a r t s of tenders, a n d to award less t h a n t h e a m o u n t
bid for, and any action he m a y take in any such respect or respects shall be final.
PAYMENT

P a y m e n t for a n y bonds allotted on accepted tenders m u s t be made or completed
on or before September 3, 1935, in cash or other immediately available funds.
I n every case where p a y m e n t is not so completed, t h e 5 percent deposit with the
application shall, upon declaration m a d e by t h e Secretary of t h e Treasury in
his discretion, be forfeited to the Federal F a r m Mortgage Corporation.
GENERAL PROVISIONS

Federal Reserve banks, as fiscal agents of the United States, are authorized
a n d requested to receive tenders, to m a k e allotments as indicated by t h e Secret a r y of t h e Treasury to t h e Federal Reserve b a n k s of t h e respective districts, to
issue allotment notices, to receive p a y m e n t for bonds allotted, to m a k e delivery
of bonds on full-paid allotments, and to perform such other acts as m a y be necessary to carry out the provisions of this circular. Pending delivery of the definitive
bonds. Federal Reserve banks m a y issue interim receipts.
T h e Secretary of t h e Treasury m a y a t any time, or from time to time, prescribe
supplemental or a m e n d a t o r y rules and regulaiJions governing t h e receipt of
tenders and the sale of bonds under this circular, which will be communicated
p r o m p t l y to t h e Federal Reserve banks.
H E N R Y M O R G E N T H A U , Jr.,

Secretary of the Treasury.
Exhibit 32
Acceptance of tenders for Federal F a r m Mortgage Corporation bonds of 1939 {from
press release, Aug. 29, 1935 ^)
On August 29, 1935, Secretary of t h e Treasury Morgenthau announced the
result of the offering by the Treasury of $100,000,000, or thereabouts, of V/i percent
bonds of 1939 of t h e Federal F a r m Mortgage Corporation, tenders for which were
received a t t h e Federal Reserve banks up to 12 o'clock noon, August 28.
Tenders for $85,592,000 face a m o u n t of bonds were received, of which
$85,122,000 was accepted a t prices ranging from 100 down to 98. T h e average
price of t h e bonds issued was approximately 99. Based on t h e average price at
which t h e bonds were issued on September 3, 1935, the yield was about 1.762
percent to m a t u r i t y , September 1, 1939.
Miscellaneous
Exhibit 33
Receipt of Treasury bonds and Treasury notes for Federal estate or inheritance taxes
[Seventh supplement to Department Circular No. 225. Public Debt]
TREASURY

DEPARTMENT,

October 15, 1935.
1. D e p a r t m e n t Circular No. 225, dated J a n u a r y 31, 1921, prescribed the regulations governing t h e receipt of bonds and notes of t h e United States for Federal
estate or inheritance taxes p u r s u a n t to the provisions of section 14 of t h e Second
Liberty Bond Act, approved September 24, 1917, as amended (U. S. C , title 31,
1 Hevised Sept. 10, 1935.




.264

REPORT OF THE SECRETARY OF THE TREASURY

sec. 765). Said circular has been supplemented on J u n e 30, 1922, July 3 1 , 1923,
October 15, 1925, October 30, 1926, February 14, 1931, and J a n u a r y 12, 1934,
to show t h e bonds and notes on such dates, respectively, outstanding a n d receiv-able for such p a y m e n t s . Said circular is hereby further supplemented to show
t h a t the only bonds a t this date outstanding bearing interest a t a higher r a t e t h a n
4 percent per a n n u m which come within t h e provisions of said D e p a r t m e n t Circular No. 225, dated J a n u a r y 31, 1921, are the 4K percent Treasury bonds of
1947-52, dated October 16, 1922. Treasury notes outstanding a t this time do
n o t come within the provisions of said circular.
2. For t h e calculation of accrued interest on t h e current coupons of bonds tendered in p a y m e n t of estate or inheritance taxes under this circular, t h e method
outlined in Exhibit B to D e p a r t m e n t Circular No. 225, d a t e d J a n u a r y 3 1 , 1921,
should be followed.
^T. J.

COOLIDGE,

Acting Secretary of the Treasury.

Exhibit 34
Letter of the Secretary of the Treasury, May 27, 1936, to the presidents of the Federal
Reserve banks, relative to the announcements of offerings of and the submission of
subscriptions for obligations of the United States
M a y 27, 1936.
M Y D E A R S I R : In advance of the. J u n e 15 financing, which I now expect will
be announced on Monday, J u n e 1, it seems desirable to call t h e attention of subscribing banks and any others concerned to the provisions m a d e for announcem e n t s of offerings and t h e submission of subscriptions. Accordingly, I a m
addressing this communication to you with t h e request t h a t you will t r a n s m i t a
copy to each banking institution in your district, and others concerned.
On the occasion of a public offering of interest-bearing obligations of t h e United
States, announcement will be m a d e by the Secretary of the Treasury through t h e
press, and each Federal Reserve bank will mail, to banking institutions in its
district, full information concerning t h e offering, together with application forms
for use in entering subscriptions. Effort will be m a d e to arrange the mailing so
t h a t information will be received a t each banking institution addressed on t h e
morning of the opening day. In case a banking institution which may be interested in subscribing is so far distant from t h e Federal Reserve bank of its district
t h a t announcements are n o t ordinarily received on t h e opening day, it m a y
request the Federal Reserve bank t h a t it be listed to receive telegraphic advice
of all offerings.
T h e subscription books for a n y offering m a y be closed by t h e Treasury without advance notice, and therefore each subscribing bank, upon receipt of information as to t h e terms of a Treasury offering, either in t h e press, through the mail,
or by telegram, should p r o m p t l y file with t h e Federal Reserve bank any subscriptions for itself and its customers. No assurance can be given as to t h e period
t h e subscription books m a y remain open, and subscribing banks, even before t h e
receipt of official subscription blanks m a y file their subscriptions by telegram or
b y mail to t h e Federal Reserve banks. Any subscription so filed by telegram
or mail in advance of receipt by subscribing bank of subscription blanks furnished
for t h e particular issue, should be confirmed immediately by mail, and on t h e
blanks provided when such blanks shall have been received. This is necessary,
for each subscribing bank or t r u s t company is required to give t h e names a n d
addresses of its customers subscribing to t h e offering and t h e a m o u n t subscribed
by each, and to make certification with respect to t h e subscription by t h e bank for
its own account and for account of its customers.
Subscriptions will be received a t the Federal Reserve b a n k s a n d branches a n d
a t t h e Treasury D e p a r t m e n t , Washington. Banking institutions generally may
submit subscriptions for account of customers. Others t h a n banking institutions
will not be permitted to enter subscriptions except for their own account.
Cash subscriptions from banking institutions for their own account will be
received without deposit, b u t will be limited on each issue to an a m o u n t which
will be stated in t h e Treasury offering. Recently t h e limit placed has been onehalf of the a m o u n t of t h e combined capital and surplus. A cash subscription from
any other subscriber m u s t be accompanied by p a y m e n t in an a m o u n t which also
will be specified in such offering. T h e purpose of this initial p a y m e n t is to limit
t h e a m o u n t of customers' subscriptions to their legitimate requirements, a n d i t




REPORT OF TUE SECRETARY OF THE TREASURY

265'

tends to defeat this purpose if unsecured loans, or loans without collateral other
than the securities subscribed for, are made to cover the initial deposit. Bankinginstitutions will'greatly assist if they will cooperate in avoiding this practice.
In receiving applications from customers for cash offerings, each banking
institution is requested to certify that, to the best of its knowledge and belief, itscustomers' applications are made in good faith for the customers' legitimate
requirements, and that the bank itself has no beneficial interest therein.
Attention is invited to the following certificate which will appear on all subscription blanks furnished b37^ Federal Reserve banks for cash offerings, for the
use of subscribing banking institutions:
"We hereby certify: That we have received applications from our customers^
in the amounts set opposite the customers' names on the attached list which i8>
made a part of this subscription; that there has been paid to us by each such
customer, not subject to withdrawal until after allotment and payment in full
for securities allotted, the full amount required to accompany his application:
(a) if for $
or less the amount in full, or {b) if for more than $
,percent of the amount applied for but not less than $
; that each
such application, to the best of our knowledge and belief, is made in good faith,
for the customer's legitimate requirements; and that we have no beneficial
interest therein.
"We agree: In consideration of the receipt by you of this subscription, to makepayment in full for the entire amount which may be allotted on this subscription,
at par on or before the date of issue, or at par and accrued interest if on later
allotment. Such pa5'^ment will be made by the method indicated, hereon."
The purpose of these provisions is to provide for an equitable allotment and
distribution of securities to all classes of subscribers and the cooperation of"
banking institutions to this end is requested.
Federal Reserve banks as fiscal agents of the United States are authorized and
instructed to examine applications for cash offerings of interest-bearing securities^
of the United States and to report to the Secretary of the Treasury any which
appear to be excessive, with recommendation as to the reduction or rejection of
any such applications, which recommendations will be promptly acted upon by
the Secretary. Federal Reserve banks as fiscal agents of the United States arealso authorized and instructed to take such other action as may be necessary to
assure compliance with the procedure outlined in this letter and the provisions of
any offering circular. The right is reserved to withdraw, amend, or supplementthis letter at any time or from time to time.
Sincerely yours,
HENRY MORGENTHAU, J R . ,

Secretary of the Treasury,,
Exhibit 35
Order of the Acting Secretary of the Treasury, June 10, 1936, authorizing officers
of the Treasury Department to witness assignments of registered issues of United
States bonds and notes
Department Circular No. 300, as amended, prescribing regulations with
respect to United States bonds and notes, makes provision for the assignment of
registered issues at the Treasury Department. The following officers are hereby
authorized to witness such assignments:
The Secretary of the Treasury.
The Under Secretary of the Treasury.
The several Assistant Secretaries of the Treasury.
The Commissioner of the Public Debt.
The Assistant Commissioner of the Public Debt.
The Deputy Commissioner of the Pubhc Debt.
The Chief of the Division of Loans and Currency.
The Assistant Chief of the Division of Loans and Currency.
The Treasurer of the United States.
The Assistant Treasurer of the United States.
The Executive Assistant to the Treasurer of the United States.
No other officers in the Treasury Department at Washington are authorized
to witness the assignments of registered issues of the United States.
The attention of all officers authorized to witness assignments is called to the
Department's requirement that the witnessing officer must make certification



266

REPORT OF THE SECRETARY OF THE TREASURY

t h a t t h e person executing t h e assignment appeared personally before him, t h a t
such person was known or proved to him to be t h e payee of t h e particular .security
assigned, or his duly constituted assign, and t h a t such person executed t h e
transfer, acknowledging it to be his free act and deed. Witnessing officers will
be held to strict accountability in these respects, and w i l l b e expected to respond
in respect to any losses resulting from w a n t of care on their p a r t . T h e witnessing
officer m u s t affix to t h e assignment his official signature, title, and address, and
the d a t e of t h e assignment.
This order supersedes t h e order of August 19, 1921.
W A Y N E C . TAYLOR,

Acting Secretary.
MONEY 1
Exhibit 36
Joint resolution authorizing exchange of coins and currencies and immediate payment of gold clause securities by the United States; withdrawing the right to sue
the United States thereon; limiting the use of .certain appropriations; and for
other purposes
[Public Res. No. 63, 74th Cong., H. J. Res. 3481

Whereas in order to maintain t h e uniform value of all coins and currencies of t h e
United States, Public Resolution Numbered 10 of J u n e 5, 1933, declared
provisions known as "gold clauses" to be against public policy, prohibited
their use in obligations thereafter incurred, a n d provided t h a t money of t h e
United States legal tender for obligations generally was legal tender for all
obligations with or without gold clauses; and
Whereas t h e United States has paid and will continue to p a y to t h e holders of
all its securities their principal a n d interest, dollar for dollar, in lawful money
of the United States: Now, therefore, be it
Resolved by the Senate and House of Representatives of the United States of America in Congress assembled. T h a t t h e lawful holders of t h e coins or currencies of t h e
United States shall be entitled ^o exchange them, dollar for dollar, for other coins
or currencies which m a y be lawfully acquired a n d are legal tender for public and
private debts; and t h a t t h e owners of the gold clause securities of t h e United
States shall be, a t their election, entitled to receive immediate p a y m e n t of t h e
stated dollar a m o u n t thereof with interest to t h e date of p a y m e n t or to prior
m a t u r i t y or to prior redemption date, whichever is earlier. T h e Secretary of
t h e Treasury is authorized and directed to m a k e such exchanges a n d p a y m e n t s
upon presentation hereunder in the m a n n e r provided in regulations prescribed
by him. T h e period within which t h e owners of gold clause securities shall be
entitled hereunder to receive p a y m e n t prior to m a t u r i t y shall expire J a n u a r y . 1,
1936, or on such later date, not after July 1, 1936, as m a y be fixed by t h e Secretary
of t h e Treasury.
SEC. 2. Any consent which t h e United States m a y have given to t h e assertion
against it of any right, privilege, or power, whether by way of suit, counterclaim,
set-off, recoupment, or other affirmative action or defense in its own n a m e or in
t h e n a m e of any of its officers, agents, agencies, or instrumentalities in any proceeding of any n a t u r e whatsoever (1) upon anj'- gold clause securities of t h e
United States or for interest thereon, or (2) upon any coin or currency of t h e
United States, or (3) upon any claim or demand arising out of any surrender,
requisition, seizure, or acquisition of any such coin or currency or of a n y gold or
silver and involving t h e effect or validity of any change in t h e metallic content
of t h e dollar or other regulation of t h e value of money, is w i t h d r a w n : Provided,
T h a t this section shall not apply to any suit heretofore commenced or which
m a y be commenced by J a n u a r y 1, 1936, or to any proceeding referred to in this
section in which no claim is m a d e for p a y m e n t or credit in an a m o u n t in excess
of t h e face or nominal value in dollars of t h e securities, coins, or currencies of t h e
United States involved in such proceeding.
SEC. 3. Except in cases with respect to which consent is not withdrawn under
section 2, no sums, whether heretofore or hereafter appropriated or authorized
to be expended, shall be available for, or expended in, p a y m e n t upon securities,
coins, or currencies of t h e United States except on an equal and uniform dollar
for dollar basis.
1 Amendments, Aug. 26, 1935, and Dec. 24, 1935, to the Provisional Regulations Issued Under the Gold
Reserve Act of 1934, as amended, are available separately and are not reproduced here.




REPORT OF THE SECRETARY OF THE TREASURY

267

SEC,' 4. As used in this resolution t h e phrase "gold clause" means a provision
contained in or m a d e with respect to an obligation which purports to give t h e
obligee a right to require p a y m e n t in gold, or in a particular kind of coin or curr e n c y of t h e United States, or in an a m o u n t in money of t h e United S t a t e s
m e a s u r e d thereby, declared to be against public policy by Public Resolution
N u m b e r e d 10 of J u n e 5, 1933; and t h e phrase "securities of t h e United S t a t e s "
m e a n s t h e domestic public debt obligations of t h e United States, including bonds,
notes, certificates of indebtedness, a n d Treasury bills, and other obligations for
t h e r e p a y m e n t of money, or for interest thereon, made, issued, or guaranteed by
t h e United States.
^
Approved, August 27, 1935, six p . m., E. S. T.

Exhibit 37
Regulations governing the immediate payment of gold clause securities
[Department Circular No. 552. Public Debt]
TREASURY

DEPARTMENT,

Washington, September 10, 1935.
Public Resolution No. 63, Seventy-fourth Congress, approved August 27, 1935,
readsasfollows:
' •
[Public resolution omitted here, see p. 2661

P u r s u a n t to the a u t h o r i t y of such resolution the following regulations are
hereby prescribed to govern t h e immediate p a y m e n t of outstanding gold clause
securities of t h e United States:
1. As used in these regulations, the phrase "gold clause" and t h e phrase
^'securities of the United S t a t e s " have t h e same meaning as used in t h e foregoing
resolution.
2. T h e owners of any outstanding gold clause securities of t h e United States
are entitled, a t their election, subject to t h e provisions of such resolution a n d of
these regulations, to receive p a y m e n t of the stated dollar a m o u n t thereof with
interest to the date of p a y m e n t or to prior maturit}^ or to prior redemption date,
whichever is earlier,
3. Owners of any outstanding gold clause securities desiring to receive paym e n t hereunder should present and surrender their securities, in t h e m a n n e r
provided in t h e next following paragraphs. T h e period during which gold clause
securities m a y be presented for immediate p a y m e n t prior to m a t u r i t y under these
regulations will expire on J a n u a r y 1, 1936.
4. Surrender of bearer or coupon securities for payment.—Securities in bearer or
coupon form should be presented and surrendered to a Federal Reserve bank, or to
the Treasurer of the United States, Washington, D . C , and should have t h e next
m a t u r i n g coupon and all coupons bearing dates subsequent thereto a t t a c h e d ;
and if the securities have been called for redemption, all coupons bearing dates
subsequent to t h e redemption date should also be attached. If any such coupons
are missing, the a m o u n t thereof will be deducted from t h e p a y m e n t to be m a d e ,
a n d t h e a m o u n t s so deducted will be t r e a t e d as provided by p a r a g r a p h 26 of
D e p a r t m e n t Circular No. 300.
5. Surrender of registered securities for payment.—Securities in registered form
should be presented and surrendered to a Federal Reserve bank, or to t h e Treasury
D e p a r t m e n t , Division of Loans and Currency, Washington, D . C , and should be
assigned by t h e registered payees or assigns thereof in accordance with t h e
g e n e r a l . regulations of t h e Treasury D e p a r t m e n t governing assignments for
transfer or exchange, in one of t h e two following forms: (1) if p a y m e n t is to be
m a d e to the registered payee or his assigns, t h e assignment should be to " T h e
Secretary of the Treasury for p a y m e n t under Circular No. 5 5 2 " ; (2) if p a y m e n t is
t o be made to another, the assignment should be to " T h e Secretary of t h e T r e a s u r y
for p a y m e n t under Circular No. 552 to
"
6. Written advice and transportation.—All securities presented and surrendered
hereunder m u s t be accompanied by appropriate written advice (see F o r m P. D .
1464 hereto annexed) signed by the owner or his duly authorized agent, describing
t h e securities, requesting immediate p a y m e n t , and giving address to which
check issued in p a y m e n t is to be mailed. T h e securities m u s t be delivered a t t h e
expense and risk of t h e owners. Coupon or bearer securities should be forwarded by registered mail insured, or by express prepaid. Registered securities,




268

REPORT OF THE SECRETARY OF THE TREASURY

assigned as herein provided, m a y be forwarded by registered mail. Facilities for
t h e t r a n s p o r t a t i o n of securities by registered mail insured m a y be arranged
between incorporated b a n k s a n d t r u s t companies a n d t h e Federal Reserve b a n k s ,
a n d owners m a y t a k e a d v a n t a g e of such a r r a n g e m e n t s when available, utiliziiig^
such incorporated banks a n d t r u s t companies as their agents.
7. P a y m e n t . — P a y m e n t of t h e principal a n d accrued interest due will be m a d e
by check issued by t h e Treasurer of t h e United States or by a Federal Reserve
bank, and mailed by ordinary mail to t h e address furnished by t h e owner, or his
agent. Interest on securities paid prior to m a t u r i t y or redemption d a t e will be
c o m p u t e d to and including t h e day on which t h e check in p a y m e n t is issued.
8. General provisions.—The Treasurer of t h e United States, a n d t h e F e d e r a l
Reserve banks as fiscal agents of t h e United States, are authorized a n d requested
t o receive gold clause securities for p a y m e n t and t o m a k e p a y m e n t thereof in
accordance with these regulations. T h e T r e a s u r y D e p a r t m e n t a n d t h e F e d e r a l
Reserve banks are t h e only official agents under this circular.
9. T h e Secretary of t h e T r e a s u r y m a y a t a n y time, or from t i m e t o time^.
supplement or a m e n d these regulation's.
„ HENRY

MORGENTHAU,

Jr.,

Secretary of the Treasury,.
Approved:
THE

FRANKLIN D . ROOSEVELT,
WHITE HOUSE,

September 14, 1935,

TREASURY

DEPARTMENT.

