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ANNUAL REPORT OF THE
SECRETARY OF THE TREASURY
O N ™ STATE OF THE FINANCES
FOR FISCAL YEAR ENDED JUNE 30,1934

ANNUAL REPORT OF THE
SECRETARY OF THE TREASURY
ON

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

1934

UNITED STATES
GOVERNMENT PRINTING OFFICE
WASHINGTON : 1935

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

Price 50 cents (Paper cover)

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TREASURY DEPARTMENT
DOCUMENT N O .

Secretary

3065

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CONTENTS
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Page

Budget results
Receipts
._
Income taxes
Miscellaneous internal revenue
Agricultural adjustment taxes
1
Customs
Miscellaneous receipts
Expenditures
The public debt
Refunding the Fourth Liberty Loan
Cumulative sinking fund
Indirect obligations of the United States
General Fund of the Treasury
Emergency legislation
Revenue legislation
Liquor Taxing Act of 1934
.
Revenue Actof 1934
-• Extension of agricultural adjustment legislation
Silver Purchase Act of 1934
National Firearms Act--Estimates of receipts and expenditures
Fiscalyear 1935
Income tax receipts
Miscellaneous internal revenue
Customs receipts
Agricultural adjustment taxes
Fiscal year 1936
Income tax receipts
Miscellaneous internal revenue
Customs receipts
.
Agricultural adjustment taxes
Monetary developments
1
Gold
Silver-..
Silver certificates
l
Federal Deposit Insurance Corporation
Bureau of Internal Revenue
Back taxes on incomes
Alcohol tax administration
.
Construction activities of the Treasury
-...
.
Building program in the District of Columbia
Status of work under the several building programs
^ The original public building program
Program under the Public Works Administration
Bureau of Customs
.
.
Nonfiscal activities
Coast Guard
Public Health Service
Bureau of Narcotics
Organization changes
:

^
°

.--

1
1
3
3
4
4
4
4
7
9
10
11
11
13
16
16
16
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19
19
19
23
23
24
24
25
25
25
26
26
26
27
27
29
29
30
31
32
33
33
34
34
34
35
35
36
36
37
38
39

ADMINISTRATIVE REPORTS OF BUREAUS AND DIVISIONS
i
?J
7
y.

Accounts and Deposits, Office of the Commissioner of
Daily statement of the United States Treasury
Combined statements of assets and liabilities of governmental corporations and credit agencies
Statement of the Public Debt of the United States
Contingent liabilities of the United States

III

45
45
45
45
45

CONTENTS

Accounts and Deposits, Office of the Commissioner of—Continued.
Page
Treasury accounting system.
46
Obligations of foreign governments
.
46
Payments due July 1 to December 31, 1933
. 46
Payments due January 1 to June 30, 1934
47
Receipts from Germany
49
Army costs
49
Mixed claims, United States and Germany
49
Annuities under moratorium agreement
50
Treasury administration of alien and mixed claims
._
50
Mixed Claims Commission: Claims against Germany
51
War Claims Arbiter
54
Claims of German nationals
54
Claims of Austrian and Hungarian nationals
54
German special-deposit account
54
Tripartite Claims Commission
•..
55
Claims against Austria
55
Claims against Hungary
55
Railroad obligations
55
Section 204
.
56
Section 207
.
56
Sections 209 and 212
,
56
Section 210
56
Securities owned by the United States Government
57
Trust funds invested by the Treasury
58
Adjusted service certificate fund
58
Civil service retirement and disability fund
59
Foreign service retirement and disability fund
60
Canal Zone retirement and disability fund
61
District of Columbia teachers' retirement fund
62
Longshoremen's and harbor workers' compensation fund
63
Library of Congress trust fund
64
United States Government life insurance fund
67
National Institute of Health gift fund
67
Alien property trust fund
68
General railroad contingent fund
69
Special funds
70
Colorado River Dam fund
70
Advances to reclamation fund
71
Division of Bookkeeping and Warrants
71
Division of Deposits
.
72
Section of Surety Bonds
73
Division of Disbursement
73
Appointments, Division of__
75
Number of employeesi
75
Retirement of employees
75
Budget and Improvement Committee
75
Coast Guard
76
Protection to navigation
'
77
Enforcement of customs and other laws
78
Communications
..78
Eq uipment
79
The academy, stations, bases, repair depot, engine school, repair
base, etc
81
Engineering competition
82
Personnel
82
Awards of life-saving medals
83
Appropriations and expenditures
83
Comptroller of the Currency
83
Changes in the condition of national banks
83
Reopening and reorganization of national banks
85
Summary of changes in membership in the national banking system.
86

CONTENTS
Customs, Bureau of..
Receipts
—
Volume of business
_,
Antidumping
Countervailing duties
Smuggling
Miscellaneous provisions of the tariff act
Investigative unit
Engraving and Printing, Bureau of
Enrollment and Disbarment of Attorneys and Agents, Committee on
Financial and Economic Research, Section of
Internal Revenue, Bureau of
General
Internal-revenue collections
•
Refunds
Additional assessments
Cost of administration
Income Tax U n i t . . .
.
. Additional revenue
..
Final, notices of deficiency (60-or 90-day letters)
Claims and overassessments
Returns on hand
Audit in Washington
.
Audit in the
field
The technical staff
Miscellaneous Tax Unit
.
Estate Tax Division
'
.
Sales Tax Division
Tobacco Division
Processing Tax Division
Silver Tax Division
Alcohol Tax Unit
Accounts and Collections Unit
Collectors' Personnel, Equipment, and Space Division
Disbursement Accounting Division
Office of the General Counsel
General Counsel's Committee
Civil Division
Interpretative Division
Review Division
Appeals Division
Penal Division
Administrative Division
Compromise Section
i
Intelligence Unit
.
:
Legal Division
Mint, Bureau of
__.
Institutions of the Mint Service
Gold operations
Silver operations
Coinage
Bullion deposit transactions
.
Refineries .; .
Commemorative coins
Gold and silver in the United States
Appropriations, expenses, and income
Narcotics, Bureau of
Enforcement activities
Extent and trend of narcotic traffic

V
Page
87
87
88
89
90
90
91
91
93
95
96
97
97
97
97
98
99
99
100
101
101
102
102
103
103
103
103
105
107
107
109
109
110
112
112
113
113
113
114
114
115
115
116
116
117
118
119
119
119
120
120
121
121
121
121
122
123
123
124

CONTENTS

Procurement Division
Branch of Supply
Public Works Branch
Building activities
Original p u b h c building program
Program under t h e Public Works Administrator
Control, administration, a n d repair of Federal buildings
Relief program
Emergency construction prograin
Private architectural services
Total expenditures
Public D e b t ServiceDivision of Loans and Currency
Register of the Treasury
•
Division of Public D e b t Accounts and Audit
Division of Paper Custody
Destruction Committee
Public H e a l t h Service
Division of Sanitary Reports and Statistics
Division of Foreign and Insular Quarantine a n d Immigration
Division of Domestic Quarantine
Division of Scientific Research
Division of Marine Hospitals and Relief
Division of Venereal Diseases
'.
Division of Mental Hygiene
Division of Personnel and Accounts _ ._
Public Works of Art Project
Secret Service Division
Supply, Division of___
.
Expenditures from various appropriations
Stationery supplies
Printing and binding
D e p a r t m e n t advertising
Engraving work
.
Treasurer of t h e United States
War Finance Corporation

Page
125
125
127
127
127
128
128
129
129
130
130
131
131
134
136
136
137
139
139
139
140
141
144
144
146
146
148
148
149
149
151
151
153
153
153
156

EXHIBITS
THE PUBLIC DEBT

Issues and redonptions of bonds, notes, and certificates of indebtedness
Exhibit 1. Allotments on exchange" subscriptions. Treasury bonds of
1943-45 (from press release, Dec. 5, 1933,-revised)
Exhibit 2. Offering of certificates of indebtedness, series T D - 1 9 3 4 (2}^
percent)
Exhibit 3. Subscriptions and allotments, certificates of indebtedness, series
T D - 1 9 3 4 (from press releases, Dec. 8, 12, and 16, 1933)
Exhibit 4. Offering of Treasury notes, series C-1935 (2J^ percent), and
certificates of indebtedness, series TS-1934 {l^i percent)
Exhibit 5. Subscriptions and allotments. Treasury notes, series C-1935,
and certificates of indebtedness, series TS-1934 (from press releases, J a n .
26 and Feb. 2, 1934)
Exhibit 6. Offering of Treasury notes, series D-1935 (2J^ percent), and
series C-1937 (3 percent)
Exhibit 7. Subscriptions and aUotments, Treasury notes, series D-1935
and series C-1937 (from press releases, Feb. 14, 16, and 21, 1934, revised) _
Exhibit 8. Offering of Treasury notes, series C-1938 (3 percent)
Exhibit 9. Subscriptions and allotments. Treasury notes, series C-1938
(from press releases. Mar. 10 and 15, 1934)
Exhibit 10. Offering of Treasury bonds, 1944-46 (3>4 percent)
Exhibit 11. Subscriptions and allotments. Treasury bonds of 1944-46
(from press releases, Apr. 9, 10, and 21, 1934, revised)

161
161
162
163
165
165
166
166
167
168
170

CONTENTS

VII
Page

Exhibit 12. Partial redemption of F o u r t h Liberty Loan bonds before
m a t u r i t y (second call)
Exhibit 13. Offering of Treasury bonds of 1946-48 (3 percent) and Treasury notes, series A-1939 {2}i percent)
Exhibit 14. Subscriptions and allotments. Treasury bonds of 1946-48, and
Treasurv notes, series A-1939 (from press releases, J u n e 6, 8, and 12,
1934, reVised)

170
175
177

Issues of Treasury bills
Exhibit 15. Inviting tenders for Treasury bills dated November 1, 1933,
and maturing J a n u a r y 31, 1934 (press release, Oct. 26, 1933)
Exhibit 16. Acceptance of tenders for Treasury bills dated November 1,
1933, and maturing J a n u a r y 31, 1934 (press release, Oct. 3 1 , 1933)
Exhibit 17. S u m m a r y of information contained in press releases issued in
connection with Treasury bills offered from November 1, 1933, to J u n e
30, 1934
^
Exhibit 18. General circular governing the sale and issue of Treasur}^ bills_

178
179
180
181

Miscellaneous
Exhibit 19. Receipt of Liberty bonds, Treasury bonds, and Treasury notes
for Federal estate or inheritance taxes
Exhibit 20. Sections 4 and 5 of t h e Federal F a r m Mortgage Act (Pub. No.
88, 73d Cong.), guaranteeing principal and interest of Federal F a r m
Mortgage Corporation bonds by t h e United States
Exhibit 21. Section 1 of Public No. 178, Seventy-third Congress, guaranteeing principal and interest of t h e H o m e Owners' Loan Corporation
bonds by t h e United States
Exhibit 22. An act to amend section 3702, Revised Statutes (Pub. No.
144, 73d Cong., S. 1528)

185
186
187
188

M O N E Y AND B A N K I N G

Exhibit 23. An act to protect t h e currency system of t h e United States, to
provide for t h e better use of t h e monetary gold stock of t h e United States,
and for other purposes (Pub. No. 87, 73d Cong., H . R. 6976)
Exhibit 24. Proclamations, Executive orders, Treasury orders, and instructions relating to gold
Exhibit 25. Chronology of action with respect to gold from March 6, 1933,
to F e b r u a r y 1, 1934
Exhibit 26. Daily price quotations for newly mined domestic gold in t h e
United States from September 8,1933, to J a n u a r y 31, 1934
Exhibit 27. An act to authorize t h e Secretary of t h e Treasury to purchase
silver, issue silver certificates, and for other purposes (Pub. No. 438,
73d Cong., H . R. 9745)
Exhibit 28. Proclamation and orders relating to silver
Exhibit 29. Proclamation and Executive orders relating to banking, foreign
exchange, and related m a t t e r s

189
194
201
205
205
209
212

TAXATION

Exhibit 30. An act to raise revenue by taxing certain intoxicating liquors,
arid for other purposes (Pub. No. 83, 73d Cong., H . R. 6131)
Exhibit 3 1 . An act to provide for t h e taxation of manufacturers, importers,
and dealers in certain firearms and machine guns, to tax t h e sale or other
disposal of such weapons, and to restrict importation and regulate interstate transportation thereof (Pub. No. 474, 73d Cong., H . R. 9741)

215

219

VIII

CONTENTS
OBLIGATIONS OF FOREIGN GOVERNMENTS
Page

Exhibit 32. Statement by Acting Secretary of the Treasury Morgenthau,
announcing the postponement of the payment due from Austria on January
1, 1934, on account of its indebtedness to the United States (press release,
Dec. 13, 1933)
Exhibit 33. Correspondence exchanged between the Government of the
United States and various foreign governments concerning foreign debts
owing to the United States (Department of State press releases)
Exhibit 34. An act to prohibit financial transactions with any foreign
government in default on its obligations to the United States (Pub. No.
, 151, 73d Cong., S. 682)
Exhibit 35. Statement for the press by the Department of State concerning
an opinion of the Attorney General requested by the Secretary of State
upon various questions under the act of April 13, 1934, entitled "An act
to prohibit financial transactions with any.foreign government in default
on its obligations to the United States "
Exhibit 36. Message from the President to the Congress, transmitting a
statement on the subject of debts owed the Government and people of
the United States bv the governments and peoples of foreign countries
(H. Doc. No. 392, 73d Cong., 2d sess.)
:

222
223
238

238

243

MIXED CLAIMS

Exhibit 37. Senate Report No. 1376, June 11, 1934, to accompany Senate
Joint Resolution 135, to amend Settlement of War Claims Act of 1928,
as amended (73d Cong., 2d sess.)
Exhibit 38. Joint resolution extending for 2 years the time within which
American claimants may make application for payment, under the settlement of War Claims Act of 1928, of awards of the Mixed Claims Commission and the Tripartite Claims Commission, and extending until
March 10, 1936, the time within which Hungarian claimants may make
application for payment, under the settlement of War Claims Act of
1928, of awards of the War Claims Arbiter (Pub. Res. No. 38, 73d
Cong., H. J. Res. 325)
.
Exhibit 39. Joint resolution to amend the Settlement of War Claims Act
of 1928, as amended (Pub. Res. No. 53, 73d Cong., H. J. Res. 365)___

247

253
253

GOVERNMENT DEPOSITS

Exhibit 40. Supplements to Department Circular No. 92, revised, relating
to special deposits of public moneys under the act of Congress approved
September 24, 1917, as amended
255
Exhibit 41. Supplements to Department Circular No. 176, relating to
regulations governing deposit of public moneys and payment of Govern- .
ment checks and warrants
256
MISCELLANEOUS

Exhibit 42. Accounting system of the Treasury Department (Department
Circular No. 514)
..
Exhibit 43. Regulations and instructions governing the issue of duplicate
checks of disbursing officers (first supplement to Department Circular
No: 327, revised)
.
Exhibit 44. Laws and regulations governing the recognition of attorneys,
agents, and other persons representing claimants and others before the
Treasury Department and offices thereof
.
Exhibit 45. Executive orders and Treasury orders changing organization
and procedure in the Treasury Department
Exhibit 46. Excerpt from a letter of the Postmaster General to the Secretary of the Treasury, dated November 15, 1934, certifying extraordinary
expenditures contributing to the deficiency of postal revenues for the
fiscal year ended June 30, 1934, in pursuance of Public Act. No. 316,
Seventy-first Congress, approved June 9, 1930 (40 Stat. 523)

256
257
257
258

270

CONTENTS

TABLES
Page

Explanation of bases used in tables
Description of accounts through which Treasur}^ operations are effected..

273
274

RECEIPTS AND EXPENDITURES

General tables
Table 1. Details of receipts, by sources and accounts, for the fiscal year 1934
(warrants and daily statement bases)
Table 2. Details of experiditures, by organization units and accounts, for the
fiscal year 1934 (checks-issued and daily statement bases)
Table 3. Receipts, expenditures, and surplus or deficit for the fiscal years
1931 to 1934 (daily statement basis)
Table 4. Receipts and expenditures for the fiscal years 1789 to 1934 (warrants and daily statement bases)
Table 5. Summary of receipts and expenditures, and excess of receipts or
expenditures, by months, for the fiscal year 1934 (daily statement basis) _
Table 6. Expenditures, by months, classified according to organization
units, for the fiscal year 1934 (daily statement basis)
Specific receipts and expenditures
Table 7. Comparison of detailed internal revenue receipts for the fiscal
years 1933 and 1934 (collection basis).
Table 8. Internal revenue receipts, by sources, for the fiscal years 1916 to
1934 (collection basis)
Table 9. Internal revenue receipts, by States and Territories, for the fiscal
year 1934 (collection basis)
Table 10. Expenses of the Internal Revenue Service for the fiscal year
1934 (checks-issued basis)
Table 11. Customs duties (estimated), value of imports entered for consumption, and ratio of duties to value of dutiable imports and to value of
all imports, for the calendar years 1923 to 1933 (on basis of reports of the
Bureau of Foreign and Domestic Commerce)
Table 12. Customs duties (estimated), value'of dutiable imports, and ratio
of duties to value of dutiable imports, by tariff schedules, for the years
1923 to 1933 (on basis of reports of the Bureau of Foreign and Domestic
Commerce)
Table 13. Customs receipts, expenditures, and entries, fiscal year 1934 (collection basis)
Table 14. Panama Canal receipts and expenditures for the fiscal vears 1903
to 1934 (warrant basis)
.
!
U.

276
282
294
298
306
307

317
319
321
322

326

326
329
330

Estimates of receipts
Table 15. Actual receipts fof the fiscal year 1934 and estimated receipts
for the fiscal years 1935 and 1936, by sources

331

PUBLIC DEBT

Public debt outstanding
Table 16. Public debt outstanding June 30, 1934, by issues (revised daily
statement basis)
.
:
Table 17. Description of the public debt issues outstanding June 30, 1934
(revised daily statement basis)
Table 18. Interest-bearing debt outstanding June 30, 1934, by kind of
security and callable period or payable date (revised daily statement
basis)
Table 19. Principal of the public debt outstanding at the end of each
fiscal year from 1853 to 1934 (revised daily statement basis).

337
340
348
349

CONTENTS
Public debt operations
Page

Table 20. Public debt retirements chargeable against ordinary receipts
during t h e fiscal year 1934, and cumulative totals to J u n e 30, 1933 and
1934, by sources a n d issues (revised daily s t a t e m e n t basis)
Table 2 1 . Summary of transactions in interest-bearing and noninterestbearing securities during t h e fiscal year 1934 (revised daily s t a t e m e n t
basis)
Table 22. Summary of transactions in interest-bearing securities, by form
of issue, during t h e fiscal year 1934 (revised daily s t a t e m e n t basis)____
Table 23. Changes in interest-bearing debt, by issues, during t h e fiscal
year 1934 (revised daily s t a t e m e n t basis)
Table 24. Transactions in noninterest-bearing securities, by issues, during
t h e fiscal year 1934 (revised daily s t a t e m e n t basis)
Table 25. Issues, maturities, a n d redemptions of interest-bearing securities, exclusive of t r u s t account and other special issues, J u n e 1933 through
June 1934 (daily s t a t e m e n t basis)
Table 26. Sources of public debt increase or decrease for t h e fiscal years
1915 to 1934 (daily s t a t e m e n t basis)
j
Table 27. Transactions on account of t h e cumulative sinking fund during
t h e fiscal year 1934 (revised daily s t a t e m e n t basis)
Table 28. Transactions on account of t h e cumulative sinking fund for t h e
fiscal years 1921 to 1934 (revised daily s t a t e m e n t basis)
Table 29. Securities retired through t h e cumulative sinking fund, p a r
a m o u n t and principal cost, to J u n e 30, 1934 (revised daily s t a t e m e n t
basis)

351
353
355
356
360
364
367
368
369
369

Interest on the public debt
Table 30. Interest on t h e public debt payable, paid, and o u t s t a n d i n g unpaid, for t h e fiscal year 1934 (revised daily s t a t e m e n t basis)
Table 31. Interest paid on t h e public debt, b y issues, for t h e fiscal years
1932 to 1934 (warrant basis)
Table 32. Amount of interest-bearing debt outstanding, t h e computed
annual interest charge, and t h e computed r a t e of interest, for t h e fiscal
years 1916 to 1934, and by m o n t h s from July 1931 to J u n e 1934 (revised
daily s t a t e m e n t basis)

370
371

372

Contingent liabilities
Table 33. Contingent liabilities of t h e United States, June 30, 1934

373

CONDITION OF THE TREASURY EXCLUSIVE OF PUBLIC DEBT LIABILITIES

Table 34. Current assets and liabilities of t h e Treasury a t t h e close of t h e
fiscal years 1932, 1933, and 1934 (revised daily s t a t e m e n t basis)
Table 35. N e t balance in t h e General F u n d of t h e Treasury a t t h e end of
each m o n t h from July 1929 to. June 1934 (daily s t a t e m e n t basis)
Table 36. Securities owned by the United States Government, J u n e 30,
1934

376
377
378

ASSETS AND LIABILITIES OF GOVERNMENT CORPORATIONS AND AGENCIES

Table 37. Assets a n d liabilities of Government corporations and credit
agencies of t h e United States, as of J u n e 30, 1934

381

STOCK AND CIRCULATION OF MONEY IN THE UNITED STATES

Table 38. Stock of money, money in t h e Treasury, in the Federal Reserve
banks, and in circulation a t the end of each fiscal year from 1913 to 1934.
Table 39. Stock of money, by kinds, a t t h e end of each fiscal year from
1913 t o 1934

386
388

CONTENTS

XI
Page

Table 40. Money in circulation, by kinds, at the end of each fiscal vear
from 1913 to 1934
:
."___
Table 41. Stock of money, money in the Treasury, in the Federal Reserve
banks, and in circulation, by kinds, June 30, 1934

389
390

MISCELLANEOUS

Table 42. 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, 1934
Table 43. Estimated money cost of the World War to the United States
Government to June 30, 1934
Table 44. Estimated amount of securities outstanding, interest on which
is wholly exempt from normal income tax and surtax of the Federal
Government, by years, on December 31, 1912 to 1933, by tvpe of
obligor
1
Table 45. United States securities outstanding, interest on which is exempt
from normal income tax, but not surtax, of the Federal Government,
on June 30 and December 31, 1917 to 1934
Table 46. Net expenditures for Federal aid to States, on basis of warrants
issued for the fiscal year 1920 and checks issued for the fiscal years 1933
and 1934, and amounts appropriated for the fiscal year 1935, 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, and
other civil organizations for investigative, regulatory, protective, or
construction work
Table 47. Expenditures made by the Government as direct payments to
States under cooperative arrangements during the fiscal year 1934
.

391
392

392
393

394
397

PERSONNEL

Table 48. Number of employees in the departmental service of the
Treasury in Washington, bv months, from June 30, 1933, to June 30,
1934
.
1
Table 49. Number of emplovees in the departmental and field services
of the Treasury on June 30, 1933, and June 30, 1934
Table 50. Number of persons retired, or eligible for retirement, retained
in the departmental and field services of the Treasury from August 20,
1920, to June 30, 1934
Index

4£)2
403
404
405

SECRETARIES, UNDER SECRETARIES, AND ASSISTANT SECRETARIES
OF THE TREASURY DEPARTMENT DURING THE FISCAL YEAR 1934,^
AND THE PRESIDENT UNDER WHOM THEY SERVED
Term of service
Official

Secretary of the
Treasury

President

From-

To—

Mar. 4,1933
Jan. 1,1934

Dec. 31,1933

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

Roosevelt.
Roosevelt.

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

Nov. 16,1933
Dec. 31,1933

Woodin
Dean G. Acheson, Maryland
Henry Morgenthau, Jr., New York. Woodin
Thomas Jefferson
C o o l i d g e , Morgenthau.
Massachusetts.

Roosevelt.
Roosevelt.
Roosevelt.

Secretaries cf the Treasury

Assistant Secretaries
Apr. 18,1933
June 6,1933
June 12,1933

Dec. 12,1933

Lawrence W. Robert, Jr., Georgia. Woodin, Morgenthau..
Stephen B. Gibbons, New York... Woodin, Morgenthau. _
Woodin
ThomasHewes, Connecticut.

Roosevelt.
Roosevelt,
Roosevelt.

1 For officials since 1789, see annual report for 1932, pp. xvii to xxi, and corresponding table in annual
report for 1933.

xni

PRINCIPAL ADMINISTRATIVE AND STAFF OFFICERS OF THE
TREASURY DEPARTMENT AS OF NOVEMBER 15, 1934
OFFICE OF T H E SECRETARY
Henry Morgenthau, Jr
T. J. Coolidge
Lawrence W. Robert, Jr
Stephen B. Gibbons
Vacant
Herbert E. Gaston.
Jacob Viner.
LeRoy Barton
Harold N. Graves.
Henrietta S. Klotz
.
John Kieley
William H. McReynolds
W.,N. Thompson
Archie Lochhead
Charles R. Schoeneman
Edwin R. Ballinger.
H. R. Sheppard
Francis C. Rose
W. C. Cram, Jr
F. A. Birgfeld
W. H. Moran
L. C. Spangler
James E. Harper..
Gabrielle E. Forbush..

Secretary of the Treasury.
Under Secretary of the Treasury.
Assistant Secretary ofthe Treasury.
Assistant Secretary ofthe Treasury.
Assistant Secretary of the Treasury.
Assistant to the Secretary.
Assistant to the Secretary.
Assistant to the Secretary.
Assistant to the Secretary.
Assistant to the Secretary.
Assistant to the S^ecretary.
Administrative Assistant to the Secretary.
Assistant Administrative Assistant to the Secretary.
Technical Assistant to the Secretary.
Special Staff Assistant.
Technical Assistant to the Administrative Assistant.
Assistant to Assistant Secretary.
Assistant to Assistant Secretary.
Technical Adviser to Assistant Secretary.
Chief Clerk and Superintendent.
Chief, Secret Service Division.
Chief, Division of Supply.
Chief, Division of Appointments.
Chief, Correspondence Division.
OFFICE OF T H E GENERAL COUNSEL

Herman Oliphant...
John G. Harlan
Clarence V. Opper
Alanson Willcox...
John G. Laylin.
Robert H. Jackson
Eli Frank, Jr

1
:.

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

DIVISION OF RESEARCH AND STATISTICS
George C. Haas
L. H. Seltzer
A. S. McLeod

Director.
Head Economist.
Government Actuary.
PUBLIC D E B T SERVICE

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

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

XV
OFFICE OF T H E COMMISSIONER OF ACCOUNTS AND DEPOSITS
D. W. Bell
Vacant.
Edward F. Bartelt
William T. Heffelfinger
Guy F. Allen
Andrew M. Smith...
Edward D. Batchelder
Harry R. Schwalm

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

OFFICE OF THE COMPTROLLER OF THE CURRENCY
J. F. T. O'Connor.
P. Q. Await
Eugene H. Gough
Gibbs Lyons
W. P. Folger.
J. E. Fouts
George E. Marble

Comptrollerofthe Currency.
Deputy Comptroller.
Deputy Comptroller.
Deputy Comptroller.
Chief National Bank Examiner.
Supervising Receiver, Insolvent National Bank Division.
Chief Clerk.

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

Treasurer ofthe United States.
Assistant Treasurer.
Executive Assistant to the Treasurer.
Chief Clerk.

OFFICE OF T H E COMMISSIONER OF I N T E R N A L
Guy T. Helvering
Wright Matthews
Charles T. Russell
George J. Schoeneman
D. Spencer Bliss
Arthur J. Mellott
• Eldon P. King
A. R. Marrs
L. C. Mitchell
Bertha Wetherton

REVENUE

Commissioner of Internal Revenue.
Assistant to the Commissioner.
Deputy Commissioner.
Deputy Commissioner.
Deputy Commissioner.
Deputy Commissioner.
Special Deputy Commissioner.
- Head, Technical Staff.
Senior Technical Adviser, Technical Staff.
Special Assistant to Commissioner.
BUREAU OF NARCOTICS

Harry J. Anslinger..

Commissioner of Narcotics.

Louis Ruppel

Deputy Commissioner of Narcotics.
BUREAU OF CUSTOMS

James H. Moyle
Frank Dow

Commissioner of Customs.
Assistant Commissioner of Customs.

Thomas J. Gorman

Deputy Commissioner, Customs Agency Service.
M I N T BUREAU

Nellie Tayloe Ross...

Director ofthe Mint.

Mary M. O'Reilly...

Assistant Director.
BUREAU OF ENGRAVING AND P R I N T I N G

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

Director ofthe Bureau of Engraving and Prmting.
Assistant Director (Administration).
Assistant Director (Production).

XVI
PUBLIC H E A L T H SERVICE
Hugh S. Cumming
John McMullen
W. F. Draper
L. R. Thompson
Francis A. Carmelia. __
Walter L. Treadway.
C. E. Waller
1...
S. L. Christian....
Ralph C. Williams...
D . S. Masterson

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

General.
General.
(Jeneral.
Oeneral.
General.
Oeneral.
General.
General.

U N I T E D STATES COAST GUARD
Rear Admiral H. G. Hamlet..
Captain Leon C. Covell
Commander Russell R. Waesche
A. T. Thorson
Oliver M. Maxam

Commandant.
Assistant Commandant.
Aide to Commandant.
Chief Clerk and Chief, Division of Finance.
Chief, Division of Operations.
P R O C U R E M E N T DIVISION

Rear Admiral C. J. Peoples
W. E. Reynolds.—
Harry E. Collins
Leo C. Martin
;
Robert LeFevre
Louis A. Simon...
George 0 . Von Nerta

Director of Procurement.
Assistant Director, Public Works Branch.
Assistant Director, Supply Branch.
Assistant to Assistant Director, Public Works Branch.
Assistant to Assistant Director, Supply Branch.
Supervising Architect.
Supervising Engineer.

BOARD OP ARCHITECTURAL CONSULTANTS

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

Clarence C. Zantzinger
Louis A. Simon
John Russell Pope
Hal F. Hentz
BOARD OF AWARDS

George O.Von Nerta, Supervising Engineer, Chairman
Louis A. Simon, Supervising Architect
Nelson S. Thompson, Chief, Mechanical Engineering Section

William K. Laws, Chief, Legal Section
John H. Schaefer, Office Manager
John Weber, Secretary

STANDING DEPARTMENTAL COMMITTEES
BUDGET AND I M P R O V E M E N T C O M M I T T E E
S. R. Jacobs, Chairman
F. A. Birgfeld, Vice Chairman
W. N. Thompson
D. S. Bliss
L. C. Martin
Edward F. Bartelt

J. H. Schaefer
Arthur E. Wilson
M. E. Slindee
F. J. Lawton
Charles R. Schoeneman
E. C. Nussear, Secretary

COMMITTEE ON E N R O L L M E N T AND DISBARMENT OF ATTORNEYS AND AGENTS
W. W. Cook, Chairman

La-wrence Becker, Secretary

I, T. Gilruth, Vice Chairman
C O M M I T T E E ON PERSONNEL
F . A. Birgfeld, Chairman

S. R. Jacobs

James E. Harper
C O M M I T T E E ON C i y i L SERVICE R E T I R E M E N T
F. A. Birgfeld, Chairman
James E. Harper

W. N. Thompson
Frank Dow

90353—-36

ORGANIZATION OF THE TREASURY DEPARTMENT, NOVEMBER 15, 1934

DEPARTMENT

THE

TREASURY

November 15, 193 4
SECRETARV
OF THE
TREASURV

UNDER

SECRETARY

G E N E R A L COUNSEL
SISTANT TO T M E
SECRETARY

A S S I S T A N T TO T H E
SECRETARY
IN M A T T E R S O F
PUBLIC RELATIONS

L E G A L DIVISION

ASSISTANT SECRETARY
N CHARGE OF C U S T O M S ,
COAST G U A R D . A N D

( F F I C E O F THE
DMPTROLUER OF
HE C U R R E N C Y

BUREAU OF ENGRAVING

UNITED S T A T E S
COAST GUARD

DIVISION OF

AND CURRENCy

COMMISSIONER

PUBLIC DEBT
GOVERNMENT ACTUARY

Chart 1.

DISBURSEMENT

ANNUAL REPORT ON THE FINANCES
TREASURY

DEPARTMENT,

Washington, D. C , Novemher 20, 19S4.
SIR: I have the honor to make the following report:
BUDGET RESULTS

Receipts
Total receipts, exclusive of trust account items, during the fiscal
year 1934 were $3,115,554,050, compared with $2,079,696,742 in 1933.
ID creased receipts resulted in customs and in every important category of internal revenue except the tax on admissions. These increases, coupled with the new National Industrial Recovery taxes and
the agricultural adjustment taxes, accounted for the $1,035,857,308
increase in total receipts.
PRINCIPAL SOURCES OF RECEIPTS FOR THE FISCAL YEARS 1925 TO 1934 (EXCLUSIVE OF
TRUST ACCOUNT ITEMS)

1926

1927

1928

1929

1930

1931

1932

1933

1934

CHART 2.

The trend in receipts, by major sources, from 1925 to 1934, inclusive,
is shown in the chart above; and a more detailed comparison of
receipts for 1933 and 1934 is presented in the table on page 2.

REPORT OF THE SECRETARY OF THE TREASURY

Miscellaneous intemal revenue receipts in 1934 constituted 47
percent of total receipts, compared with 41 percent in 1933; and constituted 53 percent of total receipts exclusive of agricultural adjustment taxes. Income tax receipts increased in 1934 by $71,800,000
but constituted the smallest percentage (26 percent) of total receipts
since 1917.^
Receipts by major sources for the fiscal years 1933 and 1934 ^
[In millions of dollars]

1933

Internal revenue:
Incorae taxes:
C u r r e n t corporation
Current individual
B a c k taxes ^

. . . .
. . .

. . . .

T o t a l income taxes

. . . .

Miscellaneous internal r e v e n u e taxes:
Estates
.
. . .
Gifts
Tobacco
Di.stilled spirits a n d wines (including special taxes)
F e r m e n t e d m a l t liquors (including special taxes)
M a n u f a c t u r e r s ' excise:
Gasoline
. . .
A u t o m o b i l e s , t r u c k s , tires, t u b e s , a n d p a r t s or accessories. _
Electrical energy
Lubricating o i l s . .
All other
.
. . .
T o t a l m a n u f a c t u r e r s ' excise
Stamp
Telegraph, telephone, radio a n d cable
T r a n s p o r t a t i o n of oil b y p i p e line
Admissions
.
Checks

. . . .
. . . . .

Ta.xcs u n d e r N a t i o n a l I n d u s t r i a l Recovery .Act:
C a p i t a l stock
Dividends
Excess profits

32L5
355.0
14L5

+2.1
-t-60.0
-f9. 7

746.2

818.0

+71.8

29.7
4.6
402.7
8.0
35.2

104.0
9.2
425. 2
90.0
169.0

+74.3
+4.6
+22. 5
+82.0
+133. 8

124.9
32.8
28.6
16.2
45.3

202.6
„70.9
33.1
25.3
58.1

+77.7
+38.1
+4.5
+9.1
+12.8

247.8

390.0

+142. 2

57.3
14.6
7.5
15.5
38.5

66.6
19.3
10.4
14.6
4L4

+9.3
+4.7
+2.9
—.9
+2.9

80.2
50.2
2.6

+80.2
+50.2
+2.6

133.0

+133.0

. .

T o t a l miscellaneous internal r e v e n u e taxes

^S.2

3 5.1

+.1

858.2

1, 469. 6

+611.4

353. 0

+353. 0

1, 604. 4
250.8

2, 640. 6
313.4

+1,036. 2
+62.6

1,855. 2

2,954. 0

+1,098.8

98.7
32.1
93.7

20.4
67.4
83.7

-78.3
+25 3
—10.0

Agricultural a d j u s t m e n t taxes
T o t a l internal r e v e n u e
Customs
Total internal revenue a n d customs

. . . .
. .

Miscellaneous receipts:
Proceeds of G o v e r n m e n t - o w n e d securities:
Foreign obligations
All other
.
All other receipts, exclusive of t r u s t a c c o u n t i t e m s
T o t a l miscellaneous receipts, exclusive of t r u s t a c c o u n t i t e m s
T o t a l receipts, exclusive o f t r u s t a c c o u n t i t e m s

Increase
( + ) , decrease (—)

319.4
295.0
131.8

<>.

T o t a l u n d e r N a t i o n a l I n d u s t r i a l R e c o v e r y Act All other i n t e r n a l r e v e n u e 2

1934

224.5

16L5

-63.0

2,079.7

3,115.5

+1,035.8

.., 1 On basis of daily Treasury statements (unrevised), supplemented by report of the Commissioner of
Internal Revenue. General and special accounts combined; for description of accounts, see p. 274; for classi. fication by. accounts, see p. 276
2 Includes adjustment to basis of daily Treasury statements (unrevised).
3 The adjustment to,the daily Treasury statement basis more than absorbs "All other internal revenue", as reported by the Commissioner of Internal Revenue, by $3,200,000 ih 1933 and by $3,100,000
in 1934.

REPORT OF THE SECRETARY OF THE TREASURY

Income taxes.—In the fiscal year 1934 income taxes amoimted to
$818,000,000, compared with $746,200,000 in 1933. The increase of
$71,800,000 was accounted for as follow^s: Collections of current
taxes on individual incomes, $60,000,000; collections of current taxes
on corporations, $2,100,000; and back tax collections, $9,700,000.
The fiscal year 1934 was the first full fiscal year to reflect the
increased normal rates and surtaxes, reduced personal exemptions,
the elimination of tax credit for earned income, and other provisions
of the Revenue Act of 1932 relating to individual income taxes.
Consequently, collections of current taxes on individual incomes
increased considerably in the face of a continued decline of net taxable
incomes in the calendar year 1933.
Current taxes on corporate incomes in the fiscal year 1934 likewise
were collected for the first full fiscal year on the basis of the increased
rate of 13% percent (compared with the old rate of 12 percent), plus
an additional tax of % of 1 percent on net income reported on consolidated returns. That collections in 1934 exceeded 1933 collections by
only $2,100,000 is due to the fact that net income in the calendar
year 1933 was far below the 1931 total, which figured in the first
half of the 1933 fiscal year collections.
Miscellaneous internal revenue.—Receipts from iriiscellaneous internal revenue taxes were $1,469,600,000 in the fiscal year 1934,
compared with $858,200,000 in 1933, an increase of $611,400,000.
Receipts from the leading revenue-producing taxes are shown in the
table on page 2.
In 1934 nearly 90 percent of miscellaneous internal revenue came
from the following sources, in the order of their importance as revenue
producers: Tobacco taxes, nianufacturers^ exc^ise taxes, the tax on
fermented liquors. National Industrial Recovery taxes, the estate
tax, and taxes on distilled spirits, and wines.
The additional estate tax imposed by the Revenue Act of 1932
was largely responsible for the increased collections of taxes on estates
in 1934, which amounted to $104,000,000, compared with $29,700,000
in 1933. Inasmuch as returns of this tax are not required to be filed
until one year a:fter death, 1933 collectiohs reflected little effect of the
additional tax.
Increased collections of the tax on gasoline, raised from 1 to IK cents
per gallon by the National Industrial Recovery Act, accounted for
more than one-half of the $142,200,000 iiicrease in collections of manufacturers'excise taxes.
Taxes on fermented malt liquors collected during the fiscal year
amounted to $169,000,000; on distilled spirits, $86,000,000; and on
wines, $4,000,000.if The manufacture and sale of beer had been
authorized by the act of March 22, 1933, and consequently collections
of taxes on fermented malt liquors cover the entire fiscal year. The

REPORT OF THE SECRETARY OF THE TREASURY

manufacture and sale of distilled spirits and wine for beverage purposes have been legal since December 5, 1933; therefore, taxes collected on spirits and wine do not represent a full year's collection.
Agricultural adjustment taxes.—Agricultural adjustment taxes totaled
$353,000,000. Taxes on cotton and wheat produced the largest share,
$144,800,000 and $117,600,000, respectively.
Customs.—Customs receipts of $313,400,000 in 1934 exceeded by
$62,600,000 the sum reported in 1933, and refiected a reversal, which
began in the middle of 1933, of the previous steady decline in foreign
trade.
Miscellaneous receipts.—Miscellaneous receipts, exclusive of trust
account items, declined from $224,500,000 in the fiscal year 1933 to
$161,500,000 in 1934. These receipts include such items as the proceeds from Government-owned securities, Panama Canal tolls, fees,
fines and penalties, rents and royalties, the immigration head tax, tax
on the circulation of national bank notes, and seigniorage. The
decrease was due chiefly to the reduced receipts on account of obligations of foreign governments. These receipts amounted to $98,700,000
in the fiscal year 1933 and only $20,400,000 in 1934. Receipts on all
other Government-owned securities rose from $32,100,000 in the
fiscal year 1933 to $57,400,000 in 1934. The latter figure includes
interest in the amount of approximately $48,900,000 paid by the
Reconstruction Finance Corporation on account of advances made by
the Secretary of the Treasury.
Expenditures
During the fiscal year 1934 general and emergency expenditures,
exclusive of trust account items, aggregated $7,105,050,085, as compared with $5,142,953,627 for the fiscal year 1933. This increase was
entirely a result of an expansion in emergency expenditures, which
on the basis of the daily Treasury statement (unrevised) increased
from $1,277,000,000 to $4,004,000,000, while general expenditures
declined from $3,866,000,000 to $3,101,000,000. A portion of the
rise in 1934 emergency expenditures, however, reflected the fact that
in the year 1933 the only expenditures placed in the emergency
category were the expenditures of the Reconstruction Finance
Corporation.
The table on page 6 com-pares, for the fiscal years 1932 to 1934,
expenditures of emergency organizations and other expenditures
classified by important groups. The total shown in this table as
expenditures of emergency organizations includes emergency expenditures classified in the daily Treasury statement (unrevised) as such,
and also certain general expenditures for Agricultural Adjustment
Administration, refunds of receipts on processing taxes, and subscriptions to stock of Federal land banks. Prior to the fiscal year 1934 the

REPORT OF THE SECRETARY OF THE TREASURY

expenditures of emergency organizations included only expenditures
on account of the Reconstruction Finance Corporation and subscriptions to capital stock of the Federal land banks. Expenditures made
from general disbursing accounts for public works for certain loans
and credits to farmers, for the distribution of wheat and cotton for
relief, and for emergency conservation work, and transactions for the
agricultural marketing fund are included in the statement on page 6,
as the last item under the caption ^^all other'' expenditures, and
EXPENDITURES, FISCAL YEARS 1925 TO 1934 (EXCLUSIVE OF TRUST ACCOUNT ITEMS)

1929

1930

CHART 3.

advances by the Reconstruction Finance Corporation to States,
municipalities, and other pubUc bodies for rehef under the Emergency
Relief and Construction Act of 1932, amounting to $298,560,000, are
included under Reconstruction Finance Corporation direct loans and
expenditures. For these reasons comparisons of expenditures along
functional lines are impossible in many instances, particularly as regards public works and relief expenditures, aids to agriculture, and
the *^all other" category. It is certain, however, that substantial

REPORT OF THE SECRETARY OF THE TREASURY

increases were made in 1934 for aids to agriculture and to home owners,
for rehef, and for public works. On the other hand, the postal deficiency was reduced $65,000,000, payments to veterans decreased
$307,000,000, and service on the public debt was reduced $34,000,000.
This latter decline reflected a decrease of $102,000,000 in public debt
retirements, which was partly offset by an increase of $68,000,000 in
interest payments.
All but $10,000,000 of the $290,000,000 shown in the following
table as expended for account of the Agricultural Adjustment Administration consisted of items chargeable against receipts from
agricultural adjustment taxes. These expenditures included rental
and beneflt payments, purchases for removalof surplus products,
and administrative expenses. Receipts totaled $353,000,000 or
$63,000,000 in excess of expenditures chargeable against them.
Expenditures ^ of emergency organizations and other expenditures, fiscal years 1932,
1933, and 1934
[In millions of dollars]
Class of expenditure
Agricultural Adjustment Administration
Commodity Credit Corporation
,
^
Farm Credit Administratioh
Federal Farm Mortgage Corporation
Federal land banks:
Capital stock
Paid-in surplus
Reduction in interest rates on mortgages._
Federal Emergency Relief Administration
Federal Surplus Relief Corporation
i..
".
Civil Works Administration
Emergency Conservation Work
.
_.
Public Works:
Tennessee Valley Authority
Loans to railroads
J..
Loans and grants to States, etc
Public highways
Boulder Canyon project
River and harbor work
Another.
Home Loan System:
Home loan bank stock
Home Owners' Loan Corporation..
Federal Savings and Loan Association...
Emergency Housing
Subsistence homesteads..
Reconstruction Finance Corporation, direct loans and expenditures *..
Export-Import Banks of Washington
Federal Deposit Insurance Corporation
Administration for Industrial Recovery
Total emergency organization expenditures.
Postal deficiency
Interest on the public debt
Public debt retirements..
_
National defense
Veterans-_
Aiiother, including nonfunctional and departmental.
Total expenditures.

1932

1933

1934
290
164
146
200

62
(2)

32
41
7
667
40
805
332

(2)

(«)

11
71
79
268
19
72
133
39
153
1
(2)

2
585
3
150
7

706

893

1,277

4,283

203
599
413
708
985
1,353

117
689
462
668
863
1,067

52
757
360
480
556
617

5,154

5,143

1 On basis of daily Treasury statements (unrevised).
2 Less than $500,000.
3 Excess of credits (deduct).
* Includes expenditures by Reconstruction Finance Corporation from proceeds of capital stock
($500,000,000 in 1932) and from sale of the Corporation's obligations.'
»Advances to States, etc., under 1932 Relief Act, of $298,560,000, are included under Reconstruction
Finance Corporation, direct loans and expenditures.

REPORT OF THE SECRETARY OF THE TREASURY
THE PUBLIC DEBT

Tiie gross public debt outstanding at the end of the fiscal year 1934
amounted to $27,053,141,414 as compared with $22,538,672,560 on
June 30, 1933, an increase of $4,514,468,854. The net changes in the
character and amount of the outstanding debt are summarized in the
following table showing the amounts of the various classes of debt
outstanding at the beginning and at the end of the fiscal year.
• Changes in public debt outstanding June SO, 1933 arid 1934j hy classes
[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 . 273]

Interest-bearing d e b t :
Open m a r k e t issues:
Pre-war b o n d s
Liberty bonds
Treasury bonds
Total bonds
T r e a s u r y notes
Certificates of indebtedness
T r e a s u r y bills
TotaL..
Special issues for i n v e s t m e n t of t r u s t funds, a n d postal
savings b o n d s :
Postal savings b o n d s
T r e a s u r y notes
Certificates of i n d e b t e d n e s s
TotaL............
T o t a l interest-bearing d e b t
M a t u r e d d e b t on w h i c h interest has ceased
D e b t bearing no interest
T o t a l gross d e b t

...

Increase ( + ) or
decrease (—)

J u n e 30, 1933

J u n e 30, 1934

$753,320,130
8, 201,307, 550
5, 215, 942,300

$753,320,130
6, 345, 774, 250 - $ 1 , 8 5 5 , 533,300
9,332, 732,350 +4,116, 790,050

14,170, 569,980
4, 548,379, 200
2,108,327, 500
954,493,000

16,431,826,730
6,653,111,900
1, 517, 245,000
1,404,035,000

+ 2 , 261, 256, 750
+2,104, 732, 700
-591,082, 500
+449, 542,000

21, 781, 769, 680

26,006, 218, 630

+ 4 , 224, 448,950

52, 697,440
231,176,000
92,000.000

78,030, 240
278,439,000
117,800,000

+25,332, 800
+ 4 7 , 263,000
+25,800,000

375,873, 440

474, 269, 240

+98,395,800

22,157, 643,120
65,911.170
315,118, 270

26,480, 487,870
54, 266,830
518, 386, 714

+ 4 , 322,844, 750
-11,644,340
+203,268,444

22, 538, 672, 560

27,053,141,414

+4,614,468,854

The open market financing operations of the Treasury during 1934
reflect chiefly: (1) Borrowings necessary to finance emergency expenditures, (2) refunding of maturing debt, and (3) increase in the
General Fund balance.
The volume of open market transactions during the year is summarized in the following table:
Open market issues and maturities, fiscal year 1934
[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 . 273]
Issues

Maturities

Class
Number
of issues
Liberty b o n d s . . . . .
Treasury bonds
T r e a s u r y noteS;..
Certificates of i n d e b t e d n e s s .
T r e a s u r y bills

Total.

Amount

Number
of issues

1 $1,880,000,000
$4,122,343,400
2, 712, 686,400
1,692,150,600
4,385,975,000

70 12,913,155,300

' F o u r t h L i b e r t y loan b o n d s called for partial r e d e m p t i o n on A p r . 16, 1934,
»Includes $316,930,100 T r e a s u r y notes d u e A u g . 1,1934, exchanged J u n e 16,1934,

Amount

2 561,164, 700
2,283, 233,000
3,936,433,000
56

8,660,830,700

REPORT OF THE SECRETARY OF THE TREASURY

Public debt transactions, other than open market operations, included the issuance and redemption of special obligations connected
with the investment of trust funds and postal savings, operations in
connection with the national bank note and Federal Reserve bank
note retirement funds, and the issuance and redemption of Treasury
bonds of a special series ^ made available for payment in gold.
On the basis of the interest-bearing debt outstanding on June 30,
1933, and on June 30, 1934, the computed annual interest charge was
increased from $742,175,955 to $842,301,131, and the computed rate
was reduced from 3.350 to 3.181 percent. The course of the interestINTEREST-BEARING DEBT OUTSTANDING AND RATIO OF THE COMPUTED ANNUAL
INTEREST CHARGE TO THE INTEREST-BEARING DEBT, BY MONTHS, JANUARY 1919
TO JUNE 1934
ns

\
/

V-^

..—X

...."•"'* •«••

.•••••

•V -

•^^°m p u t z d
1

t-Be j r / n ^ Debt

In t z r z s t Rat

•""

^^-yo

PER
CENT

7
y'

•

">•

\.."'...\
'""\

..•..•••.••*

:.''•"'\

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•••.

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K.

1920 1921 1922 1923 1924 1925 1926 1927 1928 1929 1930 I 9 3 l
CHART 4.

1932 1933 1934

3.0

bearing debt outstanding and of the computed rate of the interest
charge on that debt for the fiscal years 1919 through 1934 is shown
in the chart above.
Information concerning issues, maturities, and redemptions of
interest-bearing public debt securities in the open market is shown
in table 25 on page 364 of this report, and Department circulars and
public announcements concerning the public debt offerings during
1 Treasury bonds, series of Apr. 16, 1934, authorized by the Second Liberty Bond Act, approved Sept.
24, 1917, as amended, were offered in the amount of $55,560,000 for payment in gold. The bonds, bearing
% percent interest, were dated Jan. 16, 1934, and matured Apr. 16, 1934. All bonds were redeemed before
maturity.

REPORT OF THE SECRETARY OF THE TREASURY

the fiscal year after November 1, 1933, appear as exhibits 1 to 17
on pages 161 to 181.
Refunding the Fourth Liberty Loan
Fourth Liberty Loan 4}^ percent bonds of 1933-38 were originally
issued under date of October 24,1918, in the amount of $6,964,581,100.
This amount had been reduced to about $6,268,000,000 w^hen on
October 12, 1933, the first call was issued for redemption on April
15, 1934, of about $1,880,000,000, or 30 percent, of the outstanding
bonds. This amount is only approximate. Fourth Liberty Loan
bonds had been issued in the order of their serial numbers, and therefore are divisible into 10 series, as determined by the final digits of the
serial numbers. Three series were included in the first call, the
bonds designated being those bearing serial nuinbers ending in 9,
0, or 1.
On Oetober 15, 1933, a series of Treasury bonds of 1943-45 was
offered for subscription bearing interest at the rate of 4}^ percent
per annum from that date to October 15, 1934, and thereafter at the
rate of 3% percent per annum. The new bonds were off'ered at par
in exchange for outstanding Fourth Liberty Loan bonds, whether
called or uncalled, and at 101}^ for cash, the price for cash including
accrued interest from October 15 to November 1, 1933, the date
fixed for cash payment.
The cash offering, which was for $500,000,000, or thereabouts, was
closed on October 17, 1933, at which time subscriptions aggregating
$1,989,015,000 were received, of which $500,421,950 were allotted.
Exchange subscriptions, which were not closed until December 2,
1933, aggregated $900,716,550, a like amount of Fourth Liberty Loan
bonds having been tendered in exchange—$874,863,900 of the called
and $25,852,650 of the uncalled bonds. By this operation outstanding Fourth Liberty Loan bonds called for redemption on April 15,
1934, were reduced to about $1,005,000,000.
On April 4, 1934, a series of 3K percent Treasury bonds of 1944-46
was offered for subscription in exchange for Fourth Liberty Loan
bonds called for redemption on April 15, and for Treasury notes of
series A-1934, maturing May 2, 1934. The offering was confined to
exchange subscriptions, cash subscriptions not being received. A
total of $1,061,960,500, including $827,496,200 of the called bonds and
$234,464,300 of the maturing notes, was exchanged for the new
bonds.
Through these two exchange offerings, $1,702,360,100 of the called
bonds were refunded into Treasury bonds, resulting in an annual
interest saving after the first year of over $17,000,000. On April 15
there remained outstanding about $178,000,000 of the called bonds

REPORT OF THE SECRETARY OF THE TREASURY

due that date. To the end of the fiscal year, $127,000,000 of these
bonds were redeemed in cash.
On April 13, 1934, a second call was issued for the redemption on
October 15, 1934 of about $1,246,000,000 of outstanding Fourth
Liberty Loan bonds. The bonds included in the second call were
those which bear serial numbers ending in 8 or 2, and the amount is
approximately two-sevenths of the uncalled bonds outstanding bn
April 13, 1934. No steps for refunding of the bonds included in the
second call were taken before the close of the fiscal year 1934.
Department circulars issued and public announcements made during the fiscal year 1934 concerning the first call of October 12, 1933,
and the second call of April 13, 1934, for partial redemption of Fourth
Liberty Loan bonds, and the refunding issues announced on October
12, 1933, and April 4, 1934, are included as exhibits 15 and 16 on
pages 176 to 183 of the annual report for 1933 and as exhibits 1 and
10 to 12 on pages 161 and 168 to 174 of this report.
Cumulative sinking j u n d
The permanent appropriation available for the cumulative sinking
fund during the fiscal year 1934, including a small unexpended
balance for the prior year, was $438,540,889. Treasury bonds in the
face amount of $5,187,000, and Treasury notes in the face amount of
$46,789,000, were purchased at a principal cost of $5,090,468 and
$46,579,686, respectively; and $300,002,200, face amount of Fourth
Liberty Loan bonds, and $7,513,700, face amount of Treasury notes
of series A-1934, were redeemed at par for account of the fund.
The face amount of total retirements on this account was thus
$359,491,900 at an expenditure of $359,186,054. An unexpended
balance of $79,354,835 was carried forward to the fiscal year 1935.
Tables covering transactions on account of the fund for the fiscal
year 1934, and from its inception on July 1, 1920, will be found on
pages 368 and 369 of this report.
Two amendments to the cumulative sinking fund acts were enacted
during the year: First, under provisions of the Treasury Department
Appropriation Act, 1935, the addition to the fund established by
section 308 of the Emergency Relief and Construction Act of 1932
was changed from an annual to a permanent appropriation, thus conforming to other appropriation provisions of the sinldng fund acts;
and second, under the Gold Reserve Act of 1934, the appropriation
for the fund, previously restricted to retirement of issues outstanding
on July 1, 1920, and to issues subsequently made for refunding purposes, was extended to cover the retirement of any bonds or notes
issued under the Second Liberty Bond Act, as amended.

REPORT OP THE SECRETARY OF THE TREASURY

Indirect obligations of the United States
In addition to the public debt which is a direct obligation of the
United States, there are classes of indirect obligations which are in
the nature of contingent liabilities. These liabilities include obligations, payment of which with regard to principal and/or interest is
guaranteed by the Government, as well as obligations based on the
credit of the United States. A statement, showing in detail the contingent liabihties of the Federal Government on June 30, 1934, is presented on page 373 of this report. In this connection attention is
called to the statement on page 381 of assets and liabilities of Government corporations and credit agencies of the United States, as of June
30,1934, compiled from reports received from organizations concerned.
At the end of the fiscal year 1934, principal of outstanding obhgations of Government agencies fully guaranteed both as to principal and
interest included: $312,000,000 of the Federal Farm Mortgage Corporation, $235,000,000 of the Reconstruction Finance Corporation, and
$134,000,000 of the Home Owners' Loan Corporation. The latter
agency also had outstanding $612,000,000 of bonds guaranteed only
as to interest but exchangeable until October 27, 1934, for fully
guaranteed bonds. The Federal land banks had outstanding
$331,000,000 of bonds guaranteed as to interest but not as to prmcipal.
Obligations outstanding on June 30, 1934, secured by the credit of
the United States included $58,000,000 of loans to the Secretary of
Agriculture, based upon all cotton in his possession or control and
secured by warehouse receipts for such cotton; and postal savings
funds, amounting to $1,198,000,000. ^
GENERAL FUND OF THE TREASURY
All cash receipts of the Government are deposited in the General
Fund of the Treasury and all expenditures are made therefrom. The
balance of this fund represents the cash balance of the Government.
The net change in this balance from the close of the previous fiscal
year is accounted for as follows:
Summary of the net changes in the General Fund balance between J u n e SO, 1938,
and J u n e 80, 1984
[On basis of daily Treasury statements (unrevised), see p. 273]
Balance June 30, 1933
.
$862,205, 220. 61
Increase in public debt in tbe fiscal year 1934
4, 514, 468, 854. 33
Total to be accounted for
5, 376, 674, 074. 94
Excess of expenditures over receipts in t h e fiscal year 1934:
General and special a c c o u n t s '
$3, 989, 496, 035. 42
Less charges to statutory debt retirements in t h e fiscal year 1934 __
359, 864, 092. 90
Net, exclusive of s t a t u t o r y debt
retirements
3, 629, 631, 942. 52
1 For a description of accounts through which Treasury transactions are effected, see p. 27.4.

REPORT OF THE SECRETARY OF THE TREASURY

Summary of the net changes in the General Fund balance between June 80, 1988,
and June 30, 1934—Continued
Excess of expenditures over receipts in the fiscal year 1934—
Continued.
Less net increase in trust and contributed accounts
$23,504,351.02
Less net receipts in increment on
gold account.-811, 375, 756. 72
Net excess of expenditures over receipts

$2, 794, 751, 834. 78

Balance June 30, 1934

2, 581, 922, 240. 16

Total

5, 376, 674, 074. 94

Current cash assets and liabilities of the Treasury, June 30, 1988 and 1934, and
changes during the year
[On basis of daily Treasury statements (unrevised), see p. 273]
June 30, 1933
June 30, 1934
(gold valued at
(gold valued at
$20.67+.per fine
$36 per fine
ounce)
ounce)

Increase (+),
decrease (—)

Gold assets:
$3,233,846,776.44 $7,856,074,225.67 +$4,622,227,449. 23
Gold
Deduct gold liabilities:
Gold certificates outstanding (outside of
Treasury)
-272,034,270.00
1,230,718,869.00
968,684,699.00
Gold certificate fund, Federal Reserve
Board
11.771,485,595.89 3,973, 332, 688.66 +2,201,846,992. 77
-18,343,429.69
26,722,721. 73
Redemption fund, Federal Reserve notes... 2 44,066,161.32
Gold reserve 3
___
+342.90
166,039,430.93
166,039,088.03
J&e^Exchange stabilization fund
1,800,000,000. 00 +1,800,000,000.00
Total...

2 3,202,309,704.24 6,913, 779,340. 32

+3, 711,469,636. 08

2 31,537,072. 20

942,294,885. 36

+910,757,813.16

507,191,369. 00

1, 660,000.00
603,862,622.00

+ 1 , 560,000.00
-3,338,747.00

507,191,369.00

605,412,622. 00

-1,778,747.00

479,870, 570. 00
1,200,124. 00

1, 560,000. 00
493,436,414.00
1,189, 324. 00

+1,560,000. 00
+13,565,844. 00
-10,800.00

481, 070, 694.00

496,185,738. 00

+16,116,044.00

26,120,676. 00

9,226,884. 00

-16,893,791.00

2 31,537,072. 20
26,120, 675.00
82,207, 203.16

942,294,885. 36
9,226,884. 00
93,668, 569.49

+910,767.813.15
-16,893,791.00
+11,461,366. 33

917, 767,433. 37 1,984,894,916. 20
848,458. 74
2,831,924.78

+1,067,127,482.83
+1,983,466. 04

Total
21,058,480, 842. 47 3,032,917,179.82
Deduct General Fund liabiHties:
450,994,939. 66
196,276, 621.86
Total.-Balance of increment resulting from reduction in weight of the gold dollar
811, 375,756. 72
862, 205, 220. 61 1,770,546,483.44
Working balance

+1,974,436,337.36

Gold in General Fund
Silver assets:
Silver bullion (sec. 46, Act of May 12, 1933).
Silver dollars
Total
Deduct silver liabilities:
Silver certificates (sec. 46, Act of May 12,
1933)
Silver certificates outstanding
Treasury notes of 1890 outstanding . . .
Total
Silver dollars in General Fund
General Fund assets:
In Treasury oflSces:
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

Balance in the General Fund ofthe Treasury

862,205, 220. 61 2,681,922,240.16

+264, 719, 317.80
+811,375, 756. 72
+908,341, 262.83
+1,719, 717,019. 56

» "Gold fund, Federal Reserve Board", in 1933.
2 Redemption fund, Federal Reserve notes, carried as General Fund liability in 1933. In this table the
1933 figures have been revised to include this item as a gold account liability.
8 Reserve against $346,681,016 of United States notes and Treasury notes of 1890 outstanding in the amount
of $1,200,124 in 1933 and $1,189,324 in 1934! Treasury notes of 1890 are also secured by silver dollars in the
Treasury.

REPORT OF THE SECRETARY OF THE TREASURY

The composition of the General Fund of the Treasury, existing liabilities against the assets in the fund, and the balances in excess of
such liabilities are shown for June 30, 1933 and 1934, in the above
table. These figures are on the basis of the daily Treasury statements, unrevised (for explanation, see p. 273). Similar information is
presented in somewhat greater detail, and on the basis of the daily
Treasury statements (revised), in the table on p. 376 of this report.
ElMERGENCY LEGISLATION

Further appropriations and allocations of funds were made during
the fiscal year 1934 for the purpose of dealing with the emergency
created by the depression. The amount of capital stock and obligations that the Reconstruction Finance Corporation is authorized to
have outstanding at any one time was increased from $4,575,000,000
to $5,925,000,000, exclusive of indefinite authorizations. The various
legislative provisions affecting the amount of capital stock and of
other obhgations which the Corporation may have outstanding at
any one time are summarized as follows:
Reconstruction Finance Corporation Act, sec. 2 (capital stock).
$600,000,000
Reconstruction Finance Corporation Act, sec. 9 . . .
1,500,000,000
Emergency Relief and Construction Act of 1932, sec. 205 (a)
1,800,000,000
National Industrial Recovery Act, sec. 302
i 400,000,000
Federal Home Loan Bank Act, sec. 6 (f)
125,000,000
Emergency Farm Mortgage Act of 1933, sec. 38
300,000,000
Federal Emergency Relief Act of 1933, sec. 2 (b)..
500,000,000
Act approved June 10,1933, sec. 1 (insurance company preferred stock)
60,000,000
Home Owners' Loan Actof 1933, sec. 4 (b)
200,000,000
Total authorized prior to July 1, 1933
. 4,575,000,000
Act approved Jan. 20,1934, sec. 3
850,000,000
Act approved June 16,1934, sec. 3 (a) (purchase of obligations of Federal Deposit Insurance
Corporation)
250,000,000
Emergency Appropriation Act, 1935, title II (purchase of securities held by Public Works
Administration)
250, OOQ, 000
Total authorized
5,925,000,000
Act approved Mar. 9,1933, sec. 304 (bank preferred stock, etc.)2.
Ky^ , „ . „ , , „
Agricultural Adjustment Act, sec. 5 2---HfT^jLH-iy
National Housing Act, sec. 4 3
J hmitation
1 Decrease, deduct.
2 Authorized prior to July 1,1933.
3 Authorized during fiscal year 1934.

During the year the Reconstruction Finance Corporation sold
$1,670,000,000 of its notes to the Secretary of the Treasury, increasing
the total sold to the Secretary to $3,255,000,000, in addition to the
$500,000,000 of the Corporation's capital stock purchased by the
Treasury. A total of $235,000,000 of notes was issued to banks from
which the Corporation purchased preferred stock, capital notes, and
debentures. Notes in the amount of $132,000,000 were issued for
payment in gold; these obligations were retired during the fiscal year
in connection with the sale of the Corporation's gold holdings to
the Treasury.
The following table summarizes the funds appropriated and allocated to emergency organizations, expenditures therefrom, and unexpended balances. The allocation of funds from the $3,300,000,000
provided under the National Industrial Recovery Act was virtually
completed as shown in this statement.

REPORT OF THE SECRETARY OF THE TREASURY

The emergency expenditures included in this statement for the
period prior to the fiscal year 1934 include only expenditures on
account of the Reconstruction Finance Corporation and subscriptions
to capital stock of Federal land banks under authority of the act of
January 23, 1932. Expenditures prior to the fiscal year 1934 by the
several departments and establishments for public works under the
Emergency Relief and Construction Act of 1932 were made from
general disbursing accounts, and, therefore, are not susceptible to
segregation from the general expenditures of such departments and
establishments on the basis of the daily Treasury statement.
Funds appropriated and allocated io emergency organizations, expenditures therefrom,
and unexpended balances
[In millions of dollar.s]
Sources of funds i
Appropriations

Organization
Specific

Statutory and Reconexecutive allot- struction
ments
FiTotal
Emer- nance
NaCortional gency
Indus- Appro- poration
priatrial
Recov- tion
Act,
ery
1935
Act

Expenditures
fiscal
year
Unex1934 pended
and
prior
years 2

3 860
608
898
290
Agricultural Adjustment Administration
38
(')
353
«353
353
Less processing tax
646
507
6 63
608
Net
38
164
268
Commoditv Credit Corporation
432
429
3
282
265
Farm Credit Administration
647
80
310
. 60
97"
200
200
200
Federal Farm Mortgage Corporation
Federal land banks:
2
123
125
125
Capit^il stock .
,..
84
125
125
41
Paid-in .surplus
. ..
23
23
16
7
Reduction in interest rates on mortgages...
1 Appropriations to June 30, 1934; allocations to Oct. 31, 1934.
2 On the same basis as those exhibited on page 2 of the daily Treasury statement (unrevised) but differ
with respect to classification. The principal difference in classification is with respect to amounts paid from
funds allocated by the Reconstruction Finance Corporation to various emergency organizations. The expenditures under the caption " Reconstruction Finance Corporation" in the daily Treasury statement (unrevised), comprehend all expenditures from funds of the Reconstruction Finance Corporation, including
those allocated to other organizations, whereas expenditures included in the following statement on account
of such allocated funds are exhibited as expenditures of the organizations to which the funds were allocated
rather than expenditures of the Reconstruction Finance Corporation. Similarly certain expenditures of
the Farm Credit Administration and the Commodity Credit Corporation, representing funds allocated to
those organizations for the purpose of carrying out the provisions of the Agricultural Adjustment Act, are
exhibited in the daily Treasury statement (unrevised) under the caption "Agricultural Adjustment
Administration", whereas such expenditures are exhibited in this statement as expenditures of the Farm
Credit Administration and the Commodity Credit Corporation, respectively. The total amount of
expenditures in this statement can be reconciled with the total amount of emergency expenditures in the
daily Treasury statement by adding to the latter the amounts included in general expenditures under the
captions "Agricultural Adjustment Administration", "Refunds of receipts—processing tax on farm
products", and "Subscriptions to stock of Federal land banks", and deducting the receipts under the
caption "Processing tax on farm products."
3 Includes $350,000,000 specific appropriations from the general Treasury under the acts of May 12, 1933,
May 25, 1934, and June 19, 1934.
* There are no statutory limitations on the amounts of funds which may be made available by the Reconstruction Finance Corporation for carrying out the purposes of sec. 5 of the Agricultural Adjustment Act,
and for the purchase by the Reconstruction Finance Corporation of preferred stock or capital notes of banks
and trust companies under the act of Mar. 9,1933. The Reconstruction Finance Corporvation is required to
make available to the Federal Housing Administrator such funds as he may deem necessary for the purposes
of carrying out the provisions of the National Housing Act. The amounts included in this column for the
purposes specified are based upon checks issued therefor from time to time by the Reconstruction Finance
Corporation. The authority of the Reconstruction Finance Corporation to issue its bonds, notes, and debentures has been increased by such amounts as may be required to provide funds for such purposes.
« Of this amount, $8,000,000 has been allocated for the purchase of surplus sugar under the act of
May 9, 1934.
6 Excess of processing tax, deduct.

EEPORT OF THE SECRETARY OF THE TREASTJRY

Funds appropriated and allocated to emergency organizations, expenditures therefrom,
and unexpended balances—Continued
[In millions of dollars]
Sources of funds
Appropriations

Organization
Specific

Federal Emergency Relief Administration
Federal Surplus Relief Corporation
Civil Works Administration
Emergency conservation work
,,
Department of Agriculture, relief.
Public Works:
Tennessee Valley Authority
Loans to railroads
Loans and grants to States, municipalities, etc
Public highways
Boulder Canyon project..
River and harbor work.
All other.
Home Loan System:
Home loan bank stock.
Home Owners' Loan Corporation
Federal Savings and Loan As.sociations
Emergency housing
Federal Housing Administration
Subsistence homesteads
Reconstruction Finance Corporation—direct
loans and expenditures
Export-Import banks of Washington
Federal Deposit Insurance Corporation
Administration for Industrial Recovery
Total
Unallocated funds.
Grand total.

7 556
7 19
7 375
93

Statutory and Reconexecutive allot- strucments
tion
Finance
NaEmer- Cortional gency poraIndus- Appro- tion
trial
priaRecov- tion
ery
Act,
Act
1936

50
200
255
18

1,661

387
22
400
323

864
750
114

333
114
26
• ( « )

560
437
44
249
740

(8)

125
200

J 50

128
1
25

150
3,300
(10)

2,448

3,300

1,425
1
1,426

Total

76
200
781
693
65
346
902
125
200
50
135
16
50

Expenditures
fiscal
year
Unex1934 pended
and
prior
years

705
40
806
332

856
35
59
418
114

64
129

71
79
268
19
73
133
81
164
1
(10)

702
426
46
272
44
46
49
135
16
48

* 3, 955
13

(")

3,955
14
150
20

2,412
3
150
7

1,643
11

5,963

13,137
1

6,100

7,037
1

5,963

13,138

6,100

7 The appropriation of $950,000,000, provided in the act of February 15,1934, was allocated by the President
as follows: Civil Works Administration, $375,000,000; Federal Emergency Relief Administration, $575,000.000, of which latter amount $19,000,000 has been transferred to the Federal Surplus Relief Corporation for
the purchase of commodities.
8 Under the provisions ofthe Emergency Appropriation Act, fiscal year 1935, the Reconstruction Finance
Corporation is authorized to purchase marketable securities acquired by the Federal Emergency Administration of Public Works, but the amount which the Reconstruction Finance Corporation may have invested at any one time in such securities may not exceed $250,000,000. Moneys paid for such securities are
available for loans (but not grants) under title II of the National Industrial Recovery Act. The amount of
obligations which the Reconstruction Finance Corporation is authorized to have outstanding at any one
time is increased by the sums necessary for such purchases, not to exceed $250,000,000. The purchase of
such securities by the Reconstruction Finance Corporation is reflected as expenditures of the Reconstruction Finance Corporation and as credits against expenditures of the Federal EmergencyAdministration of
Public Works.
0 Includes $500,000 allocated for savings and loan promotion as authorized by sec. 11 of the act of Apr. 27,
1934.
10 Less than $500,000.
" Under sec. 3 of the act of June 16, 1934, the Reconstruction Finance Corporation is authorized to purchase at par obligations of the Federal Deposit Insurance Corporation in a face amount of not to exceed
$250,000,000, and the amount of obligations which the Reconstruction Finance Corporation is authorized
to have outstanding at any one time is increased by $250,000,000. The amount to be included in this column
will represent the proceeds deposited vvith the Treasurer of the United States on account of the sale of such
obligations by the Federal Deposit Insurance Corporation to the Reconstruction Finance Corporation.
90353—35
3

REPORT OF THE SECRETARY OF THE TREASURY
REVENUE L E G I S L A T I O N

Important changes in Federal taxes occurred during the fiscal year
1934. With repeal of the eighteenth amendment, formally proclaimed by the President on December 5, 1933, existing taxes on
distilled spirits and wines again became substantial revenue producers
and the special taxes levied by the National Industrial Recovery Act,
according to the specific provisions of that act, were repealed, effective
as of the following dates: Dividends tax imposed by section 213 does
not apply to dividends declared after December 31, 1933; capital
stock tax imposed by section 215 does not apply in respect of any
year beginning on or after July 1, 1934; excess-profits tax imposed by
section 216 does not apply in respect of any taxable year ending after
June 30, 1934. Further provisions for taxation were made by the
specific acts cited below.
Liquor Taxing Act oj 1934.—This act, approved January 11, 1934,
repeals the act of March 22, 1933, providing for the taxation of nonintoxicating liquor containing one-half of 1 percent or more of alcohol
by volume and not more than 3.2 percent of alcohol by weight. A
copy of the Liquor Taxing Act of 1934 will be found as exhibit 30 on
page 215 of this report. The major taxes provided by the Liquor Taxing Act of 1934, which went into effect January 12,1934, and the superseded rates are as follows:
Rates
Liquor
Liquor Taxing Act of 1934
Distilled spirits
Still wines containing following percentages of absolute alcohol, by volume:
Not over 14 percent
Over 14 and not over 21 percent
..
Over 21 and not over 24 percent
Champagne or sparkling wine
Artificially carbonated wine
Liqueurs, cordials, and similar compounds.
Grape brandy and wine spirits withdrawn
and used in fortification of wines.
Fermented malt liquors containing more
than 3.2 percent of alcohol by weight.
Manufacturers of fermented malt liquors:
Brewery of 500 or more barrels a year..
Brewery of less than 500 barrels a year-

Superseded

$2 per proof or wine gallon

$1.10 per proof or wine
gallon.

10 cents per wine gallon
20 cents per wine gallon..
40 cents per wine gallon
5 cents per half pint
2J^ cents per half pint
2Yi cents per half pint...
20 cents per proof gallon..$5 per barrel of not over 31 gallons.

4 cents per wine gallon.
10 cents per wine gallon.
25 cents per wine gallon.
12 cents per half pint.
6 cents per half pint.
6 cents per half pint.
10 cents per proof gallon.

$100 per brewery per annum
$50 per brewery per annum

$6 per barrel of not over
31 gallons.
"1 $1,000 per brewery per
/ annum.

Revenue Act oj 1934-—This act, approved May 10, 1934, provides
for the following major changes in taxation:
(1) Corporations: The privilege of filing consolidated returns is
limited to railroads with an increase in the income tax rate on such
returns from 14% to 15% percent; for corporations accumulating surplus to avoid surtax on shareholders, a change in the special surtax
from 50 percent of adjusted net income to 25 percent of the amount
not in excess of $100,000, plus 35 percent of the amount in excess of

REPORT OF THE SECRETARY OF THE TREASURY

$100,000; limitation of deduction for losses from sales or exchanges of
capital assets to $2,000 plus the gains from such sales, applicable to all
corporations, except banks and trust companies, a substantial part of
whose business is the receipt of deposits; in addition to the regular rate
upon the undistributed adjusted net income of personal holding companies, a special surtax of 30 percent of the undistributed adjusted net
income not in excess of $100,000, plus 40 percent of the amount in
excess of $100,000.
Taxes on capital stock and on excess profits of corporations are
levied at the same rates as provided in the National Industrial
Recovery Act, but with a slight modification of the determination of
adjusted declared value of capital stock.
(2) Individual incomes: A decrease in the normal rate from 4 and
8 percent to 4 percent; for the purpose of normal tax, a credit against
the net income of 10 percent of earned income; for the purpose of the
surtax, a credit for personal exemption and for dependents; surtaxes
graduated from 4 percent on ^^surtax net income" in excess of $4,000
and not in excess of $6,000, up to 59 percent on ^'surtax net income"
in excess of $1,000,000; and other income tax changes, the most important of which is the treatment of gains and losses from sales or
exchanges of capital assets, whereby taxable gains and losses are computed on the basis of certain percentages, which vary according to
the period for which assets have been held. Deduction of net capital
losses computed on the bases of the various percentages is limited to
$2,000 plus gains from such sales.
(3) Estates and gifts: Increase in rates for computing the additional tax on estates so that the maximum tax rate on net estates iu
excess of $10,000,000 is 60 instead of 45 percent; increase in graduated
gift tax rates so that the maximum tax rate on net gifts in excess of
$10,000,000 is 45 instead of 3 3 ^ percent. The increased rates for the
additional estate tax apply to estates of decedents dying after May
10, 1934, and the increased rates for the gift tax to gifts for the calendar years 1935 and thereafter.
(4) Other taxes: Imposition of a tax on imports of certain marine
animal and fish oils, processing taxes on vegetable and coconut oils,
and excise taxes on crude petroleum and other articles; repeal of taxes
on soft drinks and candy as of May 10, 1934, on use of certain boats
as of June 30, 1934, and on'checks as of January 1, 1935; uicrease in
exemptions for taxes on furs and jewelry, reduction in stamp tax on
sales of produce for future delivery.
Extension oj agricultural adjustment legislation.—By two amendments to the Agricultural Adjustment Act, additions were made to
the basic agricultural commodities upon which processing taxes can
be levied by proclamation of the Secretary of Agriculture. The act
of April 7, 1934, adds to the list of basic commodities cattle, peanuts,

REiPORT OF THE SECRETARY OF THE TREASURY

rye, flax, barley, and grain sorghums; and the act of May 9, 1934,
adds sugar beets and sugarcane.
The Agricultural Adjustment Act provides for the imposition of
taxes upon the first domestic processing of specified basic agricultural
commodities, to become effective m t h respect to each commodity by
proclamation of the Secretary of Agriculture. Similar taxes are authorized upon the first domestic processing of any commodity found
by the Secretary of Agriculture to be competing to the disadvantage
of a basic commodity. Taxes are also authorized on the floor stocks
of articles processed wholly or in chief value from a commodity with
respect to which a processing tax is imposed. Compensating taxes
are imposed upon articles processed wholly or in chief value from a
commodity with respect to which a processing tax is imposed, when
such articles are imported into the United States, or into any possession thereof to which the act apphes, from any foreign country or
possession to which the act does not apply.
Under the Agricultural Adjustment Act, or the various amendments
thereof, processing taxes are authorized to become effective in the
case of each commodity on the first day of the marketing year next
following the date of a proclamation of the Secretary of Agriculture,
that rental or benefit payments are to be made with respect to that
commodity, except in the case of sugar beets and sugarcane, wliich
tax became effective on and after June 8, 1934. During the fiscal
year 1934 agricultural adjustment taxes were levied with respect to
the following basic agricultural commodities: Wheat, cotton, tobacco,
field corn, hogs, sugar beets, and sugarcane; as well as on certain
paper and certain jute found to be competing to the disadvantage of
a basic commodity.
Other laws have been enacted containing certain administrative
provisions with respect to the taxes imposed under the Agricultural
Adjustment Act. These laws relate to refunds in the case of certain
exports and to refunds or credits in the case of deliveries of articles
to organizations for charitable distribution or use, limitations with
respect to the filing of claims, and adjustments where rates of taxes are
increased or decreased. They also revise the definition of processing
in connection with certain commodities, create certain exemptions
and clfanges in method of payment of tax, and make possible an
extension of time for the payment of processing taxes.
The act approved April 21, 1934, to place the cotton industry on a
sound commercial basis, etc., provides for the imposition of a tax upon
the ginning of cotton; and the act approved June 28, 1934, to place the
tobacco-growing industry on a sound financial and economic basis,
etc., provides for a tax on the first bona fide sale of each pound of
certain tobacco harvested subsequent to the enactment of this act.

REPORT OF THE SECBETARY OF THE TREASURY

Silver Purchase Act oj i554.—This act, approved June 19, 1934,
provides for a stamp tax on the transfer of interests in silver bullion
equal to 50 percent of the net profit to the transferor. The tax
applies to all transfers of any interest in silver bullion on or after
May 15, 1934, except transfers of silver bullion by deposit or delivery
at a United States mint in compliance with an Executive order
requiring such delivery of any or all silver by whomsoever owned or
processed. A copy of this act is shown as exhibit 27 on page 205.
National Firearms Act.—The National Firearms Act, approved
June 26, 1934, provides an annual special tax of $500 on importers.
and manufacturers of certain firearms, $200 on dealers other than
pawnbrokers, and $300 on pawnbrokers, and a stamp tax of $200
each on certain firearms transferred in the United States, to be paid
by the transferor. A copy of this act is presented as exhibit 31
on page 219.
ESTIIMATES OF RECEIPTS AND EXPENDITURES

Actual receipts and expenditures for the fiscal year 1934 and estimates for the fiscal years 1935 and 1936 are shown in the table beginning on page 20. Estimated expenditures are based on the latest
information from the Bureau of the Budget.
Total receipts from customs duties and internal revenue, exclusive
of agricultural adjustment taxes, are estimated (on daily Treasury
statement basis) at $2,895,000,000 for the fiscal year 1935, and at
$3,172,000,000 for the fiscal year 1936, assuming extension of temporary taxes in the latter year. More detailed estimates of revenue
are shown in table 15, on page 331.
The revenues of the Federal Government are mainly dependent
upon the tax structure and the level of business activity. Therefore,
in preparing revenue estimates in November of each year, the Treasury is required to assume the continuance of the then existing tax
structure and to forecast the probable trend of business activity for
the ensuing 20 months (the period covering the remainder of the then
current fiscal year and the next fiscal year).

REPORT OF THE SECRETARY OF THE TREASURY

Receipts and expenditures for the fiscal year 1934, on the basis of daily Treasury
statements {unrevised), and estimated receipts and expenditures for the fiscal years
1935 and 1936
[This statement does not include contingent liabilities resulting from the issue of obligations of the Reconstruction Finance Corporation, the Federal Farm Mortgage Corporation, and the Home Owners'
Loan Corporation]
1934, a c t u a l

1935, e s t i m a t e s

1936, e s t i m a t e s

G E N E R A L AND SPECIAL ACCOUNTS
RECEIPTS

Internal revenue:
I n c o m e tax
Miscellaneous internal revenue
Processing tax on farm p r o d u c t s
Cu.stoms
...
Miscellaneous receipts:
Proceeds of G o v e r n m e n t - o w n e d securities:
Principal—foreign obligations
Interest—foreign obligations
Aiiother
P a n a m a C a n a l tolls, e t c
Seigniorage
. . .
Other miscellaneous

Total

$1,051,000,000
1, 657,197,418
589, 269, 089
287, 000,000

$1,188,000,000
1 1,685,900,000
570, 000,000
> 298,000,000

70,000
600, 000
986,000
968, 500
500,000
059, 681

70,000
325,000
163, 700, 000
24,846, 000
6, 500, 000
54, 563, 639

3, 711, 650, 688

3, 991, 904, 639

17, 652, 732. 52
358,897. 75
11,121,102. 86
108, 538, 056. 69
4,109,859. 43
31, 598, 524. 53
12, 205, 729. 73
45,922,163. 77
58, 362, 572. 39
27, 452, 419.86
10,831,904. 62
9,544,425.59

20, 224,900
441,900
14,876, 500
120, 050,100
993,300
32, 271,800
125,000
53,415,400
64,198, 900
32, 432, 000
15,146, 600
9, 857,700

19, 545,000
437,000
13, 479, 000
128,325,300
853, 700
34,617,000
25, 000
67,127, 600
65,089, 000
36, 288, 200
16,216,000
9,593,900

22,365,462.58

27, 560, 670

30, 760,800
200, 000, 000

341,335,354.16

371,879, 370

603, 069, 600

75, 515,813.86
78, 281, 478. 49

24,862,300
74,043, 600

8, 780, 000
62,474, 200

205, 305,921. 93
274, 388, 386. 06
506, 549,454.14
50,000, 000. 00
279, 723, 062. 38
23,123, 288. 26

269, 732,000
343, 053, 756
495, 232, 000
50, 000,000
548, 677, 000
13, 637, 500

316, 259, 600
477, 224, 665
604,886, 600
100, 000,000
400, 000,000
12, 323,000

14,046, 350. 08
48, 664, 202. 21
1,194, 639. 95
52, 003, 295. 62
9,197,147. 37
1,737,780.00

16, 910,800
51, 231, 500
64, 532, 000
82, 099, 053
10, 469, 900
1, 980, 000

14 000 000
50, 946, 200
60, 000, 000
80, 282, 569
11, 360, 400

20, 850, 000. 00

20,860,000

40, 000,000

292, 700. 00,

159,100

162, 400

4, 539, 295
835, 000, 000

500, 000
5, 700, 000
875,000, 000

$817,961,481.18
1,469, 593, 550. 29
353,048, 796.83
313, 434, 302.19

396,765.15
20,033, 594.10
57, 415,483. 64
27,103, 068. 08
517, 204.81
56,049,813. 26
3,115,554,049.53

78,
24,
62,
60,

EXPENDITURES

General
Departmental: 2
Legislative e s t a b l i s h m e n t
E.xecutive p r o p e r . . . .
.
State D e p a r t m e n t
Treasury Department
War Department (nonmihtary)...
D e p a r t m e n t of J u s t i c e . . . .
P o s t Office D e p a r t m e n t . . . . . .
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
Shipping B o a r d
Other i n d e p e n d e n t oflSces a n d commissions.
General p u b l i c works, a n n u a l p r o g r a m .
Unclassified items
Total departmentalP u b l i c building construction a n d sites,
T r e a s u r y D e p a r t m e n t 2^
River a n d harbor w o r k *
N a t i o n a l defense: 2
Ajmy..
Navy
.
Veterans' Administration 2
Adjusted-service certificate fund
Agricultural A d j u s t m e n t A d m i n i s t r a t i o n . . .
F a r m Credit Administration
Refunds of receipts:
Customs .
..
I n t e r n a l revenue
Processing tax on farm p r o d u c t s
Postal deficiency. _
P a n a m a C a n a l 2.
Subscriptions to stock of Federal l a n d b a n k s .
Civil service r e t i r e m e n t fund ( G o v e r n m e n t
share)
Foreign service r e t i r e m e n t fund (Governm e n t share)
Canal Zone r e t i r e m e n t fund ( G o v e r n m e n t
share)
District of C o l u m b i a ( G o v e r n m e n t share) . _
Interest on the public debt

360,353. 02

5,700, 000. 00
756, 617,126. 73

1 Assuming extension of temporary taxes and duties in present form.
2 Additional expenditures on these accounts are included under " Federal Emergency Administration of
Public Works. **

REPORT OF THE SECRETARY OF THE TREASURY

Receipts and expenditures for the fiscal year 1934, on the basis of daily Treasury
statements {unrevised), and estimated receipts and expenditures for ihe fiscal years
1935 and i5>5(5—Continued
1934, a c t u a l

1935, e s t i m a t e s

1936, e s t i m a t e s

G E N E R A L AND SPECIAL ACCOUNTS—Con.

EXPENDITURES—continued
Gfweraf—Continued
Public debt retirements:
Sinking fund
.
P u r c h a s e s a n d r e t i r e m e n t s from r e p a y m e n t of loans of P u b l i c W o r k s
Administration
Received from foreign g o v e r n m e n t s
under debt settlements
E s t a t e taxes, forfeitures, gifts, e t c .
S u p p l e m e n t a l a n d deficiency i t e m s
T o t a l general
Emergency
Agricultural A d j u s t m e n t A d m i n i s t r a t i o n :
D e p a r t m e n t of Agriculture
D e p a r t m e n t of Agriculture (cotton, etc.).
Treasury Department
N a t i o n a l I n d u s t r i a l Recovery Act:
D e o a r t m e n t of Asrriculture
F a r m Credit Administration
C o m m o d i t y Credit Corporation
Unclassified i t e m s
F a r m Credit Administration
Federal l a n d b a n k s :
Subscriptions to paid-in s u r p l u s
P a y m e n t for r e d u c t i o n of interest rates
on mortsfaces
F e d e r a l E m e r g e n c y Relief A d m i n i s t r a t i o n . .
F r o m funds t o be allotted
F e d e r a l S u r p l u s Relief C o r p o r a t i o n
Civil W o r k s A d m i n i s t r a t i o n
E m e r g e n c y conservation w o r k
D e n a r t m e n t of Aericulture—relief
Public Works:
Civil W o r k s A d m i n i s t r a t i o n
.
Tennessee Valley A u t h o r i t y
L o a n s to railroads
L o a n s a n d g r a n t s t o States, m u n i c i palities, etc
Public highways
-B o u l d e r C a n v o n Drbiect
R i v e r a n d h a r b o r work
Subsistence h o m e s t e a d s
All o t h e r :
Administrative
expenses—Public
Works Administration
Legislative e s t a b l i s h m e n t
State D e p a r t m e n t
Treasury Department:
P u b l i c building construction
a n d sites
Aiiother
.
War Department (nonmihtary)
N a t i o n a l defense:
Army
Navy
P a n a m a Canal
D e p a r t m e n t of Justice
P o s t OflQce D e p a r t m e n t
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' Administration
Federal Housing Administration
I n d e p e n d e n t oflaces a n d commissions .
Relief of u n e m p l o y m e n t .
D i s t r i c t of C o l u m b i a
F e d e r a l S u r p l u s Relief C o r p o r a t i o n .
E x p o r t - I m p o r t B a n k s of Washington
Unclassified i t e m s
F e d e r a l savings a n d loan associations (subscriptions to preferred shares)
E m e r g e n c y housing

$359,490,900.00

$572, 641,000

75,000,000
357,860.00
16, 342.90

25,000
85, 000,000

16,000
40, 000,000

3,100,914,534.14

3,936, 455,174

4,398, 402,134

6,876,796.76
76.66
5,000.00

140,890,000

12,000,000

2,450,640.15
60,000,000. 00
2,811,949. 79
606. 04
67,168,304.97

34, 255,000

88,788,700

40,863,477.16

84,136,600

7,029,256. 79
333, 702,701. 28

15,920, 700
610, 692,000
590,000,000

7,039, 447.80
316,157,892. 29
331,940,851.40

3,769,826
3,025,000

13,842,100
402,363,000
83,904,000

400,005,000. 00
11,036, 794. 57
70,739,000.00

35,000,000
104, 000,000

78, 596,229.76
267,882,017.66
19,445,381.64
72,450,381.47
3 2,330,180.62

166,300,000
428, 600,000
30,124, 200
185,447,800
7, 627, 500

50,107,000
19, 580,000

6,539,316.18
123, 381. 50
747,170. 01

10,000, 000
2, 676,400
2, 500,000

10,000, 000

3,190,455.42
18,928,120. 22
775, 477. 97

33,000,000
7, 711,600
1,462,400.

56,160, 000
1, 000, 000

38,023, 229.37
22, 640,904.90
751,480. 25
137, 450. 23
6,198.00
* 20,235,497.81
13,002, 563.36
6,170,815. 47
1,908,471. 87
401,033. 60

59, 207,400
149,169,700
148, 500
287,000

3, 639, 200
103,824, 600

69, 501, 300
19,849,000
9,311,000
4,188,400
1, 667.400
1,000,000

14,109, 700
1,707,400
350,000
12,000
796, 000

906,286. 01

12, 303,000
100, 000, 000
1, 467,429
25, 974,900

3,185,000
3,900,000,000

180,911.17
22,209. 81
63, 632. 67
339,918.19

1,186, 467

754,800.00
369,351.41

24,000,000
15,000,000

3 Exclusive of $42,131.17 stated under Department of the Interior.
* Includes $42,131.17 heretofore stated under "subsistence-homesteads.'

$561,419,000

15,000,000

59,839, 250

1, 500,000

24, 500,000

REPORT OF THE SECRETARY OF THE TREASURY

1936, estimates

GENERAL AND SPECIAL ACCOUNTS—Con.

EXPENDITURES—continued
Emergency—Contmued
Reconstruction Finance Corporation:
Direct expenditures by the Corporation.
From funds allocated by the Corporation:
Crop production loans.
. .
Regional agricultural credit corporations
.
Loans to jointstock land banks
Farm mortgage relief
Federal Farm Mortgage Corporation
Federal intermediate credit banks
revolving fund
Farm Credit Administration
Commodity Credit Corporation
Capital stock of home-loan banks...
Capital stock of Home Owners'
Loan Corporation
Federal Emergency Relief Administration
.
Federal Housing Administration
Federal Surplus Relief Corporation
Civil Works Administration
Export-Import Banks of Washingtion
Federal Deposit Insurance Corporation
(subscriptions to stock)
Administration for Industrial Recovery
Total emergency
Total general and emergency expenditures
Excess of expenditures over receipts.

« $566,823, 017.05

$400,000,000

62,392,665.72

5,823,308

$2,625,000

7, 756,815. 01
941,044. 35
114,129, 660. 31

3,720,600

5,456,800

85,760,050. 52

266

25.000,000. 00
37,969,954.69
6 180,329,985.06
38,475, 700. 00

15, 000, 000

153,000,000. 00
7 333,595,834.70
32,992,150. 70
88,960,000. 00

17,049,468
21, 500, 000

197,700,000
15. 000. 000

46,000,000
506, 541,800
22, 559,898

2, 590, 791. 48

36,367,157

149, 602,149. 65
6,632,491. 49

497,800
11.477, 600

4,004,135,550.81

4, 644, 613,852

27, 604, 525

4,122, Oil. 475

7,105, 050, 084. 96

8, 581,069,026

8,520,413, 609

3,989,496, 036. 42

4, 869,418, 338

4,528, 508, 970

3,989,498, 036.42
359,864, 092.90

4,869,418,338
672, 566,000

4, 528, 508,970
636,434,000

-+-3, 629, 631,942. 52

-f4, 296, 852, 338

-f 3,892,074,970

Summary
Excess of expenditures
Less public-debt retirements
Excess of expenditures (-F) or excess of receipts (—) (excluding publicdebt retirements)
Trust and contributed accounts, excess of
receipts (—) or expenditures (-f)
Total excess of expenditures (4-) or
excess of receipts ( - ) (excluding
public debt retirements)
Increase (-f) or decrease ( - ) in General
Fund balance..
Increase (+) or decrease ( - ) in the public
debt.Public debt at beginning of year
Public debt at end of year..

-834,880,107. 74

-12,299,207

-f60,914,369

+2, 794,761,834.78

+4,284, 553,131

4-3,942,989,339

-M, 719, 717,019. 55

-251, 060,671

—790,799, 657

-f 4, 514,468,854. 33
22,538,672,660.16
27, 053,141, 414. 48

+4, 033,492,460
27. 053,141.414
31,086, 633,874

4-3,152,189,782
31,086.633,874
34, 238,823, 656

162,179,890. 63

166,871,979

169,053,110

2, 811, 375, 756. 72

1,100,000
100, 000. 000
267,971,979

25,000,000
194, 053,110

TRUST ACCOUNTS AND INCREMENT ON GOLD
RECEIPTS

Trust and contributed accounts
Increment resulting from reduction in the
weight of the gold dollar
Seigniorage ^
Total

2, 973, 555, 647. 35

« Exclusive of$333,595,834.70 stated under "Federal Emergency Relief Administration" and $18,800,000
under "Commodity Credit Corporation."
6 Includes $18,800,000 heretofore stated under Reconstruction Finance Corporation, direct expenditures.
^ See note 5.
8 This item represents seigniorage resulting from the issuance of silver certificates equal to the cost of
the silver acquired under the Silver Purchase Act of 1934 and the amount retained for the silver received
under the President's proclamation dated Aug.'9, 1934.

REPORT OF THE SECRETARY OF THE TREASURY^

Receipts and expenditures for the fiscal year 1934, on ihe basis of daily Treasury
statements {unrevised), and estimated receipts and expenditures for the fiscal years
1935 and 1936—Continued
1934, actual

1935, estimates

1936, estimates

TRUST ACCOUNTS AND INCREMENT ON

GOLD—Continued
EXPENDITURES

Trust and contributed accounts
Chargeable against increment on gold:
— Exchange stabilization fund
Melting losses, etc .
Payments to Federal Reserve banks (sec.
13 b, Federal Reserve Act, as amended)
TotaL.

$138, 675, 539. 61
2,000,000,000.00

2,138, 676, 639. 61

$177, 672,772

$179,167,922

3,000,000

1,500,000

75,000,000

64,299, 567

256, 672,772

244,967,479

NOTE.—Excess credits in italics to be deducted.

In view of the nature of the Federal tax structure, it is not to be
expected that revenues will reflect promptly an anticipated improvement in business conditions. For example, collections of income
taxes during the latter half of the fiscal year 1935 will be based on
the business volume of the calendar year 1934 and income tax collections during the fiscal year 1936 will be based on the volume of business of the calendar years 1934 and 1935. Therefore, it is anticipated
that the rising level of business activity will increase income tax
receipts only moderately during the remainder of the fiscal year 1935
and the fiscal year 1936. Certain miscellaneous internal revenue receipts, notably estate and gift taxes, show a lag in tax collections
behind changes in general business conditions.
Fiscal year 1935
Total receipts from customs duties and internal revenue, excluding
agricultural adjustment taxes, are estimated (on daily Treasury statement basis) at $2,895,000,000 for the fiscal year 1935, an increase of
approximately $294,000,000 over the actual receipts in the fiscal year
1934. This estimated increase is the net result of gains in revenue
derived from improvement in business activity, changes inaugurated
by the Treasury in its administration of depreciation allowances,
reenactment of the capital stock and excess-profits taxes, upward
revisions in the yields of income, estate, and gift taxes, incorporated
in the Revenue Act of 1934, and other factors; less the decreases in
revenue occasioned principally by the removal of certain taxes,
chiefiy those on dividends and checks, and by smaller customs receipts.
Income tax receipts.—Total income tax collections are estimated at
$1,051,000,000, an increase of $233,000,000 over actual collections for
the fiscal year 1934. Collections from the current corporation income
taxes are estimated at $440,000,000, an increase of $119,000,000 over
the actual collections for the fiscal year 1934. Of this increase,

REPORT OF THE SECRETARY OF THE TREASURY

$83,000,000 is anticipated to proceed from the higher level of corporate earnings, while the remainder is expected to result from the
effects of eliminating consolidated returns, the changed provisions
with regard to reorganizations under the Revenue Act of 1934, and
the Treasury administration of depreciation allowances.
The last named factor is also expected to add to the results of the
special efforts of the Bureau of Internal Revenue to collect back
taxes on incomes, collections of which are estimated at $167,000,000,
an increase of $26,000,000 over the fiscal year 1934.
Currerit individual income taxes are estimated to yield $444,000,000,
an increase of $89,000,000 over the fiscal year 1934, of which approximately $26,000,000 is attributable to the net effect of changes
in the rate structure and in the capital gains and losses provisions
incorporated in the Revenue Act of 1934.
Miscellaneous internal revenue.—Total miscellaneous internal revenue receipts are estimated at $1,557,000,000, an increase of
$87,000,000 (on daily Treasury statement basis) over those of the fiscal
year 1934, despite a substantial decline in anticipated receipts from
manufacturers' excise taxes, stamp taxes, and certain other sources.
Estunated increased receipts from estate taxes, resulting mainly
froni the anticipated increase in the value of estates, and to a slight
extent from the application of the increased rates provided by the
Revenue Act of 1934, and greater revenues resulting from the growing domestic manufacture and consumption of distilled spirits and
wines, fermented malt liquors, and tobacco, are expected to more
than counterbalance certain losses in revenue as follows: (1) Repeal
of the tax on dividends which yielded more than $50,000,000 during
the 6 months of the fiscal year 1934 that it was in effect; (2) repeal
of taxes on checks, soft drinks, and candy; (3) reduction from 5
cents per $1,00 to 3 cents per $100 in the stamp tax on sales of produce
for future dehvery; (4) estimated decline of $43,000,000 in the yield
of the tax on gasoline in the fiscal year 1935 because of the fact that
the rate is 1 cent per gallon, as compared with the rate of Iji cents
per gallon imposed by the National Industrial Recovery Act and in
effect during part of the fiscal year 1934.
Customs receipts.—Customs receipts for the fiscal year 1935 are
expected to be about $26,000,000 smaller than those of tbe preceding
year. The decrease is.to be attributed to the reduction in duty on
Cuban sugar and to a smaller volume of other dutiable imports, exclusive of alcoholic beverages. The duty on Cuban sugar was reduced
from 2 cents per pound to 1.5 cents per pound, effective June 8,
1934; and to 9/10 of 1 cent per pound, effective September 3, 1934,
after the signing of the Cuban Trade Agreement. The effect of the
reduced sugar duty upon the customs receipts of the fiscal year 1935
was partly counteracted by the concentration in the latter half of

REPORT OF THE SECRETARY OF THE TREASURY

the calendar year 1934 of a large part of the year's quota for Cuban
sugar imports. Further counteracting, in part, the decline in customs revenues from sugar and other imports, is an estimated increase
of $10,000,000 in the fiscal year 1935 of revenues from imports of
distilled spirits and fermented liquors.
Agricultural adjustment taxes.—AgncultuTal adjustment taxes on
farm products are estimated (on daily Treasury statement basis) to
yield $589,000,000, an increase of $236,000,000 over actual collections
in the fiscal year 1934. The largest increase is anticipated in cornhog taxes, collections of which are expected to amount to $217,000,000,
as against $81,500,000 in the fiscal year 1934. A very substantial
increase is expected in receipts from taxes on sugar, which are estimated at $82,000,000 as against less than $170,000 collected in the
fiscal year 1934. Taxes on tobacco are estimated to rise from
$18,000,000 to $33,000,000, and on wheat from $117,600,000 to
$121,000,000. On the other hand, collections from taxes on cotton, including jute and paper fiber, are expected to decline from
$154,000,000 in the fiscal year 1934 to about $111,000,000 in the fiscal
year 1935. The processing tax on peanuts, which was not effective
in the fiscal year 1934, is expected to yield about $5,000,000.
Fiscal year 1936
Total receipts from customs duties and internal revenue, excludiug
agricultural adjustment taxes, are estimated at $3,172,000,000 for the
fiscal year 1936 if the temporary taxes expiririg June 30 and July 31,
1935, are extended. This figure represents (on daily Treasury statement basis) an increase of $277,000,000 over the estimated receipts
in the fiscal year 1935 and of $571,000,000 over the actual receipts
in the fiscal year 1934. Failure to extend the temporary taxes would
reduce the total internal revenue receipts by approximately $378,000,000, and customs by approximately $11,000,000, to a total of
$2,783,000,000, or $112,000,000 less than estimated receipts from these
sources in the fiscal year 1935 (on daily Treasury statement basis).
Income tax receipts.—^^Total income tax collections are estimated at
$1,188,000,000, an increase of $137,000,000 over the estimated collections for the fiscal year 1935. Receipts from income taxes in the
fiscal year will reflect fully the upward revision of the tax structure
under the Revenue Act of 1934 and are expected to show further gains
because of the moderately higher incomes anticipated for the calendar
years 1934 and 1935 as compared with those for 1933 and 1934,
respectively.
Current corporation income taxes are estimated to yield $509,000,000, an increase of $69,000,000 over the estimates for the fiscal
year 1935; and current individual income taxes are estimated to yield
$506,000,000, an increase of $62,000,000 over the 1935 estimate.

REPORT OF THE SECRETARY OF THE TREASURY

Collections of back taxes on incomes are estimated at $173,000,000,
an increase of $6,000,000 over the estimated level in the preceding
fiscal year.
Miscellaneous internal revenue.-^li the temporary taxes expiring
June 30 and July 31, 1935, are extended, important increases are
anticipated in receipts during the fiscal year 1936. Total miscellaneous internal revenue receipts, assuming extension of the temporary
taxes, are estimated at $1,686,000,000, an increase of $129,000,000
over the estimated collections for the fiscal year 1935 (on daily Treasury statement basis).
Estate tax and gift tax collections will reflect fully the increased
rates of the Revenue Act of 1934 and are estimated to yield $191,000,000 and $25,000,000, respectively, representing increases of
$54,000,000 and $14,000,000 as compared with estimated receipts
from these taxes in the fiscal year 1935. Revenues from distilled
spirits and wines and from fermented liquors are estimated to show
increases of $27,000,000 and $11,000,000, respectively, over estimates
for the fiscal year 1935, partly in consequence of the anticipated
higher level of incomes and partly because of the rising trend in the
domestic manufacture and consumption of distilled spirits and wines,
due to improvement in quality combined with a reduction in illicit
manufacture. Repeal of the tax on checks, effective as of January 1,
1935, will offset part of the gains in the fiscal year 1936 from other
sources by approximately $24,000,000.
Customs receipts.—Customs receipts are estimated at $298,000,000
for the fiscal year 1936, assuming that temporary duties on certain
commodities (coal, lumber, pertroleum products, copper and products) are extended, an increase of $11,000,000 over the estimated
collections of 1935. Decreases are expected in collections from
Cuban sugar imports and from imports of distilled spirits and fermented liquors, but other dutiable imports are expected to more
than counterbalance these reductions. The lower duty on Cuban
sugar will be effective throughout the year and, hence, is not expected to yield as much revenue as in the fiscal year 1935, when
imports that would normally have been made in the forepart of
the calendar year 1934 were concentrated in the latter half of that
year, thus swelling the customs receipts of the 1935 fiscal year. A
decline of some $3,000,000 is anticipated in the receipts from duties
on imports of alcoholic beverages by reason of improvement in the
quahty of the domestic product.
Agricultural adjustment taxes.—Receipts from agricultural adjustment taxes for the fiscal year 1936 are estimated at $570,000,000.
This estimate was made on the assumption that it would be necessary to continue the work of the Agricultural Adjustment Administration on practically the same basis as during the fiscal year 1935.

REPORT OF THE SECRETARY OF THE TREASURY

MONETARY DEVELOPMENTS

Gold
The regulation of the acquisition, holding, and export of gold established in the spring of 1933, under authority confirmed in the Emer-^
gency Banking Act of March 9, 1933, was continued in the Executive
order of August 28, 1933, which revoked earlier orders and required
the delivery to a Federal Reserve bank of all gold coin, gold bullion,
or gold certificates domestically held, with certain exceptions.
By the Executive order of August 29, the Secretary of the Treasury
was authorized to receive gold recovered from natural deposits in the
United States on consignment for sale to persons licensed to acquire
gold for use in the arts, industries, and professions, or, by export to
foreign purchasers.
On October 25, the President issued an Executive order revoking the
Executive order of August 29, and amending that of August 28. The
order of October 25 authorized the Reconstruction Finance Corporation to acquire gold recovered from natural deposits in the United
States which had been received on consignment by a United States
mint or assay office and to hold, earmark for foreigii account, export,
or otherwise dispose of such gold. On the same day the Reconstruction Finance Corporation announced that it would receive subscriptions for its debentures maturing on February 1, 1934, pa^^able in
newly mined gold recovered from natural deposits in the United
States (official release, Oct. 26,1933). The daily authorized prices for
which newly mined gold was acquired under the above orders over the
period September 8, 1933, to January 31, 1934, appear as exhibit 26,
on page 205 of this report. Certain foreign gold imported after November 1, 1933, was also authorized by the Reconstruction Finance
Corporation to be received by the Federal Reserve Bank of New York
in payment for the notes of the Corporation.
The Executive order of August 28 was supplemented by an order
of the Secretary of the Treasury on December 28 (amended on Jan.
11 and supplemented on Jan. 15, 1934), requiring all gold coin,
gold bullion, and gold certificates domestically held (with certain
stated exceptions) to be delivered for the account of the Treasurer
of the United States.
In his message to Congress of January 15, 1934, the President
recommended the passage of legislative provisions which Congress
embodied in the Gold Reserve Act of 1934, approved on January 30.
A copy of this acit appears as exhibit 23 on page 189.' This act includes
the following provisions relating to gold:
Title to all gold coin and gold bullion of the Federal Reserve Board,
the Federal Reserve banks and Federal Reserve agents is vested in
the United States Government, for which credits in the United StatesTreasury in equivalent dollar amounts are established;

REPORT OF THE SECRETARY OF THE TREASURY

Except to the extent permitted in regulations issued under the
Gold Reserve Act, no currency of the United States is redeemable in
gold, provided that gold certificates owned by the Federal Reserve
banks are redeemable at such times and in such amounts as, in the
judgment of the Secretary of the Treasury, are necessary to maintain the equal purchasing power of every kind of currency of the
United States. Such redemptions as are made in gold are to bemade in gold bullion;
The Secretary of the Treasury is authorized to prescribe the conditions under which gold may be acquired and held, imported, exported,
or earmarked;
All gold coins of the United States are to be withdrawn from
circulation and, together with all other gold owned by the United
States, formed into bars. No United States gold coin is hereafter
to be minted or paid out;
The Secretary of the Treasury is authorized to buy or seU gold
as an operation in the General Fund of the Treasury, at such rates
and upon such terms and conditions as he deems most advantageous
to the public interest, except that gold held as currency reserve of
security may be sold only to the extent necessary to maintain such,
currency at a parity with the gold dollar;
The Secretary of the Treasury is authorized, for a period of 2 years,
unless the authorization is terminated earlier or extended 1 year by
the President, to deal in gold and foreign exchange and such other
instruments of credit and securities as he may deem necessary for
the purpose of stabilizing the exchange value of the dollar. A stabilization fund of $2,000,000,000 is established for this purpose out of
the increment resulting from reduction in the weight of the gold
dollar;
The authority contained in title I I I of the act of May 12, 19^33,
permitting the President under certain conditions to fix the weight of
the gold dollar at not less than 50 percent of its then legal weight,
was made more specific by adding the provision that the weight of
the gold dollar shaU not be fixed at more than 60 percent of its then
legal weight.
The President's proclamation of January 31, 1934, issued under
the above authorization, fixed the weight of the gold dollar at 15^^21 .
grains of gold, nine-tenths fine. This action constituted a reduction
of the gold in the dollar to 59.06 percent of the former content and
gave to gold an equivalent value of $35 a fine ounce.
On January 31, 1934, the Treasury Department issued a statement
providing for the sale of gold for export whenever the United States
exchange rates with gold standard currencies reach gold export point.
The exports are to foreign central banks which buy and sell gold at
fixed prices.

REPORT OF THE SECRETARY OF THE TREASURY

Silver
The Presidential proclamation of December 21, 1933, issued under
the authorit}^ of title I I I of the act of May 12, 1933, directed the
United States mints to receive silver mined in the United States
since the date of the proclamation, and to deliver to the tenderer of
such silver, standard silver dollars ^ in face amount equal to the silver
doUars which might be coined from 50 percent of the silver so tendered. Under this authorization, domestic silver produced since
December 21, 1933, is received by the mints on the basis of about
64)^ cents per fine ounce.
The Silver Purchase Act of 1934, approved June 19, 1934, declared
it to be the policy of the United States that the proportion of silver
to gold in the monetary stocks of the United States should be increased
with the ultimate objective of having and maintaining one-fourth of
the monetary value of such stocks in silver. Whenever the proportion
of silver in the stocks of gold and silver is less than one-fourth, the
Secretary of the Treasury is directed to purchase silver, at such times
and upon such terms and conditions as he may deem reasonable and
most advantageous to the public interest, but at a price not to exceed
its monetary value arid not to exceed 50 cents per fine ounce for silver
situated in continental United States on May 1, 1934. He is required
to issue silver certificates in face amount not less than the cost of all
silver purchased under the act. With the approval of the President,
the Secretary is authorized to regulate or prohibit the acquisition, importation, exportation, or transportation of silver and silver contracts.
The President is authorized at his discretion to require the delivery to
the United States mints of any or all sflver, in return for which shall
be paid the monetary value of such sflver in any form of United
States coin or currency desired (less mint charges), provided that
such value is not less than the market price of silver over a reasonable
period previous to the date of the order. The act also imposed a tax
at the rate of 50 percent of any profit on all transfers of any interest
in sflver bullion, with certain exceptions, on or after May 15, 1934. On June 28, 1934, the Secretary of the Treasury issued an order
prohibiting the exportation pr transportation of silver from the continental United States except under license issued pursuant to the
order.
Silver certificates
The issuance of sflver certificates against silver accepted from foreign governments in payment of indebtedness to the United States
under title I I I of the act of May 12, 1933, was begun on January 13,
1934.
» See section on silver certificates below

REPORT OF THE SECRETARY OF THE TREASURY

The Gold Reserve Act of 1934 authorized the President to issue
sflver certificates ^'against any sflver bullion, sflver, or standard sflver
dollars in the Treasury not then held for the redemption of any outstanding certificates." Under this act, sflver certificates became
issuable against any unencumbered sflver in the Treasury, irrespective
of the authority under which the silver was received.
It was decided, therefore, to provide a single or consolidated series
of sflver certificates for issuance against any free silver held in the
Treasury. Consequently payment of the certiflcates specifically
prepared for issuance against silver received from foreign governments
under the act of May 12, 1933, was discontinued, and issues of certiflcates under that and later authorizations awaited the preparation
of the consolidated series.
This consolidated series of new silver certiflcates has been given
the designation, ^'Series of 1934."
Attention is called to exhibits on pages 189 to 215 containing legislation. Executive orders, proclamations, and orders of the Secretary
of the Treasury relating to monetary matters.
FEDERAL DEPOSIT INSURANCE CORPORATION

The Federal Deposit Insurance Corporation was created by the
Banldng Act of 1933 to insure the deposits of all banks which are
entitled to insurance as specified in the act and to purchase, hold,
and liquidate the assets of closed member banks of the Federal
Reserve System. All licensed banks in the Federal Reserve System,
without examination, automatically became members of the deposit
insurance fund established by the act, and nonmember banks operating on an unrestricted basis were permitted to apply for participation and became eligible when certified as solvent by the State banking authorities, subject to examination and approval h j the Corporation. The Corporation has been chiefly concerned with the insurance
provisions of the act.
A temporary plan for the insurance of deposits in the amount of
$2,500 of the net claim of any depositor was provided originally for
the period January 1 to July 1, 1934, at which time a permanent
plan was to have become effective. Under the provisions of the act
of June 16, 1934, however, the temporary plan of deposit insurance
was extended until July 1, 1935, and the amount of insured deposits
of any depositor was increased from $2,500 to $5,000, with certain
exceptions for mutual saviugs banks, for which a separate insurance
fund was established.
On June 30, 1934, the Federal Deposit Insurance Corporation had
received from the United States Treasury $150,000,000, and from
Federal Reserve banks $139,000,000, representing subscriptions to
capital stock in accordance with the act creating the corporation.

