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ANNUAL REPORT OF THE
SECRETARY OF THE TREASURY
ON

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

1931
WITH APPENDICES

UNITED STATES
GOVERNMENT PRINTING OFFICE
WASHINGTON: 1932

For »alc by the Superintendent of Documents, Washington, D . C.

Price $1.50 (Cloth)

TREASURY

DEPARTMENT

Document No. 3037
Secretary

Lb
CONTENTS
Page

Summary of the year
.
Budget r e s u l t s . . . .
*
Receipts
.
..
Income taxes
1
Statistics of individual incomes.
Miscellaneous internal revenue
Customs . .
.
Miscellaneous receipts
....
Previous estimates
.
.
Expenditures
Expenditures exclusive of those on public debt account
Public debt expenditures chargeable against ordinary receipts.._
The deficit
......
.
Condition of the Treasury
The public debt
.....
..:
.
_-_
General fund of the Treasury
.
The currency trust fund and the gold reserve fund
Gold held for the Federal Reserve Board...
" '
Interest on Government deposits
Business conditions
.
..
Production
^
Trade and distribution...
....
Prices of commodities and securities
.
.
Corporate and individual incoiries
Estimates of receipts and expenditures
'
Fiscal policy
.
^
Revenue proposals
.
..
I
Individual income tax__._.^
......
.
^
Corporation income tax
Miscellaneous taxes
Estate tax
........
•
Postal revenues....
.
.
^
Summary of revenue p r o p o s a l s . . . . . .
.
Government expenditures
..
.
Recommendations for legislation
._
.
Postponement of payments from foreign governments
Corporation relief contributions
^
Banking
..
.
Branch banking..
:
.
Increase in the capital stock of Federal land banks
Railroad obligations
.
International double taxation
...
I
Public debt operations
.
General review of public debt operations
^
Credit conditions...
'^:*^
Cost of Government borrowing
.
.
o
Treasury bonds
$

III

1
2
2
4
6
7
9
10
10
10
11
14
14
15
15
18
20
20
20
21
21
22
23
24
24
27
29
29
30
30
30
31
32
32
33
33
33
33
34
36
35
40
40
40
46
60
61

CONTENTS

Public debt operations—Continued.
- Arrangement of debt maturities
Adjusted service securities
.
d}i per cent Treasury notes
Postal savings bonds
Cumulative sinking fund
^
Amendment to the second Liberty bond act
Income tax administration
".'.
Settlement policy
New policy concerning waivers
..
The Board of Tax Appeals
.
Improved coordination of work in Washington and in the
field
Court decisions
Bureau of Customs
.
.
Imports and customs collections
The tariff act of 1930
Reorganization of the bureau
.
Federal public building program
Expenditures and outstanding contract obligations._
Contracts for outside professional services
Activities other than the public building program
Federal Farm Loan Bureau..
Federal intermediate credit banks
.
Federal land banks
.
Effects of proposals to suspend foreclosures generally
An important court decision
Joint stock land banks
.
..
Receiverships
1
Legislation
Obligations of foreign governments
.
Czechoslovakia
Estonia
Latvia
Poland
Proposed postponement of payments on intergovernmental indebtedness
Receipts from Germany
.
.
Army costs
J
Mixed claims
.
.
Treasury administration of alien and mixed claims
Claims against Germany
War Claims Arbiter
.^
Austria
Hungary.
Other supervisory and nonfiscal activities
.
Coast Guard
Public Health Service
....
....
Bureau of Narcotics
Bureau of Industrial Alcohol
Porto Rican Hurricane Relief Commission

Page
62
63
64
65
66
66
56
68
69
61
62
62
64
64
66
67
67
70
71
71
72
72
73
76
76
77
77
79
79
81
81
81
82
82
83
84
86
85
86
91
95
96
96
96
101
107
108
110

CONTENTS

ADMINISTRATIVE REPORTS OF BUREAUS AND DIVISIONS
Page

Accounts and Deposits, Olfice of the Commissioner of
Railroad obligations
Section 204
,
Section 209
Section 210
.....
Securities owned by the United States Government
...
Trust funds administered by the Treasury
:..
Adjusted service certificate fund
Civil service retirement and disability fund
District of Columbia teachers' retirement fund
.
Foreign service retirement and disability fund
Canal Zone retirement and disability fund
.
Library of Congress trust fund
United States Government life insurance fund
Division of Bookkeeping and Warrants
.._:
Division of Deposits
Amount of deposits
_.
Number and classes of depositaries
Interest on deposits
..
Section of Surety Bonds
Appointments, Division of
Number of employees
Retirement of employees
Budget and Improvement Committee
Chief Clerk and Superintendent, Office of
Housing of Treasury activities
Improvements, painting, etc
Sites for public buildings
Treasury storekeeper
._
Coast Guard
.
.
.
Protection to navigation
Enforcement of customs and other laws
Communications
_.
.....
.
Equipment
The academy, stations, bases, repair depot, etc
Personnel
^
Awards of life-saving medals
Appropriations, expenditures, and balances
ComptroUer of the Currency
.
.
National banks organized, consolidated, insolvent, in voluntary
liquidation, and in existence
.
Condition of national banks
Banks other than national
All reporting banks.
Customs, Bureau of
.
Receipts
.
Volume of business
Antidumping
Special provisions of the tariff act
Investigative activities
...
MisceUaneous
...

116
116
115
116
116
117
118
118
120
122
123
124
126
129
130
132
132
134
135
136
139
139
139
141
144
144
144
146
146
147
148
160
161
162
156
167
169
159
160
160
162
164
164
168
168
169
179
179
182
184

CONTENtrS
Page

Disbursing Clerk
.
Engraving and Printing, Bureau of
Enrollment and Disbarment of Attorneys and Agents, Committee on
Federal Farm Loan Bureau
.
Operations of Federal land banks.
Operations of joint stock land banks
Operations of Federal intermediate credit banks
Financial and Economic Research, Section of...
General Supply Committee
Activities
General supply fund
Industrial Alcohol, Bureau of—
Organization and procedure
Activities
Personnel
....
Internal Revenue, Bureau of
General
Internal revenue receipts
Refunds
.
Additional assessments
.
Cost of administration
Income Tax Unit
Returns audited and closed
Additional revenue
.
Final notices of deficiency (60-day letters)..
Claims and overassessments
Returns on hand
.
^
Audit in Washington
Audit in the
field
Audit of 1930 returns
Special Advisory Committee
Miscellaneous Tax Unit
Estate Tax Division
Miscellaneous Division
.
Tobacco Division
Appeals and Review Section
.
Accounts and Collections Unit
Collection Accounting Division
Collectors' Personnel, Equipment, and Space Division
Disbursement Accounting Division
Office of the General Counsel
....
Interpretative Division
CivU Division
Review Division
Appeals Division
:
Penal Division
Administrative Division

186
187
192
194
194
195
196
199
201
201
204
205
206
208
212
213
213
213
213
214
216
216
216
216
217
218
219
220
221
222
222
223
223
226
226
226
227
227
229
230
230
230
231
232
233
234
235

CONTENTS

VII
Page

Mint Bureau
....
Institutions of the mint service
Coinage
.
...
Gold and silver operations. .
Refineries
.
Additions and improvements
•.
Gold and silver in the United States
Appropriations, expenses, income, etc
Narcotics, Bureau of
.
Organization
Activities
...
Extent and trend of narcotic traffic
.
...
Personnel Classification Officer
.
Appeals and classification sheets
.
Efficiency ratings
PubUc Debt Service
Division of Loans and Currency
'.
Issue and retirement of securities
Individual registered accounts activities
...
Claims
.
Safe-keeping of securities
Mutilated paper and redeemed currency
.
^...^
Publicity
Register of the Treasury
Division of Public Debt Accounts and Audit
Division of Paper Custody
^
..
Destruction Committee...
.
•--•
Public Health Service
.
..
Division of Sanitary Reports and Statistics
Division of Foreign and Insular Quarantine and Immigration
Division of Domestic (Interstate) Quarantine
Division of Scientific Reseiarch
Division of Marine Hospitals and Relief
Division of Venereal Diseases
^
...
Division of Mental Hygiene
.
^
Division of Personnel and Accounts
Secret Service Division
Supervising Architect, Office of the
.
Public building program
Miscellaneous work
Remodeling and enlarging public buildings..
Annual appropriations for maintenance, repairs, etc., of public buildings
.
Total expenditures
Personnel
Supply, Division of
Expenditures from various appropriations
Stationery supplies
.
Printing and binding
.
Department advertising
...
Engraving work
...
.
Treasurer of the United States
^
War Finance Corporation-,
^,,.._-,
...^..,.,.,^.^^.,:.,
^.

236
236
236
236
237
237
238
239
241
241
242
243
246
245
246
247
247
247
248
248
248
249
249
249
252
254
256
257
257
268
262
264
268
269
270
271
274
276
276
281
282
282
282
283
284
284
286
288
290
290
291
297

Vni

CONTENTS
EXHIBITS
THE

PUBLIC

DEBT

Issue of November, 1930
Page

Exhibit 1. Inviting tenders for Treasury bills dated November 17, 1930,
and maturing February 16, 1931 (press release, November 10, 1930)
Exhibit 2. Acceptance of tenders for Treasury bills dated November 17,
1930, and maturing February 16, 1931 (press release, November 14,
1930)

301
302

Issues of December, 19S0
Exhibit 3. Offering of certificates of indebtedness. Series TJ2-1931 (1%
per cent) and Series TD-1931 (1% per cent) (press release, December 8,
1930, with Department Circular No. 429)
Exhibit 4. Subscriptions and allotments, certificates of indebtedness. Series
TJ2-1931 and Series TD-1931 (from press releases, December 11 and 12,
1930)
.

302
304

Issues of February, 1931
Exhibit 6. Inviting tenders for two issues of Treasury bills dated February
| | 3 and 4, 1931, and maturing May 4 and 5, 1931, respectively (press
release, January 27, 1931)
Exhibit 6. Acceptance of tenders for two issues of Treasury bills dated
February 3 and 4, 1931, and maturing May 4 and 6, 1931, respectively
(press release, January 31, 1931)
Exhibit 7. Inviting tenders for Treasury bills dated February 16, 1931,
and maturing May 18, 1931 (press release, February 9, 1931)
Exhibit 8. Acceptance of tenders for Treasury biUs dated February 16,
1931, and maturing May 18, 1931 (press release, February 14, 1931)..

306
307
307
308

Issues of March, 1931
Exhibit 9. Offering of Treasury bonds of 1941-43 ( 3 ^ per cent) and certificates of indebtedness. Series TS2-1931 ( 1 ^ per cent) and Series TM-1932
(2 per cent) (press release, March 2, 1931, with Department Circulars
Nos. 432 and 433).
Exhibit 10. Subscriptions and allotments. Treasury bonds of 1941-43
and certificates of indebtedness. Series TS2-1931 and Series TM-1932
(from press releases, March 6 and 11, 1931, revised)

308
312

Issues of April, 1931
Exhibit 11. Inviting tenders for two issues of Treasury biUs dated AprU 2,
and 3, 1931, and maturing July 1 and 2, 1931, respectively (press
release, March 26, 1931)
•.
Exhibit 12. Acceptance of tenders for two issues of Treasury bills dated
April 2 and 3, 1931, and maturing July 1 and 2, 1931, respectively
(pressrelease, March 31, 1931)
...
Exhibit 13. Offering of certificates of indebtedness. Series TD2-1931 (1%
per cent) (press release, April 8, 1931, with Department Circular No.
436)
Exhibit 14. Subscriptions and aUotments, certificates of indebtedness,
Series TD2-1931 (from press releases, AprU 11 and 13, 1931)

316
315
316
317

CONTENTS

IX
Page

Exhibit 16. Inviting tenders for Treasury biUs dated April 27, 1931, and
maturing July 27, 1931 (press release, AprU 21, 1931)
Exhibit 16. Acceptance of tenders for Treasury bills dated April 27, 1931,
and maturing July 27, 1931 (press release, AprU 26, 1931)

318
318

Issues of May, 1931
Exhibit 17. Inviting tenders for Treasury biUs dated May 5, 1931, and
maturing August 3, 1931 (press release, April 28, 1931)
318
Exhibit 18. Acceptance of tenders for Treasury biUs dated May 6, 1931,
and maturing August 3, 1931 (press release. May 2, 1931)
319
Exhibit 19. Inviting tenders for Treasury biUs dated May 11, 1931, and
maturing August 10, 1931 (press release. May 5, 1931)
319
Exhibit 20. Acceptance of tenders for Treasury bills dated May 11, 1931, .
and maturing August 10, 1931 (press release, May 8, 1931)
320
Exhibit 21. Inviting tenders for two issues of Treasury bUls dated May
18, 1931, and maturing July 17, 1931, and August 17, 1931 (press
release, May 12, 1931)
^
320
Exhibit 22. Acceptance of tenders for two issues of Treasury bills dated
May 18, 1931, and maturing July 17, 1931, and August 17, 1931 (press
release, May 15, 1931)
320
Issues of June, 1931
Exhibit 23. Inviting tenders for Treasury bUls dated June 1, 1931, and
maturing August 31, 1931 (press release. May 26, 1931)
Exhibit 24. Acceptance of tenders for Treasury bills dated June 1, 1931,
and maturing August 31,1931 (pressrelease. May 29, 1931)
Exhibit 25. Offering of Treasury bonds of 1946-49 {SYs per cent) (press
release, June 1, 1931, with Department Circular No. 438)
Exhibit 26. Subscriptions and allotments. Treasury bonds of 1946-49(from press releases, June 4, 6 and 9,1931, revised)

321
322
322
325

Issues of July, 1931
'Exhibit 27. Inviting tenders for two issues of Treasury bills dated July 1
and 2, 1931, and both maturing September 30, 1931 (press release, June
25, 1931)
^
Exhibit 28. Acceptance of tenders for two issues of Treasury bills dated
July 1 and 2, 1931, and both maturing September 30, 1931 (press
release, June 30, 1931)
Exhibit 29. Inviting tenders for Treasury bills dated July 17, 1931, and
maturing October 16, 1931 (pressrelease, July 13, 1931)
Exhibit 30. Acceptance of tenders for Treasury bills dated July 17, 1931,
and maturing October 15, 1931 (pressrelease, July 16,1931)
Exhibit 31. Inviting tenders for Treasury bills dated July 27, 1931, and
maturing October 26, 1931 (press release, July 22, 1931)
.
Exhibit 32. Acceptance of tenders for Treasury bills dated July 27, 1931,
and maturing October 26, 1931 (press release, July 25,1931)

326
327
327
328
328
328

Issues of August, 1931
Exhibit 33. Inviting tenders for Treasury bills dated Aijjgust 3, 1931, and
maturing November 2, 1931 (press release, July 27, 1931)....
.
Exhibit 34. Acceptance of tenders for Treasury biUs dated August 3,1931,
andmaturingNovember 2, 1931 (pressrelease, July 31, 1931).

329
329

CONTEJSTS
Page

Exhibit 35. Inviting tenders for Treasury bills dated August 10, 1931, and
maturing November 9, 1931 (press release, August 3,1931)
Exhibit 36. Acceptance of tenders for Treasury bills dated August 10, 1931,
and maturing November 9,1931 (pressrelease, August 7,1931)
Exhibit 37. Inviting tenders for Treasury bills dated August 17, 1931, and
maturing November 16, 1931 (press release, August 10, 1931)
Exhibit 38. Acceptance of tenders for Treasury bills dated August 17,1931,
and maturing November 16, 1931 (press release, August 14, 1931)
Exhibit 39. Inviting tenders for Treasury bills dated August 24, 1931, and
maturing November 23, 1931 (press release, August 17, 1931)
Exhibit 40. Acceptance of tenders for Treasury bills dated August 24,1931,
and maturing November 23, 1931 (press release, August 21, 1931)
Exhibit 41. Inviting tenders for Treasury bUls dated August 31, 1931, and
maturing November 30, 1931 (press release, August 24, 1931)
Exhibit 42. Acceptance of tenders for Treasury bills dated August 31,1931,
and maturing November 30, 1931 (press release, August 28, 1931).

330
330
330
331
331
332
332
332

Issues of September, 1931
Exhibit 43. Offering of Treasury bonds of 1951-55 (3 per cent) and certificates of indebtedness. Series TS-1932(1J^ per cent) (press release, August 31, 1931, with Department Circulars Nos. 443 and 444)
Exhibit 44. Subscriptions and allotments. Treasury bonds of 1951-55 and
certificates of indebtedness, .Series TS-1932 (from press releases, September 2, 4, 9, and 10, 1931, revised)
Exhibit 45. Inviting tenders for Treasury biUs dated September 30, 1931,
and maturing December 30, 1931 (press release, September 24, 1931)..
Exhibit 46. Acceptance of tenders for Treasury bills dated September 30,
1931, and maturing December 30, 1931 (press release, September 29,
1931)
.

333
337
338
339

Issues of October, 1931
Exhibit 47. Inviting tenders for Treasury bills dated October 16,1931, and
maturing January 13, 1932 (press release, October 8, 1931)
.
Exhibit 48. Acceptance of tenders for Treasury biUs dated October 15,
1931, and maturing January 13, 1932 (press release, October 14, 1931).
Exhibit 49. Inviting tenders for Treasury biUs dated October 26, 1931,
and maturing January 25, 1932 (press release, October 19, 1931)
Exhibit 50. Acceptance of tenders for Treasury bills dated October 26,
1931, and maturing January 25, 1932 (press release, October 23, 1931)..

339
340
340
340

Issue of November, 1931
Exhibit 61. Inviting tenders for Treasury bills dated November 2, 1931,
and maturing February 1, 1932 (press release, October 26, 1931)
Exhibit 62. Acceptance of tenders for Treasury biUs dated November 2,
1931, and maturing February 1, 1932 (press release, October 30, 1931).

341
341

Miscellaneous
Exhibit 63. Amended regulations governing exchanges of Treasury bills
(press release, December 6, 1930)
Exhibit 64. Amended regulations governing the sale and issue of Treasury
bills (Department Circular No. 418, as amended)

342
342

CONTENTS

XI
Page

Exhibit 65. Receipt of Liberty bonds. Treasury bonds, and Treasury notes
for estate or inheritance taxes (fifth supplement to Department Circular
No. 225)
Exhibit 56. An act to amend section 1 of the second Liberty bond act, as
amended (Public No. 820, 71st Congress, H. R. 1 6 1 1 1 ) . . - . . . . .
Exhibit 57. Announcement that coupon bonds in the denomination of
$100,000 will be available for three outstanding Liberty loan issues, and
denominations of $5,000 and $10,000 for First 3}^'s (press release, June
6, 1931, with amendments to Department Circulars Nos. 78, 114, and
121)
...
Exhibit 58. Notice of call for redemption of Treasury notes of Series C1930-32 (press release, June 8, 1931, with Department Circular No.
439)

347
348

348
349

THE BUDGET

Exhibit 69. Executive order. May 1, 1931, prescribing rules and regulations with regard to the reporting of expenditures in the budget (No.
5614)
Exhibit 60. The Federal Budget Situation, an address by Under Secretary of the Treasury Mills, May 21, 1931, before the National Association of Mutual Savings Banks, Washington, D. C

361
361

OBLIGATIONS OF FOREIGN GOVERNMENTS AND INTERGOVERNMENTAL DEBTS

Exhibit 61. Statements of the Treasury covering payments received from
the several foreign governments on account of their indebtedness to the
United.States (press releases, December 16, 1930, and June 15, 1931)..
Exhibit 62. Statement of the President of the United States proposing the
postponement during one year of all payments on intergovernmental
debts, reparations, and relief debts (press release, June 20, 1931)
Exhibit 63. Text of agreement reached by American and French negotiators at Paris, France, July 6, 1931 (Department of State press release)
.
Exhibit 64. Statement of the President of the United States announcing
the acceptance by the important creditor governments of his proposal
for the postponement during one year of payments on intergovernmental debts (Department of State press release, July 6, 1931)
Exhibit 65. Conclusions of the committee of experts as to the terms of
application of the President's proposal for the postponement during one
year of all payments on intergovernrnental debts (Department of State
press releases, August 11 and 14, 1931)
-—

358
359
361

362

363

MIXED CLAIMS

Exhibit 66. Regulations No. 6—Payments on account of tentative awards
of the War Claims Arbiter on account of patents and radio station .
(Department Circular No. 434)..
.....
Exhibit 67. Regulations No. 6—Payments on account of awards of the
War Claims Arbiter in respect of ships (Department Circular No. 441).
Exhibit 68. Regulations No. 7—Payments on account of awards of the
War Claims Arbiter in respect of patents and radio station (Department Circular No. 442)
,.._„____,,

366
369
374

CONTENTS
GOVERNMENT

DEPOSITS

Page

Exhibit 69. Regulations governing deposit of public moneys and payment
of Government checks and warrants (first supplement to Department
Circular No. 176)
..
Exhibit 70. Special deposits of public moneys under the act of Congress
approved September 24, 1917, as amended (second supplement to
Department Circular No. 92, revised)
:;
Exhibit 71. Regulations governing deposit of public moneys and payment
of Government checks and warrants (second supplement to Department
Circular No. 176)
Exhibit 72. Special deposits of public moneys under the act of Congress
approved September 24, 1917, as amended (third supplement to Department Circular No. 92, revised)
Exhibit 73. Regulations governing deposit of public moneys and payment
of Government checks and warrants (third supplement to Department
Circular No. 176)
Exhibit 74. Special deposits of public moneys under the act of Congress
approved September 24,1917, as amended (fourth supplement to Department Circular No. 92, revised)
.
...
Exhibit 76. Regulations governing deposit of public moneys and payment
of Government checks and warrants (amendment to Department Circular No. 176)
.
Exhibit 76. Special deposits of public moneys under the act of Congress
approved September 24, 1917, as amended (amendment to Department
Circular No. 92, revised)
^
Exhibit 77. Statement of Secretary of the Treasury Mellon relative to the
gold notes of the National Credit Corporation (press release, October 17,
1931)-.
-

380
380
381
382
382
383
384
384
385

MISCELLANEOUS

Exhibit 78. Letter from Secretary of the Treasury Mellon to Senator Vandenberg, December 4, 1930, relative to the proposal that adjusted service certificates be paid at face value immediately rather than at
maturity
.
.-.
.
Exhibit 79. The Treasury To-day, an address by Assistant Secretary of the
Treasury Ballantine, April 29, 1931, before the annual meeting of the
Chamber of Commerce of the United States, Atlantic City, N. J
Exhibit 80. Treasury Problems, a radio address by Secretary of the Treasury Mellon, May 23, 1931
:_
Exhibit 81. War Policies in Taxation, statement by Assistant Secretary of
the Treasury Ballantine, May 20, 1931, before the War Policies Commission, Washington, D. C
Exhibit 82. The Federal Building Program, a radio address by Assistant
Secretary of the Treasury Heath, October 17, 1931
._.
Exhibit 83. The Paper Money of the United States, a radio address by
Assistant Secretary of the Treasury Hope, February 6, 1931
Exhibit 84. Excerpt from a letter of the Postmaster General to the Secretary of the Treasury, dated October 22, 1931, certifying extraordinary
expenditures contributing to the deficiency of postal revenues for the
fiscal year ended June 30, 1931, in pursuance of Public Act No. 316,
Seventy-first Congress, approved June 9, 1930 (40 Stat. 523)

386
388
396
401
408
414

418

CONTENTS

XIII

TABLES
Page

Explanation of bases used in tables
.
~--^---r
Description of funds through which Treasury operations are effected
RECEIPTS

AND

423
424

EXPENDITURES

General tables
Table 1. Receipts and expenditures for the fiscal year 1931, by funds
(warrants, checks-issued, and daily statement bases)
.
. 426
Table 2. Details of receipts, by sources and funds, for the fiscal year 1931
(warrants and daily statement bases)
428
Table 3. DetaUs of expenditures, by organization units and funds, for
the fiscal year 1931 (checks-issued and daily statement bases)
.
436
Table 4. Summary of ordinary receipts, expenditures chargeable against
ordinary receipts, and surplus or deficit for the fiscal years 1916 to 1931
(daUy statement basis)
^
.
444
Table 5. Ordinary receipts, expenditures chargeable against ordinary
receipts, and surplus or deficit for the fiscal years 1920 to 1931 (daily
statement basis)
444
Table 6. Receipts and expenditures for the fiscal years 1789 to 1931 (warrant basis)
.
460
Table 7. Summary of ordinary receipts, expenditures chargeable against
ordinary receipts, and excess of receipts or expenditures, by months, from
July 1, 1929, to October 31, 1931 (daUy statement basis)
.
462
Table 8. Expenditures, by months, classified according to departments and
establishments, for the fiscal year 1931 (daUy statement basis)
464
Specific receipts and expenditures
Table 9. Comparison of detailed internal revenue receipts for the fiscal
years 1930 and 1931 (collection basis)
.
Table 10. Internal revenue receipts, by sources, for the fiscal years 1916
to 1931 (collection basis)..-.
.
Table 11. Internal revenue receipts, by months, total, and by present
major sources, July, 1929, to September, 1931 (collection basis)
Table 12. Internal revenue receipts, by States and Territories, for the fiscal
years 1930 and 1931 (collection basis)
Table 13. Expenses of the Internal Revenue Service for the fiscal year 1931
(checks-issued basis)
.
.
Table 14. Customs duties (estimated), value of imports entered for consumption, and ratio of duties to value of dutiable imports and to value
of aU imports, for the years 1900 to 1930 (on basis of reports of the
B ureau of Foreign and Domestic Commerce)
Table 15. Customs duties (estimated), value of dutiable imports, and ratio
of duties to value of dutiable imports, by tariff schedules, for the years
1900 to 1930 (on basis of reports of the Bureau of Foreign and Domestic
Commerce)
:
Table 16. Customs statistics, by districts, for the fiscal year 1931 (coUection basis)
:
r
Table 17. Customs receipts, by districts, for the fiscal year 1931 (warrant
basis)
-1
Table 18. Panama Canal receipts and expenditures for the fiscal years
1903 to 1931 (warrant basis)

468
469
471
472
474

478

479
483
486
487

XTV

CONTENTS
Estimates of receipts and appropriations
Pag©

Table 19. Actual receipts for the fiscal year 1931 and estimated receipts
for the fiscal years 1932 and 1933, by funds (daUy statement basis and
reports from the Bureau of the Budget)
Table 20. Appropriations for 1932 compared with estimates of appropriations for 1933, by organization units (basis of reports from the Bureau
of the Budget)
.
..-.
Table 21. Appropriations, by organization units, for the fiscal years 1925 to.
1932, including estimated permanent and indefinite appropriations and
deficiencies for prior years
.
.
^
Table 22. Accountability statement of appropriations, by acts of Congress, placed upon the books of the Treasury Department during the fiscal year 1931
.
.
.

488
495
497
498

PUBLIC DEBT

Public deht outstanding
Table 23. Public debt outstanding June 30, 1931, by issues (revised daily
statement basis)
Table 24. Description of the pubUc debt issues outstanding June 30, 1931
(revised daily statement basis). —
Table 25. Principal of the public debt outstanding at the end of each
fiscal year from 1853 to 1931 (revised daily statement basis)
Table 26. Interest-bearing debt outstanding June 30, 1931, by kind of
security and callable period or payable date (revised daUy statement
basis)

500
503
609
510

Transactions in the public deht during the fiscal year 1931
Table 27. Public debt retirements chargeable against ordinary receipts
during the fiscal year 1931, and cumulative totals to June 30, 1930 and
1931, by sources and issues (revised daily statement basis)
Table 28. Summary of transactions in interest-bearing and noninterestbearing securities during the fiscal year 1931 (revised daily statement
basis)
.
...
.
..
Table 29. Summary of transactions in interest-bearing securities, by form
of issue, during the fiscal year 1931 (revised daUy statement basis)
Table 30. Changes in interest-bearing debt, by issues, during the fiscal
year 1931 (revised daily statement basis).
.
Table 31. Transactions in noninterest-bearing securities, by issues, during
the fiscal year 1931 (revised daily statement basis)
Table 32. Treasury bonds, certificates of indebtedness, and Treasury bills
issued on public subscription through each Federal reserve bank and the
Treasury Department during the fiscal year 1931 (revised daily statement basis)

511
513
516
518
620

523

Transactions in public deht securities from dates of issue and hy years
Table 33. Transactions in interest-bearing securities outstanding, by
issues, June 30, 1931, from dates of issue, showing reconciliation of
account of the Treasurer of the United. States with security account
(revised daily statement basis).,
..
^---.
----Table 34. Transactions in the public debt for the fiscal years 1928 to 1931
(revised daUy statement basis)
.
.

525
629

CONTENTS

XV
Page

Table 35. Net increases and net decreases in the public debt, by issues, for
the fiscal years 1918 to 1931 (warrant basis)
Table 36. Public debt issues for the fiscal years 1928 to 1931 (revised daily
statement basis)
..
Table 37. Public debt retirements, by issues, for the fiscal years 1928 to
1931 (warrant basis)
Table 38. Reconciliation of public debt issues and retirements with (1)
public debt retirements, by sources, (2) balance in the general fund, and
(3) outstanding public debt, for the fiscal years 1918 to 1931 (revised
daily statement basis)
Table 39. Sources of public debt increase and decrease for the fiscal years
1916 to 1931 (daily statement basis)

630
632
633

534
536

Cumulative sinking fund transactions
Table 40. Cumulative sinking fund transactions during the fiscal year 1931
(revised daily statement basis)
Table 41. Cumulative sinking fund transactions for the fiscal years 1921
to 1931 (revised daily, statement basis) ^
Table 42. Securities retired through the cumulative sinking fund, par
amount and principal cost, to June 30, 1931 (revised daily statement
basis)
..

537
538
538

Interest on the public deht
Table 43. Interest on the public debt payable, paid, and outstanding
unpaid for the fiscal year 1931 (revised daily statement basis)
Table 44. Interest paid on the public debt, by issues, for the fiscal years
1918 to 1931 (warrant basis)
.
Table 45. Rates of interest payable on outstanding pubUc debt

538
539
540

C O N D I T I O N O F THE TREASURY EXCLUSIVE OF PUBLIC DEBT LIABILITIES

Table 46. Current assets and liabilities of the Treasury at the close of the
fiscal years 1929, 1930, and 1931 (revised daily statement basis)
Table 47. Net balance, in the general fund at the end of each month from
July, 1927, to September, 1931 (daily statement basis)
Table 48. Securities owned by the United States Government, June 30,
1931
..
.
.

541
542
543

TRANSACTIONS WITH RAILROADS

Table 49. Obligations of carriers acquired pursuant to section 207 of the
transportation act, 1920, as amended, receipts on account of principal,
and obligations outstanding June 30, 1931
Table 50. Loans to carriers under section 210 of the transportation act,
1920, as amended, and repayments on such loans from July 1, 1930, to
June 30, 1931, together with cumulative totals and amounts outstanding
June 30, 1930, and June 30, 1931...

645

646

STOCK AND CIRCULATION OF MONEY IN THE UNITED STATES

Table 51. Stock of money, money in the Treasury, in the Federal reserve
banks, and in circulation at the end of each fiscal year from 1913 to 1931.
Table 52. Stock of money, by kinds, at the end of each fiscal year from
1913 to 1931
-

547
548

XVI

CONTENTS
Page

Table 63. Money in circulation, by kinds, at the end of each fiscal year
from 1913 to 1931
.
Table 54. Stock of money, money in the Treasury, in the Federal reserve
banks, and in circulation, by kinds, June 30, 1931
_

549
560

MISCELLANEOUS

Table 65. 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, 1931
._Table 66. Money cost of the World War to the United States Government
to June 30, 1931
.
Table 57. Insular and District of Columbia loans outstanding and changes
during the fiscal year 1931.1
.
Table 58. Estimated amount of securities outstanding, interest on which
is wholly exempt from normal income tax and surtax of the Federal
Government, by years, on June 30, 1913 to 1930, and at the end of each
month, January, 1924, to December, 1930, by type of obligor
Table 69. United States securities outstanding, interest on which is
exempt from normal income tax of the Federal Government, by years,
on June 30, 1917 to 1929, and at the end of each month, from January,
1930, to September, 1931
.
Table 60. Net expenditures for Federal aid to States, on basis of warrants issued for the fiscal year 1920 and checks issued for the fiscal years
1930 and 1931, and amounts appropriated for the fiscal year 1932,
classified by appropriations from which direct payments are made to
States and by the more important of the appropriations providing for
expenditures by the Government in cooperation with States, municipalities, or other civil organizations for investigative, regulatory, protective,
or construction work
Table 61. Expenditures made by the Government as direct payments
to States under cooperative arrangements during the fiscal year 1931. .

651
552
552

555

563

563
666

PERSONNEL

Table 62. Number of employees in the departmental service of the Treasury in Washington, by months, from June 30, 1930, to June 30, 1931
Table 63. Number of employees in the departmental and field services of
the Treasury on June 30, 1930, and June 30, 1931.
Table 64. Number of persons retired or, eligible for retirement, retained
in the departmental and field services of the Treasury under the civU
service retirement act, to August 31, 1931
^
_--

570
671
571

APPENDICES TO REPORT ON THE FINANCES
Report of the Treasurer of the United States:
Receipts and expenditures for the fiscal year 1931
Pay warrant transactions
Foreign currencies purchased
CoUection items
District of Columbia securities
Checking accounts .;
Investments for the trust fund, relief, and rehabilitation, longshoremen's and harbor workers' compensation act
.Panama Canal
Payment of coupons from securities of the United States and insular
governments
^.
Payment of interest on registered securities of the United States and
insular governments
Receipts and expenditures on accourit of the Post Office Department.
District of Columbia teachers' retirement fund
Transactions in the public debt
Statement of the public debt of the United States, June 30, 1931
Public debt retirements chargeable against ordinary receipts
Statement of the Treasury of the United States.
'_-.
The general fund
Net available cash balance. . .
The gold reserve fund
.
Gold fund. Federal Reserve Board.
.
Gold in the Treasury
Securities held in trust
.
Postal savings bonds and investments therein
.Withdrawal of bonds to secure circulation
-_
Special trust funds
Depositaries of the United States
Interest on public moneys held by depositary banks
Restoration of depositary balances
Coin and gold bar shipments or transfers
Recoinage of gold, subsidiary silver, and minor coins
Purchases of gold bullion at the mints and assay offices
Stock of metaUic money in the United States
Redemption of Federal reserve and national currency
-.
Shipments of paper currency from Washington
Paper currency
.
1
United States paper currency, by denominations, held in reserve
United States paper currency prepared for issue and amount issued
by fiscal years from 1922
.
United States paper currency issued, by months, during the fiscal
years 1930 and 1931
.
United States paper currency redeemed, by months, during the fiscal
years 1930 and 1931..
United States paper currency issued, redeemed," and outstanding for
the fiscal year 1931
.
.
United States paper currency outstanding, by months, during the fiscal
years 1930 and 1931
.
.
Ratio of smaU denominations to all paper currency outstanding
Paper currency, by denominations, outstanding June 30, 1930 and
1931....
.
Issues of new paper currency to June 30, 1931, and old and new series
outstanding by classes and denominations on June 30, 1931
77532—32
2
xvii

Page
575
575
576
577
578
578
578
579
579
579
579
580
580
582
586
587
587
588
589
589
590
590
591
592
593
595
595
596
597
597
598
599
600
600
601
607
607
608
608
609
609
610
610
612

XVIII

CONTENTS

Report of the Treasurer of the United States—Continued.
„
Paper currency by classes, series, and denominations issued and redeemed to June 30, 1931, and outstanding on June 30, 1931
Legal tender qualities of United States currency
General account of the Treasurer of the United States
TablesNo. 1. General distribution of the assets and liabilities of the
Treasury, June 30, 1931
No. 2. Available assets and liabilities of the Treasury at the
close of June, 1930 and 1931
.
No. 3. Distribution of the general Treasury balance, June 30,
1931
No. 4. Assets of tlie Treasury other than gold, silver, notes, and
certificates at the end of each month, from July, 1928
No. 5. Assets of the Treasury at the end of each month, from
July, 1928
.
No. 6. Liabilities of the Treasury at the end of each month,
from July, 1928
.
No. 7. United States notes of each denomination issued, redeemed, and outstanding at the close of the fiscal years 1928,
1929, 1930, and 1931
.
No. 8. Gold certificates of each denomination issued, redeemed,
and outstanding at the close of the fiscal 3^ears 1928, 1929,
1930, and 1931
.
._--_
No. 9. Silver certificates of each denomination issued, redeemed,
and outstanding at the close of the" fiscal years 1928, 1929,
1930, and 1931
No. 10. Treasury notes of 1890 of each denomination issued,
redeemed, and outstanding at the close of the fiscal years 1928,
1929, 1930, and 1931
No. 11. Amount of United States notes, gold and silver certificates, and Treasury notes of each denomination issued, redeemed, and outstanding at the close of the fiscal years 1928,
1929, 1930, and 1931
No. 12. Federal reserve banks and branches, general, limited,
special, and foreign banks designated as Government depositaries of public moneys, with the balances held June 30, 1931.
No. 13. Old demand notes of each denomination issued, redeemed, and outstanding June 30, 1931
No. 14. Fractional currency of each denomination issued, redeemed, and outstanding June 30, 1931
No. 15. Compound-interest notes of each denomination issued,
redeemed, and outstanding June 30, 1931
No. 16. One and two year notes of each denomination issued,
redeemed, and outstanding June 30, 1931
_'_
No. 17. Seven-thirty notes issued, redeemed, and outstanding
June 30, 1931
No. 18. Refunding certificates, act of February 26, 1879, issued,
redeemed, and outstanding June 30, 1931 '
' No. 19. Public debt obligations retired during the fiscal year
1931-- —
!--_
No. 20. Number of banks with semiannual duty levied and number of depositaries with bonds as security, at close of each fiscal
year from 1922
.
No. 21. Principal of obligations of the insular governments paid
during the fiscal year 1931
_• .
No. 22. Coupons from obligations of the insular governments
paid during the fiscal year 1931, classified by loans
No. 23. Checks issued and paid by the Treasurer for interest on
registered bonds of the insular governments during the fiscal
year 1931
.
No. 24. Coupons from United States obligations paid during the
fiscal year 1931, classified by loans
No. 25. Checks issued by the Secretary and paid by the Treasurer
for interest on registered obligations of the United States during
the fiscal year 1931

Page
614
616
618
621
622
623
623
624
625
626
627
628
629

630
631
632
633
633
633
633
634
634
636
637
637
638
638
639

CONTENTS

Report of the Treasurer of the United States—Continued.
Tables—Continued.
No. 26. Money deposited in the Treasury each month of the
fiscal year 1931 for the redemption of national bank notes
No. 27. Amount of currency counted into the Treasurer's cash by
the National Bank Redemption Agency and redeemed notes
delivered, by fiscal years from 1922 to 1930, and by months
during the fiscal year 1931
No. 28. Currency received for redemption by the National Bank
Redemption Agency from the principal cities and other places,
by fiscal years, from 1922
No. 29. Mode of payment for currency redeemed by the National
Bank Redemption Agency, by fiscal years, from 1922
No. 30. Deposits, redemptions, assessments for expenses, and
transfers and repayments on account of the 5 per cent redemption fund of national and Federal reserve banks, by fiscal years,
from 1922
No. 31. Deposits and redemptions on account of the retirement of
circulation, by fiscal years, from 1922
..
No. 32. Expenses incurred in the redemption of national and
Federal reserve currency, by fiscal years, from 1922
No. 33. Amount of national bank notes redeemed and assorted
during the fiscal year 1931, and the assessment for expenses
of redemption
.
No. 34. Amount and number of pieces of Federal reserve notes
redeemed during the "fiscal year 1931, and the assessment for
expenses of redemption
No. 35. General cash account of the National Bank Redemption
Agency for the fiscal year 1931, and from July 1, 1874..^
No. 36. Number of notes of each kind of currency and denomination redeemed and delivered by the National Bank Redemption Agency during the fiscal year 1931
No. 37. Average amount of national bank notes outstanding and
the redemptions, by fiscal years, from 1875 (the first year of the
agency)
No. 38. Federal reserve notes, canceled and uncanceled, forwarded by Federal reserve banks and branches, counted and
delivered to the Comptroller of the Currency for credit of
Federal reserve agents, by fiscal years, from 1916
No. 39. Amount of money outside of the Treasury, the amount
held by Federal reserve banks and agents, and the amount in
circulation, the per capita, and the estimated population of
the United States, on the last day of each month from July,
1929
.
No. 40. Total amount of receipts covered into the Treasury and
the total amount expended, on the basis of warrants drawn, on
account of the Panama Canal, also the proceeds of the sale of
bonds to the close of the fiscal year 1931
Report of the Director of the Mint (abridged):
Institutions of the mint service :
Coinage
Gold operations
Silver operations...'.
.,
Refineries
Additions and improvements
Number of employees
Walter Reed medal
:
.
Stock of coin and monetary bullion in the United States
Production of gold and silver
.
___:
Industrial consumption of gold and silver. . .
Import and export bf domestic gold coin
Appropriations, expenses, and income
Deposits of gold and silver, income, expenses, and employees, by
institutions, fiscal year 1931
Domestic coinage
"
.

XIX

Page
640

640
641
642

642
642
643
643
644
645
646
648

648

649

650
651
651
651
652
652
652
653
653
653
653
654
654
654
655
655

CONTENTS

Report of the Director of the Mint—Continued.
Coinage by the United States for other countries..,
Issue of fine gold bars for gold coin and gold bullion
Receipts and disbursements of gold bullion and balances on hand
Purchase of minor coinage metal for use in domestic coinage
Minor-coin distribution costs
Minor coins outstanding
Operations of the assay departments
Proof bullion
,.
Operations of the melting and refining and of the coining departments
fiscal year 1931
Ingot melts made
Refining operations
.
Fineness of melts for gold and silver ingots.__.
Bullion gains and losses.
:
Wastage of coinage metal, and loss on sale of sweeps
Engraving department
:
Medals sold
Employees
.
Work of the minor assay offices
.
.
Gold receipts at Seattle
Laboratory, Bureau of the Mint
Assay Commission's annual test of coin
.
Bases used for mint service statistics
TablesDeposits and purchases of gold during the fiscal vear ended June
30, 1931
1
Deposits and purchases of silver during the fiscal year ended June
30, 1931
.
Deposits of gold at United States mints and assay offices since
1873..
Deposits of silver at United States mints and assay offices since
1873
.
.
.
Authority for United States coinage, by denominations, with
standard weight and fineness, and total coined
Coinage of each mint, by value, with grand total pieces, since
organization to close of business December 31, 1930
Coinage of each mint during the past 10 calendar years
Combined gold coinage of the mints of the United States, by
denominations and calendar years, since their organization
Combined silver coinage of the mints of the United States, by
denominations and calendar years, since their organization
Combined minor coinage of the mints of the United States, by
denominations and calendar years, since their organization
Total gold, silver, and minor coinage of the United States, by calendar years
.
Stock of domestic coin in the United States, June 30, 1931
Location, ownership, and per capita circulation of United States
money, June 30, 1931
Estimated monetary stock of gold and silver in the United States
and the amount per capita at the close of each fiscal year since
1873
.
Stock of domestic coin in the United States, December 31, 1930. _
Location, ownership, and per capita circulation of United States
money, December 31, 1930
.
Monetary stock of gold in the United States since 1873
•
Average price of an ounce of gold in London and United States
equivalent since 1870
.
Average commercial ratio of silver to gold each calendar year
since 1687, with gold considered as of legal monetary value..
Ratio of silver to gold, as affected by World War
Values of foreign moneys, October 1, 1931
^
Monetary stock of the principal countries of the world, end of
calendar year 1929
L
Monetary stock of the principal countries of the world, end of
calendar year 1930
,...,,,,..

Page
666
656
657
658
668
658
659
659
659
661
662
663
665
665
666
666
667
667
668
668
670
672
674
676
678
679
680
683
684
688
690
692
694
696
697
698
699
700
701
702
703
703
704
707
712

CONTENTS

XXI

Report of the Director of the Mint—Continued.
Tables—Continued.
Page
World production of gold and silver, 1929 and 1930
• 716
Production of gold and silver in the world since 1860
719
Production of gold and silver in the world since the discovery of
America
.
720
Report of the Comptroller of the Currency (abridged):
Legislation recommended—
Amendments to the national bank act
723
Other legislation recommended
733
Organization and liquidation of national banks
735
Branches
736
National banks in the trust
field
741
National bank failures
751All bank suspensions
_.,
759
Bank suspensions other than national
759
National bank circulation
760
Redemption of national and Federal, reserve bank circulation
762
National banks of issue
:
762
Condition of national banks at date of each call during the year
763
National bank liabilities on account of bills payable and rediscounts. .
766
Loans and discounts of national banks
767
Comparative changes in demand and.time deposits, loans and discounts. United States Government and other bonds and securities
owned, and the amount of reserve of national banks with Federal
reserve banks since June 30, 1927
772
United States Government securities owned by national banks in
, reserve cities and States
^
773
Investments of national banks
^
«
775
Per capita demand and time and savings deposits in all reporting
banks
780
Earnings, expenses, and dividends of national banks
788
National banks classified according to capital stock
801
National bank examiners
.
802
Convictions of national bank officers and others for violations of the
national banking laws during the year ended October 31, 1931
807
Federal reserve banks—
Assets and liabilities
^
819
Federal reserve bank discount rates
•_.
821
Discount rates prevailing in Federal reserve bank and branch
cities
821
Rates for money in New York
823
New York clearing house
825
Clearing house associations in the 12 Federal reserve bank cities and
elsewhere
825
Banks other than national
..
825
State (commercial) banks
828
Loan and trust companies
830
Stock savings banks
,
...
_^
832
Mutual savings banks
...
834
Savings depositors and deposits in mutual and stock savings
banks
...
836
Private banks
^
839
All reporting banks other than national
841
National banks
846
All reporting banks in the United States and possessions
848
Banks in the District of Columbia—
Earnings, expenses, and dividends of banks other than national.
862
Building and loan associations
864
BuUding and loan associations in the United States
-865
Money in the United States
867
Imports and exports of merchandise, gold, and silver
868
Federal land banks
869
Joint stock land banks
.
871
Federal intermediate credit banks
.
873
National agricultural credit corporations
874

XXII

CONTENTS

Report of the Comptroller of the Currency—Continued.
United States postal savings system
School savings banking. .
Savings banks in principal countries of the world
Assets of leading foreign banks of issue
Expenses of the Currency Bureau
Report of the Commissioner of Internal Revenue (abridged):
Collections
Cost of administration
Income Tax Unit—
Returns closed
Additional revenue. .
Claims and overassessments
Final notices of deficiency (60-day letters)
Returns reopened
Returns on hand end of year
.
.
Audit in Washington
Audit in the
field
.
.
Audit of 1930 returns
...
Improvements in policv and procedure and changes in organization
I
Compromise of taxes
Waivers
.
Conference of revenue agents in charge
Uniformity of action—field and Washington
Valuation division
Procedure revised governing the rejection pro forma of
qjaims for refund
Rules and regulations section
Community property
Osage Indians
Present organization
.
'..•
J
Field procedure division
Field divisions
Audit review division
.
Valuation division
Clearing division
Records division
Rules and regulations section
Service section
Personnel section
Personnel. _.
.Special Advisory Committee
Miscellaneous Tax Unit
Estate tax division
Miscellaneous division
.
Tobacco division
Appeals and review section
Accounts and Collections UnitCollections accounting division
Collectors' personnel, equipment, and space division
Disbursement accounting division
Office of the General Counsel
Appeals division
.
Interpretative division
Penal division
Civil division
Review division
Administrative division
Bureau and field personnel
.

Page
874
880
881
883
884
885
886
886
887
888
888
889
890
891
892
894
896
896
896
897
897
897
898
898
899
900
900
900
902
902
904
905
906
907
908
908
908
910
913
914
.916
920
923
924
924
926
927
928
928
931
933
935
938
940
941

CONTENTS
Report of the Commissioner of Internal Revenue—Continued.
Tables—
Summary of monthly internal revenue receipts for years ended
June 30, 1930 and 1931, by sources
Summary of internal revenue receipts, years ended June 30, 1930
and 1931, by sources
Summary of internal revenue receipts, j^ears ended June 30, 1930
and 1931, by collection districts
Summary of internal revenue receipts, year ended June 30, 1931,
by States
Summary of income tax receipts from corporations and individuals, year ended June 30, 1931, by States
Summary of receipts from income tax, 3^ears ended June 30, 1929,
1930, and 1931, by States, with per cent of increase or decreasa
in 1931 compared with 1930
Total internal revenue receipts, years ended June 30, 1863-1931- Internal revenue tax on products from Philippine Islands, years
ended June 30, 1930 and 1931, by articles taxed
_--Internal revenue tax on products from Porto Rico, years ended
JuneSO, 1930 and 1931, by articles taxed
INDEX

xxm
Page
942
950
951
953
954
955
956
956
956
957

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

11,1789
3,1795
1,.1801
14,1801
9,1814
6,1814
22.1816
7,1825
6,1829
8.1831
29,1833
23,1833
1,1834
6,1841
13,1841
8,1843
4,1844
8,1845
8,1849
23.1850
7,1863
7,1857
12,1860
15,1861
7,1861

Presidents

To—
Jan.
Dec.
May
Feb.
Oct.
Oct,
Mar.
Mar.
June
May
Sept.
June
Mar.
Sept.
Mar.
May
Mar.
Mar.
July
Mar.
Mar.
Dec.
Jan.
Mar.
June

31,1795
31,1800
13,1801
9,1814
6,1814
21,1816
6,1825
5,1829
20,1831
28,1833
22,1833
25,1834
3,1841
11,1841
1,1843
2,1844
7,1845
6,1849
22,1850
6,1853
6,1857
8,1860
14,1861
6,1861
30,1864

Alexander Hamilton, New York
Oliver Wolcott, Connecticut
Samuel Dexter, Massachusetts
Albert Gallatin, Pennsylvania *
George W. Campbell, Tennessee
Alexander J. Dallas, Pennsylvania..
Wm. H. Crawford, Georgia
___.
Richard Rush, Pennsylvania >
Samuel D. Ingham, Pennsylvania 8..
Louis McLane, Delaware
Wm. J. Duane, Pennsylvania
Roger B. Taney, Maryland *
Levi Woodbury, New Hampshire ^..
1Thomas Ewing, Ohio «
Walter Forward, Pennsylvania ^
John C. Spencer, New York «
Geo. M. Bibb, Kentucky
Robt. J. Walker, Mississippi •
Wm. M. Meredith, Pennsylvania...
Thos. Corwin, Ohio
James Guthrie, Kentucky
Howell Cobb, Georgia lo
Philip F . Thomas, Maryland
John A. Dix, New York.
Salmon P . Chase, Ohio "

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

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

XXVI

SECRETARIES OF T H E

TREASURY

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

6,1864
9,1865
12,1869
17,1873
4,1874
7.1876
10,1877
8,1881
14,1881
25,1884
31,1884
8,1885
1,1887
7,1889
25,1891
7,1893
6,1897
1,1902
4,1907
8.1909
6,1913
16.1918
2,1920
4.1921

Presidents

ToMar.
Mar.
Mar.
June
June
Mar.
Mar.
Nov.
Sept.
Oct.
Mar.
Mar.
Mar.
Jan.
Mar.
Mar.
Jan.
Mar.
Mar.
Mar.
Dec.
Feb.
Mar.

3.1866
3.1869
16,1873
3,1874
20,1876
9,1877
3.1881
13,1881
4,1884
30,1884
7,1885
31,1887
6.1889
29,1891
6,1893
6,1897
31,1902
3,1907
7,1909
6,1913
15,1918
1.1920
3.1921

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

Lincoln.
Lincoln. Johnson.
Oraqt.
Grant.
Grant.
Grant, Hayes.
Hayes.
Garfield. Arthur.
Arthur.
Arthur.
Arthur, Cleveland.
Cleveland.
Cleveland, Harrison.
Harrison.
Harrison. Cleveland.
Cleveland, McKinley.
McKinley, Roosevelt.
Roosevelt.
Roosevelt.
Taft.
Wilson.
Wilson.
WUson.
Harding, Coolidge,
Hoover.

» George Harrington (Assistant Secretary), ad interim Secretary of the Treasury from Mar. 4 to 8.1866.
»»John F . Hartley, of Maine (Assistant Secretary), ad interim Secretary of the Treasury from Mar. 6
to 11, 1869.
H Hugh McCulloch was Secretary from Mar. 9,1865, to Mar. 3,1869, and also from Oct. 31.1884, to Mar.
7, 1885.
>» Charles F. Conant. of New Hampshire (Assistant Secretary), ad interim Secretary of the Treasury
from June 21 to 30 (July 6), 1876.
»« Henry F . French, of Massachusetts (Assistant Secretary), ad interim Secretary of the Treasury from
Mar. 4 to 7, 1881.
" William Windom was Secretary from Mar. 8.1881, to Nov. 13,1881, and also from Mar. 7,1889, to Jan.
29, 1891.
J8 Charles E. Coon, of New York (Assistant Secretary), ad Interim Secretary of the Treasury from Sept.
4 to 7,1884; Henry F . French, of Massachusetts (Assistant Secretary), ad interim Sept. 8 to 14,1884; Charles
£ . Coon ad interim Sept. 15 to 24.1884.
»• A. B. Nettleton, of Minnesota (Assistant Secretary), ad interim Secretary of the Treasury from Jan.
30 to Feb. 24,1891.

UNDER SECRETARIES OF THE TREASURY AND PRESIDENTS
AND SECRETARIES UNDER WHOM THEY SERVED
Term of service
Under Secretaries >
From—

To-

July 1.1921
Nov. 20,1923
Mar. 4,1927

Nov. 17.1923
Feb. 1,1927

S. Parker Gilbert, Jr., New Jersey
Garrard B. Winston, Illinois
Ogden L. Mills, New York

> Office established act June 16.1921.

Secretaries

Mellon
Mellon
Mellon

Presidents

Harding, Coolidge,
Coolidge.
Coolidge. Hoover.

ASSISTANT SECEETAEIES OP T H B TKEASUBY

XXVII

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

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

Oct.
Nov.
Mar.
Mar.

9,1849
16,1850
13,1853
12,1857

Mar. 13,1857

Jan. 16,1861

Mar. 13,1861

July 11,1865

Mar. 18,1864

June 15,1866

Jan.

6,1865

Nov. 30.1867

July 11.1865

May 4,1875

Dec. 2,1867
Mar. 20,1869

May 31,1868
Mar. 17,1873

Mar. 8,1873 June 11,1874
July

1,1874

Secretaries

Presidents

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

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

To-

Apr.

3,1877

Mar. 4,1875
Aug. 12,1876

June 30,1876
Mar. 9,1885

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

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

Feb. 28,1882
Apr. 17,1884

Apr. 16,1884
Nov. 10,1885

Mar. 14,1885
Nov. 10,1885
July 12,1886

Apr. 1,1887
June 30,1886
Mar. 12,1889

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

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

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

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

XXVIII

ASSISTANT SECRETAHIES OF T H E TREASURY

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

Secretaries

Presidents

To—

Apr. 12,1893

Apr.

Apr. 13,1893

M:ar. 31,1897

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

July

1,1893

May 4,1897

Scott Wike, Illinois _

Carlisle, Gage..

Apr.
Apr.

7,1897
7,1897

Mar. 10,1899
Mar. 4,1903

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

Gage.
Gage, Shaw.

7,1897

June 1,1897
Mar. 13,1899

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

Mar. 6,1901

Apr. 15,1903

Milton E. Ailes, Ohio..

Mar. 5,1903 Mar. 5,1905 Robert B. Armstrong, Iowa
May 27,1903 Jan, 21,1907 Charles H. Keep, New York
Mar. 6,1905 Nov. 1,1909 James B. Reynolds, Massachusetts.
July 1,1906 Mar. 15,1908 John H. Edwards, Ohio
Jan. 22,1907 Feb. 28,1907 Arthur F. Statter, Oregon
Apr. 23,1907 Mar. 6,1909 Beekman Winthrop, New York..
Mar. 17,1908 Apr. 10,1909 Louis A. Coolidge, Massachusetts.

Gage, Shaw.
Gage, Shaw.

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

Shaw-..Shaw
Shaw, Cortelyou,
MacVeagh.
Shaw, Cortelyou.. Roosevelt. ,
Roosevelt.
Shaw..-Cortelyou
— . Roosevelt.
Cortelyou, Mac- Roosevelt, Taft.
Veagh.
Apr. 5,1909 June 8,1910 Charles D. Norton, Illinois
MacVeagh
Taft.
Apr. 19,1909 Apr. 3,1911 Charles D. Hilles, New York
MacVeagh
Taft.
Nov. 27,1909 July 31,1913 James F. Curtis, Massachusetts.. MacVeagh, Mc- Taft, Wilson.
Adoo.
June 8,1910 July 3,1912 A. Piatt Andrew, Massachusetts. MacVeagh.
Taft.
MacVeagh.
Apr. 4,1911 Mar. 3,1913 Robert 0 . Bailey, Illinois
Taft.
MacVeagh, Mc- Taft, Wilson.
July 20,1912 Sept. 30,1913 Sherman P. Allen, Vermont
Adoo.
Mar. 24,1913 Feb. 2,1914 John Skelton Williams, Virginia. McAdoo...
Wilson.
Aug. 1,1913 Aug. 9,1914 Charles S. Hamlin, Massachu- McAdoo...
Wilson.
setts.
Oct. 1,1913 Oct. 1,1917 Byron R. Newton, New York
Wilson.
McAdoo.Mar. 24,1914 Jan. 26,1917 William P. Malburn, Colorado... McAdoo
Wilson.
Aug. 17,1914 Mar. 15,1917 Andrew J. Peters, Massachusetts. McAdoo
— Wilson.
Apr. 17,1917 Aug. 28,1918 Oscar T. Crosby, Virginia
Wilson.
McAdoo
June 22,1917 Nov. 20,1919 Leo S. Rowe, Pennsylvania
McAdoo, Glass--. Wilson.
Oct. 6,1917 Aug. 26,1921 James H. Moyle, U t a h —
McAdoo, Glass, Wilson, Harding.
Houston, Mellon.
Oct. 30,1917 July 5,1920 Russell C. Leffingwell,* New McAdoo, Glass, Wilson.
York.
Houston.
Dec. 15,1917 Jan. 31,1919 Thomas B. Love, Texas
^
McAdoo, Glass... Wilson.
Sept. 4,1918 June 30,1920 Albert Rathbone, New York
McAdoo, Glass, Wilson.
Houston.
Glass, Houston... Wilson.
Mar. 6,1919 Nov. 15,1920 Jouett Shouse, Kansas
Glass, Houston... Wilson.
Nov. 21,1919 June 14,1920 Norman H. Davis, Tennessee
Houston, Mellon.. Wilson, Harding.
June 15,1920 Apr. 14,1921 Nicholas Kelley, New York
July 6,1920 June 30,1921 S. Parker Gilbert, jr.. New,Jer- Houston j Mellon.. Wilson, Harding.
sey. 8
Houston, Mellon. Wilson, Harding.
Dec. 4,1920 May 31,1921 Ewing Laporte, Missouri-Wilson.
Dec. 4,1920 Mar. 4,1921 Angus W. AlcLean, North Caro- Houston
lina.
» Office established act Mar. 3, 1849; appointed by the Secretary, Act Mar. 3, 1857, made the office
presidential.
«Act Oct. 6,1917, provided for two additional Assistant Secretaries for duration of war and six months
after.
5 Became Under Secretary July 1,1921.

ASSISTANT SECRlETARIES OF THE TREASURY

XXIX

Assistant. Secretaries of the Treasury and Presidents arid Secretaries under whom
they serv6(i—Continued
Term of service
Assistant Secretaries ^
FromMar.
May
Dec.
Mar.
July
July
Apr.
Dec.
Aug.
Nov.

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

June 26,1929
Nov. 21,1929
Mar. 16,1931

Secretaries

Presidents

ToMar.
July
July
June
Nov.
Nov.
July
June

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

Sept. 1,1929

Mar. 15,1931

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

Mellon
Mellon
Mellon
Mellon
Mellon
Mellon
Mellon
Mellon
Mellon—
Mellon.
Mellon
Mellon
Mellon

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

J Office established act Mar. 3. 1849; appointed by the Secretary. Act Mar. 3, 1857, made the office
presidential.
• Became Under Secretary Nov. 20,1923.

ASSISTANTS TO THE SECRETARY OF THE TREASURY • AND
PRESIDENTS AND SECRETARIES UNDER
WHOM THEY SERVED
Term of service
Assistants to the Secretary
From—

To—

Sept. 11,1789
Mar. 6,1917

May 8,1792
Mar. 4,1921

Secretaries

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

Presidents

Washington.
Wilson.

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

xxx

PRIKCIPAI, ADMINISTRATIVE AKD STAj'i* Oit'FlCEKS

PRINCIPAL ADMINISTRATIVE AND STAFF OFFICERS OF THE
TREASURY DEPARTMENT AS OF NOVEMBER 16, 1931
OFFICE OF T H E SECRETARY
Andrew W. Mellon
Ogden L. Mills
Seymour Lowman
Ferry K. Heath
."
Arthur A. Ballantine
John Kieley...
W. Norman Thompson
Charles R. Schoeneman
H. R. Sheppard
Francis C. Rose
Frank A. Birgfeld
W. R. Stark
Aubrey S. McLeod
W. H. Moran
James E. Harper
L. C. Spangler
Robert Le Fevre
John L. Summers

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

David E. Finley
B. H. Bartholow
Leo C. Martin
John G. Harlan
Alfred K. Cherry

Special Assistant to the Secretary.
Special Assistant to the Secretary.
Special Assistant to Assistant Secretary.
Senior Legal Assistant to the Under Secretary.
Junior Legal Assistant to the Under Secretary.
CONSULTING A R C H I T E C T U R A L SPECIALISTS

Edward H. Bennett, Chairman.
Louis Ayres.
Arthur Brown, Jr.
William A. Delano.

,»

Clarence C. Zantzinger.
Louis A. Simon.
John Russell Pope.

PUBLIC D E B T SERVICE
William S. Broughton
S. R. Jacobs
Rene W. Barr
E. E. Jones
-•
Frank A. DeGroot
Marvin Wesley
Melvin R. Loafman
Maurice A. Emerson

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

OFFICE OF T H E COMMISSIONER OF ACCOUNTS AND DEPOSITS
D. W. Bell
Edward F. Bartelt
Andrew M. Smith
Edward D. Batchelder
William T. Heffelfinger

Commissioner of Accounts and Deposits.
Assistant Commissioner of Accounts and Deposits.
Chief, Division of Bookkeeping and Warrants.
Chief, Division of Deposits.
Chief Examiner, Section of Surety Bonds.

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

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

PRINCIPAL ADMINISTRATIVE

AND STAFF OFFICEES

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

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

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

..—1

Oommissioner of Internal Revenue.
Assistant to the Commissioner.
Deputy Commissioner.
Deputy Commissioner.
Deputy Commissioner.
Special Deputy Commissioner.
Assistant Commissioner.
Assistant Commissioner.
General Counsel.

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

Commissioner of Industrial Alcohol.
Assistant Commissioner of Industrial Alcohol,
Chief Counsel.
BUREAU OF NARCOTICS

Harry J. Anslinger
Will Sanford Wood

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

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

Commissioner of Customs.
Assistant Commissioner of Customs.
Deputy Commissioner (Administration).
Deputy Commissioner (Investigation).
General Counsel.

Robert J. Grant
Mary M. O'Reilly

Director of the Mint.
Assistant Director.

M I N T BUREAU

FEDERAL F A R M LOAN BUREAU
Paul Bestor
John H. Guill
Louis J. Pettijohn
Albert C. Williams
George R. CookseyJames B. Madison
F . D . Van Sant
Peyton R. Evans
Leo H. Paulger

Farm Loan Commissioner.
Member.
Member.
Member.
Member.
Member.
Secretary.
General Counsel.
Chief, Division of Examination.
BUREAU OF ENGRAVING AND P R I N T I N G

Alvin W. Hall
Clark R. Long
Jesse E. Swigart

Director of the Bureau of Engraving and Printing.
Assistant Director (Administration).
Assistant Director (Production).
PUBLIC H E A L T H SERVICE

Hugh S. Gumming
Taliaferro Clark
J
O. C. Pierce
L. R. Thompson
F . C. Smith
C. E. Waller
Francis A. Carmelia
Ralph 0 . Williams
Walter L. Treadway
D . 8. Masterson

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

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

XXXI

XXXII

PRINCIPAL ADMINISTRATIVE AND STAFF

OFFICERS

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

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

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

Acting Supervising Architect.
Executive Officer.
Technical Officer.

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

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

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

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

C O M M I T T E E ON P E R S O N N E L
F . A. Birgfeld, Chakman.
J.E.Harper.
S. R. Jacobs.

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

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

77532—32

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ANNUAL REPORT ON THE FINANCES
TREASURY DEPARTMENT,

Washington, D. C, November 20, 1931.
SIR : I have the honor to make the following report:
During the fiscal year ended June 30, 1931, the Federal finances
for the first time reflected in a marked degree the decline in business
activity which has continued with only minor interruptions since the
middle of 1929. A very considerable decrease in Federal revenues,
together with an increase in expenditures, resulted in a deficit of
$902,716,845,^ as contrasted with a surplus of $183,789,215,^ in the
preceding fiscal year. Sinking fund and other statutory retirements
of United States obligations, which were included in expenditures,
were responsible for $440,082,000 of the deficit. The deficit, exclusive
of these items, amounted to $462,634,845; this latter figure and an
increase of $153,336,815 in the Treasury's general fund balance
account for the increase during the year of $615,971,660 in the gross
outstanding public debt.
Total ordinary receipts at $3,317,233,494 were $860,708,208 less
than in the preceding fiscal year. The decline reflected the effect of
the depression on all major sources of Federal revenues, particularly on
income taxes and customs receipts. Expenditures chargeable against
ordinary receipts aggregated $4,219,950,339 and were $225,797,852 more than in the previous year. The increase was due largely to
expenditures for agricultural aid and relief, for additional benefits to
war veterans, and for accelerated governmental construction activities.
Treasury financing during the fiscal year 1931 and in the early
months of the current fiscal year included not only the customary
sale of short-term obligations, but also the marketing of three bond
issues. Reflecting the prevailing low level of money rates, sales of
short-dated obligations, including Treasury bills with maturities of
two and three months and certificates of indebtedness with maturities
ranging from six months to a year, were effected at unusually low
rates of interest. The rate on the 3 per cent Treasury bonds of
1951-1955, issued on September 15, 1931, was the lowest at which
United States bonds have been issued on public subscription during
the past 20 years. ^
In addition to the financing made necessary by maturing issues
and by the currently cumulating deficit, the Treasury was called
» General, special, and trust funds combined; deficit exclusive of trust fund items, $901,969,080; for explanation of funds see p. 424.

REPORT OK THE EIKAKCES

upon to convert investments held in the adjusted service^certificate
fund into cash, in order to meet the heavy increase in the volume of
loans to veterans under the recent legislation which raised the loan
value of outstanding adjusted service certificates. The budget for
1931 was affected by the increased volume of loans only to the
extent of the advanced appropriation of $112,000,000 to the adjusted
service certificate fund. Conversion of the major portion of the
investments held in the fund did, however, increase by about
$756,000,000 the volume of Government obligations which the Treasury was called upon to sell in the open market.
BUDGET RESULTS

Receipts
The total ordinary receipts of the Federal Government during the
fiscal year 1931 were $3,317,233,494 as compared with $4,177,941,702
in 1930; this represents a decline of $860,708,208, or 20.6 per cent.
The receipts derived from each of the major sources of revenue in
1930 and 1931 and the changes in these receipts are shown in the table
following; and the trend, by major sources, from 1923 to 1931, is
shown in Chart 2.
Ordinary receipts classified according to major sources for the fiscal years 1930
and 1931^
[In millions of dollars!

1930

Source

R e c e i p t s from t a x a t i o n :
C u s t o m s (including t o n n a g e tax)
Internal r e v e n u e Income t a x e s C u r r e n t corporation
Current individual.
B a c k taxes '
T o t a l income t a x e s . . ,

Miscellaneous i n t e r n a l r e v e n u e T a x on small cigarettes
All other tobacco taxes
_
S t a m p t a x o n capital stock transfers
.
S t a m p t a x o n b o n d s a n d capital stock issues, e t c . . .
Estate tax
All other i n t e r n a l r e v e n u e '
T o t a l miscellaneous i n t e r n a l r e v e n u e
T o t a l receipts from taxation
Miscellaneous receipts:
Proceeds from G o v e r n m e n t - o w n e d s e c u r i t i e s Foreign obligations
All other
_
_
All other receipts, including t r u s t funds
T o t a l miscellaneous receipts
T o t a l o r d i n a r y receipts -

1931

PercentIncrease
age in( + ) or de- crease ( + )
crease (—) or decrease (—)

587.0

378.3

-208.7

—35.6

1,117.8
1,060.9
232.3

891.6
730.4
238.5

-226. 3
-330. 5
• -f6.2

-20.2
-31.2
-i-2. 7

2,411.0

1,860.4

-550.6

-22.8

359.8
90.5
46.7
22.6
64.8
43.9

358.9
85.4
25.5
14.8
48.1
36.7

-0.9
-5.1
-21.2
-7.8
-16.7
-7.2

-0.3
-5.6
—45.4
-34. 5
—25.8
-16.4

628.3

569.4

-58.9

-9.4

3,626.3

2,808.1

-818.2

-22.6

239.5
20.3
29L8

236.1
28.3
244.7

-3.4
+8.0
-47.1

-1.4
+39.4
-16.1

.551.6

509.1

-42.5

-7.7

4,177.9

3,317.2

-860.7

—20 6

* On basis of daily Treasury statements (unrevised), supplemented by reports of the Commissioner of
Internal Revenue. General, special, and trust funds combined, for description of funds see p. 424; for classification by funds, see p . 428.
> Includes adjustment to basis of daily Treasury statements (unrevised).

SECRETARY OP THE TEEASURY

Receipts from all sources, with the exception of back income taxes
and certain nontax receipts, show declines which reflect the effect of
the business depression. Taxes collected from certain sources, such
as customs and miscellaneous internal revenue, are based chiefly
on current operations in trade and industry and are therefore more or
less immediately affected by changes in business activity. Receipts
from income taxes, on the other hand, which customarily provide
more than half of the total Federal receipts, are not related to business
conditions at the time of collection. Taxes on incomes reported for
a given calendar year are collected, for the most part, during the
BILLION
DOLLARS
5

A L L OTHER'
FORE.IGN
OBLIGATIONS

MISCELLANEOUS
INTERNAL
REVENUE

INCOME TAXES

CHART 2. —Principal sources of ordinary receipts for the fiscal years 1923 to 1931 (general, special,
and trust funds combined)

following calendar year. Furthermore, taxes are reported on the
basis of income for full year periods, chiefly calendar years, so that a
turn in business conditions during the year will not always be reflected
in a corresponding change in incomes and taxes reported for the year
as a whole. Thus in 1929, notwithstanding the material decline in
business activity and the sharp break in security prices during the
last half of the year, the income of corporations reporting net income
was somewhat larger than the year before, and individual incomes
reported for the year were only moderately smaller. Receipts from
income taxes in the fiscal year 1931 were composed of collections
based on incomes for the calendar years 1929 and 1930 and therefore
do not reflect the full force of the depression.

REPORT ON T H E FINANCES

Receipts from taxation were $818,200,000 less in 1931 than in 1930
while receipts from all other sources declined $42,500,000. Receipts
from taxation, strictly speaking, represent that portion of the Government revenue which is derived from authorized levies upon the people
primarily to secure funds for the conduct of Government activities.
Such levies are composed of customs duties, income taxes, and miscellaneous internal revenue taxes. Nontax receipts consist of amounts
received by the Government incidental to the performance of its
various functions. Among these receipts are included the proceeds
from Government-owned securities, Panama Canal tolls, fees, flnes
and penalties, rents and royalties, immigration head tax, tax on the
circulation of national bank notes, seigniorage on coinage of subsidiary silver and minor coins, and receipts for trust funds. The
changes in receipts from specific sources are considered in detail in the
following paragraphs.
Income taxes.—Taxes on the income of individuals and corporations
furnish more than half of the receipts. In the fiscal year 1931 income
taxes amounted to $1,860,400,000 as compared with $2,411,000,000 in
1930, a decline of $550,600,000. The receipts from back taxes increased
about $6,600,000, from $231,500,000 in 1930 to $238,100,000 in 1931.^
Back taxes include payments on additional assessments, penalties,
and interest on returns for prior years determined as a result of
audit, and on delinquent returns. The present status of the audit
of income tax returns is summarized on page 56.
Current income tax collections declined from $2,178,700,000 in 1930
to $1,621,900,000 in 1931, or $556,800,000, notwithstanding the fact
that in only half of the fiscal year, January to June 1931, did these
receipts reflect the reduction in the income base which occurred in
1930.
Receipts from current income taxes on corporations were $891,500,000 in 1931 as compared with $1,117,800,000 in 1930, a decline
of $226,300,000. Over 90 per cent of this decrease was due to lower
collections in the second half of the fiscal year. Collections during
the first half of the year, which were based on 1929 incomes, decreased
only $19,700,000, or about 4 per cent as compared with the corresponding period of the fiscal year 1930. Although the decline in
business activity began in the middle of 1929, corporation incomes for
that year showed sufficient increase to offset largely the effect of
reduction in the tax rate applicable to incomes for 1929. In the
second half of the fiscal year 1931, however, collections, which were
based on calendar year 1930 incomes, began to refiect the full effect
of the depression and showed a decline of $206,600,000, or 38 per cent
from the corresponding period of the preceding year.
I Theseflguresfor back tax collections are before adjustments made in the table on page 2,

SECRETARY; OF T H E TREASTJRY

Comparison of indicated coUections for the full calendar year 1931
with collections in 1930, after adjustment for differences in tax rates
on incomes for these two periods, discloses a decline of approximately
45 per cent in taxable incomes of corporations between 1929 and 1930.
The further marked recession in business activity which has taken
place during the calendar year 1931 will be reflected in income tax
collections during the calendar year 1932, and will thus affect both
the fiscal years 1932 and 1933. It may be observed that when recovery in business commences, Federal income tax coUections will display a corresponding lag in refiecting increased taxable incomes.
Furthermore, in the early stages of recovery increase in tax collections
corresponding to the improvement in corporate incomes can not be
anticipated due to the deduction allowed under intemal revenue laws
for net losses for prior years. A corporation is permitted to carry
forward for two succeeding years its losses from business incurred in
any given year. On the basis of experience subsequent to the 1921
depression, it is likely that in tax returns for the first two years of
business recovery corporations will carry forward substantial losses
which will offset incomes of recovery years.
Current income tax collections from individuals declined $3.30,500,000, from $1,060,900,000, in 1930 to $730,400,000 in 1931. As in
the case of corporation income taxes the major portion of this decline,
78 per cent, was due to lower collections in the second half of the
fiscal year 1931. Collections in the first half of 1931, which were
based on 1929 incomes, decUned $71,900,000, or 14 per cent from the
same period of 1930, about one-third of which was due to the reduction of 1 per cent in the normal rates of tax on incomes for 1929.
A large proportion of individual income reported, such as salaries,
interest, and dividends, is neither as quickly nor as severely affected
by a depression as corporation profits. However, as a result of the
progressive rates, reduction in income reported by individuals from
any single source, such as profits from sales of stocks, is accompanied by relatively greater decreases in taxes. This characteristic
of individual income taxes is considered in some detaU in the following analysis of the decUne in coUections on incomes for the
calendar year 1930.
Indicated current coUections of individual income taxes for the
calendar year 1931, after an adjustment for differences in the normal
tax rates applicable during these two periods, show a decline of approximately 55 per cent from the preceding year. This sharp decline
in coUections reflects relatively smaller decreases in amounts of reported incomes, the effect of which was accentuated through the
operation of progressive tax rates.
Statistics of individual incomes.—As individual incoines increased in
recent years, the additional amounts were subject to progressively

REPORT ON THE FINANCES

higher rates and, as a consequence, the total tax paid increased more
rapidly than the income. During 1928 and 1929 there were marked
increases in incomes particularly in the higher tax brackets, due for the
most part to the unusually large amounts of profits on security transactions. The returns with net income of $100,000 and over, which
numbered somewhat less than 6,000 for 1924 incomes and about 11,000
for 1927 incomes, reached a total of about 16,000 in 1928 and even
after the break in security prices in the autumn of 1929 showed a
total of almost 15,000 for that year. Total taxes for this group
increased from almost $450,000,000 in 1927 to more than $700,000,000
in 1928. Figures now available indicate that for 1930 the number of
returns for this group will not greatly exceed 6,000, and that the tax
returned will not exceed $250,000,000. The remaining 10,000 returns
included in this income group in 1928 have now dropped into lower
net income classes; taxes for these returns have declined relatively
more than the income, due to the fact that the decrease in taxes
results from the loss of income formerly taxed at higher rates.
Income taxpayers in lower net income classes have also been
severely affected by the depression although the effect on Federal
revenue has not been equally marked because the tax rates are relatively lower. Preliminary tabulations from income tax returns show
that taxes for the calendar year 1930 from individuals with net incomes
of from $5,000 to $10,000 and from $10,000 to $100,000 were 22 per cent
and 49 per cent lower, respectively, than in 1928 as compared with a
decline of 66 per cent in taxes on incomes of $100,000 and over during
this period. Comparison is made with 1928 rather than 1929 because
of the temporary rate reduction affecting taxes on incomes of the latter
year. The following table shows the number of returns, amount of
tax, and percentage of change for the calendar years 1928 and 1930 by
major net income classes as published in the preliminary Statistics of
Income for these years.
Comparison of the number of returns and the amount of income tax for the calendar
years 1928 and 1930, individual returns of net income of $5,000 and over
[Returns filed to Aug. 31,1929 and 1931, respectively. For sake of comparability with available figures
for 1930, preliminary rather than final figures are used for 1928]
Number of returns
Net income classes
(thousand dollars)

6-10
10-100
100 and over .'
Total

Income tax
(thousand dollars)
1928

1930

Percentage decrease
Number Income
of returns
tax

1928

1930

661,114
359, 576
15, 780

605, 715
251,490
6,152

21,345
409,058
700,341

16, 591
208,133
237, 716

9.9
30.1
61.0

22.3
49.1
66.1

936, 470

763,357

1,130, 743

462,440

18.5

59.1

SECRETARY OF T H E TREASURY

The extent of the decline was not uniform for all forms of individual
income. Certain income items, such as salaries, dividends, interest
and rents displayed a considerable degree of stability. Although
income from each of these sources declined, the source of income
chiefly responsible for the downward shift of returns by net income
classes was, as has already been noted, sales of real estate, stocks, etC;
The changes in profits from the latter source and in net income
from 1928, the year of largest individual incomes, to 1930 are compared in the following table. Taking into account both the profits
and the losses reported in returns of net income of $5,000 and over,
1930 showed a declinej as compared with 1928, of about $4,230,000,000
in income from this source. This decrease accounted for approximately two-thirds of the change in reported net income. Profits
reported for 1928 from sales of real estate, stocks, etc., including
those reported for tax as capital net gains, were about $4,500,000,000
as against reported losses of about $170,000,000. In 1930 profits
reported were largely offset by losses; the reported profits^from sales
of real estate, stocks, etc., declined to about $1,070,000,000, whUe
reported losses increased to about $980,000,000.
^^
Net income and profits or lossesfrom sales of securities for the calendar years 1928 and
1930, individual returns of net income of $6,000 and over V
[In millions of dollars]
N e t income

Increase
(+)or
decrease

Source of i n c o m e

Net income'

I n c o m e from sales of real estate, stocks, e t c . :
ProfitsR e p o r t e d for t a x on sale of capital assets held more t h a n 2 y e a r s . . .
All other
Total
LossesR e p o r t e d for t a x credit on sale of capital assets held more t h a n 2
years
. . .
. . .
.
_ .
All other
1
Total
N e t , profits over losses
N e t income, excluding excess of profits over losses from sales of real estate,
stocks, e t c
i

1928

1930

(-)

16,299

10,119

-6,180

1,843
2,649

550
520

-1,293
—2,129

4,492

1,070

—3 422

40
3 130

80
898

170

978

+808

4,322

- 4 , 230

10,027

-1,950

11,977 ,.

+40
+768

1 Returns filed to Aug. 31,1929 and 1931, respectively. For sake of comparability with available figures
for 1930, preliminary rather than final figures for 1928 are used.
* Net income including the excess of capital net gains over capital net losses.
81928 Statistics of Income, final figure. Data for this item not included in preliminar^^^report.

Miscellaneous internal revenue.—Receipts from miscellaneous internal revenue taxes were $569,400,000 in the fiscal year 1931 as
compared with $628,300,000 in 1930, a decline of $58,900,000. The
changes by major sources are presented graphicaUy in Chart 3. In
contrast to income taxes, most of these taxes ^except the estate tax

REPORT ON T H E FINANCES

reflect current changes in the sources to which they relate. Over
90 per cent of miscellaneous internal revenue comes from three
sources—tobacco taxes, documentary stamp taxes, and the estate
tax. Receipts from this group declined $51,700,000 in 1931, practically all of which was due to a falling off in revenue from the latter
two sources. The remaining sources of miscellaneous internal revenue, which include taxes on distUled spirits, admissions, dues, oleomargarine, and narcotics, showed a decline of $7,200,000.
MILLION
DOLLARS
t.OOOr

600

to
4.b

•

A8
•to

A O

A L L OTHER
DOCUMENTARV

• • > .* •

:'.i.-'.

;:f;:
XXXA

•;.fe.'.

WQ?

\A!vV

K
WW

xixx

M m m

iga-a

I9ZA

1925

STAMPS

loae

1927

1928

1929

t93o

1931

CHART 3.—Principal sources of miscellaneous internal revenue collections for thefiscalyears 1923 to 1931

The tobacco taxes constitute the major and by far the most stable
source of miscellaneous internal revenue. The demand for tobacco
products appears to be relatively inelastic so that moderate changes
in prices or in the incomes of the consumers do not cause immediate
or marked changes in the volume consumed. As a consequence,
although collections of tobacco taxes respond relatively quickly to
changes in the volume of operations in the tobacco industry, the
latter is much less drasticaUy and less promptly affected by general
depression than is the case with many lines of industry. Receipts
from tobacco taxes in the fiscal year 1931 were about $6,000,000 less
than in 1930. This is the first decline that has taken place in tobacco
tax receipts since 1921. Throughout the business recessions that
occurred in 1924 and again in 1927, the volume of these receipts
continued to increase,. The average annual increase since 1921,
which has been in excess of $20,000,600, has been due to the steady

SECRETARY OF THE TREASURY

upward trend in collections from taxes on small cigarettes, which
have grown from $135,000,000 in 1921 to $360,000,000 in 1930, an
average annual increase of approximately $25,000,000. In the fiscal
year 1931 the upward trend in these receipts was interrupted and
collections declined almost $1,000,000. Receipts from taxes on other
tobacco products, such as smoking and chewing tobacco, large cigars,
and snuff, declined $5,100,000.
Revenue from documentary stamps is primarily dependent upon
developments in the security markets; collections, including taxes on
playing cards, were $47,000,000 in 1931 as compared with $77,700,000
in 1930, a decline of $30,700,000. The major part of these receipts in
recent years has been derived from taxes on capital stock transfers
and capital stock issues. Collections from taxes on capital stock
transfers declined $21,200,000 in 1931. The contrast with 1930 is
accentuated by the large collections received from these taxes as a
result of the unprecedented activity in the stock markets during the
first part of that fiscal year. Collections, which in each of the fiscal
years 1926 and 1927 aggregated about $16,000,000, increased to
approximately $38,000,000 in 1929 and to $47,000,000 in 1930; the
latter figure included the heavy increase in sales of stamps occasioned
by the record volume of stock market activity in the fall of 1929.
Receipts from taxes on issues of capital stock decreased $7,800,000.
During the fiscal year 1930 receipts from this source were unusually
high due to the large issues of new securities in 1929.
Receipts from estate taxes dechned $16,700,000 in the fiscal year
1931. Payment of estate tax is not due until one year after death
of the decedent, and under certain conditions further extensions of
time are granted. The effect of the marked downward revision in
the estate taxes, due to the increased credits for State taxes provided
for in the revenue^act of 1926, was therefore reflected more fully in
collections for the fiscal s^-ears 1930 and 1931 than for preceding
years. Decreased collections were also due in part to an unusual
number of extensions of time for payment of taxes.
Customs.—Customs receipts are dependent upon the general level
of imports and promptly reflect increases or decreases in foreign trade.
Receipts were declining as early as November, 1929, and during the
early months of 1930 were at the lowest level under the 1922 tariff act.
The closing months of the fiscal year 1930, however, witnessed an
abnormal increase in imports of those articles which would be affected
by the then pending tariff legislation; the resulting increase in collections of customs duties was almost sufficient to offset the effect of the
trade recession on customs receipts for the fiscal year 1930 as a whole.
During the fiscal year 1931, customs receipts were considerably
below the level of the preceding year, amounting to only $378,300,000,
which represents a decline of $208,700,000, or about 36 per cent.

REPORT ON T H E FINANCES

The decline refiected largely reduction in the volume and value of
the import trade which accompanied the general decline in business
activity and prices, and also adjustments of the import trade itself,
both temporary and otherwise, to the new tariff legislation.
Miscellaneous receipts.—Miscellaneous receipts from nontax items
decreased from $551,600,000 in 1930 to $509,100,000 in 1931, or
$42,500,000. An increase of $4,600,000 in receipts from Governmentowned securities, the major source of miscellaneous receipts, was offset
by a decline of $47,100,000 in receipts from all other miscellaneous
sources. Principal payments received on obligations of foreign governments were $51,600,000 and interest payments $184,500,000 in
1931, which represent a decline of $46,000,000 and an increase of
$42,600,000, respectively, as compared with 1930. Payments of
principal were unusually large in 1930 due to amounts received from
France, in addition to. payments due in that year, in order to put on a
current basis the annuity payments under the debt funding agreement, approved December 18, 1929. There were small increases
shown in receipts from railroad securities and from trust funds. The
decline in other miscellaneous receipts was distributed over a wide
variety of small items for the most part indicating the effect of the
depression on receipts of the Government from its incidental activities.
Thus, Panama Canal tolls declined $1,600,000, franchise taxes $4,400,000, the immigration head tax $1,100,000, fees $2,200,000, and fines
and penalties $4,600,000.
Previous estimates.—The total receipts were $518,000,000 less than
the Treasury estimates for the fiscal year 1931 which were made in
the autumn of 1930. The major part of this discrepancy, $330,000,000, represented smaller collections from income taxes than had been
anticipated. I t was difficult to measure the severity and duration of
the business depression, and also the effect thaf'the contraction in
industrial activity and the fall in prices of commodities and securities
would have on taxable income, especially on the distribution of
individual incomes as between the various income tax brackets.
Miscellaneous internal revenue receipts were $53,600,000 less than
estimated, due chiefly to the fact that estate taxes and documentary
stamp taxes feU short of expectations by $21,900,000 and $13,000,000,
respectively, and to the effect of the continued depression on the
accustomed growth in tobacco collections as a result of which receipts
were $15,300,000 below the estimates. Customs receipts failed to
reach the estimated figure by $123,700,000.
Expenditures
Total expenditures chargeable against ordinary receipts amounted
to $4,219,950,339 for the fiscal year 1931 as compared with $3,994,152,487 for 1930, an increase of $225,797,852, or 5.7 per cent. Expend

SECRETARY OF THE TREASURY

itures exclusive of those on account of the public debt amounted to
$3,168,308,635 for 1931, or $387,387,364 more than for the preceding
year; as subsequently brought out, the combined amount of public
debt retirements chargeable against ordinary receipts and interest
paid on the public debt, at $1,051,641,704 for 1931, showed a decrease
of $161,589,512. Comparisons between principal classes of expenditures for 1930 and 1931 are presented in the following table, and the
trend by principal classes is shown in Chart 4.
Expenditures chargeable against ordinary receipts, hy major groups, for the fiscal
years 1930 and 1931
[On basis of daily T r e a s u r y s t a t e m e n t s (unrevised), see p . 423; general, special, a n d t r u s t funds c o m b i n e d ;
for description of funds see p . 424; for classification b y funds, see p . 435]
[In millions of dollars]
Class of e x p e n d i t u r e
General e x p e n d i t u r e s :
Legislative e s t a b l i s h m e n t
E x e c u t i v e Office
state Department
^
Treasury Department
^.....
War Department
D e p a r t m e n t of Justice
P o s t Office D e p a r t m e n t
Navy Department
Interior D e p a r t m e n t
_
D e p a r t m e n t of Agriculture
D e p a r t m e n t of 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' Bureau
O t h e r i n d e p e n d e n t offices a n d commissions i..
D i s t r i c t of C o l u m b i a
. T o t a l general e x p e n d i t u r e s . .
R e f u n d s of receipts
Postal deficiency
Agricultural m a r k e t i n g fund, n e t . .
A d j u s t e d service certificate f u n d . .
All other, including t r u s t f u n d s . . . ,
T o t a l e x p e n d i t u r e s , excluding p u b l i c d e b t . . .
P u b l i c d e b t chargeable against o r d i n a r y receipts:
Interest
Retirements

1930

1931

Increase

4.0

20.0
.7
14.2
193.1
453.5
32.5
.1
374.2
290. 0
177.6
54.3
10.7
447.0
49.7
45.1

24.0
.5
15.7
204.6
478.4
44.3
.1
354.1
71.5
296.9
61.5
12.2
729.2
49.7
47.8

2,162.7
158.0
91.7
150.0
112.3,
106.3

2,390.5
91.3
145.6
190.5
224.2
126.2

227.8

2,781.0

3,168.3

387.3

659.3
553.9

611.6
440.1

T o t a l p u b l i c d e b t e x p e n d i t u r e s chargeable against ordinary receipts..

1,213. 2

1,051.7

T o t a l e x p e n d i t u r e s chargeable against o r d i n a r y r e c e i p t s . . .

3,994.2

i, 220.0

Decrease

0.2
1.5
11.5
24.9
11.8
20.1
218.5
119.3
7.2
1.5
282.2
2.7

63.9
40.5
111.9
19.9

47.7
113.8
161.5
225.8

. 1 I n c l u d e s a d j u s t m e n t of unclassified i t e m s .

Expenditures exclusive of those on public debt account. —The increase
in expenditures exclusive of public debt expenditures chargeable
against ordinary receipts, as shown in the accompanying table, rnay
be accounted for largely by goverhmental construction activity,
expanded and accelerated on account of the existing depression; the
extension of adciitional agricultural credits; and a part of the provision
made for financing the increased loans to veterans. These items of
unusual and probably temporary increase include $85,000,000 for
highways, $25,000,000 for the pubhc building program, $25,000,000
for emergency construction other than highways authorized during
the last half of the fiscal year, $44,000,000 for loans to farmers in

REPORT ON T H E FINANCES

drought or storm-stricken areas and for rehabilitation emergency
reUef, $41,000,000 for net loans under the agricultural marketing act,
and the advanced appropriation of $112,000,000 to the adjusted
service certificate fund in connection with increased loans to veterans.
The increase in the total of items classified by departments under
^'generar'expenditures represents largely increases of $119,300,000 for.
the Department of Agriculture and $24,900,000 for the War Department. The former is due chiefly to additional outlays for Federal-aid
highway construction and for emergency relief in drought-stricken
areas, and the latter to the cost of construction activities for the most

A L L OTHER
ALL OTHER
.PUBLIC
DEBT

1925

192G

1927

CHART 4.—Principal classes of expenditures chargeable against ordinary receipts for the fiscal years 1923
to 1931 (general, special, and trust funds combined)

part in connection with rivers and harbors, flood control, the Army
housing program, and increased outlay for the Air Corps. Smaller increases are shown for the Treasury Department and the Department of
Commerce. The increase of $282,200,000 for the Veterans' Administration includes additional expenditures of about $57,000,000 as a
result of liberalized provision for military and naval compensation
to war veterans and increased expenditures of approximately
$220,000,000 due to the transfer of the Bureau of Pensions from the
Interior Department to the Veterans' Administration on August 1,
1930. Similarly increased expenditures for the Department of Justice
reflect the transfer to that department on July 1, 1930, of the
enforcement of the penal provisions of the patiojial prohibition act.

SECRETARY OF THE TREASURY

The decrease of $20,100,000 for the Navy Department reflects in
part a reduction in armaments.
The increase in expenditures other than ''generaP' amounted'to
$159,500,000 and is accounted for primarily by (1) the advanced
appropriation to the adjusted service certificate fund in connection
with increased loans on adjusted service certificates, (2) loans from
the agricultural marketing fund, and (3) the unusually large postal
deficit. These increases were ofl'set in part by a decline of $66,700,000
in refunds of internal revenue and customs receipts.
In February, 1931, legislation authorized increased loans on outstanding adjusted service certificates. The 1931 budget was affected
by this legislation only to the extent of $112,000,000, the amount of
the 1932 appropriation to the adjusted service certificate fund which
was made avaUable in March, 1931. This amount, together with the
customary appropriation for 1931 and $729,200,000 spent by the
Veterans' Administration itself, brings expenditures chargeable
against ordinary receipts for veterans in 1931 to a totalof $953,200,000, which is about 23 per cent of total expenditures. An account
of operations in connection with increased loans to veterans is
presented on page 53 of this report.
Net loans from the agricultural marketing fund during the year
reached a total of $190,500,000, or $40,500,000 more than during
1930. By June 30, 1931, net loans since the establishment of the
fund by the agricultural marketing act approved June 15, 1929,
aggregated $340,500,000.
The postal deficit in 1931 was $145,600,000, an increase of
$53,900,000 over the preceding year. Expenditures for the Postal
Service exclusive of those from postal revenues are paid out of the
general fund through which all other governmental activities are
financed. From 1923 to 1928 the postal deficiencies varied from
$12,600,000 to $39,500,000. In 1929 postal expenditures exceeded
postal revenues by $94,700,000, which included $9,000,000 of the
unusual expenditure of $52,000,000 during that year for back railway
maU pay authorized by a joint resolution approved June 6, 1929.
During 1930 and 1931 postal expenditures again exceeded revenues
by large amounts, $91,700,000 and $145,600,000, respectively. Included in these amounts are expenditures representing expenses of
free services and exempt publications, the excess cost of air maU
service, and the differentials in ocean maU rates favoring vessels of
American registry, estimated by the Postmaster General in accordance with the act of June 9, 1930, which provides for the classification
of extraordinary expenditures contributing to the deficiency of postal
revenues. After, deducting such items, the postal deficits for 1930
and 1931 are about $52,000,000 and $98,000,000, respectively. These

REPORT ON T H E FINANCES

latter figures represent, in general, the amounts by which postal revenues failed to cover the cost of the regular postal service.
Public debt expenditures chargeable against ordinary receipts.—The
decrease in expenditures on account of the public debt represents a
decline of $113,800,000 in public debt retirements from ordinary
receipts and of $47,700,000 in expenditures for interest. The decline
in public debt retirements was due for the most part to the fact that
foreign governments paid $184,500,000 of interest in cash rather
than in securities of the United States Government. Prior to and
to a considerable extent during the fiscal year 1930 interest payments on foreign obligations were made largely in United States
securities; the securities thus received were automatically retired and
were included in public debt retirements chargeable against ordinary
receipts. During 1931, payments were made entirely in cash with
the result that public debt retirements were diminished and funds
available for current expenditures were correspondingly increased.
The decrease in interest paid on the public debt from $659,300,000
in 1930 to $611,600,000 in 1931 reflects in part the reduction in the
debt during 1930 and in part the reduced interest rates on new
Government issues.
The deficit
As already stated, the considerable decline in Federal revenues and
the increase in expenditures during the fiscal year 1931 resulted in
a deficit of $902,716,845, according to the daily Treasury statement,
unrevised. A summary of receipts, expenditures, and the surplus or
deficit for each year from 1919 to 1931 is shown in the following
table:
Ordinary receipts, expenditures chargeable against ordinary receipts, and surplus or
deficit for the fiscal years 1919 to 1931
[On the basis of daily Treasury statements (unrevised), see p. 423; general, special, and trust funds
combined; for description of funds see p. 424]

Ordinary
receipts

Year

1919
1920-1921 _
1922.1923
1924
1926
1926
19271928
1929
1930
1931

1 Deficit exclusive of trust funds, $901,959, i

$5,152,257,136
6,694,565,389
5, 624.932,961
4,109,104,161
4,007,135,480
4, 012,044, 701
3,780,148,684
3,962, 766, 690
4,129, 394,441
4,042,348,166
4,033, 250. 225
4,177, 941, 702
3,317, 233,494

Expenditures
chargeable
against ordinary
receipts
$18,522,894,705
6,482,090.191
5, 638, 209,189
3,795,302,500
,'3,697,478.020
3,606, 677, 715
3, 529, 643,446
3, 584,987,873
3, 493,584, 519
3, 643, 619, 875
3, 848, 463,190
3,994,152,487
4,219,950,339

Surplus or
deficit(-)

-$13,370.637,569
212, 475,198
86, 723, 772
313,801,651
309, 657,460
605,366,986
250,505,238
377, 767,817
635,809,922
398,828, 281
184, 787,035
183, 789, 215
-1902,716,845

SECRETARY OF THE TREASURY

The deficit shown for the fiscal year 1931 is the first since 1919, the
year in which war expenditures reached their peak, and refiects the
effect of business depression upon Federal receipts and to a considerable extent upon expenditures. Receipts in 1931 showed a decline
of $861,000,000 from the preceding fiscal year. Expenditures chargeable against ordinary receipts, on the other hand, were $226,000,000
larger than in 1930, refiecting in large part special activities due to
the depression.
The excess of expenditures over receipts in 1931 was financed by
borrowing. The public debt, however, was not increased by the total
amount of the deficit of $903,000,000, since expenditures chargeable
against ordinary receipts included $440,000,000 of statutory public
debt retirements. The balance in the general fund of the Treasury
showed an increase of about $153,000,000 and the gross public debt
an increase of about $616,000,000.
During the period intervening between 1919 and 1931 receipts have
in each year shown a surplus over expenditures chargeable against
qrdinary receipts aggregating for the 11 years $3,460,000,000, which
represents an average annual surplus of about $315,000,000. These
surplus receipts were applied to debt reduction. During these years
surpluses have occurred notwithstanding tax revisions and reductions
effected by four revenue acts—those of 1921, 1924, 1926, and 1928—
through which the elaborate wartime system of numerous taxes on
commodities and activities was changed into a system of comparatively few taxes. Revenues, although considerably below the peak
of the early postwar period, maintained relatively high levels until
the recent decline, owing to the generally prosperous business conditions which prevaUed during most of the period prior to 1930.
After the war, expenditures declined sharply until 1922, then more
moderately during the two following years and from 1924 to 1927
remained at the lowest level of the postwar period. Since 1927, the
total for each year has increased over the preceding year. Prior to
1931, however, the high productivity of taxes was more than sufficient
to offset increased expenditures.
CONDITION OF THE TREASURY

The public debt
At the end of the fiscal year 1931 the gross public debt outstanding,
at $16,801,281,492, showed an increase of $615,971,660. As already
brought out, this addition to the public debt reflects an increase of
$153,000,000 in the general fund balance during the fiscal year, and
a net deficit in ordinary receipts of $463,000,000, exclusive of
$440,000,000 of statutory debt retirements.
77532—3^-^

REPORT ON THE FINANCES

The following table shows the various classes of debt outstanding
on June 30, 1930, and on June 30, 1931, and indicates the net changes
in the character of the debt resulting from the year's operations:
Changes in the public debt outstanding June 30, 1930 and 1931, by classes
[On basis of daily Treasury statements (unrevised), see p. 423]
June 30, 1930
Interest-bearing debt:
Regular issuesPre-war bonds
Liberty bonds
Treasury bonds

Total bonds
Treasury notes
Certificates of indebtedness
Treasury bills
.
Total regular issues

$772, 544. 850. 00
8, 201, 803, 900. 00
3,136, 986, 600. 00

June 30, 1931

Increase (+) or
decrease ( - )

$776,164, 790. 00
+$3, 609, 940. 00
8,201, 740, 750. 00
-67, 150.00
4, 552, 621, 650. 00 +1, 416, 635 050. 00

12,111,335,350.00 13, 530, 523,190. 00 +1,419,187.840.00
451, 718, 950. 00 -1,174,396,550.00
1, 626,115, 500. 00
1, 264, 354, 500. 00 1, 801, 777, 500. 00 +537, 423, 000. 00
444, 580, 000. 00 +288, 664,000. 00
155, 916, 000. 00
. . _ . . . 15,157, 721, 350. 00 16, 228, 599, 640. 00 +1,070,878,290.00

Special issues for investment of trust f u n d s Treasury notes
._ -Certificates ofindebtedness
Total special issues
Total interest-bearing debt
Matured debt on which interest has ceased
Debt bearing no interest
J.
.Total gross debt

764,171, 000. 00

169,189, 000. 00
121,800,000.00

764,171, 000. 00

—594, 982, 000. 00
+121, 800, 000. 00

290, 989, 000. 00

-473,182, 000. 00

15, 921, 892,350.00 16,519,588,640.00
31,716,870.26
51, 819, 095. 26
231, 700, 611.17
229,873, 756. 46

+697, 696 290.00
+20,102. 226. 00
—1,820,854.72

16,185,309,831.43

+615, 971, 660. 28

16, 801, 281, 491. 71

It will be noted from the above table that the total interestbearing debt showed an increase of $598,000,000 during the year.
The portion of this debt held in the open market, however, increased
by about $1,100,000,000. The larger increase in the open-market
debt refiects chiefly the liquidation of Govermnent securities from the
adjusted service certificate fund in connection with the financing of
additional loans to veterans. The act of February 27, 1931, more
than doubled the average loan value of some $3,440,000,000 of outstanding adjusted service certificates and authorized the financing
of loans for the most part from the adjusted service certificate
fund. From the enactment of this legislation to the end of the fiscal
year 1931 additional loans made to veterans amounted to about
$825,000,000. The increase in outstanding loans to veterans for the
entire fiscal year was about $900,000,000. Of this amount about
$756,000,000 was financed through conversion into cash of special
Government securities from the adjusted service certificate fund, thus
adding to the volume of United States securities which the market
was caUed upon to absorb during the year. Operations in connection with increased loans to veterans are further described on page
53 of this report.
*
During 1931 public debt in the amount of $440,000,000 was retired
in compUance with statutory requirements. This amount included
$392,000,000 from the cumulative sinking fund, $48,000,000 from

SECRETARY OF. THE TREASURY

principal payments of foreign governments under Liberty bond acts,
and $176,000 from misceUaneous receipts specifically allocated to
debt retirement. The total constitutes a charge against ordinary
receipts and accounts for a corresponding amount of the deficit of
$903,000,000 for the year.
The payment of the war iodebtedness of the Federal Government commenced in the fiscal year 1920; during the 11 years ended
JuneSO, 1930, a total reduction of about $9,300,000,000 was effected,
$4,907,000,000 from ordinary receipts, $3,460,000,000 from surplus
receipts, and $933,000,000 through reduction in the general fund
balance. Following the increase during the fiscal year 1931 the gross
debt was stiU $8,683,000,000 smaUer than on June 30, 1919.
The following summary shows the principal accounts thrpugh
which the war debt has been discharged:
Summary of reduction in gross debt from June SO, 1919, to June SO, 1931
[On basis of daily Treasury statements (unrevised), see p. 423J
Fiscal years
1920-1930
Gross debt outstanding:
June 30, 1919 .June 30, 1930.
June 30,1931

Fiscal year 1931

Fiscal years
1920-1931

$25,484,606.160. 05
$25,484,506,160.05
i._. 16,185,309,831.43 $16,186,309,831.43
16,801,281,491.71 16,801,281,491.71

Total reduction .
Debt retirement:
Chargeable to ordinary receiptsCumulative sinking fund -.

9, 299,196,328.62

1 616,971,660.28

8,683,224,668.34

3,187,468,300.00

391,660,000.00

3.579,128,300.00

Received from foreign governments—^
Cash repayments of principal
Bonds, etc., received as principal .
Bonds, etc., received as interest

376,904,500. 00
205,446,800. 00
906,369,150. 00

48,246,950.00

425,150,460. 00
205,446,800. 00
906,369,160. 00

Total from foreign governments..

1,488, 720,450. 00

48, 245,950. 00

1, 536,966,400.00

146,620.599.09

17,550. 00

146,638,149.09

2,409,863. 31
66,182,600.00
16,224,281.75

73,850.00
84,650. 00

2,483, 713. 31
66,182,600. 00
16,308,931.75

230,437,344.15

176, 060. 00

230,613,394.15

4,906,626, 094.15
933, 057,659.43
3.459, 512,575. 04

440,082,000. 00
^153,836,816.21
^902,716,846.07

5,346,708,094.15
779,720,844. 22
2, 556, 795,729.97

9,299,196,328.62

1 616,971,660.28

8,683,224,668.34

Miscellaneous—
Franchise tax receiptsFederal reserve banks
Federal intermediate
banks
Federal estate taxes
Gifts, forfeitures, etc

credit

Total miscellaneous
Total chargeable to ordinary
receipts
Through reduction in general fund balance.
From surplus receipts.
Total reduction

1 Increase.

2 Deficit.

The course of the interest-bearing debt outstanding and of the
computed rate of the interest charge on that debt for the fiscal years
1919 through 1931 is shown in Chart 5.
Between June 30, 1919, and June 30, 1930, the annual interest
charge computed on the basis of the interest-bearing debt outstanding
pn tbpse dates was reduced from $1,054,000,000 to $606,000,000, or

REPORT ON T H E FINANCES

almost $450,000,000, and the average rate was reduced from 4.18 per
cent on the former to 3.81 per cent on the latter date. By June 30,
1931, the charge had been reduced to about $589,000,000 and the
average rate to 3.57 per cent. The effect on the Budget of reduced
charges for interest is in part offset, since any reduction in interest
through sinking fund retirements results in an increase in the sinking
fund appropriation in like amount. The sinking fund appropriation for 1932 of $411,771,300 includes $158,366,000 representing
the amount of interest which would have been payable during that
year on all securities which have been retired through the sinking
fund.

1019

I920

1921

1922

1923

1924

1925

1926

1927

1928

19E9

1930

1931

CHART 6.—Interest-bearing debt outstanding and ratio of the computed annual interest charge
to the interest-bearing debt, by months, from December, 1918, to June, 1931

During the current year long-term securities were offered by the
Treasury for the first time since July 16, 1928. Treasury bonds were
issued on March 16 and June 15, 1931, at 3% per cent and 3% per cent,
respectively. A third issue, bearing a rate of 3 per cent, was sold on
September 15, 1931. The interest rates at which the last two issues
were marketed are the lowest carried by any long-term Government
obligation issued on public subscription during the war or postwar
period.
A more detaUed account of pubUc debt operations is presented in
the section of this report beginning on page 40.
General fund of the Treasury
AU cash receipts of the Government, except as otherwise authorized
by law, are credited to the general fund and all expenditures are made
therefrom. The net balance of this fund represents the working

SECRETARY OF THE TREASURY

cash balance required in connection with the receipts and expenditures of the Government. The net change from the close of the
previous fiscal year is accounted for as follows:
Summary of the net changes in the general fund halance between June 30,1930, arid
June 30, 1931
[On basis of daily Treasury statements (unrevised), see p. 423]
Amount
$318,607,168.11
440, 082,000. 00
615,971, 660. 28

Net balance per daily Treasury statement, June 30,1930
Receipts applied to statutory debt retirements in the fiscal year 1931
Increase in public debt in the fiscal year 1931

1, 374, 660,828. 39

Total to be accounted for
Excess of total expenditures over total ordinary receipts in the fiscal
year 1931:
General and special funds i
Trust funds 1. . . . Total
Net balance June 30,1931

$901,969,080.29
757,764.78
902,716,845.07
471,943,983.32

Total

1,374,660,828.39

1 For a description of funds through which Treasury transactions are effected see p. 424.

Current assets and liabilities of the Treasury,^ June SO, 19S0, and June SO, 1931,
and changes during the year
[On basis of daily Treasury statements (unrevised), see p. 423]
June 30,1930
Gold assets:
Coin
Bullion

Total
Deduct gold liabilities:
Gold
Gold certificates...^
fund. Federal Reserve Board
Gold reserve ^
Total
Gold in general fund
Silver dollars
Deduct silver dollar liabilities:
Silver certificates
Treasury
notes of 1890 outstanding
Total
Silver dollars in general fund
General fund assets:
In Treasury oflQces—
Gold (as above)
.Silver dollars (as above)
All other (coin, currency, and bullion)
In depositary banks, reserve banks, and treasury of Philippine Islands . .
All other
Total
Deduct general fund liabilities:
Federal reserve note 5 per cent fund (gold)
Another
.•
:

June 30,1931

Changes during year

$734,970,249.54
2,757,877,629.18

$798,176,225.02 +$63,205,975.48
2,897,660,690.98 +139,6^3,161.80

3,492,847,778.72

3,696,736,916.00 +202,889,137.28

1,489,978,879.00 1,701,620,889.00 +211,542,010.00
1,796,239,234. 56 1,776,690,377.86 -19,548,856.70
156,039,006.03
156,039,088. 03
3,442,257,201.59

3,634,260,364.89 +191,993,153.30

50,690,677.13

61,486,661.11

+10,895,983.98

495,057,448.00

498,497,381! 00

+3,439,933.00

487,198, 111. 00
1,260,050.00

493,349,026.00
1,239,750.00

+6,150,915.00
-20,300.00

488,458,161.00

494,588,776.00

+6,130,615.00

6,599,287.00

3,908, 605. 00

-2,690,682.00

50,590,577.13
6,599,287. 00
40,001,121.58

61,486,561.11 +10,895,983.98
3,908, 605. 00 -2,690,682. 00
44,809,953.80
+4,808,832.22

368,071,002.76
1,528,339. 96

509,307,793.65 +161,236,790.89
794,430.90
-733,909.06

456,790,328.43

. 620,307,344.46 +163,617,016.03

36,675,622. 56
101,507,537. 76

30,166,138.13
118,197,223.01

-6,609,484.43
+16,689,685.25

Total

138,183,160.32

148,363,361.14

+10,180,200.82

Balance in the general fund of the Treasury...

318,607,168.11

471,943,983.32 +153,336,815. 21

1 For detailed statement, see p. 541.
> Reserve against $346,681,016 of United States notes, and Treasury notes of 1890 outstanding in the
amount of $1,260,050 in 1930 and $1,239,750 in 1931. Treasury notes of 1890 are also secured by silver dollars Jn the Treasury.