Division of Loans and Currency.
Form P. D. 1464

'

•

-

F O R M O F A D V I C E TO ACCOMPANY U N I T E D S T A T E S " ( J T O L D - C L A U S E " SECURITIES,,
I N C O U P O N OR R E G I S T E R E D F O R M , P R E S E N T E D FOR I M M E D I A T E PAYMENTP U R S U A N T TO T H E P R O V I S I O N S O F P U B L I C R E S O L U T I O N N O . 63, A P P R O V E D
A U G U S T 27,
1935

IMPORTANT N O T E . — R e g i s t e r e d securities should be s u b m i t t e d t o t h e T r e a s u r y
D e p a r t m e n t , Division of Loans and Currency, Washington, D. C , or a F e d e r a l
Reserve bank. Coupon securities should be s u b m i t t e d t o t h e Treasurer of t h e
United States, Division of Securities, Washington, D . C , or a Federal Reserve
b a n k . Use a separate form for each issue of securities presented. In t h e spaces,
provided therefor giye a full description of t h e securities presented, including;
t h e exact form of registration of registered bonds: Please type or write plainly..
To

THE T R E A S U R Y D E P A R T M E N T , D I V I S I O N O F L O A N S AND C U R R E N C Y ,
INGTON, D . C.

WASH-

or
T H E T R E A S U R E R OF THE U N I T E D STATES, D I V I S I O N OF SECURITIES,
INGTON, D . C.

WASH-

or
FEDERAL RESERVE
UNITED STATES.

BANK

OF

_,

FISCAL

AGENT

OF T H E

P u r s u a n t t o t h e provisions of Public Resolution N o . 63, 74th Congress, a p proved August 27, 1935, and of Treasury D e p a r t m e n t Circular No. 552, d a t e d
September 10, 1935, t h e undersigned presents a n d surrenders herewith for i m mediate p a y m e n t , a t par, with any interest t h a t m a y be p a y a b l e u n d e r t h e
t e r m s of t h e said resolution a n d circular, t h e
^1
United S t a t e s
(coupon or registered)

"gold-clause" securities described below.
T h e registered bonds presented are registered in t h e n a m e of __
a n d h a v e been duly assigned t o t h e Secretary of t h e T r e a s u r y for p a y m e n t , in
t h e m a n n e r provided in said circular.




REPORT OF THE SECRETARY OF THE TREASURY
Title of securities
Number of pieces

269

(class, rate of interest, redemption, or maturity years)
Denomination

Serial numbers

$

Face
amount

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

Total

:.

and requests that remittance covering payment thereof be mailed to the undersigned at the address indicated below.
Signature and address of the person presenting the securities to the Treasury
Department or Federal Reserve bank. If presented by a firm or corporation,
the name of the firm or corporation should be followed by the signature and title
of a member or an officer, respectively.
Signature
Name (please print)
_
_
--Address for mail in full

Date
Exhibit 38
Regulations governing the exchange of coins and currencies of the United States
[Department Circular No. 553. Public Debt]
TREASURY

DEPARTMENT,

Washington, September 10, 1935,
Public Resolution No. 63, Seventy-fourth Congress, approved August 27, 1935,
reads as follows:
[Public resolution omitted here, see p. 266]

Pursuant to the authority of this resolution, the official agencies of the Treasury
Department will continue to exchange the coins and currencies of the United
States, dollar for dollar, for other coins or currencies which may be lawfully
acquired and are legal tender for public and private debts, to the extent and
in the manner in effect immediately prior to the date hereof.
HENRY MORGENTHAU, JR.,

Secretary of the Treasury.
Approved:
' I FRANKLIN D . ROOSEVELT,
T H E WHITE HOUSE,

September 14, 1935.

Exhibit 39
Proclamation, January 10, 1936, extending powers conferred by section 10 of the
Gold Reserve Act of 1934 and section 43 of the act approved May 12, 19SS
Whereas, section 10 of the Gold Reserve Act of 1934, approved January 30,
1934 (Pubhc, Numbered 87, Seventy-third Congress), provides among other
things:
, "Sec 10. *. * *
"(c) All the powers conferred by this section shall expire two years after the
date of enactment of this act, unless the President shall sooner declare the existing




270

REPORT OF THE SECRETARY OF THE TREASURY

emergency ended and t h e operation of t h e stalDilization fund t e r m i n a t e d ; b u t t h e
President inay extend suchpeiriod for not mote thaii brie additibn'ai year aftfcr such
date by proclamation recognizing t h e continuance of such emergency"; a n d
Whereas, p a r a g r a p h (b) (2), of section 43, title I I I , of t h e act approved M a y
12, 1933 (Public, N u m b e r e d 10, Seventy-third Congress), as amended, provides
among other things:
ii^2) * * * T h e powers of t h e President specified in this p a r a g r a p h shall be
deemed to be separate, distinct, and continuing powers, and m a y be exercised by
him, from time to time, severally or.together, whenever and as t h e expressed
objects of this section in his j u d g m e n t m a y require; except t h a t such powers shall
expire two years after t h e date of e n a c t m e n t of the Gold Reserve Act of 1934
unless t h e President shall sooner declare t h e existing emergency ended, b u t t h e
President m a y extend such period for not more t h a n one additional year after
such date by proclamation recognizing t h e continuance of such emergency"; and
Whereas, such emergency which existed on J a n u a r y 30, 1934, the date of
approval of said Gold Reserve Act of 1934, has not been t e r m i n a t e d by international m o n e t a r y agreement or otherwise, but, on the contrary, continues a n d
has been intensified in divers respects by unsettled conditions in international
commerce and fiha;hce and in foreign'exchange; and
Whereas, by virtue of the continuance of such emergency, it is necessar}^ t o
extend the period during which t h e powers conferred by said section 10 of said
Gold Reserve Act of 1934 and the powers specified in said paragraph (b) (2), of
section 43, title I I I , of said act approved M a y 12, 1933, as amended, m a y be
exercised:
Now, therefore, be it known t h a t I, Franklin D . Roosevelt, President of t h e
United States of America, by virtue of t h e a u t h o r i t y vested in me by the acts of
Congress above set forth, and by virtue of all other a u t h o r i t y in me vested,
recognizing t h e continuance of t h e emergenc}^ existing on J a n u a r y 30, 1934, do
hereby proclaim, order, direct, and declare t h a t t h e period of two years within
which the'powers conferred by section 10 of the Gold Reserve Act of 1934, and
t h e powers specified in p a r a g r a p h (b) (2), of section 43, title I I I , of the act approved May 12, 1933, as amended, m a y be exercised, be, and it hereby is, extended
for one additional year from J a n u a r y 30, 1936.
I n witness whereof, I have hereunto set m y h a n d and have caused t h e seal of
t h e United States of America to be affixed.
Done a t t h e City of Washington this 10 day of J a n u a r y , in t h e year of our
Lord nineteen hundred and thirty-six, and of the Independence of t h e United
States of America t h e one-hundred and.sixtieth.
[SEAL]

FRANKLIN D ROOSEVELT

By t h e President:
CoRDELL H U L L ,

Secretary of State.
Exhibit 40
Statement by the Treasury Department, August 15, 1935, relative to the new $1 silver
certificate
Secretary Morgenthau t o d a y announced t h a t production of a new $1 silver
certificate is under way a t t h e Bureau of Engraving and Printing.
T h e new certificate is of t h e same size as currency now in circulation, b u t
represents changes both in t h e m e t h o d of printing signatures and in design.
T h e new certificate is not yet ready for issue and ample notice will be given
before it is p u t into circulation.
T h e i m p o r t a n t change in t h e face of t h e new certificate deals with t h e m e t h o d
of printing signatures on t h e notes. T h e signatures of t h e Secretary of t h e
Treasury and of t h e Treasurer of t h e United States, instead of being printed with
t h e rest of t h e design, will be typographically over-printed later, from steel
dies, when t h e bills are numbered and sealed. There are a n u m b e r of minor
changes-in the design of t h e face.
T h e design of t h e back of t h e note presents for t h e first time, on a n y mbnfey
issued by t h e United States, a representation of b o t h t h e obverse a n d reverse
of t h e great seal of t h e United States, first adopted in 1782, prior t o ' t h e adoption
of t h e Constitution.
T h e obverse of t h e great seal is t h e familiar American eagle with a shield,
grasping an olive branch in one talon and arrows in t h e other talon, s u r m o u n t e d
by 13 stars a n d t h e Latin m o t t o ' ' E Pluribus U n u m . "




REPORT OF THE SECRETARY OF THE TREASURY

271

T h e reverse of the great sieal, used'for t h e first tiine on money, shows an unfinished pyramid, surmounted by an eye in a triangular glory. T h e p y r a m i d bears
in r o m a n numerals t h e year of t h e Declaration of Independence, 1776.
Above t h e eye is t h e Latin m o t t o , ''Annuit Coeptis", rendered as ' ' H e (God)
favored our undertakings." T h e m o t t o a t t h e b o t t o m is " N o v u s Ordo Seclorum"
a n d is translated as "A new order of t h e ages." T h e eye a n d triangular glory
symbolize an all-seeing Deity. The pyramid is t h e symbol of strength a n d its
unfinished condition denotes t h e belief of t h e designers of t h e great seal t h a t
there was still work to be done. Both t h e mottoes on the reverse of the seal are
condensations of excerpts from Virgil's ^ n e i d .
T h e first committee on t h e great seal was formed on t h e afternoon of July 4,
1776, a n d consisted of Benjamin Franklin, T h o m a s Jefferson, and J o h n Adams.
The great seal as finally adopted was largely t h e work of Charles Thomson,
Secretary of Congress, a n d WiUiam Barton, a private citizen of Philadelphia.
T h e design was officially adopted on June 20, 1782, by fundamental law. T h e
great seal was again ratified after t h e Constitution was adopted in 1789.
The only previous use of t h e reverse of t h e great seal, according to Treasury
records,,was in 1882, when a centennial medal was issued by t h e United States
M i n t to celebrate t h e one h u n d r e d t h anniversary of t h e great seal's adoption.
T h e fundamental law which established t h e great seal includes t h e following
description of t h e reverse:
''A P y r a m i d unfinished. I n t h e zenith an Eye in a Triangle, surrounded with
a Glory, proper: over t h e E y e these words, 'Annuit Coeptis'.
" O n t h e base of t h e P y r a m i d the numerical letters, M D C C L X X V I , and
underneath, t h e following m o t t o , 'Novus Ordo Seclorum.' "
T h e ex]Dlanation of the reverse design written a t t h e time by Mr. Barton, one
of t h e designers, is:
" T h e pyramid on t h e reverse signifies strength and duration. T h e eye over
it, with t h e m o t t o 'Annuit Coeptis' (Prosper our endeavors), alludes to t h e m a n y
signal interpositions of Providence in favor of t h e American cause. T h e date
u n d e r n e a t h is t h a t of the Declaration of Independence and t h e words under it
signify t h e beginning of t h e new American era, which commenced from t h a t
date."
Following is a more detailed description of t h e face a n d back designs:
Face.—The face of t h e series 1935, $1 silver certificate, printed in black, is
similar to t h e present series 1934 design now in circulation with t h e foUowing
changes:
T h e large ruled face " O N E " has been removed from t h e note a n d is replaced
with t h e words "One Dollar" in r o m a n lettering having a graduated ruled face
with a ruled shadow approximately 1 inch below t h e t o p edge of t h e note. Below
this, in black roman lettering, is t h e wording "Washington, D. C . " On t h e
left of t h e portrait, across t h e gothic lettering, a shaded figure " 1 " is engraved,
t a k i n g t h e place of the blue surface-printed figure " 1 " on t h e present issue.
Space is provided below on either side of t h e portrait to permit of the printing
of t h e signatures of both the Secretary of t h e Treasury and t h e Treasurer of the
United States from steel engraved dies a t t h e time t h e notes are being numbered
a n d sealed. T h e Treasury seal is reduced to five-eighths of an inch in diameter,
a n d printed in blue across t h e words "Washington, D. C " , on t h e right side of
t h e note: T h e serial numbers have been reduced in size a n d are printed in blue
in t h e same positions as on t h e series 1934 note. T h e words "Series of 1935"
appear farther to t h e left in t h e upper left-hand corner, a n d farther to t h e right
in t h e lower right portion of t h e note.
Back.—The back is printed in green. T h e design comprises t h e obverse a n d
reverse sides of the great seal of the United States as adopted by the Congress in
1782. T h e reverse of t h e great seal is on t h e left center a n d carries t h e Latin
words " A n n u i t CoejDtis" and " N o v u s Ordo Seclorum." T h e obverse of the
great seal is on t h e right center. T h e impressions of t h e obverse and reverse of
t h e great seal are enclosed by a circular cycloid line p a t t e r n a n d ornamental
a c a n t h u s leaf scroll work. Below the reverse side are t h e words " T h e G r e a t
Seal", and below the obverse are the words "of t h e United S t a t e s " . T h e outer
portion of tlie note consists of the usual conventional geometrical lathe design
with t h e title " T h e United States of America" in white-faced r o m a n letters
across t h e top of the note in t h e lathe work. T h e words "One Dollar" in similar
lettering appear in t h e lower panel of lathe work, having a ruled t i n t on their
face. In each corner is a large white-faced numeral " 1 " , and extending across
this figure is t h e word " O n e " in white r o m a n lettering. Between t h e reverse a n d
obverse of the great seal is the word " O n e " in a ruled face roman letter having a




:272

REPORT OF THE SECRETARY OF THE TREASURY

':ruled shadow. This word is approximately 1^^ inch long and ^Ke inch in height.
A small cycloid pattern is used to furnish a lacelike edging in the inner edges of the
^lathe work.
Exhibit 41
Issue, exchange, and redemption of paper currency and coin
[Department Circular No. 55, revised. Treasurer; Mint]
TREASURY

DEPARTMENT,

Washington, March 13, 1936.
Paragraph 17 of Treasury Department Circular No. 55, revised, dated January
:26, 1927, amended on September 26, 1933, is hereby further amended to read as
^follows:
"17. Mutilated coins.—Except as hereinafter provided mutilated coins are
.not accepted at their face value but at their bullion value. Silver coins are mutilated when so punched, clipped, chipped, or otherwise mutilated, as to be appre'Ciably reduced in weight, or when so defaced as to be not readily and clearly
identified as to genuineness and denomination. Minor coins are mutilated when
so defaced as not to be readily identified, or when so punched or clipped or otherwise mutilated as to show a material loss of metal. Silver coins and minor coins
which have merely been so altered as to render them available for use as coins
-of another denomination will be received at face Value, except that such minor
-coins,must first be certified to by a coinage mint as being otherwise eligible for
receipt at such value. A charge of 40 cents per thousand pieces or coins shall
be made for such pieces or coins received by such mint for certification, with a
minimum charge of $1.00 for each such deposit received by it. The payments
-80 received shall be covered into the Treasury as a miscellaneous receipt. Such
• coins as are not certified by such mint to be eligible for receipt at their face value
shall be accepted by such mint at their bullion value or returned to the depositor
.-at his expense. Silver or minor coins that are bent or twisted out of shape, but
showing no appreciable or material loss of metal, respectively, are not regarded
-as mutilated, and will be received at face value. Gold coins are accepted only
-as provided in the acts, orders, regulations, and instructions relating to gold.
The fraudulent defacement or mutilation of United States coins is a criminal
• offense under section 165 of the Penal Code of the United States, and a fine of
.not more than $2,000 and imprisonment for not more than five years are prescribed
cfor,such an offense. Mutilated coins should not be transmitted to the Federal
Reserve banks or branches or to the Treasurer of the United States, but should be
'forwarded to the mints, or as otherwise hereinabove provided, for sale as bullion."
MARION BANISTER,

Assistant Treasurer of the United States.
NELLIE TAYLOE ROSS,

Director of the Mint,
Approved: March 13, 1936.
WAYNE C . TAYLOR,

Acting Secretary of the Treasury.