REPORT OF THE SECRETARY OF THE TREASURY

In addition, member banks of the temporary deposit insurance fund
had been assessed $40,000,000, of which $9,000,000 represented
assessments of banks withdrawing from the temporary fund. During
the 6-month period, January-June 1934, the Corporation earned
$2,400,000 on its investments; the expenses, including those of the
initial organization, estimated net loss on account of payments to
insured depositors in the one bank which closed during the period,
and a provision of $400,000 for estimated suspense items, amounted
to $3,200,000. At the close of the period the assets of the Corporation
included cash on deposit with the Treasury in the amount of
$99,000,000 and investments in United States Government bonds
amounting to $228,000,000.
An aggregate of 14,166 banks were members of the deposit
insurance fund on June 30, 1934. The membership included 5,417
national banks, 958 State member banks, 7,556 State nonmember
commercial banks, and 235 mutual savings banks. I t is estimated
that more than 56,000,000 accounts were insured and that the insured deposits amounted to approxiniately $16,000,000,000.
By June 30, 1934, 167 mutual savings banks and 21 commercial
banks had signified their intention to withdraw from, the insurancje
fund, in accordance with provisions of the law and regulations issued
by the Corporation. In this connection the Corporation was prepared to make refunds amounting to about $9,000,000. Of the
mutual savings banks withdrawing from the fund, 133, located in
New York State, have taken such action owing to the fact that a
State-wide insurance fund for mutual savings banks has been established in that State. Action w^as taken by these banks prior to the
establishment of the separate insurance fund for mutual savings
hanks under the provisions of the act of June 16, 1934. Sixty-eight
mutual savings banks have become members of tliis separate Federal
fund.
BUREAU OF INTERNAL REVENUE
During the fiscal year 1934 important changes were made in the
internal revenue laws affecting both income and miscellaneous taxes,
providing additional administrative measures for the protection of
the revenue, increasing the rates of certain existing taxes and designating new objects of taxation. Discussion of revenue legislation
appears on pages 16 to 19.
Collections of internal revenue, exclusive of agricultural adjustment
taxes during the fiscal year 1934, in the amount of ^ $2,301,000,000,
exceeded collections in the preceding fiscal year by $681,000,000.
The cost of collecting each $100 of internal revenue was $1.25 in the
fiscal year 1934, compared with $1.85 in. 1933. Agricultural adjustment taxes amounted to ^ $371,500,000; collection, which began during
1 On the basis of the report of the Commissioner of Internal Revenue.
90353—35

REPORT OF THE SECRETARY OF THE TREASURY .

the fiscal year 1934, was effected at a cost of 69 cents per $100 of
such taxes collected. The relatively lower cost of collecting agricultural adjustment taxes may be ascribed, at least in part, to the fact
that Internal Revenue employees on the regular rolls shared the
administrative burden with employees paid from agricultural adjustment funds.
Back taxes on incomes
In the autumn of 1933 a drive was inaugurated to increase collections of back taxes on incomes, and in January 1934 a 3-day meeting
of collectors, revenue agents in charge, supervisors of accounts and
collections, special intelligence agents in charge, and other field
officials was held in Washington. At that time an aggregate quota
of $200,000,000 in back tax collections was set for the calendar year
1934.
Assessments of back taxes on incomes, exclusive of jeopardy assessments (most of which are appealed), totaled $194,000,000 during
1934, an increase of $24,400,000 over 1933. Actual collections of
back taxes on incomes in the fiscal year 1934 totaled $140,600,000,
an increase of $8,200,000 over the preceding year and of $30,600,000
over the amount which it was originally anticipated would be collected.
The most significant improvement effected during the year in the
administration of the back tax problem was the reduction in the number of cases pending before the Board of Tax Appeals and appellate
courts. The number of such cases pending was 18,080 as of June
30, 1933, and 12,474 as of June 30, 1934, a net reduction of 5,606
cases. Of the 9,582 cases closed during the year, 7,490 were settled
by agreement without trial. Another significant phase of the work
appears in the record of agreements secured after final notices of
deficiency had been issued but before appeals had been ffied. Such
agreements during 1934 resulted in the assessment of $38,500,000, as
compared with $10,700,000 in 1933.
Investigations, undertaken during the fiscal year 1934, of alleged
sales of securities between members of families and close business
associates resulted in recommendations for the assessment of additional taxes totaling more than $25,000,000. Returns of information
required to be ffied by brokers formed the basis for these investigations.
Satisfactory progress was made during the fiscal year in the program to determine reasonable and consistent depreciation allowances
for taxpayers claiming such deductions. Wliile it is not possible at
this stage of the program to measure accurately the result in back
tax collections, data compiled for the 3-month period ended July 15,
1934, indicate a total reduction in depreciation allowances that will,
it is estimated, produce approximately $30,000,000 in additional
taxes.

REPORT OF THE SECRETARY OF THE TREASURY

Alcohol tax administration
The twenty-first amendment to the Constitution became effective
on December 5, 1933, maldng inoperative on that date the National
Prohibition Act so far as it concerned the use of intoxicating liquors
for beverage purposes. The Bureau of Industrial Alcohol and the
Alcoholic Beverage Unit of the Bureau of Investigation, Department
of Justice, were consolidated with the Bureau of Internal Revenue
by Executive order of March 10, 1934, which became effective May
10, 1934. The Alcohol Tax Unit was organized in the Bureau of
Internal Revenue to assume the functions of determining assessments of taxes on spirits, wines, and beer, and to suppress unlawful
transactions in these hquors. The field organizations of the Bureau
of Industrial Alcohol and of the Alcoholic Beverage Unit of the
Department of Justice were rearranged by the Alcohol Tax Unit
into 15 districts with 62 branch offices.
By the end of the fiscal year 1934, the following were under the
supervision of the Alcohol Tax Unit: 174 distilleries, 188 warehouses,
805 wineries and 91 bonded wine storerooms, 725 breweries, 384
rectifying plants, 6,666 wholesale hquor dealers, 39 denaturing
plants, 69 bonded dealers in and 4,298 bonded manufacturers using
speciaUy denatured alcohol, and 5,887 hospitals, laboratories, and
educational institutions using tax-free alcohol.
A detailed description of the work of the Bureau of Internal
Revenue will be found on pages 97 to 118 of this report.
CONSTRUCTION ACTIVITIES OF THE TREASURY

The Department's building operations during the fiscal year 1934,
carried on under several different programs and appropriations,
resulted in the completion and occupation during the year of 203
projects with limits of cost of $38,830,400. In addition 52 projects
with a total limit of cost of $24,594,977 were placed under contract,
85 additional projects with a total limit of cost of $7,596,901 were
on the market for bids, or in the final stage of preparing specifications. Plans were being prepared for 172 additional projects, at a
limit of cost of $15,283,445, and land had been acquired for 5 projects to cost approximately $456,000. Sites for 151 projects, to
cost approximately $19,479,465, had been selected, or were in process
of selection.
In the closing days of the fiscal year, additional funds were made
available for construction activities in an emergency construction
fund of $65,000,000, provided by the Emergency Appropriation
Act, approved June 19, 1934. Under this act, before the close of
the fiscal year, 303 projects were selected by the Secretary of the

REPORT:

OF THE SECRETARY OF THE TREASURY

Treasury and the Postmaster General from projects contemplated
by previous legislation, at a total limit of cost of $60,228,700.
i n selecting these lists of projects the Secretary of the Treasury
and the Postmaster General were guided by the wording of the
Appropriation Act which provides that ''with a view to relieving
country-wide unemployment" they ''shall endeavor to distribute the
projects equitably throughout the country so far as may be consistent with the needs of the public service."
The acquisition of the necessary land and the preparation of
plans and specifications were taken in hand immediately with a view
to getting the projects on the market for construction bids and
contracts awarded within the shortest practicable time.
Building program in the District of Columbia
The program for Federal buildings in the District of Columbia under
the original public building program is nearing completion. The
Department of Commerce, the original Internal Revenue Building,
the Post Office Department Building, the extension of the City Post
Office Building, the Central Heating Plant, and the Public Health Service Building are completed arid occupied. The Department of Ijabor
Building arid the Interstate Commerce Commissiori Building, with
their connecting wing, the Department of Justice Building, the
Archives Building, the last of the seven wings of the extensible office
building of the Department of Agriculture, and the National Institute of Health are all rapidly nearing completion. A contract under
the Public Works Program has been awarded for the construction of
an addition to the Internal Revenue Building and the work is under
^•way. •. "

Status oj work under the several building programs
The status of the various programs under which the Treasury's
building activities are carried on is indicated below.
. ..The original public building program.—The Public Building Act
approved May 25, 1926, and subsequent acts enlarging the reguliar
building program made general authorizations of $702,296,794 and
total speciflc authorizations and appropriations for bufldings and land
of $494,642,437. Of the $494,642,437 specifically authorized under
this program as of June 30,1934, $426,544,427 in the aggregate was
obligated as of that date. Expenditures to June 30, 1934, have been
made.under these obligations to the amount of $396,612,829. The
amount of obligations outstandirig at the end of the fiscal year was
$29,931,598. The unobligated portion of the.funds appropriated
Urider these acts became unavailable urider the provisioris of the act
approved; March 31, 1933, except for itenis necessary to the completion of projects already under contract. Of the 735 construction
projects previously under contract in this program, 578 with limits

REPORT OF THE SECRETARY OF THE TREASURY

of cost of $170,321,222 had been completed on June 30, 1934, leaving
still under contract 157 projects with limits of cost of $272,358,457.
The projects completed during the fiscal year uiider this program are
listed in the opening paragraph of this article.
Program under the Public Works Administration.—Under the
National Industrial Recovery Act, approved June 16, 1933, except
with respect to uncompleted projects under contracts made previous
to that date, public building construction was made subject to allotment by the Administrator of Public Works. During the flscal year
1934, allotments of Public Works Administration funds were made to
the Treasury for 465 building projects, most of which were contemplated by previous legislation, at a total limit cost of $67,410,788.
No projects have yet been completed under this program; the status
of the projects under contract, etc., is included in the opening paragraph of this article.
Detailed information with reference to all building programs and
appropriations will be found in the abstract of the report of the Procurement Division under which the building activities of the Treasury
are conducted, on pages 127 to 131 of this report.
BUREAU OF CUSTOMS

Customs receipts for the fiscal year 1934 amounted to $313,434,000,
an increase of $62,684,000 over the preceding year. About 40 percent
of this increase, $24,000,000, represented duties on imports of distilled and fermented liquors, the importation of which was legalized
by the repeal of the eighteenth amendment, effective December 5,
1933. The remaining 60 percent may be attributed to higher unit
values and larger quantities of commodity importations. An even
larger increase in importations was offset in part by a reduction in
importations of sugar from Cuba, in anticipation of the Reciprocal
Trade Agreement between Cuba and the United States. Although
the agreement was not effective until after the close of the fiscal year
1934, the rate on Cuban sugar was reduced by proclamation of the
President of May 9, 1934, and made effective June 8, 1934.
The value of dutiable imports entered for consumption was $605,012,000, or 44.4 percent over the preceding year, and 4.8 percent over
1932. The value of imports entered free of duty constituted 63.6 percent of the total value of all imports entered for consumption during
1934, as compared with 64.3 percent for 1933.
The value of dutiable merchandise imported for consumption, exclusive of distilled and fermerited liquors, was $574,660,000, or 37.2
percent over the. preceding year. In addition to these imports the
value of distilled and fermented liquors released from customs custody
between December 5, 1933, and June 30, 1934, was $30,352,000.

REPORT OF THE SECRETARY OF THE TREASURY

The imports of distilled spirits and wines from December 5, 1933,
through June 30, 1934, the duties collected thereon and the stocks
in bonded warehouses at the end of the fiscal jesiV were as follows:
Distilled
spirits (imports and
stocks in proof
gallons)
Imports:
Total, free and dutiable
-..
Entered for consumption >
Stocks in customs bonded warehouses at end of year
Duties collected
::..

Wines (imports and
stocks in
wine gallons)

4, 938, 652
3,041,646
2,176, 657
$5, 379, 274

8, 291,408
3, 790,155
4, 529, 297
$18, 644, 429

1 Includes withdrawals for ship supplies and diplomatic use.

The general trade situation and customs collections are summarized
by fiscal years in the following table:
Merchandise exports and imports and customs collections, 1929 to 1934
[In millions of dollars]

Fiscal year

1929
1930
1931

Excess
of
General exports
Customs
Exports imports
over receipts'
imports
6,373
4,694
3,083

4,292
3,849
2,432

1,082
845
651

602
587
378

Fiscal year

Excess
of
Customs
General exports
Exports imports
over receipts >
imports

1932 .
1933
1934....

1,948
1,440
2,042

1,730
1,168
1,721

218
272
321

328
251
313

» On basis of daily Treasury statements (unrevised).

A more complete statement of the activities of the Bureau of
Customs is presented on pages 87 to 92 of this report.
NONFISCAL ACTIVITIES

Coast Guard
During the year the Coast Guard continued to perform its usual
duties, which have close relation both to the maritime interests and
general public interests. In the main, its activities included the International Ice Patrol of the trans-Atlantic steamship lanes, in the
vicinity of the Grand Banks of Newfoundland, and associated iceobservation and oceanographic cruises and surveys; patrol of the
coast—including aircraft patrol—to aid vessels and persons in distress; patrol of the waters of the North Pacific Ocean, Bering Sea,
and southeastern Alaska in the enforcement of laws for the protection of the fur seal and sea otter, and of game, the fisheries, and furbearing animals of Alaska, and of other laws in Alaska; supervision
over the anchorage and movements of vessels at ports and other
places; enforcement of the customs, navigation, and motor boat laws;

REPORT OF THE SECRETARY OF THE TREASURY

prevention of the smuggling of liquor and other contraband; removal
of derelicts and other obstructions to navigation from the paths of
marine commerce; and the preservation of life and property at sea
and along the coasts. A noteworthy record was achieved during the
year by the service forces in the saving of life—5,597 persons were saved
or rescued from peril.
The following is a summary of the principal operations of the Coast
Guard which are susceptible of statistical presentation:

Lives saved or persons rescued from peril
Persons on board vessels assisted
Persons in distress cared for
^
Vessels boarded and papers examined
Vessels seized, reported, or warned 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 derelicts and other obstructions recovered
Value of vessels assisted (including cargoes)
Persons examined for certificates as Hfeboat men

Increase (4-)
or .
decrease (—)

1934

1933

6, 492
33. 716

595
83,031
1,549
$244, 558

5,597
34, 767
1,246
31, 730
1,401
$94, 500

155

204

7,176
7,476

6,861
7,877

300

267

$112,100
$55,565
$40, 516, 220 . $47,296,109
3,828
5,917

-895
4-1,051
4-651
-51,301
-148
-$150,058
4-49
-315
4-401
-33
4-$56,635
4-$6, 779,889
4-2,089

A more detailed account of these and other operations of the Coast
Guard will be found on pages 76 to 83 of this report.
Public Health Service
The unusual features of the work of the Public Health Service
during the year occurred in connection with the outbreak of three
major epidemics, amoebic dysentery in Chicago, epidemic encephalitis
in St. Louis, and poliomyelitis in California. The Public Health
Service cooperated m t h State and local authorities in these epidemics
by the institution of careful epidemiological and laboratory studies.
The reservations of the United States with reference to the International Sanitary Convention for Aerial Navigation were accepted
by all prior signatory governments, and the convention was signed on
behalf of the United States by the American Minister at The Hague
on Aprfl 6, 1934. Ratification of the convention by the 23 countries
now signatory is pending.
The regulations governing the importation of birds of the parrot
family into ports of the United States were revised further to safeguard this country. Quarantine officers of the United States were
authorized to accept, under certain conditions, foreign certificates of
deratization or deratization exemption not visaed by the American
consular officers at the ports of issuance; under the Phflippine Islands
Independence Act, medical officers of the Public Health Service on
duty in Manila were authorized to perform the medical examinations

REPORT OF THE SECRETARY OF THE TREASURY

of citizens of the Philippine Islands who are applicants for immigration visas under the Philippine quota, and to make the medical
examinations required in connection with the issuance of workers'
permits to Filipino laborers destined for Hawaii; and instructions
were issued to officers of the Public Health Service on duty at quarantine stations on the Mexican border to pass without formal examination Mexican citizens maldng temporary visits and presenting identiflcation cards issued by American consular officers in the interior of
Mexico.
In connection with the civil works program the Public Health
Service assisted 14 States with malaria-control drainage projects,
aided in the construction of more than 225,000 sanitary outdoor
toilets for rural homes in 22 States, and assisted States in the sealing
of abandoned mines to remove acid wastes from streams, and in
conducting a rat-flea survey in connection with typhus fever control.
The research activities were for the most part a continuation of the
investigations begun during the preceding fiscal year and included
such problems as cancer, heart disease, leprosy, nutrition, spotted
fever, psittacosis, typhus fever, and industrial hygiene.
In addition to cooperating with the State and local health departments in the control of venereal diseases, the Public Health Service
participated in important studies in the clinica] aspects of syphilis.
At the request of the medical director of the Tennessee Valley Authority, a comprehensive program for the control of venereal diseases was
submitted and the suggested measures were put into effect in the
Norris area.
Administrative. duties connected with the establishment of the
United States Narcotic Farms, the supervision and furnishing of
medical, psychiatric, and technical services for the Federal penal and
correctional institutions, and studies dealing with the country's
medical and scientific needs for narcotic drugs and with the medicosocial problems of drug addiction were continued.
American merchant seamen and other legal beneficiaries continued
to receive medical care in 26 marine hospitals and 183 contract
hospitals in 154 ports of the United States and the possessions; seamen remain the most numerous class of beneficiaries. The customary
medical assistance was given other Government agencies.
The activities of the Public Health Service are more fully presented
on pages: 139 to 147 of this report.
Bureau oj Narcotics
In pursuing its policy of special enforcement against major narcotic law violators, the Bureau of Narcotics has made continued
progress in eliminating the sources of supply of illicit narcotic drugs.
Through the arrangement with foreign countries for the direct inter

REPORT OF THE SECRETARY OF THE TREASURY

national exchange of information relative to illicit narcotic dealers
and their shipments, and with the cooperation of the Bureau of Customs, the supply of narcotics heretofore available to the domestic
illicit traffic from smuggled sources has been substantially decreased.
Upon analysis of narcotic drugs seized in illicit traffic, particularly
heroin, adulteration up to 90 percent to meet market demand has
been noted. Another factor whicii aided in decreasing smuggling
supplies at the place of foreign manufacture was the Convention for
Limiting the Mariufacture and Regulating the Distribution of Narcotic Drugs, flrst ratified by the United States March 31, 1932, subsequently ratified or acceded to by 46 other governments, and valid
and effective as an international agreement since July 9, 1933. By
July 1, 1934, the convention had been in effect nearly a year.
Decreased smuggling supplies have forced peddlers and addicts to
tap legitimate domestic medical supply channels, evidenced by robberies of narcotic stocks as reported by wholesale and retail drug
stores and by practitioners, by forgery or false execution of narcotic
prescriptions, and by improper prescribing or dispensing of narcotics
by a few practitioners. These methods of diversion of narcotics have
received enforcement attention. The assistance of State and municipal enforcement agencies has been solicited to supplement the activity
of Federal narcotic officers. Efforts are being made to give greater
effect to local cooperation by causing the enactment throughout the
States generally of the uniform State narcotic law, approved nearly
2 years ago by the Conference of Commissioners on Uniform State
Laws and by the American Bar Association. During the fiscal year
1934 tliis act was adopted with little or no amendment in four States—
Kentucky, Rhode Island, South Carolina, and Virginia. This makes
a total of eight States which have adopted this model legislation.
The four other States which had previously adopted the amendment
are Florida, Nevada, New York, and New Jersey.
A more complete account of the activities of the Bureau wiU be
found on pages 123 to 125 of this report.
ORGANIZATION CHANGES

A number of important changes in the organization of the Treasury
Department were made during the fiscal year 1934. On November
20, 1933, by Treasury Department order, the following offices were
created: (1) Assistant to the Secretary, in charge of all matters of
public relations; (2) General Counsel to the Secretary, in charge of
all legal matters; and (3) Administrative Assistant to the Secretary,
in charge of all administrative matters including personnel and the
departmental budget. The Revenue Act of 1934, approved May
10, 1934, established the General Counsel as the chief law officer of
the Department with the title of General Counsel for the Department

REPORT OF THE SECRETARY OF THE TREASURY

of the Treasury, and abolished the offices of General Counsel and
Assistant General Counsel for the Bureau of Internal Revenue, and
of Solicitor and Assistant Solicitor of the Treasury. A Legal Division was established on June 20, 1934, by order of the Secretary of
the Treasury and was placed under the direct supervision and control
of the General Counsel. To the Administrative Assistant to the Secretary, by Treasury Department order dated December 26, 1933, was
assigned the super\dsion of the office of the Chief Clerk of the
Department, which previously had reported to the Under Secretary,
and of the Divisions of Appointments and of Supply, which previously
had reported to an Assistant Secretary.
By order of the Secretary, pursuant to Executive orders of June
10 and July 27, 1933, there was established on October 10, 1933, a
Procurement Division, reporting directly to the Secretary and having
charge of the policies and methods of procurement, warehousing,
and distribution of all property, equipment, and supplies. There
were transferred to this Division the functions of specifled Government agencies, including those of the ' Office of the Supervising
Architect and the General Supply Comniittee of the Treasury Department, which latter activities formerly reported to an Assistant
Secretary. Pursuant to the Executive order of June 10, 1933, there
was also organized on December 16, 1933, a Division of Disbursement, which by order of the Secretary of the Treasury was assigned
to the general supervision of the Commissioner of Accounts and
Deposits.
Following the repeal of the eighteenth amendment to the Constitution, a number of changes were made in the organization of the
Bureau of Industrial Alcohol. On December 6, 1933, the Bureau
was consolidated under the Bureau of Internal Revenue. By Executiye order, the President on March 10, 1934, abolished the Bureau
of Industrial Alcohol and the Office of Commissioner of Industrial
Alcohol and transferred the functions, duties, and personnel of the
Bureau of Industrial Alcohol to the Bureau of Internal Revenue. By
the same Executive order, the functions and personnel of the Alcohol
Beverage Unit of the Division of Investigation of the Department of
Justice, except those employed in the Taxes and Penalty Section of
that Unit, were transferred to the Bureau of Internal Revenue. This
action was effective 60 days thereafter, namely. May 10, 1934. On
May 10, 1934, Treasury Decision 4432 established in the Bureau of
Internal Revenue a unit designated as the Alcohol Tax Unit, to which
was assigned all of the functions and duties theretofore performed by
the Bureau of Industrial Alcohol and those transferred from the
Department of Justice.

REPORT OF THE SECRETARY OF THE TREASURY

The Bureau of Internal Revenue and the Secret Service Division
were ordered to report directly to the Secretary of the Treasury
instead of to the Fiscal Assistant Secretary.
The various Executive and Treasury orders affecting the organization of the Treasury are shown in exhibit 45 on page 258 of this report.
Attention is invited to the attached reports of other bureaus and
divisions of the Treasury Department and to the exhibits and tables
accompanying the report on the finances.
H E N R Y MORGENTHAU,

Jr.,

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

ADMINISTRATIVE REPORTS
OF BUREAUS AND DIVISIONS

ADMINISTRATIVE REPORTS OF BUREAUS AND DIVISIONS
OFFICE OF THE COMMISSIONER OF ACCOUNTS AND DEPOSITS

Daily Statement oj the United States Treasury
The Treasury makes available in the Daily Statement of the United
States Treasury information with respect to the receipts and expenditures of the Government, the condition of the Treasury, and the public
debt. In view of the special interest in the status of the funds provided by the Congress for carrying out the recovery program, provision
was made to include in the Dafly Statement of the United States
Treasury a statement showing the sources of funds of the emergency
organizations (i. e., from specific appropriations, statutory or exec^utive allotments from lump-sum appropriations, or through allocations
from the Reconstruction Finance Corporation), the expenditures
therefrom, and the current unexpended balances. ^ A cop}^ of the
statement showing the status of funds for carrying out the recovery
program is shown on page 14 of this report.
Combined statement oj assets and liabilities oj governmental corporations
and credit agencies
There is available as of June 30, 1934,^ a combined statement of
assets and liabilities of governmental corporations and credit agencies
of the United States, compiled from reports received from the organizations concerned. This statement appears on page 381 of this report.
Statement oj the Public Debt oj the United States
The Statement of the Public Debt of trie United States, issued at the
end of each month, contains a detailed classification of the obligations
constituting the gross debt of the United States, together vdth certain
detailed information concerning the outstanding securities representing the interest-bearing debt. Since June 1920 the reverse side of the
Statement of the Public Debt has included a statement of the face
amount of securities owned by the United States Government.
Effective June 30, 1934, several important changes were made in the
form of the public debt statement for the purpose of maldng additional
information conveniently available. The detafled information relative to the outstanding interest-bearing issues has been extended to
include a condensed statement of the tax exemption features of the
various issues and of their receivability in payment of certain taxes
and their circulation privfleges. This information appears in the
footnotes to the table beginning on page 340 of this report.
Contingent liabilities oj the United States.—The public debt represents a direct obligation of the United States, but there are classes of
indirect obligations of the United States which are in the nature of
1 First included in daily Treasury statement, July 6,1934.
2 Released by the Secretary of the Treasury Aug. 29,1934.

REPORT OF T H E SECRETARY OF

THE TREASURY

contingent liabflities. The United States has assumed responsibility
for the payment of such obligations, but they are, in the first instance,
secured by specific collateral assets. For example, under the act of
Congress approved June 25,1910, as amended, the "faith of the United
States is solemnly pledged to the payment of the deposits made in
Postal Savings depositary offices." These funds when received in
the Postal Savings System are authorized to be redeposited in banks
throughout the United States, which pledge collateral to secure such
funds deposited with them. To the extent that such funds are not
deposite(i in banks or represented by cash in possession of the Postal
Savings System, they are invested in obligations of the United States.
Likewise, the United States guarantees as to "principal and
interest" bonds issued by the Home Owners' Loan Corporation and
the Federal Farm Mortgage Corporation. These bonds are backed
by mortgages on homes and farms acquired by these organizations at
conservatively appraised values and under safeguards and limitations
prescribed by statute. An additional margin of security is provided
to the extent of the capital stock of these corporations which has been
subscribed for and paid in by the United States.
No comprehensive tabulation of contingent liabilities of the
United States has previously been published by the Treasury.
Effective June 30, 1934, there is included with the Statement of the
Public Debt of the United States a monthly statement of contingent
liabilities of the United States, a copy of which appears on page 373.
Treasury accounting system
In order.to provide a more eft'ective and coordinated control of the
accounting in the various bureaus, divisions, and offices pf the
Treasury Department, the Secretary, on June 30, 1934, issued
Department Circular No. 514, providing that thereafter no installation of new accounting forms, systems, and procedures and no change
in existing accounting forms, systems, and procedures shall be made
in the Treasury Department without express approval of the Secretary
of the Treasury or of an officer of the Department duly authorized
to act for the Secretary, and also providing that all recommendations
with respect thereto, before being acted upon by the Secretary of the
Treasury or by his duly authorized representative, shall be submitted
to the Office of the Commissioner of Accounts and Deposits for
investigation and report. A copy of this circular appears as exhibit
42 on page 256.
Obligations ojjoreign governments

During the fiscal year 1934 the United States received payments
aggregating $9,062,691.16 on account of the indebtedness of foreign
governments, of which $212,000 was for account of principal,
$8,812,630.16 was for account of interest, and $38,061 was for
account of annuities under the moratorium agreements.
Payments due July 1 to December 31,1933.—The following statement
shows payments due during the period July 1 to December 31, 1933,
and the amounts actuaUy paid on account by certain governments:

REPORT OF THE SECRETARY OF THE TREASURY
AMOUNTS PAYABLE
F u n d i n g agreements
Moratorium
agreements

Country
Principal
Belgium
.
Czechoslovakia
Estonia
Finland...
France
Great Britain
Greece i
Hungary
Italy
Latvia
Lithuania
Poland

1, 393, 000

286, 265. 00
148, 592. 50
19, 261, 432. 50
75, 950, 000. 00
223, 445. 00
28, 444. 36
1, 245, 437. 50
119, 609. 00
92, 386. 01
3, 582,810. 00

$4.84. 453. 88
182, 812. 78
36, 585. 29
19, 030. 50
3, 046, 879. 72
9, 720, 765. 05
67,137. 38
4, 225. 58
896,155. 88
15, 274. 26
13, 683. 26
456, 229. 71

$2,859, 453. 88
1, 682, 812. 78
437, 350. 29
229. 623. 00
22, 308, 312. 22
117. 670, 765. 05
526, 582. 38
45, 454. 94
2,141, 593. 38
182, 383. 26
106, 069. 27
5,432, 039. 71

35, 365, 785

103, 313, 421. 87

14,943, 233. 29

163,622,440.16

$19, 030. 60

$150, 000. 00
229, 623. 00
7, 500, 000. 00

. ..

$2,376,000.00
$1, 500,000
114, 500
62,000
32, 000, 000
236, 000
12, 785
47, 500

Total-.

Total

Interest

AMOUNTS ACTUALLY PAID
Czechoslovakia
Finland
Great B r i t a i n
Greece
-...
Italy .
Latvia
Lithuania

$150,000
62,000

Total

212, 000

$148, 592. 50
7, 500, 000. 00
(2)

(2)

1, 000. 000. 00
9, 530.16
7, 000. 00

1, 000,000. 00
9, 530.16
• 7,000.00
8, 665,122. 66

19, 030. 50

8,896,153.16

1 Exclusive of principal payment of $150,000 postponed under the provisions of the debt agreement with
Greece.
2 A payment of $59,928 (27H percent of the amount due Nov. 10, 1933) was received on July 6, 1934.

Payments due January 1 to June 30,1934-—The following statement
shows payments due during the period January 1 to June 30, 1934,
and the amounts actually paid on account by certain governments:
AMOUNTS PAYABLE
F u n d i n g agreements
Moratorium
agreements

Country
Principal
Austria i
Belgium
Czechoslovakia
Estonia
Finland
France
Great Britain
Greece 1
Hungary
Italy
Latvia
Lithuania
Poland
Rumania
Yugoslavia..
Total-

Total

Interest

..
$4, 300, 000. 00
1, 500, 000. 00
36, 691,906. 36
240,000. 00
12, 600, 000. 00
41, 795. 00
1.

$484, 453. 88
182,812. 78
36, 585. 29
19, 030. 50
3,046,879. 72
9, 720, 765. 05
67,137. 38
4, 225. 58
896,155.88
16, 274. 26
13, 683. 26
456, 229. 71
97, 500.16

$7,159, 453.88
1, 682,812. 78
322,850. 29
166, 538. 00
59, 000, 218. 57
85, 670, 765. 05
533, 769. 88
37, 410. 66
14, 741, 593. 38
134,883. 26
147,864. 26
4, 039,039. 71
1, 297, 500.16
300, 000. 00

16, 040,733. 46

175, 234,699.88

$147, 507. 50

$19, 030. 50

$166, 538

147, 607. 60-

19,030. 60

166, 538

$2, 375, 000. 00
286, 265. 00
147, 507. 50
19, 261, 432. 50
75, 950, 000. 00
226, 632. 50
33,185. 08
1, 245, 437. 50
119, 609.00
q2, 386. 00
3, 682, 810.00

1, 200, 000. 00
300, 000. 00
66, 873, 701. 35

103, 320, 265. 08

AMOUNTS ACTUALLY PAID
Finland..
Greece.Total.

» Exclusive of payments postponed under the provisions of the respective debt agreements: Austria,
$494,860.23; Greece, $150,000.
2 A payment of $76,272 (35 percent of the amount due May 10,1934) was received on July 6,1934.
90353—35
5

REPORT OF THE SECRETARY OF THE TREASURY

A message from the President of the United States to the Congress,
dated June 1, 1934, containing a review of the situation with respect
to the debts owed the Government and people of this country by the
governments and peoples of other countries will be found as exhibit 36
on page 243 of this report.
Press releases and the various notes exchanged betw^een the Department of State and representatives of foreign governments regarding
the amounts due during the fiscal year will be found as exhibit 33
on page 223 of this report.
A statement showing the principal of the funded and unfunded
indebtedness of foreign governments to the United States, the accrued
and impaid interest thereon, and payments on account of principal and
interest as of November 15, 1934, appears as table 42 on page 391.
Public No. 151, Seventy-third Congress, approved by the President
on April 13,1934, provides that it shall be unlawful within the United
States or any place subject to the jurisdiction of trie United States,
for any person to purchase or sell bonds, securities, or other obligations
of any foreign government or political subdivision thereof or any
organization or association acting for or on behalf of a foreign government or political subdivision thereof, issued after the passage of this
act, or to make any loan to such foreign government, political subdivision, organization, or association, except a renewal or adjustment
of existing indebtedness whfle such government, political subdivision, organization, or association, is in default in the payment of its
obligations, or any part thereof, to the Government of the United
States. The text of this act appears as exhibit 34 on page 238. An
opinion of the Attorney General dated May 5, 1934, requested by the
Secretary of State, upon various questions arising under the. act will
be found in exhibit 35 on page 238 of this report.
The total amounts previously due from foreign governments on
account of their indebtedness to the United States under the funding
and moratorium agreements and not paid as of November 15, 1934,
according to contract terms are shown in the following statement:
A m o u n t s n o t p a i d according to contract t e r m s
Country

F u n d i n g agreements
Moratorium
agreements
Principal

Belgium..
Czechoslovakia
Estonia
France
Great B r i t a i n
Greece
Hungary L . .
Italy
Latvia
Lithuania
Poland
Rumania.-.
Yugoslavia
Total--

.
.

$8, 500,000.00
$9,000,000.00
4,170,085.83
135, 500.00
1,104,165.00
58,169,041. 35
77,045, 730. 00
32,000,000. 00 210,349, 481. 58
1,179,000. 00
780,724.00
25,070. 00
118,518.14
1, 736, 291. 74
24,900,000. 00
47, 500.00
343, 296.84
81, 500. 00
260,167. 66
1,625,000. 00
13,819,410.00
2, 200,000. 00
825,000. 00

$968,907. 76
365, 625. 56
73,170. 58
6,093, 759. 44
19, 441, 530.10
201,412.14
8,451.16
1, 792,311. 76
30, 548. 52
27, 366. 52
912,459. 42
97, 500.16

314,657,784.96

30,013,043.12

133,857,697.18

Total

Interest

.. ...

$18,468, 907. 76
4, 535, 711. 39
l,i312,835. 58
141, 308, 630. 79
261,791, Oil. 68
2,161,136.14
152,039. 30
28,428, 603. 50
421, 345. 36
369,034.18
16, 356,869. 42
2, 297. 500.16
825,000. 00
478,428, 526. 26

1 The Hungarian Government has deposited with the foreign creditor's account at the Hungarian National
Bank the aggregate amount of 676,105.17 pengo. The debt funding agreement with Hungary provides
for payment in dollars in the United States.

REPORT OF THE SECRETARY OF THE TREASURY

On September 6, 1934, the Trustees of the Austrian Guaranteed
Loan of 1923-43 notified the Austrian Government that the objection
raised in their letter of November 21, 1933, to the payments due by
Austria under the relief credit agreements on January 1, 1934, must
be considered as covering all payments due by Austria under relief
credit agreements, including the annuities due January 1, 1934,
coveririg payments postponed under the so-called Hoover moratorium.
In view of this action by the Trustees, in recently clarifying their
notice of November 21, 1933, the annuity of $34,767.23, due January 1, 1934, from Austria under the agreement of September 14, 1932,
whicii had previously been treated by the Treasury as a payment due
and unpaid, has been postponed, subject to repayment beginniag
January 1, 1944, in accordance with the provisions of the agreements
of May 8, 1930, and September 14, 1932, between Austria and the
United States.
Receipts jrom Germany
During the fiscal year 1934 the United States received no payments
from the Government of Germany under the debt-funding agreement of June 23, 1930, covering the costs of the American Army
of Occupation and the awards of the Mixed Claims Commission,
United States and Germany, other than a semiannual payment of
interest due on principal installments postponed under the provisions
of that agreement.
Armycosts.—Payments aggregating 18,600,000 reichsmarks due during the fiscal year on account of the costs of the Army of Occupation
were postponed under the provisions of the debt-funding agreement.
In accordance with the provisions of the agreement such postponed
payments bear interest at the rate of 3^^ percent per annum. On
September 30, 1933, interest in the amount of 458,562.50 reichsmarks,
due on principal installments previously postponed, w^as paid in
reichsmarks into an account in Germany, and was not paid to the
United States in dollars, as required by the terms of the debt agreement. The interest due on March 31, 1934, on account of principal
installments previously postponed was paid by Germany in the sum
of 627,125 reichsmarks, or $249,800.84.
There has been no change in the Army cost account from that
shown in the statement appearing on page 39 of the Annual Report
for 1932.
Mixed claims. United States and Germany.—The payment of
20,400,000 reichsmarks. due on September 30, 1933, from the Government of Germany on account of mixed claim awards, was postponed
under the provisions of the debt agreement of June 23, 1930. The
amount postponed bears interest at the rate of 5 percent per annum,
payable semiannually. Germany paid the sum of 2,040,000 reichsmarks, representing the interest due September 30, 1933, on amounts
previously postponed on this account into an account in Germany,
but this payment was not paid to the United States in dollars, as
required by the debt agreement.

REPORT OF THE • SECRETARY OF THE TREASURY

On March 31, 1934, Germany paid the sum of 2,550,000 reichsmarks, or $1,015,733.92, representirig the interest due on that date
on payments aggregating 102,000,000 reichsmarks previously postponed under the provisions of the debt agreement. The payments
aggregating 102,000,000 reichsmarks, which were previously postponed, became due on March 31, 1934, and there also matured on
that date a payment of 20,400,000 reichsmarks. These principal
sums were not paid by the Government of Germany.
Annuities under moratorium agreement.—The firsts semiannual
installment of the annuity under the moratorium agreement with the
Government of Germany dated May 26, 1932, was due on September
30, 1933, in the amount of 1,529,049.45 reichsmarks. This amount
was paid in reichsmarks into an account in Germany and was not
paid to the United States in dollars, as required by the moratorium
agreement. The second semiannual installment of the annuity due
on March 31, 1934, in the amount of 1,529,049.45 reichsmarks, was
not paid by Germany.
Treasury administration oj alien and mixed claims
The Settlement of War Claims Act of 1928 authorized the Secretary
of the Treasury to make payments on account of (1) awards of the
Mixed Claims Commission, United States and Germany, for claims
of American nationals against the Government of Germany; (2)
awards of the War Claims Arbiter for claims of German, Austrian,
and Hungarian nationals against the Government of the United
States; and (3) awards of the Tripartite Claims Commission for claims
of American nationals against the Governments of Austria and
Hungary.
The time within which claimants receiving awards from the Mixed
Claims Commission, United States and Germany, and the Tripartite
Claims Commission, United States, Austria, and Hungary, could file
application expired on March 10, 1934. Congress, however, by act
of June 18, 1934 (Public Res. No. 38, 73d Cong.), extended the time
within which such applications could be filed for a period of an additional two years from March 10, 1934. A copy of the act will be
found as exhibit 38, page 253 of this report.
The joint resolution approved June 27, 1934, to amend the Settlement of War Claims Act of 1928, as amended (Public Res. No. 53,
73d Cong.), which will be found as exhibit 39 on page 253 of this
report, requires the postponement of (a) further payments to German
nationals from the German special deposit account established under
section 4 of the Settlement of War Claims Act of 1928, on account of
awards made by the War Claims Arbiter for ships, patents, and a radio
station seized and used by this Government during the war; and (b)
further return of property belonging to German nationals held by the
Alien Property Bureau, Department of Justice, while Germany is in
arrears on its payments on claims of American nationals under the
-debt agreement of June 23, 1930. The position of the United States
with respect to the enactment of this joint resolution is presented in
Senate Report No. 1376, submitted by the Committee on Finance
after its consideration of the joint resolution. Senate Report No.
1376 appears as exhibit 37 on page 247.

REPORT OF THE SECRETARY OF THE TREASURY

Mixed Claims Commission: Claims against Germany.—The Treasury had made payments up to September 30, 1934, in the aggregate
amount of $135,377,880.29 on account of awards of the Mixed Claims
Commission, from which there has been deducted $676,889.99, representing one-half of 1 percent authorized by the Settlement of War
Claims Act, maldng net payments to claimants of $134,700,990.30.
Of the deductions so made, $650,025.54 have been covered into the
Treasury as miscellaneous receipts or reserved for such purpose in
accordance with the act as reimbursement to the United States for
expenses incurred, and $26,864.45 has been paid to the German
Government or reserved for payments to that Government in accordance with the agreement of December 31,1928, and the act of Congress
approved June 21, 1930, for defraying such expenses as were incurred
by that Government in connection with the adjudication of the late
claims.
The following summary shows by classes, number, and amount of
awards certified to the Treasury by the Secretary of State, the amount
paid on account, and the balance due as of September 30, 1934:

Number and amount of awards of the Mixed Claims Commission, United States and Germany, certified to the Secretary- of the Treasury by the
Secretary of State; and the amount paid and balance due, by class, as of Sept. 80, 1934
Class I I

Class I

A w a r d s certified

1. A m o u n t d u 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 A u g . 10, 1922.
A g r e e m e n t of D e c . 31, 1928

Total
number
of
awards

4,551
2,290

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 thereon to d a t e of p a y m e n t or, if u n p a i d Sept. 30,
1934, at 5 percent per a n n u m , as specified i n t h e Settlem e n t of W^ar Claims A c t of 1928

Number of
awards

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

Numberof
awards

A w a r d s over
$100,000

U . S. G o v e r n m e n t

Numberof
awards

Amount

$156, 685,145.09
3,695,863. 20

420 $3,489,437. 75
556,625. 00
115

3,829 $15,102,155.76
2, 447,803.92
2,169

298 $96,058, 757.17
6
691,434. 28

$42,034,794.41

160. 381,008. 29

4, 046,062. 75

17, 549, 959. 68

96,750,191.45

42,034, 794. 41

48, 012. 60

139, 214. 36

160,193, 781. 44

4, 046,062. 75

17, 501,947.18

96, 610,977.10

42,034,794.41

69, 755,018. 74
1, 409, 240.88

732,801. 61
115,976. 22

6, 851, 202.19
971,159.15

42, 961, 689. 72
322.105. 51

19,209, 326. 22

231, 358, 041. 06

4,894,840. 58

25, 324, 308. 52

139, 894, 772.33

61, 244,119. 63

42, 619, 626. 37

188,767.87

1, 367, 545. 55

20, 408,104. 38

20, 655, 208. 57

273, 977, 667. 43

5, 083, 608. 45

26, 691,854. 07

160,302,876.71

81,899, 328. 20

15, 028, 485. 44
2, 445, 731. 44

1102,865,944.27
789,280.11

6, 841.014.15
970, 313. 85

(2)
(2)

Total due claimants

A w a r d s on
account of
death and
personal
injury

187, 226. 85

I n t e r e s t to J a n . 1,1928, a t rates specified i n 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

T o t a l p a y m e n t to Sept. 30, 1 9 3 4 . . .

Number of
awards

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
others . .

2. P a y m e n t s m a d e on a c c o u n t u p to Sept. 30, 1934:
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.
Agreement of D e c . 31, 1928
I n t e r e s t to J a n . 1,1928, a t rates specified i n 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 at 5.percent per a n n u m from J a n . 1,1928, to d a t e
of p a y m e n t , as directed b y t h e S e t t l e m e n t of W a r
C l a i m s A c t of 1928..

Total amount

Class I I I

4,234
2,261

1121,383,867.46
3,791,036. 65
7, 573, 815. 76
1, 086,165. 06

420
114

3, 489,437. 75
556, 025. 00
732,801. 61
115, 851. 21

3,814
2.147

1, 542,995. 46

188, 523. 35

1,354, 472.11

(2)

135,377, 880. 29

5, 082, 638. 92

26, 640, 016. 99

103, 655, 224.38

Less H of 1 percent 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 _
A g r e e m e n t of D e c . 31, 1928

3 650, 025. 54
4 26, 864. 45

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 to Sept. 30,
1934
3.IB alance d u 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 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 r a t e s specified in a w a r d s :
A g r e e m e n t of A u g . 10, 1922
A g r e e m e n t of D e c . 31, 1928
Accrued interest at 5 percent 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,
1934 .

134, 700,990. 30

317
29

97, 285, 065. 72
226,932.16

21,650. 20
3, 762.95

114. 045. 22
19,155.11

514,330.12
3,946.39

5, 057, 225. 77

26, 506,816. 66

103,136,947.87

600.00

15
22

25, 657.82
2, 072. 48

298
6

36,015,288. 27
224, 259. 68

61, 244,119. 63

hj
O

10,188. 04
970. 31

125. 01

10,188. 04
845.30

41, 076,630. 91

244. 52

13, 073. 44

20, 408,104. 38

20, 655, 208. 57

138, 599, 787.14

969.53

51,837. 08

56,647,652. 33

81,899, 328. 20

1 Includes payments on account of interest to Jan. 1, 1928. on class III awards. Payments on this class of awards are first applied on account of the total amount payable as of
Jan. 1,1928, as directed by the Settlement of War Claims Act of 1928, until total of all payments on the 3 classes equals 80 percent of the amount payable Jan. 1, 1928. Payment of
accrued interest since Jan. 1, 1928, on this class of claims deferred in accordance with act.
2 See above note.
3 Of this amount, $646,428.40 has been covered into the Treasury as miscellaneous receipts. A further sum of $3,597.14 will be covered into the Treasury at a later date.
* Of this amount $24,150.09 has been paid to the Government of Germany. A further sum of $2,714.36 is payable in connection with the adjudication of late claims under'the
agreement of Dec. 31, 1928.

Balance d u e c l a i m a n t s as of Sept. 30, 1934...

o
El

;>
w
d

Ol
CO

REPORT OF THE SECRETARY OF THE TREASURY

War Claims Arbiter.—Under the Settlement of War Claims Act of
1928 it was the duty of the War Claims Arbiter, within certain limitations, to hear the claims of 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 tbe United
States, and a radio station sold to the United States.
War Claims Arbiter: Claims oj^ German nationals.—Except for the
accrual of an additional year's interest, there has been practically
no change in the status of the awards of the War Claims Arbiter on
account of claims of German nationals since September 30, 1933, as
shown by the table on page 49 of the Annual Report of the Secretary
of the Treasury for the fiscal year 1933.
War Claims Arbiter: Claims oj Austrian and Hungarian nationals.—
The total awards of the War Claims Arbiter to Austrian nationals
amounted to the sum of $663,740, together with $248,948 as interest
at the rate of 5 percent per annum from July 2, 1921, to December
31, 1928, or a total of $912,688. The Treasury had made payments
on account of these awards as of June 30, 1934, in the amount of
$912,688, together with interest since December 31, 1928, at the rate
of 5 percent per annum in the amount of $149,549.
The awards made by the Arbiter to Hungarian nationals in the
sum of $39,125, together with interest amounting to $14,675 at the
rate of 5 percent per annum from July 2, 1921, to December 31, 1928,
or a total of $53,800, have been paid with the exception of three
awards amounting to $4,675.24, together with interest at the rate of
5 percent from December 31, 1928.
German special deposit account.—The following statement shows
the total amounts deposited in the German special deposit account,
the amounts paid therefrom up to September 30,1934, and the balance
held in the account:
Statement showing funds deposited in the German special dej jsit account and the
payments made therefrom up io September 30, 1934
RECEIPTS
From investments by Alien Property Custodian under
Trading with the Enemy Act, as amended:
Unallocated interest fund
$25,000,000.00
Less refunds
3,250,000.00
20 percent German property retained
From Germany:
2H percent of Dawes' annuities available for reparations (Paris agreement of Jan. 14,1926)
Under German-American debt agreement, June 23,
1930
...
Interest on payments postponed under terms of debt
agreement dated June 23, 1930..

21,750,000.00
17,562,096.91

$39,302,096.91

32,183,060.87
19,469,964.00
1,743,738.70
53,396,763. 57

Appropriation for ships, patents and radio station
Expenses of Administration, War Claims Arbiter, on
account German nationals
Earnings and profits on investments by Secretary of the
Treasury
Total receipts
.

86,738,320.83
113,624.20

86,851,945.03
4,344,446.95
$183,895,262.46

REPORT OF THE SECRETARY OF THE TREASURY

Statement showing funds deposited in the German special deposit account and the
payments made therefrom up to September SO, 1984—Continued
PAYMENTS ON ACCOUNT
Awards of the Mixed dlairhs Conimission:
Under agreement of Ailg. 10,1922
Under agreement of Dec. 31,1928...........
Awards of War Claims Arbiter:
For ships
For patents and one radio station

$129,354,916.20
5,346,074. lO
$134,700,990.30
37,126,205.21
6,242,006.60

One-half of 1 percent deducted from mixed claims payments covered into
Treasury ($3,697.14 withheld but not paid)
One-half of 1 percent deducted from mixed claims payments on account of
awards entered under agreement of Dec. 31, 1928 (act of June 21, 1930)
and paid to Germany ($2,714.36 withheld but not paid)
Advances to special fund, expenses of administration of the settlement of
War Claims Act of 1928 (OflSce of the Secretary of the Treasury)
Expenses of administration, War Claims Arbiter account of German
nationals

43,368,211. 71
646,428.40
• 24,150.09
36,175.00
113, 624.20
• $178,888,679.70

B alance in German special deposit account (including investments)

6,006,672.76

Made up as follows:
Principal cost
.$4,447,000 face amount 3 percent Treasury bonds of 1951-56
$4,426,098.61
$110,000 face amount ZH percent Treasury notes, series A, due
Sept. 15,1937
110,103.13
Cash balance
471,47L12
Total

6,006,672.76

Tripartite Claims Commission: Claims against 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 the annual reports for the fiscal years 1929
to 1932. No payments were made on the awards during the past
year. There is one award unpaid in the amount of $135.06.
Tripartite Claims Commission: Claims against Hungary.—The
awards entered by the Tripartite Claims Commission against Hungary, in favor of American nationals, amounted to $199,975.57. As
of June 30, 1934, awards aggregating $23,765 had not been paid
because claimants had not ffied applications required by law.
Railroad obligations
The total receipts during the fiscal year on account of railroad
securities amounted to $1,270,803.10, classified as foUows:

Collections by Treasury Department:
Sec. 210
Sec. 207
Equipment trust notes . .
Total
Collections by Director General
Grand total

Principal

Interest

$704,016. 27
67,200.00

$476,405. 27
12,841.02
5,266.45

$1,179,421.34
12,841.02
72,466. 46

771,216. 27
6,000.00

493, 512. 74
1,074. 29

1, 264, 728.81
6,074. 29

776, 216.27

494, 687. 03

1,270,803.10

Total

REPORT OF THE SECRETARY OF THE TREASURY

There was also received the sum of $2,207,745.62 from the Pullman
Co. under the provisions of section 209 (d) of the Transportation Act
of 1920, as amended. The company made this payment because its
railway operating income for the guaranty period from March 1, 1920,
to September 1, 1920, was $2,207,745.62 in excess of the minimum
railway operating income for the 3-year "test period" ending June
30, 1917.
The follow^ing statement shows the total amount of railroad obligations, by classes, originally held by the United States Government,
the amount held on June 30, 1934, and payments received on account
(exclusive of certain miscellaneous obligations held by the Director
General of Railroads):
Railroad obligations held originally by the United States Government, amount' held
J u n e 80, 1934, o,nd total payments of principal and interest received {exclusive of
certain miscellaneous obligations held by the Director General of Railroads)
Principal
Principal amount amount held
originally held
on June 30,
1934
Federal Control Act:
• Equipment trust notes
Sec. 7
Sec. 12
Transportation Act:
Sec. 207 . .Sec. 210
.
Total

$346, 556,750. 00
98,401,755. 00
62,103,453. 28

$33,600.00

282,712,837. 36
290,800, 667. 00

5, 219, 500.00
32,457,941. 34

1,080, 576,462.64

37, 711,041.34

Total payments received
Principal

Interest

$346, 523,150. 00 $45,292,355.38
98,401, 755. 00 23,100, 562. 27
62,103,453. 28
4,248,171.96
277, 493, 337. 36
258,342, 725. 66

54, 334,839. 70
89,952, 264.89

1,042,864, 421. 30 216,928,194. 20

Section 204-—There have been no transactions under section 204
since June 30, 1931. The total payments under this section have
amounted to $10,967,801.80.
Section 207.—A statement showing the principal amount of 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, 1933, appears as table 38 on page 370 of
the Annual Report of the Secretary of the Treasury for 1933. There
was no change in the status of such obligations durin.e the fiscal year
ended June 30, 1934.
Sections 209 and 212.—During the year there was paid to carriers on
this account the sum of $51,572.64, maldng the total payments
$532,006,103.30.
Section 210.—This section established a revolving fund of $300,000,000 to be used for loans to railroads under the conditions set forth in a
certificate of the Interstate Commerce Commission authorizing each
loan, and also for paying judgments, decrees, and awards rendered
against the Director General of Railroads. No new loans are being
made as the time for maldng application has expired. The net expenditures by the Director General during the fiscal year under this
section, after deducting repayments, amoimted to $3,562.41, maldng
net expenditures bv him on this account of $33,631,037.66 to June 30,
1934.
Total loans (including renewal loans and repayments thereof aggregating $59,800,000) to June 30, 1934, amounted to $350,600,667,
repayments amounted to $318,142,725.66, and loans outstanding as

REPORT OF THE SECRETARY OF THE TREASURY

of that date amounted to $32,457,941.34.^ Table 39 on page 371 of
the Annual Report for 1933 shows by carriers the obligations held on
June 30, 1933, on account of loans under section 210. Repayments
during the fiscal year ended June 30, 1934, were made by the following carriers:
Chicago & Western Indiana R. R. Co.
Fernwood, Columbia & Gulf R. R. Co
National Railway Service Corporation, account of the—
Minneapolis & St. Louis Railroad Co
Wheeling & Lake Erie Ry. Co
Toledo, St. Louis & Western R. R. Co

$219,000.00
2,000.00
45,711. 90
391,304.37
46,000.00

Total

704,016.27

The following statement shows the amounts of principal and interest due from carriers in default as of June 30, 1934, on account of
their obligations for loans under this section:
Principal and interest due from carriers in default on J u n e 30, 1934, on account
of loans under sec. 210
Principal
in default

Name of carrier
Aransas Harbor Terminal Ry
Des Moines & Central Iowa R. R
Fort Dodge, Des Moines & Southern R. R. Co.
Gainesville & Northwestern R. R. Co
Georgia & Florida Ry., receiver
Minneapolis & St. Louis R. R. Co
Missouri & North Arkansas Ry. Co..
Salt Lake & Utah R. R. Co
Seaboard Air Line Ry. Co
Seaboard-Bay Line Co
Virginia Blue Ridge Ry. Co
Virginia Southern R. R. Co
Waterloo, Cedar Falls & Northern Ry. Co
Wichita Northwestern Ry. Co
Wilmington, Brunswick & Southern R. R. C o . .

$44,304.67
633,500.00
200, 000. 00
75, 000. 00

., 382, 000. 00

(0
141, 300. 00

Interest in
default
$4, 066.17
263, 619. 73
63, 168. 02
49, 352. 53
213, 840. 00
874, 769. 73
2,033, 255.19
497, 326. 80
3,168, 834. 96
188, 400. 00
50, 880.00
18, 627. 84
929, 615. 88
240, 502. 50
21, 600. 00

785, 000. 00
106, 000. 00
38,000. 00
800, 000.00
381, 750. 00
90,000. 00
4, 676,854. 67 8, 607, 859. 35

Total

Total
370. 84
897, 119. 73
253, 168. 02
124, 352. 53
213, 840.00
2, 256, 769.73
2,033, 255.19
638, 626. 80
3,168, 834.96
973, 400. 00
156, 880. 00
56, 627. 84
1, 729, 615. 88
622, 252. 50
111, 600. 00
13, 284, 714. 02

1 Principal not yet due.

Securities owned by the United States Government
The aggregate amount of securities owned by the Government on
June 30, 1934, based upon the latest reports received, was $17,026,671,010.22 (including securities aggregating $235,445,700 acquired
with funds originally advanced to the Reconstruction Finance Corporation) as against $14,776,524,896.68 on June 30, 1933, an increase
of $2,250,146,113.54. A summary coiriparison of the holdings at
the end of the last two fiscal years is as follows:
Summary of securities owned by the United States on J u n e SO, 1988 and 1984
June 30, 1933
Foreign obligations:
Received under debt settlements
Another
Total
Capital stock of war emergency corporations
Capital stock, etc., of other Government
corporations and credit agencies:
Capital stock of Panama Railroad Co...
Capital stock of Inland Waterways
Corporation
Reconstruction Finance Corporation

June 30, 1934

$11, 064,038,496. 50 $11,155,851, 007. 57
683, 210, 284. 67
859, 205, 363. 64
11, 747, 248, 781.17
66, 334, 508. 04

12,015, 056, 371. 21
59, 601, 795. 44

7,000,000.00

7,000,000. 00

12,000, 000. 00
.2,057,959,236.28

12, 000,000. 00
3,705,424,714. 69

Increase (-|-) or
decrease (—)

4-$91,812,611.07
-f 175,995,078.97
-f 267, 807, 590. 04
-\-Z, 267, 287.40

-f 1,647,465,478.41

REPORT OF THE SECRETARY OF THE TREASURY

Summary of securities owned by ihe United States on June 80, 1983 and 1934—
Continued
June 30, 1933
Capital stock, etc., of other Government
corporations and credit agencies—Con.
Capital stock of Federal Deposit Insurance Corporation
Capital stock of Federal home loan
banks ^
Capital stock of Home Owners' Loan
Corporation ^
Capital stock (preferred and full-paid
income shares) of Federal savings
and loan associations
Capital stock and paid-in surplus of
Federal land banks
Capital stock and paid-in surplus of
Federal intermediate credit banks
Capital stock of central bank for cooperatives
. . . . _ _
Capital stock of banks for cooperatives..
other obligations and securities:
Railroad obligations
..
Obligations acquired by Public Works
Administration
_
Notes received by Farm Credit Administration evidencing outstanding advances made from the revolving
fund created by the Agricultural
Marketing Act
.
Securities received by Secretary of War
Securities received by Secretary of Navy.
Securities received by U. S. Shipping
Board Bureau..
Total

June 30, 1934

$150,000,000.00

Increase (-f) or
decrease (—)

-f $150,000,000. 00

$42,970,000.00

81,446, 700.00

1,000,000.00

154,000,000.00
1,086,300.00

-f 1,086,300. 00

124, 871, 729. 25

163,883,162.16

+39, Oil, 422. 91

60,000,000. 00

85,000,000.00

-1-25,000,000. 00

50,000,000. 00
60,000,000.00

+60,000,000. 00
+60,000, 000. 00

38,482,257. 61

-f 38, 476, 700. 00
-1-153,000,000.00

37,711,041.34

-771, 216. 27

145,423,423.39

+146,423,423. 39

465,462, 216. 77
828,000. 00
4,924,381.40

150,360, 286. 43
828,000. 00
4,909,988. 20

-315,091,930. 34

157, 453,786.16

142,940, 237. 36

-14,513,548.80

14, 776, 524,896. 68

17,026, 671,010. 22

+2, 260,146,113. 54

-14,393.20

1 Acquired with funds originally advanced to the Reconstruction Finance Corporation.

There was a net increase during the year of $267,807,590.04 in the
principal amount of obligations of foreign governments held by the
United States. This increase was due to an increase of $267,874,750
in the dollar equivalent of the German bonds held by the United
States, which are in reichsmarks. On June 30, 1933, for purposes of
showing the securities owned, the bonds were converted at 23.82
cents to the reichsmark, whereas on June 30, 1934, the bonds were
converted at 40.33 cents to the reichsmark. There was also a decrease
of $67,159.96 in principal, due to a payment by the Government of
Finland. A detailed statement of the securities held on June 30,
1934, wiU be found as table 36, page 378.
Trust junds invested by the Treasury
Adjusted service certijicate jund.—Investments for the account of the
adjusted service certificate fund, created by the act of May 19, 1924,
were made during the fiscal year 1934 in special issues of Treasury
obligations bearing interest at the rate of 4 percent 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.
Iri vestments made during the year amounted to $180,100,000 of
which $50,000,000 represented funds appropriated by Congress under
the provisions of the act approved June 16, 1933; $126,100,000 represented the principal proceeds of maturing notes reinvested; and
$4,000,000 was derived from interest on investments. During the

REPORT OF THE SECRETARY OF THE TREASURY

year $154,300,000 face amount of securities (including $126,100,000 of
maturing notes and notes amounting to $38,200,000 redeemed to meet
current payments from the fund) were recieemed on account of the
adjusted service certificate fund, the proceeds of which, together with
interest thereon, were credited to the fund.
According to reports received by the Treasury from the Veterans'
Administration, net expenditures of the fund during the fiscal year
1934 amounted to approximately $66,000,000, of which about
$40,000,000 represented the net increase in direct loans to veterans.
A statement of the fund as of June 30, 1934, as shown by the books
of the Treasury (exclusive of fund assets held by the Veterans'
Administration on account of bank loans on adjusted service certificates redeemed amounting to $51,963,727.88 and direct loans to
veterans amounting to $1,101,108,119.40) is as follows:
Adjusted service certificate fund, June 80, 1984
FUND ACCOUNT

Appropriations:
To June 30, 1933
Available July 1, 1933

$1,196,000,000.00
50,000,000.00
: $1, 246, 000, OOO. 00

Interest on investments:
To June 30, 1933
July 1, 1933, to June 30, 1934

103, 377, 513.78
4,614,783.61

Total
:
Checks paid by Treasurer of the United States, less credits on account of repayments of
loans and interest thereon
Balance in fund June 30, 1934

107,992, 297. 39
1,353,992,297.39
1,234,505,953.30
119,486,344.09

' FUND ASSETS ^

Investments, 4 percent Treasury certificates of indebtedness
Unexpended balances:
To credit of chief disbursing officer, Division of Disbursement, and disbursing officers
of the Veterans' Administration with the Treasurer of the United States
To credit of fund on books of the Division of Bookkeeping and Warrants
Total fund assets June 30, 1934

117,800,000.00
1,611,272. 65
75,071.44
119,486,344.09

Civil service retirement and disability jund.—The civil service retirement and disability fund was created b}^ the act of May 22, 1920.
During 1934 the Treasury continued to make investments for account
of the fund in special issues of Treasury notes bearing interest at the
rate of 4 percent per annum in accordance with the procedure outlined
in the Annual Report of the Secretary of the Treasury for the fiscal
year 1926. Total investments amounting to $47,700,000 were made,
of which $16,900,000 represented the proceeds of maturing notes.
Redemptions, in addition to the maturing notes, were made in the
amount of $18,900,000 to meet current payments from the fund.
Total credits to the fund during the fiscal year amounted to
$60,221,817.47, of which $28,703,458.68 was on account ()f deductions
from basic compensation of employees and service credit payments,
$10,518,358.79 represented interest on investments, $20,850,000 was
appropriated by Congress to fulfill the current liabflity of the United
States Government in connection with the fund, and $150,000 was
appropriated from the revenues of the District of Columbia to cover
its liability on account of the fund. The total earnings and profits on
investments to June 30, 1934, amounted to $59,748,989.07.
1 Exclusive of assets held by Veterans* Administration.

REPORT OF THE SECRETARY OF THE TREASURY

The following statement shows the status of the fund as of June 30,
1934:
Civil service retirement and disability fund, June 80, 1934
Credits:
On account of deductions from basic compensation of employees and
service credit payments:
From Aug. 1, 1920, to June 30, 1933
i $290,760,432.58
July 1, 1933, to June 30, 1934
28, 703, 468. 68
Appropriations:
To June 30, 1933
Available July 1,1933.Interest and profits on investments:
From Aug. 1, 1920, to June 30, 1933
July 1, 1933, to June 30, 1934

103,450, 000.00
2 21,000,000.00
.

49,230, 630.28
10, 518, 358.79

$319,463,891. 26

124,450,000.00

69, 748,989.07

Total.-.
503,662,880.33
Less checks paid by Treasurer of the United States on account of annuities and refunds,
Aug. 1, 1920, to June 30, 1934
241,608,546.38
Total--

262,054,333.95

Assets:
Face amount
$15,811,050 i H percent fourth Liberty Loan bonds
6,884,000 iH-ZH percent Treasury bonds, 1943-46...
. 32,400,000 4 percent special Treasury notes payable June 30, 1935
64,200,000 4 percent special Treasury notes payable June 30, 1936
44,000,000 4 percent special Treasury notes payable June 30, 1937
72,100.000 4 percent special Treasury notes payable June 30, 1938
26,000,000 4 percent special Treasury notes payable June 30, 1939
261, 395, 050
Unexpended balances June 30, 1934:
To credit of disbursing officers
,
On books of Division of Bookkeeping and Warrants
Totalfund assets June 30,1934

..-

Principal cost
$15,605,116.98
6, '194, 338.03
32,400,000.00
. 64,200,000.00
44,000,000.00
72,100,000.00
26,000,000.00
406,801.14
648,078.80

261,099,464.01

954,879. 94
262,054,333.96

Foreign service retirement and disability jund.—The foreign service
retirement and disability fund was established by section 18 of the
act of May 24, 1924 (43 Stat. 144), and is under the administrative
supervision of the Secretary of State, but under the act the Secretary
of the Treasury is directed to make investments from time to time of
such portion of the fund as in his judgment may not be immediately
required for authorized payments, the income derived from such
investments to be credited to the fund as a part thereof.
Investments for account of the foreign service retirement and disability fund were made during the fiscal year 1934 in special issues of
Treasury notes in the face amount of $772,000, bearing interest at the
rate of 4 percent per annum in accordance with the procedure outlined
in the Annual Report of the Secretary of the Treasury for the fiscal
year 1927. .Redemptions during the year amounted to $454,000 face
amount, including $246,000 maturing notes and $208,000 of notes
redeemed to meet current payments from the fund. The net investments amounted to $318,000.
Credits to the fund during the year aggregated $554,936.29, of which
$163,733.60 was on account of deductions from basic compensation of
employees and service-credit payments, $98,502.69 represented earnings on investments, and $292,700 was.appropriated by Congress to
1 Exclusive of $1,430,808.84 transferred to the Canal Zone retirement and disability fund pursuant to act
of May 2, 1931.
2 Includes $20,850,000 appropriated from the General Fund to cover the liability of the United States
and $150,000 appropriated from the revenues of the District of Columbia to cover its liability in connection
with the financing of the fund.

REPORT OF THE SECRETARY OF THE TREASURY

meet the current liability of the Government in ponnection with
the fund.
The following statement shows the status of the fund as of June
30, 1934:
Foreign service retirement and disability fund, June 30, 1984
Credits:
On account of deductions from basic compensation and service credit
payments:
From May 24, 1924, to June 30, 1933
$1,454,802.02
July 1, 1933, to June 30, 1934
163.733. 60
Appropriations:
To June 30, 1933
Available July 1, 1933
Interest and profits on investments:
From May 24, 1924, to June 30, 1933
J u l y l , 1933, to June 30, 1934

302, 586. 48
98,502.69

Total
L
._
Less checks paid by Treasurer of the United States on account of annuities
and refunds, May 24, 1924, to June 30, 1934...

special
special
special
special
special

Treasury
Treasury
Treasury
Treasury
Treasury

notes due June 30, 1935.
notes due June 30, 1936
notes due June 30, 1937
notes due June 30, 1938
notes due June 30, 1939

2,437,000
Unexpended balance June 30, 1934:
Treasurer of the United States, disbursing account
On books of Division of Bookkeeping and Warrants
Totalfund assets June 30, 1934

401,089.17
3,588,324.79
1,107,049. 63

Balance in fund June 30, 1934..
Assets:
Face amount
$509,000 4 percent
440,000 4 percent
654,000 4 percent
614,000 4 percent
320,000 4 percent

$1, 618, 635. 62

1,276,000.00
292,700.00
•
1,668,700.00

2,481, 275.16

Principal cost
$509,000.00
440,000.00
654,000.00
514,000.00
320,000.00

23,357.22
20,917.94

2,437,000.00

44,276.16
2,481,275.16

Canal Zone retirement and disability jund.—The Canal Zone retirement and disability fund was created by section 9 of the act of March
2, 1931 (46 Stat. L. 1477), and under section 10 of the act the Secretary
of the Treasury is directed to make investments from time to time of
such portions of the fund as in his judgment may not be immediately
required for the payment of the annuities, refunds, and allowances
authorized by the act, the income from such investments to be credited
to the fund.
Investments for account of this fund in the face amount of $97,000
were made during the fiscal year 1934 in special issues of Treasury
notes bearing interest at the rate of 4 percent per annum in accordance
with the procedure outlined on page 125 of the Annual Report of the
Secretary of the Treasury for the fiscal year 1931. Redemptions
to meet current expenditures from the fund during the year amounted
to $52,000 face amount, maldng net investments of $45,000 for the
year. Credits to the fund during the year aggregated $595,157.46,
of which $506,262.88 was on account of deductions from basic compensation of employees and service-credit payments, and $88,894.58
represented earnings on investments.

REPORT OF THE SECRETARY OF THE TREASURY

The following statement shows the status of the fund as of June
30, 1934:
Canal Zone retirement and disability fund, June 30, 1934

Credits:
Account of deductions from basic compensation of employees subject to
retirement act:
From July 1, 1931, to June 30, 1933...
$2, 683, 686. 93
July 1, 1933, to June 30, 1934
506, 262,88
Interest and profits on investments:
•'
^'^' ^^^' ^^^- ^^
From July 1, 1931, to June 30, 1933.__
161,371. 20
July 1, 1933, to June 30, 1934
88,894. 58
240, 265. 78
Total..
3,430,215.59
Less checks paid by Treasurer of the United States, on account of annuities
and refunds, July 1, 1931, to June 30, 1934
1,071, 694. 70
Balance in fund June 30,1934
2, 358, 520.89
Assets:
Face amount
Principal cost
$1,942,000 4 percent special Treasury notes matiu-ing June 30, 1936
$1,942,000. 00
179,000 4 percent special Treasury notes maturing June 30, 1937
179,000. 00
93,000 4 percent special Treasury notes maturing June 30, 1938...
93,000. 00
88, 000 4 percent special Trea.sury notes maturing June 30, 1939
88,000. 00
2,302,000
2,302,000.00
Unexpended balances June 30, 1934:
Treasurer of the United States, disbursing account
11,965.04
On books of Division of Bookkeeping and Warrants
44,555.85
56. 520.89
Total fund assets June 30, 1934
2,358,520.89

District oj Columbia teachers^ retirement jund.—The act of January
15, 1920, as amended by the District of Columbia appropriation act
of June 5, 1920, vested the administration of this fund in the Commissioners of the District of Columbia, except that it was directed that
such funds shaU be held and invested by the Treasurer of the United
States. A further amendment of June 11, 1926, created a reserve
fund, provided for annual appropriations to this end, and provided
that investments on account of such fund shall be held by the Treasurer of the United States separate from the investments on account of
contributions of teachers. During the fiscal year 1934, the Treasurer
purchased for account of the deductions fund (derived from deductions from teachers' compensation) $285,000 face amount of United
States and Puerto Rican bonds at a principal cost of $308,777.26, as
follows:
Class of security
4 percent Treasury bonds of 1944-54..
iM: percent Treasury bonds of 1947-52.
4 ^ percent Puerto Rican bonds

Face amount

Principal
cost

$43,000. 00
226,000. 00
16, 000. 00

$44, 021. 25
248, 793. 44
15,962. 57

285, 000. 00

308, 777. 26

There were also purchased for account of the Government reserves
fund $202,000 face amount of United States and Puerto Rican bonds
at a principal cost of $215,832.69, as foUows:
Class of security
4 percent Treasury bonds of 1944-54..
i^A percent Treasury bonds of 1947-52
4H percent Puerto Rican bonds

Face amount

Principal
cost

$12,000. 00
135,000. 00
55, 000. 00

$12, 285. 00
148, 438.13
55,109. 56

202, 000. 00

216,832. 69

REPORT OF THE SECRETARY OF THE TREASURY

The following statement shows the status of the combined funds
as of June 30, 1934:
District of Columbia teachers' retirement fund, June 80, 1984

Credits:
On account of deductions from basic compensation of teachers:
From Jan. 15, 1920, to June 30, 1933
July 1, 1933, to June 30, 1934

$3,403,324. 77
291,646.59

Appropriations:
To June 30, 1933
Available July 1,1933

2,669,940.91
400,000.00

Interest on investments:
From Jan. 16,1920, to June 30, 1933..
July 1, 1933, to June 30, 1934

1,057,939.33
219,477.40

Total
Less disbursements on account of annuities, refunds, etc., Jan. 15, 1920, to
JuneSO, 1934
•

$3,694, 971. 36

3,069,940.91

1,277,416.73
8,042,329.00
2,418,180.32

Balance in fund June 30,1934

5,624,148.68

Assets:
DEDUCTIONS FUND

Face amount
$26,850 i}i percent First Liberty Loan converted bonds....
562,750 i H percent Fourth Liberty Loan bonds
339,200 i}4 percent Treasury bonds of 1947-52.
122,000 4 percent Treasury bonds of 1944-54
87,000 33^ percent Treasury bonds of 1946-66
. 48,000 3% percent Treasury bonds of 1943-47
142,000 3^^ percent Treasury bonds of 1941-43
232,000 i}4-Z}i percent Treasury bonds of 1943-45
182,000 4H percent Philippine Islands bonds
16,000 4H percent Puerto Rican bonds...
66,320 4 percent Federal land bank bonds...
1,368,880 43^ percent Federal land bank bonds
469,440 43^ percent Federal land bank bonds
91,380 4 ^ percent Federal land bank bonds
.
166,000 6 percent Federal land bank bonds...

Principal cost
$27,529.64
641,497.81
367,781.44
123, 387. 50
87,437.81
49,500.00
137,657.50
232,000.00
197,669. 56
15,962.67
54, 660.95
1,313,830.89
•....
467,020.91
94,627.91
156,836.78

3,888,820
= = = = = =

21,000
135,000
12,000
31,000
199,000
178,000
65,000
216,640
819,600
100
40,000

3,867,400.27

GOVERNMENT RESERVES FUND

i H percent Fourth Liberty Loan bonds
i}4 percent Treasury bonds of 1947-52
4 percent Treasury bonds of 1944-54
3 ^ percent Treasury bonds of 1946-56
3 ^ percent Treasury bonds of 1943-47
ZH percent Treasury bonds of 1941-43
43^ percent Puerto Rican bonds
4 percent Federal land bank bonds
43^ percent Federal land bank bonds
i H percent Federal land bank bonds
5 percent Federal land bank bonds

1,706,340
Accrued interest paid in 1934 (on investment purchases), repayable in 1935
Unexpended balance June 30,1934 on books of Division of Bookkeeping and
Warrants
Total fund assets June 30, 1934

21,183.76
148,438.13
12,285.00
31,146.31
204, 701. 25
177, 606.56
55,109.56
208,050. 78
776, 281.48
101.64
37,547.20

1,672,450.66
6, 639,850.93
668.04
83,639.71
6,624,148.68

Longshoremen^s and harbor workers^ compensation jund.—This fund
was estabhshed under the act of March 4, 1927 (44 Stat. 1444, sec.
44), to provide for the payment of compensation for disability or
death resulting from injury to employees in certain maritime employments, and for the maintenance of employees undergoing vocational
rehabihtation. Each employer is required to pay into the fund the
sum of $1,000 as compensation for the death of an employee of such
employer resulting from injury where it is determined that there is
no person entitled under the act to receive compensation for such
death. Fifty percent of each such payment shall be available for the
payments on account of injury increasing disabihty and 50 percent
shall be available for the payments on account of maintenance for
employees undergoing vocational rehabihtation.
90353—35——6

REPORT OF THE SECRETARY OF THE TREASURY

The fund is administered by the United States Employees' Compensation Commission. Moneys not required for immediate disbursement are invested by the Treasurer of the United States.
The following statement shows the status of the fund as of June
30,1934:
Longshoremen's and harbor workers' compensation fund, June 30, 1984
Credits:
On account of assessments:
To June 30, 1933
July 1, 1933, to June 30, 1934
Interest on investments:
To June 30, 1933
July 1, 1933, to June 30, 1934..

$110,000.00
10,000.00
• $120,000. 00
9,731.92
4,327.86
14,059.77
134,059.77
21,041.64
113,018.13

Total.
Less disbursements on account of current claims and expenses.
Balance in fund June 30, 1934
Assets:
Face amount
$47,600 434 percent fourth Liberty Loan bonds 1933-38
5,500 43^4 percent Treasury bonds, 1947-52
11,550 iH-ZH percent Treasury bonds, 1943-45
11,000 434 percent Federal land bank bonds..
11,000 43^^ percent Federal land bank bonds..
10.000 3 percent Treasury bonds 1951-55
11,000 i \ i percent Federal farm loan bonds.
107,650
Unexpended balances:
Disbursing Officer (check book balances)..
Division'of Bookkeeping and Warrants...

Principal cost
$47,988.64
5,840.31
11,550. 00
9,680.48
9,542.97
9,959.38
9,171. 77
103,733.65
1,093.27
8,191.31
9,284. 58
113,018.13

Total fund assets June 30, 1934

Library oj Congress trust jund.—^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 in
connection with the Library, its collections, or its service as may be
approved by the Board and by the Joint Committee on the Library.
The moneys or securities given or bequeathed to the Board are required
to be receipted for by the Secretary of the Treasury, who is authorized
to invest, reinvest, or retain investments as the Board may determine.
In accordance with the 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 earriings collected on account
of each donation as of June 30, 1934:
Library of Congress trust fund earnings to June 30, 1984
Income account
Donation

Babine
Beethoven
Benjamin
.°.
Bowker
Carnegie.—..
Coolidge
Guggenheim
Huntington
Longworth
Wilbur
Total

Total colCollected
Total collected to
during fiscal
lected to
June 30, 1933 year 1934
June 30, 1934
..

....

$571. 26
1,729.96
20,000. 50
629.82
20,390.06
54, 274. 68
12,861. 67
34, 882.46
13.97
45,096.16
190,450. 52

$250.61
504.75
1,362.00
110.30
3,486.80
6,815. 39
3,785.15
4, 247.50
54.93
13,336. 62
33,943.95

$821.76
2,234.71
21,362. 60
740.12
23,876. 86
61,090.07
16, 646. 82
39,129.96
68.90
68,432.77
224,394.47

REPORT OF THE SECRETARY OF THE TREASURY

The following statement shows the principal cash accounts for
each donation:
Library of Congress trust fund—Cash receipts, cost of investments, and unexpended
balances, fiscal year 1984
Principal account
Unexpended
balance,
June 30,
1933

Donation

Cost of inCash re- Cash avail- vestments
ceipts dur- able
made
durduring
ing fiscal
fiscal
year 1934 fiscal year ingyear

Unexpended
balance,
June 30,
1934

Babine
Beethoven...
Benjamin—
Bowker
Coolidge
Guggenheim.
Huntington.
Longworth..
Wilbur

$38.16
4.00
26.62
45.68
18.38
39.60
33.75
39.38
225. 83

$38.16
4.00
26.62
45.68
$250. 00
268.38
39.60
33. 76
5, 284. 70
5, 324. 08 $4,351. 03
103, 609. 81 103, 835. 64 103, 635. 00

$38.16
4.00
26.62
45. 68
268. 38
39.60
33.75
973. 05
200. 64

Total..

471.40

109,144. 51 109, 615. 91 107,986. 03

1, 629. 88

The board received on account of the securities held in the donation
of Mrs. Elizabeth Sprague Coolidge the sum of $250 representing
5 percent payment on account of $5,000 face amount of Chicago
Railway 5 percent bonds. Cash donations aggregating $3,930 were
received on account of the Longworth Foundation. There was also
received during the year on account of this donation $1,354.70
from maturing investments. Receipts aggregating $103,609.81 were
received from maturing investments held for account of the Wilbur
donation; $1,000 face amount of called fourth Liberty Loan 4:}i
percent bond held for account of the Babine donation was exchanged
for $1,000 face amount of 4 ^ - 3 ^ percent Treasury bonds of 1943-45.
Investments made during the year were as follows:
Donation

Longworth
Longworth
Wilbur
Total

Face
amount

$4,100
100,800
104,900

Securities

4 percent Treasury bonds of 1944-54
Accrued interest paid on above bonds (reimbursable to
principal account).
4 percent Treasury bonds of 1944-54

Principal
cost and
accrued
interest
$4,316.81
34.22
103.635.00
107,986. 03

The following statement shows the securities held by the Board for
account of each donation as of June 30, 1934. The securities are
held in safe-keeping by the Treasurer of the United States, and the
Federal Reserve Bank of New York, subject to the order of the
Secretary of the Treasury for account of the Board.

REPORT OF THE SECRETARY OF THE TREASURY
Library of Congress Trust Fund Board securities held June 80, 1984
Name of security

Face
amount

Alexis V. Babine donation
American Chain Co., Inc..
Federal land bank bonds..
U. S. Government
U. S. Government

$600
3,800
1,000
1.000

Tung-Sol Lamp Works, Inc., 2 shares..
Tung-Sol Lamp Works, Inc., 4 shares..

(')
0)

Rate

Class of security

Percent
7 Preferred stock.
iA\ Farm loan bonds.
iM\ Fourth Liberty Loan bonds of 1933-38.
iH-ZH percent Treasury bonds of
1943-45.
Preferred stock.
Common stock.

Beethoven Association donation
Canadian National Railway..
Federal land bank bonds

10. 000
100

Guaranteed gold bonds.
Farm loan bonds.

William E. Benjamin donation
Standard Oil Co. of California

33,800

Common stock.

R. R. Bowker donation 2
Austrian Government
German Government..
Japanese Government
American Telephone & Telegraph Co..

1,000
2,000
2,000
4,800

Sinking fund bonds guaranteed loan.
German external loan.
Sinking
fund gold bonds.
63^1
Common stock.

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

52,000
80
5,000
25,400

First mortgage bonds.
iH\ Farm loan bonds.
First
and refunding mortgage bonds.
5
43^1 First mortgage bonds.

Elizabeth Sprague Coolidge donation
Canadian National Railways C o . . .
• Do
Chicago Railways Co
Federal land bank bonds
Do
Do
Great Northern Ry. Co
Houston Home Telephone Co
Missouri Pacific R. R. Co
New England Telephone & Telegraph Co.
Public Service Co. of Northern Illinois
Rio Grande Southern R. R. Co.
U. S. Government.
Utah Power & Light C o . . . .
American Ship Building Co
American Telephone & Telegraph Co
American Window Glass Co
Board of Trade Building Trust of Boston..
Commonwealth Edison Co
Elgin National Watch Co
Mexican Northern Ry. Co
Public Service Co. of Northern Illinois

7,000
10.000
3,750
11, 640
2,000
680
10,000
100
2.000
16,400
13, 000
1,000
300
10. 000
6,000
17,100
2,500
700
12, 400
6,625
800
6,000

iH\ Guaranteed gold bonds.
Do.
5
6 First mortgage bonds.
Farm
loan bonds.
4^1
Do.
434
Do.
434 General mortgage bonds.
7
mortgage bonds.
5 First
and refunding mortgage bonds.
5 First
First
mortgage bonds.
41- First and refunding mortgage bonds.
5 First mortgage bonds.
4 Treasury
bonds of 1940-43.
First mortgage bonds.
Common stock.
Do.
Do.
Do.
Do.
Do.
Do.
Preferred stock.

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

740
75,000

iH\ Farm loan bonds.
6 Guaranteed gold bonds.

Archer M . Huntington donation
Central Pacific Ry. C o . . .
Federal land bank bonds...
Missouri Pacific R. R. Co

105, 000
1,000
49,500

Nicholas Longworth donation
U. S. Government
James B. Wilbur donation
Canadian National Railways
Federal land bank bonds
Do
Public Service Co. of Northern Illinois..
U. S. Government

Total..

7
7

4 First and refunding mortgage bonds.
loan bonds.
iH\ Farm
First and refunding mortgage bonds.
5
Treasury bonds of 1944-54.

4,100
44,000
16, 300.
280
100.000
3,000
100,800

5 Guaranteed gold bonds.
iA\ Farm loan bonds.
Do.
4M
7 Preferred stock.
Treasury bonds of 1940-43.
Treasury bonds of 1944-64.

780. 895

» No par.
' Life interest in ^ of income retained under terms of donation.

REPORT OF THE SECRETARY OF THE TREASURY

United States Government lije insurance jund.—^Under the provisions
of section 18 of the act approved December 24, 1919, as amended
March 4, 1923, the Secretary of the Treasury is required to invest in
interest-bearing obhgations of the United States or in bonds of the
Federal land banks all moneys received in payment of premiums on
converted insurance in excess of authorized payments. The act
approved March 3, 1927, as amended by the Emergency Adjusted
Compensation Act of February 27, 1931, authorized the Administrator of Veterans' Affairs to make loans to veterans upon their adjusted
service certificates out of the United States Government life insurance
fund. All of the funds avaflable for investment during the fiscal year
1934 were used to make loans to veterans or invested in obligations
of the United States. The Administrator of Veterans' Affairs reported
outstanding loans to veterans from this fund, June 30, 1934, on policies
and adjusted service certificates, aggregating $550,061,163.97. The
net increase in loans on adjusted service certificates during the year
amounted to $33,346,218.45.
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 veriflcations of the security holdings are made
through reports rendered to the Administrator by the safe-keeping
offices. The investments as of June 30, 1934, were as follows:
Government life insurance fund, June 30, 1934
Par value
434 percent Treasury bonds of 1947-52
4 percent Treasury bonds of 1944-54
Z% percent Treasury bonds of 1946-56
434 percent Federal farm loan bonds
i H percent 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 fund

$35,479, 000. 00
6,371, 000. 00
200, 000. 00
32, 660, 000. 00
69, 200, 000. 00

Principal cost

143, 800, 000. 00
121, 718, 128.89
428,343, 035. 08

$36,190,122. 74
• ,295.98
207,'
, 437. 50
32,477,, i590. 04
69, 742,1
, 644. 40
145, 298,090. 66
121, 718, 128.89
428, 343, 035.08

550.061.163. 97
693,861,163. 97

550.061,163.97
695, 359, 254.63

National Institute oj Health gijt jund.—The National Institute of
Health was created by the act of May 26, 1930 (46 Stat. 379), for
the purpose of creating a system of fellowships in said institute, and
to authorize the Government to accept donations for use in ascertaining the cause, prevention, and cure of diseases affecting human
beings, and for other purposes.
Under the provisions of section 2 of the act, the Secretary of the
Treasury is authorized to accept, on behalf of the United States,
gifts made unconditionally by wdll or otherwise for study, investigation, and research in the fundamental problems of diseases of man
and matters pertaining thereto, and for the acquisition of grounds
or for the erection, equipment, and maintenance of buildings and
premises.
The Secretary of the Treasury is also authorized to accept conditional gifts if recommended by the Surgeon General of the Public
Health Service and the National Advisory Health Council. Any
such'gifts shall be held in trust and shall be invested by the Secretary
of the Treasury in securities of the United States, and the principal
or income thereof shall be expended by the Surgeon General, with the

REPORT OF THE SECRETARY OF THE TREASURY

approval of the Secretary of the Treasury, for the purposes indicated
in the act.
No gifts were received during the year. In order to meet expenditures of the institute, $1,000 face amount of 4K percent Treasury
bonds of 1947-52 was sold. The receipts and expenditures during
the year were as follows:
Receipts and expenditures during 1984
Unexpended balance June 30,1933
^
Receipts:
Net earnings collected during year on investments
Principal cost of securities sold during year.
Total
Expenditures: Advances to institute..
Unexpended cash balance June 30,1934

$847. 56
3,739.03
1,115.68
5,702.27
4,218.67
1,483.60

The following statement shows the status of the fund as of June
30, 1934:
National Institute of Health conditional gift fund, June 80, 1984
Credits:
Principal proceeds of donated securities redeemed at par at maturity
Net earnings on investments
Total
Less advances to meet expenditures on account of the institute
Balance in fund June 30, 1934

$100,000.00
12,860.90
112,860.90
13,197.69
99,663. 21

Accp'fc'

$88,000 face amount 4)4 percent Treasury bonds of 1947-62, principal cost
Unexpended balance to credit of the fund on books of Division of Bookkeeping and Warrants
Total fund assets June 30, 1934

98,179.61
1,483.60
99,663. 21

Alien property trust jund.—Under the act of October 6, 1917, as
amended, and the Settlement of War Claims Act of 1928, approved
March 10, 1928 (44 Stat. 254), as amended, the Secretary of the
Treasury held on June 30, 1934, Government securities in the face
amount of $26,710,000 for account of the Alien Property Custodian.
During the year the following transactions were made in this account.
Securities:
Held June 30,1933
Sold or redeemed
Held June 30, 1934

Face amount
$28,976,500.00
2,266,500. 00
26,710,000.00

1..

A statement of the alien property trust fund as of September 15,
1934, follows:
Alien property trust fund as of Sept. 15, 1984

Credits:
Trusts
Earnings on investments, etc
Total--

$36,920,029.87
30,763,799. 20
67,683,829.07

Assets:
Principal at
Face amount
amortized cost
$9,800,000 4 percent Treasury bonds 1944-54
$10,432,461.93
11,250,000 434 percent Fourth Liberty Loan bonds
11,250,000.00
5,100,000 i\i-ZH percent Treasury bonds 1943-46
6,100,000.00
350,000 3 34 percent Treasury notes maturing Aug .1,1936..
353,828.13
200,000 3H percent Treasury notes maturing Sept. 15, 1937
203,000. 00
10,200 23-^ percent Treasury notes, series A-1939
10,413.56
'
27,349,703.62
26,710,200
Accrued interest receivable
390,461.61
Participating certificates issued under section 26 (e) of the Trading With the Enemy
Act:
Noninterest-bearing
$21,750,000.00
6 percent interest-bearing.
17,652,096.91
_ 39,302,096.91
Cash with Treasurer of the United States
641,667.03
Total fund assets, Sept. 15,1934

67,683,829.07

REPORT OF THE SECRETARY OF THE TREASURY

Checks issued by the Treasury Department during the fiscal year
on account of the alien property trust fund were as follows:
To claimants upon authorizations of the Alien Property Custodian and the Attorney General.-..
$1,636,827.58
To the Alien Property Custodian for—
Distribution of income
1
1,910,171.92
Distribution of Government earnings
_
500,000.00
Administrative expenses
'.
_
250,000.00
Total

4,296,999.50

General railroad contingent jund.—The general railroad contingent
fund was created by paragraph 6 of section 15 (a) of the Interstate
Commerce Act, approved June 18, 1910, as amended by the act of
February 28, 1920 (41 Stat. 489). Under the provisions of this
section any carrier which received for any year a net railway operating income in excess of 6 percent of the value of the railway's property
held for and used by it in the service of transportation was required
to place one half of such excess in a reserve fund established and
maintained by and for use of the carrier, the other half to be paid to
the Government for deposit in the general raflroad contingent fund.
Under the provisions of section 15 (a) of the Interstate Commerce
Act as amended by section 206 (a) of the Emergency Raflroad Transportation Act, 1933, approved June 16, 1933, the Secretary of the
Treasury is directed to liquidate the general railroad contingent fund
and to distribute the fund among the carriers which have made
payments under that section.
A statement showing the distribution by the Secretary of the Treasury of the general railroad contingent fund as of October 31, 1933,.
is included in the annual report of the Secretary of the Treasury for
the fiscal year 1933 as exhibit 40, page 270. During the year ended
June 30, 1934, the Treasury made refunds to the following carriers:
Franklm & Abbeville Ry. Co
Gideon & North Island R. R. Co
Jonesboro, Lake City & Eastern R. R. Co
Kinston Carolina R. R. Co
Potato Creek R. R. Co.
Sugar Land Ry. Co
Wichita Falls & Southern R. R. Co
Total

$22,404.18
1,484.77
66,234.48
91.82
1,675.82
40,246.05
521.04

122,558.16

All amounts due carriers have been paid except the sum of $30,000
due the Genesee & Wyoming R. R. Co. and the sum of $2,388.61 due
the Central Railroad Co. of Arkansas. The existence of the latter
corporation has terminated. A refund will be made as soon as it is
determined who is entitled to receive payment.
The following statement shows the status of the fund as of June
30, 1934:
General railroad contingent fund, June 30, 1984
Credits:
Excess earnings deposited in Treasury under section 15 (a) of the Interstate Commerce
Act
.-;
$10,739,279.57
Interest and profits on investments
.'
3,735,720.97
Total.Deduct:
Amounts refunded prior to passage of Emergency Railroad Transportation Act of 1933:
Illinois Terminal Co
$800,000.00
Tuckerton R. R. Co
2,164.28
Washington Run R. R. Co
3,167.20
Amounts refunded to June 30, 1934, under Emergency
Railroad Transportation Act of 1933
Balance in fund June 30,1934

14,475,000.54

$806,33L48
13,637,280.46

14,442,611.93
32,388.61

REPORT OF THE SECRETARY OF THE TREASURY

Special junds
Colorado River Dam jund.—This fund was established imder the
act of December 21, 1928, to provide for the construction of works
commonly referred to as the Boulder Canyon project. All revenues
received in carrying out the provisions of the act are payable into the
fund. Expenditures are made out of the fund under the direction of
the Secretary of the Interior.
The Secretary of the Treasury is authorized to advance to the fund,
from time to time, within the appropriations therefor, such amounts
as the Secretary of the Interior deems necessary for carrying out the
provisions of the act, except that the aggregate amount of such
advances shall not exceed the sum of $165,000,000. Of this amount,
$25,000,000 shall be allocated tp flood control, and shall be repaid to
the United States out of 62K percent of revenues, if any, in excess of
the amount necessary to meet periodical payments during the period
of amortization, as provided in section 4 of the act. If the $25,000,000
is not repaid in full during the period of amortization, then 62K percent of all net revenues shall be applied to payment of the remainder.
The Secretary of the Treasury is required to charge the fund, as of
June 30 each year, with such amount as may bfe necessary for the
payment of interest at the rate of 4 percent per annum accrued during
the year upon the amounts advanced from the General Treasury and
remaining unpaid, except that if the fund is insufficient to meet the
payment of interest the Secretary of the Treasury may, in his discretion, defer any part of such payment, and the amount so deferred
shaU bear interest at the rate of 4 percent per annum until paid.
Under an opinion of the Attorney General of the United States, dated
December 26, 1929, funds advanced from the General Treasury to
the Colorado River Dam fund for construction costs of the allAmerican canal are not subject to the interest charge. To date,
however, no funds have been advanced to the fund on account of the
all-American canal.
On June 30, 1934, the liabflity of the Colorado River Dam fund to
the General Fund of the Treasury amounted to $61,508,529.64 representing advances in the sum of $58,058,561.96 and interest in the
amount of $3,449,967.68. Upon recommendation of the Secretary of
the Interior and in accordance with the authority contained in section 2 (d) of the act of December 21, 1928, the Secretary of the
Treasury deferred for one year the payment of the total amount of
interest due on June 30, 1934, of $3,449,967.68.
The status of the fund as of June 30, 1934, was as follows:
Colorado River Dam fund, June 30, 1984
Advances from General Fund:
Fiscal year 1931
Fiscal year 1932
Fiscal year 1933
Fiscal year 1934
Interest:
Fiscal year 1931
Fiscal year 1932
Fiscal year 1933_
Fiscal year 1934..
Total
Less amount covered into Treasury as miscellaneous receipts
Total liability to General Fund

$1,746,866.46
17,018,608.34
19,709,297.48
19,684,789.68
25,631.68
365.029.92
1,161,488.18
1,933,449.68
3,475,599.26
25,631.68

^ ^ ' ^^^ ^^^' ^^

13,449,967.68
61,508,629.64

» Payment of interest due June 30,1934, $3,449,967.68 deferred for 1 year lender sec. 2 (d) of the act of Dec.
21,1928.

REPORT OF THE SECRETARY OF THE TREASURY

Advances to reclamation jund.—Under the act of Congress approved
June 17, 1902 (32 Stat. 388), there was established in the Treasury a
special fund known as the "reclamation fund", representing receipts
from the sale of public lands in certain States and Territories to be used
for the construction of irrigation works for the reclamation of arid
lands. Pursuant to theactof June25,1910 (36 Stat. 835), the Secretary
of the Treasury advanced to the reclamation fund from the General
Fund of the Treasury $20,000,000. The act of June 12, 1917 (40 Stat.
149), provides for the reimbursement of the money so advanced
through the transfer of $1,000,000 annually from the reclamation fund
to the General Fund of the Treasury beginning July 1, 1920, and continuing until full reimbursement is made. Beginning with the flscal
year 1921 there has been returned to the General Fund $1,000,000
annually, maldng a total of $10,000,000 for the 10 years ended with
the fiscal year 1930. TheDeficiency Actof February 6,1931,provided
for a suspension of the annual payments for a period of two years and
the act of April 1, 1932, as amended by the act of March 3, 1933,
provided a further extension untfl the fiscal year beginning July 1,
1936.
The Deficiency Act of March 4, 1931, authorized an additional
advance to the reclamation fund from the General Fund of $5,000,000
all of which was advanced between April 28, 1931, and November 30,
1931.
The following statement shows the status of the account as of
June 30, 1934:
Charges:
Advances from the General Fund:
Under act of June 25, 1910
Under act of Mar. 4, 1931
Total
Less repayment of advances to June 30,1930 ^
Unreimbursed balance

$20,000,000
6,000,000
25,000,000
10,000,000
15,000,000

Division oj Bookkeeping and Warrants
The Division of Bookkeeping and Warrants, in the name of the
Secretary of the Treasury, issues all warrants on the Treasurer of the
United States, and under section 10 of the act ofJuly 31,1894 (U. S. C ,
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. The Division also
maintains budgetary accounts relating to the apportionment and
obligation of public funds covering all executive departments and
independent establishments.
Statements of the receipts and expenditures of the Government for
the fiscal year 1934, compiled by this Division, are shown as tables
1 and 2, pages 276 to 293 of this report.
Installmentsjfor 1931-36 suspended.

REPORT OF THE SECRETARY OF THE TREASURY
Division oj Deposits

The Division of Deposits is charged with the administration of
matters pertaining to the designation and supervision of Government
depositaries and the deposit of Government funds in such depositaries.
The regulations of the Treasury governing the deposit of public funds
in depositaries are incorporated in Department Circulars Nos. 176
and 92.
The following statement shows the number and classes of depositaries maintained by the Treasury and the Government deposits
held by such depositaries ori June 30, 1934:
Number of depositaries and amount of Government deposits held on J u n e 30, 1934,
by class of depositaries
[On basis of daily Treasury statements (revised), see p. 273]
Depositaries

Amount

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

384,870.94

1 In addition 217 branch banks are carried on the depositary list of the Treasury under the designation
of the parent banks.
2 Includes 2,018 national banks and 1,422 State banks and trust companies, of which 2,066 held deposits
on June 30,1934.

Several factors contributed toward unusual activity in the Treasury's depositary system during the fiscal year ended June 30, 1934,
principally the rapid progress made by the Comptroller of the Currency in the reopening of urilicensed banks under old or new charters,
or absorption b}^ going banks, the establishment of new bureaus and
agencies of the Government, requiring additional depositary facilities,
and the increased number of special depositaries which were qualifled
to make payment by credit for Government securities purchased
under the terms of Department Circular No. 92. On March 16, 1933,
approximately one-third of the regular depositaries were unlicensed.
At the end of Jurie 1934, all cases, with a few exceptions, had been
adjusted. During the fiscal year 1934, approximately 1,300 changes
arid adjustments were effected within the depositary system, including
new designations; some were necessary to meet new or changed
governmental requirements and others resulted from reorganization
of depositaries under new charters, the cancelation of designations
in cases involving the curtailment or termination of governmental
activities in certain localities, or the liquidation of existing depositaries,
and other adjustments involving changes in the balances carried
with general or limited depositaries. Changes in the collateral security accounts of depositary banks were abnormal, chiefly as the
result of the Treasury's call for redemption of 4)^ percent Fourth
Liberty Loan bonds on October 15, 1933, and April 15, 1934, and

REPORT OF THE SECRETARY OF THE TREASURY

the issuance of new Government securities and of securities guaranteed by the Government, either as to interest or principal, or both,
all of which were made eligible as collateral security for Government
deposits supervised by the Secretary of the Treasury. (Amendments
to Department Circulars Nos. 92 and 176, in this connection, will
be found as exhibits 40 and 41 on pp. 255 and 256.)
The adjustment of depositary accounts in banks closed for liquidation during the past two years has proceeded in orderly fashion and was
substantially completed during the past flscal year. To date, the
United States has not sustained any losses through the failure of
depositary banks.
As indicated on page 70 of the .annual report for the fiscal year 1933,
the collection of interest upon Government deposits carried with
banks by the Secretary of the Treasury, terminated by June 30, 1933,
except in the case of certain special deposits. The total of all interest
received by 'the Treasury to June 30, 1934, from all depositaries
designated by the Secretary of the Treasury, including past-due
interest accrued on deposits to June 30, 1933,^ is $112,702,126.59,
according to the latest revised figures.
Section oj Surety Bonds
On June 30, 1934, there were 62 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 2 domestic companies and 5 branches
of foreign companies holding certificates of authority authorizing
them to act only as reinsurers on bonds iri favor of the United States.
Changes in the outstanding certificates of authority during the period
ended June 30, 1934, are indicated in the following table:
Companies authorized as of June 30, 1933
Changes during the year ended June 30,1934:
Certificates terminated:
Companies in process of liquidation
Company in rehabilitation

Certificates issued
Net reduction in number

Companies authorized as of June 30,1934

71
3
1

4
2
2
69

In accordance with the practice of the Treasury, a number of
departmental circulars to the heads of departments and independent
establishments of the Government, bond-approving officers, and
others concerned, have been issued during the past year to advise
such officials of the status of the bonds in favor of the United States
executed by the companies whose certificates of authority were
terminated. These circulars are numbered as follows: 492, 493, 495,
496, 497, 510, and 511.
Division oj Disbursement
The Division of Disbursement was organized December 16, 1933,
under the provisions of section 4 of Executive Order No. 6166, which
transferred the function of disbursement of moneys of the United

REPORT OF THE SECRETARY OF THE TREASURY

States exercised by any agency of the executive branch of the Government to the Division of Disbursement of the Treasury Department.
The office of the Disbursing Clerk of the Treasury Department was
transferred on December 16, 1933, and one week later the disbursing
functions of eight independent establishments were likewise transferred. At various times up to June 1, 1934, this function was transferred from each of the departments and independent estabhshments
located in Washington, except the Post Office Department, the Panama
Canal, and that portion of the War and Navy Departments relating
to national defense.
The personnel, supphes, equipment, and appropriations which were
available for the disbursing work performed by these various departments and estabhshments were transferred to the Division of Disbursement as provided by the Executive order. The Division has been
furnished quarters in the Treasury Annex, with an assignment of
space in the old Post Office Building, for making rental and benefit
payments for the Agricultural Adjustment Administration, and on
June 30, 1934, had a force of approximately 700 employees. As the
(consohdation has been effected, the various accounts have been
merged when possible without conflicting with estabhshed accounting
procedures.^
In March 1934, at the request of the Federal Emergency Rehef
Administration, the Division of Disbursement estabhshed an office at
Oklahoma City, Okla., for the purpose of disbursing relief administration funds in that State. About a month later offices at Boston, Mass.,
and Bismarck, N. Dak., were estabhshed for the same purpose.
During the month of June, field offices were estabhshed at Minneapolis, Kansas City, and San Francisco for the purpose of maldng disbursements in connection with emergency purchases of hvestock and
seed under the drought rehef program of the Agricultural Adjustment
Administration. I t is anticipated that additional offices in other
parts of the country will be established in the near future for the same
purpose.
At various times assistant disbursing officers of the Division have
been sent to various locahties in order to make payments for land
purchased for slum eradication projects of the Public Works Administration.
The Division has been requested by several of the Governmentowned corporations to perform the disbursing services for those organizations, and as new agencies of the Government have been created,
the Division has assumed the function of disbursement for those
agencies. Among the largest agencies for which the function of disbursement has been assumed are the Railway Labor Retirement
Board and the Federal Housing Administration.
On June 30, 1934, the Division of Disbursement was issuing in
Washington an average of approximately 75,000 checks per day in
payment of pay rolls and vouchers. The various field offices were
issuing an average of approximately 50,000 checks per day, and in
addition, the offices disbursing emergency rehef funds were maldng
several thousand payments in cash each week for the rehef of transients.
» On July 1,1934, all disbursements by the Division were consolidated in the account of the Chief Disbursing Officer.

REPORT OF THE SECRETARY OF THE TREASURY

DIVISION OF APPOINTMENTS

Nurriber of em^ployees
For the fiscal year ended June 30, 1934, there was a net increase
of 2,310 in the number of employees in the Treasury Department in
Washington. The principal increases occurred in the OflGice of the
Treasurer, due to the large number of checks issued by the Civil
Works Administration, and in the Division of Loans and Currency,
because of the activities in connection with the calling of the Fourth
Liberty Loan and the handling of bonds of the Home Owners'
Loan Corporation and the Federal F a r m Mortgage Corporation.
The principal decrease was in the Bureau of Engraving and
Printing.
I n the field service the force was reduced from 48,922 on June 30,
1933, to 45,245 on June 30, 1934, a net decrease of 3,677. The principal decrease was caused by the transfer of the Custodian Service
to the Post Office Department. Considerable increases occurred in
the Public Health Service, due to the activities in connection with
the Civil Works Administration program, and in the Bureau of
Internal Revenue, caused by various new tax laws.
The number of employees in the departmental service of the Treasury, classified according to bureaus and oflfices, at the end of each
month from June 30, 1933, to June 30, 1934, is shown in table 48,°
page 402, of this report. A comparison of the number of employees
in the departmental and field services of the Treasury on J u n e 30,
1933, and June 30, 1934, is contained in table 49, page 403.
RetireTnent of em^ployees
During the fiscal year 1934, 318 persons were retired from the
departmental service of the Treasury Department, 23 of whom
were retired at their own option. During the same period 290
persons were retired from the field services, 18 at their own option.
As of June 30, 1934, 10 persons above the retiremeut age were retained in the departmental service of the Treasury and 1 in the
field service, under authority of the President in accordance with
the provisions of section 204 of the Economy Act. U p to J u n e 30,
1934, 36 employees of the Treasury Department in Washington, and
177 employees of the field services, who have served 30 years or more,
and whose services were discontinued on account of necessary reduction of force on or since June 30, 1933, have been granted annuities
under the provisions of section 8 (a) of the Independent Offices
Appropriation Act of June 16, 1933.
Table 50, page 404, shows the number of persons retired and the
number retained in the departmental and field services of the Treasury under the provisions of the Civil Service Retirement Act, as
amended, and of section 204 of the Economy Act of June 30, 1932,
and the number granted annuities under the provisions of section 8 (a) of the Independent Offices Appropriation Act of June
16, 1933.
BUDGET AND IMPROVEMENT COMMITTEE

The Budget and Improvement Committee is responsible, under
the direction of the budget officer, for the preparation and examination of Treasury estimates of appropriations and for the improve

REPORT OF THE SECRETARY OF THE TREASURY

ment of administrative methods and procedure within the Treasury
Department. I n addition to examining all estimates, the committee
makes inquiries as to the reserves which may be set up under the
various appropriations and considers other matters affecting expenditures of the Department.
Subsequent to the submission of the regular estimates of. appropriations for the fiscal year 1935, supplemental and deficiency estimates aggregating $98,831,462 were received. After examination by
the budget officer, with the assistance of the committee, these estimates were reduced to $98,754,441 and submitted to the Director of
the Bureau of the Budget.
I n pursuance of the President's intention to effect substantial
reductions in all expenditures, the Director of the Bureau of the
Budget indicated that the cash withdrawals from the Treasury during the fiscal year 1934 on account of appropriations for the Treasury
Department, other than for interest,on and retirement of the public
debt, should not exceed amounts under particular appropriations
which were determined in general by taking as a base for each the
amount appropriated for 1934, or the actual expenditures for 1932,
whichever was less; and, after deducting the amount of the 15 per
cent reduction in compensation of all officers and employees, making
a, further reduction equal to 10 percent of the remainder. The
amounts so allocated were modified from time to time in accordance
with changed conditions during the year and particularly because
of the restoration of 5 percent of the compensation effective February 1,1934. The revised total of the allocations for cash withdrawals
was $252,884,936 of which $246,764,423 was actually withdrawn from
the Treasury, leaving a saving of $6,120,513.
For the fiscal year 1935 the Director of the Bureau of the Budget
has approved $182,817,841 for expenditure from appropriations, with
reserves of $2,631,670 for savings.
For the fiscal year 1936 heads of bureaus and offices submitted
estimates for annual and permanent and indefinite appropriations
aggregating $1,635,269,793. After the examination by the Budget
and Improvement Committee, items aggregating $21,721,720 were
disapproved in estimates for .annual appropriations. There was
approved and submitted to the Director of the Bureau of the Budget
for annual appropriations, $180,084,953 (which amount included
$16,801,550 of appropriations made in lieu of permanent and indefinite appropriations, which were repealed by the Permanent Appropriations Repeal Act 1934, approved June 26, 1934) ; for permanent
and indefinite appropriations and special funds, $2,491,420; trust
funds, $15,535,300; interest on the public debt, $854,000,000; and
public debt retirements chargeable against ordinary receipts, $561,.434,000; maldng a grand total of $1,613,545,673.
COAST GUARD

The following is a summary of the principal operations of the
Coast Guard for the fiscal year 1934, in-which comparisons with the
preceding year 1933 are indicated:

REPORT OP THE SECRETARY OF THE TREASURY

Increase (+)
or decrease

1933

Lives saved or persons rescued from peril
—
Persons on board vessels assisted
Persons in distress cared for
Vessels boarded and papers examined
Vessels seized, reported, or warned 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 derehcts and other obstructions recovered
Value of vessels assisted (including cargoes)
Persons examined for certificates as hfeboat men...