REPORT ON THE FINANCES ,

The currency trust fund and the gold reserve fund
The respective amounts of gold coin and buUion and silver dollars
held in the Treasury on June 30, 1931, against equal amounts of
outstanding gold certificates, silver certificates, and Treasury notes
of 1890, were as follows:
Gold coin and buUion
.__,..-_-.-__.___"_:_--._-_ $1, 701, 520, 889
Silver dollars.
493,349,026
Silver dollars, against Treasury notes of 1890
1, 239, 760

On June 30, 1931, the gold reserve against United States notes and
Treasury notes of 1890 was $156,039,088. The United States notes,
for which this reserve is held, are outstanding in' the amount of
$346,681,016, a sum which is fixed by law. When such notes are
received they are reissued. The Treasury notes of 1890, for which
this gold reserve is also held, were outstanding on June 30, 1931,
in the amount of $1,239,750. When such notes are received they are
not reissued.
Gold held for the Federal Reserve Board
The Treasury also holds in trust a large amount of gold for the
account of the Federal Reserve Board. This is shown on the books
of the Treasury as ''Gold fund. Federal Reserve Board,'' and amounted
on June 30, 1931, to $1,776,690,377, a decrease of $19,548,857 in
the fiscal year. The fund is an aggregate of net deposits of gold made
by the Federal reserve banks, principally for the purpose of effecting
clearance settlements among themselves, and by the Federal reserve
agents of gold received by them as part of the security against outstanding Federal reserve notes.
Against the gold in the general fund, amounting on June 30, 1931,
to $61,486,561, there was a liabihty of $30,166,138 for the Treasurer's
5 per cent gold redemption fund for Federal reserve notes; $1,139,730
notes in process of redemption are a charge against this amount.
This gold is part of the gold received by Federal reserve agents as
security against outstanding Federal reserve notes.
Interest on Government deposits
In view of the lower rates paid by the Treasury on Government
securities issued to the public during the current fiscal year, the rate
of interest required to be paid by Government depositary banks on
deposits of public moneys was reduced three times during the year.
From June 1, 1913, until December 1, 1930, the rate of interest paid
on Government deposits had been 2 per cent per annum. The rate
was reduced on the latter date to IK per cent per annum; on February
16, 1931, to 1 per cent; and on June 1,1931, to one-half of 1 per cent

SECRETARY OF THE TREASURY

BUSINESS CONDITIONS

During the calendar year 1930 and thC first three quarters of 1931,
this country in common with others has experienced a marked decrease ih the volume of production and trade accompanied by a
decline in employment and in the prices of commodities and
securities. As already brought out, depression in trade and industry
has had a marked effect on the budget of the Federal Government,
particularly the Federal revenues which have refiected the effect of
inactive business on corporate and individual incomes and customs
receipts and to a lesser extent on sources of miscellaneous internal
revenue. The present and prospective budget situation, therefore,
can not be adequately considered apart from the industrial and
commercial factors which affect Federal revenues.
There is a relatively close relationship between changes in the
taxable income and changes in business conditions. The precision
with which variation in taxable income may be related to statistics
of business conditions is, however, limited by the variety of factors
affecting incoiries and also by the fact that many corporations and
individuals are engaged in pursuits not adequately represented by
avaUable statistics. There are also elements in incomes which, though
they respond in a general way to changes in economic conditions,
do riot respond to them as promptly as do other forms of income.
Furthermore, changes in corporate or individual incomes are not
immediately refiected in Federal revenue. These incomes are for the
most part reported for calendar year periods and taxes are paid (luring the following year. Thus incomes reported for the calendar year
1930 underlie collections in the last six months of the fiscal year 1931
and the first six months of the fiscal year 1932. Conditions which
have prevailed during the calendar year 1931 will not be materially
reflected in income tax recjeipts until March, 1932, when the first quarterly payments on 193! incomes will become due. A review of
changes in industriial production and trade, and the movement of
coirimodity arid security prices, which largely account for the decline in revenues, is presented in the following paragraphs.
'^ Production " '
From the peak of June; 1929, to September, 1931, the physical
volume of industrial production showed a decline of about 40 per
cent.^ This decline over a period of about two years, interrupted by
moderate recoveries iu the spring of 1930 and 1931, compares with
the e^rly postwar decline of 33 per cent during the 14 months from
Januayy, ,1920, to March,.1921. Average production during the first
1 Prodii'ciion comparisons for recent years based oh Fedei'al Reserve Board index, adjusted for seasonal
yariations.

REPORT ON T H E FINANCES

9 months of 1931 was about 16 per cent below the average for the
corresponding period of 1930, and about 31 per cent below the corresponding period of 1929.
Until the latter part of 1930 the decUne in production was common
to most Unes of industry. It was most marked, however, in such
industries as those producing iron and steel, automobUes, and rubber
tires, whUe certain others, producing goods for immediate consumption
such as food and tobacco, showed only moderate decUne or comparative stabiUty. During subsequent months there have been considerable increases in the volume of output of industries producing certain
classes of consumers' goods. The output in the textUe industry
showed considerable increase and in September," 1931, was about 23
per cerit larger than in August, 1930. Production of leather and shoes
increased 27 per cent between January and May, 1931, remained at a
relatively high level for the next three months, then decUned somewhat
in September. The output of rubber tires showed marked increase
during the first half of the year, decreasing, however, in the third
quarter. FoUowing temporary recovery in the spring of 1931, production in the iron and steel industry and in the automobile industry
decUned again and in each of these industries output in September
was about 20 per cent below the previous low point reached late in 1930.
In the building industry, which absorbs large amounts of steel and
other building materials, decline commenced in 1928 and has continued with only temporary interruptions. By the autumn of 1931,
the value of buUding contracts awarded showed a decline of 58 per
cent from the peak in early 1928.^ During the first three quarters
of 1931 contracts showed relatively smaUer declines from the corresponding period of 1930 for residential construction and public works
than for commercial and factory construction. The actual doUar
volume of contracts awarded for commercial buUding during the
first three quarters of 1931 declined by 53 per cent from the total for
a corresponding period in 1930, and for factory buUding 54 percent,
while the volume of residential and pubUc works decUned by 21 and
29 per cent, respectively. The decUne for aU classes of contracts
combined amounted to 30 per cent as compared with the corresponding period of 1930, and was 44 per cent below 1929.
Trade and distribution
During 1930 and the past months of 1931 various measures of trade
activity also continued the decUne which commenced in 1929. Total car
loadings^ have decUned almost without interruption since June, 1929,
and in September, 1931, were about 36^per cent below the level of the
earUer date. Loadings of merchandise freight, which are a better
measure of the movement of finished goods into trade, showed a
8 Federal Reserve Board index, adjusted for seasonal variations.

SECRETARY OF THE TREASURY

decUne of about 19 per cent over the same period and during the
first three quarters of 1931 averaged about 10 per cent below the
average for the corresponding period in 1930. DoUar volume
of department store sales ^ decUned throughout most of 1930.
Recovery in the spring of 1931 was followed by further decUnes and
in September department store sales were about 26 per cent below
the peak reached two years earlier.
Foreign trade showed simUar decUnes. By August, 1931, the
dollar volume of exports had fallen to a level considerably lower than
at any other time in the past 12 years, and the dollar volume of
general imports had reached the low level of 1921. Exports and
general imports during the first eight months of 1931 decUned 37 per
cent and 33 per cent, respectively, from the corresponding period of
1930 and both were 51 per cent smaller than in the first eight months
of 1929. The course of our international commerce is not only an
important factor in the general business situation in the country, but
is significant also, from the point of view of the Federal revenues,
because dutiable imports provide substantial receipts. Dutiable
imports had receded by the middle of 1931 to a level shghtly below
the low point reached in 1921. The monthly average for the first
eight months of the year was 39 per cent smaUer than in 1930 and
52 per cent smaUer than in 1929. These decreases in dollar volume
of our foreign trade refiected decUnes in both quantity and prices.
Prices of commodities and securities
Prices of commodities and of securities have an important bearing
upon corporate and individual incomes, and consequently upon Federal revenues, particularly during periods of marked price changes.
From 1922 to 1929 the index of selected wholesale prices varied within
a relatively narrow range although from 1925 the general trend was
moderately downward.^ During 1930 and the first half of 1931, however, the index continued the relatively rapid decUne which commenced in the latter part of 1929, and by June, 1931, was approximately at the level of the years immediately preceding the war, a
decrease of nearly 30 per cent from July 1929, and of 58 per cent from
the high point reached in 1920. As in the 1920-1921 period of decline,
agricultural prices have dropped farther and more rapidly than nonagricultural commodity prices. Largely reflecting the reduced prices
of farm products, gross agricultural income is estimated to have declined
by about 22 per cent from 1929 to 1930. Since the end of May, 1931,
there has been less fluctuation in the general average of wholesale
prices, and in October the prices of a number of agricultural commodities showed marked recovery.
> Federal Reserve Board index, adjusted for seasonal variations.
'Bureau of Labor Statistics index of wholesale prices of commodities.

.REPORT ON THE, FINANCES

During 1930 and the past months of 1931, continuance of the sharp
decline in security prices, whi(ih began in the autumn of 1929, has
affected Federal revenues in several important respects. Corporate
arid individual income derived directly from dealings in securities have
been very materially reduced. Furthermore, the marked downward
redistribution in individual incomes as between various income classes,
which has accompanied reduced income from this source, has had a
marked effect on revenue derived from these income taxes which are
levied at progressive tax rates. The decline in income from security
transactions has also brought about readjustments in consumer
demand, which,have been a factor in decreased business activity.
In addition the decline in the volume of trading in securities and
the consequent decrease in taxes collected on capital stock sales or
transfers have had an important influence in reducing Federal
revenue.
.
Corporate and individual incomes
The drastic declines during the calendar year 1930 and the past
months of 1931 in economic factors relating to corporate and individual
incomes affect Federal budget receipts during the three fiscal years
1931, 1932, and 1933. Complete data from income tax returns for
the calendar year 1930 are not yet available, but taxes collected on
these incomes during the first nine months of the calendar year 1931
indicate a decline from 1929 of 45 per cent in the taxable income of
corporations. Taxes on individual incomes, which are levied at
progressive tax rates, showed a decline from 1929 of bb per cent,
after adjustment for rate changes. Further declines are indicated
for both corporate and individual incomes for 1931, on which tax
collections wUl be made during the calendar year 1932.
ESTIMATES OF RECEIPTS AND EXPENDITURES

The following table presents ordinary receipts, and expenditures
chargeable against ordinary receipts, for the fiscal year 1931, on the
basis of daily Treasury statements (unrevised), arid estimates for the
fiscal years 1932 and 1933. Public debt transactions other than pubhc
debt retirements from the sinking fund and from special receipts
are not included. The estimates in the table are on the basis of the
latest information received from the Bureau of the Budget.

SECRETAR'S- 01- THE TBBAStrBY

Receipts and expenditures for the fiscal year 1931, on the basis of daily Treasury
statements {unrevised), and estimated receipts and expenditures for the fiscal
years 1932 and 1933
[Receipts and expenditures are separately presented for general and special funds combined and for
trust funds, to conform to the practice of the Bureau of the Budget, in addition to the customary totals for
general, special, and trust funds combined; for explanation of funds, see p. 424]
1931

1932

1933

GENERAL AND SPECIAL FUNDS COMBINED

Receipts:
Internal revenueIncome tax___
Miscellaneous internal revenue.--.

$1,860,394, 295. 25
569, 386, 721.07

$1,140,000,000.00 $1,100,000,000.00
544,000,000. 00
688,000,000.00

Total internal revenue
. Customs (excluding tonnage tax)..
Miscellaneous receipts—
Proceeds of Government-owned securi. . tiesPrincipal—foreign obligations
Interest—foreign obligations
Railroad securities
All other
.
Proceeds of sale of surplus property
Panama Canal tolls, etc .. . .
other miscellaneous (including tonnage
tax).

2,429, 781, Oio. 32
376, 676,392.81

83,627,050.14

76,728,601.00

83, 226,455.00

Total general and special fund receipts-

3,189,638, 632. 20

2,238,878,800.00

2,576, 630, 202. 00

23,978,412.68
606,811. 30
2 708, 609, 669. 76
33,961,996. 34
^50,835,844.74
,296,865,944.69
61,477,117. 63
8 64, 542, 778. 63
44,403,497. 73
12,181,471. 83
353, 768,185.35
82, 297. 69
15,753,493.07
204, 656, 704. 68
« 476,842, 697.12

32,382,800.00
433, 300.00
784,442,000. 00
60,800,000.00
57,611,800.00
333,647,300.00
54,673, 600. 00
78,344,100. 00
53,798,800. 00
14,129,200.00
378,913,100. 00
75,000.00
16, 564, 600. 00
312,854,800.00
483, 726,000. 00

23,243,900.00
429,300.00
830, 210,000. 00
21,800,000. 00
62,003, 200.00
215,723,600.00
48, 343, 050. 00
71,849 000.00
53,440. 500.00
14, 609,000. 00
375, 340, 600. 00
75,000. 00
14, 730,900. 00
279 567 100 00
430,038, 200. 00

2, 348, 466, 923. 04 '
182,624.77

2, 662, 296,400. 00

2,431,303, 350. 00

Expenditures:
Legislative Establishment..
._
Executive Office.- •_.
. .
Veterans' Administration
__
Shipping Board-Other independent offices and commissionsDepartment of Agriculture. __
- -.Department of Comrnerce...
Department of the Interior
.. .
Department of Justice
Department of Labor......
Navy Department\ ;Post Office Department
„
Department of state.—
Treasury Department War Department-...
.Add unclassified items

61,588,133. 37
184,474.622. 38
16,767,027.42
11, 658,913. 62
8, 641, 223. 07
26,624, 253.07

1,684,000,000.00
. 410,000,000.00

(0
(0

2,007,597.00
27,914,965.00
13,089,957.00
25,137,680.00

1, 688,000,000.00
480,000,000. 00
74,881,881.00
195,094, 690. 00
1,577, 500. 00
19, 545,440. 00
9, 067, 236. 00
25,137,000. 00

2,348,649.647.81 2,662,295,400.00 2,431,303,350.00
Public d e b t Interest-^..-..,.
...
605, 000, 000.00
611,559,704.35
640,000,000.00
Sinking fund.-.-_.-—411,771,300.00
391,660,000.00
426,489,600. 00
Purchases and retirements from foreign
repayments——-I-.-..._.--_.48,245,950.00
69,138, 800. 00
Purchases and retirements from franchise tax receipts (Federal reserve
and Federal intermediate credit
banks) . .
1. .
75,000.00
91,400.00
1 075 000 GO
100,000.00
Forfeitures, gifts, etc
100,000.00
84,650.00
Refunds of receipts20,010,500.00
Customs
20,815,600.00
21,369,006.78
70, 217,600. GO
69,887.928.92
Internal revenue 5
..
_.44 389,200 00
Postal deficiency-.:-:
i.—...^......
195,000,000.00
145,643,-613..12155, 000, 000. 00
11,000,000.00
9,299,056.81
13 400 000.00
Panama Canal - 1
'.
-'.'
Agricultural marketing fund (net).
, 190,640,854.70 > 156, 000,000. 00
16, 000. 000. 00
200,000,000.00
224,
000,
000.
00
150
COO, 000. 00
Adjusted service certificate fund . _ _
Civil service retirement f u n d . . . . . . . . - — . . , . .
20,860,000.00
20,850,000.00:
20,850, COO. 00
1 No estimates of amounts payable during the fiscal year 1932 on these accounts are included because of
the President's proposal of June 20, 1931, for postponement. (See p. 32.)
? The Veterans' Administration began to function on Aug. 1,1930, in.acccrdance with Executive order of
July 21,1930. For comparative purposes, the figures shewn above for the Veterans' Administration include
the expenditures for the entire fiscal year 1931 for the Bureau of Pensions, heretofore under the Department
of the Interior, and for the National Homes for Disabled Volunteer Soldiers; payment of annuities under
acts of May 23, 1908, and Feb. 28, 1929; and artificial limbs, appliances, and trusses for disabled soldiers,
heretofore under the War Department.
8 Exclusive of the Bureau of Pensions. . See note 2.
• Exclusivi3 of National Homes for Disabled Volunteer Soldiers and War accounts referred to in note 2.
«Includes refunds and drawbacks under Bureau of Industrial Alcohol,

REPORT ON THE FINANCES

Receipts and expenditures for the fiscal year 1931, on the basis of daily Treasury
statements {unrevised), and estimated receipts and expenditures for the fiscal
years 1932 and ii^55—Continued
1931

1932

1933

GENERAL AND SPECIAL FUNDS COMBINED—COU.

Expenditures—Continued.
Foreign service retirement fund
District of Columbia..

.-.__._

Total general and special fund expenditures
- _ - . - Excess of expenditures

$216,000. 00
fl 9,600,000.00

$216, 000. CO
9, 600, 000.00

$416, 000.00
9, 500,000. 00

4,091, 697, 712.49

4,361,839,800.00

3,996,672,460.00

901,959,080.29

2,122.961, 000. 00

1,420,142,248.00

127,594,861.61
128,352,626. 39

120,690,915. 00
120,313,600.00

119,430,3C0.00
116,237,500.00

277. 316. 00

3,192,800. 00

3,317,233.493.81
4, 219,960,338.88

2,369,469, 716. 00
4,482,153.400.00

2,695,960,502.00
4,112,909,950.00

902, 716.845.07

2.122,683,685.00

1,416.949,448. 00

TRUST FUNDS

Receipts.
Expenditures

Excess of expenditures..
Excess of receipts

—
-

757,764.78

GENERAL, SPECIAL, AND TRUST FUNDS COMBINED

Receipts
_
Expenditures

Excess of expenditures

» Expenditures shown above for the District of Columbia represent the share of the United States charged
against the general fund of the Treasury. The expenditures chargeable against the revenues of the District
of Columbia under "trust funds" amounted to $38,868,647.61 for the fiscal year 1931.

Existing conditions make the task of forecasting tax receipts over
a considerable period of time one of unusual difiiculty. In making
forecasts of revenue it has been assumed that in the calendar year
1932 there will be definite improvement in the general conditions of
industry and trade. The full effect of the improvement is not
apparent, however, in the estimated receipts. The delay in improvement in receipts results partly from the fact that income tax
collections on 1932 incomes will not be included in receipts until the
last half of the fiscal year 1933, and partly from the fact that in the
initial stages of recovery increased income, particularly of corporations, will be reduced by the deduction of losses which under the law
may be carried forward from prior years.
The present estimate of total receipts for the fiscal year 1932
(general, special, and trust funds combined) is $2,359,000,000, as
compared with actual receipts of $3,317,000,000 for the fiscal year
1931. The indicated decline is to be accounted for largely by a decrease of $720,000,000 in income taxes, which in the fiscal year 1932
wUl be collected on the reduced incomes of the calendar years 1930
and 1931, and by a decrease in receipts from foreign governments,
due to the fact that about $253,000,000 due in the fiscal year 1932
has been omitted from receipts in accordance with the proposed
postponement of such payments.
The deficits for the three fiscal years are primarily due to the
depression. Receipts from income taxes, in recent years the principal

SECRETARY OF THE TREASURY

element of Federal revenue, were abruptly reduced in 1931. CoUections to date of current corporation and individual income taxes
indicate that receipts from these sources during the calendar year
1931 will be about half as large as in either 1929 or 1930. Conditions prevaUing during 1931, which wiU be reflected in income tax
collections for the calendar year 1932 and consequently in the budgets
for both the fiscal years 1932 and 1933, indicate stUl further drastic
reductions in incomes and in income tax coUections. The decreased
business activity has also resulted in marked reductions in receipts
from other sources of revenue. For the fiscal years 1932 and 1933
average receipts from all taxes, including customs, are estimated at
about $2,131,000,000 as compared with average receipts in the
two fiscal years 1929 and 1930 of about $3,583,000,000.
FISCAL POLICY

The foregoing estimates show deficits for the fiscal years 1932 and
1933 in the amounts of $2,123,000,000 and $1,417,000,000, respectively. The estimated expenditures include for the retirement of debt
in accordance with the provisions of the sinking fund and other statutory requu-ements, $412,000,000 for 1932 and $497,000,000 for 1933.
In the absence of other provisions, the amounts of deficits must be
financed through borrowing. For the 3-year period 1931-1933
the gross deficits aggregate approximately $4,440,000,000 and the indicated increase in the public debt approximates $3,250,000,000.
Such a financial situation calls for immediate remedy, notwithstanding the fact that the rapid retirement of our public debt throughout a
decade of plenty may be considered to have created something in the
nature of a reserve upon which we are justified in drawing during lean
years.
If the public credit is to be maintained, there are certain basic
principles that must be observed in the conduct of national finances.
First, the sinking fund assigned to gradual retirement of the public
debt must be maintained, and even when of necessity the public debt
is increasing the regular sinking fund appropriations must be accepted
in the accounts of the Government as fixed charges against Federal
revenues. Second, over a period of years revenues must be equal to
expenditures. Deficiency in revenue for a time may be inevitable,
owing to operation of the emergency conditions, but must not be
allowed to continue. Observance of these principles in the conduct
of our Federal finances requires, in addition to continued effort to
reduce expenditures, a very substantial increase in the revenues
through taxation. For 1932 a large deficit is inevitable and, notwithstanding such improvement in trade and industry as may be
anticipated, addition to the public debt in the fiscal year 1933 can
not be avoided without such additional taxation.

REPORT OK THE FIHANCES

I t is not easy for any people to determine to assume a large additional tax burden at a time when their resources are depleted through
business depression, but in the long run they will best serve their own
interests by doing whatever is required to maintain the finances of
their Government on a sound basis. The history of many nations
attests this conclusion.
I t must not be forgotten that the very abUity of the Government to
borrow depends upon the conviction on the part of purchasers and
holders of Government obligations that the proper relationship
between expenditures and receipts wUl be maintained. I am confident that increased taxation, clearly necessitated by emergency conditions, will meet the supporting response of our citizens to the needs
of the Government.
The increase of the revenues must be decisively undertaken, but the
promptness with which full adjustment can wisely be effected is
conditioned upon existing economic circumstances. The rate at
which debt reduction has hitherto been effected still permits some
leeway. Additional tax burdens should not be so great as to retard
the business recovery upon which the restoration of the normal fiow
of revenue depends.
I recommend revenue increases so planned as to insure the attainment of three objectives—first, substantial reduction of the deficit for
the fiscal year 1932; second, the provision of revenue adequate in 1933
to meet current expenditures, not including the sinking fund, thus
bringing to an end in that year any further increase of the public
debt; and, third, laying the basis for the expectation of a fully balanced
budget for the fiscal year 1934. Until full balance is attained the
observance of the sinking fund provisions will not result in a corresponding reduction in the debt, but through this program the integrity
of such provisions will have been maintained as a normal part of the
financial operations and as a guaranty of good faith;
Our immediate concern is the fiscal year 1933, since that is the first
full year the revenues of which can be affected by new tax measures.
Bringing the increase in the public debt to a stop during that year in
spite of existing difficulties will represent a very real accomplishment.
I believe the objectives which have been set forth can be attained
by the adoption of a tax program based in the main upon giving up
for the time being the principal tax reductions effected since the
revenue act of 1924.
I advise that the Congress consider returning in principle to the
general plan of taxation existing under the revenue act of 1924. The
country knows the burdens to be expected under such a law. I t
paid taxes under that law and, notwithstanding the higher rates and
broader scope of that act, found that these taxes did not constitute
an unbearable burden nor prevent increased prosperity. Instead of

SECRETARY OF THE TREASURY

embarking on new and untried ventures in taxation, it is wiser to
utilize a known general plan with such changes as may be appropriate
in the light of altered conditions.
REVENUE PROPOSALS
To accomplish the objectives outlined above,.I make the following
recommendations for the provision of additional revenue, the new
meajsures to terminate at the close of the fiscal year 1934, that is two
years from next June:
Individual, income tax.—The normal rates to be fixed at 2, 4, and 6
per cent; surtax rates.at 1 per cent, beginning with incomes over
$10,000, graduated up.to 37 per cent on incomes between $100,000
and $200,000, and reaching 40 per cent on incomes in excess of
$500,000 as compared with the present maximum rate of 20 per
cent on incomes in excess of $100,000. Personal exemptions to be
fixed at $1,000 and $2,500 with a credit of $400 for each dependent.
The earned income provisions of the revenue act of 1928; permitting
larger deductions in respect of earned income than were permitted
by the act of 1924 should, in my opinion, be continued.
.
The Treasury contended at the time of the passage of the revenue
act of 1924 that individual income tax rates carried in. that act were
higher than it is wise or desirable to impose under normal conditions.
This is still the position of the Treasury Department. We are convinced that in the long run lower rates are more productive than the
higher ones. But these are not normal times. There is a real emergency resulting in the immediate need for a substantial amount of
additional revenue. Until the emergency is passed, we can not
avoid utUization.of emergency measures. We believe that the taxpayers wUl recognize the facts of the situation, and, particularly in
view of their temporary character, will cooperate with the Government
to make higher rates effective.
The proposed revisions would bring back into the taxpaying group
some 1,700,000 individuals. Even so, our income tax law would stUl
remain a tax paid by relatively few individuals. There would be
only some 3,600,000 Federal taxpayers in a Nation- of 120,000,000
people, and of this number less than 300,000 would contribute 90
per cent of the tax.
I t is estimated that such revisions will result in the collection of
additional income taxes in the amount of about $83,000,000 during
the last half of the fiscal year 1932 and about $185,000,000 during
the full fiscal year 1933. Of this additional revenue, it is estimated
that about three-fifths will be derived from incomes of $100,000 and
over and more than four-fifths from incomes of $10,000 and over.
For reasons I have often expressed, it is my belief that when the
emergency period is passed lower rates should be restored.

REPORT ON THE FINANCES

Corporation income tax. —The rates to be increased from the present
12 per cent to 12^ per cent.
In addition I recommend that the exemption of $3,000, at present
provided for domestic corporations with net incomes of $25,000 or
less, be eliminated.
It is estimated that this proposal will result in an increase of about
$27,000,000 in corporation income tax receipts during the last half of
the fiscal year 1932 and about $60,000,000 during the full fiscal year
1933.
Miscellaneous taxes.—Under the 1924 act a substantial amount of
revenue was provided through miscellaneous taxes. These included
the tobacco taxes, the taxes on admissions and on club dues and certain stamp taxes, which have been retained, and the capital stock
tax, other special taxes, the tax on manufacturers^ sales of automobiles, trucks and accessories, and a number of minor taxes which have
been repealed. In view of the marked contraction in corporation and
individual incomes, in recent years the principal source of taxation,
it seems essential that, as under the revenue act of 1924, substantial
additional revenues be provided by miscellaneous taxes. I do not
recommend, however, the exact provisions of that act as to miscellaneous taxes.
Accordingly, I recommend that additional revenue be provided
from the following sources: An increase of one-sixth in the present
rates on tobacco manufactures and products except cigars; an increase of 1 cent in the existing stamp tax upon sales or transfers of
capital stock; extension of the present tax on admissions through the
reduction of the present exemption to 10 cents; a tax on manufacturers' sales of automobiles, trucks, and accessories at 5, 3, and 2}^
per cent, respectively; a stamp tax on conveyances of realty of 50
cents for each $500 of value in excess of $100; a tax of 5 per cent on
manufacturers' sales of radio and phonograph equipment and accessories; a stamp tax of 2 cents on each check and draft; and a tax on
telephone, telegraph, cable, and radio messages of 5 cents for charges
Ul the amount of 14 to 50 cents, and 10 cents for charges in amounts
in excess of 50 cents.
The amount of revenue which would be reaUzed from the miscellaneous tax proposals would depend upon when they became actually
operative. Additional revenue on the basis of assumed collections for
a period of six months from January through June, 1932, is estimated
at about $205,000,000. The increase for the fiscal year 1933 is
estimated at $514,000,000.
Estate tax.—I have frequently expressed my opposition in principle
to the levying of excessive taxes on estates of decedents. Notwithstanding the views which I have expressed, I beUeve that in the existing emergency estates should contribute some additional revenue to

SECRETARY OF THE TREASURY

the Government. It should be observed, however, that because of
the longer period which is provided for the payment of tax on estates,
additional revenue from this source would not be reaUzed until the
latter part of the fiscal year 1933.
The Congress drasticaUy increased rates in the 1924 act but
evidently felt that this action was unwise, since in 1926 the increases
were repealed retroactively. I therefore recommend that the present
rates and exemptions be revised to correspond to those effective under
the revenue act of 1921. That act provided for the taxation of net
estates at rates graduated from 1 per cent on the first $50,000 up to
25 per cent on amounts in excess of $10,000,000. Except for the high
rates provided by the revenue act of 1924, which were never actually
operative, the proposed maximum rate of 25 per cent is the highest
previously in effect.
In order to avoid the undesirable result of automatic increase in
State levies on estates in certain States in which such taxes are based
on the present Federal rates, it is proposed that the increase be
effected by means of a supertax to be imposed in addition to present
rates, with no deduction from this supertax for State taxes paid.
Under such an aiTangement amounts of State taxes paid would
continue to be aUowed as credits against the Federal tax as provided
under the present law, up to 80 per cent of the latter tax, but the
entire proceeds of the proposed supertax would be retained by the
Federal Government. Additional collections from this source are
estinaated at about $11,000,000 for the last half of the fiscal year 1933.
and about $22,000,000 for the fuU calendar year 1933. The estimated
amount to be added to the Federal revenue in 1933 by the proposed
supertax represents approximately 50 per cent of the estimated
coUections (after deduction of credits) under the present law.
Postal revenues.—In recent years the faUure of postal revenues to
cover expenditures has resulted in increasing postal deficits which
have been met from the general revenues of the Federal Government.
A part of this deficiency may be attributed to expenditures for
special services, such as the cost of free postal services performed
for governmental departments and agencies, the excess of the cost of
air maU service over revenues, and the cost of special rates paid to
ocean maU carriers of American registry. According to estimates by
the Post Office Department the postal deficit exclusive of such special
expenditures will approximate $150,000,000 for the fiscal year 1932.
It is recommended that postal rates be increased to cover such deficiencies by a reasonable margin, that is, to provide additional revenues in
the amount of not less than $150,000,000 on an annual basis, thus
relieving the budget for the fiscal year 1932 by about $75,000,000
and for 1933 and subsequent years by the fuU $150,000,000.
77532-^2

REPORT ON T H E FINANCES

Summary of revenue proposals.—It is estimated that the proposed
revenue measures, if made effective on January 1, 1932, would increase revenues in the fiscal j^ear 1932 by about $390,000,000, and in
the fiscal year 1933 by about $920,000,000.
The estimated budgets for the fiscal years 1932 and 1933, as
affected by;these proposals, are summarized in the following table:
Estimates
(in millions)
1932
Receipts
Expenditures.
Deficit
Less additional receipts from proposed revenue measures..
Deficit after provision of additional revenue
statutory debt retirements
Increase in the public debt..

1933

$2,359
4,482

$2,696
4,113

2,123

1,417
920

1,733
412

497
497

1 On the basis of assumed collections during the full 6-month period, January through June, 1932.

Government expenditures.—Increased taxes must be accompanied by
a vigorous and continued effort to reduce expenditures in so far as it
may be consistent with the conduct of essential governmental activities on an efficient basis. The effort which has resulted in a reduction
of about $370,000,000 in the estimated expenditures for 1933 as
compared with 1932 must be continued. Additional expenditures for
objects in themselves most meritorious should be judged in the light
of the further burden which they would place upon the economy of
the Nation and upon the public credit at a time of unusual difficulty.
The taxpayer is asked to assume a large additional burden. He is
entitled to know that the Government on its part is so conducting
its business as not to demand of him anything more than is actually
necessary. The Government is not an entity apart from the life of
the people and it has no money to spend except what it gets from the
pockets of the people. The Treasury can not of itself create funds.
Whatever it spends must be obtained either through taxation or
through the sale of Government securities, and-the securities in the
end must be redeemed by taxes. There is a limit to the extent to
which the Government, in our social and economic structure, may
wisely divert funds from private employment to governmental use.
When we take into consideration the mounting burden of State and
loQal taxes, it is no exaggeration to say that we are approaching that
Umit.

SECRETARY OF THE TREASURY

RECOMMENDATIONS FOR LEGISLATION

Postponement of payments from foreign governments
It is recommended that the Congress give favorable consideration
to a bill which the Treasury will submit soon after Congress convenes,
intended to authorize the postponement of amounts payable to the
United States from foreign governments during the fiscal year 1932,
and their repayment over a 10-year period beginning July 1, 1933,
in accordance with the President's proposal of last June. Further
information pertaining to the proposed postponement of payments
on intergovernmental indebtedness is presented in the section
commencing on page 82 of this report.
Corporation relief contributions
Under existing law corporations, unlike individuals, are not aUowed
in computing net income subject to Federal income tax to deduct
contributions for charitable purposes, except in those cases where it
can be shown that the contributions have a reasonable relation to
the corporation's business or result in a direct benefit to the corporation. In those cases the charitable contributions by corporations are
allowable as deductions, not because they are contributions made in
the uiterest of pubhc welfare, but because they classify as ordinary
and necessary business expenses.
Contributions for reUef in the present emergency would be encouraged by a statutory provision allowing, under limitations similar
to those now in force with respect to contributions by individuals,
such contributions to be deducted in computing the net income of
corporations, where such contributions are not classifiable, as ordinary
and necessary business expenses. The importance at this time of
voluntary contributions for emergency relief from as many private
sources as possible, warrants the temporary removal of the present
restrictions upon the deduction of such contributions from corporation
incomes.
I, therefore, recommend the early enactment of legislation which
wiU permit corporations to take, under limitations simUar to those
now in force with respect to contributions by individuals, deductions
for contributions made during the present emergency for unemployment rehef or reUef of the poor or needy.
Banking
The year has been marked with an unprecedented number of bank
suspensions, both State ahd national. From January 1, 1931, to
October 31, 1931, there were 1,753 bank suspensions, involving
total deposits of $1,461,852,000. Of these banks, 1,443 with deposits

REPORT ON THE FINANCES

of $1,094,764,000 were State banks, and 310 with deposits of
$367,088,000 were national banks.
As early as December 2, 1929, the Comptroller of the Currency
called the attention of the Congress to the rapidly increasing number
of bank faUures throughout the United States and recommended
legislation designed to strengthen our banldng structure. It should
be noted in this connection that the condition of increasing bank
faUures, to which the comptroller then directed attention, was one
existing at a time of prosperity in the United States. This condition has been aggravated by the period of depression through which
we are passing and particularly by the lack of confidence on the part
of depositors in some sections of the country. Thus in certain
stricken communities the public through fear has withdrawn its
deposits; some of the banks affected have been unable to liquidate
assets fast enough to meet the withdrawals and suspensions have
occurred with the consequent shock to the community, paralysis of
business, and further decline in values. Local difficulties have been
accentuated and confidence shaken in other communities. Banks in
the affected areas have been compeUed to curtaU loans and maintain
an extremely liquid position in order to meet unreasonable demands of
depositors, thus affecting the general situation adversely. A fact
not generally appreciated is that this vicious circle of events, which
frequently leads to the restriction of operations by sound banks, is
brought about largely through the action of the depositor himself.
In order to deal with this abnormal situation and to restore confidence, the President proposed the creation of a national institution
which should extend loans to banks on assets not now eligible for
rediscount at the Federal reserve banks in order to permit sound
banks to continue to provide for the credit needs of business with
added assurance as regards the maintenance of liquidity in th'e
event of unusual demands for currency payments. Out of this
proposal grew the National Credit Corporation. This organization
has authorized the issuance of $1,000,000,000 principal amount of
gold notes to which the banks throughout the United States were
requested to subscribe at par in principal amount equal to 2 per
cent of their respective net demand and time deposits, and not to
exceed 10 per cent of their unimpaired capital and surplus.
Branch banking.—It is undoubtedly true that in the past both our
State and national authorities have granted bank charters too freely.
This was recognized some time ago by the national bank authorities.
In the ComptroUer's report to Congress in 1927 particular attention
was called to this fact, which I believe is now well recognized by State
banking authorities also. The essential question involved is the
inabiUty of a large number of small banks to survive in the face of
changing economic conditions. I am convinced that the Comp-

SECRETARY OF TSIJ TttEASURY

troller's recommendation to Congress that trade-area branch banking
be adopted for national banks is a solution in a large measure of our
present banking difficulties. This would afford better management,
service, and diversification with a greater measure of safety than can
now be obtained under our present system. I can see no justification
in the argument that banking should be confined to political or
other existing artificial boundaries rather than to its natural economic
lines.
Increase in the capital stock of Federal land banks.—The President
has recently called attention to the desirabiUty of augmenting the
resources of the Federal land banks through subscription by the
Government to additional amounts of the capital stock of these
banks. I am in fuU accord with this proposal and recommiend that
favorable consideration be given to a biU which will be presented tp
Congress authorizing the appropriation of $100,000,000 to enable the
Secretary of the Treasury to subscribe from time to time for additional
amounts of capital stock of any Federal land bank, upon the request
of the bank's board of directors and with the approval of the Federal
Farm Loan Board.
Railroad obligations
In my last annual report the following statements and recommendations were made regarding railroad obligations acquired under
the Federal control and transportation acts and now held by the
United States Government:
Under the provisions of the Federal control act, approved March 21, 1918, and
of the transportation act, 1920, the Government of the United States acquired
obligations of railroads in the aggregate principal amount of over $985,000,000,
bearing interest at the rate of 6 per cent per annum. The carriers have repaid
over $930,000,000 of this amount, leaving a balance due as of June 30, 1930, of
about $55,000,000. In addition, the carriers have paid to the Government as
interest on these obligations the sum of about $209,000,000.
At the time that the Government made loans to the carriers or acquired their
obligations as a result of indebtedness previously incurred, we had just emerged
from the World War; the state of the money market and the financial condition
of the carriers did not permit the carriers to borrow sufficient funds in the market
to carry them through the reconstruction period. As a result of this situation
it became necessary for the Government to make loans to the carriers to help
them out of their diflSculties and in addition to fund their indebtedness to the
Government incurred during the period of Federal contol.
The rate of interest was fixed by law at 6 per cent. Since this rate was higher
than that ordinarily paid by the Government for borrowed funds and also higher
than most of the carriers would be required to pay under normal conditions, it
was desirable for the carriers to refinance their obligations as soon as economic
conditions permitted in order to save interest costs. In consequence of this
relatively high rate the Government was able to sell certain of the obligations at
par and accrued interest.
As we passed out of the reconstruction period the earnings of the carriers
improved, the money market became easier, and consequently some of th^

REPORT ON THE FINANCES

carriers began to refinance their obligations through their bankers at lower rates
of interest, thus effecting a substantial saving in interest costs and at the same
time enabling them to repay substantial amounts of their obligations to the Government. The improved financial situation also enabled the Government to sell
at not less than par and accrued interest some of the obligations acquired under
the Federal control act and under section 207 of the transportation act. The
Government likewise had opportunities to sell obligations acquired under section
210 of the transportation act. However, the Attorney General advised the Secretary of the Treasury that there was no authority to sell or dispose of the obligations acquired under section 210 of the transportation act, 1920 (33 Op. Atty.
Gen. 423, 34 Op. Atty. Gen. 151), although he interpreted the statute as permitting the sale of obligations acquired under the Federal control act and section
207 of the transportation act (33 Op. Atty. Gen. 151).
Of the $55,000,000 principal amount of obligations of carriers still held by the
Government, about 50 per cent will probably be collected in full. The financial
condition of the carriers obligated on the remainder indicates that the Government may not be able to collect the full amount due. Some of these carriers are
already in receivership. Since, with regard to the obligations acquired under
section 210 of the transportation act, the Government is unable to make any adjustments either in principal or in interest due on them from the embarrassed
carriers, the difficulties in readjusting the carriers* finances are greatly increased
and in some cases reorganization plans are frustrated. With respect to the carriers in receivership it is believed that the Government should be in a position to
cooperate fully with the receivers, bondholders' committees and others in any
reorganization plan which may be approved by the court having jurisdiction.
If the Government is not permitted to carry its share of the burdens which must
be borne by all the security holders in a reorganization plan, the difficulties and
delays resulting therefrom will not only impair the value of the Government's
claim but will also jeopardize the service which the carrier can render the public.
In addition to the Government's being in the position of preventing a reorganization, it will be forced to share with other security holders in the liquidating value
obtained at a forced sale of the properties. * * *
The indebtedness due under sections 202 and 207 of the transportation act
includes receivers' certificates and notes, respectively, acquired by the Director
General of Railroads.
The indebtedness due under sections 209 and 212 represents overpayments
made by the Treasury on certificates of the Interstate Commerce Commission
under that section of the law known as Guaranty to carriers after termination
of Federal control.
Section 210 of the transportation act authorized the Secretary of the Treasury
to make loans to carriers on certificates of the Interstate Commerce Commission.
The commission specified in its certificates the collateral which each carrier was
required to deposit with the Secretary of the Treasury as security for the loans
made. At the time the loans were made the collateral usually had a market
value not less than 25 per cent in excess of the amount of the loan made by
the Government and hence was considered sufficient. Subsequent events, however, which forced some of the carriers into receivership have resulted in such a
depreciation of the collateral that if the collateral were liquidated to-day the
proceeds would be insufficient to discharge in full the Government's claim.
During the last session of the Congress bills were introduced (S. 4254, H. R.
12601, 71st Cong., 2d sess.) authorizing the Secretary of the Treasury with the
concurrence of the Interstate Commerce Commission, in cases where carriers
were in receivership, to compromise claims or to exchange evidences of indebtedness arising out of advances made under section 210 of the transportation act.

SECRETARY OF THE TREASURY

In order to enable the Government to cooperate in such plans for reorganization
as appear to be in the best interest of the Government, and to permit the maintenance of the carrier as a public convenience and necessity, I believe that some
such authority should be vested in the executive branch of the Government.
It seems to me desirable that the Government retire as soon as practicable from
participation in the financing of railroads. It is recommended, therefore, that
legislation be enacted which will authorize the Secretary of the Treasury, with
the concurrence of the Interstate Commerce Commission, to compromise claims
or to cooperate in connection with any reorganization plan or to make such
other arrangements as he may deem for the best interests of the United States
for the repayment of the indebtedness of carriers incurred under sections 209 and
210 of the transportation act. The Secretary of the Treasury should also be
given authority to sell at not less than par and accrued interest obligations
acquired from carriers under section 210 of the transportation act.
It is further recommended that a reduction may be made in the interest rate
being paid on advances under section 210 of the transportation act, in those
cases in which the Secretary of the Treasury, with the concurrence of the Interstate Commerce Commission, considers that such a reduction will assist the carrier
in avoiding receivership, provided that the interest rate shaU not be less than
Z}i per cent.

In this recommendation the statement was made that the Government would probably collect in full about 50 per cent of the obligations of the carriers remaining unpaid, amounting to about $55,000,000
principal amount. During the fiscal year 1931 the Boston & Maine
Railroad liquidated in full its indebtedness of $13,943,000 principal
amount and the Seaboard Air Line EaUroad Co., which owes
$14,443,887.84 principal amount, went into receivership. The total
principal amount of the obligations now remaining unpaid is about
$39,000,000, of which approximately $23,000,000 is owed by carriers
in the hands of receivers.
Under these circumstances the Government can not expect to realize
the full amount of the indebtedness due. It would seem essential,
therefore, that broad and general powers be given the executive branch
of the Government to deal with these obligations in a practical manner.
Authority should be given to cooperate with any reorganization plan
or to make other arrangements including such reduction in the rate of
interest as may be deemed advisable under the circumstances, not
below 3K per cent per annum.
It is strongly recommended that legislation as specified above be
enacted authorizing the Secretary of the Treasury, with the concurrence of the Interstate Commerce Commission, to take such action
as may be considored necessary under the circumstances to enable the
Government to realize the utmost amount obtainable on account
of the raUroad obligations.
The following statement shows as of November 1, 1931, the carriers
which are in receivership, the amount of their indebtedness to the
Government, and the face amount of collateral held in each case.

REPORT ON THE FINANCES

Railroads in receivership, indehtedness to the United States, and collateral held,
November 1, 1931
Indebtedness
Carrier

Date of receivership

Principal

Accrued and
unpaid
interest

Total

Section 202
Wichita Northwestern Ry. Co..

Nov. 10,1922

$48,000.00

July 26,1923

1,260,000.00

Feb. 18,1930

$48,000.00

Section 207
Minneapolis and St. Louis R. R. Co

$637,600.00

1,887,500.00

223,162.13

Section 210
Fort Dodge, Des Moines & Southern R. R,
Co.
Gainesville & Northwestern R. R. Co

200,000.00

23,162.13

Dec.

8,1923

76,000.00

38,102.53

113,102.63

Georgia & Florida Ry., Receiver ofthe

Oct. 19,1929

792,000.00

95,040.00

887,040.00

Minneapolis & St. Louis R. R. Co

July 26,1923

1,382,000.00

667,469.73

2,049,469.73

Missouri & North Arkansas Ry. Co

May 6,1927

3,500,000.00

1,607,090.71

5,007,090.71

Salt Lake & Utah R. R. Co

I July 24,1925

872.600.00

366,436.80

1,239.036.80

Seaboard Air Line Ry. Co,.

Dec 23,1930

14,443,887.84

936,421. 58

15, 379,309.42

Virginia Southern R. R. Co

May 3,1926
Nov. 10,1922

38,000.00
381,760.00

14,326.97
171,787.60

Wichita Northwestern Ry. Co
Section 209
Minneapolis & St. Louis R. R. Co,
Missouri & North Arkansas R. R..

July 26,1923
May 5,1927

62,326.97
653, 537. 60

Overpayments
292,022. 23

292,022. 23

41,376.41
23,316,635.48

41,376. 41
4,466,337.95

27,772,973.43

SECEETAEY OF THE TBEASUEY

Railroads in receivership, indebtedness to the United States, and collateral held,
November 1, 1931
Collateral
Carrier
Face amount

Type

Section 202
$50,000 (reduced to $48,000) receiver's certificates secured by the equity in $600,000 face amount of the
carrier's bonds deposited as collateral for a loan of
$381,750 under sec. 210 and a second lien on property
of the carrier subject to the mortgage securing the
bonds.

Wichita Northwestern Ry. C o . . .

Section 207
Minneapolis and St. Louis R. R.
Co.
Section 210

$1,500,000.00

Fort Dodge, Des Moines &
Southern R. R. Co.
Gainesville & Northwestern R. R.
Co.
Georgia & Florida Ry., Receiver
of the.
Minneapolis & St. Louis R. R.
Co.
Missouri & North Arkansas Ry.
Co.
Salt Lake & Utah R. R. Co.

400,000.00

First mortgage 5 per cent gold bonds of the carrier.

75,000.00

First mortgage 6 per cent gold bonds of the carrier.

1,100,000.00
2,377,000.00
6,000,000.00

16,976,500.00
2,900.00
34,800. 00
18,525.00
< 1,370,000. 00
200, 000.00
13,000.00
1,200, 000.00
299,000.00

Virginia Southern R. R. Co
Wichita Northwestern Ry. C o . . .
Section 209

I 27,520,225.00
76,000.00
600,000.00

Minneapolis & St. Louis R. R.
Co.
Missouri & North Arkansas R . R

First mortgage 20-year 6 per cent gold bonds of the
Georgia & Florida R. R.
Refunding and extension mortgage 5 per cent bonds.
Series A, of the carrier.
First mortgage 6 per cent bonds of the carrier.

830,300.00 First mortgage 6 per cent gold bonds of the carrier.
600,000. 00 7 per cent cumulative first preferred stock of the carrier.
500,000. 00 7 per cent cumulative preferred stock of the carrier.
/ 1,043,000.00
3,021,600. 00
2,235,000. 00
1,105,900. 00

Seaboard Air Line Ry. Co

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

40,478, 525. 00

Fruit Growers Express Co. stock.
Seaboard Air Line Ry. Co., common stock.
Seaboard Air Line Ry. Co., 6 per cent preferred stock.
Seaboard Air Line Ry. Co., 4 and 2 per cent preferred
stock.
Seaboard AirLine Ry. Co , first consolidated mortgage,
series A, 6 per cent gold bonds, due 1945.
Albany Passenger Terminal stock.
North Charleston Terminal stock.
Chatham Terminal Co. stock.
Land Co. of Florida, 6 per cent preferred stock.
Florida Central & Gulf Ry., first mortgage, 5 per cent
bonds, 1967.
Durham Union Station Co., first mortgage, 6 per cent
bonds, 1956.
Seaboard-All Florida Ry., first mortgage, 6 per cent
bonds, 1935.
Prince George & Chesterfield Ry., first mortgage, 6
per cent bonds, due 1953.
First mortgage, 6 per cent gold bonds of the carrier.
First consolidated mortgage, 6 per cent bonds of the
carrier.

REPORT ON THE FINANCES

International double taxation
In previous annual reports I have called attention to the movement to eliminate international double taxation. Experience has
demonstrated the wisdom and necessity for legislation on this subject, and I renew the recommendation made in m}'^ annual report for
the fiscal year ended June 30, 1930, for the enactment of the bill
introduced in the House of Representatives by Chairman Hawley
(H. R. 10165), with such changes as subsequent studies have shown
to be advisable.
PUBLIC DEBT OPERATIONS

General review of public debt operations
During the fiscal year 1931 public debt receipts on all accounts
aggregated $6,572,917,521, expenditures aggregated $5,956,945,861,
and accordingly the gross outstanding public debt was increased by
$615,971,660.
Treasury borrowing operations in the open market during the year
were occasioned by three principal factors: (1) The management of
the public debt, that is, the repayment or refunding of United States
securities; (2) the provision of funds to meet the excess of authorized
expenditures over ordinary receipts; and (3) the financing of loans to
veterans on adjusted service certificates through liquidation of special
securities held in the adjusted service certificate fund. United States
securities sold on public subscription during the fiscal year 1931
included Treasury bonds, certificates of indebtedness, and Treasury
bills in the following amounts:
Bonds (including postal savings)
Certificates of indebtedness
Treasury bills_
Total

$1, 419, 245, 990
1, 961, 718, 500
1, 059, 761, 000
.

--.

4, 440, 725, 490

The Treasury's financing is planned and executed on the basis of
periodic estimates of Federal receipts and of cash requirements for
expenditures, including public debt retirements. The greater portion
of Federal revenues is received in the quarterly income tax-payment
months, while expenditures to meet the cost of Government activities
are distributed more evenly throughout the year; as a result, revenues
during the quarterly income-tax payment months customarUy exceed
immediate requirements for governmental expenditures. In order
to avoid the disturbing effect on the money market of periodic heavy
withdrawals of funds in consequence of pajnnents to the Treasury
in excess of the Treasury's immediate needs, the maturities of a considerable portion of United States short-term issues are timed to
coincide with the quarterly peaks in revenues. Furthermore, new

SECRETARY OF THE TREASURY

securities are customarily offered in considerable volume at quarterly
intervals, serving to bring the Treasury's current receipts and disbursements, including those on account of the public debt, around
the quarterly income tax-payment dates into approximate balance,
and to provide the Treasury with additional funds, largely in the
form of credits at depositary banks, for use in supplementing revenues
prior to the next quarterly tax-payment month. These latter
requirements are now frequently met in part also by the subsequent
sale of Treasury bUls for cash.
United States security issues, maturities, and retirements, exclusive
of transactions in trust fund and other special issues, are summarized
in the following table for the period from June, 1930, through October,
1931:
Issues, maturities, and redemptions of interest-hearing securities, exclusive of trust
fund and other special issues, June, 1930, through October, 1931
Date

1930
June 16
16
July 1
14
14
Aug. 18
18

Issue

Certificates of indebtedness maturing June 15, 1931.
Certificates ofindebtedness issued Sept. 16, 1929
Postal savings bonds, series 39
Treasury bills maturing Sept. 15, 1930
Treasury bills issued Apr. 15, 1930
._
Treasury bills maturing Nov. 17, 1930
Treasury bills issued May 19, 1930
Miscellaneous redemptions before maturity

Rate
of interest!

m
L876
2.933
1.960
2.544

Total, June through August.
Sept. 15
15
15
Oct. 16
16
Nov. 17
17

Certificates of indebtedness maturing Sept. 15,1931..
Certificates of indebtedness issued Dec. 16, 1929
Treasury bills issued July 14,1930
Treasury bills maturing Dec. 16, 1930.
Treasury bills maturing Dec. 17, 1930
^
Treasury bills maturing Feb. 16, 1931
Treasury bills issued Aug. 18, 1930
Miscellaneous redemptions before maturity

Dec.

Certificates of indebtedness maturing June 16,1931.
Certificates of indebtedness maturing Dec. 15, 1931.
Certificates ofindebtedness issued Mar. 15, 1930
Treasury bills issued Oct. 15, 1930
Treasury bills issued Oct. 16, 1930

1931
Jan.
1
Feb.
3
4
16
16

Postal savings bonds, series 40..
Treasury bills maturing May 4, 1931
Treasury bills maturing May 6, 1931
Treasury bills maturing May 18, 1931
Treasury bills issued Nov. 17, 1930.-..
Miscellaneous redemptions before maturity.

$549, 707, 500
1, 266, 900
50, 920,000
61, 316,000
120,000,000
104, 600,000
130, 030,000

syi
L876
1.857
1.857
1.726
1.960

835,653, 500
351, 640, 500
50,920, 000

51, 262,000
51, 263, 000
127, 455,000
120,000,000
40, 026, 500
564,191, 000

m
m

483, 341,000
51, 262,000
51, 263,000

1.857
L857

2K
.949
.949
1.207
1.726

2,343, 040
30,000,000
30,000,000
154, 281,000
127,455,000
150
644, 946,040

562, 587, 000

159,941,000
268, 381,000

Total, December through February...

$429,373,000

601, 559, 900

Treasury notes, series A-1930-1932
Treasury notes, series B-1930-1932
Treasury bonds of 1941-1943
Certificates of indebtedness maturing Sept. 15, 1931..
2
Certificates of indebtedness maturing Mar. 15, 1932..
Treasury bills maturing July 1, 1931
L465
Treasury bills maturing July 2, 1932
L465
Certificates ofindebtedness maturing Dec. 15, 1931..
Treasury bills maturing July 27, 1931
Treasury bills issued Feb. 3,1931
l.SSO
Treasury bills maturing Aug. 3, 1931
.949
Treasury bills issued Feb. 4, 1931
1.295
.949
I For Treasury bills, average rates on a bank discount basis are shown.

M a r . 15
15
16
16
16
Apr. 2
3
15
27
May 4
5
5

Amount
matured (or
redeemed)

334, 211, 000

Total, September through November.
15
15
15
16
17

Amount
issued

713, 321,150
626, 546,350
483,826, 200

594, 230,050
300,176, 000
623,891, 500
50,427,000
50, 428, 000
275,118,000
53, 510, 000
30, 000, 000
60,100,000

'3o,"o6o,'o5o

REPQRT ON T H E FINANCES

Issues, maturities, and redemptions of interest-hearing securities, exclusive of trust
fund and other special issues, June, 1930, through October, 1931—Continued
Date

1931
May 11
18
18
18

Issue

Treasury bills maturing Aug. 10, 1931
Treasury bills maturing July 17, 1931
Treasury bills maturing Aug. 17, 1931
Treasury bills issued Feb. 16,1931
Miscellaneous redemptions before maturity..

Rate
of interest»

1.182
LOOl
1.010
1.207

Total, March through May.
1
16
15
15
July 1
1
1
1
2
2
17
17
27
27
Aug. 3
3
10
10
17
17
24
31
31

Treasury bills maturing Aug. 31, 1931
Treasury bonds of 1946-1949
Certificates of indebtedness issued June 16, 1930.
Certificates of indebtedness issued Dec. 16,1930..
Postal savings bonds, series 41
.
Postal savings bonds, series 1
Treasury bills maturing Sept. 30, 1931
Treasury bills issued Apr. 2, 1931
Treasury bills maturing Sept. 30, 1931
Treasury bills issued Apr. 3,1931
Treasury bills maturing Oct. 16, 1931
Treasury bills issued May 18, 1931
Treasury bills maturing Oct 26, 1931
Treasury bills issued Apr. 27, 1931
Treasury bills maturing Nov. 2,1931
Treasury bills issued May 6, 1931
Treasury bills maturing Nov. 9, 1931
Treasury bills issued May 11, 1931
Treasury bills maturing Nov. 16, 1931
Treasury bills issued May 18, 1931
Treasury bills maturing Nov. 23, 1931...
Treasury bills maturing Nov. 30, 1931
Treasury bills issued June 1. 1931
Miscellaneous redemptions before maturity

Sept. 16
16
15
15
30
30
30
Oct. 15
15
26

Treasury bonds of 1951-1956
Certificates of indebtedness maturing Sept. 15 1932..
Certificates ofindebtedness issued Sept. 16, 1930
Certificates ofindebtedness issued Mar. 16,1931
Treasury bills maturing Dec. 30, 1931
Treasury bills Issued July 1,1931
Treasury bills issued July 2,1931
Treasury bills issued July 17, 1931
Treasury bills maturing Jan. 13, 1932...I
Treasury bills issued July 27, 1931
Treasury bills maturing Jan. 25, 1932

June

Amount
issued

$60,000,000
60,102,000
50,000,000

Amount
matured (or
redeemed)

$154,281,000
16,500

2,157,982, 560 1,323,670,050
SM

80,013,000
821,406,000

1^4

2^
2H
.631
L465
.631
L465
.489
1.001
.456
L330
.511
1.295
.560
1.182
.631
1.010
.586
.616

Total, June through August..

4,416,140
'50,"026,"000"
50,050,000
"5i,'200,'600"
61,806,000
'59,'850,"000"
60, 005,000
"60,"280,"65o"
60,001,000
80,019,000

429,373,000
169,941,000
41,900
•50,'427,'000
50,428,000
"55,'i02,"500
53,510,000

'6o,'io5,"5o5
50,000,000

'56,"o55,'ooo
80,013,000
9,000

1,429,071,140 1,033,944,900
3

2H
1.217
.631
.631
.489
2.384
.456
2.687

Total, September and October.

800,424,000
314,279,500
100,761,000

61,641,000
"5i,"338,"600"
1,318,443,600

334,211,000
300,176,000
50,026,000
60,050,000
61,200,000
51,806,000
837,469,000

1 For Treasury bills, average rates on a bank discount basis are shown.

At the beginning of the fiscal year 1931 the gross pubhc debt aggregated $16,185,000,000, and the net balance in the general fund of the
Treasury amounted to about $319,000,000, largely representing funds
to the credit of the Treasury at depositary banks. This balance,
which had been made available for the most part through financing
in June, adequately supplemented the revenues until the next quarterly tax-payment month, September, so that during the first two
months of the fiscal year 1931--^that is, in July and August, 1930—
public debt operations were on a relatively small scale. On July 14
and August 18, the issuance of about $51,000,000 and $120,000,000
of Treasury bUls provided funds to meet bill maturities on the same
dates in the aggregate amount of $156,000,000. The increase in the
general fund balance which resulted froiri operations in June had
largely been absorbed by the end of August, and the gross debt

SECRETARY OF THE TREASURY

showed little change as compared with the beginning of the fiscal
year.
During the months September through November expenditures
from ordinary receipts aggregated $928,000,000. In addition,
$352,000,000 of certificates of indebtedness and $51,000,000 of Treasury bills matured on September 15, and $120,000,000 of Treasury
bills on November 17. The total requirements for the period were
thus about $1,450,000,000. Receipts from taxes and miscellaneous
sources aggregated about $870,000,000, of which more than $600,000,000 was received in September, representing largely income
taxes collected in that month. The financing of the excess of expenditures, including the retirement of maturing obligations, required the
issuance on pubhc offering of about $564,000,000 of new securities
and a reduction of about $20,000,000 in the general fund balance during the period. In September income tax collections due on the 15th
of the month provided funds in excess of the amount of securities
which matured on that date. Additional funds available to cover
in part requirements in October and November were obtained by
the sale of an issue of about $334,000,000 of certificates of indebtedness on September 15. Prior to the regular quarterly financing in
December, two issues of Treasury bills sold in mid-October, each in
the amount of about $51,000,000, represented partial provision for
expenditures on account of interest on the public debt in the amount
of $135,000,000 due on October 15. On November 17, $127,000,000
of Treasury bills were issued chiefly to meet bill maturities on that
date. Aggregate debt retirements from September through November, including further purchases in September of 3K per cent Treasurynotes for the sinking fund in the amount of about $40,000,000, were
in about the same volume as the new issues, and the outstanding
debt showed relatively little change for the period.
During December, 1930, and January and February, 1931, expenditures amounted to $970,000,000, including $137,000,000 invested
in special Treasury notes for the account of the adjusted service
certificate fund. During the same period debt maturities aggregated $713,000,000, mcluding $483,000,000 of certificates of indebtedness on December 15 and Treasury bUls in the amounts of
$103,000,000 on December 16 and 17, and $127,000,000 on February
16; since receipts from foreign governments in the amount of
$29,000,000 were appUed to December 15 maturities, provision for
only $684,000,000 of maturities was necessary. In addition, it was
necessary at the end of the period to provide for the redemption of
$23,000,000 of United States securities for the adjusted service certificate fund—the initial transaction in the financing of additional
loans to World War veterans. Total requirements for the period
were therefore about $1,677,000,000. Receipts from taxes and misceUaneous sources totaled $961,000,000, leaving requirements of

REPORT ON THE FINANCES

about .$716,000,000 to be met through borrowing. Income tax
receipts in December, together with $428,000,000 obtained from the
sale of two issues of certificates of indebtedness on December 15,
exceeded requirements for maturities at the middle of December,
and resulted in increased Treasury balances at depositary banks
which were available for subsequent expenditures. Additional funds
were obtained through the sale of Treasury bills in February, totaling
about $214,000,000; the proceeds of these bills were in part required
to meet bill maturities on February 16. The total volume of United
States securities issued on public offering during December and the
two months prior to the regular financing in March, 1931, approximated $645,000,000. In addition, $137,000,000 of special Treasury
notes were issued for the account of the adjusted service certificate
fund. The aggregate of these issues, $781,000,000, exceeded the
requirements of $716,000,000 by $65,000,000, which increased the
general fund balance during the period. Notwithstanding the fact
that maturities and redemptions exceeded new issues in the open
market by more than $70,000,000, the total public debt outstanding
at the end of February was about $45,000,000 larger than before the
December financing, the increase refiecting additional amounts of
special investments held in the adjusted service certificate fund.
Expenditures during the period March through M a y totaled nearly
$1,440,000,000, including $112,000,000 invested in special certificates
of indebtedness for account of the adjusted service certificate fund„
Debt maturities aggregated $1,324,000,000 including $1,109,000,000
of 3K per cent Treasury notes which had been called for redemption
on March 15 and $214,000,000 of Treasury biUs maturing in M a y ;
since $327,000,000 was applied to the redemption of the 3K per cent
notes in March for the account of the sinking fund, provision for only
$997,000,000 of maturities was necessary. Loans to veterans necessitated the liquidation of $682,000,000 of special securities held in
the adjusted service certificate fund. The Treasury's requirements;
aggregated about $3,119,000,000 for the period.
Receipts, on the other hand, included the first quarterly installment of taxes on 1930 incomes which, as has already been brought
out, showed marked reduction as a result of the decline in business
activity and in security prices. Total receipts from taxes and misceUaneous sources amounted to $706,000,000 for the three months
ended May 31, compared with $961,000,000 for the preceding
3-month period. To meet the Treasury's requirements in excess of
these receipts it was necessarj^ to issue on public offering about
$2,160,000,000 of new securities and to draw down the general fund
balance by $110,000,000. About $30,000,000 of 3)^ per cent notes
which were caUed for redemption March 15 were not presented for
payment within the quarter. In addition to the public offering of

SECRETARY OF THE TREASURY

securities, $112,000,000 of special certificates of indebtedness were
issued for the account of the adjusted service certificate fund.
The amount of Treasury notes maturing on March 15 greatly
exceeded income tax collections. The sale of about $1,518,000,000 of
new issues on March 16 provided additional funds needed to cover
maturing notes and resulted temporarUy in a substantial increase in
the general fund balance. As indicated in the preceding table, the
new issues on March 16 included 3% per cent Treasury bonds in
the amount of $594,000,000 and two issues of certificates of indebtedness aggregating $924,000,000. The offering provided for the
acceptance on preferred allotment of 3K per cent Treasury notes
called for retirement on March 15, 1931, in payment for bonds and
certificates. About $667,000,000 of maturing 3K per cent Treasury
notes were accepted in paymient for the three issues.
During April and May the balance in the general fund was again
drawn down and seven issues of^ Treasury bUls and one issue of certificates of indebtedness, totaling about $640,000,000, were sold
largely to cover Treasury bill maturities in May and to provide for
the liquidation of securities held in the adjusted service certificate
fund in connection with the financing of loans to veterans.
As a result of all public debt transactions during the period, the
gross debt outstanding on May 31 was nearly $300,000,000 larger
than at the end of February; the debt held outside the Treasury
increased by a larger amount, hov/ever, as the result of the sale of
securities to provide funds for the redemption of special securities
held in the adjusted service certificate fund.
The June financing at the close of the fiscal year 1931 was conducted with a view to covering June requirements and making partial
provision for the period prior to the regular financing in September.
Expenditures for the period June through August amounted to about
$1,030,000,000, including $30,000,000 invested in special notes for
account of civil service, foreign service, and Canal Zone retirement
funds. Maturing securities aggregated $1,034,000,000 for the period,
of which $589,000,000 matured in June. Foreign payments of
$19,000,000 were applied to June maturities so that provision had to
be made for $1,015,000,000 of maturing securities during the quarter.
Also funds for further redemptions of securities in the adjusted service
certificate fund had to be provided in the amount of $84,000,000.
Receipts from taxes and miscellaneous sources aggregated less
than $767,000,000, whereas total requirements amounted to about
$2,129,000,000. To meet this deficiency m receipts $1,429,000,000
of new securities were sold during the period. About $30,000,000
was also issued in special retirement fund notes. As a result of these
issues the deficiency in receipts was met and the general fund balance
increased $93,000,000 during the 3-month period.

REPORT ON THE FINANCES

An $80,000,000 issue of Treasury biUs was sold on June 1, and on
June 15, $821,000,000 of dYs per cent Treasury bonds were issued to
supplement current revenues, which, as in March, were inadequate
to meet the Treasury's current requirements including the amounts
necessary to retire maturing certificates of indebtedness and to
finance additional loans on adjusted service certificates. Payment
for the new issue of bonds in maturing certificates was accepted on
preferred allotment in the amount of $326,000,000. Following operations in June, the gross pubhc debt outstanding on June 30, 1931,
aggregated $16,801,000,000 as compared vrith $16,185,000,000 at
the beginning of the fiscal year, and the general fund balance, at
$471,943,983, showed an mcrease of about $153,000,000 for the
12-month period.
The increase in the general fund of the Treasury which resulted
from the June financing was largely absorbed in July and August,
and in these months new issues of Treasury bills aggregating nearly
$525,000,000 were issued to cover maturities in the amount of about
$445,000,000 and to supplement current revenues and withdrawals
from the general fund.
Financing in September included the issuance of about $800,000,000
of 3 per cent Treasury bonds and $314,000,000 of certificates of
indebtedness on September 15, in part to cover maturities on the
same date. These operations together with other issues and maturities during September and October, 1931, are summarized in the
preceding table.
Credit conditions
During the fiscal year 1931 continued decline in industrial and
trade activity and in commodity prices, together with further liquidation in the stock market, was accompanied by decline in the demand
for bank credit and by marked reduction in the volume of outstanding bank loans. Reflecting this underlying situation and the considerable inflow of gold from abroad, short-term money rates in the
open market as well as rates charged by banks on direct loans to
customers showed further marked declines. An offsetting factor to
these easing tendencies was an unusual increase in the demand for
currency during most of the fiscal year and the immediately succeeding months, representing largely currency withdrawals from banks in
consequence of banking disturbances. Following the suspension of
gold payments by Great Britain on September 21 there were large
withdrawals of gold from this country; and these withdrawals,
together with a continued growth of the demand for currency,
resulted in a rapid increase in the volume of reserve bank credit in
use and in firmer conditions in the money market.

SECRETARY OF THE TREASURY

At the beginning of the fiscal year Federal reserve bank holdings of
United States securities amounted to nearly $600,000,000, compared
with about $150,000,000 during the summer of 1929. The increase
reflected purchases in the open market in pursuance of the easy
money policy which had been adopted during the period of liquidation immediately following the break in the security markets in the
autumn of 1929. Reserve bank purchases of United States securities,
together with an inflow of gold, chiefly from South America and the
Orient, and a decline in the volume of money in circulation, were
accompanied by a reduction in the volume of member bank borrowing at reserve banks; in June, 1930, reserve bank discounts for
member banks, at about $250,000,000, were $730,000,000 smaUer in
volume than a year earlier.
During the fiscal year 1931, reserve bank holdings of United States
securities were maintained at about $600,000,000 except for a temporary seasonal increase at the end of the calendar year 1930. Except
for seasonal movements, the volume of member bank borrowing and
of reserve bank acceptance holdings fluctuated within a relatively
narrow range at comparatively low levels. There were successive
reductions in Federal reserve bank discount rates and buying rates for
acceptances. By the summer of 1931 the discount rate at the New
York bank had been reduced to IK per cent, compared with 6 per
cent in the autumn of 1929. The discount rate was 2 per cent at
Boston and 2K or 3 per cent at all other banks except Minneapolis,
where the rate was 3K per cent.
During the year there was a further heavy inward movement of
gold, from South America, the Orient, and Canada, as well as
relatively small amounts from Germany and France. These reflected
largely the combined effect on international balances of payments
of declining commodity prices, production, and trade, and the unfavorable condition of the market in this country for foreign bonds,
augmented in some instances by unsettled monetary and credit
conditions abroad. By the middle of September, 1931, the total
stock of monetary gold in the country, at about $5,000,000,000, was
mare than $500,000,000 larger than a year earUer. The effect of
this inflow of gold on the demand for reserve bank credit was, however,
more than offset by growth in the volume of currency outstanding,
and in consequence the total volume of reserve bank credit increased.
On June 30, 1931, loans and investments of member banks, at
$33,920,000,000, showed a decrease of more than $1,700,000,000
during the fiscal year and were $2,000,000,000 smaller in volume than
in October, 1929. Member bank loans were about $4,350,000,000
smaller in volume than at the high point reached October, 1929,
whUe their investment holdings showed an increase of nearly
$2,360,000,000.
77532—32

REPORT ON T H E FINANCES

Prior to the beginning of the fiscal year additions to member bank
investment holdings were chiefly securities other than United States
obligations. Subsequently, however, with increased offerings of
United States securities occasioned by the cumulating deficit in the
current Federal budget and by increased loans to veterans, additions
to member bank investment portfolios represented largely United
States securities. Of the increase in total investments, amounting
to nearly $2,360,000,000 between October, 1929, and June, 1931,
about $1,320,000,000 represented increased holdings of United States
securities.
Notwithstanding marked reduction in industrial and commercial
demand for bank loans, the volume of loans reported hy member
banks at the end of June, 1931, as eligible for rediscount at Federal
reserve banks was $3,198,000,000. These loans, together with the
banks' holdings of United States Government securities, represented
an aggregate of more than $7,500,000,000 of collateral available to
member banks as a basis for additional Federal reserve bank
accommodation.
The inactive demand for credit and the comparative freedom of
member banks from indebtedness at the reserve banks resulted in
a progressive decline in short-term money rates both in the open
market and at banks on direct loans to customers, and Federal
reserve discount rates and buying rates for acceptances were also
at low levels. Open market rates on 90-day bankers' acceptances,
which had declined from 5K per cent to l%-2% per cent between the
middle of 1929 and the middle of 1930, showed further marked
decline during the fiscal year 1931 and in June were quoted at seveneighths of 1 per cent. Open market rates on prime commercial
paper dechned from 6)4 to 3}i-3% per cent between the autumn oi
1929 and June, 1930, and by June, 1931, to 2 per cent. Conditions
underlying the decreases in open market rates were also reflected,
£L1 though more moderately, in declining rates charged on loans to
customers as reported b^' banks in principal cities. The average
of these rates for the country as a whole was about 4K per cent in
June, 1931, as compared with 5 per cent a year earlier and about
6K per cent in the autumn of 1929.
Changes in the total volume of money in circulation have been
unusually important during the past year. Decline in business
activity after the middle of 1929 accelerated the gradual decline in the
volume of money in circulation which had been in process in recent
years. By October, 1930, the total was about $4,500,000,000, a
figure only slightly above the low level reached in 1922 after the
decline from the high level of 1920. Increase in subsequent months of
1930 and 1931 in the number of bank suspensions occasioned an
unusual volume of cash withdrawals from banks. Notwithstanding

SECRETARY OF THE TREASURY

the fact that such customary criteria of changing business requirements for currency, as retail trade activity, factory pay rolls, and
commodity price averages continued to decline throughout the
period, total money in circulation amounted to about $5,000,000,000
by mid-September as compared with $4,500,000,000 a year earlier.
This large increase in the demand for currency at a time when currency requirements of industry and trade were unusually low undoubtedly reflects currency hoarding. The cash withdrawals of
deposits have increased the difficulties of many banks that had
already suffered from depreciation of their loans and investment
accounts, and furthermore occasioned a drain on the resources of the
Federal reserve system, which, however, was in a strong position for
meeting the situation.
By midsummer, monetary and credit conditions in certain foreign
countries had become increasingly critical, with the result that in a
number of countries the operation of the gold standard was either
suspended or materially restricted. Repercussions from these developments placed unusual demands upon our own banking and credit
structure, which have been met by the full cooperation of the banks
of this country with the support of the Federal reserve system.
After the middle of September, 1931, there was a rapid outflow of
gold from the country, chiefly to continental Europe, particularly
France, and an increase in the volume of gold earmarked by Federal
reserve banks for foreign correspondents. During the ensuing month
the country's stock of monetary gold decreased by nearly $600,000,000,
which was about $100,000,000 more than the accessions since the
middle of 1930. Foreign interests obtained the funds for the withdrawal of gold through sales of acceptances previously held here for
foreign account, through the use of balances held with banks in this
country, including Federal reserve banks, and through the sale of
foreign-owned securities in American markets. At the same time,
there was continued increase in the domestic demand for currency.
The resultant drain on member bank reserve funds occasioned a rapid
increase in the volume of reserve bank credit in use, which amounted
to $2,125,000,000 by the middle of October, compared with an average of about $945,000,000 in June. Member bank discounts increased
from an average of about $190,000,000 in June to about $630,000,000
at the middle of October. The acceptance holdings of the reserve
banks showed an increase of more than $600,000,000 and United
States security holdings an increase of about $120,000,000 for the
same period.
In these circumstances the discount rate of the Federal Reserve
Bank of New York was raised from the unusually low rate of IK per
cent to 2}^ per cent on October 9 and to 3K per cent on October 16.
Discount rates were also increased in October at all reserve banks

REPORT ON THE FINANCES

except Atlanta, where a 3 per cent rate remained in effect, and Minneapolis, where the rate was 3K per cent; at the end of the month the
rate was 3}^ per cent at all other reserve banks except Richmond and
Dallas which had established rates of 4 per cent. At the Federal
Reserve Bank of New York buying rates on biUs were also increased
in the latter part of September and in October. At the middle of
October the rate was 3}^ per cent on maturities up to 90 days as
compared with 1 per cent at the beginning of September.
Open market rates increased somewhat but in mid-October were
still at comparatively low levels. Rates on 90-day bankers' acceptances had increased to 2)i-3K per cent from seven-eighths per cent in
September, and prime commercial paper had increased to 2)^-4^ per
cent from 2 per cent.
Cost of Government borrowing
The cost of Government short-term borrowing during the year continued the declining trend established in the preceding fiscal year,
making record low levels; bonds also were sold at unusuaUy low rates.
Due to the increased use of Treasury bills, rates on Government borrowing reflected the general decline in open-market money rates
somewhat more promptly than would otherwise have been the case.
As outUned in preceding paragraphs, short-term money rates in
the summer of 1929 reached the highest levels in recent years, but
dropped to new postwar low levels by the end of the fiscal year 1930.
During the fiscal year 1931 open-market money rates, reflecting underlying money and credit conditions, reached the lowest level of the
postwar period; rates on Government issues followed the market
trend. Certificates of indebtedness sold on June 15 and September
16, 1929, bore rates of b)i and 4%, respectively, representing the highest
rates at which Government securities had been marketed since 1921.
The certificates offered just prior to the beginning of the fiscal year
1931 carried a 2% per cent rate, whereas the rate on the issue of April
15, 1931, was 1% per cent and on the issue of September 15, 1931, IK
per cent. These are the lowest rates at which certificates of indebtedness have ever been issued.
The rates at which funds have been obtained through the sale
of Treasury biUs have shown even greater relative declines during
the current fiscal year. Rates at which these securities were issued
ranged steadUy downward from an average bank discount rate of
approximately 1% per cent at the beginning of the fiscal year to
about seven-eighths of 1 per cent at the end, and in July and August,
1931, 3-month biUs were sold at average rates of about one-half of
1 per cent. Reflecting the firmer tendency of open-market rates
at the end of September and in October, rates on Treasury biUs

SECRETARY OF THE TREASURY

increased and the issue of October 26, 1931, was sold at an average
bank discount rate of about 2.69 per cent.
Treasury biUs have provided a valuable supplement to the regular
quarterly issues of certificates of indebtedness, from the point of view
of the cost of Government borrowing. This follows partly from the
fact that in a period of decUning short-term money rates the sale
of bills at relatively frequent intervals has resulted in a more prompt
reflection of money market conditions in the cost of Government
borrowing. A further advantage which may at times be realized
through the use of Treasury biUs is illustrated by the sale of about
$102,000,000 of bills on October 15 and 16, 1930, representing an
amount which otherwise would have been borrowed in the regular
issue of certificates on the quarterly tax-payment date in September.
Long-term financing was also accomplished at the lowest rates
experienced in the war or postwar period, as indicated in the succeeding paragraphs.
Treasury bonds
In the fiscal year 1931, for the first time in nearly three years, the
Treasury issued long-term securities on public offering. Two issues
of bonds were sold during the fiscal year and one on September 15,
1931. The first, an issue of 3% per cent bonds, was dated March 16,
1931, matures on March 15, 1943, but is redeemable at the option of
the Government on and after March 15, 1941. Subscriptions aggregating $2,112,000,000 were received, $1,369,000,000 representing cash
subscriptions and $743,000,000 representing exchange subscriptions,
for the payment of which maturing 3K per cent Treasury notes were
tendered. The exchange subscriptions only were accepted; these
were allotted on an 80 per cent basis. The total amount of bonds
issued was $594,000,000. The second issue of bonds, dated June 15,
1931, bears a rate of 3^ per cent, matures on June 15, 1949, bat is
redeemable at the option of the Government on and after June 15,
1946. Subscriptions for the payment of which certificates of indebtedness maturing on June 15 were tendered were given preferred allotment up to $326,000,000. Subscriptions aggregated $6,316,000,000,
exchange subscriptions totaling $572,000,000 and cash subscriptions
$5,743,000,000. Of the exchange subscriptions 57 per cent were
allotted; cash subscriptions in the amount of $495,000,000 were
aUotted on a graduated scale. The aggregate amount of bonds issued
was $821,000,000. The September issue of 3 per cent Treasury bonds
was dated September 15, 1931, maturing on September 15, 1955, but
redeemable at the option of the Government on and after September
15, 1951. Subscriptions totaled $941,000,000. Subscriptions not
exceeding $100,000 were aUotted in full, and all others were aUotted
on a graduated scale. A total of $800,000,000 was issued.

REPORT ON T H E FINANCES

Prior to these issues the last long-term bonds sold by the Treasury
were the issue of 16 to 20 year 3% per cent Treasury bonds dated
July 16, 1928. The issue of March 16 duplicated the rate carried by
this security. The issues of June 15 and September 15, however,
carried rates of only 3% and 3 per cent, respectively. The latter rate
is the lowest rate borne by any bond offered for public subscription
since the issue of the 3 per cent Panama Canal bonds in 1911.
Arrangement qf debt maturities
Public debt operations must be planned with a view to maintaining a distribution of debt maturities which will facilitate the
use of funds for debt reduction and the accomplishment of refunding operations when necessary or when advantageous money market
conditions make such operations desirable. A portion of the debt
is also kept in short-term securities with maturities arranged to
aid in the adjustment of the irregular flow of revenue to the more
regular distribution of expenditures. In general the management of
the public debt to meet these objectives requires maturities in each
quarterly income tax-payment month in addition to sufficient optional
maturities to permit the adjustment of debt reduction and refunding
to changes in Treasury and money market conditions. Public debt
transactions during the fiscal year 1931 and subsequent months have
been conducted with a view to these general objectives.
At the end of the fiscal year 1930, the total interest-bearing debt
aggregated $15,922,000,000. I t included less than $3,811,000,000
of debt maturing avithin five years, consisting of $1,420,000,000 of
certificates and Treasury bills maturing within a year, $1,626,000,000
Treasury notes maturing in from one to three years, and $764,000,000
of special trust fund securities, chiefly those held by the adjusted
service certificate fund. The long-term debt aggregating $12,111,000,000 included about $8,000,000,000 of the first and fourth
Liberty loans, the former callable in 1932 and maturing in 1947,
and the latter callable in 1933 and maturing in 1938.
The public debt increased during the fiscal year 1931 and subsequent months and at the end of September the outstanding interestbearing debt, at $17,048,000,000, was $1,126,000,000 larger than on
June 30, 1930. This increase was the result of the net addition of
$2,224,000,000 to the volume of outstanding long-term interestbearing securities and a net reduction of $1,098,000,000 in the volume
of securities with shorter maturities. Increase in the long-term debt
refiected the sale of three issues of bonds in March, June, and September, 1931, offset by minor redemptions of outstanding securities.
Decline in the short and intermediate term debt refiected the retirement of $1,174,000,000 of interest-bearing Treasury notes which

SECRETARY OF THE TREASURY

would have matured in 1932, and the liquidation of most of the
investments held in the adjusted service certificate fund, offset in part
by increases in other classes of short-dated securities. Outstanding
open market issues of certificates ofindebtedness, at $1,482,000,000
on September 30, showed an increase of $217,000,000 for the 15-month
period and Treasury bills, at $524,000,000, an increase of $368,000,000.
During the year a considerable amount of short-dated debt was
refunded and the total debt increased, through the issuance of longterm securities at the lowest rates prevailing in the war and postwar
period. In addition, a distribution of maturity and optional retirement dates has been secured which wiU provide a considerable degree
of flexibiUty to the future management of the debt. The major part
of the outstanding long-term issues carries maturities ranging froni
1938 to 1956 and affords the Government the privilege of optional retirement over periods varying, in the case of the different issues, from
2 to 10 years prior to maturity dates.
Adjusted service securities
Reference has already been made to the liquidation of special
Government securities, held in the adjusted service certificate fund,
for the purpose of financing loans to World War veterans. The
World War adjusted compensation act of May 19, 1924, provided for
the issuance to World War veterans of adjusted service certificates
maturing at the end of 20 years or upon prior death of the veteran.
To meet the habUity incurred by the issuance of these certificates, the
act created the adjusted service certificate fund. The act also provided for the appropriation to this fund on January 1 of each year
of an amount which invested at 4 per cent compounded annually
would be sufficient to pay the face value of the adjusted service
certificates upon their maturity in 20 years or upon prior death
of the veteran. The Secretary of the Treasury was authorized
to invest and reinvest the money in the fund in uiterest-bearing
obligations of the United States, and to sell these obUgations for the purposes of the fund. Since no United States securities then outstanding
met the requirements of the act as to interest, it has been the practice
of the Treasury to invest appropriations to this fund in special United
States Government notes and certificates of indebtedness issued for
the purpose (with interest at 4 per cent per annum, payable annually
or on the prior redemption of the security) wliich in effect reduces by
corresponding amounts the volume of its borrowing in the open
market.
These special securities constitute a part of the outstanding public
debt of the Government but are held in the Treasury for the account
of tliis fund and not by the public. At the beginning of the fiscal

REPORT ON T H E FINANCES

year 1931, there were in the Treasury for the account of this fund
$629,000,000 face amount of these special 4 per cent Treasury notes.
On January 1, 1931, simUar securities were issued to the fund in the
amount of $137,000,000 against the annual appropriation to the fund
and interest due on investments in^ the fund on that date.
In the original act and amendments thereto, certain loan privileges
were accorded to the holders of the adjusted service certificates, but
these did not authorize loans from the adjusted service certificate
fund. On February 27, 1931, however. Congress amended the
World War adjusted compensation act, authorizing an increase in
the loan basis of adjusted service certificates from about 22 per cent
to 50 per cent of their face value and the financing of such loans
from the adjusted service certificate fund and the Government life
insurance fund.
When this act became a law on February 27, 1931, securities held
for the fund had been reduced to $755,000,000 face amount of special
4 per cent Treasury notes, by redemption during the year for the
payment of death claims. The 1932 annual appropriation of
$112,000,000, which ordinarily would not have become available
untU January 1 of that year, was made immediately available by
the deficiency act of March 4, 1931. Against this appropriation
special 4 per cent certificates of indebtedness in like amount were
issued to the fund.
In order to provide funds for the loans to veterans authorized by
the act of February 27, 1931, it was necessary for the Treasury to
convert into cash securities held in the adjusted service certificate
fund. The maldng of loans from this fund involves essentially the
substitution of the veterans' notes for United States obligations held
in the fund as investments, and the sale of the latter in the open
market; actuaUy the special United States securities held in the fund
are not sold but are redeemed by the Treasury as loans are made to
veterans, and other United States securities are sold in the market
according to the Treasury's cash requirements.
In connection with the financing of about $960,000,000 of loans
to veterans from June 30, 1930, to September 30, 1931, $756,000,000
of adjusted service certificate fund securities were redeemed during
the fiscal year and an additional $59,000,000 during the three subsequent months. On September 30, 1931, $63,000,000 of these
securities were held in the fund.
For further details on the operations of the adjusted service certificate fund see page 118.
SK V^'"* ^^^^ Treasury notes
As stated in my last report, a call was issued on September 10,
1930, for the redemption on March 15, 1931, of all ontstanding 3K

SECRETARY OF THE TREASURY

per cent Treasury notes of Series A - and Series B-1930~1932. On the
date fixed for the redemption of these notes there was outstanding a
total of $1,109,372,550. Provision for the redemption of these notes
was included in the March quarterly financing, considered elsewhere
in this report; $594,230,050 of the notes were exchanged for a like
amount of 3% per cent Treasury bonds of 1941-1943, $72,482,500 for
a like amount of 2 per cent certificates of indebtedness of Series
TM-1932, and the remainder of the notes presented were redeemed
in cash.
On June 8, 1931, a call was issued for the redemption on December
15, 1931, of all outstanding 3K per cent Treasury notes of Series
C-1930-1932, which were payable on December 15,1932, but redeemable at the pleasure of the United States on and after December 15,
1930. These notes were issued in the amount of $607,399,650 on
January 16,1928,in exchange for third Libertyioan 4K per cent bonds.
By the end of September, notes aggregating $155,680,700 had been
redeemed, $41,556,100 through purchases for the cumulative sinking fund, $114,112,600 received from foreign governments in payment
of principal or interest under debt settlements, and $12,000 on miscellaneous accounts, and $451,718,950 were outstanding on September
30, 1931.
Department Circular No. 439, dated June 8, 1931, calUng the notes
of this series for redemption, and the pubhc announcement of the
same date concerning the call, will be found as Exhibit 58, page 349.
Postal savings bonds
The first series of postal savings bonds, issued on July 1, 1911, in
amount $41,900, matured on July 1, 1931, and was paid. The act
establishing the Postal Savings System, approved June 25, 1910,
provided for the surrender of these deposits in exchange for United
States bonds bearing interest at 2K per cent, redeemable after 1 year,
and payable at the end of 20 years. A series has been issued on
January 1 and July 1 in each year, beginning July 1, 1911. The
forty-first series was issued on July 1,1931,in the amount of $4,415,140.
The aggregate total of the 41 series issued is $27,249,800, and the
amount outstanding was $27,207,900 on September 30, 1931.
Cumulative sinking fund
For 1931 there was available for the cumulative sinking fund
$392,000,000, which represented the regular sinking fund appropriation and a smaU unexpended balance. During the first quarter of the
year $65,000,000 face amount of 3K per cent Treasury notes of series
A - and B-1930-1932 were purchased at the market at a total principal
cost only slightly in excess of par, and on March 15,1931, the balance

REPORT ON THE FINANCES

of the appropriation, $327,000,000, was applied to the redemption at
par of 3K per cent Treasury notes of Series A-1930-1932.
Statements showing the calculation of the amount of the appropriation and the operations on account of the fund during the fiscal
year 1931, and from its inception on July 1, 1920, to the close of 1931,
will be found on pages 537 and 538 of this report.
Amendment to the second Liberty bond act
In my report for 1930, I recommended that the Congress grant
authority for the additional issuance of bonds under the provisions
of the second Liberty bond act, as amended. In the act approved
March 3, 1931, Congress increased the aggregate amount of bonds
issuable under the second Liberty bond act from $20,000,000,000 to
$28,000,000,000. Up to September 30, bonds aggregating $20,323,981,100 have been issued under the provisions of this act; accordingly
$7,676,018,900 may hereafter be issued within the limitation of
$28,000,000,000. Of those heretofore issued, $11,631,073,850 remained outstanding on September 30, 1931.
The official circulars and all public announcements covering the
open market issues of Treasury bonds, certificates of indebtedness,
and Treasury bills, during 1931, and the first quarter of 1932, are
presented in the appended exhibits, except for those issued during
the first quarter of 1931, which will be found in the report for 1930.
Detailed statements of transactions in the public debt during the
fiscal year 1931 will be found in the appended tables.
INCOME TAX ADMINISTRATION

The administration of income taxes requires that the Bureau of
Internal Revenue determine the correct tax liability of about 5,000,000
individual and corporation returns each year. These returns must
be closed within a reasonable period prior to the end of the period
of limitation on assessment, with only a minim.um number kept open
by appeals to the Board of Tax Appeals.
For returns for 1928 and subsequent years, the law prescribes in
general (1) that the tax must be assessed within two years after the
return is filed and (2) that any refund must be allowed or made
within two years from the time the tax is paid, unless during that
period a claim for refund is filed. Accordingly, in the bureau's
program it is required that every effort be made to reach agreements
with taxpayers as to their tax liabUity promptly and within the 2-year
period. Otherwise, either waivers must be accepted extending the
period of limitation on assessment resulting in an accumulation of
unclosed returns or 60-day deficiency notices must be sent before the
expiration of the statutory period in cases where there appear to have
been underpayments of tax,

SECRETARY OF THE TREASURY

Under the present income tax law the bureau in a single fiscal year
is working for the most part on the returns for three calendar years.
I t is completing the audit of the calendar year returns for which the
period of limitation on assessment expires in March of the fiscal year.
Only a relatively small number of returns for this calendar year remain
. unaudited; usually these involve comparatively complicated auditing
problems. The bureau is also completing its audit of the major part
of the returns filed in March just preceding the beginning of the fiscal
year. More than 95 per cent of the returns filed in any one year are
found to be substantially correct as filed and involve no serious problems. These are closed within a year after thay are filed. In March
of the fiscal year the bureau receives and begins its audit work on
the returns filed for the preceding calendar year. A considerable proportion of these returns is closed by the end of the fiscal year.
During the fiscal year 1931 the bureau's work was heavier than
the program with which it will be confronted in subsequent years.
The revenue act of 1928 fixed the period of limitation on assessment
at two years after the return is filed, which under the 1926 act was
three years. As a result during the past fiscal year the audit had to
be completed for calendar year returns for both 1927 and 1928.
Since unusually large incomes and taxes had been reported for 1928
by both individuals and corporations the auditing problems with
respect to those years were even more difficult than in other years.
Notwithstanding this additional burden substantial numbers of
returns for 1929 and 1930 were audited and closed during the fiscal
year 1931.
The work of the bureau during the fiscal year 1931 is summarized
in the following table.
Summary of income tax audit during the fiscal year 1931
[Number of returns]
1931
Returns closed b y Income Tax Unit—
Without use of 60-day deficiency notice
After issue of 60-day deficiency notice, without appeal to Board of Tax Appeals
Jeopardy assessment
Total

3,134,988

Accounts and Collections Unit
Decision of Board of Tax Appeals
_...
Returns involved in appeals filed during year with Board of Tax Appeals »

2,320,000
5,036
12,158 .

June 30,
1930
Returns on hand—
For a u d i t Income Tax Unit. . .
.
..
All other, procedure prior to audit incomplete
Awaiting action of taxpayer, after issuance of 60-day deficiency notice
Appeals pending before Board of Tax Appeals

3,113,419
19,444
2,125

221,893
3, 080,000
2,282
16, 035

June 30,
1931

364, 700
2,140, 000
1,998
21, 233

»Includes some returns for which the 60-day deficiency notices were sent prior to the beginning of the
year.

REPORT ON T S E FINANCIiS

There were approximately 3,300,000 income tax returns in the
bureau for audit at the beginning of the fiscal year 1931, of which
about 3,100,000 were returns for 1929, filed in March, 1930. The
returns filed during the fiscal year, totaling approximately 4,650,000,
included for the most part calendar year returns for 1930 fUed in
March, 1931. During the fiscal year about 90 per cent of the previously unaudited returns for 1929 were closed as well as over half of
the returns filed for 1930. With respect to a substantial part of the
balance of the 1930 returns the administrative procedure prior to audit
was incomplete on June 30, 1931. The major part of the returns
closed for these two years reported small incomes as to which the
audit problems were not difficult. The procedure now foUowed by
the bureau results in the closing of returns of this type by the Income
Tax Unit and the Accounts and Collections Unit well withui a year
after they are filed.
The audit of the returns with large incomes or involving more
complicated accounting problems is conducted by the Income Tax
Unit. During 1931 the unit concentrated on returns for 1927 and
1928 for which as a general rule the period of limitation on assessment ran in March, 1931.
The total number of returns in the bureau for audit at the end of
the year was approximately 2,500,000, or about 25 per cent less than
at the beginning of the year, due in part to the decline in number
of returns filed for 1930 as compared with prior years and in part
to prompt audit of a large number of the small returns filed. Of the
total awaiting audit, approximately 2,200,000 were returns for 1930,
237,868 were returns for 1929, and 20,341 were original, new, or
reopened returns for 1928 and prior years awaiting the settlement
of unusually difficult problems relating to tax liability. Other
returns involving matters still in dispute on June 30, 1931, and not
included in the above figures include 1,998 returns awaiting action
of the taxpayer after the sending of the 60-day deficiency notice,
and returns involved in the 21,233 appeals pending before the Board
of Tax Appeals.
Settlement policy
The bureau continued its efforts to increase the nuinber of returns
closed without appeal to the Board of Tax Appeals or to the courts.
Progress in income tax administration is refiected primarUy in the
increasing effectiveness of the bureau in reaching agreements with
taxpayers through its own organization.
The results for the fiscal year 1931 indicate that the unit is having
more success in closing returns involving large amounts of additional
tax. There were ^111,403 returns involving additional taxes which
were closed without a 60-day deficiency notice, as compared with
124,124 returns thus closed during the preceding fiscal year. How

SECRETARY OF THE TREASURY

ever, the amounts of additional tax thus assessed were larger, a total
of $112,627,167 for 1931, as compared with $86,443,404 for the fiscal
year 1930. There was also an increase in the number of returns
closed and in the taxes assessed after the 60-day deficiency notice,
both as the result of agreement and by reason of the taxpayer's
failure to file an appeal with the Board of Tax Appeals.
An increasing amount of the additional assessments is agreed to
by the field force and the taxpayer. In such cases the additional
tax is assessed before review in Washington and is collected more
promptly, with a correspondingly smaller interest charge against the
taxpayers. There were $41,002,633 of additional taxes thus assessed
during 1931, an increase of $9,580,871, or 30 per cent over the preceding year. Furthermore, of additional taxes recommended by the
field forces, other than those agreed to in the field, approximately
$90,000,000 was assessed as recommended. In administering an income tax in a country as large as the United States, it is important
that large amounts of tax liability be determined by that part of the
Income Tax Unit which is in closest contact with the taxpayer, the
field organization.
The special advisory committee has continued its work of expediting the settlement of certain cases in which 60-day deficiency
notices have been issued and/or which have been appealed to the
Board of Tax Appeals. * Until the beginning of the fiscal year this
special work was performed in part by the special advisory committee
and in part by the review division of the general counsel's office, but
beginning July 2, 1930, the work was concentrated in the special
advisory committee. The scope of the committee's work was extended to include cases involving issues of law as well as mixed
questions of law and fact and also to include estate tax cases on
appeal before the Board of Tax Appeals.
During the year the committee disposed of 1,627 60-day deficiency
notices as compared with 526 in the preceding year, and 4,998 cases
appealed to the Board of Tax Appeals as compared with 4,607 during
1930.
New policy concerning waivers
Results for the fiscal year reflect to a marked degree the effect of a
new policy, effective in January, 1931, concerning waivers to extend
the period of limitation on assessment. Up to that time it had been
the policy of the bureau, in its efforts to make agreements with taxpayers, to suggest the filing of, and to accept, waivers extending the
statutory period of limitation on assessment if such action seemed
expedient and necessary to a full discussion of the cases. Beginning
in January, 1931, however, waivers were definitely discouraged by
the bureau. Consents to extend the period of limitation were

REPORT ON THE FINANCES

accepted only upon request by the taxpayer accompanied by evidence
of good and substantial reasons for the requested extension.
The new policy was initiated shortly before, the expiration of the
statutory period of limitation on assessment for returns for 1927 and
1928. There was, consequently, a marked increase in the number of
60-day deficiency notices issued. Subsequently there was a corresponding increase in appeals to the Board of Tax Appeals, as shown
in Chart 6. The number of appeals filed January to June, inclusive,
shows a marked increase ovier preceding years.

CHART 6.—Number of appeals docketed, formal decisions rendered, and number of appeals disposed of
by the Board of Tax Appeals from January, 1926, to September, 1931
Numher of 60-day deficiency notices issued and appeals filed with the Board of
Tax Appeals, January to June, 1929, 1930, and 1931
January-June

1929
1930
1931

60-day defi- Appeals filed
ciency notices with Board of
Tax Appeals i
issued
8,282
7,264
18,757

2,997
2,740
7,628

1 Including reopened returns.

There is little question but that the bureau's earlier policy concerning waivers was the means by which a taxpayer frequently postponed the additional assessment and the closing of the return. For
such cases the new policy will expedite the work of making settlements. There will, of course, continue to be certain cases in which
waivers should be accepted, such as cases in which the preparation
of evidence is unavoidably delayed. FaUure of the bureau to consider

SECRETARY OF T H E TREASURY

the taxpayer's offer of a waiver in these cases would definitely end
the opportunity of the Income Tax Unit to negotiate for settlement
and might result in extended litigation before the Board of Tax
Appeals and/or the courts.
The Board of Tax Appeals
During 1931 there was an increase in the number of cases pending
before the Board of Tax Appeals. In contrast to the gradual reduction in the number of appeals during the preceding two years from
21,639 on June 30, 1928, to 16,035 on June 30, 1930, the number
increased during the past fiscal year to 21,233 on June 30, 1931.
The increase in number of appeals filed during the year was due to
the fact that the period of Uihitation on assessment for two tax years
expired on or about March 15, 1931, and reflected, as well, the new
waiver policy made effective in January.
As is shown in Chart 7, the special advisory committee and the Board

CHART 7.—Output of the Board of Tax Appeals, the special advisory committee, and the review division
of the General Counsel's oflQce, January, 1926, to September, 1931

of Tax Appeals have already made marked reductions in the unusual
volume of work, not only by June 30, 1931, but also during the subsequent three months. During the nine months ended September
30, 1931, the special advisory committee disposed of 1,556 60-day
deficiency notices as compared with 435 during the same period
of the preceding year, and also disposed of a larger number of appeals.

REPORT ON THE FINANCES

Numher of 60-day deficiency notices and appeals disposed of by the special advisory
committee and the Board of Tax Appeals, January to September, 1930 and 1931
January to
June—
1930
Special advisory committee:
60-day deficiency notices disposed of.
Appeals disposed of
Board of Tax Appeals:
Appeals, disposed of

July to September—
1930

1931

365
2,156

1,480
2,670

70
973

76
1,499

3,490

3,628

1,246

2,440

The volume of unsettled cases before the Board of Tax Appeals
emphasizes again the n^eed for the continued effort, which is being
made, to expedite the settlement within the bureau of controversial
cases.
Improved coordination of work in Washington and in the field
The Income Tax Unit has now operated for a full year under the
new organization effected June 16, 1930. Formerly the audit sections
in Washington were organized according to type of income tax
return, that is, individual return, single corporation return, consolidated return of aflSliated corporations, etc., without regard to the part
of the country represented. This arrangement has been replaced by
an audit section for each of five parts of the country, each section
being subdivided into units to deal with special types of returns.
Reports from the field now receive the attention of auditors under
the direction of a single section head for each of five parts of the
country. In operation there is developing not only a better coordination of the work of the auditors in Washington with that of the
representatives in the field, but also more definite responsibUity in
Washington for the general program of income tax administration as
to a particular section.
Court decisions
Among the cases decided by the Supreme Court of the United
States during the last term, those involving questions arising under
the internal revenue laws constitute perhaps a larger and more
significant group than during any preceding term of the court. The
increasing number of such cases appearing upon the dockets of that
court uidicates the importance of the field of internal revenue taxation. WhUe the cases decided by the court embraced a great variety
of questions, some were of particular importance because of the large
number of taxpayers and the great amount of revenue involved.
In a group of cases, including Graham v. Goodcell and Oak Worsted
MUls V. U. S. (282 U. S. 409), the court sustained the constitutionahty
of section 611 of the revenue act of 1928, under the provisions of

SECRETARY OF THE TREASURY

which section the Government was allowed to retain certain tax
payments which had been collected after the expiration of the period
of limitation on collection in consequence of the fihng by the taxpayer of claims in abatement which operated to stay the collection of
the taxes in question. The court confirmed in all substantial points
the construction of that section contended for by the Government
and approved its application in all the situations covered by the
comprehensive language of the statute. The favorable decision in
these cases averted the necessity of the payment of refunds and
interest estimated to total $50,000,000 and $20,000,000, respectively.
Also of importance, in so far as the number of cases and the amount
of tax were concerned, were the decisions of the court in the cases of
U. S. V. Michel and U. ^. v. Krieger (282 U. S. 656), involving the
period of limitation applicable to the bringing of suits to recover
taxes Ulegally collected, following the disallowance of claims for
refund. The statutory provision that within 90 days after such disallowance the taxpayer shall be notified by mail was held to be merely
directory, so that the faUure to mail such notice does not extend the
period for bringuig suit.
In Stange v. U. S. (282 U. S. 270); Aiken v. Burnet (282 U. S..277):
W. P. Brown & Sons Lumber Co. v. Burnet (282 U. S. 283); and
Burnet v. Chicago RaUway Equipment Co. (282 U. S. 295), the court
sustained the contentions of the Government with respect to the
vaUdity and effect of waivers under the various revenue acts prior
to the act of 1926. The favorable decisions in these cases have
secured the collection of substantial amounts of taxes. The effect
of the court's decisions has been to eliminate from controversy many
technicalities with respect to the statute of limitations and to confine
the consideration of cases to questions^concerning the tax.
In the case of Phillips v. Burnet ^283 U. S. 589), the court
sustained the constitutionality of the so-called 'transferee" provisions (section 280) of the revenue act of 1926 and adopted the construction of these provisions, in conformity with the practice of the
Bureau of Internal Revenue, that the full tax liabUity may be collected
from any of the transferees to the extent of the assets received by
him, there being no necessity for apportioning the liability among all
the transferees. This decision preserves a most effective means of
collecting delinquent taxes which would otherwise be secured with
great difficulty.
In a group of cases headed by Poe v. Seaborn (282 U. S. 101), the
court decided the important question of the effect of the community
property laws upon the returns of married persons domiciled in those
States where the community property system prevails. The court
held that under the revenue act of 1926 spouses domicUed in the States
of Washington, Arizona; Texas, and Louisiana were entitled to make
77532—32

REPORT ON THE FINANCES

separate returns of community income, each reporting one-half of
the income which, upon acquisition, became community property
under the laws of the States. The decisions in these cases enabled the
Bureau of Internal*Revenue to close a large number of cases which
were dependent upon the decision of this question. On June 16,
1930, prior to the decision and upon recommendation of the Treasury
Department, Congress extended for one year the periods of limitation
on the assessment of deficiencies in taxes and the allowance of refunds
for 1927 and 1928 in the case of an individual or his or her spouse
who filed a separate income tax return and included therein community income. The department wished to avoid the inconvenience
to taxpayers which would result if 60-day deficiency notices were
issued and the taxpayers were compelled to file petitions with the
Board of Tax Appeals. A conservative estimate of the annual loss of
revenue to the Government resulting from the adverse decision of
the community income issue is approximately $25,000,000.
Questions concerning the taxability of the income of Osage Indians
derived from royalties and bonuses from mineral leases have been
under consideration in the courts for several years. Decisions were
rendered during the year by the Circuit Court of Appeals for the
Tenth Circuit in Blackbird ^?. Commissioner (38 Fed. (2d) 976), and
by the* Supreme Court in Choteau v. Burnet (283 U. S. 691) on the
basis of which 925 cases wUl be closed by the bureau without trial.
Under these decisions, the income of incompetent Osage Indians derived as royalties and bonuses on mineral leases and income from
homestead allotments is tax-exempt but the income from surplus
allotments and from reinvestment of exempt income is taxable.
BUREAU^ OF CUSTOMS •

Imports and customs collections
Customs collections declined 35.2 per cent from the total for the preceding fiscal year and reached a level that has not been approached
since 1922, the year which marked the beginning of the period of prosperity following the postwar depression of 1920-21. This decline in
customs collections compares with a decUne of 36.8 per cent in the
value of general imports. Reduced customs receipts may be attributed in part to diminished quantities of imports which reduced the
amount of both specific and ad valorem duties and in part to almost
uniformly lower values which stUl further lessened the revenue from
imports subject to ad valorem duties. Moreover, customs receipts
during 1931 were adversely affected by the increased importations and
heavy warehouse withdrawals during the few weeks immediately
preceding June 17,1930, of those goods on which duties were increased
by the tariff act of 1930.