TAXATION 1
Exhibit 42
Titles V I I I and I X of the Social Security Act {Public No. 271, approved August 14*
1935) relative to the taxes on employers and employees
TITLE VIII—TAXES WITH RESPECT TO EMPLOYMENT
INCOME TAX ON EMPLOYEES

SECTION 801. In addition to other taxes, there shall be levied, collected, and
]paid upon the income of every individual a tax equal i:o the following percentages
-of the wages (as defined in section 811) received by liim after December 31, 1936,
with respect to employment (as defined in section 811) after such date:
For footnote, see p . 273.




REPORT OF THE SECRETARY OF THE TREASURY
(1) With respect to employment during the calendar years 1937,
1939, the rate shall be 1 per centum.
(2) With respect to employment during the calendar years 1940,
1942, the rate shall be 1}^ per annum.
(3) With respect to employment during the calendar years 1943,
1945, the rate shall be 2 per centum.
(4) With respect to employment during the calendar years 1946,
1948, the rate shall be 2}^ per centum.
(5) With respect to employment after December 31, 1948, the rate
per centum.

273
1938, and
1941, and
1944, and
1947, and
shall be 3

DEDUCTION OF TAX FROM WAGES

SEC. 802. (a) The tax imposed by section 801 shall be collected by the employer of the taxpayer, by deducting the amount of the tax from the wages as
and when paid. Every employer required so to deduct the tax is hereby made
liable for the payment of such tax, and is hereby indemnified against the claims
and demands of any person for the amount of any such payment made by such
employer.
(b) If more or less than the correct amount of tax imposed by section 801 is
paid with respect to smy wage payment, then, under regulations made under
this title, proper adjustments, with respect both to the tax and the amount to be
deducted, shall be made, without interest, in connection with subsequent wage
payments to the same individual by the same employer.
DEDUCTIBILITY FROM INCOME TAX

SEC. 803. For the purposes of the income tax imposed by Title I of the Revenue
Act of 1934 or by any act of Congress in substitution therefor, the tax imposed
by section 801 shall not be allowed as a deduction to the taxpayer in computing
his net income for the year in which such tax is deducted from his wages.
EXCISE TAX ON EMPLOYERS

SEC. 804. In addition to other taxes, every employer shall pay an excise taxwith respect to having individuals in his ernploy, equal to the following percentages of the wages (as defined in section 811) paid by him after December 31,
1936, wdth respect to employment (as defined in section 811) after such date:
(1) With respect to employment during the calendar years 1937, 1938, and
1939, the rate shall be 1 per centum.
(2) With respect to employment during the calendar years 1940, 1941, and
1942, the rate shall be IJ^ per centum.
(3) With respect to employment during the calendar years 1943, 1944, and
1945, the rate shall be 2 per centum.
(4) With respect to employment during the calendar years 1946, 1947, and
1948, the rate shall be 2}^ per centum.
(5) With respect to employment after December 31, 1948, the rate shall be 3
per centum.
1 These exhibits do not include the following laws which modify the tax system: Public No. 407, Aug.
30.1935, Eevenue Act of 1935; Public No. 740, June 22,1936, Revenue Act of 1936; Public No. 262, Aug. 12,
1935, exempts from taxation payments of benefits to a beneficiary under laws relative to veterans; Public
No. 374, Aug. 27, 1935, exempts from taxation official compensation of certain foreign representatives and
provides for the deductibility from income of certain dividends on certain stocks owned by the United
States or instrumentalities thereof; Public No. 470, Mar. 12, 1936, subjects all minerals including oil and
gas produced after Apr. 26, 1931, on the lands of Five Civilized Tribes in Oklahoma to Federal and State
taxes; Public No. 490, Apr. 10, 1936, exempts certain small firearms from the provisions of the National
Firearms Act; Public No. 482, Mar. 20, 1936, reaffirms the immunity from the Federal, State, and local
tax of shares and preferred stock, capital notes and debentures of banks while owned by the Reconstruction
Finance Corporation; Public No. 528. Apr. 20, 1936, exempts the members of the Xth Olympiade Committee of the Games of Los Angeles, United States of America, 1932, Ltd., from income on gift taxes in
respect to any surplus receipts from the Olympic Games if donated to the State of California and to the
city or county of Los Angeles; Public No. 815, June 26,1936, reduces by 50 percent the rates of tax on wines,
liqueurs, etc.; Public No. 837, June 29, 1936, waives any exclusive Federal jurisdiction over the premises
of Public Works Administration slum clearance and low cost housing projects, and authorizes payments
to States and political subdivisions in lieu of taxes on such premises; Public No. 842, June 29,1936, reduces
the stamp tax on transfers of stock from 4 cents per $100 to 2 cents per .$100 after July 1, 1937; Public No.
845, June 29, 1936, waives any exclusive Federal jurisdiction over premises of Resettlement or Rural.Rehabilitation projects and authorizes pa3^ments to States and political subdivisions in lieu of taxes on such
premises; Public No. 320, Aug. 24, 1935, title I, amends the Agricultural Adjustment Act of May 12, 1933,
with respect to the taxation of certain farm products, and title II, the Potato Act of 1935; Public Res. No.
109, June 19, 1936, terminates the processing, compensating, and floor stock taxes on sugar beets and sugarcane and the products thereof; and Public No. 433, Feb. 10, 1936, repeals Public 169, Apr. 21, 1934, the
Bankhead Cotton Act of 1934, except section 24 thereof. Public No. 483, June 28, 1934, as amended, the
Kerr Tobacco Act, and title II of Public No. 320, Aug. 24,1935, the Potato Act of 1935.

93790—37

-19




274

REPORT OF T H E SECRETARY OF T H E TREASURY
ADJUSTMENT OF E M P L O Y E R S ' TAX

S E C . 805. If more or less t h a n t h e correct a m o u n t of t a x imposed b y section
804 is paid with respect to a n y wage p a y m e n t , then, under regulations m a d e
under this title, proper adjustments with respect to t h e t a x shall be m a d e , without interest, in connection with subsequent wage p a y m e n t s t o t h e same individual
by t h e same employer.
R E F U N D S AND D E F I C I E N C I E S

SEC. 806. If more or less t h a n t h e correct a m o u n t of t a x imposed b y section
801 or 804 is paid or deducted with respect to a n y wage p a y m e n t a n d t h e overp a y m e n t or u n d e r p a y m e n t of t a x cannot be adjusted under section 802 (b) or
805 t h e a m o u n t of t h e overpayment shall be refunded a n d t h e a m o u n t of t h e
u n d e r p a y m e n t shall be collected, in such manner a n d a t such times (subject to
t h e statutes of limitations properly applicable thereto) as m a y be prescribed by
regulations made under this title.
COLLECTION AND PAYMENT OF T A X E S

SEC. 807. (a) T h e taxes imposed b y this title shall be collected b y t h e Bureau
of Internal Revenue under t h e direction of t h e Secretary of t h e Treasury a n d
shall be paid into t h e Treasury of t h e United States as internal revenue collections. If t h e t a x is not paid when due, there shall be added as p a r t of t h e t a x
interest (except in t h e case of adjustments made in accordance with t h e provisions
of sections 802 (b) and 805) a t t h e r a t e of one-half of 1 per centum per m o n t h
from t h e date t h e tax became due until paid.
(b) Such taxes shall be collected a n d paid in such manner, a t such times, and
under such conditions, not inconsistent with this title (either by making a n d
filing returns, or by stamps, coupons, tickets, books, or other reasonable devices
or methods necessary or helpful in securing a complete a n d proper collection
and p a y m e n t of t h e tax or in securing proper identification of t h e taxpayer), as
m a y be prescribed by t h e Commissioner of I n t e r n a l Revenue, with t h e approval
of t h e Secretary of t h e Treasury.
. (c) All provisions of law, including penalties, applicable with respect to a n y
tax imposed b y section 600 or section 800 of t h e Revenue Act of 1926, a n d t h e
provisions of section 607 of t h e Revenue Act of 1934, shall, insofar as applicable
and not inconsistent with the provisions of this title, be applicable with respect
to t h e taxes imposed b y this title.
(d) I n t h e p a y m e n t of a n y t a x under this title a fractional p a r t of a cent shall
be disregarded unless it a m o u n t s to one-half cent or more, in which case it shall
be increased to 1 cent.
RULES AND REGULATIONS

SEC. 808. T h e Commissioner of I n t e r n a l Revenue, with t h e approval of the
Secretary of t h e Treasury, shall make a n d publish rules a n d regulations for t h e
enforcement pf this title.
SALE O F S T A M P S BY POSTMASTERS

S E C . 809. T h e Commissioner of I n t e r n a l Revenue shall furnish t o t h e Postmaster General without p r e p a y m e n t a suitable q u a n t i t y of stamps, coupons,
tickets, books, or other devices prescribed by t h e Commissioner under section
807 for the.collection or p a y m e n t of any t a x imposed b y this title, to be distributed
to, a n d kept on sale by, all post offices of t h e first a n d second classes, a n d such
post offices of t h e third and fourth classes as (1) are located in county seats,
or (2) are certified b y t h e Secretary of t h e Treasury to t h e Postmaster General
as necessary to t h e proper administration of this title. T h e Postmaster General
m a y require each such postmaster to furnish bond in such increased aniount as
he m a y from time to time determine, a n d each such postmaster shall deposit
t h e receipts from t h e sale of such stamps, coupons, tickets, books, or other devices,
to t h e credit of, a n d render accounts to, t h e Postmaster General a t such times
and in such form as t h e Postmaster General m a y by regulations prescribe. T h e
Postmaster General shall a t least once a m o n t h transfer to t h e Treasury as
internal revenue collections all receipts so deposited together with a s t a t e m e n t
of t h e additional expenditures in t h e District of Columbia a n d elsewhere incurred
by t h e Post Office D e p a r t m e n t in performing t h e duties imposed upon said
D e p a r t m e n t b y this act, a n d t h e Secretary of t h e Treasury is hereby authorized
a n d directed to advance from time to time to t h e credit of t h e Post Office D e -




REPORT OF THE SECRETARY OF THE TREASURY

275

partment from appropriations made for the collection of the taxes imposed by
this title, such sums as may be required for such additional expenditures incurred
by the Post Office Department.
PENALTIES

SEC. 810. (a) W^hoever iDuys, sells, offers for sale, uses, transfers, takes or gives
in exchange, or pledges or gives in pledge, except as authorized in this title or in
regulations made pursuant thereto, any stamp, coupon, ticket, book, or other
device, prescribed by the Commissioner of Internal Revenue under section 807
for the collection or payment of any tax imposed by this title, shall be fined not
more than $1,000 or imprisoned for not more than six months, or both.
(b) Whoever, with intent to defraud, alters, forges, makes, or counterfeits any
stamp, coupon, ticket, book, or other device prescribed by the Commissioner of
Internal Revenue under section 807 for the collection or payment of any tax
imposed by this title, or uses, sells, lends, or has in his possession any such altered,
forged, or counterfeited stamp, coupon, ticket, book, or other device, or makes,
uses, sells, or has in his possession any material in imitation of the material used
in the manufacture of such stamp, coupon, ticket, book, or other device, shall be
fined not more than $5,000 or imprisoned not more than five years, or both.
DEFINITIONS

SEC. 811. [Definitions of terms used in this title omitted.]
TITLE IX—TAX ON EMPLOYERS OF EIGHT OR MORE
IMPOSITION OF TAX

SECTION 901. On and after January 1, 1936, every employer (as defined in
section 907) shall pay for each calendar year an excise tax, with respect to having
individuals in his employ, equal to the following percentages of the total wages
(as defined in section 907) payable by him (regardless of the time of payment)
with respect to employment (as defined in section 907) during such calendar year:
(1) With respect to employment during the calendar year 1936 the rate shall
be 1 per centum;
(2) With respect to employment during the calendar year 1937 the rate shall
be 2 per centum;
(3) With respect to employment after December 31, 1937, the rate shall be
3 per centum.
CREDIT AGAINST TAX

SEC. 902. The taxpayer may credit against the tax imposed by section 901 the
amount of contributions, with respect to employment during the taxable year,
paid by him (before the date of filing his return for the taxable year) into an unemployment fund under a State law. The total credit allowed to a taxpayer
under this section for all contributions paid into unemployment funds with
respect to employment during such taxable year shall not exceed 90 per centum
of the tax against which it is credited, and credit shall be allowed only for contributions made under the laws of States certified for the taxable yea,r as provided
in section 903.
CERTIFICATION OF STATE LAWS

SEC. 903. (a) The Social Security Board shall approve any State law submitted to it, within thirty days of such submission, which it finds provides that—
(1) All compensation is to be paid through public employment offices in the
State or such other agencies as the Board may approve;
(2) No compensation shall be payable with respect to any day of unemployment occurring within two years after the first day of the first period with
respect to which contributions are required;
(3) All money received in the unemployment fund shall immediately upon
such receipt be paid over to the Secretary of the Treasury to the credit of the
. Unemployment Trust Fund established by section 904;
(4) All money withdrawn from the Unemployment Trust Fund by the State
agency shall be used solely in the payment of compensation, exclusive of expenses of adiriinistration;
(5) Compensation shall not be denied in such State to any otherwise eligible
individual for refusing to accept new work under any of the following conditions:
(A) If the position offered is vacant due directly to a strike, lockout, or other



276

^ REPORT OF THE SECRETARY OF^THE TREASURY

labor dispute; (B) if the wages, hours, or other conditions of the work offered
are substantially less favorable to the individual than those prevailing for
similar work in the locality; (C) if as a condition of being employed the individual would be required to join a company union or to resign from or refrain
from joining any bona fide labor organization;
(6) All the rights, privileges, or immunities conferred by such law or by acts
done pursuant thereto shall exist subject to the power of the legislature to
amend or repeal such law at any time.
The Board shall, upon approving such law, notify the Governor of the State of its
approval.
(b) On December 31 in each taxable year the Board shall certify to the Secretary of the Treasury each State whose law it has previously approved, except that
it shall not certify any State which, after reasonable notice and opportunity for
hearing to the State agency, the Board finds has changed its law so that it no
longer contains the provision specified in subsection (a) or has with respect to such
taxable year failed to comply substantially with any such provision.
(c) If, at any time during the taxable year, the Board has reason to believe
that a State whose law it has previously approved, may not be certified under
subsection (b), it shall promptly so notify the Governor of such State.
UNEMPLOYMENT TRUST FUND

SEC. 904. (a) There is hereby established in the Treasury of the United
States a trust fund to be known as the "Unemployment Trust Fund", hereinafter in this title called the "Fund." The Secretary of the Treasury is authorized and directed to receive and hold in the fund all moneys deposited therein
by a State agency from a State unemployment fund. Such deposit may be
made directly with the Secretary of the Treasury or with any Federal reserve
bank or member bank of the Federal Reserve System designated by him for such
purpose.
(b) It shall be the duty of the Secretary of the Treasury to invest such portion
of the fund as is not, in his judgment, required to meet current withdrawals.
Such investment may be made only in interest bearing obligations of the United
States or in obligations guaranteed as to both principal and interest by the
United States. For such purpose such obligations may be acquired (1) on
original issue at par, or (2) by purchase of outstanding obligations at the market
price. The purposes for which obligations of the United States may be issued
under the Second Liberty Bond Act, as amended, are hereby extended to authorize the issuance at par of special obligations exclusively to the fund. Such
special obligations shall bear interest at a rate equal to the average rate of
interest, computed as of the end of the calendar month next preceding the date
of such issue, borne by all interest-bearing obligations of the United States
then forming part of the public debt; except that where such average rate is
not a multiple of one-eighth of 1 per centum, the rate of interest of such special
obligations shall be the multiple of one-eighth of 1 per centum next lower than
such average rate. Obligations other than such special obligations may be
acquired for the fund only on such terms as to provide an investment yield not
less than the yield which would be required in the case of special obligations if
issued to the fund upon the date of such acquisition.
(c) Any obligations acquired by the fund (except special obligations issued
exclusively to the fund) may be sold at the market price, and such special
obligations may be redeemed at par plus accrued interest.
(d) The interest on, and the proceeds from the sale or redemption of, any
obligations held in the fund shall be credited to and form a part of the fund.
(e) The fund shall be invested as a single fund, but the Secretary of the
Treasury shall maintain a separate book account for each State agency and shall
credit quarterly on March 31, June 30, September 30, and December 31, of each
year, to each account, on the basis of the average daily balance of such account,
a proportionate part of the (earnings of the fund for the quarter ending on such
date.
(f) The Secretary of the Treasury is authorized and directed to pay out of
the fund to any State agency such ainount as it may duly requisition, not
exceeding the amount standing to the account of such State agency at the time
of such payment.
ADMINISTRATION, REFUNDS, AND PENALTIES

SEC. 905. (a) The tax imposed by this title shall be collected by the Bureau
of Internal Revenue under the direction of the Secretary of the Treasury and shall



REPORT OF THE SECRETARY OF THE TREASURY

277

be paid into the Treasury of the United States as internal revenue collections.
If the tax is not paid when due, there shall be added as part of the tax interest
at the rate of one-half of 1 per centum per month from the date the tax became
due until paid.
(b) Not later than January 31, next following the close of the taxable year,
each employer shall make a return of the tax under this title for such taxable
year. Each such return shall be made under oath, shall be filed with the collector
of internal revenue for the district in which is located the principal place of business of the employer, or, if he has no principal place of business in the United
States, then with the collector at Baltimore, Maryland, and shall contain such
information and be made in such manner as the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, may by regulations prescribe. All provisions of law (including penalties) applicable in respect of the
taxes imposed by section 600 of the Revenue Act of 1926, shall, insofar as not
inconsistent with this title, be applicable in respect of the tax imposed by this
title. The Commissioner may extend the time for filing the return of the tax
imposed by this title, under such rules and regulations as he may prescribe with
the approval of the Secretary of the Treasury, but no such extension shall be for
more than sixty days.
(c) Returns filed under this title shall be open to inspection in the same manner, to the same extent, and subject to the same provisions of law, including penalties, as returns made under title II of the Revenue Act of 1926.
(d) The taxpayer may elect to pay the tax in four equal installments instead
of in a single payment, in which case the first installment shall be paid not later
than the last day prescribed for the filing of returns, the second installment shall
be paid on or before the last day of the third month, the third installment on or
before the last day of the sixth month, and the fourth installment on or before
the last day of the ninth month, after such last day. If the tax or any installment thereof is not paid on or before the last day of the period fixed for its payment, the whole amount of the tax unpaid shall be paid upon notice and demand
from the collector.
(e) At the request of the taxpayer the time for payment of the tax or any
installment thereof may be extended under regulations prescriJDed by the Commissioner with the approval of the Secretary of the Treasury, for a period not to
exceed six months from the last day of the period prescribed for the payment of
the tax or any installment thereof. The amount of the tax in respect of which
any extension is granted shall be paid (with interest at the rate of one-half of 1
per centum per month) on or before the date of the expiration of the period of the
extension.
'
' ^(f) In the payment of any tax under this title a fractional part of a cent shall
be disregarded unless it amounts to one-half cent or more, in which case it shall
be increased to 1 cent.
INTERSTATE COMMERCE