(-)

6,492
33, 716
595
83,031
1,549
$244, 558
155
7,176
7,476

5,597
34, 767
1,246
31, 730
1, 401
$94, 500
204
6, 861
7,877

-895
+ 1 , 051
+651
-51,301
-148
-$150, 058
+49
-315
+401

300
$55, 565
$40, 516, 220
3,828

267
$112,100
$47, 296,109
5,917

-33
+$56, 535
+$6,779,889
+2, 089

Protection to navigation
International service of ice observation and ice patTol.—Two cutters and one 125-foot patrol boat were detailed to carry on this
service for the season of 1934. Since vessels using the Canadian
steamship lanes had reported numerous icebergs just north of latitude 45°, of which many were in positions for a probable drift to
the southward, the 125-foot patrol boat was detailed in April 1934
to make a survey of ice conditions in the regions of the Grand
Banks. The ice patrol was inaugurated on April 17, and from
that date to June 29, 1934, two cutters made alternate cruises of
about 15 days each in the ice regions. Four times each day ice information was broadcast to shipping, and once each day the Hydrographic Office of the Navy was furnished the latest ice information.
Surface sea temperatures were collected for use in the preparation
of surface isotherm charts which were valuable in predicting the
drift of icebergs. . The 125-foot patrol boat was employed exclusively in oceanographic work. This vessel made three oceanographic cruises and dynamic surveys of the patrol area, and from
these data current charts were prepared for use in determining the
probable set and drift of the ice. During the first 7 months of
1934 approximately 575 different icebergs were reported south of
latitude 48°, which number is considerably greater than the yearly
average of 377. While the ice season as a whole was heavier than
usual, the menace to the North Atlantic steamship lanes. United
States tracks, was considerably less than during years of average
ice conditions. The patrol was discontinued on June 29, 1934.
Winter patrol.—The President, on November 6, 1933, on the recommendation of the Secretary of the Treasury, designated 12 cutters
to perform the customary special winter cruising along the coast for
the season 1933-34 to aid vessels in distress. One of the cutters was
withdrawn and ordered to the Coast Guard depot for overhauling
and repairs. These cutters cruised 36,606 miles, afforded assistance
to 45 vessels, whose value, including cargoes, amounted to $3,763,832.
There were 480 persons on board the vessels assisted. Sixty-three
vessels were boarded in the interest of United States laws.
Anchorage and movements of vessels.—Supervision was continued
over the anchorage and movements of vessels at ports and in localities where Federal regulations have been promulgated in the interest of safe navigation and the free and orderly movement of marine

REPORT OF THE SECRETARY OF THE TREASURY

traffic in congested areas. At the larger ports this duty has been
performed by officers designated as captains of the port, and enforcement of the regulations in other localities has been carried out
through periodic inspections by Coast Guard vessels and by special
assignments.
Enforcement of customs and other laws
The duties of the Coast Guard in connection with the enforcement
of the customs, navigation, and motor-boat laws of the United States
were continued as was also the customary assignment of Coast
Guard vessels at the principal ports to assist the customs authorities
in boarding incoming vessels, and in the conduct of other customs
duties. Assistance was also afforded to other branches of the Government in the enforcement of Federal laws.
Liquor smuggling.—Smuggling of liquor into the United States
from the sea changed considerably as a result of the repeal of the
eighteenth amendment on December 5, 1933. As a result of reduced appropriations a large number of units were put out of commission and the Coast Guard was not in a position to resume
promptly effective antismuggling measures. Immediately following repeal there was a sharp decline in smuggling on all coasts, but
the end of the fiscal year 1934 witnessed a considerable renewal of
smuggling activities. At that time smuggling was of moderate extent off the Atlantic coast north of the Chesapeake Capes, of considerable volume in the Carolinas and Georgia, and heavy in Florida
and along the coast of the Gulf of Mexico. On the Pacific coast
smuggling in bulk has almost terminated. A serious problem is the
control of smuggling in aircraft which fly from the Bahamas into
Florida, and from Mexico into the United States. Night flights and
night landings are known to have been made, and destinations far
inland are said^ to be common. A construction program of aircraft
has been undertaken in an endeavor to control this form of smuggling.
Patrol in northern waters.—The regular annual patrol of the
waters of the North Pacific Ocean, Bering Sea, and southeastern
Alaska was conducted for the season of 1933 by six Coast Guard cutters and one 125-foot patrol boat. The vessels cruised over 51,000
miles, assisted 16 vessels, boarded 61 vessels, afforded medical and
dental aid to 1,886 persons, and transported 317 persons.
The patrol for the season of 1934, which was in progress at the
close of the fiscal year, is being performed by seven cutters and two
125-.f oot patrol boats.
Northern Pacific halibut fishery.—The Coast Guard annually performs for the Bureau of Fisheries, Department of Commerce, the
duty of patrolling the waters in the interest of law enforcement with
respect to halibut fishing. The work was carried on by one cutter
from October 16 to 26, 1933, and March 3 to 21,1934.
Communications
Telephone and telegraph lines and cables.—The Coast Guard owns
and operates a coastal communication system consisting of telephone
and telegraph lines of approximately 1,488 miles of pole line, 2,712

REPORT OF THE SECRETARY OF THE TREASURY

miles of open wire aerial circuits, 46 miles of aerial and underground
cables, and 607 miles of submarine cable. I n addition to the routine
overhauling and repairing of the telephone and telegraph lines,
major projects were undertaken involving the replacement of submarine cable at various places ori the coasts. Other improvements
were made in the construction, rebuilding, and extension of service
lines, and the installation of cables connected with new projects.
The Coast Guard continued its scientific study and investigation
of telephone transmission problems, with the result that considerable
progress has been made.
Radio.—The extended use of aircraft in the Coast Guard necessitated the development of radio equipment to meet the special needs
of the service. Material progress has been made in the matter of
the elimination of electrical induction interference to radio reception on the planes and in the development of radio direction finders.
The program for the standardization and improvement of radio
installations aboard vessels and aircraft of the service was continued.
Previous experimentation in the matter of the installation of radio
equipment on lifeboats located at life-saving stations of the Coast
Guard has definitely proven that a standard plan could be evolved
and put into operation.
An officer of the Coast Guard continued to represent the Treasury Department on the Interdepartmental Radio Advisory Committee.
Eguipment
Floating eguipment.—On June 30, 1934, there were in commission
in the Coast Guard 37 cruising cutters, 24 harbor craft, 4 special
craft, nine 165-foot patrol boats, thirty-two 125-foot patrol boats,
thirteen 100-foot patrol boats, six 78-foot patrol boats, lifty-eight
75-foot patrol boats, 75 picket boats, and 24 miscellaneous patrol
boats. This floating equipment does not include the primarily lifesaving boat equipment attached to Coast Guard vessels and stations.
The remaining eight destroyers formerly obtained from the Navy
were decommissioned and returned to the custody of the Navy.
A program^ for the construction of seven 328-foot cutters and
five 165-foot cutters, nine 165-foot patrol boats, four 110-foot harbor
cutters, and a number of lifeboats and surfboats for cutters and stations is now underway.
I n addition to overhauling, reconditioning, and repairing certain
vessels at the Coast Guard repair depot at Curtis Bay, Md., routine
repairs to vessels and boats were made under contract with private
concerns and at navy yards. New engines were installed in two
patrol boats at an Army base.
Special study has been given to the preservation of the steel structure of Coast Guard floating units and it is thought the subject has
so developed as to permit the service to take an advanced step in the
preservation of all cutters and patrol boats.
Small boats.—Investigation and research work in connection with
accelerated corrosion of lifeboat sheathing has continued with the
cooperation of the laboratories and metallurgists of the various commercial firms which manufacture sheathing material. Conclusions
will be available shortly and it is contemplated that steps will be
taken to adopt the latest and most satisfactory material for sheathing
9Q3§3—3§

REPORT OF THE SECRETARY OF THE TREASURY

not only new boats, but also present boats in service on which the
sheathing is deteriorated.
Research work on copper bottom paint has been completed, and a
standardized paint of known ingredients has been adopted. This
procedure eliminates the use of various commercial brands of copper
bottom j)aints for wood hulls which have proven unsatisfactory.
Experimental work of investigating and testing in the related
fields of special metals, woods, marine equipment, fittings, and outfits was continued with success. Considerable economy has resulted
from the improvement of lumber procurement, and the adoption at
the Coast Guard depot of modern practices in the bending of whiteoak frames.
Special attention was given to the incorporation of modern innovations in the design and construction of the two new 52-foot motor
lifeboats. One boat will probably be completed by the end of 1934;
the construction of the second boat, which is in frame, will follow.
Aviation,—During the year Coast Guard airplanes cruised 219,572
miles and searched over an area of 1,975,014 square miles. The
planes were in the air 2,752 hours, and 5,494 vessels and planes were
identified. Through the checking and. reporting system established
by the service along the Atlantic seaboard 11,592 airplanes were
reported.
Coast Guard aircraft rendered assistance in 44 cases; transported
critically sick or injured persons at sea to hospitals on shore, and
serum and oxygen flasks to hospitals; located lost, missing, or overdue vessels and boats, and boats suspected of smuggling, and carried
on regular patrol duty in the prevention of smuggling of contraband
and aliens into the United States.
Contracts were awarded for the construction of 10 Douglas and
9 Grumman amphibian airplanes. A program for the erection of
four new air stations has been started and is progessing rapidly.
On March 9, 1934, the Secretary of the Treasury directed that all
aviation activities of the Treasury Department be consolidated under
one head, and 15 planes of miscellaneous types, and their equipment,
belonging to the Customs Service, were transferred to the Coast
Guard.
Three Coast Guard air patrol detachments have been established,
respectively, at Buffalo, N. Y., San Antonio, Tex., and San Diego,
Calif., to aid in combatting smuggling of contraband over the
Canadian and Mexican borders. Six land planes of the 02U-2 type
were transferred from the Navy to the Coast Guard during the year.
Twenty commissioned Coast Guard officers are undergoing flight
training at the Naval Air Station, Pensacola, Fla. Thirty enlisted
men were sent to Pensacola for flight training during the year. A
school for the training of enlisted men for aviation ratings has been
established at the Coast Guard air station. Cape May, N. J .
Ordnance.—The curtailment of expenditures has been continued in
the interests of economy, but efforts have been made to maintain
efficiency both in the use of arms and in the upkeep of equipment.
The Coast Guard won 3 national championship trophies, 1 gold
medal, 19 silver medals, 43 bronze medals, and 11 President's brassards in small arms competitions with other services and civilian
organizations. Interest in small arms efficiency has steadily grown,
particularly among the personnel of stations.

, REPORT OF THE SECRETARY OF THE TREASURY

Work on an armory at the Coast Guard depot has been completed,
making possible the overhaul and repair of small arms at minimum
cost. A large part of the work of reconstructing surveyed material
is performed by personnel who are taking the armorer's course. This
course includes training in the operation of small arms target ranges
and in the use of the new light type wrecking outfit. An underground, reinforced concrete magazine completed at the depot provides safe stowage space for all classes of ammunition and pyrotechnic material, and a new landing dock facilitates the loading and
unloading of magazine stores.
Experiments with shoulder line-throwing equipment have been
continued. A special projectile for use with the service rifle has been
developed.
When the modification of the fire control systems of two cutters
has been completed, and the installations authorized for two others
have been accomplished, all electric-drive cutters with the exception
of one cutter will have sound powered telephone systems for fire control and intercommunication. Each of 22 units has been equipped
with two vertical range-finder mounts, a range-computer slide rule
and a check plate, and at the academy a Vickers director has been
installed for instruction purposes. This equipment has been fur^nished in order to increase gunnery efficiency.
The acadeony.^ stations.^ bases^ repair depot.^ engine school., repair
base., etc.
Coast Guard Academy.—During the fiscal year, 51 cadets were
appointed to the academy, 25 cadets resigned, and 5 cadets completed
the course of instruction and were graduated from the academy and
commissioned as ensigns on May 28, 1934. There were 101 cadets
under instruction at the end of the fiscal year.
The practice cruise for cadets for 1933 was in progress at the close
of the last fiscal year. Two cutters composed the special practice
squadron for the 1934 cruise, and left New London, Conn., on June 3,
1934. Their itinerary includes calls at two United States ports and
a number of foreign ports. The cruise is expected to terminate the
latter part of August.
Stations and bases.—On June 30, 1934, 242 Coast Guard (life-saving) stations were in an active status and three shore bases were in
commission. Ten shore bases and one floating base were discontinued
during the year.
Rebuilding, repairs, alterations, additions, and improvements
were completed during the 37ear at 151 Coast Guard stations, 2 divisioris, 8 bases, 12 radio stations, 1 communications storehouse, 6 air
stations, at the Coast Guard Academy ( New London, Conn.), F o r t
Trumbull Training Station (New London, Conn.), the Coast Guard
depot (Curtis Bay, Md.), 7 miscellaneous units, and in 4 Coast
Guard districts on property damaged by storm.
Contracts were awarded or work was begun within the year for
major work of rebuilding, alterations, and improvements at 11 Coast
Guard stations, 1 division, 2 radio stations, 1 communications storehouse, 4 air stations, at the Coast Guard Academy, and the Coast
Guard depot. The Port Orford station, contract for the construe

REPORT OF THE SECRETARY OF THE TREASURY

tion of which was awarded in the last fiscal year, was placed in
commission July 1, 1934.
Repair depot.—During the year a number of Coast Guard vessels
were overhauled, reconditioned, repaired, and improved at the repair
depot, Curtis Bay, Md. The iDoat-building shop at the depot constructed a number of standard and miscellaneous boats for assignment to units of the Coast Guard as needed.
Engine School and Repair Ba^e.—The reclamation plant, which
operated at base 9, Cape May, N. J., as an industrial unit of the
service, was used in reconditioning several types of marine engines
and in converting aircraft engines for marine use, and also in repairing vessels of other units operating in the vicinity. The latter
part of April 1934 the plant was moved to the Gas Engine School,
at Norfolk, Va., and both units were combined under the name of
Engine School and Repair Base. The duties of the repair base will
remain the same.
Engineering competition
Thirty-one cruising cutters and eight Coast Guard destroyers took
part in the engineering competition during the year. Before the
end of the year the eight destroyers were decommissioned so none
of these qualified. The engineering competition results in maintaining engineering personnel and material in the highest possible state
of readiness and efficiency.
Personnel
On June 30, 1934, there were on the active list of the Coast Guard
459 regular and 2 temporary commissioned officers; 101 cadets; 84
chief and 503 regular warrant officers; 180 temporary warrant officers, 160 of whom were on duty with the War Department under
orders contained in Executive Order 6169; 8,754 enlisted men, and
277 civilian employees in the field, of whom 234 were per diem
civilian employees at the Coast Guard depot, Curtis Bay, Md..
Recruiting.—At the beginning of the fiscal year the recruiting
service of the Coast Guard comprised 4 main stations and 3
substations. During the year two substations were closed due to
the suspension of recruiting. Of 6,054 applicants for "enlistment,
189 were enlisted, 248 were rejected for physical disability, and
5,617 rejected for other disabling causes.
Training.—The training for enlisted personnel was necessarily
curtailed on account of a lack of funds, but where circumstances
permitted, men were trained in various schools with excellent results. Equipment was added to the plant of the Engine School and
Repair Base, at Norfolk, Va., providing better facilities for training. During the early part of the year Coast Guard men were
trained in the Marine Corps Armorer's School, Philadelphia, Pa.,
and in the Naval Gun Factory, Washington, D. C. Several men
were also trained at the Parachute Materiel School, Lakehurst, N. J.,
maintained by the Navy.
The Coast Guard Institute, at New London, Conn., continues to
afford opportunities to men desiring to pursue home-study courses
to prepare for promotion in whatever specialty they desire. During

REPORT OF THE SECRETARY OF THE TREASURY

the year, 256 International Correspondence Schools diplomas and
592 Coast Guard Institute educational certificates were awarded to
the personnel.
Awards'of life-saving medals
The Secretary of the Treasury, under the provisions of law,
awarded during the year 10 gold and 47 silver life-saving medals of
honor in recognition of bravery exhibited in the rescue or attempted
rescue, of persons from drowning in waters over which the United
States has jurisdiction, or upon an American vessel.
AppropriccUons and expenditures
The follow^ing table shows the amounts appropriated for the Coast
Guard for the fiscal year 1934, together with the balances of appropriations from the previous year, and the expenditures and unexpended balance of each appropriation. This includes an allotment
of $25,031,872 from the National Industrial Recovery Appropriation for repairs on, and construction of, vessels, stations, etc.
Appropriations, expenditures, and unexpended balances for the Coast Guard for
the fiscal year 1934

Title of appropriation for Coast Guard

Amount of
appropriation,
allotment,
or balance

Expended
and
obligated

$341, 000. 00 $306, 393. 62
Salaries, Office of Coast Guard
Pay and allowances
18,900, 000. 0014, 845, 343. 02
Fuel and water
1,825, 000. 00 1, 254, 171. 24
Outfits
1,800, 000. 00 1,400, 374. 25
Rebuilding and repairing stations, etc.,
327, 040. 00 264, 353. 04
C ommunication lines
140, 000. 00 130, 528.10
Civilian employees
94, 910. 00
86, 033.41
225, 000. 00 177, 791. 45
Contingent expenses
Repairs to Coast Guard vessels
2, 000, 000. 00 1, 516, 468. 30
Retired pay, former life-saving service
714. 79
120, 000. 00
National Industrial Recovery, Treasury,
Coast Guard
1 25,031, 872. 00 23, 220,040.87
101, 384. 80 1 16,140. 20
Additional vessels
62, 427. 44
4, 930.44
Coast Guard Academy...
Total

50,968,634. 24 43, 280,002. 33

Transferred

49, 691

Impounded
salaries

$21,
1, 505,

$12,447. 38
, 499, 559. 98
570,828. 76
390,039. 75
60, 954.96
8,822. 90
571. 59
46, 655. 55
468, 520. 70
17,007. 21
,'811,831.13'
117,525.00
57,497.00

2 50,186

1, 576,184 6,062, 261. 91

1 1933 obligations canceled.
2 Transfers:
From pay and allowances, Coast Guard
To
To
To
To

Unexpended
balance

Commissioner of Accounts
salaries, Procurement Division
salaries and expenses. Bureau of Engraving and Printing
salaries. Procurement Division...

$49,691
9,167
7,697
29,827
3,000
49,691

From salaries, Coast Guard
To Division of Disbursements, salaries

- 495
495

COMPTROLLER OF THE CURRENCY
Changes in the condition of national banks
The total assets of the 5,422 licensed national banks on June 30,
1934, aggregated $23,901,592,000, in comparison with assets of
$20,860,491,000 reported by 4,902 licensed banks on June 30 the

REPORT OF THE SECRETARY OF THE TREASURY

previous year. The deposits of the licensed banks in 1934 aggregated $19,932,660,000, or $3,158,545,000 more than the amount reported for licensed banks a year earlier. The loans and investments
totaled $17,046,296,000, or $1,554,893,000 more than on June 30, 1933.
The 95 unlicensed national banks still in the hands of conservators
had total assets of $136,128,000 and total deposits of $97,999,000.
The assets and liabilities of licensed national banks on the date of
each report from June 30, 1933, to June 30, 1934, are shown in the
following statement:
Abstract of reports of conddtion of licensed national banks at the date of each
report from June 30, 1933, to June 30, 1934
[Dollars in thousands]
June 30,
1933
4,902

Number of banks..

Oct. 26,
1933
6,057

Dec. 30,
1933
5,169

Mar. 5,
1934
6,293

June 30
1934
6,422

ASSETS

18,116,972 i, 257,937 ;8,101,166 $7, 899,279 $7,694, 749
Loans and discounts (including rediscounts)^
3,394
2,994
2,800
4,224
3,053
Overdrafts
4,031,576 :, 111, 646 4,469,147 1,407,348 6,645,741
United States Government securities
Securities guaranteed by United States Government
141, 579 357,911
as to interest and/or principal...
3,340,055 3,383,270 3,401,625 1,286,864 3,344,901
Other bonds, stocks, securities, etc
129,128
225,835 198,820 229,966 191,258
Customers' liability account of acceptances
641, 694 646, 292 646,278 643, 643 656,819
Banking house, furniture and fixtures
151,970
132,187
158,422
158,530
166,416
Other real estate owned
1,412,127 1,684,024 1, 747,364 !, 029,848 2,497,400
Reserve with Federal Reserve banks
288,478 329, 786 343,117 358,302 362,402
Cash in vault
2,381,333 2,149, 664 2,313,464 !, 498,833 2,798,241
Balances with other banks
32,812
48,922
37,008
26,543
43,260
Outside checks and other cash items
Redemption fund and due from U n i t e d S t a t e s
40,861
40,474
Treasurer
37,428
38,387
36,426
Acceptances of other banks and bills of exchange or
4,912
12, 504
4,330
14,005
1,408
drafts sold with .endorsement
4,508
4,359
6,716
2,112
Securities borrowed
3, ""
203,727
231,368 224,735
181,468
Other assets
202,616
21,747,483 22,941,173 23,901,692
Total..
20,860,491
LIABILITIES

Demand deposits, except United States Government
deposits,, other public funds and deposits of other
banks
036,761 7,180,766
Time deposits, except postal savings, public funds,
and deposits of other banks
354,017 6,484, 561
1,076,691
Public funds of States, counties, municipalities, etc..
United States Government and postal savings deposits
1,024,374 1,095,139
Deposits of other banks, certified and cashiers' checks
outstanding, and cash letters of credit and travelers'
checks outstanding.
2, 270, 586 !, 218,051

7,331,067 7,463,649 8,041, 680
6,619,119
1,253,664

1,125,216 1,609, 262 1,330,460
2,360,937 2, 755,268 2,986,982

Total deposits...
16,774,115 17,055, 208 17, 589,882
Secured by pledge of loans and/or investments 2
Not secured by pledge of loans and/or investments 2
730,436
Circulating notes outstanding.:
Agreements to repurchase United States Government
9,223
and other securities sold
88,628
Bills payable
29,327
Rediscounts
Acceptances of other banks and bills of exchange or
draft sold with endorsement
4,
229,
Acceptances executed for customers
Acceptances executed by other banks for account of
reporting banks
Securities borrowed
Interest, taxes, and other expenses accrued and unpaid..
41,
Other liabilities
1 Includes customers' liability under letters of credit.
2 Information not compiled prior to Mar. 6,1934.

730,547 6,076,625
331,771 1,499,013

790,487

932,660

640,397

623,159

160,090

409,601

778,666

790,037

698,293

13,
81,
19,

5,905
68,452
13,636

6,061
47,369
5,350

4,399
13,672
2,007

4,
206,

14,005
235,718

12,604
194,824

1,408
133,221

6,816
6,716

5,790
4,608

6,683
2,112

46,100
81,622

56,618
108,073

41,741
64,363

746,913

7,777

REPORT OF THE SECRETARY OF THE TREASURY

Abstract of reports of condition of licensed national banks at the date of each
report from June SO, 1938, io June 80, 1984—Continued
[Dollars in

thousands]
J u n e 30,
1933

Oct. 26,
1933

D e c . 30,
1933

M a r . 5,
1934

J u n e 30,
1934

LIABILITIES—continued
C a p i t a l stock (see m e m o r a n d u m below)
Surplus
U n d i v i d e d profits, n e t . . .
Reserves for contingencies
Preferred stock r e t i r e m e n t fund .

20,860,491 21,198, 649 21, 747,483 22,941,173 23,901, 592

Total
Memoranda:
P a r v a l u e of capital stock:
Class A preferred stock
Class B preferred stock
C o m m o n stock
Total

$1,515,647 $1, 566, 698 $1,688,250 $1,653,930 $1,737,827
867,825
854,057
880, 670
940,598
916,183
257, 311
236,022
248,870
235, 600
264, 376
151, 267
197, 224
149,807
164, 709
176,344
130
671

243,291
401,989
75,119
140, 295
51,193
10,081
4,400
6,535
2,600
3,800
1,463, 412 1,488,682 1,444,769 1,406,162 1,326, 722
1, 517, 205 1, 567,601 1, 589,454 1,654,988 1,738,792

L o a n s a n d i n v e s t m e n t s pledged to secure liabilities: 2
U n i t e d States G o v e r n m e n t securities
O t h e r b o n d s , stocks, a n d securities . .
L o a n s a n d discounts (excluding rediscounts)

2,869,879 2, 606,142
997, 637
991,388
121,407
102, 226
3,988,923 3,699,756

Total.
Pledged:
Against circulating notes o u t s t a n d i n g
Against U n i t e d ^States G o v e r n m e n t a n d
postal savings deposits
Against p u b l i c funds of States, counties,
school districts, or o t h e r subdivisions or
municipalities
.
.
Against deposits o f t r u s t d e p a r t m e n t
Against other deposits
.
.
Against borrowings
W i t h S t a t e authorities to qualify for t h e exercise of fiduciary powers
F o r o t h e r purposes _.

816, 269

724, 566

1,658,117 1,445,592
935,153
245,805 .
146,572
87,907

976,448
249,491
176,768
26,387

64,893
34, 207

82,902
18, 602

3,988,923 3, 699, 756

Total

2 Information not compiled prior to Mar. 5, 1934.

Reopening and reorganisation of national banks
On July 1, 1933, there remained in conservatorship as a result
of the President's proclamation of March 6,1933, 985 national banks
with total deposits of $990,218,000. During the fiscal year 1934,
three banks previously licensed to reopen had their licenses revoked
and were placed in conservatorship bringing the total to 988 with
total deposits of $994,201,000.
As the result of the activities of the Reorganization Division, 583
banks with deposits of $742,833,000 were licensed to reopen under
old or new charters or absorbed by other national banks; 14 banks
with deposits of $4,972,000 were placed in voluntary liquidation or
received authorization for the sale of their assets to State banks; and
296 banks with deposits of $148,317,000 were placed in receivership.
On June 30^ 1934, there remained unlicensed 95 national banks, of
which 82 with deposits of $89,747,000 have approved plans of reorganization, leaving only 13 with deposits of $8,332,000 without
approved reorganization plans.

REPORT OF THE SECRETARY OF THE TREASURY

Summary of national banks, licensed and unlicensed, from July 1, 1933, to
June 30, 1934
[Dollars in thousands]
Number

S t a t u s of b a n k s
Unlicensed, J u l y 1,1933
Revocation of licenses

. ... ...

985
3

$990,218
3,983

988

994,201

893

896,122

98,079

C h a n g e s in unlicensed b a n k s , J u l y 1, 1933, t o J u n e 30, 1934:
NumReorganized u n d e r old or n e w charter or absorbed b y a n - ber Deposits
other n a t i o n a l b a n k
583 $742,833
V o l u n t a r y l i q u i d a t i o n or left t h e n a t i o n a l b a n k i n g s y s t e m .
14
4,972
Placed in receivership
296 148,317
Unlicensed, J u n e 30,1934

Unlicensed, J u n e 30, 1934 (deposits as of J u n e 30,1934)
Licensed, J u l y 1,1933
Changes i n hcensed b a n k s , J u l y 1, 1933 t o J u n e 30, 1934:
N e w charters issued 2
Licensed u n d e r old c h a r t e r . . .
Restored t o solvency
T o t a l increase for year
Voluntary hquidations...
Placed in r e c e i v e r s h i p . .
Consolidations
Revocation of licenses

.:.

T o t a l reduction for year

Number
495
154
3

Deposits
$555,037
166,474
2,229

652

713,740

123
2
4
3

107,635
334

132

111, 606

97,999

4,902

16, 821,850

3,637

N e t increase i n licensed b a n k s for y e a r

Licensed, J u n e 30, 1934...
Licensed, J u n e 30, 1934 (deposits as of J u n e 30, 1934, call)

Deposits 1

. . .

620

602,134

5,422

17,423,984

5,422

19,932,660

1 Deposits, unless otherwise indicated, are taken from condition reports as of Dec. 31, 1932, and conservators' first reports. In the case of new banks, deposits are ajpproximately as of opening date.
2 Represents newly chartered banks which opened in period.

Summ^ary of changes in membership in the national banking system.
The authorized common capital of the 5,633 national banks in
existence on June 30, 1934, was $1,354,428,741, a decrease during the
year of $242,828,434, and the authorized preferred capital of these
banks was $412,963,600, an increase during the year in this class of
capitalization of $358,519,000. The net increase in capitalization
was $115,690,566. During the year charters were issued to 491
national banking associations, of which 205 had common stock only,
aggregating $30,192,500; the remaining 286 banks had an aggregate
of $23,061,800 common stock and $25,873,800 preferred stock.
During the year, 798 existing national banks took advantage of
the provisions of the act of March 9,1933, and increased their capital
by issuing preferred stock of an aggregate par value of $332,728,900.
While charters were issued during the year to 491 associations, there
was a net decrease of 313 in the number of banks—that is, from 5,946
to 5,633—^by reason of voluntary liquidations, receiverships, and
consolidations.
Changes in the number and capital of national banks during the
last year are shown in the following summary:

REPORT OP THE SECRETARY OF THE TREASURY

Organization, capital stock changes, and liquidations of national banks during
"
the fiscal year 1934
Capital
Number of
banks

Charters granted
Issues of preferred capital (798 banks) 2__.
Increases of common capital (87 banks) 3..
Restored to solvency

Common

Preferred

$53, 254, 300 $25,873,800
332, 728, 900
9, 636,116
3, 555,00.0

Total.

66,445, 416

Voluntary liquidations
.
Receiverships^
Decreases of capital (328 banks) *
Closed under consolidation (Act of Nov. 7, 1918) and capital
decreases incident thereto
Total..

294
563

41, 428, 000
71,867, 500
201, 248, 350

358, 602, 700
50, 000
'33,'700

1, 250, 000
861

315, 793,850

83, 700

Net increase in preferred capital
Net decrease in banks and common capital
Charters in force June 30, 1933, and authorized capital.

6 313
5,946

242,828,434
1, 597, 257,175

Charters in force June 30, 1934, and authorized capital.

5,633

1, 354,428, 741 412, 963, 600

358, 519, 000
.54, 444, 600

1 Of these banks 286 had both common and preferred capital stock.
2 Includes 2 increases aggregating $400,000 which were accomplished in connection with consolidations
under the acts of Nov. 7,1918, and Feb. 25, 1927.
3 Includes 1 increase of $60,000 which was effected as a result of a consolidation under the act of Nov. 7,
1918, and 1 increase of $100,000 incident to the consohdation of a State bank under the act of Feb. 25, 1927,
and 7 increases aggregating $710,000 by stock dividends.
4 Includes 41 banks with aggregate capital of $6,520,000, which had been previously reported in voluntary
liquidation.
* Includes 2 banks with preferred stock retirements.
6 Net decrease in number of national banks in existence including adjustment of the number of receiverships for 41 banks previously reported in voluntary liquidation.

BUREAU OF CUSTOMS

Receipts
Customs receipts during the fiscal year 1934 showed an increase
over those for the preceding year for the first time since 1929. Total
collections for the year, $314,093,508, represented an increase of 25
percent over those for 1933, although they were 4 percent lower than
the receipts for 1932.
A large portion of the increase is the result of the collection of duty
on distilled hquors and wines, which, from Dec'ember 5, 1933, to June
30, 1934, amounted to $24,023,703. The difference was due in part to
increases in the quantities of certain commodities imported and in
part to higher unit values of imported merchandise dutiable on an ad
valorem basis.
The following statement shows in detail customs collections, refunds,
and payments of drawback claims for the fiscal years 1933 and 1934.
The total amount collected and covered into the Treasury as customs
receipts does not include tonnage tax, head tax, internal revenue tax,
and miscellaneous collections made by customs officers for other
bureaus and deposited as receipts for the appropriate bureau or
service.

REPORT OF THE SECRETARY OF THE TREASURY
Customs receipts and refunds during the fiscal years 1933 and 1934
[On basis of accounts of Bureau of Customs]
1933

Receipts:
Duties
Miscellaneous:
Sale of unclaimed merchandise and abandoned
goods
Fines and forfeitures
Liquidated damages
Sale of seizures
All other customs receipts..

$250,601,722
$39,366
622.421
23. 598
41,756
71,707

Total miscellaneous
Total receipts

Refunds:
Excessive duties
Drawback payments

1934

$133,361
485,826
200,524
88,249
91,830
798,838

999,780

251,300,660

314,093,608

4,923,378
7,590,971

Total refunds

$313,093,728

6,849,243
8,076,988
12,614,349

13,926,231

Volume of business
Entries oj merchandise.—The number of entries of merchandise
increased from 2,010,068 in 1933 to 2,159,660 in 1934. Every type
of entry participated in this increase, wdth the exception of mail.
Although the mafl entries decreased from 521,032 in 1933 to 449,799
in 1934, duties collected on importations through the mafls, exceeding
$100 in value, aggregated $3,047,944, an increase of $809,302 over
1933.
Vessels, highway traffic.—The decline in international Sraffic continued during 1934, as shown in the following table:
Number of vehicles and persons entering the United States from abroad during the
fiscal years 1933 and 1934
1933

Vehicles:
Automobiles
Doeuniented ve-ssels
Trains, passenger...
Airplanes

Total
Passengers by:
Vehicles
Vessels and ferries
Trains
Airplanes
Pedestrians ._
Total...

--.

1934

Increase
(+) or decrease (—)

9,433,328
27,731
39,284
6,209

8,744,310
28,690
38,420
4,672

Percent
-7.3
+3.1
-2.2
-12.2

9,606,562

8,816,892

-7.3

26,960,991
3,652,768
811,301
19,847
9,383,672

26,555,099
3,669,714
906,021
20,729
9,636,860

-5.2
—2 3
+11.6
+4.4
+2.7

40,828,679

39,686,423

—2 8

Drawback transactions.—Drawback entries numbered 17,319, which
is 9.3 percent more than for 1933. In addition 160,609 notices of
intent to export merchandise with benefit of drawback were filed,
an increase of 55.3 percent over 1933. Drawback claims allowed
increased from $7,708,797 in 1933 to $8,092,783 for the past year,
while drawback claims paid increased from $7,590,971 to $8,076,988.

REPORT OF THE SECRETARY OF THE TREASURY

Under authority of section 318 of the Tariff Act of 1930, the President, by proclamation dated December 30, 1933, declared an emergency to exist because of trie general business conditions and authorized the Secretary of the Treasury to extend for 1 year, after the
expiration of the 3-year period prescribed by law, the time within
which merchandise imported during 1931 may be permitted to remain in warehouse under the provisions of sections 557 and 559 of
trie Tariff Act of 1930; the time during which proof may be furnished that wool or camel's hair imported or withdrawn from bonded
warehouse conditionally free of duty, under bond, during the calendar
year 1931 has been used in manufactures prescribed in paragraph
1101, Tariff Act of 1930; and the time wdthin which articles manufactured or produced with the use of merchandise imported during the
calendar year 1933 may be exported with benefit of drawback under
section 313, Tariff Act of 1930. Pursuant to this proclamation the
Secretary of the Treasury issued Treasury Decision 46823, granting
an extension of the time for 1 year in these cases.
Public Act No. 397, Seventy-third Congress, to provide for the
establishment, operation, and maintenance of foreign trade zones in
ports of entry of the United States, to expedite and encourage foreign
commerce, and for other purposes, was approved June 18, 1934.
Regulations covering the protection of the revenue and prescribing
customs procedure in zones to be established pursuant to this act
are in course of preparation.
Seizures.—Seizures for violations of the customs laws continued to
decline, the number effected being 38,841, or a decrease of 12 percent
from the preceding year. The number of liquor seizures was 11,721,
as compared with 21,013 for 1933. Since repeal of the eighteenth
amendment, most of the liquor seizures have been made either along
the Atlantic coast or in dry States adjacent to the Mexican border.
In connection wdth violations of the customs laws, 786 automobiles,
161 boats, and 14 airplanes, with an aggregate value of $502,078, were
seized, a decrease of 374 automobfles, 235 boats, and 16 airplanes
from the number seized during 1933. In addition, customs officers
efl'ected 1,169 seizures for other agencies of the Government and detained 672 persons for violation of immigration, prohibition, and other
laws.
Fines and penalties.—Collections due to violations of laws pertaining to the Customs Service aggregated $686,349, an increase of $40,330 over 1933. Undervaluation and false invoicing were responsible
for almost one-third of the collections during 1934. Penalties for
faflure to declare foreign merchandise were responsible for only 5
percent of the total, whereas in 1933 they aggregated practically onefourth of all fines collected.
Antidumping
Upon the recommendation of trie antidumping unit of the investigative branch of the Customs Service, in cooperation with the Bureau
of Customs, findings of dumping have been issued by the Secretar}^ of
the Treasury on a number of commodities. Only $6,625 was collected
in dumping duties during the year, as compared with $37,807 collected in 1933.

REPORT OF THE SECRETARY OF THE TREASURY
Countervailing duties

Countervailing duties are collected under the provisions of section
303 of the,Tariff Act of 1930, which directs the Secretary of the
Treasury to impose rates of duty comparable with those imposed
by foreign countries on the same commodity. The total collected
amounted to $223,625, as compared with $203,556 during the preceding year. Approximately one-half of the 1934 collections was on
coal and lumber products imported from Canada, while more than
one-fourth represents duties on automobiles and parts from Great
Britain and other countries. Countervailing duties on liquors and
wines from Great Britain constituted 11 percent of the collections of
such duties.
Smuggling
The system of handling criminal cases in connection with the
smuggling of m^erchandise has resulted in securing a high percentage
of convictions. All criminal cases incident to seizures effected by the
Customs Service are investigated, reported, and followed through
the courts by customs agents. When seizures are made, customs
agents interrogate the persons immediately after arrest, are responsible for the taking of their fingerprints and photographs, undertake
to develop evidence in connection with the cases, present the case
to the United States Commissioner, report them in proper form to
the United States, attorney, cooperate in their presentation to grand
juries, cooperate with United States marshals in locating and enforcing
attendance of defendants and witnesses at trials, and cooperate with
the United States attorney in the actual presentation of testimony
during trials.
Obscene books, pamphlets, stationery, etc., abortive and preventive
drugs and appliances, lottery tickets and related advertisements, and
insurrectionary or treasonable literature are prohibited importations
under section 305, Tarifl' Act of 1930. During the past year, 16,440
seizures of lottery tickets and advertisements and 714 seizures of
obscene and other prohibited articles were destroyed. In addition,
31 seizures were permitted to be exported under customs supervision,
17 were released to the importers after investigation, and 758 lottery
seizures were assigned to the Post Office Department for the issuance
of fraud orders.
The prevention of smuggling of narcotics has occurred in several
instances by the use of a ffie containing the names of all persons
suspected of smuggling and methods employed for landing contraband.
The work has also been facilitated by the close relationship maintained between the Royal Canadian Mounted Police and the
Customs Service.
Smuggling of watches and watch movements declined during the
year. The activities of the customs agents, especially on the Canadian border, resulted in the apprehension of some of the most notorious smugglers of these articles.
The smuggling of grain, grain products, and particularly raw wool
from Canada, has been continuous. These products are brought into
border territory, a large portion of which is difficult to patrol because of inadequate equipment and the climatic conditions during
the winter months. Last winter the iriternational boundary line

REPORT OF THE SECRETARY OF THE TREASURY

was accessible for crossing at practically all points by utilizing sleighs
and sleds.
An investigation instituted at the beginning of the present calenciar
year into the smuggling activities of a certain company and its allied
companies, owned or controlled by persons of Vancouver, British
Columbia, disclosed that more than 200,000 cases of foreign liquors
had been landed on the Pacific coast between July 1929, and the
date of the repeal of the eighteenth amendment. A civil suit was
instituted in the United States District Court at Seattle, Wash., for
the recovery of $17,500,000, the forfeiture value of the liquors and
other charges due the United States. Two of the four defendants
named in the indictment posted a $100,000 bond, each, which they
forfeited by default. In order to further secure itself in case of
favorable judgment, the Government has levied attachments against
the real and personal property of the defendant companies valued
at approximately $500,000.
Miscellaneous provisions oj the tariff act
Marking oj imported articles.—Importations received without
having been marked so as to indicate the country of origin, as required by section 304, Tariff Act of 1930, were disposed of as follows:
In 7,935 cases, the articles were released after having been marked
under customs supervision; in 5,074 cases, they were released as
incapable of being marked; and in 211 cases, were exported. The
10 percent additional duty imposed under this section resulted in a
coUection of $125,097 in 1934, as compared with $69,741 in 1933.^
Merchandise bearing American trade marks.—Under the provisions
of section 526 of the Tariff Act of 1930, prohibiting the unauthorized
importation of merchandise bearing an American trade mark,
2,701 seizures were accomplished during the year, of which 9 were
destroyed, 19 exported, 2,400 permitted to be imported after removal
or obliteration of the trade mark, and 256 permitted to be imported
by consent of the trade-mark registrant, the remainder being either
sold or released under bond.
Investigative unit
Undervaluation.—Investigations of undervaluation cases continued
a most important factor in the work of the investigative unit, both
in the United States and abroad. Information was obtained which
indicates the continued attempt on the part of unscrupulous importers
to invoice merchandise incorrectly. Recoveries made as the result
of this class of work during 1934, amounted to $284,590, which was
in excess of that collected in 1933.
A major undervaluation and smuggling case involving an importer
of women's apparel was concluded in Philadelphia, Pa., and resulted
in the acceptance of an offer in compromise of $30,553, and in
addition $700 in penalties and forfeiture value was collected from the
president of the firm for the smuggling of a diamond bracelet.
Criminal cases.—Criminal cases incident to seizures effected by
the Customs Service are investigated, reported, and followed through
the courts by customs agents. This system has continued with
gratifying success since it has resulted in securing a high percentage
of convictions.

REPORT OF THE SECRETARY OF THE TREASURY

Classijication.—Many investigations have been conducted relative
to the classification of merchandise imported. Evidence was developed to warrant a change in the classification of human hair
imported from China so as to provide a 20 percent instead of a 10
percent ad valorem rate of duty. This change will result in increased
revenue of hundreds of thousands of dollars per year. I t was also
found that leaf tobacco imported from Cuba was not being properly
classified and appraised.
Customs joreign service.—The investigative unit maintains offices
in Canada, Europe, the Orient, and Cuba, which are divided for
adininistrative purposes into districts. An officer, known as a
Treasury attache, is in charge of each of these foreign offices, except
the district of Montreal,Canada, whose chief officer is the supervising
customs agent. A corps of trained investigators is assigned to each
Treasury attache. These investigators contact foreign manufacturers in an effort to establish foreign market values of merchandise
exported to the United States, in response to requests made by
appraising officers in this country.
The foreign service officers render invaluable service through their
cooperation with the domestic service in the detection and prevention
of the smuggling of narcotics and other articles.
Customs injormation exchange.—The customs information exchange is the medium used by the Customs Service to disseminate
information relative to market values and classifications of imported
merchandise and other pertinent customs data. The statement
following summarizes its activities during the year:
Appraisers' reports of value received
Appraisement of appeal reports received..
Changes in values circulated
Requests for investigations abroad
Reports received in response to requests for investigations
Reports received covering original investigations by Treasury attaches
Difference in classification reported

Number
11,506
2,575
2,346
1,361
1,948
5,751
^.
357

The exchange issues weekly circulars giving the dates of sailing
of vessels from foreign ports and their arrival at the various United
States ports.
Summary.—The following statement shows the results achieved
by the investigative unit during the past year, in so far as direct
results have a monetary measure or may be measured by count of
individual cases:
Ports examined
Drawback investigations
Foreign investigations
Arrests..
Convictions
Acquittals
Failures to indict
Indictment cases pending
Seizures made
Seizures appraised
Seizures released or pending
Cases pending investigation:
July 1,1933
June 30, 1934

Appraised value of seized merchandise
Merchandise entered free but found dutiable
Bail forfeitures
Fines imposed by United States courts
Fines, penalties, and forfeitures incurred, exclusive of court
Increased and additional duties collected
Deposits as offers in compromise
Proceeds of sale of seized merchandise

Number
196
._ 1,936
2,087
1,087
789
104
97
274
1,003
: . . 946
270

1,309
1,531
^

fines
.

Amount
$1,213,112.27
23,140.73
64, 380. 50
139,549.49
621,316.00
284,689.53
666,643.34
._
278,607.62

REPORT OF THE SECRETARY OF THE TREASURY

BUREAU OF ENGRAVING AND PRINTING

Deliveries of currency, securities, stamps, and miscellaneous work
by the Bureau during the year amounted to 315,905,581 sheets, as
compared with 308,917,247 sheets for the previous year, an increase
of 6,988,334 sheets. A comparative statement of deliveries of finished
work follows:
Deliveries of flnisJied work in the fiscal years 1933 OMd 1934
Sheets
Face v a l u e , 1934

Currency:
U n i t e d States notes
8, 746,000
Silver certificates
49, 248,000
1, 662, Odo
Gold certificates
6, 579, 285H
National bank currency
10,424, 000
F e d e r a l Reserve n o t e s . .
F e d e r a l R e s e r v e b a n k notes (national cur3,174, 000
rency)
TotaL79,833, 285^^
B o n d s , notes, certificates, a n d bills:
37,823
Pre-war b o n d s
102, 678M
Liberty bonds
482,4473^
Treasury bonds
367, 025
T r e a s u r y notes
T r e a s u r y bills
18, 206
Certificates of i n d e b t e d n e s s
115,140
Insular bonds:
200
Philippine Islands
3,440
Puerto Rican
F a r m loan b o n d s
—
25, 245Mo
C o n s o h d a t e d farm loan b o n d s
8,182
Collateral t r u s t d e b e n t u r e s '.
Federal F a r m Mortgage
Corporation
bonds.-_
.
H o m e Owners' Loan Corporation b o n d s . . .
R e c o n s t r u c t i o n F i n a n c e C o r p o r a t i o n notes.
P h i l i p p i n e t r e a s u r y certificates
1, 538, 600
N o t e s for t h e b a n k of t h e P h i l i p p i n e
132, 200
Islands
I n t e r i m receipts for b o n d s of H o m e O w n e r s '
L o a n Corporation
1.
750
I n t e r i m certificates for P u e r t o R i c a n b o n d s
I n t e r i m transfer certificates for postal savings
bonds
Specimens:
Treasury bonds
T r e a s u r y notes
Treasury bills.
Certificates of i n d e b t e d n e s s
Insular bonds, Puerto Rican
11
F a r m loan b o n d s
4
Consolidated farm loan b o n d s
Collateral t r u s t d e b e n t u r e s
F e d e r a l F a r m M o r t g a g e Corporation bonds.
H o m e O w n e r s ' L o a n Corporation b o n d s . . .
R e c o n s t r u c t i o n F i n a n c e Corporation notes.
2.831,9661^0
Total

Stamps:
Customs
Internal revenue:
U n i t e d States
P h i l i p p i n e Islands
Puerto Rican
Virgin Islands
District of C o l u m b i a
Specimens, U n i t e d States
Postage s t a m p s :
U n i t e d States
U n i t e d States, surcharged
Zone"
C a n a l Zone
P h i l i p p i n e Islands
Specimens, U n i t e d States
Proofs, U n i t e d States
Postal Savings s t a m p s
Total

119,700
93,854,696^04
419, 350
38
102^
116,146,256

4, 500, 001
39, 273, 000
20, 000
4, 527,120
3, 916, 600

$234,000, 012
476, 244,000
456,000,000
457,921, 200
609,480,000

2, 224,000

221, 760,000

54, 460, 721

2, 455, 406, 212

60, 9001^
140, 484
2, 298, 3 3 3 %
339, 625
19,934
69,125
700
1,938
33, 457
249, 636
21,440
2,118, 310
2, 956, 300
29,850
7^54, 500

206,115, 520
1, 461, 756, 800
10,606,165,300
8,881,400,000
11,891,118,000
3, 753,000,000
-700,000
1, 350,000
33, 439, 600
784, 500,000
648, 200,000
893,800,
1, 204, 525,
1, 749, 500,
2, 628,

000
000
000
750

93, 500
100
1,000

6%
3
10

16H
18
23
10
14
9,159, 2343%o
145,365
108, 633,98617 %04
189,425
423, 200
525
22,440
127K
113,628,878

42,118,198.870
Subjects
4,637,300
9, 500, 659, 758
22, 291,584
30,403,000
52, 500
4,488,000
3,238H
11,839,687,310

' Canal
16,800
3,150
344, 483
161*^00
6,318
.210,909,0453^40

1,576,000
15,750
20,664
1,558,200
122,976
12,418,660
3,020
442^00
460
2
688,200
6,882
223,209,265^37^100 21,418,266,120H

REPORT OF THE SECRETARY OF THE TREASURY
Deliveries of finished work in the fiscal years 1933 and 1934—Continued
Sheets

Miscellaneous:
Checks.
Warrants
Commissions.
Certificates...
Transportation requests
Liquor permits. . .
Other miscellaneous...
Blank paper.
Specimens
Total
.
Grand total

.
.

Subjects

1933

1934

8,444, 205
68,260
31, 290^
4,348,704
281, 111
2,032,125
147,12615^6
1
127
15, 342, 9501^5
308, 917, 246126^/1276

24,430,978
50,440
112,966
3,907,372
255,470
- 156,9371^
161, 076H

122,154,890
243,020
63, 718
17, 531, 207
1, 277,350
765,500
2, 722,412

1,120
29, 076, 359^
315, 905, 58FM26

6,648
144, 753, 745

There was expended during the year for salaries and expenses
$7,101,598, as compared with $7,840,291 in 1933. These expenditures
are exclusive of $311,221 and $892,836 for 1934 and 1933, respectively,
the amounts impounded under the provisions of sections 110 and
203 of the Economy Act. The following statement shows the appropriations, reimbursements, and expenditures for the fiscal years 1933
and 1934:
Appropriations, reimlbursements, and expenditures for the fiscal years 1933
and 1934
1934

1933
Appropriated by Congress, salaries and expenses
Transferred from pay and allowances, Coast Guard
Reimbursements to appropriation from other bureaus
for work completed i
...
Total
—
. . . .
..
Expended, salaries and expensesJ
__
Unexpended balance (including impoundments)...

$6,430,000.00

Increase (+) or
decrease ( - )

$5, 060, 680. 00 -$1,369,320. 00
29,827.00
+29,827.00

2, 531, 569. 36
8, 961, 569. 36
7,840, 291. 67
1,121, 277. 79

2, 692, 005. 31
7, 782, 512. 31
7,101,598. 56
680,913. 76

+160, 435.95
— 1,179,-067.05
-738,693.01
-440, 364.04

l A n additional a m o u n t of $3,239.65, 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 $12,000 a n d $8,000 transferred to Bureau of S t a n d a r d s for research work
In the fiscal years 1933 and 1934, respectively; $264,993.98 and $238,485.42 transferred
to retirement fund in the, fiscal years 1933 and 1934, respectively.

Spoilage of currency was reduced from 2.59 percent for 1933 to
2.52 percent for 1934.
The following dies for new postage stamps and other work were
engraved during the year:
U N I T E D STATES POSTAGE STAMPS
Denomination

Issue

National Recovery Administration
General Kosciuszko
Maryland Tercentenary . . .
Mothers' Day
Little America
. .
Byrd Expedition II

Cents

3
5
3
3
3
3

Issue

Wisconsin Tercentenary
National Park, Yosemite (orders for 2
to 10 cent, inclusive, also received)
Air mail, Fhght of Zeppelin to the Century of Progress Exposition
Air mail

Denomination
Cents
3
1
60
6

P H I L I P P I N E POSTAGE STAMPS, ORDINARY

Rizel
.Woman with Palay.
Filipino Girl
Pearl Fishing,

Centavos
2
4
6
8

Fort Santiago.
-..
Salt Springs..1
Magellan's LandingJuan de la Cruz

Centavos
10
12
16
20

REPORT O^ THE SiECRETARY OF THE TREASURY

The passage of the 40-hour week law for mechanics affected 769
employees of the Bureau. Inasmuch as 3,289 employees were not
included in this legislation it was necessary to continue operating
the plant on a 44-hour basis and to coordinate as effectively as possible the work of these two groups of employees.
The rotating furlough continued throughout the year, but schedules were changed frequently to meet conditions brought about by
the receipt of new and increased orders for securities of various
classes.
The greatest pressure for work during the year occurred in connection with checks, bonds, and postal savings certificates. All orders received were urgent and three shifts were frequently established until sufficient engraved stock was available. Much overtime
work was necessary to meet delivery schedules. There was also considerable loss of time and extra expense in meeting orders as a result
of changes in regular production routine in order to meet urgent
orders.
The largest bond orders came from the Federal F a r m Mortgage
Corporation and the Home Owners' Loan Corporation, and aggregated (the orders totaling) more than 2,000,000 sheets. Special
stamps were prepared for bottled distilled spirits, and a special
issue of liquor stamps was ordered by the District of Columbia.
I n addition, certificates of indebtedness. Treasury notes, and bonds
were printed in connection with the Treasury financing program.
New models were prepared for gold and silver certificates and for
Federal Reserve notes. The engraving work of a few denominations
of silver certificates was completed before the end of the year and a
small quantity was printed and delivered.
Production and distribution of Civil Works Administration checks
required the employment of 50 temporary employees and the organization of three 8-hour shifts.
COMMITTEE ON ENROLLMENT AND DISBARMENT OF ATTORNEYS
AND AGENTS

The Committee on EnroUment 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 enroUed practitioners. The conclusions of this committee
in each case are submitted as recommendations to the Secretary of
the Treasury.
During the fiscal year 1934, 1,329 applications for enrollment of
attorneys and agents were approved and 4 were disapproved. I n
one case the applicant for enrollment was afforded a formal hearing
by the committee.
On June 30, 1933, complaints were pending against 93 enroUed individuals, 48 new complaints were ffled during the year, and 49 were
disposed of by the Secretary, leaving 92 pending on June 30,1934. In
16 cases the Secretary, on recommendation of the committee, accepted
the answers of the respondents as sufficient and the complaints were
dismissed. In each of 33 cases the committee, after formal hearing
accorded the respondent, submitted its findings and recommenda90353—35—8

REPORT OF THE SECRETARY OF THE TREASURY

tions to the Secretary, who disposed of them as follows: In 3 cases it
was found that the charges were not proven and the complaints were
dismissed; in 30 cases the charges were found proven in whole or in
part and the Secretary imposed penalties—22 practitioners were disbarred from further practice before the Treasury Department, 4 were
suspended from practice for various periods, and 4 were reprimanded.
I t is the policy of the committee to give an enroUed attorney or
agent opportunity to show cause why formal disbarment proceedings
should not be instituted against him; 11 such cases occurred during
the year.
Since the organization of the Committee on EnroUment and Disbarment, 36,241 applications for enrollment have been approved and
502 disapproved. One hundred and sixty-one practitioners have
been disbarred from further practice before the Treasury Department,
114 have been suspended from practice for various periods, and 156
have been reprimanded. In 13 cases the order of disbarment has
been terminated and the practitioner restored to good standing before
the Department.
SECTION OF FINANCIAL AND ECONOMIC RESEARCH i

The section, which includes the Office of Government Actuary, performs a combined research, editorial, actuarial, 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, largely for use within the Department. Studies
in taxation during the fiscal year were related especially to tax legislation passed dming the period. The section engages also in estimating
revenue receipts.
As in the past, the Annual Report of the Secretary of the Treasury
was edited and in part prepared by the section, under the general
supervision of the Under Secretary; the section also participated in
the preparation and editing of Statistics of Income for 1932, and of
other Treasury publications.
.The montlfly publication of daily yields of Government bonds and
notes, and the montlfly estimate of the population of the United
States (appearing on the Circulation Statement of United States
Money) were continued. A monthly index of yields of Treasury
bonds was inaugurated during the fiscal year.
Service on various governmental committees was performed by
members of the section, including the service of the Government
Actuary on the Board of Government Actuaries in connection with
the Civfl Service retirement law.
1 By order of the Secretary of the Treasury, dated Sept. 17,1934, the Section of Financial and Economic
Research was abolished. The same order created the Office of Director of Research and Statistics to exercise
direct authority over and responsibility for all economic research, production, analysis, and publication of
statistics in all branches of the Treasury Department. The Director is also the Chief of the Division'of
Research and Statistics (including the Office of the Government Actuary) which was created to absorb the
duties theretofore assigned to the Section of Financial and Economic Research.

REPORT OF THE SECRETARY OF THE TREASURY
BUREAU OF INTERNAL REVENUE

General
Internal revenue coUections.—Receipts from internal revenue, including agricultural adjustment taxes, during the fiscal years 1933
and 1934 were as follows:
SwTwnary of internal revenue receipts for the fiscal years 1933 omd 1934 "^
[On basis of reports of collections, see p. 274]
1933

1934

$394, 217,783.93
362, 573,620.18

$397, 516,851.94
419, 509,487. 78

$3, 298,068 01
66,936,867.60

746, 791,404.11

817.026, 339. 72
60, 229,122. 97
2,630, 616. 66

70, 233,935. 61
60, 229,122. 97
2, 630, 615 56

869,886,078. 25

123,093,674 14

113,138, 364.10
425,168,897. 04

78,828, 640. 25
22,429,837 79

Sources
Income Tax Unit:
C o r p o r a t i o n income tax 2
I n d i v i d u a l income t a x _ _
Total
D i v i d e n d tax
Excess profits tax
Total

. .

—

Miscellaneous T a x U n i t :
E s t a t e a n d gift taxes
Tobacco manufacturers
_. .
Sales (capital stock, s t a m p a n d excise, a d m i s sion, c o m m u n i c a t i o n s , checks, oleomargarine,
etc.)
Total
Agricultural a d j u s t m e n t tax
Alcoholic T a x U n i t :
Alcoholic liquor taxes:
Received b y collectors of i n t e r n a l r e v e n u e . D e p o s i t e d b y collectors of c u s t o m s
Total.
Miscellaneous receipts (prohibition, d e l i n q u e n t
u n d e r repealed l a w s , etc.)
T o t a l collections

34, 309, 723. 85
402, 739, 059. 25

Increase

392, 238,008.12

633,282,270. 62

241, 044, 262. 50

829, 286, 791. 22

1,171, 689, 531. 76
371, 422,885. 64

342, 302, 740. 54
371,422,885. 64

43,174,316.92
5, 505. 52

262, 333,373.97
6, 577, 958. 66

209,159,057. 05
6, 572, 453.13

43,179,822.44

258,911,332.62

215, 731, 510.18

681, 206. 53

430, 366. 26

160,840.28

1, 619,839, 224. 30

2, 672, 239,194. 62

1,052, 399,970. 22

1 In this summary tax receipts are classified according to the administrative organization for the audit of
returns, i. e., the Income Tax Unit, the Miscellaneous Tax Unit which includes the Estate Tax Division,
the Tobacco Division, the Sales Tax Division, the Processing Tax Division, and the Alcohol Tax Unit.
A detailed statement of collections appears in table 7, p. 317.
2 Includes income tax on Alaska railroads (act ofJuly 18,1914) amounting to $4,262.03 for 1933 and $2,240.12
for 1934.

Rejunds.—In the foregoing statement of receipts no deductions
have been made on account of refunds, which during the fiscal year
1934 were paid from the several appropriations as follows:
Refunding taxes illegally collected 1932 and prior years
Refunding taxes illegally collected 1933 and prior years
Refunding taxes illegally collected 1934 and prior years..

$402.96
7, 792,909. 27
38,027,006.05

Total
45,820,318.28
Advances to Agricultural Adjustment Administration (transfer to Internal Revenue for
refunds)
1,374,404.47
Grand total, all refunds (interest included)

47,194,722.76

I n 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 $1,479,237.36.

REPORT OF THE SECRETARY OF THE TREASURY

Number of claims, amount refunded, and interest allowed on each class of tax
during the fiscal year 1.934
Number
of claims

A p p r o p r i a t i o n a n d class of t a x

" R e f u n d i n g taxes illegally collected", for t h e fiscal year 1932
a n d prior years, 1933 a n d prior years, and'1934 a n d prior
years:
I n c o m e taxes
.
..
.
Miscellaneous i n t e r n a l r e v e n u e :
C a p i t a l stock .
E s t a t e a n d gift
Sales
.
Spirits a n d narcotics
.
Tobacco
.
. . . .
Miscellaneous

A m o u n t refunded i ,

I n t e r e s t allowed

65,495

$40, 810, 312. 65

$11, 754,027. 39

720
1,067
1,837
638
13
288

128, 401. 07
3, 386, 790. 93
1, 334,895.84
46, 407. 29
637. 92
112, 872. 58

30, 320.16
395, 406.14
407.124. 62
992. 52
15.76
20,197.18

Total
Agricultural a d j u s t m e n t taxes

70, 058
8,320

45,820, 318. 28
1, 374, 404. 47

12, 608, 083. 77
2, 685. 57

G r a n d total, all refunds

78, 378

47,194, 722. 76

12. 610. 769. 34

1,213
3,064
8,566

902,946.64
83, 520.82
492, 769. 90

184.16
51. 954. 09

12, 843

1,479, 237. 36

62,138. 25

R e p a y m e n t s (not refunds of taxes erroneously collected):
R e d e m p t i o n of s t a m p s :
Tobacco
Spirits a n d narcotics
Miscellaneous
Total
1 Including interest.

If the tax refunds during the year on account of erroneous or
illegal collections for 1934 and prior years, amounting to $47,194,722.75, and payments for redemption of stamps, amounting to
$1,479,237.36, were deducted from the gross coUections of $2,672,239,194.52, the net collections for the fiscal year 1934 would be
$2,623,565,234.41. 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
$328,188,720.51, were as follows:
Additional assessments made during the fiscal year 1934, by class of tax
Class of tax
Income taxes.
Miscellaneous i n t e r n a l r e v e n u e :
Estate
Gift
Tobacco
.
Sales (excise)
Capitalstock
. . .
0 ther miscellaneous
Total
Agricultural a d j u s t m e n t taxes
G r a n d total . .

Amount

._ _

1 $279, 971,171. 04
14, 773, 265. 93
152,485. 74
229,464. 70
3,418, 745. 54
207,179. 81
16,910,810. 72
2 35,691, 952 44
3 12, 525, 597. 03
328,188, 720. 51

1 Includes, for income taxes, $247,327,330.04 from the Income Tax Unit and $32,643,841 from the Accounts
and Collections Unit. The assessments of the Income Tax Unit include $53,296,583.68 made under the
jeopardy provisions of sees. 279 and 280 of the Revenue Act of 1926 and sec. 273 of the Revenue Acts of 1928
and 1932.
2 Includes, for miscellaneous internal revenue, $22,463,679.44 from the Miscellaneous Tax Unit and
$13,228,273 from the Accounts and Collections Unit.
3 Includes, for agricultural adjustment taxes, $905,912.03 from the Processing Tax Unit and $11,619,685
from the Accounts and Collections Uijit,

REPORT OF THE SECRETARY OF THE TREASURY

Cost of administration.—The total amount expended and obligated in administering tax laws during the fiscal year 1934 was
$31,370,404.12. This sum does not include the amount expended for
refunding taxes illegally or erroneously collected, and for redemption of stamps, which is in no sense an administrative expense. The
total revenue collected was $2,672,239,194.52 of which $2,300,816,308.88 represented internal revenue and $371,422,885.64, agricultural
adjustment taxes. Therefore, the cost of collecting each $100 of the
total revenue was $1.17. Administration of the internal revenue
laws cost $28,826,225.73, as compared with $30,031,722.98 during the
fiscal year 1933. The cost of collecting each $100 of internal revenue
was $1.25, as compared with $1.85 for the fiscal year 1933. (The
amounts expended by the Bureau of Industrial Alcohol in administering the liquor laws prior to consolidation with the Bureau of
Internal Revenue, May 10, 1934, are not included in these figures.)
The amount expended and obligated in administering the agricultural
adjustment tax laws was $2,544,178.39, or 69 cents for each $100 of
agricultural adjustment taxes collected.
Inconie Tax Unit
The Income Tax Unit is charged with the duty of auditing and
closing all income tax returns except those filed on form 1040A.
Returns filed on form 1040A (returns of individuals reporting income, chiefly from salaries and wages, of less than $5,000), are
audited in the collectors' offices under the supervision of the Accounts
and Collections Unit.
Summary of work of the Income Tax Unit for the fiscal years 1933 and 1934
Number
1933
Returns on hand in Washington and in the field at beginning of year i
Returns received during year:
Reopened and amended
Original
Total
Total to be disposed of
Returns closed during year: 2
Additional assessments except jeopardy:
Before final notice of deficiency
After final notice of deficiency: 3
Agreement...
Default
Total
1
Jeopardy assessments (subject to appeal)
Certiflcates of overassessment
No change
Total closed...
.
Returns not closed during year:
On hand for audit in Washington and in the field at end of year
Awaiting action of taxpayer after mailing final notice of deficiency
Involved in appeals to Board on final 60 or 90-day notice of deficiency mailed
during year
Total not closed

1934

254, 771
112, 972
2,080,146
2,193,118

87, 252
1, 920,041
2,007, 293

2,447,889

2, 333, 027

85, 628

84, 026

3,136
9,657
98, 421
1,595
45, 986
1, 967, 582
2,113, 584

4,339
7,255
95, 620
1,600
34, 859
1,830, 018
1, 962,097

325, 734
2,836

363, 670
1,913

5,736
334, 305

5,347
370, 930

1 This total does not include returns with respect to which final notices of deficiency (60 or 90-day letters)
were mailed prior to the beginning of the year.
2 Excludes returns closed through decisions of Board of Tax Appeals.
3 Includes some returns with respect to which final aotices of deficiency (60 or 90-day let ters) were mailed
prior to the beginning of the year,

100

REPORT OP THE SECRETARY OP THE TREASURY

A d d i t i o n a l revenue.—The total additional revenue made available for collection (exclusive of jeopardy assessments) was $194,030,746.36 as compared with $169,629,609.96 the previous fiscal year,
an increase of $24,401,136.40. T h e field forces of the Income T a x
U n i t secured agreements t o the immediate assessment and collection
of $18,897,448.21, while $175,133,298.15 was assessed after consideration in Washington.
The additional revenues are classified in the following table to
show the amounts involved as additional t a x , interest, and penalty,
and also the procedure involved in reaching a settlement with the
taxpayers.
Additional revenue made availaMe for collection du/ring the fiscal years 1933
and 1934, classified according to the tax, interest, and penalty, and the o.greement procedure iufvolved

1933
Amount
Tax
Interest
Penalty

_
.

Total
.
.- Rejected claims for abatement and credit
Total additional revenue
Procedure involved in settlement:
Mimeograph 35521
.
Regular procedure:
Agreements executed by taxpayer without 60 or 90-day letters
Agreements executed by taxpayer subsequent to 60 or 90-day letters
Appeals not filed within 60 or 90-day
period
Action of Board of Tax Appeals
Total

1934
Percent

Amount

Percent

$134,914,736.48
31,232,819.66
2,003,206.42

79.5
18.4
L2

$161,483,716.42
38,126,719.46
2,284,213.67

78.1
19.6
1.2

168,160,762.66
1,478,847.40

99.1
.9

191,894,649.65
2,136,096.81

98.9
Ll

169,629,609.96

100.0

194,030,746. 36

100.0

21,361,130.31

12.7

18,897,448.21

9.8

39,764,168.16

23.7

41,742,943.05

21.8

10,653, 592.10

6.3

38,503,162.99

20.1

27,751,240.03
68,630,63L96

16.6
40.8

23,420.736.60
69,330,358.80

12.2
36.1

168,150,762.56

100.0

191,894,649.66

100.0

1 The effect of Mimeograph 3552 is to shorten the interest period when the additional tax is agreed to
by the taxpayer and field force. The abovefigurescover assessments made during periods June 1, 1932,
to May 31, 1933, and June 1, 1933, to May 31,1934.
I n addition to the amount of revenue t h u s 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 1933 and 1934^
1933
Under bankruptcy and dissolution procedure. _
Returns believed to be fraudulently rendered . .
Total assessed
Interest..
Penalties
.

. . . .

Grand total

__ _ . .

1934

$78,177,84L35
11,783,466.63

$26,223,640.96
13,426,730.81

89,961,297.98
16,806,103.31
3,128,596.28

39,649,271. 77
8,875,646.89
4,771,665.02

109,896,996.67

63,296,683.68

1 The amounts shown in this table may or may not represent taxes upon which collectors can proceed to
immediate collection, since the majority of jeopardy assessments are appealed to the Board of Tax Appeals,

101

REPORT OF THE SECRETARY OF THE TREASURY

Final notices of deficiency {60 or 90-day letters).—During the
year 13,003 final notices of deficiency (60- or 90-day letters) were
mailed by the Income Tax Unit, as compared with 17,772 for the
previous fiscal period.
Petitions were filed with the Board of Tax Appeals involving 41
percent of the returns with respect to which 60- or 90-day letters had
been issued. This compares with 37 percent (revised basis) during
the fiscal year 1933.
The following table shows the number of tax years involved in
petitions filed with the Board of Tax Appeals during the fiscal years
1931 to 1934, inclusive:
Number of tax years involved in petitions filed with the Board of Tax Appeals
during the fiscal years 1931 to 1934, by tax yeoA^s
Tax year

1931

1917
1918--.
1919
1920
1921
1922.
1923
1924
1925
1926-

30
38
50
127
86
105
174
452
617
1,288

1932
18
28
28
86
29
82
66
108
161
246

1933
9
35
32
64
37
35
37
52
65
113

1934
24
21
18
37
58
33
60
76
95
128

Tax year
1927.
1928
1929.
1930-.1931
1932-.
1933
Total

1931

1932

1933

3,164
5,643
378
5
1

849
1,493
6,107
269
4
1

175
298
1,827
3,576
236
6
1

1,632
2,023

8,575

6,598

5,347

12,158

1934

172
223
589
156
2

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, duringthe fiscal years 1933 and 1934:
Refund claims adjusted and overassessments determined ddiring the fiscal years
1933 and 1934
1933
Claims:
Pending at beginning of year..
Filed during year
Total to be adjusted
Allowed in full or in part..
Rejected
Total adjusted
Pending at end of year

Certificates of overassessment issued when no claim had been filed...
Amount of overassessments settled by:
Abatement
Credit.
Refund
Total-.Interest
Grand total.

1934

Number
24,046
39,326

Number
22,434
34,135

63, 372

56,569

27,147
13, 791

25, 641
10,196

40, 938

35,837

22,434

20, 732

30,167

26,480

Amount
$108, 614,453. 21
18,877,869.82
32,627, 780.15

Amount
$112, 371, 340. 67
19,123, 080.94
29,056, 285.26

160,120,103.18
10,379, 441. 26

160, 550, 706.87
11, 754,027.39

170,499, 544.44

172, 304, 734. 26

N O T E . — T h e amount involved in claims filed during the year was $176,132,959.94 as
compared 'with $229,134,005.48 the preceding year. Of t h e claims adjusted during the
year, t h e a m o u n t s rejected totaled $113,340,642.51 a s compared with $170,934,417.94 t h e
preceding year.

102

REPORT OJF THS3 SECRETARY OF T H £ T R E A & U H Y

There were also allowed during the year 10,114 collectors' claims,
of which 8,898 recommended abatements or credits and 1,216 recommended refunds. A collector's claim usually lists a number of items
in favor of different taxpayers, and those settled during the year
covered 13,590 items for abatement or credit and 42,128 for refund.
Returns on hand.—A comparative table of returns for all tax years
on hand at the close of the past four years follows:
Returns on hand in the Income Tax Unit on June SO, 1931 to 1934, by tax years
T a x year
1917
1918
1919
1920
1921
1922 .
1923
1924
1925
1926

1931

1932

1933

142
180
174
298
249
276
423
735
1,001
1,630

150
207
251
275
261
307
373
517
677
1,101

293
248
267
240
239
245
315
536
1,028
1,265

1934

T a x year

116
85
118
116
98
146
157
212
277
388

1927
1928
1929
1930
1931
1932.
1933
Total

1932

1931

1934

1933

5,061
3,713
2,939
2,632
10,172
4,380
5, 236
237,868 10,496
9,929
• 106,491 209, 921
122,142 208,111
192,211

634.
1,033
3,246
4,298
9,522
297,803
1 45,421

. 364, 700 254, 771 325, 734

363, 670

1 Figures are incomplete, since the preliminary work against the returns for the year just previous to
the end of the fiscal year cannot be completed within that fiscal year.

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 retu/rns under consideration in Washington, June 30,
1934, by tax years
A u d i t R e v i e w Division a n d Conference
Section

Special
Adjustment
Section

Valuation
Division
T a x year

Individual
returns

Corporation
returns

Consolidated
returns

OrigReinal opened

58
31
51
25
20

1
2
3
6
1

23
20
17
23
17

185

1
2
2
3
6
179
628

20
18
30
29
52
161
222
903
920

5
4
3
7
19
41
68
179
292

821

2, 355

181

3,750
6,695
202

1,182
519
36

600
1,638
100

1917
1918
1919
1920
1921
Total
1922
1923
1924
1925
1926 .
1927
1928
1929
1930
Total
1931
1932
1933

..:

Total
G r a n d total

-.
2
2
6
6
40
125

OrigReReinal opened opened
1

5
5
8
9'
9

23
17
22
34
39

Total

OrigReinal opened
1

110
75
101
97
86

100

135

469

4
4
18
19
29
39
50
127
232

18
18
30
36
66
95
147
214
206

2
2
4
14
20
30
42
63
238

9
11
19
13
19
28
50
100
106

66
80
74
104
110
105
216
428
554

6
6
24
37
53
77
104
409
1,223

118
131
156
189
266
430
703
1,824
2,078

618

522

830

415

355

1,737

1,939

5,895

264
98
9

461
1,185
73

140
43
4

604
1,323
11

90
66

831 4,415
540 10,841
386
15

2,507
1,266
64

9, 647

1,737

2,338

371

1,719

187

1,938

,156

1,386 15,642

3,837

10. 468

4,277

2,519

1,002

2,241

1,117

2, 354

547

3,258 17, 582

10, 201

REPORT OF THE SECRETARY OF THE TREASURY

103

Audit in the field.—On June 30, 1934, there were 310,566 returns
for all years pending for verification in the offices of the 38 field
divisions of the Income Tax Unit, compared with 230,119 returns on
hand June 30, 1933.
Changes in tax liability were recommended by the field forces in
137,682 returns, or 26 percent of the 527,517 returns disposed of by
the field during the year. On 110,590 returns, or 80 percent of those
changed, taxpayers agreed with revenue agents' conclusions. The
total additional tax recommended by revenue agents during the fiscal
year was $203,510,465.96, compared with $209,560,777.80 the preceding fiscal year.
The technical staff
Effective November 16, 1933, the Commissioner of Internal Revenue abolished the special advisory committee and created in lieu
thereof the technical staff. The following represents the results of
the settlement work conducted by these two settlement agencies
during the fiscal year 1934:
On July 1, 1933, the special advisory committee had on hand a
total of 7,652 docketed cases pending before the United States Board
of Tax Appeals. During the period from Jul}^ 1, 1933, to November
15, 1933, it considered to a conclusion 2,333 Board cases and recommended for settlement 1,410 Board cases, or 60 percent thereof. The
deficiency j)roposed on cases recommended for settlement by the committee during this period was $37,352,377.57 and the recomputed
deficiency (without eliminating the enforced credit in estate tax
cases) was $7,680,868.25.
On November 16, 1933, the staff took over 5,970 docketed Board
cases. During the period from November 16, 1933, to June 30, 1934,
it considered to a conclusion 3,410 Board cases, and recommended for
settlement 2,135 Board cases, or 63 percent thereof. The deficiency
proposed on cases recommended for settlement by the staff from
November 16, 1933, to June 30, 1934, was $36,755,176.44; and the
recomputed deficiency (eliminating the enforced credit in estate tax
cases) was $20,454,996.51.
Miscellaneous Tax Unit
The Miscellaneous Tax Unit is charged with the administration of
all internal revenue taxes, other than those applicable to incomes.and
alcoholic liquors, as well as agricultural adjustment taxes. The unit
is composed of five divisions, namely. Estate Tax Division, Sales Tax
Division, Tobacco Division, Processing Tax Division, and Silver Tax
Division. A force operating in the field is engaged solely in investigating matters affecting the miscellaneous taxes. There has been a
substantial increase in the personnel of the Miscellaneous Tax Unit,
made necessary by additional work in connection with the administration of the processing and related taxes, the capital stock tax,
the silver tax, and other miscellaneous taxes imposed under laws
recently enacted.
Estate Tax Division.—Estate tax collections amounted to $103,985,288.04, an increase of $74,292,226.15 over the collections for the
preceding year. This increase is due primarily to the additional
estate tax imposed under the Revenue Act of 1932. Gift tax collections amounted to $9^153^076.06^ an increase of $4^536^414,10 ov^r the

104

REPORT OF THE SECRETARY OF THE TREASURY

preceding year. The bollection of approximately $7,000,000 of deficiencies asserted in estate and gift taxes was stayed by the filing of
appeals with the United States Board of Tax Appeals.
The Revenue Act of 1932 lowered the exemption applicable to
estates in the case of residents from $100,000 to $50,000. Chiefly as a
result of the lowered exemption there were 11,210 estate tax returns
filed during the year 1934, an increase of 2,706 over the number filed
during the preceding year. There were filed 3,619 gift tax returns,
which represented an increase over the preceding year of 1,909
returns.
The administrative work of investigating and auditing returns of
estate and gift taxes is shown in the summary which follows:
Summary of investigation and audit of estate tax and gift tax returns for the
fiscal years 1933 and 1934
Gift tax

Estate tax
1933
Returns in field:
On hand at beginning of year
Received for investigation

1933

1934

2,118
7,632

1,967
10,410

1,397

1,068
1,046

9,750
7,783

12,377
8,928

1,397
329

2,113
1,440

1,967

3,449

1,068

673

.6,623
8,504

4,687
11,210
867

1,710

1,706
3,619

Total to be disposed of
Closed (assessment made")

14,027
9,440

16,664
10,176

1,710
4

6,326
2,034

On hand at end of year

4,687

6,488

1,706

3,291

139
2,137

98
864

2,276
2,178

962
726

25
9

236

216
386

288
132

Total to be disDosed of
Closed

602
314

420
417

On hand at end of year

288

297

1243

Total to be disposed of
Major reports submitted by field force. _
On hand at end of year
Returns in Bureau:
On hand at beginning of year
Received..
Reopened

Protest letters of taxpayers as a result of tax determined
by audit:
1 On hand at besrinninsr of vear
t ^ Received
Total to be disposed of
^ Disposed of by Estate Tax Division
^

1934

•

" On hand at end of year

Final and conclusive agreements (sec. 606 of the Revenue Act of 1928):
On hand at besfinnin? of vear

Cases adjudicated by the Board of Tax Appeals

1 Thisfigureis included in the 10,176 returns closed, shown above.

As a result of the audit of estate tax returns, deficiencies in tax
aggregating $13,185,549.91 were assessed, such deficiencies being attributable to approximately 52.5 percent of the cases closed. Deficiencies in gift tax amounting to $138,097.51 were assessed. The
refunds of estate and gift taxes amounted to $2,991,384.79 (exclusive
of interest), and taxes were abated in the amount of $61,130,238.15.
Substantially all of the abatements of estate tax resulted from the
allowance of credit for State estate, inheritance, legacy, or succession

105

REPORT OF THE SECRETARY OF THE TREASURY

taxes. I n these cases the Federal estate tax had been assessed either
at the time the return was filed, or later for the purpose of protecting
the interests of the Government because the evidence required to substantiate the credit had not been filed by the end of the statutory
period provided for the assessment of the tax. A summary of
refund and abatement claims follows:
Estate tax and gift taw claims on hand, received an d disposed of during the
fiscal year 1934
Gift tax claims

Estate tax claim?
Refund
Number
Claims filed:
On hand July 1,1933
Received during year.-.
Total to be disposed of.

Amount

Total disposed of
On hand June 30,1934

156 3,181,607. 54

No claims filed, overassessments allowed...
Interest allowed
Additional 2 percent interest i
Total amount allowed, including interest

Number

219 $6, 504,801. 50
646 2,588, 305. 20
865 9,093,108. 70
691 2, 609,778.81
118 3,401,820. 35
709 5,911, 599.16

Allowed
Rejected

Abatement

444

472,911. 03
.389,895.83

6,163.04

1,043 3, 377, 748. 71

Amount

Relund

Abatement

Num- Amount Num- Amount
ber
ber

$14, 680. 55
6
364 29,711,713.82

1 $8.654.40
14 11, 615. 65

4 $6,357.83

370 29,726,394. 37

15 20,269.95

4 6, 357. S3

365 29,724,421.09
365 29. 724,421.09

5 3,837.16
1 8,708.18
6 12, 545. 34

1,973.28

9 7, 724. 61

270 31,383,102.14

19 4,857. 79
347. 27

4 16,357.09

635 61,107,523. 23

24 9,042. 22

8 22, 714.92

4 6,357.83
4 6, 357. S3

1 As provided by the act of Mar. 3,1933.

Sales Tax Division.—The yield from the taxes administered in the
Sales Tax Division amounted to $633,282,185.22, an increase over the
preceding year of approximately $241,000,000. These figures do not
include the taxes relating to distilled spirits, wines, and fermented
liquors, since the alcoholic liquor taxes are now administered by the
Alcohol Tax Unit of the Bureau. The increase in collections is due
principally to the imposition of the capital stock tax and to larger
returns of manufacturer's excise taxes, stamp taxes, tax on checks,
tax on electrical energy, and taxes on telegraph, telephone, cable,
and radio messages.
A comparison of the taxes collected by the Sales Tax Division
during the fiscal years 1933 and 1934, and the sources of those taxes,
are shown in the table which follows:
Miscellaneous taxes collected du/ring the fiscal years 1933 a/nd 1934
Source
Documentary stamps, including plasdng cards:
Bonds of indebtedness, capital stock issues, etc
Capital stock sales or transfers
Sales of produce (future delivery)..
Playing cards
_
Total

1933

1934

$16, 034,755. 59 $16, 259, 304. 76
33,188,494.94
38,065,999. 47
4, 206, 597. 74
7,847, 743. 08
3,908,354. 20
4,406,384. 68
67,338,202.47

66,579,431.99

Increase (+) or
decrease (—)

+$224, 549.17
+4,877, 504. 53
-i-3, 641,145. 34
+498,030.48
+9,241,229 52

106

REPORT OF THE SECRETARY OF THE TREASURY .

Miscellaneous taxes collected during the fiscal years 1938 and 1984—Continued
Source

Oleomargarine s t a m p a n d special taxes
A d u l t e r a t e d a n d process or r e n o v a t e d b u t t e r ,
cheese a n d mixed flour...
Total...

Increase ( + ) or
decrease ( - )

1933

1934

$1, 347,190. 45

$1,476, 230. 32

15, 511. 97

14, 984. 59

—527. 38

1, 362, 702. 42

1,491, 214. 91

+128,512.49

+$129,039.87

filled

.--

M a n u f a c t u r e r ' s excise taxes (title I V , R e v e n u e Act of
219.188, 686. 92 356, 850, 559. 07 +137,661,872.15
1932)
+ 2 , 912, 072. 09
7, 4G7, 297. 50
10, 379, 369.59
T r a n s p o r t a t i o n of oil bj^ p i p e line
Electrical energy
33,134, 407. 26
+ 4 , 571, 667. 93
28, 562, 739. 33
18, 094, 685. 26
+4,360,511.68
13, 734,173. 58
Telegraph, telephone, cable, a n d radio messages, etc
1,156,114. 59
+325, 532. 00
830, 582. 59
Leased wires, etc. (telegraph a n d telephone)
.
2, 715,850. 67
+350,809.84
2, 365, 040. 83
Safe-deposit boxes
41, 383,198. 66
+ 2 , 926, 705.17
38, 456, 493. 49
Checks
Total

310, 605, 014. 24

Admissions
D u e s a n d initiation fees

. .

Total
Pistols a n d revolvers
Narcotics
Yachts and boats
D e l i n q u e n t u n d e r repealed laws
Total

14,613,414.42
5, 986,150. 46

-907,097.88
—693,110.49

22,199, 773. 25

20, 599, 564. 88

—1,600,208.37

35,388.89
457,067. 63
239, 859. 22
44, 612. 64

52, 980. 41
495, 270.18
180, 672. 98
520. 64

+17,591.52
+ 3 8 , 202. 55
—59,186. 24
- 4 4 , 092. 00

776,928. 38

C a p i t a l stock
392, 282, 620. 76

T o t a l miscellaneous taxes

463, 714,185.10 +153,109,170.86

15, 520, 512. 30
6, 679, 260. 95

729, 444. 21

- 4 7 , 484.17

80,168, 344.13

+80,168, 344.13

633, 282,185. 22 +240,999,664.46

The claims for refund and abatement of taxes received and adjusted in the Sales Tax Division during the fiscal years 1933 and
1934 are shown in the table which follows:
Claimis for refund and abaten/ient received and disposed of during the fiscal
years 1933 and 1934
1933

O n h a n d at beginning of year
Received or reopened
Total
Transferred to B u r e a u of I n d u s t r i a l Alcohol, D e c . 13, 1933
T o t a l to b e disposed of
Adjusted
O n h a n d a t e n d of year

. . .
.

. . . .

Number
3,283
39,407

Number
8,881
29, 531

42, 690

38, 412
3,173

42, 690
33,809

35, 239
28,122

8,881

Amount
Claims allowed
I n t e r e s t included in refunds

. . .

1934

$4,856, 797. 72
694, 285. 98

7 117

Amount
$4, 402, 950. 35
510, 206. 32

There were 9,041 sales tax credit cases, totaling $1,927,597.94, on
hand at the beginning of the year; 17,891 cases amounting to $3,982,614.23 were received; 18,663 cases aggregating $2,770,365,88 were
disposed of, leaving on hand at the end of the year 8,269 sales tax
credit cases amounting to $3,139,846.29.
A total of $673,460,413.37, representing 1,803,570 items, was approved by the Commissioner on miscellaneous assessment lists. The

107

REPORT OF THE SECRETARY OF THE TREASURY

miscellaneous tax lists do not include the processing and related taxes,
or the taxes collected by the sale of stamps. There was included
in these lists a total of $22,463,679.44, representing 50,180 additional
assessments resulting from office audit and field investigation. The
interest paid and assessed on the miscellaneous tax lists amounted
to $1,898,607.61.
During the year there were received and examined 1,288,348 returns filed by taxpayers in connection with the taxes administered
in the Sales Tax Division, not including the capital stock tax returns.
There were received in the same period returns of capital stock by
corporations as follows: 371,496 taxable domestic returns; 115,092
nontaxable domestic returns; 272 taxable foreign returns and 37
nontaxable foreign returns. The total capital stock returns filed
numbered 486,897, of which approximately 150,000 had been examined at the end of the year and closed.
The number of offers in compromise submitted in settlement of
liabilities incurred in connection with sales, tobacco, estate, gift,
spirits, narcotics, capital stock, and miscellaneous stamp and special
taxes, and the aggregate amounts thereof, received and disposed of
are shown in the table which follows:
Offers in compromise received and disposed of during the fiscal years 1933
and 1934
1933
Number

1934
Amount

Number

Amount

On h a n d a t beginning of year
Received d u r i n g y e a r . .

1,532
17,194

$116, 277. 73
689,054.41

9,898
25,168

$391, 287. 95
627,182.48

T o t a l t o b e disposed of

18,726

805,332.14

35,066

1, 018,470.43

7,751
715
362

327, 629.89
52, 259. 70
34,154. 60

23, 242
926
6
6,027

389,894.83
83,418. 71
235. 00
79,750.99

8,828

414,044.19

30, 201

553, 299. 53

9,898

391,287.95

4,865

465,170.90

Accepted
Rejected
Withdrawn
Transferred t o B u r e a u of I n d u s t r i a l Alcohol i
T o t a l disposed of
O n h a n d a t e n d of year

1 The duties and functions of the Miscellaneous Tax Unit relating to alcoholic liquor offers in comprornise were transferred to the Bureau of Industrial Alcohol on Dec. 13, 1933.

Tobacco Division.—The collections from tobacco taxes amounted
to $425,168,897.04, which reflected an increase of $22,429,837.79, or
5.57 percent, over the previous year. The sources of the taxes collected on the various tobacco products are shown in table 8, page 319.
Processing Tax Division.—The total collections from processing,
compensating, and floor stock taxes imposed under the Agricultural
Adjustment Act during the year amounted to $371,422,885.64. The
amount of tax liability due is somewhat in excess of actual collections, as many taxpayers availed themselves of the privilege provided by the act of securing extensions of time of from 30 to 90
days, within which to make payment of the tax. A summary of the

108

REPORT OF THE SECRETARY OF THE TREASURY

taxes imposed under the Agricultural Adjustment Act, collected during the year, is shown in the table which follows:
Collections of processing and related taxes by coinmodities, fiscal year 1934 ^
Commodity

Floor tax
(wholesale)

Floor tax ,
(retail)

Total

$104,038,634.96 $20, 774. 75 $10,941,402.43 $2,620, 362. 68 $117, 621,174.82
85, 713,359. 52 , 086,773.46 46,375,040.40 11,592,069.27 144, 767,232.64
3,413,305. 32
81,761. 64
18,450.05
982, 676.73
4, 496,193.74
70,716,192.12
118,160.40 77; 034,611. 24
33,289. 21 6,166,969. 51
15,873,985.81 165,209.07
244,
602.16
1,814, 629.01
18, 088,426.06
69,880.40
5, 251,648.11 916,342. 01 3,006,960.26
9, 244,830. 78
170,416.37
140,020.78
30,395.69

Wheat
Cotton
Corn
Hogs
Tobacco
Paper and jute
Sugarcane and sugar beets..
'

Compensating

Processing

Total

286,007,125.84

2,370,859. 32 69,318,073.93 14,726,826.66

371,422,885. 64

1 Processing taxes were levied under the Agricultural Adjustment Act on the dates indicated: Wheat
July 9, 1933; cotton, Aug. 1, 1933; tobacco, Oct. 1, 1933; field corn, Nov. 6, 1933; hogs, Nov. 5,1933; paper
and jute, Dec. 1,1933; and sugar, June 8,1934.

The returns of processing tax, compensating tax, and floor stock
tax filed during the year are shown in the following table:
Numlber of processing and related tax returns filed by comm^odities,
fiscal year 1934
Commodity
Wheat
Cotton
Corn _
Hogs
Tobacco
Paper and jute
Sugarcane and sugar beets

Compensating

42,616
11,248
53,122
117,228
41,076
1,199

5,305
38,106
2,633
1,634
1,965
2,032
128

65,451
47,646
21,866
16, 564
12,671
10,430
41

206,998
247,912
107,186
78,438
197,955
11,352
7

320,370
344,912
184,807
213,864
253,667
25,013
176

266,489

61,803

174, 659

849,848

1,342,799

Total

Floor tax Floor tax
(wholesale) (retail)

Processing

Total

I n addition to the general provisions of internal revenue laws
relative to claims for refund, abatement, or credit, the Agricultural Adjustment Act, as amended, specifically provides for the refund or credit of taxes paid with respect to articles delivered for
charitable distribution or use and for the refund of taxes paid with
respect to articles exported.
An analysis of all claims received and disposed of during the year
in connection with the taxes imposed under the Agricultural Adjustment Act is shown in the table which follows:
Claims received, disposed of, and on hand during the fiscal year 1934
Received

Allowed

Rejected

On hand June 30,
1934

Kind
Number
Refund:
Export
Charitable
Other
Credit
Abatement
Uncollectible
Total

Amount

22,229 $7,463,126.64
8,919 2,140,049. 64
8,386 2,220, 763.27
2,083 1,471,403. 78
3,586 13, 975,874.14
76
2,646.61

Number

Amount

6,323 $1,153,279. 71
2,090 620,118.69
4,813
187, 966.38
179
6,136.11
1,463 1,300,520. 61
10
166.04

45,278 27,273,763.98 14,878 3,267,186.34

Number

324
372
951
487
232

Amount

$146,342.49
231,524.68
469,676. 64
382,318.67
617,603.48

Number

Amount

16,682 $6,164, 604.44
6,467 1,288,406. 27
2,621 1,563,120. 25
1,417 1,083,949.10
1,891 12,067,850.16
66
2,381.67

2,366 1,846,366.86 28,034 22,160,211.78

REPORT OF THE SECRETARY OF THE TREASURY

109

The offers in compromise submitted during the year in settlement
of. the liabilities incurred under the Agricultural Adjustment Act
totaled 684 and amounted to $35,945.14.
During the year a total of $332,733,693.67, representing 1,351,230
items, was approved by the Commissioner on the processing tax assessment lists. Included in this amount was $905,912.03, representing 835 additional assessments resulting from office audit and field
investigation. The interest assessed on the processing tax lists
amounted to $79,902.85.
Silver Tax Division.—A division is being organized to administer
the silver tax, which became effective May 15, 1934, and a force will
be functioning in sufficient time to audit returns when filed in accordance with the regulations, and to adjust claims and furnish rulings.
Alcohol Tax Unit
On December 5, 1933, the effective date of the twenty-first amendment to the Constitution, the functions of the Bureau of Industrial
Alcohol were transferred to the Bureau of Internal Revenue and the
personnel of the Bureau was placed under the Commissioner of
Internal Revenue. These transfers were made by Treasury Decision
4410, in accordance with the authority contained in section 4 of
the act of March 3, 1927. The Bureau of Industrial Alcohol was
continued for the time being as a unit of the Bureau of Internal
Revenue.
By Executive order the President, on March 10, 1934, under authority of section 16 of the act of March 3, 1933, abolished the
Bureau of Industrial Alcohol and the office of Commissioner of Industrial Alcohol and transferred the functions and duties, as well
as the personnel of the Bureau of Industrial Alcohol, to the Bureau
of Internal Revenue. By the same Executive order the functions
and personnel of the Alcoholic Beverage Unit of the Division of Investigation, Department of Justice, except those employed in the
Taxes and Penalties Section of that unit, were transferred to the
Bureau of Internal Revenue. Under the statute this Executive order
was required to be transmitted to the Congress and could not take
effect until 60 days after it was so transmitted, unless otherwise determined in accordance with law. No action was taken by the Congress in respect of this Executive order, and it accordingly took
effect on May 10, 1934.
On May 10, 1934, Treasury Decision 4432 established in the Bureau of Internal Revenue the Alcohol Tax Unit. This unit was
charged with the administration of internal revenue laws relating
to the supervision of production and warehousing, and the tax payment of distilled spirits, alcohol, wines, fermented liquors, cereal
beverages, and denatured alcohol. All functions relating to the
production, custody, and supervision of these products, together with
the inquiries and investigations relating to returns for occupational
taxes and the detection of violations of laws relating to these products, remain with the local supervisors. The receipt and accounting
for taxes continued as a function of the collectors of internal revenue.
The 12 field districts of the Bureau of Industrial Alcohol, each
under the direction of a district supervisor, were continued. The
23 local offices of the Alcoholic Beverage Unit were also continued.

110

REPORT OF THE SECRETARY OF THE TREASURY

each under the direction of an acting investigator in charge. The
12 field districts are being rearranged into 15 districts with 62
branch offices. The 23 local offices transferred from the Alcoholic
Beverage Unit will be merged with the 62 branch offices when these
branch offices are established. Each of the branch offices will be
under the direction of an investigator in charge and will function as
enforcement agencies for the detection and suppression of violations
of laws relating to spirits, wines, and beer.
The Alcohol Tax Unit in Bureau headquarters was placed in
charge, of a deputy commissioner of internal revenue, with two
assistant deputy commissioners. One assistant deputy commissioner will have supervision of the permissive activities of the unit,
and one assistant deputy commissioner is charged with the duties
relating to the enforcement of the liquor laws.
Five major divisions were set up in Bureau headquarters in the
Alcohol Tax U n i t : The Technical Division; the Audit Division;
the Enforcement and Investigative Division; the Field Inspection
Division; and the Plant Control Division.
The Technical Division supervises the chemical laboratories of the
Bureau and passes upon plans and surveys of distilleries, bonded
warehouses, breweries, and wineries, to determine whether all requirements of law and regulations are complied with.
The Audit Division examines and adjusts the accounts of alcohol
and other distilled spirits, rectified spirits, wine, and beer, and has
general supervision over assessments, claims, and offers in compromise relating to taxes on these products.
The Enforcement and Investigative Division directs the operations
of investigators and inspectors in the detection and prosecution of
persons violating the internal revenue laws relating to distilled
spirits, wine, and beer. I t is contemplated that there will be approximately 1,800 field agents in this force.
The Field Inspection Division examines the offices of field supervisors and branch officers with respect to procedure and management. There are at present nine field office inspectors in this division.
Inspectors operating under the Plant Control Division examine
distilleries, alcohol and denaturing plants and warehouses, wineries,
breweries, and rectifying plants to determine whether they are complying with the requirements of the laws and regulations. There
are at present 34 plant-control inspectors.
Accounts and Collections Unit
The Accounts and Collections Unit, which is the central administrative organization for the 64 collection districts, is divided into
3 divisions: The Collection Accounting Division; the Collectors'
Personnel, Equipment, and Space Division; and the Disbursement
Accounting Division.
There were filed in the collectors' offices during the year, 9,144,268
tax returns, compared with 7,288,080 for the previous year, an increase of 1,856,188. Of the total tax returns filed in 1934, there were
4,933,376 income tax returns compared with 5,166,091 filed during
the previous year, a decrease of 232,715.
Approximately 2,300,000 income tax returns of individuals on
form 1040-A were audited and closed in collectors' offices during the
year, and 4,140,634 information returns were verified. I n connection
with this audit work 44,954 income tax returns were investigated»

REPORT OF THE SECRETARY OF THE TREASURY

111

A total of 9,351,968,124 revenue stamps, valued at $833,901,971.05,
was issued to collectors of internal revenue and the Postmaster General, compared with 8,415,413,120 stamps, valued at $565,354,578.51,
issued during the fiscal year 1933. Stamps returned by collectors
and by the Postmaster General amounted to $52,946,424.83, compared
with $5,698,164.98 for 1933. The repeal of the eighteenth amendment to the Constitution was mainly responsible for the large increase in the number and value of stamps issued to collectors and the
stamps returned by collectors to the Bureau.
After the appropriate administrative procedure, collectors, of internal revenue transmitted to the Bureau, or otherwise disposed of,
151,470 claims as compared with 110,519 during 1933, an increase of
40,951. The number of claims on hand at the close of the fiscal year
1934 was 6,878, compared with 2,396 at the close of the previous fiscal
year. The large increase in the number of claims on hand at the
end of the year was due principally to necessary correspondence of
collectors with processing taxpayers for additional information before the claims could be forwarded to the Bureau.
During the year field deputy collectors made 532,609 revenueproducing 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
$57,491,799, including $44,588,643 collected and $12,903,156 reported
for assessment. The amounts involved for the various types of work
were:
Additional taxes collected and reported for assessment lyy collectors^ field forces
during the fiscal year 1934
Collected
Verification of tax returns
Delinquent taxpayers
Warrants for distraint
Total

-...

Reported lor
assessment

$3,028,888'
14,603,119
26,956,636

$3,696,767
9,206,399

44,688,643

12,903,166

There were 103,808 warrants for distraint served by deputy collectors during the year, and on June 30,1934, there were 52,425 warrants
in the hands of the field forces for collection as compared with 27,434
on June 30, 1933.
Special attention has been given to the discovery of the various
classes of delinquent taxes and to the collection of back income taxes.
That these efforts have been successful is evidenced by the fact that
the total income tax collections during the year, relating to other than
current taxable periods (back taxes) amounted to $140,586,953.02,
which is $30,586,953.02 in excess of the amount which it was originally
anticipated would be collected. After the Director of the Budget
released $2,885,799 to assist in carrying out the program for the
speedy collection of back taxes, the Treasury made another estimate
increasing to $130,000,000 the probable amount of back tax
collections.
The supervisors of accounts and collections submitted 100 reports
covering their examinations of the accounts of the various collectors'
90353—35

112

REPORT OF THE SECRETARY OF THE TREASURY

offices compared with 120 reports submitted during 1933. With the
exception of two districts, every collector's office was examined at
least once and most of them twice during the year. During the year
these officers installed in office 59 new collectors and 6 acting
collectors.
Collectors'^ Personnel.^ Equipnnent.^ and Space Division.—At the
beginning of the fiscal year 1934 there was in the Internal Revenue
Collection Service engaged on regular internal revenue work a total
authorized force, including collectors, of 4,571 employees at an
annual basic salary rate of $10,022,701. On July 15, 1933, a reduction of 242 positions was made in the total authorized collectors'
personnel. On October 2, 1933, 190 of these positions were restored
in connection with a special drive inaugurated for the collection of
back taxes and 82 additional positions were later authorized as a
further aid in the prosecution of the delinquent tax drive, to provide
needed assistance in connection with the increased work as the result
of repeal of the eighteenth amendment, and to aid collectors in handling the increased work incident to the many new taxes. At the close
of the fiscal year there was a total authorized force, including collectors, of 4,601 employees at an annual basic salary rate of $9,654,580.
I t will be observed that there was a net increase of only 30 in the
total number of positions although there was a decrease of $368,121 in
the annual basic salary rate. The decrease in the annual rate is
due to the large turn-over in the force during the year and the fact
that all appointments have been made at the initial salary rates in
the respective grades.
During the year a total of $163,474.70 was expended from the
internal revenue allotment for the employment of temporary personnel, compared with $93,682.02 during the preceding fiscal year.
The increase of $69,792.68 in expenditures for temporary assistance
during the year was occasioned chiefly by emergency conditions which
arose in connection with the repeal of the eighteenth amendment.
During the year the sum of $1,720,133.89 (net) was expended for
salaries of permanent and temporary office and field employees on
the processing tax roll.
Considerable preliminary work was handled during the latter part
of the year in connection with the setting up of a special section in
collectors' offices in cotton-producing States to administer the tax collection provisions of the Bankhead Cotton Control Act. At the
close of business June 30, 1934, collectors of such districts had been
authorized to employ a total of 235 temporary office and field
employees on the cotton tax roll to carry out the tax provisions of
this act.
During the fiscal year the sum of $115,969.24 was expended from
the rental of quarters for collectors' offices and branch offices, compared with $209,306.43 in the preceding fiscal year. The decrease of
$93,337.19 was brought about by the removal of several of the offices
from commercial to Federal space and in certain instances through
reduction in rental under existing leases.
Disbursement Accounting Division.—The Disbursement Accounting Division is charged with keeping the internal revenue appropriation accounts and expenditures, and is responsible for the administrative examination required by law of the accounts of 64 collectors of
internal revenue and 38 internal revenue agents in charge of divi

RtePORT OP THE SECRETARY OP THE TREASURY

113

sions, including internal revenue salary accounts of the collector of
customs at San Juan, Puerto Rico. The appropriation accounting
work increased considerably during the year by reason of the
bureau's administrative duties in connection with assessing and
collecting the processing taxes.
Office of the General Counsel
Under the provisions of section 512 of the Revenue Act of 1934, the
office of General Counsel for the Department of the Treasury, and
the office of Assistant General Counsel for the Bureau of Internal
Revenue were created. The incumbents qualified and took office on
June 20, 1934, at which time the office of General Counsel for the
Bureau of Internal Revenue was abolished.
General CounseVs Committee.—On July 5, 1933, a committee was
organized in the office of the General Counsel for the Bureau of
Internal Revenue known as the " General Counsel's Committee ", and
composed of six members, one of whom was the General Counsel.
The purpose of this committee is to facilitate and expedite the rendering of final decisions in cases and at the same time to coordinate
rulings so that conflicting results in similar cases in different sections
of the office would be minimized. During the fiscal year just closed
the committee received 286 cases and closed 274, leaving 12 cases
pending on June 30, 1934.
Civil Division.—The Civil Division, in cooperation with, and at
the request of the Department of Justice and the various United
States attorneys, assists in handling civil internal revenue cases
arising in the Federal district courts, the United States Court of
Claims, and the SujDreme Court of the District of Columbia, together
with a limited number of cases originating in State courts. Except
in bankruptcy and receivership cases, and cases arising in the Court
of Claims, the actual trials of such cases and the arguments upon
appeals are now conducted by the Department of Justice pursuant
to the President's Executive order of June 10, 1933. The Division's
major activities during the fiscal year are shown in the following
tables:
Civil cases received and disposed of during the fiscal year 1934 ^
Pending
Pending
Received
Closed
July 1,1933 during year during year July 1,1934
In court
For suit by the United States
Lien cases in court
Total

2,935
212
1,072
4,219

716
109
843
1,668

965
116
705
1,786

1 Excludes bankruptcy, receivership, insolvency, compromise, and liquor cases.

Civil cases pending in courts July 1, 1933 and 1934 *
Courts
District courts
Circuit courts of appeals
Court of Claims
Supreme Court
State courts and miscellaneous...
Pending payment of judgment claims
Total
i Excludes bankruptcy, receivership, insolvency, compromise, and liquor cases

2,686
205
1,210
4,101

114

REPORT OF THE SECRETARY OF THE TREASURY

Offers in compromise of pending suits received during the year
numbered 51. Compromise offers disposed of, including those pending a t the beginning of the fiscal year, numbered 45, of which 16
were accepted and 29 were rejected. The total amount of taxes
sought to be recovered in cases finally compromised was $538,515.02,
and the sum of $73,452.67 was secured.
The number of cases tried or decided during the fiscal year is
shown in the following table:
Tax cases tried and decided by the Federal courts during the fiscal year 1934
Cases decided
Cases tried

District courts
Circuit courts of appeals
Court of Claims.
Supreme Court
Total

For Government

Against
Government

Partly for
and partly
' against
Government .

Total

165
37
78
5

169
54
47
4

78
20
14
4

20
0
3
1

267
74
64
9

285

274

116

414

The work of the division for the fiscal year 1934, in bankruptcy
and receivership cases, is summarized as follows:
Bankruptcy OAid receivership cases closed during the fiscal year 1934
Cases

Number
2,174
1,509

Pending July 1, 1933
Received during year
Total to be disposed of.
Closed during year

3,683
1,585

Pending June 30, 1934

2,098

I n the 1,585 cases closed, relating to bankruptcy and receivership,
claims were filed in the amount of $8,672,514.96, and the sum of
$1,848,214.76 was collected.
Interpretative Division.—This division is charged with the preparation of opinions relating to the administrative construction of internal revenue ,laws aiid, until July 1, 1934, with the framing of
regulations to carry such laws into effect. The enactment by Congress of new legislation, such as the Revenue Act of 1934, the Liquor
Taxing Act of 1934, the acts amending and supplementing the
Agricultural Adjustment Act of 1933, increased the Avork of this
division.
Review Division.—This division reviews cases involving refunds,
credits, and abatements of internal revenue taxes. I t prepares public decisions in accordance with Treasury Decision 4264 in all cases
where the overassessments exceed $20,000; prepares reports to the
Joint Committee on Internal Revenue Taxation in cases involving
credits and/or refunds in excess of $75,000, as required by section
710 of the Revenue Act of 1928; and also participates in conferences

115

REPORT OF THE SECRETARY OF THE TREASURY

and negotiations in other bureau agencies involving proposed overpayments.
There were 779 cases disposed of during the year involving reductions in tax aggregating $102,143,621.93. I n 169 of these cases memoranda were prepared. The allowances were reduced by adjustments in this division in the amount of $4,113,449.51. Some of the
principles involved in these adjustments affected the disposition of
other cases pending elsewhere in the Bureau. Public decisions w^ere
promulgated in 575 cases, and memoranda were submitted to the
joint congressional committee in 39 cases.
As heretofore this division has regularly afforded conferences in
cases in which issues appeared to require action contrary to the taxpayer's contentions.
Appeals Division.—Cases involving income, estate, and gift taxes
filed with the Board of Tax Appeals are in the immediate charge of
this division. During this fiscal year 9,582 cases were closed while
3,976 ncAv cases were filed. A t the end of the year there were pending 16 gift tax cases involving $198,715; 449 estate tax cases involving $60,160,922; and 12,009 income tax cases involving $388,133,443;
or a total of 12,474 cases involving $448,493,080. Of this number
11,338 were pending before the Board and 1,136 were in appellate
courts on appeal from Board decisions.
Gases filed with and closed before the Board of Tax Appeals during the fiscal
years 1933 and 1934
1933

1934

Cases
Number
P e n d i n g a t beginning of year
Filed a n d reopened d u r i n g year
T o t a l t o b e disposed of
Closed
By
By
By

d u r i n g year:
default, e t c
decision on m e r i t s . . _
agreed s e t t l e m e n t

Total
P e n d i n g a t close of y e a r

. . .

Amount

Number

Amount

20,469
5,997

$707, 265, 709. 56
229, 620, 213. 68

18,080
3,976

$574, 257, 340
83, 692, 291

26, 466

936,885,923. 24

22, 056

657,949, 631

1,122
1, 537
5, 727

574
1,518
7,490

8,386

164,409,489.40

9,582

209,456, 551

18, 080

I 772,476,433.84

12,474

448,493,080

1 This sum includes duplications aggregating $198,219,093 in amount representing deficiencies redetermined against transferees and sub.sidiary corporations in affiliated groups. This duplication is eliminated
from the computations for the fiscal year 1934.

Pencil Division.—The Penal Division, in cooperation with the
Department of Justice and the various United States attorneys,
passes upon criminal internal revenue cases; prepares opinions on
liability for percentage penalties for fraud (occasionally for negligence or delinquency), and on acceptance or rejection of offers in
compromise of tax cases in which such questions are involved. The
Division also prepares opinions interpreting or construing percentage penalty and criminal statutes, and opinions on all questions of
law involved in a case where there is also a question of percentage
penalty or crime. The Division also passes upon questions as to
whether cases that have been closed by agreement under section 606
of the Revenue Act of 1928, and similar provisions of the other

116

REPORT OF THE SECRETARY OF THE TREASURY

revenue acts, should be reopened, because of " fraud or malfeasance,
or misrepresentation of a material fact", and informers' reward
claims under section 3463 of the Revised Statutes.
The following table shows the work of the division during the last
two fiscal years:
Cases received and disposed of by the Penal Division during the fiscal years
1933 and 1934
1933
Pending at beginning of year..
Received during year

1,123
1,634

Total to be disposed of..
Disposed of

933
1,444
2,377
1,254

2,757
1,233

Pending at end of year

1,123

1,524

Administrative Division.—The activities of the Administrative
Division include the review of offers in compromise and the holding
of conferences on difficult and complicated or protested cases. The
Division is charged with the supervision of the personnel, library,
manuscripts, mail, and records; and devises and inaugurates methods
of 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.
Compromise Section.—During the fiscal year 629 cases handled in
this Section were closed by acceptance of offers in compromise and
collection of filed claims in the aggregate amount of $5,208,075.
The following table shows the volume of cases handled by the
Section.
Offers in compromise, fiscal year 1934
Pending action by Compromise Section at beginning of year
Received during year

1, 796
3, 905

Total to be disposed of
Closed or in process of closing

5, 701
4,456

Pending action by Compromise Section at end of year

1,245

Effective June 4, 1934, all offers in compromise involving income
tax liability, except cases in which insolvent banks, or assignment
for the benefit of creditors, or liquidation proceedings, or liability of
decedents or their estates are involved, were, by order of the Commissioner, transferred to the Technical Staff. Up to June 4, 1934,
the Section handled all offers submitted in compromise of income and
miscellaneous taxes, interest, ad valorem penalties, and specific penalties, except those offers that involved fraud penalties, criminal prosecution, section 104 of the Revenue Acts of 1928 and 1932, or section
220 of prior revenue acts.
I n addition to the individually docketed cases covered by the above
table this section, during the fiscal year 1934, handled cases briefed
in the Income Tax Unit covering interest and delinquency penalties
and cases briefed in the Miscellaneous Tax Unit covering specific
penalties, as shown in the following table and, since the organization
of the Alcohol Tax Unit, May 10, 1934, offers involving specific

REPORT OF THE SECRETARY OF THE TREASURY'

117

|)enalties under the Liquor Taxing Act of 1934 are being routed to
this section and handled as other specific penalty cases. Cases involving questions of remission and/or mitigation of forfeitures under
section 709 of the Revenue Act of 1928 are also being routed to this
section by the Alcohol Tax Unit, but action on them is being withheld
pending determination of procedure to be followed.
Interest and penalty compromise cases, fiscal year 1934
Interest and
delinquency
penalty cases
Pending July 1,1933....
Received July 1,1933-June 30, 1934.
Total to be disposed of.
Returned for change
Rejected
Number accepted-Total disposed of...
Amount accepted
Pending June 30,1934

Specific
penalty

Total

28
3,610

0
33, 033

36, 643

3,638

33,033

36, 671

2,382
24
1,232

2,394
388
30, 261

4,776
412
31, 483

33,033
$206, 689.10
0

36, 671
$264,428. 79
0

Intelligence Unit
The Intelligence Unit was formed on July 1, 1919. Its duties
were defined as, primarily, the investigation of willful attempts to
defraud the Government of taxes due under the various revenue acts,
and the investigation of charges against employees in the Internal
Revenue Service. There have been added to the duties of the unit
since that time the investigation of charges against attorneys and
agents practicing before the Treasury Department, the investigation of offers in compromise of tax liability, and such special investigations as may be desired by the Commissioner with respect to
the general work of the Bureau of Internal Revenue and by the Secretary of the Treasury with respect to general departmental matters.
The principal work of the unit consists in the investigation. of
tax fraud cases. This work is performed in cooperation with internal revenue agents and deputy collectors and has increased steadily
during the last few years. For the period from July 1, 1919, to
June 30, 1934, there were investigated 7,744 tax fraud cases (approximately 31,000 tax years). There have been 1,236 indictments for
these offenses and to date 688 of these cases have been disposed of
in the courts, resulting in the conviction or plea of guilty of 615
individuals and 73 acquittals. During the period from July 1,
1919, to June 30,1934, the total amount of taxes and penalties recommended for assessment as a result of investigations of this character was $354,659,992. The yearly average of such recommendations for the 15 years ended June 30, 1934, was $22,310,666; the average for the last 6 fiscal years has been $30,306,000.
I n addition to the collections by the Bureau of Internal Revenue
of taxes, penalties, and interest, amounts are covered into the Treasury by way of fines imposed in criminal cases; in fact, in some jurisdictions the courts have imposed an additional penalty by requiring
the defendants to pay the costs of the investigations, that is, the
salaries and expenses of the agents incurred during investigations.