S E C & E T A E * O F T S S ! TUfiAStJ&Y

Free goods constituted a slightly larger proportion of the total imports ^ r consumption during the past fiscal year than during the
years immediately preceding, such imports constituting the 69.0 per
cent of the total in 1931, as compared with 65.5 per cent for the preceding year. This change is partly attributable to the large stocks
of dutiable imports accumulated by manufacturers and dealers immediately prior to the passage of the present tariff act which caused a
corresponding reduction in dutiable imports for consumption during
the earlier months of the past fiscal year.
The period between the autumn of 1929 and the close of the fiscal
year 1931 was characterized by a steady decline in the value of imported commodities which, at the end of the period, amounted to only
55.6 per cent of their volume 20 months before. Importations of both
free and dutiable goods showed much the same trend with the exception of a temporary peak in dutiable goods in June, 1930, at the time
of the passage of the tariff act.
All classes of general imports showed marked declines during 1931 as
compared with the previous fiscal year, the total decrease amounting to
$1,417,000,000, or 36.8 per cent. Imports of semimanufactures and
crude materials showed the greatest proportionate declines, 42.2 and
41.6 per cent, respectively; the rates of decrease for manufactured
foodstuffs, finished manufactures, and crude foodstuffs (32.4, 32.1,
and 27.1 per cent, respectively) were less than the rate of decrease
for all imports. In both 1930 and 1931 the decrease in value of imports of crude materials as compared with the preceding year was
larger than for any other class of imports, $544,000,000 during 1931
and $201,000,000 during 1930. Large decreases in the value of leading crude commodities, such as crude rubber, raw silk, hides and
skins, and copper ores, contributed substantially to the total decrease.
The six groups of imports which comprise the leading sources of
Government revenue from customs are cane sugar, unmanufactured
tobacco, raw wool, wool manufactures, cotton manufactures, and sUk
manufactures. The changes in general imports of these commodities
during the fiscal year 1931, as compared with 1930, are shown below:
Quantity (in Value (in mil- Per cent increase
(+) or decrease
million pounds)
lions)

(-)

Cane sugar
Tobacco, unmanufactured
Wool and mohair, unmanufacturedWool manufactures, including semimanufactures...
Cotton manufactures, including semimanufactures.
Silk, manufactured

1930

1931 Quantity Value

1930

1931

7,282
63
220

6,574 $158. 6 $112.1
37.7
75
47.6
24.4
59.4
150
25.8
62.5
38.0
60.6
13.6
31.9

-9.7
-M9.0
-31.8

-29.3
-20.8
-58.9
-58. 7
-37.3
-67.4

REPORT ON THE FINANCES

The value of imports of wool and mohair, of wool manufactures,
and of silk manufactures declined almost 60 per cent. Although the
quantity of cane sugar imported decreased less than 10 per cent from
the preceding year, price declines were considerably greater and the
total value of imports showed a decline of 29 per cent. The only
one of these groups to compare favorably with 1930 was unmanufactured tobacco, the imports of which increased 19 per cent; however,
as in the case of cane sugar, price declines were marked and the value
of imports showed a decrease of 21 per cent.
The tariff act of 1980
The tariff act of 1930 enlarges the Secretary's discretionary powers
by authorizing him to admit under certain conditions articles not
marked with the country of origin; to grant an extension of six months
in the period for which certain classes of merchandise may be imported
under bond; to provide for such exceptions from the requirements for
the production of certified invoices as he deems advisable; to remit
additional duties in the case of clerical errors regardless of whether
such errors were '^manifest"; and to prescribe the conditions under
which bonds shall be required in addition to those specifically required
by law. These provisions have enabled the department to afford
relief in a great many meritorious cases and to simplify and expedite
the customs business without in any way endangering the revenue.
Section 484 of the new act provides two alternative methods in
addition to that of producing the original bill of lading in connection
with the entry of merchandise. One of these authorizes entry on a
carrier's certificate and the other on a duplicate bill of lading. Provision is also made for the release of merchandise from customs custody
only to, or upon an order of, the carrier which transports it, as well
as for the return to the person making entry of the bUl of lading if
such is produced with a notation thereon that entry has been made.
The collector is protected by a specific provision that he shall not be
liable to any person in respect to the delivery of the merchandise
released from customs custody under this section of the act.
A decided improvement has been accomplished in connection with
the importation of antique furniture and artistic antiquities by the
requirement in section 489 that such articles shall be entered only at
ports designated by the Secretary of the Treasury. Under this provision, importations of this character are restricted to ports at which
expert examiners are stationed, resulting in protecting the Government against the free importation of spurious antiques.
Section 501 extends the time of appeal for reappraisement from 10
to 30 days; and also requires the single judge, rendering decisions
on appeals to reappraisement, to state in writing the reasons for and
the facts on which the decision is based. This greatly facUitates the

SECRETARY OF THE TREASURY

consideration of cases on appeal and in many cases tends to discourage
appeals.
Regulations governing the procedure in connection with the enforcement of the provisions coveriug convict labor were promulgated on
November 24, 1930. These provide for findings by the Commissioner
of Customs to be approved by the Secretary of the Treasury against
the importation of commodities mined, produced, or manufactured
in a foreign country by convict labor.
Reorganization qf the bureau
The reorganization of the bureau, commenced toward the close of
the last fiscal year and outlined in the last annual report, was perfected
during the year. The improved supervision under the new form of
organization and the increased personnel resulted in raising the standard of efiiciency and uniformity in the administration and enforcement of the customs laws generally, and in the settlement of claims
and disputes to the greater advantage of the Government yet in
fairness to importers and the public generally.
The number of pending cases in the legal unit was reduced from
509 at the close of the fiscal year 1930 to 344 at the close of the current year, and in the administrative unit the number of cases was
reduced from 907 to 425.
FEDERAL PUBLIC BUILDING PROGRAM

By the act approved May 25, 1926, Congress authorized the Secretary of the Treasury to provide suitable accommodations in the
District of Columbia for the executive departments and independent
establishments of the Government, and throughout the country,
post offices, courthouses, immigration stations, customhouses
marine hospitals, quarantine stations, and other public buildings
of the classes under the control of the Treasury Department. Tlje
Postmaster General and the Secretary of the Treasury were authorized to act jointly in regard to buUdings for post-office occupancy.
This legislation authorized an expenditure of $165,000,000 over a
period of seven years.
On February 14, 1927, a report was submitted to Congress by the
Secretary of the Treasury and the Postmaster General setting forth
the results of a nation-wide survey of the Government's building
requirements; the report included specific recommenda,tions for
Federal buildings urgently needed.
Owing to the acute situation in the District of Columbia, the acts
of January 13 and February 24, 1928, were passed increasing the
authorization for land and construction by $125,000,000.
During 1929 and 1930 the present administration strongly recommended the enlargement of the public building program, and as a *

REPORT ON THE FINANCES

result. Congress further increased the authorization for acquisition
of land and construction of buildings by $230,000,000 in the KeyesElliott Act approved March 31, 1930, and by another $100,000,000
on February 16, 1931, in the second Keyes-Elliott Act.
Total general authorizations, therefore, amount to $629,239,000,
in which amount is included $9,239,000 carried over from previous
authorizations. The proceeds from the sale of obsolete buildings
estimated at $69,000,000 is to be added to the above total. These
figures include $40,000,000 for the purchase of the so-called triangle
site in the District of Columbia.
The limit of annual expenditures for the public building program
under the act of May 25, 1926, was $25,000,000. This was increased
to $35,000,000 in the act of February 24, 1928; to $50,000,000 in the
first Keyes-Elliott Act; and finaUy to $65,000,000 in the act of
February 16, 1931—$15,000,000 in the District of Columbia and
$50,000,000 outside. Any balance of such annual amounts unexpended inay be expended in later years beginning with 1928. This
provision permits the completion of the present program within 10
years beginning with the fiscal year 1928.
Commencement of operations under the public building program
followed the act of March 5, 1928, in which appropriations were
made for the first list of specific projects, recommended in the survey
of the Secretary of the Treasury and the Postmaster General, in the
amount of $58,237,450. Further specific authorizations were made
under the acts of May 5, 1928; May 29, 1928; March 4, 1929; March
26, 1930; July 3, 1930; and March 4, 1931. As a result specific
authorizations have now been obtained from Congress to a total of
$495,441,192.26, or about 70 per cent of the value of the total program which is to be completed by the end of 1937; these authorizations
include 817 projects.
o The specifically authorized projects in the District of Columbia
are:
Limit of cost

Administration building, Department of Agriculture
Extension, Government Printing OfBce
Internal Revenue Building
Commerce Building
Extensible building, Department of Agriculture
Archives Building
Additional stories, Liberty Loan Building
Economics Building (purchased building)
Supreme Court site
Water mains
Post Office Department Building
Interstate Commerce Commission Building
Department of Labor Building
;
Connecting wing between Labor and Interstate Commerce Buildings

$2, 000, 000
1, 250, 000
10,000,000
17, 500, 000
12, 800, 000
8, 760, 000
375,000
350, 000
1, 768, 741
525, 000
10, 300, 000
4, 500, 000
4, 750, 000
2,000,000

SECRETARY OF THE TREASURY

69
Limit pf cost

Department of Justice Building
$12, OOD, 000
Public Health Service Building
_.__
865, 000
State, War, and Navy Building, remodeling
3, 000, 000
Landscape work
50, 000
Extension and remodeling of power plant, Department of Agriculture
85,000
Central heating plant
4, 857, 023
Coast Guard Building
3,000,000

Of these, the Administration Building of the Department of
Agriculture, the Economics Building, the Government Printing Office
Building, the Internal Revenue Building, the Liberty Loan Building,
and the water mains, etc., have been completed. The Department of
Commerce Building is very near completion; a portion of the building
will be occupied during November. The central wing of the extensible building of the Department of Agriculture, the only part now
under contract, will be completed early in the new year.
The largest projects specifically authorized outside the District of
Columbia are:
Chicago, 111., post office
Boston, Mass., post office
Detroit, Mich., post office
Minneapolis, Minn., post office
Kansas City, Mo., post office
New York City, N. Y:
Parcel-post building
Post-office annex
Courthouse
Office building (land only)
Assay office
Cleveland, Ohio, parcel-post building
Philadelphia, Pa.:
Post office.
___.._
Customhouse and appraisers' stores building
Pittsburgh, Pa., post office

_. $24, 725, 000
6, 000, 000
:___
5, 650, 000
4, 150, 000
4, 500, 000
11, 000, 000
9, 500, 000
10, 700, 000
5,000,000
3, 765, 000
5, 275, 000
9, 750, 000
4, 200, 000
7, 902, 000

As regards the status of the specifically authorized projects totaling
$495,000,000 as of July 1, 1931, $422,000,000 or 85 per cent of this
total represents projects completed, under contract, on the market
for construction bids, or in the drawing stage. The remaining 15
per cent represents projects for which sites have recently been acquired
or are in process of acquisition. Of the program outside the District
of Columbia, 6 per cent is completed and 22 per cent in process of
construction. At a time when relief for unemployment is very greatly
needed there are, under the public building program, 186 projects
under actual construction; these involve limits of cost aggregating
$104,795,366.
The exact status of the program on June 30, 1931, divided as between the District of Columbia and the country at large, is given in
outline form below:

REPORT ON THE FINANCES
DISTRICT OF COLUMBIA

Completed, 6 buildings, total limit
$14,200,000. 00
Under contract, 2 projects, total limit
23, 550, 000. 00
Sites purchased in the District of Columbia
23, 514, 990. 73
Bids in, on market, or in specification stage, 2 projects, total
limit
3,950,000. 00
Drawing stage, Supervising Architect, 1 project, total limit
7, 050, 000. 00
Drawing stage, private architects, 9 projects, total limit
50, 207, 023. 22
Sites acquired, Supreme Court Building
1, 768, 741. 00
Available for purchase of sites in the District of Columbia
5, 165, 009. 27
Total

129, 405, 764. 22

COUNTRY AT LARGE

Completed, 109 buildings, total limit
23, 537, 362. 04
Under contract, 184 projects, total limit
81, 245, 366. 00
Bids in, on market, or in specification stage, 63 projects, total
limit
64, 091, 800. 00
Drawing stage, supervising architect, 114 projects, total limit__ 15, 771, 000. 00
Drawing stage, private architects, 69 projects, total limit
115, 375, 000. 00
Sites acquired, drawings not yet taken up, 21 projects', total
limit
3, 889, 500. 00
Sites accepted, awaiting title, 51 projects, total limit
9, 301, 600. 00
Sites selected, 9 projects, total limit
_•
7, 125, 000. 00
Sites or additional land under condemnation, 18 projects, total
limit
___.
10, 217, 000. 00
Site reports in awaiting selection, 125 projects, total limit
30, 030, 500. 00
Agents inspecting sites, 30 projects, total limit
4, 481, 300. 00
Advertised for site, 1 project, total limit
.
360, 000. 00
Held in abeyance, 2 projects, total limit
610, 000. 00
Total..-.

366, 035, 428. 04

Expenditures and outstanding contract obligations
Of the 817 specificaUy authorized projects as of June 30, 1931, with
limits of cost amounting to $495,441,192.26 for acquisition of land,
construction of buildings, and extension and remodeling of buildings,
301 projects, amounting to $199,219,476.91 in the aggregate, had
been obligated to that date, of which 140 projects, amounting to
$46,162,088.71, were contracted for during the fiscal year 1931.
Expenditures have been made under these obligations to the amount
of $140,448,888.46, including expenditures for the fiscal year ended
June 30, 1931, amounting to $66,522,202.45. Expenditures in 1931
included $48,262,139.22 for the country at large and $18,260,063.23
for the District of Columbia.
It is expected that by the end of the fiscal year 1932, approximately
650 of the 817 projects now specifically authorized wUl have been
completed or placed under contract. The amoimt involved will

SECRETARY OF THE TREASURY

represent approximately $450,000,000 of the $495,441,192.26 specifically authorized. In addition, it is expected that on June 30, 1932,
plans will be in progress for approximately 150 projects, involving
limits of cost of about $100,000,000. Contract obligations are expected to average about $10,000,000 per month during the fiscal
year 1932, which wUl require an expenditure for that year of about
$120,000,000.
Contracts jor outside professional services
Under the Keyes-Elliott Act of March 31, 1930, permission was
granted to the Secretary of the Treasury to employ outside architects
for full professional services. As soon as specific appropriations for
further projects became available under the act of July 3, 1930, contracts were made with architects for 78 projects amounting to
$165,582,023.22 and representing 133 architectural firms throughout
the country. These projects include in the District of Columbia:
The Archives Building, central heating plant. Coast Guard BuUding,
connecting wing between Labor and Interstate Commerce Buildings,
Interstate Commerce Commission Building, Department of Justice
Building, Department of Labor BuUding, landscape work in the
triangle, and the Post Office Department BuUding. At the end of
September, 1931, a total of 181 contracts had been made with architectural firms for building projects totaling approximately $220,000,000. The drawings and specifications for a majority of these
projects will be completed during the next fiscal year and the work
placed on the market for bids.
Activities other than the public building program
The Treasur}?- has other building projects under its supervision which
are not strictly part of the so-called public building program; for
example, the Coast Guard Academy at New London, Conn., and the
narcotic farm at Lexington, Ky.
In addition to the construction work under the direction of the
Treasury, there are other building projects contemplated or in course
of construction in the District of Columbia, including the Supreme
Court Building, House Office BuUding extension. Senate Office
Building extension. Government storehouse. Botanical Garden Building, Lincoln Memorial Bridge, landscape treatment of Plaza between
the Capitol and Union Station, District of Columbia municipal
center, and the Congressional Library Annex.
The Office of the Supervising Architect is rendering partial service
on building projects in contemplation or in course of construction
under the supervision of other Government departments, such as the
Federal prison at Lewisburg, Pa., and reformatories at El Reno,

REPORT ON THE FINANCES

Okla., and Springfield, Mo., under the Department of Justice; and
foreign service buUdings in various foreign countries under the State
Department.
Furthermore, the Office of the Supervising Architect has charge of
many projects of remodeling and enlarging public buildings and the
maintenance and repairs of all buildings under the supervision of the
Treasury. These activities are described in detail in the administrative report of this office, page 276 of this report, where complete data
with reference to the public building program are also shown.

FEDERAL FARM LOAN BUREAU
In this difficult period it has been the function and policy of the
banks of the Federal farm loan system to render the utmost assistance to agriculture consistent with the principles of soundness and
safety and at the same time to take all possible steps to strengthen
and improve the position of these institutions. The Farm Loan
Board, in the exercise of its supervisory duties, has kept in close and
constant touch with the banks and with conditions in the system and
has maintained its program of thorough examinations. The banks
generally have cooperated with the board and the comprehensive
reports of examination have been of great service to their officers and
directors.
Federal intermediate credit banks
The volume of credit extended. during the year by the Federal
intermediate credit banks in the interest of agriculture was the largest
in the history of the system. Loans to cooperative marketing associations were 145 per cent and loans and discounts to financing institutions 21 per cent greater than in 1930, when the volume was the largest
for any year up to that time. The amount of loans, including renewals,
outstanding at the close of the fiscal year aggregated $57,535,035,
and of discounts, including renewals, $79,205,949, or a total of
$136,740,984.
The increase in volume of loans and discounts of the Federal intermediate credit banks was a result of the greater credit needs of
farmers, due mainly to the drought of 1930, the fall in commodity
prices, and restricted credit facUities in rural communities. Some
existing agricultural credit corporations increased their capital stock
so that their operations could be enlarged and, in addition, a number
of new corporations were organized. These steps were facUitated by
funds made available to the Secretary of Agriculture under an act
approved February 14, 1931, to be used, in part, for the purpose of
making loans to individuals in the drought, storm, or haU stricken
areas of the United States for the purpose of formmg local agricultural
credit corporations, livestock loan companies, or like organizations,
or of increasing the capital stock of such corporations privileged to do

SECRETARY OF THE TREASURY

business with the Federal intermediate credit banks, and of making
loans to individuals upon the security of the capital stock of such
corporations. As of August 20, 1931, the Department of Agriculture
had closed loans for this purpose to 49 corporations in 21 States in the
aggregate amount of $1,327,440. The Federal Farm Board also
assisted in this situation through loans to cooperative marketing
associations for the capitalization of financing institutions aflBLliated
with such associations. The increase during the year in the number
of financing institutions discounting with the Federal intermediate
credit banks is indicated by the fact that at the close of the year 426
institutions had discounts outstanding, as compared with 272 at the
beginning of the year.
The expansion in the volume of credit extended made an increase
in the volume of financing operations also necessary. The total,
debentures issued during the year aggregated $217,500,000 and exceeded by 33 per cent the debentures marketed in the previous year,
which was the largest amount to that date. The amount of debentures
outstanding on June 30, 1931, was $106,200,000, excluding matured
debentures and those held by banks of issue. The debentures were
sold during the year on more favorable terms than ever before, with
the result that reductions were made by the banks in the rates of
interest charged on loans and discounts. At the close of the year all
but three banks and the branch office in Porto Rico, which had a 4 per
cent rate, were charging 3% per cent which was the lowest rate in effect
since the banks were organized.
Federal land banks
During the year Federal land banks reported loans closed amounting to $50,145,900, which exceeded, by nearly $3,000,000 the amount
closed in the previous year. The net amount of loans outstanding on
June 30, 1931, was $1,184,203,339. Federal land bank bonds were
issued during the year in the total amount of $28,000,000, including
a public offering of $20,000,000 of 4^ per cent 2-3 year bonds iu
November, 1930, the proceeds of which were used, in part, for the
retirement of existing short-term bonds. The amount of bonds outstanding on June 30, 1931, was $1,179,007,805, mcludmg $5,025 of
bonds matured or called for redemption but not including $1,808,560
held by banks of issue. During the year, one bank advanced its loan
rate to 6 per cent, bringing the number makuig loans at that rate to
three. The other nine banks maintained a rate of 5}^ per cent, while
the branch in Porto Rico continued its rate of 6K per cent.
The major problems confronting the system have been those
arising from the decline in the prices of agricultural commodities
and the incidence of that dechne upon farmers' incomes, farm land
values, and the market for farm lands. As stated in my previous

REPORT ON T H E FINANCES

annual reports, energetic measures have been taken by the FarmLoan
Board and the banks of the system to meet the problems that have
arisen. Special efforts have been made to improve the procedure in
the examination of banks and national farm loan associations, and
to build up a strong and competent staff of examiners. All national
farm loan associations are now examined at least once a year and all
banks twice a year. Any indications of unsound accounting practices or inefficient management are promptly taken up by the Farm
Loan Board with the officers and directors of the banks concerned.
Steps have been taken by the board in perfecting appraisal technique
and personnel. The appraisal unit in the bureau has been reconstructed. A trained reviewing appraiser is located in each land bank
district to supervise directly the work of individual appraisers. Similar steps have been taken to strengthen and improve the personnel
and work of other units in the bureau.
The various banks in the system likewise have adapted their organizations to the new situations that have arisen, particularly in connection with collections and the disposal of farm real estate which
has been acquired. As regards foreclosures, in general it has been
the policy of the banks to avoid the institution of foreclosure proceedings in so far as the merits of individual cases have made this
possible.
The board has kept in close touch with the developments in all of the
banks and, in addition, the banks have freely exchanged views and
results of various procedures in the matter of effecting collections and
sales of real estate. In the case of the Federal land banks, the cooperation and assistance of the national farm loan associations have
been solicited, and, for the most part, obtained. Through the more
thorough examinations by the Farm Loan Board and the closer contacts between the associations, the board, and the banks, these local
units generally have taken a greater interest in the affairs of the
system and have acquired a clearer realization of their responsibilities
in connection with their indorsements on the loans made through
them by the Federal land banks. As a consequence, they have
cooperated more effectively.
Sales of real estate have steadily increased during the past few
years. The reports of the Federal land banks to the board indicate
that during the year ended June 30, 1931, they sold or disposed of a
total of approximately 2,680 farms, which compares with 2,340 farms
in the fiscal year 1930, and 1,630 farms in 1929. These increases
have been effected in the face of declining land values and prices of
agricultural commodities. While the rate of sales has increased, the
rate at which real estate has been acquired has also increased, with
the result that there was an increase in the real estate holdings of
the banks.

SECRETARY OF THE TREASURY

Effects of proposals to suspend foreclosures generally.—A number of
bUls were introduced during the last session of the Congress providing
for a general suspension of foreclosure proceedings or the granting of
a general moratorium to borrowers for a specified period of time, and
there has been a great deal of public discussion of such proposals
during the past summer. Several of these measures were referred to
this department by committees of Congress during the last session
and the disastrous effect which their enactment would have was
pointed out in the department's reports.
It is obvious that many of the suggestions of this character are
based upon a misunderstanding of the situation. The Federal land
bank system has $1,179,000,000 of bonds outstanding, while, at the
same time, there are net mortgage loans of $1,184,000,000. Nearly
all of these loans are pledged as cohateral security for the payment
of these bonds. The interest on these bonds must be paid semiannually on the respective issues on the due dates, and the banks
must rely primarUy on the collection of interest on their outstanding
loans in order to meet this obligation.
As already pointed out, it is not the desire of the Federal land
banks to acquire farms; such assets are expensive and burdensome.
In cases of dehnquency it is the pohcy of the banks generally to consider each case on its individual merits and to institute foreclosure
proceedings when investigation discloses that the borrower is not
making satisfactory effort to meet his obligations or is unlikely to
succeed if given a reasonable opportunity, or when there are other
factors making it necessary to take action in the best interests of the
bank. To go beyond such a policy and make general provision
through Federal legislation for delaying foreclosure would be hkely to
impair the morale of borrowers, give rise to wholesale delinquencies
throughout the system, and destroy the market for Federal land bank
bonds. It may be observed that the proposal of such legislation
during the last session of Congress and pubhc discussion of the matter
during the past summeroperated to increase collection difficulties and
expenses of the banks.
There are, moreover, legal difficulties involved in any proposal
that the Congress authorize the banks to grant general extensions in
the time of payments on loans. The mortgages taken by the land
banks constitute contracts between the borrowers and the banks.
The status of these contracts as liens upon the land covered thereby,
the procedure to be followed in case of foreclosure, and the subsequent rights of the parties to such foreclosure proceedings, as well as
those of other creditors, are fixed by the laws of the State in which
the property is situated. There is serious doubt, therefore, as to the
power of Congress to deal with established rights in the manner in
which such proposals would operate.

REPORT ON THE FINANCES

Apart from the legal aspects of the subject, it may be observed
that the loans of the banks in the farm loan system constitute only a
relatively small portion of the indebtedness of farmers, the greater
part of such indebtedness being held by other institutions, including
national and State banks, insurance companies, mortgage loan
companies, etc.
An important court decision.—A decision involving an interpretation
of the farm loan act in an important respect was rendered by the
Supreme Court of North Dakota on August 1, 1931, in which the
court upheld the right of a Federal land bank to apply amounts
payable to a national farm loan association in connection with the
retirement of stock of the bank held by the association on debts
owed to the bank by the association.
A borrower from a Federal land bank purchases stock in a national
farm loan association in an amount equal to 5 per cent of the amount
of his loan and the national farm loan association in turn subscribes
for stock of the Federal land bank to a like extent, the latter being
held by the bank as collateral security for the payment of the loan.
In the North Dakota case under consideration a borrower, whose
defaulted loan had been foreclosed by the Federal Land Bank of
St. Paul, sued the bank and the NortonvUle National Farm Loan
Association for the amount of his stock in the association. The
association was insolvent and was heavUy indebted to the Federal
land bank. Therefore the bank retired the amount of its stock which
was owned by the association and which had been pledged with the
bank in connection with the loan in question. The bank withheld
and applied the proceeds upon the NortonvUle association's indebtedness to the bank; in turn the association retired the amount of its
stock which had been issued to the borrower, but was unable to pay
him in cash. The Supreme Court of North Dakota in a sweeping and
unanimous decision sustained the action of the bank and the association. Discussing the cooperative principles of the Federal land bank
system, the court said:
As we have already pointed out, the principle involved in the act is cooperative
in its nature. It is only through the cooperation of his neighbors, with their
assistance, upon their recommendation and the pledge of their liabilities he can
secure his loan. They pledge their faith and credit to aid him, and he pledges
his faith and credit to aid them. Having secured their cooperation and assistance,
and finding his loan paid, he now wants to avoid his responsibilities to those who
made it possible for him to get his loan. His rights are not superior to the rights
of any other stockholder in the corporation.' * * * 'pj^g plaintiff is cooperative when he desires a loan and needs the assistance of his neighbors; but becomes
extremely individualistic when the loan is paid. * * * One shareholder has
no right to increase the indebtedness of the others by securing payment for his
stock. If he avoids his responsibilities the burden of debt resting upon those
who assisted him is increased. Plaintiff has no cause of action against either
defendant.

SECRETARY OF THE TREASURY

Joint stock land banks
During the fiscal year two new charters were granted—The Corn
Belt Joint Stock Land Bank of TaylorvUle, 111., chartered on March
20, 1931, beginning operations on AprU 2, 1931, and the Phoenix
Joint Stock Land Bank of Kansas City, Mo., chartered on June 1,
1931, beginning business on July 1, 1931, as a result of the reorganization of the properties and affairs of the Kansas City Joint Stock
Land Bank. On June 30, 1931, the assets of the Ohio-Pennsylvania
Joint Stock Land Bank of Cleveland, Ohio, were purchased and its
liabilities assumed by the Union Joint Stock Land Bank of Detroit,
Mich.
During the year joint stock land banks reported loans closed in
the amount of $5,661,609 as compared with $8,345,538 in the previous
year. The net amount of loans outstanding on June 30, 1931, was
$533,697,677, exclusive of loans amounting to $34,474,850 in the
three joint stock land banks in receivership.
During the year only five banks issued bonds, the total amount
bemg $1,350,000. The latter figure does not include $24,499,960 of
bonds and $22,566 of certificates in lieu of fractional bonds issued on
July 1, 1931, in connection with the organization of the properties
and affairs of the Kansas City Joint Stock Land Bank. The aggregate amount of joint stock land bank bonds outstanding on June 30,
1931, was $532,561,300, mcluding $3,500 of bonds matured or called
for redemption but not including $3,978,600 held by banks of issue
nor the bonds issued or assumed by the three joint stock land banks
in receivership.
Receiverships.—In my last annual report reference was made to the
adoption by the bondholders' protective committee of the Kansai
City Joint Stock Land Bank of a plan of reorganization of the properties and affairs of that bank. The plan was submitted by the committee to the holders of bonds issued or assumed by the bank and
thereafter, upon the assent of the holders of more than 95 per cent of
the principal amount of bond obligations of the bank, the committee
declared the plan operative as of February 20, 1931. Bondholder?
holding approximately 98.23 per cent of the total amount of bonds
issued or assumed elected to participate in the plan. As.contemplated by the plan the receiver offered for sale on June 4, 1931, aU
the assets of the bank except a relatively small amount of cash and
Government securities. The committee and A. O. Stewart were
bidders and became the purchasers of the pledged assets at the price
of $25,000,000 and the unpledged assets at the price of $1,750,000.
Accordingly, a settlement was made as at the beginning of July 1,
1931, and the purchasers proceeded in accordance with the terms of
the plan. The new joint stock land bank is known as the Phoenix

REPORT ON T H E FINANCES

Joint Stock Land Bank of Kansas City, a charter having been granted
to it on June 1, 1931, and the liquidation company organized in accordance with the plan is known as the Farm Mortgage Holding Co.
The Farm Mortgage Holding Co. is obligated to the bank for a period
of three years, as contemplated by the plan, to substitute securities
acceptable to the Federal Farm Loan Board as collateral up to a
total of $1,500,000 for mortgages acquired under the plan of reorganization which become as much as 90 days delinquent. The new bank
began business on July 1, 1931, with gross assets of $28,674,637,
including net mortgage loans aggregating $21,890,056, none of which
were delinquent, together with Government securities and cash
amounting to $6,360,203. Its outstanding farm loan bonds, together
with certificates representing fractional interests in farm loan bonds,
aggregated $24,522,526, and its capital, surplus, and legal reserve
were $4,037,852. The loan territory of the new joint stock land
bank embraces the States of Missouri and Kansas and its headquarters are at Kansas City, Mo.
The entire purchase price of the pledged assets, aggregatiag $25,000,000, was declared as a dividend to bondholders; and the entire
purchase price of the unpledged assets, aggregating $1,750,000, was
declared as a dividend to bondholders and other creditors whose
claims had been established on or before the date of the declaration
of the dividend, which was June 24, 1931. It is anticipated by the
board that the receivership wUl be concluded at an early date when
the net proceeds of the liquidation will be available for final dividends.
Substantial progress has been made by the receiver of the Bankers
Joint Stock Land Bank of Milwaukee in the liquidation of assets held
by that bank, through the ordinary collection processes and the sale
of real estate, and on June 30, 1931, the receiver had invested proceeds of liquidation in Government securities having a par value of
$2,877,150. However, no further liquidating dividend suice the one
of 15 per cent mentioned in my previous report has been declared
because of pending litigation involving the interpretation of the
farm loan act as to the administration of the pledged assets, from
which the bulk of the liquidation has been derived. In the meantime negotiations by interested parties have continued and various
proposals have been made looking to the purchase of the assets as a
whole from the receiver, but these proposals have not yet reached the
point of consummation. Since the close of the fiscal year further
litigation has been instituted, a suit having been filed by an interested bondholder in the United States District Court at St. Paul in a
cause entitled Van Dyke et al. v. H. C. Libby et al., raising certain
questions as to the authority of the Federal Farm Loan Board and
of the receiver of the Bankers Joint Stock Land Bank of Milwaukee
to sell as a whole the pledged as well as the unpledged assets and as

SECRFJTARY OF THE TREASURY

to the basis upon which collateral should be treated as security for
outstanding bonds of the bank. The board is advised that it is the
view of interested parties that the questions involved in this litigation should be determined judicially before an attempt should be
made to consummate a sale in bulk of the assets of the bank.
WhUe no further liquidating dividends in the case of the Ohio
Joint Stock Land Bank have been paid since the two mentioned in
my last annual report, each of which was 10 per cent of the outstanding bond obligations of the bank, rapid progress has been made by
the receiver in the liquidation of the assets in his hands. A sale was
finally approved since the close of the fiscal year, providing for the
disposition of all the remaining loans, except certain ones which
were ui process of foreclosure and leaving unsold only these loans in
foreclosure and a few items of real estate. Proceeds of liquidation
have been accumulated to an extent sufficient to warrant the payment of a dividend of 30 per cent or more of the outstanding bond
obligations, and, since the bondholders' committee, together with
individual bondholders representing, it is understood, more than
95 per cent of the bond obligations, have requested the payment of
such a dividend on a pro rata basis, arrangements are being made by
the receiver and the board for the declaration of such a dividend at
an early date. Every effort is being made by the receiver to dispose
of the few remaining assets.
Legislation.—On March 4, 1931, the President approved an amendment to section 16 of the Federal farm loan act, which provides that
when a joint stock land bank acquires the assets and assumes the
liabilities of another joiat stock land bank, it may, if authorized by
the Federal Farm Loan Board, make loans within the States in
which the other joint stock land bank was authorized to make loans
at the time of such acquisition, and the acquiring bank may, with the
approval of the board, continue to make loans in the States constituting its charter territory at the time the other bank was acquired.
The amendment provides, however, that the acquiring bank shall
not be authorized to make loans at any one time in more than five
States, of which one shall be the State in which the bank has its
principal office, and all of which must be contiguously situated.
OBLIGATIONS OF FOREIGN GOVERNMENTS

During the fiscal year 1931 the Treasury received from foreign
governments on account of their indebtedness to the United States
the sum of $236,062,755.75, of which $51,588,133.37 was for account
of principal and $184,474,622.38 for account of interest. During the
past year money market conditions were such that all obligations of
the United States available to foreign governments in making payment on account of their indebtedness to the United States under
77532—32

REPORT ON T H E FINANCES

the various debt agreements were quoted at a premium. The payments were, therefore, made in cash rather than in United States
securities as had been the practice in previous years.
The following statement shows total payments received on account
of principal under the funding agreements up to the close of the
fiscal year:
Aggregate payments of princi pal to June SO, 1931, under funding agreements
United States obligations
Country

Oash
Face amount

$862,668. 00
Austria ._ _.
Belgium
___
11,700,042.81 $6,342,900.00
4,482,160.00
Czechoslovakia _
13,600,434.32
246,084. 98
148,850.00
Finland
149,282,079.04
11,971,100. 00
France
- _
28,035,744. 29 173, 545, 200.00
Great Britain
Greece
_._____.
981, 000. 00
73,995. 50
Hungary _
27,100,029.75
9,956,600.00
Italy
-234,783.00
Lithuania
1,
287,297.
37
Poland
- - 2, 700,000. 00
Rumania
1,226,000. 00
Yugoslavia
- -.
-237, 229,159. 06 205,446,800.00

Total

Accrued interest to date of
payment

$57,057.19
17,415.68
1,065.02
96,820.96
419,055.71
43,370.26

634, 784.81

Total principal
payments

$862,668.00
17,100,000.00
18,000,000.00
396,000. 00
161,350,000.00
202,000,000. 00
981,000.00
73,996.50
37,100,000. 00
234,783.00
1,287,297.37
2,700,000. 00
1,225,000.00
443, 310,743.87

The following statement shows total payments received on account
of interest up to the end of the fiscal year:
Aggregate payments of interest to J u n e SO, 1931, under funding agreements
United States obligations
Country

Bonds of debtor Governments

Belgium
Estonia .
. ._
Finland
France
Great Britian
Greece
. Huncarv
Italy
Latvia
Lithuania
. _.
Poland
Total

$43,655.50
402,466.00
446,020.60

Cash
Face amount

$9, 491,089. 67 $4,947, 050.00
123,900.00
1,122,006.06
645,150.00
1,701, 383.46
38, 650,000.00
248, 511,419.84 897, 618,400.00
948,860. 00
393,717.78
2, 621, 250.00
45,000.00
468, 337.84
94,050. 00
798, 200. 25
2,995, 600.00
16, 310,801.13
320,907,066.03

906,369,150.00

Accrued interest to date of
payment
$51,860.33
1,084.13
2,836.64
3,690,180.16

4,374.77
3,650,335.93

Total interest
payments, including accrued
interest funded

$14,490,000.00
1,246,990.19
2, 249,370. 00
38,650,000.00
1,149,720,000.00
948,860.00
437, 273.28
2, 521, 250. 00
603,337.84
1, 294,715. 25
19,310,776.90
1,231,372,572.46

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, 1931, wUl be found as
Table 55 on page 551 of this report.

SECRETARY OF THE TREASURY

Czechoslovakia
The Government of Czechoslovakia has not yet ratified the funding
agreement concluded on October 13, 1925, and for that reason has
not yet delivered bonds in exchange for the obligations now held, as
provided for uiider the agreement. Czechoslovakia has, however,
continued to make payments regularly under the funding agreement.
Estonia
Under paragraph 5 of the funding agreement concluded October
28, 1925, with the Government of Estonia, that government was
granted the option during the five years ended December 15, 1930, of
paying smaller amounts than those required under paragraph 2 of
the agreement. The agreement provided that the difference, including interest on all overdue payments at the rate of 3 per cent per
annum from their respective due dates to December 15, 1930 (the
date of expiration of the option), should be funded into bonds of the
Government of Estonia, payable serially over the remaining 54 years
of the funding period, the bonds issued to be substantially similar
to the bonds first issued under the debt agreement. The amount
paid by Estonia under the option granted under paragraph 5 of
the funding agreement was $1,000,000, whereas the amount due
and payable under paragraph 2 was $3,870,700, leaving a balance
due of $2,870,700, which, together with accrued interest amounting
to $378,312.87, totals $3,249,012.87. Additional 3-3K per cent gold
bonds of the Government of Estonia in the aggregate face amount of
$3,249,012.87, dated December 15, 1930, and maturing serially over
the succeeding 54 years, were delivered to the Treasury on November
18, 1931.
Latvia
The debt agreement with the Government of Latvia contains a
provision for optional payments similar to that described above in
the debt agreement with the Government of Estonia. This option
expired on December 15, 1930, and it has, therefore, become necessary
to fund the difference between the amount paid under the optional
provision and the amounts required under paragraph 2 of the debt
agreement. The Government of Latvia paid to the United States
under the optional paragraph the sum of $400,000, whereas the
amount due and payable under paragraph 2 of the agreement was
$1,612,800, leaving a balance due of $1,212,800, which, together with
accrued interest of $152,864.20, made a total to be funded of
$1,365,664.20. The Government of Latvia delivered to the Treasury
on March 10, 1931, its 3~3K per cent gold bonds in the principal

REPORT ON T H E FINANCES

amount of $1,365,664.20. All the bonds are dated December 15,
1930, and mature serially over the succeeding 54 years.
Poland
The debt agreement with the Government of Poland contains a
provision similar to those in the agreements with Estonia and Latvia,
whereby that Government was permitted, during the five years
ended December 15, 1930, to pay smaller amounts than would ordinarily have been due under the regular schedule of payments. A
statement of account has been submitted to the Polish Government
showing the amount due, and a request has been made that steps
be taken to fund this amount as of December 15, 1930, into 3-3K
per cent gold bonds of that government similar in character to the
bonds first issued under the debt agreement. The amount involved
is $35,269,297.37, which wUl probably be funded within the course of
the next few months into gold bonds of the Government of Poland
in accordance with the debt-funding agreement.
Proposed postponement of payments on intergovernmental indebtedness
The world-wide depression of the past two years has borne heavUy
on the economic aijd financial position of many countries. Adverse
economic developments, accentuated in some instances by political
uncertainties, gave rise during 1931 to increasing lack of confidence
which as it affected Europe focused largely on Germany and Austria
in the initial stages, subsequently extending to other countries.
Early in June a critical situation developed in Austria following the
disclosure of the unsound condition of the Oesterreichische CreditAnstalt, the largest bank in the country. An already serious and
increasing apprehension regarding the economic and budgetary situation of Germany was accentuated by the Austrian crisis and was
accompanied by a steady outward movement of funds from Germany.
Following the issuance of the German Government manifesto of June
6, 1931, indicating that the limit of the financial burden on that
nation had been reached, the drain on the country's banking reserves
reached proportions which threatened the entire German banking
and credit structure. Repercussions from these critical developments and the continued operation of other adverse forces were
responsible for the suspension of gold payments by the Bank of
England in September, 1931, and for the subsequent suspension or
restriction of gold operations in other countries.
By early summer it had become evident that events were shaping
toward serious crises. Eecognizing the need for initiating international cooperation to oppose this trend of events, and recognizing
the relative increase in the burden of payments on intergovernmental

SECRETARY OF THE TREASURY

debts in times of depression, the President on June 20, 1931, after
consultation with congressional leaders of both political parties,
issued a statement in which the offer was made, subject to congressional approval, to suspend during the fiscal year 1932 all payments
due the United States on account of indebtedness of foreign governments, provided that the important creditor powers would take simUar
action with respect to payments due them on intergovernmental
debts. The proposal was favorably received throughout the world,
and on July 6, 1931, it was announced that the offer had been accepted
in principle by all the important creditor governments.
The amounts which would have been payable to the United States
during the fiscal year 1932 are as foUows:
Amounts payable during the fiscal year 1932 by foreign governments on account of
their indehtedness
Country
Austria
Belgium...
Czechoslovakia . . .
. .
. . . .
__
Estonia
Finland
.
France
Great Britain
Greece.
_
Hungary
_..._._
. _ _ . _ . _
. ._
Italy
.
Latvia
._.__
_____
. _ _ _ _ . _
Lithuania
P o l a n d _._ ._
_
Rumania
Yugoslavia
Total
G e r m a n y ( a r m y costs)

Total

Principal

$287, 556
4, 200, 000
3, 000, 000
108,012
55, 000
11, 363, 500
28, 000, 000
660, 000
12, 270
12. 200, 000
44, 664
38. 615
1, 325, 000
800, 000
250, 000

Interest

$3, 750, 000
492,360
257, 296
38, 636, 500
131, 520. 000
449, 080
67, 072
2, 506,125
205,989
185, 930
6,161, 835

Total
$287, 566
7, 950, 000
3, 000, 000
600, 372
312, 295
50, 000, 000
159, 520, 000
1,109, 080
69, 342
14, 706,126
250, 653
224, 545
7,486,835
800, 000
250, 000

62, 344, 617
6,000,000

184, 222,186

246, 566, 803
6, 000, 000

68,344, 617

184,222,186

252, 566,803

With the exception of Yugoslavia, the above-mentioned countries
have accepted the President's proposal and have tentatively made
it effective as regards their own debtors in respect of intergovernmental debts.
The Treasury wUl present to Congress' a draft of legislation to
authorize the Secretary of the Treasury to conclude agreements with
our debtor governments carrying into effect the President's proposal.
The President's statement of June 20, 1931, and information relating to the proposed postponement of intergovernmental debt payments, are presented as Exhibits 62 to 65, on pages 359 to 363 of
this report.
RECEIPTS FROM GERMANY

The United States received during the fiscal year from the Government of Germany payments on account of the American army of
occupation and awards of the Mixed Claims Commission, United
States and Germany, in accordance with the terms of the debt-funding
agreement approved June 23, 1930.

REPORT ON THE FINANCES

Army costs
During bhe fiscal year the United States Government received from
Germany on account of the costs of the American army of occupation
the sum of $5,062,936.60, representing bonds Nos. 2 and 3, due
September 30,1930, and March 31,1931, respectively, in the aggregate
principal amount of 25,500,000 reichsmarks. Bond No. 4 in the principal amount of 12,650,000 reichsmarks was due and payable on September 30, 1931, but the German Government gave notice to the
Secretary of the Treasury that the payment of this bond as well as
the payment of bond No. 5 in the principal amount of 12,650,000
reichsmarks, maturing March 31, 1932, would be postponed in accordance with the option granted under the debt-funding agreement of
June 23, 1930. These payments due during the fiscal year 1932,
amounting to 25,300,000 reichsmarks, are included under the President's proposed debt moratorium, and authority wUl be requested
of Congress to conclude an agreement with the German Government providing for the postponement of such payments and for their
repayment over a period of 10 years, beginning July 1, 1933.
The army cost account as of October 1, 1931, stood as follows:
Total army cost charges (gross), including
expenses of Interallied Rhineland High
Commission (American department)
S292, 663, 435. 79
Credits to German}^:
Armistice funds (cash requisition on
German Government)
$37, 509, 605. 97
Provost
fines
.-_
159, 033. 64
Abandoned enemy war material
5, 240, 759. 29
Armistice trucks
1, 532, 088. 34
Spare parts for armistice trucks
355, 546. 73
Coal acquired by army of occupation
756. 33
44, 797, 790. 30
247,865,645.49
Payments received:
Under the army cost agreement of May
25, 1923, which was superseded by
agreement of Jan. 14, 1925
Under Paris agreement of Jan. 14, 1925Under debt agreement of June 23, 1930_

14, 725, 154. 40
39, 203, 725. 89
12, 069, 631. 84
•

65, 998, 512. 13

Balance due as of October 1, 1930
181, 867, 133. 36
NOTE.—The balance due on account of army costs is exclusive of the 10 per cent
reduction allowed in the amount of the total army costs originally due, contemplated in the agreement with Germany, to accord with similar reductions accepted
by the Governments of France and Great Britain under the Young plan.

SECRETARY OF THE TREASURY

Mixed claims
The United States has received during the year from the Government of Germany on account of the awards of the Mixed Claims
Commission, United States and Germany, the sum of $8,100,698.57,
representing payment of bonds Nos. 2 and 3, due September 30,
1930, and March 31, 1931, respectively. The Government of
Germany has paid the sum of $19,469,964, on account of these awards
under the debt agreement of June 23, 1930; and the sum of
$32,183,060.87 has been received under the Paris agreement of
January 14, 1925, maldng a total of $51,653,024.87 the United States
has received on this account.
In view of the nature of the claims forming the basis of the awards
entered by the commission, and the fact that the payments received
have been, and those to be received for some time to come will be,
applied entirely on account of private claims, the United States has
taken the position that the payments to be made by Germany on this
account are in the nature of private obligations and not intergovernmental, and, therefore, do not fall within the terms of the President's
proposed debt moratorium. The Government of Germany has notified
the United States of its intention to postpone the payments due on September 30, 1931, and March 31, 1932, in the principal amount of
20,400,000 reichsmarks each, in accordance with the option granted
it under the debt funding agreement of June 23, 1930.
As Congress has already approved the debt-funding agreement
with Germany, it will not be necessary to ask for further authority on
account of this postponement.
TREASURY ADMINISTRATION OF ALIEN AND MIXED CLAIMS

The settlement of war claims act of 1928 authorized the Secretary
of the Treasury to make payments on account of (1) awards of the
Mixed Claims Commission, United States and Germany, for claims
of American nationals against the Government of Germany; (2)
awards of the Tripartite Claims Commission on account of claims of
American nationals against the Governments of Austria and Hungary;
and (3) awards of the war claims arbiter for claims of German,
Austrian, and Hungarian nationals against the Government of the
United States.
The time within which claimants receiving awards from the Mixed
Claims Commission, United States and Germany, may file application
will expire on March 10, 1932. The Treasury holds 67 awards entered
by the Mixed Claims Commission, aggregating, with accrued interest
to September 30, 1931, about $300,000, for which no applications have
been received. Some of these awards represent claims filed by the

REPORT ON T H E FINANCES

Secretary of War on behalf of American soldiers who were taken
prisoners by Germany during the war, and are based on claims for
their personal belongings seized by German military authorities.
The department so far has not been able to locate some of these
claimants. In addition, the Mixed Claims Commission has not yet
completed its work, and, in view of the untimely death of Hon.
Roland W. Boyden, the umpire, it is not possible to estimate the time
required to finish it, but it is almost certain to extend beyond March
10, 1932.
There are only three awards, amounting to $696.51, remaining
unpaid on account of the awards entered against Austria. The
awards entered against Hungary have not yet been certified to the
Treasury for payment because of the provision of the settlement of
war claims act of 1928 requiring the commission at the same time to
certify that the funds deposited by Hungary in the Hungarian special
deposit account in the Treasury are suflBcient to pay such awards.
Hungary has not yet deposited a sufficient amount to pay its awards.
Because of these conditions it is recommended that the time limit
within which applications may be filed be extended for a period of
one year from March 10, 1932.
Claims against Germany
During the past year the Treasury has continued to make payments on account of the awards of the Mixed Claims Commission,
United States and Germany. These payments have been, for the
most part, on account of those awards which exceed $100,000 in
amount, commonly referred to as class 3 awards. Substantially all
of the awards in an amount less than $100,000 and those on account
of death and personal injury have been previously paid in full in
accordance with the priorities established in the settlement of w^ar
claims act of 1928. On September 30, 1930, the department distributed 12 per cent of the remaining unpaid principal, on March
31, 1931, 9 per cent, and again on September 30, 1931, 27 per cent
on account of class 3 awards. Funds avaUable for the purpose of
making these payments are detailed in the statement of the German
special deposit account shown later in this report and include the
receipts from Germany, earnings on investments, and 50 per cent of
the appropriation made available to pay the awards of the war
claims arbiter in favor of German nationals over and above the first
$50,000,000 appropriated in May, 1928. The following statement
shows the dates of distribution and the amounts authorized to be
distributed on account of this class of awards. The actual amounts
paid in the various classes to September 31, 1931, are shown in a
later table.

SECEETABY OP T H E TEEASURY

Date authorized to be distributed

Jan. 1,1928. __
Aug. 6, 1928...
Aug. 22, 1928_.
Jan. 15, 1929..
July 15, 1929..
Dec. 16,1929..
Mar. 31, 1930.
Sept. 30,1930.
Mar. 31,1931.
Sept. 30 1931.
Total.

Amount authorized to be distributed

$16,100,000.00
37,163, 352. 29
8, 671,448.87
5, 463, 012. 79
6, 632,202.43
4, 623, 347. 72
7,370,937.22
4,864, 818. 67
13, 280, 954. 69

Per cent
of undistributed
principal
authorized to
be distributed

Undistributed
balance

$139,977, 840.97
123,877, 840.97
86,714, 488.68
78,043, 039.81
72,680, 027.02
66,047, 824. 69
61,424, 476.87
54,053, 639. 66
49,188, 721.08
35,907, 766. 39

104,070,074.58

1 $100,000 on a c c o u n t .

On March 15, 1928, the Secretary of the Treasury, under the authority contained in section 25 (b) of the trading with the enemy act,
as amended by the settlement of war claims act of 1928, requested the
Alien Property Custodian to invest in a noninterest-bearing participating certificate the sum of $25,000,000, representing an estimate of
the portion of the so-called unallocated interest fund belonging to
German nationals. The proceeds of this investment were used to
make payments to American nationals on account of awards entered
in their favor by the Mixed Claitns Commission. Section 25 (b) also
authorizes an adjustment in the participating certificate in case it is
found that its amount is more or less than the amount belonging to
the German nationals. The Alien Property Custodian during the
year has advised the Treasury that, according to the allocation made
to date, the sum of $25,000,000 first invested was $1,500,000 in excess
of the amount belonging to German nationals and requested that this
sum be returned to him from the German special deposit account as
authorized by section 25 (b) of the trading with the enemy act, as
amended. This was accordingly done and the noninterest-bearing
participating certificate for $25,000,000 face amount has been reduced
to $23,500,000.
Up to October 1, 1931, the Treasury has made payments in the
aggregate amount of $133,087,348.47 on account of the awards of the
Mixed Claims Commission, from which there was deducted $665,437.38, representing one-half of 1 per cent for reimbursement to the
United States on account of expenses incurred, making net payments to claimants of $132,421,911.09. Of ihe amount of the
deductions, $638,993.66 has been covered into the Treasury as
misceUaneous receipts in accordance with the settlement of war
claims act, and $24,150.09 has been paid to the Government of
Germany. together with a further sum of $2,293.63 available for

REPORT ON T H E FINANCES

payment, representing the amounts deducted from the awards
entered by the commission under the late claims agreement of December 31, 1928, which was made available to the German Government for defraying such expenses as may be incurred by that Government in connection with the adjudication of those late claims. The
settlement of war claims act was amended on June 21, 1930, so as
to authorize the payment of the deductions last mentioned to the
German Government.
The foUowing summary shows, by classes, the number and amount
of awards certifiied to the Treasury by the Secretary of State, the
amount paid on account, and the balance due as of September 30,
1931:

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, hy classes, as of September 30, 1931

A w a r d s certified

1. A m o u n t p a y a b l e on account:
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 Aug. 10, 1922
A g r e e m e n t of D e c . 31, 1928

A w a r d s on acN u m - c o u n t of d e a t h N u m ber of
ber of
a n d personal
awards
awards
injury

A w a r d s of
$100,000 a n d
less

Number of
awards

A w a r d s over
$100,000

I n t e r e s t to J a n . 1, 1928, a t r a t e s specified i n a w a r d s —
A g r e e m e n t of Aug. 10, 1922
_
A g r e e m e n t of Dec. 31, 1928
__ _
T o t a l p a y a b l e to J a n . 1, 1928
I n t e r e s t t h e r e o n to d a t e of p a y m e n t or, if u n p a i d , to Sept. 30,1931, a t 6 per
cent per a n n u m as specified in t h e s e t t l e m e n t of w a r claims act of 1928..
_

2. P a y m e n t s m a d e on account u p to Sept. 30,1931:
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 to J a n 1, 1928, at rates 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 5 per cent per 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, to d a t e of p a y m e n t as directed b y t h e s e t t l e m e n t of w a r
claims act of 1928
T o t a l p a y m e n t to Sept. 30, 1931

Total

4,528 $114, 279,116.18
2,288
3, 693, 716.85

Less a m o u n t s p a i d b y Alien P r o p e r t y C u s t o d i a n a n d o t h e r s

Total due claimants

Total

Class I I I

Class I I

Class I

417
116

$3,475,187. 76
.
656,626.00

3,813
2,167

$14, 694, 956. 51
2,446,657. 67

298
6

$96,108, 972.92
691,434. 28

117,972,833.03
187, 226.86

4,031,812.76

17,140. 613. 08
48,012.60

96,800,407. 20
139, 214. 36

117, 785,606.18

4,031,812. 76

17,092,600.58

96, 661,192.85

60,372, 704. 03
1,408, 766. 63

729,832. 63
115,976.22

6,648,328.89
970, 683. 90

42, 994,642.61
322,105.51

169,567,076.84

4,877, 621.50

24,711, 613.37

139, 977,840.97

16,331,026. 25

182, 976. 47

1,151,983. 98

14, 996,065.80

185,898,102. 09

6, 060,697. 97

25,863, 697. 36

154, 973, 906. 77

W
Pi
tei

Ul
4,204 1119,676,259. 38
3, 733, 342. 78
2,241
7,319,565. 04
1,070,424.93

417
112

3,475,187. 75
649,426. 00
729,832.53
114,476.05

3,787
2,129

14,603,558.22
2,418, 996.41

1 101, 697,613.41
764, 921.37

6,589, 732.51
955, 948.88

C^)

1, 287, 766.34

181, 347. 27

1,106.409. 07

133, 087, 348.47

5.060. 268.60

25.674,645. 09

(*)

102, 462, 434. 78

See footnotes, p. 90.

Numher 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 halance due, by classes, as of September 30, 1931—Continued
Class I

-^
A w a r d s certified

Total

2. P a y m e n t s m a d e on a c c o u n t u p t o S e p t . 30, 1931—Continued.
Less one-half of 1 p e r c e n t d e d u c t i o n from each p a y m e n t A g r e e m e n t of A u g . 10, 1922, p a y a b l e t o U n i t e d States
A g r e e m e n t of D e c . 31, 1928

Number of
awards

$638,993.66
3 26, 443. 72
132,421, 911. 09

N e t p a y m e n t s m a d e t o c l a i m a n t s u p t o Sept. 30, 1931
3. B a l a n c e d u e o n account:
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 rates specified i n t h e 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
Accrued interest a t 5 per c e n t per 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, to Sept. 30,1931.
B a l a n c e d u e c l a i m a n t s as of Sept. 30,1931

Total

.__

Class I I

A w a r d s o n ac- N u m c o u n t of d e a t h ber of
a n d personal a w a r d s
injury

A w a r d s of
$100,000 a n d
less

Class I I I

Number of
awards

A w a r d s over
$100,000

$21,536.63
3, 714.68

$108,969.08
18,904.44

$508,487.95
3,824.60

5,025, 017.29

25,446, 771.67

101, 950,122.23

O
pi
O

324
47

37,410,172. 56
282, 479.58

7, 200.00

26
38

143,384. 79
26,661.16

298
6

37, 266, 787.77
248 618 42

58, 696.38
16, 235.19

1, 500.17

68, 596.38
14, 735.02

16,043,269.91

1, 629. 20

45,574.91

14,996, 066.80

52,810, 763.62

10, 329. 37

238,952.26

52, 511, 471. 99

tel

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 three classes equals 80 per cent 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.
s Payments on account of interest to Jan. 1,1928, on this class of awards are included under principal.
3 Of this amount $24,150.09 has been paid to the Government of Germany. A further sum of $2,293.63 is payable in connection with the adjudication of late claims under the
agreement of Dec. 31,1928.

CO
O

o
tel

SECRETARY OF THE TREASURY

War Claims Arbiter
Under the settlement of war claims act of 1928 it is the duty of the
War Claims Arbiter, within certain limitations, to hear the claims of
the German, Austrian, and Hungarian nationals, and to determine the
fair compensation to be paid by the United States for ships seized,
patents sold or used by the United States, and a radio station sold to
the United States.
In June, 1930, the arbiter entered tentative awards in favor of
German nationals for 94 merchant ships, including certain property
contained therein, in the aggregate amount of $74,252,933, which
included simple interest at the rate of 5 per cent per annum from July
2, 1921, to December 31, 1928, and certified them to the Secretary of
the Treasury for payment. The Secretary of the Treasury determined that, of the $25,000,000 reserved from the appropriation of
$50,000,000 made in May, 1928, for payments on account of tentative
awards of the arbiter, the sum of $20,000,000 should be paid on
account of the tentative awards entered for ships and property contained therein and that the remaining $5,000,000 should be reserved
for payments to be made on account of tentative awards to be
entered by the arbiter for patents and a radio station. The sum
made available for payment on account of ships enabled the department to distribute to each claimant 26.935152525 per cent of each
tentative award entered on his behalf. Substantially aU these payments on account of ships were made in July, 1930.
In May, 1931, the arbiter began to certify to the Treasury for
payment tentative awards on account of patents. The amount of
these awards including an award for the radio station certified to
date aggregates $11,940,860.70. The Treasury immediately prepared regulations and a form of application so that the claimants
could make application in accordance with the settlement of war
claims act for payment of the amount due on account of their
awards. As soon as properly executed applications were received,
the Treasury began to make payments to claimants receiving
awards for patents on the same proportionate basis as was done in
the case of the awards for ships. By the end of August, 1931, the
arbiter had practically completed his work, with the exception of
two small claims, and the Treasury had paid out $3,178,547.58 on
account of tentative awards for patents certified for payment. The
arbiter advised the Treasury that he had completed his work on
account of the claims of German nationals with the exception of the
two small claims. He further advised that tentative awards already
entered by him aggregated $86,193,793.70 ($74,252,933 on account of
ships and $11,940,860.70 on account of patents and a radio station);
that the two claims still penduig could not exceed the amount claimed,

REPORT ON THE FINANCES

or $1,746,797, exclusive of accrued interest; and that expenses would
not exceed $130,500. He stated that, in view of the fact that the total
awards and expenses of arbitration could in no event exceed the limit
set by Congress in the settlement of war claims act, he hoped that the
awards already made might be treated as final so that payment would
not be delayed because of the pendency of the two remaining claims.
It was clear to the Treasury that this was the only practical way in
which to handle the matter and thus stop interest running on the
amount of the awards at 5 per cent per annum. The arbiter was
immediately advised that his suggestion would be carried into effect.
The awards were promptly certified as final and $36,193,793.70 of
the appropriation was made avaUable, of which one-half was distributed to American nationals holding awards of the Mixed Claims
Commission, as explained earlier, and a like amount was distributed
to German nationals holding awards of the arbiter. The act provides
that only 50 per cent of any sums appropriated by Congress to pay
the awards of the arbiter shall be made available to those claimants,
and the remaining 50 per cent shall be avaUable to pay the awards of
the Mixed Claims Commission, which, in effect, substitutes German
nationals for American nationals against the German Government.
The first payment made to the German claimants receiving awards
on account of ships was made in dollars, practically all of which was
deposited in New York banks to the credit of the respective claimants.
It was necessary, however, to make different arrangements in making
payments on account of the tentative awards for patents. Claimants receiving the latter awards were scattered throughout Germany,
and, in order to avoid considerable correspondence, the Treasury
made arrangements with the German Government for the applications
to be submitted by the claimants through the German Patent Owners
Association in Berlin. These applications, passed upon by that
organization as to whether they had been executed in accordance
with the regulations, were then forwarded to the German embassy
in Washington, where they were approved by the German Property
Commissioner before being forwarded to the Treasury for payment.
Provision was also made for the Treasury to open a reichsmark account with the Reichsbank in Berlin and checks in payment of the
awards to the patent claimants were drawn in reichsmarks payable
only at the Reichsbank or one of its branches. For several reasons,
this was the most practical way to make these payments. When
the department had under consideration the matter of making
further distribution of funds to German nationals up to 50 per cent
of their final awards, as authorized by the settlement of war claims
act, a critical financial situation prevaUed in Germany. The German
Government had issued several decrees requiring its citizens to turn
over to the Reichsbank all foreign exchange acquired by them. In

SECRETARY OF THE TREASURY

view of this situation, the department, in cooperation with the
German Government, adopted the policy of making these further payments in reichsmarks in the same manner as the payments made on
account of the tentative awards for patents. The department,
therefore, issued its checks in reichsmarks payable only at the Reichsbank or one of its branches. This arrangement has seemed to work
out to the general satisfaction of all concerned, and apparently has
been of benefit to the German economy in relieving to some extent
its foreign exchange difficulties.
The following summary statement shows the number and amount
of awards certified to the Treasury for payment by the War Claims
Arbiter and the payments made on account by the Treasury.
Number and amount of awards of the War Claims Arbiter on account of claims of
German nationals for ships, patents, and a radio station, and the amount paid
and balance due on each as of September SO, 1931
Total
Number of
awards
1. Amount due on account:
Principal of awiards, including
interest to Jan. 1,1929
Interest at 6 per cent per annum
from Jan. 1, 1929, on total
amount payable as of Jan. 1,
1929, or on the principal
amount remaining unpaid to
Sept. 30,1931
Total due claimants
2. Payments made on account to
Sept. 30,1931:
Principal of awards
_
Interest at 6 per cent per annum
from Jan. 1, 1929, on total
. amount payable as of Jan. 1,
1929, or on the principal
amount remaining unpaid to
Sept. 30,1931
Total payments to Sept. 30,
1931
3. Balance due on account:
Principal of awards
Interest accrued at 6 per cent
per annum from Jan. 1,1929,
on total amount payable as
of Jan. 1,1929, or on the principal amount remaining unpaid to Sept 30,1931
Balance due claimants as of
Sept. 30,1931.-

Amount

313 $86,193,793.70

Ships
Number of
awards

Amount

27 $74,252,933.00

Patents and a radio
station
Number of
awards

Amount

286 $11,940,860.70

10,684,943.01

8,981,86L 37

1,603,081.64

96,778,736.71

83,234,794.37.

13,643,942.34

41,891,969.60

36,940,825.63

5,951,143.97

41,891,969.60

35,940,825.63

5,951,143.97

313 44,301,824.10

38,312,107.37

286

5,989,716.73

10,684,943.01

8,981,861.37

1,603,081.64

64,886,7e7.11

47,293,968.74

7,692,798.37

A copy of Department Circular No. 441, dated August 10, 1931,
covering payments on account of the final awards of the arbiter for
ships, together with form of application, containing the regulations
covering payments on account of the tentative awards of the arbiter

REPORT ON THE FINANCES

for patents and a radio station, and a form of application for payment;
and a copy of Department Circular No. 442, dated August 14, 1931,
wUl be found as Exhibits 67 and 68, on pages 369 and 374 of this
report.
The following statement shows amounts deposited in the German
special deposit account and payments made therefrom up to September 30, 1931:
Statement showing the funds deposited in the German special deposit account and the
payments made therefrom up to September SO, 1931
Receipts:
UnaUocated interest fund i
$23, 500, 000. 00
Appropriation for ships, patents, and
radio station
86, 193, 793. 70
Receipts f r o m G e r many—
2}4 per cent of
Dawes* annuities available
for reparations
(Paris agreement
of Jan. 14,1925) _ $32, 183, 060. 87
Under GermanAmerican agreement June 23,
1930
19,469,964.00
51,653,024.87
Investments of Alien Property Gusto^
dian under section 25 of trading with
the enemy act, as amended
17, 052, 069. 47
Earnings and profits on investments
3, 936, 412. 99
$182, 335, 301. 03
Payments:
On account of the
awards of the Mixed
Claims Commission
as shown in above
statement—
Under agreement
of Aug. 10, 1922_$127,159, 567. 37
Under agreement
of Dec. 31, 1928.
5, 262, 343. 72
132, 421, 911. 09
On account of awards. War Claims Arbiter, for ships
35, 940. 825. 63
On account of awards. War Claims Arbiter, for patents and a radio station
5, 951, 143. 97
One-half of 1 per cent deductions from
payments
638, 993. 66
1 Reduced by a further $500,000 on Oct. 8,1931.

SECRETARY OF THE TREASURY
Payments—Continued.
One-half of 1 per cent deductions from
payments on account of awards under
new agreement account of expenses of
German Commission, act of June 23,
1930 (total deductions $26,443.72, of
which $2,293.63 has not yet been paid
to German Government). _
_._
Advances for expenses of
Treasury (limited to $25,000 per annum)
$23,175.00
Advances to War Claims Arbiter for expenses
130,350.00

$24,150.09

153,525.00
$175, 130, 549. 44
Balance available in German special deposit account
(including investments)
Made up as follows (principal cost)—
$5,000,000 face amount 3 per cent Treasury bonds of
1951-1955
1,778,450 face amount fourth Liberty loan 4}4 per
cent bonds
54,500 face amount 3}4 per cent Treasury notes, series
C-1930-1932
Accrued interest paid on investments when purchased
but not yet collected
' Cash balance
.
_

7, 204, 751. 59

4, 975, 375. 02
1, 835, 008. 71
55, 330. 00
3, 066. 62
335,971.24
7.204,751.59

A substantial part of the above-mentioned balance, together with
the balance of $22,947,930.53 authorized to be invested under section
25 of the trading with the enemy act, is reserved to make payment
on account of any further awards which may be entered by the
Mixed Claims Commission on account of the so-called sabotage cases.
In case no aSwards are entered on this account, the combined amounts
will be released for payment on account of other awards, in accordance with the priorities established under the settlement of war
claims act. A small portion of the balance is reserved to make payments on account of awards already certified to the Treasury, but for
which properly executed applications have not been received.
Austria
A full statement of the payments made to American nationals on
account of the awards entered by the Tripartite Claims Commission
against Austria was included in my annual reports covering the fiscal
years 1929 and 1930. In the latter report it was shown that there
were 12 awards against Austria remaining unpaid, on account of
77532—32

REPORT ON T H E FINANCES

which there was due the sum of $1,441.52. During the past year nine
of these awards, amounting to $745,01, were paid, leaving three
awards amounting to $696.51 still unpaid.
Hungary
There has been no change in the situation with respect to the
awards entered by the Tripartite Claims Commission against Hungary
which would enable the Treasury to make payment on account of
these awards. As set out in previous reports, the Treasury has
received from the Government of Hungary the amount of $8,250 in
partial satisfaction of these awards, but that Government can not
make further payment until a waiver has been secured from the
Government of France of the '^most favored nation^^ clause contained in the debt agreement between that Government and Hungary.
A similar situation existed with respect to the Governments of
Hungary and Italy, but Italy has recently advised the Treasury
that it is willing to waive the ''most favored nation'' clause in its
debt agreement with Hungary and does not object to Hungary's
making payment of the awards entered against it by the Tripartite
Claims Commission. The matter has again been brought to the
attention of the Government of France and as soon as favorable
action by France has been secured and an amount sufficient to pay
the awards, with interest, has been deposited in the Treasury by
Hungary, payments will go forward in the regular manner.
OTHER SUPERVISORY AND NONFISCAL ACTIVITIES

Coast Guard
The following is a summary of the principal operations of the
Coast Guard for the fiscal year 1931 in which comparisons with the
preceding year 1930 are indicated:
1

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

1930

Increase (-f-)
or decrease (—)

1931

6,004
29, 079

5,627
26,898

924

561

87, 033
2, 441
$438, 765

L37

5,241
5,960

233
$49,018, 073
3,992

88, 357
2,929
$369, 341

.14
5,536
6,561

370
$47, 959, 466
5,695

-377
-3,181
-363
+1,324
-f488
-$69,424
—23
-F295
-+-601
+137
,058,608
+1, 603

The season of 1931 is the first since the inauguration of the international service of ice observation and ice patrol that icebergs have

^ECMtARY OF THE TREAStJRY'

not reached as far south as the Grand Banks and formed a menace
to shipping along the trans-Atlantic steamship lanes during the
spring and early summer months. The customary patrol was consequently not necessary. Arrangements had been perfected, however,
for the prompt institution of the service should icebergs approach
toward the steamship lanes. The 125-foot cutter General .Greene,
especially outfitted for the purpose, conducted ice observations and
scientific work early in the calendar year 1931, taldng oceanographic
observations to determine the drift and directions of currents and
scouting for the vanguard of the season's icebergs. I t also conducted
an oceanographic survey as a basis for the study of conditions bearing
upon the unprecedented iceberg situation during the season of 1931.
The cutters participating in the work of winter cruising for the
1930-31 season cruised more than 77,000 miles and afforded assistance to 25 vessels, whose values, including their cargoes, amounted
to more than $6,600,000. There were 403 persons on board the
vessels assisted. In the interests of the enforcement of United States
laws 320 vessels were boarded and examined.
In the course of the year 370 derelicts and other floating dangers
and obstructions to navigation were removed by the agencies of the
service.
Coast Guard officers continued to serve at a number of places
throughout the country as captains of the port to enforce regulations
governing ihe anchorage and movement of vessels. The Coast
Guard continued its duties during the year in connection with the
enforcement of the customs laws and the navigation and motor boat
laws of the United States.
The law-enforcement work of the Coast Guard having to do with
the prevention of smuggling of liquor into the United States from the
sea continued to make heavy and continuous demands upon resources
of the- service. Coast Guard forces have succeeded in greatly cur- .
tailing the influx of hquor and have made damaging inroads into the
operations of smugglers. As a result of Coast Guard activities the
lawbreakers have sustained losses through seizure and confiscation and
through curtailment of their operations. That illegal landings of
liquor still occur is not surprising when it is considered that the
Coast Guard has 10,000 mUes of irregular coast line to defend against
this highly organized traffic.
The Coast Guard cutters conducted the regular annual patrol of the
waters of the North Pacific Ocean, Bering Sea, and southeastern
Alaska for the enforcement of the convention of July 7, 1911, between
the United States, Great Britain, Russia, and Japan, and the laws and
regulations for the protection of the fur seal and sea otter and of the
game, the fisheries, and fur-bearing animals of Alaska. In the
prosecution of their duties the cutters cruised nearly 58,000 mUes,

REPORT ON THE FINANCES

boarded 166 vessels, aftorded medical and dental aid to 1,486 persons,
transported 328 persons, assisted vessels needing help, and performed
other services falling within their purview.
The Coast Guard owns and operates as a part of the communication service a coastal communication system consisting of a telephone
and telegraph line system of approximately 1,443 miles of pole line,
2,485 mUes of open wire aerial circuits, 35 miles of aerial and underground cables, and 573 mUes of submarine cable. Considerable
progress has been made in the program of scientific study and investigation of telephone transmission problems with the view to increasing
the efficiency of the telephone circuits. With the cooperation of the
Bureau of Standards and commercial companies, the quality of submarine cable has been vastly improved. This has been beneficial
not only to the Coast Guard but to all agencies using submarine
cable.
An officer of the Coast Guard was designated by the Secretary of'
State as technical assistant to the delegation from the United States
to attend the meeting of the International Technical Consulting
Committee on Radio Communications, at Copenhagen, Denmark,
in May and June. This officer also continues to represent the Treasury Department on the Interdepartmental Radio Advisory Committee. He also represents the Treasury Department on the interdepartmental committee in preparation for the International Radio
Conference to be held in Madrid in 1932.
The Coast Guard maintains a training school at New London,
Conn., to prepare men to become radio operators; 70 men were
graduated from this school during the year.
On June 30, 1931, there were in the Coast Guard in commission
23 cruising cutters of the first class and 14 of the second class, 16
Coast Guard destroyers, 32 harbor cutters and harbor launches,
thirty-three 125-foot patrol boats, thirteen 100-foot patrol boats, 3
special inshore patrol boats, one hundred and eighty-five 75-foot patrol
boats, 45 other patrol boats, 82 cabin picket boats, 63 open picket
boats, a fioating section base, and a floating workshop. This floating
equipment does not include the primarily life-saving boat equipment
attached to Coast Guard vessels and stations.
Four more of the ten new cutters authorized by the act of June 10,
1926, mentioned in last year's report as being under construction,
were completed and placed in commission during the year. The
tenth and last cutter is now in course of construction. Contract was
entered into on January 21, 1931, for the construction of seven
165-foot boats. These boats were authorized by the act approved
May 15, 1930. Preliminary design work is in progress for the construction of the cutter authorized by the act approved April 18, 1930.
This work will be ready for bidding during the fiscal year 1932.

SECRETARY OF THE TREASURY

During the year five Navy destroyers were transferred to the Coast
Guard, in pursuance of the act approved May 15, 1930, in place of
certain destroyers that have outlived their usefulness. Two cutters
have been sold, and one was placed out of commission December 11,
1930. A program for the construction of fifteen 38-foot cabin picket
boats has been initiated. Seven have been completed. A program
for building six 78-foot special inshore patrol boats has also been
started. Three of the boats have been delivered.
In the course of the year Coast Guard seaplanes cruised 46,270
miles and searched over an area of 1,156,750 square miles. The
planes were in the air 661 hours, and more than 1,100 vessels were
identified. The airplane reporting sj^stem established in 1929 along
the Atlantic seaboard continued the work of observing and reporting
all passing aircraft. No plane taking advantage of the facilities has
been lost. Contract has been awarded for the construction of five
large flying boat seaplanes which will have a cruising radius of more
than one thousand miles without refueling.
After two years of experimental and development work, a system
of flare signals to serve the dual purpose of positively identifying
Coast Guard craft at night and of illuminating the immediate surroundings of a Coast Guard patrol boat has been devised. A pistol
has finally been developed capable of projecting into the air a parachute flare to a- distance of approximately 200 feet, the flare burning
for approximately 40 seconds with a candle power of 50,000. In
order to make the flare distinctive of the Coast Guard, a combination
of colors—white, red, white—has been adopted. The area of illumination is approximately one-half mUe in diameter. Not onl}^ is the flare
distinctive by its colors but any vessel within the area of Ulumination
is sufficiently lighted up so that its characteristics can readily be
determined.
The Coast Guard has been most generously helped by the Army,
Nav}^, and Marine Corps in the procurement of equipment and in the
training of personnel.
In May, 1931, 33 cadets were graduated and commissions were
issued to them as ensigns. As the result of entrance examinations of
candidates for cadets, 65 appointments have become effective.
The practice cruise for cadets for 1930 began on June 9, 1930, and
included calls at numerous foreign ports. The cruise was concluded
on August 28. The 1931 cruise left New London, Conn., on June 18.
Contract for the construction of the new buildings for the Coast
Guard Academy was entered into on December 30, 1930. The contract provides for completion, ready for occupancy, by the fall of 1932.
On May 15, 1931, the corner stone of the first of the new group of
buildings was laid by the Secretary of the Treasury with appropriate
ceremonies.

100

REPORT ON THE FINANCES

On June 30, 1931, there were 253 Coast Guard (life-saving) stations in an active status. There were 1 fioating section base, 18 shore
section bases, and 1 subbase established for law-enforcement purposes.
The service craft attached to these bases operate primarily against
smuggling activities. The establishment of a new section base early
in the ensuing fiscal year at Galveston, Tex., is contemplated.
Contract for the construction of the Coast Guard (life-saving)
station authorized by the act of February 8, 1929, to be established
at or in the vicinity of the Quillayute River, Wash., was awarded
April 6, 1931. Appropriation was made immediately available by
the act approved February 23, 1931, for constructing and equipping
the life-saving station authorized by the act approved March 3, 1891,
to be established at or near Port Orford, Oreg. Appropriation was
also made in the second deficiency act, approved March 4, 1931, for
constructing and equipping the life-saving station authorized by the
act approved February 26, 1930, to be established at or in the vicinity
of Grand Island, Mich.
On June 30, 1931, there were on the active list of the Coast Guard
400 regular commissioned officers, 17 temporary commissioned
officers, 86 cadets, 84 chief warrant officers, 525 regular warrant
officers, 265 temporary warrant officers, 10,589 enlisted men, and
362 civilian employees in the field, of whom 318 were per diem civilian
employees at the Coast Guard depot, Curtis Bay, Md.
At the beginning of the fiscal year the recruiting service of the
Coast Guard comprised 10 main stations and 28 substations. On
December 3, 1930, due to the need of an additional recruiting office
on the west coast, the main recruiting station at Kansas City, Mo.,
was closed and transferred to Seattle, Wash. There was a total of
10 main stations and 25 substations at the close of the fiscal year 1931.
During the year there were 12,184 applicants for enlistment, of
which number 1,570 were enlisted, 1,392 rejected for physical disabUity, and 9,222 rejected for other disabling causes.
At the close of the year the Coast Guard Institute at New London,
Conn., had an enrollment of 1,433 enlisted men. Forty-one educational certificates and 13 International Correspondence School
diplomas were issued during June.
A very satisfactory state of service discipline has continued. The
percentage of men reenlisting upon expiration of enlistment was 94.8
per cent during the fiscal year 1931. The number of losses prior to
expiration of enlistment has been gradually reduced, and there has
also been a material reduction in the number of desertions.
The Secretary of the Treasury, under the provisions of law,
awarded during the year 33 life-saving medals of honor (6 gold and
27 sUver).

SECRETARY OF THE TREASURY

101

Public Health Service
The calendar year 1930 was noteworthy for the low incidence of
influenza and consequent low death rates for influenza and pneumonia. The death rate for these two diseases together during the
year was 101.8 per 100,000 population, as compared with 149 per
100,000 in 1929 and 143.2 in 1928. There was^an outbreak of influenza during the winter of 1931, but the death rates were low as
compared with those during the 1928-29 outbreak.
Preliminary reports indicate that during the calendar year 1930
there was a continuation of the decrease in the death rate for tuberculosis in the United States. Reports from the health officers of 43
States gave a tuberculosis death rate of 68.5 per 100,000 population,
which is the lowest rate ever shown by these reports, the next lowest
rate being 73.1 per 100,000, which was recorded for the year 1929.
The case rates and death rates for diphtheria also continued to
decline. The diphtheria death rates for the last three years, as
computed from the reports of State health officers of 44 States to the
Public Health Service, were as follows:
Deaths per 100,000 population
1930
1929
1928

4 9
6. 6
7. 2

The death rate of 4.9 per 100,000 in 1930 is the lowest diphtheria
death rate ever recorded by the Public Health Service for a large
number of States. The population included is over 120,000,000.
The prevalence of smallpox has been increasing in parts of the
United States for several years. More than 48,000 cases of smallpox
were reported by 44 States during 1930. The disease has been mild
with very few deaths compared to the large number of cases. This
fact may be in part responsible for the apparent indifference regarding
protection against the ravages of this disease. Experience has shown
that the virulent form of smallpox may appear at any time, a fact
which many persons do not reahze. When a number of deaths from
smallpox are reported in a community, people are usually willing to
submit to vaccination, but it is then too late to avoid much needless
suffering and the sacrifice of lives.
The prevalence of pellagra was relatively high during 1928 and 1929.
Reports from 44 States show a decrease in the incidence of the disease
during 1930, but incomplete reports indicate some increase during the
first six months of 1931.
The outbreak of cholera in the PhUippine Islands, which began in
May, 1930, continued during the fiscal year 1931, but the number of
cases reported during May and June, 1931, was comparatively smalL

102

REPORT ON T H E FINANCES

About 5,000 cases were reported during the fiscal year. The numbers
of cases and deaths were small as compared with the numbers during
outbreaks which occurred in the latter part of the last century and the
early part of the present century.
Plague was reported from nearly all parts of the world during the
year 1930, although the number of cases in British India, which is
the principal world focus of plague, was smaller than the number
reported in 1929.
Yellow fever did not appear in the United States or its possessions
during the fiscal year, but it was reported in Brazil in South America
and in the Gold Coast and British Cameroons in Africa. A case of
yellow fever was reported at Lagos, Nigeria, which was said to have
been infected in a laboratory. Just after the close of the fiscal year
cases of yellow fever were reported in Colombia. Quarantine officers
realize that this disease requires constant vigilance.
Preliminary reports for the calendar year 1930 from 19 States,
having an aggregate population of.nearly 63,000,000, give a general
death rate of 11.3 per 1,000 population, and reports from 17 States,
with a population of 53,000,000, give an infant mortality rate of 64
deaths per 1,000 live births of infants under one year of age. Both of
these rates are very low as compared with rates from the same areas
for preceding years.
At the close of the seventy-first session, the Congress of the United
States passed legislation (act of March 3, 1931) authorizing 24-hour
quarantine inspection service to be established in certain ports of the
United States, as the need for such service might be determined by
the Secretary of the Treasury. Applications are now pending for
such extended quarantine service for the ports of New York, Boston,
PhUadelphia, San Pedro, and New Orleans.
The act of March 3, 1931, also modifies the charges made for quarantine services rendered at the port of New York to conform with the
charges made at other United States ports. I t also corrects a discrimination heretofore obtaining under existing laws respecting oflicers
and employees engaged in the navigation and care of quarantine
vessels operatedby the Public Health Service in the various maritime
ports of entry.
WhUe Executive Order No. 5143, approved June 21,1929, restricting
for the time being the transportation of passengers from certain ports
in the Orient, remained in force during the fiscal year 1931, the
regulations prescribed in accordance with the provisions of this
Executive order have been modified from time to time as conditions
warranted so that now the very minimum requirements are imposed
and no undue hardship results. In connection with the occurrence
of cases of cerebrospinal meningitis among steerage passengers on
vessels arriving from oriental ports, the Public Health Service is

SECRETARY OF THE TREASURY

103

conducting a study of ventilation and berthing facilities on vessels of a
steamship line engaged in the carriage of oriental steerage to United
States ports. These studies are being made jointly h j representatives
of the Public Health Service, the steamship line medical service, and
the University of California.
The problem of the sanitary control of aerial navigation, which has
been receiving international attention by leading sanitarians for
several years, has finally culminated in an International Convention
for the Sanitary Control of Aerial Navigation. This convention
formed the principal topic for discussion at the last two meetings of the
Permanent Committee of the Office International d'Hygiene Publique
in Paris in October, 1930, and May, 1931, as well as at the meeting in
April, 1931, of the Second Pan American Conference of Directors of
Health held in Washington, D . C , under the auspices of the Pan
American Sanitary Bureau, of which the Surgeon General of the
Public Health Service is director. Thus the views of the two most
important international public health bodies were incorporated in a
final draft adopted by the Permanent Committee of the Office International d'Hygiene Publique at the meeting in Paris in May, 1931.
This Government was represented at this meeting by the Surgeon
General of the Public Health Service.
Of international interest also is the problem of the satisfactory
control of psittacosis. This subject will form one of the major topics
for discussion at the forthcoming meeting of the Permanent Committee
of the Office International d'Hygiene Publique in Paris in October,
1931. The regulations of the United States for the control of this
disease, prescribed in accordance with Executive Order No. 5264,
issued by the President on January 24, 1930, restricting for the time
being the introduction of parrots into the United States, have been
modified during the past year to permit the importation of commercial shipments of these birds under approved sanitary restrictions.
It is believed that these regulations represent the minimum conditions
under which a reasonable protection from such a danger may be had
short of the more drastic prohibition of all importation, as authorized
by the Executive order.
Upon the recommendation of the Surgeon General of the Public
Health Service, a change has been made during the past year in the
measures designed to prevent the spread of typhus fever at ports of
embarkation in Europe. This step was taken in view of the better
organization of sanitary services and improvement in sanitary conditions now obtaining in Europe. Where formerly the application of
the measures designed to prevent the spread of typhus fever was
based upon broad geographic areas, now their application is contingent
upon the actual endemic or epidemic prevalence of typhus fever in

104

REPORT ON THE FINANCES

such ports, places, or localities, from which persons destined for the
United States have originated or embarked.
Domestic quarantine work consists chiefiy in (1) cooperation with
State and local authorities in preventing the interstate spread of
disease; (2) assistance to State and local authorities in the development of local health organizations through studies and demonstrations in rural sanitation; and (3) cooperation with other departments and bureaus of the Federal Government in connection with
the sanitation of national parks, reservations, and public buildings
and grounds.
Activities directed toward preventing the interstate spread of
disease during the fiscal year 1931 included the certification of water
supplies used by common carriers in interstate traffic, the inspection
of shellfish-growing areas and shipping establishments and approval
of State certffications of interstate shippers meeting sanitary requirements, cooperation with State authorities in the eradication of
trachoma in centers where this disease is endemic, and suppressive
measures against plague in California.
The reciprocal arrangement between the Public Health Service
and the Department of Pensions and National Health of Canada with
respect to certification of water supplies used on common carriers
and the certification of shellfish shippers continued to operate successfully toward preventing spread of water-borne diseases in international traffic and commerce.
The most outstanding activity in the field of rural sanitation concerned the administration of the emergency appropriation of $2,000,000
made avaUable by the last Congress for health work in the droughtstricken areas. Immediately after the appropriation was made, the
Public Health Service called a conference of health officials from the
States affected by the drought to consider plans, and within a short
time work was under way in all of the localities where the need for
emergency health measures was most urgent. This work has prevented much distress and suffering by protecting the people in the
stricken areas from iUnesses for which adequate medical care would
have been beyond the means of many families.
Although no human case of plague occurred in the United States
duruig the fiscal year, the disease continued to exist in ground
squirrels in certain rural sections of California. A new focus of
rodent infection was discovered in Monterey County. Although
measures directed toward eradication of ground squirrels in California have been more extensively carried out during the past three
years, through the activities of the horticultural commissioners of
the different counties, the campaign has not yet reached a state in
any locality where control activities may be suspended.

SECRETARY OF THE TREASURY

105

By the act of Congress approved February 27, 1931, authority was
granted to take over the laboratory of the Montana State Board of
Entomology, located at HamUton, Mont. This laboratory is especially designed and constructed for the study of tick-borne diseases
and is to be used by the Public Health Service in its studies of Rocky
Mountain spotted fever. This act also authorized the erection of
an additional laboratory buUding made necessary by the increasing
demands for this work and by the recognition of its national aspect.
Two noteworthy contributions have been made during the year to
the work in typhus fever and spotted fever. Officers of the Public
Health Service proved the existence of typhus fever virus in rat
fleas obtained from wild (Norway) rate trapped in typhus foci. The
strains of virus recovered from these fleas were definitely shown to
be identical with the virus of endemic typhus recovered from a
human case.
In the course of epidemiological studies of typhus fever in the
eastern States, a number of cases diagnosed as typhus were found to
be a type of spotted fever closely resembling, and for practical purposes, clinically indistinguishable from Rocky Mountain spotted
fever. Later laboratory studies showed that this disease produced
cross immunity with spotted fever of western origin. Heretofore it
has been thought that Rocky Mountain spotted fever existed only in
i^he western part of the United States.
A study of public health methods iucluding surveys of State and
local health departments is again being intensively pursued. A study
of the organization of county health units as they now exist and a
measurement of their actual accomplishments is under way.
In addition to cooperating with State and local health departments
in the control of venereal diseases, it has been possible for the division
in charge of this work to extend more active cooperation to other
divisions of the service and to other Federal bureaus and nonofficial
agencies concerned with the control of syphUis and gonorrhea. The
division has participated in important studies in both the cluiical and
laboratory aspects of these diseases. Results of the year's work
on prevalence data indicate that chronic cases are remaining under
treatment longer now than formerly. This is one of the most encouraging signs of the value of the campaign for the control of venereal
diseases.
Cluiical studies which have been conducted in conjunction with
five of the leading venereal disease clinics in the country have
resulted in several completed reports.
The experiment in community-wide treatment of the negro population in a county of one southern State has given satisfactory results.
Infected persons discovered by this survey have received far more
treatment than would otherwise have been avaUable, and many

106

REPORT ON T H E FINANCES

individuals not included in the primary group have sought examination and treatment voluntarUy.
American merchant seamen and other legal beneficiaries continued
to receive medical care in the marine hospitals and other relief stations
operated in 142 ports of the United States and 15 others in Alaska,
Porto Rico, Virgin Islands, the Philippines, Honolulu, and the
Canal Zone. There has been an increase of 7.2 per cent in the amount
of hospital treatment and 4.2 per cent in out-patient treatment for
American merchant seamen over the preceding year due partly, no
doubt, to the operation of the merchant marine act of May 22, 1928.
This is the 133d year for which this service has been rendered in the
iuterests of the American merchant marine.
All medical services, including those of medical and dental officers
detailed aboard vessels, were furnished to the Coast Guard, which
now has a personnel of 13,020. Valuable medical assistance was
also given other Government agencies, particularly the Steamboat
Inspection Service, Lighthouse Establishment, Immigration Service,
Coast and Geodetic Survey, Mississippi River Commission, Shipping Board, Employees' Compensation Commission, Veterans'
Administration, CivU Service Commission; and, by segregating and
treating approximately 340 patients at the National Leper Home,
assistance was given the several States.
The Supervising Architect has made satisfactory progress with the
hospital buUding program. The large out-patient building in PhUadelphia was completed and occupied on September 3, 1930. The
new marine hospitals at Galveston, San Francisco, and New Orleans
are nearly completed; construction work has begun on the marine
hospital in Seattle, and the contract has been let for the addition at
Key West. Plans are in preparation for the marine hospitals in New
York City, Baltimore, Norfolk, Detroit, Chicago, LouisvUle, EvansvUle, Memphis, and MobUe, for all of which appropriations have
been made. The building program also contemplates additional
facUities at Portland, Me., Boston, Buffalo, Pittsburgh, St. Louis,
CarvUle, La., Fort Stanton, and San Diego, Calif.
During the year an appropriation of $300,000 was obtained for the
beginning of the construction of the new laboratory buUding, not to
exceed a cost of $750,000, for the National Institute of Health,
authorized under the act of May 26, 1930.
Legislation previously enacted authorized the acceptance of
bequests made to the National Institute of Health, and during the
year a gift of $100,000 was received from the Chemical Foundation
(Inc.), for the establishment of a research fellowship in chemistry.
During the fiscal year the Division of Mental Hygiene has been
engaged largely in administrative duties incident to the establishment of the United States ^narcotic farms and the organization of an

SECRETARY OF THE TREASURY

107

adequate medical service fqr Federal prisons. Special studies have
been conducted dealing with the subject of narcotic drugs and the
narcotic drug addiction problem. In accordance with the requirements of the act creating the narcotic farms, which are to be administered under the direction of the Public Health Service, sites for these
farms have been selected at Lexington, Ky., and Fort Worth, Tex.
Bureau of Narcotics
The Bureau of Narcotics was created as of July 1, 1930, by the act
of June 14, 1930, as amended. There were transferred to this bureau
the functions of the Federal Narcotics Control Board and those functions of the former Bureau of Prohibition in the Treasury Department
relating to enforcement of the Federal narcotic laws.
The activities of the bureau are directed toward the apprehension
of major law violators, the elimination of the sources of supply of
narcotic drugs and the main channels through which such drugs are
illicitly distributed, as well as the control of the legitimate manufacture and distribution of drugs for medical purposes.
Close cooperation has been maintained between the Bureau of Narcotics and the Bureau of Customs to detect and prevent smuggling.
The international exchange of information relating to illicit shipments
proceeding from one country to another has effectively supplemented
these efforts. There were seized at ports or border points during the
year 66,674 ounces of narcotic drugs as compared mth 23,666 ounces
during the previous year. In addition there were seized or purchased
as evidence from illicit sources by Federal narcotic enforcement officers 41,622 ounces of narcotic drugs as compared with. 23,948 ounces
during the previous year.
During the year 6,075 criminal cases were reported by Federal
narcotic officers, as compared with 9,270 last year. There were 3,111
convictions. The average sentence imposed upon convicted violators
was 3.08 years as compared with an average sentence of 2.38 years
during the fiscal year 1930. Fines imposed for violations of the
narcotic laws amounted to $161,220.16. There were 632 cases compromised, resulting in payment into the Treasury of $69,676. Fortysix aliens were deported for violation of or conspiracy to violate
narcotic laws and the cases of 197 persons reported to the Department of Labor for such offenses were pending at the close of the year.
On June 30, 1931, there were 332,877 registrations under the Harrison Narcotic Law, as amended, 263 as importers and manufacturers,
1,605 as wholesale dealers, 53,227 as retail dealers, 149,025 as practitioners, and 128,757 as dealers in and manufacturers of untaxed
narcotic preparations.

108

REPORT ON THE FINANCES

As a supplement to Federal activities, field officers in the several
divisions have developed the cooperation of State, county, and
municipal authorities to the end that the latter, under local laws,
deal with minor violators and provide as far as possible for the institutional treatment of addicts within their respective jurisdictions.
Efforts have also been made to have State licensing boards withdraw
medical, dental, or pharmaceutical licenses from practitioners offending against the narcotic law. A draft for a uniform State narcotic
law is being prepared by the conference of State Commissioners,
recommendations having been made to that body by the bureau.
The bureau has also cooperated with the new Division of Mental
Hygiene in the United States Public Health Service established by the
act of June 14, 1930, in determining quantities of crude drugs to be
permitted importation into the United States, and with reference to
other matters connected with narcotic law enforcement.
The control of the legal importation, manufacture, and distribution
of narcotic drugs appears to be reasonably effectual. The quantity
of drugs of domestic manufacture which is diverted to illicit use is
comparatively negligible. Suppression of smuggling and the subsequent selling of opium, morphine, heroin, and cocaine continue tc
constitute the bureau's principal enforcement problem.
Bureau of Industrial Alcohol
Under the prohibition reorganization act, which became effective
on July 1, 1930, the Bureau of Prohibition in the Treasury became
the Bureau of Industrial Alcohol, retaining jurisdiction over the
administration of the permissive provisions of the national prohibition
act, the duties incident to the enforcement of the penal provisions of
the national prohibition act having been transferred to the Attorney
General. The functions of the Bureau of Industrial Alcohol thus
comprise chiefly the direct supervision of the production of industrial
alcohol under restrictions designed to prevent the diversion of such
alcohol to illegal uses and, in conjunction with the Attorney General,
the control of permits relating to the manufacture, sale, and use of
alcohol.
The administration of the provisions of the national prohibition
act relating to industrial alcohol and Uquors for medicinal purposes
entails the supervision of the operation of the largest chemical and
drug manufacturers in the country whose productions are essential
materials in the manufacture of varnishes, paints, lacquers, smokeless
powders, artificial sUk, dyes, essential medicinal alkaloids, and coaltar derivatives. In the medicinal field the supervision covers the use
of alcohol and medicinal liquors by hospitals, sanitariums, institutions
for medicinarresearch, physicians, and others havuig professional uses

SECRETARY OF THE TREASURY

109

for alcohol. In the research and educational field the supervision
covers the procurement and use of alcohoPby universities, colleges,
and Government and State institutions. The production and distribution of wine for sacramental purposes are likewise under the bureau's
supervision. The bureau also supervises the production and use of
ethyl alcohol, a very important industrial product.
The scope of the activities of the bureau is indicated by the fact
that on June 30, 1931, there were 177,883 permits in force throughout
the United States and its Territories. Of this number, 124,179
permits were issued to doctors, hospitals, dentists, druggists, and
other health practitioners; 94 for use for ritualistic purposes; 463
for manufacture and storage; 180 for dealcoholizing plants; 22,989
for use of alcohol in the manufacture of other articles; 475 for carriers;
19,681 for purchase, sale, and/or use; 135 relating to import and
export; 5,525 for tax-free alcohol for hospitals, schools. Government
use, etc.; 86 as special permits; and 4,076 permits in connection with
the manufacture, storage, sale, and use of industrial alcohol.
During the year 2,435,631 gallons of whisky were produced under
permit at seven distUleries. I t is estimated that this quantity, with
the stock already in bond, will be sufficient for medicinal purposes for
a period of five years. A 5-year supply is required since the law does
not permit the bottling of whisky in bond until it is aged four years in
a bonded warehouse.
The manufacture of synthetic ethyl alcohol from ethylene gas
during the past fiscal year has been firmly established on a commercial basis and is now a recognized source of industrial alcohol on a
large scale. Between six and seven million gallons of alcohol were
produced during the year by this method.
In the Bureau of Industrial Alcohol laboratory research and experimentation were carried on to develop improved denaturing formulae
that will better meet the requirements both of industry and of prohibition enforcement. The policy of exercising extreme care in
approving preparations manufactured with specially denatured alcohol
has reduced to a minimum the illegal distillation of alcoholic preparations to obtain alcohol for Ulegal purposes. On January 1, 1931, the
use of wood alcohol in completely denatured alcohol was eliminated,
and alcotate was substituted therefor, a new denaturant developed
in the laboratory at Washington. Alcotate is obtauied by treating
distUlates from certain crude petroleum oils. During the latter part
of June, required denaturants in completely denatured alcohol were
again increased to include denaturing grade isopropanol and alpha
terpineol as additional denaturants. Denaturing grade isopropanol
is crude isopropyl alcohol produced synthetically from gases. The
use of these two additional denaturants with alcotate and aldehol in
completely denatured alcohol renders it totally unfit for use as a

110

REPORT ON THE FINANCES

beverage and impracticable for illegal manipulation for the recovery
of potable alcohol. These denaturants were developed after considerable research and study and are nontoxic.
Porto Rican Hurricane Relief Commission
The Porto Rican Hurricane Relief Commission, established by an
act of Congress approved December 21, 1928 (Pubhc Resolution
No. 74, Seventieth Congress), is composed of the Secretary of the
Treasury, the Secretary of War as chairman, and the Secretary of
Agriculture. To date the amount authorized by Congress to be
appropriated for use by the commission aggregates $11,150,000, of
which amount $10,150,000 has already been appropriated. Of the
amount already appropriated, $6,000,000 was for loans to individual
Porto Rican farmers, $2,000,000 for ^'the rebuilding and repair of
schoolhouses damaged or destroyed by the hurricane in the small
towns and rural districts of Porto Rico and for the employment of
labor and purchase of materials for repairing insular and rural municipal roads," $2,000,000 for the employment of labor and the purchase
of supplies, materials, and equipment for repairing and constructing
roads, $100,000 ^'for the purchase and distribution within the devastated area of Porto Rico of seeds and seedlings * * *," and
$50,000 for administrative expenses. Durmg the fiscal year 1931,
$1,000,000 was appropriated.
During the year the commission carried forward its rehabihtation
program described in the last two annual reports. The expenditures
of the commission during the year for relief and rehabilitation work
have totaled $3,180,444. The loaning operations during the past year
have consisted mainly in administering the loans in force and in
making installment payments to borrowers, practically all of the
$6,000,000 appropriated for loans having already either been expended
or obligated under loan contracts by which the borrowers receive the
advances in monthly or semimonthly installments.
The construction engineers detailed from the Supervising Architect's Office to assist in the planning and supervision of the work of
repairing and rebuilding the schoolhouses damaged or destroyed by
the hurricane completed their work during the year and were returned
to the United States. AU the repair work, involving about 400
schools, was completed during the preceding year at a total cost of
approximately $300,000. The reconstruction of 330 schools, undertaken at a cost of about $1,000,000, was completed in February,
1931. A small amount of additional work is still being carried out in
connection with the school-building program, this having been made
possible by savings effected in the original projects.

SECRETARY OF THE TREASURY

111

The repair and construction of roads under the Federal appropriations totaling $2,000,000, made available during the fiscal years 1931
and 1932, were initiated early in the year and have gone steadily
forward. This work has aided very materially in the general
rehabilitation of the entire island.
Attention is invited to the attached reports of the various bureaus
and divisions of the Treasury Department and to the exhibits and
tables accompanying the report on the finances.
A. W.

MELLON,

Secretary of the Treasury.
T o THE SPEAKER OF THE H O U S E OF REPRESENTATIVES.
77532r-32

ADMINISTRATIVE REPORTS
OF BUREAUS AND DIVISIONS

113

ADMINISTRATIVE REPORTS OF BUREAUS AND
DIVISIONS
O F F I C E O F THE COMMISSIONER OF ACCOUNTS AND DEPOSITS

Railroad obligations
The total receipts during the fiscal year on account of railroad
securities amounted to $16,766,958.42, of which $14,851,842.02 was
on account of principal and $1,915,116.40 was on account of interest.
The raUroad obligations have been gradually reduced each year
untU the principal outstanding at the close of the fiscal year 1931
amounted to only $39,942,432.85. The following statement shows
the total amount of railroad obligations by classes originally held by
the United States Government, the amount held on June 30, 1931, and
payments received on account:
Railroad obligations held originally by the United States Government, amount held
June SO, 1931, and total payments of principal and interest received
Principal
amount originally held
Federal control act:
Equipment trust notes
Section 7
Transportation act:
Section 207
Section 210
Total

Principal
amount held
on June 30,
1931

• Total payments received
Principal

Interest

$346,566,760.00
93,401,755. 00

$134,400.00

$346,422,350. 00
93,401, 766. 00

$45, 272,976.93
23, 354,495. 32

254,334,891. 00
290,800,667. 00

5,219,300.00
34, 688,732.85

249,116,591. 00
256,211,934.15

54,137,647. 36
88, 317, 273.89

985, 094,063. 00

39,942,432. 85

945,161,630.16

211,082,393.49

During the year the equipment trust notes were reduced by payments received from the Minneapolis & St. Louis Railroad Co. A
reduction was also made in the obligations acquired under section 210
of the transportation act, 1920, as amended, due to payment, amounting to $14,816,242, received on account of the obligations of the
Boston & Maine RaUroad. For detaUed statements of the obligations held and payments m.ade on account of principal, see Tables 49
and 50, pages 545 and 546.
Section 204-—This section provides for reimbursement of deficits qf
the so-called short-line railroads during Federal control. No payments were made by the Government to carriers during the fiscal
year on this account. The total payments to June 30, 1931, were
$10,967,801.80, of which $9,046,412.99 was paid to carriers direct and
$1,921,388.81 was paid to the Director General of Railroads on account
of amounts certified to be due from the carriers to the President as
operator of the transportation systems under Federal control.

115

116

R E P O R T O N THE FINANCES

, Section 209.—This section provides for the guaranty of net railway
operatuig income during the six months' period immediately following
the termination of Federal control on March 1, 1920. No payments
were made by the Government to carriers during the fiscal year on
this account. The total payments to June 30, 1931, were $531,756,045.71, the same as reported for last year. The following carriers are
stUl indebted to the United States on account of overpayments made
under the provisions of paragraph (g) of this section:
Great Northern Railway Co
$1, 329, 785. 98
Minneapolis & St. Louis Railroad Co., receiver
292, 022. 23
Missouri & North Arkansas Railroad Co., receiver
41, 375. 46
Oregon Electric Railway Co. (subsidiary Spokane, Portland &
Seattle Railway Co.)
25, 74L 83
Spokane, Portland & Seattle Railway Co
.
104, 273. 48
Total

1, 793, 198. 98

In some cases these claims are in litigation and the others have
been placed in the hands of the.Attorney General of the United States.
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, because the time for making application has expired.
The expenditures by the Director General during the fiscal year for
this purpose amounted to $169,396.81 making net expenditures by
him on this account to June 30, 1931, of $33,992,845.63.
For a statement showing the principal amount of obligations held
as of June 30, 1930 and 1931, on account of loans made, see Table 50,
page 546.
The following statement shows the amounts of principal and interest due from carriers in default as of June 30, 1931, on account of
their obligations for loans under this section:
Principal and interest due from carriers in default on June 30, 1931, on account of
loans under section 210
Name of carrier
Aransas Harbor Terminal Ry
Des Moines & Central Iowa R. R
.
Fort Dodge, Des Moines & Southern R. R. Co..
Georgia & Florida Ry
Gainesville & Northwestern R. R. Co
Minneapolis & St. Louis R. R. Co
Missouri & North Arkansas Ry. Co
Salt Lake & Utah R. R. Co
Seaboard Air Line Ry. Co
Shearwood Ry. Co
Virginia Blue Ridge R. R. Co
Virginia Southern R. R. Co
Waterloo, Cedar Falls & Northern Ry. Co
Wichita Northwestern Ry. Co
Wilmington, Brunswick & Southern R. R. Co...
» Principal not yet due.

Principal in
default
$44,304. 67
633,600.00
200,000.00

75,000.00
1,382,000.00

94,200.00

(0
1,172. 81
106,000.00
38,000.00
200,000.00
381, 750.00
90,000.00
3,245,927.48

Interest in
default
$163,039.66
17,162.13
71,280.00
38,102. 53
626,009. 73
1,403,062.94
314,080.80
571,977. 62
31,800. 00
13,680. 00
716,930.97
171,787.50
MOO. 00
4,143,313.88

Total in
default
$44,304. 67
796,639. 66
217,162.13
71,280.00
113,102. 63
2,008,009. 73
1,403,062. 94
408,280. 80
571,977. 62
1,172. 81
137,800.00
61,680.00
915,930.97
663,637. 60
95,400.00
7,389,241.36

SECRETARY OF THE TREASURY

117

Securities owned by the United States Government
The aggregate amount of securities owned by the Government on.
June 30, 1931, as compiled from the latest reports received, was
$12,333,717,959.69, as against $11,639,563,681.44 on June 30, 1930,
an increase of $694,154,278.25. A summary comparison of the
holdings at the end of the last two fiscal years is as follows:
Summary of securities owned hy the United States on June 30, 1930 and 1931
Security

June 30,1930

Foreign obligations:
Received under debt settlements.
Aiiother
Total
Capital stocic of war emergency corporations
Railroad obligations
Capital stock of Panama Railroad
^
Capital stock of Inland Waterwaj'^s Corporation .
Capital stock of Federal land banks..
Capital stock of Federal intermediate credit banks
'
Miscellaneous securities received by War and Navy Departments, U. S. Shipping Board, and Federal Farm Board
Total

June 30, 1931

$11,086,120,082.43
320, 787,222. 80

$11,062,897,683. 63
683,211,013.88

11,406, 907,306. 23
47,569,880. 40
54, 792, 274. 87
7,000, 000. 00
9,000,000. 00
292, 519. 25
30,000,000. 00

11, 746,108,697. 51
46,673,080.14
39,942,432. 85
7,000,000. 00
12,000, 000.00
237, 733.00
30,000,000.00

84,001, 701. 69

461,756,016.19

11, 639, 563, 681. 44

12,333, 717,959. 69

There was a net increase of about $339,000,000 in foreign obligations
held by the United States, due principally to bonds received from the
German Government, amounting to the equivalent of about $386,000,000, for account of reimbursements of the costs of the United
States army of occupation and the awards of the Mixed Claims Commission, under the funding agreement of June 23, 1930, as authorized
by the act of Congress approved June 5, 1930. These bonds are in
reichsmarks, which, for the purpose of this statement, have been
converted into dollars at the rate of 23.82 cents to the reichsmark.
This increase is partially offset by the payments received on account
of principal during the year under the various debt agreements.
p o t h e r increases comprise about $367,000,000 in miscellaneous
securities due almost entirely to additional securities acquired by the
United States Shipping Board and the Federal Farm Board; $3,000,000 in the capital stock of the Inland Waterways Corporation,
which was called duruig the year, pursuant to the authority contained
in the act of May 29, 1928, to give the corporation greater working
capital.
There was a decrease of about $15,000,000 ui raUroad obligations
due to repayments received from the Boston & Maine RaUroad on
account of its notes given for loans made by the Government under
the transportation act, 1920, as amended.
A detailed statement of the securities held on June 30, 1931, will
be found as Table 48, page 543.

118

REPORT ON THE FINANCES

Trust funds administered by the Treasury
Adjusted service certificate fund.—Investments for the account of
the adjusted service certificate fund, created by the act of M a y 19,
1924, were made during the fiscal year 1931 in special issues of Treasury obligations bearing interest at the rate of 4 per cent per annum in
accordance with the procedure outlined on pages 118-120 of the
annual report of the Secretary of the Treasury for the fiscal year 1925.
Investments made during the year amounted to $600,000,000, of
which $224,000,000 represented funds appropriated by Congress;
$107,300,000 represented the principal proceeds of maturing notes
reinvested; $244,000,000 represented an exchange of 5-year notes
for a like face amount of certificates of indebtedness; and $24,700,000
was derived from interest on investments. The appropriation of
$112,000,000 provided by the independent offices appropriation act
for 1932, which ordinarUy would not have become avaUable until
January 1, 1932, was made immediately available by the deficiency
act of March 4, 1931. The redemption during the year of $756,100,000 of securities from the adjusted service certificate fund plus $9,626,542.45 of interest paid on these redeemed securities provided funds for
authorized payments to veterans in the amount of about $766,000,000.
On February 27, 1931, Congress amended the World War adjusted
compensation act by authorizing an increase in the loan basis of
adjusted service certificates up to 50 per cent of their face value.
This act authorized the Administrator of Veterans' Affairs to make
loans to veterans out of the Government life insurance fund or the
adjusted service certificate fund.
When the emergency adjusted compensation act became law,
February 27, 1931, the Treasury held for account of the adjusted
service certificate fund $755,400,000 face amount of special 4 per cent
Treasury obligations. In order to convert these special obligations
into current funds for the purpose of financing the additional loans
to veterans on their adjusted service certificates, it was necessary for
the Treasury to borrow money in the open market. During the first
two weeks after the passage of the act, redemptions of securities in
the fund had been made, as previously, upon approved requisitions of
the Administrator of Veterans' Affairs to cover authorized disbursing
credits with the Treasurer of the United States in favor of the several
disbursing officers. The securities so redeemed were charged against
the general fund as any other public debt redemption, and the proceeds were credited to the adjusted service certificate fund, in order
to provide the necessary credits to cover the requisitions. Under

SECRETARY OF THE TREASURY

119

this procedure a large check float resulted from a considerable lapse
of time between the crediting of funds to disbursing officers and the
actual cashing of checks drawn in favor of veterans. Ih order to
eliminate the consequent loss of interest to the adjusted service certificate fund, the Treasury changed this procedure on March 13, 1931.
After that date redemptions were made on the basis of checks paid
from day to day by the Treasurer of the United States instead of in
advance upon the basis of estimated future requirements of disbursing
officers. Furthermore, the new procedure resulted in a better presentation, in the Treasury's daily statement of receipts and expenditures, of operations through the adjusted service certificate fund.
Except as to the new appropriations to this fund, which have previously been mentioned, loans to veterans on their adjusted service
certificates should not be reflected in the Government's receipts and
expenditures. Loans to veterans from the adjusted service certificate
fund involve essentially the substitution of the veterans' notes for
United States obligations held in the fund, the latter being in effect
sold in the open market for cash to meet veterans' checks (although
actually the special United States securities held in the fund are
redeemed by the Treasury and other securities sold in the open market
in accordance with the Treasury's cash requirements). Credits to
the adjusted service certificate fund expenditure account of the
proceeds of redeemed special securities should in the long run be
offset when checks drawn on the fund in favor of veterans are paid.
However, under the earlier procedure, delay in the presentation of
checks for payment resulted temporarily in only a partial offsetting of
the credits to the adj usted service certificate fund expenditures account,
and in consequence an understatement of expenditures. Had this
procedure been continued the result would have been an understatement of the deficit in ordinary receipts by the amount of the check
float. As already indicated, this was avoided by placing funds to the
credit of disbursing officers on the security of United States obligations
held in the fund and prior to the redemption of such securities. As
indicated in the statement below, securities held in the fund on June
30, 1931, amounting to $121,800,000, were thus committed to the
extent of $18,500,000 as a result of funds being placed to the credit of
disbursing officers in advance of actual redemption of securities. As
soon as the transactions under the adjusted service certificate fund
have returned to a normal basis and the check float has been materially
reduced, the former practice of making advances to disbursing officers
on the basis of securities actually redeemed by the Treasury will be
resumed.

120

REPORT ON THE FINANCES

A statement of the fund as of June 30, 1931, follows:
Adjusted service certificate fund, June SO, 1931
FUND ACCOUNT

Appropriations:
To June 30, 1930—
Available January 1, 1931
Available Mar. 4, 1931

$672, 000, 000. 00
$112, 000, 000. 00
112, 000, 000. 00
;_.

Interest on investments

Checks paid by Treasurer of the United States
Balance in fund June 30, 1931

224,000,000.00
94, 781, 707. 35
990, 781, 707. 35
867, 547, 108. 69
123, 234, 598. 66

FUND ASSETS

Investments:
4 per cent Treasury certificates of indebtedness
$121, 800, 000. 00
Less amount committed on account of
advances to disbursing oflficers prior
to redemption of securities
18, 500, 000. 00
103, 300, 000. 00
Unexpended balances to credit of disbursing officers of the
Veterans' Administration with the Treasurer of the United
States
.
Unexpended balance to credit of fund on books of the Division of Bookkeeping and Warrants
Total fund assets June 30, 1931

19, 856, 498, 89
78, 099. 77 .
123, 234, 698. 66

Civil service retirement and disability fund.—During the year the
Treasury continued to make investments for account of the civil
service retirement and disability fund in special issues of Treasury
notes bearing interest at the rate of 4 per cent per annum in accordance with the procedure outlined in the annual report of the Secretary
of the Treasury for the fiscal year 1926.
Total credits to the fund during the fiscal year amounted to
$58,276,512.15, of which $29,944,191.69 was on account of deductions
from basic compensation of employees and service credit payments,
$7,332,320.46 represented interest on investments, $20,850,000 was
appropriated by Congress to fulfill the current obligation 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. Expenditures on account of refunds to employees, annuities, etc., amounted during the fiscal year to
$23,930,706.21 as compared with $18,147,216.91 for the previous year.
The total earnings and profits on investments to June 30, 1931,
amounted to $30,889,518.90,

S:ECREa?ARY OF THE TRfeAStTRY

121

The foUowing statement shows the status of the fund as of June 30,
1931:
Civil service retirement and disability fund, June SO, 1931
Credits:
On account of deductions from basic compensation of
employees and service credit payments from Aug. 1,
1920, to June 30, 1931
$229, 844, 743. 61
Appropriations:
To June 30, 1930
$40, 450, 000. 00
Available July 1, 1930
i 21, 000, 000. 00
•
61, 450, 000. 00
Interest and profits on investments.
30, 889, 518. 90
322, 184, 262. 51
Less checks paid by Treasurer, United States, on account
of annuities and refunds
Total..--

130, 927, 492. 58
191, 256, 769. 93

Assets:
Face amount

Principal cost

$22, 695, 050 fourth Liberty loan 4^4 per
cent
14, 400, 000 4 per cent special Treasury
notes payable June 30,
1932
47, 800, 000 4 per cent special Treasury
notes payable June 30,
1933
.
35, 800, 000 4 per cent special Treasury
notes payable June 30,
1934
32, 400, 000 4 per cent special Treasury
notes payable June 30,
1935
37, 500, 000 4 per cent special Treasury
notes payable June 30,
1936
:
190, 595, 050
Unexpended balances June 30, 1931:
Treasurer, United States, disbursing
account
Settlement warrants outstanding
On books of Division of Bookkeeping
•
and Warrants

$22,399,454.01
14, 400, 000. 00
47, 800, 000. 00
35, 800, 000. 00
32, 400, 000. 00
37,500,000.00
190,299,454.01

881, 974. 65
15. 96
75, 325. 31
957, 315. 92

Total fund assets June 30, 1931

191, 256, 769. 93

1 Includes $20,850,000 appropriated from the general fund to cover the United States liability, and $150,000 appropriated from the revenues of the District of Columbia to cover its liability in connection with
thefinancingof the fund.