SEC. 906. No person required under a State law to make payments to an
unemployment fund shall be relieved from compliance therewith on^the ground
that he is engaged in interstate commerce, or that the State law does not distinguish between employees engaged in interstate commerce and those engaged ,in
intrastate commerce.
DEFINITIONS

SEC. 907. [Definitions of terms used in this title omitted.]
RULES AND REGULATIONS

SEC. 908. The Commissioner of Internal Revenue, with the approval of the
Secretary of the Treasury, shall make and publish rules and regulations for the
enforcement of this title, except sections 903, 904, and 910.
ALLOWANCE OF ADDITIONAL CREDIT

SEC. 909. (a) In addition to the credit allowed under section 902, a taxpayer
may, subject to the conditions imposed by section 910, credit against the tax
imposed by section 901 for any ^taxable year after the taxable year 1937, an
amount, with respect to each State law, equal to the amount, if any, by which
the contributions, with respect to employment in such taxable year, actually




278

REPORT OF THE SECRETARY OF THE TREASURY

paid by the taxpayer under such law before the date of filing his return for such
taxable year, is exceeded by whichever of the following is the lesser—'•
(1) The amount of contributions which he would have been required to pay
under such law for such taxable year if he had been subject to the highest rate
applicable from time to time throughout such year to any employer under such
law; or
(2) Two and seven-tenths per centum of the wages payable by him with
respect to employment with respect to which contributions for such year were
required under such law.
(b) If the amount of the contributipns actually so paid by the taxpayer is less
than the amount which he should have paid under the State law, the additional
credit under subsectidn (a) shall be reduced proportionately.
(c) The total credits allowed to a taxpayer under this title shall not exceed 90
per centum of the tax against which such credits are taken.
CONDITIONS OF ADDITIONAL CREDIT ALLOWANCE

SEC. 910. (a) A taxpayer shall be allowed the additional credit under section
909, with respect to his contribution rate under a State law being lower, for any
taxable year, than that of another employer subject to such law, only if the Board
finds that under such law—
(1) Such lower rate, with respect to contributions to a pooled fund, is permitted on the basis of not less than three years of compensation experience;
(2) Such lower rate, with respect to contributions to a guaranteed employment account, is permitted only when his guaranty of employment was fulfilled
in the preceding calendar year, and such guaranteed ernployment account
amounts to not less than 7^2 per centum of the total wages payable by him, in
accordance with such guaranty, with respect to employment in such State in
the preceding calendar year;
(3) Such lower rate, with respect to contributions to a separate reserve
account, is permitted only when (A) compensation has been payable from such
account throughout the preceding calendar year, and (B) such account amounts
to not less than five times the largest amount of compensation paid from such
account within any one of the three preceding calendar years, and (C) such
account amounts to not less than 7}i per centum of the total wages payable by
him (plus the total wages payable by any other employers who may be contributing, to such account) with respect to employment in such State in the
preceding calendar year.
(b) Such additional credit shall be reduced, if any contributions under such
law are made by such taxpayer at a lower rate under conditions not fulfilling the
requirements of subsection (a), by the amount bearing the same ratio to such
additional credit as the amount of contributions made at such lower rate bears
to the total of his contributions paid for such year under such law.
(c) As used in this section—
(1) The term "reserve account" means a separate account in an unemployment fund, with respect to. an employer or group of ehiployers, from which
compensation is payable only with respect to the unemployment of individuals
who were in the employ of such employer, or of one of the employers comprising
the group.
(2) The term "pooled fund" means an unemployment fund or any part
thereof in which all contributions are mingled and undivided, and from which
compensation is payable to all eligible individuals, except that to individuals
last employed by employers with respect to whom reserve accounts are maintained by the State agency, it is payable only when such accounts are exhausted.
(3) The term "guaranteed employment account" means a separate account,
in an unemployment fund, of contributions paid by an employer (or group of
employers) who
(A) guarantees in advance thirty hours of wages for each of forty calendar
weeks (or more, with one weekly hour deducted for each added week guaranteed) in twelve months, to all the individuals in his employ in one or more
distinct establishments, except that any such individuaPs guaranty may
commence after a probationary period (included within twelve or less consecutive calendar weeks), and
(B) gives security or assurance, satisfactory to the State agency, for the
fulfillment of such guaranties.




REPORT OF THE SECRETARY OF THE TREASURY

279

from which account compensation shall be payable with respect to the unemployment of any such individual whose guaranty is not fulfilled or renewed and
who is otherwise eligible for compensation under the State law.
• (4) The term "year of compensation experience", as applied to an employer, means any calendar year throughout which compensation was payable
with respect to any individual in his employ who became unemployed and was*
eligible for compensation.
Exhibit 43
An act to levy an excise tax upon carriers and an income tax upon their employees,
and for other purposes
[Public No. 400, 74th Cong., H. R. 86521

Be it enacted by the Senate and House of Representatives of the United States of
America in Congress assembled,
DEFINITIONS

SECTION 1. That as used in this act
means March 1, 1936. * * *

* *

*

(e) the term "effective date"

INCOME TAX ON EMPLOYEES

SEC. 2. In addition to other taxes, there shall be levied, collected, and paid upon
the income of every employee, 3)4 per centum of the compensation of such
employee (except a representative) not in excess of $300 per month, received by
him after the effective date.
DEDUCTION OF TAX FROM WAGES

SEC. 3. (a) The tax imposed by section 2 of this act shall be collected by the
employer of the taxpayer, by deducting the amount of the tax from the compensation of the employees as and when paid. Every employer required so to
deduct the tax is hereby made liable for the payment of such tax and is hereby
indemnified against the claims and demands of any person for the amount of any
such payment made by such employer.
(b) If more or less than the correct amount of tax imposed by section 2 is paid
with respect to any compensation payment, then, under regulations made under
this act by the Commissioner of Internal Revenue, proper adjustments, with
respect both to the tax and the amount to be deducted, shall be made, without
interest, in connection with subsequent wage payments to the same employee
by the same employer.
EXCISE TAX ON CARRIERS

SEC. 4. In addition to other taxes, every carrier shall pay an excise tax of
3>^ per centum of the compensation not in excess of $300 per month paid by it to
its employees after the effective date.
ADJUSTMENT OF TAX

SEC. 5. If more or less than the correct amount of the tax imposed by section 4
is paid, with respect to any compensation payment, then, under regulations
made by the Commissioner of Internal Revenue, proper adjustments with respect
to the tax shall be made, without interest, in connection with subsequent excise
tax payments made by the same employer.
REFUNDS AND DEFICIENCIES

SEC. 6. If more or less than the correct amount of the tax imposed by sections 2
or 4 of this act is paid or deducted with respect to any. compensation payment
and the overpayment or underpayment of the tax cannot be adjusted under
sections 3 or 5, the amount of the overpayment shall be refunded, or the amount
of the underpayment shall be collected in such manner and at such times (subject
to the statute of limitations properly applicable thereto) as may be prescribed
by regulations under this act as made by the Commissioner of Internal Revenue.




280

REPORT OF THE SECRETARY OF THE TREASURY
INCOME TAX ON EMPLOYEES^ REPRESENTATIVE

SEC. 7. In addition to other taxes, there shall be levied, collected, and paid
upon the compensation of each employees' representative received by such
representative an income tax of 7 per. centum annually upon that portion of the
compensation of such employees' representative not in excess of $300 per month.
The compensation of a representative for the purpose of ascertaining the tax
thereon shall be determined according to such rules and regulations as the Commissioner of Internal Revenue shall deem just and reasonable and as near as
may be shall be the same compensation as if the representative were still in the
employ of the last former carrier.
COLLECTION AND PAYMENT OF TAXES

SEC. 8. (a) The taxes imposed by this act shall be collected by the Commissioner of Internal Revenue and shall be paid into the Treasury of the United
States as internal revenue receipts. If the taxes are not paid when due, there^
shall be added as part of the tax (except in the case of adjustments m.ade in
accord with the provisions of this act) interest at the rate of 6 per centum per
annum, or for any part of a month, from the date the tax became due until paid.
(b) . Such taxes shall be collected and paid quarterly in such manner and under
such conditions not inconsistent with this act as m.ay be prescribed by the
Commissioner of Internal Revenue.
(c) All provisions of law, including penalties, applicable with respectfto an}'tax imposed by section 600 or section 800 of the Revenue Act of 1926, and the
provisions of section 607 of the Revenue act of 1934, insofar as applicable and
not inconsistent with the provisions of this act, shall be applicable with respect
to the taxes imposed by this act.
(d) In the paym.ent of any tax under this act a fractional part of a cent shall
be disregarded unless it amounts to one-half cent or more, in which case it shall
be increased to 1 cent.
COURT JURISDICTION

SEC. 9. The several District Courts of the United States and the Supreme
Court of the District of Columbia, respectively, shall have jurisdiction to entertain
an application and to grant appropriate relief in the following cases which may
arise under the provisions of this act:
(a) An application by the Commissioner of Internal Revenue to compel an
employee or other person residing within the. jurisdiction of said court or a carrier
subject to service of process within said jurisdiction, to comply with any obligations
imposed on said employee, other person, or carrier under the provisions of this act.
(b) The jurisdiction herein specifically conferred upon the said Federal courts
shall not be held exclusive of any jurisdiction otherwise possessed by said courts
to entertain actions at law or suits in equity in aid of the enforcement of rights or
obligations arising under the provisions of this act.
PENALTIES

SEC. 10. Any person or any carrier which shall willfully fail or refuse to make
any report in accordance with this act required by the Commissioner of Internal
Revenue in the administration of this act, or which shall knowingly make any
false or fraudulent statement or report in response to any report or statement
required by this act shall be punished on conviction by a fine of not less than $100
nor more than $10,000.
SOCIAL SECURITY ACT

SEC. 11. The term "em.ployment", as defined in subsection (b) of section 811 of
title VIII of the Social Security act, shall not include service performed in the
employ of a carrier as defined in subdivision (a) of section 1 of this act.
TERMINATION OF TAXES

SEC. 12. The taxes imposed by this act shall not apply to any compensation
received or paid after February 28, 1937.
SEPARABILITY

SEC. 13. If any provision of this act, or the application thereof to any person
or circumstance, is held invalid, the remainder of the act, and the application of
such provision to other persons or circumstances shall not be affected thereby.
Approved, August 29, 1935, 3 p. m.



Exhibit 44
Major tax rate changes made by the Revenue Acts of 1935 and 1936, and the rates which they superseded, together with legal citations and effective
dates
Superseded

Revenue Act of 1935
Tax

Legal
citation

Income tax:
Surtax on individuals. Sec. 101

Effective date

Rate

Rate

Effective period

Legal citation

O

Graduated from 4 percent Graduated from 4 percent Taxable years beginning Revenue Act of 1934, sec.
on surtax net incomes
on surtax net incomes
after Dec. 31, 1933, and
12(b).
between $4,000-$6,000 to
between $4,000-$6,000 to
before Jan. 1, 1936.
75 percent on surtax net
59 percent on surtax net
incomes over $5,000,000.
incomes over $1,000,000.
Revenue Act of 1934, sec.
do
Graduated from 12)^ per- 3 3 ^ percent of net income.
Corporation
Sec. 102
do
cent on net incomes not
13 (a), 141.
in excess of $2,000 to 15
percent on net incomes
over $40,000.1
Revenue Act of 1934, sec.
Surtax on personal hold- Sec. 1 0 9 . . . . .
do
_
- . - Graduated from 20 per- 30 percent of the undistri- .._-.do.___
351 (a).
cent of the undistributed
buted adjusted net ining companies.
adjusted net income not
come not in excess of
in excess of $2,000 to 60
$100,000 plus 40 percent
percent of the amount
of the amount thereof in
thereof in excess of
excess of $100,000.
$1,000,000.
$1 per $1,000 of adjusted Each year ending June 30, Revenue Act of 1934, sec.
701.
Each year ending June $1.40 per $1,000 of adjusted
1934 and 1935.
Sec. 105
Capital stock tax
declared value of capital
30, beginning with the
declared value of capital
stock.
year ending June 30,
stock.2
1936,
Sec. 106
, Income-tax taxable year 6 percent of a corporation's 5 percent of a corporation's Income-tax taxable year Revenue Act of 1934, sec.
Excess profits tax___
702.
net income in excess of
ending after June 30,
ending after June 30,
net income in excess of
10 percent and not in
1934, and before July 1,
1936.
12K percent of the adexcess of 15 percent of the
1936.
justed declared value of
adjusted declared value I
capital stock.
^of its capital stock plus
12 percent of a corporation's net income in
excess of 15 percent of
the adjusted declared
value of its capital stock.
» The rate of tax for consolidated returns of electric and steam railroads for the years 1934 and 1935 was 15^ percent. This rate in the Revenue Act of 1934 was in lieu of the corporation income tax and in the Revenue Act of 1935 it was in lieu of the graduated income tax. The 1936 act does not distinguish between the rates applicable to corporations
privileged to file consolidated returns and other corporations. The 1936 act extended the privilege to file consolidated returns to street, suburban, or interurban electric railways.
3 Under the law an entirely new value may be declared for the capital stock, regardless of any declaration of value made for any previous year.




O

Taxable years beginning
after Dec. 31, 1935.

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Major tax rate changes made by the Revenue Acts of 1935 and 1936, and the rates which they superseded, together with legal citations and effective
date^—Continued

Additional estate tax

Legal
citation
Sec. 201

to

Superseded

Revenue Act of 1935
Tax

00

Effective date

Rate

Rate

Effective period

Legal citation

Deaths after Aug. 30,
1935.

Graduated from 2 percent
on net estates not in
excess of $10,000 to 70
percent on net estates in
excess of $50,000,000.
Graduated from lyi percent on net gifts not in
excess of $10,000 to 523^
percent on net gifts in
excess of $50,000,000.
Hs of 1 cent per barrel

Graduated from 1 percent
on net estates not in
excess of $10,000 to 60
percent on net estates in
excess of $10,000,000.
Graduated from ^ percent
on net gifts not in excess
of $10,000 to 45 percent
on net gifts in excess of
$10,000,000.
Mo of 1 cent per barrel.

Deaths from May 11,
1934, through August
30, 1935.

Revenue Act of 1934, sec.
405.

Calendar year 1935

Revenue Act of 1934, sec.
520.

June 9, 1934, to Sept. 1,
1935.

Revenue Act of 1934, sees.
604, 605.

o

Gift tax . .

Sec. 301

Calendar year 1936 and
calendar years thereafter.

Taxes on production and
refining of crude petroleum.

Sec. 407

Sept. 1, 1935

Revenue Act of 1936

n

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Superseded

Tax
Legal
citation
Corporation income tax:
Corporations subject
to surtax on undistributed profits:
Normal tax

Surtax




Effective date

Rate

Rate

Sees. 13, 141. Taxable years beginning
after Dec. 31, 1935.

Sec. 14

. . . do - -

Graduated from 8 percent Graduated from 12H peron normal-tax net incent on net incomes not
comes not in excess of
in excess of $2,000, to 15
$2,000, to 15 percent on . percent on net incomes
net incomes over $40,000.i
over $40,000.1
--- Graduated from 7 percent
of the undistributed net
income not in excess of
10 percent of the adjusted net income to 27 percent of the undistributed
net income in excess of
60 percent of the adjusted net income.

Effective period

Legal citation

Taxable years beginning
after Dec. 31, 1935, but
actually never in effect.

Revenue Act of 1935,
sec. 102.

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REPORT OF THE SECRETARY OF THE TREASURY

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Major tax rate changes made by the Revenue Acts of 19S5 and 1936, and^the rates which they superseded^ together with^legal citations and_effective
dates—Continued
Revenue Act of 1936
Tax

Legal
citation

do

Surtax on personal holding companies.

Sec. 351

Tax on unjust enrichment.

Sees. 501,504. Taxable years ending
during the calendar
year 1935, and subsequent taxable years.

Capital stock tax

Sec. 401

Excise taxes:
Jewelry

Sec. 809

Furs

Sec. 810

Tax on imports of—
Sunflower oil, rapeseed oil, kapok oil,
hempseed oil, and
perilla oil.
Hempseed,
perilla
seed, rapeseed, sesame seed, and kapok seed.
For footnote, see p. 281.




Sec. 701

Each year ending June
30, beginning with the
year ending June 30,
1936.
June 23, 1936

do_-.-

Aug. 21, 1936

:

Superseded
Rate

Effective date

to
00

Rate

Effective period

Legal citation

Graduated from 8 percent Graduated from 20 percent Taxable years beginning Revenue Act of 1935, sec.
of the undistributed adof the undistributed adafter Dec. 31, 1935, but
109.
justed net income not in
justed net income not in
actually never in effect.
excess of $2,000, to 48 perexcess of $2,000, to 60 percent of the amount
cent of the amount
thereof in excess of
thereof in excess of
$1,000,000.
$1,000,000.
80 percent of net income
arising from: (a) Federal
excise taxes shifted to
vendee but not paid by
vendor, (6) Federal excise taxes shifted by vendee for which he was
reimbursed by the vendor, (c) refunds or credits of Federal excise taxes
shifted to others.
$1 per $1,000 of adjusted $1.40 per $1,000 of adjusted Each year ending June 30,. Revenue Act of 1935, sec.
declared value of capital
declared value of capital
beginning with the year
105.
stock.2
stock.
ending June 30, 1936,
but actually never in
effect.
Repealed

10 percent of selling price.. June 21, 1932, to June 23,
1936.