118

REPORT OF THE SECRETARY OF THE TREASURY

Since the organization of the unit charges of a serious nature
involving employees of the service have been investigated by special agents, and in all cases where the interests of the service demanded, employees have been promptly separated from their positions. I n those instances in which violations of the criminal statutes were indicated, prosecutions have been instituted.
The investigation of charges against attorneys and agents admitted to practice before the Treasury Department was assigned
to this unit effective April 1, 1924. From that date to June 30, 1934,
957 such cases were investigated, as a result of which 157 agents
and attorneys were disbarred from practicing and 308 otherwise
punished.
The work of the Intelligence Unit has been performed by a yearly
average of 79 special agents, including special agents in charge of
divisions, with a present enrollment of 115. The present annual cost
of this unit is $522,650, and the average annual cost has been approximately $358,000.
LEGAL DIVISION

The Treasury Department had no legal division until Executive
Order No. 6166 of June' 10, 1933, became effective on August 10,
1933. Legal questions arising in the Department were referred for
opinion and advice to the Solicitor of the Treasury, who was an
officer of the Department of Justice answerable to the Attorney
General. By section 5 of the aforesaid Executive order the functions of the office of the Solicitor of the Treasury not specifically placed
under the Department of Justice were transferred to the Treasury.
With a view to centralizing control aiid coordinating in one agency,
under a single officer, the legal duties and functions of the Department, handled by legal, units in the different bureaus and agencies,
there was submitted to the Congress a provision which subsequently became section 512 of the Revenue Act of 1934. This section created in the Department of the Treasury the office of General
Counsel for the Department, and provided that the General Counsel,
to be appointed by the President with the advice and consent of the
Senate, should be the chief law officer of the Department. The section also authorized the appointment, in the same manner, of an Assistant General Counsel for the Bureau of Internal Revenue and the
appointment by the Secretary of not exceeding five Assistant General
Counsels. The offices of General Counsel for the Bureau of Internal
Revenue and of Solicitor of the Treasury were abolished and the
powers, duties, and functions of such offices were transferred to the
General Counsel. The General Counsel qualified and took office on
June 19, 1934.
Organization of the Legal Division was begun immediately by the
appointment of an Assistant General Counsel for the Bureau of Internal Revenue. Thereafter an Assistant to the General Counsel
and four Assistant General Counsels were appointed, each Assistant
General Counsel being made answerable to the General Counsel for
the handling of all legal problems arising in, or pertaining to, the
particular bureaus and agencies of the Treasury Department placed
under his jurisdiction.
The order of the Secretary of the Treasury of June 20, 1934,
created a Legal Division, Department of the Treasury, under the

REPORT OF THE SECRETARY OF THE TREASURY

119

supervision and direct control of the General Counsel. All personnel,
records, books, furniture, and supplies connected with the legal
activities of the Treasury Department were transferred to this
Division.
Since organization, the Legal Division, in addition to the usual
routine legal business of the Department, has engaged in the preparation of legal opinions, briefs, and memoranda for the information and
guidance of administrative officers; prepared and examined numerous
contracts pertaining to the public building program of the Treasury;
drafted proposed legislation deemed necessary or desirable for the
more efficient operation of the Department, for the collection of revenue, and for the safeguarding of the national credit; prepared Executive orders, and departmental orders and regulations, particularly
with reference to gold and sflver; and handled numerous questions
arising in connection with the Emergency Banking Act.
BUREAU OF THE MINT

Institutions oj the Mint Service
During the fiscal year ended June 30, 1934, six Mint Service institutions were in operation: Coinage mints at Philadelphia, San Francisco, and Denver; the assay office at New York, which makes large
sales of fine gold bars; the mint at New Orleans conducted as an assay
office; and the assay office at Seattle. The two last-named institutions
are, in effect, bullion-purchasing agencies for the large institutions and
also serve the public by making assays of ores and bullion. Electrolytic refineries are located at the New York, Denver, and San Francisco institutions.
Gold operations ^
Under the Executive order of August 29, 1933, providing that gold
produced from domestic mines might be sold abroad at world-market
prices, the United States mints and assay offices received, on consignment, newly produced gold, supported by affidavits evidencing
ehgibflity, and delivered gold to buyers. The average sale price
under this order was $30.99-{- per fine ounce.
An Executive order of October 25 authorized acquisition by the
Reconstruction Finance Corporation of newly mined domestic gold
received on consignment by United States mints and assay offices.
Gold was received under this order at prices fixed by authorized Government officials from day to day, ranging from $31.36 to $34.06,
averaging through January 15, 1934, $33.59 per fine ounce.
An Executive order of January 15, 1934, and regulations issued
thereunder authorized purchase by the New York Federal Reserve
Bank of gold received on consignment by the mints and assay offices,
at prices fixed from day to day by the vSecretary of the Treasury.
Under this order the price was fixed at $34.45 per fine ounce and
remained at that level until the President's proclamation of January
31, 1934.
The Presidential proclamation of January 31, 1934, authorized by
the act of May 12, 1933, as amended by act of January 30, 1934, fixed
the gold content of the dollar of the United States at 15^i grains of
gold 0.9 fine. This compares with the previous gold doflar consisting
1 For a more complete description of monetary legislation during thefiscalyear, see p. 27; and for a table
showing daily price quotations on newly mined gold m the United States from Sept. 8,1933, to Jan. 31,1934,
see exhibit 26, p. 205.

120

REPORT OF THJa SECRETARY OF THE TREASURlf

of 25.8 grains of gold 0.9 fine, and constitutes a reduction of about 41
percent, making the present gold dollar equivalent to about 59.06
cents of the former unit. Under this proclamation the United States
mints and assay offices resumed the purchase of proffered eligible gold,
at the price of $35 per fine ounce fixed by the proclamation, and
revalued the gold they held, at the same figure.
Gold purchased by the several Mint Service institutions during the
fiscal year 1934, at $20.67 + per fine ounce amounted to $20,114,858.02;
gold purchased at $35 per fine ounce amounted to $800,047,115.02.
Gold from the Federal Reserve banks and agents and gold coin, both
received through other Treasury offices, valued at $35 per fine ounce,
amounted to $107,290,767.68 and $10,207,157.47, respectively; and
gold bullion originally consigned to the mint institutions, purchased
by the Reconstruction Finance Corporation and finally received by
the mint institutions as Government holdings through the Treasurer's
office, amounted to $27,834,891.57 valued at $32.75. The increment
resulting from the revaluation of amounts received at less than $35
an ounce was $15,854,442.50. The total of direct purchases by the
mints and acquisitions through other Treasury offices, valued at $35
per fine ounce, was $981,34i9,232.26. In addition intermint service
institution transfers, at $35 per fine ounce, amounted to $8,582,894.42.
This constitutes a grand total of $989,932,126.68 at $35 a fine ounce.
Silver operations ^
Sflver bullion acquired by the Mint Service institutions during the
fiscal year 1934 totaled 32,578,359.12 fine ounces, the average cost of
which was 54.377 cents per fine ounce, and the total cost $17,715,096.26.
The items making up this total were: Silver received in exchange for
bars bearing the Government stamp, 509,864.45 fine ounces; silver in
gold deposits purchased at market rates, 354,825.84 fine ounces; silver
received for credit on foreign debts at 50 cents per ounce (act of May
12, 1933), 22,734,824.35 fine ounces; newly mined domestic silver
acquired at 64-+- cents per ounce (Presidential proclamation of Dec.
21, 1933), 8,558,160.96 fine ounces; and silver received through other
Treasury offices under the Silver Purchase Act of 1934 (act of June 19,
1934), valued at market rates, 420,683.52 fine ounces. In addition.
United States coin received for recoinage totaled 5,026,139.37 fine
ounces, the recoinage value being $6,949,092.15, and silver deposited
in trust by other governments totaled 16,062,294.32 fine ounces. Sflver
transfers between Mint Service offices totaled 2,040,305.16 flne ounces.
The aggregate of the above items is 55,707,097.97^ne ounces.
The market price of silver in New York (mean of bid and asked),
during the fiscal year 1934, was at the lowest point on August 16,
1933, $0.353125; the highest point, $0.470625, was effective for three
different periods, February 19, 1934, March 12, 13, and 14, and
April 10 and 11, 1934. The fiscal year average was $0.42540, which
compares with the prior fiscal year average of $0.28714. The prior
year's range was between $0.245625 and $0.375625.
Coinage
Resumption early in 1934 of coinage demand by the public was a
factor in the increased output of domestic coin during the fiscal year
1934. Total domestic pieces, made in the fiscal year under review
For a more complete description of monetary legislatioii during the fiscal year, see p. 27.

REPORT OF THE SECRETARY OF THE TREASURY

121

were 46,634,250 as compared with 32,154,300 in 1933. The 1934
value was $3,499,125 as compared with the prior year's value of
$27,861,420; the decrease is explained by the absence of gold coinage
in 1934. The 1934 domestic coinage consisted of 10,414,250 silver
pieces valued at $3,136,925, and 36,220,000 bronze pieces valued at
$362,200.
For foreign countries there were made during the fiscal year 1934,
19,040,000 pieces, consisting of 10,540,000 silver, and 8,500,000 nickel
pieces. These were all made at the Philadelphia mint, and were for
Colombia, Cuba, Ecuador, and Honduras. The prior year's coinage
for foreign countries consisted of 5,921,800 pieces.
The total of domestic and foreign pieces coined in the fiscal year
1934 amounted to 65,674,250, compared with the 1933 total of
38,076,100.
Bullion deposit transactions
The number of bullion deposits again showed a large increase over
recent prior years, the 1934 total being 115,870 as compared with
73,238 in 1933, 54,105 in 1932, and 36,098 in 1931. SmaU parcels of
newly mined gold from placer miners, and from secondary materials
returned from industry to monetary use, continued in large volume.
Refineries
The refineries produced, during the year, 2,387,817 fine ounces
(81.8 tons) of electrolytically refined gold, compared with 2,336,943
fine ounces (80.1 tons) in the prior year; and 703,284 fine ounces
(24.1 tons) of electrolytically refined silver, compared with 872,249
fine ounces (29.9 tons) in the prior year.
The stock of gold and silver in unrefined bullion on hand at the close
of the fiscal year 1934 was 929 tons, an increase of about 99 tons
during the year as compared with the prior year's increase of 165 tons.
Except for a very short period during the past fiscal year, the electrolytic refinery at the New York assay office remained closed for the
fourth successive year.
Commemorative coins
Silver 50-cent commemorative coins of special design were authorized as follows:
Event
Texas, centennial of independence
Maryland, tercentennial of founding...
Connecticut, tercentennial of founding.
Arkansas, centennial of statehood
Daniel Boone, bicentennial of birth

Date of law
June
May
June
May
May

16,1933
6,1934
21,1934
14,1934
26,1934

Pieces
1,600,000
25,000
26,000
600,000
600,000

Gold and silver in the United States
Stock of coin and monetary bullion.—On June 30, 1934, the estimated
stock of domestic coin in the United States was $961,884,257, of which
$540,006,894 was standard silver doUars, $294,770,252 subsidiary
sflver coin, and $127,107,111 minor coin.
The stock of gold held in the Treasury on the same date was $7,856,180,556 at $35 per fine ounce; the stock of silver bullion was
59,476,956 ^fine^ounces, an increase of 31,720,059 fine ounces.

122

REPORT OF THE SECRETARY OF THE TREASURY

Production oj gold and sifoer.—Domestic gold production during the
calendar year 1933 was $52,842,300 (at $20.67-f per ounce), compared
with $50,626,000 in 1932. The output was about 52 percent of that
for the record year 1915, when the total was $101,035,700.
Domestic sflver production during 1933 totaled 23,002,629 ounces,
valued at $8,050,920, compared with 23,980,773 ounces, valued at
$6,762,578, for 1932. The record production of 1915 was 74,961,075
fine ounces, valued at $37,397,300.
Industrial consumption oj gold and silver.—Go\A consumption in the
industrial arts during the calendar year 1933 is estimated at
$17,013,260; the return from industrial use exceeded the estimated
use by industry by $5,792,700, which is a reversal of the usual practice. Silver used in the arts is estimated at 29,343,451 fine ounces, of
which 10,810,571 fine ounces was new material. As compared with the
prior year, silver consumption was about 5,100,000 ounces more and
gold consumption about $3,000,000 less.
Appropriations, expenses^ and income
Appropriations available for the Mint Service during the fiscal year
1934 totaled $1,296,842, and reimbursements to appropriations for
services rendered amounted to $148,132.50, making a total of
$1,444,974.50.
Expenses amounted to $1,246,355.64, of which $1,208,871.52 was
chargeable to appropriations and $37,484.12 chargeable to income.
The income realized by the Treasury from the Mint Service aggregated $3,116,524.81, of which $528,886.32 was seigniorage. The
seigniorage on subsidiary silver coin was $197,941.16, and on bronze
coin, $330,945.16.
The number and value of deposits, transfers, gross income, and
expenses for the fiscal year 1934, and number of employees on June 30,
1934, at each institution are shown in the following table:
Deposits of gold and silver, income, expenses, a n d employees, by institutions, fiscal
year 1984

Institution

Philadelphia
San Francisco
Denver
New York
N e w Orleans
Seattle
D i s c o n t i n u e d field offices..,
Total
B u r e a u of t h e M i n t
Grand t o t a l . . .

Num- Number of ber of
de- .
t a r y value
i n t M oofn egold
posits m
and
servsilver reof
ice
ceived 1
gold t r a n s and
fers
silver
19,462
56,234
9,415
26,149
1,236
3,375
0

Gross income 2

Gross expense 2

EmExcess of in- ploycome ( + ) or ees,
June
of expense
30,
1934

(-)

$21,878, 669.96 $558, 629.99 $505, 634.84 +$52,995.15
-2,837.36
98,106,679.23 204,327.57 207,164.93
45, 546,664.01 299, 612.87 170,665.47 +128,947.40
862,075, 792. 85 2,037,251.05 297,047. 49 +1,740,203.56
9,365. 39
- 5 , 384. 74
3,980. 66
1,415,041.15
22,480.03
- 7 , 363. 78
15,116. 25
10, 057, Oil. 11
25. 22
- 2 6 . 22
0
0

206
124
85
140
10
12
0

15,870
0

3,176 1,039,079,658. 31 3,118,918.38 1,212,383.37 +1,906,535.01
0
0
36,365.84
- 3 6 , 365.84
0

577
30

15,870

3,176 1,039,079,658. 31 3,118,918.38 1,248,749.21 +1,870.169.17

607

Prior fiscal year (10 field in72,125
stitutions)

1,997
901
253
24

?
0

1,113

487,639,103.68 1,670,128.04 1,213,621.68

+466, 606.36

1 At monetary value. Includes interinstitution transactions amounting to $118,694,198.20.
2 Includes interinstitution transactions amounting to $2,393.57.

538

REPORT OF THE SECRETARY OF THE TREASURY

123

BUREAU OF NARCOTICS

Enforcement activities
The special attention which the Bureau has paid to eliminating
the larger sources of supply of illicit narcotic drugs has unquestionably resulted in somewhat of a stringency in the illicit market.
Prices of contraband narcotics have remained high, and the peddlers
have found it necessary to adulterate the, drug in an attempt to
meet the market demand of addicts. Samples of drugs seized in the
illicit traffic have been found upon analysis to contain as high as
90 percent of nonnarcotic ingredients.
Dearth of supply through the usual channels has also resulted
in efforts by peddlers and addicts to divert narcotics from legitimate medical channels. Enforcement attention has been given to
the metho(Js^ of diversion, and the cooperation of State and municipal authorities has been solicited to supplement Federal action.
An important factor in achieving State cooperation is the enactment by several more States of the uniform State narcotic law
Avhich was mentioned in the previous report. Four additional
States, Kentucky, Rhode Island, South Carolina, and Virginia, have
now adopted the uniform narcotic law with little or no amendment,
making a total of eight States which have put into effect this model
legislation. A number of States have already enacted narcotic
legislation^ comparable to the uniform narcotic law, but the Bureau
is conducting an educational campaign to secure a more widespread
adoption of the uniform law to afford a complete enforcement basis
for narcotic drug traffic control.
The Convention for Limiting the Manufacture and Regulating the
Distribution of Narcotic Drugs, to which the United States is a
party, went into effect July 9, 1933. Pursuant to its obligation
under this convention, the Bureau prepared and submitted for the
first time, through the State Department, to^ the supervisory body
at Geneva, estimates of the medical needs 'of the United States for
manufactured narcotic drugs covered by the convention. These estimates formed the basis for limiting the manujFacture of narcotic
drugs in the United States during the calendar year 1934.
The following table shows the number of cases of violation, by
registered and nonregistered persons, of the narcotic laws and the
cases disposed of during the year as reported by Federal narcotic
enforcement officers:
Violations of the narcotic laws and the cases disposed of during the fiscal
year 1934
Registered persons
Federal court
Pending July 1, 1933
Reported during 1934:
Federal
Joint-

^..

Total to be disposed
of.

State court

Nonregistered persons
Federal court

State court

. 466

1,247

1,319
54

2,424
846

1,839

4,617

124

REPORT OF THE SECRETARY OF THE TREASURY

Violations of the narcotic laws and the cases disposed of during the. fiscal
year 1934—Continued
Registered persons
Federal court
Convicted!
Federal
Joint
Acquitted:
Federal
Joint
Dropped:
Federal
Joint
Compromised: i
Federal . . . Joint

State court

120
14

Federal court

State court

1,453
475

166
137

58
20

3
3

794
174

7
14

4 .
2

3
676
18

Total disposed of—..
Pending June 30,1934

ff
Sentences Imposed:
Federal
Joint
-

Nonregistered persons

Total....
Fines imposed:
Federal
Joint
Total

181
8

927

3,306

912

1,211
.a

285
22

9
0

10
0

307

ff
1
6
7

1 1

>»

4
0

0 2,998
0 863

1
3

2
6

106
122

10
11

24
21

0 3,861

228

$13,006.00
2,677. 60

$86,620.61
34,924. 00

la. 682 60

120. 444 fil

$8,940. 50
3, 792. 26
12.732. 7R

J Represents 47 cases involving tax liability which were closed on payment of taxes and penalties in the
sum of $441.20; and 144 cases which were compromised in the sum of $12,368.34.
NOTE.—Federal cases are made by Federal officers working independently, while joint cases are made by
Federal and State officers working in cooperation with each other.

Extent and trend of narcotic traffic
On June 30, 1934, there were 317,394 registrants under the Harrison Narcotic Law, as amended, 218 as importers and manufacturers,
1,426 as wholesale dealers, 49,907 as retail dealers, 144,643 as practitioners, and 121,200 as dealers in and manufacturers of untaxed
narcotic preparations, the latter number including registrants not
required to pay occupational tax under the act.
During the year 131,194 pounds of opium were imported as compared with importations of 112,654 pounds during the previous year,
or an increase of 18,540 pounds. Importations of coca leaves for
medicinal purposes amounted to 246,679 pounds as compared with
importations of 131,512 pounds during the previous year, or an increase of 115,166 pounds. A further quantity of 9,879 pounds of
coca leaves was imported for manufacture of decocainized coca extracts as provided by section 6 of the act of June 14, 1930.
Exports of narcotic drugs of all kinds amounted to 1,871 ounces in
1933 and 2,834 ounces in 1934, or an increase of 963 ounces: The
drugs exported during 1934 involved 50,959 taxable ounces of
products.

REPORT OF THE SECRlSTARY OF THE TREASURY

125

The net quantity of pure drugs of all kinds sold to domestic purchasers by manufacturers amounted to 373,339 ounces as compared
with sales of 338,759 ounces of such drugs during the previous year.
PROCUREMENT DIVISION

Provision for the creation of the Procurement Division was made in
Executive Order No. 6166, dated June 10, 1933. The operation of this
order, however, was delayed by Executive Order No. 6224 of July 27,
1933, but made effective with regard to this Division by the order of
the Secretary of the Treasury, approved by the President, October 9,
1933.
Under these orders the Procurement Division is charged with the
determination of policies and methods involved in the procurement,
warehousing, and distribution of property, facihties, structures, improvements, machinery, equipmxent, stores, and supphes. The following functions and divisions were transferred to it under the same
orders: The functions of the General Supply Committee of the Treasury Department; the functions of the Office of the Supervising Architect of the Treasury Department (the administration of buildings
containing major post-office activities, however, was transferred to the
Post Office Department, and the administration of buildings containing neither postal nor Treasury activities was transferred to the Interior Department); the fuel yards of the Bureau of Mines, Department of Commerce; custody and control of the Federal warehouse;
the functions of the Federal Coordinating Service relating to the disposition of seized and surplus property, and to the procurement, warehousing, and distribution of property as exercised by the area coordinators, by the Federal Real Estate Board, the Federal Specifications
Board, the Federal Standard Stock Catalog Board, the Federal
Traffic Board, and the Interdepartmental Board of Contracts and
Adjustments.
The Procurement Division is comprised of two main branches, the
Branch of Supply and the Public Works Branch.
Branch oj Supply
The Branch of Supply performs all those functions formerly vested
in the General Supply Committee, the fuel yards of the Bureau of
Mines, Department of Commerce, and those functions of the former
Federal coordinating service relating to the disposition of seized and
surplus property, and to the procurement, warehousing,, and distribution of property.
The order of the Secretary of the Treasury dated AprU 16, 1934,
provided that the disposition of all property, including all motor
vehicles, seized by the Government and made available for use by
the Treasury Department shall be in charge of the Director of
Procurement.
By order of the Secretary of the Treasurer, effective June 1, 1934, the
authority and responsibility for the acquisition of all motor equipment
of the Treasury Department and the assignment there()f to the
various agencies of the Departihent were vested in the Director of
Procurement. This order also charged the Branch of Supply with
responsibility for the maintenance, repair, and garaging of afl motor
equipment of the Treasury Department in the District of Columbia,
and transferred to it all garages, garage equipment, and records.

126

REPORT OF THE SECRETARY OF THE TREASURY

During the fiscal year 1934, 5,548 bids were received and 2,269
contracts entered into, purchases by the departments thereuncier
aggregating approximately $20,000,000." In connection with the bids
received, 30,357 samples were submitted.
Material, supplies, and equipment received at the Federal warehouse during the year amounted to 14,736,365 pounds and deliveries
to the departments and establishments amounted to 16,239,936
pounds.
The fuel y^ards issued and delivered to the departments and establishments 28fe,727 tons of coal, 421 cords of wood, 22 tons of charcoal,
58 tons of coke, and 22,072 tons of ofl valued at $1,645,990. In
addition, stowage and reimbursable work performed amounted to
$36,610.
Approximately 8,000 typewriters were overhauled or adjusted for
the various Government activities in Washington, representing
charges of $16,175.
The Federal Real Estate Section acted upon 3,647 requests for
clearance to lease property, 66 applications to purchase, 62 applications for sales, and 6 transfers of land and/or buUdings among the
executive departments.
The Federal Traffic Section, in addition to its general coordinating
activities, issued 2,461 routing orders covering 39,709 cars and furnished 31,774 rate quotations.
The Federal Specifications Board promulgated 72 new specifications, 111 revisions, and 95 amendments to Federal specifications,
and in addition submitted to the departments for criticism 61 proposed new Federal specifications and 88 proposed revisions.
The Federal Standard Stock Catalog Board aided in bringing the
general schedule of contracts into conformity with its catalog, and in
securing the inclusion in the proposal forms revisions to Federal or
departmental specifications to enable manufacturers or dealers to
quote upon the requirements set forth.
The Federal Contract Board, together with its studies and recommendations relating to Government contracts, contract forms, and
procedure, acted upon numerous requests for deviation from existing
standard forms.
The Federal Surplus Property Section, in addition to its activities
in the District of Columbia, handled 1,000 hsts of surplus property
in the field, effecting 1,170 transfers and granting 429 clearances for
sale.
Since March 1934 the Branch of Supply has been the general liaison
office between the Government activities and the National Recovery
Administration in matters arising from the application of Executive
Order No. 6646. All requests for exceptions to this order are submitted to the National Recovery Administration by the Director of
Procurement. This procedure has materiaUy expedited requests of
the departments and has enabled the Director to maintain uniformity of applications.
The 143 Federal business associations, whose memberships comprise
Federal officials and employees, functioned actively as agents of the
Director of Procurement. Efforts have been made to promote cooperation among local Government activities, and economy and efficiency in transacting the routine business of the Government. The
associations have been particularly active in the adjustment pf office

127

REPORT OF THE SECRETARY OF THE TREASURY

space and loan of property and equipment, consolidated procurement,
and special surveys. The following table shows the financial status
of the Branch of Supply at the close of the fiscal year 1934:
Statement of the working assets of the Branch of Supply for the fiscal year 1934
Inventory as of July 1, 1933 i
Purchases during 1934

$101,698.38
2,265,387.33

$2,367,086. 71
808.88
2,085,268.58
38,629.57 2,124,707.03

Inspection and breakage
Cost of goods sold
Cost of sales, not billed June 30, 1934
Inventory as of June 30,1934

242, 378. 68

Revenue:
Surcharge for delivery..
Purchase discount

79,696. 62
14,081.84
93,778.46

Total-

Balance sheet as of June 80, 1934
ASSETS

U A B I L I T I E S AND CAPITAL

Treasury cash
$141,576.06
Disbursing officer's cash
41,832. 37
Accounts receivable, old
334,018. 73
Purchases, old
328,444.19
Purchases, inventory as of June 30,
1934
242,378.68
Price adjustment, loss
586.65
Deferred charges, 1933
.".
44,464. 60
Deferred charges, 1934
41,190.56
Total...

1,174,491.84

Price adjustmenc gain..l
Sales, old
Inventory mark-up.
Unvouchered invoices
Unpaid audited vouchers
Undistributed receipts
General Fund revenue

$691.01
334,018.73
11,541.84
328,444.19
48,507. 51
31,372.84
119,915.72

Unencumbered capital

874,491.84
300,000.00

Total

1,174,491.84

Public Works Branch
Building activities.—On October 16, 1933, the Public Works Branch
assumed the duties of the Office of the Supervising Architect. Under
•an order approved by the Secretary of the Treasury on January 18,
1934, a temporary reorganization was effected, under an assistant
director, with units headed, respectively, by a supervising engineer, a
supervising architect, an office manager, a chairman of the Board of
Award, and a chief of the Legal Section. The branch was moved in
February, 1934, from the Treasury BuUding and rented quarters to
the Federal Warehouse BuUding.
The functions of the Public Works Branch are to coUect and prepare for submission to Congress data and estimates for public building projects; to acquire land for public building sites; to prepare plans,
and specifications, and estimates for construction; to take bids and
award contracts therefor; to supervise construction, remodeling,
extension, etc.; to repair all public buUdings transferred from the
Treasury Department under the Executive order of June 10, 1933, to
the custody of the Post Office and Interior Departments; and to
operate, repair, equip, and maintain all pubhc buUdings in the
custody of the Treasury Department outside of the District of
Columbia.
Original public building program.—Under the act of March 31,
1933, the unobligated funds, appropriated by Congress for public
buUdings under the Keyes-EUiott Act and subsequent acts, became
unavailable, except for items necessary to the completion of projects
already under contract. Consequently, no new contracts were
awarded under these acts during the fiscal year, but 203 projects at a
limit of cost of $38,830,400, previously contracted for, were completed.
1 Represents inventory of the General Supply Committee.

90353—35-

128

REPORT OF THE feECtlETARY OF THE T H E A ^ U H Y

The status of the work under the original public building program
was as follows at the end of the fiscal year 1934:
'
Completed, 578 projects..
Under contract, 157 projects..

Limit of cost
$170,321, 221. 78
272,358,457.00

As of June 30, 1934, $494,642,437.31 had been specifically authorized under this program. Of this amount, $426,544,426.54 in the
aggregate was obligated as of that date, and expenditures to June 30,
1934, under these obligations amounted to $396,612,828.91. Outstanding obligations at the end of the fiscal year were $29,931,597.63.
Program under the Public Works Administrator.—Under the National
Industrial Recovery Act, approved June 16,1933, public buUding construction by the Treasury, not necessary to the completion of contracts made previous to t h a t date, became subject to aUotment by
the Administrator of Public Works.
At various times during the fiscal year 1934 allotments of funds for
465 building projects in the sum of $67,410,788 were made to the
Treasury Department by the Administrator of Public Works.
The status of the work under this program on June 30, 1934,
is shown in terms of hmits of. cost in the following table:
status

Number
of
projects

Limit of
cost

Authorized by the Public Works Administration.

466 $67,410,788

Under contract
Bids in, on market, or in specification stage
Drawing stage
Land owned, ready for drawings
Sites selected, title not yet vested
Sites advertised for, examined, and awaiting selections

62
86
172
5
46
106

24,694,977
7,696,901
16, 283, 446
456.000
4,009,746 •
16,469, 720

466

67,410,788

Total

The following tabulation shows the value of contracts awarded both
for land and construction plus certain administrative expenses
incident thereto, as of June 30, 1934:
Contracts awarded
Total amount unobligated for land and buildings

$21,239,351.20
46,171,436.80
67,410,788. 00

The following table classifies the projects selected under the Public
Works Administration program:
Projects
New projects not included in H. Doc. 788, 71st Cong
.
Projects included in H. Doc. 788 and not previously authorized.
Projects specifically authorized by Congress not included in H. Doc. 788
Projects specifically authorized by Congress included in H. Doc. 788
Projects authorized under the Relief Act of July 21, 1932.
.
Total

Number

Limit of
cost

109 $21,456,140
83
5, 245, 525
702,904
2
45 16,486,330
226 23, 519,889
466

67,410,788

Control^ administration, and repair oj Federal buildings.—In accordance with Executive Orders No. 6166, June 10, 1933, and No. 6224,
dated July 27, 1933, the Treasury Department, during the fiscal year
1934, transferred to the Post Office Department the administration
of 1,629 buUdings, and to the Interior Department the administra

REPORT OF THE SECRETARY OF THE TREASURY

129

tion of 11 buildings. The control of these buildings, however, is
charged to the Procurement Division, as well as that of all other buildings listed in the following table, which indicates, as of June 30,
1934, the number, administration, and cost of the buUdings (exclusive of land), for which repairs are payable from annual appropriations
for repairs to public buildings:
Buildings
Administration transferred to Post Office Department
Administration transferred to Interior Department
Administered by Procurement Division
Vacant-.
Administered by Procurement Division
In Washington, D. C , administered by Chief Clerk Treasury Department
Marine hospital, administered by Public Health Service.
Quarantine station, administered by Public Health Service
Total..:

Number -

Cost

1,629 $332,588,862.00
11
4,419,013.11
84
62,577,705.77
61
12, 236.504. 33
i4
7,156,944.08
4
10,739,303.74
» 28
16,793,169.18
- 26
6,334,445.19
1.846

441,844,947.40

1 Includes 1 assay office and 3 mint buildings.
2 Includes Public Health Building, Cincinnati, Ohio; Public Health Building, Philadelphia, Pa.; and
National Institute of Health, Washington, D. C.

Reliej program.—Under the Emergency Relief and Construction Act
of 1932,^ approved July 21, 1932, $100,000,000 was authorized and
appropriated for public building projects. Under the act of March
31, 1933, providing for the emergency construction program of the
Government, all moneys previously appropriated for public works,
unless obligated in connection with projects on whicti actual construction had been commenced or might be commenced within 90 days,
were allocated to the conservation program. The foUowing table
gives an accounting of the appropriation for public building projects
under the Emergency Relief and Construction Act to June 30, 1934:
Appropriated
Transferred t o Emergency Conservation fund
Office appropriations—Not transferred
Unobligated balance, June 30,1933
Obligated to June 30, 1933
Expended to June 30,1933
Outstanding, June 30,1933
Expended during fiscal year 1934 for purchase of 61 sites, etc
Net cancelation during fiscal year 1934
_
Outstanding June 30, 1934
Unobligated cash balance June 30, 1934
NOTE.—Amounts in italics to be deducted.

^ $100,000,000.00
$92.876, SOO. 00
308, HI. 66

1,721,360.31
353,606.66

93,183, U l . 66
6,816,658.36
1,336,037.80
6,481,520.66
8,849,432.21
2,632,088.34
2,074,866.97
557,222.37
1,688,643.46

Emergency construction program.—In the Emergency Appropriation
Act approved June 19, 1934, Congress appropriated an additional sum
of $65,000,000 for the emergency construction of public buildings
throughout the country, to be selected by the Secretary of the Treasury and the Postmaster General from public buUding projects specified in statements nos. 2 and 3 in House Report 1879, Seventy-third
Congress. In accordance with this legislation, 303 projects at a total
limit of cost of $60,228,700 had been selected and approved by the
end of the fiscal year, including administrative expenses and one item
of $1,540,000 for structural and mechanical equipment repairs to

130

REPORT OF THE SECRETARY OF THE TREASURY

Federal buUdings throughout the country. Congress also authorized
$2,500,000 from Public Works Administration funds for the purpose
of permitting increases up to 10 percent in limits of cost of Public
Works Administration and emergency construction projects, when
the bid of the lowest responsible bidder exceeds the amount previously
available for any project.
No expenditures were incurred, and no contracts were awarded
under this legislation during the fiscal year 1934.
Private architectural services.—Under the authorization by Congress
for the employment of private architects to the extent deemed necessary by the Secretary of the Treasury, contracts had been made by
the end of the fiscal year 1933 with architectural firms for 349 projects,
having limits of cost amounting to approximately 50 percent of the
aggregate specific authorizations at that time. During 1934, 8
additional contracts were made, and 56 of those in force were terminated or settled, leaving 301 contracts in force at the end of the fiscal
year 1934.
Total expenditures.—Total expenditures for all purposes for the
Public Works Branch during the fiscal year 1934, together with outstanding contract liabUities and remaining unencumbered balances
of appropriations, are shown in the following table:
Expenditures from July 1, 1933, to June 80, 1984, contract liabilities charged against
appropriations, and unencumbered balances
Expenditures

Statutory roll...Sites a n d a d d i t i o n a l l a n d . . .
C o n s t r u c t i o n of n e w buildings
Extensions to buildings
Miscellaneous special i t e m s
E m e r g e n c y construction of p u b l i c buildings, acts J u n e
19, 1934
A.dministrative expenses P u b l i c W o r k s A d m i n i s t r a t i o n
projects
Unallotted appropriation (lump s u m ) .
R e m o d e l i n g a n d enlarging p u b l i c b u i l d i n g s .
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 S t a t e s .
R e p a i r s a n d preservation of p u b l i c buildings
Mechanical e q u i p m e n t for p u b l i c b u i l d i n g s . . .
Vaults a n d safes for p u b l i c buildings
Furnitui-e a n d repairs of s a m e for p u b l i c b u i l d i n g s .
Operating supplies for p u b l i c buildings
General expenses for p u b h c buildings
R e n t of t e m p o r a r y q u a r t e r s
O u t s i d e professional services
O p e r a t i n g force for p u b h c buildings
Total.

C o n t r a c t liaUnencumbilities charged bered balances,
against a p p r o - J u n e 30, 1934
priations

$385,686.15
3,483,471. 84
66,135, 327. 94
6,120,029. 68
104, 621. 73

$10,877, 275. 92
42,491, 919.14
4,413,165.13
496,046. 45

939,866. 79

513,812.42

1 $350,439. 98
323, 636. 34
37,324, 545.43
6, 283, 935. 23
636, 626. 52
65,000,000. 00
5, 970, 550. 61
2,354,289. 66

13, 024.19
437,099. 44
377, 284.46
75,424.10
887, 061.10
1, 624, 388. 47
1, 652, 381. 96
575,172.80
1, 605,936.18
2, 937,899.92

180,971.28
145, 261. 24
8,332. 54
31,822.09
219,670. 33
43,175. 31
44, 335. 31
1,893, 275. 79
15,225.05

1, 196. 71
2 426,542.96
3 427,921. 79
4 454,972. 51
5 3,511, 832.71
6 1,057, 464. 59
7 1,717, 493. 91
8 839,721.86
^801, 389.04
10 3,009, 043. 74

87, 364, 576. 75

61, 374, 288.00

130,491,603. 69

1 I n c l u d e s $10,000 reserve 1933; $216,000, 1934.
2 I n c l u d e s $350,000 reserve 1934.
3 I n c l u d e s $10,000 reserve 1933; $200,000, 1934.
* I n c l u d e s $254,355 reserve, 1934.
8 I n c l u d e s $2,660,043 reserve, 1934.
6 I n c l u d e s $20,000 reserve, 1932; $387,231.45, 1934.
7 I n c l u d e s $8,000 reserve, 1932; $10,000, 1933; $1,043,526, 1934.
8 I n c l u d e s $372,063 reserve, 1934.
8 Deficiency.
10 I n c l u d e s $2,920,000 reserve, 1934.

The foUowing table prepared pursuant to act approved June 6,
1900 (31 Stat. 592), shows the total expenditures to June 30, 1934,

REPORT OF THE SECRETARY OF THE TREASURY

131

for all purposes for buUdings 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 30, 1934, prepared pursuant to
act approved 'June 6, 1900 {81 Stat. 592)
Construction

T o t a l expenExtensions, a l
ditures,
terations, a n d A n n u a l repairs
J u n e 30, 1934
special i t e m s

Post-office, courthouse, c u s t o m h o u s e build
$166, 958, 583. 33 $34, 300, 299.
ings, etc
.
C o u r t h o u s e buildings
7, 594, 701. 68
601, 241.
C u s t o m h o u s e buildings
24,116, 289. 69 3, 483, 554.
M a r i n e hospital buildings
13, 997, 348. 65 5, 440, 678.
Post-office buildings
:
171, 818, 969. 58 12, 547, 343.
Q u a r a n t i n e station buOdings
3, 682, 570.11 2, 432, 952.
Miscellaneous buildings
124, 624, 483. 79 6, 094, 467.
Total--.

512, 792, 946. 83

Cost of sites

43 $21, 013, 203. 32 $222, 272,086. 08
8, 803, 957. 72
608, 014.15
89
30, 426. 396. 95
2,826, 552. 31
95
23, 470,854. 33
4, 032, 827. 45
23
73 13, 027, 366. 42 197, 393, 679. 73
7, 977,898.19
1,862, 376. 07
01
6, 434, 415. 46 137, 153, 366.89
64

64, 900, 537. 88

49,804, 755.18

Outstanding liabilities
chargeable against a p p r o priations 1
Sites

Post-office,
courthouse,
customhouse
buildings, e t c . .
C o u r t h o u s e buildings
C u s t o m h o u s e buildings
M a r i n e hospital buildings
Post-office buildings
Q u a r a n t i n e station buildings
Miscellaneous buildings
E m e r g e n c y construction of p u b l i c buildings, act, J u n e 19, 1934
A d m i n i s t r a t i v e expenses. P u b l i c W o r k s
A d m i n i s t r a t i o n projects
Unallotted a p p r o p r i a t i o n ( l u m p s u m )
Total

$46,865, 436. 39
4, 590,834. 69
3,886,922. 33
889, 238. 97
69, 705, 765. 44
328,837. 60
56, 405, 424.12

627, 498, 239.89

Unencumbered balance
of a p p r o priations

Buildings

$109, 941.17

$7, 997, 992. 97
4, 441,864. 59
2, 696.00
3, 515, 026. 83
10, 729,199. 75 16,162, 546. 74
440, 786. 34
38,"i35."6o' 14, 830, 217. 25

$1, 923,879. 82
60, 680. 23
725,104. 90
407, 369.11
33,140,808. 23
543, 994.86
7, 766, 906. 37
65, 000, 000. 00
5, 970, 550. 61
2, 354, 289. 66

182,672,459.54

10,877,275.92

47,391,130.72

117,893,583. 79

1 A d m i n i s t r a t i v e expenses, P u b l i c W o r k s A d m i n i s t r a t i o n projects, $513,812.42.

PUBLIC DEBT SERVICE

Division oj 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 otlier obligations of Puerto 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 the United States currency canceled as
unfit, and mutilated paper (spoilage, etc.) received from the Division
of Paper Custody and the Bureau of Engraving and Printing.
Issue and retirement oj securities.—The following is a summary of
the issues and retirements of securities conducted through this Division
during the fiscal year 1934. Complete details of all transactions in
public debt securities are presented in formal statements elsewhere in
the|report.

132

REPORT OF THE SECRETARY OF THE TREASURY

Issues, retirements, and transactions in stock of United States securities, fiscal year
1984
[Par value]
Registered

Nonregistered

Total

2 $621,562,230
959,752,010

$6,494,386,850.00
24,272,724,850.00
49,042,670.00
132, 508.960.00

$6,494,386,850.00
24,272,724,850. 00
670,604.900.00
1,092,260,960.00

1,581,314,240

30,948, 663,320. 00 32,529,977, 560.00

ISSUES

Stock shipments to Federal Reserve banks:
For exchange transactions
Allotment for original issue
Original issues by the division.
Issues on exchange
Total issued and shipped.
RETIREMENTS

Retired on exchange
Cleared for redemption
Retired on other accounts (i. e. claims, credit, and
exchange authorization retirements)

442,443,160
2 499,709,965

649,817,800.00
2, 210,271. 76

1,092,260,960.00
501,920, 236.75

396,110.020

35.630.00

396,145,650.00

1,338,263,145

652,063,701.75

1,990,326,846.76

Received from Bureau of Engraving and Printing. 2 2,391,712,620
Canceled and delivered to Register of Treasury:
Securities...
D e t a c h e d m a t u r e d coupons (10,047,326
pieces—amount $629,308,440.08).

34,710,966,820.00

37,102,679,340.00

1,657,240,600.00

1,667,240,600.00

Total rethred..
STOCK ACTIVITIES

1 Includes Treasury bills available for either original issue or exchange, amounting to $11,891,118,000.
2 Includes special 1-day certificates of indebtedness amounting to $3,000,000.

Individual registered accounts.—In connection with registered public
debt issues, individual accounts are maintained and interest is paid
periodically in the form of checks. The accounts open on June 30,
1934, were as follows:
Number of
accounts
Interest-bearing loans:
Pre-war loans
Liberty and Treasury loans
.
Treasury notes and certificates of indebtedness...
Total interest-bearing loans
Matured loans (Liberty, Victory, and postal savings)
Total open accounts

Principal

34,114 $805,551,030
804,498 2,747,355,700
16
396,239,000
3,909

3,949,146,730
614,500

842, 537 3,949,760,230

There were 223,389 individual accounts closed for registered Liberty
bonds, Victory notes, and Treasury bonds, and 154,675 accounts were
decreased, representing the retirement of securities amounting to
$893,616,300 par value. In connection wdth the same loans, 173,251
new accounts amounting to $1,048,430,800 principal were opened.
Changes of address, aggregating 39,789 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 1,700,800 checks, amounting to $102,495,231.91.
On registered securities of the pre-war loans 72,155 checks for
$16,757,410.75 were issued and on registered Treasury notes and
certificates of indebtedness interest payable amounting to $13,392,982.36 was certified to the Treasurer. There were received from the

133

iiEPORT OF T H E SECRETAJEIY O F T H E T R E A S U R Y

Bureau of Engraving and Printing 2,153,550 checks as stock, and
there were canceled and delivered to the Destruction Committee
stock consisting of 193,424 checks, including 7,650 checks for the
Home Owners' Loan Corporation.
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
of securities
clauns
(pieces)
Received

3,423

8,393

$1,160,898.34

Settled b y Reissue or redemption of securities.. .
Recovefy of securities
Disallowance of claims
Other disposition 1

1,444
926
35
111

4,137
1,746
60
649

720,956.69
662.000.00
18,650.00
2, 716. 50

2,516

6,481

Total settled

^. .

1,294,322.09

1 War savings cases sent to Surrenders Section for settlement because of question of ownership.

Saje-keeping oj securities.—At the beginning of the year securities
amounting to $376,878,250 were in safe-keeping for various Government offices, against which formal audited receipts were outstanding.
Throughout the year securities amounting to $286,350,200 were received for safe-keeping and receipts therefor issued, and securities
amounting to $248,457,700 were delivered from safe-keeping upon
the surrender of outstanding receipts, leaving a balance of securities
amounting to $414,770,750 in safe-keeping June 30, 1934.
Mutilated paper and redeemed currency.—Mutilated paper verified
and delivered to the Destruction Committee consisted of 49,296,516
sheets and coupons, of which 48,541,045 sheets and coupons were
received from the Bureau of Engraving and Printing and 755,471
sheets from the Division of Paper Custody.
Redeemed currency, unfit for circulation, counted and delivered to
the Destruction Committee during the year amounted to 594,403,973
pieces, representing $1,182,208,693.02, detailed as follows:
Number of pieces and amount of redeerned currency delivered to the Destruction
Committee during the fiscal year 1984
Old series
Currency

United States notes
Silver certificates
Silver certificates (act of May 12,1933)
Gold certificates
Treasury notes...
.
Fractional currency
. . . .
Total. . .

Number of
pieces
1,092,680
2,673,136
913,861
2,397
7,116
4,689,190

Face value

New series
Number of
pieces

$3,465,668.00 67,463.433
3,230,799.00 608,622,184
24,050
21,901,730.00 23,706,116
13,160.00
1,631.02

Face value
$240,467,444
608, 617,801
240, 500
404,369,970

28,612,978.02 689,714,783 1,163,596,715

134

REPORT OF THE SECRETARY OF THE TREASURY

Publicity.—The Division maintains a maUing list, in addition to its
list of holders of registered securities, for the purpose of placing new^
public debt ofl'erings, notices of redemption, and such matters before
the public. Approximately 3,027,800 printed circulars were distributed to the public during the year.
Other activities.—In addition to the regular activities of the Division,
securities of Government instrumentalities were received and issued
by the Bureau of Engraving and Printing as follows:
Securities of Government instrumentalities received and issued, fiscal year 1984
Received

Issued

Balance on band,
June 30,1934

Securities
Number
of pieces

Amount

Number
of pieces

Amount

Number
of pieces

25,700
2,949,800

$32,500,000
1,192,025,000

4,114
2,231,538

$5,886,000
836,368,726

21,586
718,262

$26,614,000
355, 666,275

2,975, 500 1,224,526,000

2,235,652

842,254,725

739,848

382,270,275

Amount

HOME OWNERS' L O A N '
CORPORATION BONDS

Registered
Coupon
Total
F E D E R A L FARM MORTGAGE
CORPORATION BONDS

Registered
Coupon

Total.

82,060
603,000

564,500,000
329,300,000

5,183
5.77,971

132,015,300
298,818,200

76,877
25,029

432,484, 700
30,481,800

685,060

893,800,000

583,154

430,833,500

101, 906

462, 966,600

112,200

143,500,000

110,973

142,385,000

1,227

1,116,000

9,808

276,279,500

20,042

1,473,220, 500

2,939, 587 1,691,762, 726

863,023

2,319, 672,276

CONSOLIDATED F E D E R A L
FARM LOAN BONDS

Coupon

RECONSTRUCTION FINANCE
CORPORATION BONDS

Coupon
Grand total . .

29,850

1,749,500,000

3,802,610

4, Oil, 325,000

Register oj the Treasury
The Register of the Treasury is charged with the final audit and
custody of all retired Federal securities, including interest coupons,
and renders monthly certification to the Comptroller General of all
public (3ebt securities redeemed by the Treasurer of the United States.
The Register also establishes credits due the Federal Reserve banks
and the Division of liOans and Currency for securities forwarded by
them on account of exchanges, replacements, transfers of registration, etc. During the fiscal year 1934 the Register's Office has taken
over the retirement and custody of securities issued by the Home
Owners' Loan Corporation and the Farm Credit Administration.
During the fiscal year 1934 more than 35,000,000 security documents, aggregating over $27,000,000,000, were retired in the Register's
Office, which represents an increase of over 5,500,000 pieces as
compared with the previous fiscal year. This increase is due principally to the redemption of portions of the Fourth Liberty Loan and
the retirement of securities issued by agencies of the Government.
The following statement sets forth, by class of security, the total
number of documents, together with the face value thereof, which
w^ere received, examined, and filed duruig the fiscal year 1934:

135

KEPOKT OF THE SECRETARY OF THE TREASURY
Securities retired, fiscal year 1934
Bearer
Security

N u m b e r of

Registered

Amount

Number
of pieces

Amount

Redeemed
U n i t e d S t a t e s securities:
P r e - w a r loans
Libertyloans
.
Treasury bonds
T r e a s u r y notes
...,
Certificates of i n d e b t e d n e s s
T r e a s u r y bills
T r e a s u r y (war) savings securities
. I n t e r e s t coupons
—
I n t e r e s t checks
S t a n d a r d full-paid i n t e r i m certificates
O t h e r securities: H o m e O w n e r s ' L o a n Corporation interest c o u p o n s .
Total-

$41,180.00
1,556, 852, 760.00
61, 113,100.00
609, 161, 300.00
2,299, 348,650.00
3,929, 416,000.00
175,310.96
360,856.01

1,212,
126,
39,
123,
18,618,

4,746
346,976

$2, 200,690.00
299,913, 550.00

133
157

36, 306, 000. 00
157,300,000.00

6,768

149,465.40

3.18

14.64
406,
20,457,204

!, 352, 284. 50
9,077,801,446.11

357,781

495,869,708.58

R e t i r e d on account of exchanges for o t h e r securities, etc.
U n i t e d States securities:
Pre-war loans
Libertyloans...
Treasury bonds
T r e a s u r y notes
Certificates of i n d e b t e d n e s s
T r e a s u r y bills
T r e a s u r y (war) savings securities
F i r s t 3V^'percent L i b e r t y loan i n t e r i m certificates. _.
S t a n d a r d full-paid i n t e r i m certificates
O t h e r securities:
I n s u l a r possessions loans
H o m e O w n e r s ' L o a n Corporation securities.
Federal F a r m M o r t g a g e Corporation securities
Total

2,836
695,601
276,257
256,021
73,840
7,063
1,642

$924,050.00
795, 540,800.00
1,433,808,050.00
3,912, 279,000.00
1,413, 581,000.00
545, 736, 000.00
7,615.00

17
24

1,000. 00
20, 091,481.60

406
634, 824

39,146
190, 206
44, 307
6
6

$207, 310,910. 00
249, 436,150. 00
344, 265,850.00
24, 209,000.00
9,000,000.00

-2,646

-12,725.00

406,000.00
78,960, 500.00

2,124
66,007

4, 277,000.00
24,933,050.00

73, 583

21,218, 500.00

2,022,014

8, 222, 553, 996. 50

78
329, 333

899, 435, 735. 00

36, 016, 500.00

U n i s s u e d stock retired
U n i t e d States securities:
Libertyloans
Treasury bonds
1
T r e a s u r y notes
Certificates of i n d e b t e d n e s s _ .
T r e a s u r y bills
T r e a s u r y (war) savings securities
S t a n d a r d full-paid i n t e r i m certificates
I n t e r e s t coupons
O t h e r securities: H o m e O w n e r s ' L o a n Corporation interest coupons
Total

20,322
17,339
22, 599
282,928
57, 761
-894
474
11,148,845

$99, 641,100.00
199,963, 950.00
166,380,600.00
2,123, 903, 500. 00
5,354,848, 000.00
-5,292.00
{')
734,924, 239. 26

2 1,506,698
13,056,072

8,691,218,092. 26

2 11, 559,996. 00

Recapitulation
U n i t e d States securities:
Pre-war l o a n s .
L i b e r t y loans
Treasury b o n d s . .
Treasury n o t e s —
Certificates of i n d e b t e d n e s s
T r e a s u r y bills
T r e a s u r y (war) savings securities
First 31^ percent L i b e r t y loan i n t e r i m certificates
—
S t a n d a r d full-paid i n t e r i m certificates
.Interest coupons
I n t e r e s t checks
Other securities:
I n s u l a r possessions loans
H o m e O w n e r s ' L o a n Corporation:
Securities
I n t e r e s t coupons
Federal F a r m M o r t g a g e Corporation securities
TotalNo value.

3,152
1,928, 082
294, 549
307, 597
483, 352
104, 216
123, 764

$965, 230.00
2,452, 034, 650.00
1,694,885,100.00
4, 687,810,900.00
5,836,833,150.00
9,830, Obo, 000. 00
179, 633.96

17
500
29,667,586

1, 000. 00
20,091,496.14
1,354,276,095.27
1

3.18

406

406,000.00

2,124

4, 277,000.00

634,824
21,913. 672

78,960, 500.00
213,912, 279. 50

56, 007

24,933,050.00

21, 218, 500.00
73, 683
35, 636, 290 25,991, 573, 634.87

43,892
536,182
44,307
138
162

$209,511,600.00
549, 349, 700. 00
344, 265,850.00
60,515,000.00
166, 300,000. 00

4,223

136, 740.40

78
36, 016, 500.00
687,114 1,395, 305, 443. 58

2 Received figures used, w h i c h are in process of a u d i t .

136

REPORT OF THE SECRETARY OF THE TREASURY
Division oj Public Debt Accounts and Audit

This Division maintains administrative control accounts for all
official transactions in the public debt conducted by the various
Treasury offices and the Federal Reserve banks as fiscal agents of
the United States, and also for transactions involving paper used for
printing public debt securities, United States currency, stamps, etc.,
and other miscellaneous securities and documents in the B.ureau 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 and of
cash balances in custody and collateral securities held in trust in the
offices of the Treasurer of the United States.
During the fiscal year, 77 physical audits were conducted, involving
securities, currency, paper, interest checks, etc., amounting to about
$18,000,000,000 in face value and oyer 65,000,000 in number of
pieces.
The 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. I t prepared estimates of
interest to become payable on public debt securities in future fiscal
years, and expenditures to be made on account of retirements for the
sinking fund and other special accounts, and prepared statements
showing the accountability of Federal Reserve banks for public debt
securities for the use of Federal Reserve Board examiners in their
periodical examinations of those banks. Numerous data pertaining to public debt transactions for various interested offices and
individuals were also compiled.
During the last half of the fiscal year the work of this ^Division was
greatly increased on account of activities in connection with the
various issues of bonds of the Home Owners' Loan Corporation and
the Farm Credit Administration, which were handled by the Treasury
Department under agreements entered into with those corporations.
During this period about 350,000 shipments of these bonds were
made, amounting to over 2,800,000 pieces with a face value of $1,270,000,000. The work of this Division involved the securing of receipts
in connection with all of these shipments and the transmission of
copies of such receipts to the corporation which authorized the issue,
in addition to the regular auditing and accounting work incident to
the verification of all transactions in these bonds, and the maintenance
of control and detaU accounts refiecting this information.
Division oj Paper Custody
A summary of the operations of the Division of Paper Custody
during the fiscal year 1934 is presented in the following tables:

137

REPORT OF THE SECRETARY OF THE TREASURY

Receipts and issues of distinctive and nondistinctive paper during ihe fiscal yeaf 1984
On hand July
1, 1933

Kind
Distinctive paper for United States currency.
Federal Reserve notes. Federal Reserve bank
notes, and national bank currency, new series,
12 subjects
Bank note paper, experii?iental
United States bond papei-...
Parchment, artificial parchment, and parchment
deed paper
Miscellaneous paper
Philippine Islands, distinctive paper for Philippine currency
..•.
Philippine Islands; postal card
Total

Receipts

Sheets
Sheets
1 10,986, 691 2 58,115,934
6,600
9,995
1 7, 019, 677 2 10, 793, 223

On hand
June 30,
1934

Issues

Sheets
51,025,702
16, 595
12,543,784

Sheets
18,076,923

95,051
688, 924

153, 787
1,984,991

148,271
616,146

285,841
4,901

1,086,400

20, 426, 325

70, 786,132

888, 815
4,028
66, 617, 702

483, 426
873
24, 594, 755

207,007
1, 912, 213

5, 269,116

1 3,099,001 sheets transferred from United States currency paper to bond paper account.
2 5,980,555 sheets transferred from United States currency paper to bond paper account.

Federal Reserve notes, new series, and Federal Reserve bank notes, series H
received and issued during the fiscal year 1934
[000 omitted]
Federal Reserve bank notes,
series 1929

Federal Reserve notes, new series
Federal Reserve bank

Boston
New York
Philadelphia..
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis..
Kansas City..
Dallas
San Francisco
Total...

On hand
July 1,
1933

Received

Is.sued

On
On hand hand
ReJune 30, July 1, ceived
1934
1933

$326,280 $53,400 $25,000 $354,680 $14, 760
303, 760 4.5,400
336,040 165,120 197,400
68, 880 108,000
449,800
410, 680 19,840
51,000
380,140
9,600
421, 540 52, 920
245, 360 28.680
34, 600 239, 440 50. 040
202, 640 36, 300 33, 060 205,880 23, 540
675, 260 77,100
12, 000 740, 360 29, 620
25, 740 23,140
136,980
139, 580 21. 540
27, 600
102,100
8,400
121,300 42, 280
23, 340 11, 600 181,300 36, 840
169,560
9,600
168,580
1.78,180 17,820
42, 720 24, 860 220,460 16,000
202,600
3, 395, 340 609,480 487,660 3,517,160 370,600

On
hand
Issued June 30,
1934

$15,000 $15. 060
27,000
75, 530
19.700
21,740
23, 800 69, 020
48. 040
2,000
26, 440
5,140
8,040
93, 340
63, 720
14,380
7,160
8,120
34,160
12, 680 40,180
4,080
13, 740
16, 000

$15,300
57.180
.21. 600
39,900

221,760 141,560

450. 800

In addition to the receipts and issues of distinctive and nondistinctive paper and of Federal Reserve notes and Federal Reserve bank
notes, the division counted 68,807,784 sheets of Government securities,
Philippine currency, and cut paper.
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 the fiscal year 1934:
Pieces»
Division of Loans and Currency and
Treasurer of the United States:
New series:
Silver certificates...
Silver certificates (act of May 12,
1933)
Gold certificates
United States notes

506,364,184

Face value

$506,359,801. 00

24, 050
22,979, 292
57,399,763

686, 767, 289
^All currency under the head of "Pieces" is expressed as whole notes.

240, 500.00
390, 754,070. 00
240,178,044. 00
• $1,137, 532, 415. 00

138

REPORT OF THE SECRETARY OF THE TREASURY
Pieces ^

Division of L o a n s a n d C u r r e n c y a n d
T r e a s u r e r of t h e U n i t e d States—Con.
Old series:
Silver certificates
Gold certificates
U n i t e d States notes
Treasury notes..
F r a c t i o n a l notes

Face value

$3, 230, 799.00
21,901,730. 00
3,465, 668. 00
13,150.00
1, 631.02

2,673,136
913,861
1,092,680
2,397
7,116

$28, 612,978.02
1,166,145,393.02

4, 689,190
Total
C omptroller of t h e C u r r e n c y a n d national
b a n k agents:
N e w series:
N a t i o n a l b a n k notes (5 percent
account)
N a t i o n a l b a n k notes (retired)
Unissued v a u l t stock
. Old series:
N a t i o n a l b a n k notes (5 p e r c e n t
account)
..
N a t i o n a l b a n k notes (retired)
Federal Reserve b a n k notes (retired)
Total
Comptroller of t h e C u r r e n c y a n d Federal
Reserve b a n k agents:
Federal Reserve notes (new series)
Federal Reserve notes (old series)
Federal R e s e r v e b a n k notes (new
series)

591, 456,479

362, 706,957. 50
94, 660,120. 00
20, 244,130.00

44, 676,885H
11, 524, 731
1,919,112

477,611,207.50.

58,120,728H
4,993, 202. 50
3,627, 565. 00

381,9633^^
290,964

149,171. 00

84,477

8, 769,938. 50
486, 381,146.00

757,404H
58,878,133
1,000,941, 550. 00
29, 203, 645.00

107,135,494
1,846, 775

50,426, 500.00

6,836, 662
115,818,931

1, 080, 671, 695. 00

Internal Revenue Bureau:
Miscellaneous s t a m p s from S t a m p
Division
Miscellaneous s t a m p s from S t a m p
Division ("obsolete a n d s u r p l u s . " ) . .
Miscellaneous s t a m p s from T o b a c c o
Division
Refund, miscellaneous s t a m p s , T a x
Unit
...
Alcohol T a x U n i t . . .

52,946,424.83
6,933,070.80
871,861. 28
131, 605. 92
17,243.61
60,900,196. 44

Register of t h e T r e a s u r y :
I n t e r e s t coupons, u n i s s u e d . . .
I n t e r e s t coupons, u n i s s u e d Federal
Reserve b a n k
U n i t e d States thrift s t a m p s , r e d e e m e d .
C o u p o n b o n d s a n d notes, Federal Reserve (unissued)
,
Registered b o n d s a n d notes (unissued)
Bearer certificates of i n d e b t e d n e s s
(unissued)
F a r m loan b o n d s a n d coupons

559,827,384.88

10, 275, 693

34,600,082.44
47,487. 60

593,616
189, 950 .

110,869,200.00
326,036, 500. 00

73,669
321,132
1, 347,400
762,855

6, 608,952,850.00
549,924, 504.81
13, 564, 215

P u b l i c D e b t Service, p h o t o s t a t s
Division of L o a n s a n d C u r r e n c y (Security
Section) interest checks

8.190, 258,009. 63

184
199,631

Grand total.

779,917, 573

10,984, 256,440.09
Coupons

Sheets
D i v i s i o n of L o a n s a n d C u r r e n c y ( B u r e a u
of E n g r a v i n g a n d P r i n t i n g spoilage):
M o n e y of all k i n d s
Postage s t a m p s
Internal revenue stamps
B o n d s a n d certificates of i n d e b t e d n e s s
C u s t o m s a n d miscellaneous s t a m p s . .
Postal savings certificates
Experimental, bond paper
.Distinctive a n d n o n d i s t i n c t i v e paper
(experimental)
Void coupons

1,482,384^^
7,007,480i49%800
2,372,3153^1
989, 623M2
3,166,-420H
133,802
783
1,143
33,387,095
16,153, 952i689%0400

Division of L o a n s a n d C u r r e n c y (Division of P a p e r C u s t o d y ) :
B o n d paper
Experimental paper

745,476
9,995
755,471

Grand total.

15,909,423i689%o4oo'

I All c u r r e n c y u n d e r t h e h e a d of " P i e c e s " is expressed as whole notes.

33,387,095

REPORT OF THE SECRETARY OF THE TREASURY

139

PUBLIC HEALTH SERVICE

Division of Sanitary Reports and Statistics
Reports to the Public Health Service from 27 States .indicate a
general death rate for the calendar year 1933 of 10.5 per 1,000 population. The death rate in 1932 which was the lowest previously
recorded rate for these States was 10.8 per 1,000. New low death
rates for tuberculosis, typhoid fever, and diphtheria were recorded
for 1933 in these States.
Late in July 1933 there appeared in the suburban area of St. Louis,
Mo., a type of encephalitis which had not heretofore made its appearance in the United States in serious epidemic form. A total of
approximately 1,100 cases was reported during the epidemic, with a
mortality of about 20 percent.
The Public Health Reports was issued regularly each week. Information on outbreaks of disease dangerous to the public health
and on the prevalence of communicable diseases was collected, and
the data were made available to health officers and other sanitarians.
Copies of publications distributed during the fiscal year 1934 numbered 179,370, as compared with 130,802 during the preceding fiscal
year.
Division of Foreign and Insular Quarantine and Immigration
Quarantine trar\,sactions.—During the fiscal year 14,796 vessels and
1,737,416 persons from foreign ports were inspected by quarantine
officers at continental and insular ports, as shown in the following
table:
Inspections by quarantine officers during the fhscal year 1934
Inspection at—
Ports in continental United States
Insular ports
Foreign ports, prior to embarkation _
Total

Vessels
.
..

.•

Passengers

Seamen

11,576
3,220
211

524.283
135,125
51,674

852.749
225,259
8,198

15.007

710,982

1,086,206

In addition, 3,668 airplanes, carrying 26,951 persons, arrived at
19 airports of entry in the United States from foreign ports, requiring quarantine inspection. Of the number of persons, 4,364 were
aliens who were medically examined by medical officers of the Public
Health Service.
A total of 18,417 passengers who embarked at European ports for
TJnited States ports was vaccinated and 7,226 were deloused under
the surveillance of medical officers of the Public Health Service, and
17,818 pieces of baggage were disinfected to safeguard against the
introduction of smallpox and typhus fever into United States
territory.
A total of 1,289 vessels was fumigated either because of the occurrence of disease on board or for the destruction of rats as a plaguepreventive measure.
Six-thousand and seventy dead rats were retrieved following fumigation, 4,229 of which were examined for plague infection.
None of the quarantinable diseases was imported into the United
States or its dependencies during the year.

140

REPORT OF THE SECRETARY OF THE TREASURY

The regulations governing the importation of birds of the parrot
family into ports of the United States were revised to prohibit the
importation of birds under the age of 8' months (as young birds
were found to be especially likely to transmit infection) and to
provide for the laboratory examination of suspected birds upon
arrival at ports of entry.
The International Sanitary Convention for Aerial Navigation
was signed on behalf of the United States by the American minister at The Hague on April 6, 1934. During the year ended April
12, 1934, the latest date on which the convention was open for
original signatures, 23 countries, including the United States, had
signed the convention. Its ratification by the sigTiatory countries is
now pending. The ratifications of 10 countries must be deposited
with the Government of the Netherlands before the convention will
become effective.
Medical exannination of alieiis.—Tliere were 680,152, alien passengers and 783,377 alien seamen examined by medical officers at
the various ports of entr5^ Of this number 1,502 passengers and
507 seamen were certified to the proper immigration officials, in
accordance with the act of February 5, 1917, as being afflicted
with one or more mental or physical defects or diseases calling for
exclusion under the immigration laws.
The work of the medical officers of the Public Health Service on
duty in the Philippine Islands was increased by the acceptance by
the Philippine Legislature, on May 1, 1934, of the Philippine Islands
Independence Act, which provides for the application of the immigration laws of the United States to citizens of the Philippine
Islands and for the administration of such laws by Foreign Service
officers of the United States.
I n order to facilitate the entry of Mexican citizens desirous of
temporarily visiting the United States, officers of the Public Health
Service on duty at quarantine stations on the Mexican border were
authorized to pass without formal examination all persons holding
identification cards issued to them by American consular officers
in the interior of Mexico, provided they show no evidence of quarantinable disease at time of entry.
Examination of prospective immigrants abroad.—There were
35,539 applicants for immigration visas exanlined by medical officers
in American consulates in foreign countries. Of this number, 22,420
were examined in Europe, and the remainder were examined in the
Western Plemisphere. Of the number examined, 5,049 in Europe
and 1,955 in the Western Hemisphere were reported by the medical
officers to the American consuls as being afflicted with one or more
mental or physical defects, and 1,446 in Europe and 881 in the
Western Hemisphere were refused visas for medical reasons. None
of the aliens to whom immigration visas had been issued was certified upon arrival at a United States port as being afflicted with a
defect or disease requiring mandatory deportation.
Division of Domestic Quarantine
The State health agencies continued their cooperation in connection with the certification of sources of drinking water used by
interstate railroads, busses, vessels, and airplanes. Of the 2,241 supplies used, 94 percent were inspected and controlled. Of the vessels

REPORT OF THE SECRE.TARY OF THE TREASURY

141

engaged in interstate traffic, 52.6 percent were inspected and issued
certificates of compliance with the regulations governing drinkingwater systems, while 20 percent were issued temporary certificates
pending inspection.
Surve^^s and inspections of shellfish-growing areas and shipping
establishments were continued in order to determine the efficiency
of State control over the sanitation of the shellfish industry. A
total of 1,498 State certificates was approved during the year.
Assistance was rendered States engaged in stream pollution investigations, and, with funds allotted by the Public Works Administration at the request of the Chesapeake Bay Authority, a study
was made of the pollution of the Hampton Roads area of Chesapeake
Bay.
Allotments from the Public Works Administration to other Federal agencies for public works projects increased the public health
engineering services rendered by the Public Health Service to such
agencies considerably over the volume of service rendered in previous
years. This work amounted to 43 percent of the time of the engineering field force, of which over 26 percent was time devoted to
assisting the National Park Service and Bureau of Indian Affairs.
As in previous years, assistance was rendered the Procurement Division, Public Works Branch (formerly the Supervising Architect's
Office), the Bureau of Prisons, the Lighthouse Service, and others.
The design of a sewage disposal plant for the Beltsville Experimental Station of the Department oi Agriculture was also supervised.
A spread of rodent plague to three additional counties in California necessitated more intensive work by the Public Health Service
in cooperation with the State health authorities toward the close of
the fiscal year. Rodent infection of a virulent type was discovered
in Kern, Tulare, and Modoc Counties. Human cases occurred in
Tulare County, Calif., and in Lake County, Oreg. I t is possible
that rodent infection has spread to other localities in the inland areas
of the northwestern States.
To protect the port of Honolulu from the possible introduction
of plague infection from the Island of Maui, the Public Health
Service inaugurated control activities in cooperation with the Territorial authorities of Hawaii.
Studies of health problems in rural areas were continued. On
account of the drastic reduction in the appropriation for rural health
work, financial assistance to county health units was abandoned; the
maintenance of advisory service for State health authorities on rural
health activities was continued, however. There was a decrease in
the number of full-time county health units maintained in the several
States from 581 in 1932 to 533 in 1933.
Allotments for trachoma eradication work were reduced, but cooperative activities were continued in Tennessee, Kentucky, and Missouri; 32,677 persons were examined, 6,329 treatments were given
in field clinics and dispensaries, and 726 cases were admitted to
hospitals.
Division of Scientific Research
The original systematic program of cancer research was continued
in its major aspects. As in the past the investigations included
studies of the biological effects of radiation, resistance and suscep

142

REPORT OF THE SECRETARY OF THE TREASURY

tibility to malignant growths, and biochemical, cytological, physiological, and pathological studies.
Epidemiological and laboratory studies of the St. Louis encephalitis epidemic were conducted by service officers working in cooperation with State aiid local health authorities and the Washington
University Medical School.
Further attempts have been made by laboratory and field studies
to determine the factors predisposing to rheumatic heart disease,
with particular attention being given to a determination of the role
which subclinical scurvy may play in the etiology of rheumatic
carditis.
Studies to determine the basic needs of the people in matters pertaining to public health practices in county health departments are
being continued. The information thus gained will be of value in
planning future rural health organizations.
The personnel engaged in field investigations of malaria has
planned and supervised the malaria control activities undertaken in
connection with the Civil Works Administration emergency program
which commenced in November 1933, and which were in progress at
the close of the fiscal year.
The study of the attempt to control malaria in tropical climates
by the administration of atabrine alone was brought to a conclusion,
the findings indicating that while the drug controls the clinical
attack rate of malaria, it does not materially affect the infection rate.
However, a combination of plasmochin and atabrine has produced
encouraging results.
Researches in the malaria therapy of paresis have been continued,
and studies conducted to perfect methods for retaining the viability
of sporozoites after dissection of infected mosquitoes have been very
successful.
Clinical studies of leprosy have been directed toward investigations
of the early manifestations of the disease. Experimental studies
have been concerned with attempts to determine the mode of entrance
of the leprosy bacillus into the human body.
I t was felt that the correlation between blacktongue (canine pellagra) and human pellagra had been worked out thoroughly enough
for sufficiently reliable results on the study of the pellagra-preventive
value of foods tO' be obtained from experiments with dogs, and so the
studies of human pellagra conducted at the Milledgeville State PIospital, Milledgeville, Ga., were discontinued. Considerable attention
is being given to the development of a satisfactory rat method for
testing pellagra-preventive activity.
The incidence and mortality of psittacosis in the United States
were greater than during the preceding fiscal year, due largely to
an epidemic occurring in a Pittsburgh department store. From the
studies conducted by the Public Health Service it is now apparent
that psittacosis can be controlled by adequate control of breeding
and commercial handling of psittacine birds.
Construction work on the new laboratory unit at Hamilton, Mont.,
for the study of Rocky Mountain spotted fever and related diseases
has been completed except for mechanical installations. Two hundred and twelve liters of vaccine were manufactured for the 1934
season. The year-by-year increase in the demand for vaccine continues. An additional 40.8 liters of vaccine were furnished for use

REPORT OF THE SECRETARY OF THE TREASURY

143

by the personnel in Civilian Conservation Camps located in sections
where the danger of infection is greatest or the disease most fatal.
A statistical analysis of data on weights of children, collected in
May 1933, in studies of child health and development in relation to
the economic crisis, indicates that in comparison with the average
weight for age and sex obtained during the years 1923-28, there
was no significant difference in the weights of boys during the last
few years of the depression, but that there was a slight increase in
the number of underweight girls.
A dental health survey undertaken in cooperation with the American Dental Association has been in progress and is designed to
show existing facilities in State departments and institutions and
to determine the dental needs of children of school age.
I n connection with studies of industrial dermatoses, investigations
were made of processes of manufacture with reference to the skin
hazards involved in 27 plants employing a total of 19,483 workers.
Studies of the health of workers in dusty trades have included the
effects of the respective dusts on anthracite coal miners and talc
workers, the physiological response of the peritoneal tissue to dusts
introduced as foreign bodies, silicosis among granite quarriers, pulmonary infection in pneumoconioses, and the effect of inhaled
marble dust as observed in Vermont marble finishers.
The study of atmospheric pollution in 14 cities, made to determine
the average conditions and various fundamental relations which
might prove of importance in programs for smoke abatement, has
been completed and a report of the study is in progress.
Research activities in connection with milk investigations have
included laboratory studies on the chlorine and thermal resistance
of the B . coU Gomrniumior test organism, the bactericidal treatment of
milk coolers, design of air- and foam'-heatiiig equipment, and the
washing and bactericidal treatment of milk cans and milk bottles.
The statistical analysis of the data collected on sickness and mortality among families of the unemployed was continued. The results indicate higher sickness rates among the recent poor class and
a rising mortality in the class most severely affected by the depression in the face of a downward trend in the death rate in the general
population.
The efficiency of the activated sludge method of sewage purification and stream oxidation continue to be the major research studies
at the stream pollution laboratory.
Studies at the National Institute of Health included investigations
of such diseases as typhus. Rocky Mountain spotted fever, epidemic
encephalitis, relapsing fever, tularemia, poliomyelitis, and trachonia,
as well as studies relating to the control of biologic products in
accordance with the act of July 1, 1902.
Work on the etiology of epidemic encephalitis which prevailed in
St. Louis, Mo., in the summer of 1933 has led to the isolation, at
the National Institute of Health, of a virus that is distinct, in its
animal symptomatology, pathology, and immunology, from the other
viruses isolated from six fatal cases of the disease.
On the basis of animal experiments a chemical method was discovered for the treatment of bichloride poisoning in human cases.
90353—35

144

REPORT OF THE SECRETARY OF THE TREASURY

I n connection with sugar researches the 5-carbon sugar xylose has
been transformed to the 4-carbon sugar threose by a method which
will permit its preparation in sufficient quantity for biochemical
study. The basic problem of carbohydrate nutrition is being advanced by such work.
Following the outbreak of am(Ebic dysentery in Chicago in the
summer of 1933, the Public Health Service, in conjunction with the
Chicago city health department, undertook epidemiological and
laboratory studies pf this disease which are still in progress.
Division of Marine Hospitals and Relief
The daily average number of patients in hospitals was 4,455; the
daily average number of out-patient treatments was 2,804; there
were 42,611 patients in hospital during the year. A total of 305,155
beneficiaries received treatment and other medical services at the
marine hospitals and other relief stations, and on June 30,1934, there
were 4,531 in hospital, representing 599 more patients than were in
hospital on June 30, 1933; and of this number 157 were old-line
beneficiaries, 230 patients from the Civilian Conservation Corps, 113
patients from the Civil Works Administration, and 99 patients from
the Veterans' Administration. A total of 24,649 patients from the
Civil Works Administration was treated during the year, the Service having been obliged to care for them without additional appropriation, and, therefore, it was necessary to secure a release of $120,000 of impounded funds for the purpose.
The hospitals continued to work with reduced appropriations and
personnel. I n 1933 the personnel was reduced by 476 persons, following the withdrawal of veterans from marine hospitals. However, the enactment of Public No. 141 liberalized the benefits to
veterans, and more of these patients have been admitted to marine
hospitals; on June 30, 1934, there were 99 in hospital as compared
with 37 on June 30, 1933, adding somewhat to the income and making it possible to employ a few additional persons. Throughout
the year it was necessary to practice every economy, and it became
apparent on,January 2, 1934, that unless additional funds were secured some of the relief stations would have to be closed. Upon
presenting the facts to the Director of the Budget, $150,000 of
impounded funds was released.
The per diem cost was forced down to the low figure ,of $3.05.
because of insufficient available appropriations. This was done by
keeping personnel at the lowest practicable number and foregoing,
for the time being, the replacement and repair of equipment in
normal amount.
Division of Venereal Diseases
The program of disease control includes a study of methods of
treatment and prevention of venereal diseases, dissemination of information concerning these diseases, and cooperation Avith State
boards of health for their control. In furthering this program, experimental research work has been continued at the laboratory of the
Stapleton Marine Hospital. The subjects of study during the year
were the chemical proph^daxis of syphilis, the possibility of the

REPORT OF THE SECRETARY OF THE TREASURY

145

existence of a sj^hilis carrier, culture of Treponema pallidimi., and
lymphogranuloma inguinale.
Results of treatment for syphilis have been studied over a period
of several years. This investigation is carried on in cooperation
with several of the leading syphilologists of the United States,
material from five large clinics being made available for study.
Financial assistance was given by the Milbank Memorial Fund. I n
April of 1934, an article entitled " Standard Treatment Procedure
in Early Syphilis: a Resunte of Modern Principles " was published
in Venereal Disease Information, issued by the Division. The findings of this important study were given further publicity by an
exhibit of charts at the annual meeting of the American Medical
Association. Studies of other phases of clinical syphilis, part of this
same undertaking, have also been published and have had wide
circulation.
Subscriptions to Venereal Disease Information have shown a gradual gain since January 1934, as a result, in part, at least, of the
circularization of the county medical societies through the cooperation of the State boards of health, and of fourth-year students of
accredited medical schools. Reprints of six of the special articles
have had wide distribution. The bulletin is a valuable contribution
to the program for the control of venereal disease, as is attested by
the increasing number of requests for further information received
from subscribers. These requests come from syphilologists, social
workers, and general practitioners in all sections of the country.
Efforts directed toward the prevention of disease were carried on
largely in cooperation with the State departments of health. I n two
States control activities were directed by Public Health Service
officers. I n North Carolina the plan of enlisting the aid of physicians throughout the State to act as cooperating clinicians was
adopted. Thirty-three physicians were furnished with drugs for the
free treatment of persons who were carried on the relief rolls and
others who, in the judgment of the local relief officers, were unable
to pay for treatment. I n Tennessee, renewed activity in the economic life of the State made special provisions necessary. One request for aid came from the medical director of the Tennessee Valley
Authority, in response to which a comprehensive program for
venereal disease control was prepared and put into effect.
The clinic at Hot Springs, Ark., the only clinic which is maintained by the Public Health Service, has faced the most trying year
of its existence. The tremendous influx of transients into the city
brought with it an enormous increase in the number of applicants
for admission to the clinic. Additional personnel was necessary to
handle the work, which has increased more than 50 percent over the
preceding year.
State boards of health have been urged to encourage private
physicians and clinic directors to submit reports of all cases of
venereal diseases. At the present time it is estimated that only
about one-half of all cases under treatment are reported. Activities
of 615 cooperating clinics were reported during the year. Approximately 128,000 cases were admitted; more than 55,000 were discharged as cured, and more than 3,000,000 treatments were given.
From 47 State departments of health approximately 385,000 cases

146

REPORT OF THE SECRETARY OF THE TREASURY

of venereal diseases were reported. More than 1,276,000 doses of
arsphenamine were administered, and about 2,000,000 laboratory
examinations made.
Division of Mental Hygiene
The activities of the Division of Mental Hygiene included studies
of the nature and treatment of drug addiction and dissemination
of information upon the subject; studies of the abusive uses of
narcotic drugs; administrative functions incident to the establishment of narcotic farms; supervising and furnishing the medical
and psychiatric services for the Federal penal and correctional
system; and cooperating with other agencies interested in the various phases of work with which the Division is concerned.
Two additional medical units were established during the year,
one at the United States Penitentiary, Alcatraz Island, Calif., and
one at the Federal Prison Camp, Tucson, Ariz., making a total of
17 medical units being operated by the Public Health Service in
connection with the correctional institutions under supervision of
the Department of Justice.
Special studies of the nature of drug addiction were continued
at the United States Penitentiary Annex, F o r t Leavenworth, Kans.,
incident to the establishment of the first United States Narcotic
Farm. Progress has been made in the construction of the latter
institution, and it is anticipated that it will be completed and ready
to receive admissions by April 1, 1935. Funds were made available
through the Public Works Program for beginning construction of
the second institution at Fort Worth, Tex.
Further studies were made dealing with the addiction liability of
codeine and other substances, including dihydrodesoxymorphine-D
made from opium by a process discovered by Dr. Lyndon F . Small,
consultant in alkaloid chemistry. Application for patenting this
process was made by Dr. Small, the patent to becoine the property
of-the United States and to be lodged with the Secretary' of the
Treasury as ex officio custodian thereof.
Division of Personnel and Accounts
Personnel.—The operation of the marine hospitals and quarantine
stations was attended by difficulty, due to the reduction of personnel
made necessary by decreased appropriations. A t the hospitals, for
example, it was necessary in many instances to employ internes in
place of the experienced physicians, which the character of the work
required.
On July 1, 1934, the regular commissioned corps of the Public
Health Service consisted of 370 commissioned officers, of whom 48
were on waiting orders. The reserve officers on active duty numbered 37. Other personnel of the Service totaled 5,646, not including
4,674 collaborating and assistant collaborating epidemiologists who
served at nominal compensation and who were for the most part
officers or employees of State and local health organizations.

REPORT OF THE SECRETARY OF THE TREASURY

147-

Financial statements.—Following is a statement of appropriations
and expenditures for the fiscalyear 1934:
Appropriation title
Salaries, Office of Surgeon General
Pay, etc., commissioned officers
Pay of acting assistant surgeons
Pay of other employees
Freight, transportation, e t c . . .
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:
D ivision of venereal diseases
Division of mental hygiene
Educational exhibits
Total

Appropriated
$307,, 890.00
1,528, 393. 00
325, 400.00
1,017, 750.00
36, 175. 00
54, 775.00
500.00
5,844,259.00
475, 000.00
333, 650.00
353, 564. 00
38, 454.00
150, 000.00
43, 900.00

Expended
$266, 314. 09
1, 372,666.42
253, 227. 61
801, 194. 25
25, 161.00
40, 982. 32
406. 90
5,048,340.85
308, 621.46
206, 893. 60
210, 020.00
33, 255. 21
24, 544.94
39, 657. 50

75, 000.00
44, 377.00
1,500. 00

58,268. 71
30,938. 50
957. 64

210,630,587.00

8,721,451. 00

1 Includes $244,259 reimbursement for care and treatment of beneficiaries of the Veterans' Administration
and Civilian Conservation Corps.
2 Statement does not include expenditure of $4,177.01 from trust fund "National Institute of Health,
Conditional Gift Fund."

Expenditures from allotments of funds from other bureaus and
offices for direct expenditure during the fiscal year 1934 were as
follows:
Appropriation title
Veterans' Administration: Working Fund
Department of Justice: Medical and Hospital Service, Penal Institutions.
Public Works Administration: National Industrial Recovery
Civil Works Administration: Working Fund.
Department of Agriculture: Working Fund
Total

Allotted

Expended

$72, 550. 00
393,278. 00
1, 726, 863.00
131,124.88
1,800.00

$72, 550.00
393, 278. 00
1,726,863.00
131,124.88
1,800.00

2,325,615.88

The revenues derived from operations of the Public Health Service
during the fiscal year 1934, and covered into the Treasury as miscellaneous receipts, were as follows:
Source
General fund receipts:
Quarantine charges
Hospitalization charges and expenses
Sale of subsistence.
Sale of occupational therapy products
Sale of obsolete, condemned, and unserviceable equipment
Rents
Reimbursement for Government property lost or damaged
Commis-sions on telephone pay stations installed in service buildings.
Sale of refuse, garbage, and other by-products
Sale of livestock and livestock products
Other revenues
• Total
Trust fund receipts:
Effects of deceased patients
Grand total

$220,809.33
22, 639. 07
10,334.31
431. 02
5,112. 21
2, 582.25
62.57
1,070.14
712. 72
352.16
125.78
264,231. 56
1,418.09
265,649. 65

148

REPORT OF THE SECRETARY OF THE TREASURY
PUBLIC WORKS OF ART PROJECT

The Public Works of Art Project was organized on December 8,
1933, as an emergency relief activity designed to aid those of artistic
inclination who were in need of employment and qualified as artists
to produce work of value. Policies were outlined by an advisory
committee composed of 6 leading authorities, and 5 directors were
named to coordinate and supervise procedure. The country was
divided into 16*regions with a chairman named for each. More than
600 private citizens contributed their services and expert knowledge
without remuneration in administering the project. Artists given
employment numbered 3,749.
The project was financed by an allotment of $1,408,381 from the
Federal Emergency Relief Administrator. A total of $1,184,748.32
was paid out in the form of artists' pay rolls, and $127,429.61 on
administrative pay roll, travel, and miscellaneous supplies, leaving
an unexpended balance of $96,203.07 as of June 30, 1934.
The project produced some 15,663 works of art, including 3,821
oU paintings, 54 portraits, 1,076 etchings, 2,938 water colorings, and
647 pieces of sculpture. A large proportion of these works of art
has been allocated to publicly owned buildings throughout the
country, such as public libraries, public schools, museums. Government .offices, etc. The distribution is now being completed by the
Federal Emergency Relief Administration. The allocations have
been made with the understanding that the works of art remain the
property of the Federal Government.
Field reports indicate that the project was well received throughout
the country. A complete report on the activities of the project has
been made to the Federal Emergency Rehef Administrator.
SECRET SERVICE DIVISION

During the fiscal year 1934, 3,251 persons w^ere arrested b}^^ agents
of the Service, or by their direction, on charges involving counterfeiting of the obligations and coins of the United States and forgery,
as well as miscellaneous offenses against the Federal statutes relating
to the Treasury Department. Of this number, 1,724 were note
counterfeiters and note passers, 86 were note raisers and passers of
altered currency, 725 were coin counterfeiters and coin passers, 486
were check forgers, 32 were apprehended for negotiating stolen or
forged bonds, 10 were held for fraudulent negotiation of adjusted
service. certificates, and 188 arrests were made for miscellaneous
offenses.
Only two new counterfeit issues, both photo-mechanical productions and warranting distribution of descriptive warning circulars,
were detected during the year; 119 counterfeits of varying types and
denominations were detected in circulation in different sections of
the country for short periods, some being hand-drawn and photographic specimens of extremely crude workmanship.
Counterfeit notes aggregating $1,214,279 were seized by operatives
of the Service. This total included altered notes aggregating $12,390,
of which $6,345 were made and passed in foreign countries, and
fractional currency amounting to $242. Counterfeit coins totaling
$77,960 were confiscated by agents in connection with raids and
subsequent arrests.

REPORT OF THE SECRETARY OF THE TREASURY

149

I n connection with investigations and arrests, operatives seized
312 metal plates, 834 film and glass negatives for printing counterfeit obligations and securities, together with 2 lithograph stones,
371 plaster molds, 25% metal molds, 51 steel dies for counterfeiting
coins, together with a large quantity of miscellaneous materials
and paraphernalia.
Of the counterfeit notes seized during the year, a total of $469,368
was used in evidence against the makers and passers, while altered
notes aggregating $1,865 were used in evidence in the prosecution
of note raisers and passers of altered notes. Counterfeit coins,
totaling $6,438, were also used in evidence in cases of this character.
Of the total number of persons arrested, 1,596 were convicted and
sentenced; 121 acquitted; 1,027 are awaiting action of the courts,
and various dispositions were made of others.
Agents conducted investigations of 2,408 check cases, 57 bond cases,
and 3 war-savings stamp cases. I n check-case investigations $6,969
was received in restitution and transmitted to the Department.
The Veterans' Administration forwarded to the Service for investigation 87 cases involving violation of the World War Adjusted Compensation Act. Inquiries in 283 cases were received from the Procurement Division for information concerning prospective bidders on
Government supplies. Three requests were transmitted by the Farm
Loan Board for investigation of offenses against the F a r m Loan Act,
and 145 cases involving violation of the Gold Reserve Act of 1934
were referred to the Service for investigation.
DIVISION OF SUPPLY

The Division of Supply is the central procuring or purchasing
agency of the Treasury Department, and as such does the purchasing
for all local and field activities, with the exception of purchases from
a]Dpropriations for the Bureau of Engraving and Printing (exempted
by law), the Coast Guard, and, to some extent, the Bureau of the
Mint. The Division 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 the administrative
control of the Division.
Expenditures from various appropriations
The total cost of purchases made by the Division of Supply during
each of the past two fiscal years from specified appropriations from
which allotments were made to the Division to cover expenditures

150

REPORT OF THE SECRETARY OF THE TREASURY

made by it, and also purchases chargeable to appropriations from
which no allotments were made, are shown in the following table:
Expenditures by Dimsion of Supply for the fiscal years 1933 and 1934, "by
appropriations
Bureaus and offices, and titles of appropriations
Chief Clerk and Superintendent:
Contingent expenses, Treasury Department _
Library..
Working fund. Civil Works Administration..

1934

$117,082.88
860. 20

246,940.90

TotalDivision of Supply:
Stationery, Treasury Department
Printing and binding, Treasury Department...
General Supply Committee, salaries and expenses.
Total.
Division of Bookkeeping and Warrants, contingent expenses, public
moneys
Bureau of Customs, collecting the revenue from customs...
Public Health Service:
Pay of personnel and maintenance of hospitals
Quarantine ser vice...
Interstate quarantine service...
Maintenance, National Institute of Health
Field investigations
Preventing the spread of epidemic diseases
Expenses, Division of Venereal Diseases
Control of biologic products...
Books...
Studies of rural sanitation
Educational exhibits..
Expenses, Division of Mental Hygiene
Mosquito control in District of (Columbia
Working fund, Civil Works
Working fund, Beltsville, Md., Public Works
National Industrial Recovery
1^...
- Department of Justice transfers to Public Health Service:
Medical and hospital services, penal institutions
TotalProcurement Division:
Branch of Supply...
Public Works Branch (account public buildings):
Repairs and preservation
Mechanical equipment
Vaults and safes
General expenses
Furniture and repairs
.'
Operating supplies
Total-

314,809.40
556,867.70
8,872. 59

369,248. 74
» 697,638. 51

880,639.69

956,887.26

Total.

Total-

1,962.07
333,082.83

, 774,637.33
176,892. 69
1, 203.99
32,410.33
62,708.10
.48,950.52
4,702.93
18,881.38
493. 51
188.85
383. 65
790.66
102.40

1, 500, 239. 65
173,112.84
874.12
33,899. 80
17,144. 56
43, Oil. 69
3, 231.31
12,991.30
418. 36
311. 33
421. 39
260.83

86, 693. 68

84,144. 35
1,993,113. 24
8, 650. 51

95,171. 63
111, 717. 21
136,000. 09
95,801. 33
1,618,329.33
1, 031, 300. 23

110,324.09

82, 539. 64
115, 517.82
10,433. 68
65, 368. 34
478,797. 68
869,426. 58
1, 610,734. 25
165, 411. 61
304, 762.81
470,174.32

8,303.12
20,312. 24

4, 486. 06
25, 260. 09

2,701. 63
24, 505. 27

83, 577. 52
14, 732. 22

27, 206.!

98,309. 74
27,783. 74

6,656,143.89
103,248.09

5, 768,723.49
659, 502. 21

6,769,391.98

6,328,226.70

J Includes receipts from sales of customs forms (reimbursed to the appropriation).
2 Shown under Procurement Division, Branch of Supply.
8 Appropriation accounting by bureaus and offices for which purchases were made.

44, 750.45
34.87
78, 266. 39

2,198,839.81

Total appropriations and allotments
Purchases from appropriations from which no allotments were made s.
Grand total

227.32

110,324.09

Bureau of Narcotics, salaries and expenses
Bureau of Industrial Alcohol, salaries and expenses...
Public Debt Service:
Expenses of loans (act Sept. 24,1917, as amended and extended).
Public Debt Service...

(2)

304,127.92

2,988, 319.82

Bureau of Internal Revenue, collecting the internal revenue..
Advances to Agricultural Adjustment Administration (transfer to'
Internal Revenue, administrative expenses).

Division of Disbursement, salaries and expenses

$105,961. 73
464.41
140, 614. 76

REPOUT OS' THE SECllETAllY OF THE TREASURY

151

The foregoing expenditures involved the preparation of specifications, the solicitation of quotations, the writing of 47,517 purchase
orders, and the examination and audit of 102,272 vouchers for payment through the disbursing clerk of the Treasury Department.
The purchase orders in 1934 required the preparation of 7,791 sets of
specifications and the circulation of 59,544 invitations to dealers to
submit quotations, as compared with 9,365 sets of specifications in
1933.
Stationery^ supplies
The appropriations, reimbursements, and expenditures for articles
of stationery for the past two years are summarized in the following
table:
Appropriations, reimlbursements, and expenditures for stationery foi• the fiscal
years 1933 and 1934
1933
Appropriations
Reimbursements.

__ .

Available credits .
Total expenditures

. .

Balance.

1934

$350,000.00
9, 247.90

$325,000.00
34,613.08

359,247.90
324,057. 30

369,613.08
369,248.74

35,190.60

264.34

Printing and binding
The appropriation for printing and binding for the fiscal year
1934 was $575,000. The Bureau of the Budget restricted expenditures from this appropriation to $500,000, but this s u m . was
'insufficient to meet the essential requirements of the Department,
and the balance of the appropriation, $75,000, was released. Reimbursements to the amount of $23,715 from the sales of customs
forms were made to the appropriation of $575,000, making a total
of $598,715 available. Of this sum, $597,639 was expended, leaving
a balance of $1,076. I n addition, the sum of $282,421 was expended
from funds other than the printing and binding appropriation made
by Congress, making a total of $880,059.
Expenditures for printing and binding, by bureaus, offices^ and
services, for each of the last two fiscal years are shown in the following table:
Appropriations, expendHtv/res, and reimbursements for printing^ and binding for
the fiscal years 1933 and 1934'
SUMMARY
1933
Annrnnriatinn nriiitincr and bindincT. TrGasurv DeDartinGiit

- -

Exnended from other aPoroDriations
Total available
Total pxnenditures

Balance

- ..

1934

32,368. 28

$676,000.00
23,714.60
282,420. 69

702,358.28
582,651. 23

881,136.19
880,069.20

119,707,05

1,075.99

$670,000.00

1 Figures subject to shght variations, due to necessary delays in receiving bills from the Pubhc Printer
for certain items until pending work is completed after the close of each fiscal year.

152

REPORT OF THE SECRETARY OF THE TREASURY

Appropriations^ expenditures, and reimbursements for printing and binding for
the fiscal years 1933 and 1934 ^—Continuecl
EXPENDITURES

FROM APPROPRIATIONS FOR P R I N T I N G
BUREAUS, OFFICES, AND DIVISIONS

AND BINDING, BY

1934
Secretary, Under Secretary, and Assistant Secretaries..
Appointment Division
Bookkeeping and Warrants Division
Bureau of Engraving and Printing
Bureau of Industrial Alcohol
Bureau of Narcotics
Chief Clerk and Superintendent
Coast Guard...
Commissioner of Accounts and Deposits
Comptroller of the Currency..
Custodians of public buildings
Customs
Disbursing Clerk._.._..
Division of Supply
Genera] Supply Committee
Government Actuary...
Internal Revenue
MintNational bank depositaries...,.
Public Debt Service
Public Health
Secret Service
Supervising Architect
Treasurer of the United States.
Miscellaneous
Total

.$8,101.93
214.86
18,459.85
3,623. 92
19,371.90
4,213.21
622.41
18,896. 26
543.93
23, 494.48
1, 689.23
34, 703. 62
410.67
7, 769. 46
38, 646.96
2. 330. 63
225, 83L63
6, 458.21
1, 377.38
11. 983.15
48, 809. 17
484.19
318.33
807.97
440.70

$8, 701. 77
449. 45
23,684. 55
4,134.92
19,248.21
4,474. 36
1,562.17
18,151.31
394. 32
27,133. 20
2 710. 33
31,969.15
696.07
7,022. 75
s 41.662.79
1,683. 39
227,325.90
6,683. 86
1,787. 62
10,445. 35
60,477.87
723.40
2 3,700.65
13,818.96
68,692.68

660,292.96

673,924.01

REIMBURSED AND E X P E N D E D F R O M OTHER APPROPRIATIONS
1933
Administration of the Cotton Act, 1934 (transferred to Internal Revenue,
administrative expenses)
Advances to Agricultural Adjustment Administration:
Internal Revenue
Treasurer ofthe United States
General expenses. Agricultural Adjustment Administration (tranferred to
Treasury Department, Division of Disbursements)
Bureau of Engraving and Printing
.-.
Civil Works Administration
Collecting the revenue from customs
Contingent expenses, national currency
Customs Service, blank forms 3
Emergency conservation fund
Expenses, Emergency Banking, Gold Reserve, and Silver Purchase Acts,
1934-36.
Expenses, National Banking Emergency Act of Mar. 9, 1933..
Expenses of loans (act of Sept. 24, 1917, as amended and extended) _
Expenses, Settlement of War Claims Act of 1928-.
Federal Deposit Insurance Corporation
Federal Farm Loan Bureau (miscellaneous expenses)
Fuel yard, Procurement Division
Insolvent national bank fund
National bank examiners
National Bank Redemption Agency
National Industrial Recovery
Salaries and expenses, Division of Disbursement
Working fund. Emergency Relief
;.
Working fund, Home Owners' Loan (Corporation
Total-

$5, 645. 07
$6,982.67

292.87
"373." 60'

2,179.31
1,285.02
6,904.72
1,599.56
11,940.49
1,800.14

32,358. 28

73,174.95
809. 01
594.00
704.99
90,475. 67
268.75
1,636.31
23,714.50
63.95
1,686. 74
8,917.79
34,186. 36
108. 21
33,200. 20
31.63
215. 50
9,946.71
14,190. 70
851.84
2,864. 67
3,028.39
3L36
306,135.19

1 See footnote on preceding page.
2 In October 1933 there was transferred to the Procurement Division the former Custodians of public
buildings. General Supply Committee, and Office of Supervising Architect.
3 Reimbursed to printing and binding appropriation.

REPORT OF THE SECRETARY OF THE TREASURY

153

Department advertising
Authorizations to publish advertising were issued to 2,605 newspapers and periodicals in the fiscal year 1934, compared with 3,480
in 1933, a decrease of 875; while the expenditures thus authorized
were $41,863.42 in 1933 and $37,911.20 in 1934, a decrease of
$3,952.22.
Engraving work
A total of 142,025,685 certificates, checks, commissions, drafts,
liquor perinits, transportation requests, and warrants was 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 1934, compared with 71,918,243 in the preceding year.
TREASURER OF THE UNITED STATES

Public moneys are received and disbursed through the accounts of
the Treasurer of the United States with designated Government depositaries and the Treasury at Washington.
Funds appropriated by Congress for the use of the various departments and establishments of the Government are advanced to disbursing officers as required and credited to their accounts on the books
of the Treasurer, and all disbursements therefrom are made by checks
drawn on the Treasurer.
The total receipts and total expenditures of the Government are
shown for the fiscal years 1933 and 1934 in the following table. The
figures used in this table and throughout this section of the report
(pp. 153 to 156, inclusive) are on the basis of daily Treasury statements, revised. (For explanation of accounts, see p. 274; and for
explanation of bases, see p. 273.)
Account

1933

General and special accounts:
Receipts
Expenditures >

$2,083, 656,464.32
6,131,692, 754.49

Deficit»-.

3, 048,036, 290.17

4, 009, 998, 080. 37

160,597,596.76
163, 255,868. 66

3 2,972, 670,581.96
< 2,138, 224,450.87

Trust and contributed accounts: 2
Receipts
Expenditures
Surplus..
Deficit..

$3,121,431,991. 22
7,131,430,071. 59

834,446,131. 09
2,658,261.90

1 Includes expenditures made by the Reconstruction Finance Corporation, which were not included in
these items in preceding annual reports.
2 The classification of receipts and expenditures on account of contributed funds prior to the fiscal year
1934 is not available. Such receipts and expenditures were classified as special funds and are included in
the receipts and general expenditures under General and Special Funds for the fiscal year 1933.
3 Includes increment resulting from the reduction in the weight of the gold dollar of $2,811,397,066.16.
< Includes $2,000,000,000 authorized to be credited to the exchange stabilization fund.

154

REPORT OF THE SECRETARY OF THE TREASURY

The total receipts and expenditures on account of the principal of
the public debt during the fiscal year 1934 were as follows:
Receipts

Class
T r e a s u r y bills
Certificates o f i n d e b t e d n e s s
^.
Certificates of i n d e b t e d n e s s (adjusted service certificate fund
series)
T r e a s u r y notes
T r e a s u r y notes (civil service r e t i r e m e n t fund series)
T r e a s u r y notes (foreign service r e t i r e m e n t fund series)
T r e a s u r y notes (Canal Zone r e t i r e m e n t fund series)
T r e a s u r y notes (Postal Savings S y s t e m series)
...
Treasury b o n d s . .
W a r savings securities
T r e a s u r y savings s e c u r i t i e s . . .
First Liberty bonds
Second L i b e r t y b o n d s
Third Liberty bonds
Fourth Liberty bonds
Victory notes
P o s t a l savings b o n d s
Other d e b t i t e m s —
Deposits for, a n d r e t i r e m e n t s of, national b a n k notes a n d Federal
Reserve b a n k notes
1

Total..

Expenditures

$4,385, 975,000.00
1, 695,150, 500. 00

$3,929,416,000.00
2, 302, 348, 650.00

180,100,000.00
2, 712, 686,400.00
47, 700,000. 00
772,000. 00
97,000. 00
35, 000,000.00
4,177,903,164. 64

154, 300,000.00
609,151,300.00
35,800,000. 00
454,000. 00
52,000. 00

990.00

27, 579,500. 00

61,113,114.64
23,120. 50
120,135.00
2,100. 00
410,150. 00
711, 950.00
1,855, 531,150. 00
110, 950. 00
2, 238. 200. 00
5, 643. 92

319, 962,860.00

116,725,126.00

13, 582,927, 414.64

1,068, 513, 590.06

The public debt retirements included in the above public debt
expenditures are as follows:
C u m u l a t i v e sinking fund
Received from foreign g o v e r n m e n t s u n d e r d e b t s e t t l e m e n t s
Forfeitures, gifts, etc

$359,491,900.00
357,850.00
15,342.90

Total

369,866,092.90

During the fiscal year 1934 the increase in the dollar value of the
gold holdings of the Treasury was $4,621,967,544.94, on the basis
of daUy Treasury statements, revised. The amount held on June 30,
1933, valued at $20.67 an ounce was $3,234,213,011.51, and the
amount held on June 30, 1934, valued at $35 an ounce was $7,856,180,556.45.
The holdings as of the two dates are shown in the following table
by liabUity accounts:

L i a b i l i t y account

J u n e 30, 1933
(gold v a l u e d a t
$20.67 per fine
ounce)

Reserve against gold certificates o u t s t a n d i n g — $1, 230, 717,109. 00
Gold certificate fund, F e d e r a l Reserve B o a r d i._ 1, 771, 485, 596. 89
R e d e m p t i o n fund, F e d e r a l R e s e r v e notes 2
44, 066,151. 32
Gold reserve
156, 039, 088. 03
E x c h a n g e stabilization fund
Gold in General F u n d
31, 905,067. 27
Total.-.-

3, 234, 213, Oil. 51

J u n e 30, 1934
(gold v a l u e d a t
$35 per fine
ounce)

Increase (-)-) or
decrease ( - )

$958, 463, 029. 00
3, 973, 332, 588. 66
25, 722, 721. 73
156, 039, 430. 93
1, 800, 000, 000. 00
942, 622, 786.13

, -$272, 254, 080. 00
+ 2 , 201,846, 992. 77
-18,343,429.59
-f-342. 90
- f l , 800, 000 000 00
. -1-910,717,718.86

7,856,180,556. 45

-f-4. 621,967, 544. 94

1 " G o l d fund, Federal Reserve B o a r d " , in 1933.
2 Carried as General F u n d liability in 1933. I n t h i s t a b l e t h e 1933 figures h a v e been revised to include
this i t e m as a gold account h a b i l i t y .

The increase in these holdings during the fiscal year resulted chiefiy
from the gold held by the Federal Reserve banks and agents and the

REPORT OF THE SECRETARY OF THE TREASURY

155

reduction in the weight of the gold dollar. The additions to the gold
holdings during the fiscal year are analyzed by sources as follows:
Gold a t cost

Source
U n d e r t h e Secretary's order of D e c . 28, 1933..
F r o m Federal Reserve b a n k s a n d agents u n d e r t h e Gold Reserve
A c t o f 1934
Coin p u r c h a s e d u n d e r sec. 734, title 31, U n i t e d States Code
P u r c h a s e d from t h e R e c o n s t r u c t i o n F i n a n c e Corporation
N e t purchases b y m i n t s a n d assay oflQces on account of i m p o r t s , e t c .
Purchases abroad as authorized b y t h e P r e s i d e n t at various t i m e s .
T o t a l increase a t cost
I n c r e m e n t to J u n e 30, 1934, resulting from t h e reduction in t h e
weight of t h e gold dollar.
._
Total

Gold a t $35 a n
ounce

$28,446,156. 49

$48,162, 898. 03

806, 302, 292.87
55, 564,869.10
131, 990,972.82
776,947,428. 58
11, 318,758.93

1, 365,170, 569. 65
58, 218, 704.19
141, 059, 054. 94
778, 671, 052. 06
17, 221,879. 67

1.810, 570, 478. 79
2.811, 397, 066.15
4, 621, 967, 544 94

1 2, 213,463, 386. 40
4, 621, 967, 544. 94

1 On holdings in T r e a s u r y offices J a n . 29, 1934.

Public moneys on deposit in designated Government depositaries on
June 30, 1934, exclusive of items in transit on that date, amounted to
$1,953,384,870.94 and were distributed as follows:
T o credit of
Treasurer

Class of depositaries
Federal Reserve b a n k s a n d b r a n c h e s
-.
Special d e p o s i t a r y b a n k s (account of sales of G o v e r n m e n t securities)..
General depositary b a n k s
L i m i t e d depositary b a n k s
Foreign depositary b a n k s
T r e a s u r y of t h e P h i l i p p i n e I s l a n d s
..
Total

$64,185,068. 68
1,854, 045,099. 45
6, 546,830. 05
1,338,468.05
1,110,352.99
1, 927, 225, 819. 22

T o credit of
other Governm e n t officers

$9, 479, 451.18
14, 929,149. 34
1, 750, 451. 20
26,159, 051. 72

United States paper currency issued and redeemed (including
Treasury notes of 1890 redeemed) during the fiscal year 1934 amounted
to $813,890,512 and $1,403,162,332, respectively, and the amount
outstanding at the end of the fiscal year was $1,987,091,226. The
amount of such currency shipped during the fiscal year 1934 from the
Treasury in Washington to Treasury offices. Federal Reserve banks
and branches, and others amounted to $792,165,080, as compared
with $798,651,071 in the previous fiscal year.
The proceeds of currency counted into the Treasurer's cash by the
National Bank Redemption Agency amounted to $572,476,726.66,
of which $470,466,290 was in national bank notes, $51,836,626 in
Federal Reserve bank notes, $50,096,050 in Federal Reserve notes,
and $77,760.66 in United States currency.
Canceled Federal Reserve notes amounting to $989,356,700 were
received from Federal Reserve banks and branches for credit of
Federal Reserve agents.
During the fiscal 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 $29,054,270.64. 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 $22,340,095.70.
Government and other securities held in custody by the Treasurer
on June 30, 1934, amounted to $19,035,094,929, whereas the amount

156

REPORT OF THE SECRETARY OF THE TREASURY

held on June 30, 1933, was $16,831,891,905, an increase of $2,203,074,374. The purpose for which the securities were held and the amounts
thereof as of June 30, 1933 and 1934, were as follows:
P u r p o s e for which held

J u n e 30, 1933

T o secure national b a n k circulation
.
.
. .
T o secure deposits of p u b l i c m o n e y s in d e p c s i t a r y b a n k s
T o secure Postal Savings funds
..
. .
H e l d for .special t r u s t accounts
H e l d for District of C o l u m b i a teachers' r e t i r e m e n t fund
Held for Longshoremen's a n d H a r b o r W o r k e r s ' fund.
H e l d for D i s t r i c t of C o l u m b i a W o r k m e n ' s C o m p e n s a t i o n fund
Total

J u n e 30, 1934

$856, 394, 230
50, 876, 098
1, 047,883, 902
14, 871, 516, 365
1..
5,108,100
102.150
11,000
..

$737, 023, 670
52, 920, 500
738, 868, 235
17,500,558,708
5.595,160
107,650
21,000

16, 831, 891, 905

19, 035, 094. 929

The number of pieces of public debt principal obligations examined,
verified, and redeemed during the year was 1,888,858, as compared
with 600,181 for the previous fiscal year.
Checks in payment of interest on the registered obligations of the
United States, verified and paid, numbered 1,765,541 and amounted
to $119,249,060.62. Interest coupons detached from Government
obligations and examined, verified, and paid, numbered 18,518,767
and amounted to $619,351,763.67.
The checks issued by the Treasurer of the United States in payment
of interest on the registered obligations of the insular governments
numbered 6,222 and amounted to $1,135,333.75. Coupons from
obhgations of the insular governments and Government corporations
paid numbered 549,648 and amounted to $5,947,787.
Funds were advanced to United States disbursing officers by accountable warrants issued in an aggregate amountof $5,321,665,626.38.
Warrants, aggregating $11,543,615,384.74, were also issued covering
pubhc debt principal, interest, and premium payments by the Treasurer and increases in the gold reserve. Treasurer's checks aggregating $2,232,304,541.21 were issued on settlement warrants in payment of claims settled by the Comptroller General.
Drafts were purchased in payment of claims settled in 45 different
kinds of foreign currencies for the Comptroller General and for
other departments and bureaus of the Government at a total (iost of
$102,319.43.
Checks drawn on the Treasurer of the United States by Government
disbursing officers and paid during the year numbered 104,616,644,
an increase of 64,800,250 checks as compared with the previous year.
Balances to the credit of disbursing officers and Government agencies
in 4,467 accoimts on June 30, 1934, amounted to $859,150,867.24, an
increase of $538,923,400.53 over the total of such balances in 3,215
accounts on June 30, 1933. The increases in the balances and in the
. number of checks paid were due principally to the emergency operations of the Government.
WAR FINANCE CORPORATION
(In liquidation)

The hquidation df the War Finance Corporation, which began ori
January 1, 1925, was continued during the year. By the act approved
March 1, 1929, the hquidation of the Corporation's assets remaining
at the close of April 4, 1929, and the windiug up of the affairs of the

REPORT OF THE SECRETARY OF THE TREASURY

l57

Corporation thereafter were transferred to the Secretary of the^
Treasury.
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. In addition, the Corporation has paid into the
Treasury $64,631,271.70 on account of earnings. Of this amount
the sum of $100,000, representing proceeds from hquidating activities during the last few years, was paid into the Treasury on January
26, 1934; the last preceding payment having been made on June 30,
1931.
The amount advanced by the Corporation for all purposes, from its
creation, not including such part of new apphcations as represent
proceeds used to retire other advances, was $690,431,100, of which
$688,475,938, has been repaid. The amount carried on the Corporation's books on June 30, 1934, was $132,201.80, of which $119,500
represented war loans and $12,701.80, agricultural and hvestock loans
(including expense advances of $375). During the year ended June
30, 1934, no expense advances were made. The repayments during
this period aggregate $31,053.46, of which $553.46, apphed on account
of the Corporation's agricultural and hvestock loans and $30,500 on
account of war loans.

EXHIBITS
(Exhibits in this report are limited to circulars, press releases, proclarnations, etc., issued during the
fiscal year ended June 30, 1934, except those included in the report for the preceding year which included all such material released after June 30, 1933, and prior to the printing of the report]

159

90353—35

THE PUBLIC DEBT
Issues and redemptions of bonds, notes, and certificates of indebtness
Exhibit 1
Allotments on exchange subscriptions. Treasury bonds of 1943-45 (Jrom press
release, Dec. 6, 1938, revised ^)
Acting Secretary Morgenthau announced on December 5, 1933, that the subscription books for 4J4-3>^ percent Treasury bonds of 1943-45, dated October 15,
1933, were closed on December 2, 1933, for the receipt of subscriptions in exchange
for Fourth Liberty Loan bonds. The details of this issue of Treasury bonds
were given in the annual report of the Secretary of the Treasury for 1933, pages
176 to 183. •
Allotments on exchange subscriptions and the revised cash allotments to the
several Federal Reserve districts and the Treasury were as follows:
Total cash
allotments

Federal Re.serve district

Total exchange
allotments

Boston
New York
Philadelphia..
Cleveland
Richmond
.\tlanta..
Chicago
St. Louis
Minneapolis..
Kansas City..
Dallas...
San Francisco.
Treasury

$70, 724, 300
217,928,800
29,036,300
26,554, 550
13,607,850
23, 713,800
44, 668,800
9,839, 550
5, 217,850
5,914, 250
8,137, 750
45, 050,150
28,000

$55, 252.050
324, 466,750
50, 744,550
126,857,850
36,188,700
15, 667, 450
108, 632, 650
41, 534, 250
16,132,060
39, 095,350
14,766,400
29, 685, 650
41, 692,850

Total...