122

REPORT ON THE FINANCES

District of Columbia teachers^ retirement fund.—The act of January
15, 1920, as amended by the District of Columbia appropriation act
of June 5, 1920, vested the administration of this fund in the Commissioners of the District of Columbia, except that it was directed
that such funds shall be held and invested by the Treasurer of the
United States. . A further amendment of June 11, 1926, created a
reserve fund, provided for annual appropriations to this end, and
authorized the investments on account of such fund to be held by the
Treasurer of the United States separate from the investments on
account of contributions of teachers. During the fiscal year 1931,
the Treasurer purchased for account of the deductions fund (derived
from deductions from teachers' compensation) $285,000 face amount
4K per cent Federal farm loan bonds at a principal cost of $263,097.79,
and $42,000 face amount 4^ per cent Federal farm loan bonds at a
principal cost of $40,231.95, and for account of the Government reserves fund $284,000 face amount of 4}{ per^ cent Federal farm loan
bonds at a principal cost of $266,370.54.
The following statement shows the status of the combined funds
as of June 30, 1931:
District of Columbia teachers' retirement fund, June SO, 1931
Credits:
On account of deductions from basic compensation of
teachers from Jan. 15, 1920, to June 30, 1931
$2, 826, 407. 96
Appropriations:
To June 30, 1930
$1, 468, 456. 03
Available July 1, 1930
400, 000. 00
Available July 3, 1930 (deficiency act
for annuities for prior years)
1, 484 88
1, 869, 940. 91
Interest on investments
.
680, 653. 01
5, 377, 001. 88
Less disbursements on account of annuities, refunds, etc.:
To June 30, 1930
$1, 201, 987. 30
July 1,1930, to June 30,1931..
__.249, 688. 03
1, 451, 675. 33
Balance in fund June 30, 1931

3, 925, 326. 55

Assets: .
Face amount

Deductions fund—

$26, 850 4K per cent first Liberty loan
converted
735,750 4K per cent fourth Liberty
loan
_-_
10, 000 4J4 per cent Treasury bonds of
1947-1952
55, 320 4 per cent Federal farm loan
bonds
-

Principal cost

«
$27, 529. 64
704, 37L 27
10,000.00
54, 660. 95

SECRETARY OF THE TREASURY

123

Assets—Continued.
$1, 358, 880 4:}i per cent Federal farm loan
bonds
$1,313,830.89
459, 440 4>^ per cent Federal farm loan
bonds
467, 020. 91
91, 380 4% per cent Federal farm loan
bonds
94, 627. 91
1, 000 5 per cent Federal farm loan
bonds
1,030.00
182, 000 4}^ per cent Philippine Islands
bonds...
197, 669. 56
2, 920, 620
Government reserves fund—
215, 640 4 per cent Federal farm loan
bonds
819, 600 4K per cent Federal farm loan
bonds
.
100 4 ^ per cent Federal farm loan
bonds
1,035,340
Accrued interest paid in 1931 (on investment
purchases), repayable in 1932
Unexpended balances June 30, 1931:
Treasurer, United States, disbursing account
On books of Division of Bookkeeping and
Warrants

2, 870, 741. 13

208, 050. 78
776,281.48
IOL 64
984,433.90
=
$3, 855, 175. 03
1, 680. 74
$49,990. 94
18,479.84
68, 470. 78

Total fund assets June 30, 1931

3, 925, 326. 55

Foreign service retirement and disability fund.—Investments for
account of the foreign service retirement and disability fund were
made during the fiscal year 1931 in special issues of Treasury notes
bearing interest at the rate of 4 per cent per annum in accordance
with^the procedure outlined in the annual report of the Secretary of
the Treasury for the fiscal year 1927.
Credits to the fund during the year aggregated $443,379.95, of
which $173,931.32 was on account of deductions from basic compensation of employees and service credit payments, $53,448.63 represented earnings on investments, and $216,000 was appropriated by
Congress to meet the current liability of the Government in connection with the fund. Net advances to the disbursing officer of the
State Department for the payment of annuities and refunds, etc.,
amounted during the fiscal year to $106,000 as compared with
$129,142.59 for the previous year. The total interest and profits
credited in the fund to June 30, 1931, amounted to $153,154.80.

124

REPORT ON THE FINANCES

The following statement shows the status of the fund as of June 30,
1931:
Foreign service retirement and disability fund, June SO, 1931
Credits:
On account of deductions from basic compensation and
service credit payments of employees subject to the foreign
service act
$1, 113, 156. 99
Appropriations—
To June 30, 1930
. . $429,000.00
Available July 1, 1930
216, 000. 00
•
645, 000. 00
Interest and profits on investments
153, 154. 80
1, 911, 3 n . 79
Less checks paid by Treasurer, United States, on account of annuities and refunds
_
Balance in fund June 30, 1931
Assets: _
Face

1, 299, 926. 23
= = = = = =

amount

$278, 000 4 per
due
454, 000 4 per
due
509, 000 4 per
due
48, 000 4 per
due

cent
June
cent
June
cent
June
cent
June

special Treasury
30, 1933
special Treasury
30, 1934
special Treasury
30, 1935
special Treasury
30, 1936

611, 385. 56

Principal cost

notes,
$278, 000. 00
notes,
454, 000. 00
notes,
.._
notes,

509, 000. 00
48, 000. 00

1,289,000
Unexpended balance June 30, 1931:
Treasurer, United States, disbursing account
On books of Division of Bookkeeping and
Warrants

1,289,000.00
10, 468. 37
457. 86
10, 926. 23

Total fund assets June 30, 1931.

1, 299, 926. 23

Canal Zone retirement and disability fund.—The Canal Zone retirement and disabUity fund was created by section 9 of the act of March
2, 1931 (46 Stat. L., 1477). It is under the administrative supervision
of the Administrator of Veterans' Affairs, but 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 aUowances authorized by the act, the income from such investments to be credited to the fund.
In the case of any employee to whom the act applies and who shall
be transferred to a position not within the purview of the act, or who

SECRETARY OF T H E TREASURY

125

shall become separated from the service before becoming eligible for
retirement on annuity, the total amount withheld from his pay shall
be returned to him, together with interest at 4 per cent per annum,
compounded on June 30 of each year. The act also requires that, in
the event an annuitant should die without having received in annuities
an amount equal to the amounts withheld from his pay, including
interest thereon at 4 per cent per annum, the difference shall be paid
to his legal representatives, unless the annuitant at the time of his
retirement shall have elected to receive, in lieu of a life annuity, an
increased annuity of equivalent value; in case an employee should
die before reaching retirement age, the total amount of his retirement fund contributions, with accrued interest at 4 per cent compounded on June 30 of each year, is payable to his legal representatives. In view of these requirements, the same advantages from simplified procedure are applicable to investments made by the Treasury
for this fund as have been previously provided in connection with the
adjusted service certificate fund, the civil service retirement and disability fund, and the foreign service retirement and disability fund.
The following procedure, effective August 6, 1931, therefore, was
prescribed for investments on account of the Canal Zone retirement
fund:
(1) Investments for account of the fund wUl be made in special
issues of Treasury certificates of indebtedness and Treasury notes
bearing interest at the rate of 4 per cent per annum payable on
June 30 in each fiscal year, or on earlier redemption. Such obligations wUl be issued in denominations of $1,000 or multiples thereof
and at par as of dates of issue.
(2) The Commissioner of Accounts and Deposits will be responsible for the investments from available funds, and the Commissioner of the Public Debt for the issuance of the securities and
for their safe-keeping as in the case of the adjusted service certificate fund, the civU service retirement and disability fund, and the
foreign service retirement and disabUity fund. Credits to meet
requisitions of the disbursing clerk of the Veterans' Administration
for authorized payments wUl be provided when necessary through
redemption of the special issues.
Pursuant to the second paragraph of section 9 of the act of March
2, 1931, there was transferred from the civil service retirement and
disabUity fund to the Canal Zone retirement and disabUity fund
the sum of $1,430,808.84, representing the amount certified to the
Secretary of the Treasury by the Administrator of Veterans' Affairs, as the amount, including interest to June 30, 1931, due
from the civU service retirement fund to employees of the Panama
Canal coming within the purview of the Canal Zone retirement act.

126

REPORT ON T H E FINANCES

In accordance with the third paragraph of section 9 of the act,
the Panama Railroad Co. deposited with the Treasury, in available funds, the sum of $355,984, representing the gross assets in the
Panama Railroad pension fund at the close of business June 30,
1931, applying to employees included within the provisions of the
act of March 2, 1931, subject to the assumption of the liabilities of
that fund as of the close of business on June 30, 1931, by the Canal
Zone retirement and disability fund. The fund has also been
credited with $83,931.97 to October 31, 1931, on account of salary
deductions and service credits.
Investments aggregating $1,825,000 were made for account of the
fund to October 31, 1931, at par in special issues of Treasury notes
maturing June 30, 1936, bearing interest at the rate of 4 per cent
per annum payable on June 30 of each year, as described above.
Library of Congress trust fund.—Under the act of March 3, 1925,
as amended, a Library of Congress Trust Fund Board, consisting of
the Secretary of the Treasury, the chairman of 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 hi connection with the library, its collections, or its
service as may be approved by the board and by the Joint Committee on the Library. The moneys or securities given or bequeathed to the board are required to be receipted for by the Secretary of the Treasury, who is authorized to invest, reinvest, or retain
investments as the board may determine. In accordance with the
policy adopted by the board, investments and reinvestments of the
trust funds are made in interest-bearing securities of high rating.
The following statement shows the earnings collected on account
of each donation:
Library of Congress trust fund earnings to June SO , 1931
Income account
Donation

Babine
Beethoven
Benjamin
_
Bowker
Carnegie
Coolidge
Guggenheim
Huntington
Wilbur

Total collected to
June 30,
1930

..
._
_

Total

__
.
.

.
. . .
-

Collected
during
fiscal year
1931

Total collected to
June 30,
1931

$219.09
11, 245.00
361.49
9,184. 62
31, 585. 74
1, 531. 25
14, 748. 75
14, 735. 94

$127.48
501. 37
3,347. 60
84.30
3,734. 90
8, 248. 91
3, 760.12
6, 688. 71
9, 221. 83

$127.48
720. 46
14, 592. 50
445. 79
12,919. 42
39, 834. 65
5, 291. 37
21,437. 46
23,967. 77

83, 611. 78

35, 715.12

119,326 90

The following statement shows the principal cash accounts for each
donation:

127

SECEETARY OF THE TREASURY

Library of Congress trust fund—Cash receipts, cost of investments, and unexpended
balances, fiscal year 1931
P r i n c i p a l account

Donation

Babine
Beethoven
Benjamin
Carnegie
Coolidge
Guggenheim..
Huntington..
Wilbur

Total..

Unexpended
balance
J u n e 30,
1930

C a s h re- Cash availceipts dur- able for ining fiscal
vestment
year 1931

70.75
7,500.18
750.00
993. 75

' 12,155.'63'
15, 646. 60

$3,320.41
100. 00
26.62
70.75
19, 955.81
750.00
993. 75
15,933. 26

9,701.34

31,449. 26

41,150. 60

$3,320.41
$100.00
26.62

Cost of investments

Unexpended
balance
J u n e 30,
1931

$96. 00

$3,320. 41
4.00
26.62

70.75
9,853. 55
710. 40
960. 00
15, 550.80

10,102. 26
39.60
33.75
382. 46

27, 241. 50

13,909.10

Substantially all of the unexpended balances shown above were
invested shortly after the close of the fiscal year.
During the past year the board accepted a bequest under the will
of the late Alexis V. Babine, chief of the Slavonic Division of the
Library of Congress. The Librarian of Congress was made executor
under the will and the board was named residuary legatee. At a
meeting of the board held on April 23, 1931, it was voted tb accept
the bequest subject to the approval of the Joint Committee of the
Library when tendered by the executor to the chairman of the board.
The Senate committee, acting during recess of the joint committee,
approved the acceptance of the bequest on May 26, 1931. The
executor delivered the residue of the estate to the chairman on June
13, 1931, as follows:
Cash
'
:
$3,320.41
Fourth Liberty loan 4 ^ per cent bonds of 1933-1938, face amount.. 2, 000. 00
Seven per cent preferred stock of the American Chain Co. (Inc.), par
value.
.
...
600. 00
2 shares of preferred stock of the Tung-Sol Lamp Works (Inc.), no
par value.
4 shares of common stock of the Tung-Sol Lamp Works (Inc.), no
par value.

Investments for account of this donation, siuce the close of the
fiscal year, were made in $3,800 face amount of 4J< per cent farm loan
bonds of the Federal Land Bank of St. Paul, due July 1, 1936, at a
pruicipal cost of $3,282.25.
The board received on account of the donation made by William
E. Benjamin a stock dividend of 2 per cent on 1,326 shares of stock
of the Standard Oil Co. of California, amounting to 26.52 shares. A
certificate of stock was received for the 26 shares and a check of the
company for $26.62 in payment of fifty-two one hundredths of a
share at $51.20 per share, in accordance with the resolution of the
board of directors of the company.
77^^—32
IX

128

REPORT ON T H E FINANCES

The board received on account of the securities held in the donation
made by Mrs. Elizabeth Sprague CooUdge the sum of $250 representing 5 per cent payment on account of $5,000 face amount of
Chicago Railways 5 per cent bonds; the sum of $10,000 on account of
payment on note of Jacob M. Fine et al., due April 28,1931, and subscription rights to 8K shares of common stock of the Public Service
Co. of Northern Illinois; and 12% shares of common stock of the
Commonwealth Edison Co. The subscription rights were sold on
the market for $2,205.63. Total receipts during 1931 on principal
accounts under the Coolidge donation amounted to $12,455.63. The
unexpended balance brought forward from the preceding fiscal year
was $7;500.18, making a total of $19,955.81 avaUable for 1931. Investments during 1931 on this account were as follows:
$7,000, face amount of Canadian National Railways 4 ^ per cent
guaranteed gold bonds, due June 15, 1955, at a principal cost of
$7, 043. 75
$680, face amount 4% per cent Federal farm loan bonds of the Federal
Land Bank of New Orleans, due July 1, 1954, at a principal cost
of
.
652.80
$2,300, face amount 4 ^ per cent Federal farm loan bonds of the
Federal Land Banks of St. Paul and Spokane, due January 1, 1936,
at a principal cost of
2, 157. 00
$11,640, face amount of 4 ^ per cent Federal farm loan bonds of the
Federal Land Bank of St. Paul, due July 1, 1936, at a principal
cost of
_ . . 10, 054. 05.

The board also received on account of the Wilbur donation subscription rights to IQQ% shares of the common stock of the Pubhc
Service Co. of Northern Illinois, which were sold on the market for
$15,646.60. This sum was invested in $16,300 face amount of 4}^ per
cent Federal farm loan bonds of the Federal Land Banks of St. Paul,
Houston, Columbia, St. Louis, and Spokane, at a total principal cost
of $15,282.
The following statement shows the securities held by the board for
account of each donation as of June 30, 1931. The securities are all
held in safe-keeping by the Treasurer of the United States, subject to
the order of the Secretary of the Treasury for account of the board.
Library of Congress Trust Fund Board securities held June SO, 1931
Name of security

per
Face amount Rate
cent

Class of security

Alexis V. Babine donation
American Chain Co. (Inc.)
_
Tung-Sol Lamp Works (Inc.), 2 shares..
Tung-Sol Lamp Works (Inc.), 4 sharesUnited States Government

$600.00
No par
No par
2,000.00

Preferred stock.
Do.
Common stock.
Fourth Liberty loan bonds of 1933-38.

Beethoven Association donation
Canadian National Railways
Federal land bank bonds

10,000.00
100.00

5 Guaranteed gold bonds^
4M Farm loan bonds.

SECRETARY OF THE TREASURY

129

Library of Congress Trust Fund Board securities held June 30, 1931—Continued
per
Face amount Rate
cent

Name of security

Class of security

William E. Benjamin donation
$33,800.00

Standard Oil Co. of California

Common stock.

R. R. Bowker donation i
0

Austrian Government
Detroit Edison Co
German Government
Japanese Government

,
_

1,000.00
6,000.00
2,000. 00
2,000.00

7
5
7
6M

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

Carnegie donation
Commonwealth Edison C o . .
Federal land bank bonds.
Missouri Pacific R. R. Co
New England Telephone & Telegraph
Co.

52,000.00
80.00
5,000.00
25,400.00

mortgage collateral bonds.
Farm loan bonds.
P. First
First and refunding mortgage bonds.

7, 000. 00
10, 000.00
4, 250.00
2,300.00
680.00
10, 000.00
100. 00
2, 000. 00
16, 400. 00

iH
5
6
4H
iH
7
5
5
iy2
5
4
6

5 First mortgage bonds.
43^

Elizabeth Sprague Coolidge donation
Canadian National Railways Co
1...
Do_
,
Chicago Railways Co
Federal land bank bonds
Do..._.
Great Northern Ry. Co.-_.._
Houston Home Telephone C o . . .
Missouri Pacific R.,R. Co
New England Telephone & Telegraph
Co.
Public Service Co..of Northern Illinois..
Rio Grande Southern R. R. Co
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..

13, 000. 00
1, 000. 00.
10, 000. 00
6, 000. 00
17,100. 00
2, 600. 00
700. 00

Guaranteed gold bonds.
Do.
First mortgage bonds.
Farm loan bonds.
Do.
General mortgage bonds.
First mortgage bonds.
First and refunding mortgage bonds.
First mortgage bonds.
First and refunding mortgage bonds.
First mortgage bonds.
Do.
Common stock.
Do.
Do.
Do.

12, 400. 00
9, 376. 00
800. 00
5, 000. 00

740. 00
75, 000.00

i H Farm loan bonds.
6 Guaranteed gold bonds.

Do.
Do.
Do.
Preferred stock.

Harry F. Guggenheim donation
Federal land bank bonds
Harbor Commissioners of Montreal
Archer M. Huntington donation
Central Pacific Ry. Co
Federal land bank bonds

.-..

105, 000. 00
1, 000.00
49, 600. 00

4 First and refunding mortgage bonds.
i H Farm loan bonds.
First and refunding mortgage bonds.
5

Missouri Pacific R. R. Co
44,000. 00
James B. Wilbur donation
16,300. 00
280. 00
Canadian National Railways
100, 000. 00
Federal land bank bonds
7
Do..
_
661,405.00
Public Service Co. of Northern Illinois..
Total
I Life interest in six-sevenths of income retained under terms of

Guaranteed gold bonds.
Farm loan bonds.
Do.
Preferred stock.

donation.

United States Government life insurance fund.—Under the provisions
of section 18 of the act approved December 24, 1919, as amended
March 4, 1923, the Secretary of the Treasury is required to invest
in interest-bearing obUgations 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

130

REPORT ON THE FINANCES

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 avaUable for investment during the fiscal
year 1931 were used to make loans to veterans. During the year the
total Governments ecurities decreased $46,915,000, face amount. The
Administrator of Veterans' Affairs reported total loans to veterans to
June 30,1931, on policies and adjusted service certificates, aggregating
$392,506,243.89.
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 safe-keeping offices
The investments as of June 30, 1931, were as follows:
Government life insurance fund, June SO, 1931
Par value

4H per cent Treasury bonds of 1947-1952
4J4 per cent Federal farm loan bonds
i H per cent Federal farm loan bonds
Total investments made by the Secretary of the Treasury
Policy loans
Adjusted service certificate loans
Total investments made by Administrator of Veterans' Affairs
Total investments in the fund.
.
•

$28, 000, OOQ. 00
32, 660, 000. 00
69, 200, 000. 00
129, 750, 000. 00
78, 535, 777. 22
313, 970, 466. 67
392, 506, 243. 89
522, 266, 243. 89

Principal cost
$28, 016,345. 21
32,477,690.04
69, 742, 644.40
130, 236, 679. 66
78, 635, 777. 22
313, 970,466. 67
392, 506, 243. 89
522,742, 823. 64

Division of 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. Code, Title 5, Sec. 255), keeps the official accounts relating to the
receipt, appropriation, and expenditure of the public money 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. A detailed description
of these duties is contained on pages 121-127 of the annual report
of the Secretary of the Treasury for the fiscal year 1930.
A summary of the receipts and expenditures of the Government
for the fiscal year ended June 30, 1931, on the basis of daily Treasury
statements, unrevised, is given below. The details may be found on
page 426 of this report.
Receipts
Expenditures!..
Excess of expenditures over receipts

$3,317,233,493.81
4, 219, 950, 338. 88
902, 716, 845. 07

1 Includes $440,082,000 public debt retirements chargeable against ordinary receipts.

131

SECRETARY OF THE TREASURY

The warrants issued under the several classes during the fiscal year
1931 are summarized below.
Number
Covering warrants 2
_
Investment warrants (debits)
Investment warrants (credits)
Appropriation warrants.. _
Accountable warrants
Settlement warrants
_
Transfer-appropriation w a r r a n t s
(debits)
Transfer-appropriation w a r r a n t s
(credits)
—
_
Transfer warrants (debits)
._
Counter warrants (credits)
Surplus-fund warrants
Total-

Ordinary

Public debt i

Total

11,146 $3,858, 794,452.49 $5,907,592,600. 59 $9, 766,387,053.08
462, 269, 944. 31 1,138, 707,000. 00 1,600,976,944. 31
181
1,600,976,944.31
936,451,944. 31
665,625,000.00
181
664 4, 978,306,786.20 6,313, 732,301.94 10,292,039,087.14
24,643 4, 776, 338,336. 46 4,818,233,756.31 9,594,572,092.76
89,694,336. 70
89,694,335.70
25,485
676

2,134,133,552.11

521,982,000.00

2,656,116,552.11

675
651
651
53

1, 490, 433, 562.11
8 828,628,700. 06
3 828,628,700.06
24,936,414. 09

1,166,682, 000. 00

2, 656,115,552.11
828,628, 700. 06
828,628, 700. 06
24,936,414. 09

19, 531,454,668.84

39,938,971,375. 73

65,006

20,407,516,716.89

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

A detailed description of the classes and functions of the several
warrants issued by the division is set forth on page 1Q6 of the Secretary's annual report for 1929.
Under the act of June 29, 1922 (42 Stat. 669), the Treasury is required to keep a special account of receipts and expenditures of the
District of Columbia. The transactions in this account during the
fiscal year 1931 on warrants-issued basis are as follows:
General funds Special funds

Total

Trust funds

Balance, June 30, 1930
Revenues, fiscal year 1931

$14, 668,416. 99
$674, 391.42
$352, 790. 50 $15, 695, 698. 91
1 29, 873, 955. 61 2 3, 745, 271. 21 3 2,837, 298. 63 36,456, 626.45

Expenditures, fiscal year 1931

44,542,372.60 4,419, 662. 63 3,190,089.13
* 33, 398, 399. 33 6 3, 798, 643. 60 2,823,058. 88

Balance, June 30,1931

11,143, 973. 27

621, 019. 03

367,030.25

62,152.124. 36
40,020,101. 81
12,132,022. 65

1 Exclusive of $539,608.80 general revenues of the District of Columbia covered into the Treasury to credit
of "Policemen and firemen's relief fund (trust fund)" under the act of Sept. 1,1916 (39 Stafr. p. 718, sec. 12),
to meet deficiencies in said fund; and $20,729.90 general revenues of the District covered into the Treasury
to credit of "Water fund (special fund)" under the act of June 27,1930 (46 Stat. p. 821).
2 Includes $20,729.90 referred to in note 1.
8 Includes $539,608.80 referred to in note 1.
* Exclusive of $9,500,000 payable from revenues of the'United States.
«Includes $58,433.10 for "Purchase and maintenance of traflQc lights. District of Columbia, 1927 and
1928" (special fund), carried to surplus fund of Treasury under provisions of the act of June 20, 1874 (18
Stat. 110, 111, sec. 5).

Under the act of October 6, 1917, and the settlement of war claims
act of 1928, approved March 10, 1928 (44 Stat. 254), the Secretary of
the Treasury held on June 30, 1931, securities in the face amount of
$41,521,700, for account of the Alien Property Custodian. During
the year the following transactions were made in this account:
Securities—
Held June 30, 1930
Purchased and exchanged

$58, 205, 300
17, 173, 900
75, 379, 200
33, 857, 500

Sold or redeemed
Held June 30, 1931

41, 521, 700

132

REPORT ON THE FINANCES

The above sales included $4,000,000 of securities, which, together
with $590,000 face amount of Treasury notes, were transferred to the
German special deposit account.
Under the decison of the Supreme Court of the United States,
dated May 24, 1926, in the case of Max Henkels, appellant, v, Howard
Sutherland, as Alien Property Custodian, and Frank White, as
Treasurer of the United States, and opinions of the Attorney General,
dated August 25, 1926, and July 7, 1927, rendered in connection
therewith, there has been paid by the Treasury to eligible claimants
upon determination of the Attorney General the sum of $5,318,431.40,
and to the Alien Property Custodian, for administrative expenses the
sum of $70,361.71. Payments of this character are now made by
the Alien Property Custodian under the provisions of section 26 (b)
of said act. In connection with these cases the sum of $155,745.41
was withheld from claimants by the Treasury pending determination
of their income tax liability, if any. All of the amount so withheld
has been refunded or paid to the Commissioner of Internal Revenue.
The total amount paid during the fiscal year 1931, upon authorizations of the Alien Property Custodian and the Attorney General,
was $16,483,541.67.
Division of 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 depositary system of the Treasury is divided into two groups:
(1) Regular depositaries embracing the 12 Federal reserve banks
and their 25 branches, member bank depositaries, both general and
limited, depositaries in foreign countries, and depositaries in the
territories and insular possessions of the United States; the functions
of this group are to provide facilities for the safe-keening and prompt
remittance of all public moneys or other funds deposited by Government officers and to meet the requirements of Government officers
for cash for pay-roll or other expenditures. Depositaries are designated and maintained only where required to provide these facilities. (2) Special depositaries which are permitted, when qualified,
to make payment by credit for Government securities subscribed to
from time to time.
Amount of deposits.—The following statement indicates the Government deposits held by depositary banks on June 30, 1931:

SECRETARY OF THE TREASURY

133

Government deposits held hy depositary banks on June 30, 1931
[On basis of daily Treasury statements (revised), see p. 423]

Deposits in Federal reserve banks and branches
$46, 573, 240. 96
Deposits in special depositaries
413, 124, 488. 64
Deposits in.foreign depositaries:
To credit of Treasurer of the United States
.
851, 940. 85
To credit of other Government officers
1, 208, 207. 44
Deposits in member bank depositaries:
To credit of Treasurer of the United States
6, 905, 483. 07
To credit of other Government officers
20, 103, 557. 39
Deposits in insular depositaries:
To credit of Treasurer of the United States
56, 419. 44
To credit of other Government officers
42, 799. 70
Deposits in Philippine treasury to credit of the Treasurer of
the United States
738, 882. 65
Total

489, 605, 020. 14

While the greater part of the Government's receipts and disbursements are handled through the Federal reserve banks and their
branches, there are many points at which it is necessary to provide
other depositary facilities. During the fiscal year 1931 it was necessary for the Treasury to maintain balances to the credit of the
Treasurer of the United States with about 315 general depositaries
in the United States and its territories. The balances carried with
these depositaries for the fiscal year 1931 averaged in the aggregate
approximately $6,800,000 as against an approximate average of
$7,300,000 during the preceding year. Upon the basis of these
balances, depositaries furnish cash to Governnient disbursing officers
and upon pay-roll checks averaging approximately $11,000,000 per
month, and receive Government deposits, which are remitted daily to
the respective Federal reserve banks, for credit in the Treasurer's
account averaging about $35,000,000 per month. The Treasurer's
balances carried with three foreign depositaries averaged about
$440,000 during the fiscal year 1931 and about $475,000 during 1930.
In addition to the Treasurer's balances with general depositaries
it is considered essential for the proper transaction of the Government's business to maintain locally official disbursing accounts of
postmasters and United States district courts and their officers.
Such balances carried with general and limited depositaries during the
past fiscal year averaged about $19,490,000 as compared with approximate average of $19,400,000 during the preceding year. Balances in
foreign depositaries to the official credit of disbursing officers of the
War and Navy Departments averaged $1,800,000.
For several years past the regulations of the Treasury have required disbursing accounts of all Government officers located in the
United States proper, with the principal exception of post office and
court accounts, to be carried on the books of the Treasurer of the

134

REPORT ON THE FINANCES

United States. This practice has been of importance in the development of a uniform accounting system and has resulted in the elimination of many unnecessary balances formerly carried with depositary
banks. During the past fiscal year this practice was extended to
include a considerable number of disbursing officers' accounts heretofore carried on the books of depositary banks in Alaska and the
Hawaiian Islands. This change has already produced satisfactory
results.
The unsettled banking conditions in various parts of the country
have necessitated very careful supervision of Government accounts
with depositary banks during the year in order that the Government
might be protected from loss. During the fiscal year 31 general
and limited depositaries, holding Government deposits approximating
$315,000, closed. As a result of the close supervision, the Government has sustained no loss in the failure of these banks, 28 of the
accounts having been settled in full prior to June 30, 1931, and the
remainder subsequent, to that date. Special depositaries totaling 49
were closed during the year. Of this number 12 at the time of closing
held balances in their war-loan deposit accounts aggregating $2,290,777.37. All of these cases, with one exception, were settled prior
to June 30, 1931, and the remaining case is now in process of settlement. The banldng situation has also resulted in an unusual number
of changes within the depositary system because of the many mergers
and other changes in the corporate existence of designated depositaries. This has necessitated very close attention to the reports of
changes issued daily by the Comptroller of the Currency and the
Federal Reserve Board in order that Government officers might not
be embarrassed by the lack of depositary facilities at emy time.
The special depositary system continued to function with its customary efficiency. War-loan deposit accounts during the fiscal year
1931 averaged approximately $183,000,000 as compared with average
balances of about $133,000,000 during the preceding fiscal yesLr. A
considerably greater number of depositaries were active than in
recent years, the active special depositaries on June 30, 1931, totaling
1,269 as compared with 833 on June 30, 1930.
Regulations with respect to deposits of public moneys were amended
on October 16, 1931, so as to authorize the acceptance of gold notes,
issued by the National Credit Corporation, as collateral to secure
deposits. Amendments to the regulations, together with a statement by the Secretary of the Treasury relative thereto, will be found
as Exhibits 75 to 77, on pages 384 and 385 of this report.
Number and classes of depositaries.—The following statement shows
the number and classes of depositaries maintained by the Treasury
and changes during the fiscal year 1931:

SECRETARY OF THE TREASURY

135

Numher and changes in each class of depositaries during the fiscal year 1931
Class of depositary
Federal reserve banks (including branches).
General
. . .
Limited
Insular (including Philippine treasury)
Foreign. . .
.
Special
TotaL _

June 30,
1930
12
316
1,035
3
12
2,094
3,472

Designated

Discontinued

June 30,
1931

11
67

13
71

0
353
431

1
368

12
314
1 1,031
3
11
2 2,079

. 463

3,450

»In addition, 163 branch banks are carried on the depositary list of the Treasury under the designation
of the parent banks.
21,313 national banks and 766 State banks and trust companies. 1,269 special depositaries held deposits
on June 30,1931.

During the fiscal year 244 general and limited depositaries, by
pledging additional collateral, qualified to accept increased amounts
of deposits made by postmasters and United States courts and their
officers for credit in their official checking accounts. In 159 cases
reductions were made in the maximum qualification of these depositaries as a result of the withdrawal of collateral.
Depositaries were maintained in the Territories and insular possessions of the United States as follows: Alaska, Canal Zone, Hawaii,
Philippine Islands, and Porto Rico.
Foreign depositaries were maintained in the following countries:
Belgium, China, England, France, Haiti, Italy, and Panama.
Interest on deposits.—All Government depositaries, with the
exception of Federal reserve banks, are required to pay interest on
daily balances. This interest during recent years has constituted a
considerable source of revenue to the Treasury, the bulk of which
has been derived from war-loan deposit accounts with special depositaries because of the fact that such deposits constitute the greater
part of all Government deposits carried with banks by the Treasury.
Banks subscribing to Government securities for investment purposes
and making payment through the war-loan deposit accounts must
figure the earning value of the accounts upon the basis of the spread
between the rate of interest carried by the Government issues and
the rate paid to the Treasury on deposits.
Beginning June 1, 1913, and continuing until December 1, 1930, the
rate of interest paid on Government deposits was fixed at 2 per cent
per annum. In line with the lower rates paid by the Treasury upon
its borrowings during the fiscal year, it was necessary to establisli
correspondingly lower rates of interest upon such deposits. Accordingly, the interest rate was reduced to Iji per cent per annum on
December 1, 1930. On February 16, 1931, the rate was further
reduced to 1 per cent per annum and on June 1, 1931, to one-half of 1
per cent per annum. These reductions in interest rates on deposits

136

REPORT ON THE FINANCES

are covered by amendments to Department Circulars Nos. 92 and
176, which wiU be found as Exhibits 69 to 74, pages 380 to 383 of this
report.
The interest received upon deposits with special depositaries during
the fiscal year 1931 was $2,578,294.09 and the total received from
this source from April 24, 1917, to June 30, 1931, was $87,124,443.91.
Interest received from all other depositaries during the year was
$368,864.23. The total interest received from this source since
June 1, 1913, is $20,836,445.06.
Section qf Surety Bonds
On June 30, 1931, there were 78 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 of
Congress 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 five domestic companies and six
branches of foreign companies holding certificates of authority
authorizing them to act only as reinsurers on bonds in favor of the
United States. Changes in the outstanding certificates of authority
during the period ended August 31,1931, are indicated in the foUowing
table:
Companies authorized as of June 30, 1930
Changes during the year ended June 30, 1931:
Certificates terminated—
Company ceasing business
Companies voluntarily ceasing business with United States.
Company in process of liquidation..
;
Company^s authority revoked

90
1
2
1
1
5
4

Certificates issued
Net reduction in number
Companies authorized as of June 30, 1931
^
Further changes to Aug. 31, 1931:
Certificates terminated—
Companies ceasing business
Company voluntarily ceasing business with United States
Certificate issued
Net reduction in number
Companies authorized as of Aug. 31, 1931

1
89
2
1
3
1
2
^ 87

i On Aug. 31, 1931, one company was in process of merging with another and two other companies were
negotiating a merger.

SECRETARY OF THE TREASURY

137

When the certificate of authority issued by the Treasury authorizing
a company to act as an acceptable surety on bonds in favor of the
United States is terminated, the Treasury must determine that the
Federal bonds which such company may have executed are properly
reinsured or assumed by some other duly authorized company, and
if they are not, it is then necessary to direct Federal bond-approving
officers to require principals to file new bonds in lieu of the outstanding
bonds of such company in favor of the United States, so that there
may be a constant review of the financial condition of all companies
acting as sole sureties on Federal bonds, as contemplated by the
act of August 13, 1894, as amended.
The Treasury has issued a number of departmental circulars to
the heads of departments, and independent establishments of the
Government, bond-approving officers, and others concerned, in order
to advise them of the status of the bonds in favor of the United States
executed by the companies whose certificates of authority were
terminated. These circulars (numbers 430, 431, 436, 437, 440, 446,
and 447) refer to the Equitable Casualty & Surety Co. of New York,
N. Y.; Pennsylvania Surety Corporation of Pittsburgh, Pa.; Federal
Surety Co. of Davenport, Iowa; Universal Casualty Co. of Dallas,
Tex.; General Casualty & Surety Co. of Detroit, Mich., and the
Hudson Casualty Insurance Co. of Jersey City, N. J.
The extent of the business activities and financial resources of the
89 companies authorized as of June 30, 1931, as shown by their
financial reports for the year ended December 31, 1930, is summarized
as follows:
Total
Total
Total
Total

net
net
net
net

premiums written
•
losses paid
fidelity and surety premiums written
fidelity and surety losses paid_^

Total admitted assets
Total liabilities, exclusive of capital funds.

$559, 715, 498. 30
287, 678, 397. 95
99, 540, 965. 72
51, 511, 872. 44
922, 593, 306. 93
598, 829, 052. 60

Capital, surplus, and reserves available for
protection of policyholders and obligees:
Capital
$142, 776, 813. 33
Surplus
.
».- 169, 109, 840. 40
Voluntary contingent reserves
11, 877, 600. 60
323, 764, 254. 33

The aggregate amount of capital funds of the reporting companies,
decreased during the year 1930 by $51,011,938.06, as shown by the
following tabulation:

138

REPORT ON THE FINANCES

Summary of operations of 89 reporting companies for the year ended Decemher
31, 1930
Net losses from investment profit and loss items
Net losses from underwriting
Miscellaneous adjustments in surplus accounts

84, 821, 510. 48
35, 670, 709. 95

Less net interest and rents earned
Net loss from operations
Cash dividends declared
Remittances to home offices
branches

49, 150, 800. 53
$17, 328, 815. 09
by

foreign

Less net surplus contributed by stockholders..
Reduction in outstanding capital
Decrease in capital funds

$43, 361, 199. 68
40, 774, 749. 26
685, 561. 54

3, 916, 317. 01
21, 245, 132. 10
19, 839, 734. 57
1,405,397.53
455, 740. 00
51, Oil, 938. 06

The decrease of $51,011,938.06 in the capital funds was primarily
caused by the heavy losses incurred on account of investments and
from underwriting. The investment losses were the direct result of
the decUning security values during 1930, and the increased underwriting losses experienced during 1930 reflected prevailing business
conditions during that period.
On July 17, 1931, the administrative supervision of the Section
of Surety Bonds was transferred from the Division of Appointments
to the Office of the Commissioner of Accounts and Deposits, in
order that the services of the accountants in the Section of Surety
Bonds may be avaUable to the Commissioner of Accounts and
Deposits,

DIVISION OF APPOINTMENTS

Number of employees
The total number of employees in the Treasury Department
in Washington on June 30, 1931, was 44 less than on June 30, 1930.
The principal reductions in the regular force during the period covered
by the report occurred in the Division of Loans and Currency, the
Bureau of Engraving and Printing, the Office of the Register of the
Treasury, and by the transfer of the enforcement branch of the
Bureau of Prohibition to the Department of Justice. There has
been a considerable increase in the Office of the Supervising Architect,
made necessary by the buUding program authorized by Congress.
There was also a large increase in the personnel of the Bureau of
Customs due to a reorganization of the work of the bureau.
The total number of employees in the Treasury Department outside of Washington on June 30, 1931, was 1,186 less than on June 30,
1930. The principal reduction in the regular field force during the
period covered by the report was by the transfer of the enforcement
branch of the Bureau of Prohibition to the Department of Justice.
There has been a large increase in the Public Health field service
due to the drought sanitation activities throughout the country.
There was also a considerable increase in the Office of the Supervising
Architect, made necessary by the increase of public buUdings.
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, 1930, to June 30, 1931, is shown in Table 62,
page 570 of this report. A comparison of the number of employees
in the departmental and field services of the Treasury on June 30,
1930, and June 30, 1931, is contained in Table 63, page 571.
Retirement of employees
From September 1, 1930, to August 31, 1931, 161 persons were
retired from the departmental service of the Treasury Department,
27 of whom were retired by their own option. During the same
period 252 persons were retired from the field services of the Treasury
Department, 25 of whom were j*etired by their own option. At
the present time 100 persons above the retirement age are retained

139

140

REPORT ON THE FINANCES

in the Treasury Department in Washington and 370 in its field
service. By reason of their expert knowledge and special qualifications the CivU Service Commission has approved the continuance
in the service of four employees, one in the departmental service
and three in the field service, who were more than four years beyond
the age of retirement.
Table 64, page 571, shows the number of persons retired and the
number retained in the departmental and field services of the Treasury under the provisions of the retirement act.

BUDGET AND IMPROVEMENT COMMITTEE

The Budget and Improvement Committee is responsible, under the
direction of the Under Secretary and budget officer, for the preparation and examination of Treasury estimates of appropriations and
for the improvement of administrative methods and procedure
within the Treasury Department. In addition to examining all
estimates, the committee makes inquiries as to the reserves which
may be set up under the various appropriations and considers other
matters affecting expenditures of the department. It makes inquiries
along various lines with the purpose of improving methods and
procedure, and from time to time, under special instructions, makes
a detailed examination of some particular office or service of the
department. Its reports and recommendations thereon are submitted to the Secretary of the Treasury, through the budget officer of
the department.
Heads of bureaus and offices submitted estimates for the fiscal
year 1933 (exclusive of interest on and retirements of the public debt
payable from ordinary receipts and the amounts for the support of
the Bureau of the Budget) aggregating $346,931,966, which included
$158,695,037 for ordinary annual appropriations, $26,736,929 for
permanent and indefinite appropriations and special funds,
$34,000,000 for refunding internal revenue taxes Ulegally collected,
$120,000,000 for public buildings construction under the act of May
25, 1926, as amended, and $7,500,000 for acquisition of land in the
so-caUed triangle in Washington, D. C. These estimates were given
an exhaustive examination by the budget officer, with the assistance
of the committee. On the basis of his recommendations the Secretary
of the Treasury approved deductions aggregating $23,353,068, and
submitted, with his approval, the balance of the estimates to the
Director of the Bureau of the Budget. The following statement shows
the amoiints appropriated or estimated for expenditure from permanent and indefinite appropriations and special funds for the fiscal year
1932; the amounts of the estimates for 1933 submitted by heads of
bureaus and offices, disapproved by the Secretary, and approved by

141

142

REPORT ON T H E FINANCES

the Secretary; and the increase or decrease as compared with the
appropriations or estimated expenditures for 1932:
Appropriations for 1932 and estimates for 1933
Estimates for 1933
Increase or
Appropriations
decrease in
or estimated
approved
expenditures
estimates
for
from permanent
1033
as comDisapand indefinite Submitted
Approved
by
pared
with
appropriations by bureaus proved by
appropriations
Secretary
Secretary
and oflSices
and special
and estimates
funds, 1932
for 1932
Ordinary annual appropriations
Permanent and indefinite
appropriations and special
funds
Refunding
taxes' illegally
collected
Public buildings construction,
act May 25, 1926, as
amended
Acquisition of triangle properties
- Total

$151,871,333

$158, 695, 037 $7,197,378

$161,497, 659

—$373,67.4

25,875,084

26,736,929

1,165,690

25,581,239

—293,845

26,000,000

34,000,000

14,000,000

20,000,000

-6,000,000

60,000,000

120,000,000

+60,000,000

5,000,000

7, 500,000

1,000,000

6,500,000

+1,500,000

268,746,417

346,931,966

23,363,068

323,578,898

+64,832,481

Aside from the increase of $61,500,000 because of the pubUc buUdings construction program and acquisition of triangle properties, the
approved estimates were $6,667,519 less than the appropriations or
estimates for 1932.
During the fiscal year 1931 supplemental and deficiency estimates
were submitted aggregating $10,662,823. After examination by the
budget officer, with the assistance of the committee, these estimates
were reduced to $10,253,908.
At the beginning of the fiscal year 1931, general reserves amounting
to $1,082,269 were set aside from appropriations for that year to
meet extraordinary or emergency demands that might arise. Subsequently, in accordance with instructions of the President, dated
July 29, 1930, prompted by the need for economy in the expenditure
of governmental funds, the department was systematically canvassed
for the purpose of determining what reductions could be made in the
various items of estimated expenditures for the fiscal year 1931. As
a result of this survey $4,498,925 was added to the general reserve
previously set up. Later, with a view to assisting in reheving the
unemployment situation throughout the country during the winter
of 1930-31, this program of economy was relaxed in so far as construction work under various Treasury activities was concerned, and
in consequence part of the reserves was released. Other reserves
were released from time to time on a definite showing in each case
that unforeseen or extraordinary demands had arisen. In aU, reserves amounting to $3,224,387 were released and additional reserves
of $36,890 were set up, leaving $2,393,697 in reserve at the end of
the year.

SECRETARY OF THE TREASURY

143

For the fiscal year 1932, heads of bureaus and offices recommended
reserves amounting to $777,880. After examination by the committees, $954,767 was added, making a°total for the year of $1,732,647.
The Budget and Improvement Committee was appointed July 8,
1922. It has examined estimates for the budgets of 1924 to 1933,
inclusive, as well as supplemental and deficiency estimates. As a
result of its examinations and on its recommendations, items aggregating $113,367,135 have been disapproved and deducted from said
estimates before they were transmitted to the Bureau of the Budget.
77532^32^

OFFICE OF CHIEF CLERK AND SUPERINTENDENT

Housing of Treasury activities
During the first part of the fiscal year the following activities of
the Treasury Department were moved from various outlying buildings
into Treasury Annex No. 1, as approved by the Public Buildings
Commission: Office of the Solicitor of the Treasury; photograph
gallery. Office of Supervising Architect; United States Coast Guard;
Bureau of Narcotics; and the inactive files of the Secretary's Office,
Division of Bookkeeping and Warrants, Solicitor of the Treasury,
War Finance Corporation, and Federal Farm Loan Board.
The Maintenance and Repair Divisions of the Office of the Supervising Architect were moved from the Treasur}^- Building to rented space
in the National Savings & Trust Building, and one section of the
Drafting Division of the same office was moved to rented space in the
Washington Building, to provide space in the Treasury Building in
which to house the additional force employed in connection with the
enlarged public building program.
The Office of the General Counsel, Insolvent National Bank Division,
Office of the Comptroller of the Currency, was moved from the
Treasury Building to rented space in the Washington Building, to
make space for the increase in the force in that office.
Improvements, painting, etc.
In addition to the miscellaneous maintenance and repair work
performed by the forces assigned to the Chief Clerk, the following
major projects were accomplished by awarding contracts on a competitive basis to outside contractors:
TREASURY

BUILDING

Changes in ventilating system, etc. (rooms 417-421)
Installing automatic fire sprinkler system, etc., in north court
Changes in partitions, painting, and repairs on the fourth floor to
provide additional space for the Office of the Supervising Architect.
Repairs to roof, skylights, etc
Repairs and underpinning to north end of the counting roc m of the
National Bank Redemption Agency, in the south court
Cleaning and painting eight stairways from basement to fourth floor. .
144

$1, 198. 00
1, 064. 00
8, 548. 00
2, 717. 00
2, 396. 00
2, 680. 00

SECRETARY OF THE TREASURY
TREASURY

ANNEX

145

N O . 1, E T C .

Repairs and overhauling of mechanical equipment in Treasury Annex
No. 1 and Auditors' Building..
....
$9, 432. 00
Cleaning and painting interior ceiling and wall surfaces, doors, windows, wood trim, radiators, etc., in rooms on north side of first •
floor and all rooms on second floor of Treasury Annex No. 1; also
. all rooms on the fourth and sixth floors of Treasury Annex No. 1
2, 408. 00
Installing partitions, etc., in Treasury Annex No. 1 to provide proper
space for housing activities moving into this building
^
4, 144. 00
LIBERTY

LOAN

BUILDING

Installing new wood and glass partitions

2, 330. 00

Sites for public buildings
During the year considerable progress was made in the acquisition
of further property located on sites on which Government buildings
are to be erected in Washington as a part of the Government building
program. These properties embraced apartment houses, business
houses, residences, lots, etc. As title was acquired the Chief Clerk as
custodian arranged for adjustments of rents with former owners and
the accomplishment of temporary leases for future occupancy where
the sites were not needed immediately for construction purposes.
This activity, involving negotiations, conferences, etc., especially for
the larger properties, has increased the work of the office but has been
absorbed without the employment of any additional help.
The rental contracts made in certain areas had to be discontinued
and the properties vacated. These areas involved the sites for the
Department of Justice and other offices between Ninth and Tenth
Streets, Pennsylvania and Constitution Avenues, and the land for
the Post Office Department and Interstate Commerce Commission
Buildings between Twelfth and Thirteenth Streets, Pennsylvania
and Constitution Avenues.
All buUdings of the Potomac Electric Power Co. in the area lying
between Thirteenth and Fourteenth Streets, C Street and Constitution Avenue, were vacated early in the spring of 1931, and the demolition of these buildings for the erection of the new Department of
Labor structure is well under way.
The vacating of properties in the square bounded by Fourteenth
and Fifteenth and Pennsylvania Avenue and E Streets NW., commonly known as the ''Poll Block'' was completed and all properties
made avaUable for demolition early in the present year.
The total rents collected during the year amounted to $295,035.14,
and involved 273 separate agreements.

146

REPORT ON THE FINANCES

Treasury storekeeper
The Treasury storekeeper received from several hundred local and
out-of-town contractors more than $300,000 worth of supplies, equipment, and other property, which were checked, inspected, and subdelivered by the storekeeper's force to the proper destination within
the department. In payment of these supplies, etc., 9,320 vouchers
were certified. Prompt handling of each voucher made possible the
deduction by the department of every allowable discount for payment
within 10 days.

COAST GUARD

The following is a summary of the principal operations of the Coast
Guard for the fiscal year 1931 in which comparisons with the preceding year 1930 are indicated:

Lives saved or persons rescued from peril
Persons on board vessels assisted
.-..
Persons in distress cared for
_
Vessels boarded and papers examined
1
Vessels seized or reported for violations of law
Fines and penalties incurred by vessels reported
Regattas and marine parades patrolled
Instances of lives saved and vessels assisted
Instances of miscellaneous assistance
Derelicts and other obstructions to navigation removed, or
destroyed
--.
.-Value of vessels assisted (including cargoes)
Persons examined for certificates as lifeboat men

Increase (+)
or decrease (—)

1931

1930

6,004
29,079

5,627
26,898

924

561

87,033
2,441
$438,765

88,357
2, 929
$369,341

137

114

5,241
6,960

5,536
6,561

233
$49,018,073
3,992

. 370
$47,959,465
5,596

-377
-3,181
-363
+1,324
+488
-$69,424
-23
+295
+601
+137
-$1,058,608
+1, 603

The persons saved or rescued from peril during the fiscal year 1931
numbered 5,627, being 377 below the unprecedented record attained
in 1930. The year 1931 now stands second in this form of endeavor.
There was a decrease of 3,181 under 1930 in the number of persons
on board vessels assisted. In the interests of the enforcement of the
laws of the United States 88,357 vessels were boarded and examined
by service units, an increase of 1,324 over the year 1930. The vessels
seized or reported for violations of law exceeded last year's number by
488. The activity of the service in assistance work is indicated by
the fact that the total number of instances of assistance rendered was
12,097, exceeding last year's record, then the highest in the history of
the service, by 896. There was an appreciable increase over last
year in the number of derelicts and other obstructions to navigation
removed or destroyed. The value of vessels assisted (including cargoes) was a little more than a mUUon dollars under last year.. There
were 1,603 more persons examined by the Coast Guard for certificates
as lifeboat men than in the year 1930.
Very gratifying results have attended the operations of the service
in its various activities throughout the year. A very satisfactory
state of service discipline has obtained. The percentage of men
reenUsting upon expiration of enlistment has increased during the past
several years, as is evidenced by the fact that, while 72 per cent
reenlisted during the fiscal year 1926, 94.8 per cent reenhsted during
the fiscal year 1931, an increase of 22.8 per cent. The number of

147

148

REPORT ON THE FINANCES

losses prior to expiration of enlistment has been gradually reduced,
and there has also been a material reduction in the number of
desertions.
The law-enforcement work of the Coast Guard having to do with
the prevention of smuggling of liquor into the United States from the
sea continues to call heavily and incessantly upon service resources.
The service forces are meeting the situation to the very best of their
ability with the means at their command. Satisfactory results
accompanied these operations during the year.
Protection to navigation
International ice observation and ice patrol.—The season of 1931 is
the first since the inauguration of the international service of ice
observation and ice patrol that icebergs have not reached as far south
as the Grand Banks and formed a menace to shipping along the transAtlantic steamship lanes in that region during the spring and early
summer months. Ordinarily, the number of icebergs drifting south
of the forty-eighth parallel in the western °North Atlantic ranges
annually from about 50 to 1,000, reaching the peak during AprU,
May, and June.
The absence of ice menace made the actual inauguration of the
customary annual patrol unnecessary. Arrangements had been perfected, however, for the prompt institution of the service should
icebergs approach the steamship lanes in the North Atlantic.
The Coast Guard cutters Pontchartrain and Mojave had been designated to carry on the patrol and were utilized in the performance of
other duties in New England waters ready to take up the ice patrol
work in the event of the approach of icebergs southward. The 126foot cutter General Greene, especially outfitted for the purpose, conducted early in the calendar year 1931 ice observations and scientific
work associated with this international service. The cutter, with a
physical oceanographer on board, sailed from Boston, Mass., on
March 18, and cruised thousands of miles in the waters between Newfoundland and Flemish Cap, taldng oceanographic stations to determine the drift and directions of currents and scouting for the vanguard
of the season's icebergs. Only a few icebergs were sighted, the most
southerly one being about 60 miles southeast of Cape Race, on May
2, in a position about 250 miles north of the North Atlantic lane
routes—UnitedStates.
When it was definitely determined that the Grand Banks area
would be free of ice, the General Greene, from June 19 to 29, conducted
an oceanographic survey of conditions between the forty-eighth parallel and the tail of the Grand Banks. Subsequently orders were issued

SECRETARY OF THE TREASURY

149

to the General Greene to make a special oceanographic survey of the
waters between Greenland and Labrador in order that a study might
be made of conditions having a bearing upon the unprecedented iceberg situation duruig the season of 1931. The plans for the cruise
contemplated the vessel's sailing northward along the Labrador
coastal shelf to Resolution Island (to the northward of Hudson Strait
entrance); thence eastward to a position off Ivigtut, Greenland;
thence southeastward along the southwestern tip of Greenland .to a
position off Cape Farewell; and then southwestward to the Strait of
BeUeisle, occupying, so far as practicable, the oceanographic stations
previously occupied by the Marion Expedition in 1928.
Winter cruising.—On November 5, 1930, the President, upon the
recommendation of the Secretary of the Treasury, designated the following-named Coast Guard cutters to perform for the season of
1930-31 the customary special winter cruising upon the coast to
afford aid to distressed navigators: Ossipee, Mojave, Tampa, Acushnet, Champlain, Sebago, Seneca, Mendota, Pontchartrain, Carrabasset,
Modoc, and Yamacraw. This duty is performed annually by the
Coast Guard during the season of severe weather, usually from
December 1 to March 31.
The cutters participating in the work for the 1930-31 season cruised
more than 77,000 miles and afforded assistance to 25 vessels, whose
values, including their cargoes, amounted to more than $6,600,000.
There were 403 persons on board the vessels assisted. In the interests of the enforcement of United States laws 320 vessels were boarded
and examined.
Removal of derelicts.—In the course of the year 370 derelicts and
other floating dangers and obstructions to navigation were removed
by the agencies of the service.
Anchorage and movements of vessels.—The Coast Guard during the
year continued the enforcement of the rules and regulations governing the anchorage and movements of vessels at the larger ports of
the country and at other places where Federal regulations are in
effect.
With the opening of navigation on the St. Marys River in the
spring of 1931, special regulations were put into effect diverting the
customary downbound traffic of the West Neebish Channel to the
Middle Neebish Channel during improvements to the former waterway. The regulation of the 2-way traffic in the Middle Neebish
Channel uivolved added responsibilities and special arrangements and
supervision in order to provide for a free, safe, and an orderly movement of the vast amount of shipping using this waterway.
Coast Guard officers continued to serve as captains of the port to
enforce the regulations at a number of places throughout the country.

150

REPORT ON THE FINANCES

Enforcement of customs and other laws
The Coast Guard continued its duties during the year in connection
with the enforcement of the customs laws and the navigation and
motor boat laws of the United States. In its operations having to
do with the customs laws, the service provides the assignment of
harbor cutters and harbor launches at the principal ports to aid the
customs authorities in boarding incoming vessels, and in performing
other customs duties. It also renders assistance of various kinds to
other branches of the public service in the enforcement of the Federal
laws coming under their jurisdiction.
Liguor smuggling.-—The law-enforcement work of the Coast Guard
for the prevention of smuggling of liquor into the United States
from the sea was attended during the year with satisfactory results.
It has succeeded in greatly curtailing the influx of liquor and has made
extremely damaging inroads into the operations of smugglers. As a
result of Coast Guard activities the law breakers have sustained
losses through seizure and confiscation and through curtaUment of
their operations. That illegal landings of liquor stUl occur is not
surprising when it is considered that the Coast Guard has 10,000
mUes of irregular coast line to defend against this highly organized
traffic.
The new equipment of vessels and boats latterly authorized, some
of which are now in commission, wUl be helpful to the general situation.
Cruises in northern waters.—The Coast Guard cutters Chelan,
Unalga, Haida, Northland, and Snohomish conducted during the
season of 1930 the regular annual patrol of the waters of the North
Pacific Ocean, Bering Sea, and southeastern Alaska for the enforcement of the convention of July 7, 1911, between the United States,
Great Britain, Russia, and Japan, and the laws and regulations for
the protection of the fur seal and sea otter and of the game, the
fisheries, and fur-bearing animals of Alaska.
Supplementing these immediate and prime duties of the patrol,
the cutters periormed numerous other offices with which the Coast
Guard is charged, for the Federal agencies having business in the
country and for the benefit of the natives living in these isolated
regions.
In the prosecution of their duties the cutters cruised nearly 58,000
miles, boarded 166 vessels, afforded medical and dental aid to 1,486
persons, transported 328 persons, assisted vessels needing help, and
performed other services falling within their purview.
The patrol for the season of 1931, in progress at the close of the
year, is being carried on by the Coast Guard cutters Shoshone, Tallapoosa, Snohomish, Northland, Chelan, Itasca, and one 125-foot patrol
boat.

SECRETARY OF T H E TREASTJRY

151

Northern Pacific halibut fishery.—This annual activity of the Coast
Guard, conducted in behalf of the Bureau of Fisheries, Department
of Commerce, was performed during the year by the Coast Guard
cutters Haida and Snohomish.
Communications
The communication service is concerned with the provision, construction, operation, and maintenance of all communication facilities
of the Coast Guard, the design and development of materials, the
instruction and trainuig of the personnel connected therewith, the
handling of secret and confidential publications, and the preparation
of codes and ciphers. The methods of communication employed by
the Coast Guard are the telegraph, telephone, radio in various applications, and visual signals. The system is so appointed and the work
so coordinated that the business devolving upon it may be transacted
efficiently and with expedition and accuracy.
Telephone and telegraph lines and cables.—The Coast Guard owns
and operates as a part of the communication service a coastal communication system consisting of a telephone and telegraph line system
of approximately 1,443 miles of pole line, 2,485 miles of open wire
aerial circuits, 35 mUes of aerial and underground cables, and 573
miles of submarine cable, all divided into 188 separate and distinct
telephone and telegraph lines. Through these facilities telephone
and telegraph service is furnished the Coast Guard (life-saving)
stations and other service units and a large number of lighthouses
and other Government stations. The greater part of these lines is
connected with the central offices of commercial telephone systems,
thus affording local and long-distance telephone and telegraph
service for all the units connected.
In addition to the routine overhauling and repairing of the telephone
and telegraph lines owned by the service, certain major projects, as
follows, were undertaken during the year: The replacing of 40 miles
of submarine telephone cable connecting four lighthouses along the
Florida Keys with the main Coast Guard line terminating at Key
West, Fla.; the construction of a portion of the second telephone
circuit which it is planned to build along the east coast of the United
States from New York to North Carolina; the continuation of the
complete rebuilding of the telephone pole line between Cape Henry,
Va., and Beaufort, N. C , and a telephone pole line along the south
shore of Puget Sound, East.
Considerable progress has been made in the program of scientific
study and investigation of telephone transmission problems with the
view to increasing the efficiency of the telephone circuits. With the
cooperation of tbe Bureau of Standards and commercial companies

152

REPORT ON THE FINANCES

the quality of submarine cable, both electrically and mechanically,
has been vastly improved. This has been beneficial not only to the
Coast Guard but to all agencies within and without the Government
using submarine cable. This development and research work is of
considerable value in laying out new construction in order that
maximum transmission may be obtained at a minimum cost consistent
with dependable service.
Radio.—Material progress has been made in proportion to the
funds avaUable in providing modem radio equipment for all radioequipped units of the service. As indicated in last year's report, it
will be necessary to provide more frequent replacements of radio
equipment with newer and more recently developed apparatus because
of the more or less unstable radio situation existing. Rapid changes
in the field of radio necessitates a liberal policy of replacement.
An officer of the Coast Guard was designated by the Secretary of
State as technical assistant to the delegation from the United States
to attend the meeting of the International Technical Consulting
Committee on Radio Communications, at Copenhagen, Denmark,
in May and June.
This officer also continues to represent the Treasury Department
on the Interdepartmental Radio Advisory Committee, which committee coordinates certain governmental radio activities and acts in
an advisory capacity to the President, through the Secretary of
Commerce, on matters relating to radio affecting the several departments. He also represents the Treasury Department on the interdepartmental committee in preparation for the International Radio
Conference to be held in Madrid in 1932.
Training of communication personnel.—It is very important that
the service have highly trained men to conduct its communication
service. The Navy has cooperated with the Coast Guard in this
direction by permitting warrant officers and enlisted men of the Coast
Guard to attend its radio schools to pursue courses in advanced
technical subjects. The Coast Guard maintains a training school
at New London, Conn., to prepare men to become radio operators;
70 men were graduated from this school during the year.
Eguipment
Floating equipment.—On June 30, 1931, there were in the Coast
Guard in commission 23 cruising cutters of the first class and 14 of the
second class, 16 Coast Guard destroyers, 32 harbor cutters and harbor
launches, thirty-three 125-foot patrol boats, thirteen 100-foot patrol
boats, 3 special inshore patrol boats, one himdred eighty-five 75-foot
patrol boats, 45 other patrol boats, 82 cabin picket boats, 63 open
picket boats, a floating section base {Wayanda), and a floating work-

SECRETARY OF THE TREASURY

153

shop (Alpha). This floating equipment does not include the primarUy
Ufe-saving boat equipment attached to Coast Guard vessels and
stations.
Four more of the 10 new cutters authorized by the act of June 10,
1926, mentioned in last year's report as being under construction,
were completed and placed in commission during the year. They
were named, respectively, Itasca, Sebago, Saranac, and Shoshone.
Nine of the ten cutters have been completed and placed in commission. The tenth and last cutter for which design plans w^ere under
way at the close of the fiscal year 1930, is now in course of construction, under contract of September 30, 1930, at the Staten Island
plant of the United Dry Docks (Inc.), New York, N. Y. The cutter
will be named Cayuga.
Design work and specifications having been completed for additional
patrol boats referred to in the report for 1930, contract was entered
into on January 21, 1931, with the Bath Iron Works Corporation,
Bath, Me., for the construction of seven 165-foot boats. These
boats were authorized by the act approved May 15, 1930.
Preliminary design work has been in progress for the construction
of the cutter, authorized by the act approved April 18, 1930, also
mentioned in last year's report, as suitable for service in assisting
shipping on the waters of Lake Michigan. This work wUl be ready
for bidding during the fiscal year 1932.
During the year five Navy destroyers were transferred to the Coast
Guard, in pursuance of the act approved May 15, 1930, in place of
certain destroyers that have outUved their usefulness. The names
of the destroyers so transferred are: George E. Badger, Herndon, Hunt,
Welborn C Wood and Abel P . Upshur. These destroyers were overhauled and reconditioned at the Philadelphia Navy Yard. The
following-named destroyers formerly obtained by the Coast Guard
from the Navy were decommissioned and returned to the custody of
the Navy: Ammen, Beale, Burrows, Downes, Fanning, Henley, Jouett,
McCall, Monaghan, Patterson, Paulding, Roe, and Terry.
The cutters Manning and Comanche have been sold, and the
Algonquin was placed out of commission December 11, 1930.
In the course of the year routine repairs to vessels of the service
were made under contract with private concerns and at various
navy yards.
A program for the construction of fifteen 38-foot cabin picket boats
has been initiated and is well under way. Of these boats which are
being built at the Gibbs Gas Engine Co., Jacksonville, Fla., 7 have
been completed.
A program for buUding six 78-foot special inshore patrol boats
has also been started and is progressing rapidly. Three of the boats
have been dehvered.

154

REPORT ON THE FINANCES

Aviation.—In the course of the year Coast Guard seaplanes cruised
46,270 miles and searched over an area of 1,156,750 square miles.
The planes were in the air .661 hours, and more than 1,100 vessels
were identified. They were called into service on many occasions
to search for lost boats, persons, and various kinds of floating property.
On four occasions they were used to transport disabled and sick
seamen from vessels to hospitals.
The airplane reporting system established in 1929 along the
Atlantic seaboard continued the .work of observing and reporting all
passing aircraft. This comparatively new activity was quick to
prove its value to the air navigator flying along the lanes of observation. Thousands of planes again this year were reported; no plane
taldng advantage of the facilities has been lost. Many suffering
accident or distress have been given assistance by the Coast Guard
stations along the routes.
In the latter part of the year a large patrol plane, equipped with
two air cooled motors, was borrowed from the Navy for experimental
purposes in connection with the design of the large flying boats being
built under contract for the Coast Guard. Contract has been awarded
for the construction of five large fiying-boat seaplanes which will have
a cruising radius of more than one thousand miles without refueling.
These planes will be able to search over an area of 25,000 square miles
in one day.
Ordnance.—While no radical changes have been made, material
improvement has been effected along many lines having to do with
ordnance and gunnery, particularly in the training of personnel in the
care and use of small arms, large caliber guns, and ordnance equipment.
All the destroyers in commission held short-range battle practice,
day spotting practice, and long-range battle practice, as well as smallarms target practice, in the vicinity of St. Petersburg. Most of the
cutters have completed small-arms target practice, several have held
short-range battle practice, and more will carry out this training
before the end of September, an extension of time having been.gran ted.
Every section base has completed the prescribed small-arms training
and nearly all bases have held target practice instruction with 3-inch,
23-caliber or 1-pounder guns. Ninety Coast Guard stations have
held small-arms target practice, an increase over last year.
The rifie ranges at Egmont Key, Fla., and at Cape May, N. J.,
have been materially improved, the former by the repairing of barracks and running of water lines to firing points and the latter by
seeding.
Nearly every station in the fifth, sixth, and seventh Coast Guard
districts has sent a man to take the course for small-arms coaches at

SECRETARY OF THE TREASURY

155

Cape May, N. J., or Virginia Beach, Va. With so many men quahfied as coaches, it is expected that much improvement will be shown
in the small-arms scores of stations during the ensuing year.
Nine more men have completed the course for warrant gunners at
the Naval Gun Factory, Washington, D . C , this being a three months'
course in the care, repair, and adjustment of guns, mounts, optical
equipment, and other ordnance material. Three men have had the
armorers' course at the Marine Corps depot, Philadelphia, Pa., also a
three months' course, covering the care, repair, and adjustments of
small arms. These courses are given Coast Guard personnel in order
that the service may have a corps of men thoroughly qualified to effect
minor repairs on board ship, insure proper care of ordnance and fire
control equipment, and reduce the cost of maintenance.
The breech mechanisms of all 5-inch, 51-caliber guns have been fitted
with improved salvo latch^.s. Also, alterations have been made in
the magazines of vessels, in some instances, to bring them into conformity with Navy standards.
After two years of experimental and development work, a system of
fiare signals to serve the dual purpose of positively identifying Coast
Guard craft at night and of Uluminating the immediate surroundings
of a Coast Guard patrol boat has been devised. The particular
difficulty in developing such a flare was the fact that it would be
fired from a pistol or other small arm readilj^ carried on board picket
boats and other small patrol craft. A pistol has finally been developed
capable of projecting into the air a parachute flare to a distance
of approximately 200 feet, the flare burning for approximately 40
seconds with a candle power of 50,000. In order to make the flare
distinctive of the Coast Guard, a combination of colors—^white, red,
white—has been adopted. The area of illumination is approximately
one-half mile in diameter. Not only is the flare distinctive by its
colors but any vessel within the area of illumination is sufficiently
Ughted up so that its characteristics can readily be determined. Only
a few units have been provided with this equipment, but others will
be so equipped as fast as funds will permit.
The Coast Guard has been most generously helped by the Army,
Navy, and Marine Corps in the procurement of equipment and in
the training of personnel. At every opportunity, not only in Washington but wherever the various service units of the field have come in
contact, there has been evident a fine spirit of cooperation.
The academy, stations, bases, repair depot, etc.
Coast Guard Academy.—There were 85 cadets under instruction at
the Coast Guard Academy, at New London, Conn., at the close of the
fiscal year, and one cadet, first class,, was in the hospital at Fort
Stanton, N. Mex. The resignations of 27 cadets were accepted and 5

156

REPORT ON T H E FINANCES

cadets were dismissed during the year. In May, 1931, 33 cadets
were graduated and commissions were issued to them as ensigns.
Entrance examinations of candidates for cadets were held beginning
June 17,1931, and as the result of these examinations 65 appointments
have become effectiYe.
The practice cruise for cadets for 1930 was carried on by the Coast
Guard cutters Champlain and Mendota, which constituted the practice
squadron. The ^cruise began on June 9, 1930, and included calls at
the following foreign ports: Funchal, Madeira; Casablanca, Morocco;
Antwerp, Belgium; Danzig, Germany; Gdynia, Poland; Stockholm,
Sweden; Copenhagen, Denmark; Oslo, Norway; Glasgow, Scotland;
and also Gardiners Bay, Long Island. The cruise was concluded on
August 28.
The cutters Mendota and Sebago composed the special practice
squadron for the 1931 cruise and left New London, Conn., on June IS,
The itinerary includes calls at the following foreign ports: Gibraltar,
Spain; Alexandria, Egypt; Istanbul, Turkey; Marseilles, France;
Las Palmas, Canary Islands; and also Gardiners Bay, Long Island.
The cruise was in progress at the close of the fiscal year and it is
expected it will terminate at New London, Conn., near the end of
August.
On May 20, 1931, the Mendota and the Sebago, with the cadets on
board, proceeded from New London to the Marine Corps rifle range
at Parris Island, S. C , where small-arms target practice for the cadets
and ships' complements was held. They returned to New London
June 16.
Contract for the construction of the new buildings for the Coast
Guard Academy was entered into on December 30, 1930. The contract provides for completion,'ready for occupancy, by the fall of 1932.
On M a y 15, 1931, the corner stone of the flrst of the new group of
buildings was laid by the Secretary of the Treasury with appropriate
ceremonies. This project has received the most careful study by
the Office of the Supervising Architect, Treasury Department, which
office is performing the work, and the Coast Guard, to the end that the
structures shall be in keeping with a high standard of architectural
excellence and provide all appropriate facilities for the accommodation
and training of young men who enter the academy to become
commissioned officers of the Coast Guard.
Stations and bases.—On June 30, 1931, there were 253 Coast Guard
(life-saving) stations in an active status. There were 1 floating section base, 18 shore section bases, and 1 subbase established for lawenforcement purposes. The service craft attached to these bases
operate primarily against smuggling activities. The establishment
of a new section base early in the ensuing flscal year at Galveston,
Tex., is contemplated.

SECRETARY OF THE TREASURY

157

Rebuilding, repairs, improvements, alterations, and additions, extensive and minor in character, were completed during the year at
175 Coast Guard (life-saving) stations, at 17 section bases, in certain
Coast Guard divisions, at the academy, depot, and certain radio stations, and miscellaneous units. Contracts were awarded or work was
begun within the year for rebuilding, repairs, improvements, alterations, and additions at 26 Coast Guard (life-saving) stations, at the
depot, and at one section base.. The Evanston, 111., station has been
rebuilt at Wilmette Harbor, 111.; the work was completed May 22,1931.
Considerable progress was made during the year in modernizing
and improving operating facUities and living conditions at a number
of Coast Guard (life-saving) stations. Contract for the construction
of the Coast Guard (life-saving) station authorized by the act of February 8, 1929, to be established at or in the vicinity of the Quillayute
River, Wash., was awarded April 6, 1931. Appropriation was made
immediately avaUable by the act approved February 23, 1931, for
constructing and equipping the Coast Guard (life-saving) station
authorized by the act approved March 3, 1891, to be established at
or near Port Orford, Oreg.
Appropriation was also made in the second deflciency act, approved
March 4, 1931, for constructing and equipping the Coast Guard (lifesaving) station authorized by the act approved February 26, 1930, to
be esta^blished at or in the vicinity of Grand Island, Mich.
Repair depot.—The following-named Coast Guard vessels were overhauled at the Coast Guard repair depot, Curtis Bay, Md., during
the fiscal year: Apache, Calumet, Chulahoma, Gresham, Guthrie,
Leopard, Pamlico, Ossipee, Pequot, Tallapoosa, Winnisimmet, and
Yamacraw.
Several patrol boats also were overhauled and reconditioned.
The Pamlico has had a thorough reconditioning, the underwater body
work being performed by a private concern due to the lack of docking
facilities at the depot. The cutter Unalga was dismantled preparatory to work being performed at the PhUadelphia Navy yard. This
vessel will later be completed by the depot and fitted for service.
The Vinces was reconditioned for freight service to take the place of
a boat sent to the Coast Guard Academy for use of the cadets. The
Alexander Hamilton has been withdrawn from active service and
turned into a receiving ship for the depot. The boat-building shop
at the depot constructed during the year 57 standard boats for assignment to various units of the service.
Personnel
On June 30, 1931, there were on the active list of the Coast Guard
400 regular commissioned officers, 17 temporary commissioned officers, 86 cadets, 84 chief warrant officers, 525 regular warrant officers,

158

REPORT ON THE FIINANCES

265 temporary warrant officers, 10,589 enlisted men, and 362 civUian
employees in the field of whom 318 were per diem civUian employees
at the Coast Guard depot, Curtis Bay, Md.
Recruiting.—On July 1, 1930, the beginning of the fiscal year, the
recruiting service of the Coast Guard comprised 10 main stations and
28 substations.
On December 3, 1930, due to the need of an additional recruiting
office on the west coast, the main recruiting station at Kansas City,
Mo., was closed and transferred to Seattle, Wash. There was no
increase in the number of main stations during the year. There was
a decrease of 3 substations due to the closing of substations formerly
under the Kansas City office, leaving a total of 10 main stations and
25 substations at the close of the fiscal year 1931.
During the year there were 12,184 applicants for enlistment, of
which number 1,570 were enlisted, 1,392 rejected for physical disabUity, and 9,222 rejected for other disabling causes.
Welfare.—For the first time in many years, the entire amount
appropriated for recreation and welfare was made avaUable for expenditure and it was, therefore, possible to accomplish much more for
the benefit of the enlisted men. The funds were used in much the
same way as in previous years. Radio receiving sets, athletic equipment, and periodicals of various kinds were the items furnished in
largest number, but the reports show that a wide variety of diversion
was offered and that commendable resourcefulness was exercised by
officers in expending the welfare allotments in such a way that their
men derive a maximum of pleasure, benefit, and instruction.
At the close of the year the Coast Guard Institute at New London,
Conn., had an enrollment of 1,433 enlisted men. Forty-one educational certificates and 13 International Correspondence School diplomas were issued during June. Since the establishment of the
institute about two years ago 1,050 educational certificates and 299
International Correspondence School diplomas have been awarded.
In addition to the regular instruction work the institute is now in a
position to grade most of the examination papers of enlisted men for
advancement in rating and is thus of increased value to the service.
Through the cooperation of the Bureau of Navigation, Navy Department, arrangements have been made to furnish several of the larger
vessels of the service with sound motion-picture projectors. FUm
service wUl be furnished as it has been during the past several years
through the Navy Motion Picture Exchanges. The assistance of the
Bureau of Navigation in the matter of motion pictures and in the
procurement of rating courses for enlisted men has been very helpful
to the Coast Guard and is deeply appreciated.

159

SECRETARY OF THE TREASURY

It is believed that the morale of the service is greatly improved by
providing means for healthful diversion, and that the efficiency of the
service is increased by the educational opportunities and facUities made
avaUable to the men.
Awards of life-saving medals
The Secretary of the Treasury, under the provisions of law, awarded
during the year 33 life-saving medals of honor (6 gold and 27 sUver)
in recognition of bravery exhibited in the rescue or attempted rescue
of persons from drowning in waters over which the United States has
jurisdiction or upon an American vessel.
Appropriations, expenditures, and balances
The appropriations available for the Coast Guard for the fiscal
year 1931, the expenditures therefrom, and the balances are as follows:
Title of appropriation

pended and Unobligated
Appropriation E x obligated
balance

Salaries, office of Coast Guard, 1931
Pay and allowances. Coast Guard, 1931..
Fuel and water. Coast Guard, 19311
Outfits, Coast Guard, 1931.—
Rebuilding and repairing stations, etc.. Coast Guard, 1931
Rebuilding and repairing stations, etc. (Emergency Construction), Coast Guard, 1931
Rebuilding and repairing stations, etc.. Coast Guard, 1931
and 1932
•—
Draft animals. Coast Guard, 1931
_
Communication lines. Coast Guard, 1930 and 1931.Communication lines, Coast Guard, 1931...
Civilian employees, Coast Guard, 1931
Contingent expenses. Coast Guard, 1931
s..
Construction and equipment of Coast Guard cutters, 1931.
Construction and equipment of Coast Guard cutters, 1931
and 1932.
-.
Repairs to Coast Guard vessels, 1930 and 1931
Repairs to Coast Guard vessels, 1931
_
Coast Guard Academy...
Additional vessels. Coast Guard
Seaplanes and their equipment. Coast Guard..
Establishing Coast Guard stations...
Retired pay, former Life-Saving Service, 1930 and 1931
1 Includes expenditure of $9,500.00 for the fiscal year 1930.
2 Includes expenditure of $82,370.85 for the fiscal year 1930.
8 Includes expenditure of $34,634.93 for the fiscal year 1930.
* Includes expenditure of $1,500.00 for the fiscal year 1930.
6 Includes expenditure of $29,355.00 for the fiscal year 1930.

77532—32-

-13

$342,100.00
20,158,946.00
2,451, 890. 00
2, 283,150. 00
694, 000. 00

$334, 765. 52
19,929,467.81
2, 111, 693. 78
2,193,710.86
687,929.13

70, 000. 00

.69,525.80

100,000.00
22,600.00
30, 000. 00
162, 000. 00
100, 976. 00
276, 000. 00
800, 000. 00

15,143. 58
1 29,907. 63
159, 351. 04
94,189. 07
266, 002. 24
794, 031. 65

1, 350, 000. 00
150,000. 00
2,165, 394. 00
2, 500, 000. 00
2, 650, 000. 00
144, 000. 00
45, 000. 00
170, 250. 00

883, 089. 26
2 147, 799.17
2,151, 305. 53
3 2,116,773.92
* 2, 384,448. 58
144, 000. 00
40,816.86
8 161, 583.00

$7, 334.48
229, 478.19
340,196.22
89, 439.14
6, 070. 87
474. 20
100, 000. 00
7,456.42
92.37
2, 648.96
6, 786. 93
9, 997. 76
5, 968. 35
466, 910. 74
2, 200. 83
14, 088.47
383, 226. 08
265, 551.42
4,183.14
8, 667. 00

COMPTROLLER OF THE CURRENCY

National banks organized, consolidated, insolvent, in voluntary liquidation, and in existence
From the inauguration of the national banking system in 1863 to
June 30, 1931, charters have been issued to 13,560 national banldng
associations, of which 6,886 are in existence. By reason of liquidations, consolidations, and failures, 6,674 associations have been terminated.
The authorized capital of the banks in existence on June 30, 1931,
was $1,713,597,146, a decrease durmg the fiscal year of $40,168,483.
While charters were issued during the year to 81 associations, there
was a net decrease of 425 in the number of banks—that is, from 7,311
to 6,886—by reason of voluntary liquidations, receiverships, and
consolidations.
Summaries of operations during the last year relating to the number
and capital of national banks organized, increases and reductions of
capital, with number of national banks organized under various acts
of Congress and number closed for various reasons during the existence
of the system, together with the number organized, consolidated,
failed, liquidated, and in existence in each State and geographical
division, are shown in the statements following:
Organization, capital stock changes, and liquidations of national banks during the
fiscal year 1931
Total
Number
of banks

Charters granted
^
Increases of capital (123 banks)»
Restored to solvency.
..__ _
Voluntary liquidations
Receiverships 2
Decreases of capital (18 banks)
Closed under consolidation act of Nov. 7,1918, and capital decrease incident thereto
1

Capital

$8,626,000
16,062,617
1,176,000

81
10
278
237

33,830,000
28,260,000
3,403,600

1,677,600

Net decrease
Charters in force June 30,1930, and authorized capital..
Charters in force June 30, 1931, and authorized
capital

•

Number
of banks

Capital

$24,862,617

8 640

s 67,171,100

426
7,311

40,168,483
1, 753, 765,629

6,886

1. 713, 697,146

•

1 Includes 3 increases aggregating $275,000 which were effected as a result of consolidations under the act
of Nov. 7,1918, and 20 increases aggregating $4,465,000 incident to the consolidation of State banks with national banks under the act of Feb. 25,1927, and 20 increases by stock dividends aggregating $1,721,117.
a Includes 24 banks with aggregate capital of $2,140,000 which had been previously reported in voluntary
liquidation.

160

161

SECRETAEY OF T H E TREASTIRY

Number of national hanks organized since February 25, 1863, passed out of the
system, and in existence June SO, 1931
Organized under—
Act of Feb. 25, 1863
_
-456
Actof J u n e s , 1864...8,375
Gold currency act, July 12, 1870_
10
Actof Mar. 14, 1900
4,719
Total number of national banks organizedVoluntary liquidations
:
Expiration of corporate existence
Consolidations under act of Nov. 7, 1918
Receiverships, exclusive of those restored to solvency.

13,560

4, 600
—
208
334
1, 532

Total number passed out of the system
Number in existence June 30, 1931

6, 674
^—

•

6, 886

Number of. national banks organized, consolidated under act of November 7,
1918, insolvent, in voluntary liquidation, and in existence on June SO, 1931, by
States, etc.
Organized

s t a t e s , etc.

Maine
.
.
New Hampshire
Vermont
_. .
._
Massachusetts
Rhode Island
. *
Connecticut
Total N e w England States
NewYork
.
. .
N e w Jersey
..
Pennsylvania
Delaware
Maryland
D i s t r i c t of C o l u m b i a
Total Eastern States
Virginia
W e s t Virginia
N o r t h Carolina
S o u t h Carolina
Georgia
Florida
Alabama
Mississippi. . .
Louisiana
Texas
.
...
Arkansas
Kentucky..
. .
Tennessee
T o t a l S o u t h e r n States
Ohio
Indiana
Illinois
Michigan
Wisconsin
.
. .»_
.
Minnesota . .
...
_....
Iowa
.
.Missouri
Total Middle Western States
North Dakota
South Dakota
. _
..
Nebraska
.
Kansas
M o n t a n a . ——
W^vominc
-.
Colorado
.
. .
N P W Mexiro
Oklahoma
T o t a l W e s t e r n States

113
74
77
360
65
119
808
960
387
1,163
30
128
30
2,698
237
168
133
113
173
124
166
73
86
1,073
129
233
197

2,905
.-

----

---

-.....---.

--...
-

640
407
726
271
244
469
610
280
3,547
255i|
216}
383
438
191
57
206
80
720
2,546

Consolidated
I n liquiu n d e i act I n s o l v e n t d a t i o n
N o v . 7,
1918

157

60
14
23
177
51
48
373
312
64
238
13
52
10
689.

13
17
27
31
29
35
26
10
9
93
26
11
14

58
38
46
46
68
37
46
30
44
416
42
90
82

341
52
36
76
22
16
80
120
27

1,043
274
170
216
121
69
134
170
125
1,279

429
83 j
66i
55
54
66
12
30
24
63

453

2
1
1
17
2
4
27
45
13
34
1
4
97
12
6
4
6
7
1

I
2
20
1
9
6
77
22
9
12
4
8
6
4
9
74
3
1
1
4
3
3

4
8
16
2
6
36
57
12
81
1
2
4

71l
574^
159
141
64
20
60
30
382
984

I n existence

51
55
45
150
10
61
372
646
298
810
16
73
12
1,755
154
107
56
31
69
51
93
29
31
544
60
123
96
1,444
292
192
422
124
151
249
216
119
1,765
98
92
168
239
58
25
113
26
263
1, 082

162

REPORT ON THE FINANCES

Number of national banks organized, consolidated under act of November 7, 1918,
insolvent, in voluntary liquidation, and in existence on June SO, 1931, by States,
etc.—Continued
Consolidated
liqui- In existOrgan- under
act Insolvent Indation
ence
ized
Nov. 7,
1918

States, etc.

Washington
Oregon
California.,
Idaho
.--•
Utah
_
Nevada
_
...
Arizona
Total Pacific States
Alaska
. .
The Territory of Hawaii
Porto R i c o . . .
Total Alaska and island possessions
Total United States arid possessions

._..

213
139
500
108
38
16
30
1,044
5
6
1
12
13,560

16
1
12
2
31

35
15
30
27
4
2
3
116

1
1
334

1,532

61
32
267
41
15
4
14
434
1
4
1
6
4,808

101
91
191
40
17
10
13
463
4
1
5
6,886

Condition of national banks
A summary of the resources and liabilities of national banks in
the continental United States, Alaska, and Hawau, on June 30,
1931, as compared with June 30, 1930, is as follows:
Summary of condition of national banks on June 30, 1930 and 1931
[Dollars in thousands]

Classification

Number of banks..

June 30, 1930 June 30, 1931

Increase (+)
or decrease (—)

7,252

6,805

$14,887,752
9,452
6,888,171
787,750
124, 584
342, 507
1,421, 676
2, 353, 669
1,297,487
1,003,491

$13,177,485
7,790
7, 674,837
795,866
125,681
368, 589
1,418,096
2,354,145
854, 365
865,844

-$1,710,267
-1,662
+786,666
+8,116
+1,097
+26,082
- 3 , 580
+476
-443,122
-137,647

29,116,539

27,642,698

-1,473,841

1,743,974
1, 591, 339
545,873
94,962

1,687,663
1,493,876
443, 692
130, 599

-56,311
-97,463
-102,281
+35,637

79,129
652,339
2,679,821

62,881
639, 304
2,746,412

-16,248
-13,035
+66,691

738,327
10,926,201
8,752, 571
171,964

631,127
10,105,885
8, 579, 590
235,226
22,198,21,0
153,533
10,266
442,235
380,509

-207,200
-820,316
-172,981
+63,262
-1,070,6U
-76,500
+2,093
-68,772
-11,317

27,642,698
69.36

-1,473,841
-4.62

RESOURCES

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

Capital stock paid in
Surplus
•
Undivided profits—net
Reserves for dividends, contingencies, etc
Reserves for interest, taxes, and other expenses accrued and
> unpaid
•.
Nationalbank circulation
Due to banks 2
_
__
_._.
Certified and cashiers' checks and cash letters of credit and
travelers' checks outstanding
Demand deposits
1
Time deposits (including postal savings)
United States deposits
_
Total deposits
Bills payable and rediscounts
_.
Agreements to repurchase securities sold
Acceptances executed for customers
Other liabilities
Total
Ratio of loans and discounts to total deposits (per cent)..

£3, ms, 884229,033

8,173
511,007
391,826

29,116,539
63.98

* Includes customers' liability under letters of credit.
' Includes certified and cashers' checks, and cash letters of credit and travelers' checks outstanding.

163

SECRETARY OF THE TREASURY

The resources and liabUities of the national banks on the date of
each report since June 30, 1930, are shown in the foUowing statement:
Abstract of reports of condition of national banks at the date of each report since
June SO, 1930
[Dollars in thousands]
Classification
Number of banks..

June 30,
1930
7,252

Sept. 24,
1930
7,197

Dec. 31,
1930
7,038

Mar. 25,
1931
6,935

June 30,
1931
6,805

RESOURCES

Loans and discounts (including redis$14,887,752 $14,653,078 $14,362,039 !$13,722,072 $13,177,485
counts)»
9,452
11,128
7,388
Overdrafts
_
7,037
7,790
United States Government securities
2, 753, 941 2,817,155
2, 654,836
3,192, 718
owned
3,256, 268
Other bonds, stocks, securities, etc., owned.. 4,134, 230 4, 307,096 4,437, 230 4,469, 659
4,418, 569
509, 433
475, 549
613, 635
639, 284
Customers' liability account of acceptances.
434, 717
787, 750
793,808
811,980
810, 789
Banking house/ furniture and fixtures
795,866
124, 584
129,471
120, 722
124,662
125, 681
Other real estate owned
1,421, 676 1,432, 892
1,460, 365 1,441,387
Reserve with Federal reserve banks ..^
1,418,096
342, 507
339, 839
409,084
334,122
Cash in vault.
368, 589
3, 579,892 2, 888,481
.3,338, 017 2,942,432
Due from banks
3,146,951
71,264
36, 741
63,131
32, 304
Outside checks and other cash items
61, 559
Redemption fund and due from United
32,821
32,768
32,671
32,427
states Treasurer
—
32,166
Acceptances of other banks and bills of ex244,100
228, 527
244,489
215, 326
change or drafts sold with indorsement..
168,137
17, 596
15,803
16,505
14,910
Securities borrowed
11,986
199, 541
215,645
228,294
247,338
Other resources
218, 839
29,116,539

Total.:

28,378,683

28,799,684

28,126,467

LIABILITIES

1,743,974 1,745,125 1,722,159 1, 716, 254
Capital stock paid in
1, 591, 339 1, 592,814 1, 548, 364 1, 529,896
Surplus
545,873
586,430
515,973
532, 759
Undivided profits—net
94, 962 . 83,813
108, 507
113, 568
Reserves for dividends, contingencies, etc..
Reserves for interest, taxes, and other ex79,129
95,619
64,495
82,145
penses accrued and unpaid
—
652, 339
652,260
642,902
645, 523
National bank notes outstanding
3,418,148
3,184,949
3,
342,406
3, 282, 226
Due to banks 2
10,926, 201 10, 334, 688 10,638, 790 10,046, 037
Demand deposits
Time deposits (including postal savings)... 8, 752, 571 8, 798, 252 8, 727,430 8, 711,402
163,428
171,964
163,020
304, 501
United States deposits
Total deposits
— 28,268,881, 22,481,317 22,871,646 22,344,166
Agreements to repurchase United States
11, 954
8,173
33,073
13,857
Government or other securities sold
229, 033
219,850
194,466
Bills payable and rediscounts
255, 606
Acceptances of other banks and bills of ex228, 527
244,489
244,100
215,326
change or drafts sold with indorsement..
511,007
487,102
625,478
554,866
Acceptances executed for customers
Acceptances executed by other banks for
15, 544
8,242
9,830
8,627
account of reporting banks..
17, 596
15,803
16, 505
14, 910
Securities borrowed
114,
586
142,947
167, 537
160,104
Other liabilities
TotaL.

29,116, 539 28,378, 683 28, 799, 684 28,126,467

1, 687,663
1,493,876
443, 592
130, 599
62,881
639,304
3,277, 539
10,105,885
8, 579, 590
235, 226
22,198,240
10,266
153,533
168,137
442, 235
5,874
11,986
194, 512
27, 642, 6

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

164

REPORT ON THE FINANCES

Banks other than national
A summary of the resources and liabilities of reporting banks other
than national in the continental United States, Alaska, and insular
possessions, on June 30, 1931, as compared with June 30, 1930, is as
follows:
Resources and liabilities of banks other than national on June 30, 1931, compared
with June 30, 1930
[Dollars in thousands]
Increase
June 30,1930 June 31,1931 (+) or decrease (—)

Classification

Number of banks

16,827

15, 266

-1,561

RESOURCES

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

$25, 572, 918 $21,987, 365 -$3, 585, 553
37,860
39,986
-2,126
11, 056, 557 12, 385, 316 +1, 328, 759
1, 022, 607
1, 012, 388
-10,219
,
300, 567
320,807
+20, 240
523,463
515, 738
- 7 , 725
2, Oil, 426
1, 984,093 • -27,333
1, 640, 656
1, 779, 575
+138,919
1,587,148
1, 092, 344
-494,804
1,148, 257
1, 450,965
+302, 708

Total

44,903, 585

42, 566, 451

-2, 337,134

2,145,445
3, 377, 660
608, 931
173, 314
43, 608
1, 657, 299

1, 982, 335
3, 298,975
566, 536
227, 503
34,958
2,082, 329

-163,110
-78, 685
-42, 395
+54,189
- 8 , 650
+425,030

876, 950
13,172, 316
20,712, 790
41,758
117,199
36,678,311
436,784
39, 505
74, 962
1,425,066

651,876
11,220, 325
20, 579,771
212,963
19, 240
34,666,604
304,087
302,069
496,172
687,312

-325,074
-1,951,990
-133,019
+171, 205
-97, 959
-1,911,807
-132,697
+262, 564
+421, 210

44,903,585

42, 566,451

-2, 337,134

LIABILITIES

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

-737,763

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

Reporting banks on June 30,1931, numbered 22,071, which included
6,805 national banks and 15,266 banks other than national. A comparison of the resources and liabilities of all reporting banks on June
30, 1930, and June 30, 1931, follows:

165

SECRETARY OF THE TREASURY

Resources and liabilities of all reporting hanks on June SO, 1931, compared with
June 30, 1930
[Dollars in thousands]
June 30,
1930

Classification

Number of banks

24,079

June 30,
3931
22,071

Increase
(+) or decrease (—)
-2,008

RESOURCES

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

$40,460,670 $35,164,850 -$5,295, 820
-3,788
49,438
45, 650
17,944, 728 20, 060,153 +2,115,425
-2,103
1,810,357
1, 808,254
+21, 337
425,151
446,488
865, 970
884,327
+18, 357
3,433,102
3,402,189
-30, 913
3, 994, 325
4,133, 720
+139,395
2,884, 635
1,946, 709
-937, 926
2,151, 748
2,316,809
+165, 061

Total

74, 020,124

70,209,149

-3,810,975

3,889,419
4,968, 999
1,154,804
268, 276
122, 737
652, 339
4,337,120

3,669.998
4, 792,851
1, 010,128
358,102
97, 839
639, 304
4,828, 741

-219,421
-176,148
-144,676
+89, 826
-24,898
-13,035
+491, 621

1. 615.277
24, 098, 5J 6
29,465, 361
213,722
117,199
69,847,196
665,817
47,678
585, 969
1,816, 891

1,083,003
21, 326, 210
29,159, 361
448,189
19,240
66,864,744
457, 620
312, 335
938,407
1,067,821

-532, 274
-2,772.306
-306, 000
+234,467
-97, 959
-2,982,461
-208,197
+264, 657
+352,438
-749, 070

74,020,124-

70,209,149

-3,810, 975

LIABILITIES

Capital stock paid in
Surplus
Undivided profits—net
Reserves for dividends, contingencies, etc
Reserves for interest, taxes, and other expenses accrued and unpaid
Nationalbank circulation
Due to banks
Certified and cashiers' checks and cash letters of credit and travelers' checks outstanding
—
Demand deposits
Time deposits (including postal savings)
United States deposits
Deposits not classified...
—
Total deposits..

Bills payable and rediscounts.
Agreement to repurchase securities sold
Acceptances executed for customers
0ther liabilities

'..

Total

The following statement shows the number of national banks on
June 30, 1931, in each State, with the amount of capital and total
resources, in comparison with similar information for all reporting
banks:
Number, capital, and resources of national banks, and all reporting banks, June 30,
1931, by States
National banks
states, etc.

Maine
New Hampshire
Vermont
Massachusetts
Rhode Island
Connecticut.
Total New England States.
New York
New Jersey
Pennsylvania
Delaware
Maryland
District of Columbia
Total Eastern States

Number of
banks
47
64
45
149
10
61

Capital
(000
omitted)
$6,870
5,640
5,260
115, 236
4,520
21,312

All banks, including national
banks

Total re- Numsources (000 ber of
omitted) banks
$151,495
86, 620
74,407
1,733,168
61, 567
315,869

122
119
103
444
35
239

Capital
(000
omitted)
$13,076
6,770
7,936
163,656
16,425
47,207

Total resources (000
omitted)
$474, 711
323,280
264,235
4,859, 763
607,804
1,610,038

366

158, 738

2,423,126

1,062

256,070

8,039,821

541
294
808
16
73
12

429, 071
66, 520
164, 384
1,648
11,309
11,176

6, 977, 604
1,013,329
3, 261, 522
24,406
235,126
188, 790

1,079
545
1,452
61
219
39

922,577
i 139,448
367,472
„ 13,156
'41, 708
P ''23,328

22,474,204
2, 738,380
6,890,466
196, 726
1,005, 400
340,180

1,744

674,107

3,396

1,607,689

33,645,356

11,700,777

166

REPORT ON T H E FINANCES

Number, capital, and resources of national hanks, and all reporting banks, June 30,
1931, hy States—Continued
All b a n k s , i n c l u d i n g n a t i o n a l
banks

National banks
States, etc.
Number of
banks

Capital
(000
omitted)

T o t a l reNumsources (000 ber of
omitted)
banks

Capital
(000
omitted)

T o t a l resources (000
omitted)

153
104
55
31
69
51
92
28
29
537
56
123
93

$29,118
13,308
10, 380
5,550
19, 080
15,436
18,305
4,535
8,725
76,478
5,305
14,403
21, 074

$366,076
181, 865
113,949
76,196
278,886
190,447
210, 344
65, 535
140, 642
982, 573
73, 845
235, 259
296,180

430
262
324
141
350
193
286
267
206
1,181
321
515
433

$56, 798
29,529
29, 720
14,018
36, 704
24.485
27,581
13,606
32,091
109,177
15,983
39,676
38.486

$622, 606
375,379
366,127
178, 722
407,032
271,466
294,003
191,377
613,158
1,265,239
188, 666
531,140
476,130

],421

241, 696

3, 211, 796

4,909

467, 754

5, 680,945

290
187
418
119
148
244
214
118

57, 608
28, 832
88,475
32,150
32, 730
37, 420
18, 555
34, 785

826,493
437,190
1, 506, 098
637, 996
542, 648
679, 935
308, 864
637,014

921
812
1,463
696
915
937
1,138
1,101

185,943
64,999
296,340
113, 637
70,932
58, 794
57, 767
106,554

3,052,586
1,038,134
4,224,417
2,193,366
1,089,384
1,094,839
869,085
1,434, 742

1,738

330, 555

6,476, 238

7,983

954,966

14,996,653

98
92
165
237
58
25
113
26
.260

5,070
4,705
14, 510
17, 262
4,600
2,270
12, 300
1,910
25,625

77, 787
75, 628
263,140
246,105
88, 794
40, 300
264,465
33, 878
362, 207

302
320
727
975
166
82
250
52
550

8,810
10,456
29,156
37,985
9,800
4,205
17,241
2,970
32, 207

112,882
140 256
418,374
453,833
157,887
68,204
327, 794
45,972
436, 690

1,074

88, 252

1,452, 304

3,424

152,829

2,161,892

100
90
189
39
17
10
12

25, 875
13, 665
142,125
2,650
3,275
1,500
1,800

340, 079
234, 027
2, 608, 505
41,822
57, 256
22,147
30, 523

311
215
411
131
96
33
37

40,617
21,176
212,424
5,942
11,146
3,197
6,116

667 473
310,843
4,042,855
92, 536
184,924
46,296
83,990

T o t a l Pacific States

457

190, 890

3, 334, 359

1,234

299, 618

6,328,917

Alaska
T he T e r r i t o r y of H a w a i i _
P o r t o Rico
Philippines

4
1

275
3,160

5,012
39, 086

17
19
16
12

915
11, 711
6,804
12,742

13 447
124,931
78,376
138,912

3,425

44, 098

32,172

355, 666

6,805

1,687,663

27,642,698

22,071

3,669,998

70,209,149

Virginia.
West Virginia...
N o r t h Carolina
South Carolina.Georgia
Florida
Alabama
. .
Mississippi
Louisiana
Texas
Arkansas
Kentucky
..
Tennessee

1
.

T o t a l S o u t h e r n States
Ohio
Indiana
Illinois
Michigan
Wisconsin
Minnesota
I o w a ._ Missouri
'•^

_
- -

T o t a l M i d d l e W e s t e r n States _ . .

North Dakota
South Dakota
Nebraska
Kansas.Montana.....
Wyoming
Colorado
New Mexico...
Oklahoma

. •.
.....,,. .
_
.-

Total Western States
Washington . . .Oregon
California
. Idaho
Utah
Nevada
Arizona .
. .

T o t a l possessions
T o t a l U n i t e d S t a t e s a n d possessions

Resources and liabilities of all reporting banks, June 30, 1925 to 1931
[Dollars in thousands]
Classification

1925

Number of banks

1926

28,841

28,146

1927
27, 061

1928

1931
25, 330

24, 079

22,071

$39, 642, 067
50,407
18, 771,814
1,663, 696
403,967
887,845
3,105,840
3, 616,408
1, 763, 098
1, 779,186
71, 574, 328

$41,376,269
56,857
17, 348,738
1, 754, 454
390,816
819,928
3,192,200
3, 567,525
1,691, 772
1, 973, 946
72,172,505

$40,460,670
. 49,438
17, 944, 728
1,810,357
425,151
865, 970
3,433,102
3,994, 325
2, 884,635
2,151, 748
74,020,124

$35,164, 850
45, 650
20,060, 153
1,808, 254
446, 488
327
3,402, 189
4,133, 720
1,946, 709
2, 316,809

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

3, 796,978
4,611,698
1,097, 386
161, 483
142, 776
649, 452
3,629,197

3,889,419
4, 968, 999
1,154,804
268,276
122,737
652, 339
4, 337,120

837, 430
24, 350,164
28, 787, 617
286,112
20,121

1,615, 277
24,098, 516
29,465, 361
213, 722
117,199

67,910,641

69,847,195

1,630,703
55, 523
449, 917
1, 665, 948
72,172, 505

665, 817
47, 678
585,969
1,816, 891
74,020,124

26, 213

RESOURCES

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

$33,707,150
50,259
15,374,899
1, 401, 099
335, 486
951,286
2, 718,910
4,055,482
2,181,137
1, 281, 329

$36,001,030
49,470
15,815,141
1,493, 050
358, 917
996, 520
2, 926, 586
3, 842, 475
2, 037, 661
1,372,612

$37,270, 378
43,450
17,255, 093
1,580,105
399, 473
1, 007,896
2,932, 954
3,967, 448
2,181,167
1,494,594

62, 057, 037

64, 893, 362

68,132, 558

3,169, 711
3,173, 334
1, 007,439

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

70, 209,149

LIABILITIES

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

.
_

2 60,078
648, 494
4, 370, 909

3 761, 727
17, 947, 562
20, 946,104
147, 220
7,821, 537

2 64, 618
651,155
4, 330, 605
3 724,190
19, 553,122
24,401, 527
187, 827
4,871,986

2 70, 326
. 660,946
4,289, 337
31, 205,821
23,784, 702
26, 381, 693
194,024
895, 730

2 83,753
649, 095
4, 081.028
3 882, 519
24, 306,651
28,538,109
222,816
399,938

3 51,995,059

3 54,069,267

3 66,751,307

3 58,431,061

838, 069
2 3, 413
2164, 569
«996, 871
62,057, 037

923,142
2 3^ 489
2 221,131
«1,152,128
64,893, 362

1 Included in undivided profits.
- For national banks only; figures for banks other than national included in undivided profits.
3 Revised to include cash letters of credit sold by national banks and outstanding.
* For banks other than national.
5 Includes cash letters of credit sold by banks other than national and outstanding.

3, 376, 498
3, 764, 527
1,131,206

829, 608
.2 3, 529
2 248,184
8 1, 306, 527
i8,132,568

1, 566,146
2 7,217
2 411, 763
g 1, 527,881
71, 574, 328

3, 669,
4, 792,
1,010,
358,
97,
639,
4, 828,
1,083, 003
21, 326,210
29,159, 361
448, 189
19, 240

66,864, 7U

72
O

457, 620
312, 335
938, 407
1, 067,821

70, 209,149

BUREAU OF CUSTOMS

Receipts
The fiscal year 1931 coincided almost exactly with the period during which the new tariff act has been in effect. The tariff act of 1930,
signed by the President on June 17,1930, was made effective the following day. In the period immediately preceding the passage of the act,
large quantities of goods.were imported to avoid the increased duties
under the new act. This adversely affected customs receipts during
the fiscal year 1931 since, under other conditions, a considerable
portion of the imports between June 1 and June 17, 1930, would
have been released for consumption after July 1, 1930.
This condition is particularly noticeable in the case of warehouse
withdrawals which ranged between thirty and forty million dollars
a month during the first 11 months of the fiscal year 1930, but mounted
to almost $90,000,000 during the month of June. As a partial
result of the very heavy • warehouse withdrawals immediately preceding the passage of the tariff act, there was no month during the
fiscal year 1931 during which warehouse withdrawals amounted
to as much as $20,000,000.
Imports of free goods, which were affected to a very slight extent
by the tariff act, were 34.8 per cent lower in value than in the preceding
year. The value of imports of dutiable goods showed a decline
of 40 per cent, and customs receipts a decline of 35 per cent. That
the decline in customs receipts was less than the decline in the valu(i
of imports may be largely accounted for by the higher rates on
certain commodities under the new tariff act, by the fact that collections at specific rates are not directly affected by commodity-price
changes, and by changes which occurred in the makeup of imports.
The statement below shows the customs receipts, refunds, and
net proceeds for the past two fiscal years based on the amounts
actually collected and disbursed by collectors of customs.
168

SECRETARY OF THE TREASURY

169

Customs receipts and refunds during the fiscal years 1930 and 1931
1931

1930
Receipts:
Duties, including tonnage tax_
MiscellaneousSale of u n c l a i m e d m e r c h a n d i s e a n d a b a n d o n e d
goods
Sale of seizures
.
.
Fines
All o t h e r c u s t o m s receipts
T o t a l miscellaneous

$17,428
156,012
2,094,148
84,840

$10, 946
112,469
1,802,970
103, 267
2, 351,428

2,029, 652

588, 265, 634

381,912, 424

___

T o t a l receipts
Refunds:
Excessive d u t i e s
Drawback payments

T o t a l refunds

$379,882,772

$585,9^4, 206

9,686,338
14,466,994

. .

N e t c u s t o m s receipts from all sources

. 8,562,334
12,830, 375
24,162,332

21, 392,709

664,113,302

360, 519,716

The proceeds from the sale of unclaimed and abandoned merchandise and seizures do not represent the total amount received
from such sales and deposited in the Treasury, since the amount
of duties accruing on such merchandise is deducted and deposited
as duties. The amounts in the foregoing table, therefore, show
only the balances remaining from the proceeds of sale after deduction
of duties and expenses connected with the sale.
Volume qf business
Entries qf merchandise.—The world depression in business which
continued throughout the year was reflected in a decline in the number
of entries of merchandise, although not to so great an extent as the
decline in the dollar volume of imports. The total number of entries,
2,784,829, was less than that for any preceding year since 1925
and 13 per cent less than in 1930. All classes of entries participated
in the decline with the exception of baggage entries, which increased
24,469 from 1930, or 5.6 per cent. The number of entries of all
classes for each fiscal year from 1928 to 1931, inclusive, is shown
in the following statement:
Number of entries of merchandise during the fiscal years 1928 to 1931
Class of entries
Consumption:
Free
Dutiable...
Informal
Mail
Warehouse and rewarehouse
.
Immediate transportation without appraisement..
Transportation and exportation
Warehouse withdrawals, duty paid
Warehouse withdrawals, all other..All other entries
-Drawback notices of intent
Drawback entries
-.
Total entries.,

1928

246,677
495,696
214, 777
825,925
400,894
66, 048
143, 757
115, 270
251, 768
36, 572
13, 752
241, 767
26,960
3,079,732

1929

264,194
501,705
214, 603
838, 228
397,823
65, 773
146, 714
124,064
264, 592f
37,660
24, 200
266,888
29, 799

1930

270,038
484,131
220, 589
848, 543
437,969
66, 537
143,094
106,470
276, 612
33, 752
30,805
261,268
31, 616

3,175,144 3, 200,324

1931

214,922
391,026
183,639
808,677
462,438
50, 433
110, 714
87,981
179,470
25, 698
30,266
210,316
29,460
2,784,829

170

REPORT ON T H E FINANCES

Vessels.—The number of entrances and clearances of vessels at the
various seaports in the United States also continued to decline during
the year, although to a greater extent than during the previous fiscal
year. In contrast with the general trend, the number of entrances of
vessels from domestic ports was greater than during any recent^'year.
A detailed summary of the entrances and clearances of vessels for the
fiscal years 1928 to 1931, inclusive, is shown in the following comparative statement:
Number of vessels entered and cleared during the fiscal years 1928 to 1931

Entrances:
Direct from foreign portsIn ballastForeign vessels...
Domestic vessels.
With bulk cargoForeign vessels.-.
Domestic vessels.
With general cargoForeign vessels—.
Domestic vessels.
From domestic p o r t s Foreign vessels
Domestic vessels

I 17,765

Total clearances

1930

1931

7,891
12, 531

6,399
10, 743

5,914
9,907

}

13,387

7,529
5,965

6,778
6,632

5,087
6,095

}

18,059

9,081
5,998

9,157
6,251

8,676
6,394

I 34,272

9, 479
30, 903

1,004
32, 251

9,369
31, 301

83,483

19, 377

79, 215

80, 743

I 48,406

24, 668
25,076

22, 707
22, 956

20,138
19, 012

}

35,820

8,441
32,900

8,943
33, 497

8,960
32, 679

84, 226

91,085

88,103

80,789

Total entrances
Clearances:
For foreign p o r t s Foreign vessels
Domestic vessels
For domestic p o r t s Foreign vessels
Domestic vessels

1929

Highway traffic.—International traffic by highways showed the first
decline which has appeared in recent years. The number of automobiles which entered the United States during the fiscal year 1931 was
12,374,424, or 90,243 less than the number which entered during the
previous year, a decline of less than 1 per cent.
The Detroit-Windsor vehicular tunnel under the Detroit River was
opened to traffic November 4, 1930. From that date to the end of
the fiscal year 306,076 automobUes and 89,340 buses entered the
United States through this tunnel.
The number of automobiles which entered the United States at the
various border districts during each of the past four fiscal years is
listed in the following table:

SECRETARY OF THE TREASURY

171

Automobile entries at the various border districts during the fiscal years 1928 to 1931

Maine
-.Vermont
St. L a w r e n c e
Rochester
Buffalo
Ohio
Michigan
Duluth
Dakota
Montana
Washington

_-.

N o r t h e r n border
Los Angeles
S a n Diego L .
Arizona
E l Paso
.
San A n t o n i o

1929

1928

C u s t o m s district

1,087,001
399, 826
217, 775
490
1, 966.452
1,072
877, 395
69, 402
62,401
20, 538
• 209, 758

1, 256, 436
460, 697
328, 013
470
2, 387,998
3.310
1, 076,146
86, 230
117, 626
64, 964
237, 999

4,912,200
3,146,080
1,462,640
792,915
798,461

G r a n d total

1931

1,161, 786
518,397
352, 056
475
2, 561, 751
3,181
1, 525, 981
99, 633
119,098
89, 244
267, 537

1, 248, 865
575, 731
368,897
423
2, 368,473
3,818
1,978, 701
86, 902
139, 241
• 91,780
263, 503

6, 019, 889

6, 689,139

7,126, 334

2, 536, 722
1, 229,811
946,802
985,859

2,287, 087
52, 835
1, 331, 203
1,052,888
1, 030,197

2 164, 348
1, 214, 399
904, 003
961, 588

6,189,096
12,000

5, 699,194
16. 925

5,754, 210
21, 338

5, 244, 338
3,752

11,113, 296

11, 736, 008

12, 464, 687

12, 374, 424

.. ...

S o u t h e r n border
Alaska

1930

1 Established as a separate customs district, June 21,1930. All of the border ports in southern California
were previously included in the Los Angeles district.