3 percent of selling price of
all articles.

10 percent of selling price of May 10, 1934, to June 23,
articles selling for $75 or
1936.
more.

4 ^ cents per pound

Revenue Act of 1932, sec.
605, as amended by
Revenue Act of 1934,
sec. 609.
Revenue Act of 1932, sec.
604, as amended by
Revenue Act of 1934,
sec. 608.

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2 cents per pound

REPORT OF THE SECRETARY OF THE TREASURY

285

Exhibit 45
Processing tax rates under the Agricultural Adjustment Act, and rates of tax on
cotton ginning, tobacco sales, and potatoes, during the fiscal year 1936, with effective dates 1
Source of tax

Effective date

Rate

Processing 2
Wheat
Cotton
Tobacco ^

July 9, 1933
Aug. 1, 1933
Feb. 1, 1935

'

Oct. 1, 1935

>

30 cents per bushel of 60 pounds.
4.2 cents per pound.
Cigar leaf (including all types of tobacco used in manufacture of cigars
and scrap chewing and smoking
tobacco):
Used in cigars:
Fire-cured tobacco—3.0,
3.25, and 4.3 cents per
pound.
Other—3.0, 3.75, and 5.0
cents per pound.
Used in scrap chewing and smoking tobacco—2.0, 2.5, and 3.3
cents per pound.
Maryland—0 cents per pound.
Burley:
Used in chewing tobacco—2.5,
2.9, and 3.9 cents per pound.
Other—6.1, 7.0, and 9.5 cents per
pound.
Flue-cured:
Used in chewing tobacco—2.0,
2.3, and 2.9 cents per pound.
Other—4.2, 4.7, and 6.1 cents per
pound.
Fire-cured:
Used in chewing tobacco—2.0,
2.2, and 2.9 cents per pound.
Other—2.9, 3.2, and 4.1 cents per
pound.
Dark air-cured:
Used in chewing tobacco—2.0,
2.3, and 3.1 cents per pound.
Other—^3.3, 3.8, and 5.1 cents per
pound.
Cigar leaf (including all types of tobacco used in manufacture of cigars
and scrap chewing and smoking
tobacco):
Used in cigars:
Fire-cured tobacco—3.0,
3.25, and 4.3 cents per
pound.
Other—3.0, 3.75, and 5.0
cents per pound.
Used in scrap chewing and smoking tobacco—2.0, 2.5, and 3.3
cents per pound.

\ On Jan. 6,1936, the taxes imposed by the Agricultural Adjustment Act, as amended, were held unconstitutional by the United States Supreme Court. On Feb. 10, 1936, the taxes imposed upon the ginning
of cotton, the sale of tobacco, and the first sale or first change in form of potatoes were repealed.
2 Tax applies to the first domestic processing and is measured by the quantity of the commodity put in
process, unless otherwise specified.
3 The three rates given apply, respectively, to farm sales weight, tobacco from which the stem has not
been removed, and tobacco from which the stem has been removed.




286

REPORT OF THE SECRETARY OF THE TREASURY

Processing\tax rates under the Agricultural Adjustment Act, arid rates of tax on
cotton ginning, tobacco sales, and potatoes, during the fiscal year 1936, with effective dates 1—Continued
Source of tax

Effective date

Rate

Processing 2—Continued
Tobacco 3—Continued

Oct.

1, 1935

Field^corn
Hogs
Sugar.^beets and^sugarcane.

Nov. 5, 1933
Mar. 1, 1934
June 8, 1934

Peanuts

Oct.

Rice
Paper__.

Apr. 1, 1935
June 12, 1934

1, 1934

Oct. 1, 1933
June 12, 1934
Dec. 1,1933
Nov. 1,1935
Jute-

June 12, 1934
Dec. 1, 1933

Rye
For footnotes see p. 285.



Sept. 1, 1935

Maryland—3.62, 3.85, and 5.2 cents
per pound.
Burle}^:
Used in chewing tobacco—2.5,
2.9, and 3.9 cents per pound.
Other—3.5, 4.0, and 5.4 cents per
pound.
Flue-cured—1.89, 2.13, and 2.73 cents
per pound.
Fire-cured—2.14, 2.36, and 3.1 cents
per pound.
Dark air-cured:
Used in chewing tobacco—2.0,
2.3, and 3.1 cents per pound.
Other—3.3, 3.8, and 5.1 cents per
pound.
5 cents per bushel of 56 pounds.
$2.25 per hundred pounds.
Direct-consumption sugar—0.5 cents
per pound of sugar raw value.
Sirup of cane juice and edible molasses
from sugarcane—0.125 cent per
pound of sugar content, raw value.
Other than those used in the m,anufacture of peanut oils—1 cent per
pound.
1 cent per pound.
Used in—
Bags, as defined, other than open
m,esh:
4.5- to 5.4-pound size—$1.24
per thousand bags.
5.5- to 7.9-pound size—$1.47
per thousand bags.
8- to 10.9-pound size—$2.02
per thousand bags.
11- to 12.9-pound size—$2.25
per thousand bags.
13- to 16.9-pound size—$3.11
per thousand bags.
17- to 29.9-pound size—$3.96
per thousand bags.
30- to 74.9-pound size—$7.91
per thousand bags.
Open-m.esh paper bags—2.14
cents per pound of open-mesh
fabric.
Paper towels—0.346 cents per
pound of paper.
Gum.med paper tape—4.06 cents
per pound of paper.
Reinforced paper fabric tape—21.7
cents per thousand 1-inch yards.
Fabric into small bags—2.1 cents per
pound of fabric.
Yarn into twine—2.9 cents per pound
of yarn.
30 cents per bushel of 56 pounds.

KEPORT OF THE SECRETARY OF THE TREASURY

287

Processing tax rates under the Agricultural Adjustment Act, and rates of tax on
cotton ginning, tobacco sales, and potatoes, during the fiscal year 1936, with effective dates ^—Continued
Source of tax

Effective date

Rate

Other agricultural
adjustment
Cotton ginning:

_ __

Tobacco sales
Potato stamp tax

June 18, 1935 6.0 cents per pound of lint cotton produced from ginning.4
Oct. 21, 1935 5.45 cents per pound of lint cotton
produced from ginning.^
July 1^ 1935 33>^ percent of the price received from
first bona-fide sale.
Dec. 1, 1935 0.75 cent per pound on either the first
sale or the first change in form.

1 See note 1, p. 285.
< 50 percent of average central market price as determined and proclaimed by the Secretary of Agriculture
in accordance with provisions of the act.

Exhibit 46
Executive order, August 29, 1935, requiring the preparation and publicity of written
decisions in respect of overassessments of income, profits, estate, and gift taxes
allowed in excess of $20,000
By virtue of and pursuant to the authority vested in me by section 257 (a) of
title II of the Revenue Act of 1926 (ch. 27, 44 Stat. 9, 51); section 55 of title I of
the Revenue Act of 1928 (ch. 852, 45 Stat. 791, 809); section 55 of title I of the
Revenue Act of 1932 (ch. 209, 47 Stat. 169, 189), as amended by section 218 (h) ,
of the National Industrial Recovery Act (ch. 90, 48 Stat. 195, 209); and section
55 (a) of title I of the Revenue Act of 1934 (ch. 277, 48 Stat. 680, 698), it is hereby
ordered that written decisions in respect of overassessments of income, profits,
estate, and gift taxes allowed in excess of $20,000 shall be prepared and shall be
open to public inspection in accordance with the regulations prescribed by the
Secretary of the Treasury amending paragraph 16 of Treasury Decision 4359, as
amended, and approved by me this date.
FEANKLIN D ROOSEVELT.
T H E WHITE HOUSE,

August 29, 1935.
Exhibit 47
An act relating to the filing of copies of income returns, and for other purposes
[Public No. 610, 74th Cong., H. R. 11365]

Be it enacted by the Senate and House of Representatives of the United States of
America in Congress assembled. That section 54 of the Revenue Act of 1934, as
amended, is amended by, inserting at" the end thereof the following new subsection:
''(d) COPIES OF RETURNS.—If any person, required by law or regulations made
pursuant to law to file a copy of any income return for any taxable year beginning
after December 31, 1934, fails to file such copy at the time required, there shall be
due and assessed against such person $5 in the case of an individual return or $10
in the case of a fiduciary, partnership, or corporation return, and the collector
with whom the return is filed shall prepare such copy. Such amount shall be
collected and paid, without interest, in the same manner as the amount of tax due
in excess of that shown by the taxpaj^er upon a return in the case of a mathematical error appearing on the face of the return. In case of a person who filed
a return for any taxable year not beginning after December 31, 1935, such amount
of $5 or $10 shall be due and assessed only if the copy is not filed before the
expiration of fifteen days after the mailing by the collector in whose office the



288

REPORT OF THE SECRETARY OF THE TREASURY

return is filed, of a request to such person for the filing of the copy.
returns filed or prepared pursuant to this subsection shall remain on
period of not less than two years from the date they are required to be
may be destroyed at any time thereafter under the direction of the
sioner."
Approved, April 10, 1936.

Copies of
file for a
filed, and
Commis-

OBLIGATIONS OF FOREIGN GOVERNMENTS
Exhibit 48
Correspondence exchanged between the Government of the United States and various
foreign governments and statements concerning foreign debts owing to the United
States
AUSTRIA

Announcing the inability of Austria to make payment of the amounts due on January
1, 1936 {State Department press release, Jan. 7, 1936)
The Austrian Minister at Washington notified the Department of State under
date of December 26, 1935, that Austria is not in a position to make payment
of the amounts due on January 1, 1936, on the Austrian relief debt to the United
States.
The amounts due were:
Principal of bond no. 8, dated Jan. 1, 1928, due Jan. 1, 1936, under
agreement of May 8, 1930
$460,093. 00
Third annual annuity due Jan. 1, 1936, under the moratorium
agreement of Sept. 14, 1932
34, 767. 23.
Total
494, 860. 23
Previous Austrian payments to the United States which have fallen due
since January 1, 1933, have been postponed under a clause in the.agreement of
May 8, 1930, that ''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 payment of the annuity in question on the due date", and that any
payment so postponed will be paid with interest in the years 1944 to 1968. No
communication from the trustees of the Austrian reconstruction loan of 1923
has been received in regard to the pa3^ments due January 1, 1936, the reconstruction loan having been redeemed during the year 1935 through the issue of
the Austrian guaranteed conversion loan of 1934-59.
The Austrian relief obligation to the United States, funded under the agreement
of May 8, 1930, was one of a series of obligations of similar tenor but in different
amounts and payable in different currencies which were issued by the Austrian
Government in 1920 to the Governments of Denmark, France, Great Britain,
Italy, the Netherlands, Norway, Sweden, Switzerland, and the United States.
In these obligations the Government of Austria agreed that no payment will be
made upon or in respect of any of the obligations, whether for principal or for
interest, unless a similar and proportionate payment shall simultaneously be
made upon all the obligations.
The eight governments other than the United States, which are holders of
Austrian relief obligations, are represented on the International Relief Bonds Committee which meets from time to time at "London. Under date of June 24, 1935,
the Austrian Government in a communication addressed to the committee applied to the governments represented on it to grant a moratorium in respect of the
relief debt installments,which fall due to these governments under existing agreements on January 1, 1936, 1937, and 1938; and stated that, should the committee agree to this moratorium, the Austrian Government would negotiate with
the committee before the end of the year 1938 as to the resumption of payments
under the agreements. On October 14, 1935, the chairman of the committee
informed the Austrian Government that the governments represented on the
committee were prepared to accept this proposal, provided that it was accepted
by all the creditor governments which hold Austrian relief bonds.
On October 29, 1935, the Austrian Minister at Washington informed the State
Department of his Government's negotiations with the International Relief Bonds
Committee, and asked for a like concession in regard to the postponement of



REPORT OF THE SECRETARY OF THE TREASURY

289

payments falling due on January 1 of the years 1936, 1937, and 1938. On November 13, 1935, the Secretary of State replied that the Austrian relief debt tothe United States was regulated by legislation and that it was not possible for the
executive branch to take any action which would postpone or in any way affect
the status of the payment due January,1, 1936.

To the Secretary of State from the Belgian Ambassador, December 14) 1935
[Translation]
M R . SECRETARY OF STATE:

Under date of November 26 Your Excellency informed me of the amounts due
to the Government of the United States by the Belgian Government on December
15, 1935, in execution of the agreement of August 18, 1925, and of the moratorium
agreement of June 10, 1932.
By my note of June 14 last, I had the honor to recall to the Government of the
United States the reasons why the Belgian Government found it impossible to
resume on June 15, 1935, the service of its debt to America.
Since the last due date, no new element has arisen which would permit Belgium
to alter its attitude. I t finds itself, therefore, unable to make, on December 15,
the payment contemplated by the Belgian-American agreement of August 18,
1925.
I avail myself [etc.].
R. V. STRATEN.

To the Secretary of State from the Belgian Ambassador, June 13, 1936
[Translation]
M R . SECRETARY OF STATE:

By your note of May 22 last. Your Excellency was good enough to transmit to
me a statement of the payments envisaged by the Belgian-American debt agreement of August 18, 1925, and of the moratorium agreement of June 10, 1932.
As I had the honor of informing the Department of State, in my note of May 23,
I hastened to transmit that document to the King's Government
I have been instructed to inform the American Government that the Belgian
Government regrets to state that the reasons which have forced it to suspend,
since December 15, 1932, the service of its debt to the United States, have lost
none of their validity.
No new element having arisen which would permit Belgium to modify its
attitude, my country finds it impossible to effect, on June 15 next, the payment
in question.
I avail myself [etc.].
VAN DER STRATEN.
CZECHOSLOVAKIA

To the Secretary of State from the Chargi d'Affaires ad interim of Czechoslovakia,
December 14, 19S5
EXCELLENCY:

Acting upon the instruction of my Government I have the honor to acknowledge
the receipt of Your Excellency's note of November 26, 1935, enclosing a statement
showing the amounts due from the Czechoslovak Government under the provisions of the debt agreement of October 13, 1925; and the moratorium agreement
of June 10, 1932.
In its previous notes the Czechoslovak Government, presenting its point of
view with regard to the international intergovernmental indebtedness, stressed
the reasons for which it was prevented from fulfilling its duty in continuing the
payments under the provisions of the mentioned agreements. Appreciating the
suggestion expressed in Your Excellency's note for discussing, through diplomatic
channels, the proposals for putting forward the payment of the indebtedness, the
Czechoslovak Government after renewed and careful investigations of all questions connected with the problem of the obligations of the Czechoslovak Government to the Government of the United States, has been led, to its profound regrets,
93790—37

20




290

REPORT OF THE SECRETARY OF THE TREASURY

to t h e conviction t h a t t h e prevailing unsettled economic a n d financial conditions
existing throughout t h e world do n o t w a r r a n t convenient and successful outcome
of such negotiations for t h e revision of t h e debt settlement a t t h e present time.
Accept [etc.].
DR. JOSEF NEMECEK,

Charge d'Affaires ad interim of Czechoslovakia.
To the Secretary of State from the Minister of Czechoslovakia, J u n e 11, 1936
EXCELLENCY,

I n accordance with instructions from m y Government, I have t h e honor to
acknowledge t h e receipt of Your Excellency's note of M a y 22, 1936, enclosing a
s t a t e m e n t showing t h e a m o u n t s due from t h e Czechoslovak Government under
t h e provisions of t h e debt agreement of October 13, 1925, a n d t h e m o r a t o r i u m
agreement of J u n e 10, 1932.
T h e Czechoslovak Government has resumed, on this occasion, its investigation
of all t h e questions involved in t h e problem of Czechoslovak intergovernmental
indebtedness, with special reference to t h e suggestion expressed in Your Excellency's note for discussing, through diplomatic channels, a n y proposals which m y
Government m a y have t o present relative to t h e p a y m e n t of this indebtedness.
To its great regret, however, t h e Czechoslovak Government has reached t h e conclusion t h a t under prevailing conditions it can hardly perceive t h e possibility of
establishing a basis conducive to t h e reopening of negotiations which would lead
to a satisfactory m u t u a l a r r a n g e m e n t a t present.
Accept [etc.].
FERDINAND VEVERKA,

Envoy Extraordinary and Minister
Plenipotentiary of Czechoslovakia.

ESTONIA

To the Secretary of State from the Acting Estonian Minister of Foreign Affairs, M a y
28, 1936
EXCELLENCY:

1 have t h e honor t o inform you t h a t t h e Estonian Government for reasons
stated in their previous notes regret to be unable to effect, under t h e terms of
t h e d e b t funding agreement of 1925 between Estonia and t h e United. States of
America, t h e p a y m e n t of t h e installments falling due during t h e present financial
year, i. e., on June 15, 1936, and December 15, 1936.
1 avail myself [etc.]
H. LARETEI,

R. Minister of Foreign Affairs.

Announcing the receipt of payments due from Finland {Treasury Department press
releases, December 16, 1935, and J u n e 15, 1936)
D E C E M B E R 16,

1935.

T h e Treasury received today t h e sum of $230,453 from t h e Government of
Finland, representing a p a y m e n t of principal in t h e a m o u n t of $65,000 a n d t h e
semiannual p a y m e n t of interest in t h e a m o u n t of $146,422.50 under t h e funding
agreement of M a y 1, 1923, and $19,030.50 as t h e fifth semiannual annuity due
under t h e m o r a t o r i u m agreement of M a y 23, 1932. This p a y m e n t represents t h e
entire a m o u n t due from t h e Government of Finland and was paid in cash t h r o u g h
t h e Federal Reserve Bank of New York.
J U N E 15, .1936.