600, 421, 950

900, 716, 550

Total allotments
$125,976,350
542, 395, 550
79,780,850
153,412,400
49, 796, 550
39, 381, 250
153,301,450
51,373,800
21,349,900

.45, 009,600
22,904,150
74, 735,800
41.720,850
1, 401,138, 500

Exhibit 2
Offering of certificates of indebtedness, series TD-1934 (^}i percent)
On December 7, 1933, the Treasury offered for subscription Treasury certificates of indebtedness as described in the following circular. In the related press
release it was stated that about $728,000,000 of Treasury certificates of indebtedness and about $114,000,000 in interest payments on the public debt would
become due and payable on December 15, 1933.
[Department Circular No. 503]

The Secretary of the Treasury offers for subscription, at par and accrued
interest, through the Federal Reserve banks, under the authority of the act approved September 24, 1917, as amended, Treasury certificates of indebtedness of
series TD-1934. The amount of the offering is $950,000,000, or thereabouts.
DESCRIPTION OF CERTIFICATES

The certificates will be dated December 15, 1933, and will bear interest from
that date at the rate of 2}^ percent per annum, payable semiannually. They will
be payable on December 15, 1934.
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 on June 15 and December 15, 1934.
I Revised .\pr.' 23, 1934,

161

162

REPORT OF THE SECRETARY OF THE TREASURY

T h e certificates shall be exempt, both as to principal a n d interest, from all
taxation (except estate and inheritance taxes) now or hereafter imposed by t h e
United States, any State, or any of t h e possessions of t h e United States, or by
any local taxing authority.
T h e certificates will be accepted a t p a r during such time and under such rules
a n d regulations as shall be prescribed or approved by t h e Secretary of t h e Treasury in p a y m e n t of income and profits taxes payable a t t h e m a t u r i t y of t h e
certificates.
T h e certificates will be acceptable t o secure deposits of public moneys, b u t will
not bear t h e circulation privilege.
APPLICATION AND ALLOTMENT

Applications will be received a t t h e Federal Reserve banks and branches and
a t t h e Treasury D e p a r t m e n t , Washington.
Subscriptions for which p a y m e n t is to be tendered in Treasury certificates of
indebtedness of series T D - 1 9 3 3 and T D 2 - 1 9 3 3 , m a t u r i n g December 15,1933, will
be given preferred allotment. All cash subscriptions for a m o u n t s over $5,000^
will be allotted on an equal percentage basis.
T h e Secretary of t h e Treasury reserves t h e right to reject any subscription, in
whole or in part, and to allot less t h a n t h e a m o u n t of certificates applied for and
to close t h e books as to any or all subscriptions a t any time without notice; t h e
Secretary of t h e Treasury also reserves t h e right to m a k e allotment in full upon
applications for smaller a m o u n t s , to m a k e reduced allotments upon, or to reject
applications for larger a m o u n t s , and to m a k e classified allotments and allotments
upon a graduated scale; a n d his action is these respects shall be final. Allotment
notices will be sent out p r o m p t l y upon allotment, and t h e basis of the allotment
will be publicly announced.
PAYMENT

P a y m e n t a t p a r a n d accrued interest for certificates allotted m u s t be m a d e on
or before December 15, 1933, or on later allotment. Any qualified depositary
will be permitted to m a k e p a y m e n t by credit for certificates allotted to it for
itself a n d its customers up to any a m o u n t for which it shall be qualified in excess
of existing deposits, when so notified by t h e Federal Reserve bank of its district.
Treasury certificates of indebtedness of series T D - 1 9 3 3 a n d T D 2 - 1 9 3 3 , m a t u r i n g
December 15, 1933, will be accepted a t par in p a y m e n t for any certificates which
shall be subscribed for and allotted, with an adjustment of t h e interest accrued,
if any, on t h e certificates so paid for. Applications, unless m a d e b y an incorporated bank or t r u s t company, or by a responsible a n d recognized dealer in Gove r n m e n t securities, m u s t be accompanied by p a y m e n t in full or by p a y m e n t of
10 percent of the a m o u n t of certificates applied for. T h e forfeiture of t h e 10
percent p a y m e n t may be declared by t h e Secretary of t h e Treasury if p a y m e n t
in full is not completed on t h e prescribed date in t h e case of subscriptions allotted.
GENERAL PROVISIONS

As fiscal agents of t h e United States, Federal Reserve banks are authorized
and requested to "receive subscriptions and to make allotments on t h e basis and
up to t h e a m o u n t s indicated by t h e Secretary of t h e Treasury t o t h e Federal
Reserve banks of t h e respective districts. After allotment and upon p a y m e n t
Federal Reserve banks m a y issue interim receipts pending delivery of t h e definitive certificates.
HENRY MORGENTHAU, J R . ,

Acting Secretary of the Treasury.
T R E A S U R Y D E P A R T M E N T , December 7,

1933.

Exhibit 3
Subscriptions and allotments, certificates of indebtedness, series TD-1934 (Jrom
press releases, Dec. 8, 12, and 16, 1933)
Acting Secretary of t h e Treasury Morgenthau announced t h a t t h e subscription books for t h e current offering of l-year, 2% percent Treasury certificates of
indebtedness, series T D - 1 9 3 4 , payable December 15, 1934, closed a t t h e close
of businessjDecember 7, 1933.

REPORT OF THE SECRETARY OP THE TREASURY

163

Reports received from the Federal Reserve banks show that for this offering
of certificates, which was for $950,000,000, or thereabouts, total subscriptions
aggregated $2,806,779,500. Of these subscriptions, $607,610,500 represents
exchange subscriptions, in payment for which Treasury certificates maturing
December 15, 1933, were tendered. The exchange subscriptions, as well as cash
subscriptions in amounts up to and including $5,000, were allotted in full. Cash
subscriptions in amounts over $5,000 were allotted 17 percent, but not less than
$5,000 on any one subscription.
Subscriptions and allotments were divided among the several Federal Reserve
districts and the Treasurv as follows:

Federal Reserve district

Boston
New York.
-Philadelphia..
Cleveland
Richmond
Atlanta
Chicago
St. L o u i s
Minneapolis...
Kansas C i t y . . .
Dallas
San Francisco..
Treasury

TotaL

T o t a l cash subscriptions
received

T o t a l exchange subscriptions
received

T o t a l subscriptions received

$88, 396, 000
1,131, 946, 000
112,797,000
134, 023, 500
66,142, 500
83,873, 000
305, 527, 000
34, 208, 000
16, 257, 000
35, 007, COO
82,928, 000
108, 064, 000

243, 500
466, 782. 500
7, 259, 500
5, 695,500
1, 724, 000
836,000
538,000
303. 000
877, 500
741, 500
631, 000
416, 500
562, 000

$96,639, 500
1, 598, 728, 500
120, 056, 500
139,719, 000
67,866, 500
84, 709, 000
390,065, 000
40,511,000
18,134,500
47, 748, 500
89, 559, 000
112, 480, 500
562, 000

$23, 718, 500
661, 401, 500
27, 092, 500
28,948. 500
13,215,000
15,731,500
138, 755, 500
13, 056, 000
5, 037, 500
19, 260, 500
22, 400, 500
23, 317, 000
562, 000

2,199,169,000

607,610, 500

2,806, 779, 500

1992,496,600

Total subscriptions
allotted

' I n c l u d e s $607,610,500 exchange subscriptions, which were allotted i n full.

Exhibit 4
Offering of Treasury notes, series C-1935 (^J^ percent), and certificates of indebtedness, series TS-1984 {lYi percent)
On January 24, 1934, the Treasury offered for subscription Treasury notes
and Treasury certificates of indebtedness as described in the following circulars:
[ D e p a r t m e n t C i r c u l a r N o . 504]

The Secretary of- the Treasury offers for subscription, at par and accrued
interest, through the Federal Reserve banks, under the authority of the act
approved September 24, 1917, as amended. Treasury notes of series C-1935.
The amount of the offering is $500,000,000, or thereabouts.
DESCRIPTION

NOTES

The notes will be dated January 29, 1934, and will bear interest from that date
at the rate of 2}4 percent per annum, payable on a semiannual basis on March 15
and September 15 in each year. They will mature March 15, 1935, and will not
be subject to call for redemption prior to maturity.
Bearer notes with interest coupons attached will be issued in denominations
of $100, $500, $1,000, $5,000, $10,000, and $100,000. The notes will not be issued
in registered form.
The notes shall be exempt, both as to principal and interest, from all taxation
(except estate or inheritance taxes) now or hereafter imposed by the United States,
any State, or any of the possessions of the United States, or by any local taxing
authority.
The notes will be accepted at par during such time and under such rules and
regulations as shall be prescribed or approved by the Secretary of the Treasury
in payment of income and profits taxes payable at the maturity of the notes.
The notes will be acceptable to secure deposits of public moneys, but will not
bear the circulation privilege.
APPLICATION

AND

ALLOTMENT

Applications will be received at the Federal Reserve banks and branches and
at the Treasury Department, Washington. Banking institutionjs generally will
handle applications, for subscribers, but only the Federal Reserve b^iUks and the
Treasury Department are authorized to act as official agencies.,

164

REPORT OF THE SECRETARY OF THE TREASURY

Subscriptions for amounts up to and including $10,000 will be allotted in full; all
other subscriptions will be allotted on an equal percentage basis.
The Secretary of the Treasury reserves the right to reject any subscription, in
whole or in part, and to allot less than the amount of notes applied for and to
close the books as to any or all 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 shall be final. Allotment
notices will be sent out promptly upon allotment, and the basis of the allotment
will be publicly announced.
PAYMENT

Payment at par and accrued interest for notes allotted must be made on or
before January 29, 1934, or on later allotment. Any qualified depositary will
be permitted to make payment by credit for notes allotted to it for itself and its
customers up to any amount for which- it shall be qualified in excess of existing
deposits, when so notified by the Federal Reserve bank of its district.
Applications, unless made by an incorporated bank or trust company, or by a
responsible and recognized dealer in Government securities, must be accompanied
by payment in full or by payment of 10 percent of the amount of notes applied for.
The forfeiture of the 10 percent payment may be declared by the Secretary of the:
Treasury if payment in full is not completed on the prescribed date in the case
of subscriptions allotted.
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. After allotment and upon payment Federal
Reserve banks may issue interim receipts pending delivery of the definitive notes.
HENRY MORGENTHAU, Jr.,

Secretary of the Treasury.
TREASURY DEPARTMENT, January 24, 1934[Department Circular No. 505]

The Secretary of the Treasury offers for subscription, at par and accrued
interest, through the Federal Reserve banks, under the authority of the act
approved September 24, 1917, as amended, Treasurv certificates of indebtedness
of series TS-1934. The amount of the offering is $500,000,000, or thereabouts.
DESCRIPTION OF CERTIFICATES

The certificates will be dated January 29, 1934, and wiU bear interest from that
date at the rate of IK percent per annum, payable on a semiannual basis. They
will be payable on September 15, 1934.
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 on March 15 and September 15, 1934.^ * * *
APPLICATION AND ALLOTMENT

Applications will be received at the Federal Reserve banks and branches and
'at the Treasury Department, Washington.
Subscriptions for amounts up to and including $10,000 will be allotted in full;
all other subscriptions will be allotted on an equal percentage basis. * * *
PAYMENT

Payment at par and accrued interest for certificates allotted must be made on
or before January 29, 1934, or on later allotment. 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 * * *,
HENRY MORGENTHAU, J R . ,

Secretary of the Treasury.
TREASURY DEPARTMENT, January 24, 19341 Omitted portions are similar to corresponding sections of Department Circular No. 503, p. 161.

REPORT OF THE SECRETARY OF THE TREASURY

165

Exhibit 5
Subscriptions and allotments, Treasury notes, series C-l935, and certificates of
indebtedness, series TS-1934 (Jrom press releases Jan. 26 and Feb. 2, 1934)
Secretary of the Treasury Morgenthau announced the subscription figures
and the basis of allotment for the January 29 offering of 2% percent Treasury
notes of series C-1935, maturing March 15, 1935, and of V/z percent Treasury
certificates of indebtedness of series TS-1934, maturing September 15, 1934.
Reports received from the Federal Reserve banks show that for the offering of
notes, which w^as for $500,000,000, or thereabouts, total subscriptions aggregated
$3,424,212,200. Subscriptions in amounts up to and including $10,000 were
allotted in full, and all other subscriptions were allotted 14 percent, but not less
than $10,000 on any one subscription.
For the offering of certificates, which was for a like amount of $500,000,000,
or thereabouts, total subscriptions aggregated $1,360,564,500. Subscriptions in
amounts up to and including $10,000 were allotted in full, and all other subscriptions were allotted 38 percent, but not less than $10,000 on any one subscription.
Subscriptions and allotments were divided among the several Federal Reserve
districts and the Treasury as follows:
T r e a s u r y notes series C-1935

Certificates of i n d e b t e d n e s s ,
series TS-1934

F e d e r a l Reserve district
Total subscriptions
received
Boston
NewYork
Philadelphia
Cleveland . . . . .
Richmond
Atlanta
. . .
Chicago..
St. Louis
Minneapolis
Kansas City
.
Dallas....
San Francisco
Treasury

.
. .
-

Total

. .

Total subscriptions
allotted

Total subscriptions
received

$224,601,600
1, 674, 552,000
199, 640, 000
173,848, 700
96,177, 400
140,924, 200
431, 744. 300
58,202,000
41,460, 700
85,798, 500
96, 384,400
199,974,500
904,000

$36,836,300
243, 998,000
29, 672, 700
26, 627, 600
15,145,400
22, 271,800
69. 263, 500
11, 214,100
8,327, 700
15, 976, 200
18, 031,300
30, 608, 000
130, 000

$111,372,500
699, 703,000
28,924,000
91, 266, 000
38, 360, 000
62, 410. 000
114,819.000
38, 777, 000
4, 245, 500
33, 254, 000
33, 392, 500
103, 741, 000
300, 000

$43,015,600
266,929, 500
11, 227,000
36, 085, 500
14, 714, 500
23,830. 500
44,970, 000
15, 356, 000
2, 616, 000
13, 420, 500
13, 877, 000
39, 592, 500
114,000

3, 424, 212, 200

528,101, 600

1, 360, 564, 500

524, 748, 500

Total subscriptions
allotted

Exhibit 6
Offering of Treasury notes, series D-1935 (,2}^ percent) and series C-l937 (3 percent)
On February 13, 1934, the Treasury offered for subscription two series of
Treasury notes as described in the following circular:
[Department Circular No. 506]

The Secretary of the Treasury offers for subscription, at par and accrued
interest, through the Federal Reserve banks, under the authority of the act
approved September 24, 1917, as amended, $800,000,000, or thereabouts. Treasury notes, in two series. The amount of each series is $400,000,000, or thereabouts.
DESCRIPTION OF NOTES

The notes of series D-1935 will be dated February 19, 1934, and will bear
interest from that date at the rate of 2J^ percent per annum, payable on a semiannual basis on June 15 and December 15 in each year. They will mature
December 15,1935, and will not be subject to call for redemption prior to maturity.
The notes of series C-1937 will be dated February 19, 1934, and will bear
interest from that date at the rate of 3 percent per annum, payable on a semiannual basis on August 15 and February 15 in each year. They will mature
February 15, 1937, and will not be subject to call for redemption prior to maturity.* * * *
1 Omitted portions are similar to corresponding sections of Department Circular No. 604, p. 163.

166

REPORT OF THE SECRETARY

OF|THE

TREASURY

APPLICATION AND ALLOTMENT

* * * Subscriptions for amounts up to and including $10,000 will be given
preferred allotment; all other subscriptions will be allotted on an equal percentage
basis. * * *
PAYMENT

Payment at par and accrued interest for notes allotted must be made on or
before February 19, 1934, or on later allotment. Any qualified depositary will be
permitted to make payment by credit for notes allotted to it for itself and its
customers up to any amount for which it shall be qualified in excess of existing
deposits, when so notified by the Federal Reserve bank of its district. * * *
HENRY MORGENTHAU,

Jr.,

Secretary of the Treasury.
TREASURY DEPARTMENT, February 13, 1984.

Exhibit 7
Subscriptions and allotments, Treasury notes, series D-1935 and series C-1937
(Jrom press releases, Feb. 14, 16, and 21, 1934, revised 0
Secretary Morgenthau announced that the subscription books for the current
offering of 2>^ percent Treasury notes of series D-1935, maturing December 15,
1935, and 3 percent Treasury notes of series C-1937, maturing February 15, 1937,
closed at the close of business February 13, 1934.
Reports received from the Federal Reserve banks show that for the offering
of notes of series D-1935, which was, for $400,000,000, or thereabouts, total
subscriptions aggregated $1,332,409,900. Subscriptions in amounts up to arid
including $10,000 were allotted in full, and all other subscriptions were allotted
30 percent, but not less than $10,000 on any one subscription.
For the offering of notes of series C-1937, which was for a like amount of
$400,000,000, or thereabouts, total subscriptions aggregated $2,285,754,500.
Subscriptions in amounts up to and including $10,000 were allotted in full, and
all other subscriptions were allotted 16% percent, but not less than $10,000 on
any one subscription.
Subscriptions and allotments were divided among the several Federal Reserve
districts and the Treasury as follows:
Treasury notes, series D-1935 Treasury notes, series C-1937
Federal Reserve district

Total subscriptions received
$86, 649,000
557,316,400
79, 572,400
69,980, 500
53,479,000
69, 702, 200
215,631, 200
38,432, 700
23,674, 500
34, 777, 500
46,999, 500
55,695,000
500,000

Boston
New York
Philadelphia...
Cleveland
Richmond
Atlanta
Chicago...
St. Louis
Minneapolis...
Kansas City...
Dallas
....
San Francisco..
Treasury

1,332,409,900

Total.

Total subscriptions
allotted

Total subscriptions received

Total subscriptions
allotted

$28,023,000
169,037,900
24, 540,900
21, 789,000
16,810,000
21,346, 200
69,275, 200
12,931, 700
9.022, 500
12,677,000
15,404, 500
17, 284,000
150,000

$144, 330,400
1,190, 611,100
137, 194,000
109, 012,600
60, 481,000
80, 663,100
241, 627,400
54, 876, 700
41, 632, 500
47, 451, 200
64, 661, 200
113,,098,000
216,300

$29, 270, 300
207,231,300
25,431, 500
21,480, 300
12,442, 200
16, 204.300
48,062,300
12,104, 600
10,197, 600
11,496, 600
14,386,800
20, 374,300
48,700

418, 291,900

2, 285, 764,500

428, 730, 700

Exhibit 8
Offering of Treasury notes, series C-l938 (8 percent)
On March 8, 1934, the Treasury offered for subscription Treasury notes as
described in the following circular. In the related press release it was stated that
about $460,000,000 of Treasury certificates would become due on March 15, 1934.
1 Revised Mar. 6, 1934.

167

REPORT OP THE SECRETARY OP THE TREASURY
[Department Circular No. 5071

The Secretary of the Treasury offers for subscription,; at par, through the
Federal Reserve banks, under the authority of the act approved September 24,
1917, as amended. Treasury notes of series C-1938, in exchange for Treasury
certificates of indebtedness of series TM-1934, maturing March 15, 1934. The
amount of the offering is limited to the amount of Treasury certificates of indebtedness of series TM-1934, maturing March 15, 1934, tendered and accepted.
DESCRIPTION OF NOTES

The notes will be dated March 15, 1934, and will bear interest from that date
at the rate of 3 percent per annum, payable semiannually, on September 15 and
March 15 in each year. They will mature March 15, 1938, and will not be
subject to call for redemption prior to maturity.^ * * *
APPLICATION AND ALLOTMENT

* * * The Secretary of the Treasury reserves the right to reject any
subscription, in whole or in part, and to allot less than the amount of notes
applied for arid to close the books as to any or all subscriptions at any time
without notice; and his action in these respects shall be final. Allotment notices
will be sent out promptly upon allotment, and the basis of the allotment will
be publicly announced.
PAYMENT

Payment for notes allotted must be made on or before March 15, 1934, or on
later allotment, and may be made only in % percent Treasury certificates of
indebtedness of series TM-1934, maturing March 15, 1934, which will be accepted
at par. * * *
HENRY MORGENTHAU, JR.,

Secretary of the Treasury.
TREASURY DEPARTMENT, March 8, 1984-

Exhibit 9
Subscriptions and allotments. Treasury notes, series C-l988 {from press releases.
Mar. 10 and 15, 1984)
Secretary of the Treasury Morgenthau announced that the subscription books
for the current offering of 3 percent Treasury notes of series C-1938, maturing
March 15, 1938, would close at the close of business March 10, 1934.
Substantially aU of the maturing certificates of indebtedness amounting to
$455,175,500 were tendered in exchange for the new certificates and allotted
in full.
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
and allotted
$14,276,500
335,475, 500
3,940, 600
9, 354,500
2,447,000
3,341,000
63,193,000
7, 967, 500

Federal Reserve district

Total subscriptions
received
and allotted

Minneapolis..
Kansas City..
Dallas
San Francisco.
Treasury

$4, 592, 500
9,100, 500
2,842, 600
7,127,000
1,617, 600

Total...

455,175, 500

1 Omitted portions are similar to corresponding sections of Department Circular No. 504, p. 163.

168

REPORT OF THE. SECRETARY OF THE TREASURY
Exhibit 10
Offering of Treasury bonds, 1944-46 {SYi percent)

On April 4, 1934, the Treasury offered for subscription Treasury bonds as
described in the following circular. In the related press release it was stated
that the issue would be limited to the amount of called Fourth Liberty Loan
bonds outstanding in the amount of $1,000,000,000 and Treasury notes of series
A-1934 outstanding in the amount of $244,234,600, tendered in exchange and
accepted.
[Department Circular No. 508]
TREASURY

DEPARTMENT,

April 4, 1984.
The Secretary of the Treasury invites subscriptions, from the people of the
United States, at par, for Z% percent Treasury bonds of 1944-46, of an issue of
bonds of the United States authorized by the Second Liberty Bond act, approved
September 24, 1917, as amended, in payment of which only Fourth Liberty Loan
4J4 percent bonds of 1933-38 (hereinafter referred to as Fourth 4K's) called for
redemption on April 15, 1934, and Treasury notes of series A-1934, maturing
May 2, 1934, may be tendered. The amount of the issue will be limited to the
amount of such called Fourth 4J4's and Treasury notes of series A-1934, tendered
and accepted. Fourth 4>4's not called for redemption on April 15, 1934, may
not be tendered under this circular.
DESCRIPTION OF BONDS

The bonds will be dated April 16, 1934, and will bear interest from that date
at the rate of 3}4 percent per annum, payable on October 15, 1934, on a semiannual
basis, and thereafter semiannually on April 15 and October 15 in each year until
the principal amount becomes paj^able. They will mature April 15, 1946, but
may be redeemed at the option of the United States on and after April 15, 1944,
in whole or in part, at par and accrued interest, on any interest day or days, on
4 months' notice of redemption given in such manner as the Secretary of the
Treasury shall prescribe. In case of partial redemption the bonds to be redeemed
will be determined by such method as may be prescribed by the Secretary of the
Treasury. From the date of redemption designated in any such notice, interest
on the bonds called for redemption shall cease.
Bearer bonds with interest coupons attached and bonds registered as to principal and interest will be issued in denominations of $50, $100, $500, $1,000,
$5,000, $10,000, and $100,000. Provision will be made for the interchange of
-bonds of different denominations and of coupon and registered bonds and for the
transfer of registered bonds under rules and regulations prescribed by the Secretary of the Treasury.
The bonds 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 authorized
by said act approved September 24, 1917, as amended, the principal of which
does not exceed $5,000, owned by any iridividual, partnership, association, or
corporation, shall be exempt from the taxes provided for in clause (b) above.
The bonds will be acceptable to secure deposits of public moneys, and will"
bear the circulation privilege only to the extent provided in the act approved
July 22, 1932, as amended. They will not be entitled to any privilege of conversion.
The bonds will be subject to the general regulations of the Treasury Department, now or hereafter issued, governing United States bonds.
APPLICATION A N D ALLOTMENT

Applications will be received at the Federal Reserve banks and branches and
at the Treasury Department, Washington. Banking institutions generally will
handle applications for subscribers, but only the Federal Reserve banks and the
Treasury Department are authorized to act as official agencies.
Subject to the reservations contained in the next succeeding paragraph, all
subscriptions will be allotted in full.
The Secretary of the Treasury reserves the right to reject any subscription,' in
whole or in part, and to allot less than the amount of bonds^applied for^and^to

REPORT OF THE SECRETARY OF THE TREASURY

169

close the books as to any or all subscriptions or classes of 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 and to make reduced
allotments upon, or to reject, applications for larger amounts, to make classified
allotments or to make allotments upon a graduated scale or to adopt any or all
of said methods or such other methods of allotment and classification of allotments as shall be deemed by him to be in the public interest; and his action in
these respects shall be final. Allotment notices will be sent out promptly upon
allotment, and the basis of the allotment will be publicly announced.
PAYMENT

Payment for any bonds allotted may be made only in called Fourth 4>^'s,
which will be accepted at par, with no adjustment of interest, or in Treasury
notes of series A-1934 (with coupon dated May 2, 1934, attached), which will be
accepted at par with an adjustment of accrued interest as of April 16, 1934, and
should be made when the subscription is tendered, except that Fourth 4X's
which have previously been surrendered for redemption on April 15, 1934, in
accordance with the provisions of Department Circular No. 501, will be accepted
as payment upon request "in proper form of the owners thereof, such subscriptions to be presented through the same channels as were the called bonds when
surrendered for redemption. If any subscription is rejected, in whole or in part,
any called Fourth 4}^'s which may have been tendered and not accepted will be
held for redemption, and any Treasury notes of series A-1934 which may have
been tendered and not accepted will be returned to the subscriber.
SURRENDER OF CALLED F O U R T H 4H'S ON E X C H A N G E SUBSCRIPTIONS

Surrender of coupon bonds.—Called Fourth 4)4's in coupon form tendered in
exchange for Treasury bonds issued hereunder should be presented and surrendered to a Federal Reserve bank or to the Treasurer of the United States and
should accompany the application (unless such called Fourth 4}4's have already
been presented for redemption on Apr. 15, 1,934, in accordance with the provisions of Department Circular No. 501). The bonds must be delivered at the
expense and risk of the holder. Facilities for transportation of bonds by registered mail insured may be arranged between incorporated banks and trust companies and the Federal Reserve banks, and holders may take advantage of such
arrangements when available, utilizing such incorporated banks and trust companies as their agents. Incorporated banks and trust companies are not agents
of the United States under this circular. Coupons dated October 15, 1934, and
all coupons bearing dates subsequent thereto, must be attached to coupon bonds
when presented.
Surrender of registered bonds.—Called Fourth 4}'4's in registered form tendered
in exchange for Treasury bonds issued hereunder should be assigned by the registered payee or assigns thereof to "The Secretary of the Treasury for exchange
for Treasury bonds of 1944-46", in accordance with the general regulations of
the Treasury Department governing assignments for transfer or exchange, and
thereafter should be presented and surrendered with the application to a Federal
Reserve bank, or to the Treasury, Department, Division of Loans and Currency,
Washington (unless such called Fourth 4J4's have already been presented for redemption on Apr. 15, 1934, in accordance with the provisions of Department
Circular No. 501). The bonds must be delivered at the expense and risk of the
holder.
GENERAL PROVISIONS

As fiscal agents of the United States, Federal Reserve banks are authorized
and requested to receive subscriptions and to make allotments on the basis and
up to the ainounts indicated by the Secretary of the Treasury to the Federal
Reserve banks of the respective districts. After allotment and upon payment
Federal Reserve banks may issue interim receipts pending delivery of the definitive bonds.
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 or branch, or to the Treasury Department, Washington.
The Secretary of the Treasury may at any time, or from time to time, prescribe
supplemental or amendatory rules and regulations governing the offering and the
exchanges hereunder.

HENRY MORGENTHAU,

Jr.,

Secretary of the Treasury.

170

REPORT OF T H E SECRETARY OF T H E TREASURY
Exhibit 11

Subscriptions and aliotments, Treasury bonds of 1944~46 {from press releases, Apr.
9, 10, and 2 1 , 1934, revised i)
On April 9, 1934, Secretary of t h e Treasury Morgenthau announced t h a t exchange subscriptions a m o u n t i n g to a b o u t $550,000,000 h a d been received up t o
t h e close of business on April 7 for the new series of 3>1 percent 10-12-year bonds
to be issued on April 16 in exchange for F o u r t h Liberty Loan bonds which were
called for redemption Aj^ril 15 and Treasury notes of series A-1934 m a t u r i n g
May 2.
On April ^10, 1934, Secretary Morgenthau announced t h a t t h e subscription
books for t h e current offering of 334 percent Treasury bonds of 1944-46 would
close April 12, 1934. Subscriptions a m o u n t i n g to a b o u t $625,000,000 had been
received up to the close of business April 9.
Subscriptions and allotments were divided among the several Federal Reserve
banks and the Treasury as follows:

Federal Reserve district

Fourth Liberty Treasury notes
Loan bonds
Total allotted
tendered
tendered

Boston
New York
Philadelphia..
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis..
Kansas City..
Dallas
-San Francisco
Treasury.....

$22,090,100
484,176,850
28,889,900
36,006,750
13,172,800
12, 428, 500
128,943,450
25,882,800
9, 613,950
21,071,850
10, 268, 700
17, 396, 250
17, 554, 300

$3, 292, 900
200, 253,100
350,700
794,000
416,100
517,000
877,500.
974,400
317,800
602,400
609, 200
314, 200
145,000

Total...

827,496, 200

234,464,300

$25,383,000
684,429,950
29, 240, 600
39, 800,750
17,588,900
12,945, 500
134,820,950
27,857, 200
9,931, 750
22,674, 250
10,877,900
18,710,450
27,699,300
1,061,960,600

1 Revised Aug. 7 and 28, 1934.

Exhibit 12
P a r t i a l redemption of Fourth Liberty Loan bonds before maturity {second call)
On April 13, 1934, t h e Treasury issued a call for two series of F o u r t h Liberty
Loan 4>1 percent bonds for redemption on October 15, 1934, as described in t h e
following circular. There were outstanding a b o u t $4,300,000,000 of uncalled
F o u r t h Liberty Loan bonds. T h e call included a b o u t $1,200,000,000 of bonds.
[Department Circular No. 509]
TREASURY

DEPARTMENT,

April 13, 1934.
To Holders of Fourth Liberty Loan 4% Percent Bonds of 1938-88, and Others
Concerned:
I. N O T I C E OF SECOND C A L L FOR P A R T I A L R E D E M P T I O N B E F O R E M A T U R I T Y OF
F O U R T H L I B E R T Y L O A N 4>i P E R C E N T B O N D S OF 1933-38 ( F O U R T H 4>^'S)I

1. All outstanding F o u r t h Liberty Loan 4>4 percent bonds of 1933-38 (hereinafter referred to as F o u r t h 4>i's) bearing serial numbers t h e final digit of which
is 8 or 2 (such serial numbers in the case of p e r m a n e n t coupon bonds being
1 Fourth 4H's (temporary coupon, permanent coupon, and registered) are numbered serially beginning
with no. 1 for each denomination; in the case of permanent coupon bonds each serial number is prefixed
by a distinguishing letter, the letters A to K (omitting I) being used, which letters, in order, rotate with
and correspond to the final digits from 1 to 0, respectively.
Fourth 434's called for redemption on Apr. 15, 1934, bear serial numbers ending in9,0, or 1 (inthe case of
permanent coupon bonds preceded by the distinguishing letter J, K, or A, respectively); Fourth 4J.4's
included in the second call for partial redemption on Oct. 15, 1934, bear serial numbers ending in 8 or 2 (in
the case of permanent coupon bonds preceded by the distinguishing letter H or B, respectively); uncalled
Fourth 4H's bear serial numbers ending in 3, 4, 5, 6, or 7 (in the case of permanent coupon bonds preceded
by the distinguishing letter 0 . D, E, F, or Cl, respectively).

REPORT OJ^ THE S E C B E T A H Y

OF T H E T:fiEASUEY

171

prefixed by t h e corresponding distinguishing letter H or B, respectively), are
hereby called for redemption on October 15, 1934, on which date interest on such
bonds called for redemption will cease.
2. This second call for partial redemption is m a d e p u r s u a n t to t h e provision
for redemption contained in the bonds and in Treasury D e p a r t m e n t Circular
N O . 121, dated September 28, 1918, under which t h e bonds were originaUy
issued, the bonds to be redeemed having been determined by lot in t h e m a n n e r
prescribed by the Secretary of t h e Treasury.
3. Outstanding F o u r t h 4>i's bearing serial numbers (and prefix letters) other
t h a n those designated are not included in or affected by this second call for
partial redemption.
II.

T R A N S A C T I O N S IN C A L L E D AND U N C A L L E D B O N D S

1, P u r s u a n t to the first call for partial redemption on April 15, 1934 (see D e p a r t m e n t Circular No. 501, dated Oct. 12, 1933), all F o u r t h 4}4's outstanding
October 12, 1933, were divided into two separate and distinct classes: Called
bonds, a n d uncalled bonds. Hereafter such F o u r t h 4}4's called for redemption
on April 15, 1934, shall be designated *'first-called" bonds. P u r s u a n t to the second
call for partial redemption, and effective a t t h e close of business on this date, all
outstanding F o u r t h 4}4's included in t h e second call for partial redemptiori on
October 15, 1934, will be included in t h e class of called bonds and shall be designated ''second-called" bonds. T h e Treasury D e p a r t m e n t , and t h e Federal
Reserve banks as fiscal agents of t h e United States, will observe this division of
F o u r t h 4}{'s into three classes—first-called, second-called, and uncalled bonds—
and hereafter in all transactions affecting second-called and uncalled F o u r t h 4J4's,
including exchanges of denominations, exchanges of coupon bonds for registered
bonds, exchanges of registered bonds for coupon bonds, and transfers of registered
bonds: (1) Only bonds bearing distinguishing serial numbers or letters falling
within t h e class second-called bonds will be issued upon exchange or transfer of
second-called bonds, and (2) only bonds bearing distinguishing serial numbers
or letters falling within t h e class uncalled bonds will be issued upon exchange or
transfer of uncalled bonds. Exchanges or transfers as between second-called
and uncalled bonds wiU not be permitted. Denominational exchanges of coupon
bonds within t h e class "called for redemption on October 15, 1 9 3 4 " (secondcalled bonds) will t e r m i n a t e on t h a t d a t e . Transfers and exchanges of registered
bonds falling within t h e class "called for' redemption on October 15, 1 9 3 4 "
(second-called bonds) will t e r m i n a t e on September 15, 1934, t h e date of t h e
closing of t h e transfer books.
2. I n accordance with t h e provisions of Treasury D e p a r t m e n t Circular N o . 121,
dated September 28, 1918, t h e provisions of Treasury D e p a r t m e n t Circular N o .
300, dated July 31, 1923, prescribing regulations with respect to United States
bonds and notes, which were modified by D e p a r t m e n t Circular No. 501, d a t e d
October 12, 1933, are hereby further modified accordingly with respect to t r a n s actions in F o u r t h 4j4's.
III.

P A Y M E N T OR E X C H A N G E

1. Payment of called bonds on October 15, 1984-—Holders of any outstanding
F o u r t h 4}^'s included in t h e second call for partial redemption on October 15,
1934, will be entitled to have their bonds redeemed and paid a t p a r on October
15, 1934, with interest in full to t h a t date. After October 15, 1934, interest will
not accrue on any bonds included in this second call for partial redemption on
t h a t date. (See sees. IV and V of this circular for instructions for presentation
of bonds for redemption on Oct. 15, 1934, under this second call.)
2. Optional exchange offering.—Holders of any outstanding F o u r t h 4]4's included in the second call for partial redemption on October 15, 1934, m a y , in
advance of October 15, 1934, be offered t h e privilege of exchanging all or p a r t of
their called bonds for other interest-bearing obligations of t h e United States.
Holders who desire to avail themselves of an exchange privilege, if a n d when
announced, should watch for an announcement thereof, a n d should request their
bank or trust company to notify t h e m when information regarding any exchange
offering is received. {In case of an optional exchange offering, instructions then
given in t h e public announcement should be followed in presenting called bonds
for exchange.)
IV.

R U L E S AND R E G U L A T I O N S G O V E R N I N G

REDEMPTION

P u r s u a n t to the second call for partial redemption, as set forth in section I of
this circular, t h e following rujes and regulations are hereby prescribed to govern
t h e surrender of F o u r t h 434's called for redemption on October 15, 1934:

172

REPORT OF THE SECRETARY OF THE TREASURY

1. Presentation and surrender of coupon bonds.—Any Fourth 4}^'s in coupon
form, which are included in the second call fpr partial redemption, should be presented and surrendered to any Federal Reserve bank or branch, or to the Treasurer of the United States, Washington, D. C , for redemption on October 15,
1934. The bonds must be delivered at the expense and risk of holders (see par.
8 of this section) and should be accompanied by appropriate written advice.
(See form P. D. 1381 attached hereto.) Checks in payment of principal will be
mailed to the address given in the form of advice accompanying the bonds
surrendered.
2. Coupons dated October 15, 1934, which become payable on that date, should
be detached from any Fourth 4:%'s included in the second call for partial redemption before such bonds are presented for redemption on October 15, 1934, and
such coupons should be collected in regular course when due. All coupons pertaining to such bonds bearing dates subsequent to October 15, 1934, must be
attached to any such bonds when presented for redemption, provided, however,
if any such coupons are missing from bonds so presented for redemption the
bonds nevertheless will be redeemed, but the full face amount of any such missing
coupons will be deducted from the payment to be made on account of such redemption, and any amounts so deducted will be held in the Treasury to provide
for adjustments or refunds on accountvof such missing coupons as may subsequently be presented.
3. The final coupon attached to temporary coupon bonds became due on
October 15, 1920. The holders of any such temporary bonds which are included
in the second call for partial redemption on October 15, 1934, will receive all past
due interest from October 15, 1920, when the bonds are redeemed pursuant to
such call. Any coupons now attached to any such temporary bonds should be
detached and collected in regular course.
4. Presentation and surrender of registered bonds.—Any Fourth 4}4's in registered form, which are included in the second call for partial redemption, must be
assigned by the registered payees or assigns thereof, or by their duly constituted
representatives, in accordance with the general regulations of the Treasury
Department governing assignments, in the form indicated in the next paragraph
hereof, and should thereafter be presented and surrendered to any Federal
Reserve bank or branch, or to the Division of Loans and Currency,*^ Treasury
Department, Washington, D. C , for redemption on October 15, 1934. The
bonds must be delivered at the expense and lisk of holders (see par. 8 of this
section) and should be accompanied by appropriate written advice. (See form
P. D. 1382 attached hereto.) In all cases checks in payment of principal will be
mailed to the address given in the form of advice accompanying the- bonds
surrendered.
5. If the registered holder of record, or an assignee holding under proper assignment from the registered holder of record, or a duly constituted representative of
such registered holder or assignee, desires that payment of the principal be made
to him, the bonds should be assigned to "The Secretary of the Treasury for
redemption." In case it is desired to have payment of the registered bonds made
to someone other than the registered holder of record, without intermediate
assignment, the bonds may be assigned to "The Secretary of the Treasury for
redemption for account of
" and in such case the name and address
of the payee for whose account the redemption is to be made must, be inserted.
Assignments in this form must be completed before acknowledgment and not
left in blank.
6. Assignment in blank, or other assignment having similar effect, will be
recognized, but in that event payment will be made to the person surrendering
the bond for redemption, since under such assignment the bonds become in effect
payable to bearer. Assignments in blank or assignments having similar effect
should be avoided, if possible, in order not to lose the protection afforded by
registration.
7. Final interest due on October 15, 1934, on any Fourth 4}^'s in registered
form, which are included in the second call for partial redemption and presented
for redemption on October 15, 1934, will be paid by checks issued in regular
course in the same manner as if such bonds had not been called for redemption.
8. Transportation of bonds.—Bonds presented for redemption under this circular must be delivered to a Federal Reserve bank or branch, or to the Treasury
Department, Washington, D. C , at the expense and risk of the holder. Coupon

REPORT OF THE SECRETARY OF THE TREASURY

173

borids should be forwarded b y registered mail insured, or b y express prepaid.
Registered bonds bearing restricted assignments m a y be forwarded by registered
mail, b u t registered bonds bearing unrestricted assignments should be forwarded
by registered mail insured or by express. Facilities for t r a n s p o r t a t i o n of bonds
by registered mail insured m a y be arranged between incorporated b a n k s a n d
t r u s t companies a n d t h e Federal Reserve banks, a n d holders m a y t a k e a d v a n t a g e
of such arrangements when available, utilizing such incorporated b a n k s a n d t r u s t
companies as their agents. Incorporated b a n k s a n d t r u s t companies are n o t
agents of t h e United States under this circular.
V. T I M E O F P R E S E N T A T I O N O F F O U R T H 434'S F O R R E D E M P T I O N

1. I n order t o facilitate t h e redemption of F o u r t h 4)^*s included in t h e second
call for partial redemption on October 15, 1934, a n y such bonds m a y be presented a n d surrendered in t h e m a n n e r herein prescribed in advance of t h a t d a t e
b u t n o t before September 15, 1934. Such early presentation by holders, on a n d
after September 15, 1934, a n d well in advance of October 15, 1934, will insure
prompt p a y m e n t of principal when due. This is particularly i m p o r t a n t with
respect t o registered bonds, for p a y m e n t cannot be m a d e until registration shall
have been discharged a t t h e Treasury D e p a r t m e n t .
2. I t will expedite redemption if bonds included in t h e second call for partial
redemption are presented t o Federal Reserve b a n k s or branches, a n d n o t direct
to t h e Treasury D e p a r t m e n t .
3. As hereinbefore provided: (1) Coupons d u e October 15, 1934, should be
detached from a n y p e r m a n e n t coupon bonds included in this second call for
partial redemption when such bonds are presented for redemption on t h a t d a t e ,
such coupons to be collected when d u e ; a n d (2) final interest d u e on a n y registered bonds included in this second call for partial redemption will be paid by
check issued in regular course. Accordingly, early presentation of bonds will n o t
affect t h e p a y m e n t of final interest d u e on October 15, 1934.
VI.

FURTHER

INFORMATION

Any further information which m a y be desired regarding t h e partial redemption of F o u r t h 4}l's under this circular m a y be obtained from a n y Federal Reserve
bank or branch, or from t h e Treasury D e p a r t m e n t , Washington, D . C , where
copies of t h e Treasury D e p a r t m e n t ' s regulations governing assignments m a y also
be obtained. T h e Secretary of t h e Treasury m a y a t a n y time, or from time to
time, provide supplemental or a m e n d a t o r y rules a n d regulations governing t h e
m a t t e r s covered by this circular.
H E N R Y MORGENTHAU,

Jr.,

Secretary of the Treasury.
I.MPORTANT NOTE.—Fourth 4K's called for redemption on October 15, 1934, should be presented well in
advance of that date but not before September 15, 1934, and the instructions given in this circular should
be followed. If an exchange opportunity is afforded, and Fourth 4H's are to be presented for exchange, the
instructions given in subsequent announcement should be followed. Information concerning the partial
redemption of Fourth i W s on October 15, 1934, and information concerning an optional exchange if and
when offered, may be obtained from the oflBcers of banks and trust companies generally. As those banks
and trust companies may offer their facilities in the matter of arranging redemption or exchange, it is suggested that holders of Fourth 4K's consult their own bank or trust company.

FOR COUPON BONDS
[Form P. D. 1381. For registered bonds use form P. D. 1382]
F O R M O F A D V I C E TO ACCOMPANY C A L L E D F O U R T H L I B E R T Y L O A N 4}^ P E R C E N T
B O N D S ( F O U R T H 4>l's) I N C O U P O N F O R M P R E S E N T E D F O R R E D E M P T I O N O N
OCTOBER 15, 1934
To the FEDERAL R E S E R V E BANK OF

or
T R E A S U R E R O F T H E U N I T E D S T A T E S , Washington, D. C :

P u r s u a n t t o t h e provisions of Treasury D e p a r t m e n t Circular N o . 509, dated
April 13, 1934, t h e undersigned presents a n d surrenders herewith for redemption
on October 15, 1934, $
, face a m o u n t of F o u r t h Liberty Loan bonds in

174

REPORT OF THE SECRETARY OF THE TREASURY

coupon form, with coupon due April 15, 1935, a n d all subsequent coupons
attached, as follows:
Number of bonds

Denomination

Serial numbers of bonds

Face
amount

$50
100
500
1,000
6,000
10,000
100,000

Total

a n d requests t h a t remittance covering p a y m e n t therefor be forwarded to t h e
undersigned a t t h e address indicated below.
Signature
N a m e (please print)
Address in full
Date:
FOR REGISTERED

BONDS

[Form P. D. 1382. For coupon bonds use form P. D. 1381]
F O R M OF A D V I C E TO ACCOMPANY C A L L E D F O U R T H L I B E R T Y L O A N 4>{ P E R C E N T
B O N D S ( F O U R T H 4 > ^ ' S ) I N R E G I S T E R E D F O R M P R E S E N T E D FOR R E D E M P T I O N
ON O C T O B E R 15, 1934
To the F E D E R A L R E S E R V E B A N K OF
T R E A S U R Y D E P A R T M E N T , D I V I S I O N OF L O A N S AND C U R R E N C Y ,

Washington, D. C :
P u r s u a n t to t h e provisions of Treasury D e p a r t m e n t Circular No. 509, dated
April 13, 1934, t h e undersigned presents a n d surrenders herewith for redemption
on October 15, 1934, $
, face a m o u n t of F o u r t h Liberty Loan bonds
in registered form, inscribed in t h e n a m e of
a n d duly
assigned t o " T h e Secretary of t h e Treasury for r e d e m p t i o n " , as follows:
Number of bonds

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

Serial numbers of bonds

Face
amount

Total

a n d requests t h a t remittance covering p a y m e n t therefor be forwarded to t h e
undersigned a t t h e address indicated below.
- Signature
N a m e (please print)
Address in full
Date:

REPORT OF THE SECRETARY OF THE TREASURY

175

Exhibit 13
Offering of Treasury bonds of 1946-48 {8 percent) and Treasiiry notes,
series A-1989 {2% percent)
On June 4, 1934, the Treasury offered for subscription Treasury bonds and
Treasury notes as described in the following circulars. In the related press
release it was stated that about $175,000,000 of Treasury certificates would
mature on June 15, 1934, and about $345,000,000 of Treasury notes would mature on August 1, 1934, and about $117,000,000 in interest payments on the
public debt would become due and payable on June 15, 1934.
[Department Circular No. 512]
TREASURY DEPARTMENT,

June 4, 1984.
The Secretary of the Treasury, pursuant to the authority of the Second Liberty
Bond Act, approved September 24, 1917, as amended, invites subscriptions, at
par and accrued interest, from the people of the United States, for 3 percent
bonds of the United States, designated Treasury bonds of 1946-48. The amount
of the offering is $300,000,000, or thereabouts, with the right reserved to the
Secretary of the Treasury to increase the offering by an amount sufficient to
accept all subscriptions for which Y^ percent Treasury certificates of indebtedness
of series TJ-1934, maturing June 15, 1934, or 2}i percent Treasury notes of
series B-1934, maturing August 1, 1934, are tendered in payment.
DESCRIPTION OF BONDS

The bonds will be dated June 15, 1934, and will bear interest from that date
at the rate of 3 percent per annum, payable semiannually, on December 15, 1934,
and thereafter on June 15 and December 15 in each year until the principal
amount becomes payable. They will mature June 15, 1948, 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 4 months'
. notice of redemption given in such manner as the Secretary of the Treasury
shall prescribe. In case of partial redemption the bonds to be redeemed will be
determined by such method as may be prescribed by the Secretary of the Treasury. From the date of redemption designated in any such notice, interest on
the bonds called for redemption shall cease.i * * *
APPLICATION AND ALLOTMENT

Applications will be received at the Federal Reserve banks and branches and
at tiEie Treasury Department, Washington, and unless made by an incorporated
bank or trust company, must be accompanied by payment in full or by payment
of 5 percent of the amount of bonds applied for. Banking institutions generally
will handle applications for subscribers, but only the Federal Reserve banks and
the Treasury Department are authorized to act as official agencies. The Secretary of the Treasury reserves the right to close the books as to any or all subscriptions or classes of subscriptions at any time without notice.
The Secretary of the Treasury reserves the right to reject any subscription,
in whole or in part, to allot less than the amount of bonds applied for, to make
allotments in full upon applications for smaller amounts and to make reduced
allotments upon, or to reject, applications for larger amounts, to make classified
allotments or to make allotments upon a graduated scale, or to adopt any or all
of said methods or such other methods of allotment and classification^ of allotments as shall be deemed by him to be in the public interest; and his action in
any or all of these respects shall be final. Allotment notices will be sent out
promptly upon allotment, and the basis of allotment will be publicly announced.
Subject to the reservations contained in the next preceding paragraph, allotments will be made as follows: Cash subscriptions for amounts up to and including $10,000 will be given preferred allotment, all other cash subscriptions will be
allotted on an equal percentage basis, and subscriptions for which pa3^ment is to
be tendered in Treasury certificates of indebtedness of series TJ-1934 or in
Treasury notes of series B-1934 wiU be allotted in full.
I Omitted portions are similar to corresponding sections of Department Circular No. 608, p. 168.
90353—35

-13

176

REPORT OF THE SECRETARY OF THE TREASURY
PAYMENT

Payment at par and accrued interest, if any, for bonds allotted must be made
or completed on or before June 15, 1934, or on later allotment. In every case
where payment is not so completed, the 5 percent payment with application shall,
upon declaration made by the Secretary of the Treasury in his discretion, be
forfeited to the United States. Any qualified depositary will be permitted to
make payment by credit for bonds allotted on cash subscriptions to it for itself
and its customers up to any amount for which it shall be qualified in excess of
existing deposits, when so notified by the Federal Reserve bank of its district.
Treasury certificates of indebtedness of series TJ-1934, maturing June 15, 1934,
will be accepted at par in payment for any bonds subscribed for and allotted.
Treasury notes of series B-1934, maturing August 1, 1934, with coupon dated
August 1, 1934, attached, wiU be accepted at par with an adjustment of accrued
interest as of June 15, 1934, iri paj^^ment for any bonds subscribed for and allotted.
Payment through surrender of Treasury certificates of indebtedness, of series
TJ-1934 or Treasury notes of series B-1934 should be made when the subscription is tendered.
GENERAL

PROVISIONS

As fiscal agents of the United States, Federal Reserve banks are authorized
and requested to receive subscriptions, to make allotments on the basis and up
to the amounts indicated by the Secretary of the Treasury to the Federal Reserve
banks of the respective districts, to issue allotment notices, to receive payment
for bonds allotted, to make delivery of bonds on full-paid subscriptions allotted,
and they may issue interim receipts pending delivery of the definitive bonds.
The Secretary of the Treasury may at any time, or from time to time, prescribe
supplemental or amendatory rules and regulations governing the offering, which
will be communicated promptly to the Federal Reserve banks.
HENRY MORGENTHAU,

Jr.,

Secretary of the Treasury.
[Department Circular No. 613]
^

TREASURY

DEPARTMENT,

June 4, 1984.
The Secretary of the Treasury, pursuant to the authority of the Second Liberty
Bond Act, approved September 24, 1917, as amended, offers for subscription, at
par and accrued interest, through the Federal Reserve banks, 2}^ percent notes
of the United States, designated Treasury notes of series A-1939. The amount
of the offering is $500,000,000, or thereabouts.
DESCRIPTION OF NOTES

The notes will be dated June 15, 1934, and wiU bear interest from that date
at the rate of 2)^ percent per annum, payable semiannually, on December 15,
1934, and thereafter on June 15 and December 15 in each year. They will
mature Jurie 15, 1939, and will not be subject to call for redemption prior to
maturity.
The notes shall be exempt, both as to principal and interest, from all taxation
(except estate or inheritance taxes) now or hereafter imposed by the United
States, any State, or any of the possessions of the United States, or by any local
taxing authority.
The notes will be accepted at par during such time and under such rules arid
regulations as shall be prescribed or approved by the Secretary of the Treasury
in payment of income and profits taxes payable at the maturity of the notes. °
The notes will be acceptable to secure deposits of public moneys, but will not
bear the circulation privilege.
Bearer notes with interest coupons attached will be issued in denominations of
$100, $500, $1,000, $5,000, $10,000, and $100,000. The notes wiU not be issued
in registered form.
APPLICATION AND ALLOTMENT

Applications will be received at the Federal Reserve banks and branches and
at the Treasury Department, Washington, and unless made by an incorporated
bank or trust company, must be accompanied by payment in full or by payment
of 5 percent of the amount of notes applied for. Banking institutions generally
will handle applications for subscribers, but only the Federal Reserve banks and
the Treasury Department are authorized to act as official agencies. The Secre

REPORT OF THE SECRETARY OF THE TREASURY

177

tary of the Treasury reserves the right to close the books as to any or all subscriptions or classes of subscriptions at any time without notice.
The Secretary of the Treasury reserves the right to reject any subscription, in
whole or in part, to allot less than the amount of notes applied for, to make allotments in full upon applications for smaller amounts and to make reduced allotments upon, or to reject, applications for larger amounts, to make classified
allotments or to make allotments upon a graduated scale, or to adopt any or all
of said methods or such other methods of allotment and classification of allotments as shall be deemed by him to be in the public interest; and his action in any
or all of these respects shall be final. Allotment notices will be sent out promptly
upon allotment, and the basis of allotment will be publicly announced.
Subject to the reservations contained in the next preceding paragraph, allotments will be made as follows: Subscriptions for amounts up to and including
$10,000 will be given preferred aUotment, and all other subscriptions will be
allotted on an equal percentage basis.
PAYMENT

Payment at par and accrued interest, if any, for notes aUotted must be made
or completed on or before June 15, 1934, or on later aUotment. In every case
where payment is not so completed, the 5 percent payment with application shall,
upon declaration made by the Secretary of the Treasury in his discretion, be forfeited to the United States. Any qualified depositary wiU be permitted to make
payment by credit for notes aUotted on cash subscriptions 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.
GENERAL PROVISIONS

As fiscal agents of the United States, Federal Reserve banks are authorized
and requested to receive subscriptions, to make allotments on the basis and up to
the amounts indicated by the Secretary of the Treasury to the Federal Reserve
banks of the respective districts, to issue allotment notices, to receive payment
for notes allotted, to make delivery of notes on full-paid subscriptions aUotted,
and they may issue interim receipts pending delivery of the definitive notes.
The Secretary of the Treasury may at any time, or from time to time, prescribe
supplemental or amendatory rules and regulations governing the offering, which
will be communicated promptly to the Federal Reserve banks.
HENRY MORGENTHAU,

Jr.,

Secretary of the Treasury.
Exhibit 14
Subscriptions and allotments. Treasury bonds of 1946-48 and Treasury notes, series
A-1989 {from press releases, June 6, 8, and 12, 1934i revised^)
Secretary Morgenthau announced that the subscription books for the current
offering of 2}^ percent Treasury notes of series A-1939 closed at the close of busi-.
ness June 5, 1934.
The subscription books for the offering of 3 percent Treasury bonds of 1946-48
also closed at the close of business June 5 for the receipt of cash subscriptions, but
remained open through June 8 for the receipt of subscriptions for which payment
was tendered in Treasury certificates of indebtedness of series TJ-1934, maturing
June 15, 1934, or in Treasury notes of series B-1934, maturing August 1, 1934.
Reports received from the Federal Reserve banks show that cash subscriptions
for the Treasury bonds aggregated $2,514,503,500. Cash subscriptions in
amounts up to and including $10,000 were allotted in full, and those in amounts
over $10,000 were allotted 10 percent, but not less than $10,000 on any one subscription. In addition to such allotments on cash subscriptions, all subscriptions
for which payment was tendered in Treasury certificates of indebtedness of series
TJ-1934, maturing June 15, 1934, or Treasury notes of series B-1934, maturing
August 1, 1934, were aUotted in fuU.
For the offering of Treasury notes, which was for $500,000,000, or thereabouts,
total subscriptions aggregated $4,931,830,600. Subscriptions in amounts up to
and including $10,000 were aUotted in fuU and those in amounts over $10,000 were
aUotted 9 percent, but not less than $10,000 on any one subscription.
I Revised July 12,1934.

178

REPQiaT O^ THE SECRETARY OF THE

THEASUI^Y

Subscriptions and allotments were divided among the several Federal Reserve
districts and the Treasury as foUows:
Total cash
subscriptions received

Federal Reserve district

Exchange
subscriptions received (June
certificates)

Exchange
subscriptions received
(August
notes)

Total subscriptions
received

Total subscriptions
allotted

T R E A S U R Y BONDS OF 1946-48
Boston.
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Treasury ! ..' .

$147,178,300
1, 099, 970, 950
108, 265, 360
148,941,800
73,129,950
111, 458, 750
299, 215,950
77,459,760
24,797,000
45. 276,350
125,996,260
240, 552, 700
12, 260,400

$1, 284,000
123,040,500
799, 500
1,113, 500
205, 000
775, 000
35, 376, 000
3, 676, 500
609. oob
2,950,000
892, 500
284,000
923,000

$5, 655, 500 $154,017,800
247, 674, 400 1, 470, 685,850
111, 868, 850
2, 804, 000
152, 098, 300
2, 043, 000
1,401, 800
74, 736, 750
821, 000
113,054,750
38, 737,100
373, 329.050
4, 291, 700
85, 427, 950
4,143, 600
29, 549. 600
2, 772, 400
50,998, 750
1, 591, 000
128, 479, 760
1, 088, 600
241,925, 300
4,106,000
17, 289, 400

$27,941,800
495, 250,900
18,121, 350
26, 660, 800
12. 956, 250
16,166,750
119,170, 850
22,892, 350
10, 278, 600
17, 350,400
22, 246,800
29,149,800
6, 322,400

Total

2,514, 503,600

171,928, 500

317,030,100 3, 003,462,100

1 824,608,050

T R E A S U R Y N O T E S , SERIES A-1939
Boston
NewYork.
Philadelphia
Cleveland.
Richmond
Atlanta
Chicago..
St. Louis
Minneapolis.
Kansas City
Dallas
S a n Francisco
Treasury

Total

$262, 781, 000
2, 411, 373, 400
256, 327,100
271, 261,100
190, 524, 200
232.441, 500
561.442, 500
139, 727,000
67, 570, 000
96. 854, 700
215, 679, 700
225,840, 400
8,000

$30,139,100
235,910, 300
27, 771, 600
28, 434, 200
20, 209, 400
28,918, 300
65, 893,000
18, 029, 500
9,170, 600
14, 795, 600
26, 381,900
22,860, 400
8,000

4,931,830, 600

628, 521, 700

1 Includes $171,928,600 allotted on exchange subscriptions (June certificates) and $317,030,100 allotted on
exchange subscriptions (August notes).

Issues of Treasury bills
Exhibit 15
Inviting tenders for Treasury bills dated November 1, 1988, and maturing January
31, 1984 {press release, Oct. 26, 1988)
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 p. m..
Eastern Standard time, on Monday, October 30, 1933. Tenders will not be
received a t the Treasury Department, Washington.
The Treasury bUls will be dated November 1, 1933, and will mature on January 31, 1934, and on the maturity date the face amount wiU be payable without
interest. They will be issued in bearer form only, and in amounts or denominations of $1,000, $10,000, $100,000, $500,000, and $1,000,000 (maturity value).
It is urged that tenders be made on the printed forms and forwarded in the
special envelops 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.

REPORT Oi' Tim SECRETARY OP THE THEASUilY

179

Tenders will be accepted without cash deposit from incorporated banks and
trust companies and from responsible and recognized dealers in investment securities. Tenders from others must be accompanied by a deposit of 10 percent of
the face amount of Treasury bills applied for, unless the tenders are accompanied by an express guaranty of payment by an incorporated bank or trust
company.
Immediately after the closing hour for receipt of tenders on October 30, 1933,
all tenders received at the Federal Reserve banks or branches thereof up to the
closing hour will be opened and public announcement of the acceptable prices
will follow as soon as possible thereafter, probably on the following morning.
The Secretary of the Treasury expressly reserves the right to reject any or all
tenders or parts of tenders, and to allot less than, the amount applied for, and
his action in any such respect shall be final. Those submitting tenders will be
advised of the acceptance or rejection thereof. Payment at the price offered for
Treasury bills allotted must be made at the Federal Reserve banks in cash or
other immediately available funds on November 1, 1933.
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 allow;ed as a deduction, or otherwise recognized,
for the purposes of any tax now or hereafter imposed by the United States or any
of its possessions.
Treasury Department Circular No. 418, as amended, and this notice prescribe
the terms of the Treasury bills and govern the conditions of their issue. Copies
of the circular may be obtained from any Federal Reserve bank or branch thereof.
Exhibit 16
Acceptance of tenders for Treasury bills dated November 1, 1988, and maturing
January 81, 1984 {press release, Oct. 81, 1988)
Acting Secretary of the Treasury Acheson announced today that the tenders
for $60,000,000, or thereabouts, of 91-day Treasury bills, dated November 1,
1933, and maturing January 31, 1934, which were offered on October 26, were
opened at the Federal Reserve banks on October 30, 1933.
The total amount applied for was $232,713,000, of which $60,180,000 was
accepted. The accepted bids ranged in price from 99.955, equivalent to a rate
of about 0.18 percent per annum, to 99.939, equivalent to a rate of about 0.24
percent per annum, on a bank discount basis. Only part of the amount bid for
at the latter price was accepted. The average price of Treasury bills to be
issued is 99.945 and the average rate is about 0.22 percent per annum on a bank
discount basis.

180

REPORT OF THE SECRETARY OF THE TREASURY
Exhibit 17

Press releases pertaining to Treasury bill issues subsequent to October 25,
1933, were similar in form to the foregoing and are, therefore, not here reproduced. The essential details regarding each issue are summarized in the following
table:
Summary of information contained in press releases issued in connection wiih
Treasury bills offered from Nov. 1, 1983, to June SO, 1984
B i d s accepted

D a t e of issue

1933
Nov. 1 .
Nov. 8
N o v . 15
N o v . 22
N o v . 29
Dec. 6
Dec. 20
D e c . 27

D a t e of m a t u r i t y

Total
D a y s to a m o u n t
m a t u - applied for
(in t h o u rity
sands)

Highest

Lowest

Price (per E q u i v a l e n t
ratei
hundred)
(percent)

Price (per
hundred)

Equivalent
rate «
(percent)

1934
J a n . 31
Feb. 7 ..
F e b ; 14
F e b . 21
F e b . 28
Mar. 7
M a r . 21
M a r . 28

91
91
91
91
91
91
91
91

$232,713
181,015
170,682
207,445
187, 069
182,760
282,143
271,832

$99.955
a 99.949
99.939
3 99.907
99.907
4 99.894
99. 851
fi 99.874

0.178
.202
.241
.368
.368
.419
.589
.498

$99.939
99.937
99.876
99.884
99.886
99.811
99.808
99.815

0.241
.249
.491
.459
.451
.748
.760
.732

Apr. 4. .
A p r . 11
A p r . 18
A p r . 25
May 2
May 9
Aug. 8
M a y 16
Aug. 15
M a y 23
Aug. 29. _
Sept. 5
J u n e 20
J u n e 27
Sept. 26
July 3
Oct. 3
J u l y 11
Oct. 10
J u l y 18
Oct. 17
J u l y 25
Oct. 24
Aug. 1
Oct. 31
Aug. 8
Nov. 7
A u g . 15
N o v . 14
A u g . 22
N o v . 21
D e c . 19
D e c . 26 .

91
91
91
91
91
91
182
91
182
91
182
182
91
91
182
90
182
91
182
91
182
91
182
91
182
91
182
91
182
91
182
182
182

384, 619
252,825
289,397
303,560
381,422
302,858
244, 427
230,078
178,326
307.110
420,115
393,054
344,987
194, 789
138, 221
184,356
117,990
182.226
147,811
164, 508
150,816
184,572
145,331
193,076
198,699
156,841
199, 266
172,335
153, 646
190,788
164,466
234,994
251,941

99 848
99 900
99 862
8 99.863
99.860
99.900
99. 650
99.850
99. 723
99. 864
7 99.750
99.809
99.987
99.987
99.929
8 99.983
99. 924
e 99. 987
99.914
99.987
10 99.914
99.987
" 99.915
99. 990
12 99. 920
99. 987
99.935
100
99.940
100
99.949
99.976
99. 976

.601
.396
.646
.542
.554
.396
.692
.593
.647
.538
.495
.378
.051
.051
.140
.068
.160
.051
.170
.051
170
051
168
040
158
.051
.129

99.843
99.824
99. 822
99.820
99.811
99 826
99.510
99 826
99 469
99.849
99.676
99. 773
99 975
99 977
99.890
99.978
99.895
99. 980
99. 903
99. 977
99.900
99.978
99.903
99, 980
99. 916
99.980
99.925
99. 982
99.926
99.983
99.931
99.956
99.958

.621
.696
.704
.712
.748
.688
.969
.688
.050
• .597
.641
.449
.099
.091
.218
.088
208
.079
.192
.091
.198
.087
.192
.079
.168
.079
.148
.071
.146
.067
.136
.087
.083

'1934
Jan. 3
J a n . 10
J a n . 17
J a n . 24 .
J a n 31
Feb. 7
Do
F e b . 14
Do
F e b . 21
F e b . 28
Mar. 7
Mar. 21...
M a r . 28
Do
Apr. 4 <
Do
A p r . 11
Do
A p r . 18
.....
Do
A p r . 25
Do
M a y 2. _
...
Do
M a y 9. .
Do
M a y 16
Do
M a y 23. .
Do
J u n e 20
J u n e 27

.. .

. .
. .

.119
.101
.047
.047

1 Bank discount rate.
2 Except for 1 bid of $25,000 at $99,975, equivalent to an interest rate of 0.099.
3 Except for 1 bid of $200,000 at $99,950, equivalent to an interest rate of 0.198.
* Except for 1 bid of $50,000 at $99,975, equivalent to an interest rate of 0.099.
» Except for 1 bid of $10,000 at $99,950, equivalent to an interest rate of 0.198.
6 Except for 1 bid of $10,000 at $99,976, equivalent to an interest rate of 0.095.
7 Except for 1 bid of $3,000 at $99,861, equivalent to an interest rate of 0.275.
8 Except for 2 bids aggregating $21,000, at an average price of $100.
fl Except for 1 bid of $505,000 at $100.
10 Except for 2 bids totaling $55,000 at an average price of $99,925, equivalent to an interest rate of 0.147.
11 Except for 2 bids totaling $65,000 at an average price of $99,949, equivalent to an interest rate of 0.101.
12 Except for 1 bid of $5,000 at $99,935, equivalent to an interest rate of 0.129.

181

REPORT OF THE. SECRETARY OP THE TREASURY

Summary of information contained in press releases issued in connection with
Treasury bills offered from Nov. 1, 1938, to June 80, 1934
Bids accepted

Date of issue

.\ verage
Amount (in
thousands) Price (per Equivalent
rate i
hundred)
(percent)

Date of press releases

1933
Nov. 1.
Nov. 8...
Nov. 15
Nov. 22
Nov. 29
Dec. 6
Dec. 20
Dec. 27
Jan. 3

Date of
closing

1933
$60,180
75, 335
75. 295
60, 063
100,027
100, 050
100, 263
100,890

.$99. 945
99. 940
99.S99
99. 892
99.892
99.847
99.814
99.816

0.216
.236
.398
.426
,429
.604
.735
.729

100,990

99.843

.621

1933 .

Oct. 26 and 31
Nov. 1 and 4.
Nov. 9 and 14
Nov. 16 and 21
Nov. 23 and 28
Nov. 29 and Dec. 6..
Dec. 14 and 19..
Dec. 20 and 23..

Oct. 30.
Nov. 3.
Nov. 13.
Nov. 20.
Nov. 27.
Dec. 4.
Dec. 18.
Dec. 22.

Dec. 27 and 30..

Dec. 29.

1934
1934

Jan. 10
Jan. 17
Jan. 24
Jan. 31
Feb.7
Do
Feb. 14
Do.
Feb. 21
Feb. 28.
Mar. 7
Mar. 21
Mar. 28
Do.
Apr. 4
Do
Apr. 11
Do.
Apr. 18
Do
Apr. 26
Do
May 2
Do
May 9...
Do
May 16
Do
May 23
Do
June 20
June 27

100, 050
125. 340
125.126
150.320
125,493
50.078
75,007
75,044
74,955
75, 088
100. 236
100.110
•50.091
50. 525
50,151
50,096
50, 257
50, 225
75,047
50, 033
75.325
50,040
75,056
50,037
75,114
50,173
50, 254
50, 080
50,457
50,140
75, 226
75, 353

99.843
99.831
99.831
99.819
99.834
99. 524
99. 833
99. 501
99.855
99. 688
99. 781
99. 978
99. 980
99. 904
99. 981
99. 902
99. 982
99. 908
99. 980
99. 906
99.980
99. 907
99.981
99.918
99, 983
99. 926
99.984
99. 929
99. 985
99. 936
99. 963
99.966

.622
.670
.669
.717
.656
.942
.662
.988
.575
.617
.434
,089
,080
.190
.077
.194
.073
.182
.079
.187
.078
.185
.074
.162
.068
.146
.063
.140
.058
.127
.074
.067

Jan. 4 and 9 . . .
Jan. 11 and 16.
•Ian. 18 and 23.
Jan. 25 and 30.
Feb. 1 and 6...
.do..
Feb. 7 and 10
.....do
....
Feb. 16 and 20
Feb. 23 and 27
Mar. 2 and 5
Mar. 16 and 20.
Mar. 23 and 27
do
Mar. 30 and Apr. 3..
.do..
Apr. 6 and 10
do....
Apr. 13 and 17
do
Apr. 20 and 24
do..
Apr. 27 and May 1.
.do..
May 4 and 8 . . .
....do
May 11 and 15.
.do..
May 18 and 22.
do
June 15 and 19..
June 22 and 26..

Jan. 8.
Jan. 15.
Jan. 22.
Jan. 29.
Feb. 5.
Do.
Feb. 9.
Do.
Feb. 19.
Feb. 26.
Mar. 5.
Mar. 19.
Mar. 26.
Do.
Apr. 2.
Do.
Apr. 9.
Do.
Apr. 16.
Do.
Apr. 23.
Do.
Apr. 30.
Do.
May 7.N
Do.
May 14.
Do.
May 21.
Do.
June 18.
June 25.

1 Bank discount rate.

Exhibit 18
General circular governing the sale and issue of Treasury bills
[Department Circular No. 418, as amended]
TREASURY

DEPARTMENT,

May 3, 19841. 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_Treasury biUs so offered and the tenders made
1 The statute appears in T. D. 4431 on pp. 3 and 4 of this circular. (See p. 184 of this report.)

182

REPORT OF THE SECRETARY OF THE TREASURY

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.
D E S C R I P T I O N O F T R E A S U R Y 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
dates of the original issue and the maturity thereof will be stated thereon. Treasury bills are payable at maturity upon presentation to the Treasurer of the
United States in Washington or to any Federal Reserve bank.
3. Treasurv 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 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
Treasury bills shall be allowed as a deduction, or otherwise recognized, for the
purposes of any tax now or hereafter imposed by the United States or any of
its possessions,^ However, taxpayers making income tax returns are required
to report in their returns, for information purposes, the number and amount of
obligations and securities of the United States owned by them and the income
received therefrom. In reporting in their income tax returns the amount of
Treasury biUs owned by them and the income received therefrom, taxpayers will
be governed by the provisions of Treasury Decision 4431 which appears on pages
3 and 4 of this circular. It 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
3^ear 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.
P U B L I C NOTICE

6. When tenders are to bc invited, public notice thereof will be given by the
Secretary of the Treasury prior to the date of issue of the Treasury bills. In
such public notice there will be set forth (a) the amount of the Treasury bills
for which tenders are then invited, (b) the date or dates of issue, (c) the date or
dates when such bills will become due and payable, (d) the closing hour and date
for the receipt of tenders at the Federal Reserve banks, and (e) the date or dates
on which payment for accepted tenders must be made.
7. Tenders, in response to any such public notice, will be received only at the Federal
Reserve banks, or branches thereof, and unless received before the fixed time of closing
will be disregarded.—No tender will be accepted for an amount less than $1,000
(maturity value), and each tender must be for an amount in multiples of $1,000
(maturity value). The price or prices offered by the subscriber for the amount or
amounts (at maturity value) applied for must be stated, and must be expressed
on the basis of 100, with not more than three decimal places, e. g., 99.125. Fractions must not be used.
* For Treasury bills issued prior to June 17,1930, see Department Circular No. 418, dated Nov, 22, 1929,
and T. D. 4276 annexed to that circular,

HEPOJIT OF THE SECRETARY OF THE TREASURY

183

8. Tenders should be submitted on the prescribed forms and inclosed in special
envelops, securely sealed. On application, the forms and special envelops will be
supplied by the Federal Reserve bank of the district in'^which the subscriber is
located. If a special envelop is not available, the inscription "Tender for Treasury Bills" should be placed on the envelop 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 percent 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 percent 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. In considering the acceptance of tenders, the highest prices offered will be
accepted in full down to the amount required, and if the same price appears in
two or more tenders and it is necessary to accept only a part of the amount offered
at such price, the amount accepted at such price will be prorated in accordance
with the respective amounts applied for. However, the Secretary of the Treasury
expressly reserves the right on any occasion to reject any or all tenders or parts
of tenders; and to award less than the amount applied for; and any action he may
take in any such respect or respects shall be final.
11. All payments which may be due on account of accepted tenders must be
made to the appropriate Federal Reserve bank in cash or other funds that will
be immediately available on the date specified: Provided, however, That the
Secretary of the Treasury, in his discretion, on any occasion inviting tenders for
Treasury bills, may permit any qualified depositary to make such payments by
credit 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.
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 bUls.
DESTROYED, MUTILATED, OR DEFACED TREASURY BILLS

13. No relief will be granted on account of the loss or theft of Treasury biUs
issued hereunder. Relief wiU 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.

^ HENRY MORGENTHAU,

Jr.,

Secretary of the Treasury.

184

REPORT OF THE SECRETARY OF THE TREASURY
(T. D. 4431)
Income Tax—Exemption of Treasury Bills
TREASURY DEPARTMENT,
O F F I C E OF C O M M I S S I O N E R OF I N T E R N A L R E V E N U E ,

Washington, D. C , May 3, 1934.
To Collectors of Internal Revenue and others concerned:
Attention is invited to t h e act entitled " A n act providing certain exemptions
from taxation for Treasury bills", approved J u n e 17. 1930 (46 S t a t . L. 775),
which amends section 5 of the Second Liberty Bond Act, as amended (46 S t a t .
L. 19), by adding a t t h e end thereof a new subdivision known as subdivision (d).
This, new subdivision provides th'at any gain from t h e sale or other disposition of
Treasury bills issued after t h e e n a c t m e n t of t h e act approved June 17, 1930, shall
be exempt from all Federal, State, and local taxation (except estate or inheritance taxes), and t h a t no loss from t h e sale or other disposition of such Treasury
bills shall be allowed as a deduction, or otherwise recognized, for t h e purposes of
any tax imposed by t h e United States or any of its possessions. Section 5 of t h e
Second Liberty Bond Act, as so amended, reads as follows, the tax-exemption
provisions being contained in subdivisions (b) and (d) thereof:
" S E C . 5. (a) T h a t in addition to t h e bonds a n d notes authorized b y sections
1 and 18 of this act, as amended, t h e Secretary of the Treasury is authorized to
borrow from time to time, on t h e credit of t h e United States, for the purposes of
this act, to provide for the purchase or redemption before m a t u r i t y of any certificates of indebtedness or Treasury biUs issued hereunder, and to meet public
expenditures authorized by law, such sum or sums as in his j u d g m e n t m a y be
necessary, and to issue therefor (1) certificates of indebtedness of t h e United
States a t not less t h a n p a r and a t such r a t e or rates of interest, payable a t such
time or times as he m a y prescribe; or (2) Treasury bills on a discount basis a n d
payable a t m a t u r i t y without interest. Treasury bills to be issued hereunder shall
be offered for sale on a competitive basis, under such regulations a n d upon such
terms and conditions as t h e Secretary of t h e Treasury m a y prescribe, and t h e
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, shaU be payable a t such time not e x ceeding 1 year from t h e date of issue, and m a y be redeemable before m a t u r i t y
upon such terms and conditions as t h e Secretary of t h e Treasury m a y prescribe.
Treasury bills issued hereunder shall not be acceptable before m a t u r i t y in p a y m e n t of interest or of principal on account of obligations of foreign governments
held by t h e United States of America. T h e sum of t h e p a r value of such certificates and Treasury bills outstanding hereunder a n d under section 6 of t h e First
Liberty Bond Act shall not a t 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 t h i s subdivision becomes law) shall be exempt, both as to
principal a n d interest, from aU taxation (except estate and inheritance taxes)
now or hereafter imposed by t h e United States, any State, or any of t h e possessions of t h e United States, or by any local taxing a u t h o r i t y ; a n d t h e a m o u n t
of discount a t which Treasury bills are originally sold by the United States shall
be considered to be interest within t h e meaning of this subdivision.
"(c) Wherever t h e words 'bonds a n d notes of t h e United S t a t e s ' , or ' b o n d s
and notes of t h e Government of t h e United S t a t e s ' , or ' b o n d s or notes of t h e
United S t a t e s ' are used in t h e Federal Reserve Act, as amended, they shall be
held to include certificates of indebtedness and Treasury biUs issued hereunder.
" (d) Any gain from t h e sale or other disposition of Treasury bills issued hereunder (after t h e date upon which this subdivision becomes law) shall be exempt
from all.taxation (except estate or inheritance taxes) now or hereafter imposed
by t h e United States, any State, or any of the possessions of t h e United States,
or by any local taxing a u t h o r i t y ; a n d no loss from t h e sale or other disposition
of such Treasury bills shall be allowed as a deduction, or otherwise recognized,
for the purposes of any tax now or hereafter imposed by t h e United States or
any of its possessions."
T h e report of t h e Committee on Ways a n d , M e a n s (H. R e p t . No. 1759, accompanying H . R. 12440, 71st Cong.) shows t h a t it is t h e purpose of t h e act
approved J u n e 17, 1930, to obviate t h e necessity, which existed under t h e law
prior to its a m e n d m e n t by such act, of keeping a complicated system of book-

REPORT OF THE SECRETARY OF THE TREASURY

185

keeping 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 1932, which
provides in part:
"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 the taxes
imposed by this title; * * *."
• Article 81 of regulations 77 promulgated under the Revenue Act of 1932,
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 1932 and regulations 77, 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
"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.
GUY T . HELVERING,

Commissioner of Internal Revenue.

Approved:
HENRY MORGENTHAU, Jr.,

Secretary of the Treasury.

Miscellaneous
Exhibit 19
Receipt of Liberty bonds, Treasury bonds, and Treasury notes for Federal estate or
inheritance taxes
[Sixth supplement to Department Circular No. 225]
TREASURY

DEPARTMENT,

January 12, 1934.
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 (U. S. C , title 31,
sec. 765). Said circular has been supplemented on June 30, 1922, July 31, 1923,
October 15, 1925, October 30, 1926, and February 14, 1931, 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 percent per annum
which come within the provisions of said Department Circular No. 225, dated

186

REPORT OF THE SECRETARY OF THE TREASURY

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 i H percent bonds of 1932-47..
(b) First Liberty Loan second co'nverted 4H percent bonds of
1932-47.
(c) Fourth Liberty Loan 4H percent bonds of 1933-38..
(d) iH percent Treasury bonds of 1947-52
(e) iH-ZH percent Treasury bonds of 1943-45, until Oct. 16,
1934,

May 9,1918
Oct. 24,1918

Short title

First 4H's.
First second 4H's.
Fourth 4H's.
.....do
Oct. 16,1922 Treasury bonds of 1947-52.
Oct. 16.1933 Treasury bonds of 1943-45.

2. Treasury bonds of 1943-45 are dated October 15, 1933, and bear interest
at the rate of 4J^ percent per annum until October 15, 1934, and thereafter at
Syi percent. The computing of the required period of ownership will begin on
such date, on or after October 15, 1933, as the decedent acquired such bonds,
and they will be receivable for Federal estate or inheritance taxes under Department Circular No. 225, dated January 31, 1921, as supplemented, only between
the termination of any such required period of ownership and October 15, 1934.
3. For 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.
HENRY MORGENTHAU,

Jr.,

Secretary of the Treasury.
Exhibit 20
Sections 4 and 5 of the Federal Farm Mortgage Act (Public No. 88, 73d Cong.,
approved Jan. 81, 1934), guaranteeing principal and interest of Federal Farm
Mortgage Corporation bonds by the United States
SEC. 4. (a) With the approval of the Secretary of the Treasury, the Corporation is authorized to issue and have outstanding at any one time bonds in an
aggregate amount not exceeding $2,000,000,000. Such bonds shall be in such
forms and denominations, shall have such maturities, shall bear such rates of
interest, shall be subject to such terms and conditions, and shall be issued in such
manner and sold at such prices, as may be prescribed by the Corporation, with the
approval of the Secretary of the Treasury. Such bonds shall be fully and unconditionally guaranteed both as to interest and principal by the United States
and such guaranty shall be expressed on the face thereof, and such bonds shall be
lawful investments, and may be accepted as security, for all fiduciary, trust, and
public funds the investment or deposit of which shall be under the authority or
control of the United States or any officer or officers thereof. In the event that
the Corporation shall be unable to pay upon demand, when due, the principal of
or interest on, such bonds, the Secretary of the Treasury shall pay to the holder
the amount thereof which is. hereby authorized to be appropriated, out of any
moneys in the Treasury not otherwise appropriated, and thereupon to the
extent of the amount so paid the Secretary of the Treasury shall succeed to all
the rights of the holders of such bonds. The Secretary of the Treasury, in his
discretion, is authorized to purchase any bonds of the Corporation issued hereunder, and for such purpose the Secretary of the Treasury is authorized to use
as a public debt transaction the proceeds from the sale of any securities hereafter
issued under the Second Liberty Loan Act, as amended, and the purposes for
which securities may be issued under such act, as amended, are extended to
include any purchases of the Corporation's bonds hereunder. The Secretary of
the Treasury may, at any time, sell any of the bonds of the Corporation acquired
by him under this section. All redemptions, purchases, and sales by the Secretary
of the Treasury of the bonds of the Corporation shall be treated as public debt
transactions of the United States. Such bonds shall be fully and adequately
secured by such assets of the Corporation and in such manner as shall be prescribed by its board of directors. The Corporation shall have power to purchase
such bonds in the open market at any time and at any price. On such terms and
conditions as may be agreed upon, the Corporation may exchange such bonds,
upon application of any Federal land bank for consolidated farm loan bonds of
equal face value issued under the Federal Farm Loan Act, as amended, and may
exchange such consolidated farm loan bonds held by it for bonds of the Corporation of equal face value.

REPORT OF THE SECRETARY OF THE TREASURY

187

(b) The Corporation is further authorized to purchase from time to time,
for cash, such consolidated farm loan bonds at such prices, and upon such terms
as may be approved by the board of directors of the Corporation, to make loans
to Federal land banks on the security of such consolidated bonds, and to invest
its funds in mortgage loans made under section 32 of the Emergency Farm Mortgage Act of 1933, as amended.
(c) In order to furnish bonds for delivery by the Federal Farm Mortgage
Corporation, the Secretary of the Treasury is hereby authorized to prepare
suitable bonds in such form, subject to the provisions of this act, as the board
of directors may approve, such bonds when prepared to be held in the Treasury
subject to delivery upon order of the Corporation. The engraved plates, dies,
bedpieces, and so forth, executed in connection therewith shall remain in the
custody of the Secretary of the Treasury. The Corporation shall reimburse the
Secretary of the Treasury for any expenditures rnade in the preparation, custody,
and delivery of such bonds.
SEC. 5. After 90 days after the enactment of this act, no Federal land bank
shall issue any bonds under the provisions of the last paragraph of section 32 of
the Federal Farm Loan Act, as amended, subject to the guarantee of interest on
such bonds by the United States except for the purpose of refinancing any bond
which is or has been issued subject to such guarantee of interest.

Exhibit 21
Section 1 of Public No.. 178, Seventy-third Congress, approved April 27, 1984,
guaranteeing principal and interest of the Home Owners' Loan Corporation bonds by
ihe United States
Be it enacted by the Senate and House of Representatives of the United States of
America in Congress assembled. That (a) section 4 (c) of the Home Owners' Loan
Act of 1933 is amended to read as follows:
"(c) The Corporation is authorized to issue bonds in an aggregate amount
not to exceed $2,000,000,000, which may be sold by the Corporation to obtain
funds for carrying out the purposes of this section, or exchanged as hereina|ter
. provided. Such bonds shall be in such forms and denominations, shaU mature
within such periods of not more than eighteen years from the date of their issue,
shall bear such rates of interest not exceeding 4 per centum per annum, shall be
subject to such terms and conditions, and shall be issued in such manner and sold
at such prices, as may be prescribed by the Corporation, with the approval of the
Secretary of the Treasury. Such bonds shall be fully and unconditionaUy guaranteed both as to interest and principal by the United States, and such guaranty
shall be expressed on the face thereof, and such bonds shall be lawful investments,
and may be accepted as security, for all fiduciary, trust, and public funds, the
investment or deposit of which shall be under the authority or control of the
United States or any officer or officers thereof. In the event that the Corporation shall be unable to pay upon demand, when due, the principal of, or interest
on, such bonds, the Secretary of the Treasury shall pay to the holder the amount
thereof which is hereby authorized to be appropriated out of any moneys in the
Treasury not otherwise appropriated, and thereupon to the extent of the amount
so paid the Secretary of the Treasury shall succeed to all the rights of the holders
of such bonds. The Secretary of the Treasury, in his discretion, is authorized to
purchase any bonds of the Corporation issued under this subsection which are
guaranteed as to interest and principal, and for such purpose the Secretary of
the Treasury is authorized to use as a public debt transaction the proceeds from
the sale of any securities hereafter issued under the Second Liberty Bond Act,
as amerided, and the purposes for which securities may be issued under such act,
as ahlended, are extended to iriclude any purchases of the Corporation's bonds
hereunder. The Secretary of the Treasury iriay, at any time, sell any of the
bonds of the Corporation acquired by hiiri urider this subsection. All redemptions, purchases, and sales by the Secretary of the Treasury of the bonds of the
Corporation shall be treated as public debt transactions of the United States.
The bonds issued b}^ the Corporation under this subsection shall be exempt, both
as to principal and interest, from all taxation (except surtaxes, estate, inheritance,
and gift taxes) now or hereafter imposed by the United States or any District,
Territory, dependency, or possession thereof, or by any State, county, municipality, or local taxing authority. The Corporation, including its franchise, its
capital, reserves and surplus, and its loans and income, shall likewise be exempt

188

REPORT OF THE SECRETARY OF THE TREASURY

from such taxation; except that any real property of the Corporation shall be
subject to taxation to the same extent, according to its value, as other real property is taxed. No such bonds shall be issued in excess of the assets of the Corporation, including the assets to be obtained from the proceeds of such bonds,
but a failure to comply with this provision shall not invalidate the bonds or the
guaranty of the same. The Corporation shall have power to purchase in the open
market at any time and at any price not to exceed par any of the bonds issued
by it. Any such bonds so purchased may, with the approval of the Secretary of
the Treasury, be sold or resold at any time and at any price. For a period of six
months after the date this subsection, as amended, takes effect, the Corporation
is authorized to refund any of its bonds issued prior to such date or any bonds
issued after such date in compliance with commitments of the Corporation outstanding on such date, upon application of the holders thereof, by exchanging
therefor bonds of an equal face amount issued by the Corporation under this
subsection as amended, and bearing interest at such rate as may be prescribed
by the Corporation with the approval of the Secretary of the Treasury; but such
rate shall not be less than that first fixed after this subsection, as amended, takes
effect on bonds exchanged by the Corporation for home mortgages. For the
purpose of such refunding the Corporation is further authorized to increase its
total bond issue in an amount equal to the amount of the bonds so refunded.
Nothing in this subsection, as amended, shall be construed to prevent the Corporation from issuing bonds in compliance with commitments of the Corporation
on the date this subsection, as amended, takes effect."
(b) The amendments made by subsection (a) of this section (except with
respect to refunding) shall not apply to any bonds heretofore issued by the Home
Owners' Loan Corporation under such section 4 (c), or to any bonds hereafter
issued in compUance with commitments of the Corporation outstanding on the
date of enactment of this act.
Exhibit 22
[Public No. 144, 73d Cong., S. 1528]

Ari act to amend section 3702, Revised Statutes
Be it enacted hy the Senate and liouse of Representatives of the United
States of America in Congress assembled, That section 3702 of the Revised
Statutes is hereby amended by adding at the end thereof the following paragraphs:
"(2) Whenever it appears to the Secretary of the Treasury by clear and
unequivocal proof that any interest-bearing bond of the United States, fully
identified by number and description, has, without bad faith on the part of the
owner, been lost to such owner under such circumstances and for such period
of time after it has matured or has become redeemable pursuant to a call for
redemption as in the judgment of the Secretary would indicate that it had been
destroyed or irretrievably lost, is not held by any person as his own property,
and will not be presented by a bona fide holder for value, the Secretary of the
Treasury is authorized to make payment of the amount which would have been
due on such bond had it been presented at the time it became due and payable.
But no payment shall be made on account of interest represented by coupons
claimed to have been attached to a missing coupon bond at the time of its loss
or destruction, unless the Secretary of the Treasury is satisfied that such
coupons have not been paid and are in fact destroyed or can never be made
the basis of a claim against the United States: Provided, That where relief is
authorized under the provisions of this paragraph the bond of indemnity required by section 3703 of the Revised Statutes shall be in a penal sum of
double the amount to be paid and shall be executed by an approved corporate
surety. The Secretary of the Treasury is further authorized to make from
time to time such regulations and restrictions as he may prescribe with respect
to the administration of this paragraph.
"(3) The term 'bond' wherever used in this section and in sections 3703,
3704, and 3705 of the Revised Statutes shall be deemed, for the purposes of
these sections, to include any interest-bearing obligation of the United States
or those issued on a discount basis."
Approved, April 9, 1934,

REPORT OF THE SECRETARY OF THE TREASURY

189

MONEY AND BANKING
Exhibit 23
[Public No. 87, 7 3 D CONG., H.R. 6976]^

An act to protect the currency systevn of the United States, to provide for the
better use of the monetary gold stock of the United States, and for other
purposes
Be it enacted by the Senate and House of Representatives of the United
States of America in Congress assembled, That the short title of this act shall,
be the " Gold Reserve Act of 1934,"
SEO. 2. (a) Upon the approval of this act all right, title, and interest, and
every claim of the Federal Reserve Board, of every Federal Reserve jjank,
and of every Federal Reserve agent, in and to any and all gold coin and gold
bullion shall pass to and are hereby vested in the United States; and in
payment therefor credits in equivalent amounts in dollars are hereby established in the Treasury in the accounts authorized under the sixteenth paragraph of section 16 of the Federal Reserve Act, as heretofore and by'this act
amended (U. S. C, title 12, sec. 467). Balances in such accounts shall be
payable in gold certificates, which shall be in such form and in such denominations as the Secretary of the Treasury may determine. All gold so
transferred, not in the possession of the United States, shall be held in custody
for the United States and delivered upon the order of the Secretary of the
Treasury; and the Federal Reserve Board, the Federal Reserve banks, and
the Federal Reserve agents shall give such instruction and shall take such
action as may be necessary to assure that such gold shall be so held and delivered.
(b) Section 16 of the Federal Reserve Act, as amended, is further amended
in the following respects:
(1) The third sentence of the first paragraph is amended to read as follows : " They shall be redeemed in lawful money on demand at the Treasury
Department of the United States, in the city of Washington, District of
Columbia, or at any Federal Reserve bank."
(2) So much of the third sentence of the second paragraph as precedes the
proviso is amended to read as follows: " The collateral security thus offered
shall be notes, drafts, bills of exchange, or acceptances acquired under the
provisions of section 13 of this act, or bills of exchange endorsed by a member
bank of any Federal Reserve district and purchased under the provisions of
section 14 of this act, or bankers' acceptances purchased under the provisions
of said section 14, or gold certificates:".
(3) The first sentence of the third paragraph is amended to read as follows:
" Every Federal Reserve bank shall maintain reserves in gold certificates or
lawful money of not less than 35 per centum against its deposits and reserves
in gold certificates of not less than 40 per centum against its Federal Reserve
notes in actual circulation: Provided, however, That when the Federal Reserve
agent holds gold certificates as collateral for Federal Reserve notes issued to
the bank such gold certificates shall be counted as part of the reserve which
such bank is required to maintain against its Federal Reserve notes in actual
circulation."
(4) The fifth and sixth sentences of the third paragraph are amended to read
as follows: " Notes presented for redemption at the Treasury of the United
States shall be paid out of the redemption fund and returned to the Federal
Reserve banks through which they were originally issued, and thereupon
such Federal Reserve bank shall, upon demand of the Secretary of the Treasury, reimburse such redemption fund in lawful inoney or, if such Federal
Reserve notes have been redeemed by the Treasurer in gold certificates, then
such funds shall be reimbursed to the extent deemed necessary by the Secretary of the Treasury in gold certificates, and such Federal Reserve bank shall,
so long as any of its Federal Reserve notes remain outstanding, maintain
with the Treasurer in gold certificates an amount sufficient in the judgment of
'the Secretary to provide for all redemptions to be made by the Treasurer.
Federal Reserve notes received by the Treasurer otherwise than for redemption
may be exchanged for gold certificates out of the redemption fund hereinafter
provided and returned to the Reserve bank through which they were originally
issued, or they may be returned to such bank for the credit of the United
States."

190

REPORT OF THE SECRETARY OF THE TREASURY

(5) The fourth, fifth, and sixth paragraphs are amended to read as follows:
" The Federal Reserve Board shall require each Federal Reserve bank to
maintain on deposit in the Treasury of the United States a sum in gold
certificates sufficient in the judgment of the Secretary of the Treasury for the
redemption of the Federal Reserve notes issued to such bank, but in no event
less than 5 per centum of the total amount of notes issued less the amount of
gold certificates held by the Federal Reserve agent as collateral security; but
such deposit of gold certificates shall be counted and included as part of the 40
per centum reserve hereinbefore required. The Board shall have the right,
acting through the Federal Reserve agent, to grant in whole or in part, or to
reject entirely the application of any Federal Reserve bank for Federal Reserve
notes; but to the extent that such application may be granted the Federal
Reserve Board shall, through its local Federal Reserve agent, supply Federal
Reserve notes to the banks so applying, and such bank shall be charged with
the amount of the notes issued to it and shall pay such rate of interest as may
be established by the Federal Reserve Board on only that amount of such notes
which equals the total amount of its. outstanding Federal Reserve notes less
the amount of gold ^certificates held by the Federal Reserve agent as collateral
security. Federal Reserve notes issued to any such bank shall, upon delivery,
together with such notes of such Federal Reserve bank as may be issued under
section 18 of this act upon security of United States 2 per centum Government
bonds, become a first and paramount lien on aU the assets of such bank.
"Any Federal Reserve bank may at any time reduce its liability for outstanding Federal Reserve notes by depositing with the Federal Reserve agent
its Federal Reserve notes, gold certificates, or lawful money of the United
States. Federal Reserve notes so deposited shall not be reissued, except upon
compliance with the conditions of an original issue.
" The Federal Reserve agent shall hold such gold certificates or lawful money
available exclusively for exchange foi* the outstanding Federal Reserve notes
when offered by the Reserve bank of which he is a director. Upon the request
of the Secretary of the Treasury the Federal Reserve Board shall require
the Federal Reserve agent to transmit to the Treasurer of the United States
so much of the gold certificates held by him as collateral security for Federal
Reserve notes as may be required for the exclusive purpose of the redemption
of such Federal Reserve notes, but such gold certificates when deposited with
the Treasurer shall be counted and considered as if collateral security on
deposit with the Federal Reserve agent."
(6) The eighth paragraph.is amended to read as follows:*
"All Federal Reserve notes and all gold certificates and lawful money
issued to or deposited with any Federal Reserve agent under the provisions of
the Federal Reserve Act shall hereafter be held for such agent, under such
rules and regulations as the Federal Reserve Board may prescribe, in the joint
custody of himself and the Federal Reserve bank to which he is accredited.
Such agent and such Federal Reserve bank shall be jointly liable for the safekeeping of such Federal Reserve notes, gold certificates, and lawful money.
Nothing herein contained, however, shall be construed to prohibit a Federal
Reserve agent from depositing gold certificates with the Federal Reserve Board,
to be held by such Board subject to his order, or with the Treasurer of the
United States for the purposes authorized by law."
(7) The sixteenth paragraph is amended to read as follows:
" The Secretary of the Treasury is hereby authorized and directed to receive"
deposits of gold or of gold certificates with the Treasurer or any Assistant
Treasurer of the United States when tendered by any Federal Reserve bank or
Federal Reserve agent for credit to its or his account with the Federal Reserve Board. The Secretary shall prescribe by regulation the form of receipt
to be issued by the Treasurer or Assistant Treasurer to the Federal Reserve
bank or Federal Reserve agent making the deposit, and a duplicate of such
receipt shall be delivered to the Federal Reserve Board by the Treasurer at
Washington upon proper advices from any Assistant Treasurer that such deposit has been made. Deposits' so made shall be held subject to the orders of
the Federal Reserve Board and shall be payable in gold certificates on the order
of the Federal Reserve Board to any Federal Reserve bank or Federal Reserve
agent at the Treasury or at the Subtreasury of the United States nearest the
place of business of such Federal Reserve bank or such Federal Reserve agent.
The order used by the Federal Reserve Board in making such paj-ments shall
be signed by the governor or vice governor, or such other officers or members
as the Board may by regulation prescribe. The form of such order shall be
approved by the Secretary of the Treasury.'*

REPORT OF THE SECRETARY OF THE TREASURY

191

(8) The eighteenth paragraph is amended to read as follows:
" Deposits made under this section standing to the credit of any Federal Reserve bank with the Federal Reserve Board shall, at the option of said bank,
be counted as part of the lawful reserve which it is required to maintain against
outstanding Federal Reserve notes, or as a part of the reserve it is required
to maintain against deposits."
SEC. 3. The Secretary of the Treasury shall, by regulations issued hereunder,
with the approval of the President, prescribe the conditions under which gold
may be acquired and held, transported, melted or treated, imported, exported,
or earmarked: (a) for industrial, professional, and artistic use; (b) by the
Federal Reserve banks for the purpose of settling international balances; and
(c) for such other purposes as in his judgment are not inconsistent with the
purposes of this act. Gold iri any form may be acquired, transported, melted
or treated, imported, exported, or earmarked or held in custody for foreign
or doniestic account (except on behalf of the United States) only to the extent
permitted by, and subject to the conditions prescribed in, or pursuant to, such
regulations. Such regulations may exempt from the provisions of this section,
in whole or in part, gold situated in the Philippine Islands or other places
beyond the limits of the continental United States.
SEC. 4. Any gold withheld, acquired, transported, melted or treated, imported,
exported, or earmarked or held in custody, in violation of this act or of any
regulations issued hereunder, or licenses issued pursuant thereto, shall be
forfeited to the United States, and may be seized and condemned by like
proceedings as those provided by law for the forfeiture, seizure, and condemnation of property imported into the United States contrary to law; and in addition any person failing to comply with the provisions of this act or of any such
regulations or licenses, shall be subject to a penalty equal to twice the value of
the^gold in respect of which such failure occurred.
SW 5. No, gold shall hereafter be coined, and no gold coin shall, hereafter
be paid out or delivered by the United. States: Provided, however, That coinage
may continue to be executed by the mints of the United States for foreign
countries in accordance with the act of January 29, 1874 (U. S. C, title 31,
sec. 367). All gold coin of the United States shall be withdrawn from circulation, and, together with all other gold owned by the United States, shall be
formed into bars of such weights and degrees of fineness as the Secretary of
the Treasury may direct.
SEC. 6. Except to the extent permitted in regulations which may be issued
hereunder by the Secretary of the Treasury with the approval of the President,
no currency of the United States shall be redeemed in gold: Provided, however,
That gold certificates owned by the Federal Reserve banks shall be redeemed at
such times and in such amounts as, in the judgment of the Secretary of the
Treasury, are necessary to maintain the equal purchasing power of every kind
of currency of the United States: And provided further, That the reserve for
United States notes and for Treasury notes of 1890, and the security for gold
certificates (including the gold certificates held in the Treasury for credits
payable therein) shall be maintained in gold bullion equal to the dollar amounts
required by law, and the reserve for Federal Reserve notes shall be maintained
in gold certificates, or in credits payable in gold certificates maintained with
the Treasurer of 1 he United States under section 16 of the Federal Reserve Act,
as heretofore and by this act amended.
No redemptions in gold shall be made except in gold bullion bearing the stamp
of a United States mint or assay office in an amount equivalent at the time of
redemption to the currency surrendered for such purpose.
SEC. 7. In the event that the weight of the gold dollar shall at any time be
reduced, the resulting increase in value of the gold held by the United States
(including the gold held as security for gold certificates and as a reserve for
any United States notes and for Treasury notes of 1890) shall be covered into
the Treasury as a miscellaneous receipt; and, in the event that the weight of
the gold dollar shall at any time be increased, the resulting decrease in value
of the gold held as a reserve for any United States notes and for Treasury
notes of 1890, and. as security for gold certificates shall be compensated by
transfers of gold bullion from the general fund, and there is hereby appropriated an amount sufficient to provide for such transfers and to cover the decrease
in value of the gold in the general fund.
90353—35

-14

192

REPORT OF THE SECRETARY OP THE TREASURY

SEC. 8. Section 3700 of the Revised, Statutes (U. S. C, title 31, sec. 734) is
amended to read as follows:
" SEC. 3700. With the approval of the President, the Secretary of the Treasury
may purchase gold in any amounts, at home or .abroad, with any direct obligations, coin, or currency of the United States, authorized by law, or with any
funds in the Treasury not otherwise appropriated, at such rates and upon such
terms and conditions as he may deem most advantageous to the public interest;
any provision of law relating to the maintenance of parity, or limiting the
purposes for which any of such obligations, coin, or currency, may be issued,
or requiring any such obligations to be offered as a popular loan or on a competitive basis, or to be offered or issued at not less than par, to the contrary
notwithstanding. All gold so purchased shall be included as an asset of the
general fund of the Treasury."
SE'O. 9. Section 3699 of the Revised Statutes (U. S. C, title 31, sec. 733) is
amended to read as follows:
" SEC. 3699. The Secretary of the Treasury may anticipate the payment of
interest on the public debt, by a period not exceeding one year, from time to
time, either with or without a rebate of interest upon the coupons, as to him
may seem expedient; and he may sell gold in any amounts, at home or abroad,
in such manner and at such rates and upon such terms and conditions as he
may deem most advantageous to the public interest, and the proceeds of any
gold so sold shall be covered into the general fund of the Treasury: Provided,
howev^er, That the Secretary of the Treasury may sell the gold which is required to be maintained as a reserve or as security for currency issued by the
United States, only to the extent necessary to maintain such currency at a
parity with the gold dollar."
SEC. 10. (a) For the purpose of stabilizing the exchange value of the dollar,
the Secretary of the Treasury, with the approval of the President, directly or
through such agencies as he may designate, is authorized, for the account of
the fund established in this section, to deal in gold and foreign exchange and
such other instruments of credit and securities as he may deem necessary to
carry out the purpose of this section. An annual audit of such fund shall be
made and a report thereof submitted to the President.
'
(b) To enable the Secretary of the Treasury to carry out the provisions of
this section there is hereby appropriated, out of the receipts which are directed \ ^
to be covered into the Treasury under section 7 hereof, the sum of $2,000,000,000, ' q ^
which sum when available shall be deposited with the Treasurer of the United
States in a stabilization fund (hereinafter called the "fund") under the exclusive control of the Secretary of the Treasury, with the approval of the
President, whose decisions shall be final and not be subject to review by any
other officer of the United States. The fund shall be available for expenditure,
under the direction of the Secretary of the Treasury and in his discretion, for
any purpose in connection with carrying out the provisions of this section, including the investment and reinvestment in direct obligations of the United
States of any portions of the fund which the Secretary of the Treasury, with
the approval of the President, may from time to time determine are not currently required for stabilizing the exchange value of the dollar. The proceeds
of all sales and investments and all earnings and interest accruing under the
operations of this section shall be paid into the fund and shall be available
for the purposes of the fund.
(c) All the powers conferred by this section shall expire two years after the
date of enactment of this act, unless the President shall sooner declare the
existing emergency ended and the operation of the stabilization fund terminated ; but the President may extend such period for not more than one additional year after such date by proclamation recognizing the continuance of such
emergency.
SEC. 11. The Secretary of the Treasury is hereby authorized to issue, with the
approval of the President, such rules and regulations as the Secretary may
deem necessary or proper to carry out the purposes of this act.
SEC. 12. Paragraph (b) (2), of section 43, title III, of the act approved May
12, 1933 (Public, Numbered 10, Seventy-third Congress), is amended by adding
two new sentences at the end thereof reading as follows:
" Nor shall the weight of the gold dollar be fixed in any event at more than
60 per centum of its present weight. The powers of the President specified in
this paragraph shall be deemed to be separate, distinct, and continuing powers,
and may be exercised by him, from time to time, severally or together, when

REPORT OF THE SECRETARY OF THE TREASURY

193

ever and as the expressed objects of this section in his judgment may require;
except that such powers shall expire two years after tlie date of enactment of
the Gold Reserve Act of 1934 unless the President shall sooner declare the
existing emergency ended, but the President may extend such period for not
more than one additional year after such date by proclamation recognizing the
continuance of such emergency."
Paragraph (2) of subsection (b) of section 43, title III, of an act entitled
"An act to relieve the existing national economic emergency by increasing agricultural purchasing power, to raise revenue for extraordinary expenses incurred by reason of such emergency, to provide emergency relief with respect
to agricultural indebtedness, to provide for the orderly liquidation of joint stock
land banks, and for other purposes ", approved May 12, 1933, is amended by
adding at the end of said paragraph (2) the following:
" The President, in addition to the authority to provide for the unlimited
coinage of silver at the ratio so fixed, under such terms and conditions as he
may prescribe, is further authorized to cause to be issued and delivered to the
tenderer of silver for coinage, silver certificates in lieu of the standard silver
dollars to which the tenderer would be entitled and in an amount in dollars
equal to the number of coined standard silver dollars that the tenderer of such
silver for coinage would receive in standard silver dollars.
" The PresiSent is further authorized to issue silver certificates in such
denominations as he may prescribe against any silver bullion, silver, or standard
silver dollars in the Treasury not then held for redemption of any outstanding
silver certificates, and to coin standard silver dollars or subsidiary currency for
the redemption of such silver certificates.
" The President is authorized, in his discretion, to prescribe different terms
and conditions and to make different charges, or to collect different seigniorage,
for the coinage of silver of foreign production than for the coinage of silver
produced in the United States or its dependencies. The silver certificates herein
referred to shall be issued, delivered, and circulated substantially in conformity
with the law now governing existing silver certificates, except as may herein be
expressly provided to the contrary, and shall have and possess all of the
privileges and the legal tender characteristics of existing silfer certificates now
in the Treasury of the United States, or in circulation.
" The President is authorized, in addition to other powers, to reduce the
weight of the standard silver dollar in the same percentage that he reduces
the weight of the gold dollar.
" The President is further authorized to reduce and fix the weight of subsidiary coins so as to maintain the parity of such coins with the standard silver
dollar and with the gold dollar."
SEO. 13. All actions, regulations, rules, orders, and proclamations heretofore
taken, promulgated, made or issued by the President of the United States or the
Secretary of the Treasury, under the act of March 9, 1933, or under section 43
or section 45 of title III of the act of May 12, 1933, are hereby approved, ratified,
and confirmed.
SEO. 14. (a) The Second Liberty Bond Act, as amended, is further amended
as follows:
(1) By adding at the end of section 1 (U. S. C, title 31, sec. 752; Supp. VII,
title 31, sec. 752), a new paragraph as follows:
Notwithstanding the provisions of the foregoing paragraph, the Secretary of
the Treasury may from time to time, when he deems it to be in the public
interest, offer such bonds otherwise than as a popular loan and he may make
allotments in full, or reject or reduce allotments upon any applications whether
or not the offering was made as a popular loan."
(2) By inserting in section 8 (U^ S. C, title 31, sec. 771), after the words
" certificates of indebtedness ", a comma and the words " Treasury bills."
(3) By striking out the figures "$7,500,000,000" where they appear in section 18 (U. S. C, title 31, sec. 753) and inserting in lieu thereof the figures
" $10,000,000,000."
(4) By adding thereto two new sections, as follows:
" SEO. 19. Notwithstanding any other provisions of law, any obligations authorized by this act may be issued for the purchase, redemption, or refunding,
at or before maturity, of any outstanding bonds, notes, certificates of indebtedness, or Treasury bills, of the United States, or to obtain funds for such purchase, redemption, or refunding, under such rules, regulations, terms, and
conditions as the Secretary of the Treasury may prescribe.

194

REPORT OF THE SECRETARY OF THE TREASURY

" SEO. 20. The Secretary of the Treasury may issue any obligations authorized
by this act and maturing not more than one year from the date of their issue
on a discount basis and payable at maturity without interest. Any such obligations may also be offered for sale on a competitive basis under such regulations and upon such terms and conditions as the Secretary of the Treasury
may prescribe, and the decisions of the Secretary in respect of any issue shaU
be
final."
'
>.
(b) Section 6 of the Victory Liberty Loan Act (U. S. C, title 31, sec. 767;
Supp. VII, title 31, sees. 767-767a) is amended by striking out the words "for
refunding purposes", together with the preceding comma, at the end of the
first sentence of subsection (a).
(c) The Secretary of the Treasury is authorized to issue gold certificates, in
such form and in such denominations as he may determine, against any gold
held by the Treasurer of the United States, except the gold fund held as a
reserve for any United States riotes and Treasury notes of 1890. The amount
or gold certificates issued and outstanding shall at no time exceed the value, at
the legal standard, of the gold so held against gold certificates.
. SEC. 15. As used in this act the term " United States " means the Government
of the United States; the term " t h e continental United States" means the
States of the United States, the District of Columbia, and t^e Territory of
Alaska; the term "currency of the United States" means.currency which is
legal tender in the United States, and includes United States notes. Treasury
. notes of 1890, gold certificates, silver certificates. Federal Reserve notes, and
circulating notes of Federal Reserve bariks and national banking associations;
and the term " person " means any iridividual, partnership, association, or corporation, including the Federal Reserve Board, Federal Reserve banks, and
Federal Reserve agents. Wherever reference is made in this act to equivalents
as between dollars or currency of the United States and gold, one dollar or one
dollar face amount of any currency of the United States equals such a number
of grains of gold, nine-tenths fine, as, at the time referred to, are contained in
the standard unit of value, that is, so long as the President shall not have
altered by proclamation the weight of the gold dollar under the authority of
section 43, title III, of the act approved May 12, 1933, as heretofore and by
this act amended, twenty-five and eight-tenths grains of gold, nine-tenths fine,
and thereafter such a number of grains of gold, nind-tenths fine, as the President
shall have fixed Imder such authority.
SEO. 16. The right to alter, amend, or repeal this act is hereby expressly
reserved. If any provision of this act, or the application thereof to any person
or circumstances, is held invalid, the remainder of the act, and the application
of such provision to other persons or circuriastances, shall not be affected
thereby.
SEO. 17. All acts and parts of acts inconsistent with any of the provisions
of this act are hereby repealed.
Approved, January 30, 1934.

Exhibit 24
Proclamations, Executive orders. Treasury orders, and instructions relating to
gold
OBDBR OF T H E SECRETARY OF T H E TREASURY, DECEMBER 2 8 , 1 9 3 8 , RBQUIKINQ T H E
DELIVERY OF GOLD COIN, GOLD B U L L I O N , AND GOLD CEBTIFICATES TO T H E TREASUBEB
OF T H E U N I T E D STATES ^

Whereas section 11 of the Federal Reserve Act of December 23, 1913, as
amended by section 3 of the act of March 9, 1933, entitled "An act to provide
relief in the existing national emergency in banking, and for other purposes ",
provides in subsection (n) as foUows:
" Whenever in the judgment of the Secretary of the Treasury such action is
necessary to protect the currency system of the United States, the Secretary of
the Treasury, in his discretion, ma:y require any or aU individuals, partnerships,
associations, and corporations to pay and deliver to the Treasurer of the United
States any or all gold coin, gold buUion, and gold.certificates owned by such
^Amended J a n . 11, 1934, and supplemented J a n , 15, 1934.

(Soe pp. 196 and 197.)