Air traffic.—International travel by airplane continued to increase
during the fiscal year. Although the number of airplanes entering
the United States from abroad totaled 6,708, a decline of 642 from
the number entered during the previous year, the number of passengers
arriving by airplane exceeded by 1,446 the number so entered during
1930. The foUowing table presents in detaU the number of airplanes
and passengers entering the United States for the fiscal years 1930
and 1931:
Number of airplane and passenger entries at the various border districts during the
fiscal years 1930 and 1931
Airplanes

Passengers

C u s t o m s district
1930
Maine
Vermont
St. L a w r e n c e
New York
Buffalo
Ohio
.
Michigan
_
Dakota
..
..
Montana
Washington
N o r t h e r n border
L o s Angeles
San Diego
.
Arizona
El Paso.
San Antonio
S o u t h e r n border

1931

67
36
16
433
310
28
349
100
21
674
2,033

.^jl
1,498
l i Si^ 161
i'ifSC;^ 267
:"'.
874

. - .
-

Alaska
P o r t o Rico
Florida
Other
G r a n d total

1 Estimated.

51
106
68
404
349
18
430
244
58
648
2,376
1,052
99
318
851
2,320

2,846
64
285
2,122
2,471

78
252
1,682
2,012

7,360

6,708

1930
1134
19
14
552
367
84
283
158
48
2,019
3,678
208
4,814
260
430
3,666.
9,378
63
927
5,415
6,405
19,461

1931
1 102
158
111
483
517
44
259
373
151
1,558
3,756
3,596
18
670
3,565
7,848
133
1,160
8,010
9,303
20,907

172

REPORT ON T H E FINANCES

Passengers, other than airplane.—Despite a decUne in the number of
automobUes entering the United States during the fiscal year 1931, the
number of passengers arriving by vehicles was shghtly larger than for
the previous year. The number of passengers arriving by boats and
by trains, on the other hand, decUned 41.6 per cent and 27.2 per cent,
respectively. The following table presents the number of passengers
entering the United States during each of the past three fiscal years:
Passengers entering the United States otherwise than hy airplane, fiscal years 1929 to
1931
Fiscal year

By vessels
11,304,077
10,029,942
5,869,997

1929
1930
1931

By vehicles
33,426,657
37,089,175
37,473,686

By trains
2,131,750
1,973,201
1,436,552

Drawback transactions.—FOT the first time, detaUed statistics were
secured during the fiscal year 1931, covering the activities in respect
to drawback allowances. The following table summarizes the available information:
Number and amount of drawback transactions during the fiscal year 1931
Number

Drawback entries received
Notices of intent received
Certificates of manufacture issued
Import entries used in drawback liquidation
Certificates of importation issued

29, 460
210, 315
13, 069
47, 110
10, 332
Amount allowed

On exported articles manufactured with use of imported merchandise..-.
...
$12, 160, 707
On merchandise exported from continuous customs custody (sec.
557)
_
570,858
On merchandise which did not. conform to sample or specifications
and was returned to customs custody and exported (sec. 313-c)
76, 023
On salt used in curing
fish
1, 839
Total drawback allowed by customs
.
On articles manufactured with domestic alcohol, the internal revenue tax on such alcohol being refunded on exportation (sec.313-d).
Total

12, 809,387
139, 001
12, 948, 388

The amount of drawback actually paid during the current fiscal
year amounted to $12,830,375 as compared with $14,466,994 during
the previous year. The amount paid corresponds very closely with
the amount of drawback allowed as presented in the above table,
the difference being due to the fact that some claims allowed in
1930 were not paid untU 1931.

173

SECRETARY OF THE TREASURY

Appraisement of merchandise.—During the fiscal year for the first
time, statistics of the activities of appraisement officials were secured
covering not only the work performed in those districts where an
appraiser is stationed, but also examinations made by acting appraisers at other ports.
A summary of the information secured for the entire Customs
Service for the fiscal year is presented below.
Examinations made for appraisal during the fiscal year 1931
Number of invoices examined
Number of wharf samples examined
Number of packages examined:
Mail
At appraisers' stores
On wharf or at railway terminals..
At importer's place of business
Additions to value by examiner:
Number..
Amount
.
Additions to value by importers:
Number
Amount
Advances in rates:
Number
Amount

889, 998
787, 599
.

4, 125, 053
4, 931, 264
6, 072, 818
478, 689
44,021
$1, 909, 759
81,519
$10, 227, 312
"
50, 531
. $3, 460, 467

The number of examination packages received in the various appraisers' stores is shown in detaU by ports for the fiscal years 1930
and 1931 in the following table:
Port
St. Louis
Cleveland
Los Angeles...
Boston
New York
Seattle
,
Buffalo
San Francisco

1030
10,991
9,245
37,028
58,996
496, 791
30,118
3,801
85,635

1931
7,696
7,491
36,143
63,696
384,122
22,911
2,157
68,234

Port

1930

1931

Philadelphia.
New Orleans.
Portland, Me
Detroit
Chicago
Baltimore

48,033
10,389
8,799
9,862
43,391
23,016

37,978
10, 563
7,926
6,888
31,345
16,944

Total..

876,185

693,994

Seizures.—The number of seizures for customs violations during
the fiscal year 1931 aggregated 40,995 as compared with 39,902
during the previous year. The appraised value of these seizures,
moreover, amounted to $9,946,232, an increase of $2,283,599, or 30
per cent, over the fiscal year 1930. The number of seizures together
with the appraised values of such seizures, for the fiscal years 1930

174

REPORT ON THE FINANCES

and 1931, classified by groups of commodities, is shown in the
folloAving table:
Number and appraised value of seizures for violations of customs laws during the
fiscal years 1930 and 1931, classified by commodities

1930

Class of commodities

Merchandise:
Number of seizures
ValueFurs
Furniture and chinaJewelry
Wearing apparel—
.
Edibles
Toilet articles
Textiles
Cigars and cigarettes . . .
Guns and ammunition
Books, cards, etc
Obscene articles
Miscellaneous

..
.

__.

Total value

Per cenl
+13.8

9,129

$61,492

726,107

$46,566
2, 629, 719
629,972
417, 293
121,493
26,934
2,601,687
1,824
3,180
2,812
5,901
31,281,666

6,362,184

7,568,926

Vi99.5
)
(*)
M
+41.2

146
$131,140

196
$263,340

+34.2
+93.2

1,681,104
444,615
19,423
(})
1,978,164
561,279

Increase
(+) or decrease ( - )

8,022

1931

-24.1
(2)

-66.6
-6.1
+626. 6

(2)

+26.5
Q)

•

Narcotics:
Number of seizures
Value

. . . .

Liquor, means of transportation, etc.:
Number of seizures
LiquorSpirituous liquor (gallons) *
Malt liquor (gallons) « .
AlcoholQuantity (gallons)
Value
BoatsNumber
Value
Automobiles—
Number..
Value
AirplanesNumber—
Value
.Horses and horse-drawn vehiclesNumber
Value

,^
.

31,734

31,670

-0.2

286,809
270,753

376,397
104, 710

+31.7
-61.3

23,185
$158,198

17, 230
$86,143

-26.7
-46.6

956
.- $1, 231,890

564
$1,307,374

-41.0
+6.1

2,090
$731,952

2,199
$676,767

+6.2
-7.6

22
$38,660

-60.0
+26.7

214
$8,609

11
$48,970
100
$4,712

$2,169,309

$2,123,966

-2.1

39,902
40,996
$7, 662, 633 $9,946,232

+2.7
+29.8

Total value
Grand t o t a l Number of seizures..
Value

-63.3
-45.3

1 Included in miscellaneous values.
»Not available.
8 $1,187,756 of this amount represents a seizure of whale oil.
* Not comparable.
« No appraised value reported as commodity is a prohibited importation and has no sale value.

In connection with the seizures of liquor, customs officials seized
a number of boats, automobiles, airplanes, and other vehicles used
in transportation. The following table presents in detail ihe regional
distribution of seizures of liquor and means of transportation during
the fiscal years 1930 and 1931:

175

SECEETAEY OP THE TEEASUET

Seizures of liquor and means of transportation during the fiscal years 1930 and
1931, hy customs districts
Liquor (gallons)
Number of
seizures

Customs district

Spirituous liquor

Alcohol

Malt liquor

1931

1930

1931

1930

1,405
2,616
4,515
21
3,611
4,413
480
726
115
1,461

1,303
2,816
4,952
10
2,985
3,971
703
696
126
1,829

3,903
2,768
7,466
131
7,113
32,197
2S3
367
2,125
1,998

2,510
7,594
8.993
471
2,316
7,516
318
340
347
2,255

661
45, 286
52, 345
3,700
14, 313
105,957
20
118
3,157
248

226
19, 755
43, 333
3,712
6,313
14,101
89
243
1,803
706

150
48
1
12
30
208

Total, Canadian border- 19, 363 19,291

58,341

32, 660

225,811

90,281

1,207

2,713

342

Oanadian border:
Maine and New Hampshire
Vermont .
St. Lawrence .
Rochester
Buffalo. . . .
Michigan
Duluth..
Dakota
Montana
Washington

Mexican border:
Los Angeles
San Diego ._ .
Arizona
El Paso
San Antonio

Total, Mexican border..

1931

1930

1931

1930

164
148
446

551
16
104
2,013

871
12
691
1,262
2,899

347
1,624
605
1,164
2,894

1,580
14
837
4,965
7,690

1,139
1,310
441
3,746
6,857

690'
492
1,940

24
269
20
721
3,215

265
17
73
1,695
5,904

2,023
2,053
55
2,036
3,890
10,057

5,636

6,634

15,086

12,493

3,464

4,249

7,954

Atlantic coast:
Massachusetts.-..
Rhode Island
Connecticut
New York
Philadelphia
Maryland
Virginia
North Carolina-South Carolina
Georgia
Florida

273
25
1
3,511
67
88
67
I
32
6
1,106

285
20
8
3,360
88
81
60
6
21
26
771

11,458
3,898
3,412
71,634
13,960
5,095
5,648
8
2,461
624
39,933

39,911
14, 558
8,028
144,183
14,896
3,349
18,487
4,528
13,113
3,577
29,401

12
8
101

648

1,921

4,278
75
1
9

2,564
17

1
18
6
J
3,565

1,939
1,320

266

340

Total, Atlantic coast-_All other districts

6,167
1,579

4,726
1,019

158,031
54, 351

294,031
37,213

3,712
37. 766

8,170
2,010

4,768
9,256

1,398
3,062

31, 734 31,670

285,809

376,397

270, 763

104,710

23,185

17,230

Grand total

77532—32-

-14

986
52
20

176

REPORT ON THE FINANCES

Seizures of liquor and means of transportation during the fiscal years 19S0 and
1931, hy customs districts—Continued
Boats
Customs district

Number
1930

Canadian border:
Maine and New Hampshire
Vermont
St. Lawrence
Rochester
Buffalo
Michigan
Duluth
Dakota
Montana
Washington
Total, Canadian border.
Mexican border:
Los Angeles
San Diego
Arizona. . .
El Paso.San Antonio . . .
Total, Mexican border..

Number

Value

1931

1930

1931

$9, 218
32
1,360
20
5,685
24, 546
147

1930

Valuo

1931

1930

1931

$21,273 $13,876
51,123 65, 536
115, 562 120, 211
1,250
2, 640
28,130 30,820
72, 720 3£', 820
2.450
2,485
12,140 17,, 702
22, 485 15,160
23,820 27, 584

15
1
58
5
89
410

11
2
28
1
71
113
3

$7,267
8
6,589
2,280
15,414
372, 224

1
1

"2'

900
6,000

4,015

55
207
472
5
123
352
4
30
66
67

580

231

410,682

45,023

1,381

1,304

350,953

331, 833

7
2

56,700

20, 675
6,800

14
123
23
153
193

24,303
925
13, 040
36,970
48, 510

10, 4:50
33, 741
6,730
33,649
44,870

49
266
508
10.
114
195
5
38
57
62

1,613

915

78
2
40
126
240

58, 213

28,390

486

506

9
4
2
35
8
4
1

71,125
54,000
37,000
221,082
48, 200
1,100
30,000

44,095
395, 260
62,000
366, 305
14,100
40,000
79,800
35, 925
9,000
19, 376
92, 255

25
3

Atlantic coast:
Massachusetts
Rhode Island . .
Connecticut
New York
Philadelphia
. .
Maryland
Virginia
North Carolina. _
South Carolina . .
Georgia
Florida
._

1
6
222

17
10
6
53
9
2
8
4
10
4
153

Total, Atlantic coast...
All other districts .

292
74

276
44

956

664

Grand total

Automobiles

123, 748 129,440
10,450
100
20,180
5,200
3,302

18,625
125

43, 695
6,950
4,476
650
8OO" 2,450
10, 650
1,482
1,025
71, 580 87,328

677, 857 1,168,116
85,138
75,845

2'
167
217
6

35'
11
6
2
5
16
7
185
295
94

112, 637 176,430
144,614 39,064

1, 231,890 1,307,374

2,090

2,199

9,000
10,110
196, 240

19
6
8

731,952

676,767

In connection with seizures made there were 3,136 arrests as
compared with 2,811 arrests during the previous year. Convictions
were obtained in 1,564 cases, an increase of 152 convictions as compared with the previous year. The fines imposed in the criminal
cases amounted to $164,255, while imprisonment imposed aggregated more than.790 years. The remaining cases are still pending
or have been prosecuted under.laws other than the customs laws.
Other Government enforcement agencies cooperate in the enforcement of customs laws. The following table presents the record of
customs seizures classified according to the several branches of the
Customs Service and other governmental agencies which were
instrumental iii apprehending violators of customs laws:

177

SECEETAEY OF T H E TEEASTJEY

Seizures made hy the Customs Service and other governmental agencies for violation
of the customs laws during the fiscal year 1931
Narcotics

Customs patrol.
Customs agents
Customs Service exclusive of patrol and
agents....
Entire Customs
Service
Coast Guard
Immigration
Customs assisted by
other oflacers
Local oflacers
Grand total.

Liquor

Merchandise

Branch of service by
which seizure was Number of
made
sei- Value
zures

Number of
seizures

Num- spiritAlcober of uous
Beer,
hol, Numsei- liquor, gallons galber
zures gallons
lons

Value

$131
102,686

284 $12,699
326 |4,530,605

157 148,306

8,414 3,013,018

210
2,007

196 253, 340

8,375
1,022

. Entire Customs Service.
Coast Guard
Immigration...
Customs assisted by other
officers
Local oflficers.—
Grand total

$53,822
89,971

117,936

86, 088 11, 785 4,470

233
74

10, 442
7,723

299 261, 729
189 1, 013, 562
1,963
65

194
2,038

6,051
1,723

14
7

Horses, etc.

3,195
26, 925

564 1, 307, 374

Airplanes

Total Total Total apnumber numberl praised
Num-1
Numvehicles seizures value
Value ber Value ber Value

Number

Customs patrol
Customs agents
--.
Customs Service exclusive of
patrol and agents

28,664

Value

173
. 78

9,129 7, 668, 926 31, 670 376, 397 104, 710 17,230

Automobiles
Branch of service by which
seizure was made

2,043 39,306 67, 570 4,981
92 15, 276 7,940 1,045

1,024 17, 556,322 30,799 140, 668 77,295 10, 496
36
1,322
213 1214, 715 8,552 2,437
1,885
351 2,849 12, 089 2,085
48

185 251,123

Boats

$299,600
40,410

75 $3,022

632 205,277

$5, 320
42, 750

687

459

2,337 $374, 594
436 4,806,422

1, 335
163

37,235

645, 287
10, 645
33,760

'"'87'

101
116

39, 249
47,826

669
475

900

124
129

247
91

2,199

676, 767

4,712

48,970

2,874

40, 995

3,481

100

10 48,070

3,484, 996

2,185 40, 008 8, 666, 012
206
249 1, 025, 629
400
230
37,695

1,796
17
170

52, 598
78, 255

In a number of instances customs officials made seizures for violations of other than customs laws. The number of such seizures,
number of persons apprehended, together with the number of automobiles, and the quantity of Uquor seized, are Usted in the following
table:
Seizures made by customs ofiicers and transferred to other governmental organizations during the fiscal year 1931
B r a n c h of service t o w h i c h transfer
was made

Narcotics Bureau
Immigration
Prohibition
Justice
Agriculture
.
Interior
C a n a d i a n service
M u n i c i p a l authorities
Total

. _ . .

.
.

Persons
apprehended

Automobiles

Liquor

Beer

Alcohol

Number
1

Gallons

Gallom

95
8

Number
6
1,795
101
8

679

1,018

1
75

5
1
105

10
22

1309

2,021

730

1,091

3,229

Seizures

Number
3

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

3,197

. . .

178

RJEPORT ON T H E

FINANCES

Fines and penalties collected,—Fines and penalties collected for
violations of customs laws during the fiscal year ended June 30, 1931,.
amounted to $1,802,970 as compared with $2,094,148 during the
previous fiscal year. The decrease was due rather to the fact that
several unusually large fines were collected during the earUer period
than to a diminution in the imposition and collection of fines for
violations of the various provisions of the tariff act.
Each of the classes of violations for which comparable figures are
available shows an increase over the earlier year, with the exception
of mail fines and liquor fines. In the case of liquor fines there were
undoubtedly included in 1930 many penalties for failure to manifest
and for unlading without permit, which were classed separately in the
compilation for the later period and which would result in a substantial increase in fines collected for violations of this character.
Almost one-half of the fines collected during the fiscal year 1931
represented a penalty imposed on passengers from abroad for failure
to make a declaration for all of their foreign purchases. These fines
include the personal penalty equal to the home value of the goods and
such additional amounts as were paid to secure release after forfeiture.
During the fiscal year 1930, many of the fines levied against the
master of a vessel for failure to manifest all articles and for unlading
without permit were made as a result of liquor seizures and were
classed with other liquor fines. Since this classification was not
followed in 1931, the actual fines collected for all violations involving
the illegal importation of liquor shown in the following table for 1930
and 1931 are not strictly comparable.
Fines and penalties collected for violations of customs laws during the fiscal years
1930 and 1931

Nature of violation

1930

1931

Increase
(+)or
decrease

(-)

Failure to make declaration
Undervaluation
Failure to report to customs
Liquidated damages (penalties on bonds)
Immediate transportation and transportation and exportation.
Mail
Failure of master to manifest
_
Unlading without permit
Liquor
_.
Miscellaneous
_
Total
1 Included in miscellaneous fines.

(0
$242,690
12,669

(0
6,682
66, 748
44,289

279,490
1,451,880

2,094,148
«Not available.

Per cent
$893,859
281,673
26, 358
28,922
9,377
43,104
79,882
14,122
256, 367
169,908

1,802,970

(2)

+16.1
+109. 7
(2)

+42.6
—24.0
+80.4
(2)

—8.6
(3)

-13.9

8 Not comparable.

Informers.—An unusually large number of individuals submitted
confidential information of customs frauds, the informers in such cases
receiving 25 per cent of the net amount recovered by the Government.

SECRETARY OF THE TREASURY

179

During the fiscal year 1931 a total of $328,590 was paid to informers,
the Government receiving four dollars for each doUar so expended, of
which sums, lawfully due, it would have been deprived except for the
information furnished.
Smuggling.—^By the enactment of the tariff act of 1930, under
which uncut diamonds are free of duty and cut diamonds subject to
a duty of 10 per cent only, commercial smuggling of these commodities
was apparently made unprofitable. No major seizures of this kind
were made and no authentic information of such smuggling operations was received during the year.
Noncommercial smuggling of legitimate merchandise by tourists
was considerably reduced during the year, but an unusuaUy large
number of major seizures of narcotic drugs was made, two seizures
alone amounting to 43,793 ounces.
Antidumping
Many complaints were received during the fiscal year 1931 against
the alleged dumping of foreign merchandise, most of these complaints
having been directed against goods exported from a country with
which the United States has no diplomatic-relations and in which
there is no official Government representation. Some of the complaints received, upon investigation, indicated the existence of actual
dumping as contemplated by the antidumping act, whUe the investigation of other cases indicated that the low prices prevaihng were due
to a low or declining commodity market.
Special provisions of the tariff act
Importations of prohibited articles.—Section 305 of the tariff act of
1930 lists a considerable number of articles, the importation of which
is prohibited. Among such prohibited articles are obscene books,
pamphlets, statuary, etc., abortive and preventive drugs and appliances, lottery tickets and advertisements thereof, and insurrectionary
or treasonable hterature. Except in the case of obscene books, many
of the seizures consist of articles for which no appraised value can be
satisfactorily assigned. The estimated value of the articles seized
during the fiscal year 1931, however, taking into consideration the
above quahfication, amounted to $5,901.
During the fiscal year, 2,944 seizures of prohibited articles were cUsposed of, most of these being destroyed by consent of the importer.
No seizures of any treasonable or insurrectionary hterature were reported by the various collectors of customs.
Improperly marked articles.—Section 304 of the tariff act provides
that aU imports shall be marked in such a manner as to indicate the
country of origin. During the fiscal year 1931 the delivery of a considerable number of such imported articles was withheld because of

180

REPORT ON THE FINANCES

improper marking. Of the 4,657 cases disposed of during the year,
4,528 were released after the goods were properly marked, and additional duty was imposed amounting to $72,280.77, or 10 per cent of
the value of the goods.
In three cases, goods, the delivery of which was withheld, were
released upon orders from the Secretary of the Treasury on the
ground that the goods were incapable of being marked. In 126 cases
&•
such goods were exported from continuous customs custody.
Countervailing duties.—The aggregate of countervailing duties collected during the fiscal year 1931 was $163,403.13, of which almost
one-half represented duties imposed on bituminous coal from Canada
and more than one-third represented countervaUing duties on automobUes imported from Canada and from several European countries.
The following table presents the countervaihng duties collected,
classified according to commodities and countries from which the
commodities involved were exported.
Countervailing duties collected during the fiscal year 1931, classified according to
commodities and countries from which the commodities were exported
Amount

Automobiles
.'
Automobile parts
Bicycle and motorcycle parts
Coal
Fish
Pulp, j&bre, paper, and wall board
Sheathing, wrapping, and tarfelt paper
Silk, spun and woven, and silk wearing apparel
Wool
Total
Canada
Great Britain
Germany
France
.
Belgium
Italy
Sweden
Spain
Finland
Australia
Mexico
Total-

$63,821
6, 296
420
81,173
2,161
3, 829
262
5, 434
8
163,404

,
.

93, 545
60, 905
3,477
2,068
713
2,486
9
2
3
25
171
163,404

Consular invoices.—As a result of authority vested in the Secretary
of the Treasury under the tariff act of 1930, the bureau has been able
to make regulations dispensing with the requirement for production
of consular invoices unon entrv of many classes of duty free and

SECRETARY OF THE TREASURY

181

specific duty merchandise, such as agricultural products, forest
products, wood pulp, pulp wood, etc. This change has reUeved many
importers of the expense and inconvenience of producing a document
which is of no particular value from the customs standpoint, no
question of a duty based on value being involved in the entry of
such shipments.
Customhouse brokers.—Noticeable improvement has followed the
promulgation of the revised regulations issued pursuant to section
641 of the tariff act of 1930, relating to customhouse brokers.
Licenses, which were formerly issued by coUectors of customs for the
transaction of customhouse-brokerage business in the several collection districts, are now issued by the Commissioner of Customs, after
rigid investigation of the applicant's character and qualifications.
Boards of examiners are about to be appointed to inquire more fully
into the abUity of future applicants to render valuable service to
exporters and importers, and under supplemental regulations to be
issued shortly a more searching investigation wiU be made into the
apphcant's character and reputation, and particularly as to his
record in customs matters.
Foreign bounties and grants.—For a number of years legislation has
been in existence providing for the imposition of countervaUing duties
on merchandise in connection with which foreign bounties or grants
have been paid or bestowed. Up to the time of the passage of the
tariff act of 1930, the Secretary of the Treasury was required under
the law in connection with the imposition of countervailing duties,
to ascertain and determine the net amount of bounties or grants paid
or bestowed by foreign countries. Section 303 of the tariff act of
1930 permits the Secretary to estimate the net amounts of foreign
bounties and grants.
Drawback.—The bureau has instituted investigations of a large
number of claims for drawback to determine whether the so-called
production or manufacture was such in fact and, if so, whether it
was applicable to the merchandise treated and also whether the production or manufacture was- undertaken within the contemplation of
the statute or merely to secure drawback on merchandise outmoded
or nonsalable. As the result of such investigations a number of drawback claims involving substantial amounts have been denied.
Mail importations of cigars.—A parcel post convention, effective
September 1,1930, was entered into between the United States and the
Republic of Cuba, following the repeal of Section 2804 of the Revised
Statutes, which placed a limitation on importation of packages of cigars
and cigarettes, by Section 651 of the tariff act of 1930. Provision was
made in Treasury Decision 44208 for the prepayment of duty and
internal revenue tax on informal entry shipments of Cuban cigars
and cigarettes arriving by mail at the port of Jacksonville, Fla. As

182

REPORT ON THE FINANCES

a result of these changes, maU coUections at the port of JacksonvUle
increased from $9,175 in 1930 to $18,979 in 1931, the increase being
almost entirely due to duties on cigars and cigarettes in the foreign
maU, which aggregated $9,612.52.
Investigative activities
Port examinations.—The port examination committee made examinations of the accounts and procedure in seven customs collection
districts during the year. In addition to the scheduled examinations
of the accounts and procedure, personnel surveys were made in all
customs collection districts resulting in considerable savings to the
customs appropriation.
Undervaluations.—Investigations of undervaluation cases continued
a very important factor in the work of the investigative unit, both in
the United States and abroad. The recoveries made as a result of
this class of investigations greatly increased during the fiscal year
1931, there having been collected in 1930 an aggregate of approximately $102,000, while in 1931 the sum of $857,341.54 was coUected
in increased and additional duties.
Smuggling.—There was a decided increase in the amount of narcotic drugs seized during the fiscal year 1931 as compared with previous years, some of the largest seizures of narcotics ever made having
been accomphshed.
The ultimate object is the securing of information regarding large
operators sufficient to prevent the landing of shipments of narcotic
drugs in the United States, and the development of evidence sufficient
to convict such operators. The results thus far obtained in this connection have been highly satisfactory, there being several important
criminal cases pending against some of the largest known operators.
During the past year three large shipments of narcotic drugs were
seized in China, and one in Italy, as a direct result of the world-wide
system of cooperation and information dissemination established by
the bureau in conjunction with the Narcotics Bureau. The drugs in
these shipments originated in Turkey and were shipped packed with
dried fruits and bUled as such. All such shipments were intended for
ultimate shipment into the United States, the total of the four shipments aggregating approximately 6200 pounds of heroin and morphine. Two very large shipments of narcotic drugs were seized after
arrival at a port in the United States, aggregating approximately two
tons of heroin and morphine. One of these shipments was packed in
seventeen large boxes manifested as furs, although no furs were found
in the packages.
SpeciaUy trained customs agents devoted their time to the prevention of liquor smuggling. A number of important convictions were

SECRETARY OF THE TREASURY

183

obtained and evidence was developed in several large conspiracy cases
which are still pending.
Duiing the fiscal year 1931 customs agents investigated and reported 1,178 criminal cases to United States attorneys, involving
1937 defendants, and investigated and reported on 678 civil petitions.
Customs information exchange.—The customs information exchange
continued its activities as the clearing house for information respecting
market values and classification for the entire Customs Service. In
this capacity the following work was performed by the customs information exchange during the year:
Appraisers' reports of value received
Appraisement appeal reports received
Advanced value reports received
Changes in value circulated
Requests for investigations abroad

15, 777
3, 361
5, 361
3, 746
1, 251

Drawback.—The number of drawback investigations made by customs agents continued to increase throughout the country, due apparently, to a large extent, to the provisions of section 313 (b) of the tariff
act of 1930. During the fiscal year 1930, 1,856 drawback investigations were made, while in 1931, 2,683 such investigations were completed, an increase of slightly more than 44 per cent.
These investigations require the ascertainment of the manufacturing processes of almost every line of industry using imported merchandise, the rendering of assistance to manufacturers in the formation of
a system of records whereby the identity of the imported merchandise can be maintained from the time of importation throughout the
manufacturing process, to the exportation thereof. This is a very
important phase of the work of the Investigative Unit, drawback
payments during the year amounting to $12,830,375, a decrease of
$1,636,619 as compared with 1930.
Summai^y.—The following statement shows the results during the
past year of the investigative activities so far as direct results can be
measured in dollars and cents, or by count of individual cases:
Number

Ports examined
Drawback investigations.
Foreign investigations
Arrests
Convictions
Acquittals
Failures to indict
Indictment cases pending
Seizures made
Seizures appraised
Seizures released or pending

345
2, 683
2, 404
1, 112
442
54
71
234
1, 261
963
274

184

REPORT ON THE FINANCES
Amount

Appraised value of seized merchandise
$2, 927, 163. 33
Fines, penalties and forfeitures incurred, exclusive of court fines. 2, 588, 721. 03
Proceeds of sale of seized merchandise
432, 556. 43
Increased and additional duties collected
857, 341. 54
Amount deposited in offers of compromise
581, 411. 84
Fines imposed by United States courts
101, 121. 00
Bail forfeited
126, 550. 00

The actual recoveries and penalties assessed as the result of investigative activities during the past fiscal year aggregated $4,687,701.84. The .total cost of operating the investigative unit during
the same period, in this country and abroad, amounted to $1,016,500.
While the foregoing is descriptive of the tangible results of the
efforts of the investigative unit during the year, it is not possible to
accurately measure the effectiveness of this branch in terms of dollars
and cents, because its primary function is the prevention of frauds
on the customs revenue. For instance, there is no accurate method
of determining the amount of increased collections resulting from
advances in value of imported merchandise due to market value investigations abroad, but it is known the amount is considerable.
Despite the decrease in the volume of business and general receipts
throughout the customs service during the past fiscal year as the
result of the economic depression that prevailed during such period,
there continued to be a steady increase in the investigative activities.
This is evidenced by the.fact that during the fiscal year 1931 the
actual recoveries and penalties assessed as the result of these activities
aggregated $4,687,702 as compared with $2,633,158 for 1929, and
$2,486,410 for 1930. Further, on July 1, 1930, there were 1,720
pending cases to be investigated whUe on June 30, 1931, there were
2,022 pending cases, an increase of 302.
Miscellaneous
Carrying out the recommendations of the New York Port Improvement Committee, and utilizing the reports of the seven customs
officers who made experimental trips abroad in the summer of 1930,
much time and thought were given during the year to the preparation
of a new type of booklet of customs information for free distribution
to steamship passengers. Every effort was put forth to insure that
the completed publication would be as attractive as possible to the
average ocean traveler. The booklet was issued in January under
the title, ^'United States Customs Information for Passengers from
Overseas.'' It has been well received by the thousands of ocean
travelers who have adopted it as their guide in customs matters.
The bureau is also engaged on the preparation of a booldet for the
information of travelers entering the United States at border ports
from Canada and Mexico, which should be ready for distribution

SECRETARY OF THE TREASURY

185

late in the faU. There will also be issued at the same time a fourpage leaflet for ^'border travelers" which wUl present a condensed
statement of customs requirements and which is designed particularly for automobile tourists and others ordinarUy not having time
to read the more complete booklet. These two publications will
make available to those entering at border ports the same type of
information now avaUable to ^'overseas passengers."
A newly designed baggage stamp, distinctive in st3de and appearance, was engraved and printed at the Bureau of Engraving and
Printing and placed in use late in the calendar year 1930. It has
proven to be an outstanding aid in the constant endeavor to safeguard the revenue and discourage smuggling, and has received the
hearty approval of the customs officers in charge of baiggage examinations. It has been of particular value at the port of New York
where approximately 1,000,000 baggage stamps are used each year.

DISBURSING CLERK

The following is a summary of the work performed by the office of
the Disbursing Clerk during the fiscal year 1931:
Number
Disbursements:
Checks (salaries, expenses, supplies, etc.)
Cash (salaries)
Checks (refunding taxes illegally collected)
Total
Collections on account of rents, sales, etc
Vouchers paid
Schedules of claims for tax refunds
Appropriations under which disbursements were made.

334,061
198,960
144,739

$68,636,230.06
16, 732,468.45
68,684,411. 72

677, 760

153,953,110. 23

9,359
282, 769
6,798
612

821,844.13

The cash payments and the checks for salaries, expenses, supplies,
etc., cover disbursements for all bureaus and divisions of the Treasury
Department in the District of Columbia (except the Bureau of Engraving and Printing), and a large portion of the salaries and expenses
outside the District of Columbia under the Public Health Service,
Supervising Architect's Office, Bureau of Internal Revenue, Bureau
of Industrial Alcohol, Bureau of Narcotics, Federal Farm Loan Board,
the Comptroller of the Currency, Coast Guard, Secret Service Division, Bureau of Customs, and Public Debt Service.
Collections represent moneys received and accounted for on account
of rents of buildings and sites, sales of public property, etc., under
various bureaus and offices of the department.
186

BUREAU OF ENGRAVING AND PRINTING

Deliveries of all classes of work by the bureau during the year
amounted to 325,523,665 sheets, as compared with 338,541,969 sheets
for the previous year, a decrease of 13,018,304 sheets, or 3.84 per
cent. This difference represented a decrease of 13,366,098 sheets of
currency, bonds, notes, and certificates, and customs, revenue, and
postage stamps, and an increase of 347,794 sheets of miscellaneous
work.
A comparative statement of deliveries of finished wark in the fiscal
years 1930 and 1931 follows:
Deliveries of finished work during the fiscal years 1930 and 1931
Sheets
Face value, 1931

Classes
1930
Currency:
United States notes
Silver certificates.._
Gold certificates
National bank currency
Federal reserve notes
Total

. . . .

9,044,000
44, 722.000
5, 992, 000
_. 8, 576, 302^
20,342,137

6.162, 000
52,130,000
4, 458.000
- 3,999,998
14,853,144

$338, 328,000
625, 560,000
861,960, 000
394, 989,420
2, 325, 600, 000

88. 675, i S m

81, 603,142

4, 546,437,420

Bonds, notes, and certificates:
Pre-war bonds
Liberty bonds.
Treasury bonds.
Treasury notes
Treasury bills
Certificates of indebtedness
Insular bonds—
Philippine Islands
Porto Rican
Farm loan bonds
Certificates for farm loan bonds
Collateral trust debentures,
Philippine treasury certificates
Interim transfer certificates for postal savings
bonds
..
Interim certificates for Philippine Islands bonds
Interim certificates for Porto Rican bonds
Bonds evidencing indebtedness of foreign governments to the Government of the United
States
SpecimensLiberty bonds.
Treasury bonds
Treasury bills
_
Certificates of indebtedness
.
Insular b o n d s Philippine Islands
Porto Rican
.
Farm loan bonds
Certificates for farm loan bonds
Bonds evidencing indebtedness of foreign
governments to the Government of the
United States
_ .
Total

1931

16, 626
192,14m
3,750
3,850
6,464
93.200

12, 606V^
142, 693
393,277%
3,501
6,160
73,535

73,982,340
2,634, 517,400
3.105,177,400
420,000, 000
1,929,660,000
4,421,000,000

3, 250
3, 330^^
46, 201

1,521
7,9731^
222, 055H
2,600
6,940
1,056,000

1.521,000
4, 650, 000
91,976,100

17,167
1,898.600
1,000
2,126
4, 750

650

186

162

1
1
4
SH
6

1
2,292,667M2

256,600,000
2,640,000

5
2H

m
2
7^0
83/5

1
1,928,6111^0

12,941,724,240

187

188

REPORT ON THE FINANCES

Deliveries of finished work during the fiscal years 1930 and 1931—Continued
Sheets
Subjects, 1931

Classes
1930
Stamps:
60,000
Customs..
Internal r e v e n u e U n i t e d States
88,761,876i0H02
142,645
P h i l i p p i n e Islands
.. ..'.,^ .
533,900
Porto Rican
Virgin I s l a n d s _ «
..
. ..
24
Specimens, U n i t e d States
Postage145, 614, 762
U n i t e d States
3,556
U n i t e d States, surcharged " C a n a l Z o n e " . . .
34,368
C a n a l Zone
5,372
Philippine Islands
.
66
Specimens, U n i t e d States
2,8IOH0
P o s t a l savings s t a m p s
_
Total
Miscellaneous:
Checks
. . . .
Drafts
Warrants
Commissions
Certificates
. . .
Transportation requests
Liquor permits
_.
O t h e r miscellaneous
Blank paper . .
Specimens
Total
Grand total

2.35,159,3691^10

.:....
:.

7.191,206
10,762>^
60, 332
234,720
1, 731,499^^
199.987
2,848,900
136,939i8M80
60
96^
12,414,5031 Hso

1931

33,600
88,884,681^04
197,865
193,680
300
35

•

950,000

8,650,037,949
23,803,148
16,475,240
30,000
80

139,127,353
7,060
65,814
716,289
30%o
3,0071^

15,715,348,070
706. 000
6,809,040
71,613,650
3,045
300.760

229,229,61448^10

24, 486, 076,972

7,896.136

39,479,800

52,080
30,0451^
1,807,057
350,443
2.464,087^
157,6463^
4,750
52

251,400
33,895
7, 508,907
1.752, 215
10,402, 700
8, 246,905

12,762,296^

67,676,082

260

338,641,969359'! 630 325,623,66413^04

The surplus personnel, which had resulted from the adoption of
the small-size currency and the reduction in orders for certain classes
of work, was less on June 30,1931, than it was at the beginning of the
year. As explained in last year's report, this surplus personnel is
absorbed by a rotating furlough schedule, whereby all employees in
an overmanned unit take off a fixed number of days each month
without pay. The reduction of the surplus personnel is accomplished
by voluntary separations from the service. The furlough for the
various divisions ranged from one to five days a month, depending
upon the condition of the work in each division. In some groups
where the number of voluntary separations was heavy, it was necessary to discontinue the furlough. On June 30,1931, only three groups
were stiU subject to this program.
The average number of persons employed during the year was 4,567,
as compared with 4,741 during the previous fiscal year, a decrease of
174 persons, or 3.67 per cent.
The foUowing statement shows total deliveries made, total expenses,
and average number of employees engaged by the bureau since 1878:

SECRETARY OE THE TREASURY

189

Total deliveries, expenses, and average numher of employees, fiscal years 1878 to 1931
Average numFiscal ^Total number of sheets Expenditures
ber of emdelivered i
ployees
'
1878....
1879....
1880..1881....
1882....
1883....
1884-..1885....
1886....
1887....
1888....
1889...:
1890....
1891....
1892...1893—.
1894.-..
1895....
1896....
1897-—
1898-—
1899....
1900..-.
1901.-..
1902....
1903..-.
1904.-.-

13,098,756
21, 304,030
23,438,798
26, 017,661
31,112,484
33. 330,746
30, 205, 865
28,217, 706
26,655,496
32, 652, 207
38,040, 984
39,207,164
36, 512, 719
46, 390,381
62, 508,438
48,853, 628
55, 516,961
70,886,033
85,050, 595
86,174, 766
92,979,478
112,161,122
116.909.423
121. 558, 291
139,167,359
155, 743, 691
159,918,061

$538,861.33
814, 077.01
883,171.95
901,165. 26
936,757. 62
1,104,986.43
977, 301.85
965,195.47
763,207.84
794,477.90
948,995.83
932, 577. 78
1, 012,789.18
1, 265, 263. 29
1,316, 585. 89
1, 238,464. 36
1, 317, 389. 61
1,439, 265.94
1,469, 359.70
1,450,611.86
1.570,598.46
1,884,441.39
2, Oil, 702. 01
2, 393,494.26
2,967, 091. 74
3,136,477. 73
3,159,940.69

622
804
905
958
1,011
1.173
1.193
1,133
886
840
895
917
992
1,161
1,358
1,333
1,380
1,427
1,519
i,605
1,623
1,903
1,999
2,364
2,672
2.850
2,928

Fiscal

Average numTotal number of sheets Expenditures ber of emdelivered i
ployees

1906....
1906....
1907....
1908...1909-—
1910....
1911....
1912....
1913...1914
1915....
1916....
1917....
1918....
1919...1920-—
1921
1922—
1923....
1924-..
1925....
1926....
1927....
1928....
1929....
1930....
1931....

165,364,614
180, 289, 766
201,123,528
210.589,197
239,405,723
252, 710,864
262,806,113
262,434.739
287,192,192
280, 272,828
307, 634, 334
300, 711,800
343,345, 005
396,790,285
447,464,105
402, 7x1, 759
438, 694,824
416,820,113
411, 546,429
431,868, 658
464,869,695
482,307,106
490, 264,868
483,455,932
529, 742, 699
338, 541,969
325,523,665

3,292,217.06
3,355.186. 23
3,849,064.39
3.841,173.60
4, 355,935. 65
4 375,365. 57
4,180,284. 20
4, 319,246.57
4,449,726.22
4, 372.922.81
5, 039,204. 80
5,066,048.72
6, 324,118.70
9.086,303.90
11, 571,186.10
II, 854,171.45
13,965, 233. 57
10,812, 756.38
10,106, 320. 28
9,401,925. 68
10,041,457.46
10,483,674. 68
10,415, 742.42
9, 734,996.41
10,603,971. 77
9,806,803.11
9,426, 366. 29

3,002
3,084
3,437
3,672
3,977
3,964
3,814
3,899
3,920
3,932
4,119
4,048
4,221
6,214
7,508
6,912
7, 097
6,416
5,535
4,980
6,098
6,173
6,097
4,979
4,920
4,741
4,567

1 Beginning fiscal year 1930, currency expressed in 12-subject sheets.

There was expended during the year a total of $9,426,366.29, as
compared with $9,806,803.11 in 1930, a decrease of $380,436.82, or
3.87 per cent. A comparative statement of appropriations, receipts,
and expenditures for the fiscal years 1930 and 1931 follows:
Appropriations, receipts, and expenditures during the fiscal years 1930 and 1931
Decrease

1930
Appropriated by Congress:
Salaries
Compensation of employees
Plate printing
Materials and miscellaneous expenses
Reimbursements to appropriations from other bureaus
for work completed:
Compensation of employees
^
Plate printing...
Materials and miscellaneous expenses.._
Total—

Expended:
Salaries
.•
Compensation of employees
Plate printing
,
Materials and miscellaneous expenses 2.
Totals

Unexpended balance:
Salaries
Compensation of employees
Plate printing
_
Materials and miscellaneous expenses
Total

—

$584, 345. 00
3, 266,916.00
1,630,000.00
895,000.00

$6, 362, 315. 00

$13, 945. 00

2,025, 249. 20
650, 289. 02
1,030,022. 09

1 3,105, 774. 21

599, 786.10

10,081,820.31

9,468,089. 21

574, 749.16
5,274, 705. 82
2, 096,619. 82
1,860,728.31

9, 426, 366. 29

380,436. 82

9,806,803.11

9,426, 366. 29

380, 436. 82

9,696. 84
17,458. 38
183, 669. 20
64,293. 78

41, 722. 92

233, 294. 28

275,017. 20

41, 722. 92

233, 294. 28

1 An additional amount of $13,596.98, received from sale of by-products and useless property, was deposited
to the credit of the Treasurer of the United States as miscellaneous receipts.
2 Includes $15,000 in 1930 and 1931 transferred to Bureau of Standards for research work.
3 Includes $275,641.02 and $276,768.04 transferred to retirement fund in the fiscal years 1930 and 1931,
respectively.

190

REPORT ON T H E FINANCES

The foUowing is a statement of the percentage of spoUage, based
on the number of sheets delivered, since 1918:
1918
1919
1920
1921
1922
1923
1924

Per cent
4.63
6.48
5.44
7.39
6.63
7. 11
12.69
12.
69

Per cent

1925
1926
1927
1928
1929
1930
1931

.
.
.
.
.
.
.

6.80
3.70
2. 11
2.02
2.68
4.16
3.95

In addition to the regular work performed, orders for the engraving
of nine new classes of postage stamps were received, as follows:
General von Steuben, Battle of Braddock's Field, Pulaski, Yorktown,
Red Cross Commemoratives, postage due of 1930 series, PhUippine,
Harding l}^-cent new design, and 11-cent to 50-cent rotary. Designs
were prepared for an annual series of internal revenue stamps for
tobacco, snuff, cigars, and cigarettes as required by the act of March
3, 1931. Engravmgs were also made for new denominations of
Liberty loan bonds, viz: $5,000, $10,000, and $100,000 first 3K per
cent coupon, and $100,000 each first converted 4K per cent coupon
and fourth 4K per cent coupon.
The changing over of the old 25-cycle, 6,600-volt substation to 60cycle, 13,200 volts was completed during the year and all units of
the plant were in satisfactory operation during the last nine months.
The instaUation of automatically fed trimming machines was completed during the early part of the year. In addition to this installation, a new vault with a mezzanine floor, a new stock cage, a new shop
for machinists, and a new concrete floor were constructed. A central vacuum plant to supply suction to the trimming machines, as
well as to the wetting and sizing machines, was installed. In order
to provide space for sightseers to witness the operations in this section,
it was necessary to buUd an extension to the visitors' gaUery.
The experiments referred to in last year's report in connection with
an electrical drying machine for drying currency sheets as they come
from a flatbed power printing press were continued.
In order that the activities of the various machine shops might be
coordinated, plans were completed for the location of a new shop in
the basement of D wing in the main buUding. The plans provide
for the relocation of most of the machinery now used in the present
shop, the motorizing of aU belt-driven machines, the construction of a
new office and tool room, the purchase of some new equipment, and
the remodeling of the dressing rooms. On June 30,1931, the work was
progressing rapidly.
An exhaustive study of lighting conditions in the plant was in
progress at the end of the year. A number of installations of indirect

SECRETARY OE THE TREASURY

191

and semi-indirect lights have been made in various parts of the building in an effort to determine whether it is possible to improve the present Ughting arrangement.
In order to provide for an increase in the output of stamps, it was
necessary to purchase two new gumming machines. Specifications of
the new machines were prepared and the order was placed during the
latter part of the year. As the machines are specially designed and
buUt, they wUl not be ready for instaUation for several months.
The old machine, which lias been in use for a number of years, is
obsolete and inadequate for handling the output.
Among the important improvements accomplished during the year
were the transportation of currency sheets to, from, and within a
division on skids and Uft trucks; the trimming of Treasury bonds on
four sides, permitting automatic feeding for overprinting; the installation in the bindery of a new gluing machine and.wringer; the installation of humidifiers in the stock rooms where wetted paper for plate
printing is stored; the adoption of changes on rotary presses to reduce
the breakage of roll paper under tension; the installation of improved
motor generators for electric stops on currency-numbering presses;
and the installation of new guards for the main drive chain on numbering presses to prevent the notes from being damaged by comiag
in contact with the chain.
The studies and experiments for the enhancement of the value of
macerated pulp resulted in the adoption of a de-inking macerating
process. New equipment has been ordered and will be installed during the next year. The cost of operation, it is estimated, wiU be considerably less than the method now used, and the quality of the pulp,
it is believed, wUl be improved.
Considerable experimenting was done to *'break" the gum on
postage stamps in order to eliminate the curling of the stamps after
perforating. At least six devices were tried untU one was found
which, it is believed, has eliminated most of the curl. A greatly
reduced number of complaints seems to confirm the success of this
improvement.
The usual inventories of engraved plates and securities were taken
and in|each instance the auditors reported that the stock on hand
agreed with the records.
77532—32—15

COMMITTEE ON ENROLLMENT AND DISBARMENT OF ATTORNEYS
AND AGENTS

The Committee on Enrollment and Disbarment of Attorneys and
Agents, created by Department Circular No. 230, dated February 15,
1921, is responsible for the examination of applicants wishing to
practice as attorneys, agents, or other representatives before the
Treasury Department or offices thereof, and receives complaints,
conducts hearings, and makes inquiries concerning violations of the
regulations by enrolled practitioners. The conclusions of this committee in each case are submitted as recommendations to the Secretary of the Treasury.
During the fiscal year 1931, 2,250 applications for enrollment of
attorneys and agents were approved and 17 were disapproved.
Since the organization of the committee in 1921, 30,086 applications
have been approved and 473 disapproved. Some 8,600 persons were
enrolled prior to the organization of the committee and many of
them are now in active practice.
A large part of the committee's work arises from complaints filed
with the committee charging violations by enrolled practitioners of
the regulations governing practice before the department. All such
complaints are carefully investigated, and, if found sufficient to
warrant action, a formal complaint is prepared by the committee's
attorney, to which the respondent is required to answer under oath.
If the answer is accepted as satisfactory, the complaint is dismissed;
otherwise a formal hearing is held by the committee, at which the
respondent may appear in person and be represented by counsel. A
respondent in any such disbarment proceedings is entitled to a trial
according to '^due process of law"; therefore all such hearings before
the committee are conducted with practically the same formality
and under the same rules of law which apply to trials in civil actions.
After the hearing, the committee reports to the Secretary its finding
of facts, and if the complaint has been proven the committee recommends that the respondent be disbarred from further practice before
the department, suspended from practice for a definite period, or
reprimanded.
On June 30, 1930, complaints against 75 individuals were awaiting
final disposition. During the past year 56 new complaints were filed.
In nine cases the answer of the respondent was accepted as sufficient
and the complaint was dismissed by the Secretary. Formal hearings
192

SECRETARY OF THE TREASURY

193

on 42 complaints were held by the committee on 32 days, and of these
cases 23 were disposed of by action of the Secretary, as follows: In 1
case it was found that the charges were not proven and the complaint
was dismissed; in 22 cases the charges were found proven in whole or
in part, and the Secretary imposed the following penalties—6 practitioners were disbarred from further practice before the Treasury
Department, 3 were suspended from practice for various periods, and
13 were reprimanded. At the close of the year there were 99 cases
awaiting final disposition. Since the organization of the committee
in 1921, 90 practitioners have been disbarred, 100 have been suspended
for various periods, and 138 have been reprimanded.
In five cases the committee held formal hearings in connection
with applications for enrollment.
It is the policy of this committee to give an enrolled attorney or
agent opportunity to show cause why formal disbarment proceedings
should not be instituted against him; five such cases occurred during
the year.

FEDERAL FARM LOAN BUREAU
Operations of Federal land hanks
During the fiscal year 1931 the Federal land banks closed 12,809
loans amounting in the aggregate to $50,145,900. These brought
the total credit extended by these banks from organization to June
30, 1931, to 519,213 loans in an amount of $1,681,716,914.87. On
June 30, 1931, the net amount of mortgage loans outstanding was
$1,184,203,338.89 and the farm loan bonds of Federal land banks
outstanding, including $5,025 of bonds matured or called for redemption but not including $1,808,560 held by banks of issue, were
$1,179,007,805.
The combined capital stock of all Federal land banks on June 30,
1931, amounted to $66,204,473 of which $65,134,430 was owned by
national farm loan associations, $122,745 by borrowers through
agents, $345 by individual subscribers, $709,220 by individual subscribers through the Porto Rico branch, and $237,733 by the Federal
Government. This latter figure was decreased from $292,519,25
during the year through retirement in the manner provided by the
farm loan act. The 12 banks reported legal reserves totaling $13,297,707.81, and undivided profits of $3,P50,059.24. In addition
to the legal reserves, they had special reserves against real estate,
delinquent installments, etc., and other reserves aggregating $18,756,356.29.
National farm loan associations decreased in number from 4,659
to 4,653.
Only one change in the rates of interest charged by the banks
was made during the year. The Federal Land Bank of New Orleans,
on July 15, 1930, advanced its rate from 5K to 6 per cent. The
Federal Land Banks of Baltimore and Columbia continued their rate
of 6 per cent and the other nine banks made no change in their rate
of 5K per cent. Similarly, the Porto Rico branch of the Baltimore
bank maintained its rate of 6}^ per cent.
The following table shows the net mortgage loans and total assets,
together with principal liabUities of each Federal land bank, on June
30, 1931.
194

SECRETARY OF THE TREASURY

195

Principal assets and liabilities of Federal land banks on June SO, 1931
Name of bank

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

Total assets ^

..
.

$54,836,210
74,162, 537
68,142,015
129, 221,884
119, 251, 683
114, 295, 926
136, 202, 774
175, 690,153
94, 696, 792
162, 530, 345
55,011,210
108,152,858
1,292,194,386

Net mortgage
loans
$49, 669,088
67,820, 494
66,113, 973
121, 615,660
106, 631, 917
107,470, 718
116,428,759
167,834,873
89, 321,044
165, 619, 740
51, 263,192
94,523, 992
1,184,203,339

Bonds outstanding 8

Capital
stock

Reserves and
undivided
profits»

$60,000,260
67, 372, 620
62, 973, 340
117, 521, 360
109, 394,060
105, 678,060
125,617,260
160,066, 660
86, 647,340
146, 560. 440
60, 378, 220
96, 793, 260

$3,008,424
3,826,095
3,136,796
6,723,600
6,086,460
6,957,620
6,489, 440
9,183, 495
4,871,936
8,608,636
3,079,934
6, 334,040

$482,081
848,378
153,922
2, 684, 656
1, 278,907
768,669
1,087,108
2,866,033
1,288,671
i, 616,884
463, 799
6,069

1,179,002, 780

66,204,473

16,424,067

1 Total assets have been decreased by the amount of special reserves set up against particular assets.
2 Bonds on hand and bonds matured or called but not yet presented for payment are not included.
3 Special reserves set up against particular assets not included.

Operations of joint stock land banks
. During the fiscal year two joint stock land banks were chartered,
while the assets of a third were purchased and its liabilities assumed
by another joint stock land bank. One of the two charters was
granted in connection with the reorganization of the properties and
affairs of the Kansas City Joint Stock Land Bank, in receivership;
although the new bank was chartered on June 1, 1931, it did not begin
operations until July 1. .
Loans numbering 861 and amounting to $5,661,608.59 were made
by the joint stock land banks during the year, bringing the total
closed by these banks since organization to June 30, 1931, to 129,467
loans, in an amount of $896,816,417.25.
The combined capital stock of 49 joint stock land banks on June 30,
1931, as shown by reports submitted by them to the Farm Loan
Board, was $41,853,060.24. Legal reserves were $5,445,816.98, and
surplus paid in, surplus earned, and undivided profits were $7,090,415.50. In addition, they reported speicial reserves against real
estate, delinquent installments, etc., and other reserves totaling
$6,126,194.49. Seven joint stock land banks reported deficits aggregating $4,408,008.03. On June 30, 1931, the net amount of mortgage loans outstanding was $533,697,676.55 and the amount of farm
loan bonds of joint stock land banks outstanding was $532,561,300,
including $3,500 bonds matured or called for redemption but not
including $3,978,600 held by banks of issue. In addition, the three
banks in receivership had $34,474,849.99 of mortgage loans outstanding.
The aggregate amount of bonds of these three banks outstanding
on the respective dates on which they were placed in receivership
was $61,517,400.

196

REPORT ON THE FINANCES

The following table shows the total assets, net mortgage loans, and
principal liabUities of each bank as of June 30, 1931:
Principal assets and liabilities of joint stock land hanks on June 30, 1931 ^

Name and location of bank

Atlanta, Atlanta, Ga
Atlantic, Raleigh, N. C
Burlington, Burlington, Iowa
California, San Francisco, Calif
Chicago, Chicago, 111
Corn Belt, Taylorville, 111
Dallas, Dallas, Tex.
Denver, Denver, Colo
Des Moines, Des Moines, Iowa
First Carohnas, Columbia, S. C
First, Fort Wayne, Ind
_
First, Montgomery, Ala
J
First, New Orleans, La
First Texas, Houston, Tex
First Trust, Chicago, 111
Fletcher, Indianapolis, Ind
Fremont, Lincoln, Nebr—
Greenbrier, Lewisburg, W. Va
Greensboro, Greensboro, N . C
Illinois, Monticello, 111
Illinois Midwest, Edwardsville, 111
Indianapolis, Indianapolis, Ind
Iowa, Sioux City, Iowa
Kentucky, Lexington, Ky
LaFayette, LaFayette, Ind
Lincoln, Lincoln, Nebr
Louisville, Louisville, Ky
Maryland-Virginia, Baltimore, Md
Minneapolis-Trust, Minneapolis, Minn.
Mississippi, Memphis, Tenn
New York, Rochester, N. Y
North Carolina, Durham, N. C
Northwest, Portland, Oreg
Ohio-Pennsylvania, Cleveland, Ohio 0Oregon-Washington,. Portland, Oreg.--.
Pacific Coast, Portland, Oreg
Pacific Coast, Salt Lake City, Utah
Pacific Coast, San Francisco, Calif
Pennsylvania, Philadelphia, Pa
Potomac, Washington, D. C
St. Louis, St. Louis, Mo
San Antonio, San Antonio, Tex
--.
Southern Minnesota, Minneapolis,
Minn
Southwest, Little Rock, Ark
Tennessee, Memphis, Tenn
Union, Detroit, Mich
Union, Louisville, Ky
Union Trust, Indianapolis, Ind
-.
Virginia-Carolina, Elizabeth City, N. C.
Virginian, Charleston, W. Va
Total-.

Total

Net mortgage loans

Bonds outstanding 3

$5,310,000
13,955,600
3,163, 500
14, 200,000
45,396,600

Capital
stock

$350,000
907,500
250,000
916,000
4,000,000
250,000
2,431,200
1,184,800
1,160,000
786,000
400,000
660,000
250,000
650,000
4,600,000
750,000
850,000
250,000
250,000
460,000
360,000
260,000
500,000
660,000
300,000
2,711,400
600,000
250,000
450,000
350,000
800,000
700,000
87,160

$6,020,936
16,530,944
3,470,190
16,172,269
48,370,644
248,117
41,020,368
14,476,981
11,950,648
11,622, 534
8,425,061
9.062.833
4.044.834
7,687,725
71,620,367
16,631,359
8,960,887
2,511,046
5,031,573
7,181, 266
6,794,241
1,048,099
7,867,746
11,264,332
9,314, 258
35,990, 287
6,958, 782
2,712,507
4,888,666
4,401,401
13,420,061
14,812,107
105,195

$5, 208,684
14, 225,034
3,038, 584
15,128,116
40, 679,613
89,136
37,607,976
13,511,883
9, 536,248
9,040,266
7,635,766
8, 210,179
3,667,029
7,021,622
70,741,016
16,478,601
8,105,766
2, 276,013
4,495,035
6,873,646
6,363,471
930,050
7,083,579
10,152, 111
8,812,494
33,448,771
5,447,970
2,653,297
4,730,816
3,910,756
12,063,137
12,015,284
11,685

3, 260,176
7,787,224
4, 577,164
20,400,167
6, 524,703
6,189,406
20,088,077
18,760,110

2,844,743
7, 282,645
4,337,705
18,355,165
5,996,105
6, 684,997
17,300,192
17,842,694

2,786,000
6,894,000
4,063,000
16,814,000
5, 776,000
5,495,000
18, 791,000
16,594,000

250,000
450,000
300,000
1,400,000
418,500
400,000
1,430,000
1,226, 500

23,780,317
4,666,778
3,680,980
23,683,426
2,974,476
677,622
6,904,735
14,427,754

13,947,265
4,169,142
3,405,608
21, 273,614
2,575,967
556,637
6,155,833
13,086,846

21,416,700
4,141,100
3,281,000
20,824, 500
2,643,000
202,000
6,153, 500
12,634,400

3,000,000
285,000
250,000
1,370, 000
250,000
250,000
400,000
1,160,000

596,491, 245 533,697,677

36,420,000
12,178,500
11,179,000
10,435,600
7,427,200
8,192,000
3,623,000
6,814,000
65,133,000
14,592,800
7,634,600
2,161,600
4,487,000
6,538,000
6,188, 000
766, 600
6,896,400
10,374, 500
8,603,600
31,718,000
6,392,600
2, 271,600
4,064,000
3,835,000
11,928,000
13,280,000

532, 667,800 41,853,060

Surplus, reserves, and
undivided
profits *
$254,566
323,736
883
776,661

(*)
(»)

1,091,627
736,190

611,551
148,458
109,177
192,776
787,978
993,194
322,855
59, .610
178,067
116,427
90,012
20,999
352,564
42, 599
416, 286
957,934

160, 622
299,005
116,799
292,830
486,548
16, 521
80,601
268, 251
94,744
848,116
180,301
176,113
496,079

(«)
41,029
86,639
698, 291
33,690
112,116
232,067
381,928
13,476,340

1 Joint stock land banks in receivership not included.
2 Total assets have been decreased by the amount of special reserves set up against particular assets,
a Bonds on hand and bonds matured or called but not yet presented for payment not included.
* Special reserves set up against particular assets not included.
8 These banks had deficits as follows: Chicago, $1,753,159; Corn Belt, $1,883; Des Moines, $693,349; First
Carolinas, $177,691; Louisville, $32,401; St. Louis, $469,838; Southern Minnesota, $1,279,686.
8 Merged with Union Joint Stock Land Bank of Detroit at the close of business June 30,1931.

Operations of Federal intermediate credit banks
During the fiscal year these banks made loans to cooperative
marketing associations, including renewals, of $151,828,288.79. These
amounts brought the total loans from organization to June 30, 1931,

197

SECRETARY OF THE TREASURY

to $655,363,842.67. The loans outstanding on that date were
$57,535,035.16.
Discounts, including renewals, during the year amounted to
$119,947,571.29, bringing the total from date of organization to June
30, 1931, to $608,149,954.40. The total discounts outstanding on that
date were $79,205,948.54.
Under the law, 50 per cent of the net earnings of the Federal intermediate credit banks each year must be paid into the Treasury as a
franchise tax. The amount of net earnings for the calendar year 1930,
after providing reserves for contingencies of $1,335,728.10, was
$147,208.10, and the amount of franchise tax paid into the Treasury
was $73,604.04. This compares with earnings of $344,461.12, after
deducting reserves of $1,035,096.17 and a franchise tax of $172,230.57
during the calendar year 1929.
On June 30, 1931, the surplus, reserves, and undivided profits of
11 banks aggregated $4,612,092.47. The remaining bank had a
deficit of $639,251.96, as compared with a deficit of $715,281.92 at the
close of the preceding fiscal year.
The loan and discount rates charged by each bank at the beginning
and end of the year, and the changes made during that period are
shown in the table following:
Loan and discount rates of Federal intermediate credit banks during f iscal year 1931
Changed to—

Changed to—
June 30,
1930

Name of bank

Springfield:
Loans
_
Discounts
Baltimore:
Loans—
Discounts
Porto Rico: Discounts
Columbia:
Loans
Discounts . . .
Louisville:
Loans
Discounts
New Orleans:
Loans
i
Discounts . . .
St. Louis:
Loans
.
Discounts
St. Paul:
Loans
Discounts
Omaha:
Loans
Discounts
Wichita:
Loans
Discounts
Houston:
Loans
-Discounts......
Berkeley:
Loans
Discounts
Spokane:
Loans...
Discounts
.

P.ct.
4
4

-. -

_ -

Date

Rate

P.ct.
SH June 15
SH ...do

Date

P.ct.

June 30,
1931

P.ct.
SH
SH

4H
4H
5

July
...do
—do

SH June 15
SH ...do

SH
SH
4

4M
4M

SH June 16
SH

SH
SH

4K
i'A

—do
—do
July 16
...do.—

...do
ti ...do

SH
SH

iH
iH

July
—do

4H
4H

—do
—do
Sept. 15
—do

Rate

i'A
iA
5
5
iA
iA.

%
. .
4H

—do
—do
July
—do

—do
...do
July 15
...do
...do
...do

-^^

4.
4
15
.do-...
ti -June

SH
SH

SH - . d o
-.do
SH - . d o
sy, - . d o
SH . . . d o . - . SH —do

SH
SH

SH —do
SH —do

SH
SH

sy,

M
SH
SH

4
4
4
4

198

REPORT ON THE FINANCES

The following table shows the total assets, loans, and discounts, and
the principal liabiUties of each Federal intermediate credit bank as of
June 30, 1931:
Principal assets and liabilities of Federal intermediate credit banks on June SO, 1931

Name of bank

Total assets

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

$16,082,637
8,732,979
12,097, 646
8,153, 659
16,433, 528
15, 744,007
13, 504, 216
13, 541, 358
10,961, 263
24, 227, 635
17,157,017

Total..

172,963,820

16, 327,875

Loans and
discounts

6,198,610
11,889,808
4, 607,490
12,436, 027
12,304,909
10, 242,114
10, 317, 504
7,887, 033
20, 636,847
16,657,837
12,764,144
136,740,983

Debentures
outstanding

$10,460,000
3,250,000
7,625,000
2,650, 000
10,760,000
10, 000, 000
7, 800,000
7,900,000
5,400,000
18, 200,000
11, 550,000
10,625, 000
106,200,000

Capital
stock

$5,000,000
5,000,000
6,000,000
.5,000,000
6,000,000
5,000,000
6,000,000
5,000,000
5,000,000
5,000,000
6, 000,000
6,000,000

$454,298
451,688

8 60,000,000

4,612,092

1 Debentures held by banks of issue and debentures matured are not included.
2 Deficit of $639,251.96.
8 $30,000,000 paid in, and $30,000,000 callable from the United States Treasury.

Surplus, reserves, and
undivided
profits

452,908
377,384
355,151
489,195
481,451
614, 323
663,651
372,043

SECTION OF FINANCIAL AND ECONOMIC RESEARCH •

The section performs a combined research, editorial, and service
function for the Treasury, largely in the field of finance. Upon
request or on the initiative of the section, studies and investigations
in taxation, public debt, and other subjects in or related to the field
of public finance are conducted. These projects, the results of which
are for the most part for confidential use within the department, are
undertaken with a view to providing information for the use of
Treasury officials in formulating the policies of the department and
in improvuig Treasury methods and records. Information on business and financial developments is made available currently to
Treasury officials.
The specific tasks performed during the year were as follows:
(1) The customary estimates of tax receipts for the two succeeding
fiscal years were prepared. These, together with forecasts of other
Treasury agencies, were the basis of the Treasury's regular estimates
of Federal revenue.
(2) Under the general supervision of the Under Secretary of the
Treasury, the Annual Report of the Secretary of the Treasury for
1930 was outlined, assembled, edited, and indexed, a considerable
part of the material in the body of the report being prepared in the
section.
(3) The section also assisted in editing Statistics of Income
compUed from income tax returns for 1929, published by the Bureau
of Internal Revenue, and in editing and revising several other publications of the Treasury.
(4) Articles discussing various phases of public finance appearing
in periodicals, encyclopedias, etc., under Treasury authorization,
together with material for public use by Treasury officials, were
prepared in part or in whole in the section.
(5) The financial, economic, and bibliographical information service to Members of Congress and to the general public was continued,
and a diversified correspondence, dealing with problems of public and
general finance, was conducted.
(6) During the sessions of Congress a digest of the progress of
financial and other economic legislation was made and distributed
daUy.

199

200

REPORT ON THE FINANCES

For administrative reasons the office of Government Actuary was
transferred to the Section of Financial and Economic Research duruig
the year. The duties of the Government Actuary include (1) the
recording of daily market prices of all outstanding Government
securities and the calculation and publication of yields of United
States bonds and the calculation of yields of all other United States
securities; (2) collaboration in the estimating of Federal revenues;
(3) the making of monthly estimates of the population of the United
States; and (4) service on the Board of Government Actuaries in
connection with the civU service retirement law. Under the new
arrangement the Government Actuary, in addition, participates in
the general work of the section.

GENERAL SUPPLY COMMITTEE

Activities
The transactions of the General Supply Committee during the last
three fiscal years are shown in the following summary:
Summary of transactions of the General Supply Committee for the fiscal years 1929,
1930, and 1931.

Purchases from General Supply Committee contractors
Receipts from disposition of surplus
property:
Auction sales
Contract sales
Transfers to Government activities.
Total
Grand total

1929

1930

1931

1931 compared
with 1930, increase (-f) or
decrease (—)

$9,299,289.41

$11,869,481.61

$13,678,196.22

-f$l, 808,713.71

46,323.47
90,329.12
16,804.39

43,601.04
134, 653. 66
16, 607.98

28,158.12
90,663.35
24,379. 64

-15,442.92
—43,900.20
-f 8,871.66

153,456.98

193,662.67

143,191.11

—50,471.46

9,452,746.39

12,063,144.08

13,821,386.33

-f 1,768,242.26

The following tables show, by classes, the value of the purchases
reported by the various Government departments and estabhshments
under contracts negotiated by the Secretary of the Treasury through
the General Supply Committee during the fiscal years 1927 to 1931,
and the number of specifications mailed, bids and samples received,
contracts entered into, and items on which awards and no awards
were made during the fiscal year 1931:
Value of purchases reported hy executive departments under contracts negotiated hy
the Secretary of the Treasury through the General Supply Committee for the fiscal
years 1927 to 1931, hy classes
Class No. 1
1
2
3
4
5
6
7 8
9 10
11
12
13
14
15
16
17 18
19 20
21

1927
_

_
-

Total

1928

1929

1930

1931

$1,061,239.13
159,282.16
227,621.29
82,147.46
82,866.60
245,273.92
319,628.68
258,115. 25
985, 528. 50
518,680. 39
119,322. 63
324,734.73
3,946. 66
17,198.46
742, 668. 22
1,698. 92
485,966.53
. 930, 583.00
462,719.66
477,80L43

$869,388.99
245, 242.94
260,920. 31
90,996.39
87,355.32
297,926.12
349,708.43
396,045.01
953,572.00
733,671. 30
139,800.60
287,500.93
3,144,17
25,270. 63
740,061.64
972.47
1,041,051.47
1,158,713. 99
.639,039.86
615,416.93

$1,093,098.34
359,502. 36
432,863.78
166, 371. 37
126,069.69
408,281.44
459,862.27
408,543.81
1,157,423.72
823,467.41
227,388.86
370,126. 38
3,887.27
22,892.21
805,192. 50
669.62
387,604.58
996,039.78
528,493. 58
603, 256.92
18,353.62

$1,362,880.04
354,009. 77
431,402.76
207,586.93
125, 571. 73
373,224. 34
490,798.61
638, 572.00
1,636,752. 64
1,013,956. 79
161,432. 33
413,913.64
3,060.14
23,951.29
949,410.13
644.90
533,659.69
1,962,665.09
716,759.36
659,125.25
10,104,08

$2,017,222.65
635,290. 33
619,733.83
158,546.38
196,500.45
745,682.28
503,115.46
495,811, 21
1,850,672.24
1,077, ^ 5 . 69
274,447.17
391,668.09
2,824.46
33,945.60
856,376. 68
712.84
652, 534. 59
2,038,759. 04
578, 002.95
623,979.83
24,843.45

7,606,923.41

8,835,799.40

9,299,289.41

11,869,481.51

13,678,195.22

1 See titles of classes on p. 202.

201

202

REPORT ON T H E FINANCES

Number of specifications mailed by the General Supply Committee, bids received,
contracts entered into, items on which awards and no awards were made, and samples
received and retained during the fiscal year 1931, by classes
Sets of
specificaBids
tions
received
mailed

Class No.i

1
2
3- 4
5
6
7
8
9
10
11
12
13 . .
14
15
16
17
18
19
20
21

-—
-

. . . .

Total

1,004
450
864
175
208
287
201
403
361
2,650
160
130
45
9
18
5
480
121

Contracts
Samples
received

5,733
1,415
2,354
109
1,193
694
152
508
565
4,723
10
275
55

337
196
265
95
149
148
89
106
112
653
41
62
10
3
17
1
90
80
1
1
10

7,622

2,466

18,667

366
67
348

Number
180
84
135
44
56
81
43
66
39 .
401
28
47
7
3
3
1
54
51
1
1
8
1,333

Award
items
2,224
2,654
2,483
934
1,178
1,783
938
731
1,485
1,024
645
2,024
39"
28
129
51
203
1,624
48
134
92
20,451

Samples
retained

No award
items

1,229
408
411
16
357
132
45
107
257'
1,000
5
84
27

90
152
76
73
120
102
104
16
55
150
8
74
5
1

105
56

5
4
15

4,296

1,055

I Class No.—
1. stationery, paper and paper articles, drafting supplies, and school supplies.
2. Hardware, metals, brief cases, hand bags, leather goods, and shoe findings.
3. Dry goods, flags,, wearing apparel, boots, shoes, slippers, window shades, and cordage.
4. Drugs, medicines, and chemicals.
5. Laboratory apparatus, hospital appliances, and surgical instruments.
6. Electrical, engineering, and plumbing supplies.
7. Lumber, millwork, excelsior, sawdust, packing boxes, building materials, slag, stone, and
asphalt, oil, and tar for road building.
8. Brushes, glass, lubricantSj fuel oils, paints, and painters' supplies.
9. Furniture and floor covermgs.
10. Groceries, provisions, cleaner, floor machines and vacuum cleaners, floor wax, polish, scouring
compound, soaps, soap dispensers, meat, fish, lard, oleomargarine, and household supplies.
11. Feed, forage, and seed,
12. Photographic supplies, meteorological apparatus, microscopes, surveying instruments, and meatinspection supplies.
13. Engraving, printing, and lithographic supplies (excluding supplies for the Government Printing
Office and the Bureau of Engraving and Printing).
14. Ice.
16. Incandescent electric lamps.
16. Incandescent gas-lamp supplies.
17. Automobile and motor-cycle accessories, motor cycles, tires and tubes.
18. Computing, addressing, dictating, duplicating, folding, sealing machines; labor-saving devices;
typewriting machines, exchange allowances, repair parts, and equipment.
19. Electric service.
20. Telephone service.
21. Athletic supplies and playground equipment.
NOTE.—The value of purchases, by classes, for earlier years is shown in the following reports: 1913 to
1918, in 1921 report, p, 488; 1919 to 1925, in 1928 report, p. 234; 1926, in 1930 report, p. 199.

203

SECRETARY OF THE TREASURY

The value of the surplus property received from and issued to the
various Government departments and establishments during the
fiscal year is shown in the following table:
Surplus property received and issued by the General Supply Committee, by departments and establishments, during the fiscal year 1931
Issues
Department or establishment

Balance on hand.
Agriculture Department
Alien Property Custodian
American Battle Monument Commission
Columbia Institution for the Deaf
Commerce Department
District of Columbia.Federal Farm Board
Federal Trade Commission
.Federal Power Commission
General Accounting Office
-—
House of Representatives
Interior Department. _
Interstate Commerce Commission
Justice Department
Labor Department
.^
Library of Congress
Mississippi River Commission
National Advisory Committee for Aeronautics.
National Guard, District of Columbia
National Training School for Boys
Navy Department
Panama Canal
Post Office Department
Public Buildings and Public Parks
Smithsonian Institution
State Department
Treasury Department
U. S. Bureau of Efficiency
U, S. Civil Service Commission
U, S, Employees' Compensation Commission...
U. S. Marine Corps
U. S. Railroad Administration
U, S. Senate
U, S. Shipping Board
U. S. Tariff Commission
U, S. Veterans' Bureau
WarDepartment
Total...-

Costi

Charge 2

$3,081.95

$2, 627. 60

Serviceable Unserviceproperty able propfor reissue erty, JQUk
$12,534.12

20.00
30.00
387.99
231. 74
70.80
358.40

20.
22.
2, 273.
4,155.
65.
268.

• 800.00
131.76
[, 794.85
767. 85
1,018.12
291.83
45.00
1.37
. 8.81
170. 00
208. 52
125. 50
57.12
284.79
542.17
105. 60
868. 82
;, 091.37
11.50
39.88

800.
131,
1,392.
565.
2,941.
242.
45.

54.00

222. 50
4,125. 34

85, 682. 63

6, 071.13

14, 055.90
255.47
48.89
87.41

40. 50
'i23.'00"

97.00
., 241.18
587, 69

72.75
1, 202.97
565. 23

12,997.11
16, 019. 81
64.55
235. 96
29.02

265. 00

4.40
127. 50
208. 52
80.75
50.62
185. 79
528.49
79.12
854. 66
4, 669. 07
11.50
22.44

'i23.'00'

26,648.50

135. 50

$1,073. 06
71,209.73
1,105. 40

'i,'7i6.'89
1, 542. 50

6,557. 76

2,920.00

3, 391. 63
20,772. 61

24, 379. 64 103, 079. 75

160,04.0.17

1 Original cost of surplus property as shown by transfer invoices from departments,
2 Transfer price of surplus property issued to departments.

Recapitulation of surplus property stores account of the General Supply Committee
for the fiscal year 1931
iBalance of stores as of June 30, 1930
Transferred to the General Supply Committee during the fiscal year
.1931
Total
.
Net sales to departments and establishments
^
Discounts allowed on above
Net proceeds from auction sales
Reimbursements to departments and expense account of auction
sales
Difference between invoiced value and proceeds from auction sales.
Balance on hand June 30, 1931
Net decrease in stores during the fiscal year 1931.

$13, 607. 18
249, 512. 74
263, 119. 92
24, 379. 64
2, 268. 86
15, 520. 92
12, 637. 20
144, 519. 25
63, 119. 92
263,119.92
192, 870. 38

204

REPORT ON THE FINANCES

General supply fund
Under the provisions of the act of February 27, 1929 (45 Stat., 1341)
and the act of March 26,1930 (Public No. 78, 71st Cong.), the General
Supply Committee is authorized and directed to purchase or procure
and distribute supplies to meet the consolidated requirements of the
executive departments and independent establishments of the Federal
Government in Washington, D. C , of the municipal government of
the District of Columbia, and of the field services when request is
made by the head thereof. These supplies are paid for by the General
Supply Committee out of a revolving fund and collections therefor are
made from the departments and deposited in the general supply
fund.
Statement of assets, liabilities, and operating expenses of the general supply fund
for the fiscal year 1931
Total supplies purchased
$1, 255, 834. 57
Total supplies issued
1, 252, 716. 53
Actual inventory as of June 30, 1931
$3, 118. 04
Total service charge and cash discounts as a result of above transactions:
Surcharge 5 per cent—local deliveries
$35,549.51
Surcharge 1 per cent—field deliveries __
^_
5, 661. 24
Purchase discounts
4, 173. 69
45, 384. 44
Operating expenses:
Salaries and wages
42,612.85
Truck maintenance
2,329.78
Inspection and breakage
226. 61
Inventory adjustments
1, 168. 45
46, 337. 69
Net loss__._
953.25
General supply fund balance sheet, June 30, 1931
Treasury cash__
Disbursing officer's cash
Accounts receivable.
Invoices receivable
Inventory—stores
Total a s s e t s . . .
Unpaid audited vouchers
Unvouchered invoices payable

^
;
.

General fund revenues
Net loss
Amount to be covered as miscellaneous receipts
Unencumbered capital
Unliquidated capital encumbrances._1
Capital reimbursable
Total liabilities and capital

$157, 864. 71
. 48,442.67
79,122.75
125,601.28
3, 118. 04
.... $414,149.45
3, 648. 88
66,511.19
70, 160. 07
44, 942. 63
953. 25
43, 989. 38
292, 214. 56
4,667.40
3,118.04
:
300, 000. 00
414, 149. 45

BUREAU OF INDUSTRIAL ALCOHOL

Organization and procedure
On July 1, 1930, the Bureau of Prohibition of the Treasury Department was terminated by the prohibition reorganization act, approved
May 27, 1930, and was succeeded by the Bureau of Industrial Alcohol
in the Treasury Department and the Bureau of. Prohibition in the
Department of Justice. The duties incident to the enforcement of
the penal provisions of the national prohibition act were transferred
to the Attorney General, and the Treasury Department retained
jurisdiction over the administration of the permissive provisions of
the act. Under the terms of the act to create in the Treasury Department a Bureau of Narcotics, approved June 14, 1930, the enforcement
of the narcotic laws was separated from the Bureau of Prohibition
and a Bureau of Narcotics created to take over these activities on
July 1, 1930.
The act by which the Bureau of Industrial Alcohol was created
mentioned only one statutory position in the bureau, namely, that of
Commissioner of Industrial Alcohol. With the approval of the
Secretary of the Treasury, the position of assistant commissioner was
established, and in lieu of deputy commissioner the position of special
assistant to the commissioner was created. Various adjustments were
made throughout the bureau, both in organization and personnel,
following the transfer of prohibition enforcement and narcotic w^ork
to other bureaus. The position of chief clerk was changed to that
of chief, administrative division, under which were organized an
appointment section, accounts section, supply section, mail section and
messenger service. The statistical section was abolished as such and
the work merged with that of the public relations and information
section. The former law division was designated the office of the chief
counsel. The industrial alcohol section was designated plants and
alcohol section, and the bonded accounts subdivision was organized in
three sections—alcohol,-wine, and distUled spirits. The field office
inspection and special inspection sections were abolished and the field
inspection section organized under the supervision of a field inspector
in charge. This section was made responsible for aU types of inspections relating to personnel, accounts, supplies, automobiles, law, and
permit admuiistration in general. Certain necessary reductions in
the personnel of some sections, particularly the administrative
division, were effected, and the small surplus absorbed by the technical

205

206

REPORT ON THE FINANCES

division, particularly the bonded accounts subdivision where additional personnel was needed.
Twelve district field ofl&ces were set up for the issuance of permits.
The territory covered by several of the field ofllces will also be served
by one or more branch ofiices. Districts are in charge of supervisors
of permits and branch offices are in charge of assistant supervisors of
permits.
Each district and branch office in the continental United States has
been periodicaUy examined during the past year. Permit-renewal
procedure has been so standardized in all districts as to eliminate the
need for temporary employees to take care of this extra work. The
procedure relative to the issuance of original basic permits, covering
in aU 17 groups of permits, has been standardized and new forms for
making inspection reports on applications for original basic permits
are now in use in aU districts.
Standard instructions respecting the assignment of inspectors on
different types of inspection work were likewise issued to the field.
Procedure charts, covering distUled spirits, wine, alcohol, and denatured alcohol, showing exactly what forms are used in all phases of
operations, including companion reference charts to governing laws
and regulations, have been prepared and issued for purposes of information and standardization, to both bureau and field personnel engaged on bonded accounts work. In order to facilitate prompt
destruction of prohibition enforcement samples after cases have been
closed, arrangements have been made with the Bureau of Prohibition,
Department of Justice, whereby the field laboratories are notified
through the prohibition field offices whenever cases involving samples
have been closed.
Field inspection manuals pertaining to disbursements and accounts,
and automobUe maintenance and operation, have been completed.
The manual for field inspectors (personnel) is being thoroughly reviewed prior to reissue. The manual for field inspectors (administrative) pertaining to detailed operations in the various district and
branch offices, has likewise been revised and is being given final study
prior to issuance. The manual describing the technical operations of
cereal beverage plants and proper methods of inspection has been
practically completed, subject to final review and issuance.
A new form of permit was devised during the year for doctors,
dentists, and other professional classes. Heretofore this class of permits was issued on the same form as that for druggists, manufacturers, etc. All unnecessary details were eliminated from the new
form. The use of this form is resulting in a considerable saving of time
and labor. Approximately 60 per cent of the permits issued by this
bureau are of the professional class.

SECRETARY OF THE TREASURY

207

All basic permits under the national prohibition act are renewable
annually on January 1. The reissuance of this large number of permits, approximately 177,000 for 1931, at one time each year, converges
the clerical and inspection activities of the bureau to a considerable
peak during the last months of the year. Heretofore, a number of
temporary employees were required in order to issue these permits on
time. During the present year the importance of economical administration was impressed upon all officers of the bureau and as a result
the issuance of annual permits is being accomplished without temporary employees.
In accordance with the provisions of the prohibition reorganization
act of May 27, 1930, joint regulations relating to permits issued by
the Bureau of Industrial Alcohol were signed by the Secretary of the
Treasury and the Attorney General and became effective on April 1,
1931. The new regulations set up administrative machinery for the
joint consideration of applications by the Treasury Department and
the Department of Justice where substantial quantities of industrial
alcohol are involved. The applications of doctors and druggists for
small quantities of permitted liquors, and a few other classes of applications of minor importance, are generally not subject to joint action
of the two departments. If the field officers in the administrative
districts disagree upon a pending application, the case may be referred
to the two bureaus in Washington for decision.
Under the new classifications set up for permits, physicians constitute one class and dentists, veterinarians, optometrists, osteopaths,
chiropractors, chiropodists, and spineologists another class. Provivision is made for physicians and dentists to obtain necessary quantities of alcohol for use in their professional work, and not to exceed six
quarts of liquor a year for administration to patients in their practice.
The regulations further provide that on satisfactory showing the
Commissioner of Industrial Alcohol may reconsider the action taken
in cases of revocation of permits by supervisors of permits in the 12
field districts.
The regulations also prescribe rules for the production and denaturation of alcohol and the use of industrial alcohol in numerous and
varied products and processes.
The public relations and information section during the past year
prepared for dissemination to the public in the form of printed publications a series of factual manuscripts relating to the organization,
functions, and activities of the bureau. The subject matter deals
with permit procedure, policy, and problems relating to denaturation,
the uses of alcohol, methods of permit control, and other related
material. These publications are designed to promote better understanding of the public in matters relating to permit control. They
77532—32—16

208

REPORT ON THE FINANCES

are intended particularly to be helpful to the business public, including more than 177,000 individuals and firms directly affected in their
business|itransactions by bureau supervision. They also will serve
the purpose of answering frequent inquiries for information that
reach the bureau at Washington and the supervisors of permits in
the 12 regional districts throughout the country.
Much research work was done in buUding up factual data for
possible publication and other official uses. Statistical work of
varied character for different bureau uses was another phase of
the clerical work.
The section of public relations has served as a contact between
the bureau and the public, particularly with representatives of the
press and of technical and trade publications. Special statements
and articles of a special character, dealing with the Government's
relationship with chemical industries using alcohol for commercial
purposes, were prepared from time to time. Progress was made in
revising and expanding mailing lists to include constituent members
of chemical and allied trade groups interested in publications issued
by the bureau.
Activities
The technical division conducts the chemical work of the Bureau
of Industrial Alcohol as well as the work of this character for the Bureau
of Prohibition, Bureau of Narcotics, and the Bureau of Internal
Revenue. I t supervises generally the activities of the chemical laboratories of the Bureau of Industrial Alcohol in the field. I t also has
supervision of work relating to the provisions of Title I I I of the national
prohibition act and regulations issued pursuant thereto, and conducts
work relating to the permissive use of intoxicating liquors under
Title I I of the national prohibition act. Certain features of the
general internal revenue laws relating to bonded warehouses and other
miscellaneous items are also administered. This division is also
charged with the work in connection with the concentration of distilled spirits in accordance with the provisions of the act of February
17, 1922.
All formulas involving the use of tax-paid intoxicating liquors are
examined and recommendation made to the supervisors of permits
regarding the issuance of permits authorizing the procurement and
use of these liquors. The character of the formulas examined varies
greatly, and includes all articles in which there is incorporated any
tax-paid intoxicating liquor. Medicinal preparations, food products,
and sirups form the major classifications considered.
The centralization of all technical inquiries concerning the use of
any intoxicating Uquor has been deemed necessary in order to maintain uniform control over the articles in which such spirits are used.

SECRETARY OF THE TREASURY

209

This work is assigned the nonbeverage section, while the basic permits"
are issued by the various field offices.
The work of the field laboratories has increased both in the number
of samples examined and in the importance of the character of the
chemical work. During the past fiscal year 131,074 samples were
received and examined in the field laboratories, an increase of approximately 4,000 samples over the number received and examined during
the fiscal year 1930. All private formulas for preparations that are
to be manufactured with alcohol are examined and passed upon in
the technical division in Washington, but the field laboratories are
continuing to do an increased amount of check analyses for the field
officers.
These check analyses are to determine whether products manufactured by permittees conform to the formulas approved in Washington, thus enabhng the field laboratories to furnish testimony, if
necessary, in permit revocation proceedings. This relieves the
Washington laboratory of that phase of the work and reduces the
expenditure for travel expenses of chemists attending revocation proceedings at points outside of Washington. The number of samples
examined in the main laboratory at Washington decreased approximately 20 per cent over the number examined during the fiscal year
1930, due to the fact that the Washington laboratory examines very
few enforcement samples and devotes practically its entire time to
research and technical matters involving the manufacture of alcohol
and alcoholic preparations under permits. The formulas for all
preparations and processes using pure or denatured alcohol are submitted to the Technical Division for review and approval before
permits are issued for the withdrawal of alcohol. This work makes
it necessary for the employees of the technical division to be familiar
with all preparations and processes in which pure or denatured alcohol
is used.
In the study of the modification of the formulas for specially denatured alcohol, which is of greatest importance to both industry
and the enforcement of the* national prohibition act, substantial
and important results are continuing to be obtained in eliminating
weaker formulas from certain lines of industry, thus reducing diversion and assisting the legitimate industry to secure denatured
alcohol better adapted to its needs. Research work is being conducted with the hope of further strengthening the specially denatured
alcohol formulas with the view not only of safeguarding the alcohol
but also for the purpose of making these formulas more adaptable
for use in the arts and industries. The policy of exercising extreme
care in approving preparations manufactured with specially denatured alcohol has reduced to a minimum the illegal distillation of

210

REPORT ON THE FINAlsrCES

alcohol preparations for the purpose of obtaining potable alcohol
for bootleg purposes. Preparations which are susceptible of yielding potable alcohol by simple distUlation or manipulation are disapproved, and the addition of bona fide essential oils or ingredients
that can not be eliminated by simple distillation or manipulation
are required. The use of calol ethatate, a denaturant for ethyl
acetate developed by the technical division over a year ago, has effectually prevented the diversion of ethyl acetate for illegal purposes.
The bureau adopted a new policy when on January 1, 1931, it
eliminated the use of wood alcohol in completely denatured alcohol
which was available to the public without restriction. It revoked
completely denatured alcohol Formula No. 1 and revised completely
denatured alcohol Formula No. 5 by replacing wood alcohol with
alcotate, a new denaturant developed in the laboratory at Washington after several months of research work. Alcotate is a nontoxic
denaturant obtained by treating distillates from certain crude petroleum oils found only in California. During the latter part of June
completely denatured alcohol Formula No. 5 was again revised and
strengthened by requiring the addition of denaturing grade isopropanol and alpha terpineol as additional denaturants. Denaturing
grade isopropanol is crude isopropyl alcohol produced synthetically
from gases. Alpha terpineol is a natural constituent of oil of pine.
The use of these two additional denaturants with alcotate and aldehol
in completely denatured alcohol Formula No. 5 renders the alcohol
totally unfit for use as a beverage and impracticable for illegal manipulation for the purpose of recovering potable alcohol. These
denaturants, developed after considerable research and study, are
nontoxic.
The chemists in the Washington and field laboratories spent
3,138 days in attending court proceedings and revocation hearings,
while 346 days were spent in special investigations and inspections
where technical knowledge was essential.
The chemists both in the field and in Washington are being used
more and more by administrative officers in investigating and inspecting permittees where technical knowledge is valuable. Practically the entire time of one chemist in the Washington laboratory is
occupied as liaison officer between the bureau and the trade using
industrial alcohol, so that the permissive features of Title III can
be administered in a manner that will not hamper legitimate industry;
This policy of using the technically trained "men of the bureau in this
manner has been one. of the factors in reducing the quantity of industrial alcohol diverted to beverage purposes and in preventing the
issuance of permits to applicants who were not qualified to carry on
chemical or technical operations.

211

SECRETARY OF THE TREASURY

The policy of limiting the production of industrial alcohol to the
actual needs of legitimate industry, initiated January 1, 1928, has
continued to be successful. Each industrial alcohol plant is allotted
a fixed quota of the total alcohol to be produced with a provision
that only 40 per cent of the total quota for the year could be produced
during the first six months of the calendar year, provided that
legitimate industries do not require an excess of that quantity.
In the following statement comparison is made of the production
and withdrawals of alcohol, denatured alcohol, other distilled spirits,
and wines during the fiscal years 1930 and 1931, together with other
related information.
Comparative figures pertaining to the production of alcohol, denatured alcohol, other
distilled spirits and wines during the fiscal years 1930 and 1931
1930

1931

Increase (+) or
decrease (—)

191,859, 342. 42 166, 014, 346.15 -25,844,996. 27
Alcohol produced (proof gaUons)
Alcohol withdrawn, tax paid (proof gallons)
8, 250, 482. 34 7, 398, 519. 54
-851, 962. 80
Total alcohol withdrawn tax free (proof gallons)
._-. 184, 760,197.83 162,172,186. 27 -32, 588, Oil. 56
Alcohol withdrawn tax free for denaturation (proof gal181,601, 420. 34 149, 303, 438. 59 -32, 297,981,75
lons)
Completely denatured alcohol produced (wine gallons). 58,141,740.88 49,136.200. 64 - 9 , 005, 540. 24
Specially denatured alcohol produced (wine gallons)
47,645,796.84 37,172,740. 71 -10,473,056.13
Cereal beverage plants operated
231
211
-20
Cereal beverages produced (gallons)
114,116, 673
97, 243, 528
-16,873,145
Distilled spirits other than alcohol withdrawn tax paid
1, 471,881. 2
1, 262, 932.9
(proof gallons)
-208, 948. 3
Rum produced for denaturation and exportation (proof
1, 070, 719. 2
gallons)
+93, 762. 7
976,956. 5
Taxes collected on wines
$239, 383. 68
$228, 495. 06
-$10, 888. 62
Wineries and wine storerooms operated
397
436
-39
Wine produced (gallons)
3,154,866.47
6, 658,854 +3, 503, 987. 53

The decrease in the quantity of alcohol produced and denatured
during the year is attributable, principally, to the business depression
as affecting industries using alcohol as a raw material, to the pohcy
of the bureau of limiting production to the actual needs of industry
and to the use of a smaller quantity of completely denatured alcohol
as an antifreeze in automobUe radiators during the past winter.
The manufacture of synthetic ethyl alcohol from ethylene gas has
been firmly established on a commercial basis and is now a recognized
source of industrial alcohol on a large scale. Between six and seven
milhon gallons of alcohol were produced during the year by this
method.
During the fiscal year 1931, two concentration warehouses were
closed and one distUlery warehouse was established. at a fruit distillery for the temporary storage of brandy. At present there are
20 concentration warehouses containing 16,443,518.8 gallons of distilled spirits, original gauge. There are four distillery warehouses and
two general bonded warehouses containing 852,916.3 taxable gallons
of^distiUed spirits, which have not as yet been concentrated, owing
to the fact that the security, storage, and bottling facUities are

212

REPORT ON T H E FINANCES

adequate; and as most of them are contiguous to a distUlery, industrial
alcohol plant, or industrial alcohol bonded warehouse where Government officers are maintained, no additional expense for supervision
is incurred by the Government.
Fourteen concentration warehousemen were given allotments to
manufacture a total of 2,728,100 proof gallons of medicinal whisky
during the permit jesiT ending December 31, 1931. DistiUing permits
were issued to operate seven distiUeries in the manufacture of this
whisky. Those firms whose allotments were too small to justify the
issuance of a distilling permit and those who did not find it desirable
for commercial reasons to operate a distillery arranged to manufacture
their allotment at one of the seven distUleries. During the year,
2,435,631.4 taxable gallons of medicinal whisky were produced, part
of which was manufactured during the fall season of 1930 under
permits issued for the permit year 1930.
The increase in wine production is attributable largely to unusually
low production during the previous year and to the use of more
wine for distilling material in the manufacture of medicinal brandy
and fruit spirits for general nonbeverage purposes, authorized under
the tariff act of 1930.
Personnel
Funds made available by the second deficiency act, approved
March 4, 1931, enabled the bureau to increase its authorized quota
of inspectors and storekeeper-gaugers. The civU service register for
storekeeper-gaugers having become practically exhausted, a new
examination was held December 6, 1930, which contained a more
difficult mental and educational test, insuring that applicants must
have had an education equivalent to graduation from high school.
To fill inspector vacancies, the only available civil-service register
was that resulting from an examination conducted in 1927, the scope
of which did not meet the bureau's requirements for its present needs.
Accordingly, the Civil Service Commission held a new examination
on February 4, 1931, admittance to which required graduation from
a recognized college or university with major work in chemistry or
physics, or graduation from a recognized school of pharmacy, together
with a specified amount of subsequent training and experience along
technical lines.
At the close of the fiscal year there were 153 permanent employees
in the office at Washington, and 1,565 permanent and 14 temporary
employees in the field service, making a total of 1,718 permanent and
14 temporary employees on the rolls of the Bureau of Industrial
Alcohol on June 30, 1931.

BUREAU OF INTERNAL REVENUE

General
Internal revenue receipts.—Receipts from internal revenue taxes
during the fiscal years 1930 and 1931 were as follows:
Summary of internal revenue receipts for the fiscal years 1930 and 1931
[On basis of reports of collections, see p. 423]
1930

Sources
Income taxes:
Corporation ^
Individual

•

$1, 263, 414, 466. 60 $1,026, 392, 699. 02 $237, 021,767. 58
833, 647,798,37 313,196,965.31
1,146, 844, 763. 68

2,410, 259,230,28

Total
Miscellaneous internal revenue:
Estates of decedents
Tobacco manufactures, etc
Other miscellaneous taxes ^
Receipts imder national prohibition laws
Collected through customs offices
Miscellaneous receipts —

- - - - -

1,860,040,497. 39

64, 769, 625.04
450,339, 060. 50
113, 547,269.77
1,105,171.74
15,186, 07
110,189.77

Total
Grand total--

Decrease

1931

48,078,326.89
444,276, 502. 62
75,227,812. 00
586,149.68
6, 317. 21
13,148,43

550,218,732.89
16,691,298.15
6, 062, 557,88
38, 319,457.77
519, 022. 06
8,868.86
97,041.34

629,886, 502. 89

568,188, 256. 83

61,698, 246.06

3,040,145,733.17

2,428,228,754.22

611,916,978.95

1 Includes income tax on Alaska railroads (act of July 18, 1914) amounting to $15,346,36 for 1930 and
$11,311.92 for 1931,
2 Includes $2,507,504.84 for 1930 and $147,052.47 for 1931, delinquent taxes collected under repealed laws.

In this summary tax receipts are classified according to the administrative organization for the audit of returns,—the Income Tax
Unit, the Estate Tax Division, the Tobacco Division, and the Miscellaneous Division. A statement of collections by taxes in detail
appears in Table 9, page 468.
Refunds.:—In the foregoing statement of receipts no deductions
have been made on account of refunds, which during the fiscal year
1931 were paid from the several appropriations as follows:
Refunding taxes illegally collected, 1929 and prior years
Refunding taxes illegally collected, 1930 and prior years
Refunding taxes illegally collected, 1931 and prior years
Total

$199. 67
25, 336, 995. ^S
44, 139, 734. 71
69, 476, 930. 26

In addition to the above amount there were certain repayments
as provided under specific appropriations which were not refunds of
taxes erroneously paid under our present internal revenue laws.
The redemption of stamps represents the return to the Government
of stamps purchased by the taxpayer in excess of his requirements.
The stamps so redeemed during the fiscal year, including interest,
totaled $597,200.52. Repayments under the appropriation act ^'Refunding legacy taxes, act of March 30, 1928,'' totaling $101,476.26,

213

214

REPORT ON THE FINANCES

relate to claims under repealed tax laws, the interpretation of which
has been changed by court decision.
Number of claims, amount refunded, and interest allowed on each class of tax during
the fiscal year 1931
Appropriation and class of tax
"Refunding taxes illegally collected," for the fiscal years 1929
and prior years, 1930 and prior years, and 1931 and prior
years:
Income taxes
Miscellaneous internal revenueEstate
Tobacco Capitalstock
Sales
Spirits—narcotics
.
Miscellaneous
Total -—

- .

Repayments (not refunds) of taxes erroneously collected:
Redemption of s t a m p s Tobacco
Spirits—narcotics
Miscellaneous
Total
:
Refunding legacy taxes, act of Mar, 30, 1928

Interest
included

Claims

Amount
refunded

143,338

$63,127,955.21

$16,437, 404. 91

1,666
29
76
456
262
98

6,086,902.33
1, 668, 24
85, 257.12
1,125, 953.51
21, 237,01
27, 956. 84

626, 700. 58
65.02
18, 308. 60
227,091. 90
1, 327. 96
669. 02

145,925

69,476,930. 26

17, 311,507. 99

537
136
2,577

254,653.64
4,533.01
338,013.87

364. 45
14,339. 42

3,250
24

597, 200. 52
101,476. 26

14, 703. 87

If the tax refunds during the year on account of erroneous or
illegal collections for 1931 and prior years, amounting to $69,476,930.26, were deducted from the gross collections of $2,428,228,754.22,
the net collections for the fiscal year would be $2,358,751,823.96.
The gross collections, however, are used for comparative purposes
in this report.
Additional assessments.—The additional assessments resulting
from office audits and field investigations, which amounted to
$382,788,076.45, were as foUows:
Additional assessments made during the fiscal year 1931, by class of tax
Class of tax
Amount
Income taxes
^ $351, 285, 204. 59
Miscellaneous internal revenue:
Estate
Tobacco
Gift
Capitalstock
Sales
Miscellaneous
Total
Grand total

25, 109, 773. 82
58, 665. 19
72, 366. 96
531.75
424, 577. 04
5, 836, 957. 10

2 31^ 502, 871. 88
382, 788, 076. 45

»Includes for income taxes, $293,318,731.59 from the Income Tax Unit and $57,966,473 from the Accounts and Collections Unit. The assessments of the Income Tax Unit include $50,426,493,68 made under
the jeopardy provisions of sections 279 and 280 of the revenue act of 1926 and section 273 of the revenue act of
1928.
' Includes for miscellaneous internal revenue, $6,446,352 from the Accounts and Collections Unit ;
and $26,057,619.86 from the Miscellaneous Tax Unit.

215

SECRETARY OF THE TREASURY

Cost qf administration.—The amount expended and obligated in
administering the internal revenue tax laws for the fiscal year 1931
was $33,997,785.84. This does not include the amount expended for
refunding taxes illegally or erroneously collected, which is in no sense
an administrative expense. The aggregate receipts of internal revenue
were $2,428,228,754.22, which makes the cost of operation for the
fiscal year 1931, $1.40 for each $100 collected as compared with $1.13
for the fiscal year 1930, when the receipts were nearly $612,000,000
greater.
Income Tax Unit
The Income Tax Unit has charge of the auditing and closing of all
income tax returns except certain returns of small incomes for which
the auditing problems are not difficult. The latter are settled in the
coUectors' offices under the administration of the Accounts and Collections Unit. For its work, the Income Tax Unit has an organization
of auditors in Washington and a field force throughout the country.
Returns audited and closed.—The number of returns audited and
closed by the Income Tax Unit during the fiscal year 1931 is summarized in the following table:
Summary of work of the Income Tax Unit for the fiscal years 1930 and 1931
Number
1930*

Returns on hand, in Washington and in the field, at beginning of vear i
Returns received during year:
Reopened
- - - - . Original and new
- -.

_ ^

Total
Total to be disposed of
Returns closed during year: 2
Additional assessment, except jeopardy—
Before 60-day deficiency notice
After 60-day deficiency notice 3—
Agreement
Default
Total
. Jeopardy assessment..
Certificate of overassessment
No change
.

- ,

Total closed—
Returns not closed during year:
On hand for
auditof in
Washington
andsending
in the field
at enddeficiency
0 f vear notice
Awaiting
action
taxpayer
after the
of 60-day
Involved in appeals to board during year on 60-day deficiency notice sent
during year *
_
Total not closed

1931

270,447

221, 893

115,953
2,134,801

73,475
3, 217,738

2, 250,754

3, 291,213

2, 521, 201

3, 513,108

124,124

111, 403

2,900
7,761

6,153
13, 291

134, 785
1,850
49, 038
2,106, 223

130 84?
2,125
57,435
2,944, 581

2, 291, 896

3,134, 988

221,893
2,282

364,700
1,998

5,130

11,420

229,305

378,118

• Revised,

1 This total does not include returns with respect to which 60-day deficiency notices were sent prior to
the beginning of the year,
2 Excludes returns closed through decision of Board of Tax Appeals.
8 Includes some returns with respect to which 60-day deficiency notices were sent prior to the beginning
of the year.
< These figures do not agree with the number of returns with respect to which appeals were taken during
the yeai since many of such appeals were from determinations set forth in 60-day deficiency notices sent
prior to the beginning of the year. The number of the latter returns with respect to which appeals were
taken were 5,810 and 12,158, respectively, for 1930 and 1931,

216

REPORT ON THE FINANCES

At the beginning of the fiscal year 1931 there were 221,893 returns
on hand in the unit. During the year the unit received 3,291,213
returns or 1,040,459 more than during the fiscal year 1930. The
increase was due in part to the unusually large proportion of 1929
returns, ffied in March, 1930, which were sent to the unit after the
end of the fiscal year 1930, and in part to the large proportion of 1930
returns, filed in March, 1931, which were received prior to June 30,
1931. Of the total received, 3,217,738 were original returns filed
covering the taxable years 1929 and 1930, and 73,475 were reopened
and new returns for taxable years prior to 1929 resulting from delinquent returns and from the ffiing of claims. The total number of
returns before the unit for consideration and closing during the fiscal
year amounted to 3,513,106, or 991,905 more than during 1930.
Through its own efforts, that is, without an appeal having been
taken to the Board of Tax Appeals, the unit closed 3,134,988 returns,
an increase of 843,092 over the number thus closed during the fiscal
year 1930. In part the increased production may be attributed to
. the reorganization of the unit effected during 1930 and to the concentration of activities in the new building.
In addition to the 3,134,988 shown above there were also closed
during the year 5,036 returns after action of the Board of Tax Appeals
on appeals pending before that organization, maldng a total number
of 3,140,024 returns closed. The total included 2,496,188 individual
and partnership and 643,836 corporation returns.
WAdditional revenue.—The total additional revenue made avaUable
for coUection (exclusive of jeopardy assessments 0 was $242,893,237.91, as compared with $172,304,836.51 the previous fiscal year, an
increase of $70,588,401.40. The field forces of the Income Tax Unit
secured agreements for the immediate assessment and collection of
$41,002,633.22, while $201,890,604.69 was assessed after consideration
in Washington.
[ '. The additional revenues are classified in the following table to show
the amounts involved as additional tax, penalty, and interest, and also
the procedure involved in reaching a settlement with the taxpayer:
1 These assessments are shown in table, p. 217, and are included in totals shown on p. 214.

217

SECEETARY OF THE TEEASTTRY

Additional revenue made available for collection during the fiscal years 1930 and
1931, classified according to the tax, interest, and penalty, and the procedure
involved
1931

1930
Amount
I. Tax, interest, and penalty:
Tax--Interest
. Penalty

TotalRejected claims for abatement and credit.
Total additional revenue
II. Procedure involved in settlement:
Mimeograph 3552 L .
..Regular procedureAgreements executed by taxpayer
without 60-day letters Agreements executed by taxpayer
and filed subsequent to 60-day
letters ^
Appeals not filed within 60-day
period
Action of Board of Tax Appeals
Total

Per cent

Amount

$140,350,442. 67
25, 586,805. 28
1, 379,428. 62

81.6
14.8
.8

$197, 798, 730. 90
37,488,328. 48
3,443,464.39

81.5
15.4
1.4

167, 316,676. 45
4,988,160. 06

97.1
2.9

238,730,523.77
4,162, 714.14

98.3
1.7

172,304,836. 51

100.0

242,893,237.91

100.0

31,421, 761. 70

18.8

41,002,633.22

17.2

55,021,641. 98

32.9

71,624,534. 22

30.0

9,504,.125. 30

5.7

31, 267,359. 72

13.1

20,868, 302. 79
50,500,844: 68

. 12.4
30.2

43,520, 692. 78
51,315, 303.83

18.2
21.'5

157,316,676.46

100.0

238,730,523. 77

100.0

> The effect of mimeograph 3552 is to shorten the interest period when the additional tax is agreed to by
taxpayer and field force. The above figures cover assessments made during the periods June 1, 1929, to
April 30,1930, and May 1,1930, to May 31,1931.

In addition to the amount of revenue thus made available, additional taxes were also assessed under the jeopardy provisions of the
several revenue acts, as follows:
Additional revenue assessed under the jeopardy provisions of revenue acts during
the fiscal years 1930 and 1931
1930
$19,822,481. 57
6, 786, 822.13

Under bankruptcy and dissolution procedure
Returns believed to be fraudulently rendered
Total assessed
Interest..
Penalties

..'-

Grand total...

. .

1931
$22, 611, 283.87
13,664,648.49

26, 609, 303. 70
5, 569, 651. 79
3, 945, 271.16

36, 275, 932. 36
6, 608, 210,31
7, 541, 351, 01

36,124, 226. 65

50,425,493. 68

Final notices of deficiency {OO-day letters).—For the major part of
the returns closed during the year with an additional assessment, an
agreement was reached with the taxpayer without the use of the
60-day deficiency notice.
There were, however, 26,670 deficiency notices issued, an increase
of 13,012 over the preceding year. The unusual number of these
notices was due in part to the large volume of work required to be
completed during the year and in part to the effect on this work of a
change made in the policy regarding waivers, as described below.
The increase in the number of 60-day letters issued may be attributed in part to the fact that the work in respect to returns for two

218

REPORT ON T H B FINANCES

tax years had to be completed during the fiscal year 1931. On or
before March 15, 1931, the period of limitations on assessment expired
for taxes on incomes for both the calendar years 1927 and 1928, as a
result of the cutting down by the revenue act of 1928 of the hmitation
period from three years for 1927 to two years for 1928.
In previous years the rule had prevaUed of negotiating with taxpayers for an extension of the period of limitation within which final
action might be taken. However, during the fiscal year 1931 no such
waivers or consents were invited by the bureau. As a matter of fact
they were negotiated only upon the initiative of the taxpayer who was
required to show in writing good and substantial reasons why his case
could not or should not be closed within the statutory period of
limitation. Therefore, final action was taken in many cases in
which, according to the rules prevailing in prior years, the notices of
deficiency would not have been released. I t is believed that there
are many advantages in the new procedure. On the basis of past
experience it appears that in many cases in which waivers might have
been negotiated, a settlement would not have been effected during
the extended limitation period.
The ratio of the number of returns involved in petitions filed with
the Board of Tax Appeals to the number involved in 60-day letters
issued during the year was 35 per cent as compared with 30 per cent
during the fiscal year 1930.
The following table gives comparative data in respect of petitions
filed with the Board of Tax Appeals during the fiscal years 1928 to
1931:
Number of taa, years involved in petitions filed with the Board of Tax Appeals during
the fiscal years 1928 to 1931, by tax years
Tax year

1928

1929

1930

1917
1918
1919
1920 1921
1922
1923
192i'.'.'.'.l'.'-'-'.'-'."
1925

174
339
476
966
823
1,844
4,638
3,274
3,000

62
89
118
198
166
265
579
1,845
2,514

16
47
67
99
67
79
159
679
1,094

1931

50
127
86
105
174
452
617

Tax year
1926
1927
1928
1929
1930
1931

1928

1929

1930

825
17

1,947
348
13

2,054
1,233
211
5

1,288
3,164
6,643
378
6
1

16,376

8,144

5,810

12,168

:
Total

1931

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 1930 and 1931:

219

SECRETAEY OF THE TREASURY

Refund claims adjusted and overassessments determined during the fiscal years 1930
and 1931
1930
Claims:
P e n d i n g a t b e g i n n i n g of y e a r
Filed d u r i n g year
T o t a l t o b e adjusted
Allowed in full or in p a r t
Rejected
_-

Number
12,812
42, 219

56, 978

55, 031
21,147
10, 005
31,152

31, 317.
12,849

.
-

1931

Number
13,250
43, 728

T o t a l adjusted
_.
44,166
P e n d i n g a t e n d of year
._
12,812
Certificates of overassessment issued w h e n n o claim h a d been filed - . .
36, 969
A m o u n t of overassessments d e t e r m i n e d on all claims settled b y :
Amount
$124, 019, 819, 63
Abatement
Credit
35,819, 633.37
81,687,363.32
Refund
Total
_
241, 526, 816. 32
Interest -36, 515,874. 99
Grand total--.
.
278,042,691.31

23, 879
43, 904
Amount
$100,187, 067. 04
23, 717, 559. 31
46, 690, 550. 30
170, 595,176. 65
16 437,404.91
187, 032, 581. 56

NOTE.—The amount involved in claims filed during the year was $293,826,780.64, as compared with
$299,619,106.17 the preceding year. Of the claims adjusted during the year, the amounts rejected totaled
$207,611,943.68, as compared with $164,093,902,48 the preceding year.

There were also allowed during the year 9,220 collectors' claims,
of which 7,556 recommended abatements or credits and 1,664 recommended refunds. These claims were largely multiple-item claims and
involved 9,651 items for abatement or credit and 94,211 for refund.
The balance of claims on hand unadjusted on June 30, 1931, was
not as large as originally estimated. The increase over the preceding
year was the result of the contraction from three to two years of the
period of limitations for making assessments and for filing claims
for refund. The practical situation thus created by the statute,
together with the waiver policy heretofore mentioned, both increased
temporarily the filing of claims for refund by taxpayers and made it
necessary to stress in the production program the importance of closing
original cases for recent and prior years. Upon the passing of that
emergency, instructions were issued to give preference to w^ork on
claims.
Returns on hand.—A comparative table of returns for all tax years on
hand at the close of each of the past five fiscal years foUows:
Returns on hand on June 30, 1927 to 1931, by tax years
Tax year
1917
1918--1919
1920__
1921__
1922-_
1923
1924-:.
1925__
1926
1927--1928
1929
1930

-.
. _
- -

Total

1927

1928

1929

1930

622
861
1,184
2,081
2,020
5,136
35,316
107, 607
289, 275
130,433

294
389
493
637
668
1,109
2,531
15, 662
38, 067
120, 248
1148,088

185
232
299
400
409
575
1,111
6,019
7,305
17,104
122, 286
1115, 622

147
222
270
367
305
466
754
1,828
2,556
5,814
18, 529
166, 800
123,835

474, 535

328,186

270,447

221,893

1931
142
180
174
298
249
276
423
735
1,001
1,630
6,061
10,172
237, 868
1106, 491
364, 700

»Incomplete, since the preliminary work against the returns for the year just previous to the end of the
flscal year can not be completed within that fiscal year.