T h e Treasury received t o d a y t h e sum of $164,315.50 from t h e Government of
Finland, representing t h e semiannual p a y m e n t of interest in t h e a m o u n t of
$145,285 under t h e funding agreement of M a y 1, 1923, and $19,030.50 as t h e
sixth semiannual annuity due under t h e moratorium agreement of M a y 23, 1932.
This p a y m e n t represents t h e entire a m o u n t due from t h e Government of Finland
a n d was paid in cash through t h e Federal Reserve Bank of New York.




REPORT OF THE SECRETARY OF THE TREASURY

291

To the Secretary of State from the French Ambassador, December 14, 1935
[Translation]
Mr.

SECRETARY OF S T A T E :

I have t h e honor to acknowledge t h e receipt of Your Excellency's note of
November 26, transmitting a s t a t e m e n t of t h e a m o u n t s due by France t o t h e
United States December 15, 1935, under t h e terms of t h e agreements signed by
t h e French Government.
I n presenting this statement, you took occasion to reiterate t h a t t h e American
Government is fully disposed to discuss through diplomatic channels any proposals which t h e Government of t h e Republic m a y desire to p u t forward in regard to the settlement of this indebtedness and to give t h e m careful consideration
with a view to their eventual submission to t h e American Congress.
The French Government t h a n k s the American Government for having been
so kind as to renew these assurances. I t desires in t a r n , referring to its previous
communications, to repeat t h a t it is prepared t o seek, as soon as circumstances
permit, a settlement of its debt on bases acceptable to both countries.
Still finding itself, however, unable to p u t forward proposals a t t h e present
time, it can only hope t h a t the situation will develop sufficiently to justify, in
t h e near future, undertaking negotiations with a view t o assuring t h e early att a i n m e n t of t h e understanding desired equally by t h e two Governments.
Please accept [etc.].
A N D R 6 DE L A B O U L A Y E .

To the Secretary of State from the French Charg6 d'Affaires, J u n e 13, 1936
[Translation]
Mr.

SECRETARY OF S T A T E :

I have t h e honor to acknowledge t h e receipt of Your Excellency's note, d a t e d
May 22, 1936, t r a n s m i t t i n g a s t a t e m e n t of t h e a m o u n t s due by France to t h e
United States on J u n e 15 next, under t h e terms of t h e agreements sighed by t h e
French Government.
I n presenting this statement, you take occasion to reiterate t h a t t h e Governm e n t of t h e tJnited States is fully disposed to discuss t h r o u g h diplomatic channels
any proposals which t h e Government of t h e Republic m a y desire to p u t forward
in regard to t h e settlement of this indebtedness a n d t o give t h e m careful consideration with a view to their eventual submission t o Congress.
T h e French Government t h a n k s t h e American Government for having been
so kind as to renew these assurances. I t has n o t overlooked t h e difficulties involved in t h e question of debts and hopes t h a t they m a y be overcome. Accordingly, having in view t h e communications m a d e by preceding Governments, it
desires on its p a r t to m a k e it absolutely plain t h a t it is prepared to seek, as soon
as circumstances permit, a settlement of its debt on bases acceptable t o both
countries.
Still finding itself, however, unable t o p u t forward proposals a t t h e present
time, it can only hope t h a t t h e situation will develop sufficiently to justify, in
t h e near future, undertaking negotiations with a view to assuring t h e early
a t t a i n m e n t of t h e understanding desired equally by t h e two Governments.
Please accept [etc.].
JULES HENRY.

GREAT

BRITAIN

To the Secretary of State from the British Ambassador, December 10, 1935
SIR:

I have t h e honour t o acknowledge t h e receipt of your note of t h e 26th November enclosing a s t a t e m e n t of t h e a m o u n t s due on t h e 15th December, 1935,
from His Majesty's Government in t h e United Kingdom under t h e debt agreem e n t of t h e 19th June, 1923, a n d t h e moratorium agreement of t h e 4 t h June, 1932.
I have been instructed by His Majesty's Principal Secretary of State for
Foreign Affairs t o inform you in reply t h a t His Majesty's Government note with
appreciation t h e continued readiness of t h e United States Government t o discuss
any proposals which His .Majesty's Government m a y desire t o p u t forward on
this m a t t e r .
I t does n o t appear t o m y Government however t h a t circumstances have so
changed since their note of t h e 4th J u n e , 1934, as to enable proposals t o be p u t



292

REPORT OF THE SECRETARY OF THE TREASURY

forward at the present time which would be acceptable to both Governments.
They wish to repeat however that they will be glad to resume discussions whenever the situation warrants the hope that a satisfactory result might be reached..
I have the honour [etc.].
R. C. LINDSAY.

To the Secretary of State from the British Ambassador, June 7, 1936
SIR:

In accordance with instructions from His Majesty's Principal.Secretary of
State for Foreign Affairs, I have the honour to acknowledge the receipt of your
noteof the 22nd May enclosing a statement of the amounts due from His Majesty'sGovernment in the United Kingdom under the provisions of the debt agreement,
of the 19th June, 1923, and the moratorium agreement of the 4th June, 1932.
His Majesty's Government explained in their note of the 4th June, 1934, thereasons for which they were reluctantly forced to suspend payments under those
agreements. Those reasons are unfortunately no less valid now than they werethen.
His Majesty's Government desire me to express their appreciation of your
assurance that the United States Government are ready to discuss any proposalsin regard to payment which may be put forward, and I am instructed to assureyou in return that His Majesty's Government will be glad to reopen negotiations,
whenever circumstances are such as to warrant the hope that a satisfactory
result might be reached.
I have the honour [etc.].
R. C. LINDSAY.

To the Minister of Greece from the Secretary of State, September 30, 1935
SIR:

I have observed the publication in American newspapers of September 26>.
1935, of an advertisement in which the Greek Minister of Finance requests;
holders of dollar bonds of the Greek Government stabilization and refugee loan^
of 1928 to present to certain American banks (who, it is stated, are effecting:
payment for the account and on behalf of the Bank of Greece) coupons due
August 1, 1935, for payment of 35 percent of their face value.
In this connection, I have the honor to inquire when a reply may be expected
to my note dated April 22, 1935, notifying your Government of the amounts due
from it under part II of the debt agreement of May 10, 1929, and the moratorium,
agreement of May 24, 1932, and requesting payment thereof.
It will be recalled that section 2 of part XI provides in part as follows:
*'The new loan provided for in this agreement shall rank with and shall sharethe same securities and all other advantages as the Greek stabilization and refugeeloan of 1928 provided for in the international loan agreement executed January
30, 1928, between representatives of Greece and Speyer and Co., the National
City Co., and the National City Bank of New York, and in the international
loan agreement executed January 30, 1928, between representatives of Greece
and Hambros Bank Ltd., and Erlangers, which agreements were concluded in
pursuance of and under the authority of the Greek stabilization and refugee loan
protocol signed at Geneva on behalf of Greece by the Greek Minister of Financeon September 15, 1927, and approved by the Council of the League of Nations^
by resolution of the same date and ratified by the decree law of Greece of November 10, 1927, and signed by the President of Greece and ratified by the GreekParliament and published in the Greek Official Gazette of December 7, 1927.
"In the event of there occurring in any year a default in the payment of theservice of this new loan by the United States, the ratio in which it is to share the
same securities as the Greek stabilization and refugee loan of 1928 provided for
in the international loan agreements dated January 30, 1928, shall be the same
as that which the amount of the annual service charge due the United States-bears to the amount of the. annual service charge due the holders of the bonds
issued in accordance with the above-mentioned international loan.agreements of
January 30, 1928."
Accept [etc.].
For the Secretary of State:



WILLIAM PHILLIPS..

REPORT OF THE SECRETARY OF THE TREASURY

293

To the Secretary of State from the Minister of Greece, January SO, 1936
EXCELLENCY:

Referring to the Department's letter of September 30,1935, regarding the payment of amounts due under part II of the debt agreement of May 10, 1929, and
in conformity with instructions from my Government, I have the honor to inform
you that the Ministry of Finance of Greece is ready to effect a payment to the
Treasury of the United States of 35 percent of the interest due on May 10, 1935,
and November 10, 1935, each installment amounting to $76,272.
Such percentage was offered to the stockholders of the Greek stabilization and
refugee loan and, despite the fact that no agreement was reached up to now, the
Royal Greek Government decided to put at the disposal of the paying banks
the amounts due to the stockholders.
The Royal Greek Government, desiring always to scrupulously fulfill their
•obligations within the limit of their capacity to pay, propose for the consideration of the American Government the immediate payment of the two installanents as above independently of the pending negotiations with the aforesaid
•stockholdersMy Government wish, however, to state that this payment of interest does not
(imply recognition of this debt as a private debt, but maintain their position that
(regarding its final settlement it should be considered as a war debt.
Accept [etc.].
D . SiClLIANOS.

To the Minister of Greece from the Secretary of State, February 8, 1936
SIR:

I have the honor to acknowledge the receipt of your note no. 113, dated January 30, 1936, regarding the payment of amounts due under part I I of the debt
agreement of May 10, 1929.
This Government will be glad to receive the installments which your Government tenders, without prejudice to the position which has been publicly taken by
associations acting on behalf of holders of Greek bonds that it would be well
within the capacity of Greece to make larger payments than 35 percent of the
interest on its external bonds which fall due in the year beginning April 1, 1935,
and without prejudice to the contractual rights of the Government of the United
States under part II of the debt agreement of May 10, 1929. This last-nientioned
reservation of the rights of the United States is applicable alike in regard to the
.specific provision made for the event of there occurring in any year a default in
the payment of the service of the new loan provided for in the agreement, and to
the general provision that the new loan shall rank with and shall share the same
securities and advantages as the Greek stabilization and refugee loan of 1928.
As indicated in my note of October 22, 1935, payment of the amounts tendered
by your Government may be made either at the Treasury in Washington or at
the Federal Reserve Bank of New York. Pursuant to your request, on receipt
of these payments the Treasury will apply $76,272 to the payment of 35 percent"
of the -semiannual interest amounting to $217,920, due May 10, 1935, on the 4
percent loan of 1929, and $76,272 to the payment of 35 percent of the semiannual
interest amounting to $217,920 due November 10, 1935, on the same loan.
With regard to the last paragraph of your note under acknowledgment, I
irefer to the reservation of the rights of the United States hereinabove.
Accept [etc.].
CoRDELL H U L L .

A.nnouncement concerning matters relating to the indebtedness of Greece to the United
States {State Department press release. Mar. SO, 1936)
The Treasury Department is announcing that the Greek Government transferred to the United States Treasury on March 26, 1936, the sum of $152,544
representing 35 percent of the semiannual interest amounting to $217,920 due
May 10, 1935, and $217,920 due November 10, 1935, on the 4 percent loan of
1929.
The agreement for the funding of the Greek indebtedness to the United States,
made May 10, 1929, is in two parts.
Part I provided that Greece should issue bonds in the aggregate amount of
$20,330,000, payable January 1 and July 1 of each year from 1929 to 1989, in
repayment for $15,000,000 cash advanced to Greece in 1919 and 1920, together
with interest accrued and unpaid thereon as of January 1, 1928.



294

REPORT OF THE SECRETARY OF THE TREASURY

Part II provided that the United States should loan to Greece the sum of
$12,167,000, for which Greece should deliver to the United States its 20-year gold
bonds, bearing interest at the rate of 4 percent, payable semiannually. The
amount so loaned should be turned over in its entirety by Greece to the refugee
settlement commission, to be expended by said commission for thd purpose of
carrying out its settlement work. The new loan should rank with and should
share the same securities and all other advantages as the Greek stabilization and
refugee loan of .1928. It was further provided that:
"In the event of there occurring in any year a default in the payment of the
service of this new loan by the United States, the ratio in which it is to share the
same securities as the Greek stabilization and refugee loan of 1928 provided for
in the international loan agreements dated January 30, 1928, shall be the same as
that which, the amount of the annual service charge due the United States bears
to the amount of the annual service charge due the holders of the bonds issued in
accordance with the above-mentioned international loan agreements of January
30, 1928." .
Greece, which since 1932 has been in partial default on all its external loans,
paid the United States the same percentages of interest payments due November
10, 1932, through November 10, 1934, under part II of the debt agreement that
it paid on coupons of the Greek stabilization and refugee loan of 1928 (and on
coupons of other external bonds) after annually negotiating agreements with
bondholders' associations. The payments to the United States under part II of
the agreement have been as follows:
Nov. 10, 1932
M a y 10, 1933
Nov. 10, 1933
M a y 10, 1934
N o v , 10, 1934

..-_.
:
"....

$65,376
59.928
59,928
76,272
76, 272

The amounts due under part II which were left unpaid are a.s follows:
Principal
Nov. 10, 1932.
M a y 10, 1933.
Nov. 10, 1933.
M a y 10, 1934.
Nov. 10, 1934.

$227,000
231, 000
236, 000
240,000
245, 000

Interest
$152, 544
157,992
157,992
141, 64»
141, 648

During this period Greece has made no payment on amounts which have fallen
due under part I of the agreement or under the moratorium agreement of May 24,
1932.
For the Greek fiscal year beginning April 1, 1935, Greece reached no agreement
with bondholders' associations and thereupon provided funds with fiscal agents
of the various Greek external loans for 35 percent payment on coupons. The
first tender of this kind with reference to the Greek stabilization and refugee loan
of 1928 was the subject of the State Department's note of September 30, 1935.
The Greek reply of January 30, 1936, is of the same date as the publication of the
Greek Government's offer to pay bondholders 35 percent of the face value of coupons maturing February 1, 1936—the coupons to be stamped *'35 percent paid"
and returned to the bondholders to reattach to the bonds from which they were
detached. This announcement further stated that acceptance would not prejudice the rights of the bondholders toward any further payment whatsoever which
might eventually be agreed upon for the year 1935-36.
The Greek legation's note of January 30 refers to pending negotiations with the
bondholders of the Greek stabilization and refugee loan. These negotiations are
conducted between the Greek Government and the league loans committee, which
is not an organ of the League of Nations but is a bondholders protective committee
of which Sir Austen Chamberlain is the chairman and Mr. Eliot Wads worth is
the American member. The reservations expressed in the Department's note of
February 8 are intended to protect not only the contractual rights of the United
States but the negotiating position of the bondholders, including American bondholders, who share the same securities as the United States Government loan of
1929.




REPORT OF THE SECRETARY OF THE TREASURY

295

Announcing the receipt of interest payments due from Greece (Treasury Department
press release, M a r . 3 1 , 1936)
Acting Secretary of t h e Treasury Taylor yesterday announced t h a t t h e Greek
Government h a d transferred to t h e United States Treasury on March 26, 1936,
t h e sum of $152,544 representing 35 percent of the semiannual interest a m o u n t ing to $217,920 due May 10, 1935, a n d $217,920 due November 10, 1935, on t h e
4 percent loan of 1929.

HUNGARY

To the Secretary of State from the H u n g a r i a n Minister, December 10, 1935
SIR:

I have t h e honor to inform you t h a t I have been instructed by m y Government
to advise t h e Government of t h e United States t h a t owing to t h e continued
difficult financial situation in H u n g a r y , m y Government regrets exceedingly its
inability to p a y the a m o u n t of $50,057.93, representing t h e principal a n d semia n n u a l interest due on December 15, 1935, under t h e funding agreement or t o
deposit its pengo equivalent a t t h e H u n g a r i a n National Bank. However, on
t h a t date m y Government will deposit to t h e Foreign Creditors Account a t t h e
H u n g a r i a n National Bank a H u n g a r i a n Treasury Certificate in t h e pengo equivalent of t h e a m o u n t due bearing interest a t t h e r a t e of 2 per centum per a n n u m .
Accept [etc.].
J O H N PEL]ENYI.

To the Secretary of State from the H u n g a r i a n Charge d^ Affaires ad interim, J u n e 12,
1936
SIR:

I have t h e honor to inform you t h a t I h a v e been instructed by m y G o v e r n m e n t
to advise t h e Government of the United States t h a t owing to continued unfavorable economic conditions, t h e H u n g a r i a n Government regrets exceedingly its
inability to pay the a m o u n t due on J u n e 15, 1936, under t h e funding agreement or
to deposit its pengo equivalent a t the H u n g a r i a n National Bank. However, on
t h a t date m y Government will deposit to t h e Foreign Creditors Account a t t h e
Hungarian National Bank a Hungarian Treasury certificate in t h e pengo equivalent of the a m o u n t due bearing interest a t the r a t e of 2 per centum per a n n u m .
. Accept [etc.].
\

A N T H O N Y BALXSY,

ChargS d'Affaires ad interim of Hungary.

To the Secretary of State from the I t a l i a n Ambassador, December 14, 1935
HONORABLE SIR:

I have t h e honor to acknowledge t h e receipt of your note of November 26, 1935,
enclosing a s t a t e m e n t of t h e accounts due from t h e Italian Government up to t h e
15th of December 1935, under t h e provisions of t h e debt agreement of N o v e m b e r
14, 1925, a n d t h e moratorium agreement of J u n e 3, 1932.
M y Government has taken note with appreciation of t h e renewed assurance
t h a t the United States Government is fully disposed to discuss, through diplomatic
channels, any proposals which t h e Italian G o v e r n m e n t m a y desire t o p u t forward
in regard to the p a y m e n t of its indebtedness a n d t h a t such proposals would receive
careful consideration with a view to eventual submission to t h e American
Congress.
While t h a n k i n g 3^ou for this communication, m y Government regrets to be
unable a t present to submit a n y proposals a n d wishes to refer to t h e considerations previously brought to the a t t e n t i o n of t h e Federal Government.
Accept [etc.].
Rosso.




:296

REPORT OF THE SECRETARY OF THE TREASURY
To the Secretary of State from the Italian Ambassador, June 8, 1936

HONORABLE SIR:

I have the honor to acknowledge the receipt of your note of May 22, by which
you have sent me a statement of the accounts due from the Italian Government
up to the 15th of June 1936, under the provisions of the debt agreement of Novem!ber 14, 1925, and the moratorium agreement of June 3, 1932.
My Government has taken note with appreciation of the renewed assurance
that the United States Government is fully disposed to discuss, through diplomatic channels, any proposals which the Italian Government may desire to put
forward in regard to the payment of its indebtedness and that such proposals
would receive careful consideration with a view to eventual submission to the
American Congress.
While thanking you for this communication, my Government regrets to be
unable at the present time to submit any proposals and wishes to refer to the
•considerations previously brought to the attention of the Federal Government.
Accept [etc.].
Rosso.