REPORT OF THE SECRETARY OF THE TREASURY

195

individuals, partnerships, associations, and corporations. Upon receipt of such
gold coin, gold bullion or gold certificates, the Secretary of the Treasury shall
pay therefor an equivalent amount of any other form of coin or currency coined
or issued under the laws of the United States. The Secretary of the Treasury
shall pay all costs of the transportation of such gold bullion, gold certificates,
coin, or currency, including the cost of insurance, protection, and such other
incidental costs as may be reasonably necessary. Any individual, partnership,
association, or corporation failing to comply with any requirement of the Secretary of the Treasury made under this subsection shall be subject to a penalty
equal to twice the value of the gold or gold certificates in respect of which such
failure occurred, and .such penalty may be collected by the Secretary of the
Treasury by suit or otherwise "; and
Whereas in my judgment such action is necessary to protect the currency
system of the United States;
Now, therefore, I, Henry Morgenthau, Jr., Acting Secretary of the Treasury,
do hereby require every person subject to the jurisdiction of the United States
forthwith to pay and deliver to the Treasurer of the United States all gold
coin, gold bullion, and gold certificates situated in the United States, owned by
such person, except as follows:
(a) Gold bullion owned by a person now holding such gold under a license
heretofore granted by or under authority of the Secretary of the Treasury,
pursuant to the Executive order of August 28, 1933, relating to the hoarding,
export, and earmarking of gold coin, bullion, or currency and to transactions
in foreign exchange;
(&) Gold coin having a recognized special value to collectors of rare and
unusual coin (but not including quarter eagles, otherwise known as $2.50
pieces) ;
(c) Unmelted scrap gold and gold sweepings in an amount not exceeding in
the aggregate $100 belonging to any one person; and gold which has been put
through a process of fabrication for a specific and customary industrial,
professional, or ornamental use;
(d) Gold coin, gold bullion, and gold certificates owned by a Federal Reserve
bank or the Reconstruction Finance Corporation; and
(e) Gold bullion and foreign gold coin now situated in the Philippine Islands,
American Samoa, Guam, Hawaii, Panama Canal Zone, Puerto Rico, or the
Virgin Islands of the United States, owned by a person not domiciled or doing
business in the continental United States.
SEC 2. Delivery.—The gold coin, gold bullion, and gold certificates herein
required to be paid and delivered to the Treasurer of the United States shall
be delivered by placing the same forthwith in the custody of a Federal Reserve
bank or branch or a bank member of the Federal Reserve System for the
account of the United States and by forwarding confirmation that the gold
coin, gold bullion, and gold certificates have been so placed in custody for the
account of the United States and are held subject to the order of the Treasurer
of the United States, signed by such bank and the person making the delivery
(or the authorized agent of such person) to the Treasurer of the United States,
Washington, D. C, in a postage-prepaid envelop bearing a postmark dated
prior to midnight of the day the gold coin, gold bullion, and gold certificates are
so placed in custody.
SEC. 3. Payment and reimbursement of costs.—Upon receipt of the confirmation signed and delivered as required under section 2, the Secretary of the
Treasury will pay for the gold coin, gold bullion, and gold certificates placed
in custody for the account of the United States in accordance with section
2, an equivalent amount of any form of coin or currency coined or issued
under the laws of the United States designated by the Secretary of the
Treasury. The Secretary of the Treasury will pay all costs of the transportation of such gold coin, gold bullion, and gold certificates to the Federal Reserve
bank or branch or bank member of the Federal Reserve System in the city
or town nearest to the place where such gold coin, gold bullion, and gold
certificates are now situated, including the cost of insurance, protection, and
such other incidental costs as may be reasonably necessary. Persons desiring
reimbursement for such costs actually incurred shall submit their accounts
(m voucher forms which may be obtained by writing to the Treasurer of the
United States, Washington, D. C.
SEC. 4. Definitions.—As used in this order, the term ** person " means any
individual, partnership, association, or corporation; the term " United States "

196

REPORT OF THE SECRETARY OF THE TREASURY

means the United States and any place subject to the jurisdiction thereof; the
term "continental United States" means the States of the United States,
the District of Columbia, and the Territory of Alaska; the term " gold coin "
means any coin containing gold, including foreign gold coin; and the term
" gold bullion" means any gold which has been put through a process of
smelting or refining that is in such form that its value depends upon the gold
content and not upon the form, but does not include gold coin or metals
containing less than five troy ounces of fine gold per short ton.
SEC. 5. Any individual, partnership, association, or corporation failing to
comply with any requirement hereof or of any rules or regulations issued
by the Secretary of the Treasury hereunder shall be subject to the penalty
provided in section 11 (n) of the Federal Reserve Act as amended.
This order may be modified or revoked at any time.
HENRY MORGENTHAU, Jr.,

Acting Secretary of the Treasury.
Approved:
FRANKLIN D . Roosim^ELT,

The White House, December 28, 1933.
O R D E R O F T H E SECRETARY OF T H E TREASURY, J A N U A R Y 1 1 , 1 9 3 4 , A M E N D I N G T H E
ORDER OF DECEMBER 2 8 , 1 9 3 3 , R E Q U I R I N G T H E DELIVERY OF GOLD COIN, GOLD
BULLION, AND GOLD CERTIFICATES TO T H E TREASURER OF T H E U N I T E D STATES

Whereas, in my" judgment, the order of December 28, 1933, requiring the
delivery of gold coin, gold bullion, and gold certificates to the Treasurer of the
United States, may be amended as hereinafter provided without adversely
affecting the purposes thereof.
Now, therefore, I, Henry Morgenthau, Jr., Secretary of the Treasury, do
hereby amend said order of December 28, 1933, by inserting after the word
"pieces" in the parenthetical phrase in paragraph (B) of the first section
thereof a comma and the following:
" unless held, together with rare and unusual coin, as part of a collection for
historical, scientific, or numismatic purposes, containing not more than four
quarter eagles of the same date and design, and struck by the same mint."
This order may be modified or revoked at any time.
HENRY MORGENTHAU, Jr.,

Approved:

Secretary of the Treasury.

FRANKLIN D . ROOSEVELT,

The White House, Jartuary 11, 1934.
EXECUTIVE O R D E R , J A N U A R Y 1 2 , 1 9 3 4 , A M E N D I N G EXECUTIVE ORDER OF A U G U S T 2 8 ,
1 9 3 3 , RELATING TO T H E A C Q U I S I T I O N OF GOLD COIN A N D BULLION

The first paragraph of section 4 of Executive Order No. 6260 of August 28,
1933, relating to the hoarding, export, and earmarking of gold coin, bullion, or
currency, and to transactions in foreign exchange is hereby amended to read
as follows:
" SEC 4. Acquisition of gold coin artd gold bullion.—No person other than a _
Federal Reserve bank shall, after the date of this order, acquire in the
United States any gold coin, gold bullion, or gold certificates except under
license therefor issued pursuant to this Executive order, provided that member
banks of the Federal Reserve System may accept delivery of such coin, bullion,
and certificates for surrender promptly to a Federal Reserve bank, and provided further that persons requiring gold for use in the industry, profession, or
art in which they are regularly engaged may replenish their stocks of gold up
to an aggregate amount of $100, by acquisitions of gold bullion held under
licenses issued under section 5 (b) without necessity of obtaining a license for
such acquisitions, and provided further that collectors of rare and unusual coin
may acquire from one another and hold without necessity of obtaining a license
therefor gold coin having a recogriized special value to collectors of rare and
unusuar coin (but not including quarter eagles, otherwise known as $2.50
pieces, unless held, together with rare and unusual coin, as part of a collection
for historical, scientific, or numismatic purposes, containing not more than four
quarter eagles of the same date and design and struck by the same mint)."

REPORT OF THE SECRETARY OF THE TREASURY

197

Section 6 of the aforesaid order is hereby amended by adding thereto the
following subparagraph:
" ( e ) Through any agency that he may designate, the export of gold coin
having a recognized special value to collectors of rare and unusual coin (but not
including quarter eagles, otherwise known as $2.50 pieces, unless held, together
with rare and unusual coin, as part of a collection for historical, scientific, or
numismatic purposes, containing not more than four quarter eagles of the
same date and design and struck by the same mint)."
FRANKUN D . ROOSEVELT.
T H E WHITE HOUSE,

January 12, 1934.
EXECUTIVE ORDER, J A N U A R Y 1 5 , 1 9 3 4 , RELATING TO RECEIPT OF GOLD ON C O N S I G N M E N T
BY T H B M I N T S AND A S S A Y OFFICES

By virtue of the authority vested in me by section 5 (b) of the act of
October 6, 1917, as amended by section 2 of the act of March 9, 1933, entitled
"An act to provide relief in the existing national emergency in banking, and
for other purposes ", I, Franklin D. Roosevelt, President of the United States
of America, do declare that a period of national emergency exists, and by virtue
of said authority and of all other authority vested in me, do hereby prescribe
the following regulations for receiving gold on consignment for sale:
SECTION 1. The United States mints and assay offices are hereby authorized,
subject to such regulations as may from time to time be prescribed by the
Secretary of the Treasury, to receive on consignment gold which the mint or
assay office concerned is satisfied has not been held in noncompliance with the
Executive orders or the orders of the Secretaiy of the Treasury, issued under
sections 2 and 3 of the act of March 9, 1933, or in noncompliance with any
regulations or rulings made thereunder or licenses issued pursuant thereto.
SEC 2. The Secretary of the Treasury is hereby authorized and empowered
to issue such regulations as he may deem necessary to carry out the purposes
of this Executive order.
SEC 3. This Executive order and any regulations issued hereunder may be
modified or revoked at any time.
FRANKLIN D . ROOSEVELT.
T H E WHITE HOUSE, January 15,

1934.

ORDER OF T H E SECRETARY OF T H E TREASURY, J A N U A R Y 1 5 , 1 9 3 4 , S U P P L E M E N T I N G
T H E ORDER OF 'DECEMBER 2 8 , 1 9 3 3 , E E Q U I E I N G T H E DELI'VnEEY OF GOLD COIN, GQLD
B U L L I O N , AND GOLD CERTIFICATES TO T H E TREASURER OF T H E U N I T E D STATES

Whereas on December 28, 1933, I, Henry Morgenthau, Jr., as Acting Secretary
of the Treasury, issued an order under authority of section 11 of the Federal
Reserve Act of December 23, 1913, as amended by section 3 of the Act of March
9, 1933, entitled "An act to provide relief in the existing national emergency
in banking, and for other purposes ";
Whereas said order, as amended by an order of January 11, 1934, required
every person subject to the jurisdiction of the United States forthwith to pay
and deliver to the Treasurer of the United States all gold coin, gold bullion,
and gold certificates situated in the United States, owned by such person, except
as follows:
{a) Gold bullion owned by a person now holding such gold under a license
heretofore granted by or under authority of the Secretary of the Treasury, pursuant to the Executive order of August 28, 1933, relating to the hoarding, export,
and earmarking of gold coin, bullion, or currency and to transactions in foreigii
exchange;
(b) Gold coin having a recognized special value to collectors of rare and
unusual coin (but not including quarter eagles, otherwise known as $2.50 pieces,
unless held, together with rare and unusual coin, as part of a collection for
historical, scientific, or numismatic purposes, containing not more than four
quarter eagles of the same date and design, and struck by the same mint) ;
(c) Unmelted scrap gold and gold sweepings in an amount not exceeding in
the aggregate $100 belonging to any one person; and gold which has been put
through a process of fabrication for a specific and customary industrial, professional, or ornamental use;

198

REPORT OP THE ^ECHETAilY OJ^ THE T H E A S U H Y

{d) Gold coin, gold bulUon, and gold certificates owned by a Federal Reserve
bank or the Reconstruction Finance Corporation; and
(e) Gold bullion and foreign gold coin now situated in the Philippine Islands,
American Samoa, Guam, Hawaii, Panama Canal Zone, Puerto Rico, or the
Virgin Islands of the United States, owned by a person not domiciled or doing
business in the continental United States;
Whereas a reasonable time has elapsed within which any person required
to deliver gold coin, gold bullion, and gold certificates could pay and deliver
to the Treasurer of the United States in the manner provided in said order of
December 28, 1933, the gold coin, gold bullion, and gold certificates situated in
the United States, owned by such person; and
Whereas in my judgment such action is necessary to protect the currency
system of the United States;
Now, therefore, I, Henry Morgenthau, Jr., Secretary of the Treasury, do
hereby fix midnight of Wednesday, January 17, 1934, as the expiration of the
period within which any gold coin, gold bullion, or gold certificates may be
paid and delivered to the Treasurer of the United States in compliance with
the requirements contained in such order of December 28, 1933, as .amended.
In the event that any gold coin, gold bullion, or gold certificates withheld
in noncompliance with -said order and of this order are offered after January
17, 1934, to the Secretary of the Treasury, the Treasurer of the United States,
any United States mint or assay office, or to any fiscal agent of the United
States, there shall be paid therefor only such part or none of the amount
otherwise payable therefor as the Secretary of the Treasury may from time
to time prescribe and the whole or any balance shall be retained and applied to
the penalty payable for failure to comply with the requirements of such order
and of this order. The acceptance of any such coin, bullion, or certificates
after January 17, 1934, whether or not a part or all of the amount otherwise
payable therefor is so retained, shall be without prejudice to the right to collect
by suit or otherwise the full penalty provided in section 11 (n) of the Federal
Reserve Act, as amended, less such portion of the penalty as may have been
retained as hereinbefore provided.
The definitions of the terms " person ", " United States ", " gold coin ", and
" gold buUion " contained in section 4 of said order of December 28, 1933, apply
equally to such terms as used in this order.
HENRY MORGENTHAU,

Jr.,

Secretary of the Treasury.
Approved.
FRANKLIN D . ROOSEVELT,

The White House, January 15, 1934.

I N S T R U C T I O N S S E N T B Y T H E S E C R E T A R Y O F T H E T R E A S U R Y O N JANUARY 17,
1934,
TO T H E T R E A S U R E R O F T H E U N I T E D S T A T E S , T H E U N I T E D S T A T E S M I N T S A N D A S S A Y

O F F I C E S , A N D T H E F I S C A L A G E N T S O F THB UNITED STATES, CONCERNING WRONGFULLY WITHHELD GOLD COIN, GOLD BULLION, AND GOLD CERTIFICATES DELIVERED
AFTER JANUARY IT, 1934

The order of the Secretary of the Treasury dated January 15, 1934, supplementing the order of December 28, 1933, requiring the delivery of gold coin,
gold bullion, and gold certificates to the Treasurer of the United States provides, in part, as follows :
» * * * i^ Henry Morgenthau, Jr., Secretary of the Treasury, do hereby
fix midnight of Wednesday, January 17, 1934, as the expiration of the period
within which any gold coin, gold bullion, or gold certificates may be paid and
delivered to the Treasurer of the United States in compliance with the requirements contained in such order of December 28, 1933, as amended.
'* In the event that any gold coin, gold bullion, or gold certificates withheld
in noncompliance with said order and of this order are offered after January 17, 1934, to the Secretary of the Treasury, the Treasurer of the United
States, any United States mint or assay office, or to any fiscal agent of the
United States, there shall be paid therefor only such part or none of the
amount otherwise payable therefor as the Secretary of the. Treasury may from
time to time prescribe and the whole or any balance shall be retained and
applied to the penalty payable for failure to comply with the requirements
of such order and of this order. The acceptance of any such coin, bullion,

REPORT OF THE SECRETARY OF THE TREASURY

199

or certificates after January 17, 1934, whether or not a part or all of the
amount otherwise payable therefor is so retained, shall be without prejudice
to the right to collect by suit or otherwise the full penalty provided in section
11 (n) of the Federal Reserve Act, as amended, less such portion of the
penalty as may have been retained as hereinbefore provided."
Subject to the rights reserved in said order of January 15, 1934, supplementing the order of December 28, 1933, requiring the delivery of gold coin,
gold bullion, and gold certificates to the Treasurer of the United States, and
without prejudice to the right to alter or amend these instructions from time
to time by notice to the Treasurer of the. United States, the United States
mints and assay offices, and the Federal Reserve banks, I do hereby prescribe
that in the event that any gold coin, gold bullion, or gold certificates held in
noncompliance with said order of December 28, 1933, as amended, and said
order of January 15, 1934, are offered after January 17, 1934, to the Secretary of the Treasury, the Treasurer of the United States, any United States
mint or assay office, or to any fiscal agent of the United States, the Secretary
of the Treasury, the Treasurer of the United States, any United States
mint or assay office, and the fiscal agents of the United States shall pay
for such gold coin and gold certificates the dollar face amount thereof, and
for gold bullion $20.67 an ounce. Member banks of the Federal Reserve System
may receive such gold coin, gold bullion, and gold certificates for account of
the Treasurer of the United States and forthwith forward the same to the
Secretary of the Treasury, the Treasurer of the United States, any United
States mint or assay office, or any fiscal agent of the United States, whichever
is nearest.
HENRY MORGENTHAU,

Jr.,

Secretary of the Treasury.

PROCLAMATION, J A N U A R Y 3 1 , 1 9 3 4 , REDUCING T H E W E I G H T OF T H E GOLD DOLLAR

Whereas, by virtue of section 1 of the act of Congress approved March 14,
1900 (31 Stat. L. 45), the present weight of the gold dollar is fixed at twenty-five
and eight-tenths grains of gold nine-tenths fine; and
Whereas, by section 43, "title III of the act approved May 12, 1933 (Public
No. 10, 73d Cong.), as amended by section 12 of the Gold Reserve Act of 1934,
it is provided in part as follows:
"Whenever the President finds, upon investigation, that (1) the foreign
commerce of the United States is adversely affected by reason of the depreciation in the value of the currency of any other government or governments in
relation to the present standard value of gold, or (2) action under this section
is necessary in order to regulate and maintain the parity of currency issues
of the United States, or (3) an economic emergency requires an expansion of
credit, or (4) an expansion of credit is necessary to secure by international
agreement a stabilization at proper levels of the currencies of various governments, the President is authorized, in his discretion—
"(a) To direct the Secretary of the Treasury to enter into agreements with
the several Federal Reserve banks and with the Federal Reserve Board whereby
the Federal Reserve Board will, and it is hereby authorized to, notwithstanding
any provisions of law. or rules and regulations to the contrary, permit such
reserve banks to agree that they will, (1) conduct, pursuant to existing law,
throughout specified periods, open-market operations in obligations of the
United States Government or corporations in which the tJnited States is.the
majority stockholder, and (2) purchase directly and hold in portfolio for an
agreed period or periods of time Treasury bills or other obligations of the
United States Government in an aggregate sum of $3,000,000,000 in addition to
those they may then hold, unless prior to the termination of such period or
periods the Secretary shall consent to their sale. No suspension of reserve requirements of the Federal Reserve banks, under the terms of section 11 (c) of
the Federal Reserve Act, necessitated by reason of operations under this section,
shall require the imposition of the graduated tax upon any deficiency in reserves
as provided in said section 11 (c). Nor shall it require any automatic increase
in the rates of interest or discount charged by any Federal Reserve bank, as
otherwise specified in that section. The Federal Reserve Board, with the approval of the Secretary of the Treasurj^ may require the Federal Reserve banks
to take such action as may be necessary, in the judgment of the Board and of
the Secretary of the Treasury, to prevent ijndue credit expansion,

200

REPORT OF THE SECRETARY OF THE TREASURY

"(b) If the Secretary, when directed by the President, is unable to secure
the assent of the several Federal Reserve banks and the Federal Reserve
Board to the agreements authorized in this section, or if operations under the
above provisions prove to be inadequate to meet the purposes of this section, or
if for any other reason additional measures are required in the judgment of the
President to meet such purposes, then the President is authorized—
Hs

5t:

rJ:

'•!:

"(2) By proclamation to fix the weight of the gold dollar in grains ninetenths fine and also to fix the weight of the silver dollar in grains nine-tenths
fine at a definite .fixed ratio in relation to the gold dollar at such amounts as
he finds necessary from his investigation to stabilize domestic prices or to
protect the foreign commerce against the adverse effect of depreciated foreign
currencies, and to provide for the unlimited coinage of such gold and silver at
the ratio so fixed, or in case the Government of the United States enters into
an agreement with any government or governments under the terms of which
the ratio between the value of gold and other currency issued by the United
States and by any such government or governments is established, the President may fix the weight of the gold dollar in accordance with the ratio so
agreed upon, and such gold dollar, the weight of which is so fixed, shall be the
standard unit of value, and all forms of money issued or coined by the United
States shall be maintained at a parity with this standard and it shall be the
duty of the Secretary of the Treasury to maintain such parity, but in no event
shall the weight of the gold dollar be fixed so as to reduce its present weight
by more than 50 per centum. Nor shall the weight of the gold dollar be fixed
in any event at more than 60 per centum of its present weight. The powers
of the President specified in this paragraph shall be deemed to be separate,
distinct, and continuing powers, and may be exercised by. him, from time to
time, severally or together, whenever and as the expressed objects of this section in his judgment may require; except that such powers shall expire two
years after the date of enactment of the Gold Reserve Act of 1934, unless the
President shall sooner declare the existing emergency ended, but the President
may extend such period for not more than one additional year after such date
by proclamation recognizing the continuance of such emergency " ; and
Whereas, I find, upon investigation, that the foreign commerce of the United
States is adversely affected by reason of the depreciation in the value of the
currencies of other governments in relation to the present standard value of
gold, and that an economic emergency requires an expansion of credit; and
Whereas, in my judgment, measures additional to those provided by subsection (a) of said section 43 are required to meet the purposes of such section;
and
Whereas, I find, from my investigation, that, in order to stabilize domestic
prices and to protect the foreign commerce against the adverse effect of depreciated foreign currencies, it is necessary to fix the weight of the gold dollar at
15^1 grains nine-ten ths fine,
Now, therefore, be it known that I, Franklin D. Roosevelt, President of the
United States, by virtue of the authority vested in me by section 43, title I I I
of said act of May 12, 1933, as amended, and by virtue of all other authority
vested in me, do hereby proclaim, order, direct, declare and fix the weight of the
gold dollar to be 15^^ i grains nine-tenths fine, from and after the date and
hour of this proclamation. The weight of the silver dollar is not altered or
affected in any manner by reason of this proclamation.
This proclamation shall remain in force and effect until and unless repealed
or modified by act of Congress or by subsequent proclamation; and notice is
hereby given t h a t I reserve the right by virtue of the authority vested in me to
alter or modify this proclamation as the interest of the United States may seem
to require.
In witness whereof I have hereunto set my hand and have caused the seal
of the United States to be affixed.
• Done in the city of Washington at 3:10 o'clock in the afternoon, eastern
standard time, this 31st day of January, in the year of our Lord one thousand
nine hundred and thirty-four, and of the independence of the United States
the one hundred and fifty-eighth.
[SEAL]

F R A N K L I N D . ROOSEVELT.

By the President:
CORDELL HULL,

Secretary of State.

REPORT OF THE SECRETARY OF THE TREASURY

201

STATEMENTS BY SECRETARY OF T H E TREASURY MORGENTHAU, JANUARY 3 1 AND FEBRUARY 1, 1 9 3 4 , RELATING TO T H E PURCHASE AND SALE OF GOLD BY T H E TREASURY
JANUARY 31,

1934.

In connection with the announcement today (Jan. 31) that the Treasury will
buy gold, the Secretary of the Treasury states that, until further notice, he will
also sell gold for export to foreign central banks whenever our exchange rates
with gold standard currencies reach gold export point. Like the purchases, all
such sales of gold will be made through the Federal Reserve Bank of New
York as fiscal agent of the United States upon the following terms and conditions which the Secretary of the Treasury deems most advantageous to the
public interest:
Sales of gold will be made at $35 per fine ounce plus one-quarter percent
handling charge and will be governed by the regulations issued under the Gold
Reserve Act of 1934.
FEBRUARY 1,

1934.

Amplifying his statement issued yesterday, * * * the Secretary of the
Treasury today made public the following announcement:
" Beginning Thursday, February 1, 1934, and until further notice, I will buy
imported fine gold bars through the Federal Reserve Bank of New York as
fiscal agent of the United States; and other gold, foreign or domestic, through
any United States Mint or the United States Assay Offices at New York or
Seattle, both at the following rate and upon the following terms and conditions
deemed by me most advantageous to the public interest:
" Purchases will be made at the rate of $35 per fine troy ounce, less the usual
mint charges and less one-quarter of one percent for handling charges, all subject to compliance with the regulations issued under the Gold Reserve Act of
1934."
It was explained that the phrase " fine gold bars " means gold bars of a fineness of 0.899 or finer, such as are ordinarily used in the settlement of international balances, carrying a recognized stamp indicating the weight and degree
of fineness. The mints will purchase imported gold in other condition, such as
unrefined gold and gold in other forms than in stamped bars, along with the
domestic gold specified in section 35 of the regulations issued yesterday.
Regulations as to hoarded gold are unchanged.

Exhibit 25
Chronology of action with respect ta gold from March 6, 1933, to February 1,
1934
1. On March 6, 1933, the President of the United States issued a proclamation
declaring a banking holiday from March 6 to March 9, 1933, both dates inclusive, and directing that during the holiday, except as provided in said proclamation, no banking institution should " pay out, export, earmark, or permit the
withdrawal or transfer in any manner or by any device whatsoever of any gold
or silver coin or bullion or currency or take any other action which might
facilitate the hoarding thereof, nor pay out deposits, make loans or discounts,
deal in foreign exchange, transfers of credit from the United States to any place
abroad, or transact any other banking business whatsoever." The Secretary of
the Treasury, with the approval of the President, was authorized to permit any
bank to perform any or all of the usual banking functions. This action of the
President was based upon the authority of section 5 (b) of the act of October
6, 1917 (40 Stat. L. 411) as amended.
The Treasurer of the United States and the Director of' the Mint were
instructed by separate orders of March 6, 1933, signed by the President and
the Secretary of the Treasury, to make payments in gold in any form during
the continuance of the bank holiday only under license issued by the Secretary
of the Treasury.
2. On March 9, 1933, a message sent by the President to the Congress transmitted for enactment tlie Emergency Banking Act. It was enacted into law
the same day. Title I of that act approved and confirmed the action taken by
the President March 6, and amended the act of October 6, 1917. In addition

202

EEPORT OF THE SECRETARY OF THIS T E E A S U H Y

section 11 of the Federal Reserve Act was amended by adding a new subsection
(n), authorizing the Secretary of the Treasury to "require any or all individuals, partnerships, associations, and corporations to pay and deliver to the
Treasurer of the United States any or all gold coin, gold bullion, and gold
certificates " owned by them. An equivalent amount of any other form of coin
or currency coined or issued under the laws of the United States was directed
to be given in exchange for the surrendered gold and gold certificates.
3. On March 9, after the passage of the Emergency Banking Act, the President issued a proclamation continuing in full force and effect the provisions of
the proclamation of March 6, 1933, and the regulations and orders issued thereunder " until further proclamation by the President."
4. On March 10 the President issued an Executive order which, among other
things, prohibited until further order any individual, partnership, association,
or corporation from exporting or otherwise removing or permitting t o be withdrawn from the United States or any place subject to the jurisdiction thereof
any gold coin, gold bullion, or gold certificates, except in accordance with
regulations prescribed by or under license issued by the Secretary of the
Treasury. The order provided that permission given to banking institutions to
perform banking functions should not include authorization to pay out any
gold coin, gold bullion, or gold certificates, except as authorized by the Secretary
of the Treasury.
5. On April 5 the President issued an Executive order forbidding the hoarding of gold coin, gold bullion, and gold certificates. All persons were required
to deliver to a Federal Reserve bank or branch or agency thereof or to a member bank all gold coin, gold bullion, and gold certificates, with certain exceptions, including reasonable amounts for use in industry and the arts, and rare
coins, and a maximum of $100 per person in gold coin and gold certificates.
Member banks were required to deliver all gold coin, gold bullion, and gold
certificates owned or received by them (with the same exceptions as aforementioned) to the Federal Reserve banks of their respective districts.
6. On April 19, 1933, the Secretary of the Treasury advised that until further
notice no further licenses would be granted for the export of gold from the
United States for the purpose of supporting the dollar in foreign exchange. On
April 20, the President issued an Executive order relating to foreign exchange
and the earmarking and export of gold coin or bullion or currency. It prohibited the earmarking for foreign account and the export of gold coin, gold
bulUon, or gold certificates, but authorized the Secretary of the Treasury to
issue licenses permitting such export under certain conditions.
7. On April 29, the Secretary of the Treasury issued regulations relating to
the Executive orders of April 5 and 20 with respect to gold hoarding and the
gold export embargo. On the previous day Acting Secretary of the Treasury
Ballantine ruled that " Until further notice the Secretary of the Treasury will
grant no licenses for the acquisition of gold, gold coin, or bullion by persons
making application for the same under the Executive order of April 5, 1933, for
the purpose of meeting maturing obligations calling for payment in gold coin
or bullion, within the United States or elsewhere, except where such applicants
have surrendered gold coin, gold bullion, or gold certificates in obedience to the
Executive order of April 5, 1933." No licenses to acquire gold or gold coin to
meet maturing gold clause obligations in the United States were, in fact, issued,
none of the applicants having surrendered gold, gold coin, or gold certificates.
8. On May 12, the President approved an act of Congress dealing primarily
with agricultural purchasing power and farm indebtedness, title I I I of which
dealt with currency and monetary matters. The act authorized the President
under certain conditions—
A. To direct the Secretary of the Treasury to enter into agreements with
the Federal Reserve banks and Board under which such banks would conduct open-market operations in United States securities, and purchase
directly from the Treasury and hold in portfolio Treasury bills or other
Government obligations in an aggregate amount of $3,000,000,000 in addition
to those they might then hold.
B. To direct the Secretary of the Treasury to cause to be issued United
States notes, the aggregate amount of which outstanding at any one time
should not be more than $3,000,000,000. Such notes and all other coins and
currency theretofore or thereafter coined or issued by or under the authority
of the United States were declared to be legal tender for all debts.

BEPORT OF THE SECBETARY OF THE TREASURY

203

C. By proclamation to fix the weight of the gold dollar and to fix the
weight of the silver dollar at a definite fixed ratio to the gold dollar and to
provide for unlimited coinage of gold and silver at the ratio so fixed, or,
in case the United States enters into an agreement with any government
under the terms of which the ratio between the value of the gold and other
currency issued by the United States and by any such government is established, to fix the weight of the gold dollar in accordance with the ratio so
agreed upon, but in no event was tlie weight of the dollar to be fixed so as to
reduce its then existing weight by more than 50 per centum. The gold
dollar as thus fixed was to be the standard unit of value and all forms of
money issued by the United States were to be maintained at a parity with
such standard.
D. To accept silver at a price not to exceed 50 cents an ounce in payment
of the debts of foreign governments, up to $200,000,000, and to cause it to be
coined into silver dollars to be retained in the Treasury for the redemption
of silver certificates which the act directed to be issued.
9. By Public Resolution No. 10, approved June 5, 1933, all " gold clauses " contained in dollar obligations, excepting currency, were declared to be against public policy; and such obligations, whether or not they contained a " gold clause ",
were declared to be discharged upon payment, dollar for dollar, in any coin or
currency which was legal tender at the time of payinent. All coins and currencies of the United States were declared to be legal tender.
10. On July 2, the President sent a message to the London Economic Conference. In it he spoke of " efforts to plan national currencies with the objective
of giving to those currencies a continuing purchasing power which does not
greatly vary in terms of the commodities and need of modern civilization." He
stated that " the United States seeks the kind of a dollar which a generation
hence will have the same purchasing and debt-paying power as the dollar we
hope to attain in the near future."
11. On August 28, the President issued an Executive order, revoking the
Executive orders of April ^ and April 20, referred to above, and containing more
complete provisions with respect to the hoarding, export, and earmarking of
gold coin, bullion, or currency and to transactions in foreign exchange. Returns
of gold and gold certificate holdings were required and the acquisition, holding,
arid export of gold and gold certificates were regulated. This order was amended
in a minor respect by the Executive order of January 12, 1934.
12. On August 29, the President issued an Executive order relating to the sale
and export of gold recovered from natural deposits. The Secretary of the Treasury was authorized to receive such gold on consignment for sale (a) to persons
licensed to acquire gold for use iri the arts, industries, and professions, or (&)
by export to foreign purchasers.
13. On September 12, 1933, the Secretary of the Treasury issued regulations
under said Executive orders of August 28 and 29.
14. On October 22, in a radio address, the President reiterated that the definite
policy of the Government " has been to restore commodity price levels." He
Stated that when the price level had been restored, " we shall seek to establish
and maintain a dollar which will not change its purchasing and debt-paying
power during the succeeding generation." Stating that " it becomes increasingly
important to develop and apply the further measures which may be necessary
from time to time to control the gold value of our own dollar at home ", and that
" the United States must take firmly in its own hands the control of the gold
value of our dollar ", the President announced the establishment of a Government market for gold in the United States. He stated that he was authorizing
the Reconstruction Finance Corpora.tion to buy gold newly mined in the United
States at prices to be determined from time to time after consultation with the
Secretary of the Treasury and the President. " Whenever necessary to the end
in view ", the President added, " we shall also buy or' sell gold in the world
market." He continued, " Goyernment credit Avill be maintained and a sound
currency will accompany a rise in the American commodity price level."
15. On October 2:5, the President issued an Executive order revoking the
Executive order of August 29 and amending that of August 28 referred to above.
The order of October 25 authorized the Reconstruction Firiance Corporation to
acquire and to hold, earmark for foreign account, export, or otherwise dispose
of gold newly mined in the United States and received by the mints and assay
offices on consignment for such purpose. The Reconstruction Finance Corporation announced on the same day that it would receive subscriptions for its

204

REPORT OF THE SECRETARY OF THE TREASURY

90-day notes payable in the gold so received. The circular for such notes
was issued on October 26. The rate at which newly mined gold was to be taken
was announced from time to time. The rate for gold other than newly mined
gold was not changed by the orders of August 29 or October 25, or the act of
the Reconstruction Finance Corporation; but remained at $20.67 an ounce.
16. On November 1, the Chairman of the Reconstruction Finance Corporation
announced that the Corporation had authorized the Federal Reserve Bank of
New York to dispose of the notes of the Corporation and take therefor certain
foreign gold.
17. On December 28, the Secretary of the Treasury issued an order complementing the President's orders of April 5 and August 28. This order
required every person subject to the jurisdiction of the United States to deliver
to the Treasurer of the United States all gold coin, gold bullion, and gold
certificates situated in the United States, with certain stated exceptions. This
order did not contain the exception of the earlier orders with respect to holdings
in amounts of less than $100. An exception relating to rare coin was amended
in a minor respect on January 11, 1934.
18. On January 15, the President issued an Executive order authorizing the
mints and assay offices to receive gold on consignment provided the gold had
not been withheld unlawfully; and on the same day the Secretary of the
Treasury directed the mints and assay offices to receive gold newly mined in
the United States on consignment for the Federal Reserve Bank of New York.
The rate for gold other than new^ly mined gold was not changed by the order of
January 15, or by the purchases by the Federal Reserve bank.
19. The Secretary of the Treasury, on January 15, supplemented his order of
December 28 by fixing midnight of January 17, 1934, as the expiration of the
period within which deliveries of gold coin, gold bullion, and gold certificates
could be made in compliance with the order of December 28.
20. On January 17, the Secretary of the Treasury sent instructions to the
Treasurer of the United States, the United States m-ints and assay offices, and
the fiscal agents of the United States, concerning wrongfully withheld gold
coin, gold bullion, and gold certificates delivered after January 17, 1934.
21. On January 30, 1934, the Gold Reserve Act of 1934 was approved, and
the Secretary of the Treasury, with the approval of the President, issued the
provisional regulations thereunder. This act transferred to the United States
title to all gold of the Federal Reserve System. It amended the act of May 12,
1933, so as to provide that the weight of the gold dollar should not be fixed
in any event at more than 60 per centum of the weight then existing. Gold
coin was ordered withdrawn from circulation and formed into bars. It was
provided that redemption of currency in gold should be made only to the
extent permitted in regulations issued by the Secretary of the Treasury with
the approval of the President, and in such cases should be made only in gold
bullion. The act provided that gold in any form might be acquired, transported, melted or treated, imported, exported, or earmarked or held in custody for foreign or domestic account (except on behalf of the United States)
only to the extent permitted by the regulations issued under the act. The act
made provision for a fund for the purpose of stabilizing the exchange value of
the dollar.
22. On January 31, the President issued a proclamation fixing the weight
of the gold dollar at 15 5/21 grains nine-tenths fine. At this weight, the
statutory value of gold is $35 per fine ounce.
23. On January 31, the provisional regulations under the Gold Reserve Act
were amended by adding new articles authorizing the mints (1) to purchase
newly mined gold, unmelted scrap gold, gold imported after January 30, and
such other gold as might be authorized from time to time by rulings of the
Secretary of the Treasury, and (2) to sell gold to licensed persons for industrial, professional, or artistic use. The purchase price payable by the mints
was fixed at $35 (less one-fourth of 1 percent), and the sales price at $35
(plus one-fourth of 1 percent) per troy ounce of fine gold.
24. The Secretary of the Treasury issued statements with respect to tjie
purchase and sale of gold, which are as follows:
" Beginning Thursday, February 1, 1934, and until further notice, I will buy
imported fine gold bars through the Federal Reserve Bank of New York as
fiscal agent of the United States; and other gold, foreign or domestic, through
any United States mint or the United States assay offices at New York or

EEPORT OF THE SECRETARY OF THE TREASURY

205

Seattle, both at the following rate and upon the following terms and conditions
deemed by me most advantageous to the public interest: Purchases will be made
at the rate of $35 per fine troy ounce, less the usual mint charges and less onequarter of 1 percent for handling charges, all subject to compliance with the
regulations issued under the Gold Reserve Act of 1934." (Statement of Jan. 31,
as amplified by statement of Feb. 1.)
" I n connection with the announcement today (Jan. 31) that the Treasury
will buy gold, the Secretary of the Treasury states that, until further notice,
he will also sell gold for export to foreign central banks whenever our exchange
rates with gold standard currencies reach gold export point. Like the purchases, all such sales of gold will be made through the Federal Reserve Bank of
New York as fiscal agent of the United States upon the following terms and
conditions which the Secretary of the Treasury deems most advantageous to
the public interest:
" Sales of gold will be made at $35 per fine ounce plus one-quarter percent
handling charge and will be governed by the regulations issued under the
Gold Reserve Act of 1934." (Statement of Jan. 31.)

Exhibit 26
Daily price quotations for newly mined domestic gold in the United States
from Sept.. 8, 1933, ta Jan. 31, 1934'
[Per fine ounce]
Day of
Sepmonth tember
1
2.
3
4
5
6
7
8
9...
10..
11
12
13
14
16
16.

$29. 62
29.12
29.10
29.21
29.48
29.77
30.41
30.49

OctoNoDeber vember cember

January

$32. 26 $34.01
$31.88 32.36 34.01 ""$34.'06
32.12 32.57
34.06
31.79 32.67 "34."6i'
34.06
3L55
34.01
34.06
31.72 "'32,"84" 34.01
34.06
3L20
34.01
34.01
'"33.'05"
'"'34.'66
"si.'ir 33.15 34.01 34.06
34,06
31.26 33.20
34.06
30.91 33.32 "34."0i"
34.06
34.01
34,06
30.62 33.46 34.01
29.83 33.56 34.01
33.56 34.01 ""34.'06
""29.'00" 33,56 34.01
34.45

Day of
month

September

OctoNoDevember cember
ber

17 . .
$29.86 $33.66
18
$31.44 30.33 33.56 '$34."06"
19
3L64
29.18
34.06
32.28 29,13 ""33."66' 34.06
20
3L33 29.01 33.76 34,06
21.
3L76
22
33.76 34.06
3L86 ""29."69" 33.76 34.06
23.
24
29.80 33.76
33.76
25.
31.30 3L36
2 6 . . . . . . . 3L49 3L54
"34."06"
3L76 "33."76' 34.06
27
3L36
28
3L05 3L82 33.85 34.06
29
3L33
33.93 34.06
34.06
31.46 "3i,"96"
30
31
32,12

January
$34.45
34.46
34.45
34.45
34.45
34,45
34.45
34.46
34.45
34.45
34.45
34.45
34.45

1 Prices shown from Sept, 8 through Oct. 24,1933, represent the price at which the Secretary of the Treasury was authorized to sell newly mined domestic gold received on consignment under authority of Executive order of Aug. 29, 1933. Quotations from Oct. 26, 1933, through Jan. 15, 1934, represent the price lixed
for newly mined domestic gold by the Reconstruction Finance Corporation in consultation with the Secretary of the Treasury and the President, which was offered in payment for notes of the Reconstruction Finance Corporation, under authority of Executive order of Oct. 25,1933. (This>rder revoked the Executive
order of Aug. 29.) Quotations from Jan, 15, to Jan. 31, 1934, represent the price at which the Federal
Reserve Bank of New York as fiscal agent purchased newly mined domestic gold consigned to the mints and
assay oflQces. Payment for this gold when coined was made by the Treasury with a special issueof
Treasury bonds, series of Apr. 16, 1934 (see note 1 on p. 8). Under regulations issued by the Treasury
Department Jan. 31, 1934, the mints are authorized to purchase newly mined domestic gold, unmelted
scrap gold, and gold imported into the United States after Jan. 30, 1934, at $35 less one-fourth of 1 percent
and less mint charges.

Exhibit 27
[Public No. 438, 73d Cong., H. R. 9745]

An act to authorize the Secretary of the Treasury to purchase silver, issue
silver certificates, and for other purposes
Be it enacted by the Senate and House of Representatives of the United
States of America in Congress assembled. That the short title of this Act shall
be the " Silver Purchase Act of 1934."

206

REPORT OF THE SECRETARY OF THE TREASURY

SEC. 2. It is hereby declared to be the policy,of the United States that the
proportion of silver to gold in the monetary stocks of the United States should
be increased, with the ultimate objective of having and maintaining, one-fourth
of the monetary value of such stocks in silver.
SEC 3. Whenever and so long as the proportion of silver iri the stocks of gold
•and silver of the United States is less than one-fourth of the monetary value
of such stocks, the Secretary of the Treasury is authorized and directed to
purchase silver, at home or abroad, for present or future delivery with any
direct obligations, coin, or currency of the United States, authorized by law,
or with any funds in the Treasury not otherwise appropriated, at such rates,
at such times, and upon such terms and conditions as he may deem reasonable
and most advantageous to the public interest: Provided, That no purchase of
silver shall be made hereunder at a price in excess of the monetary value
thereof: And provided further, That no purchases of silver situated in the
continental United States on May 1, 1934, shall be made hereunder at a price in
excess of 50 cents a fine ounce.
SEC 4. Whenever and so long as the market price of silver exceeds its monetary value or the monetary value of the stocks of silver is greater than 25
per centum of the monetary value of the stocks of gold and silver, the Secretary
of the Treasury may, with the approval of the President and subject to the
provisions of section 5, sell any silver acquired under the authority of this
act, at home or abroad, for present or future delivery, at such rates, at such
times, and upon such terms and conditions as he may deem reasonable and
most advantageous to the public interest.
SEC 5. The Secretary ot the Treasury is authorized and directed to issue
silver certificates in such denominations as he may from time to time prescribe
in a face amount not less than the cost of all silver purchased under the
authority of section 3, and such certificates shall be placed in actual circulation.
There shall be maintained in the Treasury as security for all silver certificates
heretofore or hereafter issued and at the time outstanding an amount of silver
in bullion and standard silver dollars of a monetary value equal to the face
amount of such silver. certificates. All silver certificates heretofore or hereafter issued shall be legal tender for all debts, public and private, public
(.^barges, taxes, duties, and dues, and ^shall be redeemable on demand at the
Treasury of the United States in standard silver dollars; and the Secretary of
the Treasury is authorized to coin standard silver dollars for such redemption.
SEC. 6. Whenever in his judgment such action is necessary to effectuate the
policy of this act, the Secretary of the Treasury is authorized, with the approval
of the President, to investigate, regulate, or prohibit, by means of licenses or
otherwise, the acquisition, importation, exportation, or transportation of silver
and bf contracts and other arrangements made with respect thereto; and to
require the filing of reports deemed by him reasonably necessary in connection
therewith. Whoever willfully violates the provisions of any license, order, rule,
or regulation . issued pursuant to the authorization contained in this section
shall, upon conviction, be fined not more than $10,000 or, if a natural person,
may be imprisoned for not more than ten years, or both; and any officer, director, or agent of any corporation who knowingly participates in such violation
may be punished by a like fine, imprisonment, or both.
SEC 7. Whenever in the judgment of the President such action is necessary
to effectuate the policy of this act, he may by Executive order require the
delivery to the United States mints of any or all silver by whomever owned or
possessed. The silver so delivered shall be coined into standard silver dollars
or otherwise added to the monetary stocks of the United States as the President may determine; and there shall be returned therefor in standard silver
dollars, or any other coin or currency of the United States, the monetary value
of the silver so delivered less such deductions for seigniorage, brassage, coinage,
and other mint charges as the Secretary of the Treasury with the approval of
the President shall have determined: Provided, That in no case shall the value
of the amount returned therefor be less than the fair value at the time of such
order of the silver required to be delivered as such value is determined by the
market price over a reasonable period terminating at the time of such order.
The Secretary of the Treasury shall pay all necessary costs of the transportation of such silver and standard silver dollars, coin, or currency, including
the cost of insurance, protection, and such other incidental costs as may be
reasonably necessary. Any silver withheld iri violation of any Executive order
issued under this section or of any regulations issued pursuant thereto shall be
forfeited to the United States, and may be seized and condemned by like pro

REPORT OF THE SECRETARY OF THE TREASURY

207

ceedings as those provided by law for the forfeiture, seizure, and condemnation
of property imported into the United States contrary to law; and, in addition,
any person failing to comply with the provisions of any such Executive order or
regulation shall be subject to a penalty equal to twice the monetary value of
the silver in respect of which such failure occurred.
SEC 8. Schedule A of title VIII of the Revenue Act of 1926, as amended
(relating to stamp taxes), is amended by adding at the end thereof a new
subdivision to read as follows:
" 10. SILVER, AND SO FORTH, SALES AND TRANSFERS.—On all transfers of

any

interest in silver bullion, if the price for which such interest is or is to be
transferred exceeds the total of the cost thereof and allowed expenses, 50 per
centum of the amount of such excess. On every such transfer there shall be
made and delivered by the transferor to the transferee a memorandum to which
there shall be affixed lawful stamps in value equal to the tax thereon. Every
such memorandum shall show the date thereof, the names and addresses of
the transferor and transferee, the interest in silver bullion to which it refers,
the price for which such interest is or is to be transferred, and the cost thereof
and the allowed expenses. Any person liable for payment of tax under this
subdivision (or anyone who acts in the matter as agent or broker for any such
person) who is a party to any such transfer, or who in pursuance of any such
transfer delivers any silver bullion or interest therein, without a memorandum
stating truly and completely the information herein required, or who delivers
any such memorandum without having the proper stamps affixed thereto, with
intent to evade the foregoing provisions, shall be deemed guilty of a misdemeanor, and upon conviction thereof shall pay a fine of not exceeding $1,000
or be imprisoned not more than six months, or both. Stamps affixed under
this subdivision shall be canceled (in lieu of the manner provided in section
804) by such officers and in such manner as regulations under this subdivision
shall prescribe. Such officers shall cancel such stamps only if it appears that
the proper tax is being paid, and when stamps with respect to any transfer
are so canceled, the transferor and not the transferee shall be liable for any
additional tax found due or penalty with respect to such transfer. The Commissioner shall abate or refund, in accordance with regulations issued hereunder, such portion of any tax hereunder as he finds to be attributable to
profits (1) realized in the course of the transferor's regular business of furnishing silver bullion for industrial, professional, or artistic use and (a) not resulting from a change in the market price of silver bullion, or (b) offset by contemporaneous losses incurred in transactions in interests in silver bullion
determined, in accordance with such regulations, to have been specifically related
hedging transactions; or (2) offset by contemporaneous losses attributable to
changes in the market price of silver bulUon and incurred in transactions in
silver foreign exchange determined, in accordance with .such regulations, to
have been hedged specifically by the interest in silver bullion transferred. The
provisions of this subdivision shall extend to all transfers in the United States
of any interest in silver bullion, and to all such transfers outside the United
States if either party thereto is a resident of the United States or is SL citizen
of the United States who has been a resident thereof within three months
before the date of the transfer or if such silver bullion or interest therein is
situated in the United. States; and shall extend to transfers to the United
States Government (the tax in such cases to be payable by the transferor),
but shall not extend to transfers of silver bullion by deposit or delivery at a
United States mint under proclamation by the President or in compliance with
any Executive order issued pursuant to section 7 of the Silver Purchase Act
of 1934. The tax under this subdivision on transfers enumerated in subdivision
4 shall be in addition to the tax under such subdivision. This subdivision shall
apply (1) with respect to. all transfers of any interest in silver bullion after
the enactment of the Silver Purchase Act of 1934, and (2) with respect to all
transfers of any interest in silver bullion on or after May 15, 1934, and prior
to the enactment of the Silver Purchase Act of 1934, except that in such cases
it shall be paid by the transferor in such manner and at such time as the
Commissioner, with the approval of the Secretary of the Treasury, may by
regulations prescribe, and the requirement of a memorandum of such transfer
shall not apply.
"As used in this subdivision—
" The terms * cost' means the cost of the interest in silver bullion to the
transferor, except that (a) in case of silver bullion produced from materials
90353—35——15

208

REPORT OF THE SECRETARY OF THE TREASURY

containing silver which has not previously entered into industrial, commercial,
or monetary use, the cost to a transferor who is the producer shall be deemed
to be the market price at the time of production determined in accordance
with regulations issued hereunder; (b) in the case of an interest in silver
bullion acquired by the transferor otherwise than for valuable consideration,
the cost shall be deemed to be the cost thereof to the last previous transferor
by whom it was acquired for a valuable consideration; and (c) in the case
of any interest in silver bullion acquired by the transferor (after April 15, 1934)
in a wash sale, the cost shall be deemed to be the cQst to him of the interest
transferred by him in such wash sale, but with proper adjustment, in accordance with regulations under this subdivision, when such interests are in silver
' bullion for delivery at different times.
" The term ' transfer' means a sale, agreement of sale, agreement to sell,
memorandum of sale or delivery of, or transfer, whether made by assignment
in blank or by any delivery, or by any paper or agreement or memorandum
or any other evidence of transfer or sale; or means to make a transfer as so
defined.
" The term ' interest in silver bullion' means any title or claim to, or interest
in, any silver bullion or contract therefor.
" The term ' allowed expenses' means usual and necessary expenses actually
incurred in holding, processing, or transporting the interest in silver bullion
as to which an interest is transferred (including storage, insurance, and transportation charges but not including interest, taxes, or charges in the nature
of overhead), determined in accordance with regulations issued hereunder.
" The term ' memorandum' means a bill, memorandum, agreement, or other
evidence of a transfer.
" The term ' wash sale ' means a transaction involving the transfer of an
interest in silver bullion and, within thirty days before or after such transfer,
the acquisition by the same person of an interest in silver bullion. Only so
much of the interest so acquired as does not exceed the interest so transferred,
and only so much of the interest so transferred as does not exceed the interest
so acquired, shall be deemed to be included in the wash sale.
" The, term ' silver bullion' means silver which has been melted, smelted,
or refined and is in such state or condition that its value depends primarily
upon the silver content and not upon its form."
SEC 9. The Secretary of the Treasury is hereby authorized to issue, with the
approval of the President, such rules and regulations as the Secretary of the
Treasury may deem necessary or proper to carry out the purposes of this Act,
or of any order issued hereunder.
SEC 10. As used in this Act—
The term " person" means an individual, partnership, association, or
corporation;
The term " the continental United States" means the States of the United
States, the District of Columbia, and the Territory of Alaska;
The term " monetary value" means a value calculated on the basis of $1
for an amount of silver or gold equal to the amount at the .time contained
in the standard silver dollar and the gold dollar, respectively;
The term " stocks of silver " means the total amount of silver at the time
owned by the United States (whether or not held as security for outstanding
currency of the United States) and of silver contained in coins of the United
States at the time outstanding;
The term " stocks of gold " means the total amount of gold at the time owned
by the United States, whether or not held as a reserve or as security for any
outstanding currency of the United States.
SEC 11. There is authorized to be appropriated, out of any money in the
Treasury not other^^ase appropriated, the sum of $500,000, which shall be available for expenditure under the direction of the President and in his discretion,
for any purpose in connection with the carrying out of this act; and there
are hereby authorized to be appropriated annually such additional sums as
may be necessary for such purposes.
SEO. 12. The right to alter, amend, or repeal this act is hereby expressly
reserved. If any provision of this act, or the application thereof to any
person or circumstarices, is held invalid, the remainder of the act, and the
application of such provision to other persons or circumstances shall not be
affected thereby.

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SEC. 13. All acts and parts of acts inconsistent with any of the provisions
of this act are hereby repealed, but the authority conferred in this act upon
the President and the Secretary of the Treasury is declared to be supplemental
to the authority heretofore conferred.
Approved, June 19, 1934, 9 p. m.

Exhibit 28
Proclamation and orders relating ta silver
P R O C L A M A T I O N , DECEMBER 2 1 , 1933, RELATING TO' THE COINAGE OF SILVER

Whereas, by paragraph (2) of section 43, title III, of the act of Congress,
approved May 12, 1933 (Public No. 10), the President is authorized "By
proclamation to fix the weight of the gold dollar in grains nine-tenths fine and
also to fix the weight of the silver dollar in grains nine-tenths fine at a definite
fixed ratio in relation to the gold dollar at such amounts as he finds necessary
from his investigation to stabilize domestic prices or to protect the foreign
commerce against the adverse effect of depreciated foreign currencies, and to
provide for the unlimited coinage of such gold and silver at the ratio so
fixed, * * * " ; and
Whereas, from investigations made by me, I find it necessary, in aid of the
stabilization of domestic prices and in accordance with the policy and program
authorized by Congress, which are now being administered, and to protect our
foreign commerce against the adverse effect of depreciated foreign currencies,
that the price of silver be enhanced and stabilized ; and
Whereas a resolution presented by the delegation of the United States of
America was unanimously adopted at the World Economic and Monetary Conference in London on July 20, 1933, by the representatives of sixty-six governments, which in substance provided that said governments will abandon the
policy and practice of melting up or debasing silver coins; that low valued
silver currency be replaced with silver coins and that no legislation should be
enacted that will depreciate the value of silver; and
Whereas a separate and supplemental agreement was entered into, at the
instance of the representatives of the United States, between China, India,
and Spain, the holders and users of large quantities of silver, on the one hand,
and Australia, Canada, Mexico, Peru, and the United States on the other hand,
as the chief producers of silver, wherein China agreed not to dispose of any
silver derived from the melting up or debasement of silver coins, and India
agreed not to dispose of over 35,000,000 ounces of silver per annum during a
period of four years commencing January 1, 1934, and Spain agreed not to
dispose of over 5,000,000 ounces of silver annually during said period, and
both of said governments agreed that at the end of said period of four years
they would then subject themselves to the general resolution adopted at the
London Conference, and in consideration of such limitation it was agreed that
the governments of the five producing countries would each absorb from the
mines in their respective countries a certain amount of silver, the total amount
to be absorbed by said producing countries being 35,000',000 ounces per annum
during the four years commencing the 1st day of January, 1934; that such silver
so absorbed would be retained in each of said respective countries for said
period of four years, to be used for coinage purposes or as reserves for currency,
or to otherwise be retained and kept off the world market during sUch period of
time, it being understood that of the 35,000,000 ounces the United States was to
absorb annually at least 24,421,410 ounces of the silver produced in the United
States during such period of time.
Now, therefore, finding it proper to cooperate with other governments and
necessary to assist in increasing and stabilizing domestic prices, to augment the
purchasing power of peoples in silver-using countries, to protect our foreign
cominerce against the adverse effect of depreciated foreign currencies, and to
carry out the understanding between the sixty-six governments that adopted the
resolution hereinbefore referred to; by virtue of the power in me vested by the
act of Congress above cited, the other legislation designated for national
recovery, and by virtue of all other authority in me vested;
I, Franklin D. Roosevelt, President of the United States of America, do proclaim and direct that each United States coinage mint shall receive for coinage

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REPORT OF THE SECRETARY OF THE TBEASURY

into standard silver dollars any silver which such mint, subject to regulations
prescribed hereunder by the Secretary of the Treasury, is satisfied has been
mined, subsequently to the date of this proclamation, from natural deposits in
the United States or any place subject to the jurisdiction thereof. The Director
of the Mint, with the voluntary consent of the owner, shall deduct and retain
of such silver so received fifty percent as seigniorage and for services performed
by the Government of the United States relative to the coinage and delivery of
silver dollars. The balance of such silver so received, that is, fifty percent
thereof, shall be coined into standard silver doUars and the same, or an equal
number of other standard silver dollars, shall be delivered to the owner or
depositor of such silver. The fifty percent of such silver so deducted shall be
retained as bullion by the Treasury and shall not be disposed of prior to the
thirty-first day of December, 1937, except for coining into United States coins.
The Secretary of the Treasury is authorized to prescribe regulations to carry
out the purposes of this proclamation. Such regulations shall contain provisions substantially similar to the provisions contained in the regulations made
pursuant to the act of Congress, approved April 23, 1918, (40 Statutes at Large,
page 535), known as the Pittman Act, with such changes as he shall determine,
prescribing how silver mined, subsequently to the date of this proclamation,
from natural deposits in the United States or any place subject to the jurisdiction thereof, shall be identified.
This proclamation shall remain in force and effect until the thirty-first day
of December, 1937, unless repealed or modified by act of Congress or by
subsequent proclamation.
The present ratio in weight and fineness of the silver dollar to the gold
dollar shall, for the purposes of this proclamation, be maintained until changed
by further order or proclamation.
Notice is hereby given that I reserve the right by virtue of the authority
vested in me to revoke or modify this proclamation as the interest of the United
States may seem to require.
In witness whereof, I have hereunto set my hand and caused the seal of the
United States to be affixed.
Done at the city of Washington this 2ilst day of December, in the year of
our Lord nineteen hundred and thirty-three, and of the Independence of the
United States of America the one hundred and fifty-eighth.
FRANKLIN D . ROOSEVELT.

By the President:
WILLIAM PHILLIPS,

Acting Secretary of State.
OFFICIAL ORDER, J U N E 1 4 , 1 9 3 4 , RELATING TO T H B ISSUANCE OF SILVER CERTIFICATES
JUNE 14, 1934.

MY DEAR MR. SECRETARY : Pursuant to the authority vested in me by the act
approved May 12, 1933, as amended by the Gold Reserve Act of 1934, approved
January 30, 1934, I hereby authorize and direct the issuance of silver certificates, pursuant to law, in any or all of the follov^ing denominations, $1, $5, $10,
$20, and $100, against any and all silver bullion or standard silver dollars now
in the Treasury not held for redemption of any outstanding silver certificates.
Sincerely yours,
(Signed)

FRANKLIN D . ROOSEVELT.

The honorable the SECRETARY OF THE TREASURY.

ORDER OF T H E SECRETARY OF THE TREASURY, JUNE 28, 1934, FORBIDDING THB EXPORT
OF SILVER EXCEPT UNDER LICENSE

Whereas, section 6 of the Silver Purchase Act of 1934 provides as follows:
[Section 6 omitted here, see p. 206.]
Whereas, in my judgment, such action is necessary to effectuate the policy
of said Silver Purchase Act of 1934;
Now, therefore; I, Henry Morgenthau, Jr., Secretary of the Treasury, do
hereby prescribe the following provisions for the investigation, regulation, and
prohibition of the acquisition, importation, exportation, or transportation of

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211

silver and of cori tracts and arrangements made with respect thereto, and requirements concerning the filing of reports deemed by the Secretary of the
Treasury reasonably necessary in connection therewith.
SECTION 1. Definitions.—As used in this order the term " person " means an
individual, partnership, association, or corporation; and the term " continental
United States " means the States of the United States, the District of Columbia,
and the Territory of Alaska.
SEC 2. Exportation or transportation from the continental United States.—
Except as otherwise specifically provided in sections 4, 5, and 6 hereof, no person shall export or transport from the continental United States, any silver except under license issued pursuant to section 3 of this order.
SEC 3. Licenses.—The Secretary of the Treasury, subject to such regulations
as he may prescribe, acting directly or through such agency or agencies as he
may designate, may issue licenses authorizing the exportation or transportation
from the continental United States of silver which the Secretary of the Treasury, or the designated agency, is satisfied:
(a) Is required to fulfill an obligation to deliver such silver outside of the
continental United States, incurred or assumed by the applicant on or before
the date of this order;
(&) Has been owned on and continuously after the date of this order by a
recognized foreign government, foreign central bank, or the Bank for International Settlements;
(o) Was imported for prompt reexport, or was imported in silver-bearing
materials under an agreement to refine such materials and export the silver
so refined;
{d) Is of a fineness of 0.8 or less; or
(e) With the approval of the President, for other purposes not inconsistent
with the purposes of the Silver Purchase Act of 1934.
SEC 4. Fabricated silver.—Silver contained in articles fabricated and held
in good faith for a specific and customary use and not for their value as
silver bullion may be exported, or transported from the continental United
States, without the necessity of obtaining a license: Provided, That a statement containing such information as may be required by the Secretary of
the Treasury shall have been executed, sworn to, and filed in duplicate with
the collector of customs at the port of shipment from the continental United
States or with the postmaster at the place of mailing; and such collector or
postmaster shall have endorsed on the duplicate copy of such affidavit that
he is satisfied that the shipment from the continental United States is not
being raade for the purpose of holding or disposing of such articles outside
of the continental United States primarily for their silver content: Provided,
That persons leaving the continental United States may carry with them such
articles owned by them and for their personal use in their fabricated form,
of a fine silver content not exceeding 100 troy ounces without the necessity
of filing such affidavit or obtaining an export license under this order.
SEC 5. Metals contadning silver.—Metals containing not more than 50 troy
ounces of fine silver per short ton may be exported or transported from the
continental United States without the necessity of obtaining a license under
this order: Provided, That the collector of customs at the port of export or
the postmaster at the place of mailing may require the furnishing of such
eviderice and the execution of such affidavits as are necessary to satisfy him
as to the silver content of the metals.
SEC 6. Silver coin.—Silver coins may be exported or transported from the
continental United States without the necessity of obtaining a license under
thig order.
SEC 7. Collectors of customs and postmasters.—At the time any license is
issued under section 3, the issuing agency shall transmit a copy thereof to the
collector of customs at the port of export designated in the license. The collector of customs shall not permit the exportation or transportation from the
continental United States of silver in any form except upon surrender of a
license issued under section 3, a copy of which has been received by him from
the agency authorized to issue such license: Provided, That a license under
this order shall not be required to export or transport from the United States
silver described in sections 4, 5, and 6, if the provisions of such sections
respectively are complied with. In the event that the shipment is to be made
by mail, a copy of the license shall be serit to the postmaster of the post
office designated in the application, who will act under the instructions of
the Postmaster General in regard thereto.

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REPORT OF THE SECRETARY OF THE TREASURY

SEC 8. Exports prohibited by other orders, etc.—The provisions of sections
3, 4, 5, and 6 shall not be construed to authorize any exportation or transportation from the continental United States prohibited by any other order or by
any law, ruling, or regulation.
SEC 9. Reports.—The Secretary of the Treasury shall require the filing of
such reports, in such manner, at such times, and containing such information,
as is deemed by him reasonably necessary in connection with the investigation,
regulation, or prohibition of acquisitions, importations, exportations, or transportations of silver and of contracts and arrangements made with respect
thereto.
SEO. 10. Regulations.—The Secretary of the Treasury is hereby authorized
and empowered to issue such regulations as he may deem necessary to carry
out the purposes hereof. Licenses and permits granted in accordance with the
provisions of this order and such regulations may be issued through such officers
and agencies as the Secretary of the Treasury may designate.
SEO. 11. Penalties.—All persons are hereby informed that section 7 of the
Silver Purchase Act of 1934 prescribes penalties for willful violation of any of
the provisions hereof or of any license, order, rule or regulations issued or prescribed under the authority hereof.
This order and any regulations, rules, and licenses prescribed or issued hereunder may be modified or revoked at any time.
HENRY MORGENTHAU,

Jr.,

Secretary of the Treasury.
Approved:
FRANKLIN D . ROOSEVELT,

The White House, June 28, 1934.

Exhibit 29
Proclamation and Executive orders relating to banlcing, foreign exchange, and
related matters
P R O C L A M A T I O N , DECEMBER 30, 1933, RELATIVE TO THE CONTROL OVER STATE BANKING
INSTITUTIONS

Whereas, on March 6, 1933, I, Franklin D. Roosevelt, President of the United
States of America, by virtue of authority vested in me by the act of October
6, 1917 (40 Stat. L. 411), as amended, issued a proclamation declaring that
an emergency existed and that a national banking holiday be observed;
Whereas, on March 9, 1933, I issued a proclamation continuing the terms
and conditions of said proclamation of March 6, 1933, in full force and effect
until further proclamation by the President:
Whereas, on March 10, 1933, I issued an Executive order authorizing the
appropriate authority having immediate supervision of banking institutions
in each State or any place subject to the jurisdiction of the United States
to permit any banking institution not a member of the Federal Reserve System
to perform any or all of its usual banking functions except as otherwise
provided;
Whereas, the Secretary of the Treasury, pursuant to authority granted by
other provisions of the said Executive order of March 10, 1933, has acted upon
all requests for licensing of banks members of the Federal Reserve System;
Whereas, the Federal Deposit Insurance Corporation has acted upon all
applications to it for membership in the Temporary Federal Deposit Insurance
Fund as provided for in section 12B (y) of the Federal Reserve Act as amended
by section 8 of the act of June 16, 1933, PubUc No. 66, Seventy-third Congress,
and has admitted to the said fund all applicant banks which are. duly and
properly qualified; and
Whereas, it is now appropriate that the banking authority in each State
and any place subject to the jurisdiction of the United States should have
and exercise the sole responsibility for, and control over, banking institutions
not members of the Federal Reserve System;
Now, therefore, I, Franklin D, Roosevelt, President of the United States,
in order to assure that the banking authority in each State and in any place
subject to the jurisdiction of the United States shall have and exercise the sole

REPORT OF THE SECRETARY OF THE TREASURY

213

responsibility for, and control over, banking institutions which are not members
of the Federal Reserve System, do hereby proclaim, order, direct, and declare
that the proclamations of March 6, 1933, and March 9, 1933, and the Executive
order of March 10, 1933, and all orders and regulations pursuant thereto, are
amended, effective the first day of January, nineteen hundred and thirty-four,
to exclude from their scope banking institutions which are not members of
the Federal Reserve System: Provided, however. That no banking institutions
shall pay out any gold coin, gold bullion, or gold certificates, except as authorized by the Secretary of the Treasury, nor allow the withdrawal of any
currency for hoarding, nor engage in any transactions in foreign exchange
except such as may be undertaken for legitimate and normal business requirements, for reasonable traveling and other personal requirements, and for the
fulfillment of contracts entered into prior to March 6, 1933.^
In witness whereof I have hereunto set my hand and caused the seal of
the United States to be affixed.
Done in the city of Washington this 30th day of December in the year
of our Lord one thousand nine hundred and thirty-three, and of
[SEAL] the Independence of the United States the one hundred and fiftyeighth.
FRANKLIN D . ROOSE\^ELT.

By the President:
WILLIAM PHILLIPS,

Acting Secretary of State.

E X E C U T I V E ORDER, JANUARY 15, 1934, AMENDING THB EXECUTIVE ORDER OF MAROH 10,
1933, AND THE PROCLAMATION OF DECEMBER 30, 1933, CONCERNING THE OPERATION
OF BANKS

By virtue of the authority vested in me by section 5 (b) of the act of
October 6, 1917 (40 Stat. L. 411), as amended by the act of March 9, 1933, and
by section 4 of said act of March 9, 1933, and by virtue of all other authority
vested in me, I, Franklin D. Roosevelt, President of the United States of
America, do hereby issue the following Executive order:
SECTION 1. The last two paragraphs of the Executive order of March 10,
1933, concerning the operation of banks, are amended, effective from the date
of this order, by striking out the following:
" nor to engage in any transaction in foreign exchange except such as may be
undertaken for legitimate and normal business requirements, for reasonable
traveling and other personal requirements, and for the fulfillment of contracts
entered into prior to March 6, 1933.
" Every Federal Reserve bank is authorized and instructed to keep itself
currently informed as to transactions in foreign exchange entered into or consummated within its district and shall report to the Secretary of the Treasury
all trarisactions in. foreign exchange which are prohibited."
The Secretary of the Treasury is authorized to amend the licenses heretofore
issued with his approval by the Federal Reserve banks under the Executive
order of March 10, 1933, by issuing through the Federal Reserve banks amendatory licenses removing the restriction upon transactions in foreign exchange
contained in the licenses heretofore issued.
SEO. 2. The proclamation of December 30, 1933, relating to the licensing of
banking institutions which are not members of the Federal Reserve System
is amended, effective from the date of this order, by striking out the following:
" nor to engage in any transaction in foreign exchange except such as may be
undertaken for legitimate and normal business requirements, for reasonable
traveling and other personal requirements, and for the fulfillment of contracts
entered into prior to March 6, 1933."
SEC. 3. The amendment of such Executive order of March 10, 1933, or of any
licenses issued thereunder, and the amendment of such proclamation of December 30, 1933, shall not affect any act done, or any order, decision, or finding
made, or relieve any person from the consequences of any unauthorized act
comrbitted prior to the date of this Executive order; nor shall the amendment
of the Executive order of March 10, 1933, or the proclamation of December 30,
1 Amended by Executive order of J a n . 15, 1934, see below.

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REPORT OF THE SECRETARY OF THE TREASURY

1933, relieve any person from the obligation of complying with the t;erms of
the Executive order of January 15, 1934, relating to the export o^ coin and
currency and transactions in foreign exchange, or the regulations or licenses
issued thereunder, or of any other provision of law affecting transactions' in
foreign exchange.
FRANKLIN D . ROOSEVELT.
T H E WHITE HOUSE,

January 15, 1934.
E X E C U T I V E ORDER, JANUARY 15, 1934, REGULATING TRANSACTIONS IN FOREIGN
EXCHANGE, TRANSFERS OF CREDIT, AND THE EXPORT OF COIN AND CURRENCY

By virtue of the authority vested in me by section 5 (b) of the act of October
6, 1917 (40 Stat. L. 411), as amended by section 2 of the act of March 9, 1933,
entitled "An act to provide relief in the existing national emergency in
banking, and for other purposes ", I, Franklin D. Roosevelt, President of the
United States of America, do declare that a period of national emergency continues to exist, and by virtue of said authority and of all other authority vested
in me, do hereby prescribe the following regulations for the investigation, regulation, and prohibition of transactions in foreign exchange, transfers of credit
between or payments by banking institutions as herein defined, and export of
currency or silver coin, by any person within the United States or any place
subject to the jurisdiction thereof:
SECTION 1. Every transaction in foreign exchange, transfer of credit between
any banking institution within the United States and any banking institution
outside of the United States (including any principal, agent, home office, branch,
or correspondent outside of the United States of a banking institution within
the United States), and the export or withdrawal from the United States of
any currency or silver coin which is legal tender in the United States, by any
person within the United States, is hereby prohibited, except under license
therefore issued pursuant to this Executive order: Provided, however, That,
except as prohibited under regulations prescribed by the Secretary of the Treasury, foreign exchange transactions and transfers of credit may be carried out
without a license for (a) normal commercial or business requirements, (b)
reasonable traveling and other personal requirements, or (c) the fulfillment of
legal]y enforceable obligations incurred prior to March 9, 1933.
SEC. 2. Possessions of the United States.—Except as prohibited in regulations
prescribed by the Secretary of the Treasury, transfers of credit between banking institutions in the continental United States and banking institutions in
other places subject to the jurisdiction of the United States (including principals, agents, home offices, branches, or correspondents in such other places, of
banking institutions within the continental United States), may be carried out
without a license.
SEO. 3. Licenses.—The Secretary of the Treasury, acting directly or through
any agencies that he may designate, and the Federal Reserve banks acting in
accordance with such rules and regulations as the Secretary of the Treasury
may from time to time prescribe, are hereby designated as agencies for the
granting of licenses as hereinafter provided. Licenses may be granted authorizing such transactions in foreign exchange, transfers of credit, and exports of
currency (other than gold certificates), or silver coin in such specific cases or
classes of cases as the Secretary of the Treasury may determine in regulations
prescribed hereunder and rulings made pursuant thereto.
SEC 4. Reports.—The Federal Reserve banks shall keep themselves currently
informed as to foreign exchange transactions entered into or consummated,
and transfers of credit made between banking institutions outside of the continental United States and banking institutions, in their districts, arid report to
the Secretary of the Treasury all transactions in foreign exchange and all such
transfers of credit not permitted under sections 1 or 2 hereof which are effected
or attempted in their districts without a license.
SEC 5. ReguloMons.—The Secretary of the Treasury is authorized and empowered to prescribe from time to time regulations to carry out the purposes
of this order, and to provide in such regulations or by rulings made pursuant
thereto, the conditions under which licenses may be granted by the Federal
Reserve banks and by such other agencies as the Secretary of the Treasury
rnay designate; and the Secretary of the Treasury may require any person
engaged in any transaction, transfer, export, or withdrawal referred to in

REPORT OF TBiE SECRETARY OF THE TREASURY

215

this Executive order to furnish under oath complete information relative thereto,
including the production of any books of account, contracts, letters, or other
papers, in connection therewith in the custody or control of such person either
before or after such transaction, transfer, export, or withdrawal is completed.
SEC 6. Penalties.—Whoever willfully violates or knowingly participates in
the violation of any provision of this Executive order or of any license, order,
rule, or regulation issued or prescribed hereunder, shall be subject to the penalties provided in section 5 (b) of the act of October 6, 1917, as amended by
section 2 of the act of March 9, 1933.
SEC 7. Definitions.—^As used in this Executive order, the term " United
States" means the United States and any place subject to the jurisdiction
thereof; the term " continental United States " means the States of the United
States, the District of Columbia, and the Territory of Alaska; the term " person " means an individual, partnership, association, or corporation; and the
term " banking institution" includes any person engaged primarily or incidentally in the business of banking, of granting or transferring credits, or of
purchasing and selling foreign exchange or procuring purchasers and sellers
thereof, as principal or agent; and, for the purposes of this order, each home
office, branch, principal, agent, or correspondent of any person so engaged
shall be regarded as a separate " banking institution."
SEC 8. Section 8 of the Executive order of August 28, 1933, relating to the
hoarding, export, and earmarking of gold coin, bullion, or currency, and to
transactions in foreign exchange, is hereby revoked.
This Executive order and any rules, regulations, or licenses prescribed or
issued hereunder may be modified or revoked at any time.
FRANKLIN D . ROOSEVELT.
T H E WHITE HOUSE,

January 15, 1934.
TAXATION 1
Exhibit 30
[Public No. 83, 73d Cong., H. R. 6131]

An act to raise revenue by tawing certainl intoxicating liquors, and for other
purposes
Be it enacted by the Senate and House of Representatives of the United
States of America in Congress assembled.
TITLE I

SECTION 1. This act may be cited as the " Liquor Taxing Act of 1934."
SEC 2. Paragraphs (3) and (4) of subdivision (a) of section 600 of the
Revenue Act of 1918, as amended (relating to the tax on distilled spirits generally and the tax on distilled spirits diverted for beverage purposes) [U. S. C,
Sup. VI, title 26, sec. 1150 (a) (1) and (2)], are amended to read as follows:
"(3) On and after January 1, 1928, and until the effective date of title I of
the Liquor Taxing Act of 1934, $1.10 on each proof gallon or wine gallon when
below proof and a proportionate tax at a like rate on all fractional parts of
such proof or wine gallon; and.
"(4) On and after the effective date of title I of the Liquor Taxing Act of
1934, $2.00 on each proof gallon or wine gallon when below proof and a proportionate tax at a like rate on all fractional parts of such proof or wine
gallon."
SEO. 3. Subdivision (c) of section 600 of the Revenue Act of 1918 (relating
to tlie internal revenue tax on imported perfumes containing distilled spirit)
[U,,S. C., Slit). VI,. title 26, sec. 1150 (a) (4)], is amended by striking out
"$i.lO per wine gallon" and inserting in lieu thereof "$2.00 per wine gallon."
1 These exhibits do not include the following laws which modify the tax system:
Public 216, May 10, 1934, Revenue Act of 1934; amendments to the Agricultural Adjustment Act of May 12, 1933, so as to include cattle and other products (Public 142,
April 7, 1934) and sugar beets and sugar cane (Public 213, May 9, 1934) as basic
agricultural commodities; Public 169, April 21, 1934, to place the cojtton industry on a
sound commercial basis; Public 483, June 28, 1934, to place the tobacco-growing
industry on a sound financial and economic basis; and section 8 of Public 438, June 19,
1934, Silver Purchase Act. This section appears on page 207 of this report.

216

REPORT OF THE SECRETARY OF THE TREASURY

SEC 4. In lieu of the rate of drawback provided in section 3329 of the Revised Statutes, as amended [U. S. C, Sup. VI, title 26, sec 1239], the rate of
drawback allowed upon the exportation of distilled spirits exported on'or after
the effective date of this title shall be equal to the rate of the internal revenue
tax paid in respect of the distilled spirits exported but shall not exceed a rate
of $2.00 per proof gaUon.
SEC 5. Section 3309 of the Revised Statutes, as amended (relating to the
tax on deficiencies in distilled spirits production) [U. S. C, Sup. VI, title 26,
sec. 1197], is amended by striking out " a t the rate of $1.10" wherever such
phrase appears and inserting in lieu thereof " at the rate of tax imposed by
law."
SEC 6. So much of section 611 of the Revenue Act of 1918, as amended (relating to the tax on stiU wines) [U. S. C, Sup. VI, title 26, sec. 1300 (a) (1)],
as reads:
" On wines containing not more than 14 per centum of absolute alcohol, 4
cents per wine gallon, the per centum of alcohol taxable under this section to be
reckoned by volume and not by weight;
" On wines containing more than 14 per centum and not exceeding 21 per
centum of absolute alcohol, 10 cents per wine gallon;
" On wines containing more than 21\ per centum and not exceeding 24 per
centum of absolute alcohol, 25 cents per wine gallon;
"All such wines containing more than 24 per centum of absolute alcohol by
volume shall be classed as distilled spirits and shall pay tax accordingly."
is amended to read as follows:
" On wines containing not more than 14 per centum of absolute alcohol, 10
cents per wine gallon, the per centum of alcohol under this section to be reckoned by volume and not by weight;
'* On wines containing more than 14 per centum and not exceeding 21 per
centum of absolute alcohol, 20 cents per wine gallon;
" On wines containing more than 21 per centum and not exceeding 24 per
centum of absolute alcohol, 40 cents per wine gallon;
"All such wines containing more than 24 per centum of absolute alcohol by
volume shall be classed as distilled spirits and shall be taxed accordingly."
SEC. 7. So much of section 613 of the Revenue Act of 1918 [U. S. C, Sup. VI,
title 2,6, sec. 1300 (a) (2)] as reads:
" On each bottle or other container of champagne or sparkling wine, 12 cents
on each one-half pint or fraction thereof;
" On each bottle or other container of artificially carbonated wine, 6 cents on
each one-half pint or fraction thereof;
" On each bottle or other container of liqueurs, cordials, or similar compounds,
by whatever name sold or offered for sale, containing sweet wine fortified with
grape brandy, 6 cents on each one-half pint or fraction thereof."
is amended to read as follows:
'* On each bottle ot other container of champagne or sparkling wine, 5 cents
on each one-half pint or fraction thereof;
" On each bottle or other container of artificially carbonated wine, 2% cents
on each one-half pint or fraction thereof;
" On each bottle or other container of liqueurs, cordials, or similar compounds,
by whatever name sold or offered for sale, containing sweet wine fortified with
grape brandy, 2^/^ cents on each one-half pint or fraction thereof;
"Any of the foregoing articles containing more than 24 per centum of absolute
alcohol by volume shall be classed as distilled spirits and shall be taxed
accordingly."
SEO. 8. Section 612 of the Revenue Act of 1918, as amended (relating to the
tax on grape brandy and wine spirits withdrawn and used in the fortification of
wines) [U. S. C, Sup. VI, title 26, sec. 1301], is amended by striking out "10
cents per proof gallon" and inserting in lieu thereof " 20 cents per proof
gallon."
SEO. 9. (a) Section 608 of the Revenue Act of 1918, as amended (relating to
the tax on malt Uquors) [U. S. C, Sup. VI, title 26, sec 1330 ( a ) ] , is amended
by striking out " a tax of $6.00 " and inserting in lieu thereof " a tax of $5.00."
(b) Subsection (a) of section 1 of the act entitled "An act to provide revenue by the taxation of certain nonintoxicating liquor, and for other purposes ",
approved March 22, 1933, is hereby repealed.
(c) Paragraph " F i r s t " of section 3244 of the Revised Statutes, as amended,
is amended to read as foUows:

REPORT OF THE SECRETARY OF THE TREASURY

217

" First. Brewers shall pay $100 in respect of each brewery: Provided, That
any brewer of less than 500 barrels a year shall pay the sum of $50. Every
person who manufactures fermented liquors of any name or description for
sale, from malt, wholly or in part, or from any substitute therefor, shall be
deemed a brewer."
SEC 10. (a) Upon all distilled spirits produced in or imported into the
United States upon which the internal revenue tax imposed by law has been
paid, and which, on the day this title takes effect, are held by any person and
intended for salQ or for use in the manufacture or production of any article
intended for sale, there shall be levied, assessed, collected, and paid a floor
tax equal to the amount, if any, by which the tax provided for under this title
exceeds the tax so paid, not including in the computation of the tax so paid ^
the 30-cent tax imposed by section 605 of the Revenue Act of 1918.
(b) Upon all articles specified in section 6 or 7 of this title produced in or
imported into the United States upon which the internal revenue tax imposed
by law has been paid, and which, on the day this title takes effect, are held
by any person and intended for sale or for use in the manufacture or production of any article intended for sale, there shall be levied, assessed, collected,
and paid a floor tax equal to the amount, if any, by which the tax provided
for under such sections of this title exceeds the tax so paid, not including in
the computation of the tax so paid the 30-cent tax imposed by section 605 of
the Revenue Act of 1918.
(c) Upon all wines held by the producer thereof upon the day this title takes
effect and intended for sale or for use in the manufacture or production of any
article intended for sale, there shall be levied, assessed, collected, and paid
a floor tax equal to the amount, if any, by which the tax provided for under
section 8 of this title exceeds the tax paid upon the grape brandy or wine
spirits used in the fortification of such wine.
(d) The person required by this section to pay any floor tax shaU, within
thirty days after the effective date of this title, make return under oath, in
such form and under such regulations as the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, shall prescribe. Payment of the tax shown to be due may be extended to a date not exceeding
seven months after the effective date of this title, upon the filing of a bond
for payment in such form and amount and with such sureties as the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury,
may prescribe. All provisions of law (including penalties) applicable in respect of internal revenue taxes on distilled spirits or wines shall, insofar as
applicable and not inconsistent with this section, be applicable in respect of
the taxes imposed by this section.
(e) As used in this section and in title II, the term "person" includes an
individual, a partnership, an association, and a corporation; and the term
" distilled spirits " includes products produced in such manner that the person
producing them is a rectifier within the meaning of section 3244 of the Revised
Statutes, as amended.
SEO. 11. As used in this act, the term " internal revenue taxes" does not
include taxes imposed under the Agricultural Adjustment Act.
SEO. 12. That section 5 of the act entitled "An act making appropriations
for the Post Office Department for the year ending June 30, 1918", approved
March 3, 1917. as amended, is amended to read as follows:
'* SEC 5. Whoever shall order, purchase, or cause intoxicating liquors to be
transported in interstate commerce, except for scientific, sacramental, medicinal, and mechanical purposes, into any State, Territory, or the District of
Columbia, the laws of which prohibit the manufacture or sale therein of
intoxicating liquors for beverage purposes, shall be fined not more than $1,000
or imprisoned not more than six months, or both; and for any subsequent
offense shall be imprisoned not more than one year."
Nothing: in this act shall.be construed to amend or repeal any provision of
section 1110 of the Revenue Act of 1917.
SEC 13. This title shall take effect on the day following its enactment.
TITLE II

SEC 201. No person shall (except as provided in section 202) transport,
possess, buy, sell, or transfer any distilled spirits, unless the immediate container thereof has affixed thereto a stamp denoting the quantity of distilled
spirits contained therein and evidencing payment of all internal revenue taxes
Imposed on such spirits. The provisions of this title shall not apply to—

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REPORT OF THE SECRETARY OF THE TREASURY

(a) Distilled spirits placed in a container for immediate consumption on
the premises or for preparation for such consumption;
(b) Distilled spirits in bond or in customs custody;
(c) Distilled spirits in immediate containers required to be stamped under
existing law^;
(d) Distilled spirits in actual process of rectification, blending, or bottling,
or in actual use in processes of manufacture;
(e) Distilled spirits on which no internal revenue tax is required to be
paid;
(f) Distilled spirits not intended for sale or for use in the inanufacture or
production of any article intended for sale; or
(g) Any regularly established common carrier receiving, transporting, delivering, or holding for transportation or delivery distUled spirits ip the
ordinary course of its business as a common carrier.
SEC 20'2. Every person who, on the effective date of this title, holds for sale
(or use in the manufacture or production of an article intended for sale) any
distilled spirits in containers required to be stamped by section 201, on which
all internal revenue taxes have been paid, may possess such spirit^, but shall,
not later than the tenth day after such date, apply for, and shall be sold (in
accordance with section 203) the requisite stamps. Such stamps shall be
promptly affixed to the immediate containers of such spirits, except that wb^^
such spirits contained in bottles in closed cases are held for s^ale or sold
otherwise than at retail, such stamps need not be aiOGixed until tlie cases are
opened or sold at retail, when such stamps shall be immediately affixed to the
bottles, but such stamps shall be sold or transferred in connectiqn with any
sale or transfer of such spirits and the person in possession of sjich spirits
shall be in possession of such stamps therefor.
SEC 203. Any person placing or intending to place any distilled spirits upon
which all internal revenue taxes have been paid into any container upon
which a stamp is required by this title, or withdrawing or intending to withdraw any imported spirits in such containers from customs custody, shall be
entitled to purchase sufficient stamps for stamping such containers. Such
stamps shall be issued by the Commissioner of Internal Revenue to each
collector of internal revenue, upon his requisition, in such numbers as may
be necessary in his district, and shall be sold by^ the collectors to persons entitled thereto upon application therefor and compliance with regulations iinder
this title, at a price of 1 cent for each stamp, except that in the case of stamps
for containers of less than one-half pint the price shall be one-quarter of 1 cent
for each stamp. When in his judgment there is no danger to the revenue,
and upon the giving of such bonds or other security as he may deem necessary,
the Commissioner may authorize (1) the sale prior to the effective date of this
title of such stamps and (2) the sale of such stamps to importers for staraping
containers in the country from which imported.
SEO. 204. Every person emptying any container stamped under the provisions
of this title shall at the time of emptying such container destroy the stamp
thereon.
SEC 205. The Commissioner, with the approval of the Secretary of the
Treasury, shall prescribe (a) regulations with respect to the time and m^anner
of applying for, issuing, affixing, and destroying stamps required by this title,
the form and denominations of such stamps, proof that applicants are entitled
to such stamps, and the method of accounting for rieceipts from the sale of
such stamps, and (b) such other regulations as he shall deem necessary for
the enforcement of this title.
SEC 206. All distilled spirits found in any container required to bear a stamp
by this title, which container is not stamped in compliance with this title and
regulations issued thereunder, shall be forfeited to the United States! Distilled spirits placed in such containers prior to the effective; date of this title
shall not be subject to this section until the expiration of 10, days after the
effective date of this title, nor (when it is established tha.t appjlicatipn for
stamps therefor was made within the proper'time) until such sta.mps are
received by the applicant.
SEC 207. Any person who violates any provision of this title, or who, with
intent to defraud, falsely makes, forges, alters, or counterfeits any stamp made
or used under this title, or who uses, sells, or has in his possession any such
forged, altered, or counterfeited stamp, or any plate or die used or which m,ay
be used in the manufacture thereof, or any stamp required to be destroyed^ by
this title, or who makes, uses, sells, or has in his possession any paper in

REPORT OF THE SECRETARY OF THE TREASURY

219

imitation of the paper used in the manufacture of any such stamp, or who reuses any stamp required to be destroyed by this title, or who places any distilled spirits in any bottle which has been filled and stamped under this title
without destroying the stamp previously affixed to such bottle, or who affixes
any stamp issued under this title to any container of distilled spirits on which
any tax due is unpaid, or who makes any false statement in any appUcation for
stamps under this title, or who has in his possession any such stamps obtained
by him otherwise than as provided in sections 202 and 203, or who sells or
transfers any such stamp otherwise than as provided in section 202, shall, on
conviction, be punished by a fine not exceeding $1,000, or by imprisonment at
hard labor not exceeding five years, or by both. Any officer authorized to enforce any provisions of law relating to internal revenue stamps is authorized to
enforce the provisions of this section and the provisions of section 7 of the
act of March 3, 1897, relating to the bottling of distilled spirits in bond.
SEC. 208. This title shall take effect on the thirtieth day following the date
of the enactment of this act, except that if on or before tlie twentieth day following the date of the enactment of this act the Secretary of the Treasury finds
that it is impracticable to put this title into effect on the thirtieth day following
the date of the enactment of this act and so proclaims, specifying the date,
not later than the sixtieth day following the date of the enactment of this
act on which it will be practicable to put this title into effect, this title shall
take effect on the date specified in such proclamation. Notwithstanding the
previous provisions of this section, this section and sections 202, 203, and
205 shall take effect on the date of the enactment of this act.
Approved, January 11, 1934, 11.50 p. m.
Exhibit 31
[Public No, 474, 73d Cong., H. R. 9741]

An act to provide for the taxation of manufacturers, importers, and dealers in
certain firearms and machine guns, to tax the sale or other disposal of such
loeapons, and to restrict importation and regulate interstate transportation
thereof
Be it enacted by the Senate and House of Representatives of the United States
of America in Congress assembled, That for the purposes of this act—
(a) The term " firearm " means a shotgun or rifie having a barrel of less than
eighteen inches in length, or any other weapon, except a pistol or revolver, from
which a shot is discharged by an explosive if such weapon is capable of being
concealed on the person, or a machine gun, and includes a muffler or silencer for
any firearm whether or not such firearm is included within the foregoing
definition.
(b) The term " machine gun " means any weapon which shoots, or is designed
to shoot, automatically or semiautomatically, more than one shot, without
manual reloading, by a single function of the trigger.
(c) The term "person" includes a partnership, company, association, or
corporation, as well as a natural person.
(d) The term "continental United States " means the States of the United
States and the District of Columbia.
(e) The term "importer" means any person who imports or brings firearms
into the continental United States for sale.
(f) The term "manufacturer" means any person who is engaged within the
continental United States in the manufacture of firearms^ or who otherwise produces therein any firearm for sale or disposition.
(g) The term "dealer" means any person not a manufacturer or importer
engaged within the continental United States in the business of selling firearms.
The term " dealer " shall include wholesalers, pawnbrokers, and dealers in used
firearms.
(h) The term "interstate commerce" means transportation from any State
or Territory or District, or any insular possession of the United States (including the Philippine Islands), to any other State or to the District of Columhia.
(i) The term " Commissioner " means the Commissioner of Internal Revenue.
(j) The term "Secretary" means the Secretary of the Treasury.
(k) The term " t o transfer" or ** transferred " shall include to sell, assign,
pledge, lease, loan, give away, or otherwise dispose of.

220

REPORT OF THE SECRETARY OF THE TREASURY

SEC 2. (a) Within fifteen days after the effective date of this act, or upon
first engaging in business, and thereafter on or before the 1st day of July of
each year, every importer, manufacturer, and dealer in firearms shall register
with the collector of internal revenue for each district in which such business
is to be carried on, his name or style, principal place of business, and places of
business in such district, and pay a special tax at the following rates: Importers or manufacturers, $500 a year; dealers, other than pawnbrokers, $200
a year; pawnbrokers, $300 a year. Where the tax is payable on the 1st day
of July in any year it shall be computed for one year; where the tax is payable
on any other day it shall be computed proportionately from the 1st day of
the month in which the liability to the tax accrued to the 1st day of July
following.
(b) It shall be unlawful for any person required to register under the provisions of this section to import, manufacture, or deal in firearms without ^
having registered and paid the tax imposed by this section.
SEC 3. (a) There shall be levied, collected, and paid upon firearms transferred in the continental United States a tax at the rate of $200 for each^
firearm, such tax to be paid by the transferor, and to be represented by appropriate stamps to be provided by the Commissioner, with the approval of the
Secretary; and the stamps herein provided shall be affixed to the order for
such.firearm, hereinafter provided for. The tax imposed by this section shall
be in addition to any import duty imposed on such firearm.
(b) All provisions of law (including those relating to special taxes, to the
assessment, collection, remission, and refund of internal revenue taxes, to the
engraving, issuance, sale, accountability, cancelation, and distribution of taxpaid stamps provided for in the intemal revenue laws, and to penalties)
applicable with resnect to the taxes imposed by section 1 of the act of December 17, 1914, as amended (U. S. C. Supp. VII, title 26, sees. 1040 and 1383),
and all other provisions of the internal revenue laws shall, insofar as not
inconsistent with the provisions of this act, be applicable with respect to the
taxes imposed by this act.
(c) Under such rules and regulations as the Commissioner, with the approval
of the Secretary, may prescribe, and upon proof of the exportation of any
firearm to any foreign country (whether exported as part of another article
or not) with respect to which the transfer tax under this section has been paid
by the manufacturer, the Commissioner shall refund to the manufacturer the
amount of the tax so paid, or, if the manufacturer waives all claim for the
amount to be refunded, the refund shall be made to the exporter.
SEC 4. (a) It shall be unlawful for any person to transfer a firearm except
in pursuance of a written order from the person seeking to obtain such article,
on an application form issued in blank in duplicate for that purpose by the
Commissioner. Such order shall identify the applicant by such means of
identification as may be prescribed by regulations under this act: Provided,
That, if the applicant is an individual, such identification shall include fingerprints and a photograph thereof.
(b) The Commissioner, with the approval of the Secretary, shall cause
suitable forms to be prepared for the purposes above mentioned, and shall
cause the same to be distributed to collectors of internal revenue.
(c) Every person so transferring a firearm shall set forth in each copy of
such order the manufacturer's number or other mark identifying such firearm,
and shall toward a copy of such order to the Commissioner. The original
thereof with stamps affixed, shall be returned to the applicant.
(d) No person shall transfer a firearm which has previously been transferred
on or after the effective date of this act, unless such person, in addition to
complying with subsection (c), transfers therewith the stamp-affixed order
provided for in this section for each such prior transfer, in compliance with
such regulations as may be prescribed under this act for proof of payment of
all taxes on such firearms.
(e) If the transfer of a firearm is exempted from the provisions of this
act as provided in section 13 hereof, the person transferring such firearm shall
notify the Commissioner of the name and address of the applicant, the number
or other mark identifying such firearm, and the date of its transfer, and shall
file with the Commissioner such documents in proof thereof as the Commissioner may by regulations prescribe.
(f) Importers, manufacturers, and dealers who have registered and paid
the tax as provided for in section 2 (a) of this act shall not be required to
conform to the provisions of this section with respect to transactions in fire

REPORT OF|THE SECRETARY OF THE TREASURY

221

arms with dealers or manufacturers if such dealers or manufacturers have
registered and have paid such tax, but shall keep such records and make such
reports regarding such transactions as may be prescribed by regulations under
this act.
SEC 5. (a) Within sixty days after the effective date of this act every
person possessing a firearm shall register, with the collector of the district in
which he resides, the number or other mark identifying such firearm, together
with his name, address, place where such firearm is usually kept, and place of
business, or employment, and, if such person is other than a natural person, the
name and home address of an executive officer thereof: Promded, That no
person shall be required t o ' register under this section with respect to any
firearm acquired after the effective date of and in conformity with the provisions of this act.
(b) Whenever, on trial for a violation of section 6 hereof, the defendant is
shown to have or to have had possession of such firearm at.any time after
such period of sixty days without having registered as required by this section,
such possession shall create a presumption that such firearm came into the
possession of the defendant subsequent to the effective date of this act, but
this presumption shall not be conclusive.
SEC 6. It shall be unlawful for any person to receive or possess any firearm
which has at any time been transferred in violation of section 3 or 4 of this act.
SEC 7. (a) Any firearm which has at any time been transferred in violation
of the provisions of this act shall be subject to seizure and forfeiture, and
(except as provided in subsection (b)) all the provisions of internal revenue
laws relating to searches, seizures, and forfeiture of unstamped articles are
extended to and made to apply to the articles taxed under this act and the
persons to whom this act applies.
(b) In the case of the forfeiture of any firearm by reason of a violation of
this act: No notice of public sale shall be required; no such firearm shall be
sold at public sale; if such, firearm is in the jpossession of any officer of the
United States except the Secretary, such officer shall deliver the firearm to the
Secretary; and the Secretary may order such firearm destroyed or may sell
such firearm to any State, Territory, or possession .(including the Philippine
Islands), or political subdivision thereof, or the District of Columbia, or retain
it for the use of the Treasury Department or transfer it without charge to any
Executive department or independent establishment of the Government for use
by it.
SEC 8. (a) Each manufacturer and importer of a firearm shall identify it
with a numlber or other identification mark approved by the Commissioner,
such number or 'mark to be stamped or otherwise placed thereon in a manner
approved by the Commissioner.
(b) It shall be unlawful for anyone to obliterate, remove, change, or.alter
such number or other identification mark. Whenever on trial for a violation
of this subsection the defendant is shown to have or to have had possession
of any firearm upon which such number or mark shall have been obliterated,
removed, changed, or altered, such possession shall be deemed sufficient evidence to authorize conviction, unless the defendant explains such possession to
the satisfaction of the jury.
SEC 9. Importers, manufacturers, and dealers shall keep such books and
records and render such returns in relation to the transactions in firearms
specified in this act as the Commissioner, with the approval of the Secretary,
may by regulations require.
SEC 10. (a).No firearm shall be imported or brought into the United States
or any territory under its control or jurisdiction (including the Philippine
Islands), except that, under regulations prescribed by the Secretary, any firearm may be so imported or brought in which (1) the purpose thereof is shown to
be lawful and (2) such firearm is unique or of a type which cannot be obtained
within the United States or such territory.
(b) It shall be unlawful (1) fraudulently or knowingly to import or bring
any firearm into the United States or any territory under its control or jurisdiction (including the Philippine Islands),-in violation of the provisions of
this act; or (2) knowingly to assist in so doing; or (3) to receive, conceal, buy,
sell, or in any manner facilitate the transportation, concealment, or sale of
any such firearm after being imported or brought in, knowing the same to have
been imported or brought in contrary to law. Whenever on trial for a violation
of this section the defendant is shown to have or to have had possession of such
firearm, such possession shall be deemed sufficient evidence to authorize convic

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REPORT OF THE

SECBETABY

OF THE TBEASURY

tion unless the defendant explains such possession to the satisfaction of the
jury.
SEC 11. It shall be unlawful, for any person who is required to register as
provided in section 5 hereof and who shall not have so registered, or any other
person who has not in his possession a stamp-affixed order as provided in section 4 hereof, to ship, carry, or deliver any firearm in interstate commerce.
SEC 12. The Commissioner, with the approval of the Secretary, shall prescribe such rules and regulations as may be necessary for carrying the provisions of this act into effect.
SEC 13. This act shall not apply to the transfer of firearms (1) to the
United States Government, any State, Territory, or possession of the United
States, or to any political subdivision thereof, or to the District of Columbia;
(2) to any peace officer or any Federal officer designated by regulations of the
Commissioner; (3) to the transfer of any firearm which is unserviceable and
which is transferred as a curiosity or ornament
SEO. 14. Any person who violates or fails to comply with any of the requirements of this act shall, upon conviction, be fined not more than $2,000 or be
imprisoned for not more than five years, or both, in the discretion of the court.
SEC 15. The taxes imposed by paragraph (a) of section 600 of the Revenue
Act of 1926 (U. S. C, Supp. VII, title 26, sec. 1120) and by section 610 of the
Revenue Act of 1932 (47 Stat. 169, 264), shall not apply to any firearm on which
the tax provided by section 3 of this act has been paid.
SEC 16. If any provision of this act, or the application thereof to any person
or circumstance, is held invaUd, the remainder of the act, and the application of
such provision to other persons or circumstances, shall not be affected thereby.
SEC 17. This act shall take eft'ect on the thirtieth day after the date of its
enactment.
SEC 18. This act may be cited as the " National Firearms Act."
Approved, June 26, 1934.
OBLIGATIONS OF FOREIGN

GOVERNMENTS

Exhibit 32
^Statement by Acting Secretary of the Treasury Morgenthau, announcing the
postponement of the payment due from Austria an January 1, 1934, on
account af its indebtedness to the United States {press release, Dec. 13, 1933)
The Treasury has been notified by the Department of State that a note dated
December 1, 1933, was received from the Austrian Minister stating that the
Austrian Government received on November 29, 1933, a communication from
the trustees of the guaranteed Austrian loan of 1923-1943, in which objections
are raised by the trustees against the payment to the creditor governments
signatory to the agreements relative to the settlement of the relief debts, of the
amounts due to them on January 1, 1934. In view of these objections the
Austrian Government has notified the United States that no remittance can
be made to cover the sixth installment due on January 1, 1934, on account of
its relief debt to the United States.
The lien upon the assets and revenues of Austria pledged for the payment of
the Austrian relief bonds has been subordinated to the lien upon such assets
and revenues pledged for the payment of the Austrian reconstruction loan of
1923. The objections by the trustees to the payriaents due from Austria on
account of the relief bonds is in accordance with the agreements concluded
between Austria and the International Relief Bonds Committee and the agreement of May 8, 1930, between Austria and the United States. The debt-funding
agreement between Austria and the United States provides that:
" * * * the obligation of Austria to pay annuities during the years 1929
to 1943 will in the case of each annuity not arise if the trustees of the reconstruction loan of 1923 prior t o . the preceding December first have raised
objection to the payment of the annuity in question on the due date."
In accordance with the provisions of the debt-funding agreement between
the Republic of Austria and the United States bond no. 6 in the face amount
of $460,093, due January 1, 1934, will be postponed, which, together with
interest at the rate of 5 percent per annum compounded annually to December
31, 1943, shall be repaid, together with further interest at 5 percent per annum,
in twenty-five equal annuities on January 1 of each of the years 1944 to 1968,
inclusive.

BEPORT OF THE SECRETARY OF THE TREASURY

223

Exhibit 33
Correspondence exchanged between the Oovernment of the United States and
various foreign goveiyiments concerning foreign debts owing to the United
States {Department of State press releases)

To the Acting Secretary of State from the Belgian Ambassador, December 12,
1933 {translation)
(1) In a note of December 6, 1932, the Belgian Ambassador informed the
Government of the United States of the reasons why the Belgian Government
was not in a position to resume the payments which had been suspended pursuant to the agreement entered into in July 1931. The Belgian Government is
obliged to point out that the circumstances which motivated its attitude haye
not changed and that the arguments it invoked have retained all their force.
(2) The solemn engagements of the Allied and Associated Powers and the
spontaneous promises of Germany concerning the entire restoration of Belgium
create a moral right which nothing can destroy and place Belgium in a special
situation among the Powers which took part in the war of 1914^18.
(3) Relying upon the declaration of President Wilson which had made the
restoration of Belgium one of the conditions of peace, the Belgian representatives in 1919 did not consent to sign the Treaty of Versailles until they had
received formal assurance of the cancelation of their war debts.
(4) When the Belgian Government signed the Washington agreement of
August 20, 1925, it did so because it had been assured by the statements of the
American representatives themselves that the payments due to the United
States would be amply covered by the payments of Germany on reparations
account.
(5) In June 1931 when President Hoover jproposed to suspend for a year the
service of intergovernmental debts, the Belgian Government in its reply to the
American Government recalled the recognized special rights of Belgium. In
a spirit of international solidarity it consented to give up temporarily a claim
which the country regarded as sacred, but it took pains to affirm that it did not
intend that an action taken with a view to international recovery should become
a cause of ruin for Belgium.
(6) Later, in consenting at Lausanne to make definitive the sacrifice which
the Hoover proposal imposed on it, Belgium assumed the cancelation of its
claim to reparations to be inconceivable without the parallel suppression of its
intergovernmental debts.
(7) By its note of December 5, 1932, the Belgian Government set forth the
effects on Belgium of the interruption of German payments and of the general
economic depression. The difficulties pointed out at that time have continuously
increased.
In these circumstances the Belgian Government, while reaffirming its good
wUl and its desire to collaborate in a comprehensive settlement of the debt
question, finds itself unable to make on December 15 next the payment provided
for in the agreement of 1925.
BELGIAN EMBASSY.

To the Belgian Ambassador, December 13, 1933
EXCELLENCY :

In acknowledging the receipt of the note transmitted Under your no. 4095, of
December 12, 1933, I take note of Your Excellency's statement that the Belgian
Government finds itself unable to make the payment falling due December 15,
1933, on account of the indebtedness of Belgium to the United States.
Accept [etc.],
WILLIAM PHILLIPS,

Actvng Secreta/ry of State.

90353-

224

REPORT OF THE SECRETARY OF THE TREASURY
To the Secretary of State from the Belgian Ambassador, Jwie 8, 1934
{translation)

I have the honor to acknowledge the receipt of Your Excellency's letter dated
May 26, 1934. I immediately transmitted the text thereof to my Government.
The latter has just charged me to bring to Your Excellency's knowledge the
following communication:
" By a note of the 6th of December last the Ambassador of Belgium a t Washington recalled to the Government of the United States the reasons for which
the Belgian Government was not in a position to resume, on the date of December 15, 1933, the service of its debts to America.
" Since the last due date no new factor has intervened which would permit
Belgium to modify her attitude.
" She therefore sees herself under the impossibility of effecting, on June 15th
next, the payment contemplated by the Belgian-American agreement of August
18, 1925."
I avail myself [etc.].
PAUL MAY.
CZECHOSLOVAKIA

To the Acting Secretary of State from the Minister of Czechoslovakia, December 9, 1933
EXCELLENCY :

In the note of June 15, 1933, I had the honor to express the hope of the
Czechoslovak Government that a final settlement of the Czechoslovak debt due
to the United States would be reached in the near future and offered at the
same time a partial payment of the due installment as an expression of its
utmost willingness to meet its obligations in the limits of the budgetary and
monetary equilibrium of Czechoslovakia.
As the next installment of the payment is due on the fifteenth of this month,
both the short span of time and the present complex and difficult economic and
monetary conditions do not permit the hope of reaching a final settlement, I am
directed to offer again a partial payment amounting to $150,000 (one hundred
and fifty thousand dollars) on account of the due obligations and to confirm
these existing obligations until a final settlement will be made possible.
Accept [etc.].
FERDINAND VEVERKA.

To the Minister of CzechoslovaMa, December 11, 1933
SIR

The President directs me to acknowledge the receipt of your note of December 9, 1933, in which you set forth that you are instructed by your Government, with reference to the payment due December 15 on the indebtedness of
your Government to the United States; to offer a partial payment of $150,000
on account of the due obligations and to confirm these existing obligations.
Note is taken of your reference to the willingness of your Government to meet
its obligations in the limits of the budgetary and monetary equilibrium of
Czechoslovakia.
This Government will receive the partial payment of $150,000 as confirmation of existing obligations.
Accept [etc.].

WILLIAM PHILUPS,

Acting Secretary af State.

REPORT OF THE SECRETARY OF THE TREASURY

225

ESTONIA

To the Secretary of S t a t e from the E s t o n i a n Minister for Foreign Affairs,
November 16, 1933
EXCELLENCY :

By notes dated November 28, 1932, December 15, 1932, and J u n e 13, 1933, the
Estonian Government h a d t h e honour to inform t h e Government of t h e United
States of America of the economic and financial reasons on account of which
it had not been in a position to effect the payinent of the installments due on
December 15, 1932, and on J u n e 15, 1933, u n d e r t h e terms of the debt-funding
agreement of 1925, and to request t h e Government of the United States of
America to agree to a friendly exchange of views regarding the possibility of
a reconsideration of the debt agreement of 1925.
I n view of the circumstance t h a t the economic and financial conditions in
Estonia have up to now not shown any improvement, I have the honour to
inform Your Excellency t h a t the Government of Estonia will unfortunately
not be able to effect the payment of the installment falling due on December
15, 1933.
I avail myself [etc.]. '
JUL.

SELJAMAA.

To the Estonian Actvng Consul General at Neio York City, December 9, 1933
SIR:

I n acknowledging receipt of the note (12-R) addressed to the Secretary
of S t a t e on November 16, 1933, by the Minister for Foreign Affairs of Estonia,
I take note of the Minister's statement t h a t the Government of Estonia will
not be able to effect the payment falling due December 15, 1933, on account of
the indebtedness of Estonia to t h e United States.
Accept [etc.].
WILLIAM

PHILLIPS,

Acting Secreta^-y of State.
To the Secretary of S t a t e from the E s t o n i a n Minister for Foreign Affairs,
May 31, 1934
EXCELLENCY :

T h e Estonian Government view with great concern the continuation of the
economic depression which still dominates the world and which hinders to
develop such intercourse between nations which would be normal and which,
granted reciprocal t r a d e relations, would allow them to discharge their obligations t o w a r d s each other. The Estonian Government have likewise and with
t h e greatest of interest followed t h e steps t a k e n by t h e United S t a t e s Government towards recovery and on their p a r t have not spared, within their limited
possibilities, any efforts to do their s h a r e in t h e same spirit.
B u t unfortunately the courageous policy adopted by the United States and the
steps taken elsewhere have not yet brought about an improvement in the fields
of international cooperation between nations, and Estonia, dependent in her
economic intercourse with the outside world only on her foreign trade, having
no capital reserves and no foreign investirients, cannot abandon her position
of defense of h e r economic selfpreservation.
I n view of the fact t h a t economic and financial conditions in Estonia h a v e
not improved, I have the honor to inform you t h a t t h e Estonian Government,
a f t e r . a m a t u r e consideration of the debt question to the United States Government, will unfortunately not be able u n d e r the t e r m s of the Debt F u n d i n g
Agreement of 1925, to effect the payment of the installment falling due on J u n e
15th, 1934.
I sincerely hope t h a t this decision of t h e Estonian Government prescribed hy
necessity will be understood and appreciated by t h e United States Government.
I avail myself [etc.].

SEJLJAMAA.

226

REPORT OF THE SECRETARY OF THE TREASURY
FINLAND

Department af State, far the press, December 14, 1933
The Minister of Finland has informed the Acting Secretary of State that the
full amount due on account of the Finnish debt to the United States wUl be
paid in the ordinary routine to the Federal Reserve Bank in New York on
December 15th. This installment amounts to $229,623.

Department af State, for the press, June 4, 1934
The Finnish Minister, Mr. L. Astrom, called at the Department of State today
to advise the Acting Secretary of State, Mr. William R, Phillips, that he had
received instructions to make full payment of the installment due on the Finnish
debt owing to the United States and that payment accordingly would be made
in cash as usual in New York.
The call relates to the installment on the Finnish debt due on June 15 next
of $166,538, of which $147,507.50 is interest and $19,030.50 principal.
To the Charge d'Affa/lres ad interim af Finland, July 7, 1934
SIR:

I am requested by the Secretary of the Treasury to notify you that the Federal
Reserve Bank of New York received on June 15, 1934, the sum of $166,538.00,
representing a payment made for the account of the Government of Finland;
and that this amount has been deposited in the Treasury as a payment of semiannual interest due June 15, 1934, in the amount of $147,507.50 on the funded
indebtedness of the Government of Finland to the United States pursuant to
the funding agreement of May 1, 1923, and as the semiannual payment of the
annuity due June 15, 1934, in the amount of $19,030.50 under the agreement
of May 23, 1932.
I take the occasion to express my recognition of the effort on the part of the
people of Finland which this payment has required and to associate myself with
the manifest appreciation with which the attitude of the Government of Finland
has been greeted in this country. At a time when contractual obligations have^
been widely disregarded or are too easily subordinated to considerations of^
brief expediency, and to a degree which threatens one of the most important
bases of human relations, the consistent steadfastness with which Finland has
unhesitatingly met its obligations has been enheartening.
While this Government in its role of creditor is ever mindful of leniency, or
equity, or ability to pay, and of other considerations to which debtor governments are entitled, it was never more important than at present that debtor
governments should make every reasonable effort to meet their financial obligations, and in doing so to preserve for the future their credit and the international
credit structure.
Therefore, in keeping faith with its financial obligations, the Government of
Finland has set a timely and valuable example.
Accept [etc.].
CORDELL HULL.

Ta the Secretary of State from the Frenxih Ambassador, December 15, 1933
{translation)
I have the honor to acknowledge the receipt of your letter of November 28
last, and in reply to transmit herewith the following communication from my
Government:
°
** Inasmuch as no new factor has developed with respect to war debts since
the resolution voted by the Chamber of Deputies on December 13, 1932, the
French Government regrets that it is not in a position usefully to initiate
a new debate on the question, and is obliged to postpone the payments due
December 15 next.

REPORT OF THE SECRETARY OF THE TREASURY

227

"Nevertheless, in order to remove any possibility of misunderstanding it
desires to recall the tenor of this resolution.
" The French Government has never contemplated the unilateral violation of
undertakings freely entered into, which would have been contrary to the
invariable traditions of France. But it judged that the decisions which were
taken on both sides in 1931 and 1932 in the hopes of facilitating the economic
recovery of the world had modified conditions which formerly existed, and now
justify new arrangements which take into account the changes thus brought
about.
" The French Government cannot of course fail to recognize the difficulties
which the achievement of such a new arrangement would involve. Nevertheless it hopes that such difficulties may be overcome and that in the near
future a solution of the problem of war debts acceptable to both countries may
be anticipated.
" For its part it will consider it a duty not to neglect any of the possibilities
which may arise in order to attain this end."
Accept [etc.].
ANDR:^ DE LABOULAYE.