220

REPORT ON T H E FINANCES

Keturns pending for the tax years 1917 to 1928, inclusive, are now
regarded by the Income Tax Unit as its work on prior year returns,
since as a general rule the statute of limitation on assessment has run
in respect of these returns. On the other hand, the work on returns
for 1929 and 1930 is regarded as part of the current work of the unit
since for these returns the period of limitation on assessment has not
expired.
On June 30, 1931, the returns for 1929 and prior years were distributed as follows: 17,540 (1929 returns only) with collectors of internal
revenue for audit and investigation, 36,655 in Washington for audit,
and 204,014 wilih revenue agents in the field for investigation.
Audit in Washington.—The following table presents an analysis of
the returns, original and reopened, pending in the several divisions
and sections of the Washington office:
Original and reopened returns pending i n the divisions and sections of the Washington
ofiice on J u n e 30, 1931, by tax years
A u d i t R e v i e w Division

T a x year

Original

Reopened

1917
1918
1919
1920
1921

1922
1923
1924
1925
1926

Corporation
returns

Individual
returns

Original

Reopened

Original

Reopened

22
16
16
36
21

6
6
6
9
4

50
56
47
77
60

111

280

21
30
40
59
104

22
23
59
73
138

41
49
63
84
125

4
8
40
47
78

23
38
49
75
61
Total.

246

58
84
156
212
378

Total.
1927
1928
Total.
1929

Grand total-

1
8
11
24

1
1
5
9
11

Special
Adjustment .
Section

Division

Consolidated
returns

Original

Total

Reopened

Original

14
20
15
17
. 13

21
39
38
56
69

6
6
5
9
4

130
169
165
261
214

223

939

11
22
42
44
86

85
121
195
268
368

27
33
112
140
251

216
306
496
667
1,061

Reopened

888

264

315

362

177

205

1,037

563

2,746

1,138
3; 652

1,695
1,572

62
168

200
389

300
487

146
196

144
243

50
60

462
675

1,644
4,550

2,553
2,892
5, 445

4,790

3,267

230

589

787

342

387

110

1,137

6,194

13, 711

617

2,845

197

1,281

1,623

414

19, 460

1,278

18,545

5,018

3,102

1,151

2, 413

1,022

2,187

406

2,811

26, 247

10, 408

23, 563

4,253

3,435

2,593

2,811

36,655

SECRETARY OF THE TREASURY

221

Audit of returns for prior years.-—Further reductions were made
during the year in the number of original returns for ''prior years'*
awaiting determination of tax by the Income Tax Unit. Such
returns include aU those relating to income years for which, as a general rule, the period of limitation on assessment would have expired.
The number of original returns awaiting action by the unit should
not be confused with returns for the same years which are now before
the unit as a result of the development of new returns and the reopening of old returns. I t is to be anticipated that the filing of claims for
refund and the discovery of delinquent taxpayers will result from
year to year in a certain number of new and reopened returns. The
number of new and reopened returns decreased from 115,953 during
1930 to 73,475 during 1931.
During the fiscal year 1931 there was a reduction of 54 in the returns
covering the excess-profits years 1917 to 1921 which still awaited
original audit. The 30 original returns for these years pending on
June 30, 1931, involved but 13 taxpayers as compared with 84
returns and 33 taxpayers at the beginning of the year. The 13 cases
include returns of large corporations which involve intricate questions
of law, valuation, and accounting. Every possible effort is being
made to close these cases at the earliest practicable date. During
the year 6,817 returns for the excess-profits years were reconsidered
principally as a result of claims filed by taxpayers.
For tax years 1922 to 1926 there was a reduction of 4,617 in the
original returns for audit, the returns on hand being reduced from
5,180 at the beginning of the year to 563 at the close of the year, or
by 89.1 per cent. The 563 returns involved 295 taxpayers.
During March, 1931, returns for 1927 and 1928 became part of the
unit's work on returns for prior years, since as a general rule the
period of limitation on assessment for these returns expired in that
month. There were 6,194 original and 5,445 reopened returns for
these years on hand for audit on June 30, 1931.
Audit in the field.—On June 30, 1931, there were 204,014 returns
for 1929 and prior years pending for verification in the offices of the
38 field divisions of the Income Tax Unit, compared with 145,992
returns for 1928 and prior years on hand June 30, 1930.
Changes in tax liabUity were recommended by the field forces in
160,901 or 35.8 per cent of the 449,459 returns disposed of by the
field during the year. For 126,180 or 78.4 per cent of the changed
returns taxpayers agreed with revenue agents' conclusions. The
total additional tax recommended by revenue agents during the fiscal
year was $295,338,223.99, compared with $207,220,446.39 the preceding fiscal year.
Settlement in the field.—A study has been conducted over a period
of several months to determine'^the'^number of cases and the amount

222

REPORT ON THE FINANCES

of tax involved in which, after consideration in Washington, the
agents' recommendations for deficiency taxes are approved and are
assessed. The reports of the Income Tax Unit show deficiency taxes
to which the field forces secured agreements (mimeograph 3552) totaling $41,002,633.22 for the fiscal year 1931. The true total of taxes
assessed as recommended by the field is approximately $131,000,000,
the additional $90,000,000 representing the sum which was assessed
after review in Washington upon the basis of the recommendations
of revenue agents' reports that were not changed in any respect.
Audit of 1930 returns.—The filing period of 1930 calendar year
returns ended March 15, 1931; over 2,500,000 returns of approximately 4,700,000 filed and requiring audit have been or will be forwarded to Washington for audit by the Income Tax Unit. Of this
number 1,344,526 had been closed by June 30, 1931, and 105,624 were
in the offices of internal revenue agents in charge for investigation.
All 1930 returns which are to be examined in the field will be in the
possession of the revenue agents at a very early date.
During the year, in several communications to the field agents,
stress was laid on the importance of the work on individual returns
and a program outlined with a view to expediting further the examination of these returns. UntU recently there has been some disposition
to consider work on individual returns less exacting and difficult than
the handling of corporation returns. In a great many cases, however,
the field work on individual returns requires the best available ability.
The records of individual taxpayers are not as a rule maintained with
the same care as those of corporations. Many of the troublesome
questions of law involved in corporation cases will be frequently
encountered in individual cases.
The rules for the classification or selection of returns remain
unchanged from those outlined in last year's report. The responsibilities of the collectors' forces and the revenue agents' forces appear
now to be exactly defined. Both of these branches of the service
should now be able to organize their forces to meet the necessities of
the work assigned to them and to estabhsh and maintain permanent
forces.
Special Advisory Committee
The Special Advisory Committee was organized to consider cases
pending before the bureau, the Board of Tax Appeals, or the courts
for the purpose of attempting to reach settlement without htigation.
In those cases in which settlement is reached the final responsibUity
rests with the committee subject to the approval of the commissioner.
The work of the committee over a period of approximately four years
has demonstrated that the disposition of most problems arising out of
tax disputes is and should be a matter of administration rather than
of litigation.

SECRETARY OF THE TREASURY

223

Under its original authority the jurisdiction of the committee was
confined almost exclusively to those income and profits tax cases
which involved only questions of fact or mixed questions of fact and
law. Effective July 2, 1930, the jurisdiction of the committee was
extended to cases involving solely questions of law and also to estate
tax cases.
During the four years of its existence, the committee has completed
its consideration of 27,543 cases, involving 43,652 tax years. Settlements were effected in 17,842, or 64.8 per cent of this number. The
remaining 9,701 cases were recommended for defense, no basis for
settlement having been reached. Further statistics of the committee
show that, of the cases included in the latter group and decided by the
board to date, the bureau has been sustained in 69.8 per cent of total
proposed deficiencies. Of the remaining 30.2 per cent of the proposed
deficiencies which were not affirmed by the board, it is found that the
board's decisions in part covered issues not acquiesced in by the commissioner on prior cases and issues raised before the board but not
raised before the committee.
Miscellaneous Tax Unit
The Miscellaneous Tax Unit is charged with the administration of
all taxes other than income taxes. The unit is composed of the Estate
Tax Division, the Miscellaneous Division, the Tobacco Division, and
an Appeals and Review Section, which is attached to the office of
the deputy commissioner in charge. The personnel of the unit was
reduced during the year, principally in the Estate Tax Division, due
in part to the transfer of a group of employees engaged on valuation
work to the Valuation Division, Income Tax Unit, created for the
purpose of coordinating all work of this character in the bureau.
Estate Tax Division.—Estate tax collections amounted to $48,078,326.89 compared with $64,769,625.04 for 1930. Collections for the
year would have been somewhat larger under normal business conditions. The records show that numerous taxpayers have applied
under authority of the law for an extension of time in which to pay
the taxes assessed.
Florida and Indiana passed amendatory legislation during the
year whereby these States were enabled to collect estate taxes amounting to 80 per cent of the Federal estate taxes assessed against their
deceased residents. Practically all of the States now have in effect
similar statutes. The amounts of Federal estate taxes collected have
decreased nearly every year since 1924, as successive States have
enacted appropriate legislation and an increasing amount of credits
has been allowed for State inheritance taxes paid.
There were filed during the year 9,816 estate tax returns showing
tax of $44,008,889.48, compared with 10,308 such returns showing
77532—32

224

REPORT ON T H E FINANCES

tax of $39,024,268.66 in 1930. The administrative work involved in
auditing returns during the year is summarized below:
Summary of audit of estate tax returns for the fiscal years 1930 and 1931
1931
Major tax reports submitted by field force
Returns audited in Washington
Returns on hand for audit at end of year:
In field for investigation
In Washington for audit
Total-Protest letters of taxpayers as a result of tax determined
On hand at beginning of year
Received during year
Total to be disposed of
Disposed of
,
Onhand at end of year
Deficiency taxes assessed, including interest i

10,092
13, 949

8,820
1],695

2,768
1,206
3, 974

2,916
1,217
4,133

,
by audit:
-

80
1,978
1,854
124

2,522
2,069
453

.-| $27,656,938.96

$25,109, 773,82

--...

^ Amounts include certain delinquent taxes excluded from figures on deficiency taxes in earlier reports.

During the year the estate tax field force submitted 8,820 estate
tax major reports compared with 10,092 such reports in 1930. The
decrease was due in part to the reduction in number of returns filed
and in part to the inauguration of new field procedure during the year
which temporarily retarded work. During 1931, 335 final closing
agreements with estate tax payers were approved by the Secretary of
the Treasury under section 606 of the revenue act of 1928, and 257
estate tax cases were adjudicated by the Board of Tax Appeals.
The overassessments and abatements allowed during the year on
estate and gift taxes totaled $86,441,862.02. The amounts allowed
and the claims disposed of during the year are classified by refund and
by abatement claims in the following table. It should be noted that
the 80 per cent credit for State inheritance taxes paid, allowed under
the revenue act of 1926, is in most cases claimed as a refund or abatement after the estate tax return has been filed.
Estate and gift tax claims received and disposed of during the fiscal year 1931
Estate tax
Refund
Number of
cases
Claims filed:
On hand July 1,
1930.
Received during
year—.
Total to be disposed of
Allowed
Rsjected
Total disposed of.
On hand June 30,
1931-.:
No claims filed, overassessments allowedInterest on claims allowed
Total amount allowed,
including interest....

Amount

383 $10,290,769.31
1,347
1,730
1,118
193
1,311

8,266, 278.05

Gift tax
Abatement

Number of
cases

132

Amount

$543,780.91

4,311 59, 498,477.38

18,567,037.36 4,443 60,042,258. 29
3, 781,097.56 4,354 59, 591, 509.43
4,983,844.66
344,838.75
61
8, 764, 942.22 4,415 59, 936.348.18

Refund
Number of
cases

Amount

8 $126,990.36
9

118,473,76

5 $9,525.04

17
6
6
12

245,464.12
82, 300.36
56,024,38
137,324.74

6
3
2
6

419

9,792,095.14

105,910.11

108,139.38

539

628,466.62

2,011

21,721,734,04

68,337,21

9.525.04
668.30
8,856. 74
9,625. 04

4 41,047.92

17,706.60

•608,993.98
4,918,658.16

Abatement
Number of Amount
cases

81,313,243.47

168,344.17

41,716.22

226

SECRETARY OF THE TREASURY

Miscellaneous Division.—Total coUections of taxes under the administration of the MisceUaneous Division amounted to $75,227,812 for
the year, compared with $113,547,269.77 for 1930. These are shown
by specific taxes in the following table:
Miscellaneous taxes collected during the fiscal years 1930 and 1931
Source

1930

Documentary stamps, including playing cards:
Bonds ofindebtedness, capital stock issues, etc
Capital stock sales or transfers..
--Sales of produce for future delivery
Playing cards
-.

$22,611, 274,96 $14,757,383.38
46,698,226.86
25,519,972.76
3,699,875,58
1,682, 680. 66
4,819, 292. 60
4,993,659.50

Total
.Oleomargarine special and stamp taxes.
-.
Adulterated and process or renovated butter, filled
cheese, and mixed flour
Dues and initiation fees
,
--..
Admissions to theaters, etc
Pistols and revolvers..Distilled spirits
^
Narcotics
_
Delinquent, under repealed laws
Total miscellaneous taxes

1931

Increase (+) or
decrease (—)

-$7,853,891.68
-21,178, 254.11
-1,917,195.02
+174,267.00

77,728,669.90
3,919,387.75

46,953,596.19
2,681,428.29

-30,775,073.71
-1,237,959,46

11,608.19
12,521,091,52
4,230,667.99
344,389.51
11,695,267.67
588,682.40
2, 507, 504.84

11,822.36
11,477,723. 20
2,778,864.09
137,921.37
10,432,064.49
607,339.54
147,052.47

-f 214,17
-1,043,368.32
-1,451,803.90
-206,468.14
-1,263,203.18
-fl8,657.14
-2,360,452. 37

113,547,269,77

75,227,812.00

-38,319,457,77

The principal decreases of $21,178,254.11 in the coUections of the
tax on capital stock sales or transfers resulted from the decrease in the
volume of trading on the various stock exchanges; and the decrease of
$7,853,891.58 in the taxes on bonds of indebtedness and capital stock
issues resulted from a decrease in the issue of capital stocks and bonds.
The following table summarizes the work on Miscellaneous Division
claims:
Claims received and disposed of during the fiscal years 1930 and 1931
1930

On hand, beginning of year
Received or reopened _

Total to be disposed of
Adjusted
On hand, end of year

Amounts allowed
Interest included on refunds

_
. ^.,__

, ,

1931

Number
1,129
7,467

Number
1,065
7,591

8,596

8,666

7,531
1,065

7,216
1,440

Amount
$4,015,651.41
371,162.10

Amount
$2,762,557.76
262,101.35

. The Miscellaneous Division conducts certain administrative work
for the entire unit, relating to amounts approved for assessment lists,
and offers in compromise. The foUowing paragraphs summarize this
work for the fiscal year 1931.
A total of $174,595,688.38, representing 191,767 items, was approved
by the commissioner on miscellaneous assessment lists, which embrace
assessments of aU internal revenue taxes except those administered by

226

REPORT ON T H E FINANCES

the Income Tax Unit. These lists include all assessments, original
and additional, of the miscellaneous internal revenue taxes which are
not collected by the sale of stamps and the additional assessments on
the latter gro^up of taxes. There were included in the lists $26,057,519.86 additional assessments, representing 20,160 items, resulting
from office audit and field investigations, including interest totaling
$2,494,517.28.
A small amount of tax liabUity incurred in connection with sales,
tobacco, capital stock, estate, gift, spirits, narcotics, and miscellaneous stamp and special taxes is compromised with the taxpayer. The
offers in compromise received and disposed of during the year and the
amounts involved are summarized in the following table:
Offers in compromise received and disposed of during the fiscal years 1930 and 1931
1931

1930
Number
On hand at beginning of year
Received during year
Total to be disposed of

Total disposed of

On hand at end of year

Number

Amount

3,390
22,100

$652, 242. 00 2,870
1, 758,257. 98 15,775

$398,876. 09
797,838. 73

25,490

2,410,499. 98 18,645

1,196,714. 82

22,006
569
45

1, 928,369. 34 14,708
76, 720. 42
540
52
6, 534.13

715,493.13
80,987. 50
8,943. 58

22, 620 2, Oil, 623. 89 15, 300

805,424. 21

Accepted
Rejected-.
Withdrawn

Amount

2,870

398,876.09

3,345

391, 290. 61

Tobacco Division.—Collections from tobacco taxes amounted to
$444,276,502.62 for the year, a decrease of $6,062,557.88, or 1.34 per
cent, compared with the previous year. This is the first decrease
shown by these collections since the fiscal year 1921. The collections
from the taxes on the various manufactures of tobacco for the last
two fiscal years are shown in the following table:
Tobacco tax collections for the fiscal years 1930 and 1931
Source
Small cigarettes
Manufactured tobacco
Large cigars
Snuflf
Cigarette papers and tubes
Small cigars
Large cigarettes
Miscellaneous collections..
Leaf tobacco sold..
Total

1930

1931

Increase (+) or
decrease (—)

$359, 816, 274. 69 $358,915,187. 84
58, 376, 942. 03
60, 098,186. 23
18, 025,467. 34
21,141,015.19
7,190,466.16
7, 542,105.43
1,441,826.41
1,323,885.12
270, 644.10
301, 512. 05
45, 815. 64
65,100. 49
50, 381.40
599. 90
10,153.10
450, 339, 060. 50 444, 276, 502. 62

-$901, 086. 85
-1,721, 244. 20
-3,115, 547.85
-351, 639. 27
+117, 941.29
-30, 867.95"
-19, 284.85
-50, 381. 40
+9,553. 20
-6,062,557.88

Appeals and Review Section.—The Appeals and Review Section holds
hearings in cases arising under the various tax laws administered by

SECRETARY OF THE TREASURY

227

the Miscellaneous Tax Unit, renders on request from the heads of
divisions opinions on law questions arising in connection with the
administration of such tax laws, and reviews the action taken by the
division on all claims for refund or abatement allowed for amounts in
excess of $500. The majority of the hearings are held in connection
with estate taxes, although a number involve other taxes, such as
documentary stamp, excise taxes, and taxes on admissions and dues.
During the year the appeals and review section held 543 hearings, prepared 597 formal opinions on cases in which hearings had been held
or on which formal opinion had been requested by heads of divisions,
and reviewed 5,361 claims for refund and abatement and estate and
gift tax cases resulting in certificates of overassessment. There were
425 memoranda to the commissioner recommending certain changes
in 60-day letters routed through this section for approval.
There was a total of 76 cases on hand at the close of the year, of
which number 18 are held for hearings, 19 await further evidence from
taxpayers, 9 are held awaiting supplemental reports from the field, 10
await reports from the Securities Section, Valuation Division of the
bureau, and 20 are under consideration.
Accounts and Collections Unit
The Accounts and Collections Unit, which is the central administrative organization for the 64 coUection districts, is divided into three
divisions—the Collection Accounting Division; the Collectors' Personnel, Equipment, and Space Division; and the Disbursement Accounting Division.
Collection Accounting Division.—The Collection Accounting Division
is charged with the following duties: The construction of accounting
methods for use in collectors' offices; the preparation of instructions
to collectors of internal revenue on office and field activities; the
preparation of the procedure for the intensive audit of the individual
returns on Form 1040-A and a number of the smaller individual
returns on Form 1040; the auditing of collectors' revenue accounts
current and collectors' special deposit accounts current for off'ers in
compromise, surplus proceeds in distraint sales and sums offered for
the purchase of real estate; the handling of cases involving the seizure
and sale of real estate by collectors of internal revenue under distraint
proceedings; the issuing of internal revenue stamps; and the compiling
of statistics for officials of the Treasury Department and the pubhc.
The division is charged also with the duty of preparing, in conjunction
with the Income Tax Unit, the procedure for the preliminary examination in collectors' offices of about 2,300,000 corporation and individual
income tax returns. The activities of the field force of supervisors of
accounts and collections and the force of internal revenue agents on

228

REPORT ON THE FINANCES

sales and misceUaneous taxes are controUed and directed by this division under the general supervision of the deputy commissioner.
There were ffied in collectors' offices during the year 5,626,978 tax
returns, compared with 5,912,907 for the previous year, a decrease of
285,929. Of the total tax returns ffied in 1931, there were 5,027,739
income tax returns compared with 5,288,373 ffied during the previous
year, a decrease of 260,634.
There were audited and closed in this unit during the year
approximately 2,320,000 income tax returns of individuals on Forms
1040 and 1040-A which showed small incoine, and 3,558,124 information returns on Form 1099 were verified.
The policy was continued of calUng on coUectors of internal revenue
for assistance in auditing certain other individual income tax returns
on Form 1040. Approximately 275,000 returns on Form 1040 for the
year 1929 ffied in 1930 were assigned to collectors' offices for audit.
At the end of the year there were 17,540, of these returns remaining
on hand in collectors' offices. In connection with this audit work
188,986 income tax returns were investigated. On June 30, 1931,
there were outstanding in the 64 collection districts for field investigation 6,787 income tax returns for 1929 and prior years and 2,825 for
the year 1930, maldng a total of 9,612 compared with a total of 6,555
as of June 30, 1930.
A total of 8,605,729,527 stamps, valued at $496,615,229.65, was
issued to collectors of internal revenue and the Postmaster General,
compared with 8,817,283,716 stamps, valued at $548,026,321.75,
issued during the year 1930. Stamps returned by collectors of internal
revenue and by the Postmaster General and credited in their accounts
amounted to $3,887,385.76, compared with $2,649,497.93 for 1930.
The returned stamps were of various kinds and denominations,
including partly-used books and stamps for which there was no sale.
After the appropriate administrative procedure, collectors of
internal revenue transmitted to the bureau, or otherwise disposed of,
135,071 claims as compared with 125,500 during 1930, an increase of
9,571. The number of claims on hand at the close of the fiscal year
1931 was 872, compared with 758 at the close of the previous fiscal
year.
During the year field deputy collectors made 239,658 revenue producing investigations in connection with the verification of tax
returns, the discovery of delinquent taxpayers and warrants for distraint. The total amount of tax involved in these investigations was
$63,411,825, including $43,743,259 collected and $19,668,566 reported
for assessment. The amounts involved for the various types of work
were:

SECRETARY OF THE TREASURY

229

Additional taxes collected and reported for assessment hy collectors^fieldforces during
the fiscal year 1931
reported
Taxes collected Taxes
for assessment
Veriflcation of tax returns.
Delinquent taxpayers
Warrants for distraint
Total

$2,793,889
8,062,620
32,896,850

$6,860,080
12,808,486

43,743,259

19,668,666

There were 46,387 warrants for distraint served by deputy collectors
during the year, and on June 30, 1931, there were 15,352 warrants in
the hands of the field forces for coUection as compared with 11,422 on
June 30, 1930.
Special attention has been given to the discovery of the various
classes of delinquent taxes. That this work has been highly productive
of revenue is evidenced by the fact that the tax collected and reported
for assessment as the result of these investigations during the fiscal
year 1931 amounted to $20,861,006.
In addition to the above amounts, the special force of intemal
revenue agents working under the direction of the Accounts and Collections Unit collected and reported for assessment $681,337.
The supervisors of accounts and collections submitted 122 reports
covering their examinations of the accounts of the various collectors'
offices compared with 129 reports submitted during 1930. Every
collector's office was examined at least once and most of them twice
during the year. The supervisors installed three new collectors and
four acting collectors, and made two transfers of collectors' offices
under renewal bonds.
Collectors' Personnel, Eguipment, and Space Division.—The Collector's
Personnel, Equipment, and Space Division is charged with the consideration and granting of allowances to collection districts covering the
employment of personnel and miscellaneous operating expenses and
the keeping of adequate records thereof. The division passes upon
collectors' requisitions for nonexpendable supplies, mechanical equipment, and office furniture; and the procurement of space for coUectors'
offices and branch offices is also handled by this division.
At the beginning of the fiscal year 1931 there was in the internal
revenue coUection service a total authorized force, including coUectors,
of 4,859 employees, at an annual salary rate of $10,462,240. At the
close of the fiscal year there was a total authorized force, including
collectors, of 4,750 employees, at an annual salary rate of $10,460,600.
The total increase in compensation allowed officers and employees in
the field collection service on July 3, 1930, in connection with the
act of July 3, 1930, known as the Brookhart Salary Act, was $180,100.
During the. year a total of $78,331.11 was expended for the employ-

230

REPORT ON THE FINANCES

ment of temporary help in collectors' offices, compared with $117,235.14
during the preceding fiscal year, or a decrease of $38,904.03.
The sum of $294,101.08 was expended for the rental of quarters for
collectors' offices and branch offices, compared with $289,245.24 during
the preceding fiscal year. The increase of $4,855.84 was brought
about by the removal of the collector's office at Los Angeles, California,
from Federal to commercial space.
Disbursement Accounting Division.—The Disbursement Accounting
Division is charged with the duty of keeping the accounts in connection with expenditures from appropriations made available by Congress for the use of the Internal Revenue Bureau and service. The
division is charged also with the responsibility and supervision of the
administrative examination required by law of the disbursing accounts
of 64 collectors of internal revenue and 38 internal revenue agents in
charge, including internal revenue salary payments made by the collector of customs at San Juan, P. R., as well as the administrative
audit of miscellaneous vouchers for transportation, equipment, telephone service, rentals, etc., paid from internal revenue funds by the
disbursing clerk of the Treasury Department and direct settlements
by the General Accounting Office.
The division examined and recorded 1,236 monthly accounts of
collectors of internal revenue and internal revenue agents in charge,
including internal revenue salary payments made by the collector of
customs at San Juan, P. R., together with 46,507 supporting vouchers,
in addition to which 2,898 expense vouchers of employees and 8,722
vouchers covering passenger and freight transportation and miscellaneous expenses were audited and passed to the disbursing clerk of
the Treasury Department and General Accounting Office for payment.
Office of the General Counsel

The personnel engaged in the activities of the General Counsel's
Office, which embrace the whole field of Federal taxation, are divided
among six divisions—Interpretative, Civil, Review, Appeals, Penal,
and Adininistrative.
Interpretative Division.—The Interpretative Division considers questions of law arising under the several internal revenue laws. It also
considers questions of procedure arising in connection with the administration of internal revenue laws, including the preparation of the
regulations made under such statutes, and Treasury decisions, and
approves all matter proposed for publication in the internal revenue
buUetin.
This division also considers cases arising under section 104 of the
revenue act of 1928, and section 220 of prior revenue acts, taxing
corporations formed or availed of to avoid the imposition of the
surtax on shareholders by permitting gains and profits to accumulate.

231

SECRETARY OF THE TREASURY

During the past year cases were handled involving 433 separate
corporations, coming under or believed to come under the provisions
of those sections. A number of the cases were closed by compromise
or by stipulation. Direct collection of taxes resulting from the
disposition of these cases amounted during the fiscal year to $2,196,516.34.
Specific questions are submitted for opinion by the Secretary, or
the Assistant Secretary, the Commissioner, and by branches of the
bureau and outside correspondents. These are answered in the form
of memoranda, opinions, or letters. Letters, mimeographs, and
memoranda, prepared elsewhere in the bureau, are submitted for
review and comment.
The following table shows the work of this division for each of the
last six fiscal years:
Cases received and disposed of during the fiscal years 1926 to 1931
Jacketed cases
On hand at beginning of year.
Received during year
Disposed of during year
On hand at end of year

1926
236
894
813
317

1927
317
1,623
1,624
316

1928
316
2,221
2,116
422

1929
422
1,961
2,071
312

1930
312
2,224
2,150
386

1931
386
2,343
2,404
325

Civil Division.—The Civil Division, in cooperation with the Department of Justice and the various United States attorneys, handles
civU internal revenue cases arising in the Federal district courts,
the United States Court of Claims, and the Supreme Court of the
District of Columbia, together with a limited number of cases originating in State courts. The Civil Division also handles all claims for
taxes filed in bankruptcy and receivership cases penduig in both
Federal and State courts. Compromise of taxes due from insolvent
taxpayers and from estates in process of administration are taken care
of by a special section attached to the division.
During the fiscal year ended June 30, 1931, 671 internal revenue
tax cases were decided by the Federal courts, 526 of which were
decided in favor of the Government, 127 adversely to the Government,
and 18 partly for the Government and partly for the taxpayer. Cases
tried and submitted in the district courts, circuit courts of appeals,
Court of Claims, and Supreme Court numbered 429. There were
340 briefs written and ffied in the several courts named. At the
end of the fiscal year 3,916 cases were pending in the Civil Division
as compared with 3,963 at the end of the fiscal year ended June 30,
1930. During the year 1,621 new civil cases were received and 1,668
civil cases were closed. Of the 3,916 cases pending at the end of
the fiscal year, 637 were cases involving liens for taxes, suits having

232

REPORT ON THE FINANCES

been filed under the provisions of section 3207 of the Revised Statutes
as amended, and reenacted without change by the revenue act of
1926, and under the provisions of an act of Congress approved March
4, 1931, Public No. 862, which confers jurisdiction upon the State
courts to adjudicate liens of the United States in foreclosure proceedings.
Under section 3229 of the Revised Statutes, the Commissioner of
Internal Revenue, with the advice and consent of the Secretary of
the Treasury, may compromise any civil or criminal case arising
under the internal revenue laws, instead of commencing suit; and,
with the advice and consent of the Secretary and the recommendation of the Attorney General, he may compromise any such case
after a suit has been commenced.
Offers in compromise of pending suits received during the year
numbered 96. In this class of cases, including those pending at the
beginning of the fiscal year, 100 offers in compromise were disposed
of, 68 being accepted and 32 rejected. The total amount of taxes
covered by these compromises was $1,729,592.64, and $501,221.53
was accepted in Ueu thereof.
During the year, 1,192 insolvent compromise cases not in suit were
closed, 548 of the offers submitted being accepted in the sum of
$2,275,117.97 in lieu of taxes assessed aggregating $7,734,474.98,
and 599 being rejected. There were 45 cases disposed of by transfer
and otherwise.
There were 1,727 cases involving bankruptcy, receivership, decedents'
estates, and insolvent taxpayers pending at the close of the fiscal
year as compared with 1,434 at the beginning of the year. During
the year 1,240 new cases were received and 947 closed. In the cases
which were closed, claims were filed in the amount of $4,768,016.88
and the sum of $1,315,499.46 was coUected.
Review Division.—The Review Division reviews cases involving refunds, credits, and abatements of various lands of internal revenue
taxes. PubUc decisions were prepared in accordance with Treasury
Decision 4264 in all cases where the overassessments exceeded $20,000.
In cases involving credits and/or refunds in excess of $75,000, reports
to the Joint Congressional Committee on Internal Revenue Taxation
were also prepared, as required by section 710 of the revenue act of
1928. The class of cases reported to the Joint Congressional Committee was extended at the beginning of the fiscal year to include those
cases where consideration of appeals by the Special Advisory Committee or by the Appeals Division resulted in stipulations before the
Board of Tax Appeals of refunds and/or credits in excess of $75,000.
Beginning July 15, 1930, this division also reviewed aU cases involving refunds and/or credits in excess of $10,000 except aUowances

SECRETARY OF THE TREASURY

233

based on a final order of the Board of Tax Appeals and court decision
in the instant case, approved settlements by the Special Advisory
Committee, compromise cases, and estate tax cases.
There were 2,368 overassessment cases disposed of during the year
including certificates aUowing reductions in tax aggregating $172,802,480.21. Adjustments made by this division in 185 of these cases
totaled $8,278,960.12.
Public decisions under Treasury Decision 4264 were promulgated
in 1,104 cases and in 133 cases memoranda were submitted to the
joint congressional committee under the provisions of section 710 of
the revenue act of 1928.
At the beginning of the fiscal year practically all of the cases for
settlement formerly handled by the Adjustment Section of this division, were transferred to the Special Advisory Committee. Cases for
settlement which were under consideration at that time were not transferred. Of these, 162 were recommended for settlement and 70 for
defense. Deficiences proposed in cases settled were approximately
$2,000,000, and in the cases recommended for defense were in excess
of $1,360,000.
As heretofore this division has regularly afl'orded conferences in
cases in which issues appeared to require action contrary to the taxpayer's contentions. This is true in the claims cases as well as in
the cases for settlement.
Appeals Division.—The Appeals Division represents the commissioner before the Board of Tax Appeals in aU cases in which petitions
are filed from proposed deficiencies in income, profits, estate, and gift
taxes. This work includes settlement of cases by stipulation whenever
practicable without hearings before the board, as well as the defense
of aU contested cases. The number of cases stipulated reflects
settlements effected by this division, as well as by the Special Advisory
Committee. In all cases in which the decision of the board is adverse
to the commissioner, the Appeals Division prepares and submits to
the General Counsel a recommendation as to whether the board decision should be accepted or an appeal taken to the appellate courts.
Petitions for review, when approved by the General Counsel and
authorized by the Department of Justice, are handled in the appeUate
courts by the Appeals Division in cooperation with the Department
of Justice, and petitions for review ffied by taxpayers are defended
with the same cooperation. SimUar responsibility and procedure
obtain in aU cases of petitions for writs of certiorari to the Supreme
Court of the United States.

234

REPORT ON T H E FINANCES

A summary of the work of the Appeals Division during the fiscal
years 1930 and 1931 is shown in the following table:
Board of Tax Appeals cases received and disposed of during the fiscal years 1930 and
1931
Number
1930

Amount

18,301
4,369
356

$650,000,424. 62
98,007, 598.43

23,026
6,991

748, 008, 023. 05
151, 292, 620. 39

16,035

596, 715,402. 66 .

Cases on hand at beginning of year
Served on Commissioner, reopened and readjusted

16,036
11,726

596, 715,402. 66
247,215,655.41.

Total to be disposed of
Closed
On hand at end of year including reopened cases

27, 761
6,528

843,931,058. 07
137,788,635.08

21, 233

706,142, 422, 99

Cases on hand at beginning of year
.Filed
Reopened.--

Total to be disposed of
Closed
On hand at end of year including reopened cases.
1931

During the fiscal year 1931 the number of cases filed greatly
exceeded the number of cases closed. This increase resulted in part
from the present policy respecting consent agreements or waivers
extending the period of limitation on assessment, but was primarily
due to the issuance within the fiscal year of deficiency notices covering
the two taxable years, 1927 and 1928. During the fiscal year the
statute of limitations on making assessments expired respecting these
two taxable years. During the year 849 appeals were dismissed for
nonprosecution, faUure to pay filing fees, lack of jurisdiction, and
other miscellaneous reasons.
Forty-two field division hearings were held by the Board of Tax
Appeals in 29 cities during the year, at all of which the commissioner
was represented by attorneys from the Appeals Division.
A total of 1,607 appeals from decisions of the Board of Tax Appeals
to courts of appeals and to the United States Supreme Court have
been filed since the establishment of tliis appellate procedure by the
revenue act of 1926; of this number 707 appeals were pending at the
close of the current fiscal year and 900 had been closed. Fourteen
attorne^^s were giving their exclusive attention to this work on
June 30, 1931.
Penal Division.—Cases handled by the Penal Division are classified
by interpretative and law cases, and under each of these classes by
income tax cases and miscellaneous tax cases, the latter involving a
variety of taxes, such as estate, gift, tobacco, admissions, and excise,
taxes.
The foUowing table shows the work of the division during the last
two fiscal years:

235

SECEETARY OP THE TREASURY

Cases received and disposed of by the Penal Division during the fiscal years 1930
and 1931
1930

1931

Increase
(+)or
decrease

(-)

Pending at beginning of year
Received

1,211
1,180

1,134
2,546

+1,3

Under consideration...
Disposed of
..-.

2,391
1,257

3,680
2,526

+1, 289
+1,269

Pending at end of year.

1,134

1,154

+20

The di^HLsion also continued to handle Board of Tax Appeals cases
involving fraud penalties. Special effort was made during the year
to dispose of the older cases, both those which had been in the division longest and those involving the earlier tax years. This effort
has been successful and a considerable number of the older cases
have now been closed.
Administrative Division.—The activities of the Administrative Division include the review of offers in compromise and the holding of
conferences on protested cases. The division is charged with the
supervision of the personnel, library, manuscripts, mail, and records;
and deyises and inaugurates methods of office procedure, assembles
and reviews efficiency ratings, interviews applicants, and performs
other varied and miscellaneous duties pertaining to the work of the
General Counsel's Office.

MINT BUREAU

Institutions of the mint service
During the fiscal year 1931, 10 mint service institutions were in
operation—coinage mints at PhUadelphia, San Francisco, and
Denver, assay office at New York, which makes large sales of fine
gold bars; mints at New Orleans and Carson City conducted as
assay offices; and assay offices at Boise, Helena, Seattle, and Salt
Lake City. The six last-named institutions are, in effect, bullionpurchasing agencies for the large institutions and also serve the
public by making assays of ores and buUion. Electrolytic refineries
are operated at the New York, Denver, and San Francisco institutions.
Coinage
The domestic coinage executed during the past fiscal year was the
smallest in both value and number of pieces for many years, notwithstanding the 84,181,000 bronze 1-cent pieces, valued at $841,810, made
to replenish stock. The total number of domestic pieces executed was
98,236,500 valued at $6,615,110, as compared with the prior year's
399,467,200 pieces valued at $16,278,180. Gold com valued at
$4,570,000 was made to clean up small lots of partially worked
metal. The subsidiary sUver coinage totaled $795,300 face value
and 5-cent nickel coins, $408,000.
The foreign coinage executed likewise was of small volume, 2,355,120
pieces of gold and sUver, made at the PhUadelphia Mint, compared
with the prior year's 3,485,000 pieces of sUver, nickel, and bronze.
Total domestic and foreign coinage executed amounted to 100,591,620 pieces in 1931 as compared with 402,952,200 pieces in 1930.
Gold and silver operations
Gold acquired by the Government at the mint service institutions
during the fiscal year totaled $210,791,181.04; United States gold
coin received by the mints for recoinage amounted to $3,358,729.61;
transfers of gold between mint offices totaled $10,563,728.38; the
aggregate amount of gold received by the mint service institutions
was $224,713,639.03, which compares with $457,045,562.62 during the
prior year.
Receipts of purchased sUver during the fiscal year totaled 2,193,313.53 fine ounces, the average cost of which was 32. 61 cents per
236

SECRETARY OF THE TREASURY

237

ounce, total cost being $715,231.83. Receipts include 999,350.34
fine ounces of refined sUver bought in the open market for coinage.
SUver received in exchange for bars „ bearing thei Government stamp
totaled 1,368,000.79 fine ounces; United States pUver coin received
for recoinage totaled 3,615,195.75 fine ounces, the recoinage value
being $4,997,678.59; sUver deposited in trust by other governments
totaled 569,061.57 fine ounces; and transfers between mint service
offices totaled 106,327.60 fine ounces, making the aggregate quantity
of sUver received by the mint service offices during the fiscal year
7,851,899.24 fine ounces, as compared with 10,035,781.97 ounces
duiing the prior year.
The New York market price of sUver during the fiscal year averaged
$0.31879; the lowest price was $0.260625 on February 16, 1931, the
lowest ever recorded, and the highest price, $0.373125 on September
18, 1930. London's lowest price of 12 pence per standard ounce was
recorded February 9, 1931.
Refineries
The refinery at the New York assay office was not operated during
the fiscal year. In anticipation of moving into.a new buUding being
constructed outside the congested financial district, the refinery was
dismantled and a thorough clean-up made for recovery of metals
absorbed by apparatus, etc. The refineries operated at Denver and
San Francisco produced 1,365,444 fine ounces (46.8 tons) of electrolyticaUy refined gold which compares with 2,755,400 fine ounces
(94.47 tons) in the prior year from the three refineries; and 1,811,491
fine ounces (62.1 tons) of electrolyticaUy refined sUver, which compares with 3,156,096 fine ounces (108.2 tons) during the prior year
from the three refineries.
The stock of gold and sUver in unrefined bullion on hand was increased during the year by about 89 tons, to 529 tons, as compared
with the prior year's increase of about 28 tons.
Additions and improvements
The following improved devices were introduced in the mint institutions during the fiscal year under review:
Electric melting of gold and sUver deposits has been established as a
regular practice at the PhUadelphia Mint and New York assay office.
This became possible as the result of improvements in design and
modernization of equipment for electric induction melting, together
with the commercial manufacture of suitable crucibles, of carbon
bonded silica carbideo At PhUadelphia the installation consists of
two furnaces that accommodate standard No. 20 crucibles and three
smaller furnaces. These provide for the melting of aU deposits weighing up to 1,200 oimces. The instaUation at New York is a temporary

238

REPORT ON THE FINANCES

arrangement pending removal to the new building being erected.
This type of melting results in much lower heat-radiation with corresponding greater comfort for personnel, reduces melting losses of
precious metals, and increases uniformity of mixture of the bars
produced. Costs compare favorably with other means of producing
melting temperatures when full operation of the institution gives high
electric current consumption with resulting low unit costs of current.
The grinding device used at the Philadelphia mint in lieu of filing,
for smoothing the edges of silver coinage ingots, as finally adopted,
consists of a well housed pair of special alundum wheels on the ends
of the same mandrel, mounted on a bench. The work is done better,
much faster, and less laboriously, and with less scattering of the sUver
as compared with filing. The fine particles are separated from the
coarse and fire-refined before being used again for coinage ingots,
while coarse particles do not require preliminary treatment.
Gold and silver in the United States
Stock of coin and monetary bullion in the United States.—On June 30,
1931, the estimated stock of domestic coin in the United States was
$2,673,898,415, of which $1,698,433,690 was gold, $539,958,327 standard silver doUars, $308,619,365 subsidiary silver coin, and $126,887,033
minor coin.
The stock of gold bullion in the mints, assay offices, and Federal
reserve banks on the same date was valued at $3,257,487,409, an
increase during the year of $218,927,208; the stock of silver bullion
was 16,323,703.50 fine ounces, an increase of 5,194,146.43 fine ounces.
Production of gold and silver.—Doiaesiie gold production during the
calendar year 1930 was $47,247,600, as compared with $45,651,400
in 1929. The output has dechned to about 47 per cent of that for the
record year 1915, when the total was $101,035,700.
Silver of domestic production during 1930 totaled 50,748,127 ounces,
valued at $19,538,029, as compared with 61,327,868 ounces, valued at
$32,687,754, for 1929, and with the record production of 74,961,075
fine ounces, valued at $37,397,300, for 1915.
Industrial consumption of gold and silver.—Gold consumption in the
industrial arts during the calendar year 1930 is estimated at $42,689,379, of which $15,177,739 was new material. Silver used in the arts
is estimated at 36,343,207 fine ounces, of which 26,874,378 fine ounces
was new material. As compared with the prior year, silver consumption was about 6,000,000 ounces less, and gold consumption about
$14,200,000 less.
Net import and export of domestic gold coin.—According to data
compUed by the Department of Commerce, the net import of
domestic gold coin during the fiscal year was $213,742,550; during
the prior fiscal year it was $92,264,082. During the 17 fiscal years

239

SECRETARY OF THE TREASURY

1915-1931, since the opening of the World War, there has been a net
export of $808,886,520. Since 1870 the net export of domestic gold
coin has been $1,686,535,584.
Appropriations, expenses, income, etc.
Appropriations avaUable for the mint service during the fiscal
year 1931 totaled $1,689,160, and reimbursements to appropriations
for services rendered amounted to $58,344.04, making a total of
$1,747,504.04.
Expenses amounted to $1,558,584.65, of which $1,531,570.22 was
chargeable to appropriations and $27,014.43 chargeable to income.
The income realized by the Treasury from the mint Service aggregated $1,624,411.09, of which $1,138,698.29 was seigniorage.
The seigniorage on subsidiary sUver coin was $128,337.64; on nickel
coin, $285,977.38; and on bronze coin, $724,383.27.
Summary of appropriations, expenses, and balances, fiscal year 1931
Salaries and
expenses

Item

Appropriations
Earnings credited to appropriations
Total available
Expenses
-

Unexpended balances-- _

...•

Transportation of •
bullion

Total

$1,679,160.00
58,344.04

$10,000.00

$1,689,160.00
58, 344. 04

1, 737, 504.04
1,528,488. 01

10,000.00
3,082,21

1.747, 604. 04
1, 531,570. 22

209, 016. 03

6,917,79

215,933.82

The number and value of deposits, transfers, gross income, and
expenses for the fiscal year 1931, and the number of employees on
June 30, 1931, at each institution are shown in the following table:
Deposits and transfers of gold and silver, income, expenses, and number of employees,
by institutions, fiscal year 1931
Number of
deposits
of
gold
and
silver

Institution

Philadelphia--San Francisco
Denver
NewYork
New Orleans
Carson City
Boise
Helena
Seattle
Salt Lake City

77532—32

EmExcess of
income (+) ploy,
ees
or of
expense ( - ) June 30,
1931

34,807

1,291 236,072,559,17 1,633,157.17 1, 622, 670.31 +110,486.86
44, 660.42
-44, 660.42

599
13

34,807

1,291 236,072, 559.17 1,633,157,17 1,567,330.73

Grand total, fiscal
year 1931

247 $18,140,684.13 $761, 686, 64
952 84, 237, 704. 00 452,149.88
92 15, 711, 453.13 192, 524. 49
107,417,905.88 221, 223. 02
638.19
336,738.44
526. 92
152, 204.10
1, 234.40
382, 926. 34
641. 79
58, 667,81
2,320. 34
9, 619, 441, 68
311. 50
14,833, 76

Gross
expense

272
101
79
117
7
3
4
3
11
2

. -

Fiscal year 1930

Gross
income

$657,880.48 +$103, 706.16
263,132. 57 +189,017.31
198,482.50
-5,958.01
332,199. 61 -110,976.59
15,162.61
-14,524.42
6, 342. 46
- 5 , 815. 54
• 7,059.51
-5,825.11
6, 661.49
- 6 , 019. 70
31,376.41
-29,056. 07
4,372. 67
-4,061.17

7,463
9,043
2,596
13,021
362
266
287
244
1,470
55

Total
Bureau ofthe Mint

NumCoining
ber of
mint value of gold
service and silver
transreceived
fers

+65,826.44

612

35,861 24,752 469, 637,442.99 8, 468,174,01 1,715,935. 77 +6, 752,238.2\

652

240

RliPORT ON THE FINANCES

The small demand for coin has made it possible to refrain from filling
a number of positions which became vacant by reason of retirement,
death, and resignation, with the result that the roster of mint service
employees is shorter than for a long series of years. The number on
the rolls June 30, 1931, was 612, which compares with 652 one year
earUer, a reduction of 40.

BUREAU OF NARCOTICS

The Bureau of Narcotics was created as of July 1, 1930, by the
act of June 14, 1930, as amended. There were transferred to this
bureau the functions of the Federal Narcotics Control Board—which
administrative agenc}^- was thereupon abolished—and those functions
of the former Bureau of Prohibition relating to enforcement of the
Federal narcotic laws. Certain additional duties were also imposed
upon the new bureau. The act of June 14, 1930, established a Division of Mental Hygiene in the United States Public Health Service,
with the duty, among others, of performing investigative and research
functions to aid the Commissioner of Narcotics in determining quantities of crude drugs to be permitted importation into the United States;
and the two services have cooperated, not only in executing this
statutory mandate, but with reference to other matters connected
with narcotic law enforcement.
Organization
The organization of the bureau at Washington provided for an Office
of Narcotic Control, a Division of Foreign Control, an Administrative
Division, a Legal Division, a Returns Division, a Drugs Disposal Committee, and Offices of Field Supervision and Special Investigations.
For general enforcement work in the field, the several States and
Territories are divided into 15 enforcement divisions, each under the
supervision of a narcotic agent. This continues the general outline
of the enforcement organization already in effect, except that one
division was abohshed during the year and its territory consohdated
with that of another division, and one additional division was
established.
The average number of inspectors and agents operating throughout
the several divisions during the year was 263. In the interests of
better administration and enforcement there were 59 interdivisional
transfers of such agents and 7 reassignments of narcotic agents in
charge.
Economies in operation have been effected through this reorganization of field divisions and the closer supervision of enforcement work,
so that notwithstanding the additional expenses normally incident to
the creation of a new bureau the narcotic service had at the end of the
year a substantial unexpended balance of its appropriation over and
above the amount which had been determined upon as a tentative
saving reserve.
The personnel on July 1, 1930, transferred from the Bureau of
Prohibition, consisted of 425 employees. At the close of the fiscal
year there were 105 employees on the bureau roU and 323 employees
on the field roU of the bureau, making a total of 428 employees.

241

242

REPORT ON THE FINANCES

Activities
The activities of the bureau, in addition to perfecting its organization, have been directed toward the apprehension of the major law
violators in an endeavor to eliminate the sources of supply of narcotic drugs and the main channels through which such drugs are
illicitly distributed, as well as to exercise a close control on the legitimate manufacture and distribution of drugs for medical purposes.
In the pursuit of these objects, close cooperation has been maintained between the Bureau of Narcotics and the Bureau of Customs
to detect and prevent smuggling. The international exchange of
information relating to illicit shipments proceeding from one country
to another has effectively supplemented this cooperation. There
were seized at ports or border points during the year 66,674 ounces of
narcotic drugs, either in their pure state or as part content in other
drugs and preparations, as compared with 23,666 ounces similarly
seized during the previous year.
As a supplement to Federal activities, field officers in the several
divisions have developed the cooperation of State, county, and
municipal authorities to the end that the latter, under local laws,
wUl deal with minor violators and will provide as far as possible for
the institutional treatment of addicts within their respective
jurisdictions.
During the year a special representative of the Bureau of Narcotics
visited officers of the several State licensing boards and the officers
of many of the State medical associations to solicit cooperation in the
matter of revocation or suspension of licenses to practice medicine,
dentistry, or pharmacy with respect to those licentiates who have
been convicted of violating the Harrison Narcotic Law or who were
suspected of being narcotic drug addicts. The names and the facts
in a number of such cases were communicated to the appropriate
State licensing board for further action. The Bureau of Narcotics also
cooperated with the Conference of Commissioners on Uniform State
Laws by submitting certain suggestions and recommendations to that
organization with respect to a draft of a uniform State narcotic law
being prepared by the conference.
The advantage of directing major enforcement effort against largescale violations is reflected in enforcement statistics. Thus, in
addition to the seizures at ports and borders herein reported, there
were seized or purchased as evidence from illicit sources by Federal
narcotic enforcement officers during the year 41,622 ounces of narcotic drugs, either in their pure state or as part content of other
drugs and preparations, as compared with 23,948 ounces of such
drugs simUarly seized or. purchased during the previous year in which
this enforcement pohcy had not been completely effected. The

243

SECRETARY OF T H E TREASURY

average sentence imposed upon convicted violators during the fiscal
year 1931 was 3.08 years as compared with an average sentence of 2.38
years imposed upon convicted violators during the fiscal year 1930.
The following table shows the number of cases of violation, by
registered and nonregistered persons, of the narcotic laws and of
the act of January 17, 1914, which regulates the manufacture of smoking opium; and the cases disposed of during the year:
Violations of the narcotic laws and the cases disposed of during the fiscal ijear 1931
U n d e r narcotic laws other
t h a n t h e a c t of J a n . 17,
1914
U n d e r act
of J a n . 17,
1914
Registered Nonregistered
persons
persons

Cases

P e n d i n g J u l y 1,1930
R e p o r t e d d u r i n g 1931

T o t a l t o b e disposed of-Convicted
AcquittedCompromised ^
Dropped

—
.

.
-

T o t a l disposed of
P e n d i n g J u n e 30, 1 9 3 1 . .

_- _.

1,238
1,003

2,140
5,067

32
6

2,241

7,207

154
4
703
911

2, 956
87
9
2,331

1
9

1,772

6,383

469

1,824

1 Includes 80 cases involving tax liability which were closed on payment of taxes and penalties.

Fifty aliens were deported during the year for violation of or
conspiracy to violate narcotic laws and the cases of 197 persons reported to the Department of Labor for such offenses were pending at
the close of the year.
Fines imposed during the year for violations of the narcotic laws
amounted to $161,220.16. There were 632 cases compromised,
resulting in payment into the Treasury of $69,676.
Extent and trend of narcotic traffic
On June 30, 1931, there were 332,877 registrations under the Harrison Narcotic Law, as amended, 263 as importers and manufacturers,
1,605 as wholesale dealers, 53,227 as retaU dealers, 149,025 as practitioners, and 128,757 as dealers in and manufacturers of untaxed
narcotic preparations, the latter number including registrants not required to pay occupational tax in this special classification by reason of
paying another occupational tax under the act.
During the year 134,092.75 pounds of opium were imported as compared with importations of 127,187.5 pounds during the previous year,
or an increase of 6,905.25 pounds. Importations of coca leaves for
medicinal purposes amounted to 221,997.5 pounds as compared with
importations of 244,705.5 pounds during the fiscal year 1930, or a
decrease of 22,708 pounds.

244

REPORT ON THE FINANCES

A further quantity of 118,431 pounds of coca leaves was imported
for purposes other than medicinal, that is to say, for manufacture of
decocainized coca extracts as provided by section 6 of the act of June
14, 1930. From these leaves there were produced 5,550 gallons of
flavoring extracts free from cocaine or ecgonine or substances from
which these might be synthesized or made, 941,779 pounds of residues
containing such substances being removed from the manufacturing
processes and completely destroyed in the presence and under the
supervision of a representative of the Commissioner of Narcotics.
Exports of narcotic drugs of all kinds amounted to 6,466 ounces in
1930 and 3,536 ounces in 1931, or a decrease of 2,930 ounces. The
drugs exported involved 57,283 taxable ounces of products.
The net quantity of pure drugs of all kinds sold to domestic purchasers by manufacturers during the year amounted to 382,857
ounces as compared with sales of 406,038 ounces of such drugs during
the previous year. The drugs thus sold to domestic purchasers involved 4,325,024 taxable ounces of products.
The control of the legal importation, manufacture, and distribution
of narcotic drugs appears to be reasonably effectual. The quantity of
drugs of domestic manufacture which is diverted to Ulicit use is comparatively negligible. While smuggling and the subsequent seUing of
opium, morphine, heroin, and cocaine continue to present the principal
enforcement problem, the bureau, as previously stated, also continues
its efforts to secure an efficient degree of State cooperation to supplement the Federal enforcement activities hereinbefore outlined.

PERSONNEL CLASSIFICATION OFFICER

Appeals and classification sheets
The number of individual appeals presented for change in grade
was approximately 30 per cent less than during the previous fiscal
year. The total number of classification sheets handled by the Personnel Classification Officer during the fiscal year 1931, however, exceeded by about 15 per cent the number acted on during the previous
year.
A large number of classification sheets came from the Bureau of
Internal Revenue, where a reorganization was undertaken foUowing
the consolidation of the various Internal Revenue activities in the
new buUding. The increase in personnel in the Bureau of Customs
and the Office of the Supervising Architect also contributed to the
total number ctf 3,308 classification sheets considered during the year.
Classification sheets were handled for every case where there was
a change in duty, a reassignment of duty, or a new assignment, as
weU as where there had been an increase in grade or reorganization
perfected. WhUe a great many of these sheets passed through official
channels without the necessity for special investigation, many of
them, on the other hand, required individual investigation in order
to determine if the case was in order, and to enable an appropriate
recommendation to be made to the Personnel Classification Board.
The following table presents a summary of the appeals handled
during the year:
of
Number of Number
persons
appeals
involved

Appeals

Carried over from fiscal year 1930
Presented during fiscal year 1931:
Individual
Group

... .
—

288

487

279
24 303

279
184 463

691

950

179

94
113
— 207

298

326
204
— 630

-„

Total to be disposed of
Approved:
1930
1931
Disapproved:
1930
1931

89
90
164
144

Canceled:
1930
1931
Total acted on—
1930
1931

20
10
.

Carried over to fiscal year 1932:
1930
1931

263
244

25
69

22
37
—

607

443
363
— 796

46
109
— 164

245

246

REPORT ON THE FINANCES

Efficiency ratings
The present plan for establishing efficiency ratings provides for a
mathematical average of 82.5 per cent. This rule has application to
cases where there are large numbers of competing employees, but has
not been found practicable where there are smaU numbers or where
specialized groups are concerned. The Treasury Department laid
down the rule that the ratings for the entire department should not
exceed, if possible, approximately 87 per cent. The total number of
employees rated as of May 15, 1931, was 8,491, and the average for
this total number was 87.93 per cent.
Special investigation was made of ever}^ case where the efficiency
rating given the employees would involve a reduction in salary, a
reduction in grade, or dismissal, under the rules as laid down.

PUBLIC DEBT SERVICE

Division of Loans and Currency
This division is the active agent of the Secretary for the issue of
all public debt obligations of the United States and for conducting
transactions in such obligations after issue. I t is also responsible
for the issue of bonds or other obligations of Porto Rico and the
Philippine Islands, for which the Treasury Department acts as fiscal
agent. The division undertakes the safe-keeping of public debt and
insular loan securities for certain Government offices. I t also counts
and delivers to the Destruction Committee United States currency
canceled as unfit and mutilated paper (spoilage, etc.) received from
the Division of Paper Custody and the Bureau of Engraving and
Printing.
Issue and retirement of securities.—The following is a summary of
the activities during the fiscal year in connection with the issue and
retirement of securities conducted through this division. Complete
details of all transactions in public debt securities are presented in
formal statements elsewhere in the report.
Issues, retirements, and transactions in stock of United States securities during the
fiscal year 1931
(Par value)
Registered

stock shipments to Federal reserve banks:
For exchange transactions
Allotment for original issue
Original issue by the division
Securities issued on exchangeTotal securities issued and shipped-

2 $2,118,303,600. 00
1, 066,091, 040. 00
3,184, 394, 640. 00

Nonregistered

Total

$3, 928, 398,100. 00 $3,928, 398,100. 00
1 6, 783,830, 650. 00 6, 783,830, 650. 00
8, 427, 990. 00 2,126, 731, 590. 00
1,145, 985, 606. 00
79,894, 565. 00
10,800, 551, 305. 00

13,984,945,945.00

RETIREMENTS

Securities retired on exchange
Securities cleared for redemption-.
Securities retired on other accounts (i. e.,
claims, credit, and exchange authorization
retirements)
Total securities retired -

899,122, 310. 00
2 2, 587, 909,405, 00

246,863,296. 00
1,153,573. 25

406,968,900.00

6, 785. 00

1,145, 985, 605. 00
2, 589, 062,978. 25
406,975,685.00

3,894,000, 615. 00

248,023, 653.25

4,142,024, 268. 26

2 3,263,827,140. 00

12,070,436,340.00

15, 334,263,480.00

33,545,000. 00

33,545,000.00

795,266,235. 00

819,986,735.00

377,837,425,32

377,837,425. 32

STOCK ACTIVITIES

Securities received from Bureau of Engraving
and Printing
Securities restored to stock by Federal reserve banks
--stock canceled and delivered to Register of
Treasury:
Securities
Detached matured coupons (5,340,106
pieces)
-„

24,720,600.00

' Includes Treasury bills available for either original issue or exchange.
2 Includes $1,441,500,000 special 1-day certificates of indebtedness.

247

248

REPORT ON T H E FINANCES

Individual registered accounts activities.—In connection with public
debt registered issues, individual accounts are maintained and interest
is paid periodically in the form of checks. The accounts open on
June 30, 1931, were as follows:
Number of
accounts
Interest-bearing loans:
Pre-war loans
- - - Liberty and Treasury loansTreasury notes and certificates of indebtedness
Noninterest-bearing loans, Liberty and Victory loans.
Total open accounts—

Principal

14,442
858,645
10

$755,251,330
2,374,991,650
290,989,000

.--

872,997
7,236

3,421,231,880
1,592,100

880,232

3,422,823.980

There were 94,866 individual accounts closed for registered Liberty
bonds. Victory notes, and Treasury bonds, and 24,875 accounts were
decreased, representing the retirement of securities amounting to
$587,020,450 par value. In connection with the same loans, 59,195
new accounts amounting to $353,048,350 principal were opened.
Thirty-three thousand eight hundred and ninety-eight changes of
address for the mailing of interest checks were made on the registered
accounts during the year.
Interest on registered Liberty and Treasury bonds was paid on due
dates in the form of 1,752,880 checks, amounting to $100,964,682.92.
On registered securities of the pre-war loans, 44,557 checks for $15,710,906.25 were issued and there was certified to the Treasurer interest
payable amounting to $31,200,119.46 on registered Treasury notes.
There were received from the Bureau of Engraving and Fruiting
1,826,200 checks as stock, and there were canceled and delivered to
the Destruction Committee stock consisting of 131,125 checks.
Claims.—Claims for relief on account of lost, stolen, destroyed, and
mutilated securities handled by the division during the fiscal year
were as follows:
of
amount
Number of Number
securities Par
claims
of securities
(pieces)
Received-

Settled b y Reissue or redemption of securities
Recovery of securities
--_
Disallowance of claims
Other disposition (not claims treatment)
Total settled

—
-'

2,639

6,412

$946,976.04

1,698
710
87
134

3,560
1,413
184
679

644,900. 54
487, 345. 00
21,095 00
2,895.00

2,629

5,736

1,156,236,64

Safe-keeping of securities.—At the beginning of the year there were
securities amounting to $860,989,100 in safe-keeping for various
Government offices, against which formal audited receipts were out-

249

SECRETARY OF THB TREASURY

standing. Throughout the year securities amounting to $1,411,695,900 were received for safe-keeping and receipts therefor issued, and
securities amounting to $1,926,941,850 were dehvered from safekeeping upon the surrender of outstanding receipts, leaving a balance
of securities amounting to $345,743,150 in safe-keeping June 30,
1931.
Mutilated paper and redeemed currency.—Mutilated paper verified
and delivered to the Destruction Committee consisted of 17,852,541
sheets and coupons, of which 17,391,852 sheets and coupons were
received from the Bureau of Engraving and Printing and 460,689
sheets from the Division of Paper Custody.
Redeemed currency counted and delivered to the Destruction Committee during the year amounted to 732,600,009 pieces, representing
$1,513,391,730.41, detailed as follows:
Number of pieces and amount of redeemed currency delivered to the Destruction
Committee during the fiscal year 1931
Number of
pieces

Face value

OLD SERIES CXJRRENCY RETIRED FROM CIRCULATION

United states notes
Silver certificates
Gold certificates
Treasury notes
Fractional currency

-. .

Total

3,318,471
12, 296,485
5,149, 535
3,497
6, 425

$14, 322, 607. 00
13,465, 260. OC
116,772, 520.00
21, 800. 00
1, 230. 41

20, 773,413

144,583,417,41

78, 597, 310
601, 033,836
32,195, 450

323, 421,193. 00
601,028, 840.00
444,358, 280. 00

NEW SERIES CURRENCY RETIRED FROM CIRCULATION AS UNFIT

United Statesnotes '.
Silver certificates i
Gold certificatesTotal
Grand total

---

711,826, 596

1,368,808,313.00

732, 600,009

1, 613,391, 730.41

J Slight excess of pieces is due to redemption of exact half notes at half value.

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 pubhc. Approximately 400,000 printed circulars were
distributed to the public during the year by this means.
Register of the Treasury
The Register of the Treasury performs the final audit and has
custody of all retired United States securities and interest coupons,
together with securities and interest coupons of the District of
Columbia and of the insular possessions. The total amount of
securities handled during the fiscal year ended June 30, 1931,
amounted to $13,039,573,363.75, representing 25,757,835 pieces. Of
this amount, $6,379,580,907.11, consisting of 17,979,544 pieces, were

250

REPORT ON T H E FINANCES

redeemed securities transmitted to this office through the Treasurer
of the United States, which included 17,419,282 interest coupons,
aggregating $449,159,752.86, redeemed for cash. These have been
appropriately audited and certified to the Comptroller General of the
United States, clearing the Treasurer's general account. Securities
surrendered on account of denominational exchange, transfer, etc.,
transmitted through the Federal reserve banks and the Division of
Loans and Currency, amounted' to $4,546,492,905, representing
1,503,747 pieces. There were also 6,274,544 security documents
aggregating $2,113,499,551.64 retired because no longer appropriate
for issue.
The following comparative statement sets forth by class of security
the total number of documents, together with the face value thereof,
which were received, examined, and filed during the fiscal years 1930
and 1931:
Securities received, examined, and filed in the Register's Ofiice during the fiscal years
1930 and 1931
1931

1930
Class of security
Pieces

Amount

Pieces

Amount

REDEEMED

Bearer
United States securities:
38
169
$119,770.00
Pre-war loans
119,993
27,502,100. 00
40,432
Libertyloans-2
Treasury bonds
Treasury no tes628, 201, 900 00
148,986
30,4i3
314, 537 2,191,467, 700. 00
79, 342
Certificates of indebtedness-_
Treasury bills 5,305
156,046,000.00
11, 963
252, 551
Treasury (war) savings securities—
461, 780. 50
256,868
I
494,
385,
382.
45
119,
203,434
17,419,
282
Interest coupons - .
Securities not afiecting public d e b t District of Columbia loans
3
1,050. 00
District of Columbia interest cou1 55, 66
pons
143
19,926,448

Total

3,498.185,738.61

17,956,913

$5,470.00
3,966,800.00
,1,000.00
1,141,491,950.00
1,431, 579, 200. 00
771,149,000, 00
404,044, 03
449,159, 752,86

3, 797,757, 216. 89

Registered
United States securities:
Pre-war loans
Libertyloans--Treasury notesCertificates of indebtedness_Treasury (war) savings securities.Interest checks (Liberty loans)
Total-Total redeemed -

82,090 00
91
3,373, 550.00
16,194
21, 717,000. 00
207
89 1,387,500,000.00
15, 635, 015. 38
. 106, 919

41
4,199
645
309
17,435
2

123, 500 1,428, 307, 655. 38

22, 631

2, 581,823, 690. 22

20, 049, 948 4,926,493,393, 99 17,979, 544

6, 379, 580, 907.11

66,880. 00
938, 250. 00
904, 507,000,00
1. 675, 700, 000, 00
611, 555. 98
4.24

R E T I R E D ON ACCOUNT OF EXCHANGES FOR
OTHER SECURITIES, ETC.

Bearer
United States securities:
Pre-war loansLiberty loans
Treasury bonds
Treasury notes
-. .First SA per cent Liberty loan interim
certificates
standard full-paid interim certificates..

1,158
621,161
53, 417
71, 347

704,950. 00
448,152, 750 00
132, 342,000 00
495,974, 500 00

1 304
1,019! 218
90, 399
70,039

49
2

3, 550, 00
2,100, 000 00

» Adjusted to include audited figures instead of received figures for June

1, 004,480. 00
923,039, 850.00
499, 552,800. 00
449, 605, 950. 00
8,450. 00

251

SECRETAEY OE THE TREASURY

Securities received, examined, and filed in the Register's Ofiice during the fiscal years
1930 and 1931—Continued
1931

1930
Class of security

Pieces

Amount

Pieces

Amount

RETIRED ON ACCOUNT OF EXCHANGES FOR
OTHER SECURITIES, ETC.—Continued
Bearer—C ontinued
United States securities—Continued.
Treasury
Certificatesbills.
ofindebtedness.Treasury (war) savings securities
Securities not affecting public debt,
insular possessions loans
Total

80, 636 $1, 339, 425, 000. 00
530
21,806,000.00
-1
-5.00

97, 015
35
-1

$959. 260, 500. 00
2, 240, 000. 00
-5.00

2,134

2,134, 000. 00

5,985

5, 985, 000. 00

846, 317 2,042, 912, 245. 00

1, 268,153

3, 240, 427, 525. 00

14,000
205,998
13, 336
18
4
-6

80, 686,710,00
428, 444, 650. 00
157,637,550.00
512, 513,000. 00
122, 500,.000. 00
-30. 00

Registered
United States securities:
Pre-war loans
Liberty loans
Treasury bonds
Treasury notes
Certificates of indebtedness-Treasury (war) savings securities
Securities not affecting public debt,
insular possessions loans
Total

-..

Total retired on' account of
exchanges, e t c -

14,887
166,181
12, 208
3
-15

85, 901, 000. 00
414, 907, 700. 00
68,026, 750. 00
30,000, 000. 00
-75. 00

2,031

3, 573, 000. 00

2,184

4, 283, 500. 00

195, 295

602,408, 375. 00

235, 594

1, 306, 065, 380. 00

1,041, 612 2, 645,320, 620. 00

1, 503, 747

4, 546,492, 905, 00

3,009
30
333,125
244,158 1, 301, 263, 000. 00
121, 955
148,198,000.00
16, 618
16, 609
35.00
7
7
303,187,126. 78 5, 794, 463
6,136,876

167, 800. 00
245, 000. 00
626. 784. 750. 00
736, 932, 000. 00
310, 549, 000. 00
35.00
414,100, 466. 64

U N I S 8 U E D STOCK R E T I R E D

Bearer
United States securities:
Pre-war loans
Libertyloans
Treasury bonds
Treasury notes
Certificates of indebtedness
Treasury bills
..Treasury (war) savings securities
Interest coupons
Total
-

-4
341,495

- 3 , 000. 00
204, 503, 200. 00

6,739.141

1, 957,148, 361. 78

6, 269. 207

2, 088, 779, 051. 64

25
107
17,235

215,100.00.
1.27.150. 00
50; 000. 00
3, 437. 475. 00

32
115
7

113, 000. 00
494, 500. 00
14,000,00

960

2,186, 000. 00

5,183

24, 099, 000. 00

18, 328

6. 015, 725. 00

5,337

24,720, 500. 00

6, 757, 469 1, 963,164, 086. 78

6, 274, 544

2,113, 499, 551. 64

Registered
United States securities:
Pre-war loans
-_Libertyloans - -.Treasur3'' bonds
Treasury (war) savings securities
Securities not affecting public debt,
insular possessions loans
Total
Total unissued stock retired
RECAPITULATION

Bearer
United States securities:
1.342
. 821, 720. 00
1,323
Pre-war loans - - .
. - . 1, 082,
649
680,158, 050. 00 1, 062, 659
Libertyloans.
90. 431
132. 342, 000. 00
53.417
Treasury bonds
552.150
1.01, 760 1,124,176.400.00
Treasury notes
First S}^ per cent Liberty loan interim
43
3, 550. 00
49
certificates
2,100, 000. 00
2
Standard full-paid interim certificates. .
281, 933
655,710 4. 451. 991. 200. 00
Certificates ofindebtedness
29,111
306, 484, 000. 00
21, 949
Treasury bills
256, 874
252, 557
461, 810. 50
Treasury (war) savings securities
125,340.310 1 797. 572, 509. 23 23. 213, 745
Interest coupons

1. 009, 950. 00
927,174, 450. 00
499. 798, 800. 00
2.217,882.650.00
8, 450. 00
3, 507, 936. 200. 00
1,103. 604, 000. 00
404, 074. 03
863. 260, 219. 50

252

BEPOKT ON THE EIKANCES

Securities received, examined, and filed in the Register's Ofiice during the fiscal years
1930 and 1931—Continued
1931

1930
Class of security
Pieces

Amount

Pieces

Amount

RECAPITULATION—continued
JBearer—Continued
United States securities—Continued.
Securities not affecting public d e b t Insular possessions loans
Distrip.t nf n n l n m h i n loans

District of Columbia interest coupons
-

2,134
3

$2,134,000. 00
1,050.00

55.66

27, 511, 906 7,498,246,345.39

Total

5,986

$5,985.000, 00

25,494,273

9,126,963, 793. 63

14.133
210. 312
13, 343
663
313
17, 429
2

80, 866, 590. 00
429,877, 400, 00
157,651,550.00
1,417.020, 000. 00
1,798,200,000, 00
611, 525.98
4,24

Registered
United States securities:
Pre-war loans --Liberty loans - _
Treasury bonds
-.
Treasurv notes
Certificates of indebtedness
Tieasury (war) savings securities
Interest checks (Liberty loans)
Securities not affecting public debt,
insular possessions loans
--.
Total
Grand total .

86,198,190. 00
15,003
418, 408, 400. 00
182. 482
68. 076, 750. 00
12, 209
51,717,000.00
210
89 1, 387, 500, 000. 00
19,072, 415. 38
124,139
2,991

5,759, 000, 00

7,367

28,382,500. 00

337,123

2,036,731, 755. 38

263,562

3, 912,609, 570. 22

27,849,029

9,534,978,100. 77

25,757,835

13,039,573,363. 76

In an effort to assist the Post Office Department in clearing
records on redeemed war savings stamps, the Register's Office is now
arranging and checking approximately 1,000,000 registration cards,
forwarded through the office of the Third Assistant Postmaster
General from post offices throughout the country, against the stubs
of redeemed war savings certificates on file in the Register's Office.
A permanent record of each bearer security functioned in the
Register's Office is maintained in numerical ledgers in which the
various transactions connected with each bearer security, excepting
Treasury (war) savings securities, are recorded in code. These
records facilitate the answering of inquiries from the various agencies
of the Federal Government and general public, which, during the
fiscal year 1931, aggregated over 65,000 items.
Division of Public Debt Accounts and Audit
This division maintains administrative control accounts for all
official transactions in the public debt, including those conducted by
the Division of Loans and Currency, the office of the Register of the
Treasury, the office of the Treasurer of the United States, and the
Federal reserve banks as fiscal agents of the United States, and also
for transactions involving the manufacture, receipt, custody, and
issue of distinctive and nondistinctive paper used for printing-public
debt securities, United States currency, national bank notes. Federal

SECRETARY OF THE TREASURY

253

reserve notes, United States postage stamps, internal revenue stamps,
and other miscellaneous securities and documents in the Bureau of
Engraving and Printing. Numerous administrative audit functions
are performed in connection with the foregoing. The division also
maintains control accounts for various classes of unissued currency
in reserve stocks of the Treasurer of the United States and the Comptroller of the Currency, and conducts administrative examinations
and' physical audits of such unissued stocks of currency, of cash balances in custody of the several divisions of the Treasurer's office, and
also of collateral securities held in trust by the Treasurer to secure
national bank currency circulation, postal savings deposits, postal
investments, evidences of the debt of foreign governments, etc.
Physical audits conducted in the offices of the PubUc Debt Service
during the fiscal year covered securities of various classes held in custody as unissued stocks, held as unclaimed or in safe-keeping, and surrendered securities retired or in process of retirement, registered interest checks, accounts of registered bondholders, numerical records
of retired securities, and various security records, etc. The securities
involved in these audits totaled over 9,000,000 pieces and about
$12,000,000,000 in face value. Over 10,000,000 items were checked
in examination of numerical records. A force of 13 auditors and audit
clerks was continuously engaged on this work throughout the year.
Audits in the Bureau of Engraving and Printing during the year
consisted of at least one audit in each division of the bureau with
respect to each class and denomination of distinctive and nondistinctive paper. These audits embraced over 71,000^,000 sheets of
paper, approximately 48 per cent of which was sheet-counted. The
work was conducted by a force of 6 auditors regularly assigned to this
work, augmented in some of the larger audits by additional auditors,
and assisted by groups of counters detaUed for that purpose from the
Bureau of Engraving and Printing.
In the office of the Treasurer of the United States audits were
conducted of all reserve stocks of unissued currency and of the cash
balances in the cash division, the redemption division, and in the
national bank redemption agency. Audits in the office of the Comptroller of the Currency covered all reserve stocks of national bank
notes and Federal reserve notes. The face value of the currency and
securities covered by the audits in these two offices approximated
$5,000,000,000.
During the fiscal year this division determined and certified credits
to the cumulative sinking fund and amounts in the sinking fund
available for expenditure from time to time, interest on all classes of
public debt securities which became due and payable on their respective interest payment dates, and the amount of each form of public
debt securities and unpaid interest outstanding each month. It pre

254

REPORT ON THE FINANCES

pared estimates of interest to become payable on public debt securities in future fiscal years and expenditures to be made on account of
retirements for the sinking fund and other special accounts, and prepared 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.
The character,and scope of the accounts maintained in this division,
as well as the volume of transactions to which they relate, are indicated in a measure by the public debt tables appearing elsewhere in
this report which were prepared from those accounts.
Division of Paper Custody
A summary of the operations of the Division of Paper Custody
during the fiscal year 1931 is presented in the following tables:
Receipts and issues of distinctive and nondistinctive paper during the fiscal year 1931
On hand
July 1,1930

Kind

Issues

Sheets
92, 352, 645

Sheets
87,167,904

724. 501
77, 356, 000
2,964, 491
1,853,488

1,104,117
84,008, 380
3, 586,491
2, 064, 550

Sheets
31, 786, 774
9,995
4,579,395
17,283,889
476, 000
685.378

170, 433
6, 525 379

181, 768
1, 553,144

254, 017
4, 516, 528

1, 002.000
328,000

1, 540,010
173, 000
5,300
93,000

146, 268
433, 000
16, 751
6,000

59, 393,722

182,276,937

181,477 664

60,192,996

Rolls
1,361
271

RoUs
7,884
311

Rolls
8,490
388

Distinctive paper for United States currency, Federal
reserve notes, and national bank currency, new
Sheets
series, 12 subjects
26,601,033
Bank note paper, experimental
9,995
United States bond paper
4,959, Oil
Internal revenue paper
23,936, 269
Postage stamp paper
1, 098, 000
Check paper
896,440
Parchment, artificial parchment, and parchment deed
265.352
paper
544, 293
Miscellaneous paper
Philippine Islands:
684, 278
Distinctive paper for Philippine currency...
Internal revenue paper
278, 000
Postal card
_._,.
22, 051
Porto Rican internal revenue paper
99, 000
Total
Postage stamp paperInternal revenue paper

On hand
June 30,
1931

Receipts

Rolls
755
194

Federal reserve notes, new series, received and issued during the fiscal year 1931
Federal reserve bank
Boston.New York
Philadelphia..
Cleveland:
Richmond
Atlanta..
Chicago
St. Louis
Minneapolis.Kansas City..
Dallas
San Francisco.
Total--.

On hand July
1,1930

Received

$220,200,000
.$189,900, 000
574,320, 000
615,860,000
237, 220, 000'
190,860, 000
294,320, 000
210.480, 000
173, 560, 000
276,960, 000
166, 320, 000
82, 320, 000
658.256,000
319,200, 000
83, 880, 000
104,460.000
46,400, 000
50,340,000
69.720,000
61,200, 000
89. 560,000
56,760, 000
121, 720,000
208,800,000

Issued

On hand June
30,1931

$77,800,000
365, 380, 000
172, 000, 000
196,180,000
144, 320,000
68, 780, 000
427,096, 000
116, 060, 000
20,000, 000
51, 240,000
16,240.000
273,480, 000

$332, 300, 000
824,800,000
256, 080.000
308, 620,000
306, 200, 000
179. 860, 000
550. 360,000
72,280, 000
76, 740,000
79, 680, 000
130, 080, 000
57, 040, 000

2, 777,016. 000 2, 325,600, 000 1,928, 576, 000

3,174,040, 000

255

SECKETAKY OF T H E TREASURY
Blank paper counted during the fiscal year 1931
United States securities, 13J4 by 16%
United States securities, 17}^ by 1 3 ^ - - «
United States securities, 13 by 163^
Philippine currency, 7H by 14^
Certificate of indebtedness, 19 by 12H
Certificate of indebtedness, 19 by 11
Standard Treasury bond, 15^2 by 162%2
Total

Sheets
37,233,639
480,000
63,842,169
1,002,000
103,001
107,500
514,000

-.-

93,282,209

Destruction Committee
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 thefiscalyear 1931. In addition
to the items enumerated, proof sheets, counterfeit notes, coins, and
counterfeiter's tools and equipment were received from various
sources and destroyed or disposed of as directed by the Secretary of
the Treasury.
Securities received and destroyed during the fiscal year 1931
Pieces i
Division of Loans and Currency and Treasurer of the United States:
New series—
United States notes
, 78,631,090
Silver certificates
600,395,886
32,238,094
Gold certificates
711,266,070

Old seriesUnited States notes
Silver certificates
Gold certificates
Treasury notes
Fractional notes

3,343,296
12,433,820
5, 202,400
3,497
6,425
20,988,438

Total

$323,596,093,00
600,390,890.00
444,895, 580. 00
• $1,368,882,563,00
14,421,907. 00
13,605,810.00
118,030,020. 00
21,800.00
1,230.41
146,080,767.41
1,614,963,330.41

732,253,608

Comptroller of the Currency and national
bank agents:
New seriesNational bank notes (6 per cent account)
_
_
National bank notes (retired)
. Unissued vault stock
.—
Old seriesNational bank notes (5 per cent account)National bank notes (retired)
Federal reserve bank notes (retired).
Emergency bank notes (retired)

61,443, 650
2,052,116
1,379,753

• 54.876,619

4, 793,1401^
680, 9971^
163,264
41
6,637,443

Total

-..

Comptroller of the Currency and Federal
reserve bank agents:
Federal reserve notes (new series)---....
Federal reserve notes (old series)

410,831,120.00
17,213,255. 00
13,780,260.00
441,824,636.00
60,169,502. 50
9,447,164. 50
286,080.00
550.00
59,903,287.00
501,727,922.00

60, 512,962
96,641,795
12,242,461

108,884,256

1 All money under the head of "pieces" is expressed in whole notes.

77532—32

Face value

853,724, 280.00
217,127,356.00
1,070,851,635.00

256

REPORT ON THE FINANCES
Securities received and destroyed during the fiscal year 1931—Continued
Pieces

Face value

Internal Revenue Bureau:
Miscellaneous stamps from Stamp Division
Miscellaneous stamps from Tobacco
Division
Refund, miscellaneous stamps. Tax
Unit
Commissioner of Internal Revenue,
unissued vault stock..Register of the Treasury:
Coupon bond notes. Federal reserve
(unissued)
Interest coupons, unissued
.-.
Interest coupons, unissued Federal reserve bank
Farm loan bonds and coupons
Registered war savings stamps, redeemed
Nonregistered war savings stamps, redeemed-Old loan registered securities, unissued-.
Old loan bearer securities, unissued

$3,881,198.26
270,581.92
142,011.33
3,602,939.60

377,859
5,277,630

129,699,000.00
334,075,697.38

585,472
481,453

25,890,181,21
332,171,423.26

90,199

450,872.48

371,990
39,075
12,536

1,859,950.00
74,641,570.00
28,188,750.00

7,236,114

Public Debt Service, photostats

131,125
909,018,444

Grand total-

Sheets

Total-

926,977,444.33

479

Division of Loans^and Currency, Security
Section, interest checks
-

Division of Loans and Currency (Bureau of
Engraving and Printing spoilage):
Money of all kinds
Postage stamps
Internal revenue stamps
Bonds and certificates of indebtednessCustoms and miscellaneous stamps
Postal savings certificates
Void coupons
Experimental, reclaimed and nonreclaimed
Division of Loans and Currency (Division
of Paper Custody):
Blank nondistinctive and bond paper...
Security paper

$7,896,731.01

4,022,417,062,75
Coupons

4,842,895 5/6
7,521,811 2677/4080
1,735, 580 567621/1832600
950,338 5/6
i, 122, 730 7/12
68,788 1/6
1,145,233
4,477
460, 591
16,707,311

79736237/186925200

1,145,233

PUBLIC HEALTHiSERVICE

Division of Sanitary Reports and Statistics
During the fiscal year 1931 reports of the prevalence of communicable diseases were received from State, county, and city health officers
in the United States and from foreign ports and countries through
American consular officers and other agencies. Officers of the
Public Health Service stationed in all parts of the United States and
in many foreign ports also supplied much valuable information as to
sanitary conditions. These reports were studied and the pertinent
data were abstracted or tabulated and published for the information
of health officers and other sanitarians.
A plan for the establishment of a morbidity reporting area was
prepared during the year and approved by the Annual Conference of
State and Territorial Health Authorities with the Public Health
Service. Under this plan eligibUity of States for admission to the
area is determined by the facihties of the State health departments
for securing and recording reports of cases of disease dangerous to the
public health and the attainment of at least the average ratio of
cases to deaths registered, as shown by computations made from the
reports to the Public Health Service for the three preceding years.
It is hoped that the reporting area, when established, wUl stimulate
interest in securing more accurate information as to the prevalence
of communicable diseases in the United States.
Work was continued on the annual compUations of Federal and
State laws and municipal ordinances and regulations pertaining to the
public health and the abstracting of court decisions relating to this
subject.
During the fiscal year the PubUc Health Reports was issued each
week. This publication contains current information of the prevalence of communicable diseases in the United States and abroad,
articles giving the results of research and special studies of problems
in the field of public health, and other material of interest to sanitarians and health officers.
The section of public health education distributed 528,257 copies
of publications, as compared with 366,690 copies during the preceding
year.
The appropriation for preparing exhibits for aiding in the promotion of pubUc health became avaUable July 1, 1930. Several
exhibits have been prepared which give much valuable information
to the public. Among the subjects covered are Rocky Mountain
spotted fever, leprosy, undulant fever, tularaemia, silicosis, postvaccinal tetanus, and mUk sanitation.

257

258

REPORT ON T H E FINANCES

The dissemination of health information by radio was continued
during the year, two lectures each month being mailed from
Washington to approximately 250 radio stations throughout the
United States.
Division of Foreign and Insular Quarantine and Immigration
Quarantine transactions.—During the fiscal year 22,504 vessels
and 2,891,746 persons were inspected by quarantine officers.
Inspections by quarantine ofiicers during the fiscal year 1931

At stations in continental United States
At insular stations - - . - • - - -At foreign ports prior to embarkation
i
Total

.
-

Seamen

Vessels

Passengers

14,955
3,417
4,132

773,743
161,037
365,194

1,039,524
235,537
316,711

22,504

1,299,974

1,591,772

In addition, 3,137 airplanes arrived at ojEcial airports of entry in
the United States from foreign ports requiring quarantine inspection.
These planes carried, 25,351 persons; of this number, 21,028 were
required to undergo medical examination prior to entry by medical
officers of the Public Health Service.
Of the passengers who embarked at European ports, 41,737 were
vaccinated and 38,639 were deloused under the supervision of medical
officers of the service. Their clothing and baggage, amounting to
54,763 pieces, were disinfected*.
A total of 4,072 vessels were fumigated either because of the occurrence of disease on board or for the destruction of rats, and 11,390
dead rats were retrieved following fumigation, of which 6,073 were
examined for plague infection.
During the year only four cases of smallpox and no case of plague,
cholera, yellow fever, or typhus fever arrived at quarantine stations
in the continental United States. Two cases of cholera occurred on
interisland vessels in the Philippine Islands. At the beginning of the
fiscal year cholera was present in epidemic form in several of the
islands in the Visayas. There was also a minor epidemic in the city
of Manila, with some 50 cases. Interisland quarantine was put into
effect against several ports, effective at various times during the year
for Manila, Cebu, Iloilo, the Province of Iloilo, the Province of Capiz,
the island of Bohol, and the island of Samar. This epidemic can not
be attributed to any recent importation, as past history shows that
cholera recurs in epidemic form in these islands every four or five
years and may be considered as endemic there.
Reports during the year regarding the possible presence of yellow
fever near certain ports of South America on the Caribbean coast,
particularly the western part, and on the east coast from the Amazon

SECRETARY OF THE TREASURY

259

River to Rio de Janeiro, were such as to warrant the issuance of instructions to quarantine officers at stations located on the Gulf and
Atlantic coasts south of the southern boundary of Maryland to be on
the alert iri making the quarantine inspection of vessels which had
called at these ports, especially at the smaller ports along the east
coast of South America. The port of Para (Belem), at the mouth of
the Amazon River, particularly is regarded as infected, and scattered
cases have been reported at various interior points more or less close
to several of the seaports along the co^st. It is understood that the
BrazUian authorities are maintaining an effective antimosquito campaign in the principal seaports and that danger of maritime spread is
decreased accordingly. Information has also been received from
reliable unofficial sources indicating the occurrence of cases of suspected yellow fever in the interior of Colombia in the region of Santa
Marta and Barranquilla, but as yet these reports lack official confirmation.
Cases of meningitis on vessels arriving at Pacific coast ports of the
United States have been practically nil during the past year. This
is attributed to a large extent to the effectiveness of the regulations
governing the embarkation of passengers and crews at ports in China
and the Philippine Islands and their transportation to the United
States. These regulations, prescribed in accordance with the provisions of Executive Order No. 5143, approved June 21, 1929, have been
modified from time to time as conditions warranted until, on November 7, 1930, first-class passengers were exempted from the application
of the special regulations, and steerage passengers were permitted
shore liberty in ports of call, provided epidemic cerebrospinal meningitis was not prevalent in such ports.
Of considerable interest in connection with the occurrence of cases
of meningitis among steerage passengers on vessels en route from
oriental ports is a study, now being conducted by two experienced
officers of the service, of ventilation and berthing facilities on vessels
engaged in carrying oriental steerage passengers. These studies
are being conducted jointly by representatives of the Public Health
Service, the steamship hue medical service, and the University of
California.
Executive Order No. 5264, issued by the President on January 24,
1930, restricting for the time being the introduction of parrots into
the United States, remains in effect. The regulations promulgated
by the Secretary of the Treasury under date of February 3, 1930,
under the provisions of this order, were modified on October 21, 1930,
following a conference with representatives of the Pet Dealers Associations of America and members of the Biological Survey of the United
States Department of Agriculture, to permit the importation of
commercial shipments of t]iese birds under approved sanitary restric

260

REPORT ON THE FINANCES

tions relating to crates, air space, etc. These revised regulations
represent the minimum conditions for providing a reasonable protection, short of the more drastic prohibition of aU importation, as
authorized by the Executive order. Prevention of the spread of
psittacosis through the importation of infected birds from foreign
countries appears to have been successful, as the past year has shown
a decided decrease in the number of cases of this disease ui the United
States as compared with the preceding year. The problem of the
effective control of psittacosis" has become a matter of international
interest, and this subject wiU form one of the major topics for discussion at the forthcoming meetuig of the Permanent Committee of
the Office International d'Hygiene Publique in Paris in October, 1931.
One of the major problems to-day confronting not only this country
but the countries of Latin America and the countries of Europe,
Asia, and Africa, is the sanitary control of aerial navigation. Regular
lines of aircraft have been established, providing direct and rapid
communication between areas in Africa, Asia, and South America
(which have long been endemic centers of various pestilential diseases
such as cholera, plague, and yellow fever) and noninfected but infectible territory in Europe, North America, and in fact almost all the
rest of the world. The journey by airplane from most of the endemic
centers of these various pestilential diseases is usually less than the
incubation period of these diseases, excepting journeys from endemic
centers of cholera.
The problem of the sanitary control of aerial navigation has been
receiving international attention by leading sanitarians for several
years, finally culminating in a proposed International Convention for
the Sanitary Control of Aerial Navigation, which was drawn up by
the Permanent Committee of the Office International d'Hygiene
Publique in Paris at the May, 1930, meeting. This proposed convention formed the principal topic for discussion at the last two meetings of the Permanent Committee of the International Office in Paris
in October, 1930, and May, 1931, as well as at the meeting in April,
1931, of the Second Pan American Conference of Directors of Health
held in Washington, D. C , under the auspices of the Pan American
Sanitary Bureau, of which the Surgeon General of the Public Health
Service is director. The views of these two most important international pubhc health bodies were incorporated in a final draft and
adopted by the Permanent Committee of the Office International
d'Hygiene PubUque at the meeting in Paris in May, 1931. This
Government was represented at this meeting by the Surgeon General
of the Public Health Service.
The special commission, appointed by the health section of the
League of Nations in 1927 to make a detailed study of the fumigation
of vessels for the destruction of rats with particular reference to the

SECRETARY OF THE TREASURY

261

fumigation with hydrocyanic acid of vessels laden with cargo, has
made plans to visit the New York quarantine station in September,
1931, to make some practical studies in connection with this work.
This commission first miet at Paris, May 14, 1928, for a prehminary
discussion of the lines the study should follow, and the Surgeon General of the Public Health Service was appointed chairman. A preliminary report of the investigations carried on in conformity with
these recommendations was submitted by the chairman to the commission at a meeting held in Paris on May 15, 1929, for which the
commission expressed its appreciation. It was at this meeting that
the commission recommended that certain of its members and experts
visit the United States to study the execution of the program of the
special investigations and researches approved by the commission.
In the meantime the New York quarantine station has been carrying
out work along these lines, and in anticipation of the proposed visit
of these experts a r^sum^ of these investigations has been prepared
as a guide for the commission.
During the past year a change has been made in the apphcation of
. the measures designed to prevent the spread of typhus fever at ports
of embarkation. This step was taken in view of the better organization of sanitary services and improvement in sanitary conditions now
obtaining throughout Europe. Where formerly the application of
the measures designed to prevent the spread of typhus fever was
based upon broad geographic locations, now their application is contingent upon the actual endemic or epidemic prevalence of typhus
fever in such ports, places, or areas, from which persons destined for
the United States have originated or embarked.
Medical inspection of aliens.—There were 761,436 alien passengers
and 916,868 ahen seamen examined by medical officers at the various
stations in the United States. Of this number, 20,962 passengers
and 1,597 seamen were '^certified" to the proper immigration officials
as being affiicted with a mental or physical defect, in accordance
with the act of Congress approved February 5, 1917. The most
important causes of certification of alien passengers were: Trachoma
340; tuberculosis, 181; feeble-mindedness, 114; insanity, 75; syphUis,
281; gonorrhea, 315. Of the alien seamen, 21 were certified for
trachoma, 26 for tuberculosis, 178 for syphUis, 178 for chancroid,
and 447 for gonorrhea.
During the past year Regulations Governing the Medical Examination of Aliens was revised and made available for distribution.
The previous regulations were promulgated in 1917, and, therefore,
revision was required to accord with advances made in the detection
of diseases as a result of research along these lines.
Examination of alien passengers in foreign countries,-^There were
103,078 applicants for immigration visas examined by medical officers

262

REPORT ON THE FINANCES

in foreign countries. Of this number 79,058 were examined by medical officers of the service attached to American consulates in Europe;
1,622 were reported by these officers to the consular officers as afflicted
with one or more of the diseases listed in class A as mandatorily
excludable; 13,458 were reported as affhcted with a disease or condition hsted in class B as liable to affect their ability to earn a living.
All of the apphcants reported in class A and 5,791 of those reported
in class B were refused immigration visas by the consular officers
because of the findings of the medical examination.
Of 94,412 aliens, who had been given a preliminary medical examination abroad and to whom visas had been issued, only 11 were certified upon arrival at a United States port as being affhcted with class
A diseases, resulting in mandatory deportation.
There has been no material change during the past year in the system of making medical examinations of applicants for immigration
visas in their countries of origin in Europe. On July 1, 1930, an
office was opened in the American consulate general at Vienna, Austria, where applicants were examined according to the intensive
method before visas were granted. This system of the medical exam- •
ination of applicants for visas at consulates was inaugurated during
the past year at other foreign places, viz, Vancouver, Winnipeg,
Windsor, Toronto, Quebec, Ottawa, Hamilton, and Yarmouth, Canada; Mexico City, Mexico; and Havana, Cuba. The system of the
medical examination of applicants for visas at consulates was inaugurated at Montreal, Canada, during the fiscal year 1929. At several
of the Canadian stations medical officers of the Public Health Service
are performing the medical examination of intending immigrants for
both the local office of the immigration service of the United States
Department of Labor and for the Department of State.
Division of Domestic (Interstate) Quarantine
Through cooperation with the State health agencies 87.5 per cent
of the 2,275 sources of drinking water used by railroads and 88 per
cent of the 243 sources used by vessels were inspected and controlled.
During the year water supply systems on 1,124 vessels were inspected. With the assistance of municipal health agencies, 4,894
samples of water used by common carriers were examined, and in
general these were found to comply with the standards set by the
Treasury Department. Conditions under which shellfish are produced and handled showed some improvement over previous years.
Services rendered other branches of the Government were extended
during the year, such cooperative activities requiring nearly onethird of the time of the engineers. This service included sanitary
surveys; designing of water, sewage, and garbage disposal facilities;
review of plans for sanitary projects; antimosquito measures; and

SECRETARY OF THE TREASURY .

263

other miscellaneous services in the field of sanitary engineering. The
services rendered the National Park Service, Bureau of Indian.
Affairs, Bureau of Prisons, and Supervising Architect's Office occupied
a large proportion of the time devoted to this cooperative work. In
addition, assistance on spe(5ial problems was given to the Lighthouse
Service, Veterans' Bureau, District of Columbia, Coast Guard, Army
Reclamation Service, and Forest Service.
Coordination and supervision of mosquito control in the District
of Columbia was carried on in accordance with the plan adopted in
1930. In addition to the commissioners and the Office of Public
Buildings and Public Parks, there are some 28 other Federal and
District agencies having jurisdiction over areas to be controlled.
The cooperation of all agencies in carrying on a coordinated control
plan has permitted the work to be conducted with reasonable
efficiency.
Regular cooperative rural sanitation demonstration projects were
conducted in 223 counties in 28 States. On January 1, 1931, a survey
made by the office of rural sanitation showed that there were 557
counties with full-time health service in the United States. This
represented a gain of 52 over the preceding year.
On February 6, 1931, Congress appropriated to the Public Health
Service the sum of $2,000,000 for emergency health work in the
drought-stricken areas. In carrying out this work a modification of
the plan used for the regular cooperative rural*sanitation activities
was adopted, with the result that details of administration were
quickly worked out with the States and field projects were under
way within a short time. By June 30, 1931, there were in operation
in the 16 States within the drought areas, 333 field organizations,
including projects covering 395 counties. The work carried on has
consisted of the activities usually conducted by full-time county
health units, with special emphasis upon the prevention of communicable diseases by general immunization, the sanitation of mUk
and water supplies, the improvement of excreta disposal conditions,
and attention to the health of infants, children, and mothers. I t is
believed that many of the temporary units organized wUl serve to
stimulate the establishment of permanent health departments supported with local funds in the future.
Trachoma eradication work was continued at Rolla, Mo., Knoxville, Tenn., and Richmond, Ky. Following the prevalence survey
made by the Public Health Service at the request of the State commissioner of health of Georgia, arrangements were made for the
opening of a treatment center at Bainbridge, in Decatur County.
The work included not only operation upon cases in dispensaries and
hospitals, but searches for affected individuals, foUow-up visits, and
general educational activities carried on in the rural sections by

264

REPORT ON THE FINANCES

public health nurses attached to the clinics. A total of 66,000 individuals were examined in schools, homes, field clinics, and dispensaries. There were 1,196 operations and 8,380 other treatments
given to 3,895 patients seen.
Plague eradication activities included intensive rodent control
measures carried on in cooperation with State and local authorities
in four California counties—Alameda, Contra Costa, San Francisco,
and San Mateo. In addition to the work done by the Public Health
Service in these four counties, a large amount of ground squirrel
eradication work was carried on by the State horticultural commissioners in other localities. Rodent surveys, trapping operations,
sanitary inspections, and laboratory examinations were continued in
San Francisco. No case of plague infection was found among the
rats examined during the year.
Division qf Scientific Research
An increased appropriation made available at the beginning of
the fiscal year for cancer research has resulted in considerable expansion of this work. Studies are being carried on both at the National
Institute of Health in Washington and at the cancer investigations
station of the service located in the Harvard Medical School at Boston,
Mass.
Studies at the National Institute of Health relate particularly to
the factors concerned in the growth of normal cells and cancer cells.
This is of fundamental importance, since an outstanding characteristic
of cancer cells is their unrestrained proliferation in the human and
animal body. It has been shown that glutathione apparently plays
an important function in cellular metabolism, and its effect on cell
division has emphasized the need for further chemical and biochemical
knowledge of this substance. Measurement of the hydrogen ion
concentration of tumors is of value in work on cultures of malignant
and normal tissues, and so work is being done on the development of a
microelectrode suitable for such measurement.
The work at the cancer investigations station is being developed
along the following Unes: (1) Studies of the biological effects of radiation. These studies will include the investigation of the biological
action of the whole spectrum of radiation, from the highest frequency
X rays to electromagnetic radiation. (2) Studies of resistance and
immunity to malignant growths. During the fiscal year a study was
made of various methods of immunizing laboratory animals against
a variety of transplantable tumors, and it is believed that a new
method of immunization was developed in the case of mouse sarcoma
No. 180. (3) Studies of the biochemistry of malignant cells. Plans
for this study were developed during the year. They provide for an
intensive study of the inorganic constituents of malignant as compared

SECRETARY OF THE TREASURY

265

with normal cells, particularly with reference to the inorganic constituents which are present in minimum amounts. (4) Studies of
susceptibility to malignant'growths and its modifications. Experiments are under way to study the modifying effects, if any, of certain
procedures upon the tumor rate in a colony of mice susceptible to
spontaneous tumors.
One of the most successful treatments for paresis consists in inducing an attack of benign tertian malaria, but institutions for the insane
have found difficulty in maintaining their strain of malaria and in
securing new strains. The office of malaria investigations is cooperating with the Division of Venereal Diseases and the Division of Mental
Hygiene in an inquiry into the possibility of, and best methods for,
transmitting a pure strain of benign tertian malaria to hospitals for
use in the treatment of paresis.
The Territorial Board of Health of Hawaii has increased its activities in connection with its leprosy investigations, and at the request
of the board the Public Health Service secured additional funds for
its epidemiological and bacteriological work on leprosy in Hawau.
Studies in nutrition have been concerned largely with the determination of the relative pellagra-preventive potency of single staple
foods and foodstuffs. Tests of a number of canned vegetables have
disclosed that some contain the pellagra-preventive factor or factors.
This is of practical benefit throughout the pellagrous sections, since
canned foods are available at the time of year when the diet is most
restricted and peUagra most prevalent.
Special surveys of the city health service in Wilkes-Barre, Pa.,
and Baltimore, Md., being conducted by the office of studies of public
health methods at the request of State and local health officials, were
in progress at the close of the fiscal year. The office of studies of
public health methods is an outgrowth of the office of administrative
health practice. The work of this office is to be concerned largely
with the development of means for measuring the effectiveness of
health services.
Child hygiene activities have included studies in (1) the mental
hygiene of childhood, (2) the vision of school children, (3) dental caries,
and (4) statistical studies of the physical status, growth, and development of school children.
A report of the municipal dust study, undertaken to determine the
effect of such dust upon the health of the inhabitants of the municipality, has been completed. No excess in the sickness rate was found
which could be attributed to dust exposure. Other studies to determine the health of workers in dusty trades have included an investigation of the workers in a cotton cloth manufacturing plant, a sUverware manufacturing plant, and in the hard and soft coal industries.
Studies of the hazards in the radium dial painting industry have been
completed and the data obtained have been analyzed. The amounts

266

REPORT ON THE FINANCES

of radium found in the workers employed under the improved conditions existing since 1926 are relatively small compared with the
amounts previously noted in serious o r fatal cases. The evidence
does, however, show the necessity for a still further reduction of exposure to prevent further accumulation and to provide a sufficient
factor of safety under varying conditions.
The subject of the hazard involved in the use of methyl alcohol
(methanol or wood alcohol) as a substitute for denatured ethyl alcohol
to prevent freezing in automobile radiators has been taken up with
the representatives of the industry in accordance with the request of
the Conference of State and Territorial Health Officers. An agreement
has been reached which, it is believed, will provide a sufficient safeguard. In this agreement reliance is placed on a distinctive coloring,
a chemical deterrent, and a warning label.
A new edition of the milk ordinance and code is being issued, carrying the recommendation of the Bureau of Dairy Industry of the
Department of Agriculture and the Public Health Service. There
are now 437 cities in 24 States which have adopted the standard mUk
ordinance. A number of research problems have been undertaken
in connection with the production of clean milk supplies.
By an arrangement with the committee on the costs of medical
care, records of iUness during a 12-month period in a group of abou^
10,000 urban and rural famUies scattered throughout the United
States have been made avaUable to the Public Health Service. A
number of studies are being made from these records.
The resurvey of the section of the Ohio River from above Cincinnati
to the mouth of the Kentucky River, which was begun in September,
1929, was discontinued in December, 1930. Preliminary analyses of
the data collected indicate that a number of interesting changes have
occurred in the pollution of the river since the previous investigation
in 1914-1916.
Experimental studies of the efficiency of artificial water purification
processes, commenced during the summer of 1924, were brought to a
conclusion during the fiscal year. The general purpose of these
studies has been to determine under conditions both of actual practice
and of experimental control the efficiencies and limitations of the
processes more commonly used in this country for the purification of
water supplies taken from sewage polluted sources. Studies, of
natural purification in poUuted waters have been continued.
Experiments have been continued in connection with studies of
typhus fever to determine the abUity of rat parasites to transmit the
typhus virus. During the year service officers discovered that fleas
may transmit this disease. This discovery is an important one, and
further epidemiological and laboratory studies are being made on
this subject.

SECRETARY OF THE TREASURY .