To the Secretary of State from the Latvian Minister, December 15, 1935
.SIR:

In reply to the note of the Department of State of November 26, 1935, and
referring myself to the note addressed on June 13, 1935, by the Latvian Prime
Minister and Minister "for Foreign Affairs to Mr. Felix Cole, American Charge
•d'Affaires in Riga, I have the honor to inform you that in the interval which
has elapsed since the despatch of the note referred to above no changes have
been observed in the general position and in the circumstances of a nature that
•could have altered the attitude of the Latvian Government in regard to the
.settlement of the Latvian indebtedness to the United States. Neither have the
•discussions regarding war debts so far taken place between the two Governments.
In view of the above and maintaining their present views and their attitude in
rregard to the subject as expressed in the relevant correspondence, I have the
honor to inform you that to their regret the Latvian Government find it impossible to effect the payment of the installment of their debt to the United
.States which becomes due on December 15, 1935. I avail myself of this opportunity to draw your attention to the fact that through establishing a legation in
the United States and appointing a plenipotentiary representative to Washington the Latvian Government have created a situation which affords all possibilities of direct contact between the Latvian Government and the United States
Government and its competent authorities with a view to opening the discussions,
mention of which first was made in the Aide-Memoire of January 26, 1933, handed
•over to Mr. Lule, Latvian Consul General in Charge of Legation, by Mr. Stimson.
Please accept [etc.].
D R . ALFRED BILMANIS.

To the Secretary of State from the Latvian Minister, June 13, 1936
.SIR:

In reply to note no. 800.51 W 89/975 of the Department of State of May 22nd
.and referring to my note of December 15, 1935,,' I have the honor to inform you
that in the interval which has elapsed since the despatch of the note referred to
.above no changes have been observed in the general position and in the circum..stances of a nature that could have altered the attitude of the Latvian Government in regard to the settlement of the Latvian indebtedness to the United States.
In view of the above and maintaining their present views and their attitude in
..regard to the subject as expressed in the relevant correspondence, I have the
Tionor to inform you that to their regret the Latvian Government find it impos.;sible to effect the payment of the installment of their debt to the United States
-^which becomes due on June 15th next.
Accept [etc.].




ALFRED BILMANIS,

Latvian Minister.

REPORT OF THE SECRETARY OF THE TREASURY

- 297

LITHUANIA

To the Secretary of State from the Lithuanian Minister, December IS, 1935
SIR:

I have t h e honor to acknowledge t h e receipt of your note, dated N o v e m b e r
26, 1935, t r a n s m i t t i n g a s t a t e m e n t showing t h e a m o u n t s due a n d payable J u n e
15, 1933, December 15, 1933, J u n e 15, 1934, December 15, 1934, J u n e 15, 1935,
a n d December 15, 1935, from m y Government p u r s u a n t t o t h e t e r m s of t h e d e b t
agreement of September 22, 1924, a n d t h e m o r a t o r i u m agreement of J u n e 9,
1932.
T h e Lithuanian Government, while reaffirming its indebtedness to t h e G o v e r n ment' of t h e United States, regrets exceedingly t h a t , because of t h e continued
adverse economic a n d financial conditions in Lithuania, it is unable to meet t h e
p a y m e n t s due on December 15, 1935.
T h e Lithuanian Government reiterates its assurances t h a t it will be pleased
to m a k e proposals regarding t h e p a y m e n t of its indebtedness when it will a p p e a r
t h a t discussions on this subject might produce mutually satisfactory results.
Please accept [etc.].
P.

ZADEIKIS.

To the Secretary of State from the Lithuanian Minister, J u n e 9, 1936
SIR:

I have t h e honor to acknowledge t h e receipt of your note of M a y 22, 1936,
transmitting a s t a t e m e n t showing t h e a m o u n t s due a n d payable J u n e 15, 1933,
December 15, 1933, J u n e 15, 1934, December 15, 1934, June 15, 1935, December
15, 1935, a n d J u n e 15, 1936, from m y Government p u r s u a n t t o t h e terms of
t h e debt agreement of September 22, 1924, a n d t h e m o r a t o r i u m agreement of
June 9, 1932.
Acting upon instructions received from m y Government, I have t h e h o n o r
to inform you t h a t t h e Lithuanian Government, again affirming t h e acknowledgm e n t of its indebtedness to t h e United States of America, regrets very m u c h
t h a t continued unfavorable economic a n d financial conditions in Lithuania,
prevent m y Government from meeting t h e p a y m e n t s due t h e United States^
Government on June 15, 1936.
Also, I have t h e honor t o inform you t h a t m y Government will be glad tO'
submit proposals regarding its indebtedness when it wiU be found t h a t discussions on this question will be likely t o effect mutually agreeable a n d practicable
results.
Please accept [etc.].
P . ZADEIKIS.

POLAND

To the Secretary of State from the Polish Charge d*Affaires ad interim, December
14, 1935 .
[Memorandum]
T h e Charge d'Affaires ad interim of Poland has been instructed b y his Gove r n m e n t to inform t h e Government of t h e United States t h a t for reasons analogous
to those stated in t h e note of December 8, 1932, a n d confirmed by later declarations, they are obliged to request similarly a deferment of p a y m e n t of t h e i n stallment payable on December 15, 1935.
T h e Polish Government are still n o t in a position t o resume, t o w a r d t h e UnitedStates, t h e service of t h e debt.
To the Secretary of State from the Polish Ambassador, J u n e I S , 1936
[Memorandum]
T h e Ambassador of Poland has been instructed b y his Government t o inform
t h e Government of t h e United States t h a t , for reasons analogous t o those stated,
in t h e note of December 8, 1932, a n d confirmed b y later declarations, t h e y areobliged to request similarly a deferment of p a y m e n t of t h e installment p a y a b l e
on June 15, 1936.
T h e Polish Goverment are still n o t in a position t o resume, t o w a r d t h e U n i t e d
States, t h e service of t h e debt.



298 •

REPORT OF THE SECRETARY OF THE TREASURY
RUMANIA

To the Secretary of State from the R u m a n i a n Minister, December 12, 1935
SIR:

Referring to m y note of December 6, 1935, and in further reply to your note
of November 26, 1935, I have t h e honor to inform you t h a t , in accordance with
m y communications of December 20, 1934, a n d J u n e 12, 1935, t h e R u m a n i a n
Government feels t h a t no changes have occurred in t h e general situation which
would permit to expect a favorable result by initiating negotiations a t t h e present
time.
Accept [etc.].
DAVILA,

Minister of Rumania.
To the Secretary of State from the R u m a n i a n Minister, J u n e 10, 1936
SIR:

I have "the honor to acknowledge receipt of your note of M a y 22, 1936, enclosing a s t a t e m e n t of t h e a m o u n t due from t h e Government of R u m a n i a under provisions of t h e debt agreement of December 4, 1925, and t h e moratorium agreem e n t of J u n e 11, 1932.
I n reply I a m instructed to state t h a t while appreciating your assurance t h a t
t h e Government of t h e United States is disposed to discuss any proposals which
m y Government m a y desire to p u t forward in regard to t h e p a y m e n t of this
indebtedness, t h e R u m a n i a n Government feels t h a t t h e reasons which compelled
it to suspend p a y m e n t under t h e above-mentioned agreements, as set forth in
my note of December 20, 1934, are still valid and t h a t , therefore, no useful purpose
would be served by initiating negotiations a t the present time.
Please accept [etc.].
DAVILA,

Minister.
YUGOSLAVIA

To the Secretary of State from the Minister of Yugoslavia, J u n e 11, 1936
SIR:

I have t h e honor to acknowledge t h e receipt of your letter of M a y 22, t r a n s mitting, a t t h e request of t h e Secretary of t h e Treasury, a s t a t e m e n t of t h e
a m o u n t s due by Yugoslavia to t h e United States J u n e 15, 1936, under t h e terms
of the debt agreement of M a y 3, 1926.
I n accordance with t h e instructions which I received from m y G o v e r n m e n t I
beg to inform you t h a t to their regret t h e Yugoslav Government is unable to
reassume p a y m e n t s p u r s u a n t to t h e terms of t h e debt agreement.
T h e reasons for which t h e Yugoslav Government was forced to discontinue t h e
fulfillment of its obligations according to its agreements on war debts, have been
exposed in m y predecessor's note no. 486 of J u n e 15, 1933. In t h e opinion of t h e
Yugoslav Government t h e a r g u m e n t s exposed therein are still carrying full
weight.
A c c e p t [etc.].

CONSTANTIN FOTITCH,.

Minister of Yugoslavia.
O R G A N I Z A T I O N AND P R O C E D U R E
Exhibit 49
Orders changing organization and procedure in the Treasury Department
T R E A S U R Y D E P A R T M E N T O R D E R N O . 11, F E B R U A R Y 15, 1936
To

t h e C O M M I S S I O N E R OF I N T E R N A L R E V E N U E , C O M M I S S I O N E R OF C U S T O M S ,
COMMANDANT OF T H E C O A S T G U A R D , AND C H I E F OF T H E S E C R E T S E R V I C E :

I t is hereby ordered t h a t no officer or employee in t h e d e p a r t m e n t a l or field
services of t h e Bureau of I n t e r n a l Revenue, t h e Bureau of Customs, t h e Coast




REPORT OF THE SECRETARY OF THE TREASURY

299

. Guard, or the Secret Service, shall, directly or indirectly, have any interest,
whether as owner or p a r t owner, stockholder or otherwise, in any business, t h e
whole or any substantial p a r t of which consists of t h e production, sale or distribution commercially of distilled spirits, wine, or fermented m a l t liquor; nor shall
a n y such officer or employee, directly or indirectly, with or without compensation,
engage in any such business, or have any connection, whether as a p a r t n e r ,
officer, director, employee, agent, attorney, or in any other capacity, with any
person, firm, or corporation engaged in any such business.
You will bring this order immediately t o t h e a t t e n t i o n of all officers a n d emr
ployees in your respective organizations.
H.

MORGENTHAU,

Jr.,

Secretary of the Treasury.

TREASURY DEPARTMENT ORDER NO. 12, FEBRUARY 19, 1936

Hon. Wayne C. Taylor having been appointed by t h e President as an Assistant
Secretarv of t h e Treasury, is hereby designated as t h e Fiscal Assistant Secretary.
Mr. T^aylor will exercise supervision over all m a t t e r s relating to United States
sayings bonds, t h e m o n e t a r y stocks of gold and silver, a n d foreign exchange
transactions.
H.

MORGENTHAU,

Jr.,

Secretary of the Treasury.
TREASURY D E P A R T M E N T ORDER NO. 13, M A R C H 4, 1936

There is hereby created in t h e Office of t h e Fiscal Assistant Secretary a Division of Savings Bonds. T h e function of this Division shall be t o promote t h e
.sale of savings bonds, and t h e Chief of t h e Division shall be responsible to t h e
Fiscal Assistant Secretary for t h e accomplishment of this purpose. The expenses
of t h e Division shall be .paid from t h e appropriation '^Expenses of loans, act of
September 24, 1917, as amended and extended."
Mr. Eugene W. Sloan is designated as Chief of t h e Division and is authorized,
with t h e approval of t h e administrative assistant to t h e Secretary, to employ
such assistants and incur such other expenditures as m a y be required to carr}^
on t h e work of t h e Division.
Mr. James W. Bryan is designated as t h e Chief of t h e Information Section of
t h e Division. T h e functions of this section shall be to provide advertising a n d
informational material for use in t h e sale of savings bonds.
H.

MORGENTHAU,

Jr.,

Secretary of the Treasury.
Exhibit 50
Regulations governing hours of employment and overtime work {departmental and
field services)
[Department Circular No. 563. Chief Clerk]
TREASURY

DEPARTMENT,

Washington, J u n e 12, 1936.
1. P u r s u a n t to sections 2 and 3 of t h e act of Congress approved March 14,
1936, '^to provide for vacations to government employees, a n d for other purposes",
t h e r e are hereby prescribed (a) t h e hours of employment for t h e respective
groups of employees of t h e several bureaus, divisions, and offices of t h e Treasury
D e p a r t m e n t , and (b) regulations governing t h e conditions under which overt i m e work m a y be performed and recorded in excess of t h e hours specified herein
as constituting a day's work for t h e respective groups of employees.
HOURS OF E M P L O Y M E N T

2. Section 2 of t h e act of March 14, 1936, provides in p a r t as follows:
'^Each head of a d e p a r t m e n t or independent establishment shall issue general
public regulations, not inconsistent with law, setting forth t h e hours of d u t y per
d a y and per week for each group of employees."
3. T h e n u m b e r of hours of employment to be required of t h e respective groups
of employees are hereby prescribed as follows:



300

REPORT OF THE SECRETARY OF THE TREASURY
Clerical, professional, and sub-professional employees

4. With the exceptions stated below, clerical, professional, and sub-professional
employees, both field and departmental, will be required to work 7 hours (exclusive of the luncheon period) each weekday except Saturday, and 4 hours on
Saturday, a total of 39 hours per week.
5. (a) In the case of those clerical, professional, and sub-professional employees
of the Bureau of Engraving and Printing who are assigned to the operating
divisions of that Bureau, such employees will be required to work 8 hours (inclusive of the luncheon period) each weekday except Saturday, and 4 hours on
Saturday, a total attendance of 44 hours per week.
(b) In the case of professional and sub-professional employees of the Public
Health Service, such employees will be required to work an average of 56 hour»
per week over each period of 90 days—an equivalent of 8 hours each day of
the week.
(c) In the case of clerical, professional, and sub-professional employees of the
Coast Guard employed at industrial plants, the working hours may be modified
to meet existing conditions, providing, however, that 39 hours shall constitute so
normal week's work.
(d) In the case of professional and sub-professional employees of the Mint
Service who are emploj^ed on a per diem basis, such employees will be required!
to work 8 hours (inclusive of the luncheon period) each weekdaj^^ except Saturday^
and 4 hours on Saturday, a total of 44 hours per week.
Messengers
6. Except as stated below, messengers will be required, in both the field and
the departmental services, to work 8 hours (exclusive of the luncheon period)
each weekday except Saturday, and 4 hours on Saturday, a total of 44 hours
per week.
7. In the case of those messengers employed in the operating divisions of the
Bureau of Engraving and Printing, and in the field operating divisions of
the Mint Service, such employees will be required to work 8 hours (inclusive of
the luncheon period) each weekday except Saturday, and 4 hours on Saturday,.
a total of 44 hours per week.
All other employees
8. Employees in other than the clerical, professional, sub-professional, or
messenger groups shall be subject to the following schedule, as prescribed for the
respective bureaus and divisions of the Department:
CHIEF CLERK'S OFFICE:

Carpenters, chauffeurs, electricians, engineers, elevator conductors, machinists,,
mechanics, painters, plasterers, plumbers, and their respective helpers, will be
required to work 44 hours per week, the prescribed hours of work being 8 hours(inclusive of the luncheon period) on each weekday except Saturday, and 4 hourson Saturday.
Charwomen will be required to work 4 hours each weekday, including Saturday,,
a total of 24 hours per week.
Telephone and telegraph operators and operators of duplicating, addressing, and'
other labor-saving devices, will be required to work the same hours above-prescribed for clerical employees.
Laborers will be required to work 8 hours (exclusive of the luncheon period)
each weekday except Saturday, and 4 hours on Saturday, a total of 44 hours;
per week.
Guards will normally be required to work an average of 44 hours per week,,
inclusive of the luncheon period—an equivalent of 8 hours upon each weekday
except Saturday and 4 hours on Saturday.
BUREAU OF E N G R A V I N G AND PRINTING:

All employees whose wages are fixed by a wage board or other wage fixing
authority as provided by the act of March 28, 1934 (48 Stat. L. 522), will be
required to work 8 hours (including the luncheon period) each weekday except
Saturday, a total of 40 hours per week. If any employee of this group works on
Saturday, he shall have been restricted to 4 hours work on some weekday of the
.same week.