To the French Ambassador, December 15, 1933
EXCELLENCY :

In acknowledging the receipt of your communication of December 15, 1933, I
take note of the statement that the Government of Finance will not be able to
effect the payment falling due December 15, 1933, on account of the indebtedness of France to the United States.
Accept [etc.].
WILLIAM PHILLIPS,

Acting Secretary af State.
Ta the Secretary af State from the Fi^ench Ambassador, June 12, 1934
MR. SECRETARY:

I have the honor to acknowledge the receipt of the letter which Your Excellency was pleased to address to me on May 26 transmitting a statement of the
sums due by Prance to the United States on June 15, 1934, under the terms, of
the agreements of April 29, 1926, and July 6, 1931.
In compliance with instructions which I have just received, I have the honor
to inform Your Excellency that as there has been no new development in
regard to intergovernmental debts since the month of December 1932, the
French Government is not in a position to resume, on the 15th of the present
month, the payments which, since December 15, 1932, it has found itself constrained to postpone as the result of the consequences of the moratorium of
that year.
On this occasion my Government desires to reaffirm that it does not contest
the validity of its debts and that it is still prepared to seek an agreement with
the American Government in regard to that debt upon a basis which in existing circumstances may be acceptable to both countries.
The Government of the Republic hopes that such an agreement may be
reached in the near future and it desires to reaffirm to the American Government the assurance that it will consider it a duty to neglect no opportunity
which may arise to attain that result.
I take this occasion [etc.].
ANDRi; DE LABOULAYE,
GREAT BRITAIN

To the Secreta/ry af State from the British Ambassador, June 4, 193Jf
In their note of December 1st, 1932, His Majesty's Government gave a full
statement of the reasons which convinced them that the existing system of
intergovernmental war debt obligations had broken down. They pointed out
the difference between these war-debt obligations and normal credit operations
for development purposes: They showed the economic impossibility of making

228

REPORT OF THE SECRETARY OF THE TREASURY

transfers on the scale required by these obligations and the disastrous effect
which any further attempt to do so would have on trade and. prices. They emphasized the sacrifices which the British Nation had made in this matter and
the injustice of the difference between their funding settlement and those accorded to other debtors. They concluded that a revision of the existing settlements was essential in the interests of world revival,- and they urged that further payments should be postponed pending such a revision. Nothing that has
since occurred has led His Majesty's Government in the United Kingdom to
change the views they then expressed.
2. That the present settlement imposes upon the people of the United Kingdom a burden which is both unreasonable in itself and inequitable in relation
to the treatment accorded to other countries may be clearly seen from the
following figures.
In respect of the war advances totaling 4,277,000,000 dollars payments totaling 2,025,000,000 dollars have been made up to date by His Majesty's Government to the United States Government. Yet despite these payments the nominal amount of the debt still outstanding as at June 15th, 1934, amounts to
4,713,785,000 doUars.
Meanwhile in respect of war advances totaling 5,773,300,000 dollars made by
the United States Government to other European Governments, aggregate payments made up to date amount to only 678,500,000 dollars. Thus though the
war advances to these other Governments exceed by one-quarter the advances
made to the United Kingdom, payments made by the United Kingdom amount
to three times what the United States Government has received from those other
powers.
On the other hand. His Majesty's Government are creditors as well as debtors
in respect of these intergovernmental obligations. While, as stated above, they
borrowed 4,277,000,000 dollars from the United States, they themselves made
war advances to the allied governments totaUing £1,600,000,000 (7,800,000,000
dollars at par). These loans were raised by His Majesty's Government from
the people of the United Kingdom and the annual interest thereon, and
eventually their capital repayment, must, in the absence of payments by debtor
governments, be met out of the general taxation of their own people. In this
respect the position of the United Kingdom is precisely similar to that of the
United States, but whereas the United States have received very substantial
payments against the domestic charges involved. His Majesty's Government
have had to meet the domestic charges of their war loans to allied governments
in full, as they have paid over to the United States Government all that they
have received both from war debts and war reparations, and they have in
addition paid nearly as much again out of their own resources.
If the United States feel the burden of their war advances of 10,050,000,000
dollars, against which they have received 2,703,000,000 dollars, how much
heavier is the burden of the United Kingdom, which with one-third of the
population of the United States has had to meet the full charges on its war
advances of 7,800,000,000 dollars without any net receipts against these charges,
and has in addition made large payments out of its own resources on account of
its war debt to the United States.
None the less, convinced that any resumption of payments on the past scale
could not but intensify the world crisis and might provoke financial and
economic chaos. His Majesty's Government have suspended their claims on
their debtors in the hope that a general revision of these intergovernmental
obligations may be effected in the interest of world' recovery. But it would be
impossible for them to contemplate a situation in which they would be called
on to honour in full their war obligations to others while continuing to suspend
all demands for payment of war obligations due to them.
3. The improvement which has taken place in the budgetary situation of
the United Kingdom in no way invalidates this conclusion. This improvement is due entirely to unprecedented sacrifices made by the people of this
country. Since the war they have been carrying a burden of indebtedness
amounting to approximately £8,000,000,000 (40,000,000,000 doUars) or £178
(850 dollars) per head of their population, about one-fifth of which represents
war loans made to allied governments. They have balanced their budget and
even realised a surplus by the painful process of reducing expenditure and
increasing taxation. For fifteen years they have been paying taxation on a
scale for which it would be hard to find a parallel elsewhere. During the
whole of this period the burden of taxation has been higher in the United
Kingdom, and for a considerable part of the period twice as high as in the

REPORT OF THE SECRETARY OF THE TREASURY

229

United States, including all Federal, State, and local taxation. This taxation,
amounting to close on one-quarter of the national income, has aggravated the
depression over a long period and the necessity of maintaining an army of
unemployed resulting from this depression has constituted a formidable problem to the national finances ever since the war ended. Yet in order to restore
the national credit in 1931 the people of the United Kingdom accepted further
and heavy increases in taxation, accompanied by rigorous control of expenditure, and cuts in salaries and allowances of all kinds; and despite all these
measures the budget would have again shown a deficit last year had it not
been possible to secure by the conversion operation carried through in 1932
a reduction in the rate of interest paid on a large proportion of the pubUc
debt. This reduction has enabled His Majesty's Government to remit a part
of the emergency sacrifices imposed in 1931 and to restore part of the cuts
on salaries and the whole cut in unemployment allowances, the continuance
of which was imposing a severe strain on the national conscience. I t would
have been a gross act of social injustice to have denied this relief to the
people of this country in order to pay war debts to the United States while
suspending war debt payments due to the United Kingdom.
4. But although it is desirable that the internal budgetary position of this
country should not be misunderstood, it is really irrelevant to the question of
intergovernmental debt, the payment of which has to be related to the balance
of trade and not to the volume of internal revenue. The revenues of the
United Kingdom are sterling revenues, whereas the debt payments to America
have to be made in dollars or in gold. In order to secure the means to pay,
therefore, any sums available in sterling would have to be transferred across
the exchange. The attempt to transfer amounts of this magnitude would as its
immediate effect cause a sharp depreciation of sterling against the dollar, which
as His'Majesty's Government understands would not be consistent with the
monetary policy of the United States Government. And in the long run such
international transfers would be impossible without a radical alteration in the
economic policies of the United States. Payment of debts implies the willingness of the creditor to accept goods and services sufficient to cover the debts
due to him over and above the goods and services required to cover his exports;
and to make it possible for the United States to receive payment of their
claims, it would be necessary to effect a complete reversal of the existing
favourable balance of trade between their country and the rest of the world.
In the case of the United Kingdom the balance of trade is heavily unfavorable,
and the balance of accounts is not such that His Majesty's Government could
contemplate the transfer of any substantial sum across the exchange, unless it
was compensated by equivalent receipts from the foreign debts of this country.
If this were done, sterling would not be affected by the payments to America,
but the burden would be thrown on the currencies of the European debtor countries, thereby aggravating the present crisis, which it is the object of both
the United States and His Majesty's Government to alleviate.
5. Thus the question of the British war debt is only a part of the wider
question of intergovernmental obligations resulting from the World War. As
has already been pointed out, the United Kingdom, while it was a debtor to
the United States, was itself a creditor for larger amounts from France, Italy,
and other ex-Allied Powers in respect of war debts, and these in turn are cocreditors with the United Kingdom of Germany in respect of reparations.
These intergovernmental debts, as stated in the British note of December
1, 1931, are radically different from commercial loans raised by foreign governments, on the markets for productive purposes. War debts are neither
productive nor self-liquidating, and the unnatural transfers required for their
payment would involve a general collapse of normal international exchange and
credit operations. The administration of the United States under President
Hoover recognized this fact and initiated a moratorium on intergovernmental
payments in 1931 in order to avert an immediate collapse. But the moratorium of 1931 caused another change in the situation; it made any resumption
of the preexisting reparation and war debt settlements impossible, and the
revision of reparations embodied in the Lausanne Agreement was made subject
to conclusion of a subsequent agreement for the revision of war debts.
6. I t was with these facts in mind that His Majesty's Government approached
the United States Government in December 1932, and the United States Government in their note of December 7th welcomed their suggestion for a close
examination between the two countries of the whole subject. After this exchange of notes His Majesty's Government paid the instalment due on December

230

REPORT OF THE SECRETABY OF THE TREASURY

15th, 1932, in gold, explaining that this payment was not to be regarded as a
resumption of the annual payments contemplated by the existing agreement,
and that it was made because there had not been time for discussion with
regard to that agreement to take place, and because the United States Government had stated that in their opinion such a payment would greatly increase
the prospects of a satisfactory approach to the whole problem. In accordance
with the arrangement then made, discussions took place first in the spring and
later in the autumn of last year between representatives of the two countries,
and His Majesty's Government appreciate the sympathetic manner in which
their representatives were listened to. But on both occasions it was found
impossible to arrive at a settlement acceptable to the two Governments in face
of the unprecedented state of world economic and financial conditions. Accordingly the discussions were adjourned and on June 15th and December 15th,
1933, His Majesty's Government made token payments in acknowledgment of
the debt and the President expressed the personal view that he would, not
regard His Majesty's Government as in default.
7. In their note of November 6th last. His Majesty's Government expressed
their readiness to resume negotiations on the general question whenever, after
consultation wath the President, it might appear that this could usefully be
done, and His Majesty's Government are glad to note that the President in his
message to Congress on June 1st has again stated that each of the debtor
governments concerned has full and free opportunity to discuss this problem
with the Government of the United States. But unfortunately recent events
have shown that discussions on the whole question with a view to a final
settlement cannot at present usefully be renewed. In these circumstances His
Majesty's Government would have been quite prepared to make a further payment on June 15th in acknowledgment of the debt and without prejudice to
their right again to present the case of its readjustment, on the assumption
that they would again have received the President's declaration that he would
not consider them in default. They understand, however, that in consequence
of recent legislation no such declaration would now be possible, and if this be
the case the procedure adopted by common agreement in 1933 is no longer
practicable.
8. His Majesty's Government are, in fact, faced with a choice between only
two alternatives, viz, to pay in full the sum of 262,000,000 dollars, as set forth in
the communication from the United States Treasury, dated May 25th, or to
suspend all interim payments pending a final revision of the settlement, which
has been delayed by events beyond the control of the two Governments. Deeply
as they regret the circumstances which have forced them to take such a decision,
His Majesty's Government feel that they could not assume the responsibility of
adopting a course which would revive the whole system of intergovernmental
war-debt payments.
As already pointed out, the resumption of full payments to the United States
would necessitate a corresponding demand by His Majesty's Government from
their own war debtors. It would be a re-creation of the conditions which existed
prior to the world crisis and were in a large measure responsible for it. Such
procedure would throw a bombshell into the European arena which would have
financial and economic repercussions over all five continents and would postpone indefinitely the chances of world recovery.
9. Accordingly His Majesty's Government are reluctantly compelled to take
the only other course open to them. But they wish to reiterate that, while
suspending further payments until it becomes possible to discuss an ultimate
settlement of intergovernmental war debts with a reasonable prospect of agreement, they have no intention of repudiating their obligations, and will be prepared to enter upon further discussion of the subject at any time when in the
opinion of the President such discussion would be likely to produce results of
value.
I have [etc.].
R. C. LINDSAY.

To the British Ambassador, June 12, 1934
EXCELLENCY :

The observations contained in your note of June 4, 1934, concerning the
indebtedness of His Majesty's Government to the United States have been
studied with close attention.

REPORT OF THE SECRETARY OF THE TREASURY

231

This Government is sensible of the elements of the situation set forth by
His Majesty's Government, the heavy war expenditures undertaken in its own
behalf and in behalf of its Allies, the burden of taxation that has been borne
by the British people, ,and the transfer difficulties that under certain circumstances may arise in the foreign exchanges. With certain observations, however, and the inferences drawn therefrom, I regret that the American Government is unable to concur and in three instances it feels that, for the purpose
of record, it should make its own attitude clear.
First, His Majesty's Government states in effect that, unless payments were
made in full in the sum of $262,000,000 as set forth in the communication from
the United States Treasury dated May 25, 1934, the United Kingdom would
fall within the effects of the recent legislation mentioned in paragraph seven
of your note, so that the payment of this amount is regarded as the only alternative to suspension of all payment. The Attorney General has advised me
that, in his opinion, the debtor governments which, under the ruling of his
Office of May 5, 1934, are not at present considered in default because of partial
payments made on earlier installments, would have to pay only the amount of
the installment due June 15, 1934—for Great Britain $85,670,765.05—in order
to remain outside the scope of the act.
Second, in regard to the record cited by the British .Government of its loans
to its Allies and the fact that His Majesty's Government has given up great
sums due to it under those loan contracts, this Government must emphasize the
complete independence between the aforementioned transactions and the debt
contracted by His Majesty's Government to this Government. The British
Government undertook to borrow under its own name and on its o\yn credit
standing, and repayment was not made contingent upon the fate of debts due
to fhe British Government.
Third, this Government notes with disappointment the declaration of His
Majesty's Government that " while suspending further payments until it becomes possible to discuss an ultimate settlement of intergovernmental >var
debts with a reasonable prospect of agreement, they have no intention of re-.
pudiating their obligations, and will be prepared to enter upon further discussion of the subject at any time when, in the opinion of the President, such
discussion would be likely to produce results of value."
In effect, this Government reads the declaration of His Majesty's Government to mean that it will fail to meet any further payments on the debt due
to th-^ United States as evidenced by the settlement of June .19, 1923, -until
this Government shall first scale down this debt to an unascertained sum to
which His Majesty's Government might be willing to accede. This declaration
appears to represent insistence by His Majesty's Government that before it
makes any payment whatsoever it must be assured of a settlement satisfactory
to it and not necessarily in accordance with any accepted standards of payment or readjustment of the amounts due. The only indications before this
Government of the extent to which His Majesty's Government has proposed
to meet its obligations are the small fractions of the sums due mentioned by
His Majesty's representative in the course of the discussions in the spring and
autumn of last year referred to in your note of June 4. Adhering to the
opinion so often expressed by the United States Government a situation of
this kind necessarily calls for the initiation of proposals by the debtor and
not by the creditor.
Should His Majesty's Government wish to put forward proposals for the
resumption of payments, this Government would be glad to entertain and
discuss them informally. For instance, no proposal has ever been presented
to this Government looking towards payments in kind to an extent that might
be found mutually practicable and agreeable. Any proposals of this or a
similar character which promise mutual benefit will be carefully considered
for eventual submission to the American Congress.
Iri conclusion, may I refer to the statement made by the President in his
message to the Congress on June 1: " The American people would not be disposed to place an impossible burden upon their debtors, but are nevertheless
in a just position to ask that substantial sacrifices be made to meet these
debts."
Accept [etc.].

CORDELL HULL,

232

REPORT OF THE SECRETARY OF THE TREASURY

To the Secretary of State from the British Charge dAffaires, June 27, 1934
SIR:

After careful consideration of the note which you addressed to Sir Ronald
Lindsay on June 12th, His Majesty's Government in the United Kingdom feel
that there are two questions to which it may be useful to make further
reference.
In the first place, His Majesty's Government would observe that in their
note of June 4th they did not state that payment of the British war debt was
legally contingent upon payment of the debts due to them. What they said
was that it would be impossible for them to contemplate a situation in which
they would be called on to honour in full their, war debt obligations to others
while continuing to suspend all demands for payment of the war obligations
due to them. This was a statement not of law but of fact.
Secondly, as regards the suggested payments in kind, His Majesty's Government would recall that the experience of German reparations showed that
transfer difficulties are not solved by a system of deliveries in kind. As the
committee presided over by General Dawes pointed out in 1924: " In their
financial effects deliveries in kind are not really distinguishable from cash
payments." In fact, the economic objections to cash payments would apply
with equal force to deliveries in kind, unless those deliveries were to.consist
of indigenous products of the debtor country (excluding reexports) and unless
they were to be accepted by the creditor country and consumed by it in addition to the goods taken from the debtor country in the normal course of trade.
If the United Kingdom were not to receive payment for goods exported on
commercial account, her exchange resources available to purchase cotton and
other goods from America would be still further diminished. Therefore,
while not unwilling to give further consideration to possibilities in this direction, His Majesty's Government do not at present see any method of putting
such a plan into practice which would be likely to commend itself to the
Government of the United States of America.
In the view of His Majesty's Government, the primary question for settlement
is the amount that should be paid, having regard to all the circumstances of
these debts. They regret that up to the present it has not been possible to
make further progress in this matter, but they will welcome the opportunity of
resuming the discussion whenever it may appear that the present abnormal
conditions have so far passed away as to offer favourable prospects for a settlement, since they are always anxious to remove from the sphere of controversy
all or any matters which might disturb the harmonious relations between the
two countries.
I have [etc.].
D. G. OSBORNE.
HUNGARY

To the Acting Secretary of State from the Hungarian Minister, December 12,
1933
SIR:

With reference to your note of November 28, 1933, I have the honor to inform
you that I have been instructed by my Government to advise the Government
of the United States that owing to continued unfavorable economic conditions,
the Hungarian Government regrets exceedingly its inability to pay the amount
due on December 15th. However, on that date my Government will deposit to
the foreign creditors' account at the Hungarian National Bank, a Hungarian
Treasury Certificate in the pengo equivalent of the dollar aniount due bearinginterest at the rate of two per centum per annum.
I wish to add that my Government's figures show the amount due on December 15th to be $114,260.09.
Accept [etc.].

V^GH.

REPORT OP THE SECRETARY OF THE T B E A S U B Y

233

Ta the Seci^etary of State from the Hungarian Charge WAffaires, June 11, 1934
SIR:

I have the honor to inform you that I have been instructed by my Government
to advise the Government of the United States that owing to continued unfavorable economic conditions, the Hungarian Government regrets exceedingly
its inability to pay the amount of $36,971,93 due on June 15, 1934, under the
funding agreement, or to deposit its pengo equivalent at the Hungarian National
Bank. However, on that date my Government wiU deposit to the foreign
creditors' account at the Hungarian National Bank, a Hungarian Treasury
certificate in the pengo equivalent of the amount due bearing interest at the
rate of two per centum per annum.
Accept [etc.].
A. BALASY.
ITALY

To the Acting Secretary of State from the Italian Ambassador, December 7, 1933
SIR:

I have been instructed to inform you that, referring to the contents of the
communication which this Embassy has addressed to the Department of State
on the 14th of June last, with regard to the war debt, the Italian Goverriment
proposes to make on the 15th of December next a further payment of one million dollars in acknowledgment of the debt pending a final settlement.
Accept [etc.].
Rosso.
To the Italian Ambassador, December 12,1933
EXCELLENCY :

In reply to Your Excellency's note of the seventh instant, and to your previous oral communications dealing with the question of indebtedness of the
Italian Government to the United States, I am directed by the President to say
that due note has been taken of the intention of your Government to make a
further payment on December 15 next, as on June 15 last, in acknowledgment
of the debt pending a final settlement, in the sum of $1,000,000.
The President points out that it is not within his discretion to reduce or
cancel the existing debt owed to the United States, nor is it within his power
as President to alter the schedule of debt payments contained in the existing
settlement. Such power rests with the Congress. The President states, however, that in view of your representations, of the payment, and of the acknowledgment of the debt, he has no personal hesitation in saying that he does not
regard the Italian Government as in default.
Accept [etc.].
WILLIAM PHILLIPS,

Acting Secretary af State.
Ta the Secretairy af State from the Italian Ambassador, June 14, 1934
SIR :

With reference to your note of May 28th, containing a statement of the
amount due from Italy under the provisions of the debt agreement of November
14th, 1925, and the moratorium agreement of June 3, 1932, my Government has
instructed me to address to you the following communication:
" By the token payments made on the 15th of June and on the 15th of December 1933 the Italian Government has shown its good will and at the same time
the limitations imposed upon it by the actual situation.
" This situation, both in the economic and financial fields, not only has not improved since then, but has become even worse. In fact, while tariff barriers
and other hindrances to the exchange of goods, which is the chief source of
international transfers, have further increased, there is practically no hope
that Italy may be able again to collect those payments from German reparations
which in 1925 have been taken as a basis for determining Italy's ability to put
aside and transfer the amounts indicated by the debt agreement of November
14, 1925.

234

REPORT OF THE SECRETARY OF THE TREASURY

**The Italian Governinent, which has always been and is still willing to
acknowledge its obligation in view of a final settlement, would have been prepared to reaffirm its good will by another token payment. It has been informed,
however, that, under a law recently enacted, the nations which do not make
full payment of the amounts due on the 15tii of June will be considered as
being in default.
" In these circumstances and since, for the reasons mentioned above, the payment and transfer of the full amount due on the said date cannot be effected,
the Italian Government regrets to have to abandon the intention of making a
token payment.
" The Italian Goivernment feels confident that, when the question might be reexamined by the two Governments, the very foundations of the settlement of
November 1925 will, in the light of tbe new situation which has developed since
then, help to bring about a satisfactory solution."
I avail myself [etc.].
Rosso.

Note from the Latvian Minister far Foreign Affairs ta the American Chargd
WAffaires, Riga, Novemher 22, 1933
MONSIEUR LB CHARG:^ D'AFFAIRES :

With reference to the correspondence exchanged between our Governments
concerning the indebtedness of Latvia to the United States, I have the honour
to inform you that my Government have followed with the closest attention
the negotiations between the American and the British Governments on the
question of war debts, which were temporarily suspended on November 6th
last. From the notes exchanged on this occasion between the United States
Secretary of State and the Ambassador of Great Britain it results that " the
present unsettled economic and financial situations " have " made an adjournment advisable."
In this connection I should like to point out that, so far, the Latvian Government have had no opportunity for discussing with the United States Government the revision of the debt-funding agreement of September 24th, 1925,
which was proposed in the correspondence between our Governments and confirmed in the Aide-Memoire of January 26, 1933, in which the United States
Secretary of State announced that " the President would be glad to receive
separately at Washington a representative or representatives of the Latvian
Government for discussions having a similar scope and purpose (as those
conducted with the British Government) after the proposed discussions with
the British Government had been completed."
These latter negotiations having now been suspended in the circumstances
described above, my Government are of the opinion that the negotiations
between Latvia and the United States must of necessity be postponed, since
they were made dependent on the completion of the discussions between the
United States and Great Britain.
In view of the foregoing, I am authorized by my Government to propose
to the American Government to accept on December 15 next a " token payment " of $8,500, constituting approximately 5 percent of the payment due on
that date, in acknowledgment of the debt pending the revision of the existing
agreement, in which respect my Government maintain the point of view exposed
in the previous correspondence on this subject.
Please accept [etc.].
M. V. SALNAIS.

Telegram from Acting Secretary af State ta the American Legation at Riga,
DecembCQ^ 14, 1933
With reference to note enclosed your despatch 1725, November 24, 1933, advise authorities that this Government wiU receive (repeat receive) the partial
payment of $8,500 as confirmation of existing obligations.

PHILUPS, Acting.

REPORT OF THE

SECBETABY

OF THE TREASURY

235

Ta the Actimg Secretary of S t a t e from the Consul General af L a t v i a in New
York City, in Charge of Legation, December 13, 1933
SIR:

I am authorized and directed by my Government to advise you t h a t by order
of t h e Government of L a t v i a $8,500 (eight thousand five hundred dollars) have
been transferred to the Federal Reserve Bank of New York, for the Account
of the T r e a s u r y of t h e United States. My Government requests the Government
of the United States of America to accept the said amount in token of acknowledgment of the indebtedness of Latvia to t h e United States, in connection with
the payment due on December 15, 1933, pending the revision of the existing
agreement.
On behalf of my Government, I beg, sir, to express sincere regret t h a t the
financial situation of t h e country and t h e actual s t a t e of the T r e a s u r y of Latvia
do not permit of a larger p a r t i a l payment a t this time.
I h a v e permitted myself to forward a similar notification to the Secretary
of the T r e a s u r y of the United States.
Please accept [etc.].
ARTHUR B . LULE.

To the Secretary of S t a t e from the Consul General af Latvia in New York
City, in. Charge of Legation, J u n e 13, 1934
SIR:

With reference to t h e note of t h e D e p a r t m e n t of State of May 28, 1934,
s t a t i n g t h e amount d u e t h e United States Government from the Government of
Latvia, under t h e debt-funding agreement of September 24, 1925, and the
moratorium agreement of J u n e 11, 1932, I arn directed and authorized to advise
you that, to their great regret, the Government of Latvia feel compelled to
suspend all payments due under the aforementioned agreements, pending a
final revision of t h e debt-funding agreement.
Although, a s I am authorized to declare, my Government have no intention of
repudiating their obligations to the United States of America, and although
they do acknowledge again their indebtedness to the Government of t h e United
States, t h e Government of Latvia find t h a t their offering a f u r t h e r token payment on J u n e 15 would not serve t h e desired purpose since, u n d e r the Johnson
Act of April 13, 1934, and in accordance with the note of t h e Department of
State dated May 19, 1934, the Government of Latvia would not be relieved of
being regarded as in default on their obligations to t h e United States. While
my Government would be prepared to make a further token payment on J u n e
15, if assured t h a t in such case they would not be considered in default, it is
felt t h a t the pi-ocedure of m'aking token payments, as adopted in 1933, upon
common agreement, h a s become no longer practicable in view of a changed
situation, a s referred to above, and on account of a modified viewpoint of the
United States Government, a s a result of t h i s situation.
Upon a conscientious scrutiny of t h e present economic and financial situation
of Latvia, my Government find, to their sincere regret, t h a t . t h e r e is nothing
to w a r r a n t t h e resumption in full of payments under the debt-funding agreement of September 1925. I understand t h a t t h e Minister President of Latvia,
in a note delivered on J u n e 12, 1934, h a s revealed the situation to the Charge
d'Affaires of the United States in Latvia. T h e Government of Latvia have
repeatedly requested t h e United States for a revision of the existing debtfunding agreement and have expressed t h e i r desire to send a delegate or
delegates to Washington to discuss the entire m a t t e r of Latvia's indebtedness
a t such time as might be regarded as opportune and convenient by the United
States Government.
While an opportunity for such discussion h a s not yet been offered to t h e
Government of Latvia, I h a v e t h e honor to assure you, sir, t h a t my Government a r e prepared t o enter further discussions concerning L a t v i a ' s indebtedness
whenever this may be agreeable to the Government of the United States.
Please accept [etc.].

ARTHUR B . LULE.

236

REPORT OF THE SECRETARY OF THE TREASURY
LITHUANIA

To the Secreta/ry of State from the Lithuanian Charge d'Affaires, June 14, 1934
SIR:

Replying to your note of May 28, 1934, transmitting a statement of the sums
due to the United States Government by the Lithuanian Government on June 15,
1934, under the provisions of the debt-funding agreement of September 22, 1924,
and the moratorium agreement of June 9, 1932, I have the honor to inform
you that I have been instructed by my Government to submit to you the
following:
" In December 1932 the Minister of Lithuania, on behalf of the Lithuanian
Government, addressed a note to the Secretary of State transmitting a memorandum giving a detailed account of the economic and financial situation in
Lithuania, and stating the reasons which compelled the Lithuanian Government
to request a reexamination of the debt-funding agreement of September 22,
1924, with a view of its more proper adjustment to the new and changed economic and financial conditions. The Lithuanian Government also expressed a
hope that the December 15, 1932, payment might be postponed or other adequate relief might be arranged, because of the extreme difficulties it would
encounter in meeting this payment.
" In reply to the above-mentioned note, the United States Government stated
that the President of the United States was prepared to cooperate with the
Lithuanian Government in surveying the entire situation.
" Since the United States Government could not reach the conclusion enabling
it to grant the postponement of the December payment the Lithuanian Government made a supreme effort entailing great sacrifices and paid the December installment in full.
" On January 24, 1933, the United States Government informed the Lithuanian
Government that it would be glad to receive separately at Washington a representative or representatives of the Lithuanian Government for discussions
having a similar scope and purpose after the proposed discussions with the
British Government had been completed.
" Deeply grateful for this attitude of the United States Government, the Lithuanian Government was prepared to begin the reexamination of the debt problem
as suggested by the United States Government, and hoped that these discussions would take place at an early date. However, in reply to a verbal inquiry
as' to the prospects of such discussions, the Lithuanian Government, through
its Minister in Washington, was informed by the Secretary of State that as far
as the debt problem was concerned no material change of the situation had
taken place.
" The Lithuanian Government, because of the prevailing adverse economic
and financial conditions, was unable to meet in full the payments due to the
United States Government on June 15 and December 15, 1933. But, desiring
to give tangible proof of its determination to meet its obligations commensurate
with its ability and capacity, the Lithuanian Government made part payments
. on account of the installments due on the above-mentioned dates.
" Since the last payment was made, there have been no indications of betterment of the adverse economic and financial situation of Lithuania. On the
contrary, in many instances, conditions have become even more aggravated.
Consequently, it was imperative to make further reductions in the state budget
and to resort to the most stringent measures of national economy.
"A thorough survey of the existing economic and financial conditions forced
the Lithuanian Government to come to the conclusion that it is unable to meet
the installment due to the United States Government on June 15, 1934, as provided under the terms of the debt-funding agreement of September 22, 1924,
and the moratorium agreement of June 9, 1932.
" The Lithuanian Government, expressing its most sincere regret that it was
obliged to arrive at the above-mentioned conclusion, desires to reaffirm the
assurance that it continues to acknowledge its indebtedness to the United
States Government, and entertains an earnest hope that an opportunity to enter
upon discussions of the debt problem, with a view of its more proper adjustment to the new and changed economic and financial conditions, will be presented in the near future."
Accept [etc.].

MiKAS B A Q D O N A S .

REPORT OF THE SECRETARY OF THE TREASURY

237

To the Department of State from the Palish Charge d'Affaires, ad interim,
December 14, 1933
[Memorandum]

The Charg§ d'Affaires ad interim of Poland has been instructed by his
Government to inform the Government of the United States that for reasons
analogous to those stated in the Embassy's note of December 8, 1932, and confirmed by later declarations, they are obliged to request similarly a deferment
of payment of the installment, of capital and interest payable on December 15th.
The Polish Government are still not in a position to resume, towards the
United States, the service of the debt.
Referring to their previous memoranda, the latest of which is dated June 24,
1933, the Polish Government confirm their readiness to negotiate this matter.

Ta the Palish Charge d'Affaires ad interim, December I4, 1933
SIR:

In acknowledging receipt of your memorandum dated December 14, 1933,
regarding the payment due December 15, 1933, on account of the indebtedness
of the Government of Poland to the United States, note is taken of the statement of the Polish Government that it will not be able to effect the payment
falling due on that date.
Accept [etc.].
WILLIAM

PHILLIPS,

Acting Secretary af State.
To the Secretary af State from the Polish Ambassador, J%me 13, 1934
[Memorandum]

The Ambassador of Poland has been instructed by his Government to inform
the Government of the United States that for reasons analogous to those stated
in the note of December 8, 1982, and confirmed by later declarations, they are
obliged to request similarly a deferment of payment of the installment of the
interest payable on June 15, 1934.
The Polish Government are still not in a position to resume, towards the
United States, the service of the debt.
RUMANIA

To the Secretary of State from the Rumanian Minister, June 12, 1934
SIR:

Referring to my notes of June 15, 1933, setting forth the unprecedented economic and financial difficulties facing the Rumanian Government—difficulties
which have since further increased—and in reply to your note of May 28, 1934,
I have the honor to recall to your attention the fact that the payment made by
the Rumanian Government on June 15, 1933, was subsequent to the declaration
of the President of the United States, on the occasion of the token payment made
by the Government of Great Britain, that in accepting such payment it was his
personal view that he would not regard the British Government as in default.
The Rumanian Government understands that a law recently passed by the
Congress of the United States would render impossible a similar declaration by
the President.
Under these circumstances the Rumanian Government is reluctantly obliged
to suspend all further payments on its indebtedness to the Government of the
Uriited States pending a rediscussion of the entire problem, and trusts that, as
requested in my notes above referred to, a date may be set for this purpose at
the early convenience of the Government of the United States.
Accept [etc.].

DAVILA,

238

REPORT OF THE SECRETARY OF THE TREASURY
Exhibit 34
[PubUc No. 151, 73d Cong., S. 682]

An act ta prohibit financial transactions with any foreign governmerit in
default an its obligations to the United States
Be it enacted by the Senate a/nd House of Representatives af the United
States of America in Congress assembled. That hereafter it shall be unlawful
within the United States or any place subject to the jurisdiction of the United
States for any person to purchase or sell the bonds, securities, or other obligations of, any foreign government or political subdivision thereof or any
organization or association acting for or on behalf of a foreign government
or political subdivision thereof, issued after the passage of this act, or to make
any loan to such foreign government, political subdivision, organization, or
association, except a renewal or adjustment of existing indebtedness while
such government, political subdivision, organization, or association is in default in the payment of its obligations, or any part thereof, to the Government
of the United States. Any person violating the provisions of this act shall
upon conviction thereof be fined not more than $10,000 or imprisoned for not
more than five years, or both.
SEC 2. As used in this act the term " person " includes individual, partnership, corporation, or association other than a public corporation created by
or pursuant to special.authorization of Congress, or a corporation in which the
Government of the United States has or exercises a controlling interest through
stock ownership or otherwise.
Approved, April 13, 1934.
Exhibit 35
Statement far the press by the Department af State concerning an opinion of
the Attorney General requested by the Secretary of State upon various questions tinder the act of April 13, 1934, entitled 'An act ta prohibit flnatwiail
transactions with any foreign government in default on its obligations to the
United States "
The Secretary of State has received an opinion upon various questions pertaining to the act of April 13, 1934, entitled "An act to prohibit financial
transactions with any foreign government in default on its obligations to the
United States ", known as the Johnson Act. The Department of State concurs
in the interpretation. of the act expressed in the Attorney General's opinion.
Following is the full text of the Attorney General's opinion:
DEPARTMENT OF JUSTICE,

Washington, May 5, 1934.
SIR:

I have the honor .to refer to your letter of April 17 requesting my opinion
upon various questions under the act of April 13, 1934, entitled "An act to
prohibit financial transactions with any foreign government in default on its
obligations to the United States ", which reads as follows:
[Text of act is here omitted, see exhibit 34.]
Your questions, in the order in which they are set forth, and my views
thereon are stated below:
"(1) What governments, political subdivisions, or associations are in default
on their obligations to the United States? "
" Default" is" a common word which conveys at once a known meaning, but
as applied to particular situations, it is often a matter of uncertainty whether
or not or when a " default" has occurred. Concerning it, Chief Justice Eyre
declared in Dae v. Dacre, 1 B. & P. 250, 258; 126 Reprint 887, 891, " I do not
know a larger or looser word than ' default'"; but as to* civil liability the
following definitions are enlightening:
"As used in such an instrument (a contract), it can mean only the nonperformance of a contract—a failure upon the part of one of the contracting
parties to do that which he had contracted to do." {Sixteen hundred Tans
af Nitrate of Soda v. McLeod, 61 Fed. 849, 851.)
" In one sense, any failure is a default, whether it arises from the omission
to perform a contract, or from a neglect of duty. In many reported cases

REPORT OF THE SECBETARY OF THE TREASURY

239

the omission to pay a debt or to perform a contract is spoken of as a default"
{Burrill v. Grossman, 69 Fed. 749, 752.)
However, the word cannot safely be accepted as importing so inclusive a
significance when it is used as a penal statute, as pointed out by the Supreme
Court of Nebraska in State v. Moores, 52 Neb. 770, 787, upon consideration of
a constitutional provision which rendered ineligible to public office " any person
who is in default as collector and custodian of public money or property "
which the court declared to be " penal in its nature."
Lipman v. Equitable Life Assur. Sac. of the United States, 58 F. (2d) 15, and
Hartsuff v. Hall, 58 Neb. 417, each dealing with written instruments providing
for payment at a stated time with grace, reached contrary conclusions upon
consideration of the context and probable intention as to whether " default"
occurred at the time specified for payment or at the end of the grace period,
thereby indicating that no absolute or rigid meaning is to be assumed in a civil
case, and a fortiori in a criminal case.
In view, therefore, of the flexibility of the term, and bearing in mind that
a penal statute is to be strictly construed against the imputation of criminality
to an act which is not maUcm in se, 1 think it is required that we seek carefully
from authorized sources the probable intent of Congress. In connection therewith your letter indicates particular concern as to Great Britain and other
countries which have made so-called " token payments ", and as to the Soviet
Government, which has not yet, as you informed me, recognized as binding
upon it the obligations incurred by prior governments in Russia. I shall,
therefore, indicate to the extent that I properly can my views in these instances.
On November 7, 1933, the President issued the following statement:
" For some weeks representatives of the British Government have been conferring with representatives of this Government on the subject of the British
debt to this country growing out of the World War. * * *
" It has, therefore, been concluded to adjourn the discussions until certain
factors in.the world situation—commercial and monetary—become more clarified. In the meantime, I have as Executive noted the representations of the
British Government. I am a:iso assured by that Government that it continues
to acknowledge the debt without, of course, prejudicing its right again to
present the matter of its readjustment, and that on December 15, 1933, it will
give tangible expression of this acknowledgment by the payment of seven and
one-half million dollars in United States currency.
" In view of these representations, of the payment, and of the impossibility,
at this time, of passing finally and justly upon the request for a readjustment
of the debt, I have no personal hesitation in saying that / shall not regard the
British Government as in default."
;
°
^
On the same day the Chancellor of the Exchequer addressed the House of
Commons to the same effect, concluding with the President's statement that he
would not regard the British Government as in default.
A statement of similar import had been made by the President in June 1933,
shortly before certain installments upon the debts were due. It is unnecessary
to repeat here the statement then made or to treat further of later statements
by the President and their acceptance in good faith, except to say that Great
Britain and certain other countries made partial payments on installments due
in June 1933, and in December 1933, with the expectation and belief that they
would thereby avoid a default.
In his annual message to Congress delivered at a joint meeting of the two
Houses on January 3, 1934, the President stated:
" I expect to report to you later in regard to debts owed the Governm.ent and
people of this country by the governments and peoples of other countries.
Several nations, acknowledging the debt, have paid in small part; other nations
have failed to pay. One nation—Finland—has paid the installments due this
country in full." (Cong, Rec, v. 78, p. 5,) It does not appear, however, that
any further report in regard to these debts was transmitted to Congress prior
to the enactment of the statute.
I find no record of the expression of any views in the Senate upon the meaning of the word " default" when the bill was under consideration, but the
matter was considered in the House, as indicated by the following excerpts
from the Congressional Record.
"Mr. BANKHEAD. Under this bill, what would be the status of governments
like England, that made a so-called ' token payment', but has defaulted in the
main?
90353—35

240

REPORT OF THE SECRETARY OF THE TREASURY

" Mr. MCREYNOLDS. The President of the United States, as I understand it,
has held that they are not in default" (Cong. Rec, vol. 78, p. 6192.)
" Mr. BRITTEN. Does the gentleman agree with the gentleman from New
York (Mr. F I S H ) that those governments which have made a small token payment will not be held in default by our Government?
" Mr. JOHNSON of Texas. I am not so sure about that." (Cong. Rec, vol. 78,
p. 6194.)
" Mr. JOHNSON of Texas. Yes; the language is broad and comprehensive, but
the question of what constitutes a default is one that will have to be determined by the terms of the original contracts supplemented by any subsequent
agreements that may have been lawfully made." (Cong. Rec, vol. 78, p. 6195.)
" Mr. KLOEB. Since that time we have beheld the spectacle of all these debtor
countries, save one, either actually defaulting in the payments of the installments as they became due or making a so-called ' token payment' in order to
avoid the ugly word 'default'.'' (Cong. Rec, vol. 78, p. 6197.)
" Mr. BRITTEN. Mr. Speaker, I am going to vote for this bill because I have,
to my own satisfaction at least, concluded that any nation of Europe in
default of any portion of its indebtedness, interest or principal, to us is included
in the intention of the bill.
" I realize that in the following statement I am disagreeing with the chairman of the committee, and probably with the ranking Member on this side,
but on page 2, in speaking about the indebtedness, it says, ' While such government is in default in payment of its obligation or any part thereof.' I
fail to see why England, with a surplus this year of $160,000i,000 in her treasury, or France, with countless millions of gold in her treasury, more gold in
her treasury per capita than we have, and governments of that type should
be excluded from the provisions of this bill; and France is npt, I realize, just
because they made some insignificant token payments on account of their vast
obligation to us.
" If the State Department were to exclude those nations from the provisions
of this bill, then Czechoslovakia, Great Briiain, Greece, Italy, Latvia, Lithuania,
and Rumania would be excluded, because they have all made some small
payment.
" My contention is that the State Department should not act that way, nor
has it the authority to presume that because an infinitesimal payment has
been made on an indebtedness of billions it takes that nation out of one class
and puts it into a preferred class." (Cong. Rec, vol. 78, pp. 6197-6198.)
Mr. McReynolds was in charge of the bill during its consideration by the
House, and therefore, under the rules applied by the courts in considering such
proceedings, his apparent view that Great Britain and other countries similarly
situated were not to be deemed in default is entitled to especial weight.
Moreover, the President, by signing the bill, participated equally with the
Houses of Congress, and his view as to the meaning of words employed in it
is of great significance. I cannot assume that he believed Great Britain to
be in default, within the meaning of the word as used in the bill, in view of
his express statements on the subject; and from such information as I now
have before me it would appear that Czechoslovakia, Italy, Latvia, and Lithuania fall in the same category with Great Britain. I conclude, therefore, that
these five countries are not, at the present time, in default under the terms of
the act in question.
Beyond this, a specific answer as to what governments, political subdivisions,
organizations, or associations are in default on their obligations to the United
States would seem to require a survey of data not immediately available to
this office, but in general it may be said, in the words of the statute, that a
" foreign government, political subdivision, organization, or association is in
default" if it has failed." in the payment of its obligations, or any part thereof,
to the Government of the United States", according to its promise or undertaking to pay a fixed amount at a definite time, unless such default has been
postponed or waived in some competent manner or by a transaction having
that effect in law or good morals. Should any authoritative statement, in
harmony with this opinion, be issued in the form of an administrative declaration that named countries are or are not in default, I should be inclined to
follow it insofar as the Department of Justice is charged with the responsibility
of instituting prosecutions in cases of violation, thereby removing misapprehension and uncertainty to those who desire to avoid confiict with the statutory
interdiction; and should the question come before the courts it is reasonable
to bejieve that they would honor an^ such administrative deterniin^itipnj

REPOBT OF THE

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OF THS TBEASUBY

241

With regard to the status, under the act, of a political subdivision of a
defaulting country when the subdivision itself is not in default, attention is
called to the fact that while explaining the biU in the House of Representatives
Mr. McReynolds stated that in such a case the political subdivision, such as a
city in a defaulting country, would not come within the inhibitions of the
bill if the city itself were not in default (Cong. Rec, vol. 78, p. 6200). I
approve this view, not only because of the presumption arising from Mr.
McReynolds' explanation but because a reasonable interpretation of the statute
itself supports the conclusion that the default of a foreign government would
not be imputed to a political subdivision thereof, e. g., a municipality, so as
to prohibit the purchase or sale of bonds or securities of the latter, if the
municipality is not itself in default.
It has also been asked whether or not Canada, a member of the commonwealth of nations which compose the British Empire, is to be regarded as a
political subdivision of Great Britain. The question should properly be answered in the negative, and this conclusion was suggested in Congress (Cong.
Rec, vol. 78, p. 6195), but it appears to be immaterial, in view of my conclusion
above stated concerning the intention of Congress as applied to the obligations
of political subdivisions. Canada, I believe, is not in diefault.
"(2) To what types of transactions does the act apply? "
The committee reports (S. Rept 20 and H. Rept. 974, 73d Cong.) recite that
the bill was introduced following an investigation by the Senate Committee on
Finance and the revelation therein that " billions of dollars of securities
* •= •'= offered for sale to the American people" were overdue and unpaid;
that some of these "foreign bonds and obligations * -"^ •=' were sold by the
American financiers to make outrageously high profits " ; and stated a purpose
•" to prevent a recurrence of the practices which were shown by the investigation
to be little less than a fraud upon the American people * * * to curb the
rapacity of those engaged in the sale of foreign obligations * * *."
This, I think, is indicative of a purpose to deal with such " bonds" and
" securities " and with " other obligations " of like nature, observing the rule of
ejusdem geoieris—that is, obligations such as those which had been sold to the
American public to raise money for the use of the foreign governments issuing
them—not contemplating foreign currency, postal money orders, drafts, checks,
and other ordinary aids to banking and commercial transactions, which are
" obligations " in a broad sense but not in the sense intended. It was obviously
not the purpose of the Congress to discontinue all commercial relations with
the defaulting countries.
"(3) What constitutes a renewal of an existing credit? "
Your legal adviser has concluded, in the memorandum transmitted with your
letter of AprU 23d, that:
" It would seem that any instrument which would be issued for the purpose
of replacing the evidence of any existing indebtedness would constitute a
renewal or an adjustment of an existing indebtedness. If new bonds were
issued to replace old ones, it would seem that such a transaction would be
permissible. Any instrument given in satisfaction or extension of an existing
indebtedness would, it is believed, come within this exception."
In general I approve this statement, but obviously it will be a question of
fact in each case whether or not what is done amounts in good faith to the mere
" renewal * * "^^ of existing indebtedness."
"(4) Does the act apply to acceptances or time drafts? "
This question appears to be sufficiently answered by the comments under
question no. 2, supra. It appears proper to add, however, that such transactions
must be conducted in good faith in order to be within the law, and not as mere
subterfuges to circumvent its purpose.
"(5) Is the present Soviet Goyernment, as the successor to prior governments of Russia, to be regarded as in default, in view of the fact that no
payment has been made on the bonds issued to the Government of the United
States by the Provisional Government, on account of loans made to that Government by the United States during the period of the war, the Provisional
Government having been the immediate predecessor of the Soviet Government? "
The. proceedings in the House of Representatives indicate acceptance of the
view that our Government regards the Soviet Government as responsible for
the obligations incurred by prior Russian governments (Cong. Rec, vol.
78, p. 6192). The position of our Government in this respect accords with
accepted principles of international law, as illustrated by the following authorities :

242

REPOBT OF THE SECRETABY OF THE TREASURY

Moore, Int. Law Digest, v. 1, sec. 96, quoting Secretary of State Adams
(August 10, 1818) :
" No principle of international law can be more clearly established than this:
That the rights and the obligations of a nation in regard to other States are
independent of its internal revolutions of government It extends even to
the case of conquest. The conqueror who reduces a nation to his subjection
receives it subject to all its engagements and duties toward others, the fulfillment of which then becomes his own duty."
Halleck, I n t Law (3d ed.) v. 1, p. 90:
" Public debts, whether due to or from the revolutionized state, are neither
canceled nor affected by any change in the constitution or internal government
of a state."
The same rule is stated, in substance, in Kent's Commentaries (12th ed.)
V. 1, p. 26, and in an opinion of Attorney General Griggs, 22 Op. A. G. 583,
584. In connection with, and in support of, these statements the authors cite
L. Whart I n t Law Dig., sec 5; Hall, I n t Law (4th ed.), pp. 104, 105; Rivier,
Principes du Droit des Gens, I, pp. 70-72; United States v. MacRae, L. R.
8 Eq., 69; Vattel, Droit des Gens, Iiv II, ch. XII, §§ 183-197; Grotius, De
Jur. Bel., lib. II, cap. II § 8.
This view, in fact, was stated in Congress (Cong. Rec, vol. 78, p. 6192) to
have suggested the insertion of the provision in section 2 of the statute excluding from its operation public corporations controlled by the United States,
which are permitted to engage in the transactions prohibited to individuals
and private corporations, if administratively determined to be desirable. I,
therefore, regard the Soviet Government as in default within the colitemplation
of the statute.
"(6) However the last question may be answered, can the Soviet Government be considered in default to the Government of the United States pending
negotiations that are being had with a view to arriving at the amount of the
indebtedness due from the Soviet Government to the Government of the
United States?"
Bearing in mind what I have just stated in response to your fifth question,
I am aware of no principle of law under which a previously existing default
is waived or overcome because of the mere pendency of negotiations " with a
view to arriving at the amount of the indebtedness due ", assuming that there
is any uncertainty in this regard, although, of course, the matter might be
affected by the outcome of any such negotiations.
"(7) Would the issue and sale in the United States of 'scrip' or 'funding
bonds' in part payment of outstanding obligations be in violation of the act? "
This question appears to -present only a detail of the matter treated generally
under question no. 3, and the same answer is applicable. In other words, such
" scrip " or " funding bonds " are authorized if issued in the bona fide " renewal or adjustment of existing indebtedness."
It is made unlawful, as I have said, " to purchase or sell the bonds, securities,
or other (similar) obligations of any foreign government * * * issued
after the passage of this act, or to make any loan, to such foreign government * * * except a renewal or adjustment of existing indebtedness."
The word "renewal" needs no definition by me—it is frequently used; and
commonly understood in banking, business, and commercial transactions—and
the word " adjustment", relating to accounts or claims, has been used in our
statutes since the formation of the Government. (See the act of Sept. 2, 1789,
1 Stat 65, and the act of Mar. 3, 1817, 3 Stat. 366.) It is used, I think, in the
sense of compromising or determining how much is to be paid, when and where,
upon what terms, and the like. Thus an adjustment of an existing indebtedness within the meaning of the act is any lawful arrangement entered into in
good faith between the debtor and the creditor which comprises or determines
the amount to be paid by the debtor to the creditor, and it may include other
details of composition or settlement.
Respectfully,
HOMER CUMMINGS, Attaiyiey General.
The honorable the SECRETARY OF STATE.

REPORT OF THE SECRETARY OF THE TREASURY

243

Exhibit 36
Message from the President to the Congress, transmitting a statement on the
subject af debts atoed the Government and people of the United States by
the governments a%d peoples af foreign countries {H. Doc. Na. 392, 73d Cong.,
2d sess.)
To the Congress of the United States:
In my address to the Congress January 3 I stated that I expected to report
later in regard to debts owed the Government and people of this country by
the governments and people of other countries. There has been no formal
communication on the subject from the Executive since President Hoover's
message of December 19, 1932.
The developments are well known,, having been announced to the press as
they occurred. Correspondence with debtor governments has been made public
promptly and is available in the Annual Report of the Secretary of the Treasury. It is, however, timely to review the situation.
Payments on the indebtedness of foreign governments to the United States
which fell due in the fiscal year ended June 30, 1932, were postponed on the
proposal of President Hoover announced June 20, 1931, and authorized by the
joint resolution of Congress approved December 23, 1931. Yugoslavia alone
suspended payment while rejecting President Hoover's offer of postponement.
In the 6 months of July to December 1932, which followed the end of the
Hoover moratorium year, paj^ments of $125,000,000 from 12 governments fell
due. Requests to postpone the payments due December 15, 1932, were received
from Great Britain, France, Belgium, Czechoslovakia, Estonia, Latvia, Lithuania, and Poland. The replies made on behalf of President Hoover through
the Department of State declined these requests, generally stating that it was
not in the power of the Executive to grant them, and expressing a willingness
to cooperate with the debtor government in surveying the entire situation.
After such correspondence Czechoslovakia, Finland, Great Britain, Italy, Latvia, and Lithuania met their contractual obligations, while Belgium, Estonia,
France, and Poland made no payment
In a note of December 11, 1932, after the United States had declined to
sanction postponement of the payment due December 15, the 'British Government, in announcing its decision to make paj^ment of the amount due on
December 15, made the following important statements:
" For reasons which have already been placed on record His Majesty's Government are convinced that the system of intergovernmental payments in respect of
the war debts as it existed prior to Mr. Hoover's initiative on June 20, 1931,
cannot be revived without disaster. Since it is agreed that the whole subject
should be reexamined between the United States and the United Kingdom this
fundamental point need not be further stressed here.
" In the view of His Majesty's Government therefore the payment to be made
on December 15 is not to be regarded as a resumption of the annual payments
contemplated by the existing agreement. It is made because there has not been
time for discussion with regard to that agreement to take place and because the
United States Government have stated that in their opinion such a payment
would greatly increase the prospects of a satisfactory approach to the whole
question.
"His Majesty's Government propose accordingly to treat the payment on
December 15 as a capital payment of which account should be taken in any
final settlement and they are making arrangements to effect this payment in
gold as being in the circumstances the least prejudicial of the methods open to
them.
" This procedure must obviously be exceptional and abnormal and His Majesty's Government desire to urge upon the United States Government the
importance of an early exchange of views with the object of concluding the
proposed discussion before June 15 next in order to. obviate a general breakdown of the existing intergovernmental agreements."
The Secretary of State, Mr. Stimson, replied to this note on the same day
that acceptance by the Secretary of the Treasury of funds tendered in payment
of the December 15 installment cannot constitute approval of or agreement to
any condition or declaration of policy inconsistent with the terms of the agreement inasmuch as the Executive has no power to amend or to alter those terms
either directly or indirectly or by implied commitment.

244

REPORT OF THE SECRETARY OF TH]E TBEASUBY

No payment was made by France December 15, 1932', as the French Chamber
of Deputies by a vote on the morning of December 14 refused authorization
to make the payment. The resolution voted by the French Chamber at that
time invited the French Government to convoke as soon as possible, in agreement with Great Britain and other debtors, a general conference for the purpose
of adjusting all international obligations and putting an end to all international transfers for which there is no compensating transaction. The resolution
stated that the Chamber, despite legal and economic considerations, would have
authorized settlement had the United States been willing to agree in advance
to the convening of the conference for these purposes.
This resolution of ^ the French Chamber is to be read in relation with the
public statements of policy made by President Hoover and by myself on
November 23, 1932. President Hoover said:
" The United States Government from the beginning has taken the position
that it would deal with each of the debtor governments separately, as separate
and distinct circumstances surrounded each case. Both in the making of the
loans and in the subsequent settlements with the different debtors, this policy
has been rigidly made clear to every foreign government concerned."
I said:
" I find myself in complete accord with the four principles discussed in the
conference between the President and myself yesterday and set forth in a statement which the President has issued today.
" These debts were actual loans made under the distinct understanding and
with the intention that they would be repaid.
" In dealing with the debts each government has been and is to be considered
individually, and all dealings with each government are independent of dealings
with any other debtor government. In no case should we deal with the debtor
governments collectively.
" Debt settlements made in each case take into consideration the capacity to
pay of the individual debtor nations.
" The indebtedness of the various European nations to our Government has no
relations whatsoever to reparations payments made or owed to them."
Of the $125,000,000 due and payable December 15, 1932, the Treasury received
$98,750',00O, of which $95,550,000 was the British payment made subsequent to
the above correspondence, and the other $3,000,000 represented payments by
five other debtor nations. The amounts due from Belgium, Estonia, France,
Hungary, and Poland which were not received amounted to $25,000,000, of which
$19,260,000 was due and payable by France.
In my statement issued November 23, 1932, I had said:
" I firmly believe in the principle that an individual debtor should at all times
have access to the creditor; that he should have opportunity to lay facts and
representations before the creditor and that the creditor always should give
courteous, sympathetic, and thoughtful consideration to such facts and representations.
" This is a rule essential to the preservation of the ordinary relationships of
life. It is a basic obligation of civilization. It applies to nations as well as to
individuals.
" The principle calls for a free access by the debtor to the creditor. Each case
should be considered in the light of the conditions and necessities peculiar to the
case of each nation concerned."
On January 20, 1933, President Hoover and I agreed upon the following
statement:
" The British Government has asked for a discussion of the debts. The incoming administration will be glad to receive their representative early in
March for this purpose. It is, of course, necessary to discuss at the same time
the world economic problems in which the United States and Great Britain
are mutually interested and therefore that representatives should also be sent
to discuss ways and means for improving the world situation."
On March 4, 1933, the situation with regard to the indebtedness of other
governments to the United States was, in brief, as follows:
France: The French Parliament had refused to permit payment of
$19,261,432.50 interest due on the $3,863,650,000 bonds of France owned by
the United States.
Great Britain: With respect to the British bonded debt held by the Treasury
in the principal amount of $4,368,000,000, Great Britain in meeting a due payment of $30,000,000 principal and $65,550,000 interest had stated that the payment was not to be regarded as a resumption of the annual payments con-

REPORT OF THE SECRETARY OF THE TREASURY

245

templated under the funding agreement of June 19^ 1923, but was to be
treated, so far as the British Government was concerned, as a capital payment
. of which account should be taken in any final settlement.
Italy: With respect to the $2,004,900,000 principal amount of bonds of the
Italian Goyernment held by the United States Treasury, the Italian Government had paid the sum of $1,245,437 interest due December 15, 1932; but in
doing so it referred to a resolution of the Grand Council of Fascism, adopted
December 5, 1932, in which " a radical solution of the * sponging of the slate *
type was declared to be necessary for the world's economic recovery."
Czechoslovakia, in making a payment of $1,500,000 principal due December 15, 1932, on its debt of $165,000,000, had stated that "this payment
constitutes in the utmost self-denial of the Czechoslovak people their final
effort to meet the obligation under such extremely unfavorable circumstances."
Belgium had declined to pay $2,125,000 interest due December 15, 1932, on
its bonds of $400,680,000 held by the Treasury of the United States, and in
doing so had recited circumstances which it stated " prevent it from resuming,
on December 15, the payments which were suspended by virtue of the agreements made in July 1931." Adding: " Belgium is still disposed to collaborate
fully in seeking a general settlement of intergovernmental debts and of the
other problems arising from the depression."
Poland had not paid the $232,000 principal and $3,070,980 interest due December 15, 1932, on its bonds in the principal amount of $206,057,000 held by the
Treasury of the United States.
Of the nine other governments whose bonds are held by the Treasury of the
United States, Estonia and Hungary had not met payinents due December 15,
1932.
Austria is availing itself of a contractual right to postpone payments.
Greece was making only partial payments on its foreign bonded indebtedness, including that held by the United States.
Yugoslavia had declined to sign any Hoover moratorium agreement and had
stopped paying.
No payment by Rumania had fallen due since the close of the Hoover
moratorium.
Finland, Latvia, and Lithuania were current in their payments.
Although I had informal discussions concerning the British debt with the
British Ambassador even before March 4, 1933, and in April there was further
discussion of the subject with the Prime Minister of Great Britain and between
experts of the two governments, it was not possible to reach definitive conclusions. On June 13 the British Government gave notice that in the then existing circumstances it was not prepared to make the payment due June 15, 1933,
but would make an immediate payment of $10,000,000 as an acknowledgment
of the debt pending a final settlement. To this notice reply was made by the
Acting Secretary of State, pointing out that it is not within the discretion of
the President to reduce or cancel the existing debt owed to the United States
nor to alter the schedule of debt payments contained in the existing settlement.
At the same time I took occasion to announce that in view of the representations of the British Government, the accompanying acknowledgment of the debt
itself, and the payment made, I had no personal hesitation in saying that I
would not characterize the resultant situation as a default. In view of the
suggestion of the expressed desire of the British Government to make representations concerning the debt, I suggested that such representations be made
in Washington as soon as convenient.
The Agricultural Adjustment Act, approved May 12, 1933, had authorized
the President for a period of 6 months from, that date to accept silver in payment of installments due from any foreign government, such silver to be accepted at not to exceed a price of 50 cents an ounce. In the piayments due
June 15, 1933, the Governments of Great Britain, Czechoslovakia, Finland, Italy,
Lithuania, and Rumania took advantage of this offer.
On June 15, 1933, payments of about $144,000,000 were due from foreign governments, the larger amounts being about $76,000,000 from Great Britain, almost
$41,000,000 from France, and $13,500,000 from Italy. The amounts actuaUy
paid into the Treasury were $11,374,000 of which $10,000,000 was paid by Great
Britain and $1,000,000 by Italy. Communications were received from most of
the debtor governments asking a discussion of the debt question with the United
States Government.
In October 1933, representatives of the British Government arrived in Washington and conferred for some weeks with representatives of this Governmentt

246

REPORT OF THE SECRETARY OF THE TREASURY

These discussions made clear the existing difficulties and the discussions were
adjourned.
The British Government then stated that it continued to acknowledge the
debt without prejudicing its right again to present the matter of readjustment
and that it would express this acknowledgment tangibly by a payment of $7,500,000 on December 15. In announcing this I stated that in view of the representations, of the payment, and of the impossibility of accepting at that time
any of the proposals.for a readjustment of the debt, I had no personal hesitation in saying that I should not regard the British Government as in default.
On December 15, 1983, there was due and payable by foreign governments
on their debt funding agreements and Hoover moratorium agreements a total
of about $153,000,000. The payments actually received were slightly less than
$9,000,000 including $7,500,000 paid by Great Britain, $1,000,000 by Italy, and
about $230,000 by Finland.
At the present time Finland remains the only foreign government which
has met all payments on its indebtedness to the United States punctually and
in full.
It is a simple fact that this matter of the repayment of debts contracted to
the United States during and after the World War has gravely complicated
our trade and financial relationships with the borrowing nations for many
years.
These obligations furnished vital means for the successful conclusion of a
war which involved the national existence of the borrowers, and later for a
quicker restoration of their normal life after the war ended.
The money loaned by the United States Government was in turn borrowed
by the United States Government from the people of the United States, and
our Government in the absence of payment from foreigii governments is compelled to raise the shortage by general taxation of its own people in order to
pay off the original Liberty bonds and the later refunding bonds.
It is for these reasons that the American people have felt that their debtors
were called upon to make a determined effort to discharge these obligations.
The American people would not be disposed to place an impossible burden upon
their debtors, but are nevertheless in a just position to ask that substantial
sacrifices be made to meet these debts.
We shall continue to expect the debtors on their part to show full understanding of the American attitude on this debt question. The people of the
debtor nations will also bear in mind the fact that the American people are certain to be swayed by the use which debtor countries make of their available
resources—whether such resources would be applied for the purposes of recovery as well as for reasonable payment on the debt owed to the citizens of
the United States, or for purposes of unproductive nationalistic expenditure, or
like purposes.
In presenting this report to you, I suggest that, in view of all existing
circumstances no legislation at this session of the Congress is either necessary
or advisable.
I can only repeat that I have made it clear to the debtor nations again and
again that " the indebtedness to our Government has no relation whatsoever to
reparations payments made or owed to them " and that each individual nation
has full and free opportunity individually to discuss its problem with the
United States.
We are using every means to persuade each debtor nation as to the sacredness of the obligation and also to assure them of our willingness, if they
should so request, to discuss frankly and fully the special circumstances relating
to means and method of payment.
Recognizing that the final power lies with the Congress, I shall keep the
Congress informed from time to time and make such new recommendations as
may later seem advisable.
FRANKLIN D. ROOSEVELT.
T H E WHITE HOUSE,

June 1, 1934'

REPORT OF THE SECRETARY OF THE TREASURY

247

MIXED CLAIMS
Exhibit 37
Senate Report No. 1376, June 11, 1934, ta accompany Senate Joint Resolution
135, ta amend Settlement af War Claims Act af 1928, as amended {73d Cong.,
2d sess.)
The Committee on Finance, to whom was referred the joint resolution (S. J.
Res. 135) to amend the Settlement of War Claims Act of 1928, as amended,
having considered the same, report favorably thereon with amendments, and
recommend that the resolution, as amended, do pass.
Following the war, German nationals had claims against the United States
such as claims arising from our seizure of property owned by German nationals.
Similarly, American nationals had claims against the German Government
arising out of the war. On July 2, 1921, Congress passed the Knox-Porter
peace resolution (later incorporated in the peace treaty between the United
States and Germany), which provided that none of the property of the German
Government and German nationals which was seized during the war should
be returned until Germany had made suitable provision for the satisfaction of
the- claims of the United States and its nationals against Germany arising out
of the war.
Germany was not in a position to make a lump payment of the amount due
to Americans. Accordingly, the United States consented to the German-American debt agreement (June 23, 1930) under which Germany agreed (among
other things) to make payment in installments over a period of years of an
aggregate amount equal to the estimated amount due to American nationals.
The installments were not sufficiently large to permit of early payments in
substantial amounts. Accordingly, the American Congress appropriated $86,000,000 to be deposited in an account known as the " German Special Deposit
Account", out of which payments were to be made in accordance with priorities
estabUshed in the Settlement of War Claims Act of March 10, 1928. Of this
$86,000,000, approximately $43,000,000 was paid to American nationals and
$43,000,000 to German nationals.
The German Government took advantage of the provisions of the GermanAmerican debt agreement permitting postponement of its principal installment
payments for a period not exceeding 2% years. On March 31 of this year
both the postponed installments and the installment due on that date became
payable, but were not paid. The German Government did, however, make payment of interest as required by the agreement until last September, when,
instead of making the interest payment to the United States, it notified the
United States that it had established a credit in marks in a German bank
corresponding to the interest due. On March 31 of this year Germany made
payment in dollars in the United States of the current interest due; but as
previously stated, failed to make payment of the principal installments due.
Furthermore, the German Government has failed to make satisfactoiy assurances as to when those installments will be paid.
The result is that while the United States has fulfilled its undertakings,
Germany has failed to make suitable provision for the satisfaction of the
claims of the United States and its nationals called for in the Knox-Porter
peace resolution. Under these circumstances it would appear to be in accord
with the policy of the Congress as declared in that resolution to postpone any
further liquidation of the claims of German nationals against the United States
until the German Government fulfills its. undertakings to provide for satisfaction of the claims of American nationals against it. The resolution reported
is designed to carry out this policy.
The foregoing is stated in very general terms for the reason that it would be
difficult to present in brief form a picture of the whole question of the war
claims were an attempt made, at the same time, to set out the details and the
necessary qualifications covering variations not essential to the point at issue.
A detailed statement of the situation, together with an explanation of
amendments similar to those agreed to by your committee, and which are
clarifying in character, is contained in the report (appended herewith) of the
House Committee on Ways and Means upon a companion resolution, House
Joint Resolution 365.

^48

BEPORT OF THE S E C B E T A B Y OF THIE TBEASUBY
[H. Rept. No. 1924, 73d Cong., 2d sess.]

The Committee on Ways and Means, to whom was referred the joint resolution ( H . J . Res. 365) to amend the Settlement of War Claims Act of 1928, as
amended, having had the same under consideration, report it back to the House
with amendments and recommend that the joint resolution as amended do pass.
The amendments are as follows:
On page 3, line 11, strike out " any or ".
On page 4, line 14, after " postponed ", insert " under this resolution ".
On page 4 strike out in lines 15 to 18, inclusive, the following: " the action of
the President in determining the period or periods in which Germany is in
arrears in the payments hereinbefore described shaU not be subject to judicial
review " and insert in lieu thereof " the President is authorized to determine,
for the purposes of this resolution, the period or periods in which Germany is
in arrears in the payments hereinbefore described and his determination thereof
shall not be subject to judicial review ".
The purpose of this resolution is to postpone {a) further payments to German nationals from the German special deposit account in the Treasury Department, established under section 4 of the Settlement of War Claims Act of
1928, on account of awards made by the War Claims Arbiter for ships, patents,
and a radio station seized and used by this Government during the war, and
{b) further return of property belonging to German nationals held by the
Alien Property Custodian, while Germany is in arrears on her payments on
claims of American nationals under the debt agreement of June 23, 1930.
By the terms of the Settlement of War Claims Act, the awards in favor of
German nationals for ships, patents, and a radio station and the awards
entered by the Mixed Claims Commission against Germany in favor of American nationals were to be paid in accordance with the scheme of priorities
established in section 4 (c) of the act.
Germany is now in arrears on the payments due under the debt agreement
of June 23, 1980, and there is no assurance when those arrears will be discharged or further annual payments made. It is not felt that this Government
should make further payments to German nationals from the limited funds that
may be available in the German special deposit account, or that it should return
the small amount of property still held by the Alien Property Custodian while
Germany's obligations under the debt agreement remain in their present state.
The resolution withholds all amounts which may become payable to German
nationals under the Settlement of War Claims Act of 1928 and withholds the
return of all property belonging to German nationals now held by the Alien
Property Custodian under the Trading with the Enemy Act, as amended. In
view of the many complicated matters involved it is believed that a review of
the problems before Congress at the time it passed the Settlement of War
Claims Act and a review of subsequent events may be useful to the Members of
the House.
The Settlement of War Claims Act of 1928 was approved March 10, 1928.
The act is complicated by reason of the innumerable complex situations covered by it and also by the complexities of the Trading with the Enemy Act,
which was amended in several particulars by the Settlement of War Claims Act.
There were three major problems involving the United States and its nationals and the German Government and its nationals arising out of the war
which the act attempted to settle. In order not to unduly complicate the
matter, similar problems involving the United States and its nationals in their
relation to the Austrian and Hungarian Governments and their nationals, also
covered in the act, are not covered in this report. The three major problems
referred to were as follows:
1. Alien property.—Property of German nationals in the United States was
seized during the war by the Alien Property Custodian under the provisions
of the Trading with the Enemy Act, as amended, and a large part, estimated
at a lvalue of over $200,000,000', was being held at the time of the enactment of
the Settlement of War Claims Act with no authority in the Executive to return
i t Under the Knox-Porter peace resolution of July 2, 1921, quoted in part in
the first paragraph of the preamble of House Joint Resolution 365, and which
was incorporated in full in the Treaty of Berlin, the United States unquestionably possessed the right to retain this property until Germany had made suitable provision for the satisfaction of the claims of American nationals against
the German Government.
Congress in the Settlement of War Claims Act authorized the return of 80 percent of the aggregate value of the property of German

REPORT OF THE SECRETARY OF THE TREASURY

249

nationals so held, and f u r t h e r authorized t h a t t h e remaining 20 percent of the
aggregate value of such property be retained and invested in 5 percent certificates which participate under certain conditions and in a certain order of
priority in the funds in the German special deposit account in the T r e a s u r y
created by the Settlement of W a r Claims Act.
2. Mixed claims.—The United States Government and many American nationals suffered losses during t h e w a r period by reason of acts for which t h e
German Government was responsible, and their claims had to be satisfied.
A commission, known as the " Mixed Claims Commission, United States and
Germany ", was created by the agreement of August 10, 1922, to h e a r and
determine the claims and to enter a w a r d s for the losses for which Germany
was responsible. Through arrangements made by the Secretary of State with
the Allied Governments, there had been allocated to the United States under
the provisions of the Finance Ministers' agreement of J a n u a r y 14, 1925, 2^/4
percent of all receipts paid by Germany which were available for reparation
payments, with a proviso t h a t the sum so aUocated should not exceed 45,000,000
gold m a r k s in any one year. The United States was, therefore, receiving a t the
time of the enactment of the Settlement of W a r Claims Act approximately
$11,000,000 per a n n u m through the Reparation Commission for account of
(xermany's obligations.
By passing the Settlement of W a r Claims Act, Congress in effect recognized
that arrangements had been made which, if fulfilled, constituted a " suitable
provision for the satisfaction of all claims " against Germany required by the
joint resolution of July 2, 1921. By t h e debt agreement of J u n e 23, 1930, an
arrangement was m a d e directly with Germany which superseded t h e previouslymentioned arrangement and provided for the gradual liquidation of the Mixed
Claims a w a r d s through t h e payment of an annual sum of 40,SOO',OOO reichsmarks ($9,700,000') for a period of 52 years, in semiannual installments of
20,400,000 reichsmarks each. Congress approved this agreement. But if the
American claimants had been forced to rely upon only t h e distributive share
in the payments to be made under t h e two arrangements mentioned, more t h a n
TO years would have been required for payment in full. I t was necessary,
therefore, t h a t some method be provided by which the American claimants
could obtain a more immediate p a y m e n t
3. Aioards of W a r Claims Arbiter in favor of Germmi nationals.—The United
States Government, under the authority of a joint resolution of Con.gress, during the w a r seized and took title to a large number of ships owned by citizens
of Germany and acquired for its own use during t h e Avar a large number of
patents and a radio station. The United States recognized a duty to make compensation on these accounts to the German nationals f^r the value of their
property so taken and used. The Settlement of W a r Claims Act created the
offi'^e of W a r Claims Arbiter and authorized t h e Arbiter to h e a r the claims of
the German nationals and to determine t h e fair compensation to be paid by
the United States. Some provision had to be made for the payment of the
amounts determined to be due.
The Settlement of W a r Claims Act recognized the close relationship between
the three problems and their solution as a whole. TTn'"!er the circumstances, it
WPR not possible to provide for the immediate paymont of all American claimants, nor the immediate payment of all owners of the ships, patents, and the
radio station, nor the immediate return of all the alien property. T h e act did,
however, provide for the immpdiate payment of as large a percentage as
possible of the claims of the American nationals and the German nationals,
and for the return of as large a percenta.sre as possible of t h e alien property,
with a provision for the payment of the balance due over a period of years.
The act created in t h e T r e a s u r y a German special deposit account into which
the Secretary of the T r e a s u r y was directed to deposit the following f u n d s :
{a) AU sums invested by the Alien Property Custodian under the provisions
of section 25 (a) of the T r a d i n g with t h e Enemy Act, as amended, which represents 20 percent of the ag,gre.gate value of the property of German nationals
temporarily retained by the Alien Property Custodian, As the funds a^e
invested as required by the T r a d i n g with t h e Enemy Act and deposited in the
Gorman F^i^ecial ^eposit account, t h e Secretary of t h e Treasury is?;ues to the
Alien Property Custodian a 5 percent participating certificate, which is payable
in accordanre with the priorities hereinafter enumerated.
(b) All sums transferred by the Alien Property Custodian under the provisions of section 25 (&) of t h e T r a d i n g with the Enemy Act, as amended, which
was referred to as the " Unallocated interest fund " and which represented the

250

REPORT OF THE SECRETARY OF THE TREASURY

interest accrued prior to March 4, 1923, on investments of funds of the Alien
Property Custodian, plus interest on the investment of such interest after
March 4, 1923. No authority of law existed for distributing any interest
accruing on the investment of the funds prior to March 4, 1923, the date of
the approval of the Winslow Act, which act autht)rized the return of not to
exceed $10,000 per annum to any one person, of the income accruing after
that date.
(c) Amounts appropriated by Congress for the payment of awards of the
War Claims Arbiter in favor of German nationals for ships, patents, and a
radio station.
{d) All moneys received from Germany on account of the awards of the
Mixed Claims Commission in favor of American nationals.
(e) Earnings on investments of funds in the deposit account.
The act authorized and directed the Secretary of the Treasury to make payments out of the German special deposit account in the following order of
priority:
(1) Payment of expenses of administration.
(2) Payment in full of awards in favor of American nationals attributable
to death and personal injury, together with interest thereon up to the date of
payment.
(3) Payment in full of awards in favor of American nationals the amount
of which, including interest to January 1, 1928, does not exceed $100,000,
together with interest on such amount from January 1, 1928, to the date of
payment
(4) Payment of $100,000 on account of awards in favor of an American
national, the amount of which, including accrued interest to January 1, 1928, is
in excess of $100,000, provided no person shall be paid an amount in excess of
$100,000 under this priority, irrespective of the number of awards made in his
behalf.
(5) Additional payments on awards in excess of $100,000, including interest to
January 1, 1928, entered in favor of American nationals, as and when funds are
available for this purpose as determined by the Secretary of the Treasury, until
the aggregate payments authorized by priorities 2 to 5 equal 80 percent of the
aggregate amount of the awards entered, including interest to January 1, 1928.
It is pointed out that all the payments authorized by paragraphs 2, 3, and 4
above have been practically completed. There are a few cases remaining unpaid
because the claimants cannot be located and for other reasons, but funds have
been reserved for their complete payment. As to paragraph 5, payments have
been made which aggregate about 74% percent of the amount authorized to be
paid under these priorities. There remains, therefore, approximately 5% percent (about $2,000,000) to complete this priority to American nationals.
(6) Payment to German nationals of 50 percent of the awards entered by the
War Claims Arbiter for ships, patents, and a radio station, including interest to
December 31, 1928. The Secretary of the Treasury was authorized to pay this
amount without regard to any of the other priorities.
(7) Payment of accrued interest upon the 5 percent participating certificates
evidencing the amounts invested by the Alien Property Custodian.
(8) Payment of accrued interest since January 1, 1928, on awards of the
Mixed Claims Commission in excess of $100,000 in amount, including accrued
interest to January 1, 1928, in favor of American nationals and accrued interest
since December 31, 1928, on awards of the War Claims Arbiter in favor of
German nationals for ships, patents, and a radio station, including accrued
interest to December 31, 1928.
(9) Pro rata payments, to the extent funds are available, {a) to the Alien
Property Custodian, on the 5 percent participating certificates held by him as
evidence of the investment of funds representing 20 percent of German property
temporarUy retained; {b) to German nationals on account of the balance due
on their.awards entered by the War Claims Arbiter for ships, patents, and a
radio station, including interest to December 31, 1928; and (c) to American
nationals on account of the balance due on awards in excess of $100,000 in
amount, including interest to January 1, 1928, entered by the Mixed Claims
Commission.
(10) Payment to German nationals on account of the "Unallocated interest
fund." No interest accrues on this sum.
(11) Payment to the United States Government on account of awards entered
in its behalf by the Mixed Claims Commission, together with interest on such
awards.

REPORT OF THE SECRETARY OF THE TREASURY

251

The Trading with the Enemy Act, as amended by the Settlement of War
Claims Act, authorized the return of 80 percent of the aggregate value of the
property of German nationals, as determined by the Alien Property Custodian;
authorized the temporary retention of the remaining 20 percent; and authorized
that funds equal to the value of such property so retained be paid to the German
nationals from the German special deposit account in the order of priority established by the Settlement of War Claims Act
The following is a statement showing the amounts of the various classes of
claims, the payments made on account of each class, and the balance due as of
March 31, 1934:
I. Principal of awards of Mixed Claims Commission
I n t e r e s t to J a n . 1, 1928

$128,500,000
40, 500, 000

Amount due J a n , 1, 1928
P a y m e n t s made on account
Interest accrued a t 5 percent per annum, from
1, 1928, to Mar. 3 1 , 1934

169,000,000
134, 000, 000
Jan.

Balance due as of Mar, 31, 1934
II, Principal of awards of War Claims Arbiter
Interest to Dec, 31, 1928
^
Amount due Dec. 31, 1928
P a y m e n t s made on account
Interest accrued a t 5 percent per a n n u m from Dec. 31,
1928, to Mar. 3 1 , 1934
Balance due as of Mar. 31, 1934
I I I . Twenty percent of German property temporarily retained :
i n v e s t m e n t by Alien Property Custodian
Investment yet to be made by Alien Property Custodian ($15,500,000).
Interest accrued on investment to Mar, 31, 1934

35. 000,000
19, 000, 000
63, 200, 000
23, 500, 000

$54, 000, 000

86, 700, 000
43, 400, 000
43, 300, 000
16, 100, 000
59,400,000
17, 550,'000
3, 600, 000

Balance due a s of Mar. 31, 1934
21, 150,
IV. Unallocated interest fund
21, 750,
Amount due private claimants from German special deposit
account a s of Mar. 31, 1934
156, 300,
V. Principal of awards entered in behalf of the United
States Government
42, 035, 000
Interest to Mar. 31, 1934
38, 300, 000
80, 335,
Total including -accrued interest

000
000
000

000

236, 635, 000

In addition it is understood that the Alien Property Custodian has property
in his hands valued at approximately $10,000,000, of which 80 or 90 percent is
estimated to belong to German nationals. Under the law as it now stands, 80
percent of this property would probably be returned this calendar year, the
remaining 20 percent to be retained for deposit in the German special deposit
account.
The following shows the funds made, or to be made, available to the German
special deposit account and the payments that have been made out of such
account:
Receipts:
From investments of Alien Property Custodian under
Trading w i t h the Enemy Act, as amended :
Unallocated interest fund
20 percent German property retained
Total
From Germany :
2 ^ percent of receipts as authorized by Finance
Ministers' agreement of J a n . 14, 1925.Under debt agreement of J u n e 23, 1930
——
Total
Appropriation made by Congress for ships, patents, and
radio station (awards for War Claims Arbiter)
Earnings and profits on investments
Total receipts

$21, 750, 000
17, 550, 000
$39, 300. 000
32, 183, 000
20, 198, 00.0
52, 381, 000
86,852,000
4, 181, 000
182, 714, 000

252

REPORT OF THE SECRETARY OF THE TREASURY

Payments:
On account of a w a r d s of the Mixed Claims Commission- $134, 000, 000
On account of awards of t h e W a r Claims Arbiter
43, 368, 000Miscellaneous payments (expenses, e t c )
817, 000
Total

$178,185,000

Balance in German special deposit account
.-Funds in hands of Alien Property Custodian available for deposit in Germ a n special deposit account
Total available to German special deposit account

4, 529, 000
.•
15, 500, 000
20, 029, 000

It wiU be noted that the funds now available to the German special deposit
account amount to about $20,000,000, which are being reserved to make payment
on account of any awards which the Mixed Claims Commission might enter on
the claims now pending before it. In case awards are entered on account of the
claims now pending before the Commission, payments will be made in the same
manner and to the same extent as payments have already been made on account
of awards entered and certified for payment. On the other hand, if the claims
pending before the Commission are disallowed, the $20,000,000 held in reserve
will be released and distributed to American and German nationals in accordance with priorities specified in section 4 (c) of the Settlement of War Claims
Act, hereinafter enumerated. In such case the funds made available, together
with 80 percent of the value of the property in the hands of the Alien Property
Custodian estimated at $6,500,000, or a total of $26,500,000', would be distributed
approximately as follows:
To American nationals :
Balance of 80 percent of awards of Mixed Claims Commission under priority no. 5 ( 5 % percent remaining u n p a i d ) - $ 2 , 0 0 0 , 0 0 0
On account of interest accrued since J a n . 1, 1928 (approximately 40 percent of such interest)
7,800,000
Total to American nationals
To German nationals :
Interest on 5 percent participating certificates (20 percent of
German property temporarily retained)
On account of interest accrued since Dec. 31, 1928, on
a w a r d s of War Claims Arbiter (approximately 40 percent
of such interest)
Return of property in hands of Alien Property Custodian

$9, 800, 000
3,600,000
6,600,000
6, 500, 000

Total to German nationals

16, 700, 000

Total available for distribution

26, 500, 000

Under the debt agreement of June 23, 1930, the German Government is obligated to pay semiannually to the United States for a period of 52 years on
account of the awards of the Mixed Claims Commission, the sum of 20,400,000
reichsmarks ($4,850,000 at the time the agreement was concluded, or about
$8,150,000 at the present mint parity of the mark). Under the debt agreement
that Government has the option of postponing payment of the installments due
for a period of 2i/^ years, but the amounts so postponed bear interest at the rate
of 5 percent per annum, payable semiannually.
The Hoover "moratorium was declared in June 1931 and covered payments
falling due during the year July 1, 1931, to June 30, 1932. It excepted private
obligations, and the joint resolution of December 23, 1931, authorizing that
moratorium, treated the payments due on account of mixed claims as falling
under the exception. Germany, however, took advantage of the option in the
agreement to postpone the payments due, and has exercised that option ever
since up to and including the payment due September 30, 1933. It paid the
interest semiannually up to March 31, 1933, but the semiannual payment of
interest due on September 30, 1933, was paid in reichsmarks into an account
in Germany and was not transferred to the United States as required by
the terms of the debt agreement. It is understood that the United States advised the German Government that it could not accept the payment in
reichsmarks as a compliance with the debt agreement.
On March 31, 1934, all of the installments aggregating 102,000,000 reichsmarks, previously postponed since September 30, 1931, together with the semiannual installment of 20,400,000 reichsmarks and semiannual interest of
2,550,000 reichsmarks, or a total of 122,400,000 reichsmarks (about $50,000,000),
were due and payable. Germany advised that it could not meet the principal
payments falling due, but would and did pay the interest due of 2,550,000
reichsmarks (about $1,000,000).

REPORT OF THF ^ECBFTABY OF THE TBEASUBY

253

The Treasury holds German bonds for account of mixed claims in the face
amount of 2,040,000,000 reichsmarks ($500,000,000 at time of acquisition but
$800,000,000 at present rates).
The debt agreement of June 23, 1930, provides that the obligation of Germany
to make the payments specified therein shall cease as soon as all of the payments contemplated by the Settlement of War Claims Act of 1928 have been
completed and the bonds of Germany held by the United States not then
matured shall be canceled and returned to Germany.
The amendment to the joint resolution striking out " any or " and the amendment inserting "under this resolution" are clerical clarifying amendments.
The amendment to the last proviso specifically empowers the President to
determine the period or periods in which Gerinany is in arrears on her payments and retains the substance of the provision stricken out, so that judicial
review of the President's determination is denied.
Exhibit 38
[Public Resolution No. 38, 73d Cong., H. J. Res. 325]

Joint resolution extending for tiva years the time loithin which American
claimants ma/y make application for payment, under the Settlement of War
Clavms Act of 1928, of aioards af the Mixed Claims Commission and the
Tripartite Claims Commission, and extending until March 1.0, 1936, the time
within which Hungarian claimants may maUe application Jor payment, under
the Settlement af War Claims Act af 1928, af awards of the War Claimis
Arbiter
Resolved by the Senate and House of Representatives of the United States of
America in Congress assembled, That subsection (g) of section 2 and subsection
(f) of section 5 of the Settlement of War Claims Act of 1928, as amended by
Public Resolution Numbered 11, Seventy-third Congress, approved June 12, 1933,
are further amended, respectively, by striking out the words " six years " whereever such words appear therein and inserting in lieu thereof the words " eight
years ".
SEC 2. The first sentence of subsection (h) of section 6 of the Settlement of
War Claims Act of 1928 is amended to read as follows:
" No payment shall be made under this section unless application therefor is
made by March 10, 1936, in accordance with such regulations as the Secretary of
the Treasury may prescribe."
Approved, June 18, 1934.
Exhibit 39
[Public Resolution No. 53, 73d Cong., H. J. Res. 365]

Joint resolution ta amend the Settlement of War Claims Act of 1928, as
amended
Whereas the joint resolution of the Congress of the United States, approved
July 2, 1921, provides in part as follows:
" SEO. 5. All property of the Imperial German Government, or its successor
or successors, and of all German nationals, which was, on April 6, 1917, in
or has since that date come into the possession or under control of, or has
been the subject of a demand by the United States of America or of any of
its officers, agents, or employees, from any source or by any agency whatsoever,
* * * shall be retained by the United States of America and no disposition
thereof made, except as shall have been heretofore or specifically hereafter
shaU be provided by law until such time as the Imperial German Government * * * shall have * * * . made suitable provision for the satisfaction of all claims against said [Government] * * *, of all persons,
wheresoever domiciled, who owe perinanent allegiance to the United States
of America and who have suffered, through the acts of the Imperial German
Government, or its agents * * * since July 31, 1914, loss, damage, or
injury to their persons or property, directly or indirectly, whether through
the ownership of shares of stock in German, * * *, American, or other
corporations, or in consequence of hostilities or of any operations of war,
or otherwise * * *."

254

REPORT OF THE SECRETARY OF THE TREASURY

Whereas the treaty between the United States and Germany of August 25,
1921, incorporated said provision of such joint resolution and also provided
in article I thereof as follows:
" Germany undertakes to accord to the United States, and the United States
shall have and enjoy, all the rights, privileges, indemnities, reparations, or
advantages specified in the aforesaid joint resolution of the Congress of the
United States of July 2, 1921, including all the rights and advantages stipulated for the benefit of the United States in the Treaty of Versailles which»
the United States shall fully enjoy notwithstanding the fact that such treaty
has not been ratified by the United States."; and
Whereas by the agreement of August 10, 1922, between Germany and the
United States, a Mixed Claims Commission was established to adjudicate claims
of American nationals against Germany arising out of the World War; and
Whereas under the terms of the debt funding agreement between Germany
and the United States dated June 23, 1930, Gerinany agreed to pay to the
United States in satisfaction of Germany's obligations remaining on account
of awards, including interest thereon, entered and to be entered by the Mixed
Claims Commission, United States and Germany, the sum of 40,800,000 reichsmarks for the period September 1, 1929, to March 31, 1930, and the sum of
40,800,000 reichsmarks per annum from April 1, 1930, to March 31, 1981; and
Whereas Germany is now in arrears in payments due under said debt funding
agreement between Germany and the United States, and has, accordingly, failed
to make suitable provision for the satisfaction of the said claims against
Germany: Now, therefore, be it
Resolved by the Senate and House af Representatives of the United States
of America in Congress assembled. That so long as Germany is in arrears in any
payments of principal or interest, including interest at the rate of 5 per centum
per annum on principal installments not paid when due, under the debt funding
agreement between Germany and the United States, dated June 23, 1930, with
respect to Germany's obligations remaining on account of awards, including
interest thereon, entered and to be entered by the Mixed Claims Commission,
United States and Germany, all payments, conveyances, transfers, or deliveries
of money or property, or the income, issues, profits, and/or avails thereof
authorized or directed to be made under the Trading with the Enemy Act, as
amended, or the Settlement of War Claims Act of 1928, as amended, whether
or not a judgment or decree has been entered with respect thereto, shall be
postponed and the money or property, or the income, issues, profits, and/or
avails thereof reserved: Provided, however, That such of the funds as are from
time to time available (without taking into consideration interest thereafter
accruing) under the Settlement of War Claims Act of 1928, as amended, for
the payment of principal and interest upon awards of said Mixed Claims Commission shall be applied when available to the payment of principal and interest upon such awards in the same manner and to the same extent as though
certain of the payments provided for in said act had not been postponed under
this resolution: Provided further, That the President may, in his sole discretion,
remove the restriction as to any of the cases or classes of cases in relation
to which payments, conveyances, transfers, or deliveries have been postponed
under this resolution: And provided further. That the President is authorized
to determine, for the purposes of this resolution, the period or periods in which
Germany is in arrears in the payments hereinbefore described, and his determination thereof shall not be subject to judicial review.
Section 36 of the Emergency Farm Mortgage Act of 1933, as amended, is
amended—
I. By striking the comma and the word " and " after the words " to reduce
and refinance its outstanding indebtedness incurred in connection with any
such project" in the second sentence thereof and inserting in place thereof
the following: " ; or, whether or not it has any such indebtedness, to purchase
or otherwise acquire in connection with such project storage reservoirs or
dams or sites therefor, or additional water rights, or canals, ditches, or rightsof-way for the conduct of water, or other works or appurtenances necessary for
the delivery of water, provided such purchase or acquisition is not intended to
bring additional lands into production. Such loans".
II. By adding at the beginning of (5) thereof the following: " in the case of
a loan to reduce or refinance its outstanding indebtedness,".
. III. By adding at the beginning of (C) thereof the following: "in the case
of a loan to reduce or refinance the outstanding indebtedness of an applicant,".
Approved, June 27, 1934.

REPORT OF THE SECRETARY OF THE TREASURY

255

GOVERNMENT DEPOSITS
Exhibit 40
Supplements ta Department Circular No. 92, revised, relating ta special deposits
af public moneys under the act af Congress approved September 24, 1917, as
amended
THIRD SUPPLEMENT, JULY 24, 1933

Treasury Department Circular No. 92, dated February 23, 1932, as amended,
is hereby further amended by the addition of the following paragraph under
the caption " Collateral security ":
" 11. Federal land bank and Home Owners' Loan Corporation bonds.—Bonds
of the Federal land banks and bonds of the Home Owners' Loan Corporation;
all at par."
Paragraph 2 of the collateral security provisions of the circular is hereby
amended to read as follows:
" 2. Federal farm loan, insular, and territorial government securities.—
Bonds and debentures issued under the Federal Farm Loan Act, as amended
(other than bonds of the Federal land banks as specified in par. 11), bonds of
Puerto Rico, bonds and certificates of indebtedness of the Philippine Islands,
and bonds of the Territory of Hawaii; all at market value, not to exceed face
value."
DEAN ACHESON,

Acting Secretary af the Treasury.
FOURTH SUPPLEMENT, OCTOBER 30, 1933

Treasury Department Circular No. 92, dated February 23, 1932, as amended,
is hereby further amended so that paragraph 11 under the caption " Collateral
security" will read as follows:
" 11. Federal land bank bonds, obligations of the Reconstruction Finance Corporation, obligations of Federal hame loan banks, and Home Owners' Loan
Corporation bands.—Bonds of the Federal land banks, obligations of the Reconstruction Finance Corporation, obligations of the Federal home loan banks, and
bonds of the Home Owners' Loan Corporation; all at face value."
DEAN AOHESON,

Acting Secretary of the Treasury.
FIFTH SUPPLEMENT, JANUARY 30, 1934

Treasury Department Circular No. 92, dated February 23, 1932, as amended,
is hereby further amended so as to provide for payment by credit through war
loan deposit accounts for accepted tenders of Treasury bills in specific cases .
when the public notice given by the Secretary of the Treasury offering such
Treasury bills authorizes payment in that manner.
HENRY MORGENTHAU,

Jr.,

Secretary of the Treasu/ry.
SIXTH

SUPPLEMENT,

MAROH

27,

1934

Treasury Department Circular No. 92, dated February 23, 1932, as amended,
is hereby further amended so that paragraph 11, under the caption " Collateral
Security ",. will read as follows :
" 11. Federal land bank bonds, bonds issued under the Federal Farm Mortgage Corporation Act, obligations af the Reconstruction Finance Corporation,
obligations of Federal hame loan banks, and Hame Owners' Loan Corporation
bonds.—Bonds of the Federal land banks, bonds issued under the Federal
Farm Mortgage Corporation Act, obligations of the Reconstruction Finance
Corporation, obligations of the Federal home loan Ifanks, and bonds of the
Home Owners' Loan Corporation; all at face value."
STEPHEN B . GIBBONS,

Acting Secretary af the Treasury.
90353—35

256

REPOBT OF THE SECBETARY OF THE T B E A S U B Y
Exhibit 41

Supplements to Department Circular No. 176, relating to regulations governing
deposit of t^ubiic moneys and payment of Government checks and warrants
FIFTH S U P P L E M E N T , JULY 24, 1983

Paragraph 28 of Treasury Department Circular No. 176, dated September 2,
:I930, as amended, is hereby further amended so that section (b) thereof will
read as follows:
"(b) Bonds of the Federal land banks, bonds of the Home Owners' Loan
Corporation, bonds of Puerto Rico, and bonds and certificates of indebtedness
of the Philippine Islands; all at par."
DEAN ACHESON,

Acting Secretary of the Treasury.
SIXTH SUPPLEMENT, OCTOBER 30, 1983

Treasury Department Circular No. 176, dated September 2, 1930, as amended,
is hereby further amended so that section (b) of paragraph 28 will read as
follows:
"(b) Bonds of the Federal land banks, obligations of the Reconstruction
Finance Corporation, obligations of the Federal home loan banks, bonds of
the Home Owners' Loan Corporation, bonds of Puerto Rico, and bonds and
certificates of indebtedness of the Philippine Islands; all at face value."
DEAN AOI-IBSON,

Acting Secretary of the Treasury.

SEVENTH SUPPLEMENT, MARCH 27, 1934

Treasury Department Circular No. 176, dated September 2, 1930, as amended,
is hereby further amended so that section (b) of paragraph 28 will read as
follows:
"(b) Bonds of the Federal land banks, bonds issued under the Federal Farm
Mortgage Corporation Act, obligations of the Reconstruc'.ion Finance Corporation, obligations of the Federal home loan banks, bonds of the Home Owners'
Loan Corporation, bonds of Puerto Rico, and bonds and certificates of indebtedness of the Philippine Islands; all at face value."
STEPHEN B . GIBBONS,

Acting Secretary af the Treasury.
MISCELLANEOUS
Exhibit 42
Accounting system, of the Treasury Department {Department Circular No. 514)
TREASURY DEPARTMENT,

June 30, 1.93.ff.
To the heads of bureaus and offices of the Treasury Department and others
concerned:
Hereafter no installations of new accounting forms, systems, and procedures,
and no changes in existing accounting forms, systems, and procedures shall be
made in any bureau, division, or office of the Treasury Department without
express approval of the Secretary of the Treasury or by an officer of the Department duly authorized to act for the Secretary, and aU recommendations
with respect thereto, before being acted, upon by the Secretary of the Treasury
or by his duly authorized representative, shall be submitted to the office of the
Commissioner of Accounts and Deposits for investigation and report not less
th.an 15 days in advance of the date on which the proposed installations or
chan.ges are to be made. As soon as any changes in accounting procedures are
contemplated, the office of the Commissioner of Accounts and Deposits should

REPORT OF THE SECRETARY OF THE TREASURY

257

be immediately notified, in order that arrangements may be made for representatives of that office to participate in conferences which may be held
regarding the proposed changes.
HENRY MORGENTHAU,

Jr.,

Secretary of the Treasury.
Exhibit 43
Regulations and instructions governing the issue of duplicate checks of disbursing officers {first supplement ta Department Circular No. 327, revised)
TREASURY DEPARTMENT,

February 20, 1934.
To the heads af departments and establishments and others concerned:
Effective immediately, paragraph 4 of Treasury Department Circular No. 327
(revised), dated October 15, 1924, is hereby amended by adding a sentence at the
end thereof, reading as follows:
"Whenever the issuance of a duplicate check under the provisions of sections
3646 and 3647 of the Revised Statutes, as amended, is necessary to replace a
lost, destroyed, or stolen check issued by an officer whose disbursing function
has been transferred to the Division of Disbursement, Treasury Department,
but who is still in the service of the United States, such duplicate check will
be prepared in the Division of Disbursement, Treasury Department, and presented to the former disbursing officer for signature, if practicable; when signed
by the issuing officer, the duplicate check, with bond of indemnity, will be transmitted to the Secretary of the Treasury, Division of Bookkeeping and Warrants, for approval, after which it will be returned to the Division of Disbursement for delivery to the payee."
HENRY MORGENTHAU,

Jr.,

Secretary of the Treasury.
Exhibit 44
Laws and regulations governing the recognition af attorneys, agents, and
other persons representing claimants and others before the Treasury Department and offices thereof
FIRST SUPPLEMENT,

A U G U S T S,

1 9 3 3 , TO DEPARTMENT
OF J U L Y t 1 9 2 7

CIRCULAR NO. 2 3 0 ,

REVISED,

Treasury Department Circular No. 230 (revised), dated July 1, 1927, prescribing rules and regulations governing the recognition of attoiTieys and
agents and other persons representing claimants before the Treasury Department and offices thereof is hereby amended by striking out the third and
fourth paragraphs of section 1 prescribing the duties of the secretary of the
committee and the attorney for the committee and inserting in lieu thereof
the following:
"The Secretary of the Treasury shall appoint an attorney for the committee
who shall not be a member of the committee. Such attorney shall be the
legal adviser of the committee, present all formal complaints against enrolled
attorneys or agents, and represent the Government in all proceedings before
the committee. Such -attorney shall also be the secretary of the committee and
shall keep and maintain its records and shall have the custody of all of its
papers, records, rolls, etc."
THOMAS HEWES,

Acting Secretary of the Treasury.

SECOND S U P P L E M E N T , J A N U A R Y 5, 1 9 3 4 , TO DEPARTMENT CIRCULAR NO.
REfVISED, OF J U L Y 1, 1 9 2 7

230,

Section 1 of Treasury Department Circular No. 230 (revised), dated July 1,
1927, prescribing rules and regulations governing the recognition of attorneys and agents and other persons representing claimants before the Treasury

258

REPORT OF THE SECRETARY OF THE TREASURY

Department and offices thereof as amended by first supplement dated August
8, 1933, is hereby further amended to read as follows:
"A committee on enrollment and disbarment is hereby created consisting of
6 members who shall be appointed by the Secretary of the Treasury, of
whom 2 shall be detailed from the office of the Secretary. The Secretary
of the Treasury shall designate a chairman and vice chairman of the committee. The chairman shall be designated from the members detailed from
the Secretary's office. The committee shall make such rules for its own government as it considers advisable. The committee shall meet regularly on
Tuesday and Friday of each week if a business day, and shall meet on other
days at the call of the chairman. Three members shall constitute a quorum.
" The committee shall receive and consider applications to be recognized
as attorney, agent, or other representative before the Treasury Department
or offices thereof; receive complaints against those enrolled; conduct hearings; make inquiries; perform other duties as prescribed herein, and do all
things necessary in the matter of proceedings for enrollment, suspension, or
disbarment of such attorneys, agents, or other representatives, pursuant to
these regulations; and submit its recommendations thereon to the Secretary
of the Treasury for approval.
" The Secretary of the Treasury shall appoint an attorney for the committee who shall not be a member of the committee. Such attorney shall be
the legal adviser of the committee, present all formal complaints against enrolled attorneys or agents, and represent the Government in all proceedings
before the committee. Such attorney shall also be the secretary of the committee and shall keep and maintain its records and shall have the custody of
all of its papers, records, rolls, etc."
HENRY MORGENTHAU,

Jr.,

Secretary of the Treasury.
Exhibit 45
Executive orders and Treasury orders changing organization and procedure in
the Treasury Department
EXCERPTS FROM EXECUTIVE ORDER N O . 6 1 6 6 , J U N E 1 0 , 1 9 3 3 , W H I C H RELATE TO T H B
TREASURY DEPARTMENT

Whereas section 16 of the act of March 3, 1933 (Public No. 428, 47 Stat.
1517), provides for reorganizations within the executive branch of the Government; requires the President to investigate and determine what reorganizations are necessary to effectuate the purposes of the statute; and authorizes
the President to make such reorganizations by Executive order; and
Whereas I have investigated the organization of all executive and administrative agencies of the Government and have determined that certain regroupings, consolidations, transfers, and abolitions of executive agencies and functions thereof are necessary to accomplish the purposes of section 16:
Now, therefore, by virtue of the aforesaid authority, I do hereby order that:
SECTION

1.—^PROCUREMENT

The function of determination of policies and methods of procurement, warehousing, and distribution of property, facilities, structures, improvements, machinery, equipment, stores, and supplies exercised by any agency is transferred
to a Procurement Division in the Treasury Department, at the head of which
shall be a Director of Procurement.
The Office of the Supervising Architect of the Treasury Department is transferred to the Procurement Division, except that the buildings of the Treasury
Department shall be administered by the Treasury Department and the administration of post-office buildings is transferred to the Post Office Department.
The General Supply Committee of the Treasury Department is abolished.
In respect of any kind of procurement, warehousing, or distribution for any
agency the Procurement Division may, with the approval of the President, (a)
undertake the performance of such procurement, warehousing, or distribution
itself, or (b) permit such agency to perform such procurement, warehousing,
or distribution, or (c) entrust such performance to some other agency, or (d)
avail itself in part of any of these recourses, according as it may deem desir

REPORT OF THE SECRETARY OF THE TREASURY

259

able in the interest of economy and efficiency. When the Procurement Division
has prescribed the manner of procurement, warehousing, or distribution of
anything, no agency shall thereafter procure, warehouse, or distribute such
thing in any manner other than so prescribed.
The execution of work now performed by the Corps of Engineers of the Army
shall remain with said corps, subject to the responsibilities herein vested in the
Procurement Division.
The Procurement Division shall also have control of all property, facilities,
structures, machinery, equipment, stores, and supplies not necessary to the work
of any agency; may have custody thereof or entrust custody to any other
agency; and shall furnish the same to agencies as need therefor may arise.
The fuel yards of the Bureau of Mines of the Department of Commerce are
transferred to the Procurement Office. * * *
SECTION 2 . — N A T I O N A L P A R K S , BUILDINGS, AND RESERVATIONS

All functions of administration of public buildings, reservations, national
parks, national monuments, and national cemeteries are consolidated in an
Office of National Parks, Buildings, and Reservations in the Department of the
Interior, at the head of which shall be a Director of National Parks, Buildings,
and Reservations; except that where deemed desirable there may be excluded
from this, provision any public building or reservation which is chiefiy employed
as a facility in the work of a particular agency. This transfer and consolidation, of functions shall include, among other, those of the National Park Service
of the Department of the Interior and the National Cemeteries and Parks of
the War Department which are located within the continental limits of the
United States. National cemeteries located in foreign countries shall be transferred to the Department of State, and those located in insular possessions under
the jurisdiction of the War Department shall be administered by the Bureau
of Insular Affairs of the War Department.
The functions of the following agencies are transferred to the Office of National Parks, Buildings, and Reservations of the Department of the Interior,
and the agencies are abolished:
Arlington Memorial Bridge Commission.
Public Buildings Commission.
Public Buildings and Public Parks of the National Capital.
National Memorial Commission.
Ro~ck Creek and Potomac Parkway Commission.
Expenditures by the Federal Government for the purposes bf the Commission
of Fine Arts, the George Rogers Clark Sesquicentennial Commission, and the
Rushmore National Commission shall be administered by the Department of
the Interior.
SECTION

3.—^INVESTIGATIONS

All functions now exercised by the Bureau of Prohibitiori of the Department
of Justice with respect to the granting of permits under the national prohibition
laws are transferred to the Division of Internal Revenue in the Treasury
Department.
All functions now exercised by the Bureau of Prohibition with respect to
investigations and all the functions now performed by the Bureau of Investigation of the Department of Justicj are transferred to and consolidated in a
Division of Investigation in the Department of Justice, at the head of which
shall be a Director of Investigation.
All other functions now performed by the Bureau of Prohibition are transferred to such divisions in the Department of Justice as in the judgment of the
Attorney General may be desirable.
SECTION

4.—^DISBURSEMENT

The function of disbursement of moneys of the United States exercised by any
agency is transferred to the Treasury Department and, together with the Office
of Disbursing Clerk of that Department, is consolidated in a Division of Disbursement, at the head of 'which shall be a Chief Disbursing Officer.
The Division of Disbursement of the Treasury Department is authorized to
establish local offices, or to delegate the exercise of its functions locally to
officers or employees of other agencies, according as the interests of efficiency
and economy may require.

260

REPORT OF THE SECRETARY OF THE TREASURY

The Division of Disbursement shall disburse moneys only upon the certification of persons by law duly authorized to incur obligations upon behalf of the
United States. The function of accountability for improper certification shall
be transferred to such persons, and no disbursing officer shall be held accountable therefor.
SECTION 5 . — C L A I M S BY OR A G A I N S T T H E U N I T E D STATES

The functions of prosecuting in the courts of the United States claims and
demands by, and offenses against, the Government of the United States, and of
defending claims and demands against the Government, and of supervising the
work of IJnited States attorneys, marshals, and clerks in connection therewith,
now exercised by any agency or officer, are transferred to the Department of
Justice.
As to any case referred to the Department of Justice for prosecution or defense in the courts, the function of decision whether and in what manner to
prosecute, or to defend, or to compromise, or to appeal, or to abandon prosecution or defense, now exercised by any agency or officer, is transferred to the
Department of Justice.
For the exercise of such of his functions as are not transferred to the Department of Justice by the foregoing two paragraphs, the Solicitor of the Treasury is transferred from the Department of Justice to the Treasury Department.
Nothing in this section shall be construed to affect the function of any agency
or officer with respect to cases at any stage prior to reference to the Department of Justice for prosecution of defense.
SECTIO'N 8 . — I N T E R N A L

RBVEJNUE

The Bureaus of Internal Revenue and of Industrial Alcohol of the Treasury
Department are consolidated in a Division of Internal Revenue, at the head of
which shall be a Commissioner of Internal Revenue.
SECTION

1 0 . — A P P O R T I O N M E N T OF A P P R O P R I A T I O N S

The functions of making, waiving, and modifying apportionments of appropriations are transferred to the Director of the Bureau of the Budget.
SECTION

19.—GENERAL

PROVISIONS

Each agency, all the functions of which are transferred to or consolidated
with another agency, is abolished.
The records pertaining to an abolished agency or a function disposed of, disposition of which is not elsewhere herein provided for, shall be transferred to
the successor. If there be no successor agency, and such abolished agency be
within a department, said records shall be disposed of as the head of such
department may direct.
The property, facilities, equipment, and supplies employed in the work of an
abolished agency or the exercise of a function disposed of, disposition of which
is not elsewhere herein provided for, shall, to the extent required, .be transferred to the successor agency. Other such property, facilities, equipment, and
supplies shall be transferred to the Procurement Division.
All personnel employed in connection with the work of an abolished agency
or function disposed of shall be separated from the service of the United States,
except that the head of any successor agency, subject to my approval, may,
within a period of 4 months after transfer or consolidation, reappoint any of
such personnel required for the work of the successor agency without reexamination or loss of civil service status.
SECTION

20,—APPROPRIATIONS

Such portions of the unexpended balances of appropriations for any abolished
agency or function disposed of shall be transferred to the successor agency as
the Director of the Budget shall deem necessary.
Unexpended balances of appropriations for an abolished agency or function
disposed of, not so transferred by the Director of the Budget, shall, in accordance with law, be impounded and returned to the Treasury.

BilPOBT OF THE S E C B E T A B Y O F T H E TBEASUBY
SECTION

261

21.—DEFINITIONS

As used in this order—
"Agency " means any commission, independent establishment, board, bureau,
division, service, or office in the executive branch of the Government
"Abolished agency " means any agency which is abolished, transferred, or
consolidated.
" Successor agency " means any agency to which is transferred some other
agency or function, or which results from the consolidation of other agencies
or functions.
" Function disposed of" means any function eliminated or transferred.
SECTION

22.—EFFECTIVE

DATE

In accordance with law, this order shall become effective 61 days from its
date: Provided, That in case it shall appear to the President that the interests
of economy require that any transfer, consolidation, or elimination be delayed
beyond the date this order becomes effective, he may, in his discretion, fix a
later date therefor, and he may for like cause further defer such date from
time to time.
FRANKLIN D . ROOSEVELT.
T H E WHITE HOUSE,

June 10, 1933.
E X E C U T I V E O R D E R N O . 6224, JULY 27, 1933, POSTPONING CERTAIN PROVISIONS OF
E X E C U T I V E ORDER NO. 6166, OF JUNE 10, 1933

Whereas it appears that the interests of economy require that the transfers,
consolidations, and eliminations provided for under sections 1, 4, and 8 of
Executive Order No. 6166, of June 10, 1933, be delayed beyond the effective date
of said order;
Now, therefore, pursuant to the provisions pf section 22 of said order, I
hereby order that, except as hereinafter provided, the transfers, consolidations,
and eliminations contemplated by sections 1 (except the abolition of the Federal Employment Stabilization Board), 4, and 8 of Executive Order No. 6166,
of June 10, 1933, together with the operation of all other provisions of the said
order in so far as they relate to any of the said sections, shall be delayed until
December 31, 1933: Provided, That any transfer, consolidation, or elimination
in whole or in part under any of the said sections (except the abolition of the
Federal Employment Stabilization Board) including any other provisions of the
said order in so far as they relate to any of the said sections may be made operative and in force between August 10, 1933, and December 31, 1933, by order of
the Secretary of the Treasury, approved by the President.
FRANKUN D . ROOSEVELT.
T H E WHITE HOUSE,

July 27, 1933.
EXECUTIVE ORDER NO. 6244, AUGUST 8, 1933. POSTPONING CERTAIN PROVISIONS OF
EXECUTIVE ORDER NO. 6106, OF JUNE 10, 1933

Pursuant to the provisions of section 22 of Executive Order No. 6166, of June
10, 1933, and in the interests of economy, I hereby order that, except as hereinafter provided, the operation of the provisions of the first paragraph of section
5 of the said order in so far as the said provisions may relate to any function of
the Office of the General Counsel for the Bureau of Internal Revenue, and the
operation of all other provisions of the said order in so far as they may relate
to any such function shall be delayed until October 10, 1933: Provided, That
any of the provisions of the said order the operation of which is hereby delayed,
may be made operative and in force in whole or in part between August 10,
1933, and October 10, 1933, by joint order of the Secretary of the Treasury and
the Attorney General, approved by the President.
FRANKUN D . ROOSEVELT.
T H E WHITE HOUSE,

August 8, 1933.