267

A disease of the Rocky Mountain spotted fever type has been
identified as occurring in States in the eastern and southeastern sections of the United States. Laboratory studies confirmed the epidemiological findings. This eastern type of spotted fever has so far
been found to exist in rural communities in Delaware, Pennsylvania,
Maryland, the District of Columbia, Virginia, and North Carolina.
The increasing knowledge of the extent and importance of tickborne diseases in this country, and particularly of Rocky Mountain
spotted fever, has led to the need for additional space which has been
met by the act of Congress passed February 27, 1931, providing for
the purchase of the Montana State Board of Entomology laboratory
located at Hamilton, Mont., and for the construction of a new laboratory building. The amount of Rocky Mountain spotted fever
vaccine manufactured has been doubled during each of the past four
years. The season of 1931 is the first since the use of the vaccine was
begun in 1925 during which it has been possible to fill all requests
for it.
An appropriation of $300,000 was authorized by the Congress for
the construction of additional buildings for the National Institute of
Hea;lth, the total cost of these buUdings not to exceed $750,000.
The reports received from the various State departments of health
show that 1,385 cases of undulant fever were officiaUy reported and
that these reports are not complete in some States. From studies
made, it appears that approximately half of the cases of undulant fever
are traceable to the use of raw milk from infected animals and the
other half to contact with infected animals on the farm, in stockyards, or in packing establishments.
The State of Delaware was added to the area of distribution in
which tularaemia has been found, leaving Maine, New Hampshire,
Vermont, and Connecticut as the only States where this infection has
not been recognized.
The service is continuing to take an active interest in cases of postvaccinal encephalitis occurring in the United States. D a t a regarding
62 proved or probable cases have been collected for the past 10 years;
of these 11 occurred in 1928, 13 in 1929, and 21 in 1930.
The Public Health Service exhibit on post-vaccinal tetanus at the
annual meeting of the American Medical Association held in PhUadelphia, June 8 to 12,1931, received the award of a certificate of merit.
A number of new sugar compounds have been discovered in connection with the sugar researches. The studies of these new compounds are of importance in many problems of health and disease,
and may also help to increase our knowledge concerning chehiical
constitution in organic chemistry in general.
The Chemical Foundation (Inc.) made a gift of $100,000 to the
National Institute of Health for the establishment of a research

268

REPORT ON THE FINANCES

fellowship in chemistry. This is the first large gift under the act of
May 26, 1930, which provided for the acceptance of donations to be
used in the study of fundamental problems of the diseases of man and
matters pertaining thereto.
By the act of AprU 9, 1930, the name of the advisory board of the
Hygienic Laboratory was changed to the National Advisory Health
CouncU, five additional members were authorized, and the functions
of the councU broadened. The first meeting of the new council was
held on April 9 and 10, 1931, and the work of the Public Health
Service was reviewed. While suggestions were offered for additional
lines of endeavor, the council as a whole felt that the work now being
carried on was of inestimable value in the field of public health and.
should be continued without material change.
Division of Marine Hospitals and Relief
The marine hospitals were filled to capacity, all beds not needed for
American merchant seamen being allotted to patients of the Veterans'
Administration in the ports where special hospitals have thus been
made unnecessary, namely, Buffalo, Cleveland, Detroit, EvansvUle,
Key West, LouisvUle, New Orleans, Norfolk, Pittsburgh, and Portland, Me. The daily average of all hospital patients was 4,565 and
of outpatients 724. There were 1,304 deaths in hospital. The number of admissions has continued to increase at the National Leper
Home, where there were 337 patients on June 30, 1931. The results
of treatment of leprosy have been very encouraging; the majority of
patients requested admission, and the number leaving without permission is almost negligible. The average per diem cost of care in all
the marine hospitals was $4.05, which includes salaries of hospital
personnel, food, fuel, equipment, and all operating expenses. This
is lower than the average cost of similar hospital treatment in private
institutions.
For the CivU Service Commission and other agencies making
official requests, 94,487 physical examinations were performed and
written reports made, all relating to the fitness of individuals for specified duties or for pension or retirement. Through lack of personnel
at regular relief stations and of funds to engage additional help, it
was not possible to comply with all requests. This is regrettable, as a
careful and impartial physical examination properly recorded is essential to the interests of both Government and the individual seeking
employment or claiming the benefits of retirement or compensation
for injury. In instances where a Government employee is believed
to be malingering or to have a communicable disease or mental derangement, the Civil Service Commission has recently authorized the
heads of Government departments and independent establishments
to obtain immediately a special physical examination at any relief

SECRETARY OF THE TREASURY

269

station of the Public Health Service. The Secretary of Commerce
and the Secretary of Agriculture have requested the assignment of
medical officers to the emergency first-aid rooms serving large groups
of employees.
Medical services given by the Public Health Service to the Employees' Compensation Commission would have cost the compensation fund more than $1,000,000 if obtained from private sources.
The hospital care furnished detained immigrants upon official
request amounted to 40,904 patient days.
Division qf Venereal Diseases
During the year the Division of Venereal Diseases has directed
especial efforts toward the solution of some of the more difficult
problems of the treatment of syphUis and gonorrhea. Working in
cooperation with the laboratories of several of the United States
marine hospitals, the following studies have been carried on:
Stapleton, Long Island, N . Y.—A study of syphUis patients who
show no symptoms of the disease and are therefore unrecognized
potential carriers has been completed and wUl be pubUshed shortly.
Experiments in prophylaxis of syphUis are under way. Further research in the effects of ultra high frequency currents in experimental
rabbit syphUis, the early diagnosis of syphilis by the microscopic
examination of serum from the primary lesion, and the potency of
suspensions of gonococci in the treatment of gonococcus infection
have constituted a part of the year's program.
Chicago, III.—Research on the use of biologic products to be
employed in the diagnosis and treatment of gonorrhea has been
continued.
Ellis Island, N . Y.—A cUnical study of the treatment of complications of gonorrhea by employing gonococcus vaccines and other
bacterial vaccines was carried out.
Hot Springs, Ark.—In the Hot Springs clinic a considerable number
of new chemical preparations were tried in order to determine their
value for the treatment of syphUis and gonorrhea.
The widespread interest in the use of malaria inoculation for the
treatment of syphilis of the nervous system, more particularly the
treatment of general paralysis of the insane, has resulted in an increasing number of requests for material for inoculation purposes.
Necessary preliminary studies are now in progress with a view to
determining the feasibility of supplying the infected material from
a central depot established by the Pubhc Health Service.
Studies of the chnical effects of various forms of treatment of
syphUis have been carried on in cooperation with'five important
treatment centers in the United States. During 1930 results of several
special studies have been pubUshed. I n the coining year this work is

270

PuEPORT ON THE FINANCES

to be continued under the general direction of the division with the
promise of financial assistance from a large philanthropic foundation.
At the Hot Springs clinic instruction in the care and treatment of
venereal disease patients was given to a selected group of practicing
physicians and nurses.
Efforts were directed toward raising the standards of treatment
in penal and correctional institutions, the work being done in conjunction with the Division of Mental Hygiene.
An organization for the control of syphUis among the Indians was
set up on one reservation, such as has been established among the
Negroes in one southern State. The progress of this work among the
Negroes is most satisfactory. At the close of the year nearly half
of the patients had received arsenical treatments in amounts which
are considered adequate to render them noninfectious.
Prevalence studies, inaugurated in 1926, have been continued.
This year three additional cities have been surveyed for the first
time. One-half of the communities originally studied have been
resurveyed in order to discover the trend of venereal infections and
the value of the methods employed in combating these diseases.
The encouraging point disclosed by these studies is that the increase
in prevalence rates when found occurs in the group of chronic cases,
indicating that patients are continuing under treatment for a longer
time than formerly.
Forty-three State departments of health reported a total of 289,039
cases of venereal diseases for the year, an increase of 3.8 per cent
over cases reported in 1930. The 512 cooperating clinics reported
142,915 of this number.
Educational activities comprised the distribution of literature, the
pubhcation of the monthly buUetin, Venereal Disease Information,
the lending of motion picture films, and public lectures. There has
been a marked increase in the number of requests for educational
material and an increase of 4,000 in the paid subscriptions to the
buUetin.
Division of Mental Hygiene
The year ended June 30,1931, marks the first full 12 months' activities of the Division of Mental Hygiene in the office of the Surgeon
General, the name of the division having been changed by legislative
act on June 14, 1930 (U. S. Code, Supp. IV, title 21, sec. 225), from
the Narcotics Division to the Division of Mental Hygiene. The
functions of the division, as defined by law, are both administrative
and investigative in character.
The activities of the Division of Mental Hygiene during the past
fiscal year have been concerned with studies of the nature of drug
addiction and methods of treatment, embracing the compUation of
data on the epidemiological features of drug addiction and special

SECRETARY OF THE TREASURY

271

studies among drug addict Federal prisoners at the United States
penitentiary annex. Fort Leavenworth, Kans.; with the dissemination
of information on the methods of treatment and research in this
particular field; with the cooperation with States and local jurisdictions with a view to their providing facUities for the care and treatment of drug addicts; and with studies and investigations of the
abusive use of narcotic drugs and the quantities of such drugs necessary to supply the normal and emergency medical and scientific
requirements of the United States.
The site for the first United States narcotic farm was acquired on
March 14, 1931, and plans for the development of this institution were
begun during the fiscal year. The site for the second United States
narcotic farm was selected on June 1, 1931, pursuant to section 2 of
the act approved January 19, 1929, by the three cabinet officers
charged in law with this duty, after appropriate advertisement by the
Treasury Department and upon receipt of information from the
Federal Real Estate Board that no Government-owned site was avaUable in the section of the country chosen as a desirable place to locate
the institution.
A significant change affecting the individual Federal prisoner
occurred during the year. Under the act of May 13, 1930, the United
States Public Health Service was authorized to supervise and furnish
the medical and psychiatric services in the Federal penal and correctional institutions. The organization of this work was inaugurated
July 1, 1930, through the Division of Mental Hygiene, and considerable progress has been made toward developing an adequate
medical service for these institutions. Old, obsolete, and unserviceable hospital equipment and furnishings are being replaced as rapidly
as available funds permit.
Division of Personnel and Accounts
Personnel.—On July 1, 1931, the regular commissioned corps of the
Public Health Service consisted of the Surgeon General, 8 assistant
surgeons general, 41 medical directors, 1 pharmacologist director in
the grade of medical director, 31 senior surgeons, 1 senior dental surgeon, 1 senior sanitary engineer in the grade of senior surgeon, 89
surgeons, 13 dental surgeons, 12 sanitary engineers in the grade of
surgeon, 62 passed assistant surgeons, 6 passed assistant dental surgeons and 5 passed assistant sanitary engineers in the grade of passed
assistant surgeons, 53 assistant surgeons, 11 assistant dental surgeons, 4 assistant sanitary engineers and 10 assistant pharmacists,
all in the grade of assistant surgeon, a total of 349 officers. Of this
number, 2 medical directors, 14 senior surgeons, 8 surgeons, and 2
passed assistant surgeons were on waiting orders.
The number of reserve officers on active duty on July 1, 1931,
was 31. This number included 5 surgeons, 2 dental surgeons, 11
77532—32

^20

272

REPORT ON THE FINANCES

passed assistant surgeons, 1 passed assistant dental surgeon, 7 assistant
surgeons, and 5 assistant dental surgeons.
The following tabulation shows the entire personnel of the service
on July 1, 1931, including part-time employees, all persons paid on a
fee basis, and aU who are paid per diem rates when actually employed. It does not uiclude 4,616 appointees designated as coUaborating epidemiologists and assistant collaboratiag epidemiologists,
who serve at nominal compensation, and who assist in the collection
of statistics relating to the prevalence of communicable diseases, being
for the most part officers or employees of State and local health
organizations.
,
Commissioned officers, regular corps
Commissioned officers, reserve corps
Acting assistant surgeons
Attending specialists and consultants
Contract dental surgeons
Internes
Scientific personnel, National Institute of Health
Pharmacists
Administrative assistants
Druggists
Nurses
Aides
_
___
Dietitians
Laboratorians
Pilots
_
Marine engineers
Clerks
All other field employees
Departmental personnel

349
31
717
370
41
98
29
19
27
16
612
39
25
33
40
37
.—
324
3, 601
196

Total..--

6,504

Financial statement,—FoUowing is a statement of appropriations
and expenditures for the fiscal year 1931:
Appropriation title
Salaries, oflBce of the Surgeon General
Pay, etc., commissioned oflScers and pharmacists—
Pay of acting assistant surgeons
Pay of other employees
Freight, transportation, etc
Maintenance, National Institute of Health
Books
Pay of personnel and maintenance of hospitals
Quarantine service
Preventing the spread of epidemic diseases
Field investigations of public health
Interstate quarantine service
Studies of rural sanitation
Control of biologic products
Expenses, Division of Venereal Diseases
Narcotic farms
Educational exhibits
studies of rural sanitation, drought-stricken areas.
Total

Appropriated
$333,815.00
1,361,028. 00
378,300. 00
1,081,650.00
29,000.00
43,000. 00
600. 00
17,044,511.60
777,000. 00
400,000. 00
391,000. 00
68,520.00
338,000.00
46, 620.00
100,000.00
40,790 00
2, 600.00
2 2,000,000.00
14,436,234.60

1 Includes $1,167,016.60 reimbursement for care of Veterans* Administration patients*
> Appropriation available for fiscal years 1031 and 1032.

Expended
$332,064. 65
1,353,574.98
375, 601. 94
1,070,038. 01
28,246. 04
42,278. 93
498. 96
7,003,496.50
767, 634. 28
258.739. 95
378, 886. 30
66,155. 57
324, 279. 21
45, 736. 54
89,020. 09
31,915. 55
2,491. 67
.388,627.31
12,559,276.48

SECRETARY OF THE TREASURY

273

The revenues derived from operations of the Public Health Service
during the fiscal year 1931 and covered into the Treasury as miscellaneous receipts are as follows:
Source of revenue:
Amount
Quarantine charges
$444, 646. 88
Hospitalization charges and expenses
34, 408. 28
Sale of rations
14, 414. 54
Sale of obsolete or unserviceable equipment
3, 407. 99
Sale of products, by-products, etc
3, 401. 45
Sale of misceUaneous services
299. 44
Rents
180. 00
Commissions on pay telephones
.
1, 210. 91
Reimbursement by Chilean Government for services rendered12, 502. 75
Other revenues
67. 58
Total.

514, 539. 82

SECRET SERVICE DIVISION

During the fiscal year 1931, 1,524 persons were arrested by agents
of the service, or by their direction, on charges involving counterfeiting of the obligations of the United States and forgery, as well as
miscellaneous offenses against the Federal ^ statu tes relating to the
Treasury Department. Of the total number apprehended, 428 were
note counterfeiters and note passers, 127 were note raisers and passers
of altered currency, 423 were coin counterfeiters and coin passers,
436 were check forgers, 8 were taken into custody for negotiating
stolen or forged bonds, 33 were held for fraudulent negotiation of
adjusted service certificates, and 69 arrests were made for miscellaneous offenses.
Of the total number of persons arrested, 888 were convicted and
sentenced, 46 were acquitted, and 335 are awaiting action of the
courts, while others were variously disposed of, some being committed
to insane asylums and others dehvered to the military or police
authorities.
Eleven new counterfeit note issues appeared. during the year
warranting distribution of descriptive warning circulars, while approximately 35 unidentified counterfeit productions of varying types
of manufacture circulated in different sections of the country for
short periods, some being handdrawn and photographic specimens of
extremely crude workmanship. Counterfeit notes aggregating $391,957.80, including fractional currency, and altered notes aggregating
$30,572 were captured or seized by operatives of the service, and
counterfeit coins aggregating $44,078.11 were also confiscated in
connection wdth raids and subsequent arrests.
Although the number of arrests exceeds any previous year by
several hundred, the volume of counterfeit notes seized and captured
was $117,121 less than the previous year; and of the total of $391,957
confiscated, agents captured $195,877 direct from the counterfeiters,
and, therefore, prevented the spurious issues from getting into circulation. In one case on the Pacific coast agents seized $87,500 in
counterfeit $20 notes on the Federal Reserve Bank of San Francisco,
and confiscated a comprehensive printing and engraving plant. In
New York operatives suppressed in its incipiency a well-organized
plan to circulate a new $10 Federal reserve note; and arrests there
led to the seizure of $28,000 in new counterfeit $10 and $20 gold
notes and $7,400 in new counterfeit $100 gold notes which had never
appeared in circulation.
Agents captured or seized 602 plates and glass and film negatives
for printing counterfeit obligations and securities and 14 plates for
274

SECRETARY OF THE TREASURY

275

foreign notes, 312K molds for counterfeiting coins, 5K steel dies,
together with a large quantity of miscellaneous materials and paraphernalia.
Agents investigated 1,322 check cases, 77 bond cases, and 27 warsavings stamp cases, and in check case investigations received and
transmitted to the department in restitution the sum of $6,306.92.
Investigation of violations of the World War adjusted compensation act, involving altered adjusted service certificates and loans
fraudulently obtained, resulted in 33 arrests by agents in 145 cases
warranting inquiry.
Four cases were investigated by the service involving violation of
the farm loan act and 131 requests were received from the General
Supply Committee for information concerning prospective bidders
on Government supplies, reports corresponding to this number being
furnished by field agents.

OFFICE OF THE SUPERVISING ARCHITECT

In the activities covered in the following report, the so-called
public building program constitutes the major undertaking. The
Supervising Architect's Office performed in addition, however, miscellaneous architectural work on various proposed Government buildings the construction of which is under other Government agencies,
and continued to supervise the remodeling, enlarging, maintenance,
and repair of the large number of public buildings throughout the
country, continuously under the control of this office.
Public building program
The particular set of projects known as the public buUding program
was inaugurated with the appropriations provided under the act of
March 5, 1928, as a result of a nation-wide survey of the Government's
housing needs made by the Secretary of the Treasury and the Postmaster General in 1927. General authorizations for the beginning
of the work, however, were made in the act approved May 25, 1926.
This program contemplates the provision of suitable accommodations
in Washington for administrative departments and independent establishments of the Government, and of Federal buildings throughout the
'country, including post offices, courthouses, marine hospitals, quarantine stations, and other public buildings of the classes controlled by
the Supervising Architect's Office.
The magnitude of the program is indicated by the general authorizations for expenditures made by Congress to June 30, 1931. These
authorizations amount to $629,239,000, plus the proceeds from the
sale of property now held by the Government, estimated at $69,000,000. Contracts may be entered into for the buildings and sites
covered by these general authorizations only after the necessary
amounts have been appropriated by Congress for specific projects.
Such specific appropriations of Congress amounted to $495,441,192.26
up to June 30, 1931. Contracts awarded and land obligations
assumed by authority of such specific appropriations aggregated
$199,219,476.91, and expenditures under such contracts and obligations were $140,448,888.46 to the same date.
The public building program includes in the District of Columbia
sites and construction of the following:
Limit of cost

Administration building. Department of Agriculture
Extension, Government Printing Office
Internal Revenue Building.
Commerce Building
Extensible building, Department of Agriculture
276

$2, 000, 000
1, 260, 000
10, 000, 000
17, 500, 000
12, 800, 000

SECRETARY OF THE TREASURY

277
Limit of cost

Archives Building
Additional stories. Liberty Loan Building
;
Economics Building (purchased building)
Supreme Court site
--_
Water mains
Post Office Department Building
Interstate Commerce Commission Building
.
Department of Labor Building
Connecting wing between Labor and Interstate Commerce BuildingsDepartment of Justice Building
I
Public Health Service Building
State, War, and Navy Building, remodeling
Landscape work
Extension and remodeling of power plant. Department of Agriculture-..
.
Central heating plant.—
_.
Coast Guard Building

$8, 750, 000
375, 000
350, 000
1, 768, 741
525, 000
10, 300, 000
4, 500, 000
4, 750, 000
2, 000, 000
12, 000, 000
865,000
3, 000, 000
50, 000
85,000
4, 857, 023
3, 000, 000

The locations of proposed new buUdings or extensions of existing
buildings outside the District of Columbia are listed in House
Document 788, Seventy-first Congress, third session, dated February
27, 1931.
The legislation passed during the fiscal year relating to this program and the statistics indicating the progress on the program during
the year, as well as the results to date, are presented in detail below.
Legislation during the fiscal year.—The second Keyes-Elliott Act
was passed on February 16, 1931. The principal provisions of this
act were: (1) An increase of $100,000,000 in the general authorizations; (2) an increase in the limit oi annual expenditures from
$50,000,000 to $65,000,000; and (3) an increase in the limit of annual
expenditure in any one State from $10,000,000 to $20,000,000 untU
December 31, 1933, and $15,000,000 thereafter. The Treasury
appropriation act approved May 15, 1930, included an appropriation
of $7,000,000 for the acquisition of the so-called triangle properties in
the District of Columbia. In the second deficiency act of July 3,
1930, 231 specific projects were authorized, 221 projects for the
country at large and 10 projects for the District of Columbia, involving limits of cost aggregating approximately $130,000,000. Of
these, 39 are modifications or augmentations of previous authorizations. The Treasury appropriation act approved February 23, 1931,included an appropriation of $5,000,000 for the acquisition of the triangle properties. In the second deficiency act of March 4, 1931, 315
specific projects were authorized, 310 projects for the country at large
and 5 projects for the District of Columbia, involving limits of cost
aggregating approximately $91,300,000. Of these, 25 are modifications or augmentations of previous authorizations.

278

REPORT ON T H E FINANCES

General authorizations,—Total general authorizations of the Congress under the two Keyes-Elliott Acts and earlier acts covering this
program are shown in the following table. These general authorizations include authorizations for buildings and sites.
General authorizations for public building program
Total general authorizations for all buildings, extensions, etc., up
to June 30, 1930, including all land authorizations outside of
the District oio Columbia and certain ones in the District of
Columbia
$480, 000, 000
Authorization for purchase of triangle site in the District of Columbia
40, 000, 000
Authorizations prior to May 25, 1926
9, 239, 000
Total general authorizations to June 30, 1930

529, 239, 000

Total increases in authorizations for building and land sites during the fiscal year 1931 under the act of Feb. 16, 1931 (including $69,000,000 expected to be realized from the sale of property
now owned by the Government)
Total general authorizations to June 30, 1931

169, 000, 000
698, 239, 000

Specific authorizations of projects.—The part of the above general
authorizations which have been authorized or appropriated for use
in specific projects by the Congress at a definite limit of cost for each
project, up to June 30, 1931, is shown in the following table:
Number and amounts of specific authorizations for buildings and land, and appropriations for land purchases up to June SO, 1931, under the public building
program
Number of
projects
Authorizations for specific projects outside the District of Columbia up to
June 30,1931, including all land site authorizations..--Authorizations for specific projects in the District of Columbia including
certain, but not all, land site authorizations up to June 30,1931
Total specific authorizations exclusive of certain land site appropriations
in the District of Columbia to June 30, 1931
Specific appropriations for certain additional land sites in the District of
Columbia.
Total specific authorizations and appropriations for buildings and land
sites to June 30,1931
-

Amount

796

$366, 035, 428. 04

100, 725, 764. 22

817

466, 761,192. 26
28,680,000.00
495, 441,192. 26

1 Since sites in the District of Columbia are purchased in small parcels, it is not feasible to indicate the
number of sites purchased.

Contracts.—Contracts authorized by the acts of July 3, 1926, March
5, 1928, May 5, 1928, May 29, 1928, March 4, 1929, March 26, 1930,
July 3, 1930, and March 4, 1931, awarded for the construction of new
buildings, the extension of existing buildings, and for the purchase

SECRETARY OF THE TREASURY

279

of land sites both within and outside the District of Columbia up to
June 30, 1931, are as follows:
Contracts awarded up to June 30, 1930:
Outside the District of Columbia—
Under public building program authorization
Under prior authorization
In the District of Columbia.-

__ $56, 540, 350. 89
6, 006, 456. 86
^36, 085, 062. 55

Total
Obligations for triangle site in District of Columbia, assumed
up to June 30, 1930
.

98, 631, 870. 30
11, 326, 600. 49

Total contracts awarded and land obligations assumed
to June 30, 1930
109, 958, 470. 79
Contracts awarded during the fiscal year 1931:
Outside the District of Columbia—
Buildings.._•
Land
.
Buildings under prior authorization
In the District of Columbia

.'__

Total
Obligations for triangle site in District of Columbia, assumed
during the fiscal year 1931
Total contracts awarded and land obligations assumed
during the fiscal year 1931
Contracts awarded to June 30, 1931:
Outside District of Columbia
In the District of Columbia

42, 321, 167. 03
30, 910, 527. 17
2, 887, 083. 06
953, 838. 62
77, 072, 615. 88
12, 188, 390. 24
89,261,006. 12
138, 665, 585. 01
37,038,904. 17

Total
. - 175,704,486. 18
Obligations for triangle site in District of Columbia, assumed
up to June 30, 1931
.
._ 23, 514, 990. 73
Total contracts awarded and land obligations assumed
up to June 30, 1931
.
199, 219, 476. 91
Balance specifically authorized but yet to be placed under
contract
291, 056, 706. 08
Balance specifically appropriated but yet to be obligated for
purchase of sites in District of Columbia
5, 165, 009. 27
Total amount unobligated for land and buildings

296, 221, 715. 35

Of the total of $89,261,006.12 obligated for aU purposes during the
fiscal year, $46,162,088.71 represents contracts for the construction
or extension of 140 building projects, including minor related contracts. Land obligations assumed during this period amounted to
1 Total contracts in the District of Columbia as reported for the fiscal year 1930 have been reduced by
$1,074,672.30, due to this amount having been transferred to acquisition of triangle properties during the
fiscal year 1931 in compliance with the act approved July 3,1930.

280

REPORT ON T H E FINANCES

$30,910,517.27. A total of 284 projects, including both buildings and
sites, but exclusive of the triangle properties in the District of Columbia, have thus been placed under contract up to June 30, 1931, aggregating $175,704,486.18. Eight of these projects are in the District
of Columbia. There thus remain 533 specifically authorized projects
yet to be placed under contract, aggregating $291,056,706.08, exclusive of the triangle property in the District of Columbia.
Among the contracts awarded during the fiscal year 1931 were the
following large building projects:
Amount

Richmond, Va., post office...
Tulsa, Okla., post office extension
New York, N. Y., assay office
Albuquerque, N. Mex., post office extension
Fall River, Mass., post office
Oklahoma City, Okla., post office
Springfield, Mass., post office
Boston, Mass., post office
Camden, N. J., post office
Oakland, Calif., post office
Kansas City, Mo., post office
Seattle, Wash., marine hospital
Salt Lake City, Utah, post office extension

$778, 000
632, 800
1, 673, 292
503, 000
407, 000
951, 532
633, 900
4, 648, 900
484, 691
545, 200
2, 330, 000
1, 269, 900
815, 000

Expenditures and outstanding contract obligations.—^Of the $495,441192.26 specifically authorized as of June 30, 1931, $199,219,476.91
in the aggregate had been obligated to that date. Expenditures
have been made under these obligations to the amount of $140,448,.46, including expenditures for the fiscal year 1931 amounting to
3,522,202.45. Expenditures in 1931 included $48,262,139.22 for
the country at large and $18,260,063.23 for the District of Columbia.
Sites.—The situation with reference to land sites may be summarized as follows:
Status of sites as of June 30, 1931
Sites
' Outside the District of Columbia:
Acquired previous to June 30,1930
Acquired during the fiscal year 1931
Proposals accepted—
Selected, condemnation proceedings institutedDonations
Exchanges
TotalIn the District of Columbia: 2
Expenditures to June 30,1930
Expenditures during the fiscal year 1931
Total——.
In process of acquisition either by negotiation or condemnation proceedings
(approximate)
Total (approximate).

Number

135 $22, 527,020.94
127 26,440,317. 69
157 29, 329, 369.80
21 1 4,805,770.00
12
1
453

83,102,478.43
16,611,285.84
11,755,747.29
27,367,033.13
17,891,248.94
46,258,282.07

1 Total amount of original proposals.
3 Since sites in the District of Columbia are purchased in small parcels, it is not feasible to indicate the
number of sites purchased.

SECRETARY OF THE TREASURY'

281

Contracts for outside professional services.—Under the authority of
the Keyes-Elliott Act (March 31, 1930), which authorized the employment of outside architects for full professional services, contracts were made with such architects early in the fiscal year for 78
projects, amounting to $165,582,023.22.
Status of work in the Office of the Supervising Architect,—In addition to the large amount of work necessary in connection with the
employment of private architects, such as issuing both general and
specific instructions involving a great volume of correspondence,
criticizing sketch plans, revising working drawings and specifications,
etc., the Office of the Supervising Architect has prepared plans and
specifications for a large number of projects. On June 30, 1931,
there were about 115 projects in the drawing stage with limits of cost
approximating $22,821,000; 81 projects for which bids were being
obtained or for which specifications were being prepared with limits
of cost totaling $73,406,800; and 171 projects under contract with a
total limit of cost aggregathig $99,430,366, making a total of 367
projects in the production state with limits of cost aggregating $195,658,166. Of the 171 projects under contract, 140 were placed under
contract during the fiscal year 1931, the total hmit of cost being
$52,709,100.
Miscellaneous work
Beside the work connected with the public building program, the
services performed by the Office of the Supervising Architect during
the current fiscal year included:
The completion of plans and specifications and the awarding of a
contract for the Coast Guard Academy, New London, Conn., involving approximately $2,500,000.
The supervision of plans and specifications and the awarding of
a contract for a Federal prison for the Department of Justice at
Lewisburg, Pa., limit of cost of $3,850,000.
The supervision of the preparation of plans and specifications
prepared by private architects for reformatories at El Reno, Okla.,
and Sprmgfield, Mo., totalmg $5,500,000.
The preparation of plans and specifications for one narcotic farm
at Lexington, Ky., involving approximately $3,750,000.
The completion of plans and specifications for foreign service
buildings for the State Department, as foUows: Shanghai, China,
consulate buUding; Mukden, China, inclosure wall; Rio de Janeiro,
Brazil, consulate building; Aden, Arabia, consulate building; Calcutta, India, residence; Calcutta, India, office; and Monrovia, Liberia, consulate building; the preparation of plans and specifications for consulate buildings at Mukden, China; Santiago,
Cuba; Bluefields, Managua, and Mantanzas, Nicaragua; and supervision of the plans and specifications prepared by private architects

282

REPORT ON THE FINANCES

for consulate buildings at Paris, France; Lima, Peru; Ottawa,
Canada; Prague, Czechoslovakia; Montevideo, Uruguay; and Buenos
Aires, Argentina.
Remodeling and enlarging public buildings
Under the $500,000 annual appropriation for remodeling and enlarging public buildings, 54 buildings received attention under a
total obligation of $485,266.42 during the current fiscal year, the
limit of expenditures for any one building being $25,000. Total
space gained under these operations was 60,499 square feet at between $7 and $8 per foot, which is considered reasonable.
Annual appropriations for maintenance, repairs, etc., of public buildings
The 1931 appropriations for operating force, operating supplies,
repairs and preservation, mechanical equipment, furniture and furniture repairs, and vaults and safes, aggregated $14,698,500. The
Office of the Supervising Architect has charge of 1,406 completed
courthouses, post offices, customhouses, etc., and 58 quarantine
stations and marine hospitals, making a total of 1,464 buildings
throughout the country, to which new buildings and extensions are
added every year. The expenditures under these appropriations
increase accordingly and practically the entire appropriations have
been expended.
Total expenditures
Total expenditures for all purposes by the Office of the Supervising
Architect during the fiscal year 1931, together with outstanding
contract liabilities and remaining unencumbered balances of appropriations, are shown in the following table:
Expenditures from July 1, 1930, to June 30, 1931, contract liabilities charged against
appropriations, and unencumbered balances

Expenditures

S t a t u t o r y roll
Sites a n d additional l a n d
C o n s t r u c t i o n of new buildings
i
Extensions to buildings
Miscellaneous special item.^
Unallotted appropriation (lump sum)
R e m o d e l i n g a n d enlarging p u b l i c buildings
L a n d s a n d other p r o p e r t y of t h e U n i t e d States
R e p a i r s a n d preservation of p u b l i c buildings
M e c h a n i c a l e q u i p m e n t for p u b l i c buildings
• V a u l t s a n d safes for p u b l i c buildings
F u r n i t u r e a n d repairs of s a m e for p u b l i c buildings-.
Operating supplies for p u b l i c buildings
General expenses of p u b l i c buildings
R e n t of t e m p o r a r y q u a r t e r s
Outside professional services—
O p e r a t i n g force for p u b l i c buildings

Total1 I n c l u d e s $5,000 reserve, 1930.
« I n c l u d e s $6,000 reserve, 1930; $100,000,1931.

Contract
habilities
charged
against
appropriations

$493, 673. 78
38, 443, 679. 98
23, 450,069. 76
5, 573,125. 42
45, 758. 09

$37. 50
12, 365,194. 28
38, 794,845. 45
9, 237, 598.11
55, 305. 00

270, 678. 58
8.40
1, 595, 560. 72
616, 888.89
163, 763. 30
1,071, 263. 70
2, 946, 718. 72
2,012,589.07
947, 076. 58
1, 330,802.49
7, 665, 702. 41

238, 278.14

86, 627, 359. 89

387.168. 75
110, 872. 52
60, 298. 66
236, 669.17
382, 757.98
47,853. 70
127, 975. 09
4, 721, 750. 92
966,137. 36
67, 782, 742. 63

Unencumbered
balances,
J u n e 30, 1931

$33, 318.14
5, 242, 459. 27
8, 663, 473. 98
3, 257, 523. 55
23, 423. 66
53, 325, 000. 00
26, 629. 83
1, 085. 40
22, 825. 43
18, 742. 41
127, 971. 59
^ 17,488. 89
»234, 338.80
3 289, 733.15
191, 196. 33
513, 395. 75
112, 248. 20
72, 000,864. 38

J I n c l u d e s $26,000 reserve, 1930.

SECKETARY OP THE TBEASUEY

283

The following table shows the total expenditures to June 30, 1931,
for all purposes for buildings under the control of the Treasury
Department:
Classification of public buildings under the control of the Treasury Department, by
titles, showing expenditures in each class to June SO, 1931^ prepared pursuant
io act approved June 6, 1900 {31 Stat. 592)
Construction

Extensions,
alterations, and Annual repairs
special items

Total
expenditures,
June 30, 1931

Post oflSce, courthouse, customhouse
buildings, etc
_
$114, 094, 443.13 $22, 500, 028.04 $19, 456, 446. 94 $156,060,918.11
Courthouse buildings
_
995, 995.17
203, 708. 92
507, 080.. 00
1, 706, 784.09
Customhouse buildingi
23.97.3,120. 64
3, 483,126. 95
30,057, 274.16
2, 601, 026. 57
Marine hospital buildings
8, 555, 885. 93
3, 670, 901. 88
3, 669. 528.89
15, 896. 316. 70
Post office buildings
97, 267, 028. 96
6.055,115. 44 11,601,501.99
114,923, 646. 39
Quarantine station buildings
3. 366, 724. 06
2, 376, 484. 82
1,677,950.63
7,421,159. 51
Veterans' hospital buildings
493, 355.47
369, 076. 52
104, 010. 20
966,442.19
59, 739, 532. 75
5,037,100.16
Miscellaneous buildings—.
6, 094, 833. 82
70, 871, 466. 73
Total

308,486,086.11

Cost of sites

Post oflQce, courthouse, customhouse
buildings, etc
$36,090,170. 66
Courthouse buildings
1,500,834. 69
Customhouse buildings
3,886,822. 33
Marine hospital buildings.--.
799,238.97
Post office buildings
49,933,453. 70
Quarantine station buildings
308,837. 60
Miscellaneous buildings
48,856,515. 69
Unallotted appropriation Oump sum)-.
Total-

141,375,873.64

43,695, 542. 73

45,712,379.04

397,894,007.88

Outstanding liabilities chargeUnencumbered
able against appropriations
balance of
appropriations
Buildings
Sites

$6,634, 617. 26 $22,116, 755. 72
396,133. 71
2,450, 000. 00
147,192. 00
2,927,139. 28
277.43
12,812,246.71
2,377,
00
49,818. 71
11, 505.
794. 60
9,688,462.43
991,

$1,635,173.00
51,950. 67
10, 284.90
304,085.30
4,270,404. 26
163,817.89
10,751,164.44
63,325,000.00

12,365,194.28

70,611,880.46

48,137,748.56

Personnel
The personnel in the Office of the Supervising Architect includes
200 architects, 203 engineers and architectural engineers, 165 district
and construction engineers, inspectors, etc. (field force), 316 clerks
and general office workers. Of these, 267 have been added to the
force during the fiscal year 1931. In addition 1=36 architectural
firms throughout the country are engaging in work for the Office of
the Supervising Architect, 133 of these having been added to the
list during the fiscal year 1931.

DIVISION OP SUPPLY

The Division of Supply, in the office of the Secretary, is the central procuring or purchasing agency of the Treasury Department,
and, as such, does the purchasing for aU local and field activities,
with the exception of those from appropriations for the Bureau of
Engraving and Printing (exempted by law), the Coast Guard, and, to
some extent, the Bureau of the Mint. It is charged also with certain
duties closely related to purchasing, such as accounting for funds
appropriated or allotted to it; supervision over printing and binding
for the Treasury Department and engraving work by the Bureau of
Engraving and Printing for all departments and establishments, unless
money, bonds, or stamps are involved; control over newspaper and
periodical advertising for the department; routing of all freight, express, and parcel-post shipments; and warehousing and distribution
of stationery and miscellaneous supplies, including blank books and
forms, to Washington and field offices of the Treasury Department.
The appropriations to the department for purchases of stationery,
and for printing and binding, are under its admiaistrative control.
Expenditures from various appropriations
The total cost of purchases made by the Division of Supply during
each of the past five fiscal years from specified appropriations from
which allotments were made to the division to cover expenditures
made by it, and also purchases chargeable to appropriations from
which no aUotments were made, are shown in the following table:
Expenditures hy Division of Supply for the fiscal years 1927 to 1931, by appropriations
Bureaus and offices and titles of
appropriations
Chief Clerk and Superintendent:
Contingent expenses, 'Treasury Department
Carpets and repairs
File holders and cases .
Freight, telegrams, etc
Fuel, etc
Furniture, etc
Gas, etc
Motor vehicles
Miscellaneous items
Newspaper clippings and
books
- -Rent
Labor-saving ma*chinesOperating expensesTreasury Department
Annex—
Darby Building
Library
Total

284

1927

1928

1929

$977. 83
7,969.07
52. 81
16,115. 60
6,613. 62
922. 89
24,288.66
11,649.10

1930

$130,767.06

1931

$165,024. 58

$496.57
4,974.21
9,904.21
18,002.16
7,462.68
18,392.51
9,351.86
11,439.41

$929. 76
7,966.51
35.00
19,169.44
6,104.62
1,079.65
23,425.88
10,946.33

997. 28
12,500.00
13,924.13

934.49

98L57

39,016.44

31,475.24

11,877.40
3,824.36
1,999. 75

2,224.25
.1,466.66
1,000.00

3,167. 60
1,634.44
990.53

993. 75

927. 71

125,146.63

114,298.72

106,638.76

131,760. 81

165,952. 29

285

SECEETABY OF THB TEEASUBY

Expenditures hy Division of Supply for the fiscal years 1927 to 1931, hy appropria^
tions—Continued
Bureaus and offices and titles of
appropriations

1927

Division of Supply:
stationery, Treasury Department
Printing and binding,Treasury Department
Postage, Treasury Department
..
General Supply Committee, salaries and expenses

$468,656.67

$446,043.39

$432,741.00

$436,810.16

$402,206.97

1788,641.70

J 892,136.93

1792,634.45

1802,833.72

1704.612 00

1,000.00

986.76

999.96

Total-

Total

—-

1929

1930

1931

(2)

116,683.68

114,705.20

128,216.82

133,110.00

155,396. 78

1,363,881.85

1,463,886.52

1,354,678.03

1,372,803.83

1,262,216.76

2,643.23

2,875.39

4,478.23

1,849.14

3,941.36

271,195. 76

216,122.10

395,473.19

598,229.68

463,165.84

598,229.68

463,165. 84

Division of Bookkeeping and
Warrants, contingent expenses,
public moneys
Bureau of Customs:
Collecting the revenue from
customs
E q u i p m e n t , appraisers'
stores. New York

1928

69,161.48
271,195.76

216,122.10

464,634. 67

Public Health Service:
Pay of personnel and maintenance of hospitals
1,570,880. 71 1,794,610. 31 1,766,715.26 1,980,768.61
Quarantine service
311,630. 66
276,242.06
292,784.45
318,214.44
Interstate quarantine service2,463.23
759. 76
5,247.36
3,520. 65
Maintenance of Hygienic
34,115.92
Laboratory
33,589.88
34,250.06
33,287.36
Maintenance National Institute of Health
Field investigations
20,901.09
20,937.79
27,077.31
23,851.61
Preventing the spread of epi33,845. 46
demic diseases
32,711.21
35,697.34
36,957.06
Expenses, Division of Vene4,572.22
real Diseases
3,937.09
4,373.97
3,040.74
Control of biologic products19,663.41
18,087.66
19,815. 91
16,482. 83
Books
494. 66
448.24
497. 96
434.15
Studies of rural sanitation 72.76
Survey of salt marsh areas.
South Atlantic and Gulf
States
1,610. 29
1,083.94
1,734. 84
Educational exhibits
-Narcotic farms
Mosquito control in District
of Columbia
(Department of Justice transfers
to Public Health Service)
Medical and hospital services, penal institutions
United States Penitentiary,
Atlanta, G a - - .
United States Penitentiary,
Leavenworth, Kans
Prison camps
United States Industrial Reformatory,
Chillicothe,
Ohio
Federal Industrial Institution for Women, maintenance
United States Penitentiary,
Leavenworth, Kans., machinery and equipment
Total
2,000,813.56 2,195,203.53 2,176,731.38 2,414,661. 77

27,063.78
2,779,943.74

Supervising Architect (account
public buildings):
Repairs and preservation
109,039.01
Mechanical equipment
91,730.90
49,196.71
Vaults and safes
.
27,625.56
General expenses
534,303.43
Furniture and repairs
1,100,269.29
Operating supplies
Total
1,912,164.90

117,666.04
99,428. 72
91,559 72
131,244.81
966,127.02
1,042,678.42
2,448,694. 73

104,692.86
119,680.30
101,009.61
105,392.16
100,310.02
84,689.83
33,705.64
46,924.19
619,069.99
874,740.96
1,097,299.34 1,114,369.98
2,056,087.46 2,346,787.41

111,616.06
116,102.97
93,424. 59
65,949.34
860,967.47
1,068,265.90
2,316,225.33

2,163,695. 32
347,858.12
1,427. 52

32,159 77
57,979.07
44,186.84
4, 710. 52
18,099.98
500.17
23 45

1,736.13
4,358. 75
1,337.39

1,706.83
26,482.07
30.009 68
1,230. 72
3,467.11
11,910.62

•

1 Includes receipts from sales of customs forms (reimbursed to the appropriation) and certain expenditures for printing and binding from appropriations other than printing and binding.
«Included with contingent expenses, Treasury Department.

286

EEPORT ON THE FINANCES

Expenditures by Division of Supply for the fiscal years 1927 to 1931, hy appropriations—Continued
Bureaus and offices and titles of
appropriations
Bureau of Internal Revenue:
Collecting the internal revenue
_
Bureau of Prohibition: Enforcement of narcotic and national
prohibition acts
- Bureau of Narcotics: Salaries
and expenses
Bureau of Industrial Alcohol:
Salaries and expenses

1927

1928

1929

1930

$194,086.16

$236,890.74

$194,449.29

$274,423.27

212,828.37

226,267.08

146,194.94

144,612.10
18,969.44

3,632.68
36,606.44

27,182.47
23,066.11

3,168.67
28,224.80

1,913.66
16,677.68

1,668.63
17,079.67

40,139.12

60, 248. 68

31,393.37

18,491.24

18,748.30

6,122,899.48

6,649,879.12

6,813,886.08

7,272,867.17

7,463,864.62

41,269.26

107*144. 60

96,693.86

213,788.89

92,266.39

6,164,168.74

6,667,023.62

6,910,479.94

7,486,646.06

7,646,130.01

Total

Grand total

$240,022.46

62,220.72

Public Debt Service:
Expenses of loans (act Sept.
24, 1917, as amended and
extended)
_
Public Debt Service

Total appropriations and
allotments
Purchases from appropriations
from which no allotments were
made ^
- - -

1931

8 Appropriation accounting by bureaus and offices for which purchases were made.

The foregoing expenditures involved the preparation of specifications, the solicitation of quotations, the writing of purchase orders,
and the examination and audit of vouchers for payment through the
disbursing clerk of the Treasury Department.
Number of vouchers audited and purchase orders written and the amount saved in
cash discounts during the fiscal years 1927 to 1931
Vouchers
examined

Fiscal year

1927
1928
1929
1930-1931

. -

—-

87,982
94,402
103,243
116,100
120,281

Purchase
orders
written
38,886
40,700
42,171
48,571
1 50, 594

Amount
saved in cash
discounts
$12,142.94
19,288.16
30,672.99
30,715.78
31, 208.40

1 Exclusive of 5,781 quarterly and annual contracts made to purchase ice, wood, coal, fuel oil, subsistence
stores, drayage, etc.

During the last five years the number of vouchers increased 36^
per cent and the number of purchase orders increased 31 per cent.
The purchase orders in 1931 required the preparation of 10,000 sets
of specifications and the circulation of 74,466 invitations to dealers
to submit quotations, as compared with 8,432 sets of specifications
in 1930.
Stationery supplies
' The appropriations, reimbursements, and expenditures for articles
of stationery for the past five years are summarized in the foUowing
table:

287

SECEETAEY OP THE TEEASUEY

Appropriations, reimbursements, and expenditures for stationery for the fiscal years
1927 to 1931

Appropriations
Reimbursements
Available credits-Total expenditures-- Balance

1927

1928

1929

$480,000.00
15,110.04

$470,000.00
16,166.25

$420,000.00
13, Oil. 00

495,110.04
458,666.57

486,166.25
446,043.39

433,011.00
432, 741.00

436,431.15
435,810.15

417,307. 00
402, 206.97

36,553.47

40,122.86

270.00

621.00

15,100.03

1930

1931

$425,000. 00 $404,200.00
13,107.00
11,431.15

The value of stationery supplies issued to each bureau, office, and
service of the department during each of the last five fiscal years is
shown in the following table:
Issues of stationery supplies to bureaus, ofiices, and services of the Treasury Department for the fiscal years 1927 to 1931
Bureau, office, or service

1927

1928

1929

1930

1931

Secretary, Under Secretary, and Assistant
Secretaries
$1,617.03 $1,042.38 $1,026.37
$939. 53
Appointments Division
-.
626.39
430. 62
676.52
446.27
Board of Tax Appeals
162.82
3,452,37 . 136.50
Division of Bookkeeping and Warrants
514. 77
1,096.25
1, 718.58
1,064.49
Bureau of Engraving and Printing
8,227.46
6,924. 79
7,187.14
4,985.83
Bureauof the Budget
-.
534.12
643. 57
358. 28
543. 20
Division of Supply
2,886.
27
2,919.40
6,885.96
2, 358. 03
General Supply Committee
1,198.97
1,020. 76
1,119.27
707. 75
Chief Clerk and Superintendent
1,386.36
1, 757.38
1, 654.20
1, 629.29
Division of Accounts and Deposits
1,027.06
430. 76
596.27
543.24
Comptroller ofthe Currency
-6,
712.82
11,056.51
6,429.24
8, 541.22
Contingent expenses, national currency
51.41
99.00
54.08
36.66
Custodians of public buildings
1, 627. 69
1,407.81
1,391.16
1, 732. 77
Customs Service-1
72,030.83
66,425. 59 77,260.11
63,138.36
Collector, San Juan, P . R
806.85
722.90
797.00
Disbursing Clerk
571.29
778. 48
611.04
723. 51
Federal Farm Loan Board
3, 681. 73
2,914.25
2,422.03
3,979.86
Federal Reserve Board
3,977. 02
2, 736.30
4,209. 63
4, 249.95
Government Actuary
23.36
14.15
23.48
16.38
Insolvent national bank fund
680.28
1,023.77
884. 05
1,017.80
Internal Revenue Bureau203,234.04 195,135.01 191,511.70 172,558.02
Federal Farm Board
_
102. 71
Customs Service, St. Thomas, Virgin Islands
175.85
921. 76
Mint Bureau---1,134.70
943.91
962.96
1,473.24
National bank examiners
i, 767.22
1,316.10
1, 737.42
National Bank Redemption Agency
1,303.31
1, 560.04
1, 666.92
1,686.13
Prohibition Bureau
46,973.39
45,798.86
48,068.81 50,420.09
Bureau of Industrial Alcohol
Bureau of Narcotics
Public Debt Service
12, 726.03
20,026.07
20,681.34
25,583.17
Expenses of loans
203.06
2,564. 77
33.20
Public Health Service-.16,344.10
22,120. 62 21,703.45
22,178.21
1,001.47
929. 27
1,220.15
Secret Service.823. 61
10,347.03
Supervising Architect
8,481.09
6,338. 76
7,425.29
8,175. 67
7,173.37
Treasurer ofthe United States
9, 678.39
8,791.39
25, 640.16 27, 709. 58 33,266.00
Coast Guard
26,909.04
14.67
12.84
21.73
War Finance Corporation.-5.00
Personnel Classification Board
Settlement of war claims act
Expended for transportation (partly esti20,336.68 20,010. 70 19,500.00
mated)
20,000.00

73,405. 24
613.97
568.02
4, 251.46
3,152.02
20.25
1,155.17
175,244.86
93.01
35.02
913.16
2,170. 75
813. 59

463,666. 67 468,534.43
15,110.04
16,166.25

451, 326. 27 440,922. 03
13,011.00
11,431.16

426,356.85
13,107.00

448,656.63

438,315.27

413,249.85

Total
Reimbursed from other appropriations-.
Total charge to stationery appropriation. _
--1 Included under Supervising Architect.

77532—32

452,368.18

429,490.88

$1,120.05
649.80
1, 395.07
5,489.42
652. 56
2,035.18
1,249. 64
2,107.93
620. 30
6,150. 79
81.16

'(0

24,865. 31
5, 548. 67
16,345.40
21,854. 73
967.12
20,482.10
8,233. 58
26,983. 33
71.55
16.64
18,000.00

288

REPORT ON THE FINANCES

Shipments of stationery and miscellaneous supplies from the warehouse of the Division of Supply in Washington to field offices were as
follows:
Shipments of stationery supplies to field ofiices for the fiscal years 1929 to 1931

stationery and miscellaneous supPackages
plies:
11,883
Freight and express
1,566
Parcel post
-- - _ -7,367
Franked parcels—
67,805
Blank books and forms by mail
78,621

Total shipments
Government bills of lading used for
freight and express shipments

1931

1930

1929

Weight
Packages
11,977
1,372,772
552
21. 555
4,278
22,101
783, 725
92,408

Packages
Weight
1,306,362
6,819
9,077
839
7,310
17,483
71,941
711,045

Weight
1,056,934
13,319
21,930
635,409

2,200,153

2,043,967

1, 727,592

109,215

86,909

3,342

3,649

2,663

Printing and binding
The appropriation for printing and binding for the fiscal year 1931
was $715,000. From this sum $21,100 was transferred to the Department of Justice as the allotted amount for printing and binding for
the Bureau of Prohibition, Court of Customs and Patent Appeals,
and Customs Court, thus leaving a balance of $693,900 available for
printing and binding for the Treasury Department. Of this amount
$671,412.62 was expended and by exercising the most rigid economy
a balance of $22,487.38 reverted to the Treasury. To these expenditures should be added $33,049.69 reimbursed from sales of customs
forms and $34,194.38 expended from other appropriations. Thus
there were total expenditures of $738,656.69 for all classes of printing
and binding handled through the Division of Supply.
Expenditures for printing and binding, by bureaus, offices, and
services for each of the last five fiscal years are shown in the following
table:
Appropriations, expenditures, and reimbursements for printing and binding for the
fiscal years 1927 to 1931 i
SUMMARY
1927

1928

1929

$820,000.00

$716,000.00

44,086.18
62,097.88

45,639.19
34,896. 98

42,586.14
61,611.12

33,049.69
34,194.38

909, 069. 70
788,641. 70

926.183.06
892,095. 22

795,635.17
792,634.46

809,197. 26
802,883.72

761,144.07
738, 656.69

120,428.00

34,087.84

2,900. 72

6, 313. 54

22,487.38

Appropriations printing, and binding.
»$835,000.00
Treasury Department
Reimbursements from sales of customs
43, 573.85
forms.--30,495. 85
Expended from other appropriationsTotal available
Total expenditures- -

Balance

—
-

1930

1931

$715,000.00 8 $693,900.00

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,
a Exclusive of $82,600 available for 1926-27 (44 Stat. 868), which was not expended.
» Original appropriation was $715,000; transfer of $21,100 was made to Department of Justice ($19,000 for
rohibition, $1,600 for Court of Customs and Patent Appeals, $500 for Customs Court), leaving an available
alance of $693,900.

289

SECBETARY OF THE TBEASUBY

Appropriations, expenditures, and reimbursements for printing and binding for the
fiscal years 1927 to 1931 ^—Continued
E X P E N D I T U R E S F R O M A P P R O P R I A T I O N FOR P R I N T I N G AND B I N D I N G , BY
BUREAUS, OFFICES, AND DIVISIONS
1927
Secretary, U n d e r S e c r e t a r y , a n d
Assistant Secretaries
A p p o i n t m e n t s Division
B o o k k e e p i n g a n d W a r r a n t s D i visionB u r e a u of E n g r a v i n g a n d P r i n t i n g
B u r e a u of I n d u s t r i a l Alcohol
B u r e a u of Narcotics
B u r e a u of P r o h i b i t i o n *
_.
Chief Clerk a n d S u p e r i n t e n d e n t
Coast G u a r d :
Bureau
-Service
Commissioner of Accounts a n d D e posits
Comptroller ofthe Currency
C u s t o d i a n s of p u b l i c buildings
Customs:
BureauService--special agency
D i s b u r s i n g Clerk
Division of Deposits Division of S u p p l y
General S u p p l y C o m m i t t e e
Government Actuary
Internal Revenue:
Bureau
Service _
L o a n s a n d C u r r e n c y Division ^
Mint:
Bureau
^
Service
- N a t i o n a l b a n k depositaries
P r i n t i n g Division
P u b l i c D e b t Service s
Public Health:
' Bureau
Service . - Secret Service
_-.Supervising Architect
T r e a s u r e r of t h e U n i t e d StatesMiscellaneous
Total

1929

1928

Total

1931

$13, 737. 30 ° $11,899.00
946. 43
1, 210. 78
23, 747. 91
11, 541. 61
7, 753.40
6, 723.40

$11,472.45
1, 569. 68
11, 530. 20
6,891. 55

60,888.98
1,005.28

75,107. 76
1.531. 08

4,829.39

14,677. 24
18,477.33

23,824.36 } 8 26,717.73
22,378.10

8 35,634.42

8 37,971.49

123.39
28, 922. 67
1,806.13

123. 55
27,952. 32
1,002.08

82.95
23, 764.88
1,393.35

123. 53
25, 709.69
1,692.19

70.47
26,618.08
1,061.89

5, 531. 28
34,089.02
1, 389.86
630.36
29.96
7,728.87
29,885.11
1,570.86

4,066. 58
35,968.54 \ fl 34,622.88
434. 69
649.69
230.49
(J)
30,141. 79
17,152.10
36,005. 28
27,691.01
1,652. 28
1,603.24

8 48,045.10

0 27,844.42

$12,964. 76
1,457.94
18,919.53
7,185.81
59, 277.14
1,331.46

65,991.04
179,002. 79
2, 640. 58
3,337.26
2,516.82
2,120. 98
180. 22
24,036. 20
103, 650. 52
4,182.11
327. 95
6,876.49
i l , 908.81
62, 902. 52
714, 572.00

71, 315. 06
1,641. 78

$11,603.36
1, 276.68
26,645.00
6.623.07
23, 737. 68
7, 703.81

(*)

454.46

758.43

10,014. 65
30, 967. 56
1, 614.27

12,162. 27
38,037.62
1,667.98

86, 777, 77
211, 310.33 } 8263.655.90 8 246. 533.00
2.814.17

8 236,949.06

3.662.18 } 8 5,751.94
2, 940.12
2, 561. 54
2,019.04

(«)

(»)

6 7,733. 48
1, 982. 53

(«)

8 7, 216. 94
1, 990.56

(*)

12,637.85

16,080. 94

88,129.44
8,107. 57 1 6102, 264. 76 8 101,084.19
382. 91
503.93
493.14
3,041.80
6,658. 29
5,938.80
12, 966.83
11,109.45
12, 524.83
53,847.64
75, 787.48
67, 500. 05
785, 912.16
712, 099. 28
708,686.46

8 94. 517.11
553.88
6,900.17
11, 733.36
67,869.98

20.000.68

15,848.86

REIMBURSED AND EXPENDED FROM OTHER
B u r e a u of E n g r a v i n g a n d P r i n t i n g
Collecting t h e revenue from c u s t o m s C o n t i n g e n t expenses, n a t i o n a l currency - C u s t o m s Service, b l a n k forms lo
Expenses of loans (act Sept. 24, 1917,
as a m e n d e d a n d e x t e n d e d ) - _ , - . .
Expenses, s e t t l e m e n t of w a r claims
act of 1928
F e d e r a l farm loan b a n k s
Federal F a r m L o a n B u r e a u (miscellaneous expenses)
_
I n s o l v e n t national b a n k fund
Mixed Claims Commission
N a t i o n a l b a n k examiners
-_
N a t i o n a l B a n k R e d e m p t i o n -A.gency„
P u b l i c D e b t Service
Salaries a n d expenses. B u r e a u of I n dustrial Alcohol
-- _
W o r l d W a r Foreign D e b t C o m m i s sion
Enforcement of narcotic a n d n a t i o n a l
prohibition acts

1930

671,412.62

APPROPRIATIONS

$340.06

$1, 582. 99
17.56

$2,398.39
65.50

$2,806.85
428.30

$313.72
48.10

1,254. 59
43,573.85

3,562. 08
44,086.18

666.76
45, 639.19

4, 597.38
42,586.14

846.14
33,049.69

5,828.91

24,249.84

3,117.63

1,646.04

828.42

136.13

9L28

194.84

10,564. 91
1,601.33
151. 39
12,130.68
3,930.61

9,819.28
1,668. 97

11,881.04
3, 941.83

18,055.77
9,048.82

13,095.86
2,808.99

687.32
2, 737. 36
3,156. 02

6,440.16
2, 393.18

10, 337.13
2, 520. 42
20.00

12,182. 61
11, 630. 46
39.00

235.44
3, 614.06
142. 66
74,069. 70

106,183.06

80,535.17

3,448.43
94,197. 26

67,244.07

\- 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.
* Included under Bureau of Internal Revenue prior to 1927; activities relating to prohibition enforcement
transferred to Department of Justice on July 1,1930, with organization of Bureau of Industrial Alcohol and
Bureau of Narcotics in the Treasury Department.
8 Includes bureau and service.
6 Includes bureau, service, and special agency.
7 Combined with Commissioner of Accounts and Deposits.
8 Public Debt Service includes Register of the Treasury, for 1927,1928,1929,1930, and 1931, and the greater
part of Loans and Currency for all years.
»Included in Division of Supply.
10 Reimbursed to printing and binding appropriation.

290

EEPOET OK THE FINANCES

Department advertising
Authorizations to pubhsh advertisements were issued to 3,868
newspapers and periodicals in the fiscal year 1931, compared with
3,823 in 1930, an increase of 45, whUe expenditures thus authorized
increased from $31,062.92 in 1930 to $34,360.40 in 1931, an increase
of $3,297.48.
Engraving work
A total of 59,428,917 engraved forms were approved by this office
for execution by the Bureau of Engraving and Printing for the
several departments and establishments of the Government during
the fiscal year 1931, compared with 53,397,294 in the preceding year.
The following table gives the number of each class of forms constituting these totals:
1930

Class
Certificates
. - .
Checks
Commissions
Drafts
--Liquor permits
Transportation requests
Warrants
Total

- - - - -

1931

4,139,010
36,021, 655
125,437
22, 625
11,791, 200
999, 935
297, 532

7,608.907
39,479,800
33,895

63,397,294

59,428, 917

10,402, 700
1,752,216
261, 400

TREASURER OF THE UNITED STATES

Total ordinary receipts from all sources, exclusive of postal revenues,
and expenditures chargeable against ordinary receipts, are compared
for the fiscal years 1930 and 1931 in the following table. Attention
is called to the fact that figures used throughout this section of the
report (pp. 291 to 296, inclusive), except as otherwise stated, are on
the basis of daUy Treasury statements, revised, for explanation of
which see page 423.
General, special, and trust funds combined

Ordinary receipts, exclusive of postal revenuesCash expenditures chargeable against ordinary receipts
_
SurplusDeficit

1930

1931

Increase (-f) or
decrease (—)

$4,174,051,545.77

$3,318,636,668.46

-$855,414,987.32

3,993,769,636.40

4,231,097,625.24

+237,327,988.84

180,281,909.37

912,461,066.79

The above figures include receipts from tolls, etc., covering movements of tonnage through the Panama Canal, amounting to $26,534,587.74 for the fiscal year 1931 and $28,971,643.03 for the previous
year, as weU as disbursements on account of the canal, exclusive of
fortifications, on the basis of warrants drawn, amounting to $10,303,755.15 for the fiscal year 1931 and $10,497,935.33 (revised) for 1930.
The receipts and expenditures on account of the principal of the
public debt during the fiscal year 1931 are shown in the foUowing
statement:
Receipts on account of—
Treasury bills.
$1, 059, 761, 000. 00
Certificates of indebtedness
3, 403, 218, 500. 00
Certificates of indebtedness (adjusted service certificate
fund series)
356, 000, 000. 00
Treasury notes (foreign service retirement fund series) _ _
525, 000. 00
Treasury notes (adjusted service certificate fund
series)
-_
244, 000, 000. 00
Treasury notes (civil service retirement fund series)
65, 000, 000. 00
Treasury bonds
,--.-.
1, 415, 636, 050. 00
Treasury savings securities
3, 461. 19
Postal savings bonds
3, 609, 940. 00
Deposits for retirement of national bank notes (act of
July 14, 1890)
-.25, 363, 570. 00
Total...

6, 573, 117, 521. 19
291

292

EEPOET ON THE FINANCES

Expenditures on account of—
Treasury bills
' $771, 149, 000. 00
Certificates of indebtedness
2, 873, 079, 200. 00
Certificates of indebtedness (adjusted service certificate
fund series)
234, 200, 000. 00
Treasury notes (foreign service retirement fund series) _ _
107, 000. 00
Treasury notes (adjusted service certificate fund series) _
873, 200, 000. 00
Treasury notes (civil service retirement fund series)
31, 200, 000. 00
Treasury notes
1, 141, 491, 950. 00
Treasury bonds
1, 000. 00
War savings securities
46, 216. 00
Treasury savings securities.
541, 556. 00
First Liberty bonds
24, 050. 00
Second Liberty bonds
1, 517, 700. 00
Third Liberty bonds
3, 151, 250. 00
Fourth Liberty bonds
33, 100. 00
Victory notes
178, 950. 00
Other debt items
73, 680. 41
National bank notes and Federal reserve bank notes-..
26, 946, 124. 50
Total

5, 956, 940, 676. 91

Excess of receipts

616, 176,844. 28

PubUc debt retirements chargeable against ordinary receipts, included in the above expenditures, were as follows:
From—
Cumulative sinking fund
$391, 660, 000. 00
Purchases and retirements from foreign repayments._.._
48, 245, 950. 00
Purchases and retirements from franchise tax receipts
(Federal reserve and Federal intermediate credit banks).
91, 400. 00
Forfeitures, gifts, etc
84, 650. 00
Total

440, 082, 000. 00

The gold holdings of the Treasury were again increased during the
fiscal year, due chiefly to an excess of imports over exports; the total
imports of gold during the year, as reported by the Department of
Commerce, were $403,795,944 and the exports, $107,093,654. The
gold holdings of the Treasury on June 30, 1930 and 1931, on the
basis of daily Treasury statements, revised, are shown in the following
table:
June 30,1930

Account
For redemption of gold certificates outstanding
Gold fund. Federal Reserve Board
Gold reserve—.Gold in general fund (including $30,166,138.13
held for the redemption of Federal reserve
notes)
Total

June 30,1931

$1,489,989,479.00 $1,701,614,389.00
1,796,239,234. 66 1,776,690,377.86
166,039,088.03
156,039,088.03

Increase ( + ) or
decrease (—)
+$211,624,910.00
-19,648,856. 70

51,264,731.39

61,836,014.10

+10,580,282.71

3,493,522,532.98

3,696,078,868.99

+202,656,336.01

SECEETAEY OF THE TEEASUEY

293

PubUc moneys on deposit in designated Government depositaries
on June 30, 1931, exclusive of items in transit on that date, amounted
to $489,605,020.14 and were distributed as follows:
In
In
In
In
In
In

Federal reserve banks and branches._.
;
special depositary banks (war loan deposit accounts)
general depositary banks (exclusive of foreign)
limited depositary banks (exclusive of foreign)
foreign depositary banks (general and limited)
treasury of the Philippine Islands
Total

$46, 573, 240. 96
413, 124, 488. 64
13, 530, 568. 27
13, 577, 691. 33
2, 060, 148. 29
738, 882. 65

_-_ 489, 605, 020. 14

Interest accrued on balances held by general and limited depositary
banks, including foreign, in the amount of $368,864.23 and on balances
in special depositary banks arising from the sales of certificates of
indebtedness in the amount of $2,578,294.09, making a total of
$2,947,158.32. The rate of interest on these balances was reduced
from 2 per cent per annum to IK per cent on December 1, 1930, to
1 per cent on February 16, 1931, and to K of 1 per cent on June 1,
1931.
Funds aggregating $120,466,995 were transferred by wire through
the Federal reserve banks and branches to general depositary banks
and to the treasury of the Philippine Islands during the year to
restore balances depleted by the cashing of Government checks and
warrants, as compared with $122,584,559 during 1930.
United States bonds to the amount of $667,154,800 pledged to
secure national bank note circulation were held in the custody of the
Treasurer at the close of the fiscal year 1931. United States bonds
and other securities held by the Treasurer to secure public deposits
in depositary banks (not including special depositary banks) amounted
to $51,229,100, and securities held for the safe-keeping of postal
deposits in postal-savings depositaries amounted to $357,286,004.05.
Under the provisions of law, or by direction of the Secretary of the
Treasury, the Treasurer of the United States is custodian of additional bonds and other obligations pertaining to several special trust
accounts, totaling $12,487,498,371.70%. The aggregate of aU custody
holdings is $13,563,168,275.75%.
Interest coupons from United States obligations cashed by the
various Government depositaries during the year and paid, examined,
and verified by the Treasurer numbered 17,419,297 and amounted
to $449,159,795.30. Coupons from obligations of the insular governments paid during the year numbered 147,664 and amounted to
$3,478,235.
Checks issued by the Division of Loans and Currency, Public
Debt Service, in payment of interest on the registered obligations of
the United States and cashed by the various Government depositaries
were paid and verified by the Treasurer to the number of 1,752,341,

294

EEPOET ON THE FINANCES

amounting to $116,275,612.85. Checks in payment of interest on
registered bonds of the insular governments were issued by the
Treasurer of the United States to the number of 6,933, amounting
to $1,266,872.50. The payment of such checks numbered 6,990 and
amounted to $1,270,796.25.
United States paper currency shipped from the Treasury in Washington to Treasury offices. Federal reserve banks and branches, and
others amounted to $1,687,480,999, as compared with $2,006,728,788
for the previous year.
United States paper currency (gold certificates, silver certificates,
and United States notes) issued during the year numbered 744,561,900
pieces with a valuation of $1,752,014,000, as against 882,500,600
pieces valued at $2,409,706,200 for the preceding year. The redemptions of the three classes of currency numbered 729,507,419 pieces,
with a valuation of $1,511,807,350, as against 843,655,404 pieces,
valued at $2,261,755,550, for the fiscal year 1930, leaving 660,040,565
pieces, with a valuation of $2,605,033,488 outstanding at the end of
the year. Treasury notes of 1890 are no longer issued, and the
amount outstanding is gradually being redeemed.
The proceeds of currency counted into the Treasurer's cash by the
National Bank Redemption Agency amounted to $499,604,299.18.
Of this sum $487,651,152.50 was in national bank notes, $276,402 in
Federal reserve bank notes, $11,378,665 in Federal reserve notes, and
$298,079.68 in United States currency.
Payments for such currency were made as follows: In Treasurer's
checks, $1,032,893.83; by credits to banks for direct receipts in the
Treasurer's office, $16,968,273; by credits to Federal reserve banks
and branches in general account as transfers of funds for direct
remittances, $481,567,780.50, and for remittances by member banks,
$18,011.85; and by credits in other accounts, $17,340.
Canceled and uncanceled Federal reserve notes amounting to
$1,052,316,150 were received from Federal reserve banks and branches
for credit of Federal reserve agents. Such notes are settled for between the Federal reserve banks and the Federal reserve agents and
are therefore not taken into the Treasurer's cash in the National
Bank Redemption Agency,
During the year the Treasurer's office authorized and directed
shipments or transfers of gold bars and of current gold, sUver, and
minor coins to or from the Treasury, the mints, the assay office in
New York, and the Federal reserve banks and branches for use in
public disbursements and for special purposes in an aggregate amount
of $73,922,373.49. Shipments and transfers of uncurrent and lightweight coins to the mints from the Treasury in Washington and from
the Federal reserve banks and branches were authorized in the
amount of $10,014,466.42.

SECEETAEY OF THE TEEASUEY

295

Funds were advanced to United States disbursing officers by accountable warrants issued in an aggregate amount of $4,205,730,664.03. Warrants aggregatmg $6,568,293,270.36 were also issued
covering public debt principal, interest, and premium payments by
the Treasurer. Treasurer's checks aggregating $89,594,335.70 were
issued on settlement warrants in payment of claims settled by the
Comptroller General. Drafts in payment of claims settled in foreign
currencies by the ComptroUer General were purchased at a total cost
of $27,545.93, and for other departments and bureaus of the Government at a cost of $74,504.47.
Checks drawn on this office by Government disbursing officers were
paid during the fiscal year 193i to the number of 36,481,696, an
uicrease of 3,288,860 checks, as compared with the previous fiscal
year. Balances to the credit of disbursing officers and Government
agencies in 3,131 accounts on June 30, 1931, amounted to $338,891,518.77, an increase of $68,779,267.41 over the total of such balances
in 3,067 accounts on June 30, 1930. The increase in balances was
due largely to the change in the amount of funds in the accounts of
Veterans' Administration disbursing officers for loans on adjusted
service certificates. The increase in the number of checks represented
the temporary effect of legislation authorizing larger loans to veterans
on their adjusted service certificates and of legislation providing for
emergency advances in agricultural areas, and reflected also legislation, approved July 3,1930,increasing the scope of disability allowance
to veterans, resulting in monthly check payments upon the approved
claims.
Payments to correct irregularities in negotiation of checks were
made in the fiscal year 1931 to the number of 1,082, amounting to
$93,139.64, while in the previous year the number of cases was 1,124
for $69,350.72. Duplicate checks to the number of 8,929 were
requested by payees or indorsees during the fiscal year 1931, as compared with 9,545 during the previous fiscal year, the original check in
each case having been lost, stolen, or destroyed.
Replacement of the old series paper currency with the new series,
which was begun in July of 1929, has continued throughout the year
as indicated in the following table:
..

296

EEPOET ON THE FINANCES

Issues of new paper currency to June 30,1931, and old and new series outstanding,
by class and denomination, on June SO, 1931
Outstanding June 30,1931 *
New series issued to June
30,1931
Class
Number of
pieces

Old series
Number of

New series
Number of
pieces

Amount

179,396,000 $731,848,000 215,255,737 $47,008, 584 71,538,892 $299,672,432
United States notes
119,797,300 [2,097,060,000
Gold certificates
7,785,034 189,013,389 81,513,823 1,571,681,670
1,367,772,000 1,367,772,000 38,446,683 60,436, 584 444,982,079 444,982,079
Silver certificates
Treasury notes of 1890
489,147
1,239,750
Federal reserve notes
391,093,590 4,220,581,980 17,160,969 276,481,900 142,243,320 1,826,096,550
National bank notes
127,020, 666 1,107,462,890 8,946,206 100,559,581 61,690,173 602,472,155
Federal reserve bank notes.
2,183,735
2,973,962|
Total-2,185,079, 5569, 524,724,870 90,267,411 666,712,760 801,868,287 4,744,904,886
Per cent of total outstanding
101
12
90
DENOMINATION

$1
$2
$5
$10
$20.—
$50
$100
$500—
$1,000
$5,000
$10,000
Fractional parts

—

Total

1,367,772,000 1,367, 772,000 43,665,669 43, 565,1
444,982,079
55,044,000 110, 088,000 6,974,699 13,949, 3981 19,340, 676
387,328,838 1,936, 644,190 14,649,977 73, 249,886 141,976,485
254, 525,436 2, 545, 254,360 13, 271,714 132, 717,137 121,394,657
105,489, 326 ~, 109,786, 520 9, 648, 556 192,971,116 64, 301,632
9,222,852 461, 142,600
1,262,107 63,105, 340 6, 695, 264
5,179, 262 517, 926,200
805,660 80, 556,020 3,776,816
277,660 138, 830,000
35,430 17,715,000
208,118
226,516 226, 616,000
42,961 42,961, 500
179,613
6,179 25, 895,000
304 1,520, OOOf
6,041
8,487 84, 870, ooo'
434 4, 340, OOOi
8,006
61, 684

444,982,079
38,681,352
709,882,425
213,946, 570
286,030,640
284,763,200
377,681,600
104,059,000
179,613,000
25,205,000
80,060,000
20

2,185,079,556 9, 524,724,870 « 90,257,4112 666,712,750 801,868,287 4, 744,904,886

»Includes amounts in circulation, held by Federal reserve banks and agents, and held by Treasury.
> Excluding $1,000,000 estimated as destroyed in the Chicago fire in October. 1871.

WAR FINANCE CORPORATION
(In liquidation)

The liquidation of the War Finance Corporation, which began^on
January 1, 1925, was continued during the year. By the act approved March 1, 1929, the liquidation of the corporation's assets
remaining at the close of April 4, 1929, and the winding up of the
affairs of the corporation thereafter were transferred to the Secretary
of the Treasury, who, for such purpose, was given all the powers and
duties of the board of directors of the corporation under the War
Finance Corporation act of April 5, 1918, as amended. To carry
out the program of Uquidation, the Secretary of the Treasury, pursuant
to authority contained in the law, assigned to a liquidating committee
the exercise and performance, under his general supervision and
direction, of all powers and duties vested in him by the act approved
March 1, 1929. The liquidating committee consists of two officers
of the United States in the Treasury Department who serve without
compensation from the corporation.
Only $10,000 of the corporation's original capital of $500,000,000
is outstanding, $499,990,000 of capital stock having been canceled
and retired at par. On June 30, 1931, the corporation, with the
approval of the Acting Secretary of the Treasury, paid into the
Treasury $178,502.91 on account of earnings, which amount, together
with $64,352,768.79 previously paid in this manner, aggregates
$64,531,271.70 that has been covered into the Treasury on account
of earnings.
The amount advanced by the corporation for all purposes, from its
creation, was $690,431,100, of which $688,419,297 has been repaid.
The amount carried on the corporation's books on October 15, 1931,
was $222,969.25, of which $170,480 represented war loans and
$52,489.25 agricultural and livestock loans (including expense advances of $1,770.12). During the year ended October 15, 1931, no
expense advances were made. The repayments during this period
on account of the corporation's agricultural and livestock loans,
totaled $9,577.61.

297

EXHIBITS

299

EXHIBITS

THE PUBLIC DEBT
Issue of November, 1930
EXHIBIT 1

Inviting tenders for Treaswry hills dated November 17., 1930., and
niaturing Fehruary 16^ 1981 {press release^ November 10^ 1930)
The Secretary of the Treasury gives notice that tenders are invited
for Treasury bills; to the amount of $125,000,000, or thereabouts.
They will be 91-day bills, and will be sold on a discount basis to the
highest bidders. Tenders will be received at the Federal reserve
banks, or the branches thereof, up to 2 o'clock p. m., eastern standard
time, on November 13, 1930. Tenders will not be received at the
Treasury Department, Washington.
The Treasury bills will be dated November 17, 1930, and will
mature on February 16, 1931, and on the maturity date the face
amount will be payable without interest. They will be issued in
bearer form only, and in amounts or denominations of $1,000, $10,000,
and $100,000 (maturity value).
I t is urged that tenders be made on the printed forms and forwarded in the special envelopes which will be supplied by the Federal
reserve banks or branches upon application therefor.
No tender for an amount less than $1,000 will be considered. Each
tender must be in multiples of $1,000. The price offered must be
expressed on the basis of 100, with not more than three decimal
places, e. g., 99.125. Fractions must not be used.
Tenders will be accepted without cash deposit from incorporated
banks and trust companies and from responsible and recognized
dealers in investment securities. Tenders from others must be accompanied by a deposit of 10 per cent of the face amount of Treasury
bills applied for, unless the tenders are accompanied by an express
guaranty of payment by an incorporated bank or trust company.
Immediately after the closing hour for receipt of tenders on
November 13, 1930, all tenders received at the Federal reserve banks
or branches thereof up to the closing hour will be opened and public
announcement of the acceptable prices will follow as soon as possible
thereafter, probably on the following morning. The Secretary of
the Treasury expressly reserves the right to reject any or all tenders
or parts of tenders, and to allot less than the amount applied for,
and his action in any such respect shall be final. Those submitting
tenders will be advised of the acceptance or rejection thereof. Pay-

301

302

BEPOET ON THE FINANCES

ment at the price offered for Treasury bills allotted must be made at
the Federal reserve banks in cash or other immediately available
funds on November 17, 1930.
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 inheritance taxes. No
loss from the sale or other disposition of the Treasury bills shall be
allowed as a deduction, or otherwise recognized, for the purposes of
any tax now or hereafter imposed by the United States or any of
its possessions.
Treasury Department Circular No. 418, as amended, dated June 25,
1930, and this notice as issued by the Secretary of the Treasury, prescribe the terms of the Treasury bills and govern the conditions of
their issue. Copies of the circular may be obtained from any Federal
reserve bank or branch thereof.

EXHIBIT 2

Accepta/nce of tenders for Treasu/ry^ hills dated Novemher 17., 1930^
and maturing FehrVjary 16^ 1981 {press release., Nove^mher IJ^.,
1980)
Secretary of the Treasury Mellon announced to-day that the
tenders for $125,000,000, or thereabouts, of 91-day Treasury bills
dated November 17, 1930, and maturing February 16, 1931, which
were offered on November 10, 1930, were opened at the Federal
reserve banks on November 13, 1930.
The total amount applied for was $568,280,000. The highest bid
made was 99.605, equivalent to an interest rate of about 1.56 per cent
on an annual basis. The lowest bid accepted was 99.558, equivalent
to an interest rate of about 1.75 per cent on an annual basis. The
total amount of bids accepted was $127,455,000. The average price
of Treasury bills to be issued is 99.564. The average rate on bank
discount basis is about 1.72 per cent.
Issues of December, 1930
EXHIBIT 3

Offering of certificates of indehtedness.^ Series TJ2-1981 (i',% per
cent) and Series TD-1981 ( i % V^"^ cent) {press release., Decemher
<5,1980.^ with Department Circular No. 4^9)
The Treasury is to-day offering for subscription, at par and accrued interest, through the Federal reserve banks. Treasury certificates of indebtedness in two series, both dated and bearing interest
from December 15, 1930, one series, TJ2-1931, being for 6 months,
with interest at the rate of 1% per cent, and maturing June 15, 1931,
and the other series, TD-1931, being for 12 months, with interest at
the rate of 1% per cent, and maturing December 15, 1931. The

SECEETAEY OF THE TEEASUEY

303

amount of the 6 months' offering is $150,000,000, or thereabouts, and
the amount of the 12 months' offering is $250,000,000, or thereabouts.
Applications will be received at the Federal reserve banks. The
Treasury will accept in payment for the new certificates, at par.
Treasury certificates of indebtedness of Series TD-1930, maturing
December 15, 1930. Subscriptions for the 6-month, 1% per cent
certificates of Series TJ2-1931, in payment of which certificates of
indebtedness maturing December 15, 1930, are to be tendered, will be
given preferred allotment up to $30,000,000, while subscriptions for
the 12-month, 1% per cent certificate of Series TD-1931, in payment
of which certificates maturing December 15, 1930, are to be tendered,
will be given preferred allotment up to $50,000,000.
Bearer certificates will be issued in denominations of $500, $1,000,
$5,000, $10,000, and $100,000. The certificates of Series TJ2-1931
will have one interest coupon attached, payable June 15, 1931, and
the certificates of Series TD-1931-two interest coupons attached,
payable June 15,1931, and December 15, 1931.
These certificates will be exempt, both as to principal and interest,
from all taxation, except estate and inheritance taxes.
About $480,000,000 of. Treasury certificates of indebtedness and
about $90,000,000 in interest payments on the public debt become due
and payable on December 15, 1930, and about $51,000,000 in Treasury
bills become due and payable on December 16, and $51,000,000 on
December 17.
The text of the official circular follows:
(Department Circular No. 429)

The Secretary of the Treasury, under the authority of the act
approved September 24, 1917, as amended, offers for subscription, at
par and accrued interest, through the Federal reserve banks. Treasury
certificates of indebtedness, in two series, both dated and bearing
interest from December 15, 1930, the certificates of Series TJ2-1931
being payable on June 15, 1931, with interest at the rate of 1% per
cent per annum, payable on a semiannual basis, and the certificates
of Series TD-1931 being payable on December 15, 1931, with interest
at the rate of 1% per cent per annum, payable semiannually.
Applications will be received at the Federal reserve banks.
Bearer certificates will be issued in denominations of $500, $1,000,
$5,000, $10,000, and $100,000. The certificates of Series TJ2-1931
will have one interest coupon attached, payable June 15,1931, and the
certificates of Series TD-1931 two interest coupons attached, payable
•June 15,1931, and December 15, 1931.
The certificates of said series shall be exempt, both as to principal
and interest, from all taxation (except estate and inheritance taxes)
now or hereafter imposed by the United States, any State, or any of
the possessions of the United States, or by any local taxing authority.
The certificates of these series will be accepted at par during such
time and under such rules and regulations as shall be prescribed or
approved by the Secretary of the Treasury in payment of income and
profits taxes payable at the maturity of the certificates. The certificates of these series will be acceptable to secure deposits of public
moneys, but will not bear the circulation privilege.
77532^-32^

^22

304

EEPOET ON THE FINANCES

The right is reserved to reject any subscription and to allot less
than the amount of certificates of either or both series applied for and
to close the subscriptions as to either or both series at any time without
notice. The Secretary of the Treasury also reserves the right to make
allotment in full upon applications for smaller amounts, to make
reduced allotments upon or to reject applications for larger amounts,
and to make classified allotments and allotments upon a graduated
scale; and his action in these respects will be final. Allotment notices
will be sent out promptly upon allotments, and the basis of the allotment will be publicly announced.
Payment at par and accrued interest for certificates allotted must
be made on or before December 15,1930, or on later allotment. After
allotment and upon payment Federal reserve banks may issue interim
receipts pending delivery of the definitive certificates. Any qualified
depositary will be permitted to make payment by credit for certificates
allotted to it for itself and its customers up to any amount for which
it shall be qualified in excess of existing deposits, when so notified by
the Federal reserve bank of its district. Treasury certificates of
indebtedness of Series TD-1930, maturing December 15, 1930, will be
accepted at par in payment for any certificates of the series now
offered which shall be subscribed for and allotted, with an adjustment
of the interest accrued, if any, on the certificates of the series so
paid for.
As fiscal agents of the United States, Federal reserve banks are
authorized and requested to receive subscriptions and to make allotments on the basis and up to the amounts indicated by the Secretary
of the Treasury to the Federal reserve banks of the respective districts.
A. W.

MELLON,

Secretary of the Treasur*y,
TREASURY DEPARTMENT,
OFFICE OF THE SECRETARY,

Decerriber 8,1980.
To the investor:
Almost any banking institution in the United States will handle your subscription for you, or you may make subscription direct to the Federal reserve
bank of your district. Your special attention is invited to the terms of subscription and allotment as stated above. If you desire to purchase at the market
price certificates of the above issues after the subscriptions close, or certificates
uf any outstanding issue, you should apply to your own bank, or, if it can not
obtain them for you, to the Federal reserve bank of your district, which will
then endeavor to fill your order in the market.

EXHIBIT 4

Subscriptions amd allotments^ certificates of indehtedness.^ Series
TJ2-1981 and Series TD-1981 {fron% press releases^ December
11 and 12,1980)
Secretary Mellon announced that subscriptions for the two issues
of Treasury certificates of indebtedness. Series TJ2-1931, 1% per
cent, dated December 15, 1930, maturing June 15, 1931, and Series

SECEETAEY OF THE TEEASUEY

305

T D - I 9 3 I 5 1 % per cent, dated December 15, 1930, nfaturing December
15, 1931, closed at the close of business on December 9, 1930.
Keports received from the 12 Federal reserve banks show that
for the offering of the two series, which was for $400,000,000, or
thereabouts, the total amount of subscriptions was $1,457,197,000, of
which $143,938,000 represented subscriptions for which 3 % per cent
Treasury certificates of indebtedness of Series TD-1930, maturing
December 15, 1930, were tendered in payment. Total allotments
amounted to $428,322,000, of which $79,817,500 represented allotments on exchange subscriptions.
CERTIFICATES OF INDEBTEDNESS, SERIES T J 2 - 1 9 3 1

For the offering of 1% per cent certificates of Series TJ2-1931,
which was for $150,000,000, or thereabouts, total subscriptions aggregated $939,372,000, of which $159,941,000 was allotted, including
$29,840,500 exchange allotments.
Allotments on cash subscriptions for certificates of Series TJ2-1931
were made as follows: Subscriptions in amounts not exceeding $1,000
were allotted 50 per cent, but not less than $500 on any one subscription; subscriptions in amounts over $1,000 but not exceeding
$10,000 were allotted 40 per cent, but not less than $1,000 on any one
subscription; subscriptions in amounts over $10,000 but not exceeding $100,000 were allotted 30 per cent, but not less than $4,000 on
any one subscription; subscriptions in amounts over $100,000 but
not exceeding $1,000,000 were allotted 15 per cent, but not less than
$30,000 on any one subscription; and subscriptions in amounts over
$1,000,000 were allotted 10 per cent, but not less than $150,000 on
any one subscription.
CERTIFICATES OF INDEBTEDNESS, SERIES T D - 1 9 3 1

For the offering of 1% per cent certificates of Series TD-1931,
which was for $250,000,000, or thereabouts, total subscriptions aggregated $517,825,000. Total allotments amounted to $268,381,000, of
which $49,977,000 represented exchange allotments.
Allotments on cash subscriptions for certificates of Series TD-1931
were made as follows: All subscriptions in amounts not exceeding
$1,000 for any one subscriber were allotted in full. Subscriptions
in amounts over $1,000 but not exceeding $100,000 were allotted 80
per cent, but not less than $1,000 on any one subscription; subscriptions in amounts over $100,000 but not exceeding $1,000,000 were
allotted 60 per cent, but not less than $80,000 bn any one subscription; and subscriptions in amounts over $1,000,000 were allotted 35
per cent, but not less than $600,000 on any one subscription.
The subscriptions and allotments were divided among the seVeral
Federal reserve districts and the Treasury as follows;

306

EEPOET

THE

FINANCES

SERIES TJ2-1931

Federal reserve district

Boston
New York
Philadelphia-.
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis..
Kansas City..
Dallas
San Francisco.
Total...

Total subscriptions received

Total excbange subscriptions
allotted

Total cash
subscriptions
allotted

Total subscriptions
allotted

$108,211,000
341,819,500
86,454,500
63,470, 500
32,629,000
47, 274,000
113, 247,000
9,612,000
6, 462,000
10, 724,000
37, 387, 500
92,181,000

$26,000
22,192,500
1,418,000
19,000
223, 500
60,000
4,699,000
118,500
417, 500
497,000
132,000
137, 500

$16,667,000
33, 756,500
11, 800,000
10,328,000
9,443, 500
12, 049,500
14, 483, 500
1, 685,000
1,195, 500
1, 352, 500
6,956, 500
10, 383,000

$16,693,000
55,949,000
13, 218,000
10,347,000
9,667,000
12,109, 500
19,082, 500
1,803,500
1,613,000
1,849, 500
7,088,500
10,520,500

939,372,000

29,840,600

130,100,600

169,941,000

$26,840,000
178,166,500
44, 569,000
35, 458, 500
19, 372, 500
26,073,000
96, 642, 500
6, 384,000
3, 555, 500
4,143, 500
16, 283, 500
62, 325,000
21, 500

$126,000
32,525, 500
8,000
1,826, 500
705,000
121, 500
13,767,000
363,000
8,500
90, 500
108,500
310,500
16, 500

$11,667, 500
54, 756,000
22, 600,000
19,862,600
12, 707,500
18, 757, 500
36,890, 500
3, 228,000
1, 841,500
2,503,500
9, 702, 500
23,897,000

$11, 793,500
87, 281, 500
22,608,000
21,679,000
13,412,500
18,879,000
50,657, 500
3,591,000
1,850,000
2, 594,000
9,811,000
24, 207,600
16, 500

617,825.000

49,977,000

218,404,000

268,381,000

1,467,197,000

79, 817, 500

348,604,500

428, 322,000

SERIES TD-1931
Boston..
N e w York
Philadelphia
Cleveland _.
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas.
San Francisco
Treasury.-

. _
_
_

Total..
G r a n d total

Issues of February, 1931
EXHIBIT

Inviting tenders for two issues of Treasury hills dated February 8
and %,, 1981^ and maturing May J^ and 6, 1981, respectively {press
release, January 27,1981)
The Secretary of the Treasury gives notice that tenders are invited
for Treasury bills to the amount of $60,000,000, or thereabouts. They
will be 90-day bills, and will be sold on a discount basis to the highest
bidders. Tenders will be received at the Federal reserve banks, or
the branches thereof, up to 2 o'clock p . m., eastern standard time, on
January 30, 1931. Tenders will not be received at the Treasury
Department, Washington.
The Treasury bills will be issued in two series, $30,000,000, or thereabouts, to be dated February 3, 1931, and maturing on May 4, 1931,
and $30,000,000, or thereabouts, to be dated February 4, 1931, and
maturing May 5, 1931. Bidders will not be required or permitted to
bid for a particular series, but the Treasury will apportion each
accepted bid equally between the two series in so far as the minimum
denomination of $1,000 will permit. A t maturity the face amount
of the bills will be payable without interest.^ * * * Payment at
1 Omitted p o r t i o n s a r e similar to corresponding sections in E x h i b i t 1, p . 3 0 1 ,

SECEETAEY OF THE TEEASUEY

307

the price offered for Treasury bills allotted must be made at the
Federal reserve banks in cash or other immediately available funds
on February 3, 1931, for the bills allotted bearing that date of issue.
and on February 4, 1931, for bills allotted bearing the latter date oi
issue. * * *

EXHIBIT 6

Acceptance of tenders for tw\o issues of Treasury hills dated February
8 and 4,1981, and matuHng May 4 o^Tid 6,1981, respectively {press
release, January 81, 1981)
Secretary Mellon annomiced to-day that the tenders for $60,000,000,
or thereabouts, of 90-day Treasury bills which were offered on
January 27, 1931, were opened at the Federal reserve banks on
January 30, 1931. The Treasury's earlier announcement provided
that the bills would be issued in two series, $30,000,000, or thereabouts,
dated February 3, 1931, and maturing May 4, 1931, and $30,000,000,
or thereabouts, dated February 4,1931, and maturing May 5,1931, the
accepted bids to be apportioned by the Treasury equally between the
two series, in so far as the minimum denomination of $1,000 will
permit.
The total amount apphed for was $327,805,000. The highest bid
made was 99.782, equivalent to an interest rate of about seven-eighths
of 1 per cent on an annual basis. The lowest bid accepted was 99.753,
equivalent to an interest rate of about 1 per cent on an annual basis.
The total amount of bids accepted was $60,000,000, which have been
equally apportioned between the two series. The average price of
Treasury bills to be issued is about 99.763. The average rate on a
bank discount basis is about 0.95 per cent.

EXHIBIT 7

Inviting tenders for Treasurv
ry hills dated February 16, 1981, omd
maturing May 18, 1981 {press release, February 9, 1981)

The Secretary of the Treasury gives notice that tenders are invited
for Treasury bills to the amount of $150,000,000, or thereabouts. They
will be 91-day bills, and will be sold on a discount basis to the highest
bidders. Tenders will be received at the Federal reserve banks, or
the branches thereof, up to 2 o'clock p . m., eastern standard time, on
February 13, 1931. Tenders will not be received at the Treasury
Department, Washington.
The Treasury bills will be dated February 16,1931, and will mature
on May 18, 1931, and on the maturity date the face amount will be
payable without interest.^ * * * Payment at the price offered
for Treasury bills allotted must be made at the Federal reserve banks
in cash or other immediately available funds on February 16,
1931. ^ ^ *
1 Omitted portions are similar to corresponding sections in Exhibit 1, p. 301.

308

EEPOET ON THE FINANCES
EXHIBIT

Acceptance of tenders for Treasury bills dated February 16, 1931,
and maturing May 18, 1981 {press release., February IJp, 1981)
Secretary of the Treasury Mellon announced to-day that the
tenders for $150,000,000, or thereabouts, of 91-day Treasury bills
dated February 16, 1931, and maturing May 18, 1931, which were
offered on February 9, 1931, were opened at the Federal reserve
banks on February 13, 1931.
The total amount applied for was $346,532,000. The highest bid
made was 99.783, equivalent to an interest rate of about 0.86 per cent
on an annual basis. The lowest bid accepted was 99.671, equivalent
to an interest rate of about 1.30 per cent on an annual basis. The
total amount of bids accepted was $154,281,000. The average price
of Treasury bills to be issued is 99.695. The average rate on a bank
discount basis is about 1.21 per cent.
Issues of March, 1931
EXHIBIT 9

Offering of Treasury bonds of 191^.1-1^3 {8% per cent) and certificates of indebtedness, Series TS2-1931 ( i % per cent) and Series
TM-1982 {2 per cent) {press release, March 2,1981, with Department Circulars Nos. 482 and 488)
The Treasury is to-day offering for subscription at par and
accrued interest, through the Federal reserve banks, a combined
offering of 3 % per cent Treasury bonds and of 1% per cent, 6-month
certificates of indebtedness and 2 per cent, 12-month certificates of
indebtedness.
The Treasury bonds will be dated and bear interest from March
16, 1931, will mature on March 15, 1943, and will be redeemable at
the option of the United States on and after March 15, 1941.
The certificates of indebtedness are in two series, both dated and
bearing interest from March 16, 1931, one series, TS2-1931, being for
6 months, with interest at the rate of 1% per cent, and maturing
September 15, 1931, and the other series, TM-1932, being for 12
months, with interest at the rate of 2 per cent, and maturing March
15, 1932.
The amount of the Treasury bond offering is $500,000,000, or
thereabouts, the amount of the offering of 6-month certificates of
indebtedness is $300,000,000, or thereabouts, and the amount of the
12-month offering of certificates is $600,000,000, or thereabouts.
Applications will be received at the Federal reserve banks. The
Treasury will accept in payment for the new Treasury bonds and
certificates of indebtedness, at par, the 3 % per cent Treasury notes of
Series A-1930-32 and Series B-1930-32, which become due and
payable on March 15, 1931.
Subscriptions for the Treasury bonds and the 12-month series of .
certificates of indebtedness, Series TM-1932, in payment of which
31/2 per cent Treasury notes of Series A-193Q-32 and Series B-193032 are tendered, will be given preferred allotment. With respect to
the 6-month series of certificates of indebtedness, Series TS2-1931,

SECEETAEY OF THE TEEASUEY

309

subscriptions in payment of which 3^/^ per cent Treasury notes are
tendered will not be given preferred allotment.
The Treasury bonds will be issued both in bearer and registered
form, in denominations of $50, $100, $500, $1,000, $5,000, $10,000,
and $100,000. The registered bonds will also be issued in the $50,000
denomination. The certificates of indebtedness of both series will be
issued in bearer form only, in denominations of $500, $1,000, $5,000,
$10,000, and $100,000, the certificates of Series TS2-1931 having one
interest coupon attached, payable September 15, 1931, and the certificates of Series TM-1932 two interest coupons attached, payable
September 15, 1931, and March 15, 1932.
The certificates of indebtedness will be exempt, both as to principal
and interest, from all taxation, except estate and inheritance taxes.
The Treasury bonds will be exempt, both as to principal and interest,
from all taxation now or hereafter imposed by the United States,
any Stat^, or any of the possessions of the United States, or by any
local taxing authority, except {a) estate or inheritance taxes, and
{b) graduated additional income taxes, commonly known as surtaxes and excess-profits and war-profits taxes, now or hereafter imposed by the United States, upon the income or profits of individuals, partnerships, associations, or corporations. The interest on an
amount of bonds and certificates (but not including any certificates
of indebtedness issued after June 17, 1929, because they were on that
date made exempt from all taxation except estate and inheritance
taxes) authorized by the 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 said clause (b)
above.
About $1,100,000,000 of 31/2% Treasury notes of Series A-1930-32
and Series B-1930-32, and about $30,000,000 in interest payments on
the public debt, become due and payable on March 15, 1931.
The texts of the ofiicial circulars follow:
(Department Circular No. 433)

The Secretary of the Treasury invites subscriptions, at par and
accrued interest, from the people of the United States, for 3 % per
cent Treasury bonds of 1941-43, of an issue of gold bonds of the
United States authorized by the act of Congress approved September 24, 1917, as amended. The amount of the offering will be
$500,000,000, or thereabouts.
DESCRIPTION OF BONDS

The bonds will be dated March 16, 1931, and will bear interest
from that date at the rate of 3 % per cent per annum, payable on
September 15, 1931, on a semiannual basis, and thereafter semiannually on March 15 and September 15 in each year until the principal amount becomes payable. The bonds will mature March 15,
1943, but may be redeemed at the option of the United States on and
after March 15, 1941, in whole or in part, at par and accrued interest, on any interest day or days, on four months' notice of redemption
given in such manner as the Secretary of the Treasury shall prescribe,
i n case of partial' redemption the bonds to be redeemed will be determined by such method as may be prescribed by the Secretary of the

310

EEPOET ON THE FINANCES

Treasury. From the date of redemption designated in any such notice, interest on the bonds, called for redemption shall cease. The
principal and interest of the bonds will be payable in United States
gold coin of the present standard of value.
Bearer bonds with interest coupons attached will be issued in
denominations of $50, $100, $500, $1,000, $5,000, $10,000, and $100,000. Bonds registered as to principal and interest will be issued in
denominations of $50, $100, $500, $1,000, $5,000, $10,000, $50,000,
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, without charge by the United
States, under rules and regulations prescribed by the Secretary of the
Treasury.
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, and {b)
graduated additional income taxes, commonly known as surtaxes,
and excess-profits and war-profits taxes, now or hereafter imposed by
the United States, upon the income or profits of individuals, partnerships, associations, or corporations. The interest on an amount
of bonds and certificates (but not including any certificates of indebtedness issued after June 17, 1929) authorized by said 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 said clause {b) above.
The bonds will be acceptable to secure deposits of public moneys,
but do not bear the circulation privilege and are not entitled to any
privilege of conversion. The bonds will be subject to the general
regulations of the Treasury Department, now or hereafter issued,
governing United States bonds.
APPLICATION AND ALLOTMENT

Applications will be received at the Federal reserve banks, as
fiscal agents of the United States. Banking institutions generally
wdll handle applications for subscribers, but only the Federal reserve
banks are authorized to act as official agencies.
The right is reserved to reject any subscription, in whole or in
part, and to allot less than the amount of bonds applied for and
to close the subscriptions at any time without notice;. the Secretary of the Treasury also reserves the right to make allotment in
full u^Don applications for smaller amounts, to make reduced allotments upon, or to reject, applications for larger amounts, and to
make classified allotments and allotments upon a graduated scale;
and his action in these respects will be final. Allotment notices
will be sent out promptly upon allotment, and the basis of allotment
will be publicly announced.
PAYMENT

Payment at par and accrued interest for any bonds allotted must
be made on or before March 16, 1931, or on later allotment. After
allotment and upon payment Federal reserve banks may issue

SECEETAEY OF THE TEEASUEY

31.1

interim receipts pending delivery of the definitive bonds. 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.
The 3 % per cent Treasury notes of Series A-1930-32 and
B-1930-32, which were called for redemption on March 15, 1931,
by Treasury Department Circular No. 428, dated September 10, 1930,
will be accepted at par in payment for any Treasury bonds of the
issue now offered which shall be subscribed for and allotted, with
an adjustment of the interest accrued, if any, on the bonds so
paid tor. Subscriptions for which payment is to be tendered in
31/2 per cent Treasury notes of Series A-1930-32 and B-1930-32,
will be given preferred allotment up to the amount of the offering.
GENERAL PROVISIONS

As fiscal agents of the United States, Federal reserve banks are
authorized and requested to receive subscriptions and to make allotments on the basis and up to the amounts indicated by the Secretary of the Treasury to the Federal reserve banks of the respective
districts.
Any further information which may be desired as to the issue of
Treasury bonds under the provisions of this circular may be obtained
upon application to a Federal reserve bank. The Secretary of
the Treasury may at any time, or from time to time, prescribe supplemental or amendatory rules and regulations governing the
offering.
A. W.

MELLON,

Secretary of the Treaswry.
TREASURY DEPARTMENT,
OFFICE OF THE SECRETARY,

March 2, 1981,
(For letter to the investor see Exhibit 3, p. 304.)
(Department Circular No. 432)

312

EEPOET ON THE FINANCES

The certificates of these series will be accepted at par during such
time and under such rules and regulations as shall be prescribed or
approved by the Secretary of the Treasury, in payment of income
and profits taxes payable at the maturity of the certificates. The
certificates of these series will be acceptable to secure deposits of
public moneys, but will not bear the circulation privilege.
The right is reserved to reject any subscription and to allot less
than the amount of certificates of either or both series applied for and
to close the subscriptions as to either or both series at any time without notice. The Secretary of the Treasury also reserves the right to
make allotment in full upon applications for smaller amounts, to
make reduced allotments upon, or to reject, applications for larger
amounts, and to make classified allotments and allotments upon a
graduated scale; and his action in these respects will be final. Allotment notices will be sent out promptly upon allotment, and the basis
of the allotment will be publicly announced.
Payment at par and accrued interest for certificates allotted must
be made on or before March 16, 1931, or on later allotment. After
allotment and upon payment Federal reserve banks may issue interim
receipts pending delivery of the definitive certificates. Any qualified depositary will be permitted to make payment by credit for
certificates allotted to it for itself and its customers up to any
amount for which it shall be qualified in excess of existing deposits,
when so notified by the Federal reserve bank of its district. The
31/2 per cent Treasury notes of Series A-1930-32 and B-1930-32,
which were called for redemption on March 15, 1931, by Treasury
Department Circular No. 428, dated September 10, 1930, will be
accepted at par, in payment for any certificates of the series now
offered which shall be subscribed for and allotted, with an adjustment of the interest accrued, if any, on the certificates of the series
so paid for.
As fiscal agents of the United States, Federal reserve banks are
authorized and requested to receive subscriptions and to make allotments on the basis and up to the amounts indicated by the Secretary
of the Treasury to the Federal reserve banks of the respective
districts.
A. W.

MELLON,

Secretary of the Treasu/ry,
TREASURY DEPARTMENT,
OFFICE OF THE SECRETARY,

March 2,1981,
(For letter to the investor see Exhibit 3, p. 304.)
EXHIBIT 10

Subscriptions and allotments, Treasury bonds of 1941-48 and certificates of indebtedness, Series TS2-1931 and Series TM-1932 {from
press releases, March 6 and 11,1981, revised ^)
Secretary Mellon announced that subscriptions for the March 16
offering of 3 % per cent Treasury bonds of 1941-43, l i ^ per cent,
6-month Treasury certificates of indebtedness of Series TS2-1931,
and 2 per cent, 12-month Treasury certificates of indebtedness of
Series TM-1932, closed at the close of business on March 3, 1931.
1 Revised Apr. 15, 1931.

SECEETARY OF THE TEEASUEY
TREASURY BONDS OF

3IS

1941-43

The offering of 3 % per cent Treasury bonds of 1941-43 was primarily in the nature of a refunding operation, since holders of
$1,109,000,000 Treasury notes of Series A-1930-32 and Series B 1930-32, maturing March 15, 1931, were given preferred allotment
up to the amount of the new issue. Note-holders took advantage of
the offering in an amount in excess of the $500,000,000, or thereabouts, offered, and therefore no bonds were available for cash subscribers. Total subscriptions amounted to $2,111,871,300. Of this
amount, $742,723,100 represented exchange subscriptions which were
allotted 80 per cent. All cash subscriptions were rejected. On this
basis, the total amount of 3 % per cent Treasury bonds issued was
$594,230,050.
CERTIFICATES OF INDEBTEDNESS, SERIES T S 2 - 1 9 3 1

Reports received from the Federal reserve banks show that for
the offering of 1% per cent certificates of Series TS2-1931, maturing
September 15, 1931, which was for $300,000,000, or thereabouts, total
subscriptions aggregated $400,648,500. The total amount of subscriptions allotted was $300,176,000, which included both cash subscriptions and subscriptions for which Treasury notes maturing
March 15, 1931, were tendered in payment, the latter being treated
as cash subscriptions. Allotments on all subscriptions were made
as follows:
All subscriptions in amounts not exceeding $10,000 for any one
subscriber were allotted in full; subscriptions in amounts over $10,000 but not exceeding $100,000 were allotted 90 per cent, but not less
than $10,000 on any one subscription; subscriptions in amounts over
$100,000 but not exceeding $1,000,000 were allotted 80 per cent, but
not less than $90,000 on any one subscription; and subscriptions in
amounts over $1,000,000 were allotted 70 per cent, but hot less than
$800,000 on any one subscription.
CERTIFICATES OF INDEBTEDNESS, SERIES T M - 1 9 3 2

Reports received from the Federal reserve banks show that ioi
the offering of 2 per cent certificates of indebtedness of Series T M 1932, maturing March 15, 1Q32, which was for $600,000,000, or thereabouts, total subscriptions aggregated $1,223,084,500. Of this
amount, $72,482,500 represented subscription's for which Treasury
notes, maturing March 15, 1931, were tendered in payment, all of
whicii were allotted in full. The total amount of subscriptions allotted was $623,891,500.
Allotments on the cash subscriptions for certificates of Series T M 1932 were made as follows: Subscriptions in amounts not exceeding
$1,000 were allotted in full. Subscriptions in amounts over $1,000
but not exceeding $50,000 were allotted 80 per cent, but not less than
$1,000 on any one subscription; subscriptions in amounts over
$50,000 but not exceeding $100,000 were allotted 70 per cent, but not
less than $40,000 on any one subscription; subscriptions in amounts
over $100,000 but not exceeding $500,000 were allotted 60 per cent.

314

EJEPOEl: ON inis, FINANCES

but not less than $70,000 on any one subscription; subscriptions in
amounts over $500,000 but not exceeding $1,000,000 were allotted 50
per cent, but not less than $300,000 on any one subscription; and
subscriptions in amounts over $1,000,000 were allotted 35 per cent, but
not less than $500,000 on any one subscription.
Subscriptions and allotments for the three issues were divided
among the several Federal reserve districts and the Treasury as
follows:
Treasury bonds of 1941-43
Total subscriptions received

Federal reserve district

Boston
New York
PhiladelphiaCleveland..:.-.
Richmond
Atlanta
Chicago
St. Louis
Minneapolis..
Kansas City..
Dallas

Total cash
subscriptions
received

$110,126,750
965, 613,850
165,014,000
180,753,900
93,733, 560
62, 071,300
198,350,750
40, 928, 700
31, 861, 850
48,671,750
60,862,750
145,006,450
8, 875, 700

San Francisco.
Treasury......

2, 111, 871,300

Total—

$104,416,800
440, 635,150
139, 638,950
167,338,000
79,983,900
56,321, 850
123,357,150
36, 253, 750
23,371,050
30,917, 850
49, 814, 250
116,723,100
376,400
1,369,148,200

Total
Total
exchange
exchange
subscriptions subscriptions
received
allotted
$5, 709,950
624,978,700
25, 375,060
13,415,900
13, 749,650
6, 749,450
74,993,600
4, 674,960
8,490, 800
17,753,900
11,048, 500
28,283,350
8,499,300

. $4,668,200
419,983,400
20,300,000
10,770,400
10,999,900
4,599, 650
60,004,160
3,740,900
6,793,050
14,204,400
8,839,460
22,626,950
6,799,600

742,723,100

594,230,050

Certificates of indebtedness
SERIES TS2-1931
Total
Total cash
Total subscrip- exchange subscriptions
tions received subscriptions
allotted
allotted

Federal reserve district

Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
•
Chicago
St. Louis,.Minneapolis
Kansas C i t y . . .
Dallas
San Francisco
Treasury . . .
Total

. .

$13,900,000
185,029, 500
26,275,000
7,195,000
9,821,000
15, 241,000
71,066,000
14, 710,000
769, 500
2,457, 600
14,063, 500
40,119, 500
1,000

400,648,500

.
-

...

Total subscriptions
allotted
$11,996,600
132,472,600
19,930,000
5,605,000
8,445,600
13,475,600
54, 021,000
11,005,000
644, 500
2,042,000
12,041, 500
28,496,000
1,000
300,176,000

SERIES TM-1932
Boston
New York
Philadelphia...
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis.-.
Kansas City...
Dallas.-.
San Francisco..
Treasury
Total.-

815,
590, 377,
106, 406,
49, 992,
59, 120,
53, 139,
•99, 90G,
17,881,
2, 725,
11, 016,
27, 491,
76, 189,
25,
1,223,084,600

$62,644,000
46,000
156,000
6,159, 500
2,025,000
50,000
2,261, 500
50,000
90,500
72,482,600

515,600
223, 737,000
62, 704,000
25, 124,000
34, 257, 500
34, 451,000
48, 953,000
9. 354,500
1, 523, 500
5,Oil,500
17, 163,600
30, 594,000
20,000

$68,615, 600
286,381,000
62,750,000
25,124,000
34,413,500
34,451,000
54,112, 500
11,379, 600
1, 573, 500
7, 273,000
17,213.600
30,684,600
20,000

661,409,000

623,891,600

SSCEETAEY OF THE TEEAStllEtY

3l5

Issues of April, 1931
EXHIBIT 11

Inviting tenders for two issues of Treasury bills dated April 2 and
8, 1981, ofiid maturing J u l y 1 and 2, 1931.^ respectively {press
release, March 26,1981)
The Secretary of the Treasury gives notice that tenders are invited
for Treasury bills to the amount of $100,000,000, or thereabouts.
They will be 90-day bills, and will be sold on a discount basis to the
highest bidders. Tenders will be received at the Federal reserve
banks or the branches thereof up to 2 o'clock p. m. eastern standard
time on March 30, 1931. Tenders will not be received at the Treasury Department, Washington,
The Treasury bills will be issued in two series, $50,000,000, or thereabouts, to be dated April 2, 1931, and maturing on July 1, 1931, and
$50,000,000, or thereabouts, to be dated April 3, 1931, and maturing
July 2, 1931. Bidders will not be required or permitted to bid for a
particular series, but the Treasury will apportion each accepted bid
equally between the two series in so far as the minimum denomination of $1,000 will permit. At maturity the face amount of the bills
will be payable without interest.^ * * * Payment at the price
offered for Treasury bills allotted must be made at the Federal reserve banks in cash or other immediately available funds on April
2, 1931, for the bills allotted bearing that date of issue, and on April
3, 1931, for bills allotted bearing the latter date of issue. * * *
E X H I B I T 12

Acceptance of tenders for txoo issues of Treasury bills dated April
2 and 8,1931, and maturing J u l y 1 am^d 2,1981, respectively {press
release, March 81,1931)
Secretary of the Treasury Mellon announced to-day that the tenders for $100,000,000, or thereabouts, of 90-day Treasury bills which
were offered on March 26, 1931, were opened at the Federal reserve
banks on March 30, 1931. The Treasury's earlier announcement provided that the bills would be issued in two series, $50,000,000, or
thereabouts, dated April 2, 1931, and maturing July 1, 1931, and
$50,000,000, or thereabouts, dated April 3, 1931, and maturing July
2, 1931, the accepted bids to be apportioned by the Treasury equally
between the two series in so far as the minimum denomination of
$1,000 will permit.
The total amount applied for was $343,857,000. The highest bid
made was 99.695, equivalent to an interest rate of 1.22 per cent on
an annual basis. The lowest bid accepted was 99.621, equivalent to
an interest rate of about 1.52 per cent on an annual basis. The
total amount of bids accepted was $100,855,000, which has been
equally apportioned between the two series. The average price of
Treasury bills to be issued is about 99.634. The average rate on a
bank discount basis is about 1.46 per cent.
1 Omitted portions are similar to corresponding sections in Exhibit 1, p. 301.

316

EEPOET ON THE FINANCES
EXHIBIT

Offering of certificates of indebtedness. Series TD2-1981 ( i % V^'^
cent) {press release, April 8, 1981, with Department Circular No,
^35)
The Treasury is to-day offering for subscription, at par and
accrued interest, through the Federal reserve banks, an issue of
8-month, 1% per cent Treasury certificates of indebtedness of Series
TD2-1931, dated and bearing interest from April 15, 1931, and maturing December 15, 1931. The amount of the offering is $275,000,000, or thereabouts. Applications will be received at the Federal
reserve banks.
Bearer certificates will be issued in denominations of $500, $1,000,
$5,000, $10,000, and $100,000. The certificates will have two interest
coupons attached payable June 15, 1931, and December 15, 1931.
The text of the official circular follows:
(Department Circular No. 435)

The Secretary of the Treasury, under the authority of the act
approved September 24, 1917, as amended, offers for gubscription,
at p a r and accrued interest, through the Federal reserve banks.
Treasury certificates of indebtedness of Series TD2-1931, dated and
bearing interest from April 15, 1931, payable December 15, 1931,
with interest at the rate of 1% per cent per annum, payable on a
semiannual basis.
Applications will be received at the Federal reserve banks.
Bearer certificates will be issued in denominations of $500, $1,000,
$5,000, $10,000, and $100,000. The certificates will have two interest
coupons attached, payable June 15,1931, and December 15,1931.
The certificates of said series shall be exempt, both as to principal
and interest, from all taxation (except estate and inheritance taxes)
now or hereafter imposed by the United States, any State, or any
of the possessions of the United States, or by any local taxing
authority.
The certificates of this series will be accepted at par during such
time and under such rules and regulations as shall be prescribed or
approved by the Secretary of the Treasury, in payment of income
and profits taxes payable at the maturity of the certificates. The
certificates of this series will be acceptable to secure deposits of
public moneys, but will not bear the circulation privilege.
The right is reserved to reject any subscription and to allot less
than the amount of certificates applied for and to close the subscriptions at any time without notice. The Secretary of the Treasury also
reserves the right to make allotment in full upon applications for
smaller amounts to make reduced allotments upon, or to reject, applications for larger amounts, and to make classified allotments and
allotments upon a graduated scale; and his action in these respects
will be final. Allotment notices will be sent out promptly upon
allotment, and the basis of the allotment will be publicly announced.
Payment at par and accrued interest for certificates allotted must
be made on or before April 15, 1931, or on later allotment. After
allotment and upon payment. Federal reserve banks may issue in-

317

SECEETAEY OF THE TEEASUEY

terim receipts pending delivery of the definitive certificates. Any
qualified depositary will be permitted to make payment by credit
for certificates allotted to it for itself and its customers up to any
amount for which it shall be qualified in excess of existing deposits,
when so notified by the Federal reserve bank of its district.
As fiscal agents of the United States, Federal reserve banks are
authorized and requested to receive subscriptions and to make allotments on the basis and up to the amounts indicated by the Secretary
of the Treasury to the Federal reserve banks of the respective
districts.
A. W.

MELLON,

Secretary of the Treasury,
TREASURY DEPARTMENT,
OFFICE OF THE SECRETARY,

April 8, 1981,
(For letter to the investor see Exhibit 3, p. 304.)

EXHIBIT 14

Subscriptions and allotments, certificates of indebtedness,^ Series
TD2-1931 {from press releases, April 11 and 18, 1981)
Secretary Mellon announced that according to the final reports received from the 12 Federal reserve banks the total subscriptions for the offering of 1% P^^ cent Treasury certificates of indebtedness. Series TD2-1931, aggregated $908,688,000, and the total amount
of subscriptions allotted was $275,118,000.
Allotments have been made as follows: All subscriptions in
amounts not exceeding $1,000 for any one subscriber have been
allotted in full. Subscriptions in amounts over $1,000 but not exceeding $10,000 for any one subscriber were allotted 70 per cent but
not less than $1,000 for any one subscription; subscriptions in
amounts over $10,000 but not exceeding $100,000 for any one subscriber were allotted 60 per cent but not less than $7,000 on any one
subscription; subscriptions in amounts over $100,000 but not exceeding $1,000,000 for any one subscriber were allotted 40 per cent but not
less than $60,000 on any one subscription; and subscriptions in
amounts over $1,000,000 were allotted 20 per cent but not less than
$400,000 on any one subscription.
The subscriptions and allotments were divided among the several
Federal reserve districts and the Treasury as follows:
Federal reserve district

Boston
New York...
Philadelphia.
Cleveland...
Richmond-.
Atlanta
Chicago
St. Louis

Total subscriptions
received

Total subscriptions
allotted

$58,618,000
374, 288, 500
101,093,000
53, 912, 500
51, 587, 000
45, 383, 000
76, 347, 500
19, 645, 000

$24,060, 500
83,987,000
28,900,000
16,142, 000
27,744, OCO
24,127, 500
26, 616, 000
6,830,000

Federal reserve district

Minneapolis.Kansas C i t y Dallas..
_
San Francisco
Treasury
Total...