REPORT OF THE SECRETARY OF THE TREASURY

301

All employees in the custodial and clerical-mechanical services, except guards,
:guides, charwomen, and messengers in the administrative offices, will be re•quired to work 8 hours (including the luncheon. period) each weekday except
.Saturday, and 4 hours on Saturday, a total of 44 hours per week.
Cleaners (part time) will be required to work 4 hours each weekday, including
^Saturday, a total of 24 hours per week.
Guards will normally be required to work an average of 44 hours per week,
inclusive of the luncheon period—an equivalent of 8 hours upon each weekday
•except Saturday and 4 hours on Saturday.
Guides will be requii;ed to work 6 hours each weekday except Saturday, and 3
hours on Saturday, a total of 33 hours per week.
•COAST G U A R D :

Employees at the Coast Guard Depot, Curtis Bay, Md., and elsewhere, including master mechanics, quartermen, leading men, foremen, apprentices, auto
mechanics, boat builders, blacksmiths, buffers, coppersmiths, drillers, electricians,
welders, enginemen, gardeners, general helpers, skilled helpers, skilled laborers,
laborers, machinists, machinists' helpers, millmen, painters, pipe coverers, pipe
fitters, plunibers, riggers, riggers' helpers, sailmakers, sheet metal workers,
ship fitters, ship joiners, wood calkers, metal calkers, riveters, and other artisans
and laborers of any trades will be required to work 8 hours on each weekday
except Saturday, a total of 40 hours per week.
Marine gasoline engineers, pilots, boatmen, guards, and patrol inspectors,
while normally required to perform only 44 hours of work per week, will be
subject to duty at any time and for such hours as the circumstances of their
assignments may demand.
Laborers, except those eiriployed at the Coast Guard Depot, will be required
to work 8 hours each weekday except Saturday, and 4 hours on Saturday, a
total of 44 hours per week.
ctJSTOMs S E R V I C E :

Assistant chief samplers, assistant chief sugar samplers, assistant foremen,
auto mechanics, automatic scale experts, captains of customs guards, captains
of watch, carpenters, chauffeurs, chief inspectors, chief samplers, chief sugar
samplers, customs guards, electricians, elevator conductors, foremen, inspectors,
inspectresses, laborers, lieutenants of customs guards, lieutenants of watch,
marine gasoline engineers, marine motor mechanics, mechanics, openers and packers, samplers, sergeants, ship's carpenters, staff officers, station inspectors, storekeepers, sugar samplers, supervising station inspectors, verifiers-openers-packers,
and watchmen will be required to work an average of 44 hours per week, the
equivalent of 8 hours on 5 days per week and 4 hours on Saturday.
Customs agents, assistant customs agents. Treasury attaches, Treasury representatives, special employees, and customs patrol inspectors will be subject to
duty at any time and for such hours as the circumstances of their, assignments
may demand.
BUREAU OF INTERNAL REVENUE:

Warehousemen, auto mechanics, and laborers in the Alcohol Tax Unit wiU be
required to work 8 hours (exclusive of the luncheon period) on each weekday
except Saturday, and 4 hours on Saturday, a total of 44 hours per week.
Storekeeper-gangers in the Alcohol Tax Unit will be required to work 8 hours
(inclusive of the luncheon period) on each weekday except Saturday, and 4 hours
on Saturday, a total of 44 hours per week.
Special agents in charge and special agents of the Intelligence Unit, and supervisory officers in charge of enforcement activities, special investigators, investigators, . senior inspectors, inspectors and junior inspectors of the Alcohol
Tax Unit will be subject to duty at any time and for such hours as the circumstances of their assignments may demand.
BUREAU OF T H E MINT:

Blacksmiths, bricklayers, carpenters, coining, melting, and sewing department
employees, die-makers and setters, electricians, elevator conductors, engineers,
firemen, foremen, guards', helpers, janitors, laborers, machinists, mechanics,
painters, scale supervisors, skilled laborers, skilled workmen, sweep-cellar assistants, tin and sheetmetal workers, and transfer mechanics, will be required to



302

REPORT OF THE SECRETARY OF THE TREASURY

work 8 hours (inclusive of the luncheon period) on each weekday except Saturday,
and 4 hours on Saturday, a total of 44 hours per week.
Charwomen will be required to work 5 hours on each weekday including
Saturday, a total of 30 hours per week.
Junior assayers employed on per diem basis will be required to work 8 hours
(inclusive of the luncheon period) on each week day except Saturday, and 4 hours
on Saturday, a total of 44 hours per week.
BUREAU OF NARCOTICS:

Agents and inspectors in the Narcotics Service will be subject to duty at any
time and for such hours as the circumstances of their assignments may demand.
PROCUREMENT D I V I S I O N :

C

In both the departmental and field services, carpenters, carpenter-locksmiths,
chauffeurs, coal handlers, coal loaders, crane operators, dispatchers, head elevator'
conductors, elevator operators, foremen of laborers, skilled laborers, laborers,
auto mechanics, elevator mechanics, elevator mechanic-electricians, elevator
mechanic-helpers, general m.echanics, mechanics, mechanic-helpers, mechaniclaborers, electricians, electric truck operators, motor truck drivers, gardeners,
janitors, lampists, marble polishers, packers, painters, stacker operators, telephone operators, window washers, a;nd wiremen will be required to work 8 hours
(exclusive of the luncheon period) each weekday except Saturday, and 4 hours on
Saturday, a total of 44 hours per week; chief enginemen, assistant enginemen,
enginemen, engineman-janitors, coal passers, firemen, fireman-helpers, firemanlaborers, fireman-watchmen, fireman-enginemen, oilers, watchmen, and watchman-elevator conductors will normally be required to work an average of 44 hours
per week, exclusive of the luncheon period—an equivalent of 8 hours upon each
weekday except Saturday and 4 hours on Saturday.
Head charwomen, charwomen, and charmen will be required to work 5 hours
each weekday except Saturday and 4 hours on Saturday, a total of 29 hours per
week.
PUBLIC H E A L T H S E R V I C E :

Carpenters, electricians, engineers, elevator conductors, machinists, mechanics,
painters, plasterers, plumbers, steamfitters, blacksmiths, tailors, laundrymen,
laborers, foremen of laborers, firemen, masons, and bricklayers in the field service
(except at quarantine and immigration stations) will normally be required to
work an average of 44 hours per week (exclusive of the luncheon period)—an
equivalent of 8 hours each weekday except Saturday and 4 hours on Saturday.
Employees in this group in the departmental service, except laborers, will be
required to work 44 hours per week, the prescribed hours of work being 8 hours
(inclusive of the luncheon period) on each weekday except Saturday, and 4 hours
on Saturday.
Laborers and chauffeurs in the departmental service will be required to work 44
hours per week, the prescribed hours of work being 8 hours (exclusive of the luncheon period) on each weekday except Saturday, and 4 hours on Saturday.
Chauffeurs, auto mechanics, kitchen helpers, cooks, bakers, hospital attendants,
laboratory attendants, hospital orderlies, matrons and guard attendants, supervising guardians, storekeepers, packers, and upholsterers in the field service,
except at quarantine and immigration stations, will norihally be required to
work an average of 48 hours per week (exclusive of the luncheon period)—an
equivalent of 8 hours on 6 days of each week. Employees in this group on duty
at marine hospitals, or penal and correctional institutioiis, will be subject to duty
at any time and for such hours as the circumstances of their assignments may
demand.
All employees on duty at quarantine and immigration stations, and all officers
at so-called ''one-man" ports, will be subject to duty at any time and for such
hours as the circumstances of their assignments may demand.
Farmers, poultrymen, dairymen, gardeners, swineherders, and their respective
helpers, on duty at United States narcotic farms will be required to work an
average of 56 hours per week (exclusive of the luncheon period)—an equivalent
of 8 hours for each day in the week.




REPORT OF THE SECRETARY OF THE TREASURY

303

SECRET S E R V I C E :

. Secret Service operatives will be subject to duty at any time and for such hours
as the circumstances of their assignments may demand.
OVERTIME

9. Section 3 of the act approved March 14, 1936, provides as follows:
''Each head of a department or independent establishment shall keep a record
of all work performed, in excess of the work required by departmental regulations
issued in conformance with section 2 hereof, for the period commencing July 1,
1936, and ending December 31, 1936, and shall report same to the Civil Service
Commission at the end of each month. The Civil Service Commission shall
make a report of such record to the Congress on or before January 31, 1937."
10. Overtime work shall be construed as work performed beyond the hours of
duty prescribed above in these regulations; Provided, however. That any excess
less than 30 minutes in a day shall not be reported as overtime.
11. Except as specifically hereinafter authorized, overtime in the departmental
service shall be permitted to be performed only upon the written approval of the
Secretary of the Treasury. In the field service, overtime may, when, necessary,
be directed by those supervisory officers to whom authority has been delegated
by the heads of their respective activities in Washington.
12. The practice of requesting employees to volunteer their services for overtime duty shall be discouraged. All necessary overtime should be distributed as
equitably as practicable among a group of employees performing the same or
similar work.
13. Where the volume of work of a particular organization is subject to fluctuations of a periodic nature, such as, for example, the preparation of semimonthly
pay rolls, or the clearance of checks immediately following heavy disbursing
transactions, and it would be impracticable to maintain a force adequate to dispose of such peak-loads during the regular working hours, general authority for
requiring overtime may be granted upon application of the bureau head to the
Secretary of the Treasury.
14. If the overtime does not exceed 1 hour, and immediately precedes the
regular opening hour or immediately follows the regular closing hour, no formal
approval need be obtained, providing such overtime does not ocpur upon more
than 5 days in any calendar month, and providing, further, that it ife recorded
and reported as herein provided.
15. Where, in an emergency, the necessity for overtime in excess of 1 hour
could not have been foreseen in time to obtain formal approval therefor, such
overtime shall nevertheless be performed, and the report thereof shall include
an explaaiation of the circumstances which precluded the obtaining of approval
in advance.
16. Overtime work performed by an employee of his own volition, and not at the
direction of his supervisor, if not subsequently approved by tlie supervisor, shall
not be regarded as overtime within the meaning of the act of March 14, 1936.
17. No record or report for overtime will be made for time spent in travel.
Method of reporting overtime
18. Immediately at the close of each month, beginning with July 31, 1936, and
extending through December 31, 1936, there shall be forwarded by each bureau,
office, or division, and by each division of the Secretary's office, to the Secretary
of the Treasury (Division of Appointments) a consolidated report of overtime
work (in hours or fractions thereof) performed by the employees of such bureau,
office, or division, including field offices, in accordance with the regulations herein
prescribed.
19. For the purposes of the above monthly report, and regardless of the character of work performed (whether clerical, professional, custodial, mechanical, or
otherwise), employees will be classified in two groups, i. e., (1) employees whose
prescribed work schedule is 39 hours per week; and (2) employees whose prescribed work schedule ranges from 40 to 44 hours per week, inclusive. In the
Public Health Service, a third classification will be observed, to include professional, sub-professional, custodial, maintenance, and guard employees in
hospitals, penal or correctional institutions, and the United States narcotic farms.
20. A separate report shall be made for each of the above classes of employees.
Employees performing overtime will be listed alphabetically under salary groups




304

REPORT OF THE SECRETARY OF THE TREASURY

(without regard to service or grade), beginning with the lowest salary. In the
case of per hour, per diem, or piece-rate workers, the employees will be listed on
the basis of their estimated annual earnings.
21. In the case of employees who under existing law are compensated for overtime work, separate reports, with the same classification and method of listing
above-prescribed, shall be submitted, and the amount received for such overtime
shall also be indicated.
22. Standard forms 2243 and 2243-A may be used for the monthly report,
substituting the words "Overtime work" for "Absence", using the "Hours" and
"Minutes" columns, and revising the caption "Annual leave." Overtime should
be expressed in terms of hours or fractions thereof.
In lieu of standard forms 2243 and 2243-A, the report may be submitted in
the form suggested below:
MONTHLY REPORT OF OVERTIME

WORK

39-HOUR G R O U P

(Uncompensated)
TREASURY DEPARTMENT
(Bureau or division)

Month ending
(Unit or sub-unit)

, 1936

For field office

(Location)

(Certifying officer)

Name

Hours

Minutes

$1,080 salary group:
Adams, T. S._.
Brown, J. E
Smith, Frank..
$1,260 salary group:
Andrews, John.
Black, F. G..-.
Stephens, C. G.

Amount of
compensation, if any, I
received
for such
overtime

Remarks

30
30

45

23. Field offices will forward their reports to the administrative office of the
bureau or division in Washington, for consolidation and submission to the
Secretary of the Treasury (Division of Appointments). Offices located in the
District of Columbia may obtain blank forms from the Division of Appointments.
24. AU orders, circulars, and regulations heretofore promulgated and inconsistent with the foregoing regulations are hereby revoked.
HENRY MORGENTHAU,

Jr.,

Secretary of the Treasury.
Exhibit 51
An act to amend section 304 of the Revised Statutes, as amended
[Public No. 530, 74th Cong., S. 3258]

Be it enacted by the Senate and House of Representatives of the United States of
America in Congress assembled. That section 304 of the Revised Statutes, as
amended (31 U. S. C , sec. 144), is further amended to read as foUows:
"SEC. 304. The Treasurer may, in his discretion, and with the consent of the
Secretary of the Treasury, authorize the Assistant Treasurer to act in the place




REPORT OF THE SECRETARY OF THE TREASURY

306

and discharge any or all of the duties of the Treasurer of the United States; and
the Secretary of the Treasury may appoint from among the personnel of the
Treasurer's Office any person to be Acting Treasurer during the absence or illness
of both the Treasurer and Assistant Treasurer; and the Secretaiy of the Treasury
may at any time, on the recommendation of the Treasurer, appoint from among
the clerks in the Treasurer's Office any one or more of said clerks to be a Special
Assistant Treasurer, with authority to sign certificates of deposit, checks, letters,
telegrams, and other official documents in connection with the business of the
Treasurer's Office, and who shall serve in this capacity without additional salary:
Provided, hoioever. That no appointments shall be made under the provisions of
this section until the official bond given by the Treasurer shall be made in terms
to cover and apply to the acts and defaults of every person appointed hereunder.
Each person so appointed shall, moreover, for the time being, be subject to all
the liabilities and penalties prescribed by law for the official misconduct in like
cases of the Treasurer."
Approved, April 24, 1936.
Exhibit 52
Offers of compromise under section 194, ^ill^ 3^, United States Code
[Department Circular No. 39 (revised). Accounts and Deposits]
TREASURY

DEPARTMENT,

Washington, May 25, 1936.
Treasury Department Circular No. 39, dated December 29, 1914, is hereby
amended and supplemented so as to read as follows:
The following rules and regulations are ]3rescribed for carrying into effect
section 194, title 31, United States Code, which provides as follows:
"Upon a report by a district attorney, or ^ivy special attorney or agent having
charge'^of^ any claim-in favor of the United States, showing in detail the condition
of such claim, and the terms upon which the same ma}^ be compromised, and
recommending that it be compromised upon the terms so offered, and upon the
recommendation of the General Counsel for the Department of the Treasury,
the Secretary of the Treasury is authorized to compromise such claim accordingly.
But the provisions of this section shall not apply to any claim arising under the
postal laws." ^
1. The report of the special attorney or agent having charge of any claim .in
favor of the United States, which has not been referred to the Department of
Justice for prosecution or defense in the courts, in which an offer of compromise
is made, except claims arising under the postal laws, must be presented to the
General Counsel for the Department of the Treasury, who will forward the
report, with his recommendation, to the Secretary of the Treasury for final action.
2. No offer in compromise of any such claim in which a specific sum of money
is offered under the above-quoted statute will be consid.ered until such sum shall
have been deposited to the credit of the Secretary of the Treasury's special deposit
account no. 5 with the Treasurer of the United States, and the original copy of the
certificate of deposit issued therefor received by the Treasurer of the United
States and the General Counsel notified of such receipt.
3. Moneys so offered in compromise may be deposited to the credit of such
special deposit account at the United States Treasury, with any Federal Reserve
bank or branch, or with any bank designated as a general depositary of Federal
funds. The Federal Reserve bank or branch or bank designated as a general
depositary of Federal funds will be governed in accepting such deposits by the
provisions of Department Circular No. 176, amended and supplemented, dated
September 2, 1930, and will issue certificate of deposit in duplicate, on form 6599,
original to be transmitted to the Treasurer of the United States, and the duplicate
to the depositor. The Treasurer of the United States will, upon receipt of the
original copy of the certificate of deposit on form 6599, or upon the deposit direct
with him of the money so offered in compronaise, issue certificate of deposit in
triplicate on form 5260, the original to be transmitted to the Division of Bookkeeping and Warrants, the duplicate to the General Counsel, and the triplicate
1 By section 5 of Executive Order No. 6166 of June 10, 1933, jurisdiction under this law was, with respect
to any case referred to the Department of Justice for prosecution or defense in the courts, transferred to the
Department of Justice.
93790—37
21




306

REPORT OF THE SECRETARY OF THE TREASURY

t o be retained in his office. If t h e offer in compromise be rejected, t h e money
will be returned to t h e proponent; if accepted, it will be covered into t h e Treasury.
4. To enable a proponent, a t a distance from any of t h e above-named depositaries, to perfect his offer in compromise, t h e Secretary of t h e Treasury will
receive for this purpose a check, draft, or money order for t h e a m o u n t of t h e
offer, payable to t h e order of t h e Treasurer of t h e United States, t h e check, draft,
or money order to be collected by t h e Treasurer a n d t h e proceeds placed t o t h e
credit of t h e Secretary's aforesaid account awaiting action on t h e offer. Such
remittances will not be received unless they are free of all conditions as to
acceptance.
5. T h e Secretary of t h e Treasury m a y withdraw or a m e n d a t a n y t i m e or from
time to time any of t h e foregoing rules a n d regulations with or without previous^
notice, a n d m a y m a k e such special orders as he m a y deem proper in a n y case.
WAYNE C.

TAYLOR,

Acting Secretary of the Treasury.

Exhibit 53
Title V of the act {Public No. 724, approved J u n e 20, 1936) to amend certain acts
relating to public printing and binding and the distribution of public documents
and acts amendatory thereof
TITLE V
M A N U S C R I P T OF A N N U A L R E P O R T S

SEC. 8. T h a t chapter 209, section 3 (39 Stat. 336), of t h e Sundry Civil Appropriation Act for t h e fiscal year ending J u n e 30, 1917, approved July 1, 1916
(U. S. C , title 5, sec. 108), be, and is hereby, amended to read as follows:
108.

M A N U S C R I P T OF ANNUAL R E P O R T S AND ACCOMPANYING D O C U M E N T S . — T h e

appropriations m a d e for printing a n d binding shall not be used for any annual
report or t h e accompanying documents unless t h e manuscript a n d proof therefor
is furnished to t h e Public Printer in t h e following manner: Manuscript of t h e
documents accompanying such a n n u a l reports on or before t h e 1st day of N o vember of each year; manuscript of t h e annual reports on or before t h e 15th
day of November of each year; complete revised proofs of t h e accompanying
documents on t h e 1st day of December of each year a n d of t h e a n n u a l reports
on t h e 10th day of December of each year; and all of said annual reports and accompanying documents shall be printed, m a d e public, a n d available for distribution not later t h a n within t h e first five days after t h e assembling of each regular
session of Congress. T h e provisions of this section shall not apply to t h e annual
reports of t h e Smithsonian Institution, t h e Commissioner of P a t e n t s , t h e Comptroller of t h e Currency, or t h e Secretary of t h e Treasury.

:.

MISCELLANEOUS
Exhibit 54

Amendment to Executive Order No. 6981, March 2, 1935, removing, in certain cases,
restrictions imposed by Public Resolution 53, of J u n e 27, 1934, cis to payments,
transfers, and deliveries of property under the