262

REPORT OF THE SECRETARY OF THE TREASURY

ORDER OF SECRETARY OF TREASURY, OCTOBER 9, 1933, PURSUANT TO EXECUTIVE ORDERS
NOS. 6166 A N D 6224

Pursuant to the provisions of Executive Order No. 6166 of June 10, 1933, and
Executive Order No. 6224 of July 27, 1933, and subject to the approval of the
President, the following provisions of the said Executive order of June 10, 1933,
are hereby made operative and in force to the extent hereinafter set forth:
1. The establishment in the Treasury Department of a Procurement Division
with all the powers set forth in the said order of June 10, 1933.
2. The transfer to the Procurement Division of—
(a) The functions of the General Supply Committee;
(b) The fuel yards of the Bureau of Mines of the Department of Commerce;
(o) The functions of the Office of the Supervising Architect of the Treasury
Department;
{d) The functions of the Federal Coordinating Service relating to the disposition of seized and surplus property, and to the procurement, warehousing
and distribution of property, facilities, structures, improvements, machinery,
equipment, stores, and supplies exercised by—
(1) The area coordinators;
(2) The Federal Real Estate Board;
(3) The Federal Specifications Board;
(4) The Federal Standard Stock Catalog Board;
(5) The Federal Traffic Board;
(6) The Interdepartmental Board of Contracts and Adjustments.
(e) Such portions of the unexpended balances of appropriations available
for the conduct of all agencies or functions transferred pursuant hereto as the
Director of the Budget shall deem necessary.
{f) Custody and control of Federal warehouse and all property, facilities,
structures, machinery, equipment, stores, and supplies belonging to or in the
custody, control, management, or supervision of any agency whose procurement,
warehousing, and distributing functions are transferred pursuant hereto.
3. The abolition of the General Supply Committee.
4. The separation from the service of the United States of all personnel
employed in connection with the work of those functions and activities transferred pursuant hereto.
5. All persons employed in connection with the work of those functions transferred pursuant hereto as of the date this order takes effect are hereby reappointed to their same positions and at their same salaries as employees of the
Procurement Division for a temporary period of not exceeding 4 months from
and including the date this order takes effect.
6. Section 1 and subsection (d) of section 2 of this order shall take effect at
12: 01 a. m., October 10, 1933. The remaining provisions of this order shall take
effect at 12: 01 a. m., October 16, 1933.
W. H. WOODIN,

Secretary of the Treasury.

Approved:
FRANKLIN D . ROOSEVELT,

The White House, October 9,1933.
TREASURY DEPARTMENT ORDER NO 1, NOVEMBER 20, 1933

It is ordered that the following changes in organization and procedure in the
Treasury Department shall be effective immediately:
(1) All statements to the press or to the public through interviews, speeches,
or public addresses by any officer or employee of the Treasury Department
shall be submitted before release for approval by Mr. Herbert B. Gaston,
Assistant to the Secretary.
(2) All legal matters affecting the Treasury Department shall be under the
general control and direction of Mr. Herman Oliphant, General Counsel to the
Secretary.
(3) All administrative matters, including personnel and budget, shall be
handled by Mr. William H. McReynolds, Administrative Assistant to the
Secretary.

HENRY MORGENTHAU,

Jr.,

Acting Secretary of the Treasury.

REPORT OF THE SECRETARY OF THE TREASURY

263

TREASURY DEPARTMENT ORDER NO. 2 , NOVEMBER 2 2 , 1 9 3 3

Effective from and after this date, the Secret Service Division of the Treasury
Department wiU report directly to the Secretary of the Treasury. Department
Circular No. 244 of September 19, 1930, is modified accordingly.
HENRY MORGENTHAU,

Jr.,

Acting Secretary of the Treasury.
ORDER OF T H E SECRETARY O F T H E TREASURY, NOVEMBER 2 9 , 1 9 3 3 , P U R S U A N T TO EXECUTIVE ORDERS NO. 6 1 6 6 A N D N O . 6 2 2 4

Pursuant to the provisions of Executive Order No. 6166 of June 10, 1933,
and Executive Order No. 6224 of July 27, 1933, and subject to the approval of
the President, the provisions of the said Executive order of June 10, 1933, are
hereby made operative and in force to the extent hereinafter set forth:
1. The establishment in the Treasury Department bf a Division of Disbursement
2. The transfer to the Division of Disbursement of—
(a) The functions of disbursement exercised by the Disbursing Clerk of
the Treasury Department;
(b) The functions of disbursement exercised in Washington, D. C, by—
(1) The United States Civil Service Commission;
(2) The United States Employees Compensation Commission;
(3) The General Accounting Office;
(4) The Interstate Commerce Commission;
(5) The Federal Trade Commission;
(6) The United States Tariff Commission;
(7) The Federal Power Commission.
3. All persons employed on the date of transfer in connection with the work
of those functions transferred pursuant hereto are hereby reappointed at their
same salaries as employees of the Division of Disbursement for a temporary
period of not exceeding four months from and including the date of such
transfer.
4. Section 1 and subsection (a) of Section 2 of this order and the operation
of Section 3 in so far as it applies to persons affected thereby shall take effect
at 12: 01 a. m., December 16, 1933. The remaining provisions of this order shall
take effect at 12: 01 a. m., December 22, 1933.
HEiNRY MORGENTHAU,

Approyed:

Jr.,

Acting Secretary af the Treasury.

FRANKUN D . ROOSEVELT,

The White House, November 29, 1933.
ORDER OF T H E SECRETARY OF T H B TREASURY, DECEMBER 4 , 1 9 3 3 , A M E N D I N G TREASURY
DECISION NO. 1, OF A P R I L 1, 1 9 2 7 , I S S U E D P U R S U A N l i TO T H E ACT* OF M A R C H 3 ,
1927

To the Commissioner of Industrial Alcohol, the Commissioner of Internal Revenue, and all officials and employees af the Treasury Department concerned:
1. Treasury Decision No. 1 (Bureau of Prohibition) of April 1, 1927, and
any decision or order supplementary thereto or amendatory thereof are hereby
amended as follows:
2. There are hereby transferred to, conferred, and imposed upon the Commissioner of Internal Revenue, subject to the general supervision and direction
of the Secretary of the Treasury, all rights, privileges, powers, and duties
conferred or imposed upon the Secretary of the Treasury by section 4 of the
act of March 3, 1927, and which have been heretofore by the said Treasury
Decision No. 1 and/or any other orders conferred or imposed upon the Commissioner of Prohibition (now the Commissioner of Industrial Alcohol), and
any other officer or employee of the Bureau of Industrial Alcohol, except such
rights, privileges, powers, and duties as were transferred to or conferred or
imposed upon the Attorney General by the act of May 27, 1930, and except such
other rights, privileges, powers, and duties as may have been heretofore withdrawn from the Secretary of the Treasury or the Commissioner of Prohibition
(now the Commissioner of Industrial Alcohol).

264

REPORT OF THE SECRETARY OF THE TREASURY

3. Except as may hereafter be otherwise provided, all regulations prescribed,
all orders and instructions issued, and all forms adopted for the enforcement of
the laws administered by the Bureau of Industrial Alcohol, Treasury Department, remaining in effect after repeal of the eighteenth amendment, are hereby
continued in effect as regulations, orders, instructions, and forms of the Bureau
of Internal Revenue, Treasury Department.
4. The personnel of the Bureau of Industrial Alcohol shall perform such
duties as the Secretary of the Treasury or the Commissioner of Internal Revenue may prescribe.
5. Except as herein provided nothing in this order shall be construed to affect
the validity of any act done, power exercised, or order, decision, or finding
made, or to relieve any person from any liability incurred prior to the effective
date of this order.
6. This order shaUtake effect at 12:01 a. m. December 6, 1933. The right
to amend or supplement this order or any provisions thereof from time to time
or to revoke this order or any provision thereof at any time is hereby reserved.
HENRY MORGENTHAU, Jr.,

Actimg Secreta/ry af the Treasury.
TREASURY DEPARTMENT ORDER NO. 3 , DECEMBER 5 , 1 9 3 3

Effective from and after this date, the Bureau of Internal Revenue will report directly to the Secretary of the Treasury. Department Circular No. 244
of September 19, 1930, is modified accordingly.
HENRY MORGENTHAU, Jr.,

Acting Secretary of the Treasury.
TREASURY D E P A R T M E N T ORDER NO. 4, DECEMBER 26, 1933

The following offices of the Treasury Department are hereby assigned to the
supervision of tlie Administrative Assistant to the Secretary:
1. Chief Clerk of the Department.
2. Division of Appointments.
3. Division of Supply.
The Division of Disbursement created under the provisions of section 4 of
Executive Order No. 6166 of June 10, 1933, is hereby assigned to the general
supervision of the Commissioner of Accounts and Deposits, this officer reporting to the Under Secretary of the Treasury as heretofore.
The above assignments will be effective this date, and Department Circular
No. 244 of September 19, 1930, is modified and amended accordingly.
HENRY MORGENTHAU, Jr.,

Acting Secretary af the Treaswry.
EXECUTIVE ORDER NO. 6540, DECEMBER 28, 1933, RELATIVE TO THE POSTPONEMENT OF
CERTAIN PROVISIONS OF EXECUTIVE ORDER NO. 6166 OF JUNE 10, 1933

Whereas it appears that the interests of economy require that certain transfers, consolidations, and eliminations provided for under sections 4 and 8 of
Executive Order No. 6166 of June 10, 1933, be further delayed beyond the
effective date of said order:
Now, therefore, pursuant to the provisions of section 22 of said order, I
hereby order that, except as hereinafter provided, the transfers, consolidations,
and eliminations contemplated by sections 4 and 8 of Executive Order No.
6166 of June 10, 1933, which are not effected prior to December 31, 1933, pursuant to Executive Order No. 6224, dated July 27, 1933, together with the
operation of all other provisions of Executive Order No. 6166 of June 10, 1933,
insofar as they relate to said sections 4 and 8, shall be further delayed until
June 30, 1934: Provided, That any transfer, consolidation, or elimination, in
whole or in part, under said sections 4 and 8, including any other provisions of
the said order of June 10, 1933, in so far as they relate to sections 4 and 8
thereof, may be made operative and in force between January 1, 1934, and June
30, 1934, by order of the Secretary of the Treasury, approved by the President
FRANKLIN D . ROOSEVELT.
T?tE WHITE HOUSE,

jQecember ^8, 19^3.

REPORT OF THE SECRETARY OF THE TREASURY

265

ORDER OF T H E SECRETARY OF T H E TREASURY, JANUARY 13, 1934, PURSUANT TO
EXECUTIVE ORDERS NO. 6166, NO. 6224, AND NO. 6540

Pursuant to the the provisions of Executive Order No. 6166 of June 10, 1933,
Executive Order No. 6224 of July 27, 1933, and Executive Order No. 6540 of
December 28, 1933, and subject to the approval of the President, the provisions
of the said Executive order of June 10, 1933, are hereby made operative and in
force to the extent hereinafter set forth:
1. The transfer to the Division of Disbursement of the function of disbursement of moneys of the United States exercised in Washington by—
(a) The Veterans' Administration;
(b) The American Battle Monuments Commission;
(c) The Board of Mediation;
(d) The Board of Tax .Appeals;
(e) The Federal Radio Commission;
(f) The National Advisory Committee for Aeronautics;
(g) The Smithsonian Institution;
(h) The United States Geographic Board;
(i) The Department of Labor.
2. All personnel employed on the date of transfer in connection with those
functions transferred pursuant hereto are hereby reappointed at their same
salaries as employees of the Division of Disbursement for a temporary period
of not exceeding four months from and including the date of such transfer.
3. The provisions of this order affecting The Veterans' Administration and
the personnel employed therein shall take eftect at 12:01 a. m., January 16,
1934. The provisions of this order affecting the other independent establishments named and the Department of Labor, and the personnel employed
therein, shaU take effect at 12: 01 a. m., February 1, 1934.
HENRY MORGENTHAU,

Jr.,

Secretary of the Treasury.
Approved:
FRANKLIN D . ROOSEVELT,

The White House, January 13, 1934.
EXECUTIVE ORDER NO. 6 6 8 9 , M A R C H 1 0 , 1 9 3 4 , C O N S O U D A T I N G EXECUTIVE AGENCIES
ENGAGED I N T H E ENFORCEME'NT OF I H B I N T E R N A L REVENUE L A W S

Whereas section 16 of the act of March 3, 1933 (ch. 212, 47 Stat 1489, 1517),
provides for reorganizations within the executive branch of the Government,
requires the President to investigate and determine what reorganizations are
necessary to effectuate the purposes of section 16, and authorizes the President
to make such reorganizations by Executive order; and
Whereas I have investigated the organization of the executive and administrative agencies of the Government which are engaged in the enforcement
of the internal revenue laws, and have determined that a consolidation of
such agencies is necessary to accomplish the purposes of section 16;
Now, therefore, by virtue of and pursuant to the authority vested in me
by the aforesaid section 16 of the act of March 3, 1933, it is hereby ordered
as follows:
TRANSFER

FUNCTIONS

1. (a) The Bureau of Industrial Alcohol and the office of Commissioner of
Industrial Alcohol are abolished, and the authority, rights, privileges, powers,
and duties conferred and imposed by law upon the Commissioner of Industrial Alcohol are transferred to and shall be held, exercised, and performed,
by the Commissioner of internal Revenue and his assistants, agents, and
inspectors, under the direction of the Secretary of the Treasury.
(&) The authority, rights, privileges, powers, and duties conferred and imposed upon the Attorney General by the act of May 27, 1930 (ch. 342, 46 Stat.
427), entitled "An act to transfer to the Attorney General certain functions
in the administration of the National Prohibition Act, to create a Bureau of
Prohibition in the Department of Justice, and for other purposes ", so far as
they are required to, or may, be exercised and performed under existing law,
are transferred to and shall be held, exercised, and performed by the Commissioner of Internal Revenue and his assistants, agents, and inspectors.

266

REPORT OF THE SECRETARY OF THE TREASURY

under the direction of the Secretary of the Treasury: Provided, That the
Attorney General shall continue to exercise the power and authority (a) to
remit or mitigate forfeitures under the internal revenue laws and to determine
liability for internal revenue taxes and penalties, in connection with violations
of the National Prohibition Act occurring prior to the repeal of the eighteenth
amendment, and (b) to institute suits upon any cause of action under the
National Prohibition Act or under the internal revenue, laws involving a
violation of the National Prohibition Act, arising prior to, and/or not affected
by, the repeal of the eighteenth amendment, and to compromise any such
cause of action before or after suit is brought: And provided further, That
the Commissioner of Internal Revenue, subject to the approval of the Secretary of the Treasury, shall prescribe all regulations under the provisions
of the National Prohibition Act, and all laws amendatory thereof or supplementary thereto, which were not rendered inoperative by the repeal of the
eighteenth amendment, relating to permits, and he shall prescribe the form
of all applications, bonds, permits, records, and reports under such acts.
TRANSFER OF OFFICIAL RECORDS AND PROPERTY

2. {a) The official records and papers on file in, and pertaining to the business of, the Bureau of Industrial Alcohol, together with the supplies, furniture,
equipment, and other property of the United States in use in such Bureau, are
transferred to the Bureau of Internal Revenue.
(&) The official records and papers on file in the Department of Justice pertaining to the functions transferred by this order to the Commissioner of
Internal Revenue, together with the supplies, furniture, equipment, and other
property of the United States in use in said Department in connection with the
performance of such functions, are transferred to the Bureau of Internal
Revenue.
TRANSFER OF P E R S O N N E L

3. {a) The officers and employees employed in, or under the jurisdiction of,
the Bureau of Industrial Alqohol, are transferred to the Bureau of Internal
Revenue, without change in classification or compensation.
(lb) The officers and employees employed in, or under the jurisdiction of,
the Alcoholic Beverage Unit of the Division of Investigation, Department of
Justice, except those employed in, or under the jurisdiction of, the taxes and
penalties section of said unit, are transferred to the Bureau of Internal Revenue without change in classification or compensation.
(c) Officers and employees transferred tp the Bureau of Internal Revenue
hereunder, who do not already possess a competitive classified civil service
status, shall not acquire such status by reason of such transfer, except upon
recommendation by the Secretary of the Treasury to the Civil Service Commission, subject to such noncompetitive tests of fitness as the Commission may
prescribe; and no officer or employee so transferred may be retained in the
Bureau of Internal Revenue without appropriate civil service status for a period
longer than 60 days from the effective date of this order.
TRANSFER OF APPROPRIATIONS

4. The unexpended balances of appropriations for the Bureau of Industrial
Alcohol and the field service thereunder, and the unexpended balances of the
appropriations made for salaries and expenses. Bureau of Prohibition, Department of Justice, including the field service thereof, in so far as may be required
for the performance of the functions transferred by this order to the Commissioner of Internal Revenue, shall be transferred on the books of the Treasury
Department. to the appropriation entitled " Collecting the Internal Revenue ",
which shall thereafter be available in the Bureau of Internal Revenue as a
single fund for expenditure for the purposes named in the laws making the
separate appropriations for " Salaries and expenses. Bureau of Industrial Alcohol, Treasury Department", " Salaries and expenses. Bureau of Prohibition,
Department of Justice ", and " Collecting the Internal Revenue ", respectively;
and appropriations, if any, made to the Bureau of Industrial Alcohol and the
Department of Justice, respectively, for the fiscal year 1935, for the performance of the functions transferred by this order to the Bureau of. Internal Revenue shall likewise be transferred on the books of the Treasury Department to
the appropriation " Collecting the Internal Revenue ", subject to the conditions
herein set forth.

REPORT OF THE SECRETARY OF THE TREASURY

267

GENERAL PROVISIONS

5. Executive Orders Nos. 6166, 6224, and 6540, dated June 10, 1933, July 27,
1983, and December 28, 1933, respectively, are revoked in so far as they are in
conflict with the provisions of this order.
6. This order shall take effect upon the sixty-flrst calendar day after its
transmission to Congress, unless otherwise determined in accordance with law.
FRANKUN D . ROOSEVELT.

Done in triplicate.
T H E WHITE HOUSE,.

March 10,1934.
O R D E R ' ' O F T H E SECRETARY OF T H E TREASURY, A P R I L 3 ,

1934

Treasuiy financing, investment of Government funds, and other matters
relating directly or indirectly to financing operations are hereby assigned to the
supervision of Mr. T. J. CooUdge, Special Assistant to the Secretary.
Treasury officials whose duties bear on these subjects will perform such duties
under the supervision of Mr. Coolidge. This will apply paiticularly to the
following officials:
Mr. Broughton, Commissioner of the Public Debt.
Mr. Kilby, Assistant to the Commissioner of the Public Debt.
Mr. Bell, Commissioner of Accounts and Deposits.
Mr. Harlan, Assistant to the General Counsel.
Mr. Stark, Chief, Section of Financial and Economic Research.
Mr. Lochhead, Technical Assistant, Office of the Secretary.
Mr. Lanston, Technical Assistant, Office of the Secretary.
HENRY MORGENTHAU, Jr.,

Secretary af the Treasury.
T.

4432,

E S T A B U S H I N G A N ALCOHOL TAX U N I T I N T H E BUREAU
REVENUE A N D D E F I N I N G I T S J U R I S D I C T I O N

INTERNAL

To Officers and Employees af the Bureau af Internal} Revenue, Collectors of
Intemal Revenue, and Othm^s Concerned:
1. There is hereby established in the Bureau of Internal Revenue a unit to
be known as the "Alcohol Tax Unit", at the head of which shall be a Deputy
Commissioner of Internal Revenue appointed as required by law.
2. The Alcohol Tax Unit shall be charged with the administration, under
the direction of the Commissioner of Internal Revenue, of the internal revenue
laws concerning the following subjects:
{a) The production, custody, and supervision of distilled spirits, alcohol,
wines, fermented liquors, cereal beverages, denatured alcohol, and other such
liquors and liquids;
{b) The establishment, construction, operation, custody, and supervision of
distilleries, industrial alcohol plants, bonded warehouses, denaturing plants,
wineries, bonded wine storerooms, breweries, rectifying houses, dealcoholizing
plants, cereal beverage plants, and other places at which such spirits, liquors,
or liquids are produced or stored;
(c) The determination, assertion, and assessment of all internal revenue
taxes and penalties pertaining to distiUed spirits, alcohol, wines, fermented
liquors, cereal beverages, denatured alcohol, and other such liquors and Uquids,
and the compromise thereof, except that all moneys shall be received and
accounted for by the collectors of internal revenue under the direction of the
Commissioner of Internal Revenue;
{d) Inquiries and investigations relating to the filing of returns for occupational and commodity taxes and penalties in respect to distilled spirits, alcohol, wines, fermented liquors, cereal beverages, denatured alcohol, and other
such liquors and liquids, except that the collectors of internal revenue will
remain charged with the routine inspection of the places of business of retail
dealers in such liquors and liquids;
(6) The investigation, prevention, and detection of violations of the laws
pertaining to distilled spirits, alcohol, wines, fermented liquors, cereal beverages, denatured alcohol, and other such liquors and liquids, or any regulations
issued thereunder, and the apprehension of offenders against such laws;

268

REPORT OF THE SECRETARY OF THE TREASURY

{f) The detention and seizure, for violation of laws relating to distilled
spirits, alcohol, wines, fermented liquors, cereal beverages, denatured alcohol,
and other such liquors and liquids, of property, whether real or personal
(except seizure under distraint warrant), and the custody, control, sale, and
disposition of property so seized;
{g) The discharge of Uens under section 902 of the Revenue Act of 1926.
3. There are conferred and imposed upon the Deputy Commissioner of
Internal Revenue in charge of the Alcohol Tax Unit, and the assistants, inspectors, and agents under his supervision, subject to the direction of the
Commissioner of Internal Revenue and subject to such regulations as he may
prescribe from tiriie to time with the approval of the Secretary of the Treasury, all the rights, privileges, powers, and duties conferred and imposed upon
the Secretary of the Treasury and/or the Commissioner of Internal Revenue
under the provisions of the Executive order of March 10, 1934 (no. 6639), and
of section 4 (a) of the act apl)roved March 3, 1927, entitled "An act to create
a Bureau of Customs and a Bureau of Prohibition in the Department of the
Treasury", insofar as they relate to the duties to be performed by the Alcohol
Tax Unit as enumerated in paragraph 2 hereof.
4. Except as may hereafter be otherwise provided, all regulations prescribed,
all orders and instructions issued, and all forms adopted for the enforcement
of the laws heretofore administered by the Commissioner of Industrial Alcohol
or the Bureau of Industrial Alcohol, and assistants, inspectors, and agents
thereunder, and remaining in effect after the repeal of the eighteenth amendment, will continue in effect as regulations, orders, instructions, and forms
of the Bureau of Internal Revenue: Provided, That the term " Commissioner "
or " Commissioner of Industrial Alcohol", and the term " Supervisor" or
" Supervisor of Permits", wherever used in such regulations, orders, instructions, and forms, shall be held to mean, respectively, "Deputy Commissioner
of Internal Revenue" and "District Supervisor."
GUY T . HELVERING,

Commissioner of Internal Revenue.

Approved May 10, 1934:
HENRY MORGENTHAU,

Jr.,

Secretary af the Treasury.

EXECUTIVE ORDER NO. 6 7 2 7, MAY 2 9 , 1 9 3 4 , P O S T P O N I N G EFFECTIVE DATE OF
CERTAIN PROVISIONS OF EXEOUTIVB ORDER NO. 6 1 6 6 OF J U N E 1 0 , 1 9 8 3

Whereas it appears that the interests of economy require that certain transfers, consolidations, and eliminations provided for under section 4 of Executive
Order No. 6166 of June 10, 1933, be further delayed beyond the efl'ective date of
said order:
Now, therefore, pursuant to the provisions of section 22 of the said order,
I hereby order that, except as hereinafter provided, the transfers, consolidations, and eliminations contemplated by section 4 of Executive Order No. 6166
of June 10, 1933, which are not eft'ected prior to June 30, 1934, pursuant to
Executive Order No. 6224 of July 27, 1933, and Executive Order No. 6540 of
December 28, 1933, together with the operation of all other provisions of
Executive Order No. 6166 of June 10, 1938, in so far as they relate to said
section 4, be further delayed until December 31, 1934: Provided, That any
transfer, consolidation, or elimination, in whole or in part, under said section 4,
including any other provisions of the said order of June 10, 1983, in' so far
as they relate to section 4 thereof, may be made operative and effective between June 30, 1934,. and December 31, 1934, by order of the Secretary of the
Treasury, approved by the President.
FRANKLIN D . ROOSB\'ELT.
T H E WHITE HOUSE,

May 29, 1934.

REPORT OF THE SECRETARY OF THE TREASURY

269

EXECUTIVE ORDER NO. 6728, MAY 29, 1934, REVOKING IN PART SECTION 4 OF EXECUTIVE
ORDER NO. 0166 OF JUNE 10, 193 3

Whereas section 4 of Executive Order No. 6166 of June 10, 1983, provides in
part:
" The function of disbursement of moneys of the United States exercised by
any agency is transferred to the Treasury Department and, together with the
Office of Disbursing Clerk of that Department, is consolidated in a Division of
Disbursement, at the head of which shall be a Chief Disbursing Officer."
Whereas the effective date, of section 4 of Executive Order No. 6166 has been
deferred until December 31, 1934, by Executive Order No. 6727 of this date,
subject to the provisions contained therein; and
Whereas, after further consideration, I have determined that such transfer
of the disbursing functions under the jurisdiction of the War Department, the
Navy Department, and the Panama Canal, except as hereinafter set forth,
would adversely affect the operation of our military and naval forces in time
of emergency and would not be in the public interest;
Now, therefore, by virtue of and pursuant to the authority vested in me by
section 16 of the act of March 3, 1983 (ch. 212, 47 Stat, 1489, 1517), it is
ordered that the above-quoted provision of section 4 of Executive Order No.
6166 of June 10, 1933, be, and it is hereby, revoked in so far as and to the extent
that it is applicable to the disbursing functions under the jurisdiction of the
War Department, the' Navy Department (including the Marine Corps), and the
Panama Canal, except those pertaining to departmental salaries and expenses
in the District of Columbia: Provided, That the Secretary of War and the
Secretary of the Navy shall continue to furnish the Secretary of the Treasury
such fiscal reports as are now or may hereafter be required by law, and such
other fiscal data as may be required by the Secretary of the Treasury from
time to time: Proyinded further, That upon the request of the Secretary of the
Treasury and with the approval of the Secretary of War and the Secretary of
the Navy, as the case may be, the facilities of the War and Navy Departments
and the Panama Canal may be utilized in the disbursement, or aiding in the
disbursement, of public moneys of the United States available for expenditure
by any executive department, independent establishment, or agency of the
Government.
This order will become effective in accordance with the provisions of section
1, title III, of the act of March 20, 1933 (ch. 8, 48 Stat. 8, 16).
FRANKLIN D . ROOSEVELT.

Done in duplicate.
T H E WHITE HOUSE,

May 29, 1934.
D E P A R T M E N T CIRCULAR NO. 519, JUNE 20, 1934

The Revenue Act of 1934 created in the Department of the Treasury the
Office of General Counsel for the Department of the Treasury. Accordingly,
there is hereby established a division to be known as " Legal Division, Department of the Treasury ", to which is transferred all of the personnel, records,
books, furniture, and supplies connected with the legal activities of the Treasury Department, and such division is hereby placed under the direct supervision and control of the General Counsel.
The General Counsel is hereby authorized to perform all duties and functions incident to the administration of the legal activities of the Treasury
Department, including the signing of letters and the approval in my stead of
such documents as may come before him in the regular course of his administration of the Legal Division of the Treasury Department, and such other duties
as may be assigned to him by me from time to time.
All matters relating to personnel in the Legal Division, including recommendations for new appointments, transfers, promotions, or other matters relating
to changes in personnel and all matters relating to the purchase of books and
supplies for the Legal Division shall be referred to the General Counsel for
his approval ]^efo|:e any action is tak^n thereon.

JIENRY MORGENTHAU,

Jr.,

Secretary of the Treasury.

270

REPORT OF THE SECRETARY OF THE TREASURY
Exhibit 46

Excerpt from a letter af the Postmaster General ta the Secretary of the Treasury, dated November 15, 1934, certifying extraordinary expenditu/res contribut'
ing to the deficiency of postal revenues far the fiscal year ended June 30,
1934, i'i^ pursuance af Public Act No. 316, Seventy-first Congress, approved
June 9, 1930 {40 Stat. 523)
In accordance with the provisions of the act of June 9, 1930, embodied in
section 260, Postal Laws and Regulations, the amounts set forth below with
respect to certain mailings during the fiscal year ended June'30, 1934, are
certified to you in order that they may be separately classified on the book?
of the Treasury Department in stating the expenditures made from the appropriation to supply the deficiency of postal revenues:
(a) The estimated amount which would have been collected a t regular
r a t e s of postage on m a t t e r mailed during the year by officers of the
Government (other t h a n those of the Post Office Department) under
t h e penalty privilege, including registry fees
$23, 094, 882.
(b) The estimated amount which would have been collected a t regular
r a t e s of postage on m a t t e r mailed during the year by :
1. Members of Congress under the franking privilege— $775, 785. 00
2, By others under t h e franking privilege
215. 00
776, 000.
(c) The estimated amount which would have been collected during the
year a t regular rates of postage on publications going free in the
county
545, 227.
(d) The estimated amount which would have been collected at regular
r a t e s of postage on m a t t e r mailed free t o t h e blind during t h e year
103, 552.
(e) The estimated diflEerence between the postage revenue collected during t h e year on mailings of newspapers and periodicals published by
and in t h e interests of religious, educational, scientific, philanthropic,
agricultural, labor, and fraternal organizations, and t h a t which would
have been collected a t zone rates of postage
418,100.
(f) The estimated excess during t h e year of t h e cost of aircraft service
over the postage revenues derived from air mail
1
12, 992, 910.
ig) The estimated amount paid during the year to vessels of American
registry for carrying the ocean mail in excess of what would have
been paid a t pound r a t e s if carried in vessels of foreign registry
28, 692, 458,
Total

00
00
00

00
83
00

66, 623, 129. 83

TABLES

271

90353—35

EXPLANATION OF BASES USED IN TABLES
Figures in the following tables are shown on various bases, namely: (1) Daily
Treasury statements, unrevised (current cash); (2) daily Treasury s t a t e m e n t s ,
revised (actual); (3) warrants issued; (4) checks issued; and (5) collections reported by collecting officers.
Daily T r e a s u r y s t a t e m e n t s (unrevised) (receipts and expenditures).—The
,.figures shown in t h e daily s t a t e m e n t of t h e United States Treasury are compiled
from the latest daily reports received by t h e Treasurer of t h e United States
from Treasury officers and public depositaries holding Government funds. T h e
daily Treasury statement, therefore, is a current report compiled from latest
available information, and, by reason of t h e promptness with which t h e information is obtained and m a d e public, it has come into general use as reflecting
the financial operations of t h e Government covering a given jDeriod, a n d gives
an accurate idea of t h e actual condition of t h e Treasury as far as it is ascertainable
from day to day. This is known as " c u r r e n t cash b a s i s " , according to dailyTreasury statements (unrevised). Table 3 (p. 294) shows receipts and expenditures on this basis. The current assets a n d liabilities of t h e Treasury and t h e
outstanding public debt are also .available on this basis,
DaUy Treasury statements (revised) (receipts and expenditures).—-On account of t h e distance of some of t h e Treasury offices a n d depositaries from t h e
Treasury, it is obvious t h a t t h e reports from all officers covering a particular
day's transactions cannot be received and assembled in t h e Treasury a t one
time without delaying for several days t h e publication of t h e daily Treasury
statement. I t is necessary, therefore, in order to exhibit t h e actual receipts and
expenditures for any given m o n t h or fiscal year, to t a k e into consideration those
reports covering the transactions for the last few days of t h e m o n t h or fiscal year
concerned which have not been received in t h e Treasury until t h e succeeding
m o n t h or fiscal year, and to eliminate receipts a n d expenditures relating to t h e
preceding m o n t h . After taking into consideration these reports, t h e revised
figures indicate the condition of t h e Treasury on t h e basis of actual transactions
occurring during t h e period under review. This is known as " t h e basis of daily
Treasury statements (revised)."
I t is not practical to delay t h e publication of the daily Treasury s t a t e m e n t in
order to include t h e later reports, as t h e difference between t h e revised and t h e
unrevised figures is immaterial. T h e unrevised figures as shown in current
daily Treasury statements are the basis for the Budget estimates s u b m i t t e d
to Congress by the President. T h e revised figures are of no practical use except
to enable the use of a true General F u n d balance on the monthly s t a t e m e n t of
t h e public debt of t h e United States a n d to bring t h e daily Treasury s t a t e m e n t
figures into agreement with t h e figures based on warrants issued. T h e table on
page 154 shows receipts a n d expenditures on this basis. T h e current assets and
liabilities of t h e Treasury a n d t h e outstanding public debt are also available on
this basis.
W a r r a n t s issued (receipts).—Section 305 of the Revised Statutes provides t h a t
receipts for all moneys received by t h e Treasurer of t h e United States shall be
endorsed upon warrants signed by t h e Secretary of t h e Treasury, w i t h o u t which
warrants, so signed, no acknowledgment for money received into t h e Public
Treasury shall be valid. The issuance of warrants by the Secretary of t h e
Treasury, as provided by law, represents t h e formal covering of receipts into
t h e Treasury.
Certificates of deposit covering actual deposits in Treasury offices and depositaries, upon which covering warrants are based, cannot reach t h e Treasury
simultaneously, and for t h a t reason all receipts for a fiscal year cannot be covered
into t h e Treasury by warrants of t h e Secretary immediately upon t h e close
of t h a t fiscal year. I t is necessary to have all certificates of deposit before a
s t a t e m e n t can be issued showing the total receipts for a particular fiscal year
on a w a r r a n t basis. T h e figures t h u s compiled will agree with t h e figures compiled on t h e basis of daily Treasury s t a t e m e n t s (revised). T h e details in table
1 (p. 276) show receipts on this basis.

273

274

REPORT OF THE SECRETARY OF THE TREASURY

Warrants issued (expenditures).—The Constitution of the United States provides that no money shall be drawn from the Treasury but in consequence of
appropriations made by law. Section 305 of the Revised Statutes requires that
the Treasurer of the United States shall disburse the moneys of the United
States upon warrants drawn by the Secretary of the Treasury. As the warrants
are issued by the Secretary they are charged against the appropriate appropriations provided by law. Some of these warrants do not represent actual payments to claimants, but are merely advances of funds to be placed to the credit
of disbursing officers of the Government with the Treasurer of the United States
for the payment of Government obligations. The disbursing officer then issues
his check on the Treasurer in payment of such obligations. As far as the appropriation accounts are concerned, the warrants issued and charged thereto constitute expenditures, but it will be observed that such exjDenditures necessarily include unexpended balances to the credit of the disbursing officers. Under normal conditions these balances over a period of several years fluctuate very little
in the aggregate, and the difference between the total expenditures on a warrant
basis and a cash basis (revised) is immaterial. Statement of the expenditures on
a warrant basis from 1789 to 1915 is shown on page 302 of this report.
Checks issued (expenditures).—This basis, more than any other, reflects the
real expenditures of the Government. Expenditures for a given fiscal year on
the basis of checks issued differ from the corresponding figures on the basis of
warrants in that the former include expenditures made by disbursing officers
from credits granted during the previous fiscal year, and exclude the amount of
unexpended grants remaining to their credit at the end of the fiscal year. The
basis of checks issued differs from the basis of the daily Treasury statement (revised) in that the former includes checks outstanding at the end of the fiscal
year, and excludes unpaid checks outstanding at the beginning of the fiscal year.
A detailed explanation of the basis of checks issued will be found on page 89 of
the Secretary's report for 1927. Table 2 (p. 282) shows expenditures on this basis.
Collections reported by collecting officers (receipts).—Statements showing receipts on a collection basis are compiled from reports received by the various
administrative offices from collecting officers in the field, such as collectors of internal revenue and collectors of customs. These reports cover the collections
actually made by these officers during the period specified. The collections are
then deposited in a designated Government depositary to the credit of the
Treasurer of the United States, which depositary renders a report to the Treasurer. The reports of the collecting officers and the depositaries do not, of course,
coincide, for the reason that the collecting officers make collections during the
last few days of the fiscal year which are not deposited until after the close of the
fiscal year. On this account the two reports do not agree. The receipts are
reported on a collection basis merely for statistical purposes and to furnish information as to detailed sources of revenue. Classification of such items on the
basis of deposits has been found to be impracticable and uneconomical. Tables
7 and 13 (pp. 317 and 329) show receipts on a collection basis.
DESCRIPTION OF ACCOUNTS THROUGH WHICH TREASURY
OPERATIONS ARE EFFECTED
All receipts of the Government are covered into the General Fund of the Treasury from which all expenditures are made. Receipts and expenditures, however,
are classified in the Treasury's records according to the class of accounts through
which operations are effected. Transactions are segregated in order to exhibit
separately those effected through general fund accounts, as contrasted with those
effected through special and trust accounts representing restricted or specially
allocated receipts and expenditures chargeable thereto. This classification was
first shown in published records for 1927 for the warrants and checks-issued
bases and on the daily Treasury statements beginning with the July 1, 1930,
issue, in order to conform to the practice of the Bureau of the Budget. In some
tables in this report, however, transactions in the three types of accounts are combined for purposes of historical comparison. A brief general explanation of the
three classes of accounts is presented below.
General fund accounts.—The principal sources of general fund account receipts
are income taxes, miscellaneous internal revenue, and customs duties. In
addition, a large number of miscellaneous receipts come under this head including
such items as proceeds of Government owned securities (except those which are

REPORT OF THE SECRETARY OF THE TREASURY

275

applicable to public debt retirement), sale of surplus and condemned property,
Panama Canal tolls, fees (including consular and passport fees), fines, penalties,
forfeitures, rentals, royalties, reimbursements, immigration head tax, sale of
public land, tax on national bank circulation, interest on public deposits, seigniorage on coinage of subsidiary silver and minor coins, etc. Moneys represented in
the general fund accounts may be withdrawn from the Treasury only in pursuance
of appropriations made by Congress. There are four classes of appropriations
payable through the general fund accounts of the Treasury, namely: (a) Annual, being those made each year in the several departmental supply bills and
limited for obligation during the fiscal year for which made; (6) continuing
(no year), being available until expended or until the object for which appropriated has been accomplished, such as construction of public works; (c) permanent-specific, being fixed amounts provided for each of a series of years by permanent legislation, without annual action of Congress; and {d) permanent-indefinite,
being indefinite amounts (so much as may be necessary) provided by permanent
legislation without annual action of Congress, such as the indefinite appropriation
to cover interest on the public debt.
A statement of general fund receipts and expenditures is, therefore, in the
nature of a general operating statement, and gives a picture of the relationship
between the general revenues of the Government and the operating expenditures
(including capital outlays and fixed charges) chargeable against them.
Special accounts.—Special account receipts may be generally defined as funds
received under special authorizations of law which may be expended only for
the particular purposes specified therein. Special account receipts may not be
used for the general expenditures of the (government. The most important
items of receipts included under this heading, from the standpoint of amounts,
are those applicable to the retirement of the public debt. Other important
special account receipts are the reclamation fund under the Department of the
Interior, funds received for river and harbor improvements. Forest Service
cooperative funds, and proceeds from sales of ships, etc., by the United States
Shipping Board available for construction loans. There are many other special
account receipts of lesser importance.
Trust accounts.—Trust account receipts represent moneys received by the
Government for the benefit of individuals or classes of individuals. Moneys
held in trust, being payable to or for the use of beneficiaries only, are not available
for general expenditures of the Government. There are several classes of trust
account receipts, the beneficiaries under which may be either individuals or
groups of individuals. The funds may represent (a) moneys received directly
from or for account of individuals, as in the case of moneys received from foreign
governments or other sources in trust for citizens of the United States or others
under the act of February 27, 1896; {b) moneys collected as revenues and held
in trust, such as the proceeds of sales of Indian lands which are held as interestbearing funds for the benefit of Indian tribes; and (c) proceeds of grants from the
general fund accounts of the Treasury in pursuance of treaty or other obligations
such as the perpetual trust fund created for the Ute Indians under section 5 of
the act of June 15, 1880.

276

REPORT OF THE SECRETARY OF THE TREASURY

TABLES
RECEIPTS AND EXPENDITURES
General tables
TABLE 1.—Details of receipts, by sources and accounts, for ihe fiscal year 1934
[Details on basis of warrants issued with totals adjusted to basis of daily Treasury statements (unrevised),
see p, 273, For explanation of accounts, see p. 274]
Source

General and
Trust and conspecial accounts tributed accounts

REVENUE

Internal revenue:
Income taxes
Miscellaneous internal revenue taxes.
Processing tax on farm products
Total internal revenue, warrants-issued basis
Adjustment between warrants issued and cash receipts..
Total internal revenue, cash receipts
Customs (excluding tonnage tax):
Customs duties,-warrants-issued basis
Adjustment between warrants issued and cash receipts..
Total customs duties, cash receipts
Miscellaneous:
Miscellaneous taxes:
Tax on circulation of national b a n k s . . .
Tonnage tax
__
Immigration head tax
Taxes, hcenses, fines, etc., Canal Zone..
Total miscellaneous taxes
Interest, exchange, and dividends:
Interest on deferred collections-or payments
_._...
Interest on bonds of foreign governments under funding
agreements
i_
Interest on farmers' seed loans
Interest on Library of Congress trust fund, investment account
._
Interest on loans, Puerto Rican Hurricane Relief Commission
_
Interest on endowment fund, preservation birthplace of
Abraham Lincoln
__
Interest on pubhc deposits
Interest on obligations of Reconstruction Finance Corporation
Interest on money loaned from construction loan funds
Iriterest and profits on Federal Farm Mortgage Corporation
bonds.Interest on miscellaiieous obhgations
Interest on loans to States, municipalities, etc.. Public
Works Administration
_
Interest on investments. National Institute of Health conditional gift fund
Gain by exchange
_
Dividends on capital stock of the Panama R. R. owned by
the United States
^
_
Military and naval insurance, Veterans' Administration
(repayments to appropriations)
Federal control of transportation systems (repayments to
appropriations)
^
Loans to railroads after termination of Federal control (repayments to appropriations) Dividends on capital stock of Federal home loan banks
Earnings of War Finance Corporation
Discount on Treasury obligations redeemed and purchased..
Total interest, exchange, and dividends on capital stock...
Fines and penalties:
Judicial.. •.
Customs Service
Immigration Service
Enforcement of National Prohibition Act (Judicial)
For footnotes, see p. 281.

$817,025,339. 72
1,473, 724,386.62
356,152,220. 36
2,646,901,946. 70
6,298,118.40
2,640,603,828. 30
313, 522,240. 64
87,938.45
313,434,302.19
4, 518, 904.84
1,485,022.48
748,901. 00
71,092. 79
6,823,92L11
78,955.17
20,033, 594.10
1, 778, 415. 85

(')
4,746.37

285,205.90
48,924, 063. 72
3,446, 170.92
374, 048.92
154, 317.07
- 24,645.78

19,359.11

2,000,000.00
«868,108.65
, 181.76
2 19,:
2 475,405,07
652, 635. 61
100, 000.00
332, 310. 58
79,471,164. 58
347,351.86
596,807. 21
51,490. 00
490,153. 98

REPORT OF THE SECRETARY OF THE TREASURY

277

TABLE 1.—Details of receipts, by sources and accounts, for ihe fiscal year 1934—Con.
Source

General and
Trust and conspecial accounts tributed accounts

REVENUE—continued
Miscellaneous—Continued.
Fines and penalties—Continued.
Navigation
Liquidated damages
Naval fines and forfeitures
Recovery of value of oil in case of United States against Pan
American Petroleum Co
".—
Other
_
Total fines and penalties .
Fees:
Agricultural Commodities Act
Clerks, United States courts
Board of Tax Appeals
Commissions on telephone pay stations in Federal buildings
and rented post offices
Alaska game laws
Consular and passport
—
Court of Customs and Patent Appeals
Court of Claims
Copying
Copyright
Immigration (registration)
-...
Indian lands and timber
.
....
Land offices (including commissions)
Marshals, United States courts
Naturalization
_._
Naval stores grading
Navigation
Patent-.
Purchase of discharges, Navy and Marine Corps
Registration Securities Act
Testing
-.
Warehouse Act
Water and power rights.
Other
Total fees.
Forfeitures:
Bonds of aliens, contractors, etc.Bribes to United States officers
Customs Service
:
Judicial miscellaneous
Under enforcement of National Prohibition Act (Judicial)..
Unclaimed moneys and wages remaining in registry of courts.
Unclaimed merchandise
-—
Unclaimed funds—Unexplained balances in cash accounts
Other..
Total forfeitures..
Assessments:
Colorado River Dam fund, Boulder Canyon project
Deposits for establishing wool standards
Deposits, public survey work, Alaska
Deposits, public survey work, general
On Federal. Reserve banks for salaries and expenses, Federal
Reserve Board..
On Federal and joint stock land banks, and Federal intermediate credit banks for expenses of examinations. Farm
Credit Administration
On Federal Home Loan Banks for salaries and expenses
On national banks for salaries and expenses of national bank
examiners
.
General railroad contingent fund
On railroads for expenses of Federal Coordinator of Transportation
-•
German Government's moiety, expenses. Mixed Claims
Commission
—
Furlough and compensation deductions and vacancy savings (special deposit accounts)
—
Immigration Service overtime
Naval hospital fund
Total assessments..
For footnotes, see p. 281.

$30,655.60
206,640. 25
267, 974. 44
191, 214. 28
11,550.46
2,193,737.98
98,870. 00

1.458.921.11
42,805. 23
66,454.91
14,782.12
3.246.654.12
7,957. 75
6, 325. 50
38, 329. 61
250, 315. 60
94,199. 79
58, 530. 55
260,240. 35
177, 306. 38
1,761, 076. 51
7, 678. 05
172, 333.09
4, 280, 242. 55
9, 606. 56
92,980. 33
59, 341,88
15, 200. 00
31, 896,18
13, 615. 06
12, 255, 663. 23
261, 655. 55
6, 016. 40
156, 582. 58
53,969. 07
626,410. 06
249,478. 63
133,214. 02
• L436.15
2,683. 32
14,886.49
1, 506,132. 27
72,923.49
14, 000. 00
870.00
6, 240.56
(3)

170, 734. 00
268,861.96
(3)

402, 767. 30
2, 223. 69
«58,178.37
63,746.15
403,873. 22
1,464,418.74

278

REPORT OF THE SECRETARY OF THE TREASURY

T A B L E 1.—Details of receipts, by sources a n d accounts, for the fiscal year 1934—Con.
Source

General and
Trust and conspecial accounts tributed accounts

REVENUE—continued
Miscellaneous—Continued.
Reimbursements:
Construction charges (Indian Service)
Collections under Grain and Cotton Standards-Acts
Maintenance of District of Columbia inmates in Federal
penal and correctional institutions
Refunds on empty containers
Expenses, miscellaneous
By contractors for excess cost over contract price
By State of Arizona for expenditures, nonproduction of cotton zones for 1930 crop losses
Expenses of redeeming national currency
Inspection of food and farm products...
Gasoline State tax
Government property lost or damaged
Hospitalization charges and expenses.
Expenses of international service of ice observations and
patrol
Costs from estates of deceased Indians
-..
Maintenance and operation charges, irrigation systems,
Indian Service
Of appropriations made for Indian tribes
Reclamation fund, collections...
Auxiliary reclamation fund, Yuma project, Arizona
By District of Columbia for advances for acquisition of lands
under sec. 4, act May 29, 1930, as amended
Licenses under sec. 27, Trading with the Enemy Act
Settlement of claims against various depositors
Other
Total reimbursements
Gifts and contributions:
Forest Service cooperative work
Library of Congress gift fund
Library of Congress trust fund, investment account
Moneys received from known and unknown persons
Donations to the United States
Donations, "National Park Service
Contributions for river and harbor improvements
Contributions for flood control
For roads, bridges, and related works, Alaska
Return of part of compensation of the President
Return of salary and mileage paid to Members of Congress..
Return of salary from constitutional officers...
Total gifts and contributions
Sales of Government property—products:
Scrap and salvaged materials, condemned stores, waste
paper, refuse, etc
Agricultural products, including livestock and livestock
products
Dairy products
Card indexes. Library of Congress
Public documents, charts, maps, etc
1
Electric current, power plant, Coolidge Dam, Ariz
Electric current (Dam No. 2, Muscle Shoals, Ala., $40,931.14)
Fox skins and furs
Heat, light, and power
Gas from helium plants
-Ice
Occupational therapy products
-Subsistence (meals, rations, etc.)..
_
Water
Other
.
.
Total sales of Government property—products
Sales of services:
Alaska Railroad fund
_.
Fumigating and disinfecting
Laundry and dry-cleaning operations _
Livestock breeding service
__Overhead charges on sales of services or supplies (War and
Navy)
Quarantine charges (including fumigation, disinfection, inspection, etc., of vessels)
Quarters, subsistence, and laundry service
Radio service
_.
For footnotes, see p. 281.

$15,858.80
84,886.46
90,922,77
9i 014,41
107,196. 24
66,494,58
1,134.94
469,887. 79
251, 353.41
4,172. 29
37, 290.59
62,476,51
76, 854.56
46,077.12
462,910.61
104, 314.18
2,080, 677.90
14,158.48
1, 000,000. 00
103, 585. 00
5,762. 31
68,609.86
6,142, 538. 70

(0
(0
(0

8, 052.04
36,320. 55

0)
(0
0)
0)

10,625.00
1,478. 65
5,839.15

62, 316.39

989,237.76
31,099,85
36,109.40
205,986,73
485,809. 29
2,307. 69
87,333.40
23, 216. 21
86, 773, 02
17,500. 05
64,675.36
45,964.87
47,059, 54
42,836.84
34, 375. 76
2,190, 274. e
1, 360, 719. 68
19, 596,00
816,659.38
1,479.40
75,719,19
228,040.44
41,542.95
43,417, 25

REPORT OF THE SECRETARY OF THE TREASURY

279

TABLE 1.—Details of receipts, by sources and accounts, for the fiscal year 1934—Con.
Trust and conGeneral and
special accounts tributed accounts

Source
REVENUE—continued
Miscellaneous—Con t inued.
Sales of services—Continued.
Storage and other charges
. . Profits from sale of ships' stores. Navy
Telephone and telegraph
Tolls and profits, Panama Canal
Work done for individuals, corporations et a L .
Other .
.
- .

$158,029.73
189,201.80
252, 680. 21
24, 746,684. 75
11, 954. 66
71, 608.32
28, 016, 333. 66

Total sales of services _
Rents and royalties:
Rent of public buildings, grounds, etc
Rentofland
. .
Receipts under mineral leasing acts
Royalties on oil, gas, etc
Rent of equipment.
Rent of telegraph and telephone facilities . .Rent of water-power sites
Rent of docks, wharves, and piers
Annette Islands reserve lands, Alaska
Other..

295,452.19
105, 745. 56
3, 206,891. 30
753, 826. 09
71,923.99
18, 995. 67
74, 315.96
18,192.93
34,073.17
15,000.00
4, 694,416.85

Total rents and royalties
Permits, privileges, and licenses:
Alaska fund
Business concessions
_
Game, bird and wOdlife refuges
Immigration permits
Licenses under Federal water power act
Permits to enter national parks
Pipe line water and power-transmission rights..
Railway right-of-way, Newark, N. J
Other . .

210,167.66
158,959.92
2, 398.94
200, 789. 28
654,910. 08
489,415. 34
15, 253. 00
150,000. 00
765.00
1, 782, 659. 21

Total nermit*? nrivilesres and licenses
Mint receipts (profits on coinage, bullion deposits, etc.)
Forest reserve fund .

2,960.637.47

. .

3,348,949.03

20,124. 04
222,805. 54

Postal receipts, Panama Canal
Deposits, postal funds, Canal Zone

242,929.58

Total

68,117, 52

United States share of District of Columbia receipts .
Total miscellaneous revenue receipts
Total revenue receints

152,124,109. 98
3,112, 548, 297. 32

NONREVENUE

Miscellaneous—Realization upon assets:
Army costs due the United States from Germany
Repayments of investments:
Federal control of transportation systems (repayments to
appropriations)
Loans to railroads after termination of Federal control, etc.
Repayment of principal on account of loans to States, municipalities, etc Public Works Administration
Return of advances made to reclamation fund
Liquidation of capital stock, Federal land banks..
Principal of bonds of foreign governments under funding
agreements
Principal of Government-owned securities, sale of war
Construction costs of public works in Colon and P a n a m a —
Other

249,800.84

72,200.00
704, 016. 27
•

762,804.41

114, 274.25

396, 766.15
14,393. 20
66,386. 95
8,934.19
2,129, 764. 42

Sales of Dublic lands
For footnotes, see p. 281.

99,335.91

(8)

280

REPORT OF THE SECRETARY OF THE TREASURY

TABLE 1.—Details of receipts, by sources and accounts, for the fiscal year 1934—Con.
Source
NONREVENUE—continued
Miscellaneous—Realization upon assets—Continued.
Sales of Government property:
Capital equipment, includes trucks, horses, cars, machinery,
furniture, and fixtures, and other capital equipmentLand and buildings
Lands, etc., on account of military-post construction fund
Proceeds of sales, building or purchase of vessels for the Coast
Proceeds of sales, rebuilding and improving Coast Guard
stations
War supplies
.
Coos Bav wa.sfon-road crant fund
Oregon and California land-grant fund
Funds reeeived from sales of ships, etc., and deposited for
construction loans under sec. 11, Merchant Marine Act,
1920 (44 Stat. 1451)
_.
.
--.
Ordnance material (war)
Other
Total sales of Government property..
Miscellaneous:
Trust accounts:
Government life insurance fund
. . .^
Adjusted service certificate fund:
Interest on investments
Interest on loans
Canal Zone retirement fund:
Contributions
Interest on investments _.
. . .
Civil service retirement fund:
Contributions _
'.
Interest on investments
Foreign service retirement fund:
Contributions
- .
Interest on investments
Deposits of unclaimed moneys of former patients. Veterans'
Administration hospitals
Deposits, general post funds. National Homes, Veterans'
Administration.
General railroad contingent fund
Relief and rehabilitation, and interest on investments,
Employees' Compensation Commission
Deposits of commissary funds, Federal prisons
.
Deposits of funds of Federal prisoners
Pension money, St. Elizabeths Hospital _. ....
Personal funds of patients St Elizabeths Hospital
Pay of the Navy, deposit fund
' Pay of the Marine Corp.s, deposit fund
Pay of the Army, deposit fund
Soldiers' Home permanent fund
Proceeds from estates of deceased soldiers
Deposits of unclaimed moneys of individuals whose whereabouts are unknown
Civilian Conservation Corps, withheld cash allowances
Indian moneys:
Proceeds of labor, act June 13, 1930
Proceeds of labor, agencies schools, etc
Oil and gas leases, etc., Osage Reservation, Okla . .
Miscellaneous (Indians)..
Proceeds of sales and leases of Indian lands, etc
Miscellaneous trust funds
Total trust accounts..
Contributed accounts:
Forest Service cooperative work
_
Library of Congress gift fund
Library of Congress trust fund, investment account
Collections, distilled spirits industry parity payments
Donations, National Park Service
Contributions to reclamation fund
Contributions for river and harbor improvements
Contributions for flood control
.._ . . .
For roads, bridges, and related works, Alaska
.
Advance of funds for river and harbor improvements
Miscehaneous
..-.
Total contributed accounts
Total, trust and contributed accounts, exclusive of the
District of Columbia
For footnotes, see p. 281.

T r u s t a n d conGeneral and
special accounts t r i b u t e d accounts

$183, 672, 36
211,991. 29
284,167. 37
16,044. 55
11,667.01
9,805. 83
1,182, 449, 02
5, 099. 64
269, 043. 68
4,182, 067. 01
42, 482. 56
6, 302.16
6, 404, 792. 73

8 $71,838,620. 24
4,614,783. 61
192,394. 77
606,262. 88
88,894. 58
28, 703,458. 68
10,518,358. 79
163,733. 60
98, 502. 69
4, 629. 98
182,356. 96
279, 985. 30
14, 327. 85
241, 539. 72
447,426. 31
11, 025. 63
112,079. 65
34, 249, 45
104,056.18
649, 621, 31
267,203. 46
42,116. 97
5, 419.19
942,524. 78
757,211.07
215,933. 48
3,026,033. 45
14.86
630,467. 83
39, 726. 26
124,732,748.52
1,306,354.16
67,481. 96
33,944,45
315, 624. 68
285,979. 77
97,481, 07
802,862. 69
327, 795. 60
35, 944. 85
24,000. 00
9, 929. 03
3, 307,398. 26
128,040,146. 78

REPORT OF THE SECRETARY OF THE TREASURY

281

TABLE 1.—Details of receipts, by sources and accounts, for the fiscal i/ear 1934—Con.
General and
Trust and conspecial accounts tributed accounts

Source
NONREVENUE—continued
Miscellaneuos— Continued.
District of Columbia:
Revenue receipts:
District of Columbia share
United States share..

$30,934,889 86

(«)
30,934,889.86

Nonrevenue receipts:
District of Columbia share.
Total District of Columbia receipts
Total nonrevenue receipts
Total miscellaneous revenue receipts

2, 298,479.17
10 33, 233, 369. 03
. .:.

$8,883, 693.90
152,124,109. 98

161, 273, 515. 81

161,007,803.88

161, 273, 515. 81

508,115.16

906, 374. 82

161, 515,919. 04

162,179, 890. 63

. . 3,112, 548, 297.32
8,883, 693.90

161, 273, 616. 81

. .

Total miscellaneous revenue and nonrevenue receipts,
including Panama Canal and sales of public lands,
warrants-issued basis
Adjustment to basis of daily Treasury statements (unrevised).
Total miscellaneous revenue and nonrevenue receipts,
including Panama Canal and sales of public lands,
cash basis-.-.
Total receipts, warrants-issued basis:
Revenue receipts
. .
Nonrevenue receipts
.

3,121,431,99L 22
Increment resulting from reduction in the weight of the gold
dollar
Total receipts, warrants-issued basis
Adjustment to basis of daily Treasury statements (unrevised)
Total receipts on basis of daily Treasury statements
(unrevised)-

161,273, 615. 81
2,811,397,066.15

3,121,431,991.22

2,972, 670, 581,96

6,877,941.69

886,065. 39

3,115,554,049. 53

2,973,666,647, 35

1 Classified under "Contributed accounts", p. 280,
2 Items of this character represent cash receipts credited to appropriation,
3 Under the provisions of the Banking Act of 1933, approved June 16,1933, no moneys will be covered into
the Treasury or expended therefrom on this account during the fiscal year 1934.
* Stated under trust accounts,
* In addition to this amount, $66,201,065.97 was carried to the surplus fund of the Treasury as impounded
salary savings and $10,643,980.68 reserved for impounded salary savings during the fiscal year 1934, under
the provisions of the Economy Act of June 30, 1932 (47 Stat. 403, sees. 110 and 203, as amended by sec. 3 of
title II, act of Mar. 20, 1933). These figures are exclusive of $23,030,376.29 on account of impounded salary
savings and $11,636,163.28 reserve for impounded salary savings for the Postal Service.
6 Trust account receipts of $15,205.05 included in miscellaneous trust accounts.
7 The act of Apr. 1, 1932 (47 Stat. 78) suspended reimbursement of $1,000,000 annually to the General
Fund of the Treasury until July 1, 1934.
8 Includes $3,241,098.61 representing the proceeds of checks drawn by the Veterans' Administration
against the adjusted service certificate fund and deposited in the Government life insurance fund under
the Act of July 21,1932, on account of certificates which had not matured or been paid. Inasmuch as the
(iovernment life insurance fund is not entitled to reimbursement until maturity or payment of certificates,
the Veterans' Administration adjusted the transactions by medium of checks drawn against the Government life insurance fund for deposit as a repayment to the adjusted service certificate fund. Consequently,
the totals of both the receipts and the expenditures of the Government life insurance fund are overstated
by $3,241,098.61 as a result of this adjustment, the charcter of which was not disclosed to the Treasury until
after the books for the fiscal year 1934 had been closed. The balances in the two funds, however, are not
affected, since the adjustment checks reflected in the expenditures of the Government life insurance fund
are offset by a corresponding increase in the receipts of the Government life insurance fund. The necessary
adjustment will be reflected in the fiscal year 1936.
<» The item of $68,117.52 United States revenue is shown under revenue receipts, p. 279.
10 Exclusive of $68,117,62 United States revenue from District of Columbia sources.
NOTE,—Excess credits and adjustments in italics to be deducted.

282

REPORT OF THE SECRETARY OF THE TREASURY

TABLE 2.—Details of expenditures, by organization units and accounts, for the fiscal
year 1934.
[Details on basis of checks issued, totals adjusted to daily Treasury statements (unrevised), see p. 273.
For explanation of accounts, see p. 274]

Organization unit

General and
special
accounts

Emergency
accounts

Total, general,
special, and
emergency
. accounts

Trust and
contributed.
accounts

LEGISLATIVE

U. S. Senate
House of Representatives
Legislative, miscellaneous
Architect ofthe Capitol
Botanic Garden
Library of Congress
Government Printing Office

$2,999, 473.-.45
7, 227, 367. 37
6, 830. 00
2, 760, 645. 66
104,745. 82
1, 992,818. 29
2, 620, 086. 28

$124, 589. 67

Total legislative, checksissued basis
Adjustment between checks issued
and cash expenditures

17,710,956,77

124, 589. 67

17,836, 546.44

68, m- ^6

1,208.17

69,4S2.42

Total, legislative, cash basis..

17,662,732.52

123, 381. 50

EXECUTIVE

17, 776,114.02:

$114,408.06

114,408,06

OFFICE

Executive Office, checks4ssued
basis...
Adjustment between checks issued
and cash expenditures
Total, Executive Office, cash
basis
INDEPENDENT

$2, 999, 473. 45
7, 227, 357. 37
5, 830. 00
2,885, 235. 23
104,745.82
1,992, 818. 29
2, 620,086. 28

355, 480.19

3,417, 56

3,417. 66

358,897, 75

358,897. 76

295, 765. 63
2, 978. 98

296, 755. 53
2,978. 98

2,978.98

143, 292, 67
475, 477. 34
8.06

143, 292. 67
475,477. 34
8.06

2,6S9. 65

OFFICES

Alien Property Custodian
American Battle
Monuments
Commission
American National Red Cross
Arlington Memorial Bridge Commission
Board of Mediation
Board of Tax Appeals
Bureauof Efficiency...
Central Statistical Board
Chicago World's Fair Centennial
Celebration
Civil Service Commission:.
Commission of Fine Arts
Electric Home and Farm Authority, Inc.
Employees' Compensation Commission
Executive Council
Federal Alcohol Control Administration
Federal Board for Vocational Education
Federal Coordinator of Transportation
."
Federal Deposit Insurance Corporation
Federal Farm Board
Federal Home Loan Bank Board..
Federal Oil Conservation Board....
Federal Power Commission..
Federal Radio Commission
Federal .Reserve Board
Federal Savings and Loan Associations
Federal Surplus Relief Corporation.
Federal Trade Commission. _
General Accountine Office
Interstate Commerce Commission..
National Advisory Committee for
Aeronautics..
National Banking Emergency
Act
National Capital Park and Planning Commission.For footnotes, see p. 293.

314, 379. 66

(3)

349, 573.09
1, 233,419. 78

349, 573. 09
1, 233,419. 78

3, 753, 974. 99

13,426. 60

29, 589. 27

3,763,974.99
29, 589. 27

142,851. 52

142, 851. 62

401,836,11

401, 836.11

13, 525.12

(^)
(«)

339,937. 73
2,111.63
270, 875. 29
626, 736. 00
96, 004. 22

(«)
126,808.47

339, 937. 73
2, 111. 63
397, 683. 76
626, 736. 00
96, 004. 22

27'. 61

(5)

1, 275,931. 21
3, 318, 317. 27
5,057, 621. 29

145, 204.78

714,820, 64

179, 427.42

1, 276,931. 21
3,403, 522, 05
6, 057, 621. 29

29,646 17
15 787 73
307,199 81

894, 248. 06

450.00

1, 067, 771,14

1. 067, 771,14

153, 584. 73

153, 584, 73

283

REPORT OF THE SECRETARY OF THB TREASURY

TABLE 2.—-Details of expenditures, by organization units and accounts, for the fiscal
year 1934—Continued
Organization unit

General and
special
accounts

Emergency
accounts

T o t a l , general,
special, a n d
emergency
accounts

Trust and
contributed
accounts

INDEPENDENT OFFICES—COn.

National Emergency Council
National Labor Board._
..
Office of Special Advisor to the
President on Foreign Trade
Public Buildings and Public Parks
ofthe National Capital
Puerto Rican Hurricane Relief
Commission
Railroad administration and transportation act
Smithsonian Institution.
U S. Geographic Board
U. S. Shipping Board
U. S. Supreme Court Building
Commission (building)
U S Tariff Commission
W^ar Finance Corporation
Miscellaneous commissions, boards,
etc.:
District of Columbia-Virginia
Boundary Commission
George Rogers Clark Sesquicentennial Commission
George Washington Bicentennial
Commission
Mount Rushmore National Memorial Commis"'ion
Operations under Mineral Act of
Oct. 5, 1918
Protection of interests of United
States in oil leases and oil lands
Public Buildings Commission
United States-Yorktown Sesquicentennial Commission
Other
Total of the above independent offices, checksissued basis
Adjustment between checks
issued and cash expenditures_..
Total of the above independent offices, cash basis. .

$78, 585. 55
217, 555. 67

40, 240. 99

$32, 607, 90

32, 607.90

4,449,081.44
841, 257. 30

2, 646,464.14
744,998. 26
46,935. 76

2, 645,464.14
744, 998. 26
46, 935, 76

2,472. 50

(')
(«)

(*)
^ 65,043.93

65,043.93

(*)
689, 231.13

689, 231.13

1,933. 82

(2)

111. 42
926. 47

111. 42
926.47

19, 698, 239. 84

1, 375, 526. 38

21, 073, 766. 22

2, 667, 222. 74

470,240.37

2,196,982. 37

22, 365, 462. 58

905, 286. 01

23, 270, 748. 59

$S5,026.91

Veterans' Administration:
Adjusted service and dependent
pay
Hospital and domiciliary facilities and services
Military and naval compensation
Military and naval insurance.--.
National Industrial Recovery,
Veterans' Administration
Army and Navy pensions
State and Territorial homes for
Miscellaneous items
Snecial denosit accounts
Total, Veterans' Administration, exclusive of adjusted
service certificate f u n d ,
civil service r e t i r e m e n t
fund, Canal Zone retirement fund, and Government life insurance fund,
checks-issued basis
F o r footnotes, see p . 293.

63,355, 096. 82

63, 355,096. 82
1, 895,154. 67

1,895,154. 57

2, 836,026. 68

2,836,026.68
2, 037,991. 60
104,029, 588. 85
86, 650': 45

2, 037,991. 50
104, 029, 588. 85
86, 650. 45
319, 322, 029. 23

401, 794. 47
319, 322, 029. 23

151,844. 76
285. 00
2, 077, 029. 76
249,036. 62

151,844. 76
285. 00
2, 077, 029. 76
249, 036. 62

268,493.98
71,901.76

496,442,528.71

196,592.22

401, 794. 47

496,040, 734.24

401, 794.47

284

REPORT OF THE SECRETARY OF THE TREASURY

TABLE 2.—Details of expenditures, by organization units and accounts, for the fiscal
year 1934—Continued
General a n d
special
accounts

Organization u n i t

T o t a l , general,
special, a n d
emergency
accounts

Emergency
accounts

Trust and
contributed
accounts

INDEPENDENT OFFICES—COU.
Veterans* A d m i n i s t r a t i o n — C o n .
A d j u s t m e n t b e t w e e n checks issued a n d cash expenditures

$10, 508, 719.90

$760.87

$10,607,959.03

Total, Veterans' Administration, exclusive of adjusted
service certificate
fund
civil service
retirement
fund, C a n a l Zone retirem e n t fund, a n d Governm e n t life insurance fund,
cash basis-

506, 549, 454.14

401,033.60

506,950,487.74

Adjusted service certificate f u n d . .
Civil service r e t i r e m e n t a n d disa b i l i t y fund
C a n a l Zone r e t i r e m e n t fund
G o v e r n m e n t life insurance f u n d . .

50, 000, 000. 00

50,000,000.00

$5, 207,144. 77

20,850, 000. 00

20,850,000.00

38 656,699 54
572,036 97
9 72,310, 707. 68

T o t a l , checks-issued basis

70,860,000.00

116,646,588.96

T o t a l , cash basis

70,860, 000. 00

70,850,000.00

(»)

401,033.60

577,800,487.74

2, 673, 597. 30
313, 002, 240.41

2, 573, 597,30
313,002, 240.41

Total, Veterans' Administration, cash b a s i s . . . -

577, 399,464.14

Miscellaneous
C o m m o d i t y Credit Corporation....
E m e r g e n c y Conservation F u n d
E x p o r t - I m p o r t B a n k s of W a s h i n g ton
F e d e r a l Civil W o r k s A d m i n i s t r a tion
Federal E m e r g e n c y H o u s i n g Corporation
F e d e r a l E m e r g e n c y Relief A d m i n istration
National Industrial Recovery:
F e d e r a l E m e r g e n c y Relief A d ministration
_
Federal E m e r g e n c y Relief A d m i n i s t r a t i o n , S u r p l u s Relief
Administration
Tennessee Valley A u t h o r i t y
T o t a l miscellaneous, checksissued basis
A d j u s t m e n t b e t w e e n checks issued a n d cash expenditures
T o t a l miscellaneous,
basis..
.

64,775.35

64, 775.35

717,333,664.65

717,333,654, 65

863,717.16

344,666,730.35

9,964. 71

9,964.71

23, 093.49
7,006,966. 21
11,466,900.35

23,093.49
7,005,966. 21
11,466,900.35

1,397,010,639.98

1,397,010,539.98

12, 771,682. 63

12, 771, 682. 63

1,409,782, 222. 61

1,409,782, 222. 51

cash

Federal Emergency Administration
of Public Works
A d m i n i s t r a t i v e expenses
L o a n s a n d g r a n t s to States, m u n i c ipalities, railroads, etc

6,002,384.78

155, 719,695.17

166, 719,695.17
•

• T o t a l , Federal E m e r g e n c y
A d m i n i s t r a t i o n of P u b l i c
W o r k s , checks-issued basis
A d j u s t m e n t b e t w e e n checks issued
a n d cash expenditures
.
Total, Federal Emergency
A d m i n i s t r a t i o n of P u b l i c
W o r k s , cash basis

For footnote, see p . 293.

•

• • •

161,722,079.95

6,847,535.02

6,847,636.02

165,874,544.93

REPORT OF T H E

SECRETARY OF T H E

286

TREASURY

TABLE 2.—Details of expenditures, by organization units and accounts, for the fiscal
year 1934—Continued
Organization unit

INDEPENDENT

General and
special
accounts

Total, general,
special, and
emergency
accounts

Emergency
accounts

Trust and
contributed
accounts

OFFICES—COU.

Farm Credit Administration
Salaries and expenses
Agricultural marketing revolving
fund
Revolving fund (Emergency account, Farm Credit Act)
Farmers' crop production and
harvesting loans
Repayment of loans on account of
distribution of Governmentowned wheat and cotton
Agricultural credits and rehabUitation, emergency relief
Loans to farmers in storm, fiood,
and drought-stricken areas
Miscellaneous items
Special deposit accounts

13, 204, 210. 62

$60,000,000.00

73, 204, 210. 62

27, 500,000.00

40,000,000.00

67,600,000.00

28,491, 749. 08

28,491, 749.08

4,946,783,11

4,946, 783.11

4,371,195.38

4,371,196.38

13,041,870.26
8,374. 40
8,379,668.11

13,041,870.26
8, 374.40
8,379,668.11

Total, Farm Credit Administration, checks-issued
basis
^
Adjustment between checks issued

22, 301, 764. 29

Total, Farm Credit Administration, cash basis

23,123,288. 26

Total, independent offices,
cash basis___

$2,435,019.91

821, 523. 97

•
128,491,749.08

150,793, 513. 37

1,323,444-11

601,920.14

127,168, 304.97 .

622,888, 204.98 1,694,131,392. 02

$61,868.48
61,868.48

150,291,693. 23

(»)

2,317,019,597, 00

(^)

D E P A R T M E N T OF AGRICULTURE

Offi PA of I n f o r m a t i o n

Library, Department of AgriculOffice of Experiment Stations
Cooperative agricultural extension
work
Bureau of Animal Industry
Meat Inspection, Bureau of Ani-

Payment to States and Territories
from national forests fund
Acquisition of lands for protection
of watersheds and streams
Bureau of Chemistry and Soils
Bureau of Biological Survey
Bureau of Agricultural Economics..
Bureau of Agricultural Engineering.
Bureau of Home Economics
Bureau of Plant Quarantine
Enforcement of the Grain Futures
Food and Drug Administration
National Industrial Recovery,
Agricultural Adjustment Administration, National Recovery
Special deposit accounts
Total, Agriculture, departmental, checks-issued basis.
For footnotes, see p. 293.

765,900. 69
915,290.06

2,717.96

768,618,66
915,290.06
87,380.18
4,567,181.10
L 189.353.67

87,380.18
4,552, 233. 21
1,189,353.67

4,947.89

8,351,957.91
2,963,574.12
6,481,921.88

92,865.39
995,411.86

8,361,967.91
3,056,439. 51
7,477,333.74

4, 662,667.50
641,062. 27
3,663,406. 96
9,499,86L96

130, 705. 71
1,836,365.00
8, 747,245.13

4,662,567. 50
67L767.98
5,389, 771.96
18,247,107.09

443,437. 75
1,355,544.85
1,067,572.46
4, 707,491.77
345,598.30
171,361. 76
2, 726,071.76
1,594, 534.36

141,133.17
1,199.03
44,067.03
1,641,412. 58

443,437.75
1,408,132.88
L 358,162.46
4.707,491.77
486,731.47
172,660. 79
2, 770,138.79
3,136,946.94

163,180.15
1,490,019.67

29, 725. 41

163,180.15
1,519,745.08

125,141.18
132,657.90
58,201, 223. 61

1,287,828.32

679,317.09

679,317.09
62, 688. OZ
290,690.00

21, 646. 49
356,135.62

21,646,49
229,994.44
132,657.90

6,433,021.67

13, 577,485.06

71,778,708.67

4,146,193.35

286

REPORT OF THE SECRETARY OF THE TREASURY

TABLE 2.—Details of expenditures, by organization units and accounts, fqr the fiscal
year 1934—Continued
Organization unit

General and
special
accounts

Emergency
accounts

Total, general,
special, and
emergency ;
accounts

Trust and
contributed
accounts

D E P A R T M E N T OF AGRICULTURE—

continued
Adjustment between checks issued
and cash expenditures

$161,348.78

$574,921.71

U13,672.93

Total, Agriculture, departmental, cash basis

58, 362, 672.39

13,002,563.35

71,365,135.74

Agricultural Adjustment Administration:
Advances to Agricultural Adjustment Administration
Refunding processing tax on farm
products
. . ._
National Industrial Recovery
Salaries and general expenses

293,996.321.16

Total, Agricultural Adjustment Administration.,
checks-issued basis
.
Adjustment between checks issued
and cash expenditures

295,370, 623.81

10,867,437.00

306, 238,060.81

14,452,921.48

1,535,470.60

15,988,392.08

280, 917, 702. 33

9,331,966.40

290, 249,668. 73

138, 672, 714.85

138,672, 714.85

33, 934. 90
108,174,390.39

33,934. 90
108,174, 390.39

341,565. 50

341, 565. 50

57, 722. 34

Total, Agricultural Adjustment Administration, cash
' basis

1,374,302.66

Public highways:
National Industrial Recovery
Mount Vernon Memorial Highway
Road construction
Flood relief for restoration of roads
and bridges
Roads and trafls for States, national forests fund

293,996,321.16
2, 744, 629. 20
8,122,807.80

1,374,302.66
2,744,629. 20
8,122,807.80

T o t a l , public highways,
checks-issued basis
Adjustment between checks issued
and cash expenditures

10 247, 280,327.98 10 247,280,327.98

Total, public highways, cash
basis

11 267,882,017. 66 11 267,882,017. 66

Total, Department of Agriculture, cash basis..

20,601,689. 68

339, 280, 274. 72

(1)

290, 216,547.41

20, 601,689. 68

629,496,822.13

D E P A R T M E N T OF COMMERCE

Office of the Secretary
Federal Employment Stabilization
Board.
Aircraft in commerce
Bureau of Foreign and Domestic
Commerce
Bureau of Census
Bureau of Navigation and Steamboat Inspection Service
Bureau of Standards
Bureau of Lighthouses
Coast and Geodetic Survey
Bureau of Fisheries
Patent Office..
Bureau of Mines...
U. S. Shipping Board
Commerce, miscellaneous
Special deposit accounts
Total, Commerce, departmental, checks-issued basisAdjustment between checks issued
and cash expenditures
Total, Commerce, departmental, cash basis.For footnotes, see p. 293.

672, 521.17
29,263,54
4, 934.886. 97

672, 521,17
392,155.05

2,070, 638. 91
L 459,. 775.08
1,277, 714.43
1,310,481.10
8, 289, 657.48
1, 745, 080. 43
1,211,615.97
3,942, 719. 41

29.263. 54
5,327,042,02
2,070,638, 91
1,459, 775.08

19, 043. 00
74,906. 50
1, 329, 535. 77
3,150, 270. 61
326, 737.15

1,296, 757.43
1,386,387. 60
9,619,193. 25
4,895, 351.04
1, 538,353.12
3, 942, 719. 41

$100.87

(12)
(13)

64,49L 42
16,393. 61

64,491.42
16,393.61

83,778.28
83,677.41

26,873,469. 46

5,292,648.08

32,166,117, 54

578,950.40

121,832.61

467,117.79

27,452,419.86

6,170.815.47

32,623,235.33

REPORT OF THE SECRETARY OP THE TREASURY

287

TABLE 2.-—Details of expenditures, by organization units and accounts, for the fiscal
year 1934—Continued
Organization unit

General and
special
accounts

Emergency
accounts

Total, general,
special, and
emergency
accounts

Trust and
contributed
accounts

D E P A R T M E N T OF COMMERCE—COU.

U. S. Shipping Board:
Checks-issued basis
Adjustment between checks issued and cash expenditures

$9,691,668. 81

%9,691,668.81

147,243. 22

147, 243. 22

Total, U. S. Shipping Board,
cash basis

9,644,4^5.69

9,544,425.69

Total, Department of Commerce, cash basis. .

17,907,994. 27

$5,170,815.47

23, 078,809. 74

610,133.12
8,419.85

3,787,684.77

4,397,817. 89
8,419.85

306,179. 69
2, 780,402. 65
2, 216,182. 02

611,997,09
3,010,161,56

306,179.69
3,392,399. 74
5,226, 343. 58

(1)

D E P A R T M E N T OF T H E INTERIOR

Office of the Secretary
Commission of Fine Arts "
Geprge Rogers Clark Sesquicentennial Commission i<
General Land Office
Bureau of Reclamation
Boulder Canyon project
Geological Survey.
Office of National Parks, Buildings, and Reservations
Office of Education
Federal Board for Vocational
Education 1*
Government in the Territories
Beneficiaries
Bureau of Mines
U. S. Geographic Board i^
Interior, civil, miscellaneous
Special deposit accounts
Indian Affairs:
Salaries and general expenses
Education
General support and administra-tion
-.. - .Fulfilling treaty stipulations and
treaty supports
Miscellaneous expenses of Indian
Service
--Interest on Indian tribal funds
Tribal funds
Special deposit accounts
Total, Interior, departmental,
including Indian Affairs,
but excluding Boulder Canyon project, checks-issued
basis
Adjustment between checks issued
and cash expenditures
Total, Interior, departmental,
including Indian Affairs,
but excluding Boulder Canyon project, cash basis

$604.15

(13)

1, 586,044. 04

1,835,898,46

3.420,942. 50

9,237, 285. 29
2, 796,193. 33
8,131,452.85
3,049, 979. 74
2,123,102.98
1,332,807. 26
9,858. 08
102,376.48
296,112. 01

6,971,987, 29

15, 209, 272. 58
2, 796,193. 33

1,197,835. 78
7,813, 349. 51

6,873,498.57

1,121, 022,14
606,285.88
71,648. 42
128,668.03

L 817,069.87

8,131,452. 85
4,171,001. 88
2,628,388.86
1,404,455. 68
9,858. 08
231,034.61
296,112.01

197,728.80
35,852. 38
123, 932. 60
77,191.79

8,071,334. 35
7,813,349.51
1,817,059.87

(15)

5,163, 911. 37
507, 250. 23

6,163,911.37
507, 250. 23

50,287,959.17

23, 660, 526.16

73,948.485.32

4,366,795.40

1,094,847.82.

6,460,643.22

45, 922,163. 77

5,125, 564. 77
4,260,104.27

1,146.386. 64

(')

22, 566,678. 33

68,487,842.10

Boulder Canyon project:
Checks-issued basis
Adjustment between checks issued and cash expenditures- .

19, 526,289.81

19, 526, 289.81

80,908.17

Total, Boulder Canyon project, cash basis

19, 445, 381. 64

19,445,381. 64

42, Oil, 069. 97

87,933,223. 74

(1)

Total, Department of the
Interior, cash basis.- _

For footnotes, see p. 293.

90353—35-

-20

45,922,163. 77

70, 636. 99

288

RiEPOtlT OF THiE Si:CtlETARY OF THE TREAStJRY

TABLE 2.—Details of expenditures, by organization units and accounts, for the fiscal
year 1934—Continued
Organization unit

General and
special
accounts

Emergency
accounts

Total, general,
special, and
emergency
accounts

Trust and
contributed
accounts

DEPARTMENT OF JUSTICE

Office of the Attorney General:
Salaries and expenses
Detection and prosecution of
crimes
Miscellaneous objects
J^Bureau of Prisons, salaries and
expenses
Bureau of Prohibition
,
Division of Investigation
Veterans' Insurance Litigation...
The Judiciary:
Salaries and expenses, Supreme
Court
Salaries and expenses of judges...
Court of Customs and Patent
Appeals
.,
United States Customs Court
|
Court of Claims
Territorial courts
Panama Canal Zone, salaries,
District Court
United States Court for China,
salaries and expenses "
Expenses, etc., United States
courts
:..
Judicial, miscellaneous
Special deposit accounts
Penal and correctional institutions.

$1,449,775.22

$1,449,776.22

296,612.30
464,918.22

185,438.76
922,385.62
4,432,568.72
316,573.21

185,438.76
922,365.62
4,432,558.72
316,673.21

308,117.44
2,268,334.47

308,117.44
2,258,334.47

94,761.89
206,293.66
170,996.93

94,761.89
206.293.65
170,996.93

77,068.67

26,277.11

22,914.71
11,267,743.47
46,924.64
67,242.99
8,713,284.76

$214,98L95

22,914.71
11,267,743,47
46,924,54
67,242.99
8,928,266. 71

"686,'566.'90

Total, Department of Justice,
checks-issiied basis
Adjustment between checks issued
and cash expenditures

31,318,202,68

214,98L95

31,633,184.63

494,593.28

280,32L85

77,631.72

202,790.13

Total, Department of Justice,
cash basis
-

31,598,624,53

137,450.23

31,735,974.76

683,827.13
396,339.33

9,360.40
3,693.58

693,187.63
400,032.91

7.961,326.98
324.043.78
136,894.93
909,306.08
91,935.17
16, 624.69
23,147.84

1,218,786.88
""698^i72."07'

10,443,445.93

1,930,012.93

12,373,468.86

388,458.-69

21,641.06

366,917.63

10,831,904.62

1,908,471.87

12,740,376.49

$191,972.62

(1)

DEPARTMENT OF LABOR

Office of the Secretary
,
Bureau of Labor Statistics
,
Bureau of Immigration and Naturalization
Children's Bureau
Women's Bureau
U. S. Employment Service
Employment Service—
Housing Corporation
Labor, miscellaneous
Special deposit accounts
Total, Department of Labor,
checks-issued basis
Adjustment between checks issued
' and cash expenditures
Total, Department of Labor,
cash basis

9,180,113.86
324,043. 78
136,894.93
1,607,478.15
91,935.17
16,624. 69
23,147.84

133.00

476,593.54
476,460.64

NAVY DEAPRTMENT

Salaries, Navy Department
Contingent expenses, etc
Office of the Secretary
Bureau of Navigation
Bureau of Engineering
Bureau of Construction and Repair.
Bureau of Ordnance
Bureau of Supplies and Accounts:
Fuel and transportation.
—
Maintenance
National Industrial Recovery,
Navy, Supphes and Accounts..
Naval supply account fund
Pay, subsistence, and transportation, Navy
Naval working fund
Other items
For footnotes, see p . 293.

3, 265,411.09
524, 577. 64
1, 216, 513. 94
3, 262,917. 28
14, 504, 778.97
12; 495,193.96
9,065,394, 25

1, 084,864.15
i4,'700'29'
211, 345. 33

3,265,411.09
624, 577.64
2,301,378.09
3, 262,917. 28
14, 619,479. 26
12,495,193.96
9, 276, 739. 58
5,067,407.88
6, 587,081,90

5,067,407.88
6,587,081.90
1,091,639.48

117,413.93
1,091,639.48

129,094,280.39
IS, 433,220.61
496,834.48

129,094,280. 39
18,483,220.61
496,884.48

117,413. 93

36,097.42

289

REPORT OF THE SECRETARY OF THE TREASURY

T A B L E 2.— Details of expenditures, by organization units and accounts, for the fiscal
year 1934—Continued

Organization unit

General and
.special
accounts

Emergency
accounts

Total, general,
special, and
emergency
accounts

Trust and
contributed
accounts

NAVY DEPARTMENT—con.

Bureau of Medicine and Surgery...
Bureau of Yards and Docks..
Bureau of Aeronautics
Naval Academy
Marine Corps:
Pay...
General expenses
•
Other items
Alterations to naval vessels
..
Increase of the Navy:
Armor, armament, and ammunition
Construction and machinery
National Industrial Recovery,
Navy allotment
Other items
Navy, miscehaneous
General account of advances
Special deposit accounts
Total, Navy Department,
checks-issued basis
Adjustment between checks issued
and cash expenditures...
Total, Navy Department,
cash basis . . .

$2, 289, 796. 80
8, 687, 581.83
15, 698, 526. 93
1, 328, 946. 58

$ii, 396,446.82
502,227.14

$2,289,796.80
20, 084,028. 65
16, 200, 754.07
1, 328, 946. 58

12, 691, 874. 52
4,424, 071. 28
228, 486. 77
6, 611, 425.16

12, 691, 874. 52
4, 424, 071. 28
228, 486. 77
5, 611, 425.16

10,461,749.12
32, 529, 286. 88

10, 461, 749.12
32, 529, 286. 88

8, 829.14
57,117. 52
48, 292. 39
13, 587.36

23, 457, 056.19

$122, 976. 97

23, 457,056.19
8, 829.14
57,117. 52
48, 292. 39
13, 587. 36

123. 63

159,198. 02

264,141, 535.01

36, 784, 053.85

300, 925, 588. 86

10, 246,851.05

14,143,148.95,

3,896,297. 90

274, 388, 386.06

22, 640,904.90

297, 029, 290. 96

POST OFFICE DEPARTMENT

Salaries and expenses, public buildings, Post Office Department
Foreign mail transportation
Private relief acts
Deficiencies in the postal revenuesMiscellaneous expenses, Postal
Service
Total, Post Office Departmental exclusive of Postal
deficiency and Postal Service payable from postal
r e v e n u e s , checks-issued
basis
Adjustment between checks issued
and cash expenditures

9, 589,943.80
2, 600, 000. 00
19, 636. 62

9, 589, 943.80
2, 600,000.00
19, 636. 62

(13)

1, 666. 28

6,198.00

7, 764. 28

12, 211,146. 70

6,198. 00

12, 217, 344. 70

6,416.97

Total, Post Office Department.al exclusive of Postal
defic lency and Postal Service -payable frohi postal
revets ues, cash basis

12,205,729.73

Deficiencies in the postal revenues
checks-issued and cash basis

" 52,003, 295. 62

Total, Post Office Department, exclusive of Postal
Service payable from postal revenues, cash basis

64, 209, 025.36

6,198.00

64, 215, 223.35

1, 674,416. 50
9,721,912.01
9,908.08

808, 585. 93

1, 674,416. 50
10, 530,497.94
9,908.08

6,198.00

12, 211,927. 73

62,003, 296.62

DEPARTMENT OF STATE

Salaries and expenses
Foreign intercourse
Special deposit accounts
Foreign service retirement fund
Total, State, departmental,
checks-issued basis
..
Adjustment between checks issued
and cash expenditures
Total, State, departmental,
cash basis.For footnotes, see p. 293.

(13)

11,386,420.43

808, 585.93

12,195,006.36

265,317.67

61,416.92

326,783.49

11,121,102.86

747,170.01

11,868, 272.87

•

18,967.47
209,835.20

' 190,867.73

290^

REPORT OF THE SECRETARY OF THE TREASURY

TABLE 2.—Details of expenditures, by organization units and accounts, for the fiscal
year 1934—Continued
Organization unit

General and
special
accounts

Emergency
accounts

T o t a l , general,
special, a n d
emergency
accounts

Trust and
contributed
accounts

D E P A R T M E N T OT STATE—COU.

Foreign service retirement fund,
checks-issued basis
.
Total, Foreign Service retirement fund, cash basis
Total, Department of State,
cash basis .
TREASURY

$292,700.00

$292, 700.00

292, 700.00

292,700.00

(1)

• 12,160,972.87

(1)

11,413, 802. 86

$747,170.01

$245, 628. 32

DEPARTMENT

Office of the Secretary
139, 319. 35
Office of Solicitor of the Treasury..
14, 084. 27
Office of Chief Clerk and Superintendent
.
675,967. 59
Division of Supply
922, 284.92
Office of Commissioner of Accounts
and Deposits.
93,926. 63
Division of Bookkeeping and War912,770.90
rants
. . .Division of Disbursements
309,165. 34
Public Debt Service
.. .
3,814, 756. 47
Division of Appointments
37,896. 31
Bureauof Customs:
Collecting the revenue from
customs .
.
17,650, 631.43
Miscellaneous expenses
356. 00
Refunds, debentures, drawbacks,
etc
(>3)
Bureau of the Budget
155, 313.48
Office of Treasurer of United States .
1,406, 768.95
Office of Comptroller of the Cur271,148. 09
rency
Bureau of Internal Revenue:
Collecting the revenue
28, 505, 063. 50
Refunds, debentures, drawbacks,
etc
Bureau of Industrial Alcohol, salaries and expenses
2,826,810.90
Bureau of Prohibition, enforcement
of narcotic and national prohibition acts
.
1,807.86
Bureau of Narcotics
1, 029, 040.96
19, 498,818. 21
Coast Guard
. .
. . .
Bureau of Engraving and Printing. _
4, 339, 524. 32
648,912. 07
Secret Service Division
8, 245,170. 09
Public Health Service
1, 031,702. 64
Bureau of the Mint
Treasury, miscellaneous:
To promote the education of the
76,000.00
blind
Outstanding liabilities (trust
account) .
Other items
61, 628. 27
Special deposit accounts
64, 696.18
Special accounts:
Settlement of War Claims Act
of 1928
:..
79, 666. 63
Procurement Division:
Salaries and expenses
1,800, 567.49
Repairs, equipment, etc., public
2,884, 324. 32
buildings
•.
Operating expenses, public build6,146, 766. 66
ings..
.
Total, T r e a s u r y , departmental, checks-issued basis- 103,543,689.83
Adjustment between checks issued
and cawSh expenditures..
4,994, 366.86
Total, T r e a s u r y , departmental, cash basis
108, 538, 056. 69
Refunds of receipts:
Customs..
-.
13,883, 578.98
Internal Revenue
48, 024, 440.15
63,743. 64
Bureau of Industrial Alcohol
Total, refunds of receipts,
checks-issued basis
61,961,762.67

For footnotes, see p. i

139,319. 35
14,084. 27
676,967. 69
922,284.92
93,926.63
912, 770.90
309,165. 34
3,814,756.47
37,896. 31

71 364 15

17,650.631,43
356, 00
156,313. 48
1,406,768.95
271,148. 09
28.605,063. 50

2,826,810.90

17,665,307. 00
1, 397,468. 54

1,807.86
1,029,040.96
37,164,125.21
4,339, 524, 32
648,912. 07
9, 642,638,63
1, 031, 702,64

3, 216. 48

75,000, 00
89.52

61,438. 75
64, 596.18

219,898.71
170. 31
1, 317,592. 95

79,666. 63
1,800, 567.49
2,884, 324. 32
6,146, 766. 66
19, 062, 686. 02

122,606, 375.85

184,565.80

4,859,801.06

•18,928,120.22

127,466,176.91
13,883, 578.98
48, 024,440,16
53,743. 54
61,961,762.67

1,172,450.18

(1)

291

REPORT OF THE SECRETARY OF THE TREASURY

T A B L E 2.—Details of expenditures, by organization units and accounts, for the fiscal
year 1934—Continued

Organization unit

General and
special
accounts

Emergency
accounts

Total, general,
special, and
emergency
accounts

Trust and
contributed
accounts

TREASURY DEPARTMENT—COn.

Adjustment between checks issued
and cash expenditures
Total, refunds of receipts, cash
basis
...
Procurement Division:
Sites, construction, etc.:
Post offices, c u s t o m h o u s e s ,
courthouses, etc
Inspection stations
Quarantine stations
Marine hospitals .
Total, public building construction and sites, checksissued basis -_
Adjustment between checks issued
and cash expenditures
Total, public building construction and sites, cash
basis
Special accounts:
Federal land banks:
Subscriptions to capital stock
Subscriptions to paid-in surplus.
Payments to F e d e r a l land
banks, reductions in interest
rate on mortgages
Subscriptions to preferred shares.
Federal savings and loan associations
Subscriptions to capital stock,
Federal Deposit Insurance
Corporation
Total, special a c c o u n t s ,
checks-issued basis
Adjustment between checks issued and cash expenditures
Total, special accounts, cash
basis
Total, Treasury Department,
cash basis

$748,789.62

62,710, 552. 29

69,883,411. 77
• 381,898.22
58, 222.84
1, 296, 209. 59

$3,240,982. 05

73,124,393. 82
381,898. 22
58,222.84
1, 296,209. 59

71,619,742. 42

3, 240,982. 05

74,860, 724, 47

3,896, 071.44

60,526. 68

3,845,544.81

75, 515,813.86

3,190,455. 42

40,863,477.16

1,737,780.00
40,863,477.16

7,029, 256.79

7.029.256,79

1,086, 300. 00

1.086,300. 00

150, 000, 000. 00

150,000,000.00

198,979, 033.95

197,241,253.95

829,350.35

829,350.36

198,149, 683,60

196,411,903. 60

220, 268,259, 24

466, 294,902. 08

1,737,780.00

1, 737, 780. 00

1, 737, 780. 00
245, 026, 642.84

78, 706, 269. 28

WAR DEPARTMENT

National defense:
Salaries, War Department
Office of Secretary of War General Staff Corps
Adjutant General's Department..
Finance Department:
Pay of the Army.
_
Finance Service..
Judgments
Other items
Quartermaster Corps:
Army transportation
Barracks and quarters and
other buildings and utilities...
Clothing and equipage
Construction of buildings, etc.,
at military posts . . .
._
Construction and repair of hospitals
Incidental expenses of theArmy.
Regular supplies of the A r m y . . .
Subsistence ofthe Army
National Industrial Recovery..
Other items
Signal Corps
..
Air Corps.
Medical Department
Corps of Engineers
For footnotes, see p. 293,

3,996, 201. 95
393, 702. 58
92, 599.39
61. 590. 77

3, 996, 201,95
393,702.58
92, 599. 39
61,590.77

114,122, 111, 16
872,982,61
783,088,01
470,645.96

114,122, 111. 16
872,982.61
783, 088.01
470, 645.96

8, 533, 686. 53

8, 533, 686.53

10, 333,147,84
4, 733, 043.98

10,333,147.84
4, 733, 043,98

6,819,382.34

5,819,382,34

511,961. 59
2,963,795.92
3,062, 591.92
13, 537, 645. 37
171,978. 51
1.649,316. 66
17, 357,934.63
1.216,869.95
321,403. 51

27,303,122.62
94,459,12
14,922,23

611,96L59
2,963,795.92
3, 062, 591.92
13, 537, 645. 37
27,303,122, 62
171,978, 51
1,743,776, 77
17,372,866,76
1,216,869,96
321.403,61

. ... ...
• • .

. . . . . .

292

REPORT OF THE SECRETARY OF THE TREASURY

TABLE 2.—Details of expenditures, by organization units and accounts, for the fiscal
- year 1934—Continued
Organization unit

General and
special
accounts

Emergency
accounts

$7,872,672.55
806,748.26
57, 700.56
18,324. 25
23, 568.93
26, 319.65
1,414,464.16
1,975,451.09
24, 578, 722.03
3,611,852.06
3, 587,735. 70

$4,446,489.52

Total, general,
special, and
emergency
accounts

Trust and
contributed
accounts

WAR DEPARTMENT—continued
National defense—Continued.
Ordnance Department
Chemical Warfare Service
Chief of Infantry.i
Chief of Cavalry
. . .
Chief of Field Artillery
Chief of Coast Artillery
Seacoast defenses.
Military Academy..
National Guard Bureau
Organized Reserves-..
Citizens' military training
National Board for Promotion of
Rifle Practice
Accounting funds
Special deposit accounts
Total, n a t i o n a l defense,
checks-issued basis
Adjustment between checks issued and cash expenditures
.Total, national defense, cash
basis
:
Nonmilitary activities:
National cemeteries..
National military parks
Miscellaneous,
Quartermaster
Corps
Signal Corps
Corps of Engineers, miscellaneousBureau of Insular Affairs
War claims and relief acts
Miscellaneous..
_.
Trust funds . . .

2,416,690.85
1,113,212.62

51,792.95
1,180,988.87
787.17

$12,319,162.07
806,748.26
67,700.55
18,324.25
23,668.93
26,319.55
3,831,056.01
1,975,45L09
26,691,934.65
3,611,852.06
3,687,735.70
51,792.95
1,180,988.87
787.17

233,850,831.45

35.388.796.96

269,239,628.41

28,644,909.62

2,634,432.41

£5,910,477.11

205,305,92L93

38,023,229.37

243,329,16L30

721,973.29

424,060.88

1,146,034.17

239,160.37

361,259.18
142,225.77
92,648.47
239,160.37
6L782.98
97,432.11

(2)

361,259.18
142,225.77
92,648.47
61,782.98
97,432.11

Total, nonmilitary activities,
checks-issued basis
Adjustment between checks issued
and cash expenditures

1,477,32L80

663,221.25

2,140,543.05

2,632,637.63

112,256.72

2,744,794.35

Total, nonmilitary activities,
cash basis
..

$1,762,599.29
1,762,599.29

(^)

4,109,869.43

776,477.97

4,886,337.40

Rivers and harbors:
Improving rivers and harbors
Flood control and relief
.. ..
Special deposit accounts

54, 661,487.06
23,315,356.97
5,844.11

50, 232,192.88
24,834,446.65

104,883,679.94
48,149,803.62
6,844.11

583,739.71
304,728.64

Total, rivers and harbors,
checks-issued basis.
Adjustment between checks issued
and cash expenditures .

77,960,999,92

76,066,639.63

163,027,639.45

888,468.35

320,478.57

2,616,268.06

2,295,779.49

78, 281,478.49

72,460,381.47

150,731,859.96

(^)

287, 697,259.85
8,847,257. 97

111,249,088.81
808,622.12

398,946,348.66
9,665,780.09

Total, rivers and harbors,
cash basis
.
Total, War Department, excluding Panama Canal,
cash basis
Panama Canal, checks-issued basis.
Adjustment between checks issued
and cash exDenditures .
Total. Panama Canal, cash
basis

349,889,40

67,041.87

292,847.53

9,197,147,37

751,480.25

9,948,627.62

18 5,700,324.63

190,720,66

6,891,045.09

30,974,206.34

824.63

9,809.89

10,138.92

284,401.67

6,700,000,00

180,911.17

5,880,9n. 17

30,689,804.67

DISTRICT OF COLUMBIA

District of Columbia, checks-issued
basis . . .
..._._ .
Adjustment between checks issued
and cash expenditures. . . . . .
Total, District of Columbia,
cash basis..
For footnotes, see p. 293.

REPORT OF THE SECRETARY OF THE TREASURY

293

TABLE 2.—Details of expenditures, by organization units and accounts, for the fiscal
year 1934—Continued
Organization unit

General and
special
accounts

Emergency
accounts

Total, general,
special, and
emergency
accounts

Trust and
contributed
accounts

I N T E R E S T ON T H E PUBLIC D E B T

Interest on the public debt, checksissued basis
Adjustment between checks issued
and cash expenditures
Total, interest on the pubhc
debt, cash basis
•.

$757,210.099.33

$757,210,099.33

692,972.60

592,972. 60

756, 617,126.73

756,617,126.73

369, 491.900.00

359,491,900.00

PUBLIC D E B T R E T I R E M E N T S

Sinking fund—
Obligations rethred from Federal
Reserve bank franchise tax receipts and earnings from Federal
intermediate credit banks
..
Received from foreign governments under debt settlements._.
Estate taxes, forfeitures, gifts, etc
Total, public debt retirements,
checks-issued basisAdjustment between checks issued
and cash expenditures
Total, • public debt returements, cash basis.

342.90

342. 90

357,850.00
15, 000. 00

357,850.00
15,000.00

359,865,092,90

369,865,092.90

1,000.00

359,864,092.90

359,864,092. 90

SPECIAL ACCOUNTS

Reconstruction Finance Corporation - ---Chargeable against increment on
gold, exchange stabilization fundTotal, classified, expenditures,
checks-issued basis
3,110,094, 871, 76
Adjustment between checks issued
and cash expenditures
9,640,690.64
Total, classified expenditures,
Z, 100, 554,181.12
cash basis
360,363,02
Unclassified items, cash basis
Total cash expenditures on
basis of daily Treasury
3,100, 914, 534,14
statements (unrevised)
Excess of expenditures over receipts

$1,614,932,338,15

1, 614,932,338.15

3, 997, 407, 766.86

7,107, 502, 638. 62 2, 148, 874, 623. 23

$2,000,000,000.00

7,067,702.14

2,472,988.60

10,355,046.70

4,004, 476,469.00
339,918.19

7,105,029, 650.12 2,138, 519, 576! 53
155,963.08
20,434. 83

4, 004,136,660.81

7,105,050,084. 95 2,138,675, 539. 61
19 3.989.496.035.42 20 884,880,107.74

1 Expenditures from trust and contributed accounts are not classified by organization units, except for
the District of Columbia, in dafly Treasury cash statements.
2 Stated under Office of National Parks, Bufldings, and Reservations, Department of the Interior, pursuant to Executive Order No. 6166 of June 10, 1933.
8 Included under National Industrial Recovery Administration.
* Stated under the Department of the Interior, pursuant to Executive Order No. 6166 of June 10,1933.
» Under the Treasury Department.
6 Included under Farm Credit Administration, pursuant to Executive Order No. 6084 of Mar. 27, 1933.
7 Included under Federal Emergency Relief Administration.
8 Stated under the Department of Commerce, pursuant to Executive Order No. 6166 of June 10. 1933.
9 I n c l u d e s $3,241.098. 61 referred to in note 8, p . 281.

10 Exclusive of $35,275,000 advanced to States for road construction under sec. 204 (a) of the act of June 16,
1933. The payment of checks covering such advances are reflected in dafly Treasury cash statements as
expenditures during the fiscal year 1934, but wfll not be reflected as expenditures on the ba.sis of the figures
included in this report untfl the moneys in the possession of the States are expended and accounted for.
11 I n c l u d e s $35,275,000 referred t o in n o t e 10.

12 Stated under the Department of the Interior, pursuant to Executive Order No. 6611 of Feb. 22,1934.
13 See below for this item.
1* Stated under the Department of the Interior, pursuant to Executive Order No. 6166 of June 10. 1933.
Heretofore stated under independent offices.
i« Included under general support and administration,
18 Stated under the Department of Justice, pursuant to Executive Order No. 6166 of June 10,1933. Heretofore included under the Department of State.
17 For classification of extraordinary expenditures contributing to the deficiency in postal revenues for
the fiscal year ended June 30,1934, see exhibit 46 on p. 270 for statement of account.
18 $5,700,000 p l u s a d d i t i o n a l charges of $324.53 d i v i d e d a c c o u n t s .

19 Add excess of trust account expendituires over trust account receipts for comparison with surpluses and
deficits as published in annual reports for years prior to 1931,
20 Excess of receipts over e x p e n d i t u r e s .

NOTE.—Excess credits and adjustments in italics to be deducted.

294

REPORT OF THE SECRETARY OF THE TREASURY

TABLE 3.—Receipts, expenditures, and surplus or deficit for the fiscal years 1931
to 1934
[On basis of dafly Treasury statements (unrevised), see p, 273]
1931

1932

1933

1934

GENERAL AND SPECIAL ACCOUNTS
RECEIPTS

Internal revenue:
Income tax
-.. $1,860,394, 295 $1, 057, 335,853 $746, 206,445 $817,961,481
Miscellaneous internal revenue
-.
669,386, 721 503, 670,481 858, 217,612 1,469,593,651
Processing tax on farm products
353,048,797
Customs 1
250,750,251 313.434,302
Miscellaneous receipts:
Proceeds of Government-owned securities:
Principal—foreign obligations
31,667, 519
396. 756
61, 588,133
67,190, 207
20, 033,694
Interest—foreign obligations184,474,623
32,090,747
57,416,484
Aiiother22, 367, 501
28, 325,941
23, 267,600
27,103,068
Panama Canal tolls, etc
26, 624, 2631 22,688,375
70, 406, 561
56,667,018
72,008,258
Other miscellaneous
-90,490,661
Total receipts

3,189,638,632 2, 006.725,4371 2,079,696,742 3,116,554,060

EXPENDITURES

Oeneral
Departmental: 2
Legislative establishment
Executive proper
State Department
Treasury Department 3
War Department (nonmflitary)3
.
Department'of Justice
Post Office Department
Interior Department *
Department of Agriculture
Department of Commerce
Department of Labor
Shipping Board
Other independent offices and commissions.
Unclassified items

23,978,412
606,811
15, 753,493
204,656, 706

27,318,601
424, 6461
18,881,864
287,946,003

21,477,373
369,113
15, 225, 569
267,504,959

44, 403, 498
61,639, 261
82, 297
125,8991
5 64, 642, 7781 81,444,996
296,866,945 318,975,817
62, 700, 200
61, 477,118
14, 701, 344
12,18L472
33,961,996
51,540,826
52,545,271
60,836,845
45,4911
182,625

44,088,327
57,882
74,679,717
250,981,139
45,968,153
13,677,842
28, 618,830
45,237,407
895,1381

17,652,732
368,898
11,121,103
108,538,057
4.109,859
31,598,524
12, 206,730
46,922,164
58, 362,572
27,452,420
10,831,905
9,644,426
22,365, 463
360,353

Total departmental
809,428,996 958, 289,118
i, 791,173 341,335,3.54
Public building construction and sites. Treasury Department 2 3
76.516,814
78.281,479
River and harbor work 2
121,034,167 116,798,680| 118,391,256
National defense: 2
6 356,808,530 349,989,331 318,331,028 205.305,922
Army 3
_
_
_
353,768,185 357, 617,834] 349,561,925 274,388.386
Navy
5 708, 609,670 784,841,820 763,154,886 606,549,454
50,000,000
Veterans' Administration 2 *
224.000,000 200.000.000 100,000,000
279, 723,062
Adjusted service certificate fund
-.23,123,288
Agricultural Adjustment Administration
l,461,i .,
Farm Credit Administration o.-S,264,996\
190,540,865 136, 238,856
34,240,628
Agricultural Marketing Fund (net)8
Distribution of wheat and cotton for relief
12, 576,842
17,202,968
Refunds of receipts:
14,046,350
21,369, 007
Customs
83,921, 552
48,664,202
67,763,119
69,887,929
Internal revenue
1,194,640
Processing tax on farm products
--.
52,003, 296
145.643, 613 202,876,341, 117,380,192
Postal deficiency
9,197,147
10, 661,805
12, 672,729
9, 299, 057
Panama Canal
1,737,780
126,000,000
242,545]
Subscriptions to stock of Federal land banks-..
1 Beginning with the fiscal year 1932 tonnage tax was covered into the Treasury as miscellaneous receipts.
2 Additional expenditures on these accounts for the fiscal year 1934 are included under "Federal Emergency Administration of Public Works."
3 The classification of general .expenditures for public building construction and sites, Treasury Department, and for War Department (nonmilitary) prior to the fiscal year 1934 is not available, and such expenditures are therefore included in general expenditures under Treasury Department and National DefenseArmy, respectively.
* The Bureau of Pensions and National Homes for Disabled Volunteer Soldiers were transferred from
the Department of the Interior and War Department, respectively, to the Veterans' Administration in
accordance with the Executive order of July 21, 1930.
4 Revised to adjust classification.
6 On and after May 27, 1933. repayments of loans made from Agricultural Marketing Fund—Federal
Farm Board, and interest thereon, are reflected as credits in the expenditures of the Fa:rm Credit Administration.

REPORT OF THE SECRETARY OF THE TREASURY

295

TABLE 3.—Receipts, expenditures, and surplus or deficit for the fiscal years 1931
to iP54—Continued
1931

1932

1933

1934

G E N E R A L A N D SPECIAL A C C O U N T S C ontinued
EXPENDITURES—Continued

General— Continued
Civil service retirement fund (Government
share)
.
Foreign service retirement fund (Government
share)
.
District of Columbia (Government share)
Interest on the public debt. .
Public debt retirements:
Sinking fund.
Purchases and retirements from foreign
repayments
.
Received from foreign governments under
debt settlements
Estate taxes, forfeitures, gifts, etc
Total, general expenditures ^

$20,850,000

$20,850, 000

216,000
9, 500,000
611, 559, 704

215,000
9,600, 000
599,276, 631

416,000
7,775, 000
689,366,106

292, 700
6, 700, 000
756,617,127

391, 660, 000

412, 654, 750

425, 660,300

369,490,900

30,977,000

48,245,950
176,050

75,000

2,909, 650
2,057,850

357,850
15,343

4,091, 597, 712 4, 385,909, 686 3,865,915,459 3,100,914, 634

Emergency 7
Federal Emergency Administration of Public
Works:
Administrative expenses
'.
Loans and grants to States, municipalities,
etc .
Loans to railroads. _ .
.
...
Legislative establishment
State Department
Treasury Department:
Public building construction and sites
Afl other
War Department (nonmilitary):
River and harbor work
.
Afl other
National defense:
Army
Navy
Panama Canal
Department of Justice
Post Office Department
Interior Department:
Boulder Canyon project .
.
Afl other
Department of Agriculture:
Public highways
Ah other
.
.
Department of Commerce
.
Department of Labor
Veterans' Administration
Independent offices and commissions
Di.strint of Col n m b i a .

6, 539, 315
78, 596, 230
70, 739,000
123,382
747,170
3,190,455
18,928,120
72,450,381
775,478
38,023,229
22,640,906
751,480
137,450
6,198
19,445,382
22,565,678
267,882,018
13,002,563
5,170,816
1,908,472
401,034
905, 286
180,911
400,005, 000
63,633
369,351
22, 210
339,918
316,157,892
333,702, 701
7,039,448
6,632,491

Civil Works Administration
Export-Import Banks of Washington . .
Emergency Housing Corporation
Federal Surplus Relief Corporation
Unclassified items
Civfl Works Administration
.Federal Emergency Relief Administration
Federal Surplus Relief Corporation
Administration for Industrial Recovery.
Agricultural Adjustment Administration:
6,875, 797
Department of Agriculture
Department of Agriculture, special deposits
77
(cotton, etc.) ._
_.
-.
5,000
Treasury Department
7 Emergency expenditures prior to the fiscal year 1934 (except Reconstruction Finance Corporation) are
included in general expenditures, the classification of which emergency expenditures is not available for
comparison with emergency expenditures for the fiscal year 1934. Therefore, neither the totals of general
expenditures nor the totals of emergency expenditures for the fiscal year 1934 are comparable with the totals
for prior fiscal years.

296

REPORT OF THE SECRETARY OF THE TREASURY

TABLE 3.—Receipts, expenditures, and surplus or deficit for the fiscal years 1931
to 1934—Continued
1933

1934

G E N E R A L AND SPECIAL ACCOUNTS—
Continued
EXPENDITURES—Continued

Emergency—Continued
Agricultural Adjustment AdministrationContinued.
National Industrial Recovery Act:
Department of Agriculture
Farm Credit Administration
Commodity Credit Corporation
Unclassified items.
Farm Credit Administration
Emergency Conservation Work
Reconstruction Finance Corporation:
Direct expenditures by the Corporation
From funds allocated by the Corporation:
Crop production loans
Regional agricultural credit corporations..
Loans to joint stock land banks
Farm mortgage relief...
Federal Farm Mortgage Corporation...
Federal Intermediate Credit Banks, revolving fund..
_
Farm Credit Administration
Commodity Credit Corporation
Capital stock of home loan banks
Federal Surplus Relief Corporation.^..
Capital stock of Home Owners' Loan
Corporation
Export-Import Banks of Washington _.
Civfl Works Administration
Tennessee Valley Authority
.
Federal land banks:
Subscriptions to paid-in surplus
Payment for reduction of interest rates on
mortgages
Federal Savings and

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, 1934

FRASER