Total subscriptions
received

Total subscriptions
allotted

$6,221,000
$3,127,000
19, 064, 500 5, 640, 500
30,028, 500 12, 057. 600
71, 799, 500 16, 706, 000
700, 000
280, 000

908,688,000

275,118, 000

318

EEPOET ON THE FINANCES
E X H I B I T 15

Inviting tenders for Treasury bills dated April 27,1981, amd maturing J u l y 27,1981 {press release, April 21,1931)
The Secretary of the Treasury gives notice that tenders are invited
for Treasury bills to the amount of $50,000,000, or thereabouts. They
will be 91-day bills, and will be sold on a discount basis to the highest
bidders. Tenders will be received at the Federal reserve banks, or
the branches thereof, up to 2 o'clock p. m., eastern standard time,
on April 24, 1931. Tenders will not be received at the Treasury
Department, Washington.
The Treasury bills will be dated April 27, 1931, and will mature
on July 27, 1931, and on the maturity date the face amount will be
payable without interest.^ * * * Payment at the price offered for
Treasury bills allotted must be made at the Federal reserve banks in
cash or other immediately available funds on April 27, 1931. * * *

E X H I B I T 16

Acceptance of tenders for Treasury hills darted April 27, 1981, amd
maturing July 27,1981 {press release, April 25, 1981)
Secretary of the Treasury Mellon announced to-day that the tenders for $50,000,000, or thereabouts, of 91-day Treasury bills dated
April 27, 1931, and maturing July 27, 1931, which were offered
on April 21, 1931, were opened at the Federal reserve banks on
April 24, 1931.
The total amount applied for was $343,739,000. Except for one bid
for $10,000 at the rate of about 1 per cent, the highest bid made
was 99.674, equivalent to an interest rate of about 1.29 per cent on
an annual basis. The lowest bid accepted was 99.653, equivalent
to an interest rate of about 1% per cent on an annual basis. The
total amount of bids accepted was $53,510,000. The average price
of Treasury bills to be issued is 99.664. The average rate on a bank
discount basis is about 1.33 per cent.
Issues of May, 1931
E X H I B I T 17

Inviting tenders for Treasury bills dated May 5,1981, and maturing
August 8,1981 {pressrelease, April 28,1981)
The Secretary of the Treasury gives notice that tenders are invited for Treasury bills to the amount of $60,000,000, or thereabouts.
They will be 90-day bills, and will be sold on a discount basis to the
highest bidders. Tenders will be received at the Federal reserve
1 Omitted portions are similar to corresponding sections in Exhibit 1, p. 301.

SECEETAEY OF THE TEEASUEY '

319

banks, or the branches thereof, up to 2 o'clock p. m., eastern standard
time, on May 1, 1931. Tenders will not be received at the Treasury
Department, Washington.
The Treasury bills will be dated May 5, 1931, and will mature on
August 3, 1931, and on the maturity date the face amount will be
payable without interest.^ * * * Payment at the price offered for
Treasury bills allotted must be made at the Federal reserve banks in
cash or other immediately available funds on May 5,1931. * * *

EXHIBIT 18

Acceptance of tenders for Treasury bills dated May 5, 1931, and
maturing August 3, 1931 {press release, May 2,1981)
Acting Secretary of the Treasury Mills announced to-day that the
tenders for $60,000,000, or thereabouts, of 90-day Treasury bills dated
May 5, 1931, and maturing August 3, 1931, which were offered on
April 28, 1931, were opened at the Federal reserve banks on May
1, 1931.
The total amount applied for was $305,855,000. The highest bid
made was 99.688, equivalent to an interest rate of about 1.25 per cent
on an annual basis. The lowest bid accepted was 99.671, equivalent
to an interest rate of about 1.32 per cent on an annual basis. I n
order to avoid exceeding the total required, only 25 per cent of the
amount bid for at the latter price was accepted. The total amount
of bids accepted was $60,100,000. The average price of Treasury
bills to be issued is about 99.676. The average rate on a bank discount
basis is about 1.29 per cent.

EXHIBIT 19

Inviting tenders, for Treasury bills dated May 11,1981, and maturing
. August 10,1931 {press release. May 6,1981)
The Secretary of the Treasury gives notice that tenders are invited
for Treasury bills to the amount of $50,000,000, or thereabouts. They
will be 91-day bills, and will be sold on a discount basis to the highest
bidders, Tenders will be received at the Federal reserve banks, or
the branches thereof, up to 2 o'clock p. m., eastern standard time, on
May 7, 1931. Tenders will not be received at the Treasury Department, Washington.
^
The Treasury bills will be dated May 11, 1931, and will mature
on August 10, 1931, and on the maturity date the face amount will
be payable without interest.^ * * * Payment at the price offered
for Treasury bills allotted must be made at the Federal reserve
banks in cash or other immediately available funds on May 11,
1931. * * *
1 Omitted portions are similar to corresponding sections in Iflxhibit 1, p. 301.

7753^-32

^23

320

EEPORT ON THE FINANCES
EXHIBIT 20

Acceptance of tenders for Treasury bills dated May 11, 1981, and
maturing August 10,1981 {press release, May 8,1981)
Secretary of the Treasury Mellon announced to-day that the
tenders for $50,000,000, or thereabouts, of 91-day Treasury bills
dated May 11, 1931, and maturing August 10, 1931, which were
offered on May 5, 1931, were opened at the Federal reserve banks on
May 7, 1931.
The total amount applied for was $291,690,000. Except for one
bid for $30,000 at the rate of about three-fourths of 1 per cent, the
highest bid made was 99.715, equivalent to an interest rate of about
l-i/8 P^^ cent on an annual basis. The lowest bid accepted was 99.701,
equivalent to an interest rate of about 1.18 per cent on an annual basis.
The total amount of bids accepted was $50,000,000. The average
price of Treasury bills to be issued is 99.701. The average rate on
a bank discount basis is about 1.18 per cent.

EXHIBIT 21

Inviting tenders for two issues of Treasu/ry bills dated Maif 18, 1981,
and maturing J u l y 17^ 1931, and August 17, 1931 {press release.
May 12,1931)
The Secretary of the Treasury gives notice that tenders are invited
for two series of Treasury bills to the aggregate amount of
$100,000,000, or thereabouts. One series will be 60-day bills and the
other series will be 91-day bills. Both series will be sold on a discount basis to the highest bidders. Tenders will be received at the
Federal reserve banks, or the branches thereof, up to 2 o'clock p. m.,
eastern standard time, on May 14,1931. Tenders will not be received
at the Treasury Department, Washington.
The Treasury bills will, as stated, be issued in two series, $50,000,000,.
or thereabouts, to be dated May 18, 1931, and maturing on, July 17,
1931, and $50,000,000, or thereabouts, to be dated May 18, 1931, and
maturing on August 17, 1931. Bidders will be required to specify
the particular series for which each tender is made. The face amount
of the bills of each series will be payable without interest on their
respective maturity dates.^ * * * Payment at the price offered
for Treasury bills allotted must be made at the Federal reserve
banks in cash or other immediately available funds on May 18,
1931. * * *
<^
E X H I B I T 22

Acceptance of tenders for tw\a issues of Treasury bills dated May
18., 1981, and m\aturing J u l y 17, 1981, and August 17, 1981 {press,
release, May 16,1981)
Acting Secretary Mills announced to-day that tenders for $100,000,000, or thereabouts, of two series of Treasury bills dated May
1 Omitted portions are similar to corresponding sections in Exhibit 1, p. 301.

SECEETAEY OF THE TEEASUEY

321

18, 1931, which were offered on May 12, 1931, were opened at the
Federal reserve banks on May 14, 1931.
60-DAY BILLS

With respect to the offering of $50,000,000, or thereabouts, of 60day bills dated May 18, 1931, and maturing on J u l y 17, 1931, the
total amount applied for was $195,765,000. The highest bid made
was 99.837, equivalent to an interest rate of about 0.98 per cent on
an annual basis. The lowest bid accepted was 99.830, equivalent to
an interest rate of about 1.02 per cent on an annual basis. Only
part of the amouiit bid for at the latter price was accepted. The
total amount of bids accepted for the 60-day bills was $50,102,000.
The average price of the bills to be issued in this series is about
99.833. The average rate on a bank discount basis is about 1 per
cent.
91-DAY BILLS

With respect to the offering of $50,000,000, or thereabouts, of 91day bills dated May 18, 1931, and maturing on August 17, 1931, the
total amount applied for was $263,301,000. The highest bid made
was 99.762, equivalent to an interest rate of about 0.94 per cent on
an annual basis. The lowest bid accepted was 99.736, equivalent to
an interest rate of about 1.04 per cent on an annual basis. Only part
of the amount bid for at the latter price was accepted. The total
amount of bids accepted for the 91-day bills was $50,000,000. The
average price of the bills to be issued in this series is about 99.745.
The average rate on a bank discount basis is about 1.01 per cent.

Issues of June, 1931
E X H I B I T 23

Inviting tenders for Treasury bills dated J u n e 1,1981, and maturing
August 31, 1981 {press release, May 26, 1931)
The Secretary of the Treasury gives notice that tenders are invited for Treasury bills to the amount of $80,000,000, or thereabouts.
They will be 91-day bills and will be sold on a discount basis to the
highest bidders. Tenders will be received at the Federal reserve
banks, or the branches thereof, up to 2 o'clock p. m., eastern standard
time, on May 28, 1931. Tenders will not be received at the Treasury
Department, Washington.
The Treasury bills will be dated June 1, 1931, and will mature
on August 31, 1931, and on the maturity date the face amount will
be payable without interest.^ • • ^i^ Payment at the price offered
for Treasury bills allotted must be made at the Federal reserve banks
in cash or other immediately available funds on June 1, 1931. * * *
^ Omitted portions are similar to corresponding sections in Exhibit 1, p. 301.

322

EEPOET ON THE FINANCES
EXHIBIT

Acceptance of tenders for Treasury bills dated June 1, 1981, and
maturing August 81, 1981 {press release. May 29, 1981)
Secretary of the Treasury Mellon announced to-day that the
tenders for $80,000,000, or thereabouts, of 91-day Treasury bills
dated June 1, 1931, and maturing August 31, 1931, which were offered on May 26, 1931, were opened at the Federal reserve banks
on May 28, 1931.
The total amount applied for was $322,313,000. The highest bid
made was 99.838, equivalent to an interest rate of about five-eighths
of 1 per cent on an annual basis. The lowest bid accepted was
99.777, equivalent to an interest rate of about seven-eighths of 1 per
cent on an annual basis. Only part of the amount bid for at the
latter price was accepted. The total amount of bids accepted was
$80,013,000. The average price of Treasury bills to be issued is
99.785. The average rate on a bank discount basis is about 0.85
per cent.
EXHIBIT

OffeHng of Treasury bonds of 1946-49 ( 5 % per cent) {press release,
June 1, 1981, with Department Circular No. ^88)
The Treasury is to-day offering for subscription, at par and accrued interest, through the Federal reserve banks, an issue of 3 %
per cent Treasury bonds of 1946-49. The bonds will be dated and
bear interest from June 15, 1931, will mature on June 15, 1949, and
will be redeemable at the option of the United States on and after
June 15, 1946. The amount of the offering is $800,000,000, or
thereabouts.
Applications will be received at the Federal reserve banks. The
Treasury will accept in payment for the new Treasury bonds, at par.
Treasury certificates of indebtedness of Series TJ-1931 and T J 2 1931, both maturing June 15, 1931. Subscriptions for which payment is to be tendered in certificates of indebtedness maturing J u n e
15, 1931, will be given preferred allotment up to $325,000,000.^
The Treasuiy bonds will be issued both in bearer and registered
form, in denominations of $50, $100, $500, $1,000, $5,000, $10,000, and
$100,000. The registered bonds will also be issued ui the $50,000
denomination.
These bonds will 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, ahd {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 boiids and certificates (but not including any certificates of in-

SECE:ETAEY OF T H E TEEASUE"^

323

debtedness issued after June 17, 1929, because they were on that date
made exempt from all taxation except estate and inheritance taxes)
authorized by the 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 said clause {b) above.
About $589,000,000 of Treasury certificates of indebtedness and
about $90,000,000 in interest payments on the public debt become
due and payable on June 15, 1931.
The text of the official circular follows:
(Department Circular No. 438)

The Secretary of the Treasury invites subscriptions, at par and
accrued interest, from the people of the United States, for 3 % per
cent Treasury bonds of 1946-49, of an issue of gold bonds of the
United States authorized by the act of Congress approved September 24, 1917, as amended. The amount of the offering will be
$800,000,000, or thereabouts.
DESCRIPTION OF BONDS

The bonds will be dated June 15, 1931, and will bear interest
from that date at the rate of 3 % P^^ cent per annum, payable semiannually, on December 15, 1931, and thereafter on June 15 and
December 15 in each year until the principal amount becomes payable. The bonds will mature June 15, 1949, but may be redeemed at
the option of the United States on and after June 15, 1946, in whole
or in part, at par and accrued interest, on any interest day or days,
on four 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 principal and interest
of the bonds will be payable in United States go.ld coin of the present
standard of value.
Bearer bonds with interest coupons attached will be issued in
denominations of $50, $100, $500, $1,000, $5,000, $10,000, and $100,000.
Bonds registered as to principal and interest will be issued in denominations of $50, $100, $500, $1,000, $5,000, $10,000, $50,000, and
$100,000. Provision Avill be made for the interchange of bonds of
different denominations and of coupon and registered bonds and
for the transfer of registered bonds, without charge by the United
States, under rules and regulations prescribed by the Secretary of
the Treasury.
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, and
{b) graduated additional income taxes, commonly known as surtaxes, and excess-profits and war-profits taxes, now or hereafter

324

EEPOET ON THE FINANCES

imposed by the United States, upon the income or profits of individuals, partnerships, associations, or corporations. The interest
on an amount of bonds and certificates (but not including any certificates of indebtedness issued after June 17, 1929) authorized by
said act approved September 24, 1917, as amended, the principal of
Avhich 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 said clause {b) above.
The bonds will be acceptable to secure deposits of public. moneys,
but do not bear the circulation privilege and are not entitled to any
privilege of conversion. The bonds wil,l be subject to the general
regulations of the Treasury Department, now or hereafter issued,
governing United States bonds.
APPLICATION

AND

ALLOTMENT

Applications will be received at the Federal reserve banks, as
fiscal agents of the United States. Banking institutions generally
will handle applications for subscribers, but only the Federal
reserve banks are authorized to act as official agencies.
The right is Reserved to reject any subscription, in whole or in
part, and to allot less than the amount of bonds applied for and
to close the subscriptions at any time without notice; the Secretary
of the Treasury also reserves the right to make allotment in full
upon applications for smaller amounts, to make reduced allotments
upon, or to reject, applications for larger amounts, and to make
classified allotments and allotments upon a graduated scale; and
his action in these respects will be final. Allotment notices will be
sent out promptly upon allotment, and the basis of allotment will
be publicly announced.
PAYMENT

Payment at par and accrued interest for any bonds allotted must
be made on or before June 15, 1931, or on later allotment. After
allotment and upon payment Federal reserve banks may issue interim receipts pending deliver}^ of the definitive bonds. 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 shaU be qualified in excess of existing deposits, when so notified
by the Federal reserve bank of its district.
Treasury certificates of indebtedness of Series TJ-1931 and
TJ2-1931, both maturing June 15, 1931, will be accepted at par in
payment for any Treasury bonds of the issue now offered which
shall be subscribed for and allotted, with an adjustment of the
interest accrued, if any, on the bonds so paid for.
GENERAL

PROVISIONS

As fiscal agents of the United States, Federal reserve banks are
authorized and requested to receive subscriptions and to make allotments on the basis and up to the amounts indicated by the Secretary

SECEETAEY OF THE TEEASURY

325

of the Treasury to the Federal reserve banks of the respective
districts.
Any further information which may be desired as to the issue
of Treasury bonds under the provisions of this circular may be
obtained upon application to a Federal reserve bank. The Secretary of the Treasury may at any time, or from time to time, prescribe supplemental or amendatory rules and regulations governing
the offering.
A. W.

MELLON,

Secretary of the Treasury,
TREASURY DEPARTMENT,
OFFICE OF THE SECRETARY,

June 1,1981.
(For letter to the investor see Exhibit 3, p. 304.)

E X H I B I T 26

Subscriptions and allotments. Treasury bonds of 1946-4^ {from press
releases, June 4-^ ^j <^^<^ ^j 1981, revised ^)
Secretary of the Treasury Mellon announced that subscriptions for
the offering of 3 % per cent Treasury bonds of 1946-49, dated June
15, 1931, closed at the close of business, Wednesday, June 3. Subscriptions received by the Federal reserve banks and the Treasury
Department through the mails up to 10 a. m. of June 4 were considered as having been received before the close of \he subscription
books.
Reports received from the Federal reserve banks show that the
total amount of subscriptions received for the Treasury bonds was
$6,315,524,500. Of this amount, $572,106,500 represented exchange
subscriptions in payment for which Treasury certificates of indebtedness maturing June 15, 1931, were tendered. Such exchange subscriptions were allotted 57 per cent, or $326,106,550. Allotments on
cash subscriptions were made as follows:
Subscriptions in amounts not exceeding $10,000 for any one subscriber were allotted 30 per cent, but not less than $50 for any one
subscriber; subscriptions in amounts over $10,000 but not exceeding
$100,000 for any one subscriber were allotted 20 per cent, but not less
than $3,000 for any one subscriber; subscriptions in amounts over
$100,000 but not exceeding $1,000,000 for any one subscriber were
allotted 10 per cent, but not less than $20,000 for any one subscriber:
subscriptions in amounts over $1,000,000 but not exceeding $25,000,000 for any one subscriber were allotted 7 per cent but not less than
$100,000 for any one subscriber; subscriptions in amounts over
$25,000,000 but not exceeding $100,000,000 for any one subscriber
were allotted 4 per cent, but not less than $1,750,000 for any one
subscriber; and subscriptions in amounts over $100,000,000 for any
1 Revised June 26, 193J.

326

EEPOET ON T H E FINANCES

one subscriber were allotted 3 per cent, but not less than $4,000,000
for any one subscriber.
Subscriptions and allotments were divided among the several Federal reserve districts and the Treasury as follows:
Federal
reserve
district

T o t a l exchange s u b criptions
received

Boston
New York.
Philadelphia...
Cleveland
Richmond
Atlanta
Chicago
.St. Louis
Minneapolis...
Kansas C i t y . . .
Dallas
San F r a n c i s c o . .
Treasury

$15,472, 500
379, 843, 000
19, 961, 000
14, 431, 000
3, 980, 500
3, 995, 500
76, 387, 000
35, 592, 000
4, 468, 000
4, 990, 500
9, 229, 500
3,716,500
39, 600

$390, 097, 550
2,455, 702,100
491,167, 250
420.162, 650
194, 848, 650
186. 677, 750
693, 453, 700
82, 696, 700
46, 071, 400
114. 090, 150
128, 641, 150
637, 387, 250
2, 421, 700

Total--..

572,106, 600

5, 743,418, 000

T o t a l cash
subscriptions
received

Total subscriptions
received

Allotted on
exchange
subscriptions

Allotted on
cash s u b criptions

$405, 570, 050
2,836, 545.100
511,128, 250
434, 593, 650
198,829,150
190, 673, 250
769, 840, 700
118, 288. 700
50, 539, 400
119, 080. 650
137,870,650
541,103,750
2, 461, 200

$8.819,400
216, 611, 250
11, 377, 950
8, 222, 550
2, 269, 050
2, 277. 400
43, 642, 000
20, 287, 600
2, 551, 000
2, 845, 700
5, 261, 400
2,118,750
22, 600

$33,361,200
170,093, 600
45,122, 050
38, 420, 950
31, 754, 850
27, 270, 300
68, 381. 700
11,129.350
6, 466. 000
12, 892,850
17, 625, 350
32, 502, 700
378, 650

$42,180,600
386, 604, 750
66, 500, 000
46. 643, 500
34, 023, 900
29, 547, 700
111, 923, 700
31, 416, 850
9, 017, 000
15, 738, 550
22, 786, 750
34, 621. 450
401, 250

6, 315, 524, 500

326,106, 550

496, 299, 450

821,406,000

Total
allotted

Issues of July, 1931
EXHIBIT 27

Inviting tenders for two issues of Treasury hills dated July 1 and. 2,
1981, and both maturing September 30, 1931 {press release, Jume
25, 1981)
Acting Secretary of the Treasury Mills gives notice that tenders
are invited for two series of Treasury bills to the aggregate amount
of $100,000,000, or thereabouts. One series will be 91-day bills and
the other series will be 90-day bills. Both series will be sold on a
discount basis to the highest bidders. Tenders will be received at the
Federal reserve banks, or the branches thereof, up to 2 o'clock p. m.,
eastern standard time, on June 29,1931. Tenders will not be received
at the Treasury Department, Washington.
The Treasury bills will, as stated, be issued in two series, $50,000,000,
or thereabouts, to be dated July 1, 1931, and maturing on September
30, 1931, and $50,000,000, or thereabouts, to be dated July 2, 1931,
and maturing on September 30, 1931. Bidders will be required to
specify the particular series for which each tender is made. The face
amount of the bills of both series will be payable without interest on
September 30, 1931.^ * * * Payment at the price offered for
Treasury bills allotted must be made at the Federal reserve banks in
cash or other immediately available funds on July 1, 1931, for the
bills allotted, bearing that date of issue, and on July 2, 1931, for bills
allotted bearing the latter date of issue. * * *
^ Omitted portions are similar to correspon'dins sections in Exhibit 1, p. 301.

SECRETAEY OF THE TEEASUEY

327

EXHIBIT 28

Acceptance of tenders for two issues of Treasury bills dated J u l y 1
arid 2,1931, and both maturing September 80, 1981 {press release,
June 80, 1981)
Acting Secretary of the Treasury Mills announced to-day that
tenders for $100,000,000, or thereabouts, of two series of Treasury
bills which were offered on June 25, 1931, were opened at the Federal
reserve banks on June 29, 1931.
9 1 - D A Y BILLS

With respect to the off'ering of $50,000,000, or thereabouts, of 91-day
bills dated July 1, 1931, and maturing on September 30, 1931, the
total amount applied for was $201,227,000. The highest bid made was
99.848, equivalent to an interest rate of about 0.60 per cent on an
annual basis. The lowest bid accepted was 99.833, equivalent to an
interest rate of about 0.66 per cent on an annual basis. Only part
of the amount bid for at the latter price was accepted. The total
amount of bids accepted for the 91-day bills was $50,026,000. The
average price of the bills to be issued in this series is about 99.840.
The average rate on a bank discount basis is about five-eighths of 1
per cent.
9 0 - D A Y BILLS

With respect to the offering of $50,000,000, or thereabouts, of 90-day
bills dated July 2, 1931, and maturing on September 30, 1931, the
total amount applied for was $180,034,000. The highest bid made
was 99.850, equivalent to an interest rate of 0.60 per cent on an
annual basis. The lowest bid accepted was 99.835, equivalent to an
interest rate of 0.66 per cent on an annual basis. Only part of the
amount bid for at the latter price was accepted. The total amount
of bids accepted for the 90-day bills was $50,050,000. The average
price of the bills to be issued in this series is about 99.842. The
average rate on a bank discount basis is about five-eighths of 1 per
cent.
EXHIBIT 29

Inviting tenders for Treasury bills dated July 17,1931, and maturing
October 15,1931 {press release, July 18,1981)
Acting Secretary of the Treasury Mills gives notice that tenders
are invited for Treasury bills to the amount of $50,000,000, or thereabouts. They will be 90-day bills, and will be sold on a discount
basis to the highest bidders. Tenders will be received at the Federal reserve banks, or the branches thereof, up to 2 o'clock p. m.,
eastern standard time, on Wednesday, July 15, 1931. Tenders will
not be received at the Treasury Department, Washington.
The Treasury bills will be dated July 17, 1931, and will mature on
October 15, 1931, and on the maturity date the face amount will be

328

EEPOET ON THE FINANCES

payable without interest.^ * *« * Payment at the price offered
for Treasury bills allotted must be made at the Federal reserve banks
in cash or other immediately available funds on July 17,1931. * * *

E X H I B I T 30

Acceptance of tenders for Treasury bills dated J u l y 17, 1981, and
maturing October 15,1981 {press release, July 16,1981)
Acting Secretary of the Treasury Mills announced to-day that the
tenders for $50,000,000, or thereabouts, of 90-day Treasury bills
dated July 17, 1931, and maturing October 15, 1931, which were
offered on July 13, 1931, were opened at the Federal reserve banks
on July 15, 1931.
The total amount applied for was $209,314,000. The highest bid
made was 99.898, equivalent to an interest rate of about 0.41 per
cent on an annual basis. The lowest bid accepted wa,s 99.875, equivalent to an interest rate of one-half of 1 per cent on an annual basis.
The total amount of bids accepted was $51,200,000. The average
price of Treasury bills to be issued is 99.878. The average rate on a
bank discount basis is about 0.49 per cent.

E X H I B I T 31

Inviting tenders for Treasury bills dated July 27,1981, and maturing
October 26,1931 {press release, July 22,1931)
The Secretary of the Treasury gives notice that tenders are invited
for Treasury bills to the amount of $50,000,000, or thereabouts. They
will be 91-day bills, and will be sold on a discount basis to the
highest bidders. Tenders will be received at the Federal reserve
banks, or the branches thereof, up to 2 o'clock p . m., eastern standard
time, on Friday, July 24, 1931. Tenders will not be received at the
Treasury Department, Washington.
The Treasury bills will be dated July 27, 1931, and will mature
on October 26, 1931, and on the maturity date the face amount will
be payable without interest.^ * * • Payment at the price offered
for Treasury bills allotted must be made at the Federal reserve
banks in cash or other immediately available funds on July 27,
1931. * * *
EXHIBIT 32

Acceptance of tenders for Treasury hills dated July 27, 1931, and
maturing October 26,1931 {press release, July 25, 1931)
Acting Secretary of the Treasury Mills announced to-day that the
tenders for $50,000,000, or thereabouts, of 91-day Treasury bills
1 Omitted portions are similar to corresponding sections in Exhibit 1, p. 301.

SECEETAEY OF THE TEEASUEY.

329

dated July 27, 1931, and maturing October 26, 1931, which were
offered on July 22, 1931, were opened at the Federal reserve banks
on July 24, 1931.
The total amount applied for was $179,310,000. The highest bid
made was 99.900, equivalent to an interest rate of about 0.40 per cent
on an annual basis. The lowest bid accepted was 99.868, equivalent
to an interest rate of about 0.52 per cent on an annual basis. The
total amount of bids accepted was $51,806,000. The average price of
Treasury bills to be issued is 99.885. The average rate on a bank
discount basis is about 0.46 per cent.
Issues of August, 1931
E X H I B I T 33

Inviting tenders for Treasury bills dated August 3, 1981, and maturing November 2, 1931 {press release, July 27, 1981)
The Secretary of the Treasury gives notice that tenders are invited
for Treasury bills to the amount of $60,000,000, or thereabouts. They
will be 91-day bills, and will be sold on a discount basis to the highest
bidders. Tenders will be received at the Federal reserve banks, or
the branches thereof, up to 2 o'clock p. m., eastern standard time, on
Thursday, July 30, 1931. Tenders will not be received at the Treasury Department, Washington.
The Treasury bills will be dated August 3, 1931, and will mature
on November 2, 1931, and on the maturity date the face amount will
be payable without interest.^ * * * Payment at the price offered
for Treasury bills allotted must be made at the Federal reserve
banks in cash or other immediately available funds on August 3,
1931. * * *
EXHIBIT 34

Acceptance of tenders for Treasury bills dated August 3, 1931, and
maturing November 2, 1931 {press release, July 81, 1931)
Acting Secretary of the Treasury Mills announced to-day that the
tenders for $60,000,000, or thereabouts, of 91-day Treasury bills dated
August 3, 1931, and maturing November 2, 1931, which were offered
on July 27, were opened at the Federal reserve banks on July 30.
The total amount applied for was $221,171,000. The highest bid
made was 99.896, equivalent to an interest rate of about 0.41 per
cent on an annual basis. The lowest bid accepted was 99.854, equivalent to an interest rate of about 0.58 per cent on an annual basis.
The total amount of bids accepted was $59,850,000. The average
price of Treasury bills to be issued is 99.871. The average rate on a
bank discount basis is about 0.51 per cent.
1 Omitted portions are similar to corresponding sections in Exhibit 1, p. 301,

330

EEPOET ON THE FINANCES
EXHIBIT 35

Inviting tenders for Treasury hills dated August 10, 1931, and
maturing November 9, 1981 {press release, August 3, 1931)
The Secretary of the Treasury gives notice that tenders are invited
for Treasury bills to the amount of $60,000,000, or thereabouts. They will be 91-day bills, and will be sold on a discount basis to the
highest bidders. Tenders will be received at the Federal reserve
banks, or the branches thereof, up to 2 o'clock p. m., eastern standard
time, on Thursday, August 6, 1931. Tenders will not be received at
the Treasury Department, Washington.
The Treasury bills will be dated August 10, 1931, and will mature
on November 9, 1931, and on the maturity date the face amount will
be payable without interest.' * * * Payment at the price offered lor Treasury bills allotted must be made at the Federal reserve
banks in cash or other immediately available funds on August 10,
1931. * * *
E X H I B I T 36

Acceptance of tenders for Treasury bills dated August 10, 1981, and
maturing November 9,1931 {press release, August 7, 1981)
Acting Secretary of the Treasury Mills announced to-day that the
tenders for $60,000,000, or thereabouts, of 91-day Treasury bills dated
August 10," 1931, and maturing November 9, 1931, which were offered
on August 3, were opened at the Federal reserve banks on August 6.
The total amount applied for was $200,798,000. The highest bid
made was 99.878, equivalent to an interest rate of about 0.48 per cent
on an annual basis. The lowest bid accepted was 99.846, equivalent to
an interest rate of about 0.61 per cent on an annual basis. Only part
of the amount bid for at the latter price was accepted. The total
amount of bids accepted was $60,005,000. The average price of
Treasury bills to be issued is 99.858. The average rate on a bank
discount basis is about 0.56 per cent.

EXHIBIT

Inviting tenders for Treasury bills dated August 17, 1931, and maturing November 16, 1981 {press release, August 10, 1931)
The Secretary of the Treasury gives notice that tenders are invited
for Treasury bills to the ainount of $60,000,000, or thereabouts.
They will be 91-day bills, and will be sold on a discount basis to the
highest bidders. Tenders will be received at the Federal reserve
banks, or the branches thereof, up to 2 o'clock p. m., eastern standard
time, on Thursday, August 13, 1931. Tenders will not be received at
the Treasury Department, Washington.
1 Omitted portions are similar to corresponding sections in Exhibit 1, p. 301.

SECEETAEY OF THE TEEASUEY

331

The Treasury bills will be dated August 17, 1931, and will mature
on November 16,1931, and on the maturity date the face amount will
be payable without interest.^ * * * Payment at the price offered
for Treasury bills allotted must be made at the Federal reserve banks
in cash or other immediately available funds on August 17,
1931. * * *
EXHIBIT 38

Acceptance of tenders for Treasury bills dated August 17,1931, and
maturing November 16, 1981 {press release, August 14, 1931)
Acting Secretary of the Treasury Ballantine announced to-day that
the tenders for $60,000,000, or thereabouts, of 91-day Treasury bills
dated August 17, 1931, and maturing November 16, 1931, which were
offered on August 10, were opened at the Federal reserve banks on
August 13.
The total amount applied for was $211,160,000. The highest bid
made was 99.870, equivalent to an interest rate of about 0.51 per
cent on an annual basis. The lowest bid accepted was 99.833, equivalent to an interest rate of about 0.66 per cent on an annual basis.
Only part of the amount bid for at the latter price was accepted.
The total amount of bids accepted was $60,280,000. The average
price of Treasury bills to be issued is 99.841. The average rate on
a bank discount basis is about 0.63 per cent.

E X H I B I T 39

Inviting tenders for Treasury bills dated August 24, 1931, and -maturing Novemher 28, 1981 {press release, August 17, 1931)
The Secretary of the Treasury gives notice that tenders are invited
for Treasury bills to the amount of $60,000,000, or thereabouts.
They will be 91-day bills, and will be sold on a discount basis to the
highest bidders. Tenders will be received at the Federal reserve
banks, or the branches thereof, up to 2 o'clock p. m., eastern standard
time, on Thursday, August 20, 1931. Tenders will not be received
at the Treasury Department, Washington.
The Treasury bills will be dated August 24, 1931, and will mature
on November 23, 1931, and on the maturity date the face amount
will be payable without interest.^ * * * Payment at the price
offered for Treasury bills allotted must be made at the Federal reserve banks in cash or other iinmediately available funds on August
24, 1931. * * *
1 Omitted portions are similar to corresponding sections in Exhibit 1, p. 3Q1.

332

EEPOET ON THE FINANCES
EXHIBIT

Acceptance of tenders for Treasury bills dated August 24, 1931, and
maturing November 23, 1931 {press release, August 21, 1981)
Acting Secretary of the Treasury Ballantine announced to-day
that the tenders for $60,000,000, or thereabouts, of 91-day Treasury
bills dated August 24, 1931, and maturing November 23, 1931, which
were offej-ed on August 17, 1931, were opened at the Federal reserve
banks on August 20.
The total amount applied for was $224,974,000. The highest bid
made was 99.877, equivalent to an interest rate of about 0.49 per cent
on an annual basis. The lowest bid accepted was 99.844, equivalent
to an interest rate of about 0.62 per cent on an annual basis. Only
part of the amount bid for at the latter price was accepted. The
total amount of bids accepted was $60,001,000. The average price
of Treasury bills to be issued is 99.852. The average rate on a bank
discount basis is about 0.59 per cent.

E X H I B I T 41

Inviting tenders for Treasury bills dated August 81, 1981, and
maturing Novemher 80,. 1981 {press release, August 24^ 1931)
The Secretary of the Treasury gives notice that tenders are invited
for Treasury bills to the amount of $80,000,000, or thereabouts. They
will be 91-day bills, and will be sold on a discount basis to the highest bidders. Tenders will be received at the Federal reserve banks,
or the branches thereof, up to 2 o'clock p. m., eastern standard time,
on Thursday, August 27, 1931. Tenders will not be received at the
Treasury Department, Washington.
The Treasury bills will be dated August 31, 1931, and will mature
on November 30, 1931, and on the maturity date the face amount
will be payable without interest.^ « * * Payment at the price
offered for Treasury bills allotted must be made at the Federal reserve
banks in cash or other immediately available funds on August 31,
1931. * * *
EXHIBIT 42

Acceptamce of tenders for Treasury hills dated August 81, 1981, and
maturing Novemher 80,1981 {press release, August 28, 1981)
Secretary of the Treasury Mellon announced to-day that the tenders for $80,000,000, or thereabouts, of 91-day Treasury bills dated
August 31,1931, and maturing November 30,1931, which were.offered
on August 24, 1931, were opened at the Federal reserve banks on

August 27.
1 Ormtted portions are similar to corresponding sections in Exhibit 1, p. 301.

SECEETAEY OP THE TEEASUEY

333

The. total amount applied for was $269,021,000. Except for one
bid for $2,000 at the rate of about 0.50 per cent, the highest bid
made was 99.856, equivalent to an interest rate of about 0.57 per cent
on an annual basis. The lowest bid accepted was 99.838, equivalent
to an interest rate of about 0.64 per cent on an annual basis. Only
part of the amount bid for at the latter price was accepted. The
total amount of bids accepted was $80,019,000. The average price of
Treasury bills to be issued is 99.844, The average rate on a bank discount basis.is about 0.62 per cent.

Issues of September, 1931
EXHIBIT

Offering of Treasury bonds of 1951-55 {8 per cent) and certificates
of indebtedness. Series TS-1932 {ly^ per cent) {press release,
August 81, 1931, with Department Circulars Nos, 44-^ ct'^d 44h)
The Treasury is to-day offering for subscription at par and accrued
interest, through the Federal reserve banks, $800,000,000, or thereabouts, of 3 per cent, 20-24 year Treasury bonds and $300,000,000, or
thereabouts, of 1% per cent, 12-month certificates of indebtedness.
The Treasury bonds will be dated and bear interest from September 15, 1931, will mature on September 15, 1955, and will be redeemable at the option of the United States on and after September 15,
1951.
The certificates of indebtedness will be a single series, TS-1932,
and will be for 12 months, dated and bearing interest from September 15,1931, and will mature on September 15, 1932.
Applications will be received at the Federal reserve banks. The
Treasury will accept in payment for the new Treasury bonds and
certificates of indebtedness, at par, the 2 % per cent Treasury certificates of indebtedness of Series TS-1931 and the 1^^ per cent
Treasury certificates of indebtedness of Series TS2-1931, which become due and payable September 15, 1931. Subscriptions for the
12-month certincates of indebtedness, in payment for which Treasury certificates of indebtedness of Series TS-1931 and TS2-1931 are
tendered, will be given preferred allotment. No such preference
will be given in the case of subscriptions for the Treasury bonds.
The Treasury' bonds will be issued both in bearer and registered
form, in denominations of $50, $100, $500, $1,000, $5,000, $10,000, and
$100,000. The registered bonds will also be. issued in the $50,000
denomination. The certificates of indebtedness will be issued in
bearer form only, in denominations of $500, $1,000, $5,000, $10,000,
and $100,000, and will have two interest coupons attached, payable
March 15, 1932, and September 15, 1932,
The certificates of indebtedness will be exempt, both as to principal and interest, from all taxation, except estate and inheritance
taxes. The Treasury bonds will 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

334

EEPOET ON THE FINANCES

by any local taxing authority, except {a) estate or inheritance taxes,
and {h) graduated additional income taxes, commonly known as surtaxes, and excess-profits and war-profits taxes now or hereafter imposed by the United States, upon the income or profits of individuals,
partnerships, associations, or corporations. The interest on an
amount of bonds and certificates (but not including any certificates
of indebtedness issued after June 17, 1929, because tliey were on that
date made exempt from all taxation except estate and inheritance
taxes) authorized by the 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 said clause {h)
above.
About $334,211,000 of 2 % per cent certificates of indebtedness of
Series TS-1931, about $300,176,000 of II/2 per cent certificates of
indebtedness of Series TS2-1931, and about $30,000,000 in interest
paynients on the public debt, become due and payable on September
15, 1931.
The texts of the official circulars follow.
(Department Circular No. 443)

The Secretary of the Treasury invites subscriptions, at par and
accrued interest, from the people of the United States, for 3 per cent
Treasury bonds of 1951-55, of an issue of gold bonds of the United
States authorized by the act of Congress approved September 24,
1917, as amended. The amount of the offering will be $800,000,000,
or thereabouts.
DESCRIPTION OF BONDS

The bonds will be dated September 15, 1931, and will bear interest
from that date at the rate of 3 per cent per annum, payable semiannually on March 15 and September 15 in each year until the principal amount becomes payable. The bonds will mature September 15,
1955, but may be redeemed at the option of the United States on and
after September 15, 1951, in whole or in part, at par and accrued
interest, on any interest day or days, on four months' notice of redemption given in such manner as the Secretary of the Treasury shall
prescribe. I n 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 principal and interest of the bonds will be payable in
United States gold coin of the present standard of value.
Bearer bonds with interest coupons attached will be issued in denominations of $50, $100, $500, $1,000, $5,000, $10,000, and $100,000.
Bonds registered as to principal and interest will be issued in denominations of $50, $100, $500, $1,000, $5,000, $10,000, $50,000, 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, without charge by the United States,
under rules and regulations prescribed by the Secretary of the
Treasury.

SECEETAEY OF THE TEEASUEY

335

The bonds shall be exempt, both as to principal and interest, from
all taxation now or hereafter iinposed by the Uniled States, any
State, or any of the possessions of the United States, or by any local
taxing authority, except {a) estate or inheritance taxes, and (&)
graduated additional income taxes, commonly known as surtaxes, and
excess-profits and war-profits taxes, now or hereafter imposed by the
United States, upon the income or profits of individuals, partnerships,
associations, or corporations. The interest on an amount of bonds
and certificates (but not including any certificates of indebtedness
issued after June 17, 1929) authorized by said 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
said clause (&) above.
The bonds will be acceptable to secure deposits of public moneys,
but do not bear the circulation privilege and are not entitled to any
privilege of conversion. The bonds will be subject to the general
regulations of the Treasury Department, now or hereafter issued,
governing United States bonds.
A P P L I C A T I O N AND A L L O T M E N T

Applications will be received at the Federal reserve banks, as fiscal
agents of the United States. Banking institutions generally will
handle applications for subscribers, but only the Federal reserve
banks are authorized to act as official agencies.
The right is reserved to reject any subscription, in whole or in part,
and to allot less than the amount of bonds applied for and to close the
subscriptions at any time without notice; the Secretary of the Treasury also reserves the right to make allotment in full upon applications
for smaller amounts, to make reduced allotments upon, or to reject,
applications for larger amounts, and to make classified allotments and
allotments upon a graduated scale; and his action in these respects
will be final. Allotment notices will be sent out promptly upon allotment, and the basis of allotment will be publicly announced,
PAYMENT

Payment at par and accrued interest for any bonds allotted must
be made on or before September 15, 1931, or on later allotment.
After allotment and upon payment Federal reserve banks may issue
interim receipts pending delivery of the definitive bonds. 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 certificates of indebtedness of Series TS-1931 and T S 2 1931, both maturing September 15, 1931, will be accepted at par in
payment for any Treasury bonds of the issue now offered which shall
be subscribed for and allotted, with an adjustment of the interest
accrued, if any, on the bonds so paid for.
77532^32

336

EEPOET ON THE FINANCES
GENERAL PROVISIONS

As fiscal agents of the United States, Federal reserve banks are
authorized and requested to receive subscriptions and to make allotments on the basis and up to the amounts indicated by the Secretary
of the Treasury to the Federal reserve banks of the respective
districts.
Any further information which may be desired as to the issue of
Treasury bonds under the provisions of this circular may be obtained
upon application to a Federal reserve bank. The Secretary of the
Treasury may at any time, or from time to time, prescribe supplemental or amendatory rules and regulations governing the offering.
A. W. MELLON,

Secretary of the Treasury,
TREASURY DEPARTMENT,
OFFICE OF THE SECRETARY,

August 81,1981.
(For letter to the investor see Exhibit 3, p. 304.)
(Department Circular No. 444)

The Secretary of the Treasury, under the authority of the act
approved September 24, 1917, as amended, offers for subscription at
par and accrued interest through the Federal reserve banks Treasury
certificates of indebtedness of Series TS-1932, dated and bearing
interest from September 15, 1931, payable September 15, 1932, with
interest at the rate of 1% per cent per annum, payable semiannually.
Applications will be received at the Federal reserve banks.
Bearer certificates will be issued in denominations of $500, $1,000,
$5,000, $10,000, and $100,000. The certificates will have two interest
coupons attached, payable March 15, 1932, and September 15, 1932.
The certificates of said series shall be exempt, both as to principal
and interest, from all taxation (except estate and inheritance taxes)
now or hereafter imposed by the United States, any State, or any of
the possessions of the United States, or by any local taxing authority.
The certificates of this series will be accepted at par during such
time and under such rules and regulations as shall be prescribed or
approved by the Secretary of the Treasury, in payment of income
and profits taxes payable at the maturity of the certificates. The
certificates of this series will be acceptable to secure deposits of public
moneys, but will not bear the circulation privilege.
The right is reserved to reject any subscription and to allot less
than the amount of certificates applied for and to close the subscriptions at any time without notice. The Secretary of the Treasury also
reserves the right to make allotment in full upon applications for
smaller amounts, to make reduced allotments upon, or to reject, applications for larger amounts, and to make classified allotments and
allotments upon a graduated scale; and his action in these respects
will be final. Allotment notices will be sent out promptly upon
allotment, and the basis of the allotment will be publicly announced.
Payment at par and accrued interest for certificates allotted must
be made on or before September 15,1931, or on later allotment. After

SECRETAEY OF THE TREASUEY

337

allotment and^upon payment, Federal reserve banks may issue interim,
receipts pending delivery of the definitive certificates. Any qualified
depositary will be permitted to make payment by credit for certificates allotted to it for itself and its customers up to any amount for
which it shall be qualified in excess of existing deposits, when so
notified by the Federal reserve bank of its district. Treasury certificates of indebtedness of Series TS-1931 and TS2-1931, both maturing
September 15, 1931, will be accepted at par in payment for any certificates of the series now offered which shall be subscribed for and
allotted, with an adjustment of the interest accrued, if any, on the
certificates of the series so paid for.
As fiscal agents of the United .States, Federal reserve banks are
authorized and requested to receive subscriptions and to make allotments on the basis and up to the amounts indicated by the Secretary
of the Treasury to the Federal reserve banks of the respective districts.
A, W.

MELLON,

Secretary of the Treasury.
TREASURY DEPARTMENT,
OFFICE OF THE SECRETARY,

August 81,1981.
(For letter to the investor see Exhibit 3, p. 304.)

EXHIBIT 44

Subscriptions and allotments. Treasury bonds of 1951-55 and certificates of indebtedness, Senes TS-1982 {from press releases September 2, 4, 9, and 10,1931, revised ^)
CERTIFICATES OF I N D E B T E D N E S S , SERIES T S - 1 9 3 2

Secretary Mellon announced that subscriptions for the offering of
1% per cent, 12-month Treasury certificates of indebtedness of Series
TS-1932, dated September 15, 1931, maturing September 15, 1932,
closed at the close of business September 1, 1931. Subscriptions for
the certificates which did not reach a Federal reserve bank or branch,
or the Treasury Department, before the close of business September
1 were not considered.
The reports received from the 12 Federal reserve banks show that
for the offering of certificates of indebtedness, which was for $300,000,000, or thereabouts, subscriptions aggregated $1,251,196,000. Of
these subscriptions, $523,786,000 represented subscriptions in payment for which Treasury certificates of indebtedness of Series
TS-1931 and Series TS2-1931, both maturing September 15, 1931,
were tendered. Such exchange subscriptions were allotted 60 per
cent, allotments amounting to $314,279,500. All other subscriptions
were rejected.
Subscriptions and allotments of certificates of indebtedness were
divided among the Federal reserve districts and the Treasury as
follows:
1 Revised Oct. 23, 1931,

338

E E P O E T ON T H E

Federal reserve district

FINANCES

Total exTotal cash
Total subscrip- subscriptions
change subtions received
scriptions
received
received

Boston
New York
Philadelphia.
Cleveland
Richmond
Atlanta
Chicago
St. Louis
,
Minneapolis..
Kansas City..
Dallas
San Francisco.
Treasury

$29, 677,000
731,986, 500
33,865, 000
26,835, 500
33,958, 500
46, 582,000
240,461,500
31,751,000
1, 239,000
11,982,000
33,706, 500
2Q, 151, 600
1,000

Total...

1,251,196,000

$25, 586,000
404,329, 500
23, 045, 000
19,160, 500
30,008,500
39, 232,000
114, 706, 500
20, 716, 500
866. 500
4,414, 600
30, 229, 500
16,116,000

$4,091,000
327, 656, 000
10,820,000

727,410,000

623,786,000

Total exchange subscriptions
allotted

7,676,000

3,950,000
7,350,000
125, 755, 000
11,034, 500
372, 600

7, 567, 600
3,477,000
14,036,600
1,000

$2,466,000

196, 697, 000
6,492,000
4, 605, 500
2,370,000
4,410,000
76,455, 000
6, 620,000
223y 600
4, 640, 600

2,088,000
8,422,000
1,000
314,279,600

TREASURY BONDS OF 1 9 5 1 - 5 5

The subscription books for the offering of $800,000,000 3 per cent,
20-24 year Treasury bonds of 1951-55 closed at the close of business
September 5, 1931. The total amount of subscriptions received for
the Treasury bonds was $940,559,550. Subscriptions in payment for
which Treasury certificates of indebtedness maturing September 15,
1931, were tendered, were treated as cash subscriptions. Allotments
on all subscriptions were made as follows:
Subscriptions in amounts not exceeding $100,000 were allotted in
full. Subscriptions in amounts over $100,000, but not exceeding
$500,000, were allotted 90 per cent, but not less than $100,000 on any
one subscription; subscriptions in amounts over $500,000, but not
exceeding $1,000,000, were allotted 80 per cent, but not less than
$450,000 on any one subscription; and subscriptions in amounts over
$1,000,000 were allotted 75 per cent, but not less than $800,000 on
any one subscription.
Subscriptions and allotments of Treasury bonds were divided
among the Federal reserve districts and the Treasury as follows:
Federal reserve district

Boston..
New York...
Philadelphia.
Cleveland...
Richmond...
Atlanta
Chicago
St. Louis

Total subscriptions
received

Total subscriptions
allotted 1

$43,982, 050
282, 237, 900
98,072, 350
145, 608, 200
46,118,100
65, 827,800
64, 304, 550
32, 675,250

$39, 365, 050
228, 916,850
80,100,000
121,633,200
42. 606. 600
50, 862, 800
60, 217, 050
29, 746, 800

Federal reserve district

Minneapolis..
Kansas City..
Dallas
San Francisco
Treasury
Total...

Total subscriptions
received

Total subscriptions
allotted 1

$19,187,900
32,947,100
67,385,150
60, 512,160
1, 801, 050

$17,771,000
30,065,900
49, 985,150
47, 623,150
1, 641, 450

940,559, 550 800,424,000

EXHIBIT 45

Inviting tenders for Treasury bills dated September 80, 1981, and
maturing December 80,1931 {pres4 release, September 24,1981)
The Secretary of the Treasury gives notice that tenders are invited for Treasury bills to the amount of $100,000,000, or thereabouts. They will be 91-day bills, and will be sold on a discount
* Revised Oct. 23. 1931.

SECEETAEY OF THE .TEEASUEY

339

basis to the highest bidders. Tenders will be received at the Federal
reserve banks, or the branches thereof, up to 2 o'clock p. m., eastern
standard time, on Monday, September 28, 1931. Tenders will not
be received at the Treasury Department, Washington.
The Treasury bills will be dated September 30, 1931, and will
mature on December 30, 1931, and on the maturity date the face
amount will be payable without interest,^ * * * Payment at the
price offered for Treasury bills allotted must be made at the Federal
reserve banks in cash or other immediately available funds oh September 30, 1931. * * *

E X H I B I T 46

Acceptance of tenders for Treasury hills dated September 80, 1931,,
and maturing December 80, 1981 {press release, September 29,
1981)
Secretary of the Treasury Mellon announced to-day that the tenders for $100,000,000, or thereabouts, of 91-day Treasury bills dated
September 30, 1931, and maturing December 30, 1931, which were
offered on September 24, 1931, were opened at the Federal reserve
banks on September 28.
The total amount applied for was $213,103,000. Except for one
bid for $1,000 at the rate of about one-fifth of 1 per cent, the highest
bid made was 99,876, equivalent to an interest rate of about 0,49 per
cent on an annual basis- The lowest bid accepted was 99,647, equivalent to an interest rate of about 1,40 per cent on an annual basis.
The total amount of bids accepted was $100,761,000. The average
price of Treasury bills to be issued is 99.692. The average rate on
a bank discount basis is about 1.22 per cent.

Issues of October, 1931
EXHIBIT

Inviting tenders for Treasury bills dated October 15, 1981, and
maturing January 18, 1932 {press release, October 8, 1931)
The Secretary of the Treasury gives notice that tenders are invited for Treasury bills to the amount of $50,000,000, or thereabouts.
They^ will be 90-day bills, and will be sold on a discount basis to
the highest bidders. Tenders will be received at the Federal reserve
banks, or the branches thereof, up to-2 o'clock p. m., eastern standard
time, on Tuesday, October 13, 1931. Tenders will not be received
at the Treasury Department, Washington.
The Treasury bills will be dated October 15, 1931, and will mature
on January 13, 1932, and on the maturity date the face amount
will be payable without interest.^ * * * Payment at the price
offered for Treasury bills allotted must be made at the Federal
i Omitted portions are similar to corresponding sections in Exhibit 1, p. 301.

340

EEPOET ON THE FINANCES

reserve banks in cash or other immediately available funds on October 15, 1931. * * *
EXHIBIT 48

Acceptance of tenders for Treasury bills dated October 15,1981, and
maturing January 18, 1982 {press release, October 14, 1931)
Secretary of the Treasury Mellon announced to-day that the tenders
for $50,000,000, or thereabouts, of 90-day Treasury bills dated October 15, 1931, and maturing January 13, 1932, which were offered
on October 8, were opened at the Federal reserve banks on
October 13.
The total amount applied for was $127,834,000. Except for three
.bids aggregating $304,000 at prices averaging about 1 per cent, the
highest bid made was 99,625, equivalent to an interest rate of iy2
per cent on an annual basis. The lowest bid accepted was 99.313,
equivalent to an interest rate of about 2% per cent on an annual
basis. The total amount of bids accepted was $51,641,000. The
average price of Treasury bills to be issued is 99.404, The average
rate on a bank discount basis is about 2% per cent.

EXHIBIT

Inviting tenders for Treasury bills dated October 26, 1931, and
maturing January 25,1932 {press release, October 19,1981)
The Secretary of the Treasury gives notice that tenders are invited for Treasury bills to the amount of $50,000,000, or thereabouts.
They will be 91-day bills, and will be sold on a discount basis to
the highest bidders. Tenders will be received at the Federal reserve
banks, or the branches thereof, up to 2 o'clock p. m., eastern standard
time, on Thursday, October 22,1931. Tenders will not be received at
the Treasury Department, Washington.
The Treasury bills will be dated October 26, 1931, and will mature
on January 25, 1932, and on the maturity date the face amount
will be payable without interest.^ * * * Payment at the price
offered for Treasury bills allotted must be made at the Federal
reserve banks in cash or other immediately available funds on
October 26, 1931. * * *
EXHIBIT 50

Acceptance of tenders for Treasury bills dated Octoher 26, 1931, and
maturing January 25, 1932 {press release, October 23, 1981)
Secretary of the Treasury Mellon announced to-day that the tenders for $50,000,000, or thereabouts, of 91-day Treasury bills dated
October 26, 1931, and maturing January 25, 1932, which were offered
on October 19, were opened at the Federal reserve banks on October 22.
1 Omitted portions are similar to corresponding sectious in Exhibit 1, p. 301.

SECEETAEY OF THE TEEASUEY

341

The total amount apphed for was $227,253,000. Except for two
bids amounting to $3,000 at the rate of about 2 per cent, the highest
bid made was 99.411, equivalent to an interest rate of about 2i/^ per
cent on an annual basis. . The lowest bid accepted was 99.241, equivalent to an interest rate of about 3 per cent on an annual basis. The
total amount of bids accepted was $51,338,000. The average price
of Treasury bills to be issued is 99.321. The average rate on a bank
discount basis is about 2.69 per cent.

Issue of November, 1931
E X H I B I T 51

Inviting tenders for Treasury bills dated November 2, 1981, and
, maturing February 1, 1932 {press release, October 26, 1981)
The Secretary of the Treasury gives notice that tenders are invited
for Treasury bills to the amount of $60,000,000, or thereabouts. They
will be 91-day bills, and will be sold on a discount basis to the highest
bidders. Tenders will be received at the Federal reserve banks or
the, branches thereof up to 2 o'clock p. m., eastern standard time, on
Thursday, October 29, 1931. Tenders will not be received at the
Treasury Department, Washington,
The Treasury bills will be dated November 2,1931, and will mature
on February 1,1932, and on the maturity date the face amount will be
payable without interest.^ * * * Payment at the price offered for
Treasury bills allotted must be made at the Federal reserve banks in
cash or other immediately available funds on November 2,
1931. * * *
EXHIBIT

Acceptance of tenders for Treasury bills dated November 2,1981, and
maturing February 1,1982 {press release, October 30,1931)
Secretary of the Treasury Mellon announced to-day that the tenders for $60,000,000, or thereabouts, of 91-day Treasury bills dated
November 2,1931, and maturing February 1,1932, which were offered
on October 26, were opened at the Federal reserve banks on October 29.
The total amount applied for was $328,027,000. The highest bid
made was 99.500, equivalent to an interest rate of about 1,98 per cent
on an annual basis. The lowest bid accepted was 99,373, equivalent
to an interest rate of about 2.48 per cent on an annual basis. Only
part of the amount bid for at the latter price was accepted. The
total amount of bids accepted was $60,921,000. The average price of
Treasury bills to be issued is 99,410. The average rate on a bank
discount basis is about 2% per cent.
1 Omitted portions are similar to corresponding sections in Exhibit 1, p. 301.

342

EEPOET ON T H E FINANCES

Miscellaneous
EXHIBIT

Amended regulations governing exchanges of Treasury hills {press
release, Decemher 6, 1930)
TREASURY DEPARTMENT,
OFFICE OF THE SECRETARY,

Washington, December 6, 1930.
Department Circular No. 418, as amended, dated June 25, 1930,
is hereby amended so that paragraph 3 thereof shall read as follows:
3. Treasury bills will be issued in denominations (maturity value) of $1,000,
$10,000, and $100,000. Exchanges of Treasury bUls from higher to lower denominations of tile same series, and exchanges of Treasury bills of the same
series and bearing the same issue date, from lower to higher denominations, will
be permitted at Federal reserve banks.
OGDEN L . M I L L S ,

Acting Secretary of the Treasury,

E X H I B I T 54

Amended regulations governing the sale and issue of Treasury hills
{Department Circular No, 418, as amended)
TREASURY DEPARTMENT,
OFFICE OF THE SECRETARY,

Washington, October 16, 1931,
1. The Secretary of the Treasury is authorized by section 5 of the
second Liberty bond act, as amended,^ to issue Treasury bills on a
discount basis and payable at maturity without interest,' and to fix
the form, terms, and conditions thereof, and to offer them for sale
on a competitive basis, under such regulations and upon such terms
and conditions as he may prescribe. Pursuant to said authorization,
the Secretary of the Treasury, by public notice, may from time to
time offer Treasury bills for sale and invite tenders therefor, through
the Federal reserve banks. The Tresaury bills so offered and the
tenders made will be subject to the terms and conditions and to the
general rules and regulations herein contained and also to the terms
and conditions stated in the public notices as issued by the Secretary of the Treasury from time to time in connection with particular
offerings.
DESCRIPTION OF TREASURY BILLS

2, Treasury bills are bearer obligations of the United States,
promising to pay a specified amount without interest on a specified
date. They are to be issued on a discount basis. Each Treasury bill,
prior to its issue, must be validated by a Federal reserve bank as
fiscal agent of the United States, and the date of the original issue
thereof will be stated thereon. Treasury bills are payable at maturity in United States gold coin of the present standard of value upon
1 The statute appears in T. D. 4292 on pp. 8 and 4 of this circular.

SECEETAEY OF THE TEEASUEY

343

presentation to the Treasurer of the United States in Washington
or to any Federal reserve bank.
3. Treasury bills will be issued in denominations (maturity value)
of $1,000, $10,000, $100,000, $500,000, and $1,000,000. Exchanges of
denominations of Treasury bills of the same series (bearing the same
issue and maturity dates) will be permitted at Federal reserve banks.
4. Treasury bills will be exempt, as to principal and interest, and
any gain from the sale or other disposition of Treasury bills shall
also be exempt, from all taxation (except estate or inheritance taxes)
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;
and no loss from the sale or other disposition of 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.2 However, taxpayers making income tax returns
are required to report in their returns, for information purposes, the
number and amount of obligations and securities of the United States
owned by them and the income received therefrom. I n reporting in
their income tax returns the amount of Treasury bills owned by them
and the income received therefrom, taxpayers will be governed by
the provisions of Treasury Decision 4292, which appears on pages
3 and 4 of this circular. I t will be noted from that Treasury decision that (1) the "amount of such obligations and securities" to
be so reported is the face or maturity value of the Treasury bills, and
that (2) the " income received therefrom " to be reported is the net
excess of the amount realized during the taxable year from the sale
or other disposition of the bills over the cost or other basis thereof,
no separate computation of discount being necessary.
5. Treasury bills will be acceptable at maturity value to secure
deposits of public moneys, but they will not bear the circulation privilege. Treasury bills will be acceptable at maturity, but not before,
and under such rules and regulations as shall be prescribed or approved by the Secretary of the Treasury, in payment of income and
profits taxes payable at the maturity of the Treasury bills. Notes
secured by Treasury bills are eligible for discount or rediscount at
Federal reserve banks by member banks, as are notes secured by
bonds and notes of the United States, under the provisions of section
13 of the Federal reserve act. Treasury bills will be acceptable at
maturity, but not before, in payment of interest or of principal on
account of obligations of foreign governments held by the United
States.
PUBLIC NOTICE

6. When tenders are to be invited, public notice thereof will be
given by the Secretary of the Treasury prior to the date of issue
of the Treasury bills. I n such public notice there will be set forth
{a) the amount of the. Treasury bills for which tenders are then
invited, (&) the date or dates of issue, {c) the date or dates when
such bills will become due and payable, (d) the closing hour and
2 For Treasury bills Issued prior to June 17, 1930, see Department Circular No. 418,
dated Nov. 22, 1929, and Treasury Decision 4276 annexed to that circular.

344

EEPOET ON THE FINANCES

date for the receipt of tenders at the Federal reserve banks, and
{e) the date or dates on which payment for accepted tenders must be
made.
TENDERS

7. Tenders, in response to any such public notice, will be received
only at the Federal reserve banks, or branches thereof, and unless
received before the fixed time of closing will be disregarded. No
tender will be accepted for an amouiit less than $1,000 (maturity
value), and each tender must be for an amount in multiples of
$1,000 (maturity value). The price or prices offered by the subscriber for the amount or amounts (at maturity value) applied for
must be stated, and must be expressed on the basis of 100, with not
more than three decimal places, e. g., 99.125. Fractions must not be
used.
8. Tenders should be submitted on the prescribed forms and inclosed in special envelopes, securely sealed. On application, the
forms and special envelopes will be supplied by the Federal reserve
bank of the district in which the subscriber is located. If a special
envelope is not available, the inscription " Tender for Treasury bills "
should be placed on the envelope used. The instructions of the Federal reserve banks with respect to the submission of tenders should
be observed. Tenders will be accepted without cash deposit from
incorporated banks and trust companies and from responsible and
recognized dealers in investment securities. Tenders from others
must be accompanied by a 10 per cent payment of the face amount
of the Treasury bills applied for; provided, however, that such
deposit will not be required if the tender is accompanied by an
express guaranty of payment in full by an incorporated bank or
trust company. The forfeiture of the 10 per cent cash deposit may
be declared by the Secretary of the Treasury if payment in full is
not made, in the case of accepted tenders, on the prescribed date.
9. The time of closing will be specified in the public notice. At
the time fixed for closing, all tenders received by the Federal reserve
banks, or branches, will be opened. The Secretary of the Treasury
will determine the acceptable prices offered and will make public
announcement thereof as soon as possible after the opening of bids,
probably on the following morning. Those submitting tenders will
be advised by the Federal reserve banks of the acceptance or rejection thereof, and payment on accepted tenders must be made on the
date specified in the public notice.
10. I n considering the acceptance of tenders, the highest prices
offered will be accepted in full down to the amount required, and if
the same price appears in two or more tenders and it is necessary to
accept only a part of the amount offered at such price, the amount
accepted ait such price will be prorated in accordance with the respective amounts applied for. However, the Secretary of the Treasury
expressly reserves the right on any occasion to reject any or all
tenders or parts of tenders; and to award less than the amount applied for; and any action he may take in any such respect or respects
shall be final.
11. Any payments which may be due on account of accepted
tenders must be made to the appropriate Federal reserve bank in

SECEETAEY OF THE TEEASUEY

345

cash or other funds that will be immediately available on the date
specified. Following any such payment, delivery of definitive Treasury bills (or interim receipts) will be made without cost to the subscriber.
12. Federal reserve banks as fiscal agents of the United States are
authorized to perform such acts as may be necessary to carry out the
provisions of this circular and of the public notice or notices issued
in connection with any offering of Treasury bills.
DESTROYED, M U T I L A T E D , OR DEFACED TREASURY BILLS

13. No relief will be granted on account of the loss or theft of
Treasury bills issued hereunder. Eelief will be granted on account
of the destruction, mutilation, or defacement thereof under the conditions and in accordance with the procedure prescribed in paragraphs 80 and 81 of Treasury Department Circular No. 300, dated
July 31, 1923, so far as applicable.
GENERAL

14. The Secretary of the Treasury reserves the right to withdraw,
amend, or supplement this circular at any time, or from time to time.
A. W.

MELLON,

Secretary of the Treasury.
( T . D . 4292)
INCOME TAX—EXEMPTION OF TREASURY BILLS
TREASURY DEPARTMENT,
OFFICE OF COMMISSIONER OF INTERNAL REVENUE,

Washington, D. C.
To Collectors of Internal Revenue and Others Concerned:
Attention is invited to the act entitled "An act providing certain exemptions
from taxation for Treasury bills," approved .Tune 17, 1930 (Public No. 376,
71st Cong,, H, R, 12440), which amends section 5 of the second Liberty bond
act, as arnended (Public No, 11, 71st Cong., .Tune 17, 1929), by adding at the
end thereof a new subdivision known as subdivision (d). This new subdivision provides that any gain from the sale or other disposition of Treasury
bills issued after the enactment of the act approved June 17, 1930, shall be
exempt from all Federal, State, and local taxation (except estate or inheritance
taxes), and that no loss from the sale or other disposition of such Treasury
bills shaU be allowed as a deduction, or otherwise recognized, for the purposes
of any tax imposed by the United States or any of its possessions. Section
5 of the second Liberty bond act, as so amended, reads as follows, the taxexemption provisions being contained in subdivisions (b) and (d) thereof:
" S E C 5 (a) That in addition to the bonds and notes authorized by sections
1 and 18 of this act, as amended, the Secretary of the Treasury is authorized
to borrow from time to time, on the credit of the United States, for the purposes of this Act, to provide for the purchase or redemption before maturity
of any certificates of indebtedriess or Treasury bills issued hereunder, and to
meet public expenditures authorized by law, such sum or sums as in his
judgment may be necessary, and to issue therefor (1) certificates of indebtedness of the United States at not less than par and at such rate or rates of
interest, payable at such time or times as he may prescribe; or (2) Treasury
bills on a discount basis and payable at maturity without interest. Treasury
bills to be issued hereunder shall be offered for sale on a competitive basis,

346

EEPOET ON THE FINANCES

under such regulations and upon such terms and conditions as the Secretary
of the Treasury may prescribe, and the decisions of the Secretary in respect
of any issue shall be final. Certificates of indebtedness and Treasury bills
issued hereunder shall be in such form or forms and subject to such terms
and conditions, shall be payable at such time, not exceeding one yeair from
the date of issue, and may be redeemable before maturity upon such terms and
conditions as the Secretary of the Treasury may. prescribe. Treasury bills
issued hereunder shall not be acceptable before maturity in payment of interest
or of principal on account of obligations of foreign governments held by the
United States of America, The sum of the par value of such certificates and
Treasury bills outstanding hereunder and under section 6 of the first Liberty
bond act shall not at any one time exceed in the aggregate $10,000,000,000.
"(b) All certificates of indebtedness and Treasury bills issued hereunder
(after the date upon which this subdivision becomes law) shall be exempt,
both as to principal and interest, from all taxation (except estate and inheritance taxes) now or hereafter imposed by the United States, any State, or any
of the possessions of the United States, or by any local taxing authority; and
the amount of discount at which Treasury bills are originally sold by the
United States shall be considered to be interest within the meaning of this
subdivision.
"(c) Wherever the words 'bonds and notes of the United States,* or *bondg
and notes of the Government of the United States,' or * bonds or notes of the
United States * are used in the Federal reserve act, as amended, they shall be
held to include certificates of indebtedness and Treasury bills issued hereunder.
"(d) Any gain from the sale or other disposition of Treasury bills issued
hereunder (after the date upon which this subdivision becomes law) shall be
exempt from all taxation (except estate or inheritance taxes) now or hereafter
imposed by the United States, any State, or any of the possessions of the United
States, or by any local taxing authority; and no loss from the sale or other
disposition of such Treasury bills shall be allowed as a deduction, or otherwise
recognized, for the purposes of any tax now or hereafter imposed by the United
States or any of its possessions."
The report of the Committee on Ways and Means (Rept. No. 1759, accompanying H. R. 12440) shows that it is the purpose of the act approved June 17,
1930, to obviate the necessity, which existed under the law prior to its amendment by such act, of keeping a complicated system of bookkeeping records in
order to ascertain gain or loss from the sale or other disposition of Treasury
bills as differentiated from the discount received on such bills.
Attention is also invited to section 22 (b) (4) of the revenue act of 1928,
which provides in part as follows:
"SEC. 22. * * * (b) Exclusions from gross income * * *. The following items shall not be included in gross income and shall be exempt from taxation under this title: * * * (4) * * *^ Interest upon (A) the obligations of a State, Territory, or any political subdivision thereof, or the District
of Columbia; or (B) securities issued under the provisions of the Federal farm
loan act, or under the provisions of such act as amended; or (C) the obligations
of the United States or its possessions. Every person owning any of the obligations or securities enumerated in clause (A), (B), or (C) shall, in the return
required by this title, submit a statement showing the number and amount of
such obligations and securities owned by him and the income received therefrom, in such form and with such information as the commissioner may require.
In the case of obligations of the United States issued after September 1, 1917
(other than postal savings certificates of deposit), the interest shall be exempt
only if and to the extent provided in the respective acts authorizing the issue
thereof as amended and supplemented, and shall be excluded from gross
income only if and to the extent it is wholly exempt to the taxpayer from
income taxes."
Article 81 of Regulations 74 promulgated under the revenue act of 1928 provides that " Every person owning obligations of a State, Territory, any political
subdivision thereof, or the District of Columbia; securities issued under the
provisions of the Federal farm loan act or of such act as amended; or obligations of the United States or its possessions, must, however, submit in his
income tax return a statement showing the number and amount of such obligations and securities owned and the income received therefrom."
Under the above-quoted provisions of the revenue act of 1928 and Regulations
74, in the case of Treasury bills issued after June 17, 1930, (1) the " amount
of such obligations and securities" is their par (maturity) value, and (2) the

347

SECEETARY OP THE TREASUEY

"income received therefrom" is the net excess of the amount realized during
the taxable year from the sale or other disposition of the bills over the cost
or other basis thereof, no separate computation of discount being necessary.
In such cases, and pending revision of the income tax forms, taxpayers making
income tax returns shall submit the statement required by section 22 (b) (4)
and article 81 in the form of a rider attached to the return.^
ROBT. H . LUCAS,

Commissioner of Internal Revenue.
Approved: June 25, 1930.
A. W. MEILLON,

Secretary of the Treasury.

E X H I B I T 55

Receipt of Liberty bonds, Treasury bonds, and Treasury notes for
estate or inheritance taxes {fifth supplement to Department Circular No, 225)
TREASURY DEPARTMENT,
OFFICE OF THE SECRETARY,

Washington, February 14, 1931,
1. Department Circular No. 225, dated January 31,1921, prescribes
the regulations governing the receipt of bonds and notes of the
United States for Federal estate or inheritance taxes pursuant to
the provisions of section 14 of the second Liberty bond act, approved
September 24,. 1917, as amended. Said circular has been supplemented on June 30, 1922, July 31, 1923, October 15, 1925, and October
30, 1926, to show the bonds and notes on such dates, respectively,
outstanding and receivable for such payments. Said circular is
hereby further supplemented to show the bonds at this date outstanding bearing interest at a higher rate than 4 per cent per annum
which come within the provisions of said Department Circular No.
225, dated January 31, 1921. Treasury notes outstanding at this
time do not come within the provisions of said circular. The bonds
receivable are as follows:
Description

Date of issue

(a) First Liberty loan converted iM per cent bonds of
1932-1947.
(b) First Liberty loan second converted iM per cent
bonds of 1932-1947.
(c) Fourth Liberty loan i \ i per cent bonds of 1933-1938...
(d) 43<i per cent Treasury bonds of 1947-1952

May 9,1918

First 4^'s.

Oct. 24,1918

First second 4M's.

.—do
Oct. 16,1922

Fourth 4 ^ ' s .
Treasury bonds of 1947-1952.

Short title

2. F o r the calculation of accrued interest on the current coupons
of bonds tendered in payment of estate or inheritance taxes under
this circular, the method outlined in Exhibit B to Department Circular No, 225, dated January 31, 1921, should be followed.
A. W.

MELLON,

Secretary of the Treaswry,
^ T h i s rider is no longer necessary a s t h e income t a x forms have been revised to
include t h e required statement.

348

EEPOET ON THE FINANCES
EXHIBIT 56

An act to amend section 1 of the second Liberty bond act, as amended
[PUBLIC—No.

8 2 0 — 7 1 S T C O N G R E S S — H . R . 16111]

Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled. That section 1 of
the second Liberty bond act, as amended (Public, Numbered 43, 120,
and 192, Sixty-fifth Congress, September 24, 1917, April 4, 1918, and
July 9, 1918, respectively), is hereby amended-by striking out the
figures " $20,000,000,000'' and inserting in lieu thereof the figures
"$28,000,000,000."
Approved, March 3, 1931.

E X H I B I T 57

Announcement that coupon bonds in the denomination of $100,000
will be available for three outstanding Liberty loan issues, amd
denominations of $5,000 and $10,000 for first 8Y2S {press release,
June 6, 1981, with amendments to Department Circulars Nos, 78,
114, and 121)
Secretary Mellon announced to-day that hereafter coupon bonds
in the denomination of $100,00() will be available for three outstanding Liberty issues, first 3%'s, first converted 41^4's, and fourth 414's,
and in addition coupon bonds of the $5,000 and $10,000 denominations will be available for the first 31^'s. These denominations, of
course, will be issued only on exchange upon the surrender of a like
face amount of other bonds of the same issue.
The Secretary stated that the several series of Treasury bonds
issued since 1922 for refunding purposes included the denomination
of $100,000, and accordingly the additional denominations now provided for Liberty bonds will accord to holders of the latter the same
convenience heretofore accorded to holders of Treasury bonds. The
new denominations $5,000 and $10,000 now authorized for first 31/2's
will bring this issue into line with other issues of Liberty bonds and
Treasury bonds.
(Amendment to Department Circular No. 78)
F I R S T L I B E R T Y LOAN 3 % P E R CENT BONDS O F 1932-47

TREASURY DEPARTMENT,
OFFICE OF THE SECRETARY,

Washington, January 2, 1981.
Department Circular No. 78, dated May 14,1917, inviting subscriptions for and fixing the terms of first Liberty loan 3^^ per cent
bonds of 1932-47, is hereby amended so as to provide for the issue
of bearer bonds, with interest coupons attached, in denominations of
$5,000, $10,000, and $100,000 ,in addition to the denominations of
$50, $100, $500, and $1,000 authorized by said circular.

A. W.

MELLON,

Secretary of the Treasury,

SECEETAEY OF THE TEEASUEY

349

(Amendment to Department Circular No. 114)
FIRST L I B E R T Y LOAN CONVERTED 4% PER CENT BONDS OF 1932-47
TREASURY DEPARTMENT,
OFFICE OF THE SECRETARY,

Washington, J a n u a r y 2, 1981,
Section X of Department Circular No. 114, dated May 9, 1918,
fixing the terms of first Liberty loan converted 4^4: per cent bonds
of 1932-47, is hereby amended so as to provide for the issue of bearei*
bonds, with interest coupons attached, in the denomination of $100,000 in addition to the denominations of $50, $100, $500, $1,000,
$5,000, and $10,000 authorized by said section.
A. W. MELLON,

Secretary of the Treasury,
(Amendment to Department Circular No. 121)
F O U R T H L I B E R T Y LOAN 4% PER CENT BONDS OF 1933-38
TREASURY DEPARTMENT,
OFFICE OF THE SECRETARY,

Washington, January 2, 1981,
Department Circular No. 121, dated September 28, 1918, inviting
subscriptions for and fixing the terms of fourth Liberty loan 4^4
per cent bonds of 1933-38, is hereby amended so as to provide for
the issue of bearer bonds, with interest coupons attached, in the denomination of $100,000 in addition to the denominations of $50, $100,
$500, $1,000, $5,000, and $10,000 authorized by said circular.
A. W.

MELLON,

Secretary of the Treasury,

E X H I B I T 58

Notice of call for redemption of Treasury notes of Series C-1980-82
{press release, June 8,1931, with Department Circular No, 489)
The Secretary of the Treasury announces that all 3^^ per cent
Treasury notes of Series C-1930-32 have been called for redemption
on December 15, 1931, on which date the principal of any such notes
then outstanding will be payable, together with interest then accrued thereon. Accordingly, interest on all 3^/^ per cent Treasuiy
notes of Series C-1930-32 will cease on said redemption date, December 15, 1931.
The Series C-1930-32, 3 % per cent notes were issued on January
16, 1928, and were made redeemable on six months' notice on any
interest payment date on and after December 15, 1930. Of the
$607,399,650 originally issued, there remain outstanding about
$451,000,000.
The text of the official circular calling the notes for redemption
follows:

350

REPORT ON THE FINANCES
(Department Circular No. 439)
TREASURY DEPARTMENT,
OFFICE OF THE SECRETARY,

Washington, June 8, 1981.
To holders of 8^2% Treasury notes of Series C-1930-32:
1. Call'for redemption,—Public notice is hereby given that, in
accordance with the terms of their issue and pursuant to the provisions of Treasury Department Circular No. 392, dated January 9,
1928, all of the 31/2 per cent Treasury notes of Series C-1930-32,
which by their terms were made redeemable on and after December
15, 1930, are called for redemption on December 15, 1931, on which
date the principal of any such notes then outstanding will be payable, together with the interest then accrued thereon. Interest on
all 2>y2 V^^ c^^t Treasury notes of Series C-1930-32 will cease on
said redemption date, December 15, 1931.
2. Presentation for redemption on or after Decemher 15, 1981,—
All 3 % per cent Treasury notes of Series C-1930-32 should be presented and surrendered for redemption to any Federal reserve
bank' or branch, or to the Treasurer of the United States at Washington, D. C. The notes must be delivered in every case at the
expense and risk of the holder, and should be accompanied by appropriate written advice.
Facilities for transportation of the notes by registered mail insured may be arranged between incorporated banks and trust companies and the Federal reserve banks, and holders may take advantage of such" arrangements, when available, utilizing such incorporated banks and trust companies "Cs their own agents. Incorporated banks and trust companies are not agents of the United
States under this circular.
3. Interest coupons,—Interest coupons dated December 15, 1931,
should be detached and collected in regular course when due. Coupons dated June 15, 1932, and December 15, 1932, must be attached
to the notes when presented. I n the event that any notes are presented for redemption with the June 15, 1932, or December 15, 1932,
coupons detached, the notes will nevertheless be redeemed, but
the full face amount of any such missing coupons will be deducted,
4. Any further information which may be desired as to the redemption of 3 % per cent Treasury notes of Series C-1930-32
may be obtained from the Commissioner of the Public Debt, Treasury Department, Washington, D. C , or from any Federal reserve
bank or branch. The Secretary of the Treasury may at any time or
from time to time prescribe supplemental or amendatory rules and
regulations governing the matters covered by this circular.

A. W.

MELLON,

Secretary of the Treasury,

SECEETAEY OF THE TEEASUEY

351

THE BUDGET
EXHIBIT 59

Executive order, May 1,1931, prescribing rules and regulations with
regard to the reporting of expenditures in the Budget {No, 5614)
EXECUTIVE ORDER—REPORTING OF EXPENDITURES FOR USE IN THE BUDGET

I n pursuance of the provisions of the Budget and Accounting Act
approved June 10, 1921, I hereby prescribe the following rules and
regulations with regar(i to the reporting of expenditures in the
Budget:
1. As soon as practicable after the close of each fiscal year, the
Secretary of the Treasury shall furnish the Director of the Bureau
of the Budget with a detailed statement of the expenditures of the
Government on the basis of checks issued by disbursing officers and
agents of the United States, under each separate head of appropriations as carried on the books of the Treasury Department; and such
expenditures shall be classified separately under the captions " General fund," " Special funds," and " Trust funds," respectively.
2. I n order to enable the Secretary of the Treasury to comply with
the provisions of this order, the head of each executive department
and independent establishment shall furnish the Secretary of the
Treasury as soon as practicable after the close of each fiscal year
with a detailed statement of the unexpended balances in the hands of
disbursing officers and agents, or to their official credit, at the close
of the fiscal year for which "such report is made, classified according
to appropriations, special funds, trust funds, and special deposit
accounts as carrieci on the books of the Treasury.
3. The Secretary of the Treasury shall prescribe such forms as
he may consider necessary to carry out the provisions of this order.
HERBERT HOOVER.
T H E W H I T E HOUSE,

May 1, 1931,
E X H I B I T 60

The Federal Budget Situation, an address by Under Secretary of the
Treasury Mills^ May 21, 1931, before the National Association of
Mutual Savings Banks, Washington, D, C,
For the fiscal year 1931 the United States Treasury will show the
first deficit since 1919, the 3^ear in which war financing reached its
peak. I n the intervening period revenues have each year shown
a surplus over expenditures; marked progress has been made in the
reduction of the public debt; expenditures have been reduced from
inflated war levels; and the burden of taxes has been greatly diminished, although without a corresponding reduction in revenue.
A t present we are confronted with the relatively new experience of
1 Delivered by Assistant Secretary Ballantine in the absence of Mr. Mills.

77532—32

^25

352

EEPOET ON THE FINANCES

marked increase in current expenditures attended by a sharp decline
in revenues, and with the prospect of a very large deficit.
The change is so abrupt that it is well to reexamine our present
situation and future prospects in the light of the experience of the
past few years and from the standpoint of the course which normal
expenditures and normal revenue may follow during the next few
years. We have seen a tax system which produced some $672,000,000
in 1914 expanded to produce $5,728,000,000 in 1920, the peak year of
war levies, and subsequently contracted through four continuing
revisions and one temporary reduction.
There is nothing extraordinary in all this, for invariably our experience with wars has been that the expenditures of the Federal
Government mount sharply to a peak either during or shortly after
the period of war activity; subsequently expenditures decline, but not
to the pre-war level, owing partly to continuing expenditures due to
war activities, such as the service on the public debt, outlays for
military establishments on an increased scale, and the care of war
veterans. Also expansion in the civil functions of the Government is
accelerated during war periods, as compared with the gradual increase in normal peace time.
The extent to which Federal financial operations are distorted from
normal trends by wars may be amply illustrated from the record of
Federal expenditures. The average yearly expenditures of the Federal Government for the decade 1810-1819, which includes the War
of 1812, were 145 per cent larger than for the preceding decade.
From that high level expenditures for the period 1820-1829 showed
a considerable decline but the average yearly figure for this decade
was still about 76 per cent larger than for tne decade preceding the
war; subsequently, between the decades 1820-1829 and 1830-1839
there was an increase of 43 per cent. During the Civil War, the increase was, of course, more marked as compared with the preceding
period, due to the nature and duration ot that conflict. Average
yearly expenditures for the decade 1860-1869 were 775 per cent
greater than for the preceding 10-year period. During the years
1870-1879 there was a decline of only 46 per cent from the high
level' of the preceding 10 years, and this was followed by a decrease
of 4, and increases of 48 and 46 per cent, respectively, during the
three following decades ending 1909. During and after the Great
War, we experienced even broader changes. Average yearly expenditures for the fiscal years 1917-1919 were more than fifteen
times as large as for the five years preceding 1915, and for the decade
1920-1929 showed a decline of 66 per cent.
The significant fact to be noted is that each war marks the beginning of a permanently higher basis of expenditures, even after the
war and early postwar peaks have been passed.
Let us now consider briefly the major facts pertaining to present
Federal expenditures. Expenditures in 1930 amounted to $3,994,000,000, and for this year are estimated at $4,435,000,000. The composition of these figures clearly indicates that the war continues to
influence our budgets. Of total expenditures for 1930 about a billion
and a half, or nearly 40 per cent, represent disbursements that may
be classified as related directly or indirectly to the military functions
of the Government. This item in turn includes about $835,000,000

SECEETAEY OF THE TEEASUEY

353

for military pensions and the like, a class oi expenditures which will
not only continue for a considerable period of years but will inevitably increase as time goes on. Another major item in the budget
for the fiscal year 1930 which may be attributed in the main to the
war is the service on the public debt, including interest and sinking
fund retirements, totaling about $1,050,000,000. This is also a type
of expenditure which will continue; that is, until the debt has been
extinguished. These two items account for nearly two-thirds of
total expenditures chargeable against ordinary receipts for the fiscal
year 1930. The remaining expenditures represent largely the ordinary costs of government. In the present fiscal year present expenditures include a number of unusual and temporary items. These
include disbursements under the agricultural marketing act of June,
1929, and under more recent legislation providing for emergency
loans for agricultural relief, as well as expenditures resulting from
expansion and acceleration in governmental construction activity. A
statement recently issued by the President indicates that at the present rate the cost of all governmental construction work represents a
large increase over the rate of such expenditures previous to the
depression. Although it is anticipated that most of these expenditures will continue, some on a larger and some on a smaller scale, in
1932, clearly both the new expenditures and the acceleration of others
involved in the emergency program do not constitute permanent
increases in the burden on the budget.
Viewing expenditures as a whole, while a decrease may be expected
under some heads it is hardly likely, even after eliminating temporary and extraordinary items, that any reduction under the average
of the last few years is to be anticipated. On the contrary, the
normal trend of Government expenditures is upward. The annual
average of expenditures for the eight years ending June 30,1930, has
been $3,662,000,000.
Turning now to the revenue side of the picture, there are two
obvious methods of financing the peaks of war expenditures—one by
increasing tax levies, the other by borrowing. Usually both methods
are employed, but there was a marked difference during the recent
war period, as compared with the Civil War years. We financed a
relatively large proportion of the expenditures of the last war
through tax levies made during the war period. Taxes were levied
in great number, promptly and effectively. Tax receipts during the
Civil War totaled about 20 per cent of the expenditures, whereas
during the fiscal years 1917-1919 tax receipts amounted to about 27
per cent of the total ordinary expenditures, a proportion which reflects very prompt action for such a short emergency. This was an
unusual record in war financing, but the point with which we are
particularly concerned in this discussion is that because we built up
a tax system to carry currently a relatively large proportion of the
cost of the war we were thereby faced with a correspondingly serious
problem at the end of the war of revising this tax system to a peacetime basis.
^ I t has been the aim of the Treasury in recommending tax legislation during the early postwar period to retain that part of the war
revenue system which would further the development of a sound
and effective tax structure to finance the Government over a period

354

EEPOET ON THE FINANCES

of years. The greater proportion of the taxes levied during the
war were suitable only for emergency purposes and were levied with
the single purpose oi obtaining as much revenue as possible, with
little regard lor other consequences of the levies. To meet the
existing emergency was the major consideration in comparison with
which the type of the tax, the method of administration, and the
convenience of the taxpayer were secondary considerations. Also
no one questioned whether the taxes could be adapted easily to
changes in the fiscal requirements of the Government over a period
of years.
The number and rates of taxes to meet the war emergency reached
their maximum in the revenue act of 1918. Under this act single
individuals with incomes of $1,000 and over and married individuals
with incomes of $2,000 and over were taxed at rates which were
graduated upward in rough proportion to the size of the income
and ranged as high as 65 per cent surtax and 12 per cent normal
tax on amounts of income in excess of $1,000,000.
In addition, consumers, rich and poor, paid taxes on a great
variety of goods and services; and in levying many even of these
indirect taxes an effort was made, and with considerable success,
to impose the heavier burden upon the wealthy. Tobacco taxes were
increased some 50 per cent; on admissions to places of amusement
1 cent was paid to the Government for every 10 cents. Those who
traveled paid taxes on railway tickets and reservations. Telephone
calls and telegrams were taxed, and other taxes were levied on
products as they left the hands of the manufacturer or dealer, and
were, at least in part, added to prices paid by the consumer. Thus
individuals made contributions to the Government in the purchases
of automobiles, tires and accessories, candy, chewing gum, drinks,
photographic supplies, musical instruments, jewelry, perfumery, cosmetics, and medicinal articles. The burden of these indirect taxes
was distributed fairly generally; other taxes, such as those on the
estates of decedents, club dues, and a variety of consumption articlessuch as sporting goods, firearms, yachts, motor boats, hunting garments, articles made of fur, and other wearing apparel, bore more
heavily upon individuals with relatively large incomes.
There were other taxes which reached the individual as a business
man through the income and war and excess-profits, taxes, the tax
on corporation capital stock, stamp taxes on documents, and the
special occupational taxes.
After the close of the war these taxes were gradually revised
and reduced mainly through four revenue acts—those of 1921, 1924,
1926, and 1928—until finally the elaborate wartime system of
numerous, and in many cases cumbersome, taxes on commodities
and activities—some yielding a comparatively insignificant amount
of revenue—has been changed into an internal revenue system of
comparatively few taxes. Individual incomes have been relieved
through three continuing and one temporary reduction in normal
rates, three reductions in surtaxes, a special rate for income from
sale of capital assets, increases in personal exemptions and credit,
and the addition of a credit for earned income. The war and
excess-profits taxes on corporations have been removed. A substantial reduction has been made in estate taxes. . The excise taxes

SECRETAEY OF THE TEEASUEY

355

on the sale price of a long list of articles, ranging from toilet
articles and jewelry to automobiles and sporting goods, have been
virtually eliminated. The special taxes included for corporation
capital stock and a variety of occupational taxes have all been
repealed except the tax on brewers and distillers and on the use
of narcotics. Some reduction has been made in the tax on documentary stamps, admissions, dues, distilled spirits, and tobacco
products. Taxes on transportation, on telephone and telegraph, on
insurance and on nonalcoholic beverages have been repealed.
In considering the present situation in regard to revenues I am
inclined to take as a point of departure the fact that during the
past decade, despite reductions in taxes, revenues have been fairly
constant at relatively high levels, although considerably below the
peak reached early in the postwar period. Ordinary receipts have
continued close to the annual average of $4,018,000,000 for the past
eight years. This result is to be accounted for largely by the relatively high level of business activity and generally prosperous conditions which prevailed during the period, and in part by the increased productivity of taxes which followed upon the elimination
of the extremely high rates of the war period. It should be observed, however, that in considerable measure the revenues of the
period were considerably influenced by certain classes of receipts
not of permanent character. The immediate postwar years are
somewhat confused by numerous special items both of receipts and
expenditures which appeared during that period of broad readjustments. The significance of nonrecurring elements in Federal receipts of past years may be readily indicated, however, by reference
to the period beginning with the fiscal year 1923. From 1923 to
1928, inclusive, the net proceeds of sales of securities of the Federal
Government amounted to $642,000,000 and the proceeds of sales of
war materials to about $166,000,000, at the same time $254,000,000
was realized from the liquidation of the War Finance Corporation.
Eeceipts from these three sources, aggregating $1,062,000,000 for the
period, have now become negligible; they amounted to only $18,000,000 and $17,000,000 for 1929 and 1930, respectively. A somewhat
similar influence has been exerted on receipts of certain years by
the collection of back taxes. Although it is impossible accurately
to measure the amount by which receipts have been affected by nonrecurrent items, it can be said that as much as half of the combined
surplus of about $2,800,000,000 for the past eight fiscal years may be
attributed to such receipts.
The postwar tax system evolved out of our war experience differs
materially from the pre-war days. Then our revenues were derived
primarily from customs and other indirect taxes, chiefly taxes on
tobacco products, distilled spirits, and fermented liquors. Customs
produced about half of the tax receipts, and the above taxes largely
accounted for the remainder of the pre-war tax receipts. Now
about two-thirds of the taxes come from income taxes on corporations and individuals. Tobacco taxes continue to yield large revenues and except for income taxes are the most important source of
internal revenue. Customs, also, still yield substantial receipts.
Distilled spirits and fermented liquors are now, of course, a negligible source of revenue.

356

EEPOET ON THE FINANCES

The current situation forces us to scrutinize carefully our new
postwar tax system. Receipts have declined seriously with the business depression. We are faced with a large deficit. Does this mean
that taxes have been reduced too far or that the taxes that have
been retained do not constitute a sufficiently well-balanced system
to provide an even flow of revenue from year to year? History
indicates plainly enough that while during the first few years succeeding a war expenditures may be rapidly reduced from the war
level, they never return to the pre-war level, but remain on a substantially higher basis. I t is impossible, therefore, to hope to return to the comparatively simple system that existed before the
World War. I t would be entirely inadequate to meet present or
future needs. These are so vastly greater that what is required is
a modification of the war system of taxation rather than an expansion and development of our pre-war system. Wars do permit the
imposition of taxes which however sound could never be imposed
as new taxes in peace time. I t is the part of wisdom to retain some
of them, at least, after a war is over.
Our present situation raises the question, though it does not do
more than raise the question, as to whether some of the taxes developed in the war period have been repealed or modified perhaps a
little too rapidly. Through successive revisions in the income tax
laws, personal exemptions and credits have been increased, and the
income base, which bears the major direct .burden of the individual
income taxes, has been greatly narrowed. We have limited the incidence of the individual income tax to some 2,500,000 taxpayers, a
comparatively small number compared to our total population, and
of this number some 380,000 pay about 97 per cent of the tax. Partly
in consequence of this fact the amount of our revenue derived from
income taxes is much more susceptible to sweeping changes than
would otherwise be the case. Moreover, this susceptibility to change
is emphasized by our treatment of capital gains and losses, which
tend to swell abnormally the current income in times of rising prices
and expanding business and to depress it to an even greater extent
in periods of falling prices and business contraction. A t the same
time we must realize that the concept of capital gains as.taxable
income forms such an integral part of our income tax system that
its elimination would be nothing short of revolutionary and would
involve a pretty complete rewriting and reinterpretation of this
complex law. Tobacco taxes are at present our most stable form of
revenue, though customs duties may be relied on to* produce relatively stable amounts except in truly abnormal times. But the fact
that we rely for two-thirds of our tax revenue on the income tax and
that that income tax is so constructed as to be extremely sensitive,
makes our whole revenjie system susceptible to very wide fluctuations,
following in the main the curve of business peaks and depressions.
I t is true that from 1924 onward we were able steadily to reduce
rates and narrow the tax base and still witness increasing income tax
collections during most of the period, since business and the national
income expande(l more rapidly than taxes were reduced; and at the
same time governmental expenditures remained comparatively stable.
We know, furthermore, that our last revenue act, at least as it applied to income in 1928 and 1929, was adequate for our needs for the

SECEETAEY OF THE TEEASUEY

357

first two years it was in effect. But under the present conditions of
extreme depression expenditures are exceeding revenues by a wide
margin.
This would be a matter of very grave concern were it not for the
fact that conditions are so abnormal that they do not furnish any fair
test of the adequacy of a revenue system. On the one hand, expenditures are swelled by emergency needs and, on the other hand, revenues are depressed way below the normal point. Moreover, the current deficit appears less formidable when we realize that it includes
some $440,000,000 of public debt retirements so that the actual net
increase in the public debt will be much less than the deficit figures
themselves would seem to indicate. Undesirable as is any increase
in the public debt in times of peace, we can feel less concerned about
it than we ordinarily would because of the fact that during the last
10 years public debt retirements have been effective at a much
more rapid rate than might have been expected. While, therefore,
we are not justified in looking upon the present position of the
Treasury with complacency, there is no occasion for alarm unless it
should appear that there is a real danger of a series of unbalanced
budgets.
This brings us to the question of what is to be expected from any
revenue system. From a theoretical standpoint, it may be argued
that all we should aim at is a balanced budget over a relatively short
period of years, the assumption being that if through a succession of
surpluses in years of prosperity the finances of the Government have
been greatly strengthened by public debt reductions, a sufficient
margin of safety has been provided to meet successive deficits during
lean years. From a practical standpoint, however, it seems to me
that we should be guided by the sound principle of endeavoring to
close each fiscal year with a balanced budget. While theoretically a
series of surpluses might be applied to the strengthening of the financial structure, they are much more likely to be dissipated in increased
expenditures; while if once we admit the propriety of a deficit, there
is a real danger that we might come to view them with such complacency that we would shirk the disagreeable but essential duty of
avoiding them either by reducing expenditures or increasing taxes.
Insistence on a balanced budget is the one means that I know of compelling a government to live within its income and of making the
people realize that if they desire to expand the services of government they must inevitably look to increased contributions in the
form of taxes.
By a balanced budget I do not mean, of course, that it is possible
to devise a system which would provide revenues in exact balance
with current expenditures involved in the numerous and varied
Federal activities. The achievement of such a precisely balanced
budget would be a matter of the rarest accident. But I do mean that
we should so adjust our tax system that year in and year out there
will be no great variation between receipts and expenditures, and
that a comparatively small deficit one year will be offset by a comparatively small surplus the next.
The establishment of such a system demands, in the first place,
the determination, after eliminating the unusual items that now
distort the picture, of what normal expenditures are likely to be for

358

EEPOET ON T H E FINANCES

the next few years, allowing, of course, for the inevitable upward
trend. The second essential step is to ascertain whether our present
tax system, once business conditions have returned to normal, will
be adequate to furnish the necessary receipts. The second problem
is obviously an enormously difficult one under existing conditions,
and while the Treasury Department is endeavoring to formulate
some reasonable satisfactory answer, our final conclusion should be
based on further trial and experience. Certainly the present year
taken by itself offers a most inadequate criterion by which to judge
the ability of the present Federal revenue system to meet the Government's normal requirements.
OBLIGATIONS OF FOREIGN GOVERNMENTS AND INTERGOVERNMENTAL DEBTS
E X H I B I T 61

Statements of the Treasury covering payments received from the
several foreign governments on account of their indebtedness to
the United States {press releases, December 15,1980, and June 15,
1981)
DECEMBER 15,

1930,

The Treasury has received payments amounting to $122,989,450,22.
due to-day, from the following foreign Governments on account oi
their funded indebtedness to the United States, of which $30,854,052.37 was for account of principal, and $92,135,397,85 for account of
interest. All payments were received in cash.
Principal
Belgium
Czechoslovakia __ _
Estonia
Finland
France
Great Britain
Hungary

$1,600,000.00
65,000.00
28,000,000.00
11,765.00

Interest
$1,625,000.00
150,000.00
129,886.00
19,325,000.00
66,390,000.00
28,804.73

Principal
Italy
Latvia... _
Lithuania
iPoland

Interest

$1,260,625.00
50,000.00
93, 528.11
$i, 287,297. 37 3,082,555. 01
30,854,052. 37 92,135,397. 85

Of the principal payments received, the sum of $28,995,117.64 was
for account of the obligations originally acquired for cash advanced
under the authority of the Liberty bond acts. Under the terms of
these acts all such cash payments of principal must be applied to
debt retirement. The above-mentioned amount has been applied to
the Treasury certificates maturing to-day. The balance of the payments, amounting to $93,994,332.58, is available to meet current expenditures of the Government and was so treated in the estimates
submitted in the President's last budget message.
J U N E 15,

1931.

The Treasury has received payments amounting to $111,835,549.53
due June 15, 1931, from the following foreign Governments on
account of their funded indebtedness to the United States, of which
$19,962,525 was for account of principal^ and $91,873,024.53 for
account of interest. All payments were received in cash.

359

SECEETABY OP THE TREASUEY

Belgium
Czechoslovakia
Estonia.
Finland
France
Great Britain
Hungary
Italy

Principal

Interest

$4,050,000.00
1,500,000.00

$1,625,000.00

1,350,000.00
12,100,000.00

246,990.19
129,060.00
19,325,000.00
65,970,000.00
28,628.40
1,260, 625.00

Principal
Latvia
Lithuania.Poland
Rumania
Yugoslavia..

•

$37,525.00
700,000.00
225,000.00
19,962,625.00

Interest
$103,337. 84
93,528.10
3,090,856.00

91,873,024. 63

Of the principal payments received, the sum of $18,766,906,69 was
for account of the obligations originally acquired for cash advanced
under the authority of the Liberty bond acts. Under the terms of
these acts all such cash payments of principal must be applied to
debt retirement. The above-mentioned amount has been applied to
the Treasury certificates maturing to-day. The balance of the payments amounting to $93,068,642.84 is available to meet current
expenditures of the Government.

EXHIBIT 62

Statement of the President of the United States ptoposing the postponement during one y^ar of all payments on intergovernmental
debts, reparations, and relief debts {press release, June 20,1981)
The American Governnient proposes the postponement during one
year of all payments on intergovernmental debts, reparations, and
relief debts, both principal and interest, of course, not including
obligations of governments held by private parties. Subject to confirmation by Congress, the American Government will postpone all
payments upon the debts of foreign governments to the American
Government payable during the fiscal year beginning July 1 next,
conditional on a like postponement for one year of all payments on
intergovernmental debts owing the important creditor powers.
This course of action has been approved by the following Senators : Henry F . Ashurst, Hiram Bingham, William E. Borah,
James F, Brynes, Arthur Capper, Simeon D. Fess, Duncan U.
Fletcher, Carter Glass, William J . Harris, P a t Harrison, Cordell
Hull, William H. King, Dwight W. Morrow, George H. Moses,
David A. Eeed, Claude A. Swanson, Arthur Vandenberg, Kobert F .
Wagner, David I. Walsh, Thomas J . Walsh, James E. Watson; and
by the following Representatives: Isaac Bacharach, Joseph W.
Byrns, Carl E. Chindbloom, F r a n k Crowther, James W. Collier,
Charles E. Crisp, Thomas H. Cullen,- George P . Darrow, H a r r y A.
Estep, Willis C. Hawley, Carl E. Mapes, J. C. McLaughlin, Earl C.
Michenei', C. William Eamseyer, Bertrand H . Snell, John Q. Tilson,
Allen T. Treadway, and Will E, Wood. I t has been approved by
Ambassador Charles G. Dawes and by Mr, Owen D. Young,
The purpose of this action is to give the forthcoming year to the
economic recovery of the world and to help free the recuperative
forces already in motion in the United States from retarding
influences from abroad.

360

EEPOET ON THE FINANCES

The world-wide depression has affected the countries of Europe
more severely than our own. Some of these countries are feeling to
a serious extent the drain of this depression on nationaL economy.
The fabric of intergovernmental debts, supportable in normal times,
weighs heavily in the midst of this depression.
From a variety of causes arising out of the depression, such as the
fall in the price of foreign commodities and the lack of confidence
in economic and political stability abroad, there is an abnormal
movement of gold into the United States which is lowering the
credit stability of many foreign countries. These and the other
difficulties abroad diminish buying power for our exports and in a
measure are the cause of our continued unemployment and continued
lower prices to our farmers.
Wise and timely action should contribute to relieve the pressure
of these adverse forces in foreign countries and should assist in the
reestablishment of confidence, thus forwarding political peace and
economic stability in the world.
Authority of the President to deal with this problem is limited,
as this action must be supported by the Congress. I t has been
assured the cordial support of leading members of both parties in
the Senate and the House. The essence of this proposition is to give
time to permit debtor governments to recover their national prosperity. I am suggesting to the American people that they be wise
creditors in their own interest and be good neighbors.
I wish to take this occasion also to frankly state my views upon our
relations to German reparations and the debts owed to us by the
allied governments of Europe, Our Government has not been a
party to, or exerted any voice in, determination of reparation obligations. We purposely did not participate in either general reparations or the division of colonies or property. The repayment of
debts due to us from the Allies for the advance for war and reconstruction were settled upon a basis not contingent upon German
reparations or related thereto. Therefore, reparations is necessarily
wholly a European problem with which we have no relation.
I do not approve in any remote sense of the cancellation of the
debts to us. World confidence would not be enhanced by such action.
None of our debtor nations has ever suggested it. But as the basis
of the settlement of these debts was the capacity under normal conditions of the debtor to pay, we should be consistent with our own
policies and principles if we take into account the abnormal situation
now existing in the world. I am sure the American people have no
desire to attempt to extract any sum beyond the capacity of any
debtor to pay, and it is our view that broad vision requires that our
Government should recognize the situation as it exists.
This course of action is entirely consistent with the policy which
we have hitherto pursued. We are not involved in the discussion of
strictly European problems, of which the payment of German reparations is one. I t represents our willingness to make a contribution
to the early restoration of world prosperity in which our own people
have so deep an interest.
I wish further to add that while this action has no bearing on the
conference for limitation of land armaments to be held next Febru-

SECEETAEY OF THE TEEASUEY

361

ary, inasmuch as the burden of competitive armaments has contributed to bring about this depression, we trust that by this evidence
of our desire to assist we shall have contributed to the good will
which is so necessary in the solution of this major questioil.

EXHIBIT 63

Text of agreement reached by American and French negotiators at
Paris, France, July 6, 193L {Department of State press release)

After exchange of views the French Government states that it is
in agreement with the United States on the essential principle of
President Hoover's proposal and on the following propositions
which may be expressed thus:
1. The payment of intergovernmental debts is postponed from
July 1, 1931, to June 30, 1932.
2. However, the Eeich will pay the amount of the unconditional
annuity. The French Government agrees in so far as it is concerned
that the payments thus made by the Eeich shall be placed by the
B. I. S. in guaranteed bonds of the German railways.
3. All suspended payments shall be subject to interest in accordance
with the conditions suggested by the American Government payable
in 10 annual installments beginning with July 1, 1933,
4. The same conditions shall apply to the bonds to be issued by
the German railroads.
On the three points which it is recognized do not directly concern
the American Government, the French Government makes the following observations:
A. A common action by the principal central banks acting through
the medium of the B, I, S. shall be organized to assist the countries
of Europe which would be particularly, affected by the postponement
of the payment as proposed.
B. A preliminary understanding should take place between France
and the B. I. S. in order that France shall not supply the guarantee
fund provided for in the Young plan in the event of a moratorium
except by monthly payments in accordance with the acknowledged
rights of the creditor states after the actual transfer of payments by
Germany.
C. The question of deliveries in kind and the various modifications which will become necessary as a result of the application of the
American proposal and the present agreement shall be studied by a
committee of experts named by the interested ° powers which shall
reconcile the material necessities with the spirit of President Hoover's
proposal.
France reserves the right to request of the German Government
indispensable assurances concerning the utilization for exclusively
economic purposes of the sums freed to the Eeich budget.

362

EEPOET ON THE FINANCES
E X H I B I T 64

Statement of the President of the United States annoumcing the
acceptance by the irrtportant creditor governments of his proposal
for the postponement during one year of payments on intergovernmental debts {Department of State press release, J u l y 6, 1931)
I am glad to announce that the American proposal for one year's
postponement of all intergovernmental debts and reparations has
now been accepted in principle by all of the important creditor
Governments. The terms of acceptance by the French Government'
are, of course, subject to the approval of the other interested powers,
for whom the American Government naturally can not speak. Without going into technical terms, while certain payments are made by
Germany for reparations account, the substance of the President's
proposal is retained as the sums so paid are immediately reloaned
to Germany.
The technical difficulties arising from many complicated international agreements, which involve the aggregate payment between
governments of over $800,000,000 per annum, are now in the course
of solution by the good will and earnest cooperation of governmental
leaders everywhere.
The American part of the plan is, of course, subject to the approval
by Congress, but I have received the individual assurances of support from a very large majority of the members of both Senate and
House, irrespective of political affiliations.
The acceptance of this proposal has meant sacrifices by the American people and by the former allied governments, who are with all
others suffering from world-wide depression and deficits in governmental budgets. The economic load most seriously oppressing the
peoples of Germany and central Europe will be immensely lightened.
While the plan is particularly aimed to economic relief, yet economic relief means the swinging of men's minds from fear to
confidence, the swinging of nations from the apprehension of disorder
and governmental collapse to hope and confidence of the future. I t
means tangible aid to unemployment and agriculture.
The almost unanimous support in the United States is again profound evidence of the sincere humanity of the American people.
And in this year, devoted to economic upbuilding, the world has
need of solemn thought on the causes which have contributed to the
depression. I need not repeat that one of these causes is the burdens
imposed and the fears aroused by competitive armament. Contemplation of the past lew weeks should bring a realization that we must
find relief from these fundamental burdens which to-day amount to
several times the amount of intergovernmental debts.

SECEETAEY OF THE TEEASUEY

363

E X H I B I T 65

Conclusions of the committee of experts as to the terms of application
of the Presidents proposal for the postponement during one year
of all payments on intergovernmental debts {Department of State
press releases, August 11 and 14, 1981) .
AUGUST 11,

1931.

The committee of experts which has been meeting in London to
work out the terms of application as between the European countries
of President Hoover's proposal has now completed its work.
Subject to formal ratification by their legislative bodies, the following Governments have indicated their willingness to accept the President's proposal: Austria, Belgium, Bulgaria, Czechoslovakia, France,
Germany, Hungary, Italy, Japan^ Poland, Portugal, Eumania,
United Kingdom of Great Britain and Northern Ireland, Canada,
Australia, New Zealand, South Africa, India; and also as regards
relief debts due the Governments of Denmark, Holland, Norway,
Sweden, and Switzerland. The position of Greece and Yugoslavia
is not yet finally determined and certain difficulties remain to be
overcome before the question of their acceptance is settled.
The conclusions of the experts are in two main documents—^the
first a report containing the experts' recommendations to the
interested Governments relating not only to the program of repayments of suspended reparations by Germany but to repayment of
other amourits suspended during the Hoover year by other European
Governments; the second, a protocol, or formal agreement, relating
solely to German reparation payments. The latter has been signed
in London to-day. I t is a provisional agreement which will become
final upon ratification by the legislative bodies. Its provisions,
however, are retroactive so as to make the suspension of payments
effective as of July 1, 1931.
The terms of repayment recommended in the report and embodied
in ihe protocol are, generally speaking, as follows: All suspended
payments become unconditional obligations of the debtor Governments to be repaid over a 10-year period beginning July 1, 1933, with
interest at 3 per cent from July 1, 1933. There are to be 10 equal
annual installments, each installment to be divided into 12 monthly
payments, including principal and interest.
The protocol covers such matters as the.form of the bonds to be
delivered to the reparations-receiving countries on account of suspended unconditional reparations loaned to the German Eailway,
and the methods of handling existing contracts for deliveries in kind
within the spirit of the President's proposal. These two subjects
are covered in the two annexes attached to the protocol.
The report of recommendations deals with the terms of repayment
of suspended payments on account of interallied war debts due the
principal creditor Governments of Europe and contains a series of
suggestions for the adjustment of suspended payments on account
of relief debts and of various Near Eastern debt questions incidental
to the President's proposal.

364

EEPOET ON THE FINANCES

The recommendations and the protocol cover questions arising
between European Governments. There is no occasion, therefore, for
the American Government participating in the report or signing the
protocol. Our Government is gratified at the progress made in
giving practical effect to the suspension program suggested by President Hoover on J u n e 20.
AUGUST 14, 1931.

Eeferring to the protocol signed in London on August 11, 1931,
the following is the text of "Annex Two " concerning deliveries in
kind:
1. Despite the suspension of payments according to President Hoover's proposal during the year July 1, 1931, to June 30, 1932:
(a) Existing credits for deliveries in kind shall he used in accordance with
the regulations for deliveries in kind as far as th

Full text of Annual Report of the Secretary of the Treasury on the State of the Finances : Annual Report of the Secretary of the Treasury on the State of the Finances for the Fiscal Year Ended June 30, 1931, with Appendices

FRASER